Tag: Miraculous Markets

Fighting Piracy

Piracy has been the content creator’s boogeyman since Napster. We’ve been told time and again that piracy will destroy musicians, authors, and movie makers even though all three groups are raking in more money now than ever. This is because consumers are willing to pay for content. The fatal flaw in previous efforts to fight piracy has been a reliance on legal strategies. But you can’t sue people into behaving a desired way. You can, however, make them a better offer:

Online entertainment services such as YouTube and Netflix have already taken away a large chunk of BitTorrent’s “market share” in North America and the trend is carrying over to Europe and the Asia-Pacific region.

[…]

This doesn’t necessarily mean that there’s less torrent traffic, as overall bandwidth use may have doubled in the same period as well. However, other online entertainment services are gaining ground during peak hours.

With 21% YouTube currently accounts for most traffic and Netflix is also on the rise, even though it’s only available in a few countries. In the UK and Ireland Netflix is already good for 10% of peak downstream traffic.

Services such as Netflix and Spotify can succeed in fighting piracy where lawsuits cannot. This is because they rely on providing consumers a convenient service for a price they seem to find fair (judging by the fact both services have a ton of users). For me, as an Apple Music user, paying $10 per month to have easy access to almost all of the music I want to listen to without having to manually manage anything is worthwhile. With BitTorrent I have to search for the music I want, hope there’s a copy in a format I can use, hope there’s enough people seeding it to make the download take minutes instead of days, and finally manually add it to my music libraries (which span across several computers and mobile devices). My time is valuable enough to me that $10 per month is worth not having to do all that dicking around. Apple Music has effectively stopped me from pirating music (not that I ever have because it would be foolish to admit to such a thing on a public page).

Motivations for piracy are often looked at in only dollars. People assume pirates are simply too cheap to pay for content. The calculation isn’t so simple. Pirates steal content for a multitude of reasons including official sources not providing a format they want, the time needed to pirate the content is less than the time needed to acquire it through official sources, or the strings attached to official sources (such as DRM) being too draconian. If content producers want to fight piracy they need to learn why piracy is occurring and offer a solution that addresses those reasons.

The People Who Make The World Better

I have several especially statist friends who constantly claim they’re making the world a better place because of their involvement in politics. It’s the most pathetic ego stroking I’ve ever seen and there isn’t even a kernel of truth to it. Running for office, sucking off political candidates, and constantly telling other people how they should live their lives doesn’t improve the world in any way. Do you know what does improve people’s lives? Markets. Providing people the goods and services they need will actually benefit them. Consider the prosthetics market. Prosthetics are leaping ahead at a fantastic pace. We’ve gone from hooks on pulleys to replace missing arms to prosthetics attached to the nervous system capable of mimicking a lot of what natural limbs can do:

Hastened by advances in neurology and robotics — and tragically by the spike in U.S. soldiers returning from Iraq and Afghanistan without limbs — a new era of prosthetics has emerged, using signals from the brain to evoke an increasing variety of movements from bionic limbs.

Jorgenson is one of about 50 patients worldwide — and the youngest, so far — to undergo a surgery called targeted muscle reinnervation, in which severed nerve endings in her arm were reassigned to control muscles that would trigger sensors in the bionic arm. With the surgery, which was performed last year at the Mayo Clinic, she also became the first to have six nerves rewired, giving her the ability at will to move the robotic elbow up and down, rotate the wrist, and open and close the hand.

[…]

Learning how to signal the proper muscles to trigger movements from the bionic arm happened quickly, Jorgenson said, but mastering it is taking time.

“Sometimes when I raise my arm up,” she said, “the hand will start twisting around.”

When it closes, the hand can create a grip-crushing 22 pounds of force, but it can also be delicate enough to hold a paper cup. So developing control has proved crucial. After daring her older brother to let her squeeze his nose, she tried it on herself. She squeezed too tightly and found herself unable to release the hand because the shock caused her muscles to tense up.

But on Wednesday, she transplanted the plant, filled the pot with soil, and cleaned the mess with a dustpan — all with little to no delay between the time she wanted her prosthetic to move and when it did.

“It’s pretty amazing how intuitive she has become,” her father said.

Her next step will be triggering two motions at once — such as moving the elbow while closing the hand — but she is comfortable enough to start wearing the bionic arm to school. The eighth-grader had delayed until now, because her school lacks air conditioning and the prosthetic can become uncomfortable in high heat.

