Tuesday, January 31, 2006

What Would Hayek Watch?

Imagine a channel where anyone can submit shows and the audience votes on which to keep every month. Where creativity is your greatest asset. Where new ideas are constantly being churned in, and then out. That's Channel 101; almost a standard television station, but completely different at the same time.

The premise is based on peer production. Anyone, from artistes to epigones, can submit a five minute show to the site. People vote on which shows they like and the winners are picked up for another episode. The losers go back to the drawing board. (Nifty diagram here.)

The best part about it is that there's no resting on your laurels. Even if you get picked up, you get picked up for just one show; the second, third or even twelveth episode is treated like a pilot for voting purposes.

Sadly the show is not as rooted in peer production as I'd like to see. Submitted pilots have to go through a screening process by the "Prime Timers" and one cannot take a failed idea and try to improved on it (well, one might be able to, but Channel 101 gives all legal rights of the episode to the submitter, so it might get messy). Moreover, only five ideas are allowed to be kept, even if there are six good ideas.

A lot of this is meant to simulate the corporate world so (I'm guessing) promising filmmakers can get a harsh dose of reality. According to the site, "Channel 101 is where you learn three things: How to fail, how to succeed, and finally, how there is no difference between the two....You surrender to the audience as life-giving God and acquire total creative freedom through that surrender."

The consumer is king!

The Boys Are Back In Town

Today at noon, the House will reconvene for a new legislative day, returning from a vacation lasting since the 3rd of January.

I have no problem with Representatives taking some time off. However, one of my New Year's resolutions is to blog more about what the House passes but the media doesn't cover. Few people actually look at what the House passes. Perhaps that's for a good reason. Perhaps not. Looks like I'm going to find out either way.

Friday, January 27, 2006

Learn to Market "Market"

Tonight, Larry Kudlow ran an online poll for his show asking, "Which is the more reliable economic indicator? Markets or GDP?" The episode concluded with the results; 54/46, favoring of markets.

Larry seemed quite pleased with this result, but I'm just confused. Market for what? Everything? That's just a tautology. Gold? Too ambiguous. Copper? Aluminum? Sodium nitrate? Some combination? Is it a reference to the DOW or Nasdaq?

He's right to look down on GDP, and there are alternatives (copper is my favorite check, at least for short term changes), but don't load the question with the nice-sounding--but ultimately meaningless--description, "market."


Wikipedia is organized in such a way, it's very easy to get lost in it. For example, pick any date (such as your birthday) and look it up to see shared birthdays and important events (and deaths, but that's not as fun).

On my birthday, Kellogg patented corn flakes, the 17th Amendment was added to the Constitution, the Ford made the last Model T, Seinfeld premired, Union (and later Republic) of South Africa was founded and Mark Felt admited to being Deepthroat. (Not to mention the Tulsa Race Riots, the Battle of Seven Pines, the Johnstown Flood and the Ancash earthquake.)

Shared birthdays include two kings, four Nobel Prize laureates (including economist Maurice Allais), Walt Whitman and Pope Pius XI. As a juxtaposition to the last two, I also share it with Colin Farrel and Clint Eastwood. The question then becomes who do I mention first at parties?

NASA Wises Up...Sort Of

Twenty years after the Challenger explosion, NASA finally announced the space shuttle will be scraped and they will undertake a new generation of design.

The shuttle has never worked the way it was supposed to, and by that I mean be cheaper to operate than a rocket and capasule. Thus, NASA will design a new rocket and capsule.

It took two disasters, five space-worthy (relative term) shuttles and a good four decades of development to finally admit what was demonstrated with every launch; it's just not worth it.

But the most puzzling thing is the use of old capsule design for the new phase of NASA space exploration in an age when the Ansari X-Prize generated 26 teams, each with their own method of getting to space. The most notable example being the winner of the Prize: SpaceShipOne. Hell, the craft's hanging in the National Air and Space Museum. It's not like NASA officials have to go far to see it. Perhaps they don't just want to admit the private sector has a leading role in their domain.

Thursday, January 26, 2006

Paradise Still Lost

There are few events in the human imagination that are as world-changing as first contact with extra terrestrial intelligence. Its draw is so powerful we often loose perspective.

