Archive for the ‘Markets’ Category
Have your parents ever reminded you that your life is easier than theirs were? Most of us probably have. But try not to hold it against them. They heard the same thing from their parents who heard the same thing from their parents. And you will most likely tell your children the same thing. Each generation lives an easier life than the last thanks to automation.
Automation improves each and every one of our lives by making previously expensive, inaccessible technology affordable and accessible. This is why my blood pressure goes up when I read nonsense like this:
Fifty percent of the jobs will be gone in ~20 years. Not from the great sucking sound of jobs to Mexico that can be stopped with a wall. Not from moving offshore to China. From automation that is moving quickly from blue collar manufacturing to white collar information work. Second only to climate change, this is the greatest disruption of our time, and I don’t mean that word in a good way.
The article is yet another in a seemingly ceaseless stream of attempts to give legitimacy to an economic fallacy. The fallacy of machines taking our jobs is so absurd that Henry Hazlitt was able to thoroughly put it down in a single chapter of Economics in One Lesson.
What Ross Mayfield, the author of that wreck of an article, is advocating is that each and every one of us should suffer so that a handful of people don’t have to find a new line of work. Ironically, it was the evil of automation that allowed him to even publish that article. Were it not for computers, the Internet, and the availability of free (to publish and read, but as we know TANSTAAFL) publishing platforms like LinkedIn, Mayfield never would have been able to get his article published to such a wide audience. But I digress.
Let’s consider Mr. Mayfield’s world by taking a look at a fairly modern piece of automation, personal assistants like the Amazon Echo and Google Home. Through voice commands the Echo and Home are able to perform many of the tasks that once required a secretary. Paying a full time secretary was something only somebody with a decent amount of wealth could afford. Now, thanks to automation, the average American has access to many of the functions of a secretary for a fraction of the cost.
As I type this I am looking at a flat panel monitor. It’s much lighter than a smaller cathode ray tube (CRT) monitor, displays a superior image, consumes a lot less electricity, and cost less than what I could get a similar sized CRT for when CRTs were still a thing. How is this possible? For the same reason CRTs from a decade ago were both superior in every way and cheaper than the first CRT televisions, automation. Through automation resources once dedicated to hiring human labor are freed up for other activities such as research and development. When more resources are available for research and development superior technologies can be created.
We enjoy our current lifestyle because of automation. Imagine if the world had listened to Mr. Mayfield’s plea when electricity was invented. I’d be writing this post on a piece of paper with a fountain pen by candlelight… assuming I had enough free time to do so since I’d probably have to bust my ass 12 hours a day just to afford a place to live and food to eat. And when I finished writing it I would have to send it to a publisher in the hope that they would find it worthwhile enough to have their laborers configure their moveable type printing press to print off a few thousand copies for circulation. Oh, and you’d have to pay for it so that the publisher could recoup their costs and make a profit.
Does automation suck for the people who lose their jobs? Absolutely. But they can get new jobs just as candlestick makers did once the electric lightbulb became prolific. The loss of a few thousand or million jobs isn’t justification for hindering qualify of life improvements for everybody else in the world.
Everybody loves freedom so long as it’s the right kind of freedom. Neoconservatives love freedom right up until somebody wants to marry somebody of the same sex. Neoliberals love freedom right up until somebody wants to buy a firearm. Statist libertarians love freedom right up until somebody wants to opt out of paying taxes to fund the
military national defense force appointed by the duly elected representatives of the Very Small Government. Likewise, a lot of people love free markets until they fail to serve the market. When that happens those people turn into big government twats:
With competition so fierce and profit margins so small — roughly 2.7 per cent on average — the role Quebec’s highly interventionist government should play in one of the province’s most dynamic industries remains a source of contention.
The debate is not new and was rekindled earlier this year when Carlos Ferreira, owner of a well-known eatery, said Montreal should impose quotas in neighbourhoods to limit competition and help struggling legacy restaurants stay in business.
“I don’t believe in the free market anymore,” Ferreira said at the time. “We have to protect the good restaurants.”
