Broken window fallacy: some kid throws a rock through my window. I pay $100 to have it repaired. This is good for the economy because the window repairman makes an additional $100.
Walmart-is-bad theory: I buy a widget at Walmart for $10. This hurts the economy, because if I'd bought from the local Steve's Sprockets for $15 then Steve would have made an additional $5.
Both are wrong, and for exactly the same reason; they fail to account for what I would have done with the $100 had my window not been broken, and what I will do with the $5 that I saved at Walmart.
The economics of Wal-mart is a textbook case of predatory pricing.
Walmart is earning a profit, so they're clearly not selling below cost. Perhaps you're claiming that they're a monopsony (buying monopoly), which is easily disproven by the abundance of alternatives. If their market share ever approaches Microsoft levels, I'll take another look. In the meantime, lower prices are good.
Kinda like electing Bush (a Republican), only to have him run up the deficit and grow the size of the government?
Exactly. Clinton wanted to spend a lot more (e.g. HillaryCare), but Republicans in Congress blocked much of it. Unfortunately they're happy to roll over for Bush's profligate spending. I won't be too disappointed if a Democrat ends up in the White House this year; gridlock can be a good thing. (Unfortunately I expect continued bipartisan agreement on destructive policies like the War on Drugs and the DMCA).
When people save 5-10% at Walmart, they are reducing the circulation of money in the US, which depresses the economy as a whole.
Oh, come on. Thrifty shopping does not harm the economy. If I save $5 by finding a better deal at Walmart or anywhere else, I now have $5 left over which I'll either spend on something else or invest. Your argument is one of the many forms of the broken window fallacy.
The original comment was regarding public interest, not shareholder interest.
Well, shareholders are members of the public, and include millions of regular people with 401k plans.
Which is better for the public in general, to lay off 2,000 people and have the shareholders of Company X gain an extra 50 cents in dividends per share (if the company even declares a dividend), or to *not* lay them off and save the public the necessity of supporting 2,000 people on unemployment and the loss of their taxes?
What's best, and what usually happens, is for the 2,000 people laid off to find other jobs.
There are huge numbers of hard-working, intelligent Americans that have lost their jobs to outsourcing
This is true. It's also true that many of them wouldn't have had their high-paying IT jobs in the first place had not huge numbers of secretaries (among others) lost their jobs to computers and word processors. Looking at only the immediately visible effects of an economic activity is an excellent way to reach the wrong conclusion.
So a good question to ask is Is it in the public interest to put them out of work by moving their jobs overseas?
Quite possibly. If it reduces the company's expenses, it lets them lower their prices and/or increase returns to their shareholders. Forget India; if a company can replace a worker making $40,000 a year with a machine or software that costs $20,000, are you saying they shouldn't be able to?
A close variant of your argument is that open source is bad, because it reduces the revenue (and thereby hurts the employees) of companies selling proprietary software.
It will never happen. As long as there is a substantial market for which the lack of a camera is a feature, it will be provided. If nothing else, dealers will take "standard" phones and disable the cameras.
I don't give a whup if someone offers me money for certain, key private information tidbits, I wont give it
Which tidbits? What if the offer were for $50 million? Even if you're one of the enlightened who cares not for crass material posessions, imagine how many people you could help.
This research will no doubt lead to more privacy erosion on the principle that if you do not want to give up the information, then you must be hiding something bad
That's always been the standard line of those opposed to privacy. This study is not at all surprising and does nothing to support that view, unless you believe that "different" equals "bad".
I remember being taught that life and health were priceless
Whoever taught you that is wrong. Consider the trivial example of driving to work. There's a small chance that you could be killed in a car accident, but we do it anyway, because the money you get from your job is worth the risk. We don't put an infinite value on our own lives, let alone those of others.
Any money sent outside the country, bad for US economy. That simple.
Are you really arguing that all imports are harmful to the US economy? Even Pat Buchanan would likely disagree.
It's giving away wealth.
No, it's exchanging one form of wealth (currency) for another (goods and services). Are you "giving away wealth" when you buy a car? Of course not; you're getting a product that you value more than the money that it costs. This makes you wealthier. And it doesn't matter whether the car was made in Michigan, Japan, or Mexico.
