Nah, it's not a Republicrat/Democan thing. Both sides are equally stupid, and equally easy to make fun of.
Sorry, but that's just not true. The democrats are not a perfect liberal party, but insofar as they are liberal they are less stupid than conservatives. The majority view among intelligent, educated people always supports liberal positions which is why it is liberal, not conservative, politics that shares the label "progressive." Historical trends through the last two centuries have born this out worldwide: liberal views/values/norms steadily become adopted over time while those of conservatives are abandoned. It is overwhelmingly likely that this trend will continue. Just as we now think it was barbaric and grotesquely stupid to enslave black people and deny women the right to vote 150 years ago, we will progress to hold similar views about gay marriage and religion 150 years from now. Any person of nominal intelligence will grant this as indisputable.
You and I probably wouldn't enjoy living in a society that resricted people's biologic function of having children.
This thinly veiled strawman argument - that if we required qualifications for parenting that this would somehow instantly transform us into a society of Pinko or Gestapo Commies - is laughable. We restrict and regulate all sorts of basic human behaviors that you could just as well argue we should have an inalienable 'right' to freely engage in - sex with children and animals or the cultivation of plants containing 'harmful' chemicals, for example. From the tone of your post, however, I suspect you may be too busy waving the confederate flag to notice that we hardly live in a libertarian society.
As for licensure being a product of The Evil Unions and their Diabolical Plot to compromise the Magical Free Market with regulation, this is so preposterous and incoherent as to scarcely dignify a reply. By your lights, all regulation that imposes quality and safety standards upon goods and services - whether occupational or otherwise - is a product of collusion among suppliers to artificially elevate prices. This is an extraordinary feat of logic of which you should be proud, since you manage to condemn organized labor not only for making markets less competitive and but for making them more profitable - something that is sure to baffle those on both sides of the political spectrum. But I suspect that manufactures like Ford and GM and service providers like AT&T and Pacific Water & Power probably don't share your view that compliance requirements help make their industries profitable.
As for licensure creating problems in politics, well, thank goodness there are no other examples of occupations where practitioners themselves set standards for qualifications. Just imagine how lucrative academia would be if school teachers and professors required 'degrees' or some other form of certification - boy, if we ever allowed Evil Unions or Big Government to regulate educational standards, we'd turn into Maoist China before you could say "ni hao ma."
You don't have to be qualified to have an opinion.
It's funny how some of the most important decision-making roles in our society - the role of a voter, the role of a parent, the role of an elected official - require no formal qualifications. What if being a heart-surgeon required no qualifications? What if driving required no qualifications? You need a license to pitch a tent and catch a fish, but not to be a parent? You need a certification to cut people's hair or do their nails but not to be President?
I'm not sure why we expect so little of ourselves, and then proceed bass-ackwards to address the problems that arise. To take the example of parenting, we let anyone no matter how irresponsible or unqualified have kids, and then punish them - and the kids - when they screw up the job of parenting. How stupid is that? We don't do that with dentists or doctors or any other role of responsibility.
This shows the core of the problem: in the end, people just don't have any morals or ethics. If you can steal and get away with it, just do it. It's tough when you face this kind of depravity, even in the brick-and-mortar world. My 2 cents on some solutions:
1. Proprietary hardware. It has worked for consoles (it's hard to pirate a game cartridge). With a large enough consortium of developers onboard, it might work on the PC. I wouldn't put any money on this, but to my knowledge it has never been tried so it might be worth a shot.
2. Tiered value. This is already in place for games and DVDs - you can buy the basic edition or the 'collectors' edition, or whatever. Well, adjust your strategy a bit and make the basic edition free. All the 'pirating' is then just free advertising for your 'real' product.
3. Subscription-based game access, a la Steam. This works pretty well, and if you get busted your account gets banned and you lose access to ALL the games in the system, not just the one you're pirating. Now, if every PC game developer on Earth was on Steam, you'd be at risk of losing your access to ALL PC games if you got busted pirating. I'm surprised there hasn't been a bigger push by Valve to turn Steam into exactly that. I think GameSpy Arcade made the attempt to do this too. For whatever reason, it's hard to get developers onboard. Still, my money is on this as the only viable long-term solution.
4. Change of attitude. Developers must realize that, just like with music, anyone who pirates a game who would NOT have bought it (like the legions of 12-year-olds out there) is simply giving you free advertising.
The 12 year olds that pirate games will NEVER BUY YOUR GAMES even if they were priced at $19.95. Because 12 year olds dont have money and dont really care.
This is a very good point, and the music industry is (only just) starting to figure out what this implies as well: any time someone pirates your product who would NOT otherwise buy it is giving you FREE ADVERTISING.
If it required more energy to produce than ever came out of it, it could not possibly be cost-effective, regardless of any other costs - even if all other production costs were zero. Therefore, by logical deduction any solar panel that is economically cost-effective must also be net-energy positive, so as long as it makes economic sense it will automatically make technological sense too.
Not attractive compared to what?
I only meant attractive in an economic sense. Sadly, that is still the only sense that really matters. Until the dollars make sense, no other factors will trump consumers' decisions to adopt this and other green technologies. That is why it is so critical to make these new technologies economically viable.
It is not unanswerable at all - the cost of the product instantly answers its energy requirements. If the product is cost-effective, it logically must also be net-positive in terms of energy.
The fact that most solar solutions are still not attractive from a cost-benefit standpoint suggests that their energy efficiency is still marginal. But given that we have a new company announcing a radically transformative solar technology every other week these days, it seems likely that a genuinely cost-effective solution is not far a way.
I'm a big home theater person myself, and I have to admit to being seriously underwhelmed by Blu-Ray and HDTV in general. This is partly because I'm a dedicated HT projector fan, and I have not yet seen an HD projector myself. But when I watch HDTV, even though it is obviously a sharper, more detailed image it is not necessarily a better image, in exactly the same way that regular video is not aesthetically better than old, grainy film.
