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No, they'd never do something as low and underhand as that... That would be like putting an illegal tariff on steel imports...

This is also interesting for another reason: It sends the signal that they think their opinion is more important than their new reporting. What ever happened to "facts are sacred"?

I'm sure the NYT was a real shark in the days when they only had to compete for attention among other papers. But the rules have changed, and making it harder to get at their content is exactly the wrong move at the wrong time.

In related news, The Economist has adopted the earn a day pass for premium content idea popularized by Salon.com. I wonder which publication has the best economists?

What with Microsoft finally coming through on the Xbox backwards compatibility, and now this, it's pretty obvious that all three of the console makers finally get it.

The size of a game library can be just as important as the number of quality games. Consumers like choice. Just like with music, so it is with videogames. This is something that Nintendo failed to address with the Nintendo64 and the Gamecube. It's almost painful to see how well they get it when it comes to the portable market (GameBoy and family), but not their home consoles.

I, for one, am hoping they do the right thing, and make the library available for free. While they'll miss out on some revenues of old games, they'll have a guaranteed sell for the Revolution (and Nintendo typically sells it's hardware at break-even or profit), and a footstep into future sales. Combine this with sales of Gamecube games that will also work in the Revolution, and Nintendo could see itself launched into the forefront of the three console makers.

Interestingly enough, it's mostly thanks to companies like Netflix and Amazon that these companies are beginning to understand. They've made such a profitable market out of niche sales, that big business is being forced to recognize the power that is the little guy, instead of just pandering to hit sales. In the business world, they're calling this "The Long Tail", and it's turning out to be huge money. (So much so, that business executives everywhere are sitting up and taking notice.) There are articles in The Economist and Wired. The traditional thinking has been that 80% of revenues typically comes from 20% of the titles, and it's been true for a long time. However, in the internet world, where you're not limited by shelf space, and you can aggregate diverse markets, the other 80% of titles (niche titles) can bring in as much money as the most popular 20%.

Nintendo has always excelled at putting out hits (Zelda, Mario, Metroid, Pokemon, etc.), which is why I think they've typically ignored this facet of business, but I think that even they may be starting to take notice. Here's hoping so :-)

I am fairly certain that this is the article that I read a while ago which made me think a little differently about Bill Gates.

http://www.economist.com/agenda/displayStory.cfm?s tory_id=3598414

The article on reallylinux really accuses Microsoft of being entirely greedy and having nothing to do with philanthropy. Well, although there might be quite a bit of truth behind the first statement, Gates' money is Microsoft money (came with Microsoft's success), and he has done a lot of good things with it.

It is interesting because if this money was not all in one set of hands I have my doubts that this much of it would have been put towards use in this way. Essentially, Microsoft has taken other's potential money through monopoly and done what it pleases with it. In this particular case it has played the "benevolent" dictator and done something good with the money. What are the ethics behind a situation like this?

The BBC is funded by license-payers not from taxes.

Because of this they are as close to a public-interest or populist entity as I can imagine.

keep the news culture from sinking into a delusional state benefitting wealthy shareholders.

The UK's number of celebrity magazines is the highest in the world... At the same time, the perfectly commercial Economist magazine -- also from UK -- is, probably, the world's best periodic publication today.

Contrast with PBS in the United States, which is paid for (and therefore largely controlled by) a combination of government spending, commercial sponsors, and well-off individuals.

Its (and BBC's) very existence is due to a disagreable notion, that a government needs its own mass media outlet. The notion finds a lot less support in USA, hence PBS' lesser size and influence.

their confidence in the BBC's push into the digital world is rather high.

It was, of course, for the wealthy shareholders' benefit, so you can not accept it. But I can, thank you.

You obviously have no grasp of economics. Free trade works BECAUSE countries are not equal. A country should specialize according to its comparitive advantage.

Is this a sideways argument for a relative economic advantage for the US in providing the service of violence?

On the short but oil-powered commute home, there was a report of 100 insurgents (nationalities undetermined) in Iraq killed vs 3 US Marine casualties. I play FPS games. Let's just say I don't get a 30:1 ratio.

I'm not really seeing the new dinar in the table of currencies in The Economist's Big Mac Index. Last I heard, the airport Burger King just took USD. (500 bonus points to the first person with convincing evidence they take EUR.)