IT salaries won't fall. Understand that.
They will, and are. (Note that I disagree with the article's unsupported conclusion that "on the negative side, America's standard of living would inevitably decline.")
However, this seeming benefit comes at a hidden cost - The "consumers" of these products can no longer afford to buy them.
*Some* will be worse off when their jobs are outsourced. But the vastly larger number of people who didn't lose their jobs can now buy those products cheaper, leaving them with more to spend on other things. Thus there will be an increase in demand for workers to produce whatever the "other things" are.
In the long run, this pushes down the price of the product, and introduces serious disruptions to the economy as a whole.
Lower prices are generally good, and "disruptions" aren't necessarily bad (electricity, cars, microprocessors, etc).
I say this as a developer, aware that my salary will probably be lower in 5 years than it is today. But fighting the market just doesn't work. For example, the (recently rescinded) steel tariffs caused far more jobs to be lost than they "saved".
You see, things like 9/11 actually contribute to the GDP, as calculated. Sure, people died. But the US hired a bunch of security thugs for airports, we had workers on ground zero operating around the clock, people had to shell out a mint to rehab and repair all the building in downtown Manhatten. All that "economic activity" is considered a plus.
No. This is the broken window fallacy. The money that was spent rebuilding destroyed property would otherwise have been put to more productive uses.
It is a one way deal. They get our jobs, but we get nothing
Assuming outsourcing actually is cost-effective, we get lower costs, which leads to lower prices, higher profits (and returns to shareholders), or both. Yeah, it sucks for those of us in the industry. I fully expect that 5 years from now I'll be making less than I am today, which is one of the reasons I'm saving furiously. But from a macroeconomic standpoint, it's ultimately good for all nations involved.
If it were up to me, I'd get rid of the patent system, and reign way in the corporations.
Depends on what you mean. I'd certainly advocate heavily reforming the patent system. Software and business process patents are total BS; one of many methods by which established companies use government to stifle competition, which doesn't amuse us free-market libertarians. And of course corporate welfare should be eliminated.
they ought to have commesurate special responsibilities as well. Their only goal should not be profit. If they aren't helping society, revoke their charter
If a corporation earns a profit, they *are* helping society, because members of society have decided that they are better off purchasing the products of said corporation. (This assumes that the profits are derived from selling stuff to willing buyers, rather than via government favors, which is unfortunately common. But if their profits do come from rent-seeking, it's silly to expect that the same government that's giving them handouts will shut them down).
I have no problem with corporate officers who knowingly violate the law being held personally accountable.
At the best we can force social responsibility from them by fiat if they want to keep their charters, and get some benefit from the negatives they inflict on society.
What negatives? Certainly some corporations engage in (often illegal) behavior that has negative consequences, but I can't see how they are inherently bad.
I doubt even Adam Smith would believe in the free market today.
And what's your alternative? We've seen how the various workers paradises have turned out (lots of dead workers), and "third way" semi-socialism has led to abysmal economic performance in Europe. Capitalism may have problems, but I've yet to see anything that's better.
The GPL, like all software licenses, defines the terms under which the software may be used.
Minor nitpick: unlike commercial EULAs, the GPL doesn't pretend to limit your right to use the software after acquiring it. (You don't actually need a license to run software you buy; see 17 USC 117). The GPL only addresses redistribution, which would otherwise be prohibited by copyright law.
IIRC the winning cap Steve showed had 10 alphanumeric characters. Even if they're not case-sensitive, that's 36**10=3.7e15. There are 1e8 winning combinations, which is one out of 37 million. Brute-forcing that is not going to be efficient, especially considering the payoff is a 99 cent track. But yeah, I would expect Apple to have a way of noticing that somebody entered an exceptional number of combinations.
If you're putting a lot of effort into producing software, then giving it away in hopes of making money selling support, what's to stop someone else from selling the support, and taking all the profit from your effort?
Being the one who created it, you will know the software better than anyone else. Your support will be higher quality than your competitors and will command higher prices.
Re:Best examples of heresy I can think of
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What You Can't Say
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· Score: 1
If men have more desire for leadership roles (and this is debatable), that could just as easily be explained by social conditioning as evolution.
