Of Siren Servers and Radical Markets

Radical Markets: Uprooting Capitalism and Democracy for a Just Society
Eric A Posner and E. Glen Weyl
Nonfiction 337 pages
Princeton University Press, 2018

Who Owns the Future?
Jaron Lanier
Nonfiction 396 pages
Simon & Schuster, 2013

It is difficult to review what one doesn't fully understand. Which isn't to say that I was totally baffled by these two books from these  three authors. Their descriptions of socioeconomic problems made perfect sense to me. It was their solutions that baffled me.

"Radical Markets" looks at capitalism in a radical way, starting with the premise that property is monopoly. While their solutions are sometimes over-explained, they none-the-less failed to convince me. That may be due to my inadequate understanding of economics, or perhaps I've correctly intuited that something is missing in their solutions.

Regardless, the ideas are certainly worth reading. One in particular was splendid. It's called quadradic voting, and it works like this: let's say you have a number of vote credits and you can spend them across a number of issues. To vote once on an issue costs one vote credit, to vote twice costs four credits, and voting three times costs nine. If you really cared about an issue, you could vote four times, spending sixteen vote credits. The more you care, the more it costs you. This might be a good way to decide certain popular issues. We live in times where manipulating complex math is easy. There are all kinds of new solutions we could try.

The authors also discuss the idea of treating data as currency, giving credit for this idea to Jaron Lanier. The idea evolved as a solution to what Lanier calls "Siren Servers." I feel the same ambivalence toward Lanier's solutions as I do to those of the other authors. Lanier's label, "Siren Servers", refers to technology companies that make their money by mining other people's content or data. According to Lanier, people should be paid for the demographic data they provide to those who mine it for marketing products or gaining or suppressing potential votes. Sadly, in the United States a great deal of money is spent persuading voters to embrace policies that harm them while enriching those who already have too much. Paying people for their demographic data won't fix this problem. Limiting how much Political Action Committees can spend would do greater good.

I'm not sure Lanier's solution is workable, but I'm completely sure that Siren Servers are an engine of income inequality. Once software is written, only maintenance costs remain. Siren Servers don't require factories full of workers. Only a few, very well paid, employees are needed. Since there are only a handful of Siren Servers, there is little competition to limit price. Apple can charge an app maker 30 percent for a sale in its app store because no competitor charges less. It may not seem like much, but 30 percent of retail price is a strain for both the app maker and the app consumer. On the unregulated internet, price gouging is business as usual. In its earliest days the internet was used to share government and academic information. As the World Wide Web gained popularity, this information source was commodified. Going forward, the internet needs to be more like a library and less a device for monopolist rent collectors.

Big Donor Man

 

Dave asked me to write something, but I haven't had time. The children's grandparents are visiting and that means no days off for me. Granddad was playing a song by some old band called the Doors. I was thinking about the song and came up with my own lyrics about lobbyists and wealthy donors. It's not much. Perhaps the excerpt from my book explains it better.

WTF, yo...oh

C'mon, duh, duh, c'mon, duh
I am a, duh, I'm a big donor man
I'm a big donor man
The plebes don't know, but the rich folk understand

Hey, all you serfs that are tryin' to survive
I'm taking away the money that keeps you alive, duh
'Cause I'm a big dough man
The plebes don't know, but the rich folk understand
All reet, duh

You chumps go eat your lunch, crap on week-old bread
What we say at fund raisers make you wish you were dead, duh,
I'm a big donor man, wtf
The plebes don't know, but the rich folk understand

Well, I'm a big donor man
I'm a big dough man
Duh, sucka, I'm a big dough man
The plebes don't know, but the rich folk understand

Excerpt from Fix It. Voters don’t usually notice charitable donations that are subsidized by government, but these aren’t the only invisible ways in which elites can leverage government for their own advantage. Rent-seeking occurs when scarcity adds to the amount that can be charged for a product or service. Scarcity, however, can be artificially created by groups seeking to create regulations which favor themselves. There are four ways in which special interests can gain unfair market advantages, Brink Lindsey and Steven Teles write in, The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality.