I guess what I'm saying here is that there are lots of externalities that a naive libertarian may ignore, but that you can bet the exchange rates take into account. Recent US visitors to Europe may feel bad economically, but in the medium term, well...does it matter where the boat springs a leak?

Well, maybe that's because most of the people in places like Germany like it there, whereas leaving India and making twice the money sounds like a really good idea.

The German economy has been weak for the last 10 years. I'm sure if there were viable jobs, we would see German workers here too. I think the point is "making twice the money", although it's probably way more than twice for an Indian or Chinese worker. Hell, if I could move and make twice the money, I'd probably do it.

Uh, say what? http://www.economist.com/agenda/displayStory.cfm?s tory_id=3958438
It didn't happen as quickly as most people expected, but it's almost assured that the Japanese will own the car market and maybe the truck market. I do agree that the competition has made American cars better, but apparently not good enough.

Yet it should be clear, even to the most socially minded in Germany, that the clock cannot be turned back without inflicting enormous damage on the country's prospects. Germany has signed up to EU treaties that prescribe the free flow of capital across national borders. Repudiating these is impossible without leaving the Union. The same applies to taxing foreign-exchange transactions or introducing a minimum holding period for an equity investment--both recent suggestions. Hedge funds and private-equity funds have open access for the long or short term.

Meh, we'll see how long it's sustained. I'm predicting that China's drive to be the world's economic powerhouse will result in its population drastically declining through pollution and more pollution. So there you have it. China's going to poison itself, while the US kills off the rest of the world, then poisons itself.

All these subscriptions at the same time as online advertising is on the rise...or at least so the Economist says it is. Advertising revenues by Google and Yahoo are predicted to rival the combined prime-time ad revenues of America's three big television networks, ABC, CBS and NBC. And the NY Times uses google ads, so if google ads are making cash, then the NY Times is also probably making cash from those google ads...I guess just not enough. Nothing's ever enough though.

I'm not sure what your post has to do with the grandparent, but that's OK, because...

Your post ranks among probably the top 3 most economically-insightful posts I've ever seen on Slashdot (despite my high UID, I lurked here for several years before registering). Just when I had lost about all belief that more than about a half-dozen economically-literate people existed on Slashdot, along came your post... :)

Anyway, I agree, although, I'm not sure the situation is quite as dire as your analysis might initially seem; the value of the dollar has been holding steady lately (vs. the Euro, around 1.30USD/1EU). Then again, so long as our deficit spending continues, I don't expect that to last, so to that end, you're quite right about the inflation problem (which has been slowly creeping upwards for the last couple years, from around 0.95% around 2001-2002 (IIRC), to around 3.0% now).

You might also like this Economist article, BTW.

As an American, I can say that many of us do, and we don't like it. Chalmers Johnson recently wrote a book called the Sorrows of Empire making the case that we are indeed an empire in all but name. This realization has been slowly growing. People who make the claim that we are an empire are less often dismissed as cynics. Even the Economist is claiming that we are an empire.

We have military personell in over 135 nations. Most have less than 20 and are probably guarding embassies, but more than you would think have over 1000, including Belgium. The UK has over 13,000. It can be said that the sun never sets on the American Empire.

Many Americans are horified by this. Some are proud of it. Some are both horrified and proud.

Another interesting site

Thanks to visionaries such as Adam & Eve's Phil Harvey, the right for a company to sell pornography, sex-toys, contraception, and other "obsecne" material over the internet and via mail-order has been upheld.

As far as fertility going down everywhere, we in the U.S. are now at 2.08 and this is going up (albeit slowly).

This is due mainly to immigration. Fertility rates for those born abroad are much higher than those who were born in the US. The best data I've see on this is in The Economist, but there's Good public data on that, too.

That "insult" of a salary you refer to is still more than people in other countries are making doing similar work.

Yeah right. Adjust for the bigmac index and tell me that Sanjay is being paid less than me to code in Bangalore. That said, outsourcing a project to India is iffy at best and, if it succeeds, has the side effect of training our future competitors.

At least, according to this.

The push into web media comes as a surprise, but I guess the Microsoft angle makes sense (which the article also talks about).

