|Man Without Qualities|
Tuesday, April 30, 2002
"Moral rights" denotes a collection of certain rights of artists to control the fate of their works, especially the personal and reputational, rather than monetary, value of the work.
Historically, the laws of continental Europe have recognize pretty wide moral rights. Moral rights were not particularly recognized in American law, but that has been changing recently to some extent. Congress passed the Visual Arts Rights Act of 1990 (VARA) which provided rather limited “attribution” and “integrity” rights (which are types of moral rights) for certain narrowly defined classes of artistic works. Also, nine states enacted laws recognizing some moral rights prior to VARA.
When a recent work of art is to some extent threatened, the media often buzz loudly but briefly with stories about "moral rights" (as happened when Richard Serra's "Tilted Arc"was moved from its original downtown New York site a few years ago). But do moral rights do anything significant to help artists?
William Landes, an insightful economist who teaches in the University of Chicago Law School has looked into the matter pretty seriously in a recent paper, and his answers are a mix of the sadly predictable and the rather surprising.
Predictably, Mr. Landes finds that these laws may actually harm artists by adding contracting and transaction costs in the art market, although these costs are usually trivial because collectors have a strong self-interest in preserving the works in good condition. But he finds that the costs to artists may be large for certain types of works likely to be subject to destruction or alteration in the future - such as site-specific works and works installed in buildings.
Surprisingly, Mr. Landes finds that the state laws seem to have had no significant effect on artist earnings but a positive and significant effect on the number of artists living and working in the state.
Friday, April 26, 2002
The New York Times says:
"Sweden has very strict gun control laws. Licenses are largely reserved for certified hunters or for target shooting by people who belong to clubs. Collectors or security guards also can be authorized."
``'The major problem now is that firearms are being smuggled into Sweden and that's something we're considering how to combat,'' said Anders Perklev, a spokesman for the Swedish Justice Ministry. ``The problem is that illegal firearms are more often found among criminals.'''
"In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty." Then.
"In the United States, by contrast, the hard right has essentially been co-opted by the Republican Party — or maybe it's the other way around. In this country people with views that are, in their way, as extreme as Mr. Le Pen's are in a position to put those views into practice." Now
Doctor Manhattan is running a contest. Lots of competition for this one.
Thursday, April 25, 2002
John Rennie, editor in chief, Scientific American, writes what he calls “A Response to Lomborg's Rebuttal.” Bjørn Lomborg, author of the Skeptical Environmentalist had previously written a rebuttal to his book’s critics which Scientific American published and which Mr. Rennie addresses in his “Response.”
Mr. Rennie opens his tidy and ultimately rather simple Response – which is not without merit – with a snide and totally inappropriate H. L. Mencken's remark: "For every problem, there is a neat, simple solution, and it is always wrong." H.L. Menken was by choice the most acerbic, biting social gadfly thic country has seen, bar none, and it is remarkable that Mr. Rennie would himself choose deliberately to misappropriate Menken's scathing tone and quote onto the pages of what previously purported to be a publication of some scientific detachment. But that is between Mr. Rennie and his board of directors and their readers. Mr. Rennie has chosen to play in Menken's arena and he can take what he has invited to come. Continuing in his Menken tone, Mr. Rennie says that “[t]he story of The Skeptical Environmentalist is one of a political scientist who wades into the vastly complex, unsettled literature of environmental science, scrutinizes a fraction of what is to be found there, and emerges confident that the simple summary he has developed is a fair and accurate representation of the science—notwithstanding the warnings of experts in the disciplines he skims that he is mistaken.”
Now, according to the front page of his book, Mr. Lomborg is an Associate Professor of Statistics in the Department of Political Sciences at the University of Aarhus, Denmark who has published in international journals in the fields of game theory and computer simulation. Mr. Rennie’s authoritarian dismissal of Lomborg as “a political scientist who wades” therefore appears to be wilfully misleading or just hostile and ignorant. Perhaps Mr. Rennie knows something not revealed on Lomborg’s front page. But if he does, he doesn’t say what it is – and there is no lack of venom on these pages. In any event, Mr. Rennie's tone and apparent gross error as to Mr. Lomborg's qualifications convey anything but a sense if disinterested scientific inquiry.
Readers are invited to peruse the rest of Mr. Rennie’s opus on their own. At least they have the blessing of the Man Without Qualities. But Mr. Rennie seems to believe that once anointed “experts in the disciplines” (his choice, of course) have spoken, there is nothing for the layman – even an Assistant Professor of Statistics - to add to the matter, lest he be engaged in forbidden “wading.” That the “complex literature” in question is admitted to be “unsettled” doesn’t seem to hinder Mr. Rennie one bit, nor does the fact that Mr. Lomborg marshals his own experts - some unwillingly. So Mr. Rennie may not approve of laymen reading his Response – or, if they must read it, Mr. Rennie certainly couldn’t abide them thinking they thereby came to understand anything from it.
Such concerns of Mr. Rennie do not seem ill founded, at least with respect to his Response, since his arguments sometimes have a very strange texture indeed. For example, Mr. Rennie says:
“Lomborg takes exception to my chastising him for 'literally not seeing the forests for the trees.' He writes that ‘the longest data series actually tells us of very little change in the world forested area,’ but this is misleading. My comment springs from the fact that the data series may describe little change in the forested area, but the actual forests are subject to considerable clearing and replanting. Lomborg thus treats forests of new trees as ecologically equivalent to old-growth forests, which is clearly not true.”
But if Mr. Lomborg’s including new-growth with old-growth constitutes their “equivalence” which is “clearly not true,” then Mr. Rennie’s citing all of the old-growth area as a mass must treat all old-growth forests as “equivalent.” That is probably a lot more untrue than anything Mr. Lomborg is accused of by Mr. Rennie. For example, how likely is it that frozen-almost-all-the-time old-growth Siberian pine forests have equivalent environmental effects as old-growth tropical rain forests? Further, it is hard to find a place in rational scientific discourse for one scientist accusing another of "literally not seeing the forests for the trees" in the first place. As the magazine editor he is, Mr. Rennie should know that "literally" means "literally" - that is NOT FIGURATIVELY. Mr. Rennie's tone seems out of place, hostile and ultimately ignorant.
It is odd that Mr. Rennie picks up this particular hatchet. One might have thought that the entire point of a magazine like Scientific American was that intelligent laymen can understand enough of science to make reasoned judgments about it. But it now appears from Mr. Rennie that such activity would now be prohibited “wading.” It therefore seems that Scientific American must now just fold up shop. After all, if obtaining one’s opinions from reading scientific papers just exposes a layman to withering Menkenisms from the likes of Mr. Rennie, then just think of how awful it would be to be forced to admit that one had extracted one’s opinions from the pages of Scientific American! For that matter, by his own standards Mr. Rennie does not seem to have any authority or right to even write his “Response” – since the story of the Response appears to be one of a magazine editor "who wades into the vastly complex, unsettled literature of environmental science, scrutinizes a fraction of what is to be found there, and emerges confident that the simple summary he has developed is a fair and accurate representation of the science.” Previously, Mr. Rennie had hand picked various scientists to provide criticism of Mr. Lomborg's book, but apparently even those chosen scientists just didn't deliver the wattage Mr. Rennie requires. (Mr. Rennie "explains" that "Because of demands on their own time, most of the authors ... were unfortunately not available to write full responses to Lomborg's reply themselves." Since when does a scientist casitgate another and then refuse to respond to a rebuttal because of "demands on their own time?") Mr. Rennie's decision to write this Response himself has something of the quality of a fertility doctor who, frustrated with the husband's sperm count, just finally decides to take matters into his own hands. Or perhaps Mr. Rennie holds a tenured chair in all applicable sciences at some meta-University I haven't heard of yet? He must be quite a guy.
According to Sophismata, "the U.S is one of the cleanest producers of energy and Canadians live in the Great Brown North. More suprising, India is cleaner than most of Europe."
Are the worthy heirs of Albert Hadley and Sister Parish (nee, Dorothy B. Gilbert) as the creators of a new American decorative look for their time truly Russell Feingold and John McCain (nee, Republican)? Parish & Hadley is tough competition, and most interior decorators would not relish the challenge. But Messrs. Feingold and McCain have been making out as if they have what it takes. How substantial has their contribution been?
In a prior post the Man Without Qualities opined:
“[T]here is no particular reason for corporate majordomos to be gifted or not gifted in understanding major national Constitutional power shifts – it’s just not something that comes up that often or that critically in one’s growth from minordomo to majordomo. And passage of a campaign finance reform bill which effectively suppressed the ability of non-media private parties to use their accumulated wealth to lobby and influence voters would certainly constitute a major national Constitutional power shift.”
“Where would such legislation lead Big Media? It is hard to say, since prior laws supposedly passed as such “reform” have not had much of their putative intended effect. But I don’t think it would lead to the Big Media as we know it acquiring the kind of power its majordomos may hope for – and which the critics of campaign finance reform fear.”
