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.

Book Review: "Narconomics" by Tom Wainwright

I've recently read the book Narconomics by Tom Wainwright. It's an exposition into the economics of Latin American drug cartels, looking at them as businesses rather than mysterious criminal entities. In particular, it considers the competition versus monopolistic/monopsonistic behavior on the demand- & supply-sides, issues of global operations and outsourcing, diversification in products, cartel hierarchies versus franchising, public relations versus employee incompetence, and so on. Of course, as the drugs discussed in this book are illegal for the most part, there are other issues of dealing with the police and the government, whether through hiding, bribery, or warfare, and with enforcing things like non-compete agreements and franchise territories through violent means in the absence of legal recognition (where a court system could otherwise peacefully mediate such disputes). The aim of this book is to step back from the emotionally charged rhetoric of the "war on drugs" by seeing them in terms similar to legitimate businesses, and in doing so defeat the scourges of the illegal drug trade in the long-run through economically-minded legislation rather than ineffective brute force.

The book is not too long, quite accessible, well-written, and engaging to anyone with a high school-level understanding of microeconomics and an interest in issues surrounding illegal drugs. There are a few issues I have with the book though. One is that while the focus is clearly on Latin America, I would have liked to see at least some parallel discussion about the flow of drugs from Central/South Asia (particularly Afghanistan) to Europe and the economics therein, as that is mentioned a few times without further details. Another is that the last numbered chapter discusses legalization exclusively in the context of marijuana/cannabis, even though there is a discussion about the much narrower margin between safe and fatal doses for other drugs (especially heroin) compared to cannabis, which then raises questions about whether the legalization of marijuana is really meant to be a model for legalization/regulation of other currently illegal harder drugs; the epilogue addresses this point adequately with more nuance, but the structure of the final chapter still seems subpar for that reason. Finally, my biggest issue regards the discussions of how the operations of drug cartels in Latin America are influenced by how they can compete with the governmental "monopoly" on force due to unresponsive, complicit, corrupt, or ineffectual governments, and how cartels can compete with other economic opportunities through wages, protection, and other benefits. In particular, my concern is that the book acknowledges how legalization of drugs often economically incentivizes supply-side consolidation (as being outlawed necessarily limits how large drug operations can grow before attracting government attention), but in conjunction with other trends like offshoring of drug production too, it isn't clear how people in poorer Central American countries will further benefit; while the reduction in violence that would almost surely accompany restricted legalization of drugs is certainly a laudable goal, it is unclear whether the resulting economic opportunities, given the continuing poor governance and paucity of other good economic opportunities there, will really work to better the lives of those people, or whether the situation will devolve into large drug companies bullying small countries as in the banana republics of several decades ago (as discussed in the book) or tobacco or fast food companies doing the same to such countries today. In light of that, while the suggestions made in the book for improving outcomes of drug policy do seem like they would certainly help to some extent, I can't help but feel that the title of the epilogue, that economists make the best police officers, smacks of hubris. Apart from those issues, I'd recommend this to anyone interested in the subject.

Nuanced Déjà Vu in Microsoft's Desktop Monopoly

When I was in late high school, which was in the early days of this blog, I had recently switched to Linux and was essentially an evangelist, singing its praises and loudly cursing the misdeeds of Microsoft with respect to the desktop market; many of my blog posts at that time were in that vein. In the nearly 8 years since then, I, my blog, Linux, Microsoft, and the consumer device market have all evolved and matured: I've become less evangelistic and more realistic about many things (or so I'd like to think), my blog has correspondingly shifted focus in various ways, Linux distributions have become less of a "wild west" than they were 8 years ago and have gained more support for popular things like proprietary video drivers and game platforms like Steam, Microsoft has been more open about supporting free and open-source software initiatives, and the consumer device market has shifted much more toward mobile devices, including smartphones and tablets which are very different from the desktops, laptops, and netbooks of 8 years ago (the latter of which doesn't really exist anymore as it once did). That said, I recently read a post on Slashdot (original article by Brian Fagioli of Betanews) about how Microsoft is locking the configuration settings for changing the default browser (Microsoft Edge) and search engine (Bing) choices in Windows 10 S, which is its version of Microsoft Windows 10 designed for lower-end hardware used in schools. For the sake of old times, I thought it might be nice to post about it, but hopefully with a bit more nuance than what I was capable of 8 years ago (and with the benefit of having seen the last 8 years of intervening technological development). Follow the jump to see more.