Possibly. I'm not really qualified to argue that point. Males are unquestionably more physically aggressive, and it makes intuitive sense to me that this would carry over to attainment of economic and political power, but I could be wrong.
*Why* are women not as good at negotiation? Is it because they are somehow innately, due to that extra leg on the 43rd chromosome, missing some vital genetic code required for salary negotiation?
Maybe. As a gross generalization, men are competitive, and women are cooperative. Zero-sum negotiations reward the former.
But our current societal structure dictates that this is no longer useful, except for very young children.
True, but we still have appendixes. The genetic instincts of mothers to be caretakers and fathers to be providers have served us well for millions of years, and although they're far less useful today, they're not going away overnight.
In fact, in a world where employers are primarily responsible for health care and retirement, I wouldn't blame them one bit of being leery of employees with dependents... if only they were *equitably* leery.
So you're ok with discrimination on the basis of family situation? I suppose that's more justifiable than gender discrimination in that it's a chosen characteristic. But employers aren't allowed to ask about stuff like that, which may actually increase the importance they put on gender since they can use it as a (rather inaccurate) proxy.
Re:Best examples of heresy I can think of
on
What You Can't Say
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· Score: 1, Insightful
the still terribly few number of women in the political arena suggests we still have a long way to go there
Actually I don't think it does, nor do I think the rarity of women as Fortune 500 CEOs is necessarily a result of discrimination. Billions of years of evolution have resulted in men tending to have more desire and skill for leadership roles, on average. And when you look at the very highest positions, you have to go several standard deviations past the mean; very few men are able to reach these positions, but even fewer women are.
There are a lot of explanations for this. Most common is that women are more likely to take lower-paying jobs that offer more flexibility, so that they can be available for child-care duties.
Yes; according to your linked article when this is taken into account, the ratio rises to 88% or higher. And I recall recently reading a article claiming that women weren't as good at negotiating prices and salaries as men, which could account for the rest.
However, men with children don't seem to experience a similar pay disparity, so this indicates a disparity in how child-care duties are distributed in households.
Which again is not a surprise. Evolution and statistics dictate that *on average*, women will have a greater desire to care for children.
However, I'm already carefully considering how I'm going to handle my job-seeking, because if an employer knows that I just had a baby it will probably hurt my chances of getting hired, no matter how illegal that is.
Yeah, that's a problem. The thing is, it may be "rational" for the employer to discriminate in that manner. From his (yeah, I know) perspective, there *is* a danger that your child will interfere with your job duties, or that you may decide to quit altogether to stay at home. This is also a problem for women who haven't had kids; from the employer's perspective she could get pregnant at any time, which is a risk that doesn't exist for a male applicant. Sadly I don't see a good solution.
My horizontal space is more valuable than my vertical space.
Really? My impression is that usually the opposite is true, since screens are wider than they are tall, especially with the proliferation of widescreen aspect ratios. You may have a point since Omniweb's drawer will take up more horizontal space than normal tabs take vertical space, but I'm still looking forward to giving it a try.
From the standpoint of economics free software is just looney. That would be like cars just being free for the taking, like leaves on the ground in the fall. Everyone would be poor if they just get what they wanted like that.
No. This is the other side of the broken window fallacy. It is *not* good for the economy to keep window repairmen employed by deliberately breaking windows. Similarly, it *is* good for the economy if consumers can get a product for free that they used to have to pay for. In both cases, you can look at the immediately visible effects (more repairmen employed, lower profits for software publishers) and come to the wrong conclusion. You have to go a step further and realize that the money spent repairing windows would otherwise go to a more productive use, and that the money saved by using free software can now be spent elsewhere. See here for more.
Free software is good for the economy. It may not be good for certain established business interests, but they need to adapt (IBM, Apple) or die (SCO).
Slashdot Mirror
The broken window fallicy is a non-sequitor.
Broken window fallacy: some kid throws a rock through my window. I pay $100 to have it repaired. This is good for the economy because the window repairman makes an additional $100.
Walmart-is-bad theory: I buy a widget at Walmart for $10. This hurts the economy, because if I'd bought from the local Steve's Sprockets for $15 then Steve would have made an additional $5.