And by “good restaurants” he means his restaurant.
Although I won’t claim that Quebec’s restaurant scene is currently a free market, the market was free enough that the barrier to entry was low enough for Ferreira to enter. Now, like most established corporations, he’s finding that the pressures of continuously appealing to the market tiresome and wants the State to step in to protect him and his interest at the expense of everybody.
I say the expense of everybody because as things currently stand consumers have all of the power. If a restaurant starts serving shitty food consumers can go to a competing restaurant. New restaurants have to attract customers and that means appealing to consumers. What Ferreira wants is to restrict those consumer’s choices and therefore limit the power they have.
This is nothing new. The biggest threat to free markets are successful entrepreneurs because they’re the ones that throw money at politicians to get laws passed that hinder their competitors.
The federal government put a lot of resources into shutting down the Silk Road. Was it worth it? Has the online drug trade stopped or at least been reduced? Of course not! People want access to recreational drugs and the market always provides. Since the death of Silk Road the online drug trade has actually flourished:
The successors to Silk Road, the darknet drug market shut down by the FBI in 2013, are raking in tens of millions of pounds in total revenue every month, according to a new report.
British dealers apparently have a serious finger in the pie, taking home roughly 16 percent of the global revenues, or around £1.75 million, between an estimated 338 vendors.
The State, however, can never admit failure. Through the magic of statistics it has declared itself victorious over the online drug trade:
The report, commissioned by the Dutch government to gauge the growth of darknet markets in the years following the demise of Silk Road, found some good news for beleaguered law enforcement: “cryptomarkets have grown substantially in the past few years, but not explosively,” though the numbers of vendors and hosting sites have grown. In fact, researchers found around 50 of these markets in total, however, the total volume of listings is now only six times larger than in 2013.
The volume of listings has only grown six times larger! It would have obviously grown even more if it wasn’t for the State’s efforts! This reminds me of the national debt, specifically when a politician claims that they have shrunk the debt because their efforts ensured it only grew twice as fast as it would have otherwise. If you’re very careful with your statistical definitions you can make any defeat appear to be a victory.
What’s the lesson here? Easy, the State is powerless against the forces of the market. While the State does win temporary victories it is always defeated in the long run. After all, how can a handful of people ever hope to defeat the entirety of humanity? When seven billion people are thinking of new and interesting ways to get their fellows the goods and services they want there’s nothing a handful of people wearing suits and sitting in marble buildings can do.
Socialists often criticize the market for allowing people to starve. They often say it’s unfair that somebody with surplus food is allowed to keep it while others starve to death. They also lambast the idea of property rights because the concept allows a person with a surplus of food to defend it against a starving thief. These are valid criticisms, mind you. But they also ignore an important fact. Markets and private property rights may allow some people to starve but you really need a centrally planned economy if you want to starve everybody:
The fight for food has begun in Venezuela. On any day, in cities across this increasingly desperate nation, crowds form to sack supermarkets. Protesters take to the streets to decry the skyrocketing prices and dwindling supplies of basic goods. The wealthy improvise, some shopping online for food that arrives from Miami. Middle-class families make do with less: coffee without milk, sardines instead of beef, two daily meals instead of three. The poor are stripping mangoes off the trees and struggling to survive.
Venezuela is an epitome of centrally planned economics. Much of the market has been “nationalized” (a fancy word for stolen by the State) and the Venezuelan government dictates a great deal regarding production and prices. Like the Soviet Union, Venezuela’s economy has collapsed and now people are starving.
In what must seem a twist of irony to proponents of central planning, there is hope for salvation. When the economy of the Soviet Union collapsed the thing that saved countless lives was the black market:
Everyday survival here requires of everyone – from childhood to old age – a street savvy that makes life in the inner cities of the West seem innocent by comparison. Many older Soviet people say the situation is much like it was after World War II. Survival is a degraded art form requiring such skills as knowing under which bridge the black-market gasoline dealers operate on Tuesdays and what sort of Western chocolates to give a schoolteacher on a state holiday so that a child can get decent treatment in the coming semester.