To my eye, it looks like Blu-Ray stuff is shot on video, not film. It may be that the compression or the HD transfer or something is causing this effect, I'm not sure. I noticed that this effect is particularly bad in films where there is a lot of CGI. Also, more detail has less mercy on CGI - Spiderman 2 CGI looks very fake on Blu-Ray, check it for yourself.
I know from working with CGI animation that mnatching motion blur to mixed frame rates used to be a big problem, but I'd be surprised if any studios are dumb enough to make that mistake anymore. Basically, you can render your animation at 29.97 or 30 or 60fps but when you downrate it to 24 for film it will look terrible and choppy - in a way that looks like cheap video or newscam - unless you deliberately render motion blur. Again, I'm not sure if this is an issue anymore, or whether it has cropped up again with the change to HD with 1080i and 1080p etc, but for whatever reason Blu-Ray renders I've seen so far look crappy compared to both real movie theaters and good DVD renders on my HT projector.
Union BAD, blah blah. Well, maybe the UAW has grown so large that it has become corrupt and stopped serving the interests of its members. But blaming unions for the whole of the US auto industry's woes is ridiculous. GM lost $15 billion last quarter because of poor management and strategic planning, only a small part of which has anything to do with employee relations.
Moreover, the unions can only be said to be 'hurting' the automakers in ways that don't affect non-unionized manufacturers like Toyota and Honda and BMW in so far as it costs a lot of money to pay employees' pensions. Well guess what? GM and Ford and Crysler SPENT the money that was in those pension funds trying to buy their way out of trouble, and it backfired. Like deadbeats at the slots, they emptied their piggy bank in a desperate gamble to rob Peter in order to pay Paul. They lost their shirt, and are now in the shitter because their obligations to provide promised benefits remain unchanged. They're whining about it like it's somebody else's fault - it's bullshit. If they'd made a better product and hadn't run up gigantic losses, they wouldn't have had to dip into their pension funds to stay afloat. Too fucking bad. When you're obligated to pay certain benefits, and you put money into a fund for that purpose, it's probably a good idea not to have that fund pull double-duty as a rainy day fund.
It's like the saying goes, the more complicated you make things the easier it is the throw a wrench in the works.
Storing ANY information electronically on the passport is simply a bad idea. The only thing that really MUST be on the passport is the passport number, and you don't need a chip or a magnetic strip or an RFID or even a barcode to store a 16-digit number on a piece of paper. Ideally, there shouldn't be any other information shown at all. Everything else - birth dates, passport expiration dates, physical description, photo, etc should all be in a secure database. Creating false entries in the database would require hacking government systems - stuff that's difficult and carries heavy consequences. Without any of the info on the document itself, a crook wouldn't know anything about the person whose identity they've stolen. That may not matter for a credit card being used online, but for a sweaty, nervous would-be criminal standing in line at customs in JFK it'd matter a whole hell of a lot.
So having a 'fake' passport would require possession of an actual original at some point, and it'd have to be someone to whom you bear a close resemblence. Add facial-recognition software based on the images in the database, and, well, good luck impersonating someone else. Cooking up a fake passport electronically would therefore be impossible without social engineering at a government office authorized to create new passports - and that'll continue to be a problem whether you have chipped passports or not.
So, a central database is the only way to go. There are massive precedents and established methods for protecting data integrity in large databases, while the precedents for securing handheld data storage are rubbish (as the case in point shows so well). The database should be a shared international resource that nations subscribe to, administered through the UN via Interpol - it would give the UN something actually useful to do for a change.
Ideally, your passport would just be a number - and you could carry that in your head without any documents at all. The real effort should go into protecting the integrity of the basic ID numbers - this hypothetical number would be one, your SS# would be another.
"Equitably" means fairly, not equally. You might stand a chance of arguing that individuals don't all generate an equal amount of economic wealth, but you're on thin ice when you start trying to assert what is a 'fair' amount of individual wealth production. A major flaw in your reasoning right off the bat is that wealth is not created at the point of production, but rather during trade in the marketplace. The "value-at-production" you refer to is what is known as the "labor theory of value" and was, ironically, developed and championed by Karl Marx. Later, theories of marginal utility replaced the labor theory of value by (successfully) arguing that the value of something is not determined at its point of production, but rather at the point of sale. If it's a bad day at the market, your product/service may be worthless - not because it is inherently without value, but because there is no demand for it.
So it seems in your ignorance you have resurrected a now-defunct socialist theory as your primary argument. That's quite ironic, given that you're calling other folks socialists as an insult.
You are correct, it is only flatly forbidden under one or two of the mainstream schools of interpretation. I should have said, "Islam discourages and condemns birth control." But the level of discouragement and condemnation, even if contraception is not flatly outlawed either by state law or local sharia law, is tantamount to the condemnation or contraception recognized by most practicing Catholics. Pedantics aside, the development consequences are the same: families having 5+ children, limited female access to contraception, stigmatization associated with family planning, and so on.
If we can afford to pour billions into a shallow fight to control Oil, We can afford to make life's basics free for anyone who asks.
I certainly agree with your sentiments, but the truth is that we can't afford to. There are simply too many people and there isn't enough wealth in the world. Capitalism's main problem is that it doesn't distribute wealth equitably. But it IS great at generating wealth. This was a main point Gates made in the article. But it isn't enough. We aren't wealthy enough, and the growth of wealth in our global economy is not enough to keep pace - even in theory - with past or present population growth to carry everyone forward adequately (i.e. with a standard of living acceptable by modern western standards) even if all wealth was distributed evenly. The easiest proof of this comes from the well-known study that showed if everyone one Earth consumed the same resources as the average American, we would need 3 Earths to generate the basic inputs of materials and energy - clearly an impossibility.
My field of expertise happens to be international development, and one of the issues that has recently become impolitic to mention is population growth. We used to more openly recognize population growth as a major problem. Not so much now - you can conjecture why if you like. Regardless, population is and will continue to be the major obstacle standing in the way of broad-scale socioeconomic and environmental sustainability. There are just too many people.