So is the case with astronomers yesterday when they announced the discovery of OGLE-2005-BLG-390Lb, to date the most Earthlike exoplanet yet discovered.

"Earthlike," however, is a relative term; there is no alien Eden here. The rock's more than five times larger than ours with an average temperature of a chilly -364 degrees F. Clearly, no life (as we know it) could exist here yet still it's lauded as progress for the search for intelligence beyond our solar system.

But even if life as we know it could exist there, I say so what? What would we do, say "Hi?" It would only take 21,000 years for the message to get there (give or take a few millennia). Normally I wouldn't be so cynical about such things but the National Science Foundation is the one that funded the research, an aimless institution that seems to spend taxpayer money finding empty planets we can't get to.

Only the government could find a pointless little planet they claim is important, but fail to name it anything remotely memorable. Must not have been in the budget.

Tuesday, January 24, 2006

Nu-Clear Perspective

"Take a nuclear chain reaction 20 times more powerful than Hiroshima. Run it through a power plant every day near families. What management would negate the risk?"

These angry words came from President Bartlet during last Sunday's episode of the West Wing. In the show, a nuclear power plant nearly exploded and one person died from radiation poisoning in preventing the meltdown. For the record, if this event was true it would constitute the highest casuality total for any nuclear accident in the US, ever.

But still, people are wary of nuclear power. Very wary of it. Critics still cite Three-Mile-Island as a reason not to use this technology even though no one died. Imagine, for a moment, that there was a nuclear disaster with a relativity new technology that killed, say, 300 people. Not just any people, but men and women and children. I would be amazed if there would be a working reactor anywhere in the US within five years of the incident.

Well, it really did happen, but it wasn't radiation or plutonium or Manhattan Project technology that caused it. It was natural gas and the incident is better known as the New London School explosion of 1937. Three hundred students and teachers died from a leaking gas line and the spark from a newly started electric sander.

Natural gas is poisonous, explosive and pumped into millions of homes--most with families--every day. Shitty stuff happens, and it's very sad when it does, but you can't negate risk, especially at large scales. It's dangerous to assume you can.

After the New London explosion, industry started adding minute amounts of odorant to aid in the detection of leaks. When disasters happen, we shouldn't run and hide, throwing the new and unknown away in the process. We learn, adapt and move forward, building a better world for the future.

Approving the Vote

Last week I encouraged the adoption of approval voting in some part of the US system because I think it's a step in the right direction and because the system is culturally connected to everyday life, thus improving its chances to become the norm.

This apparently had a strange effect on Jason Briggeman, who was apparently apathetic enough not to comment on the article but upset enough to make his first words to me since mid-December--and I'm paraphrasing here--"What the hell is wrong with you David? Voting systems don't matter." I had a wonderful break, Jason; thank you for asking.

Voting systems do matter for the simple fact that they affect the political landscape. There are no hard fast rules on this matter but safe to say that plurality systems such as the US encourage a two party system while IRV or approval voting encourage a multi-party system.

So why should libertarians (small "l") care how many parties have a shot at office(s)? Because the more parties there are, the less percentage points any one party has, thus they have to engage in more time and energy playing politics and less time passing crazy laws. Libertarians like deadlock; deadlock is our ally. Approval voting is an easy to understand and rhetorically sympathetic way to slow government down.

Monday, January 23, 2006

Soaps and Suds All Night Long

After the Liberty Fund/IHS conference this weekend, I heard the strangest ad on the radio. A local carwash is now open 24 hours a day, 7 days a week. The dialogue went a something like, "You can get food when you need it, you can get perscriptions when you want, but why can't you wash your car at your convience?"

I can understand food and drugs because there's a strong time preference (I'm hungry now, I need to take X now) but washing your car? Maybe the queue for car washing is so long, the firm thought this would be a good way to handle it. But it is yet another example of how freakishly wonderful the free market is because it allows this choice.

Thursday, January 19, 2006

We Should Vote Like We Pick Pizza Toppings

While reading about voting systems, I wondered if we could use casual election systems to aid us in establishing a new way of voting in our political system (our current way encourages a two party system which doesn't offer as much deadlock as most libertarians would like).

For those of you that don't know, there are dozens (perhaps hundreds) of different institutional rules for voting, each yielding a different result. One of these is approval voting. Given a list of options, votes vote for which ever they approve of. They can vote for all or none or three or one. This simple method may seem strange to us who are used to one-person, one-vote but in reality, it's a method we use all the time.