Anatoli Golovkov, the resident expert on economics at Ogonyok magazine, said, “There is nothing to buy through ordinary channels, but you can get anything you need if you are willing to play the game and pay big money. The whole process makes all of us cynical about the law and ourselves. It degrades us. But what’s the choice?
“For example, say I have guests coming, and I need a cut of meat, a couple of bottles of booze and a carton of good cigarettes. There’s really just one option. With a fistful of money, you go to one of the city markets. The state-run stalls are nearly empty. But you explain what you need to someone. He nods, and never saying a word, he writes down a price on a slip of paper and says, `Come back in an hour.’ When you come back, the package is all wrapped up in a copy of Pravda and off you go.”
When central planning begins starving everybody the market is there to save lives. It happened in the Soviet Union and it’s happening in Venezuela:
But in Maracaibo, the black market is an actual place. The contrabando, as sellers call it, sits on tables out in the open.
The odd part, to an American, is that this contrabando is available every day at Aisle 3 in my local Safeway: flour, rice, coffee, Tylenol. I went in with fixer/translator Yesman Utrera and photographer Jorge Galindo, on a specific mission: to find infant formula for our driver’s baby. By the time we found two cans to compare prices, both were sold.
The very thing that socialists accuse of starving people is the only thing that keeps people fed when socialism starts to starve them.
There are no perfect solutions. Every solution has pros and cons. The cons of the market and private property rights is that some people do indeed starve. But that is far less of a con in my book than the con socialism, which means everybody starves when the State can no longer keep the centrally planned economy propped up. When a centrally planned economy begins the collapse a major pro of the market comes into play: the incentive of personal gain spurs market actors to provide the goods people desperately need. Many will point out the high prices of dealing with these black market actors as a con of the market but they fail to understand that the high prices exist because the risks are so high. When a centrally planned economy begins to collapse it’s not unusual for the State to blame the very thing keeping people alive: the black market. In the hopes of keeping the economy propped up just a little bit longer the State sends agents to hunt, assault, kidnap, and/or kill black market actors. So the high prices aren’t the fault of the black market actors but the State that is trying to maintain its control over the ashes of the civilization it burned.
What is the enemy of tyranny? Is it the ballot box? Is it the bullet box? No! It’s the black market:
North Korea’s isolation from most of the world is not just economic and diplomatic, but technological too. Only about 3 million of its people have access to its domestic telecommunications network, which does not permit access to outside countries. Its internet, meanwhile, is accessible only to the nation’s elites.
But some North Koreans have been able to circumvent these restrictions, thanks to the spread of illegal black market phones into the country. A new report from Amnesty International explains that these smuggled devices—referred to as “Chinese mobile phones,” even if they’re not actually from China—have become an important tool for North Koreans looking to connect with loved ones who have left the country and want to stay in touch.
If their relatives or friends at home don’t already have a “Chinese mobile phone,” the report explains, “often the person who has left will try to send them a phone, for example one bought in South Korea, Japan, or China.”
North Koreans who obtain one of these smartphones can connect with people outside the country by installing a Chinese SIM card in their device. They then must go to a part of the country close to the Chinese border, where they might pick up signal from a neighboring Chinese network.
No matter how repressive of a regime you suffer under the black market is there to provide you the goods you want. Are your overlords preventing you from communicating with the outside world? Never fear! The black market is here to provide you unrestricted telecommunications. Do your overlords prohibit you from owning the most effective means of self-defense? The black market is here to provide you with guns and ammo. Is there some government agency that artificially restricts your access to medication? The black market is here to provide you the medications you need.
The black market has been and continues to be the single greatest enemy to tyranny. By flagrantly providing illicit goods the black market shows that the emperor wears no clothes.
Everything should be free is the attitude a lot of people hold towards software. If you charge $9.99 for an application you spent months writing and will spend years maintaining you’ll probably receive at least some backlash for having the audacity to charge for it. But the universal principle of TANSTAAFL, there ain’t no such thing as a free lunch, >applies even to software.
