Category Archives: Technology

Obama and SOPA

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Obama and Google's Eric Schmidt

The White House has weighed in on the Online Piracy Act. They are clearly walking a tightrope between two competing powers, both of which have traditionally supported Democrats. On one side there is Hollywood and the music industry and on the other is Google. There has been an incredible amount of misinformation floating around about piracy for years and of course there are also some real bully boys who will threaten anyone who opposes their right to “free culture.” We have had these battles for two years on this blog. So here is my thoughts about all of this.

Google- The world’s largest search engine has made hundreds of millions allowing makers of pirated or counterfeit goods to advertise using Google Ad Words. It signed a non-prosecution agreement with the Federal Government and agreed to forgo $500,000,000 worth of counterfeit drug advertising. Google does not want to stop the worldwide revenue it gets from pirated content advertising. Google and it’s competitors could eliminate the need for Piracy legislation by immediately adopting the following rules:

  1. We won’t sell advertising on pirate websites.
  2. We won’t have our search engine link to pirate websites that can’t prove they have legitimate licenses to the content they host.
  3. We will stop pretending we can’t control what gets posted on You Tube.

Hollywood and the Music Business- What I can’t figure out is how did movies and music get to a position that the public feels they are entitled to these works for free? So you never feel you are entitled to a meal at a restaurant for free, do you? What is it about digital entertainment: movies, music, TV and very soon, books that makes them special? Why should the worker in these business not get paid? We built a knowledge society, and the best products we export are all digital objects of desire. But no one seems to care about the notions of intellectual property. It’s so self destructive.

So the President has to thread the needle. That’s why the statement yesterday from the White House was important.

We expect and encourage all private parties, including both content creators and Internet platform providers working together, to adopt voluntary measures and best practices to reduce online piracy.

Google could begin these voluntary measures listed above and reduce the pressure to push a flawed act through Congress. Without some middle ground this whole discussion is going in a very stupid direction.

Next Steps for OWS

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The leaderless Occupy Movement should quietly thank Mayor Bloomberg for ending the encampment in Zuccotti Park. As Ad Busters, the culture jamming magazine which first proposed Occupy Wall Street, suggested yesterday that there are two routes forward.

STRATEGY #1: We summon our strength, grit our teeth and hang in there through winter … heroically we sleep in the snow … we impress the world with our determination and guts … and when the cops come, we put our bodies on the line and resist them nonviolently with everything we’ve got.

STRATEGY #2: We declare “victory” and throw a party … a festival … a potlatch … a jubilee … a grand gesture to celebrate, commemorate, rejoice in how far we’ve come, the comrades we’ve made, the glorious days ahead. Imagine, on a Saturday yet to be announced, perhaps our movement’s three month anniversary on December 17, in every #OCCUPY in the world, we reclaim the streets for a weekend of triumphant hilarity and joyous revelry.

We dance like we’ve never danced before and invite the world to join us.

Then we clean up, scale back and most of us go indoors while the die-hards hold the camps. We use the winter to brainstorm, network, build momentum so that we may emerge rejuvenated with fresh tactics, philosophies, and a myriad projects ready to rumble next Spring.

Strategy #2 is the way to go. I don’t even think you need the “die-hards” to hold geography, because the movement is not about territory, but about ideas. What is needed over the winter months is a series of Teach-Ins like the epic events that made the Anti-Vietnam War Movement coalesce in the winter and spring of 1965. Now is the time on college and high school campuses to educate the wider public on the issues of economic inequality. The movement has a powerful meme–”We are the 99%”–which was in danger of being diffused by the inevitable crime and sanitation problems that come from putting a small cities in public parks all over the country. Out of these teach-ins should come some specific proposals that OWS would push during the 2012 election. Here are four suggested pillars:

  1. A surtax on incomes over $1 million
  2. A Tobin Tax on Stock Trading
  3. End the corrupting influence of money in politics
  4. Bring the troops home

One last thought. In the last few weeks I have often thought “What would Martin Luther King do in this moment?” Ultimately the great social justice movements in America like women’s suffrage, ending child labor or the civil rights movement have come about out of a strict adhesion to the loving principles of non-violence. Dr. King, who I marched with in Boston in April of 1965, consistently held up a vision of a better world that we would make through non-violence. His most famous speech was “I have a dream” not “I have a nightmare”. I know that there is a small group of angry young anarchists trying to influence the OWS movement. Those of us with grey in our beards have been here before, watching the Weathermen subvert a non-violent peace movement. What we ended up with was Richard Nixon (running on a law and order platform) as our President.

