April 27, 2014

it’s time to abandon the term “free market”

Filed under:— cwage @ 6:28 pm

Libertarians of all stripes would be well-served to abandon the term "free market". I know it's near and dear to a lot of them, and I get it, I do: the words should hardly be controversial -- who among us can deny the value of "freedom" and "markets"? (well, many can and do, but that's neither nor there). There are a few reasons the phrase has lost all useful communicative value:

1) Many people misunderstand our governmental and economic status quo. They see our system as a fight between "capitalism" and "regulation" -- "capitalism" being a poorly defined/understood bogeyman: a sort of Hobbesian corporate state of nature, in which evil corporations run amok in a battle royale, dragging society and the environment down with them. Therefore, "Free Market" to them does not mean what it does to most libertarians. It means the absence of the regulation keeping this nightmare scenario from unfolding -- a precarious balance only barely kept in check by the unflagging efforts of the modern progressive.

2) The term has been coopted by conservative/right-leaning politicians seeking to "privatize" elements of government function. Though they use the term "free market" to justify and earn the sympathy of their constituents, the ultimate goal is not a free market, but mere profiteering. Any politician seeking or in office who claims to want to limit government and promote freer markets is at best disingenuous, as the advocacy of free markets is unlikely to be accomplished via legislative fiat. As Steven Teles pointed out in last week's Econtalk, most attempts at privatization only further the entrenchment of a social/"public" function of government (with a few more hands in the till, to be sure):

Some of the largest consulting firms, especially around here in the Washington, D.C. area, their primary and in some cases the exclusive purchaser of their services is government. And I think some of that's come from the fact that conservatives thought that if we actually, even if we are going to perform, if some function is going to be considered to be social, if we can push it out into the private sector then that private sector will become a lobby for further privatization. But in many cases those private contractors become a lobby for the continuing socialization of the function, so long as they are the ones who end up getting the benefits.

3) Consequently, the term has also (fairly) been vilified by leftists who look at the consequences of purportedly "free market" policies, and see nothing but exploitation of the system. However, they also, unfortunately, use the term as a pejorative to denote/signal to their constituents that corporate profiteering via privatization is imminent -- to the detriment even of potential governmental policies that could actually help encourage a truly freer market.

If libertarians truly want to change the minds of others, they should abandon this unproductive phrase. For all the reasons above, it does nothing but conjure up an aura of harmful exploitation. Instead, focus on what is (for some) at the heart of libertarian ideals: opposing coercion/aggression. "Anti-aggression" is a phrase likely to get you a lot more traction in any discussion with your average statist, because it focuses the conversation on something which libertarians share quite deeply with most liberal statists: the deeply held belief that aggressive violence is harmful. From here, a genuine conversation about the trade-offs we make with respect to freedom is much easier, or at least it cuts to the heart of fundamental disagreements much more quickly. Waving the flag for "free markets" might score points with people that already agree with you, but it will do nothing but confuse and confound potential allies who grossly misunderstand your goals.

February 19, 2014

google fiber

Filed under:, , , — cwage @ 11:52 pm

Because I'm a contrarian (or should I say buzzkill. get it? buzz? kill? google buzz? get it? SEE WHAT I DID THERE), I'll play devil's advocate to the frenzied excitement over Google Fiber in Nashville. Some supposed factors driving the excitement:

Fiber is fast
Well, fiber is a physical medium that is quite capable of fast transfer. But a network has to be built to take advantage of that. This involves several points of expansion:

First, your own network infrastructure has to support these gigabit speeds. Maybe you're rollin on gig-e wired throughout your house, but if you're like me and 99.999% of internet users in Nashville, you're using a macbook on the same shitty $50 802.11n WAP that everyone else uses -- which maxes out at about 300Mbps and usually clocks in more realistically at 100-150Mbps. Yes, this technology will evolve and grow. When? Pro-tip: not till more than 3 trial cities support these next-generation speeds.