The developers of Caddy, a web server that I’ve admittedly never used, wrote an explaining why they’re asking for money. As it turns out, in spite of what many people who don’t develop software believe, creating and providing open source software involves some notable expenses:
Today you will notice an addition to the Download page: a “Payment” section. Is Caddy no longer free software?
The truth is, it never was. There’s no such thing as free software. The question is, “Who pays the price?”
In the case of Caddy, it has been the developers. The obvious problem with this is that it’s not sustainable in our economy.
In less than a year, Caddy has well over 20,000 downloads — many of which aren’t counted as the project is cloned and built locally and deployed to both development and production environments. We’ve accrued over 4,500 stars on GitHub, processed hundreds of pull requests, and have dozens of participants in our chat rooms. I can’t speak for other Caddy developers because donations are private, but thanks to very generous donors last year, our web hosting is paid (for now) and I’ve received a little over $150 for my time.
Keep in mind that commercial offerings for similar web servers cost anywhere from $80 one-time to $1900/yr. (And none of them do what Caddy does.) My text editor costs $70, even just your domain name probably costs ~$12/yr. (If you support us well enough, we’ll send you swag!)
Too many people, typically those who don’t develop software, have the attitude that all software should be free (as in price, but the ambiguity of the term free is why I refer to software with unburdened source code as open source software instead of free software). The app economy is a perfect example of this. It’s why many developers have moved towards nickel and diming customers with in-app purchases or selling a subscription service. When they tried to charge reasonable fees for their software up front people bitched. And now people are bitching because software developers are relying on in-app purchases and subscription services.
Too many people have gotten it into their heads that software should be free (again, as in price). Don’t fall into that trap. Software development incurs a lot of expenses. Time, computers, electricity, and web hosting are just a handful of things needed for software development and none of them are free.
As I said, I haven’t used Caddy. But it does seem to be popular so I’m going to assume it’s a quality product. That being the case, I do hope enough users begin paying for it to keep the developers afloat. It’s always sad to see a good software product fall into obscurity because the developers weren’t being compensated and had to abandon the project for something that actually paid the bills.
Humans aren’t very good drivers. We’re unable to watch everything that’s going on around us at all times, we’re easily distracted, and many of us seem utterly incapable of putting the cell phone down even when we’re driving. Not surprisingly, especially when you consider the number of vehicles on the road, a lot of collisions happen every day. The State benefits from this because it has create numerous laws that allow it to rake in cash when people crash into one another but do fuck all for safety. Fortunately the market is here to help and it doesn’t even need a gang of armed agents to shoot our pets:
In what may not come as a surprise, vehicles with automatic braking systems are involved in rear-end crashes (that is, accidents in which a vehicle hits a car directly in front of them) at lower rates than vehicles not equipped with the systems, says the Insurance Institute for Highway Safety, or IIHS.
The research focused on Forward Collision Warning (FCW) and Automatic Emergency Braking (AEB), as well as the suite of systems made by Volvo called City Safety, which includes advanced versions of those two technologies. The research examined vehicles from a number of different automakers including Acura, Honda, Mercedes-Benz, Subaru and Volvo, which were equipped with FCW and AEB, as well as vehicles that included just FCW or no crash prevention tech at all.
According to the IIHS research, equipping vehicles with both warning and autobraking systems reduced the rate of rear-end crashes by 39 percent and rear end crashes with injuries by 42 percent. That’s an overall reduction in crashes by 12 percent and a reduction in injury crashes by 15 percent.
Machines can be far better drivers than humans. With the right sensors they can watch everything that’s going on around them, they don’t get distracted, and they can multitask so sending information over a cellular connection doesn’t hinder their ability to drive. Adding automation to automobiles has been improving safety since, at least, power brakes became a thing. As the amount of tasks an automobile can do itself increases we will likely continue to see a correlating increase in safety.
What’s beautiful about these safety systems is that they don’t require the threat of violence to create. I’m sure the State will take credit for these automated breaking systems by making them mandatory but the State didn’t invent them, the market did. Automobile manufacturers have voluntarily developed these systems to make their vehicles safer and therefore, they hope, more appealing to customers.