Consider three friends picking pizza toppings. If two want pineapple but three want sausage, then they get sausage. Even if one really wants pineapple and is only slightly in favor of sausage, they get sausage because the third person hates pineapple. (Though they might get pineapple if the other two don't like this hypothetical third person very much.) The same sort of informal voting pops up when people choose movies, televison shows, video games, restaurants and so on. It is only when there is a tie does level of preference become an issue.

While I institutionally prefer instant runoff voting (because it includes approval and level of preference), convincing the general public of approval voting is much easier given we do it so often as it is.

Sadly, the pizza topping analogy is quickly becoming obselete as Pizza Hut and its competitors offer up solutions to choosing toppings, such as mini pizzas or Domino's bulk pizza deals. The slogan may have to be reworked.

Monday, January 16, 2006

A Pricing Lesson

Last week my brother commented about prices saying,

Prices, however, often give you no wiggle room. "An item is worth whatever the purchaser will pay for it." they say. I can't go into a Musicland and try to negotiate the price of a CD. I may think it's worth $5 but they want $20. No comprimise is possible.

It makes me very concerned because it implies that suppliers set prices and we, as consumers, have to take them. The reality is much more tricky. First, there is wiggle room when it comes to prices. If you think a price is too high, you can a) wait for a sale or b) get it somewhere else. True, traditional bargaining is very rare (particularly in the US) but we negotiate--in a sense--when we refuse to pay for something we feel is priced too high. Our actions put downward pressure on prices.

It is true that any random individual has very little control over what the tag says. But that goes for both demand AND supply. No one person sets the price from on high. It is the result of the wants and needs of millions of other people. Compromise is not only possible, it is really the everyday reality prices experience.

Hayek reminds us that prices are determined by billions of seemingly disconnected circumstances from all over the economy. They draw in knowledge that's unique to time and place, knowledge that's important but difficult to convey and, most astonishing of all, only the knowledge that's important (granted the "important" part is imperfect but it's still quite the impressive filter). "Prices" forged in the government sector (such as union wages, speed limits and sugar cane) stop being useful amalgams; they don't merge demand and supply, they ignore millions of tiny adjustments, and sidestep countless and qualifiable volumes of knowledge.

My brother quoted an old adage--"an item is worth whatever the purchaser will pay for it"--but we all know it's not quite that simple. If you think it is, try buying a yatch for the same price as your microwave.

Friday, January 13, 2006

Start Selling the Lobby

Mike sent me this link yesterday about the relator's association as they attempt to create barriers to entry in their area of expertise. Thankfully, they are having trouble.

The Justice Department sued the association last year, asserting that the group's rules for online property listings discriminate against Internet-based brokers. Battles have also raged in the states as realtor organizations pursued policies that opponents say would hurt discount brokers. The Consumer Federation of America is revving up to fight any such industry-sponsored legislation state by state in coming months.

This is all great stuff. Belated, but great. My only problem is that people don't seem to be getting an good overarching message from the trend. The biggest message people seem to be getting is "The industry could be more competitive" or "Finally, someone is standing up to that nasty lobby." A better lesson would be, "This is what happens when we let lobbies get out of hand. Let's try to create some overarching rules to diminish capacity." In other words, it's not just the lobby. More generally, it's whom the lobbies are lobbying. You focus so much on hamstringing one faction, another will just take it's place.

I'd like to see more talk about how to limit faction influence, like denying Congress from creating certain laws (such as those that restrict entry), but until the public grasps this big picture lesson, such a limitation is little more than a pipe dream.

Monday, January 09, 2006

Price Discrimination Lesson In Sports

I'm not a sports fan, but I overhead some of my colleagues discussing last Saturday's game between the Washington Redskins and the Tampa Bay Buccaneers. I'm told this was a very important game, thus many Redskins fans traveled all the way to Florida to see it.

Naturally, Buc fans didn't want the other guys sitting in their stadium, cheering the enemy so the ticket agents claimed to anyone with a Virginia, DC or Maryland license that they were sold out. This is where it gets funny. Less enthusiatic natives who could buy tickets did so and re-sold them to Redskins fans at a tidy profit.

