Book Review: "Radical Markets" by Eric A. Posner & E. Glen Weyl

I've recently read the book "Radical Markets" by Eric A. Posner & E. Glen Weyl. I should disclose that I came to know of this book upon attending a talk and Q&A session on campus by the latter author about this book, and that I was able to ask a question during that time (though as I point out later, I didn't find the answer to be so satisfactory). In any case, the topic intrigued me. This book is essentially a vision for a radical reformation of society, starting in the West but ultimately spreading through the world, such that concentrations of power are systematically broken and a level playing field is quickly approached. The two key novel contributions of this work are the notion of a common ownership self-assessed tax (COST), which aims to revolutionize notions of ownership by abolishing property rights extending to perpetuity and replacing them with auctions for goods & capital, and quadratic voting (QV), which aims to replace the principle of one-person-one-vote with voting credits such that individuals can vote on issues or candidates (for or against) in proportion to their perceived importance while being prevented from unduly swinging elections. There are also other issues discussed, such as immigration, institutional investment, and the value of digital data, all in the context of concentrations of power. It is worth pointing out that though there are many arguments that extend to Canada, the UK, other European countries, Japan, Singapore, Australia, and New Zealand, most of the arguments are made in the context of the US.

I will leave a detailed critique after the jump, and summarize my thoughts here. I found the ideas presented in the book rather intriguing and certainly novel. However, the main flaw of the book in my view is that the authors too often like to present their ideas at a very broad conceptual (macroscopic) level while simultaneously presenting examples justifying these concepts at a very granular (microscopic) level. The missing elements are the granular implementations of their broad concepts as well as the implications of the granular examples interacting on a larger scale; as a result, particularly for the introduction of the COST ideas, the claims must be taken essentially on faith, as the authors are quite glib about the importance of implementation details to the overall path of society if their ideas were to be followed. Given this, there are many reasons to remain skeptical about these ideas. This is also evident in the writing style too, in that my need to reread parts of certain chapters multiple times, while in part because these ideas are certainly not trivial, was mostly because of these sorts of logical leaps to conclusions that were not obvious, and many times, these conclusions remained non-obvious even after multiple reads through; the writing is otherwise engaging and fun to read, but I could tell that the authors were at many points getting swept up in their own ideas at the expense of clarity for readers. Overall, I recommend this book because the ideas are intriguing and I do want to see these ideas fleshed out better, but I would not recommend this book in the sense of wanting to preach these ideas myself. Follow the jump to see more detailed discussion about this book.

Stuff in Between Monopoly and Competition

It has been a while since I've ranted about an economics article, but there was one by Peter Thiel (cofounder of PayPal and Palantir) in the Wall Street Journal that caught my eye, so it is the subject of this post. In it, he argues that monopolies are not always the bad entities that people make them out to be. In particular, he argues that Google's dominance in the search market has allowed it to expand to other markets such as advertising, robotics, and phones, and in all of those it is far from a dominant market player. He also argues that firms in perfectly competitive markets are too caught up with staying afloat to be able to innovate in any meaningful way, so real innovation can only come from firms with dominant market positions (such that they have money to gamble on such an innovation). Follow the jump to see my reaction to this.

SOPA: The Year of the Zombie Internet

I haven't really talked about issues like these in a while, but there is a hugely important bill making its way through Congress right now that could make the Internet a mere shell of what it is right now. It's called the "Stop Online Piracy Act" (SOPA), and it has terrible implications for the whole Internet as it exists today.

But you must be wondering, "Isn't stopping piracy a good thing? What could possibly be bad about it? And won't it do its job right? What's there to worry about?"

1. I don't know if stopping piracy is such a good thing. Study after study has shown that piracy is merely a symptom of a need being unfulfilled. No, that need is not "greedy freetards wanting everything for free". It's people getting content they like in formats they can use in an easy way for reasonable prices. Many studies have shown that once iTunes came around selling music super-conveniently for $0.99 apiece and once that music started coming without DRM (which was supposedly made to increase sales by preventing piracy), piracy of the songs on iTunes dropped precipitously. All you need to do is compete with piracy by giving people something even more compelling; it may sound strange, but while it may be free of charge, piracy isn't actually all that convenient to carry out. And despite what major movie studios and record labels would like you to believe, you actually have to dig pretty deep into search results on sites like Google to find actual pirated content.

2. There are tons of things horrible about it. Foremost among them, it basically upends the justice system which requires that defendants be innocent until proven guilty and which requires that defendants be able to defend themselves in a court of law. This throws all that out the window: now, people can be punished severely just on accusations of infringement, and the burden of proof falls on said defendant and the website that supposedly enabled the infringement (even if it was a link to a link to a link or if the content was generated by other users of the site, not by webmasters). Basically, the big record and movie studios have admitted that they're too lazy to police their own content, so they're asking the government to do it for them and to play by their rules.

3. No, it won't necessarily do its job right. Recently, Warner Brothers admitted that it took down a whole bunch of legitimate content from other sites that they didn't even own in the first place. And Viacom has had a history of legally uploading its own videos to YouTube; under SOPA, it could basically shut down YouTube for its own stunts like that.