Governments control the supply of housing by using zoning to restrict the land available.

Governments control the supply of tobacco and alcohol by requiring licenses for the production and sale of these.

Wrong. The government doesn't "control", it "limits" and "influences". The USA government couldn't decide there will be 90 trillion new homes for sale tommorrow.

There is a huge difference between the power wielded in-game by SOE and real-world by a mortal government. The game administrator can spawn or delete millions of (previously) rare items with a single mouse-click. The USA government can only instruct people to speed or slow the rate of creation/deletion of an item. They can't conjure matter from nothing, and they can't even remove items without violating the Fifth Amendment of the USA Constitution.

There is no difference at all between what we're seeing here and a classic economic system.

There are huge differences. As the editor of The Economist said: "Real economies aim to maximize efficiency. Game economies aim to maximize fun, and fun is inherently inefficient"

(Quote is paraphrased)

This isn't going to legitimize IGE, this is going to put them out of business, once Sony gets rolling with this.

Quite true. Obviously, no 3rd-party seller of in-game resources can survive being undercut by the system administrators, who can accomplish the equivalent of MONTHS of gil-farming with a single command-line.

However, although the short-term effect may seem beneficial, I've always thought that the legitimized (or merely widespread) sale of in-game items would hasten the collapse of any typical MMORPG. This seems to be a desparation move by SOE, whose EQ2 project has been eclipsed by WoW anyhow.

My thesis is that MMORPGs provide a substantial amount of their entertainment in the same way casino gambling does: the players' victories and rewards are quite arbitrarily handed out by the operators, but the cold-blooded arithmetic is hidden behind a screen of glamour and fun. Expose the honest real-dollars cost of an activity to the player, and they'll flee to a more fantastical game.

If a slot machine has a sign on it that each 10 minutes of play loses an average of $2.85, few people will enjoy pulling the lever.
If level 60 epic flame-armor has a "Buy Now" hyperlink which costs $14.31, few people will find it fun to camp a dragon every 3 hours hoping he drops one more of the pieces.

Basic psychological principles: addiction can best be sustained if the game gives out rewards unpredictably. Game items are valued more because it was hard to know when they'd appear. Putting a blatant dollar-sign on the items is the ultimate form of predictabilty. The virtual Skinner box falls apart. When the mystique is gone, the players will be too.

PS. The Economist magazine agrees with my prediction, although the article isn't posted for nonsubscriber online reading.

Frankly the story about the cell phone I find iffy at best.

Yeah, I agree. According to a recent article in The Economist, your average transatlantic flight has a about a dozen cellphones left on. If they really a safety issue, you think they'd be a little more rigorous.

However, I firmly agree with the requirement that they be shut off. I can't imagine the pain of being trapped in a middle seat next to Inconsiderate Cellphone Man for five hours.

German wages are among the highest in the world. In addition, employers must pay heavy social-security contributions and other costs, which add another 80% to their bill. As a result, the average German manufacturing worker costs $28 an hour to hire, compared with $18 for an American or $17 for a Frenchman. True, productivity is high in Germany, but not high enough to compensate for those costs. To regain competitiveness, wages must fall or productivity must rise. The country's powerful trade unions are fighting wage cuts, so firms are trying to boost productivity or expand production abroad. In the short term, that means fewer jobs.

Also check out this chart from a 1998 (!) economist article.

Those were fairly good years for the German economy. Can you see the structural problems between the lines?

Also check out this chart from a 1998 (!) economist article.

Those were fairly good years for the German economy. Can you see the structural problems between the lines?

If this is an attempt to mock American's for being ignorant of a particular word used in the English language, fine. However, in terms of giving to charity Americans are a very generous people. Read a report on (global) philanthropy http://www.economist.com/displaystory.cfm?story_id =S')8H*P!3'%200%204%0A Or, if you're in America but don't have online access to the Economist, why not go to your local public library which may well have been funded by Andrew Carnegie and read it there?

IANAL, but it seems only fair (to all parties) that any private form of so-called "social contract" is nonsense.

I signed no contract saying that I would be bound to watch advertising in my browser or on TV. It's "just there", and until the advent of AdBlock and TiVo, I didn't have a say in the matter on most channels or most websites -- the advertising was rammed down my throat, and my only option was to flip the channel or find another, ad-free website.