“But it’s fairly obvious that a new Big Media would acquire exactly that kind of power, and that is something the current crop of majordomos may or may not understand. If campaign finance reform effectively suppressed the ability of non-media private parties to use their accumulated wealth to lobby and influence voters, then ownership and control of the Big Media companies would immediately become essential to every major economic interest group in the nation. For example, MicroSoft – which long disdained purchasing political influence in Washington but is now a major employer on Gucci Gulch – would really only have one option: it would HAVE TO acquire a Big Media company, or several of them. It would be completely immaterial whether such an acquisition was economically rational in the sense that the acquisition price square with the potential profits of the acquired company. MicroSoft would be protecting itself. And it would not be alone. Big Oil. The automotive industry. The Unions. All of them - by hypothesis - would suddenly have only one way to reach the voters: control of Constitutionally protected media. It would not be pretty.”
The above argument suggests that passage of a campaign finance reform bill which effectively suppressed the ability of non-media private parties to use their accumulated wealth to lobby and influence voters should make the stock of media companies much more valuable, and should make the news divisions within those companies the new jewels in the crown. The enhanced value of the media companies and their news divisions would not come from enhanced revenue – but rather from the ability of these entities to influence political developments that control the distribution of wealth throughout the economy.
Congress has recently passed – and the President has signed – the McCain-Feingold campaign finance reform bill. Is that bill a campaign finance reform bill which effectively suppressed the ability of non-media private parties to use their accumulated wealth to lobby and influence voters –and, if it does not accomplish such ends completely, does it move the system meaningfully in that direction? McCain-Feingold has some rather large holes, as ably described by several people, especially Mickey Kaus.
And there is some question about what the actual intent of that bill was, at least in the form it was enacted. As Mr. Kaus puts it:
“Do the defenders of McCain-Feingold simply want to restrict political ads financed by for profit corporations, as they tend to argue when it's time to file briefs in court. Or do they really want to limit the speech of individual citizens who may be rich, as their rhetoric about 'leveling playing fields' and 'curbing the influence of money' suggests?”
If McCain-Feingold meaningfully, if only partially, accomplished either of these alternative intents, it is reasonable to expect that a good portion of such displaced influence should be transferred to media companies and their news divisions. For example, if a non-network owning corporation with big political concerns (for example, Microsoft) had its influence reduced by McCain-Feingold, then it has a larger incentive to shore up its influence by seeking control or influence over such a network. Have Big Media companies benefited?
Big Media majordomos don't seem to think so - at least the ones at Disney/ABC, where current corporate policy towards the ABC news division seems to resemble current Chinese policies towards Tibet.
The stock market also seems to say “NO.” Comparing the S&P average with the stock prices of Viacom, Disney,GE, and News Corporation does not suggest that the market believes any of these companies has gained particular influence over the economy of the United States from passage of McCain-Feingold. Of course, these companies are conglomerates – and the contributions to the stock price from any single component (such as a network or news division) may be diluted. But even companies closer to being “pure plays” in news distribution – such as the New York Times and the Washington Post do not seem to have felt a particularly discernable bounce from McCain-Feingold. But the stock prices of those companies have to reflect entrenched family control - so the effect of any "control premium" may be muted. That is, the stock of family controlled public companies like the Times and the Post can't easily be bid up because a prospective buyer can't acquire the company in a hostile takeover. Of course, a buyer can still offer a high price in a consensual transaction, which is how the Los Angeles Times changed hands a few years back. Public shareholders might or might not share in an offer made to the family in such a consensual transaction. In sum, the evidence is not all in.
But what evidence exists seems more consistent with both Big Media itself and the market having concluded that McCain-Feingold is essentially showy window dressing. Which is bad news for Parish & Hadley.
McCain-Feingold will certainly affect what might be called the “personality” of the campaign finance system. Political operatives will have to work within or evade the structure of the act. So McCain-Feingold seems destined to be one of those federal statutes - such as the Securities Act of 1933 - that the affected people have to think about all the time, but which ultimately has little substantive effect. Sister Parish was famous for her belief that "personality mattered most when decorating home." Those who would say the same of a campaign finance system seem to have got that absolutely fabulous New American Look they’ve always wanted.
Wednesday, April 24, 2002
An astute reader sends word that accoding to Ha'aretz: "Egyptian Prime Minister Atef Ebeid hinted to a Persian Gulf newspaper Wednesday that his country would be ready to wage war on Israel if the Arab states were to send $100 billion to fund it."
Do I hear $101 billion from the United States to keep the peace?
$100 Billion! Going once! Going twice...!
Tuesday, April 23, 2002
Once upon a time, long ago, in a place far away, there was a very special boy named Luke. Luke was just two and eleven-twelfths years old. He had a bright face and bright little eyes. And when he smiled everyone knew he was a very special boy.
Luke still wore diapers. He lived with Mama, Papa and his big brother, Conor, in a big house with a yard and a garden.
“Boys are not expensive,” said Luke’s Papa one day, “but they ARE unusually priced!”
Papa held up one finger, “One boy: two cents!”
Conor said, “I cost two cents?”
But Papa just held up another finger and said, “Two boys: one cent! – but you have to love them both!”
Papa said that his boys were noisy boys, and silly as could be. He gave both boys a hug and Conor and Luke said they would think about what Papa said.
But Mama said Papa was the silliest of them all!
Luke really liked balls. Little balls. Big balls. Baseballs. Soccerballs. Even marbles, which are little glass balls.
Sometimes Luke would run across the room with his football in one arm and his hand held out square in front of him. He would fall on the rug and say “They tackled me!”
He had a special basketball, just big enough for his two-and-eleven-twelfths-years-old hands. And he had a special net, just high enough for two-and-eleven-twelfths-years-old legs to jump. When he made his shots he shouted “Basket!” or “Almost!” or “Way Wide!”
Luke liked the shiny silver glass gazing ball that sat in the quiet garden in his yard. On sunny days he liked to look into the gazing ball. It seemed like there was a whole little garden inside just like his, but where everything was brighter and smaller and somehow inside out. Luke could also see himself in the gazing ball, where he was like a giant in the little garden inside.
One sunny day, Luke was digging near the gazing ball while Papa planted an azalea nearby. Luke got so interested in digging and watching Papa that he forgot and bumped the gazing ball. It almost fell over. Suddenly, Luke heard a little girl’s voice that seemed to be calling to him. But when he looked around, there was only Papa and his shovel and his azalea. So Luke went back to digging.
Then he heard the little voice again. And this time he saw that it was coming from a girl standing in the bright little garden inside the gazing ball. The little girl was calling him. “Be careful!” Luke looked carefully into the ball at the little girl.
She was brightly dressed and had a sweet, concerned face. She was very small. She waved her arms back and forth and her voice sounded like a flower, singing. “Giant boy!” she called. “Be careful! Don’t break the gazing ball! Be careful!”
Luke remembered that Mama and Papa had told him that when Conor was very young he thought the gazing ball was a shiny balloon. Once Conor picked up the gazing ball and tried to toss it into the air. But it only fell and broke with a bang! Conor cried. Papa swept up the pieces and went to the garden store and bought this gazing ball they had now.
Luke didn’t want to break the gazing ball, so he said to the girl, “I’ll be careful!”
The little girl seemed relieved, and smiled at him. “Here, boy,” she said, pressing her hand against the surface of the gazing ball. As her hand came close from the inside it seemed to get bigger, the same way the reflection of Luke’s hand did when he put his hand close to the ball from the outside. The little girl held some beans, and pressed them against the inside of the ball.
In a moment little bumps formed on the outside of the ball where the beans touched it from inside. The bumps got bigger and bigger and suddenly, with a sound like pebbles falling into a pool of water, the beans popped out of the gazing ball and onto the ground where Luke had been digging. Then the bumps were gone and the gazing ball was smooth again. And the little girl was gone, too. Luke looked and looked, but she was gone.
So he picked up his beans and brought them to Papa. When Papa finished planting his azalea Luke and Papa planted the beans in a nice sunny corner of the garden. Papa put a sign up that said “Luke’s Beans” and they built a little fence out of string and willow sticks around the place where the beans were planted.
Then they went inside and had dinner with Mama and Conor. Later Papa read a story to Luke and tucked him into bed.
Overnight the beans grew and grew and grew. They grew into a giant beanstalk that reached up, up, up through the clouds to the sky! Luke was a really good climber. When he woke up in the morning he climbed the beanstalk. He climbed all morning, all the way up through the clouds, where he came to a magic castle. Standing just outside the castle door there was a giant – who staring right at him with a curious look.
“WHAT ARE YOU, … CREATURE FROM THE BEANSTALK?” boomed the giant. “ARE YOU …. A BEAN?”
“I’m a human bean,” Luke said, “a boy, to be exact!”
The giant made a note of what Luke said.
“ARE YOU … A GOOD BOY?” asked the giant in his giant voice, “OR ARE YOU … A BAD BOY?”
“I’m a good boy. I’m a very good boy.”
The giant made a note of this, too. Then he thought deeply for a minute.
“ARE YOU A QUIET BOY? … OR ARE YOU A NOISY BOY?”
Right away Luke said, “I’m a noisy boy! Papa says that I’m a noisy boy! Conor too!”
The giant made a note of all that, even the part about Conor being noisy too. Then he thought for a long, long time with his face all wrinkled up in giant thoughts. And this time he walked back and forth as he thought, rubbing his chin with his hand.
Then suddenly he pointed a giant finger at Luke. “HOW ABOUT SILLY? ARE YOU A SILLY BOY? … OR ARE YOU A SERIOUS BOY?”
“We’re both silly!” said Luke, “Conor and I are both as silly as can be! Papa says.”