4. Well, considering what I've already told you, it should be pretty obvious by now that the Internet would be a far, far worse place under SOPA. Everyone from civil libertarians (i.e. the ACLU) to tech companies to small independent productions studios to libraries to lawyers to [et cetera] have come out against it. Petitions are growing by the day. It's really only supported by Hollywood and the recording studios (and maybe the big drug companies too who don't want to admit that generic drugs are legal and are not counterfeits). It's gotten to the point where a recent House of Representatives hearing was carefully stacked with 5 speakers supporting SOPA and only 1 speaking against it. That should tip you off as to how flimsy the case for SOPA really is.

There are a whole bunch of different petitions going out around the Internet. I myself have signed about 3 of them. Please, sign the petitions, tell your friends, and call your senators and representatives in Congress and convince them that you, as a humble constituent, matter more than big entertainment lobbies, and that the government can do better than being Hollywood's hired thugs. Do it before it's too late!

(Note: this law has gone through a few different names. In 2009 and 2010, it was called "Combating Online Infringement and Counterfeiting Act" (COICA). After that it was called PROTECT-IP. After that it was called E-PARASITE, though I genuinely thought the sponsors of the bill were unwittingly referring to themselves as the "e-parasites", as they have just been reaping all the rewards of the Internet and are now going to kill it to make sure no one else can. Now it's called SOPA.)

Class Discussion on IP

Yesterday in my web design, the lecturer was a guest speaker. This particular guest speaker is my college's IP attorney, and as we are designing websites, our professor feels that we should be suitably aware of the issues surrounding IP so as to not get sued. At first, I was highly skeptical as a similar talk my high school librarian gave last year was almost totally propaganda in favor of IP-protection and the wonders it does for creative works. That said, I listened to the whole talk, and I'm glad that the attorney delivered the facts straight without injecting too much of his own opinion into the discussion, and he made it clear that we should be aware of IP laws mainly for our own defense (and not necessarily to clog the system with more IP). Whenever he did (occasionally) inject his own opinion into the discussion, he made it fairly clear that he thinks that the current state of IP is a mess and that the current copyright term is way too long for its own good. All I want to say is that I'm glad there's at least one IP lawyer out there who understands that the status quo is bad without being blinded by the powerful interests in the field of IP.
On a totally unrelated note, I have come to the realization that the reason why some widgets on this blog don't look right is because I am using these new widgets on a very old template. I can't even take advantage of the new Blogger Template Designer to tweak it. For this reason, there is going to be an overhaul in the way this blog looks; though I will try to preserve the current look and feel, it will be a more current template so that I can use widgets without having to deal with things like overlapping text. I hope to finish this by the weekend.

I'm With Republicans on Intellectual Monopolies

I say this in response to this (Thom Holwerda, OSNews) article on Obama's support for the RIAA, MPAA, and other lobbies on the topic of intellectual monopolies.
He has claimed that "Our single greatest asset is the innovation and the ingenuity and creativity of the American people".
Yes. That's true. Go on.
"It is essential to our prosperity and it will only become more so in this century. But it's only a competitive advantage if our companies know that someone else can't just steal that idea and duplicate it with cheaper inputs and labor."
Wait, what?
Isn't the whole point of a competitive advantage to be able to produce the same good/service at a lower cost, benefiting everyone (consumers AND producers) in the economy? Come on, that's Economics 101/AP Economics!
Or, is he seriously suggesting that higher costs just to maintain monopolies is OK?
I don't know how we are going to move forward as an economy with that kind of thinking - not when somehow ensuring that the "original inventor" gets all the revenue (to the detriment of all else).
Geez.
Thankfully, as stated in the article, the EU Parliament has shot down the ACTA. Good for Europeans - sadly, the American people are not informed enough to ask representatives and senators to do the same (right) thing.
The title? Usually it's Democratic politicians who are proactive about introducing new restrictions on digital rights and enforcing new, longer-lasting intellectual monopolies. This mainly derives from Hollywood's influence on the Democratic party. Republicans do not have this connection, so they are a little more reserved about introducing such new intrusive laws (in line with their beliefs in small government); sadly, they rarely have the guts to oppose "protection of 'intellectual property'" (and this is one time where I want the Republicans to be more proactive in this regard). That's why I'm with the Republicans on this one.

Apparently, IP-Protection Exists for Its Own Sake

This article's (Bobbie Johnson, Guardian) news astounds me.
It's no news to me that there are groups that have lobbied vigorously for intellectual monopoly (aka "IP")-protection and against free software.
But, it seems like one particular group based on the US has taken it farther than it has ever gone before.
It is recommending the inclusion of Indonesia on a list of countries to pressure to change IP-protection laws due to the mere encouragement of the use of open-source software.
What?
The funniest (and saddest) part is that this group is supposed to be pro-free market and pro-competition.
This is exemplified in...open-source software. Companies like Red Hat and Canonical have developed new business models around open-source software.
The status quo (i.e. Microsoft) is antithetical to that.
The worst part of its recommendation is that it wants to force stricter IP-protection laws down Indonesia's throat for the sake of...stricter IP-protection. There appears to be no other reason for this - i.e. intellectual monopoly for its own sake.
The author of the article also points out that often, open-source licenses are stricter in ensuring that the license (to promote free use) and original authorship are retained in all derivative works; one could thus argue that a beneficial form of IP-protection (one that actually fosters further creation and use while maintaining attribution to the original author) is what is needed - not the draconian measures of laws like the DMCA.
I would have laughed out loud if I forgot that this was actually happening; I am sick to my stomach and proceed to vom - [bleccccccccch].