Second, all the services you use now that ostensibly would benefit from 1Gbps bandwidth -- a surprisingly short list, currently -- have to scale their own infrastructure to support all these new clients desperately wanting to saturate their shiny new broad pipes. Will these vendors -- Dropbox, say, for example -- have incentive to do so? Well, maybe. Are you willing to pay for it? Are enough people transferring big enough files that people are willing to pay a competitive rate? Maybe -- over-the-wire backups are a clear need here.

Third, google itself has to have built the infrastructure to support -- not everyone at 1Gbps at once of course -- but an infrastructure that will support the average number of users using their fiber service and some margin for bursting/excessive load/etc. This may sound like it goes without saying, but consider how often wireless carriers roll out a New Bigger Faster 8000G wireless platform but clearly don't expand the network capacity behind it (I'm looking at you, AT&T. and Sprint. and, well, everyone.) Did/will Google scale this appropriately? Maybe. Hopefully? Who knows. Minor but real concern.

That said, yes: there is an "if you build it they will come" effect wherein larger capacity spurs innovation. But it won't be some magical lightswitch that flips on once you have something with "fiber" in the name such that everything will be 10X faster. It will be an incremental, evolutionary path of growth -- which is good! -- but not magical or instant. Just like the transition from the days of ~56k/ISDN to broadband was not magical or instant, this transition too will take time. Maybe add an exponent or two here allowing for Moore's law, sure.

Video streaming with cable sucks -- fiber will fix that
Video streaming with cable (e.g. Comcast) sucks because Comcast is throttling services that threaten Comcast's dwindling legacy cable bread&butter. This gets into the territory of advocates for so-called net neutrality, but that's a debate for another day. So, it's great that Google can provide some competitive incentive for Comcast to evolve or die. Conversely, though, I see no indication that Google intends to do anything other than enter the fray of this very competition for the same media services and thus be incentivized to perform the same sort of throttling of their competitors. In short, streaming problems have long since ceased to be a problem of technology: Netflix's HD streaming (for example) maxes out at around 5Mbps. The remaining problems of shitty user experience now revolve entirely around competitive throttling. Google may or may not be just as bad.
I'll finally have the upstream/symmetric bandwidth to host personal video servers!
Sure. Explicitly against Google's ToS for the service, but hey. How aggressively will they enforce this? That remains to be seen.
Free internet!
TANSTAAFL. Ask yourself why Google is willing to offer a tier of free internet service. This is a company that has capitalized on the decreased privacy of its customers at every opportunity. The only conclusions you can draw are ... uncomfortable. How will they treat your data? How will they sell it? How will they treat traffic that ensures privacy (VPN/SSL/etc)? Will they even allow it? There's a good case to be made (sadly) that so few people even care (or are educated enough to care) about their privacy such that the few people who do will be a non-issue.

To sum up: competition is good. Even competition from Google is better than nothing. But you won't find me frothing at the mouth or fawning over the mere prospect. Google is a company that wants to compete with everyone by doing everything. This means they not only compete with Comcast for internet access, but they will (in all likelihood) compete with Comcast (or anyone else) for the same legacy content that has motivated Comcast to depriorize/throttle its content and generally be shitty at the one thing they're supposed to be good at. It also means (because Google isn't particularly specialized) that they're probably going to suck at it, and/or sacrifice innovation, support and progress for its multitudinous other endeavors (witness gmail). How many products with satisfied customers have already been sacrificed at the altar of Google+? Why do we believe this will be any different?

It's possible that Google could surprise me by being focused and efficient in providing this one service, but they're a company that's spent the last 5 years doing the exact opposite.

High-speed fiber internet access provided by a competitive company with no interest in selling me anything other than reliable, fast, hands-off internet access? Now we're talking -- I'd be excited about that. Oh, Google? Yawn. How long will I be using that product before they decide to abruptly EOL it? (Yes, I'm still bitter.)

BOOM. Debbie downer out. *drops mic*

UPDATE 1: -- some good comments from facebook:


I got called a "pessimist" for even hinting at the points you bring up.

You bring up a lot of technical points (and there is _some_ counter argument to them) but the bigger reason why I was non plussed about the announcement (again, more providers in a market is a good thing) is less about technical and more about economics and consumer empowerment.