So the giant carefully wrote down: Both … as… silly … as … can … be.
“AND ONE LAST THING,” the giant said slowly when he finished writing, “ARE YOU A BIG BOY …. OR ARE YOU A LITTLE BOY?”
“I’m a big boy!” Luke answered proudly. Mama had told him he was her big boy.
But the giant, who was very observant, noticed a suspicious bulge in the back of the boy’s trousers. And he didn’t write anything down.
Instead, he boomed, “DO YOU STILL WEAR …. DIAPERS?”
“Yes, I wear diapers.” Luke admitted.
“THEN YOU,” boomed the giant with a certain triumph that Luke didn’t like at all, “ARE A LITTLE BOY!”
“No! No!” Luke protested, “Mama says I’m a big boy!”
But the giant just turned and said slowly, “YOU … STILL … WEAR … DIAPERS. SO YOU … ARE A LITTLE BOY. … AND THAT’S ALL THERE IS TO IT. … AND THAT’S WHAT I’M PUTTING IN MY REPORT!”
So the giant walked away back into the castle and closed the door. And when he was good and ready the giant wrote up his report just the way that he said he would.
Luke climbed back down the beanstalk and cried to Mama that the giant had described him as a “little boy” in the giant’s report – which had been placed on permanent file.
But Mama said, “Luke, the problem is that if you still wear diapers you ARE a little boy - even if some people call you a big boy.”
“But I don’t want to be a little boy,” Luke cried, “I want to be a BIG boy!”
“If you want to be a big boy,” his mother said, “you will have to learn to go without diapers. It’s the only way.”
So Luke made up his mind, and that’s just what he did. He learned to go without diapers and became a big boy.
It turned out that the whole family was very happy that Luke hadn’t chopped down the beanstalk because later that summer the price of beans reached $12.50 a pound! Mama, Papa, Conor and Luke all picked as many beans as they could every day and sold them at the farmers market. Papa said it was better than having a goose that laid golden eggs.
And they all lived happily ever after.
It is Tuesday, and the combined wrath of the blogosphere is visited upon Paul Krugman’s current missive (“Bush = Le Pen”).
Kaus! Dreck! Sullivan! Taranto! Volokh! Galt!
The list is formidable. The criticisms biting and telling.
But something is missing. Something has been overlooked! There ARE signs of progress that should be encouraged:
MR. KRUGMAN DOES NOT INSINUATE THAT A CONSPIRACY INVOLVING CONSERVATIVE AMERICANS CAUSED LE PEN’S ELECTORAL SUCCESS!
Indeed, one can FEEL his internal struggle NOT to give in this time. The battle is close, but for once he is strong. WE ARE WITH YOU PAUL!
Of course it’s just embarrassing that he suggests that Jean-Marie Le Pen is really George Bush or Tom Delay or John Ashcroft or Martha Stewart or Julia Child (her husband was a CIA agent in Paris, you know!) or whoever it is Le Pen is really supposed to be. I can’t really figure out from the column exactly who Le Pen is really supposed to be on this side of the Atlantic. Perhaps Mr. Krugman is planning a promotional sweepstakes and we're all supposed to vote? Like Keynes.
Yes, there are troubling signs his journey is just beginning. For example, he asserts that “there are some important parallels between the earthquake in French politics and recent political events in the United States. Let me draw out those parallels…” But while it’s sadly true that his “parallels” do appear to rather wildly intersect – as if he’s practicing his political geometry on the surface of a sphere - the fact that Mr. Krugman is still one postulate short of a full set shouldn’t blind us to the progress he’s made!
And then there’s that troubling unexplicated line: “And then there's John Ashcroft.” Just what was going on there, Mr. Krugman? Look around you, all you see are sympathetic eyes. See, I’m sure everyone appreciates your having the Times replace that odd little photo of yourself which made you look so, well, “troubled,” with a slightly larger if still rather odd little photo.
Let us not forget that only a few days ago Mr. Krugman seemed largely to be chalking up the coup in Venezuela to Condoleezza Rice. I think it must have been Condi because nobody else in the Administration was actually named in that column, although she is only quoted as cautioning a restored President Chavez to “respect constitutional processes” – which Mr. Krugman said only made matters worse. I wonder if poor Condi realized how much trouble she was causing?
But that is in the past! Mr. Krugman is clearly making efforts to emerge from the dead past to the living present, to a new life. And if the progress he has made is not unalloyed, that does not make it unreal.
Monday, April 22, 2002
The California court that has reportedly ruled that undocumented workers may sue and collect for back pay based on the difference between minimum and actual wages has overlooked something: many undocumented workers receive much more than minimum wage. They will therefore not be immediately affected by the court's ruling.
Even undocumented workers who receive more than the minimum wage still probably receive less than the market rate wage they would have received if the workers were American citizens or legal aliens. The court will perhaps wish to complete and generalize it's holding and also hold that an undocumented worker receiving more than minimum wage may sue and collect for back pay based on the difference between prevailing market wage rates and actual wages paid.
That way, the court will ensure that the disincentive it is creating for employers not to hire undocumented workers will extend beyond minimum wage earners. As things stand under the current holding, the court's decision hurts only the prospects of minimum wage earners to find the work they so desperately want. Surely the court doesn't want to hurt just the most desperate workers. By generalizing its holding, the court will ensure that ALL undocumented workers are hit hard.
Gee, with friends like this California court, who knows where this will lead? Perhaps the same Princeton economists who justified the last increase in the federal minimum wage law will explain that forcing employers to pay more than $6.00 per hour will cause even more undocumented workers to be employed than if employers could get away with paying the $2.17 hourly rate that was at issue in the California case. And so on with market wages.
I can hardly wait!
Sunday, April 21, 2002
Al Gore's toxic emissions on the New York Times Op-Ed pages today do not trouble themselves with any modest thing. Mr. Gore fumes:
“Under the presidency of George W. Bush, the environmental and energy policies of our government are completely dominated by a group of current and former oil and chemical company executives who are trying to dismantle America's ability to force them to reduce the extremely dangerous levels of pollution in the earth's atmosphere.”
As often so, Mr. Gore’s perspective is so august that it is only in the cosmological that concepts are found which seem sufficiently capacious to address his concerns. It is well known that observing the Universal Background Radiation and other ancient lights allows one to look back in time to the formation of the Universe. The former vice president’s writings also seem to emanate from a political quadrant formed long ago, before even his 1992 book “Earth in the Balance.” Indeed his writing has the nostalgic quality of a 1970’s revival, expressing views perhaps unchanged since his herbal days. His Op-Ed views that pollution is attributable the acts of “sabotage” by ”current and former oil and chemical company executives” are downright Manichean: the Republican/Industry demons are doing this – he implies - we of the light must strike back!
In contrast to Mr. Gore’s Manichean evangelism, it is worth considering what is perhaps the major single source of air pollution in the United States today: cars owned by people of modest means.
A Reason Magazine article states something that is fairly well known: “Automobiles in general now account for as much as half of total air-pollution emissions in many U.S. cities. But these aggregate figures obscure a critical detail. Only a fraction of cars-- around 10 percent--account for more than half of all vehicle emissions of carbon monoxide and hydrocarbons.”
Who owns those cars in the critical 10 per cent and why does Mr. Gore not call for measures against the owners “to force them to reduce the extremely dangerous levels of pollution in the earth's atmosphere?”
Well, the city of Los Angeles evaluated car ownership and found that 32 percent of those driving gross polluters had family incomes of less than $10,000 per year. It’s not just old cars that are the “gross polluters,” though old cars are disproportionately represented in that group. And new cars typically are driven more than old ones. Pollution comes from both emissions and miles driven, so targeting old cars alone won't suffice.
But the biggest reason cars (even new cars owned by prosperous people) aren’t all effectively required to comply with strict air pollution standards all the time is politicians’ concern about the costs such compliance would impose on people of modest means. Simply put, the cost of bringing (and keeping) any car, but especially a grossly polluting car, into emissions compliance is pretty high. As Reason puts it: “The real test of Californians' commitment to cleaner air will come as more and more motorists--especially low-income motorists--find themselves shelling out hundreds of dollars to get repairs, sometimes for cars barely worth the cost of those repairs. Reestablishing repair cost limits and permanent waivers can overcome potential financial distress; such measures also weaken the potential effectiveness of the program.”
It may be the case that the pursuit of clean air is not important enough to impose the costs necessary to obtain it on people of modest means. But the environmental evangelism of Mr. Gore’s Op-Ed piece doesn’t seem to allow for such considerations – after all, Earth IS in the balance! And such economic “cost-benefit” analysis is exactly the kind of thing Mr. Gore and other environmental extremists criticize constantly. Mr. Gore likely refrains from urging such costs be imposed on members of this group quite simply because they are also members of his core constituency.
Mr. Gore is willing to press for measures that impose considerable costs on people of modest means so long as those costs are imposed indirectly through industry. For example, Mr. Gore has not shied from advocating that expensive pollution control devices be installed on cars by their manufacturers, and air pollution restrictions on factories have probably cost the country many jobs which otherwise would have paid modest salaries. But those costs come in such a way that people like Mr. Gore can deflect criticism towards the manufacturer (who actually charges the high price) or the employer (who is moving the jobs off shore). Mr. Gore hides behind these demons, just as he is doing in his Op-Ed piece. But when ordinary people have to actually write a check to pay directly for air pollution regulation compliance, it is harder for people like Mr. Gore who advocate those regulations to hide politically. That seems to be why Mr. Gore's Op-Ed piece does not include any demand that ordinary people of modest means be made to write those checks, lots of those checks, and keep their cars clean. And it doesn't matter if such people as a group are the worst source of air pollution.