The people involved in the development of this girl’s prosthetic limb have done more to improve the world than anybody who has invested their time in politics. And they’re not done. Unlike politicians who accomplish a minor goal and declare complete victory, people involved in the prosthetics market aren’t satisfied with replicating only a few features of natural limbs. They want to replicate everything:

DARPA promised prosthetic limbs that produce realistic sensations, and it’s making good on its word. The agency’s researchers have successfully tested an artificial hand that gave a man a “near-natural” level of touch. The patient could tell when scientists were pressing against specific fingers, even when they tried to ‘trick’ the man by touching two digits at once. The key was to augment the thought-controlled hand with a set of pressure-sensitive torque motors wired directly to the brain — any time the hand touched something, it sent electrical signals that felt much like flesh-and-bone contact.

If you want to make the world a better place learns skills that allow you to make new goods and services for consumers. You don’t have to work in the medical field but that’s certainly a great market to consider. Something as simple as a restaurant will provide more people more good than any politicking.

Work Is Replaceable

Technology has created more jobs than it has destroyed yet I’m still subjected daily to the whining of people worried about the jobs. What will happen to people working checkout aisles at convenience stores if everybody uses kiosks? How will employees at McDonald’s afford housing if they’re replaced by kiosks? Where will people working in manufacturing go if 3D printers make their jobs unnecessary? Then you have the people, usually old folks, bitching about the current generation not working as hard. You would think any 20-something working less than 80 hours a week was some kind of lazy bums. And don’t even get me started on the people worried that there won’t be as much work available in the future because of automation.

You’re reading this so I infer that you both have access to a computer and aren’t currently working (even if you’re at work). Two things about these inferences should amaze you. First, you have access to an incredibly complex piece of machinery that has went from non-existent to pervasive throughout society in roughly half of a century. Second, you don’t have to perform hard labor every minute of the day just to survive.

It’s true, automation has replaced a lot of jobs. It’s also true that automation has allowed us to work less than the previous generation and still enjoy a better standard of living. That’s the beauty of automation. Not only does it replace hard labor with easier jobs but it also allows us to generate the same wealth in less time.

I, like you, am not spending every moment of daylight hunting animals or gathering berries. Usually I put in around eight hours five days a week. For those 40 hours a week most of it is spent sitting on my ass in front of a computer. The most strenuous effort I have to put forth most working periods is moving my fingers thousands of times to different keyboard positions so I can properly enter in the correct sequence of characters to convince a computer to do what I would rather not do myself. Programming is much easier than automotive repair, which is what my father does. I also work fewer hours than he does.

In most cases when a job is replaced with automation it reduces the amount of physical effort needed overall. You know the socialist dream of abolishing work? It becomes a little more feasible everyday as we make better use of advancing technology. Human history is actually a lengthy demonstration of this point. This generation is lazier than the previous, the previous generation is lazier than its predecessors, and so on.

This is why I scoff at neophobes and why I roll my eyes when some union leader is bitching about the machines replacing jobs. I don’t want to struggle every waking hour to obtain enough food to eek out a substance living. Fuck everything about that! What I want to do is go home after doing what little work I need and enjoy myself. Machines can create more wealth than I can so let them do it. I’ll enjoy the product of their labor.

Giving Versus Exchanging

“What do you do for a living?” “Me? Oh, I’m a programmer.” “You know computers? Can you help me fix mine?” How many of you have had this exact conversation? Judging by conversations with my computer savvy friends there is a 100% correlation between having computer knowledge and being asked to fix computers. The same applies to having any skill set. When I was working as a mechanic people would ask me to look at their cars when I wasn’t at work. The issue isn’t people asking me to fix their computers or vehicles but the expectation that I will do it for free.

Whenever somebody asks me to fix their computer or vehicles I have a standard response: “Absolutely! Let’s discuss prices.” Usually the person asking seems to be offended by that response. It’s as if they believe my time and knowledge, which they have admitted to wanting, are somehow worthless.

This may be the only time you’ll see my reference Atlas Shrugged. Although it’s dreck any novel that’s 1,000,000,000 pages long is likely to make at least one valid point if for no other reason than by accident. There is a scene where Objectivst Jesus is going to take Dangy on a tour of his holy land. Since he’s the messiah he has no need for worldly possessions or something and needs to borrow a car. When he calls up his disciple to ask to borrow the car a price in gold is negotiated. That scene stuck with me because both characters expected an exchange, not for one to give to the other (in fact Objectivist Jesus then made a quip about “give” being some kind of dirty work in his valley). Thinking back on it I think I understand why the novel is so popular with high school students who have been indoctrinated to “share” (really to give something of theirs up without compensation) for most of their lives. But I digress.