Their examples of special interest rent-seeking come from finance, intellectual property, occupational licensing, and land use. Lack of competition, they argue, is one of the reasons behind income inequality. Enforcing antitrust laws would create more competition “But an absence of competition also comes from the affirmative use of government power, such as when incumbents are able to fend off challenges by constructing barriers to entry like licenses or intellectual property protection.”

While no one wants to see a doctor lacking sufficient credentials, over-strenuous requirements can keep qualified physicians out of the game:

Although graduation from a U.S. medical school is not required to obtain a medical license, completion of a U.S. residency program is … The U.S. residency requirement, combined with highly restrictive policies on high-skill immigration, makes AMA power over medical school accreditation a powerful lever to constrict supply. Meanwhile, by historical accident the vast bulk of funding for residency slots is provided by Medicare, and for cost saving reasons the number of slots has been frozen since 1997. In 2016, for example, 8,640 graduates of accredited medical schools who applied for residencies—or roughly a quarter of all applicants—failed to be given a match.

If a quarter of new doctors can’t find residencies, then shortages of doctors are bound to lead to higher healthcare costs. Should the AMA choose to loosen requirements enough to increase the supply of physicians, they would also be reducing the potential salaries of their members. Groups like the AMA lack incentives to increase membership and are likely to become even more restrictive in influencing licensing requirements. Unfortunately lawmakers receive most of their information from those most likely to engage in rent seeking. Such groups have both money and organization on their side while ordinary citizens lack both and are often unaware of potential rent seekers.

Silicon Valley is another source of rent seeking. Just recently one of Amazon’s patents expired. This was for their one-click purchasing method. While there’s nothing inherently inventive in a method that saves a mouse click, Amazon none-the-less gained an advantage over Barnes and Nobel with this dubious patent.

It’s easier now than in earlier years to obtain patents. “In 1982, the newly established Court of Appeals for the Federal Circuit (CAFC) was vested with exclusive appellate jurisdiction over patent cases. Since then, the CAFC has reshaped the law by lowering the standards for patentability and expanding the scope of patentable inventions to include software, business methods, and even parts of the human genome. As a result, the number of patents issued annually by the US Patent and Trademark Office has increased almost fivefold. …

For this reason an entire industry buys patents in order to sue those who infringe upon them. The potential liability that one might be sued for accidentally using another company’s patented method discourages innovators from developing new products. Loosely defined and over-enforced, patent laws are stifling start-ups, crushing competition, and preventing progress.

Why the one percent wants climate change (a conspiracy theory)

My book is free on Kindle July 4, 2021 weekend

Let's discuss one of my conspiracy theories. First I'll tell you my biases. I believe that humans cause climate change just as much as I believe that humans hunted mastodons to extinction. I believe that Easter Islanders denuded their islands of vegetation prior to ending their days knocking over big stone heads. Since I also believe that the Japanese learned to manage their forests rather than denude them, I believe we should manage climate change rather than dither-about denying it. To do so effectively will require a massive amount of human cooperation and will. Without cooperation and will, other resolutions to humanity's problems will result in far more more human misery.

Climate can change for a variety of reasons. I take on faith that human activity is the main cause of current climate change. Climate science is complex and I'm no expert. I believe what I do because what I've seen matches my general science knowledge. For example, when I watch Neil Degrasse Tyson discuss climate change in his Cosmos episode on Venus, it fits with other things I know about science. On the other hand, when I hear a critic call Neil Degrasse Tyson a shill, I wonder who this critic shills with his false claims. In my view, climate change denialist arguments use cherry-picked data to back their claims. They've put their money into slick persuasion rather than sound arguments.

I also take on faith that humanity has both the technology and the ability to reduce the effects of climate change. We can't stop what's happened or what's going to happen, but we can certainly slow it down and adapt to it. What we can't do, is ignore it. Doing so would result in calamities far greater than the inconveniences we'll face if we put our efforts into tackling climate change now.

Technology and ability aren't enough however. A firm will and cooperation are required tools as well. At the moment these tools are in short supply amongst human societies. But I think attitudes can change.

Historian, Walter Sheidel writes about social collapse in his 2017 book. He shows how hunting and gathering societies must cooperate to survive. People in such societies own little besides clothing and tools. Once people began farming and herding, surpluses developed. Where there are surpluses, humans tend to create hierarchy, one result of which is Capitalism. People in hunting and gathering societies owned little besides clothing and tools. Once people began learning to farm and herd, surpluses were able to develop. Where there are surpluses, humans tend to create hierarchy, one result of which is Capitalism.