Autonomous Cars and Autonomous Ownership

I was originally going to do a Linux distribution review this month. However, when I tried a couple of distributions that I wanted to test, none of them would properly boot from a live USB, so I gave up on those. Instead, I wanted to use this space to ramble a bit on what the near-future of self-driving cars might look like. It comes from some conversations I had with my family last weekend while visiting California, after having seen the limited self-driving capabilities of a Tesla Model S (namely, its ability to autonomously pull in and out of a parking space). Moreover, as some of you who know me personally would know, I have a disability that prevents me from driving, so the sight of even minimally-autonomous cars as a present reality excites me, and I'm keeping an eye on current developments in that field/market. Given this, if you'll indulge me, then follow the jump to (not exhaustively) explore some possibilities for self-driving cars.

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.

KevJumba and Google Search Results

I know I'm quite late on this one, but I just thought of a better way to explain this somewhat recent TechDirt post on why US Senators' assertions that Google remove all biases and put up "natural" search results is wrongheaded, because Google's search results are inherently influenced by people's searches, companies' advertising, and Google's own algorithms. The issue, if I remember correctly, revolves around the fact that Google is advertising for Canadian drugs when people search online to buy drugs, and it is in some instances illegal to buy Canadian drugs that are the same type and quality as comparable American drugs. Since then, it has basically become an antitrust lawsuit against Google (or the two cases may be separate, I'm not sure which), despite the fact that Google doesn't seem to have done anything like Microsoft did in its monopoly position to actually bar other competitors from entering or raise costs for consumers, and that's the key to actually making an antitrust suit successful. Plus, the Senators themselves have basically admitted that the issue is to stop Google from growing for the sole sake of stopping it from getting to a certain size (and not actually for protecting consumers), and they've even claimed that Google was destined to succeed and monopolize, which is totally false given that quite a few famous names in computer technology predicted in 1998 that Google would fail and that in 1998, there were about 10 different big competing search engines, and few people thought Google could muscle into the market.
But I'd like to share a thought or two specifically regarding the "biased search results", and show why they would be inherently biased anyway. As I've mentioned a few times before, I'm a fan of the videos of Kevin Wu, who goes by KevJumba on YouTube. In the first video posted here, KevJumba tells the viewers about how searching on Google the phrase "Is KevJumba" yields "Is KevJumba gay?" as the first suggestion. Leaving aside the issues of homophobia and all that, it's clear that happened because thousands upon thousands of users searched for that, and that became the search result most associated with his name. In response, he asked his users to make the result a bit more masculine: "Is KevJumba a heterosexual bear wrestler?" In the second video posted here, KevJumba thanks the viewers for making his dream come true, as "Is KevJumba a heterosexual bear wrestler?" is now the first suggestion not only for the phrase "Is KevJumba" but also just for the word "Is". That only happened because of his legions of fans rushing to Google and searching it repeatedly to make that the best suggestion for the phrase "Is". That already shows in two ways the fact that Google has no "natural/unbiased" search results; for now, I rest my case.