The difference between most people who ask me to fix their computers or vehicles and the scene I just described in Atlas Shrugged is that the former expects me to give while the latter expects an exchange. Giving dictates that somebody who has something should allow other people to have it without expecting any compensation. Exchanging dictates that goods and services have value and therefore are deserving of compensation.

When you ask somebody to borrow or do something for free you’re being hypocritical. First you’re implying you don’t believe the thing you’re requesting has any real value by not offering anything for it while also necessarily implying the thing has value by wanting it.

It’s a bit offensive to have somebody imply my skills are worthless and then ask to benefit from them. That’s not to say I expect everybody to offer me the usual market value of my time. Even a token offering is appreciated. For example, the cost of the time needed to fix a computer is usually higher than the cost of a box of cookies. But I’m still willing to fix a computer for people I know if they offer to bake me some cookies. Usually I’ll turn down the offer (then they’ll insist and bake them anyways) because it’s not about the payment, it’s about the acknowledgement that my skills are worth something to them (a token of appreciation if you will).

The idea behind an exchange is that two people are in possession of something the other wants. Both people feel as though they’ll be better off in the end if they exchange their thing for the other person’s thing. Exchanges are the foundation of markets so in a way markets are a mechanism for people to compliment one another. When you offer to make an exchange you’re complimenting the other person’s effort by saying effort is worth more than something you have.

If you’re one of those people who reflexively asks, “Will you fix my computer,” every time somebody says they make a living off of computers please stop. Instead ask something like, “What would you charge me to fix my computer?” At the very least please don’t get offended when the computer person asks for something in exchange. Their time, like your time, is worth money. Acknowledge that mutual worth.

Advances In Technology Creates New Markets Which Creates New Jobs Which Creates New Wealth

One of the most idiotic claims I hear, usually from members of the labor movement, is that automation is taking American jobs. They get made when I use self-checkout kiosks at the grocery store because they think that mindless machine is eliminating a human worker permanently. Ironically they rant at me as they’re demanding the minimum wage be increased. If anything encourages a business owner to seek a way to automate labor it’s forcing them to pay a laborer more than they make for the company. Another irony is they often post their rants online using a machine that has done more to wipe out manual labor than anything else.

Here’s the thing, when automation obsoletes human labor the people who are displaced aren’t eliminated from the workforce forever. Us humans are adaptable. In fact we wouldn’t be the dominant species on this planet if we weren’t. When our set of skills is obsoleted by automation we can learn new skills. In fact the replacement of human labor by automation has lead to the increase in the number of skills needed and therefore the number of laborers needed. That’s right, technology has actually created more jobs than it has destroyed:

In the 1800s it was the Luddites smashing weaving machines. These days retail staff worry about automatic checkouts. Sooner or later taxi drivers will be fretting over self-driving cars.

The battle between man and machines goes back centuries. Are they taking our jobs? Or are they merely easing our workload?

A study by economists at the consultancy Deloitte seeks to shed new light on the relationship between jobs and the rise of technology by trawling through census data for England and Wales going back to 1871.

Their conclusion is unremittingly cheerful: rather than destroying jobs, technology has been a “great job-creating machine”. Findings by Deloitte such as a fourfold rise in bar staff since the 1950s or a surge in the number of hairdressers this century suggest to the authors that technology has increased spending power, therefore creating new demand and new jobs.

Their study, shortlisted for the Society of Business Economists’ Rybczynski prize, argues that the debate has been skewed towards the job-destroying effects of technological change, which are more easily observed than than its creative aspects.

Computers may have eliminated the need for most secretarial labor but it created the need for hardware developers, programmers, technical support specialists, network engineers, and a ton of other jobs that exist only because computers are now pervasive throughout our society.

Automation is a wonderful thing. It creates more wealth that can be invested in more ventures that employs more people. Librarians well-versed in the Dewey Decimal Classification system may not be in high demand anymore but Google, Microsoft, and DuckDuckGo have employed a lot of people to build, improve, and maintain their search engines. In addition to creating those jobs automation also lead to entirely new markets. Data mining, for example, wouldn’t exist if massive amounts of searchable data didn’t.

3D printing is an emerging technology that stands to replace a lot of human labor in manufacturing. But it also stands to open up markets for improving 3D printer technology, material engineering for 3D printers, engineering goods so they can be more easily manufactured with 3D printers, designing 3D models to print, etc.