Both are wrong, and for exactly the same reason; they fail to account for what I would have done with the $100 had my window not been broken, and what I will do with the $5 that I saved at Walmart.
The economics of Wal-mart is a textbook case of predatory pricing.
Walmart is earning a profit, so they're clearly not selling below cost. Perhaps you're claiming that they're a monopsony (buying monopoly), which is easily disproven by the abundance of alternatives. If their market share ever approaches Microsoft levels, I'll take another look. In the meantime, lower prices are good.
Kinda like electing Bush (a Republican), only to have him run up the deficit and grow the size of the government?
Exactly. Clinton wanted to spend a lot more (e.g. HillaryCare), but Republicans in Congress blocked much of it. Unfortunately they're happy to roll over for Bush's profligate spending. I won't be too disappointed if a Democrat ends up in the White House this year; gridlock can be a good thing. (Unfortunately I expect continued bipartisan agreement on destructive policies like the War on Drugs and the DMCA).
When people save 5-10% at Walmart, they are reducing the circulation of money in the US, which depresses the economy as a whole.
Oh, come on. Thrifty shopping does not harm the economy. If I save $5 by finding a better deal at Walmart or anywhere else, I now have $5 left over which I'll either spend on something else or invest. Your argument is one of the many forms of the broken window fallacy.
The original comment was regarding public interest, not shareholder interest.
Well, shareholders are members of the public, and include millions of regular people with 401k plans.
Which is better for the public in general, to lay off 2,000 people and have the shareholders of Company X gain an extra 50 cents in dividends per share (if the company even declares a dividend), or to *not* lay them off and save the public the necessity of supporting 2,000 people on unemployment and the loss of their taxes?
What's best, and what usually happens, is for the 2,000 people laid off to find other jobs.
There are huge numbers of hard-working, intelligent Americans that have lost their jobs to outsourcing
This is true. It's also true that many of them wouldn't have had their high-paying IT jobs in the first place had not huge numbers of secretaries (among others) lost their jobs to computers and word processors. Looking at only the immediately visible effects of an economic activity is an excellent way to reach the wrong conclusion.
Quite possibly. If it reduces the company's expenses, it lets them lower their prices and/or increase returns to their shareholders. Forget India; if a company can replace a worker making $40,000 a year with a machine or software that costs $20,000, are you saying they shouldn't be able to?
A close variant of your argument is that open source is bad, because it reduces the revenue (and thereby hurts the employees) of companies selling proprietary software.
It will never happen. As long as there is a substantial market for which the lack of a camera is a feature, it will be provided. If nothing else, dealers will take "standard" phones and disable the cameras.
I don't give a whup if someone offers me money for certain, key private information tidbits, I wont give it
Which tidbits? What if the offer were for $50 million? Even if you're one of the enlightened who cares not for crass material posessions, imagine how many people you could help.
This research will no doubt lead to more privacy erosion on the principle that if you do not want to give up the information, then you must be hiding something bad
That's always been the standard line of those opposed to privacy. This study is not at all surprising and does nothing to support that view, unless you believe that "different" equals "bad".
I remember being taught that life and health were priceless
Whoever taught you that is wrong. Consider the trivial example of driving to work. There's a small chance that you could be killed in a car accident, but we do it anyway, because the money you get from your job is worth the risk. We don't put an infinite value on our own lives, let alone those of others.
Any money sent outside the country, bad for US economy. That simple.
Are you really arguing that all imports are harmful to the US economy? Even Pat Buchanan would likely disagree.
It's giving away wealth.
No, it's exchanging one form of wealth (currency) for another (goods and services). Are you "giving away wealth" when you buy a car? Of course not; you're getting a product that you value more than the money that it costs. This makes you wealthier. And it doesn't matter whether the car was made in Michigan, Japan, or Mexico.
IT salaries won't fall. Understand that.
They will, and are. (Note that I disagree with the article's unsupported conclusion that "on the negative side, America's standard of living would inevitably decline.")
However, this seeming benefit comes at a hidden cost - The "consumers" of these products can no longer afford to buy them.
*Some* will be worse off when their jobs are outsourced. But the vastly larger number of people who didn't lose their jobs can now buy those products cheaper, leaving them with more to spend on other things. Thus there will be an increase in demand for workers to produce whatever the "other things" are.