While not typical price discrimination, the attempt still counts because the price to buy was deliberately increased for a certain group. But no economist should be surprised it didn't work because these tickets can be easily resold; the stadium merely created an arbitrage opportunity. A friend who was at the game tells me about half the stadium were Redskins fans (I think she's exaggerating but even half that would be impressive). Price discrimination only works with items that are hard to resell, such as education, plane tickets or the physical entering of a stadium, but not a resellable ticket that allows the ticketholder in. Economics be a harsh mistress to those that don't respect or understand her.

For the record the Redskins won 17-10.

Friday, January 06, 2006

The Roddenberry Economy

If you're a Star Trek fan, or even a person with a passing familiarity but like economics, you've probably asked yourself, how does the economy of the future work? This is a question I've taken upon myself to answer at Memory-Alpha wiki (article here).

I've already gotten flak because I've speculated and made educated guesses but only because there is so little evidence. Still, I felt that pointing out the problems with this economy would get removed rather quickly because we don't know of any critisms in the Star Trek world. So I post here.

The New World Economy, from what I can gather, is a sorts of voluntary socialism. Consider Roddenberry's comments: "Money is a terrible thing. Why do people work at jobs in Star Trek? Why does someone become a baker? Because the family is going to starve to death? No. People become bakers because certain people love the smell of things baking and certain people take pride--we all have a little pride--in something. 'Let me give this to you because it's delicious and you will love it, and I made it, and this is my recipe'. All things will be taken care of."

It would be wishful thinking to believe all things would be taken care of. Even in a world of replicators and transporters, there are thousands of needed jobs few people would do for fun. At the least, the demand would exceed the supply even in the rare case where it's known that demand exceeds supply. Building ships, fixing replicators, scrubbing plasma conduits, mining dilithium, construction, surveying, ferrying goods and people between planets, operating transporters for intraplanetary travel, maintaining the power infrastructure, etc.

Roddenberry is wrong; prices are a wonderful thing. In one stroke they provide the knowledge and incentive to get done what needs to get done. But people don't consider prices to choose a career; they do what they simply feel like doing, even if they're bad at it, even if there are brownouts. Sculptors, paintings, playwrights and actors must be a dime a dozen on Terra Prime. In this economy, Earth must be a place with lots of bad art in lots of bad lighting. But I guess that's why they call it a paradise.

Sunday, January 01, 2006

Government: Unsafe At Any Speed

Happy New Year!

Sorry it's been so long since I posted; blame the holidays. I did want to have a thematic post today, but when I was in Iowa I saw something worth mentioning.

They raised the speed limit to 70.

Considering the rhetoric surrounding speed limits, the move surprised and pleased me. Especially after being in Virginia where the top speed is a mere 55. It got me thinking, is there any way I can make the claim speed limits are unconstitutional?

Granted I am no legal scholar by any measure of the word but I know enough to know that the overarching laws and ideas trump the smaller ones. So I asked myself, is there anything in the Constitution that could be interpreted as forbidding speed limits? I think there is.

Suppose I'm driving home one night and it's rapidly approaching Southpark time. In an effort to get there in time for the opening scenes (because face it, you're lost for the whole episode without them), I exceed the speed limit by several miles per hour. In doing so, I have hurt no one but I still get pulled over for breaking the law which causes me to miss a show that gives me joy. They have denied me my pursuit of happiness.

All attempts to restrict velocity deny in fact deny the pursuit of happiness because people want to go fast for a reason. Even if that reason is work because they will surely be sad if they get fired (unless they want to get fired for some unknown reason, in which case the question becomes "Why do they want to get there on time?").

Opponents would argue that speed limits reduces crashes and deaths and that certainly makes people happier than watching TV shows. This is a sloppy argument because first, they don't know that. Second, it is dangerous because the line between acceptable and unacceptable becomes arbitary. Outlawing cars would also reduce crashes and it would do so more completely than speed limits. So why not outlaw cars? It would be smarter to advise for greater punishment if accidents occur. That way we can discourage what we don't want without denying the opportunity of satisfaction.

It's appropriate that when I was home, I discovered a friend of mine might loose his license because he got three speeding tickets in the course of a year. Two of them occured while he was working his delivery job. If his license is revoked, he will loose his job and possibly have to drop out of college. So much for his pursuit of happiness.