Mr. Gore may be forgiven his measure of realpolitik. But the combination of such realpolitik with the sanctimony of today’s Op-Ed piece makes for a mighty distasteful effect.
Now the Man Without Qualities entertains a certain general skepticism of Mr. Gore’s environmental thinking. Indeed, it is the view here that one would have to forgive anybody undertaking simultaneous reads of “Earth in the Balance” and Bjorn Lomborg’s “The Skeptical Environmentalist” a certain nagging sensation that a man coming within a few Floridian votes of the Presidency, just perhaps, rather dangerously confabulates on environmental topics. (Sample Gore: We have assumed “there would always be a hole wide enough and deep enough to take care of all of our trash. But like so many other assumptions … this one too was wrong.” Sample Lomborg response: “All American waste of the entire twenty-first century will fit into a single landfill, using … less than half a percent [of Oklahoma].”)
The most troubling aspect of today Op-Ed emission from the Goreocosm is its adoption of the extreme, polarized tone and tenor of “Earth in the Balance” – which lays to rest any notion that the 1992 book was a product of untutored high spirits. Mr. Gore's eight years in the second highest office in the land appear to have matured his judgment not at all.
Max Power and Jane Galt have interesting posts on the Bono Act.
The Dead Hand of Sonny Bono
The “Sonny Bono Copyright Extension Act”, signed by Bill Clinton in 1998, extends the term of the copyright monopoly by 20 years. Previously the monopoly persisted until 50 years after an author died, and “works for hire” (Bugs Bunny, Mickey Mouse) created for a corporation were protected for 75 years. The Bono Act extended the term of both categories by twenty years. The Supreme Court has now agreed to hear a case challenging the Constitutionality of the Bono Act, which is creating a lot of fuss in some quarters.
The plaintiffs trying to overturn the Bono Act have a fairly straightforward argument: They point out that the “copyright clause” of the Constitution allows Congress to pass laws “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Then they argue that the Bono Act’s extension of the term of copyright protection to existing works isn’t authorized by this clause of the Constitution because the "progress of science and useful arts" is just not even arguably promoted by paying more to authors to create works that have already been created. With respect to future yet-uncreated works, the Bono Act isn’t Constitutionally authorized because the additional 20 years just doesn’t provide any significant amount of additional incentive to authors since the entire additional 20 years occurs so far in the future. Put another way, because of the time value of money, a dollar to be received more than 50 years in the furture is just not worth that much as an author's incentive today. As one plaintiff put it: “We actually went to the trouble of getting an amicus brief from … a professor of economics at Berkeley, and he made the calculations and found that it would only be a few cents difference in royalties between 50 years after an author died, which is how the law has been since 1978, and 70 years after the author died.”
The Bono Act’s supporters basically seem to say that the “copyright clause” allows Congress to determine what the appropriate “limited time” should be given to authors for their copyright monopoly. The copyright laws have always been construed that way, and the Courts should continue to defer to Congress – or risk being labeled as “activist.”
In any event, Congress also has a separate Constitutional power under the “commerce clause” that authorizes Congress to pass laws “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” If the “copyright clause” doesn’t authorize the Bono Act, then the Act could be justified under the “commerce clause” with respect to copyrighted works in “interstate commerce.” That’s essentially everything. In fact, the federal trademark laws are expressly legislated under the “commerce clause.” So the plaintiff’s “copyright clause” argument seems to be essentially a dead end – which, oddly, doesn’t settle the case. In fact, the plaintiffs will probably win – but not on the basis of this argument.
The problem with the “courts should defer to Congress” argument offered by the Bono Act supporters is that copyright laws implicate First Amendment rights. Simply put, the holder of a copyright can get a court to say to an infringer: “you can’t speak or write that way because it's copyrighted.” In fact, copyright infringement is now a criminal offense, and an infringer risks going to jail for five years or a $500,000 fine. Generally speaking, the First Amendment seriously restricts the government’s right to tell anybody “you can’t speak or write that way” – especially where the speaker or writer is charged with a criminal act. And the Federal courts do not – and probably will not in this case - defer to Congress when it comes to protecting First Amendment rights. The issues that the Court has agreed to hear are very broadly phrased, and one of them is whether the Copyright Act is "categorically immune" from First Amendment attack. So the Court definitely seems to be on the First Amendment track.
The Bono Act supporters argue that any copyright period raises the same First Amendment issue. If the Bono Act were overturned, then the copyright period would still last until 50 years after the author died. At any time in that period the copyright owner can get a court to tell an infringer: “you can’t speak or write that way.” So, the supporters’ argument goes, the Bono Act raises no new issue in this respect.
The Bono Act supporters are just wrong. The First Amendment and the copyright clause are just not inconsistent with each other in the way the supporters suggest, and the Court doesn't need to "defer" to Congress to effect a reconcilliation. Generally stated, the purpose of the First Amendment is to allow the free flow of information. That policy is exactly served by the copyright clause, since the author of information-bearing materials is given an incentive to create and publish them by the grant of the copyright monopoly. For example, newspapers can inform the public because the copyright monopoly makes publishing newspapers a viable and profitable business.
But as the life of the copyright monopoly gets longer, its marginal additional positive incentive effect on information dissemination diminishes. At some point the life of the copyright monopoly will get so long that the copyright is a net restriction on the creation and flow of information through the society. The First Amendment authorizes the Court to make it’s own calculation of when that point is reached – without any deference to Congress. If the Court finds that the new extended period created by the Bono Act is so long that net information flow is restricted, then the Bono Act violates central First Amendment policies and should be struck down. Moreover, if the Court finds that the old 50-year period does not create a net restriction on information flow, then the old period will not violate the First Amendment.
The above discussion is certainly not intended to be a complete Constitutional argument, and I do not mean to minimize the difficulty of the Court’s tasks. I have tried to outline general policies. To actually create coherent rules from these policy considerations will be no easy task. And you can't even say we pay the Justices the big bucks to do it - so at least give them a hand for trying.
Justice Louis Brandeis, especially, was fond of referring to the “marketplace of ideas” in connection with the First Amendment. In that sense, one might view the First Amendment as a kind of antitrust act, which protects the “marketplace of ideas” the way the Sherman Act protects the marketplace of the economy. The Court’s Sherman Act jurisprudence was essentially an incoherent, contradictory mess until it was more or less rationalized by (quasi-) acceptance of the principle that the Sherman Act stood for maximizing consumer economic welfare. Despite the frequent references to the “marketplace of ideas,” the Court has never articulated a definite quantity analogous to “consumer economic welfare” that the First Amendment is intended to maximize. One might imagine a model of the First Amendment that contemplates maximization of “potentially politically relevant information” or the like. In practice, such a project appears very hard.
But the current Bono Act case suggests that such a project can probably not be avoided any longer. The law of intellectual property forces the marketplaces of ideas and the economy to intersect violently. Deference to Congress in this area would be an abdication of the Court’s First Amendment responsibilities that would simply be intolerable.
Friday, April 19, 2002
Matthew Hoy says cartoonist Paul Conrad "is challenging Ted Rall for the title of America's Dumbest Cartoonist. Conrad's latest cartoon (found here) likens the Israelis to Osama bin Laden's terrorists. An airliner with the Star of David on its tail heads toward the towers of two mosques."
It is not my purpose to disagree with Mr. Hoy's evaluation of Conrad's taste, which is often questionable, at least.
But solely as a detail, I believe the two towers featured in Conrad's cartoon are not mosques. They appear to be the towers of the Christian Bethlehem Church of the Nativity and another church nearby. [Scroll down to "Church of the Nativity" and click on the little magnifying glass to enlarge the tiny picture.]
The Church of the Nativity has recently been the site of much fighting and much controversy - which may be the "inspiration" for Conrad's repulsive drawing.
News on the radio today included a report of a California State Court decision than an undocumented worker who received less than minimum wage for years of California employment is entitled to sue and receive from his employer “back pay” based on the difference between the minimum wage and the actual wage he was paid. In contrast, the United States Supreme Court had held to the contrary a few months ago in another case involving the right of an undocumented worker to obtain back pay after being illegally dismissed for union organizing.
Regardless of one’s views of undocumented workers, it should be clear that this California State Court decision is a major blow to their economic well being, and a classic example of the often-perverse consequences of “liberal” positions. One of the major reasons – perhaps THE normal major reason - for an undocumented worker to enter this country is the prospect of finding and obtaining work. There are often other incentives, including avoiding civil unrest in the immigrant’s homeland or just the desire to be an American. But for most people, work is the focus of the decision.
And one of the biggest advantages an undocumented worker has in finding work is that he or she is cheap. California is full of homes staffed by undocumented nannies, and paved with patios laid by undocumented masons. This work is often done at far below minimum wage. Many people would and do object to that, and it is not my purpose here to address this fact one way or the other.
But it should be clear that anyone who might hire an undocumented worker will have a much-reduced incentive if it is known that once the job is done the worker is free to sue for the difference between minimum wage and the wage which served as the incentive for hiring the worker in the first place.