But the fact is, TANSTAAFL. If you want "free" content, you'll have to *pay* for it somehow. PBS and NPR used to be basically ad-free, but now both have the occasional corporate sponsor, because people don't donate in quite sufficient-enough amounts to keep them afloat. Yet, they are still *mostly* ad-free. But if we wanted them totally ad-free, we have to pony up.

Same will go for our currently ad-supported websites. That's why I personally don't block the ads on sites I like, like Slashdot (though not The Economist, because they use ad.doubleclick.net, which shows up everywhere and it's far-easier to just block http://*.doubleclick.net/* than to make exceptions for each site). Sites I don't care about or which have craploads of ads (*looks at IGN*) -- sorry, you're gonna hit AdBlock.

Sooner or later, we'll have to find some other way to fund websites. Whether it'll be via advertisers' cleverness in getting around AdBlock (somehow) or via a system of micropayments or subscriptions (like with The Economist, Wall Street Journal, and other high-end newspapers and magazines), remains to be seen.

IANAL, but it seems only fair (to all parties) that any private form of so-called "social contract" is nonsense.

I signed no contract saying that I would be bound to watch advertising in my browser or on TV. It's "just there", and until the advent of AdBlock and TiVo, I didn't have a say in the matter on most channels or most websites -- the advertising was rammed down my throat, and my only option was to flip the channel or find another, ad-free website.

But the fact is, TANSTAAFL. If you want "free" content, you'll have to *pay* for it somehow. PBS and NPR used to be basically ad-free, but now both have the occasional corporate sponsor, because people don't donate in quite sufficient-enough amounts to keep them afloat. Yet, they are still *mostly* ad-free. But if we wanted them totally ad-free, we have to pony up.

Same will go for our currently ad-supported websites. That's why I personally don't block the ads on sites I like, like Slashdot (though not The Economist, because they use ad.doubleclick.net, which shows up everywhere and it's far-easier to just block http://*.doubleclick.net/* than to make exceptions for each site). Sites I don't care about or which have craploads of ads (*looks at IGN*) -- sorry, you're gonna hit AdBlock.

Sooner or later, we'll have to find some other way to fund websites. Whether it'll be via advertisers' cleverness in getting around AdBlock (somehow) or via a system of micropayments or subscriptions (like with The Economist, Wall Street Journal, and other high-end newspapers and magazines), remains to be seen.

Those in America and the UK, and other developed countries, are relatively better educated. As such, their occupational mobility is higher. Moreover, they have the chance to be creative without getting their hands dirty.

I've heard, on Slashdot no less, of Americans outsourcing their own work to India, pocketing the difference and spending their time at the desk learning. Specialization of labor has always worked, and may even be the reason we are where we are now.

Many of the patents never should have been issued, and there's no incentive for the Patent Office to clean up the mess. The system is badly broken, so many of us oppose the E.U. adoption of U.S. patent laws. The E.U. should put in place a moratorium on the enforcement of U.S. patents until the U.S. cleans up its mess, at the very least. Preferably, it should avoid extending software patents at all; implementing an algorithm (which is not patentable) is often a trivial exercise (which is not supposed to be patentable).

"Normally, this newspaper's devotion to free trade is unwavering. Yet curbing the trade of in-game items is defensible, since game economies are run to maximise fun, not efficiency."

A model economy: Should links between real and virtual economies be encouraged or banned?

Look here: http://www.economist.com/displaystory.cfm?story_id =965520/
This is pretty much the strongest editorial they put up in defense of Lomborg. You can also find more evidence by just going to www.economist.com and searching for Lomborg on the site.

They stuck their foot pretty far up their mouth for this guy. If nothing else, it proves that for science news, you should go elsewhere. Besides, does anyone else think that it sometimes sounds like the science editor takes his articles from /.?

First of all, an apology. I didn't mean to come trough that way (and I had to look up what jingoistic meant :-).