NCAA: Bad for Future Business Leaders

This past week, a couple Ohio State University [American] football players have been suspended for half of next year's season and have been made to pay thousands of dollars for selling things like [parts of] their uniforms, their championship rings, and other awards and sports paraphernalia. News outlets reporting this story have frequently made reference to a similar incident a couple years ago, when Reggie Bush voluntarily forfeited his Heisman Trophy (though he was under pressure to do so at risk of it being forcibly revoked) for receiving gifts from other people while playing football for the University of Southern California.
In no other sports league are rules as draconian as in the NCAA. Conferences like the SEC already make billions of dollars every season, so a couple thousand is peanuts for them. So why are all these rules in place? "Amateurism."
These college players are enormously popular and are almost all going to school on scholarships. That said, if they are injured, the scholarships are often revoked; as they spend almost all of their time practicing or playing football, if they are injured, it's a long way towards graduation, and a decent job may not even be on the horizon. These players are doing what they can to build up some money in their bank account while they can. Really, they should own the uniforms and awards, and first sale will mean that the NCAA has no authority over what happens to these things once they are in players' hands.
These players are rightfully trying to make a business out of their playing. Yet, the NCAA isn't letting them (on the grounds of a ridiculously weak excuse). That's right: the NCAA is anti-business. (Either that, or the NCAA takes the meaning of a monopoly to a ridiculous extreme, not even letting their own players even slightly compete with their gravy train.)

Red Hat: The New Big Monopoly?

Given the presence of Microsoft and Apple, of course Red Hat can't be a monopoly (at least in the desktop market). However, there have been a slew of reports of Oracle rebranding RHEL as Oracle Linux a.k.a. "Unbreakable Linux". This article (Brian Proffitt, ITworld) discusses how that and Amazon Linux AMI (Amazon's Linux distribution built for its own cloud servers) are proof that companies are "stealing" Linux, as Oracle and Amazon are bundling their hardware with their own Linux distributions.
First, I think it's misleading (at best) to say these companies are "stealing" Linux. How is what they are doing any different from what Canonical, Novell, and Red Hat do to Linux? Are they also "stealing" Linux to make their own distribution? I feel like this is the point of free software — allowing anyone to build customized versions of software to fit their own needs; good for Oracle and Amazon for taking full advantage of the benefits of Linux and free software. I don't think Oracle and Amazon are going to prevent loading other Linux distributions; it's just that the bundled distribution will be Oracle Linux or Amazon Linux AMI, as opposed to Microsoft Windows or Ubuntu. Also, isn't this what was supposed to happen to Android — phone makers customizing Android to suit their phones' needs? Isn't this what is happening, at any rate? Saying these companies are "stealing" Linux to suit their needs just seems a bit silly to me.
The bigger problem I have, though, is that both Oracle Linux and Amazon Linux are based off of RHEL. I think it's great that Red Hat has become so successful and so widespread, but this incredible adoption rate worries me at the same time because it could give Red Hat a monopoly over the market similar to the one Microsoft currently has over the desktop market (and I fear similar effects stemming from this). Come on, Canonical and Novell. (I am fully aware that it's easy for me to say this from the comfort of my keyboard.) Learn from Red Hat and give Red Hat some competition. People will have more choice regarding the back-end, and everyone wins from choice and competition.

Microsoft is Now a Legal Monopoly in Germany

As it seems, the German government is setting up a hotline for (Windows) computer users' malware issues.
This. Is. Bad.
In a continent (the EU) that is wary of monopolies and has taking strict measures against Microsoft to reduce their monopoly status (e.g. make a "browser ballot" in a Windows installation to allow users to choose their preferred browser(s) (and the order must be random (i.e. IE cannot be the top choice each time))), this is a huge, terrible reversal.
Many posts talking about this describe this as just a subsidy for Microsoft to produce shoddy code and not improve upon it (as the government will cover that cost, essentially).
That's not the biggest problem.
Let me be clear: the German government is basically legalizing Microsoft's monopoly.
Now there will be almost no incentive to get products other than those of Microsoft, as the government will always help the users and Microsoft will reap the (larger) profits (and no longer bear the burden of fixing code).
Why, oh Germany, why?
If you happen to live in Germany, tell your elected officials to repeal this bill.
Microsoft has for the longest time been a de facto monopoly, but never in my memory have I heard of this sort of official government support for Microsoft's monopoly. This basically flies in the face of everything free-market.
Please, stop the madness.