Now there are good reasons undocumented workers do not sue. Suing exposes the worker’s immigration status, for one thing. Undocumented workers don’t often personally have the knowledge of the American courts and the English language to sue effectively, or the money to do it. So, at least at first, the effects of this California decision may be muted – but not negligible.
If the decision is upheld and persists as law, eventually “workers rights” organizations and perhaps some churches may make attorneys available. Workers will have the option to reveal their status and collect the back pay – even if that means leaving the country at least for a while. And, of course, it will be possible for the worker to simply assign or sell the claim to an American (say, his or her church), who can then sue without fear of exposing the immigrant to INS enforcement. This assignment may create a problem with proof of the claim, since the worker will not be able to appear. But if the other evidence is sufficient, the claim may be good in the hands of the assignee. Also, employers should be aware that if there is an “amnesty” for a wide class of such workers, as is now proposed in some quarters, the beneficiaries of the amnesty will be free to sue after they achieve legal status without fear of revealing their immigration status.
Once the right of an undocumented worker to receive such back pay is fully established, the courts can in their usual way begin awarding punitive damages to account for the fact that many cases will still go unreported. And then there will be class actions against larger employers. When the process is complete, undocumented workers may obtain something close to full and effective vindication of their rights to minimum wage.
Resplendent in their new rights, they may then be all but unemployable. The most bitter opponent of such immigration couldn't have designed a more effective deterrence system.
In today’s OpinionJournal Benjamin Netanyahu argues that “the root cause of terrorism is totalitarianism. Only a totalitarian regime, by systemically brainwashing its subjects, can indoctrinate hordes of killers to suspend all moral constraints for the sake of a twisted cause.”
I wish it were true.
Mr. Netanyahu is almost certainly correct to deny that “the root cause of terrorism is the deprivation of national and civic rights.” Deprivation of national and civic rights is deplorable, but through history such deprivation has been perpetrated far too often without resulting terrorism to seriously be considered terrorism's “root cause.” But it does not follow that “the root cause of terrorism is totalitarianism.”
Mickey Kaus has formulated a more general explanation:
“In fact, there's a good argument that "welfare benefits + ethnic antagonism" is the universal recipe for an underclass with an angry, oppositional culture. The social logic is simple: Ethnic differences make it easy for those outside of, for example, French Arab neighborhoods to discriminate against those inside, and easy for those inside to resent the mainstream culture around them. Meanwhile, relatively generous welfare benefits enable those in the ethnic ghetto to stay there, stay unemployed, and seethe. Without government subsidies, they would have to overcome the prejudice against them and integrate into the mainstream working culture. Work, in this sense, is anti-terrorist medicine. (And if you work all day, there's less time to dream up ways and reasons to kill infidels.)”
In one direction Mr. Netanyahu’s theory appears to be a special case of Mr. Kaus’ theory. A modern totalitarian regime is virtually doomed to gross inefficiency, unemployment, underemployment and a servere lack of prosperity. The reasons are clear: Most of what makes a modern economy function is tied up in the free flow of information and a big role for markets, all of which is inconsistent with "totaltarianism." In addition, many of what are generally known as “human rights” (say, the right to a lawyer in a criminal case, to pick but one of many examples) are wealth enhancing for the society as a whole. Having impoverished its people and demolished its markets, such a regime will be have to put a lot of people on the dole in one form or another. Presto! One only needs to add an appropriate "ethnic antagonism" and the Kaus conditions are satisfied. The limits to this theory may be seen in a country like Singapore, where there are lots of restrictions on “human rights,” but the non-totalitarian regime (what Jean Kirkpatrick might have called an “authoritarian” regime) is careful to allow substantial freedom where the economic benefits are high and the costs to the regime’s power are seen as low.
But in the other direction Mr. Netanyahu’s theory seems wrong. Indeed, some regimes themselves are “terrorist,” a term often applied to the Nazis – which were scarcely themselves the product of totaltarianism. (Of course, whether the heavilly-state-involved pre-WWII German and Italian economies contituted "welfare" societies for the purposes of Mr. Kaus' theory deserves scrutiny. But that doesn't seem far fetched.)
Post-World War II, the steamy “permanent student” societies of Europe (which allowed young people to continue as "students" indefinitely at public expense) combined with a failure to deal with the uncomfortable memories of the fascist past to create and foster the infamous terrorist Bader- Meinhof Group and the Red Brigade in the late 1960’s and early 1970’s, mostly in Germany and Italy. "An underclass with an angry, oppositional culture" can take the form of subsidised student bodies, not just frustrated pied-noires hanging out in some French public housing project. Further, the forces that created these groups have clearly not yet been fully spent, and the "ethnic antagonism" in that case took (and takes) a particularly complicated form. As one academic commentator, Ursula Duba, notes:
“[T]he anger at their parents' generation quickly turned into condemnation of imperialism in general and the US in particular. Before long, young German students were preoccupied with demonstrations against the war in Vietnam. What was missing was the confrontation with the personal history of the family and the necessary mourning for the victims of the Nazi terror. It is notable that groups like the Red Brigade and the Bader-Meinhof-Group which resorted to extreme violence in their pursuit to end imperialism, took considerable hold in both Germany and Italy, but to a much lesser degree in the other European countries which experienced similar student revolts. It is equally notable that the sixtyeighters do not talk to their own children about the Third Reich and the horrors it perpetrated and thus continue the legacy of silence.
“During the massive demonstrations in Germany in 1991 against the Gulf War, no one thought to demonstrate against the numerous German companies which had sold equipment, chemicals and technical know-how to Saddam Hussein for the manufacturing of chemical weapons - even though it was known worldwide that Saddam Hussein had used chemical weapons against Kurdish civilians and that these weapons represented an enormous threat to Israel. To my knowledge, nobody has researched any possible connection of former Nazis among those manufacturers.”
True, the determination of the “host” democracies to extirpate these groups did eventually succeed, although at considerable costs to human and civil rights in Europe. Indeed, the European police came to understand that very strong methods were needed – methods with much in common with those now being used by Israel to deal with its own terrorism problem.
It is one more spectacular act of hypocrisy for Europeans to condemn Israel for understanding the same kinds of terrifying measures are needed in that country that were used of necessity in Europe to deal with the analogous problem. Nevertheless, Mr. Netanyahu does not advance his case by stating it without its necessary, if horrifying, nuances.
Thursday, April 18, 2002
Charles Murtaugh, who writes a very nice blog which I often enjoy in my pseudonymous privacy, is calling for a boycott on links to pseudonymous blogs (like this one). I don’t agree, and not just because of my personal status.
As the cartoon line goes “On the Internet, nobody knows you’re a dog.” This site is known to be maintained under a pseudonym because I chose that. I could just as easily have pretended to maintain it under a phony “real” name (say, “Charles Murtaugh”). Who would know? In fact, it turns out that there is a very politically active Robert K. Musil out there – who has nothing to do with this blog and whom I have never met. It seems to me that what Charles is suggesting just creates an incentive for bloggers with frankly pseudonymous blogs to instead maintain clandestine pseudonymous blogs. Not everyone would see that development as an advance. The situation would resemble that in the theory one sometimes sees advanced that all of Shakespeare’s plays were written by another person …. WITH THE SAME NAME!
Further, it isn’t the pseudonymity (my God, this vocabulary is turning into a black hole!) that is bothering Charles. It’s the content of the some pseudonymous blogs. That seems to lead to advocating not linking to sites whose content one does not care for. Most people probably do that anyway to some extent, at least locally.
But perhaps Charles should advocate that before linking to a particular article in a blog one should survey the blog more generally to determine whether one approves of the blog globally? Wouldn't that be a more targeted and effective approach? I don't generally follow that approach myself, and I don't intend to - unless a blog (or other site) is very offensive indeed. I'm just suggesting that it would serve Charles' concerns better.
All of which draws to my attention that for some reason I do not have a permanent link in the left column to either Charles or to Derek Lowe, an astounding situation which will be remedied immediately.
Wednesday, April 17, 2002
Max Power begs to differ with some of the points raised in earlier posts regarding the recent Enron civil action. His comments are all worth reading.
The interesting things John Fund says in OpinionJournal today about the recent Democrat confab at Disney World (the Democrats appear to have closed their in-house “Department of Unintentional Irony Avoidance”) includes this note on the performance of North Carolina Senator and Presidential aspirant John Edwards:
“Mr. Edwards's speech scored points with a Clinton-like call to support middle-class workers ‘who play by the rules.’ But his vague policy proposals left many cold. He called for creating a public education system in which every child "can get as good an education as the richest person in America." Who isn't? But Mr. Edwards's suggestions on how to do that involved higher pay for teachers and smaller class sizes, ideas that have failed many times.
Mr. Edwards and Mr. Fund’s comments are deliberately symbiotic political nonsense from which much can be learned.
It is hard to imagine that many people – even many Democrats – think that there is an unlimited supply of top quality education in the world available at any price, still less a price the public would even conceivably want to pay, or be able to afford, to supply free to every child. So how could any sensible person be in favor of a public education system in which every child “can get as good an education as the richest person in America?” Did either Mr. Edwards or Mr. Fund ask anyone at, say, Harvard or the exclusive private Washington D.C. prep school, Saint Albans, about how easy it is to find top quality educators at any level? Messrs. Edwards and Fund make Lake Wobegon’s fictional communal belief that all of its children were “above average” seem like flinty realism. Mr. Fund rhetorical question, "Who isn't?" has as its serious answer: “Everybody isn’t” or “Nobody is.” The teachers who are normally over-represented at Democrat gatherings were probably acutely aware of how hard it is to obtain quality education, so it is possible that Mr. Edwards’ “policy proposals left many cold” in the way one may be left cold by an elderly friend whose increasingly daffy “policy proposals” leave one feeling that his dotage is progressing apace.