As one quick example, I worked in the Middle East for a number of years in several countries that were really close to an ideal development scenario: the governments had tons of money thanks to oil and low initial populations. It was basically a blank slate with a blank check - fantastic! Build roads here, power plants there, schools here, hospitals there. And things have gone really very well. But rather than enjoy a GDP per capita of something like $20,000, those countries now have GDP/c of something under $5,000. Why? Because Islam forbids birth control just like Catholicism, and the populations are growing at 15-25% annually.
The American form of government is still quite sound in design and philosophy. It is only 'fundamentally broken' in the details of its operation. A handful of minor modifications would solve a good number of its current flaws (though new flaws would, of course, likely emerge). The real problem is that the mechanisms for self-correction put in place by the constitution no longer work because corruption is so rampant. There is a tipping point of corruption past which the officials responsible for holding other officials accountable cannot themselves be trusted to carry out their duties. We have long passed this tipping point.
One very simple solution would be to limit service to one term in all branches of government. A major source of corruption is the fact that members of congress can become entrenched for decades. Career politicians are a major problem. Perhaps we should not have allowed politics to become a legitimate lifetime career path.
I would definitely encourage you to read the follow-up posts by both codebuster and myself, as we address some of your points in them.
A couple of quick things. You said: You'll see that the central theme to achieving economic freedom, in the article, is regulation to prevent theft, fraud, ensure property rights and uphold contracts.
Regulation IS a form of market intervention. When the government intervenes/intereferes with the market, that market is not "totally unbridled" or truly free. My whole point is that regulation is necessary in order for markets to work. If they are left completely alone, they become inefficient and get taken over by monopolies and cartels.
I would go back to this concept: Long-run versus short run. What I remember from my economics classes in college is that academics define profits -> 0 (going to 0) over the long run. Not the short run.
It may be true that profits decrease over time. But why? Because a new market - say for a new technology like PC-based GUI operating systems - starts out as uncompetitive, and that means inefficient. AND profitable. As the market becomes more competitive, it becomes more efficient, and profits go down. Now, if the government doesn't do any regulation, then the company making the PC-based GUI aka Windows (Microsoft) can use its power and wealth to monopolize the market and prevent competition, thereby keeping the market inefficient and profitable.
So, markets do not automatically evolve into competitive, efficient, unprofitable ones.
So you're right, "profits continue to exist in a free market." But only so far as that market is inefficient. It just so happens that, by the economic definition (not my definition), a perfectly free market is also a perfectly efficient market, and a failed free market is a highly inefficient market and often highly profitable as well. My point is that it's quite ironic that an extremely profitable market is by definition a failed market.
Thanks again for another interesting post. Quick responses, as I am at work:
You say that history has shown the markets are not efficient, but I submit that it is meaningless to say that they "are not efficient" without comparing them to alternatives. Not efficient compared to what alternative?
I've probably given you the wrong impression - that I am some kind of socialist interested in centrally planned economy. Not so. I have no problem with regulated markets. But regulation is antithetical to truly free markets, and antithetical to the ideals held by proponents of globalization and unbridled free trade. Truly 'free' markets - i.e. totally unregulated global markets, the example I cited earlier being the unskilled labor market - are not efficient nor do they serve the interests of society. Free market theory claims that the opposite will occur: that by being totally unbridled and unregulated as in anarchy, markets will tend toward optimal efficiency and thereby serve everyone's best interests. The two key points here (one of which you expressed yourself) are:
1) Regulation is necessary to ensure market efficiency, otherwise the naturaly tendency is toward monopolies and cartels, and the proof lies in the fact that the world's most successful economies are the ones that are well-regulated (i.e. North American and European markets), while those that are unregulated (Africa, India, China, Southeast Asia, etc) are rife with monopolies and cartels.
2)This squarely contradicts Friedman and other laisez-faire theorists. This is what I mean when I say that history and common sense show us that totally free markets are not efficient. So to answer your question, actual markets out there in the world are inefficient compared to what theory predicts. If this were physics and the observations did not remotely match your theory, what would you do with your theory? That's right: toss it in the circular file. As an addendum, I pointed out that market inefficiency correlates strongly with market profitability.
Lastly, as I mentioned in my earlier post, the vegetable market is not an acceptable example of a perfectly efficient market that is also profitable because the "profits" you speak of are merely sufficient to allow the sellers to cover their costs of living - as per Adam Smith's Natural Price. In essence, this perfectly efficient market is not profitable at all, it is subsistent. That is what I meant when I mentioned the difference between making a living and making a killing. And to answer your question, we decide what constitutes reasonable profit in our society through our laws - laws against price gouging, laws against price discrimination, laws against predatory pricing, laws against usury and loan-sharking, and so on. So, I must reject the example you submitted as proof that my assertion about profit and efficiency is wrong.
As a final note, the Friedman camp often falls back on the "regulation is the source of all our woes" argument. Loan sharking, for example, would be fine if we just legalized it because the market would settle at equalibrium where everyone's interests were optimally served. The problem is, reality just doesn't bear this out. I refer you to the consequences of de-regulation of the banking industry as evidence: our financial system is on the brink of collapse as a result of de-regulation, and poised to take down much of our economy along with it. I would argue that the economic picture we read about in the news these days hardly constitutes an equalibrium in which everyone's interests are best served.
marginal utility has almost nothing to do with competition or lack thereof - it simply deals with the additional satisfaction/dissatisfaction someone derives from the consumption/loss of one extra unit of something.
Marginal utility factors into supply and demand analysis, which are borked completely in the absence of competition. All supply and demand analysis, including marginal utility, is contingent upon a number of different competing sellers supplying according to market demand. In the absence of these often fairytale conditions, you get a whole lotta nuthin in your analysis.
You are quite right that risk scares off potential competitors. But risk is largely a consequence of the threat posed by market-dominant businesses already in place. Business like Microsoft and WalMart are highly profitable, and they may even attract competitors sporadically, but that does not mean that the market "is competitive" per se; i.e. it does not mean the market is efficient on any kind of ongoing basis. Microsoft and WalMart tend to destroy their would-be competitors - often using tactics that are are so nefarious as to actually be outlawed. Even markets that appear to have genuine competition - say, the rivalry between Coke and Pepsi - are often not particularly effective in reality. That's why you can go into any Kroger or Ralph's of Albertsons supermarket and buy no-name cola for half the price of Coke or Pepsi.