The best thing that could happen is Metro opens up it's considerable fiber assets and leases them to service providers. Not only do the tax payers own those resources, but it keeps control and ownership here in town rather than Palo Alto. This can be done in a cost neutral model and in some examples, it even generates a profit for tax payers (shudder).

Having Google come to town is good but as you say, there's nothing indicating the they won't be the same oversubscribed and low bar customer service as the existing oligarchy already is. If Nashville really wanted to be respected as a "entrepreneurial tech leader" then it should be insistent on some things. Infrastructure issues you raised but also free access to the poor, ubiquitous coverage across the county (or MSA if we're really thinking ahead), and the ability to extend the wireline into wireless services for all citizens.

Let's have some self respect and stop slobbering all over ourselves because some popular girl looked our way.


agreed, and well said. The technical aspects I bring up are not so much to dismiss the progress, of course -- I'm not a luddite -- but just to point out that this is nothing new. Google didn't invent fiber -- as you say, we've got shittons of it, which we paid for, sitting dark. So yeah, excuse me if I don't fall over myself faint with praise because google throws around the words "fiber" and "gigabit".

Knowing this and then reading the cryptic (and sinister in its ramifications, depending on your opinion of our current metro administration) language about how google is "evaluating" the cities and that they'll "work with our city leaders" is ominous. What exactly is there to "work with" them about? (hint: incentives). Which I guess we're supposed to be excited about and fall all over ourselves to support instead of asking ourselves "hey didn't we, like, already pay for a bunch of fiber? why are we paying more to convince google to do the same thing?"

Google is very clever indeed, using the aura of privilege and prestige to "select" cities to deign with their service instead of just launching it. This enables them to court their suitors and cherry-pick the very best of the state-subsidized incentives.

and I have no doubt our mayor would railroad this through as quickly as he has our other bread&circuses with nary a thought to what actually makes sense. So then we have a big-ass national company with government incentives serving us internet. Great. How is this any different, exactly? Except that google is also trying to do 23948234 other things? Meet the old boss, same but infinitely more distracted as the old boss.

But hey, at least we'll be really cool -- woo woo, #itcity.

To clarify succinctly: I don't care if Google wants to come compete. I have no problem with that. The excitement to me is ill-informed, and the minute that our political class attempts to turn that excitement into government-subsidized incentives for Google, you'll see me raise holy hell. (Or, more realistically, post a whiny blog entry and go back to work.)

January 14, 2014


Filed under:, , — cwage @ 7:17 pm

From this Wired piece on bitcoin derivatives:

What we need is a bitcoin market that operates on a much larger scale, one that’s approved by financial regulators.


"The derivatives, futures, options market is largely undeveloped," Ehrsam says. "You might say the counter-party is risk is unacceptable." Part of the concern is that existing services may run afoul of regulators, either in Europe or in the U.S.

What we need now is regulation, but it's a problem because of the risk of regulation. Regulation: the cause of and the solution to all of life's problems. (Disclaimer: I do not nor would I ever consider a successful derivatives market -- whether regulated or not -- a prerequisite for some cryptocurrency's success.)

January 3, 2014

socialism in a nutshell

Filed under:— cwage @ 11:28 am

Probably the most succinct description of socialist thought (as concieved by Warren, Proudhon and Marx) I've encountered:

From Smith’s principle that labor is the true measure of price—or, as Warren phrased it, that cost is the proper limit of price—these three men made the following deductions: that the natural wage of labor is its product; that this wage, or product, is the only just source of income (leaving out, of course, gift, inheritance, etc.); that all who derive income from any other source abstract it directly or indirectly from the natural and just wage of labor; that this abstracting process generally takes one of three forms,—interest, rent, and profit; that these three constitute the trinity of usury, and are simply different methods of levying tribute for the use of capital; that, capital being simply stored-up labor which has already received its pay in full, its use ought to be gratuitous, on the principle that labor is the only basis of price; that the lender of capital is entitled to its return intact, and nothing more; that the only reason why the banker, the stockholder, the landlord, the manufacturer, and the merchant are able to exact usury from labor lies in the fact that they are backed by legal privilege, or monopoly; and that the only way to secure labor the enjoyment of its entire product, or natural wage, is to strike down monopoly.