That said, my statement is not entirely biased, as you undoubtedly don't know, and I will try to prove (mod me offtopic for this :P ):

Uruguay has an iliteracy rate of 2%, while the US has a slightly higher 3%
Life expectancy is similar, with the US being slightly higher at about 76 years to Uruguay's 74
Slightly higher schooling expectancy for US citizens, at an average 16 years to Uruguay's 15 (both well above average, trailing only the nordic countries and Australia)
The Economist, which can be said to be biased, ranked the US at 13th for quality of life, with Uruguay at 43rd, behind Argentina and Chile, in 2005. However, it is believed in South America that Uruguay actually has the best quality of life, as seen in the World Institute for Development Economics Research (maybe less biased than the Economist), which places both the US and Uruguay in the top 20 countries (the US at 2nd, Uruguay at 18th).
Other sources state that Montevideo has a similar quality of life than New York

Sources:UN's statistics page http://unstats.un.org/unsd/demographic/products/so cind
The Economisthttp://www.economist.com/theworldin/inter national/displayStory.cfm?story_id=3372495&d=2005
FinFactshttp://www.finfacts.com/
http://www.wider.unu.edu/conference/conference-200 3-2/conference%202003-2-papers/papers-pdf/Rahman%2 0Tauhidur%20250403.pdf

The Economist is the same magazine that supported Bjørn Lomborg, thereby proving their utter incompetence in environmental science. They defended him in spite of clear and very detailed indications from the scientific environment that he was nuts.

I suppose they will know economics when they talk about it, but they demonstrated an inappropriate habit of pontificating on things they don't have a clue about. I for one think they burned a lot of karma.

Actually it turns out people want mobile phones.

No troll, no racism.

Here's the first result for a google search for 'china' and 'dollar' on economist.com, an article on how China ought to un-peg the yuan and allow flexibility in the capital market.

Now, I'm an engineer, not an economist, so I've got no idea what will happen after the devaluation, but I'm pretty sure it will happen.

Almost - it depends on the context:

"The Board is the highest decision-making body in the company."

and

"The Board are split on the issue."

See Economist Style Guide for the details.

Well, the alternative is to have a government that realizes its populace doesn't pay attention to it, so it goes ahead and does whatever it wants (which, for as much as it seems like the U.S. govn't does this, even with something like our Terri Schiavo case, fundamentally our age-old system of checks-and-balances prevented the theocrats that seem to have taken over our govn't from imposing their will on Schiavo - i.e., our system still mostly works, despite the heavy-handed and politically-advantaged attempts to flout it).

You know, like the famous quote "the price of liberty is eternal vigilance"?

Better that than governments which allow relatively high unemployment rates, etc.

We on this side of the pond laugh at Europeans for having governments which do things like regulate the curvature of cucumbers. (then again, we have some local/municipal laws that are almost as goofy, e.g. one in Florida which says one may not take a shower naked)

Still, in a way, I agree with you; there's too much politics on Slashdot and in most of the rest of the country too. I often wonder how much time we waste on politics that could've been spent doing something else more productive (or fun)... :-/

Re:Unscientific Unamerican (Score:2)
by R.Caley (126968) on Friday April 01, @11:18AM (#12111225)
(http://richard.caley.org.uk/)

they are calling us idiots for criticizing them for not sticking to science.

If you critisise them for `not sticking to science' then you deserve to be called an idiot,

...The arresting thing about Scientific American's coverage, however, was not this barrage of ineffective rejoinders but the editor's notion of what was going on: "Science defends itself against the Skeptical Environmentalist," he announced....

...Stephen Schneider, one of Scientific American's anti-Lomborgians, spoke we suspect not just for himself when he told Discover in 1989: "[We] are not just scientists but human beings as well. And like most people we'd like to see the world a better place...To do that we need to get some broad-based support, to capture the public's imagination. That, of course, entails getting loads of media coverage. So we have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts we might have... Each of us has to decide what the right balance is between being effective and being honest." In other words, save science for other scientists, in peer-reviewed journals and other sanctified places. In public, strike a balance between telling the truth and telling necessary lies.

Science needs no defending from Mr Lomborg. It may very well need defending from champions like Mr Schneider.

A 2-D barcode could encode much of the same information as this RFID chip -- with none of the privacy implications. Any legitimate use of your passport involves handling it anyway -- it can simply be scanned.

An ISO/IEC 16022 data matrix would do the trick (the same type used by semacode.org and NextBus for cell phones). The Economist recently did an article on these.