In the long run, this pushes down the price of the product, and introduces serious disruptions to the economy as a whole.
Lower prices are generally good, and "disruptions" aren't necessarily bad (electricity, cars, microprocessors, etc).
I say this as a developer, aware that my salary will probably be lower in 5 years than it is today. But fighting the market just doesn't work. For example, the (recently rescinded) steel tariffs caused far more jobs to be lost than they "saved".
You see, things like 9/11 actually contribute to the GDP, as calculated. Sure, people died. But the US hired a bunch of security thugs for airports, we had workers on ground zero operating around the clock, people had to shell out a mint to rehab and repair all the building in downtown Manhatten. All that "economic activity" is considered a plus.
No. This is the broken window fallacy. The money that was spent rebuilding destroyed property would otherwise have been put to more productive uses.
It is a one way deal. They get our jobs, but we get nothing
Assuming outsourcing actually is cost-effective, we get lower costs, which leads to lower prices, higher profits (and returns to shareholders), or both. Yeah, it sucks for those of us in the industry. I fully expect that 5 years from now I'll be making less than I am today, which is one of the reasons I'm saving furiously. But from a macroeconomic standpoint, it's ultimately good for all nations involved.
We're way too far twoards the free market.
:)
I will shock you by disagreeing
If it were up to me, I'd get rid of the patent system, and reign way in the corporations.
Depends on what you mean. I'd certainly advocate heavily reforming the patent system. Software and business process patents are total BS; one of many methods by which established companies use government to stifle competition, which doesn't amuse us free-market libertarians. And of course corporate welfare should be eliminated.
they ought to have commesurate special responsibilities as well. Their only goal should not be profit. If they aren't helping society, revoke their charter
If a corporation earns a profit, they *are* helping society, because members of society have decided that they are better off purchasing the products of said corporation. (This assumes that the profits are derived from selling stuff to willing buyers, rather than via government favors, which is unfortunately common. But if their profits do come from rent-seeking, it's silly to expect that the same government that's giving them handouts will shut them down).
I have no problem with corporate officers who knowingly violate the law being held personally accountable.
At the best we can force social responsibility from them by fiat if they want to keep their charters, and get some benefit from the negatives they inflict on society.
What negatives? Certainly some corporations engage in (often illegal) behavior that has negative consequences, but I can't see how they are inherently bad.
I doubt even Adam Smith would believe in the free market today.
And what's your alternative? We've seen how the various workers paradises have turned out (lots of dead workers), and "third way" semi-socialism has led to abysmal economic performance in Europe. Capitalism may have problems, but I've yet to see anything that's better.
Exactly. If I really cared about my neighbor, I'd vote to raise his taxes.
Minor nitpick: unlike commercial EULAs, the GPL doesn't pretend to limit your right to use the software after acquiring it. (You don't actually need a license to run software you buy; see 17 USC 117). The GPL only addresses redistribution, which would otherwise be prohibited by copyright law.
IIRC the winning cap Steve showed had 10 alphanumeric characters. Even if they're not case-sensitive, that's 36**10=3.7e15. There are 1e8 winning combinations, which is one out of 37 million. Brute-forcing that is not going to be efficient, especially considering the payoff is a 99 cent track. But yeah, I would expect Apple to have a way of noticing that somebody entered an exceptional number of combinations.
If you're putting a lot of effort into producing software, then giving it away in hopes of making money selling support, what's to stop someone else from selling the support, and taking all the profit from your effort?
Being the one who created it, you will know the software better than anyone else. Your support will be higher quality than your competitors and will command higher prices.
If men have more desire for leadership roles (and this is debatable), that could just as easily be explained by social conditioning as evolution.
Possibly. I'm not really qualified to argue that point. Males are unquestionably more physically aggressive, and it makes intuitive sense to me that this would carry over to attainment of economic and political power, but I could be wrong.
*Why* are women not as good at negotiation? Is it because they are somehow innately, due to that extra leg on the 43rd chromosome, missing some vital genetic code required for salary negotiation?
Maybe. As a gross generalization, men are competitive, and women are cooperative. Zero-sum negotiations reward the former.