Advances in technology creates new markets which creates new jobs which creates new wealth which leads to advances in technology. It’s a beautiful cycle of creation. The people who claim automation eliminates jobs are bloody idiots. Automation creates new jobs.

The Dangers Of Centralization

Markets tend to have redundancies. We generally refer to this characteristic as “competition.” When there is demand for a good or service everybody wants a piece of the action so monopolies are almost nonexistent in free markets. Statism, on the other hand, tends towards centralization. Where markets have competitors trying to provide you with the best good or service possible states actively try to push out any competition and establish monopolies.

The problem with centralization is that when a system fails any dependent system necessarily fails along with it. The State Department, which has a monopoly on issuing visas, recently experienced, what it referred to as, a computer glitch that effectively stopped the issuance of any visas:

The State Department says it is working around the clock on a computer problem that’s having widespread impact on travel into the U.S. The glitch has practically shut down the visa application process.

Of the 50,000 visa applications received every day, only a handful of emergency visas are getting issued.

I’m sure this news made the neocons and neoliberals giddy because it meant foreign workers couldn’t enter the country. But this news should give everybody cause for concern because it gives us another glimpse into how fragile statism is. In a free market this kind of failure would be a minor annoyance as another provider would need to be sought out.

Centralization is the antithesis of robustness, which is one reason statism is so dangerous. Under statism a single failure can really hurt millions of people whereas failures in a free market environment tend to be limited in scope and only insomuch as forcing customers to seek alternate providers.

Using The Market To Fight Poachers

Poaching is an issue in various parts of the world. Most species of rhino, for example, have been hunted to near extinction, in part, because a lot of cultures believe its horn carries magical properties that make human dicks bigger (or harder or whatever). Governments have been trying to solve this problem in the only way they know how, creating prohibitions. These prohibitions, like all prohibitions, have failed. Fortunately the market is here to bail us out. A group of researchers have come up with a clever way to reduce the demand for poaching rhinos:

Pembient, based in San Francisco uses keratin — a type of fibrous protein — and rhino DNA to produce a dried powder which is then 3D printed into synthetic rhino horns which is genetically and spectrographically similar to original rhino horns.The company plans to release a beer brewed with the synthetic horn later this year in the Chinese market.

The Chinese and Vietnamese rhino horn craze has caused an unprecedented surge in rhino poaching throughout Africa and Asia bringing the animal to the brink of extinction. In South Africa, home to 80 percent of Africa’s rhino population, 1,215 rhinos were killed in 2014.

Matthew Markus, CEO of Pembient says his company will sell rhino horns at one-eighth of the price of the original, undercutting the price poachers can get and forcing them out eventually.

Who said counterfeits were always bad? Rhino horn is worth a lot of money so poachers will continue to take bigger risks in pursuit of the few remaining animals on the planet. By creating an artificial substitute that is indistinguishable from the real deal and flooding the market with it the demand for rhino horn can be fulfilled and therefore reduce. This is the strategy that stands a chance of reducing rhino poaching because it address the root cause.

The “Black” Market Has Your Back

When people hear the term “black” market their thoughts usually jump to human trafficking, violent drug gangs, and other violent endeavors. In reality those aren’t even examples of markets because markets are based on the voluntary exchange of goods and services between individuals. The real “black” market is nothing more than the exchange of goods and services the state has declared illegal. Oftentimes this involves drugs like cannabis and cocaine but other times it involves goods or services that are extremely expensive in “legitimate” markets due to regulations. Healthcare is one of those markets where regulations have made almost everything prohibitively expensive. Fortunately there’s the “black” market ready to provide healthcare goods for far less:

Several months ago, Jackie found that her maintenance inhaler was running low. We had just obtained health insurance through Kentucky’s health care exchange and, while it wasn’t the most expensive plan, it certainly wasn’t cheap. Our monthly bill was high, but we thought the coverage was worth it.

I should mention that Jackie specifically picked a plan with low prescription co-pays.

Imagine our surprise when the total for her inhaler, with insurance applied, turned out to be around $300.

Money was very tight at that time; we just couldn’t afford the inhaler without falling behind on other necessities like utilities and groceries.

It was Jackie’s idea to check on the dark net.

[…]

It hadn’t occurred to me to look for an inhaler on the dark net until Jackie suggested it. She doesn’t really know much about the markets beyond things I’ve told her, but she asked me one night if you could buy inhalers on them. I got online, opened the Tor browser that is the gateway to the darknet, and pretty soon I found exactly the same maintenance inhaler—same brand, completely identical—that we needed to replace. The price was $30 with shipping.