RFID is a good technology, but this is a very bad application.

Simular implants have been used to treat severe, otherwise untreatable, depression. I read about it in the economist . I think non-subscribers can get to that, but if not plentfy of other sites are reporting on it as well.

Do you honestly feel that your information, and the Internet, is safer in the hands of a private unregulated "not for profit" US registered company that is given it's power by the US government and gives most (if not all) of it's contracts for vital services to US for-profit companies?

Put aside your opinions on the UN and how they don't agree with everything the US says for a minute and realise that in an ideal world, an international democractic UN backed organisation to control the future of an international network is the way things should be.

This would be infinitely better than the current US private company having full control over the world's Internet experience.

Point them to this article in the venerable, conservative, even stodgy British magazine "The Economist" which indicates that kneejerk opposition to peer to peer may be stifling innovation. Point them to corporate products such as Sun's JXTA, research project such as seti@home and folding@home.
Wait, this is Wisconsin? Nevermind, I think progressivness went out of style there in the 1920s.

Disgust is an evolutionary mechanism for disease-avoidance. It is pretty much a gut/instinctive reaction. For example, we feel squeamish when we see something gross (rotting meat, dead things, infected wounds, dog crap, and other disgusting stuff). All of these sources of disgust are also potential sources of disease. So evolutionarily speaking, individuals that didn't mess around with potential sources of disease survived, while the others that decided to mess with it, didn't.

This article has some interesting information.

The editor should read The Economist Style Guide. It details how to write clear and consise articles.

No, most of The Economist stuff isn't free, except to subscribers to the paper version. I'm not sure where the cutoff is any more, but it was high enough up that it prompted me to actually hunt out an envelope and authourise myself at some point.

Interestingly they run the oposite model to the one you propose, it is the older stuff which you would have to pay for. They presume what they write will have value over time.

I find it curious that the only people I run into that are negative on the current real-estate market are those who also find themselves priced out of it, in the area in which they live. There is zero exception to this and I talk to A LOT of people about real estate (I live in Boston, if that is any hint).

I don't think that The Economist is priced out of the market either, but they are very bearish on real estate everywhere. In last week's issue they had an article where they ran the numbers and concluded it is actually cheaper to rent, even assuming that housing prices increase with inflation.

I hope you are right and the Fed's "measured pace" of increases in the interest rate do bring the housing market in for a soft landing. I dread to think of what a nation wide real estate market crash would do to the economy. Anyway, even assuming a soft landing, I wouldn't buy now because the numbers favor renting (The Economist ran the numbers with an increase in housing prices, which is even more optimistic than a soft landing).

I find it curious that the only people I run into that are negative on the current real-estate market are those who also find themselves priced out of it, in the area in which they live. There is zero exception to this and I talk to A LOT of people about real estate (I live in Boston, if that is any hint).

I don't think that The Economist is priced out of the market either, but they are very bearish on real estate everywhere. In last week's issue they had an article where they ran the numbers and concluded it is actually cheaper to rent, even assuming that housing prices increase with inflation.

I hope you are right and the Fed's "measured pace" of increases in the interest rate do bring the housing market in for a soft landing. I dread to think of what a nation wide real estate market crash would do to the economy. Anyway, even assuming a soft landing, I wouldn't buy now because the numbers favor renting (The Economist ran the numbers with an increase in housing prices, which is even more optimistic than a soft landing).

Fortuitously, this week's edition of The Economist includes, as part of its Technology Quarterly, an article devoted to this very subject. For your convenience, portions of the full text--ordinarily available only to subscribers--is reproduced below.

----

CASE HISTORY

United we find

Mar 10th 2005
From The Economist print edition

Computing: Collaborative filtering software is changing the way people choose music, books and other things, by helping them find things they like, but did not know about

EACH year, thousands of films are released and tens of thousands of books published. A big city has thousands of restaurants. How does one deal with such abundance? Reading reviews of films, books and restaurants can provide a guide, but there are more reviews than one has the time to read, and you cannot be sure that the reviewer's taste matches your own. Word-of-mouth recommendations can help in that regard; friends, after all, are often friends because they share similar tastes.