Meanwhile the State will continue passing laws to needlessly change the roadways and highways, make more things a finable offense, and other such nonsense under the false claims of increasing safety while really increasing its revenue.
Anybody familiar with the Soviet Union probably knows black market trading was pervasive even though the communist government tried tirelessly to ruthlessly crush it. Black markets spring up anywhere a government is trying to restrict trade. Even the totalitarian government of North Korea can’t shutdown black market trading:
Although short, this video echoes a lot of ideas expressed by agorists. Namely that market forces are capable of undermining government regimes. The new generation in North Korea doesn’t remember the founding of the current regime. As is common in such situations they a proving to be less loyal than the previous generations.
One of my favorite fairytales is the one about government regulations being able to restrict the proliferation of technology.
IMSI catchers are widely used by government law enforcers for surveillance. The devices, for those of you unfamiliar, act as cell towers and by so doing get local cell phones to connect to it instead of the legitimate cell towers. It’s a man in the middle attack that allows law enforcers to snoop any unencrypted data transmitted or received by a victim’s cell phone.
In the United States the use of such device by non-law enforcers is sternly frowned upon. With the Federal Communications Commission’s (FCC) restrictions on the civilian use of IMSI catchers you might be lead to think the devices are hard to acquire. Not so. There is one thing that always renders government restrictions on technology impotent: the black market:
Across a tinny Skype connection, a Hong Kong tech company is trying to sell us state surveillance equipment.
“I switched it on already,” says Edward Tian, holding up a backpack containing a box and wires. “This is the antenna. This is the battery […] Everything is this simple.”
It’s a $15,000 IMSI catcher operated via an Android app. Tian shows us the user interface in a grainy video. He hits a button on the app and information on a bunch of cellphones in the area trickles down the screen. He has their IMSI (International Mobile Subscriber Identity, a unique identifier for their SIM card), IMEI (International Mobile Equipment Identity—the same for their device), and even full phone numbers.
Any perceived control over a technology is nothing more than an illusion.
Government regulation of the medical industry, particularly making buying health insurance mandatory and granting monopolies on ideas, have made medication unaffordable. People in need of medication are justifiably pissed about this, especially since many pharmaceutical companies feel the market is regulated enough to make it safe for them to continuously jack prices up. Unfortunately their anger is only resulting in more price increases because they believe more government regulatory power is the solution.
But more government regulatory power only exacerbates the problem because it further pushes competition out of the market and competition is the solution to high medication prices:
Turing Pharmaceuticals, the company that last month raised the price of the decades-old drug Daraprim from $13.50 a pill to $750, now has a competitor.
Imprimis Pharmaceuticals, Inc., a specialty pharmaceutical company based in San Diego, announced today that it has made an alternative to Daraprim that costs about a buck a pill—or $99 for a 100-pill supply.
“While we respect Turing’s right to charge patients and insurance companies whatever it believes is appropriate, there may be more cost-effective compounded options for medications, such as Daraprim,” Mark L. Baum, CEO of Imprimis, said in a news release.
What government enabled to run up to $750 per pill a single competitor brought down to $1.00 per pill. In a free market this is the norm. Absent of monopolies on ideas, mandatory purchasing of services, absurdly high testing costs designed to favor politically connected established manufacturers, and other forms of regulation on medical products there is actually a very large pie. And if anything can be said about markets if there is pie everybody wants a piece. Different providers attempt to grab a piece in different ways.
Some sell a premium good or service, some will provide the most inexpensive option possible, and many others will fall somewhere in between. Rolex continues to thrive by providing a premium wristwatch to its target market just as Timex continues to thrive providing very affordable wristwatches.
The medical market is no different. Some medication providers will charge a premium while others will provide an inexpensive option because the two portions of the market ensure enough pie is available for both and enough pie being available for both ensures both portions of the market are served.
If you become outraged when medical companies jack their prices up don’t beg the government to do more of the same. Instead do whatever you can to help expand a free market.