I appreciate your thoughtful response. I do, however disagree significantly with you on several key points. I'll do my best to provide illustrative examples to explain why:
There will always be a window of opportunity (limited in time) wherein an individual with the right good or service in the right place and at the right time will earn a profit. This is true even in situations where there is almost complete anarchy (the city of Berlin in the months immediately following the surrender of Germany in April 1945 for example).
These 'right place at right time' situations are defined by the lack of competition in the marketplace. I doubt you are suggesting that the anarchy of post-war Germany is a good example of a high-efficiency free market. But do note that neoclassical laissez-faire economics holds anarchy - literally the absence of any state authority to interfere with market forces - to be the ideal precondition for market efficiency. History - and common sense, I might add - show quite clearly that totally unbridled, unregulated markets are not efficient. Rather, they are the opposite. Rackets form, cartels form, monopolies form, and competition is minimized as the big fish eat up all competitors until only a few remain to reap the profits of their size.
this leaves aside the entire issue that the interests of society - which the economy is intended to serve rather than subvert - are often quashed in the bargain. A good example is the largely unregulated global unskilled labor market, which is now a festering disgrace to humanity characterized by the exploitation and enslavement of those least able to protect themselves, including children as young as 4.
Even in a competitive market, where the equilibrium has been established, profits are not categorically impossible.
You cite the farmers market example, which - coincidentally perhaps - Adam Smith also cited when he introduced the concept of the 'natural price' which is not the price at which costs of production are covered, but rather the price at which a reasonable return is also netted which pays for the seller's costs of living. The problem is that transnational corporations do not have costs of living, and the concept of a 'natural price' with 'reasonable profits' does not apply to them. The "profits" of mom-and-pop shops and farmers markets are categorically different than those of giant corporations. Making a living and making a killing are two entirely different things.
I did not mean to suggest that any market is a non-zero-sum situation. The classical definition of a market trade is one in which both buyer and seller benefit; hence, a non-zero-sum transaction. I apologize if my lack of clarity gave that impression.
saying that one was "coerced" into buying the Ford Focus because they wanted the to have the Ferrari instead but couldn't afford it is nonsense.
You must be careful not to compare apples to oranges. Fords and Ferraris are different products, offering different value propositions and different utility. To compare apples to apples, consider prescription drugs: you can 'choose' between an AIDS drug from Pfizer or a similar alternative from Merck; both are priced at hundreds of dollars per month but cost pennies to make; both are priced vastly above any R&D expenditures (profit growth in the pharmaceutical industry has outstripped R&D growth by a factor of 4 over the last 10 years). Yet these drugs do not have generic competitors because patents prevent competitors from entering the market. To say that consumers are 'coerced' in this situation is not nonsense at all. The cause of coercion: lack of competition. The source of profit: lack of competition. The source of market inefficiency: lack of competition. In this case it is legitimized by IP law. In other cases the monopolies or oligopolies or cartels that quash competition are not legitimate. The end result, however is the same.
Variable costs are per-unit costs. Fixed costs are costs that are independent of how many units of something you make. The only item you listed that is a variable cost is the printed DVD. All the other costs are fixed costs, which remain the same - like I said in my first post - whether you make one or 1 billion units. It's clear you didn't have any understanding of the difference between the two. Hope I was able to fix that for you.
-As there are downward pressures, there are also upward pressures. For instance, how about the pressure of new features and content being added?
Dude, this just doesn't make any sense. If you add new features and content, you change the product. If it's not the same product... wait for it... it's not the same product!. In case you weren't aware, different products have different prices. Tricking out and upgrading your Honda Civic with twin turbos and a nitrous tank does not put "upward pressure" on the price of regular Honda Civics. You're comparing apples to oranges. Apples to apples, sir, is how you conduct an intelligent analysis. Again, hope I was able to help set you straight you here.
At this point, you really come right off the rails. Sure, bargain bins offer cheap stuff - sometimes at what must be a very low margin. That stuff is unlikely to be profitable, nor is it likely to be new software competing directly with new products - it's probably in the bargain bin because it's old. It supports my points both ways, which is why it makes no sense for you to bring it up as a one of the "several key factors" that demonstrate my "conclusion born of ignorance." Score another FAIL for you.
Lastly, you mention the cost of entry for high tech. Well, since we're talking about profit margins, the absolute value of costs are irrelevant. If something costs a lot to make, it's going to have a high price. But that does NOT mean it will have a high profit margin. It might cost me $1,000,000 to hire a bunch of expensive techies to build an uber-home-theater system. But I could sell the system to you for $1,000,001. $1 profit for me. High price =/= high profit. Maybe the concept of "profit margin" is simply beyond you?
"as you've so aptly shown, intelligence is a rare commodity"
Really I fail to see the point of your post, just what were you trying to say? That free markets are not profitable or cannot be profitable?
That is correct - free markets, as defined by neo-classical laisez-faire economics, cannot be profitable because profit margins of any significance are categorically impossible in a genuinely competitive market, and genuine competition is a pre-requisite for the accepted definition of a 'free' market. Coercion is NOT limited to regulation imposed by governments. Indeed, the heuristic free market analyses are made based on the assumption of anarchy - literally, no authority - and hold up best (if their advocates are to be believed) in the absence of the state.
So if you're a proponent of free markets as they are defined by the academic and political right, you must accept the fact that any profitable market is - by definition - also a failed market: i.e. one whose efficiency is so poor that, via coercion, it facilitates exploitation of consumers. Contrary to the standard free-market rhetoric, the consumer does not always win. Indeed, when companies profit at all, the consumer is the loser. The consumer only wins when companies are fighting tooth and nail just to scrape by with subsistence-level profit margins.
Conveniently, this gels rather well with common sense too.
I absolutely agree - I was actually citing the prevailing rhetoric that a 'fair' price is 'whatever the market will bear' which I happen to vehemently disagree with. If I had the only life-saving medicine available to save my dying brother, would a 'fair' price be whatever he could 'bear'? What utter codswollop.