[CONTENT REDACTED]

[Image: People who liked this also liked...]

The TiVo personal video recorder, on the other hand, which can recommend programs based on your (and other users') previous viewing habits, works in a different way: the recommendations are generated by each TiVo box, not by a central server. The server generates a matrix that relates the popularity of different shows to each other, akin to the pre-calculated item lists used by Amazon to generate recommendations. But the task of making recommendations is then left to the individual TiVo boxes, which use that matrix, combined with the data they have stored locally about the viewer's preferences, to suggest shows that might be of interest. As well as unloading much of the work on to the individual boxes, this has the added virtue of preserving privacy: the central server never stores data about individual users, just aggregated data about viewing trends.

That is just one way to address what is, for privacy advocates, a major concern about collaborative filtering: that to make recommendations, it is necessary to gather information about many people in a central repository. But there are other ways too. Indeed, a scheme proposed by John Canny, of the University of California at Berkeley, shows that it is, in fact, possible for a group of individuals to pool their opinions and generate recommendations without revealing their own personal preferences to others.

Each individual encrypts their data using what is called a one-way hash--a function that is very easy to compute in one direction, but virtually impossible in the other (without a key, at least). The computations are then performed using the encrypted data. This is possible because many modern encryption schemes have the helpful property that performing calculations on encrypted data produces the same answer as manipulating the unencrypted data and then encrypting the result. The resulting matrix of recommendations is then decrypted incrementally, since each user can only decrypt a small part of it. Eventually, the whole matrix is decrypted and made available to everyone. But, says Dr Canny, "at no stage does unencrypted information about a user's preferences leave their own machine."

[CONTENT REDACTED] ::: yfnET

Fortuitously, this week's edition of The Economist includes, as part of its Technology Quarterly, an article devoted to this very subject. For your convenience, portions of the full text--ordinarily available only to subscribers--is reproduced below.

----

CASE HISTORY

United we find

Mar 10th 2005
From The Economist print edition

Computing: Collaborative filtering software is changing the way people choose music, books and other things, by helping them find things they like, but did not know about

EACH year, thousands of films are released and tens of thousands of books published. A big city has thousands of restaurants. How does one deal with such abundance? Reading reviews of films, books and restaurants can provide a guide, but there are more reviews than one has the time to read, and you cannot be sure that the reviewer's taste matches your own. Word-of-mouth recommendations can help in that regard; friends, after all, are often friends because they share similar tastes.

[CONTENT REDACTED]

[Image: People who liked this also liked...]

The TiVo personal video recorder, on the other hand, which can recommend programs based on your (and other users') previous viewing habits, works in a different way: the recommendations are generated by each TiVo box, not by a central server. The server generates a matrix that relates the popularity of different shows to each other, akin to the pre-calculated item lists used by Amazon to generate recommendations. But the task of making recommendations is then left to the individual TiVo boxes, which use that matrix, combined with the data they have stored locally about the viewer's preferences, to suggest shows that might be of interest. As well as unloading much of the work on to the individual boxes, this has the added virtue of preserving privacy: the central server never stores data about individual users, just aggregated data about viewing trends.

That is just one way to address what is, for privacy advocates, a major concern about collaborative filtering: that to make recommendations, it is necessary to gather information about many people in a central repository. But there are other ways too. Indeed, a scheme proposed by John Canny, of the University of California at Berkeley, shows that it is, in fact, possible for a group of individuals to pool their opinions and generate recommendations without revealing their own personal preferences to others.

Each individual encrypts their data using what is called a one-way hash--a function that is very easy to compute in one direction, but virtually impossible in the other (without a key, at least). The computations are then performed using the encrypted data. This is possible because many modern encryption schemes have the helpful property that performing calculations on encrypted data produces the same answer as manipulating the unencrypted data and then encrypting the result. The resulting matrix of recommendations is then decrypted incrementally, since each user can only decrypt a small part of it. Eventually, the whole matrix is decrypted and made available to everyone. But, says Dr Canny, "at no stage does unencrypted information about a user's preferences leave their own machine."

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The Economist recently ran a comparison: http://www.economist.com/displaystory.cfm?story_id =3722894 "Take a two-bedroom flat in London.... You would be almost £35,000 better off renting."