We should not make that mistake again.

What Internet Productivity?

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Bruce Charlton poses a rather important question.

Whatever happened to the massive productivity boost which much (surely?) have been the result of the internet?

Because (surely?) the internet must have led to an unequalled, world historical boost in productivity?

A decade ago people all over the place were saying confidently that the economic effect of the internet would outstrip the effects seen by the invention of railways and telecommunications, and that new synergies from fast and universal communication would generate a society of massive capability (a huge step-up like the effect of the population concentration of the first cities, or the nation state).

Science and technology would be accelerated qualitatively by the speed of access to the scholarly literature, rapid and universal sharing of methods, critique and results, international collaborations…

That was the theory.

Yet economic growth since the internet came has been, well – ahem! – very modest…

Indeed, the current ‘credit crunch’ recession revealed that much of what economists had thought was internet-produced growth in productivity, was in fact a progressive increase in borrowing. Continue reading →

Explain This?

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I thought getting computers to poor kids was going to be the great equalizer.

Economists are trying to measure a home computer’s educational impact on schoolchildren in low-income households. Taking widely varying routes, they are arriving at similar conclusions: little or no educational benefit is found. Worse, computers seem to have further separated children in low-income households, whose test scores often decline after the machine arrives, from their more privileged counterparts.

Ofer Malamud, an assistant professor of economics at the University of Chicago, is the co-author of a study that investigated educational outcomes after low-income families received vouchers to help them buy computers.

“We found a negative effect on academic achievement,” he said. “I was surprised, but as we presented our findings at various seminars, people in the audience said they weren’t surprised, given their own experiences with their school-age children.”

What’s going on?

The Internet is a Focus Group

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Our correspondent, T-Bone Burnett, added that comment to the New Yorker cartoon I posted which has generated so much traffic in the last couple of days. This comment is echoed in a magnificent essay in this morning’s New York Times by Michiko Kakutani, entitled Texts Without Context.

Other challenges to the autonomy of the artist come from new interactive media and from constant polls on television and the Web, which ask audience members for feedback on television shows, movies and music; and from fan bulletin boards, which often function like giant focus groups…As reading shifts “from the private page to the communal screen,” Mr. Carr writes in “The Shallows,” authors “will increasingly tailor their work to a milieu that the writer Caleb Crain describes as ‘groupiness,’ where people read mainly ‘for the sake of a feeling of belonging’ rather than for personal enlightenment or amusement. As social concerns override literary ones, writers seem fated to eschew virtuosity and experimentation in favor of a bland but immediately accessible style.”

From the day I started this blog, I have tried to resist this urge to write what the search engines tell me would be popular. For reasons that are lost on me, posts with the word “Torture” in them are very popular on Google. This 19 month old post is still regularly on of the most searched out ones on this site. And of course there is always this favorite, which must be an immense disappointment to the thousands of web surfers who have landed there searching for porn. If I wanted to really get a lot of hits, I’d combine these two “focus group” hints and just call the site “Torture Porn”. I’m sure it would be very popular. Continue reading →

Social Democracy & The New Frugality

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I’ve been talking about “the New Frugality” for a while and Friday’s consumer credit stats bear out my thesis, that something profound has changed in our desire to live within our means.

Americans borrowed less for a 10th consecutive month in November with total credit and borrowing on credit cards falling by the largest amount on records going back nearly seven decades.

I don’t think we will ever return to the point where the average household will live with a debt to income ration of 160% as they did in 2006. So this will mean a transition towards an economy in which consumer spending plays a smaller part in GDP, kind of like Germany or France. Continue reading →

The Long Tail is Dead

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FF_170_tail2_fI don’t mean to pick on Chris Anderson again, but he’s such an obvious cipher for the “Information wants to be free” brigade. Now it turns out that his original “grand theory of everything” called “The Long Tail” is totally bogus. Charles Blow explains.

A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That’s less than one percent of the songs.