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Modding me troll doesn't make my argument less true, it just proves you have no counter-argument.
Nah, it's not a Republicrat/Democan thing. Both sides are equally stupid, and equally easy to make fun of.
Sorry, but that's just not true. The democrats are not a perfect liberal party, but insofar as they are liberal they are less stupid than conservatives. The majority view among intelligent, educated people always supports liberal positions which is why it is liberal, not conservative, politics that shares the label "progressive." Historical trends through the last two centuries have born this out worldwide: liberal views/values/norms steadily become adopted over time while those of conservatives are abandoned. It is overwhelmingly likely that this trend will continue. Just as we now think it was barbaric and grotesquely stupid to enslave black people and deny women the right to vote 150 years ago, we will progress to hold similar views about gay marriage and religion 150 years from now. Any person of nominal intelligence will grant this as indisputable.
You and I probably wouldn't enjoy living in a society that resricted people's biologic function of having children.
This thinly veiled strawman argument - that if we required qualifications for parenting that this would somehow instantly transform us into a society of Pinko or Gestapo Commies - is laughable. We restrict and regulate all sorts of basic human behaviors that you could just as well argue we should have an inalienable 'right' to freely engage in - sex with children and animals or the cultivation of plants containing 'harmful' chemicals, for example. From the tone of your post, however, I suspect you may be too busy waving the confederate flag to notice that we hardly live in a libertarian society.
As for licensure being a product of The Evil Unions and their Diabolical Plot to compromise the Magical Free Market with regulation, this is so preposterous and incoherent as to scarcely dignify a reply. By your lights, all regulation that imposes quality and safety standards upon goods and services - whether occupational or otherwise - is a product of collusion among suppliers to artificially elevate prices. This is an extraordinary feat of logic of which you should be proud, since you manage to condemn organized labor not only for making markets less competitive and but for making them more profitable - something that is sure to baffle those on both sides of the political spectrum. But I suspect that manufactures like Ford and GM and service providers like AT&T and Pacific Water & Power probably don't share your view that compliance requirements help make their industries profitable.
As for licensure creating problems in politics, well, thank goodness there are no other examples of occupations where practitioners themselves set standards for qualifications. Just imagine how lucrative academia would be if school teachers and professors required 'degrees' or some other form of certification - boy, if we ever allowed Evil Unions or Big Government to regulate educational standards, we'd turn into Maoist China before you could say "ni hao ma."
You don't have to be qualified to have an opinion.
It's funny how some of the most important decision-making roles in our society - the role of a voter, the role of a parent, the role of an elected official - require no formal qualifications. What if being a heart-surgeon required no qualifications? What if driving required no qualifications? You need a license to pitch a tent and catch a fish, but not to be a parent? You need a certification to cut people's hair or do their nails but not to be President?
I'm not sure why we expect so little of ourselves, and then proceed bass-ackwards to address the problems that arise. To take the example of parenting, we let anyone no matter how irresponsible or unqualified have kids, and then punish them - and the kids - when they screw up the job of parenting. How stupid is that? We don't do that with dentists or doctors or any other role of responsibility.
I could get it for free so why pay for it?
This shows the core of the problem: in the end, people just don't have any morals or ethics. If you can steal and get away with it, just do it. It's tough when you face this kind of depravity, even in the brick-and-mortar world. My 2 cents on some solutions:
1. Proprietary hardware. It has worked for consoles (it's hard to pirate a game cartridge). With a large enough consortium of developers onboard, it might work on the PC. I wouldn't put any money on this, but to my knowledge it has never been tried so it might be worth a shot.
2. Tiered value. This is already in place for games and DVDs - you can buy the basic edition or the 'collectors' edition, or whatever. Well, adjust your strategy a bit and make the basic edition free. All the 'pirating' is then just free advertising for your 'real' product.
3. Subscription-based game access, a la Steam. This works pretty well, and if you get busted your account gets banned and you lose access to ALL the games in the system, not just the one you're pirating. Now, if every PC game developer on Earth was on Steam, you'd be at risk of losing your access to ALL PC games if you got busted pirating. I'm surprised there hasn't been a bigger push by Valve to turn Steam into exactly that. I think GameSpy Arcade made the attempt to do this too. For whatever reason, it's hard to get developers onboard. Still, my money is on this as the only viable long-term solution.
4. Change of attitude. Developers must realize that, just like with music, anyone who pirates a game who would NOT have bought it (like the legions of 12-year-olds out there) is simply giving you free advertising.
The 12 year olds that pirate games will NEVER BUY YOUR GAMES even if they were priced at $19.95. Because 12 year olds dont have money and dont really care.
This is a very good point, and the music industry is (only just) starting to figure out what this implies as well: any time someone pirates your product who would NOT otherwise buy it is giving you FREE ADVERTISING.
Excuse me, are you serious? It's television , FFS! They edit, it's normal. Been going on since at least the 1950s.
Yes, but it doesn't qualify as 'live' television.
Much more goes into the cost than just energy.
If it required more energy to produce than ever came out of it, it could not possibly be cost-effective, regardless of any other costs - even if all other production costs were zero. Therefore, by logical deduction any solar panel that is economically cost-effective must also be net-energy positive, so as long as it makes economic sense it will automatically make technological sense too.
Not attractive compared to what?
I only meant attractive in an economic sense. Sadly, that is still the only sense that really matters. Until the dollars make sense, no other factors will trump consumers' decisions to adopt this and other green technologies. That is why it is so critical to make these new technologies economically viable.
It is not unanswerable at all - the cost of the product instantly answers its energy requirements. If the product is cost-effective, it logically must also be net-positive in terms of energy.
The fact that most solar solutions are still not attractive from a cost-benefit standpoint suggests that their energy efficiency is still marginal. But given that we have a new company announcing a radically transformative solar technology every other week these days, it seems likely that a genuinely cost-effective solution is not far a way.
Word.
I'm a big home theater person myself, and I have to admit to being seriously underwhelmed by Blu-Ray and HDTV in general. This is partly because I'm a dedicated HT projector fan, and I have not yet seen an HD projector myself. But when I watch HDTV, even though it is obviously a sharper, more detailed image it is not necessarily a better image, in exactly the same way that regular video is not aesthetically better than old, grainy film.