-- from State Socialism and Anarchism, by Benjamin Tucker

December 30, 2013

an actual intelligent article about bitcoin

— cwage @ 8:03 pm

This is probably the best and smartest article I've read about bitcoin to date. Go read it. I don't agree with all of it, necessarily (see below), but her criticisms are well-founded and part of what makes this experiment so fascinating to me.


December 17, 2013

big government and big corporations

Filed under:, , — cwage @ 3:39 am

An interesting, if obvious, observation as to why large government's success hinges on the existence and success of large corporations:

The key mechanism that makes third-party tax enforcement successful is the combination of verifiable book evidence that is common knowledge within the firm and a large number of employees, as any single employee can denounce collusive tax cheating between employees and the employer by revealing true books to the government.

From Why Can Modern Governments Tax So Much? An Agency Model of Firms as Fiscal Intermediaries.

November 6, 2013

all aboard the panopticopter

— cwage @ 5:52 am

The headline of a Newschannel5 article by Adam Ghassemi on the recent Cessna crash at BNA caught my eye this evening: Nashville Crash Highlights Aviation Security Loophole. I had read a bit about the incident, and while it certainly seemed to be an unusual case, I wasn't aware of any loophole, so I read the article. What I expected to be a mundane/fluff update on the crash with a hastily chosen headline was actually an article rife with further odd attempts to imply that this crash was some sort of regulatory failure:

It may seem like a huge security breach, but experts said it's actually common.

"If you choose to be off-grid and not tell anyone where you are it's actually quite easy to fly undetected through the United States," [former U.S. Department of Transportation Inspector General] Schiavo said.

"A lot of people find it surprising that it's so easy to move through the airspace in the United States literally undetected," she said.

I found myself wanting to intersperse wikipedia-style [citation needed] tags throughout the article. It may seem like a huge security breach to whom, exactly? A lot of people find it surprising that you can move through airspace in the US undetected? Who? Are these same people surprised to learn that you can move on the ground undetected as well?

To end the article with an unsubstantiated (?) laundry list of supposed criminal charges the pilot (and I quote) "could" have in his history is extremely shoddy journalism, at least, and at worst, a bizarre attempt to rope in a final "won't somebody please think of the children" type plea for regulatory intervention.

What "loophole" was revealed here? A loophole in what system? Not every accident requires a knee-jerk regulatory response -- and I find the casual implication in this article that a regulatory response is a foregone conclusion to be kindof creepy. All things considered, small-craft aviation in this country is a system that actually works pretty damn well. Shit happens.

I apologize in advance for the brutally ham-fisted attempt at an aviation/surveillance pun in the post title.

September 2, 2013

quote of the (labor) day

Filed under:, , , — cwage @ 5:29 pm

For some brief context here, recall that Belloc's take on "Capitalism" is not the same as the "capitalism" as it exists in our own vernacular or current pop culture lexicon. For Belloc, (as he says below), Capitalism is an unstable equilibrium wherein the means of production are owned by a few and there exists political freedom -- meaning, basically, people are free to work or not work as they like, but if they do desire to work, it requires the means of production owned by the Capitalist. Thus your employment occurs at the whim and discretion of the Capitalist. So it does resemble (arguably) our current state of affairs, but has nothing to do with the connotations of "free market" ideology that exists in current America. Here, then, Belloc describes the essential character of insecurity (and anxiety) that exists for the laborer in Capitalism:

Combine these two elements: the ownership of the means of production by a very few; the political freedom of owners and non-owners alike. There follows immediately from that combination a competitive market wherein the labor of the non-owner fetches just what it is worth, not as full productive power, but as productive power which will leave a surplus to the Capitalist. It fetches nothing when the laborer cannot work, more in proportion to the pace at which he is driven; less in middle age than in youth; less in old age than in middle age; nothing in sickness; nothing in despair. A man in a position to accumulate (the normal result of human labor), a man founded upon property in sufficient amount and in established form is no more productive in his non-productive moments than is a proletarian; but his life is balanced and regulated by his reception of rent and interest as well as wages. Surplus values come to him, and are the fly-wheel balancing the extremes of his life and carrying him over his bad times. With a proletarian it cannot be so. The aspect from Capital looks at a human being whose labor it proposes to purchase cuts right across that normal aspect of human life from which we all regard our own affections, duties, and character. A man thinks of himself, of his chances and of his security along the line of his own individual existence from birth to death. Capital purchasing his labor (and not the man himself) purchases but a cross-section of his life, his moments of activity. For the rest, he must fend for himself; but to fend for yourself when you have nothing is to starve.

Enjoy your hot dogs!

August 23, 2013

on conscience

Filed under:, , , , , — cwage @ 3:49 pm

An unlikely confluence of ideas between two books I was reading this week:

James Q. Wilson published The Moral Sense, which makes many of the same arguments from a criminologist’s perspective. ‘What most needed explanation, it seemed to me, was not why some people are criminals but why most people are not.’ Wilson chides philosophers for not taking seriously the notion that morality resides in the senses as a purposive set of instincts. They mostly view morality as merely a set of utilitarian or arbitrary preferences and conventions laid upon people by society. Wilson argues that morality is no more a convention than other sentiments such as lust or greed. When a person is disgusted by injustice or cruelty he is drawing upon an instinct, not rationally considering the utility of the sentiment, let alone simply regurgitating a fashionable convention.

-- The Origins of Virtue, by Matt Ridley

"Ah, but our conscience, my dear Bond. What shall we do with him while we are committing some juicy sin? That is a problem. He is a crafty person this conscience and very old, as old as the first family of apes which gave birth to him. We must give that problem really careful thought or we shall spoil our enjoyment. Of course, we should murder him first, but he is a tough bird. It will be difficult, but if we succeed, we could be worse even than Le Chiffre."

-- Mathis speaking to James Bond in Casino Royale by Ian Fleming.

August 9, 2013

state of the media

Filed under:, , , , , , , , — cwage @ 4:45 pm

the dreaded usa today effect

Some required reading before you go any further: Why Nashville Needs Newspapers -- the Nashville City Paper's farewell editorial, and JR Lind on the dim future of newspapers.

In the latter, JR says:

Amazon founder Jeff Bezos paid $250 million for The Washington Post. Warren Buffet’s Berkshire Hathaway is adding newsprint alongside Dairy Queen and Orange Julius in its prodigious portfolio.

Boston Red Sox owner John Henry bought The Boston Globe.

Nashville doesn’t need to rid itself of newspapers. Nashville newspapers need fabulously wealthy benevolent benefactors.

Nashville needs a John Henry.


Eventually Gannett will bail on The Tennessean, and someone will have to step in if Nashville is to have a daily newspaper. Without a savior, 1100 Broadway will become a very valuable piece of empty real estate, the subject of interminable, high-minded and saccharine “imagining sessions.” Somewhere out there, some 20-something downtown resident is shoehorning an IKEA where the newsroom used to be.

I agree 100% with the premise (that Gannett will bail on the Tennessean) but I am less sure (or optimistic, at least) of his solution.

Gannett's current business model with respect to its local/regional papers is doomed. I won't go into a lengthy history of the evolution of media business/revenue models here (but Eric Alterman's Sound & Fury: The Making of the Punditocracy is a pretty good intro). But there was a time, of course, when local papers were just that: local. They served to disseminate a hearty mix of news and opinion -- often leaning heavily towards the latter. The revenue model was simple: they printed papers, and they sold them. If they didn't break even, they hoped for (and often got) a wealthy benefactor. Advertising changed things with the realization that advertisers would gladly pay to have their ads featured. Not long after, crafty newspaper businessmen began to realize that their ad sales were more or less directly tied to the broad appeal of their content. It no longer paid to provide a platform for just any soapbox rant or political screed -- these heavily biased pieces appealed only to small niches. What earned the most ad revenue was to stick as close to the center of any political/social divide as possible. Thus the ominous specter of objective journalism was born. Far from being the bedrock foundation of golden-age journalism we think of it as, objective journalism was invented to sell ads.