But the Edwards/Fund interchange (it isn’t really a “dialogue,” of course, it more resembles an exchange of deliberately partially responsive voice mail messages) conceals a deeper rift – much deeper than can be accounted for in “Mr. Edwards's suggestions … for higher pay for teachers and smaller class sizes, ideas that have failed many times.” Such ideas have, of course, failed just as Mr. Fund says. But there is likely a much bigger divide than that. When Mr. Fund says that he (or “everyone”) supports a public education system in which every child “can get as good an education as the richest person in America,” he probably means a system in which every child can be educated to the best of that child’s abilities – but in which student “merit” plays the biggest role (perhaps the only role) in rationing public education. (Of course, this asserted “probability” is based on my perception that Mr. Fund generally values “merit” – but he may have written to the contrary.) But when Mr. Edwards says he supports a public education system in which every child “can get as good an education as the richest person in America,” he probably (assuming he at least to some extent shares the public agenda of his party) means a system in which merit does not play such a big role as Mr. Fund is contemplating and in which many "academically unqualified" students are admitted, by way of affirmative action and other non-“merit” criteria, to the very highest realms of education. Such students would largely waste that extra measure of education but they will obtain a debased “credential.” That result seems to be close to the current Democratic ideal – and even some Republicans seem willing to flirt with it, as evidenced by Republican support for State university systems being required to accept the “top 10%” of even low-performing high schools.
But obtaining the “ideals” expressed by either of these men would be absurdly expensive – leaving little if any resources for anything else in life. How many people are there in the world who are qualified to sit on the Harvard faculty? How many students could all those people teach? That number – and a very small number it will be - is the number of people who can be given top-flight education (objectively defined by a credentialist) at the college level, like it or not. Even if the definition of “top flight education” is generalized away from this credentialist norm, the number of people who can be given such an education is very small. Education is a scarce good. And no concept of “merit” is going to get the number of “deserving” students down that far, even if it were for some reason desirable to tell wealthy people that their money is no good when it comes to buying top quality education, an argument which is far from made. Mr. Edwards’ probable “ideal” is even more expensive and wasteful than Mr. Fund's.
Both of these men know that in America today wealthy people with unintelligent or underperforming children are free to purchase for them whatever level of education they want – provided a private school or other source of such quality education may be found to supply it. Mr. Gore, for example, appears to have consumed large quantities of marijuana and did not excel at Saint Alban's, but nevertheless applied to only one college – Harvard – because he knew in advance that he would be admitted there (presumably as a beneficiary of his family connections and the famous Harvard slogan: “There has to be a bottom ten percent!”). Politicians and editorialists both are nearly universally loath to admit that this aspect of the American educational system is nearly universally accepted, if grudgingly.
There is much to be learned from this pseudo-exchange. Messrs. Edwards and Fund use the same language with deliberately different meanings to assert ideals neither they nor anyone else with any sense would actually hold, but which neither they nor anyone else would actually dare deny publicly. Both sides sound good, and nothing much comes of it. As a result, most of the education market remains rationed by price. This “exchange” is a microcosm of how education issues are treated generally in America today. It takes a game with a lot of fast moving shells to keep something as important as education economics nearly rational and efficient – but America has shown that it can be done! Indeed, polls suggest that Republicans have recently at least pulled even with Democrats on the issue of education.
As noted in prior posts, the Man Without Qualities views the market for education (and, more generally, information and knowledge) and the market for medical services to have much in common. Their commonality is perhaps nowhere more in evidence than at the points where these markets intersect the political system. This kind of “exchange” which Messrs. Edwards and Fund provide therefore should be studied as a model for future methods by which the public’s “demand” for universal availability of top quality medical services can be sublimated into something more rational and efficient. Surely most politicians and editorialists would like a system in which “basic” medical care is broadly available, some top quality medical care is available to “meritorious” people (however defined) even of lesser means, the bulk of the medical services market is rationed by price, and Democrats and Republicans can each claim they are in favor of “universal top quality medical care” while meaning different things which they don’t intend to be taken seriously anyway. Who wouldn’t be?
Just like education. Just like Messrs. Edwards and Fund.
Monday, April 15, 2002
Steven E. Landsburg has discussed the issue of whether publishers reduce the durability of textbooks in an interesting 1999 Slate article, where he says:
“The naive answer to why publishers might want to discourage the used book market is that they prefer to get paid every time a student buys a book. But by that logic, you should never sell your house when you can rent it: Why get paid only once when you could get paid every month? The logic is wrong because the sale price is likely to be far higher than the monthly rent. And the logic is still wrong when applied to textbooks, because the sale price for a book that can be resold is likely to be far higher than the price of a book designed to lose its value.”
“If a student is willing to pay, say, $30 for a textbook, that same student will be willing to pay $60 for the use of a textbook that can be resold for $30 at the end of the semester. (For the sake of simplicity, let's ignore the fact that the $30 delivered a few months from now is worth a little less than $30 delivered immediately.) And for a book that can be resold twice, the second owner's willingness to pay $60 means that the first owner is willing to pay $90.”
Mr. Landsburg is suggesting that the publisher can “capture” the resale value of its book – and therefore doesn’t care about competition from recycled durable books. If that is true generally, then an aluminum monopolist would not care about competition from recycled aluminum for the same reasons. So if Mr. Landsburg’s argument were universally correct (which, of course, he is not asserting in this example), then the government was right to prosecute its 1940’s aluminum monopoly case – and most knowledgeable people now don’t think that is right, based on Ronald Coase’s original insights. Indeed, Mr. Landsburg's argument seems to be essentially that of Learned Hand - the judge who wrote the aluminum case decision - modified to fit the textbook particularities.
In Mr. Landsburg’s approach the resale book price is a lot lower that the new book price. Why? Well, even in his example, it seems that the book has durability problems. Otherwise, why would a perfectly preserved used book clear the market at only half the price of an identical new book? Obviously, the books aren’t identical. The used one is, well, “used:” A little torn up, with some notes in the margin and the occasional tomato seeds squished between the pages. Mr. Landsburg’s argument seems to suggest that if the resale price of the book is always greater than some constant and the book could be sold any number of times (that is, the book is truly durable), then the original price will be very, very large indeed, limited only by the prevailing interest rate! In fact, if we do as he does and ignore the fact that a sale or resale price delivered in the future is worth less (by the interest rate) than the sale or resale price delivered immediately, then the original price of a completely durable book that could be sold any number of times at full price (or any constant price) would be arbitrarily large. So his example really does seem to depend seriously on books not being very durable.
But how much durability will the publisher sacrifice? That’s the tough question. The point of the fancy economic articles linked below is that if there is a really good resale market, then the publisher will make its books less durable than is economically optimal for the society as a whole. But to get to that point, one needs to consider the market power created by the copyright laws - which does not figure in Mr. Landsburg’s approach.
Mr. Landsburg makes another interesting point: “[P]lanned obsolescence occurs only under special conditions. Mistrust, for example, is a special condition. If a publisher says, ‘Buy this book for $90, and you'll be able to resell it next year for $60,’ a student might well respond, ‘How do I know you won't bring out a new edition next year and undercut my resale market?’ Unless the publisher can quell such doubts, students won't pay premium prices for books with lasting value, so publishers won't provide them.”
I’m not sure what “special conditions” are (perhaps the existence of market power is a "special condition," for example), which is no criticism of Mr. Landsburg’s informal article, but he certainly does seem correct that “distrust” will aggravate the publisher’s durability decision with respect to certain types of books.
An article in today's New York Times says that Andersen will settle the obstruction of justice charges brought against it with the Justice Department in the next day or so, and has this to say about the settlement:
"The agreement could result in a deferral from prosecuting Andersen for as long as three years. Andersen's lawyers were uncomfortable with a deferral lasting that long, but the Justice Department was concerned that its investigation into possible wrongdoing at Enron isn't close yet to filing any criminal charges, people close to the negotiations said."
So it appears to come to this: After four months of intense investigation, the Justice Department feels it needs a margin of three more years to bring possible charges against Enron and its officers. If the frauds at Enron were as "obvious" and "egregious" as the company's critics have been saying on the basis of publicly available information, why does the Justice Department - which for months has had access to vastly more information than what has appeared in the media - think it needs another three years to decide what to do?
What's wrong? Didn't the New York Times indict and convict the whole Enron management team, together with all relevant accountants, banks and attorneys, months ago? Maybe the Justice Department should just ask the Times for the evidence they used!
Sunday, April 14, 2002
In the fetid days of the late Clintonian era rumors rose like vapors from a marsh that some, including even the President and First Lady, might yet be charged by the Independent Prosecutor with “obstruction of justice.” At that time the Man Without Qualities dined with a close relative, a woman who toils selflessly for the good of the Republic in an antifraud division of one of the Federal intelligence services, frequently and with casual elegance referring the fates of ambitious business executives to United States Attorneys for prosecution. After some rehearsal of the “obstruction of justice” rumors over portions of either Bouillabaisse or Bourride (memory fails), this relative smiled most winningly across the candle-lit expanse of linen and silver and crystal, and opined with unerring judgment: “Yes, and you know what that means, don’t you? It means the prosecutors have nothing, absolutely nothing – and they know it.” I believe we enjoyed pears poached in wine for dessert.