But our current societal structure dictates that this is no longer useful, except for very young children.
True, but we still have appendixes. The genetic instincts of mothers to be caretakers and fathers to be providers have served us well for millions of years, and although they're far less useful today, they're not going away overnight.
In fact, in a world where employers are primarily responsible for health care and retirement, I wouldn't blame them one bit of being leery of employees with dependents... if only they were *equitably* leery.
So you're ok with discrimination on the basis of family situation? I suppose that's more justifiable than gender discrimination in that it's a chosen characteristic. But employers aren't allowed to ask about stuff like that, which may actually increase the importance they put on gender since they can use it as a (rather inaccurate) proxy.
the still terribly few number of women in the political arena suggests we still have a long way to go there
Actually I don't think it does, nor do I think the rarity of women as Fortune 500 CEOs is necessarily a result of discrimination. Billions of years of evolution have resulted in men tending to have more desire and skill for leadership roles, on average. And when you look at the very highest positions, you have to go several standard deviations past the mean; very few men are able to reach these positions, but even fewer women are.
There are a lot of explanations for this. Most common is that women are more likely to take lower-paying jobs that offer more flexibility, so that they can be available for child-care duties.
Yes; according to your linked article when this is taken into account, the ratio rises to 88% or higher. And I recall recently reading a article claiming that women weren't as good at negotiating prices and salaries as men, which could account for the rest.
However, men with children don't seem to experience a similar pay disparity, so this indicates a disparity in how child-care duties are distributed in households.
Which again is not a surprise. Evolution and statistics dictate that *on average*, women will have a greater desire to care for children.
However, I'm already carefully considering how I'm going to handle my job-seeking, because if an employer knows that I just had a baby it will probably hurt my chances of getting hired, no matter how illegal that is.
Yeah, that's a problem. The thing is, it may be "rational" for the employer to discriminate in that manner. From his (yeah, I know) perspective, there *is* a danger that your child will interfere with your job duties, or that you may decide to quit altogether to stay at home. This is also a problem for women who haven't had kids; from the employer's perspective she could get pregnant at any time, which is a risk that doesn't exist for a male applicant. Sadly I don't see a good solution.
My horizontal space is more valuable than my vertical space.
Really? My impression is that usually the opposite is true, since screens are wider than they are tall, especially with the proliferation of widescreen aspect ratios. You may have a point since Omniweb's drawer will take up more horizontal space than normal tabs take vertical space, but I'm still looking forward to giving it a try.
From the standpoint of economics free software is just looney. That would be like cars just being free for the taking, like leaves on the ground in the fall. Everyone would be poor if they just get what they wanted like that.
No. This is the other side of the broken window fallacy. It is *not* good for the economy to keep window repairmen employed by deliberately breaking windows. Similarly, it *is* good for the economy if consumers can get a product for free that they used to have to pay for. In both cases, you can look at the immediately visible effects (more repairmen employed, lower profits for software publishers) and come to the wrong conclusion. You have to go a step further and realize that the money spent repairing windows would otherwise go to a more productive use, and that the money saved by using free software can now be spent elsewhere. See here for more.
Free software is good for the economy. It may not be good for certain established business interests, but they need to adapt (IBM, Apple) or die (SCO).
The number of Apple stories on Slashdot suggests otherwise. Unless Slashdotters are the "societal elite", which I somehow doubt.
Of *course* we won the war!!! We're the United States! Were we expecting to *lose*?
Quite a few pundits were predicting a Vietnam-style quagmire, thousands of Americans killed in street fighting in Baghdad, etc.
We went to war over WMDs. We went to war because we were lead to believe that there was an immediate threat to the saftey of Americans.
No. We went to war because Saddam was a continuing (not "imminent") threat to the region and the world. WMDs were merely one aspect of that threat.
As for them being better off, that's an incredibly arrogant and paternalistic thing to say.
You actually think it's plausible that the Iraqi people were better off with Saddam in power? Not even Dean goes that far.
Why do you think the reaction in Iraq has been: "thanks for getting rid of Saddam, now get the fuck out!"
Yes, that's the general plan, as soon as we can insure that the remaining Baathist thugs won't be able to seize power again.