To my eye, it looks like Blu-Ray stuff is shot on video, not film. It may be that the compression or the HD transfer or something is causing this effect, I'm not sure. I noticed that this effect is particularly bad in films where there is a lot of CGI. Also, more detail has less mercy on CGI - Spiderman 2 CGI looks very fake on Blu-Ray, check it for yourself.
I know from working with CGI animation that mnatching motion blur to mixed frame rates used to be a big problem, but I'd be surprised if any studios are dumb enough to make that mistake anymore. Basically, you can render your animation at 29.97 or 30 or 60fps but when you downrate it to 24 for film it will look terrible and choppy - in a way that looks like cheap video or newscam - unless you deliberately render motion blur. Again, I'm not sure if this is an issue anymore, or whether it has cropped up again with the change to HD with 1080i and 1080p etc, but for whatever reason Blu-Ray renders I've seen so far look crappy compared to both real movie theaters and good DVD renders on my HT projector.
Just my 2 cents.
Union BAD, blah blah. Well, maybe the UAW has grown so large that it has become corrupt and stopped serving the interests of its members. But blaming unions for the whole of the US auto industry's woes is ridiculous. GM lost $15 billion last quarter because of poor management and strategic planning, only a small part of which has anything to do with employee relations.
Moreover, the unions can only be said to be 'hurting' the automakers in ways that don't affect non-unionized manufacturers like Toyota and Honda and BMW in so far as it costs a lot of money to pay employees' pensions. Well guess what? GM and Ford and Crysler SPENT the money that was in those pension funds trying to buy their way out of trouble, and it backfired. Like deadbeats at the slots, they emptied their piggy bank in a desperate gamble to rob Peter in order to pay Paul. They lost their shirt, and are now in the shitter because their obligations to provide promised benefits remain unchanged. They're whining about it like it's somebody else's fault - it's bullshit. If they'd made a better product and hadn't run up gigantic losses, they wouldn't have had to dip into their pension funds to stay afloat. Too fucking bad. When you're obligated to pay certain benefits, and you put money into a fund for that purpose, it's probably a good idea not to have that fund pull double-duty as a rainy day fund.
It's like the saying goes, the more complicated you make things the easier it is the throw a wrench in the works.
Storing ANY information electronically on the passport is simply a bad idea. The only thing that really MUST be on the passport is the passport number, and you don't need a chip or a magnetic strip or an RFID or even a barcode to store a 16-digit number on a piece of paper. Ideally, there shouldn't be any other information shown at all. Everything else - birth dates, passport expiration dates, physical description, photo, etc should all be in a secure database. Creating false entries in the database would require hacking government systems - stuff that's difficult and carries heavy consequences. Without any of the info on the document itself, a crook wouldn't know anything about the person whose identity they've stolen. That may not matter for a credit card being used online, but for a sweaty, nervous would-be criminal standing in line at customs in JFK it'd matter a whole hell of a lot.
So having a 'fake' passport would require possession of an actual original at some point, and it'd have to be someone to whom you bear a close resemblence. Add facial-recognition software based on the images in the database, and, well, good luck impersonating someone else. Cooking up a fake passport electronically would therefore be impossible without social engineering at a government office authorized to create new passports - and that'll continue to be a problem whether you have chipped passports or not.
So, a central database is the only way to go. There are massive precedents and established methods for protecting data integrity in large databases, while the precedents for securing handheld data storage are rubbish (as the case in point shows so well). The database should be a shared international resource that nations subscribe to, administered through the UN via Interpol - it would give the UN something actually useful to do for a change.
Ideally, your passport would just be a number - and you could carry that in your head without any documents at all. The real effort should go into protecting the integrity of the basic ID numbers - this hypothetical number would be one, your SS# would be another.
"Equitably" means fairly, not equally. You might stand a chance of arguing that individuals don't all generate an equal amount of economic wealth, but you're on thin ice when you start trying to assert what is a 'fair' amount of individual wealth production. A major flaw in your reasoning right off the bat is that wealth is not created at the point of production, but rather during trade in the marketplace. The "value-at-production" you refer to is what is known as the "labor theory of value" and was, ironically, developed and championed by Karl Marx. Later, theories of marginal utility replaced the labor theory of value by (successfully) arguing that the value of something is not determined at its point of production, but rather at the point of sale. If it's a bad day at the market, your product/service may be worthless - not because it is inherently without value, but because there is no demand for it.
So it seems in your ignorance you have resurrected a now-defunct socialist theory as your primary argument. That's quite ironic, given that you're calling other folks socialists as an insult.
You are correct, it is only flatly forbidden under one or two of the mainstream schools of interpretation. I should have said, "Islam discourages and condemns birth control." But the level of discouragement and condemnation, even if contraception is not flatly outlawed either by state law or local sharia law, is tantamount to the condemnation or contraception recognized by most practicing Catholics. Pedantics aside, the development consequences are the same: families having 5+ children, limited female access to contraception, stigmatization associated with family planning, and so on.
If we can afford to pour billions into a shallow fight to control Oil, We can afford to make life's basics free for anyone who asks.
I certainly agree with your sentiments, but the truth is that we can't afford to. There are simply too many people and there isn't enough wealth in the world. Capitalism's main problem is that it doesn't distribute wealth equitably. But it IS great at generating wealth. This was a main point Gates made in the article. But it isn't enough. We aren't wealthy enough, and the growth of wealth in our global economy is not enough to keep pace - even in theory - with past or present population growth to carry everyone forward adequately (i.e. with a standard of living acceptable by modern western standards) even if all wealth was distributed evenly. The easiest proof of this comes from the well-known study that showed if everyone one Earth consumed the same resources as the average American, we would need 3 Earths to generate the basic inputs of materials and energy - clearly an impossibility.
My field of expertise happens to be international development, and one of the issues that has recently become impolitic to mention is population growth. We used to more openly recognize population growth as a major problem. Not so much now - you can conjecture why if you like. Regardless, population is and will continue to be the major obstacle standing in the way of broad-scale socioeconomic and environmental sustainability. There are just too many people.