The exact same inhaler for one tenth the price was made possible by the “black” market. And thanks to the greatly reduced price Jackie didn’t have to suffer from foregoing other necessities due to lack of finances. This isn’t an isolated case either. Similar illegal trade exists for other medical necessities such as diabetes test strips.

“Black” markets are necessary in any society that suffers from a government that places regulations on free trade. Regulations always raise the costs of goods and services because they push out small providers place a barrier to entry for new providers. Fortunately there are many people out there willing to ignore the law and provide goods and services to those who want them. Instead of seeing them as dirty criminals we should acknowledge that they’re no different than individuals who provide goods and services in the “legitimate” market. If it wasn’t for them many people would have to make do without basic necessities.

Ladies and Gentlemen, This is Your Newspaper of Record

The New York Times is considered a newspaper of record. That is to say it’s editorial staff is considered professional and authoritative. Consider that point when you read this story:

Avian flu, which first appeared in the United States in December, has devastated the nation’s turkey and laying hen flocks, though it seems to be abating with the arrival of higher temperatures, as specialists had predicted. But barns still stand idle, as egg and turkey producers weigh the risks that the outbreak will pick up again in the fall.

The U.S.D.A. predicts that egg production this year will be down by roughly 341 million dozen, or about 4 percent from last year, Mr. Shagam said. “We do expect to see prices come down from this high but still be at record highs for the year,” he said.

What does that mean? An average wholesale price of $1.60 to $1.66 for a dozen New York large eggs, which would break the record high of $1.42 a dozen set in 2014.

No run on the grocery store has been apparent, at least not by consumers.

To summarize the article, avian flu has knocked back egg production so prices have increased and since prices have increased consumer demand has gone down. What really gets me about this article isn’t the fact that it’s pointing out the bloody obvious or that it took so many words to do so. No, what really gets me is that the author treats this like some kind of goddamn revelation. Who would have ever though that increasing prices decreases demand? This will change everything!

Considering the New York Times gives Paul Krugman space to write his seemingly unending flow of economic bullshit I’m not surprised its other staff members are equally ignorant of economics. I also understand that we’ve been told by the state that the only way to deal with shortages are price controls coupled with rationing. Allowing markets to shake themselves out has been labeled a pipe dream that evil anarchists say to scare the statists into disobeying their masters. But when staff members at your newspaper of record believe this very basic economic principle is even newsworthy then you really have to shake your head at the sorry state of economic knowledge in this country.

Verboten Drugs are Cheaper Than Ever

When I point out the failure of the war on drugs to stop drug usages a fairly common rebuttal is that the prohibition keeps the costs of drugs high and therefore prevents many people who would be using them from using them. My observations have indicated that claim is bullshit because I know dirt poor people who use cannabis. But now there’s research refuting that claim:

Cocaine, heroin and marijuana have become cheaper and stronger over the past two decades, despite increases in drug seizures by authorities fighting the global illegal drug market, a new study found.

The researchers looked at seven international drug surveillance databases to examine how the purity and price of illegal drugs changed between 1990 and 2009.

In the United States, the average purity of heroin, cocaine and marijuana increased by 60, 11, and 160 percent respectively, between 1990 and 2007, while the prices of these drugs, adjusted for inflation and purity, fell about 80 percent.

How can this be? Those drugs are illegal! Here we see another conflict between political dreams and reality. Political dreamers like to believe legally prohibiting something will make it go away. Reality dictates that people have wants and will seek to fulfill those wants. Creating prohibitions just makes people adjust their behavior in order to fulfill their wants.

For example, the severity of many drugs laws are based on the volume or weight of drugs a person possesses. A small amount of cannabis can net you a fine whereas a large amount can land your ass in prison on charges of intent to distribute. Drug consumers don’t want to end up in prison and drug producers don’t want their customers lock up in prison. To that end drug producers have been busy making a more potent products so their customers can enjoy the same effects in a small package. Instead of risking charges of intent to distribute cannabis users can now face a fine and still have the same potency as before.

Reducing costs makes sense. If you’re a drug producer you want as wide of a customer base as possible. Poorer people are often unable to enjoy more expensive forms of entertainment so they opt for cheaper forms. By making drugs cheaper the producers are able to access the poorer markets and therefore enjoy a larger customer base.

Once again we see markets overcoming state hurdles. The continuous pattern of markets triumphing over statism is why I firmly believe agorism, which utilizes markets, is the most tactic most likely to bring us real freedom.