And, of course, she was absolutely right. Especially in a politically charged, high profile case, any prosecutor would prefer to indict on the basis of the principal wrongs alleged - not some paper shredding rap. That the Independent Prosecutor was driven to dependence on obstruction of justice charges was a very serious sign that the President and First Lady – indeed, everyone of significance not then already charged – was unlikely ever to be charged.
My relative's insight came back forcefully when David B. Duncan, the Arthur Andersen partner in charge of auditing Enron, agreed to plead guilty to a charge of obstructing justice. According to some observers, the Duncan plea was a great blow to Andersen, and might provide the government with needed leverage against Enron.
Is the Duncan plea significant? As my relative might say: “Yes, and you know what that means, don’t you? It means the prosecutors have nothing, absolutely nothing – and they know it.”
Or, put another way, Duncan’s plea is significant, but not primarily for the reasons described in the media articles linked above. Recall that according to Enron’s critics the company’s frauds were supposedly “obvious” and “egregious,” at least once the basic data were obtained – and nobody in the Justice Department (or even the financial pornographer Lerach!) has said Duncan or anyone else succeeded in actually denying material information to investigators (as opposed to destroying material documents). Yet, despite all that investigating and the supposedly “obvious” and “egregious” frauds not one individual at Enron or Andersen has even been indicted or agreed to plead guilty to accounting, securities or bank fraud. NOT EVEN THE DEMONIC MR. FASTOW, THAT INCARNATION OF EVIL HIMSELF, HAS BEEN INDICTED AFTER MORE THAN FOUR MONTHS OF INVESTIGATING.
Further, the terms of Mr. Duncan’s plea bargain hardly suggest that the government has been deluged to date with evidence of “obvious” and “egregious” fraud – or, for that matter, any fraud. As the New York Times described Mr. Duncan’s plea bargain:
“[T]he government made concessions that are unparalleled in a corporate criminal prosecution in which charges have already been filed. Under the terms, the government will defer prosecution of Andersen — and ultimately drop the obstruction charge without trial if the firm follows the terms of the deal. The terms, legal experts said, are surprising, given that the government seemed to be holding the best cards. ‘If the government agrees to defer this prosecution and not make them plead guilty, it's a huge victory for Andersen,’ said Stephen M. Ryan, a former federal prosecutor and a partner at Manatt, Phelps & Phillips. ‘But it's a very curious result.’”
And, of course, the Duncan plea agreement admits only “obstruction of justice” – not accounting crimes. Even the plea bargain Andersen itself is negotiating is not reported to go beyond obstruction of justice.
The entire proceeding highly suggests that despite four months of intense work and full access to Enron’s and Andersen’s records the prosecutors have nothing – and they know it. They are hoping that Mr. Duncan will be able to provide the evidence that is lacking to date.
So much for “obvious” and “egregious" accounting fraud.
Now, it has always been the position of the Man Without Qualities that Andersen’s document destruction was serious business. Moreover, there are individual cases – especially the uber-knowledgeable Robert Rubin’s sly attempted intercession with his former Treasury subordinate on behalf of Citigroup (including its investment bank subsidiaries) – where I have been rather hard in suggesting the likelihood of shady practices. I have also made quite clear that investment bank analysts may have a good deal of shoddy work to explain in this case - there is no shortage of villians. But document shredding is not obvious and egregious fraud - and individual cases do not support the nearly universal sliming of “Wall Street” implied by the sustained or “cross-country” accusations contained in, say, the Lerach complaint, or the more airless reaches of New York Times coverage of the matter, for example. Such a universal sliming amounts to assertions of a "vast conspiracy" for which there is grossly inadequate support - no matter how fulsome the rhetoric may become.
Perhaps evidence of widespread “obvious” and “egregious” fraud may come. Perhaps there was even a vast conspiracy. But we’re still waiting after four months – and the signs are not auspicious.
Mickey Kaus correctly points out that nobody has a monopoly on books and the linked articles talk about monopolists. Is this a problem?
The purpose of copyright is to confer on the author (and therefore a licensed publisher) a bit of "market power" like a monopolist's - which is supposed to up the returns on book sales. No one has a monopoly on books, but the author has a monopoly on the author's book, which competes with other books which are not perfect substitutes as to its contents. A re-sold book will be a perfect substitute as to its contents (it's the same book). That's why the authors are upset.
The payoff for giving authors what is called the "copyright monopoly" to society is supposed to be the incentive for the author to produce the book in the first place. Congress makes each author a little monopolist with a little market power in exchange for the author writing a book that would not otherwise exist - or so the increasingly controversial theory goes. The more a copyrighted book is distinctive and original, the less perfect the competition to it will be from other substitute books, and the greater the author's market power will be. For such reasons it is sometimes said that the "copyright monopoly" is supposed to allow the author to gather the fruits of his or her own originality. Since most authors and their works are not very original, the market power conferred by copyright is low - and so are their sales. Patent and trademark laws works in a similar - but not identical - ways.
One will sometimes read that the "copyright monopoly" is a "misnomer" and that the right to exclude conferred by the copyright laws is no different from the right one has to exclude others from one's car - a bare property right. But as one better commentator puts it:
"Not only does the Copyright Act create economic incentives for innovators by allowing them to establish a market niche from which they may derive monopoly profits; but by making it unlawful to infringe the copyright holder's exclusive rights, the Act deters free-riding. The remedies accorded copyright holders against infringers under the Act create a disincentive to infringe for those wanting free access to the copyrighted good. As an alternative to the unlawful appropriation of the copyrighted good for personal consumption or to compete in the marketplace, a potential infringer has an incentive to create a substitute."
So Mickey is right to suggest that without the argument connecting the linked articles to the copyright monopoly, this post is hard to follow!
That “Notorious” Amazon Used Book Resale Service
The ongoing expansion of on-line resales of books, and its potential adverse effect on authors and publishers, has generated a fair amount of controversy recently This controversy – at least as reported in the mainstream media - has approached the topic in a kind of vacuum, as if the question of the effect of Internet resales of durable goods on the original seller’s profits was something quite new.
There is a tendency on many people’s parts to think that because the Internet is involved in, or even a necessary part of, a commercial development, then the development is without relevant antecedents. This tendency drove much of the dotcom retail silliness, in which what were nothing more than on-line catalogues services, for example, presented themselves as somehow fundamentally new.
There is an old saying: "A goose wakes up to a new world every day." The tendency was deeply and explicitly wrong in the dotcom arena, and it is just as deeply, if implicitly, wrong in regard to on-line resales of books and other durable goods.
The effect of the existence of a resale market on profits from resales of a durable good came up in a big way in the 1940’s in a monopoly case in which the government charged the country's main supplier of aluminum with "illegal monopoly" under the Sherman Act. The supplier argued that it was not a true monopolist because its supplies of “virgin” aluminum ingots competed with supplies of “recycled” aluminum ingots. The 1940’s courts didn’t agree with the supplier, but later economic learning (most importantly by Ronald Coase) showed that much of what the supplier was saying was true: the existence of a good resale market for a durable good strongly tends to drive its price down to the competitive level. To the extent an author hopes to extract extra high (“supracompetitive”) prices from book sales, Mr. Coase brought bad news.
But, fortunately for authors, books are not made of aluminum. In fact, unlike aluminum, books are not really very durable at all. This leads to some curious results. In fact, recent research indicates that if the durability of the book is determined by the publisher (which it largely is), the existence of a good resale market will lead to an overabundance of books with low durability. Put another way, if there is a good market for resale of books, publishers will print more physically crummy, non-durable books than is efficient. Moreover, the same research indicates that in such a market authors and publishers will retain almost all of their profitability. [If book durability is not determined by the publisher, book economics and aluminum economics look more alike.]
The mathematics gets daunting, but the concept is pretty clear: If publishers know that a resale market allows resold durable books to compete with new books and publishers can choose to publish durable or non-durable books, then the publisher will choose to make a lot fewer durable books if the resale market exists than if it doesn't. In fact, publishers will produce fewer durable books than is economically optimal for the society as a whole. And, of course, there won't be much for the re-sale market to re-sell.
In sum, if Amazon provides a good book resale market, then the public will suffer from an inefficient oversupply of nondurable books, but the profits of authors and publishers may not suffer. Authors and publishers looking for an argument against on-line book resale services which is both not self-serving and advances the public welfare might take note.
The economics and mathematics of the more recent research cited above are already complex, and the reader may wish to just review the first few pages for conclusions. The rise and fall of Napster has led to even more complex economic analyses which depend on the characteristics of the durable good in question. [Predictably, a software file and a hard-copy textbook lead to rather different game results.]
Saturday, April 13, 2002
Patrick Ruffini has an interesting article in National Review Online describing a case in Pennsylvania in which the Supreme Court's apportionment precedent has been used to mask naked incumbent protection.