As one quick example, I worked in the Middle East for a number of years in several countries that were really close to an ideal development scenario: the governments had tons of money thanks to oil and low initial populations. It was basically a blank slate with a blank check - fantastic! Build roads here, power plants there, schools here, hospitals there. And things have gone really very well. But rather than enjoy a GDP per capita of something like $20,000, those countries now have GDP/c of something under $5,000. Why? Because Islam forbids birth control just like Catholicism, and the populations are growing at 15-25% annually.
One very simple solution would be to limit service to one term in all branches of government. A major source of corruption is the fact that members of congress can become entrenched for decades. Career politicians are a major problem. Perhaps we should not have allowed politics to become a legitimate lifetime career path.
I would definitely encourage you to read the follow-up posts by both codebuster and myself, as we address some of your points in them.
A couple of quick things. You said: You'll see that the central theme to achieving economic freedom, in the article, is regulation to prevent theft, fraud, ensure property rights and uphold contracts.
Regulation IS a form of market intervention. When the government intervenes/intereferes with the market, that market is not "totally unbridled" or truly free. My whole point is that regulation is necessary in order for markets to work. If they are left completely alone, they become inefficient and get taken over by monopolies and cartels.
I would go back to this concept: Long-run versus short run. What I remember from my economics classes in college is that academics define profits -> 0 (going to 0) over the long run. Not the short run.
It may be true that profits decrease over time. But why? Because a new market - say for a new technology like PC-based GUI operating systems - starts out as uncompetitive, and that means inefficient. AND profitable. As the market becomes more competitive, it becomes more efficient, and profits go down. Now, if the government doesn't do any regulation, then the company making the PC-based GUI aka Windows (Microsoft) can use its power and wealth to monopolize the market and prevent competition, thereby keeping the market inefficient and profitable.
So, markets do not automatically evolve into competitive, efficient, unprofitable ones.
So you're right, "profits continue to exist in a free market." But only so far as that market is inefficient. It just so happens that, by the economic definition (not my definition), a perfectly free market is also a perfectly efficient market, and a failed free market is a highly inefficient market and often highly profitable as well. My point is that it's quite ironic that an extremely profitable market is by definition a failed market.
Thanks again for another interesting post. Quick responses, as I am at work:
You say that history has shown the markets are not efficient, but I submit that it is meaningless to say that they "are not efficient" without comparing them to alternatives. Not efficient compared to what alternative?
I've probably given you the wrong impression - that I am some kind of socialist interested in centrally planned economy. Not so. I have no problem with regulated markets. But regulation is antithetical to truly free markets, and antithetical to the ideals held by proponents of globalization and unbridled free trade. Truly 'free' markets - i.e. totally unregulated global markets, the example I cited earlier being the unskilled labor market - are not efficient nor do they serve the interests of society. Free market theory claims that the opposite will occur: that by being totally unbridled and unregulated as in anarchy, markets will tend toward optimal efficiency and thereby serve everyone's best interests. The two key points here (one of which you expressed yourself) are:
1) Regulation is necessary to ensure market efficiency, otherwise the naturaly tendency is toward monopolies and cartels, and the proof lies in the fact that the world's most successful economies are the ones that are well-regulated (i.e. North American and European markets), while those that are unregulated (Africa, India, China, Southeast Asia, etc) are rife with monopolies and cartels.
2)This squarely contradicts Friedman and other laisez-faire theorists. This is what I mean when I say that history and common sense show us that totally free markets are not efficient. So to answer your question, actual markets out there in the world are inefficient compared to what theory predicts. If this were physics and the observations did not remotely match your theory, what would you do with your theory? That's right: toss it in the circular file. As an addendum, I pointed out that market inefficiency correlates strongly with market profitability.
Lastly, as I mentioned in my earlier post, the vegetable market is not an acceptable example of a perfectly efficient market that is also profitable because the "profits" you speak of are merely sufficient to allow the sellers to cover their costs of living - as per Adam Smith's Natural Price. In essence, this perfectly efficient market is not profitable at all, it is subsistent. That is what I meant when I mentioned the difference between making a living and making a killing. And to answer your question, we decide what constitutes reasonable profit in our society through our laws - laws against price gouging, laws against price discrimination, laws against predatory pricing, laws against usury and loan-sharking, and so on. So, I must reject the example you submitted as proof that my assertion about profit and efficiency is wrong.
As a final note, the Friedman camp often falls back on the "regulation is the source of all our woes" argument. Loan sharking, for example, would be fine if we just legalized it because the market would settle at equalibrium where everyone's interests were optimally served. The problem is, reality just doesn't bear this out. I refer you to the consequences of de-regulation of the banking industry as evidence: our financial system is on the brink of collapse as a result of de-regulation, and poised to take down much of our economy along with it. I would argue that the economic picture we read about in the news these days hardly constitutes an equalibrium in which everyone's interests are best served.
marginal utility has almost nothing to do with competition or lack thereof - it simply deals with the additional satisfaction/dissatisfaction someone derives from the consumption/loss of one extra unit of something.
Marginal utility factors into supply and demand analysis, which are borked completely in the absence of competition. All supply and demand analysis, including marginal utility, is contingent upon a number of different competing sellers supplying according to market demand. In the absence of these often fairytale conditions, you get a whole lotta nuthin in your analysis.
You are quite right that risk scares off potential competitors. But risk is largely a consequence of the threat posed by market-dominant businesses already in place. Business like Microsoft and WalMart are highly profitable, and they may even attract competitors sporadically, but that does not mean that the market "is competitive" per se; i.e. it does not mean the market is efficient on any kind of ongoing basis. Microsoft and WalMart tend to destroy their would-be competitors - often using tactics that are are so nefarious as to actually be outlawed. Even markets that appear to have genuine competition - say, the rivalry between Coke and Pepsi - are often not particularly effective in reality. That's why you can go into any Kroger or Ralph's of Albertsons supermarket and buy no-name cola for half the price of Coke or Pepsi.