Sheidel notes that survival level societies are less innovative than hierarchical ones. Indeed, innovation was one of the advantages of our Capitalist society. During the Cold War, this advantage was promoted in public service announcements which claimed that Capitalism is superior to Communism because it encourages competition resulting in innovation and greater choice for consumers.

Now that communism is not considered the threat it once was, it might be worth considering what can be accomplished with cooperation. I believe when societies become overly hierarchical, power bottle-necks competition and opportunity, and causes poverty and ill-health. Where hierarchy was once an advantage, now it gives diminishing returns. As more and more wealth and power is held by fewer and fewer people, competition and innovation must diminish as well.

In any case it's time for my conspiracy theory. Most Americans haven’t seen significant wage increases since the early 1980s. However those in the top 20 percent have found life fairly easy. One thing, there's what, eight billion people on the planet now? Fixing the climate will mean sacrifices, and even if we make them, what will we do about all those people?

I remember a biology class experiment using two fruit fly couples. We put them in a closed environment, gave them plenty to eat and drink, and let them do their thing. They reproduced and then they reproduced some more. Soon there were generations of fruit flies living in a little closed dish. Then a couple of them died. And then they all died. They befouled themselves. Their garbage killed them. Like us — we’re getting plastic into everything. It's in shellfish. It's in fish. It's in us. So even if we start fixing the climate, we’re still drowning ourselves in our own garbage. What if Ebola or something killed most of humanity, then we wouldn’t have to do anything about climate change. Right? If we just sit back and distance ourselves from the rabble then maybe they’ll all kill themselves and solve the problem for us. And if a poor girl like me can have such a thought, imagine what wealthy people think. They’ve got more to lose than me, nicer houses, nicer cars, etc. (actually nannies like me just have school debts, not cars and houses).

And even for people who aren’t wealthy, trying to wrap your mind around all the problems humanity currently faces is enough to wish humanity extinct. Mostly. Naturally one would want a few people around and if one were rich, hung out with the cool kids, or had insider knowledge about the conspiracy, one might be able to avoid personal catastrophe oneself. But it doesn’t need to be a conspiracy, there are other ways to deny climate change. Waiting for Jesus is a good one. But I think it’s time to face up to it. If we work together we can handle this. Or die trying.

V.O Diedlaff is author of, We Can Fix It: Reclaiming the American Dream.

About those First Amendment rights

 

On January 7, 2021 Senator Josh Hawley tweeted:

“This could not be more Orwellian. Simon & Schuster is canceling my contract because I was representing my constituents, leading a debate on the Senate floor on voter integrity, which they have now decided to redefine as sedition. Let me be clear, this is not just a contract dispute. It's a direct assault on the First Amendment. (Yada, yada, yada) We'll see you in court.”

 Let’s take a closer look at this. Hawley mentions “Simon & Schuster,” “they” and “sedition” all in the same sentence. But, publisher Simon & Schuster has not accused Hawley of sedition. Hawley’s chief accuser is a PAC called The Lincoln Project which represents disgruntled current and former Republicans. Is his grammatical ambiguity Hawley’s attempt to write in Orwell's Newspeak? It's certainly Orwellian to contest votes for which there’s no evidence of voter fraud, but I digress.

 Anyone who occasionally glances at publishing news will know that publishers regularly cancel contracts. They do this for a variety of reasons, but the chief reason is future profits. Publishers are capitalists you see. They’re in business to make money. Perhaps we'll never know the 'true' reason S&S made its decision. Whatever the reason, it's not fair to say, “It's a direct assault on the First Amendment,” because once it passes through a publisher, speech isn’t free anymore, but sold at a profit. At various points in my career I’ve met people who say this sort of thing. Most have an inflated sense of self-entitlement. That seems to be a characteristic of the ruling class, people who like Hawley, attend expensive colleges, suffer from affluenza, and threaten to sue people. The ruling class has a name for those who stormed the Capital naively believing that taking selfies and destroying property will somehow change election results. They’re called sacrificed pawns. They're meant to be lied to, cheated, used and discarded.