Corporate consolidation on a national level was the next inevitable step. As communication/technology advanced, people increasingly relied on "local" papers to relay national/international news. It doesn't take a rocket scientist to figure out that there's an inefficiency in a nation of local paper staffs all producing essentially the same content. Enter companies like Gannett: buying up local papers, laying off portions of the staff, and replacing their content with centrally-produced copy.

This brings us more or less to where we find papers like the Tennessean today: it's still nominally a "local" paper, but it serves very little of the needs that a "local" paper once served. That was okay, because even if it didn't adeptly cover the needs of a local market, it still served as a conduit for national/international news. The Internet changed all that. The news I once had to buy a paper to read, I can now pull up on my phone.

So, what now? Sorry, did you think I had a solution? Ha. Well, JR thinks we need a hero. I agree that it would be nice, but I am less optimistic, at least with respect to the prospect of saving the institution of the Tennessean, should Gannett abandon it. Wealthy benefactors are hard to come by, in my experience. And should one come along that wants to attempt to hero this particular situation, there are a few hard truths I think they would be faced with:

  1. Physical printed papers are a waste of time. They may still be key for penetrating demographics (*cough*oldpeople*cough*) that still like dead tree editions, but they are useless for building something new to fill the void we're facing, and the overhead will forever be an albatross.
  2. No one wants to pay for news they can get elsewhere for free.
  3. Ad-driven content turns off readers, because a) it favors centrism, and b) ... ads are annoying.
  4. People like to share content.

Note that no-where in that list did I say what you might have been expecting: "People don't want to pay for news anymore". I don't think that's necessarily true. It was a given for decades (centuries?) that you dropped a coin into the box to get a newspaper. People are willing to pay for information. The only thing that's changed these days is that people don't want to pay for information they can get elsewhere. Why would someone buy the Tennessean to read the same shitty re-hashed national stories they see on Yahoo News? People pay for value.

There are some really tricky things to reconcile in the above list of constraints. Maybe people will pay for valuable content, but how do you compel them to pay for it other than restricting access via a pay-wall? This conflicts with #4 -- if I can't easily share/discuss a recent interesting article with my peers who may not subscribe, what's the point of reading it at all? The Nashville Post (another Southcomm publication) has subsisted thus far with a pay-wall model, so it seems to at least work for certain niches, but business news caters to a demographic that has deeper pockets. Conversely, it may work because the Nashville Post is one of few local publications genuinely producing 100% unique, valuable content. If you want to read what they're writing about, you have nowhere else to go. There's a glimmer of hope here that a subscription-based model might not be as much a non-starter as we think.

I don't have a concrete answer, but I have a vague picture of a business model that I think could work. I'm a simple guy. I believe in the power of the marketplace. If there's something of value I can't get elsewhere for free, I pay for it. I think other people would too. I have a vision of a small news outfit: digital production, subscription based. It would necessarily have to start small in order to grow organically and shift with the desires and whims of its customers. The subscriptions they buy need not necessarily pay for access to the content. The content itself could be free, and maybe the subscription buys you other perks: SMS alerts, customized/tailored frontpage tailored to your category preferences/etc. There's still a lot of potential for the industry to evolve, here. But I don't see the Tennessean -- even freed from the fetters of Gannett -- as being the source of the necessary innovation. There's simply too much overhead, unless they radically re-shape the company to be more in line with the above constraints.

The City Paper failed because its free, ad-supported revenue model just didn't work -- even with valuable locally-generated content. The Tennessean is failing even in spite of the fact that they still manage to get people to actually buy their physical papers. While I lament the failure of the City Paper's admirable attempt to reinvigorate a traditional newspaper business model, the lesson should be clear: it's time for something different.

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