I appreciate your thoughtful response. I do, however disagree significantly with you on several key points. I'll do my best to provide illustrative examples to explain why:
There will always be a window of opportunity (limited in time) wherein an individual with the right good or service in the right place and at the right time will earn a profit. This is true even in situations where there is almost complete anarchy (the city of Berlin in the months immediately following the surrender of Germany in April 1945 for example).
These 'right place at right time' situations are defined by the lack of competition in the marketplace. I doubt you are suggesting that the anarchy of post-war Germany is a good example of a high-efficiency free market. But do note that neoclassical laissez-faire economics holds anarchy - literally the absence of any state authority to interfere with market forces - to be the ideal precondition for market efficiency. History - and common sense, I might add - show quite clearly that totally unbridled, unregulated markets are not efficient. Rather, they are the opposite. Rackets form, cartels form, monopolies form, and competition is minimized as the big fish eat up all competitors until only a few remain to reap the profits of their size.
this leaves aside the entire issue that the interests of society - which the economy is intended to serve rather than subvert - are often quashed in the bargain. A good example is the largely unregulated global unskilled labor market, which is now a festering disgrace to humanity characterized by the exploitation and enslavement of those least able to protect themselves, including children as young as 4.
Even in a competitive market, where the equilibrium has been established, profits are not categorically impossible.
You cite the farmers market example, which - coincidentally perhaps - Adam Smith also cited when he introduced the concept of the 'natural price' which is not the price at which costs of production are covered, but rather the price at which a reasonable return is also netted which pays for the seller's costs of living. The problem is that transnational corporations do not have costs of living, and the concept of a 'natural price' with 'reasonable profits' does not apply to them. The "profits" of mom-and-pop shops and farmers markets are categorically different than those of giant corporations. Making a living and making a killing are two entirely different things.
I did not mean to suggest that any market is a non-zero-sum situation. The classical definition of a market trade is one in which both buyer and seller benefit; hence, a non-zero-sum transaction. I apologize if my lack of clarity gave that impression.
saying that one was "coerced" into buying the Ford Focus because they wanted the to have the Ferrari instead but couldn't afford it is nonsense.
You must be careful not to compare apples to oranges. Fords and Ferraris are different products, offering different value propositions and different utility. To compare apples to apples, consider prescription drugs: you can 'choose' between an AIDS drug from Pfizer or a similar alternative from Merck; both are priced at hundreds of dollars per month but cost pennies to make; both are priced vastly above any R&D expenditures (profit growth in the pharmaceutical industry has outstripped R&D growth by a factor of 4 over the last 10 years). Yet these drugs do not have generic competitors because patents prevent competitors from entering the market. To say that consumers are 'coerced' in this situation is not nonsense at all. The cause of coercion: lack of competition. The source of profit: lack of competition. The source of market inefficiency: lack of competition. In this case it is legitimized by IP law. In other cases the monopolies or oligopolies or cartels that quash competition are not legitimate. The end result, however is the same.
it does not follow that there can be no p
you don't buy just a CD with the software at .
Variable costs are per-unit costs. Fixed costs are costs that are independent of how many units of something you make. The only item you listed that is a variable cost is the printed DVD. All the other costs are fixed costs, which remain the same - like I said in my first post - whether you make one or 1 billion units. It's clear you didn't have any understanding of the difference between the two. Hope I was able to fix that for you.
-As there are downward pressures, there are also upward pressures. For instance, how about the pressure of new features and content being added?
Dude, this just doesn't make any sense. If you add new features and content, you change the product. If it's not the same product ... wait for it ... it's not the same product!. In case you weren't aware, different products have different prices. Tricking out and upgrading your Honda Civic with twin turbos and a nitrous tank does not put "upward pressure" on the price of regular Honda Civics. You're comparing apples to oranges. Apples to apples, sir, is how you conduct an intelligent analysis. Again, hope I was able to help set you straight you here.
At this point, you really come right off the rails. Sure, bargain bins offer cheap stuff - sometimes at what must be a very low margin. That stuff is unlikely to be profitable, nor is it likely to be new software competing directly with new products - it's probably in the bargain bin because it's old. It supports my points both ways, which is why it makes no sense for you to bring it up as a one of the "several key factors" that demonstrate my "conclusion born of ignorance." Score another FAIL for you.
Lastly, you mention the cost of entry for high tech. Well, since we're talking about profit margins, the absolute value of costs are irrelevant. If something costs a lot to make, it's going to have a high price. But that does NOT mean it will have a high profit margin. It might cost me $1,000,000 to hire a bunch of expensive techies to build an uber-home-theater system. But I could sell the system to you for $1,000,001. $1 profit for me. High price =/= high profit. Maybe the concept of "profit margin" is simply beyond you?
"as you've so aptly shown, intelligence is a rare commodity"
Yup, apparently it is.
Really I fail to see the point of your post, just what were you trying to say? That free markets are not profitable or cannot be profitable?
That is correct - free markets, as defined by neo-classical laisez-faire economics, cannot be profitable because profit margins of any significance are categorically impossible in a genuinely competitive market, and genuine competition is a pre-requisite for the accepted definition of a 'free' market. Coercion is NOT limited to regulation imposed by governments. Indeed, the heuristic free market analyses are made based on the assumption of anarchy - literally, no authority - and hold up best (if their advocates are to be believed) in the absence of the state.
So if you're a proponent of free markets as they are defined by the academic and political right, you must accept the fact that any profitable market is - by definition - also a failed market: i.e. one whose efficiency is so poor that, via coercion, it facilitates exploitation of consumers. Contrary to the standard free-market rhetoric, the consumer does not always win. Indeed, when companies profit at all, the consumer is the loser. The consumer only wins when companies are fighting tooth and nail just to scrape by with subsistence-level profit margins.
Conveniently, this gels rather well with common sense too.
I absolutely agree - I was actually citing the prevailing rhetoric that a 'fair' price is 'whatever the market will bear' which I happen to vehemently disagree with. If I had the only life-saving medicine available to save my dying brother, would a 'fair' price be whatever he could 'bear'? What utter codswollop.