This kind of judicial/political activism sends a very clear and simple message: the Federal Courts use the sanctimonious, highfalutin and incoherent Supreme Court apportionment precedent to disguise the judiciary's own naked political opportunism. The situation is undoubtedly being aggravated by the declining average quality of the Federal judiciary itself - a decline brought on in large part by the sheer growth in the number of Federal judges and the ongoing and improvident expansion of Federal legislation and the jurisdiction of the Federal courts.
Unless the Court's apportionment precedent is clarified and candidly restructured, the situation will almost certainly continue to deteriorate. As noted in prior posts, the resolution of this crescendo is likely to make the uproar over Bush v. Gore more of whimper than the bang it seemed at its time.
Friday, April 12, 2002
An honest and refreshingly remorseless friend recently criticized the Man Without Qualities for earlier Paul Krugman posts on the grounds that there is no point in close analysis of writing which, in my friend’s opinion, was so obviously the work of a hack. Mr. Krugman is back in his more obviously partisan (and hack) mode today, criticizing various members of the current Administration on various grounds. Rather than risk further chiding by my friend, I make only isolated comments. Mr. Krugman says:
“Many of the business executives recently appointed to government positions first entered the private sector after prior careers in the Reagan and Bush I administrations. As Sebastian Mallaby put it in The Washington Post, they are "political types dressed up in corporate clothing: people who got hired by business because they knew government, then hired by government on the theory that they knew business." (Dick Cheney is the quintessential example.) So are they really good businessmen, or are they just crony capitalists, men who have lived by their connections?”
The Gatsby gangster, Meyer Wolfsheim, would have called them “go-nections”
Mr. Krugman appears to view the world as a RICO enterprise on a large scale. The column includes the hints of conspiracy and near-conspiracy that increasingly preoccupy his thinking ("… are they just crony capitalists, men who have lived by their connections?"). Indeed, one’s appreciation of the humanity and tolerance of his former colleagues at the MIT economics department rises with each successive column; it cannot have been easy for them in the long years before they dispatched him to Princeton at last. One truly wishes the man peace.
But the more interesting issue raised is whether the Administration is being packed with what Mr. Krugman calls “crony capitalists” of poor business caliber, a species of which Mr. Krugman says “Dick Cheney is the quintessential example.”
Well, if Dick Cheney is the quintessential example of whatever concerns Mr. Krugman in the context of business competence, then the Administration isn’t doing too badly. According to a capsule biography:
“Cheney moved into private business, becoming chief executive of Halliburton. Cheney led the company to its position as the largest oil-drilling, engineering and construction services provider in the world, with a 1999 revenue near $20 [b]illion. The company acquired its main rival, Dresser Industries Inc., in 1999, a move that was well-regarded in the business world.”
The Wrath of Krugman also falls, strict and particular, on Thomas White, secretary of the Army, a former general who became a senior Enron executive in 1990. Mr. Krugman criticizes Mr. White’s senior involvement with Enron and his failure to divest interests in that company promptly when assuming office. This is the picking of a valid enough ethical bone, although one scoured clean by other media scarabs many weeks ago. But, with respect to the issue Mr. Krugman raises of Mr. White’s business competence, it is instructive to review the resume of Mr. White’s immediate predecessor as Secretary of the Army, Clinton appointee Louis Caldera:
“Louis Caldera became the 17th Secretary of the Army on July 2, 1998, after nomination to that post by President Clinton and confirmation by the United States Senate.
“Secretary Caldera previously served as Managing Director and Chief Operating Officer for the Corporation for National Service [, a] federal grant-making agency headquartered in Washington, DC….”
“Before coming to Washington, Secretary Caldera served for five years in the California Legislature…. He served as Chair of the Assembly's Banking & Finance Committee, Revenue & Taxation Committee, and Budget Committee. He also served as a member of the Intergovernmental Policy Advisory Committee to the U.S. Trade Representative.”
“Secretary Caldera began his public service career as an Army officer and as a lawyer. After graduating from West Point, he served as a commissioned officer in the U.S. Army from 1978 to 1983. He rose to the rank of Captain and was awarded the Meritorious Service Medal. His assignments included serving as a military police platoon leader, a battalion intelligence officer, and a battalion executive officer. He later served in the U.S. Army Reserve.”
“After leaving active duty, Secretary Caldera attended Harvard University. He earned a law degree from Harvard Law School and an M.B.A. from Harvard Business School in 1987. He then entered private practice in the areas of corporate transactions and municipal finance at the firms of O'Melveny & Myers and Buchalter, Nemer, Fields and Younger. He later represented Los Angeles County in state and federal court as a Deputy County Counsel.”
I have no wish to criticize Mr. Caldera here, although his “Army of One” advertising campaign has been controversial, to say the least.
But Mr. Caldera’s resume does relate to the question of whether Bush Administration appointees are just men who have lived by their “go-nections”? For it is clear that Mr. White’s predecessor had no relevant business experience whatsoever prior to his appointment as Secretary of the Army. Indeed, he had almost no relevant experience at all. Mr. Caldera had lived entirely by, and obtained his appointment through, Krugmanian “go-nections.”
So if Mr. Krugman can be content with a clear relative improvement between successive administrations, he can at least find peace with respect to the welfare of the Nation.
Thursday, April 11, 2002
A "vagrant" was sometimes traditionally defined in the common law as a person about whom "no one knows from whence he comes nor whither he goeth." In this sense, the Second Amendment has become the vagrant provision of the Bill of Rights.
Glenn Reynolds of InstaPundit has a fine article out on the Second Amendment and its discontents. The article discusses the Fifth Circuit Court of Appeals decision in United States v. Emerson, which may signal a new willingness of the Federal Courts to address honestly that “embarrassing” Amendment.
But the article does not discuss what may be the most embarrassing feature of the Second Amendment, at least from the standpoint of the Federal Courts: Emerson and the new (or renewed) learning about the Amendment, if accepted, suggest that the Second Amendment is a fundamental right which should therefore be “incorporated” as a restriction on the States as well as the Federal government (although Emerson dealt only with Federal law). That the police power of the States (as opposed to the powers of the Federal government) might not extend to broad control of firearms raises very difficult federalism and historical questions. The Second Amendment has never been construed as being applicable to States. But if the courts are now to awaken to its significance, it is hard to see how its "incorporation" could be denied.
In any event, the following is a reasonable discussion of the Second Amendment and the Incorporation Doctrine produced for the Public Law Research Institute at Hastings College of the Law, which I reproduce but do not necessarily completely endorse:
The Bill of Rights only protects citizens against action by the federal government. However, through the doctrine of selective incorporation, the Supreme Court has held that the Due Process Clause of the Fourteenth Amendment may limit action by state and local governments as well. Nevertheless, the Supreme Court rejects the notion that the Fourteenth Amendment incorporates the entire Bill of Rights. Instead, the Court has decided on a case by case basis which rights are so "fundamental" as to be brought into the Fourteenth Amendment and to bind state and local governments. However, ambiguity remains. Some provisions of the Bill of Rights have still not been considered by the Supreme Court since it began applying the incorporation doctrine.
The Second Amendment is not among those rights incorporated into the Fourteenth Amendment. In United States v. Cruikshank, the Supreme Court held that "the second amendment . . . means no more than that it shall not be infringed by Congress." Subsequently, in Presser v. Illinois, the Court rejected a claim that the Second Amendment could invalidate a state law. In that case, the Court upheld an Illinois statute which made it unlawful for a group other than the state militia or federal troops to drill or parade with arms in public without permission from the governor. The defendant argued that this law violated the Second Amendment guarantee of the right to bear arms. Relying on Cruikshank, the Court disagreed, reasoning that "the amendment is a limitation only upon the power of Congress and the National government, and not upon that of the states."
The Validity of Nonincorporation
Because the Second Amendment has never been explicitly addressed in formal incorporation analysis, the conclusion that the amendment only applies to actions by the federal government has been questioned. The decisions in Cruikshank and Presser came several years before any provisions of the Bill of Rights were incorporated, thus one cannot be sure that the justices in the Second Amendment cases considered the possibility of incorporation.
The first incorporation decision occurred in 1897, eleven years after Presser and twenty-two years after Cruikshank. Today, only three provisions of the Bill of Rights, including the Second, Fifth and Seventh Amendments, remain unincorporated. The almost total incorporation of the Bill of Rights lends support to the theory that incorporation of the Second Amendment is inevitable. However, more than one hundred years have passed since Cruikshank and Presser were decided, during which time the Supreme Court has been content to let those decisions stand.
The Supreme Court's reluctance to revisit the Second Amendment incorporation question is most notable in its refusal to hear an appeal of a case in which the Seventh Circuit upheld a local government's ban on possession of handguns within its borders. The appeals court, citing Presser, based its decision on the nonapplicability of the Second Amendment to state and local governments.
Likewise, the Ninth Circuit has followed Cruikshank and Presser in upholding California's Roberti-Roos Assault Weapons Control Act of 1989 (AWCA). The plaintiffs attempted to have the AWCA declared unconstitutional on several grounds, including arguing that the law violates the Second Amendment right to bear arms. The court rejected this argument, holding that the Second Amendment only binds the federal government. This case was never appealed to the Supreme Court.
More than a century after they were decided, Cruikshank and Presser remain good law. Thus, the right to bear arms granted by the Constitution, if analyzed as an individual right, only limits the federal government's attempts to restrict firearms. State and local governments are not bound by the Second Amendment.