This means that Anderson’s declaration that the “80-20 Rule” was dead (80% of the revenue would come from 20% of the product) was completely wrong. In fact it is even worse–it’s the 80-1 Rule. One of my doctoral students tried to explain to me yesterday why so many academics come down on the side of the “screw copyright” crowd–they don’t believe there is such a thing as genius–so they see any attempt to enshrine a particular artist as a continuation of the “great man” theory. If Jackson Pollack is just regarded as the vehicle that channeled the post war zeitgeist onto the canvas, why should he get the rewards for the collective consciousness? So the notion that Bob Dylan was just taking old folk melodies and putting new words to them is an academic trope that vastly underestimates Dylan’s talent and cannot account for the difference between his work and that of Phil Ochs, Tom Paxton and all the other singer songwriters of the era.

This seems to me to be a totally warped view of artistic work and yet according to my student is totally “the party line” in many academic departments.

No Free Lunch for Chris Anderson

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Chris Anderson, the Editor of Wired Magazine, who has made a mint stating the obvious (The Long Tail), has a new book Free: The Future of a Radical Price, which will cost you $27 bucks to absorb his faux-wisdom. Fortunately, you can save yourself some money and time by reading Malcolm Gladwell’s biting review in The New Yorker.

“Free” is essentially an extended elaboration of Stewart Brand’s famous declaration that “information wants to be free.” The digital age, Anderson argues, is exerting an inexorable downward pressure on the prices of all things “made of ideas.” Anderson does not consider this a passing trend. Rather, he seems to think of it as an iron law: “In the digital realm you can try to keep Free at bay with laws and locks, but eventually the force of economic gravity will win.” To musicians who believe that their music is being pirated, Anderson is blunt. They should stop complaining, and capitalize on the added exposure that piracy provides by making money through touring, merchandise sales, and “yes, the sale of some of [their] music to people who still want CDs or prefer to buy their music online.”

As I have said before, I know a great many musicians in their 60′s and 70′s with a lifetime of recorded music that is being devalued by Anderson’s ethos and attitude. While he’s out giving $30,000 lectures on “Free” , they are facing bankruptcy because of health costs. It is little comfort that this smart-ass tells them to go out and tour. Obviously we have been trying to counter this nonsense on this blog for a while, but Gladwell has a great platform to debunk Anderson’s hypocritical claims (he sells his books and doesn’t give away Wired Magazine).

It would be nice to know, as well, just how a business goes about reorganizing itself around getting people to work for “non-monetary rewards.” Does he mean that the New York Timesshould be staffed by volunteers, like Meals on Wheels? Anderson’s reference to people who “prefer to buy their music online” carries the faint suggestion that refraining from theft should be considered a mere preference. And then there is his insistence that the relentless downward pressure on prices represents an iron law of the digital economy. Why is it a law? Free is just another price, and prices are set by individual actors, in accordance with the aggregated particulars of marketplace power. “Information wants to be free,” Anderson tells us, “in the same way that life wants to spread and water wants to run downhill.” But information can’t actually want anything, can it? Amazon wants the information in the Dallas paper to be free, because that way Amazon makes more money. Why are the self-interested motives of powerful companies being elevated to a philosophical principle?

The “Free Economy” has certainly benefited Google and a few other powerful corporations. I’d be hard put to find a single artist it has helped. Maybe Anderson should donate all his book royalties to The Blues Foundation.

Will the Politicians Listen to the People?

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savingMy wife an I went out for a Sunday stroll today in Santa Monica. On Montana Avenue, the chic shopping street, every third store is empty with a for lease sign in the window. A year ago our U.S. personal savings rate was almost zero and by next month it will be over 6%. Besides saving more we are beginning to pay down our credit cards. Earlier this year household debt as a percentage of disposable income was 134% up from 68% in the early 1980′s. My Princeton classmate Vince Farrell notes that this is a huge difference.

Disposable personal income is close enough to $11 trillion that we can use that as a number. If household debt were to retreat to, say, 100% of income, it would be a retrenchment of a good bit over $3 trillion. That would be one big bite out of consumer expenditures. I have no idea where this debt to income will or should go. Things tend to revert to the norm over time, and if we were in the 70% range in the 1980′s, I don’t think returning to 100% is a crazy view. If the savings rate were to return to its 70-year average of 9%, that would chip in almost $1 trillion a year.

Vince is saying that the consumer’s reversion to a cosmology of thrift will take $4 trillion out of annual consumption which represent 72% of our GDP. Continue reading →