Catallaxy Files

polymathic pontification, bleeding heart economic rationalism and liberal secularist contrarianism

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  • Jason Soon
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  • Teresa Fels


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    Saturday, January 18, 2003
    The economics of Eldred
    Kim Weatherall has lots of good links about the recently handed down Eldred decision. Of course she's also sounding quite glum about it. It's not a good development policy-wise but I'm not that disappointed because I always thought there was only a very slim chance of the US Supreme Court overturning the copyright term extension. Sure, the US Supreme Court has intervened in policy debates before - but where the constitutional basis for intervention in the details of policy were arguably stronger than they were in this case. I don't blame the Court for taking the position that if it had the authority to intervene here it might end up having to intervene in lots more arcane policy details related to copyright. Of course, if Eldred were solely about good economic policymaking it wouldn't have a snowball's chance in hell - it's worth revisiting this amicus brief filed by a group of top economists to remember just how bad this policy is. This is from the Exec. Summary:

    The CTEA has two further effects on economic efficiency. First, the CTEA extends the period during which a copyright holder determines the quantity produced of a work, and thus increases the inefficiency from above-cost pricing by lengthening its duration. With respect to the term extension for new works, the present value of the additional cost is small, just as the present value of incremental benefits is small. By contrast, the cost of term extension in existing works is much larger in present value, especially for works whose copyrights would soon or already have expired but for the CTEA.

    Second, the CTEA extends the period during which a copyright holder determines the production of derivative works, which affects the creation of new works that are built in part out of materials from existing works. Where building-block materials are copyrighted, new creators must pay to use those materials, and may incur additional costs in locating and negotiating with copyright holders. Such transaction costs are especially large where the copyright holders whose permissions are required are numerous or difficult to locate. By reducing the set of building-block materials freely available for new works, the CTEA raises the cost of producing new works and reduces the number created. Taken as a whole, it is highly unlikely that the economic benefits from copyright extension under the CTEA outweigh the additional costs. Moreover, in the case of term extension for existing works, the sizable increase in cost is not balanced to any significant degree by an improvement in incentives for creating new works. Considering the criterion of consumer welfare instead of efficiency leads to the same conclusion, with the alteration that the CTEA’s large transfer of resources from consumers to copyright holders is an additional factor that reduces consumer welfare.

    Incidentally, Dubya's recent spirited defence of the Copyright Term Extension Act, along with the hypocritical commitment to tariffs and his determination to go to war at all costs marks him as the mercantilist and military-industrial-complex puppet that he's probably always been. The economic libertarians who supported his candidacy over Al Gore's were really sucked in.
    Media watch: A change at The Australian
    Followers of the media will no doubt *not* be shocked by the fact that Angela Shanahan in yesterday's Australian newspaper had a rapid attack on Greg Barns' piece of the day before on child porn. By Shanahan standards it was a relatively reasonable piece. What some readers of the hard copy version may have noticed is that Shanahan's picture was missing from above the piece where it usually appears. I can't verify this for myself as I didn't purchase the hard copy version but was told this was so by my source at The Australian. The significance of this, according to my source, is that only regular columnists have their pictures on the op-ed page and as of Friday, Shanahan will no longer be a regular columnist with freedom to fearlessly rove over whatever topic she so pleases. Rather she will from now on be writing as a contributor occasionally on topics on which she has expertise. Furthermore, Peter Botsman, who has impeccable left wing credentials, will become a regular columnist for the Australian.

    Well, so much for the aspersions being cast by Crikey that because certain op-ed editors have right-wing sympathies that they would be likely to cut their throats for the cause commercially and professionally by stacking the op-ed pages with boring uniformity which is merely the mirror image of, say, The Age's. These developments corroborate the suspicions I voiced earlier that:

    what we are seeing at the Oz is a phasing out of the duller writers of whatever ideology (including hopefully Angela Shanahan) while provocative, even slightly 'extreme' (well, alright, Shanahan was extreme in her own way too but hardly a wordsmith) thinkers like Guy Rundle will stay on - because this sells papers.

    Friday, January 17, 2003
    Great new blog
    My friend and fellow institutional economics/Austrian economics enthusiast Stephen Kirchner now has his own spiffy new blog called Institutional Economics. Check it out and add it to your list of bookmarks.
    Now What for Iraq? (and the anti-war movement)

    Breaking news is that UN inspectors have just found eleven chemical-capable artillery shells in good condition in a bunker south of Baghdad. I would imagine Saddam, his cronies, and apologists, are going to have to do some pretty fast talking to avoid facing the “serious consequences” of resolution 1441. After all – well kept chemical capable artillery shells are not the sort of thing one just keeps lying around for historical reference , at least not when the UN has ordered you to declare and destroy all such items.

    Unfortunately I see this as taking things one step closer to war with Iraq – but Saddam must take the blame fairly and squarely for this latest increment in Gulf tension.

    Meanwhile, North Korea continues it’s war of words with the US, rejecting the latest US offer

    “The US loudmouthed supply of energy and food aid are like a painted cake in the sky as they are possible only after North Korea is totally disarmed," said the rejection statement, issued Wednesday by the Korea Central News Agency.

    I’ll be straight up and say I am no expert on North Korea or US diplomatic relations with North Korea. But looking at the diplomatic effort that is going in to settling the North Korean situation (and lack of military buildup), versus the military buildup in the Gulf (and the fairly aggressive language used in relation to Iraq) – it would seem the US wants to solve the North Korea situation without military intervention.
    Tex on drugs
    Tex has a good short fisking of ex-druggie turned drug warrior Piers Ackerman of the Daily Terror followed by a brilliant short exposition of the case for drug legalisation..

    Thursday, January 16, 2003
    Speaking of child porn ...
    What is it with British pop stars and underage sex? Did they all go to Eton or what?
    Greg Barns on child porn
    Former Liberal turned Australian Democrat Greg Barns' piece in today's Australian on why the law should pursue makers but not users of child porn is not prima facie objectionable and he presents a good argument for his conclusion but he's more or less signed a death warrant to his political career in writing it. A brave man, pity about the corpse he left behind (see the online feedback - one reader is already calling for his scalp). This is simply an issue that the average man or woman in the street are not capable of thinking cooly and rationally about (well, there are lots of things they aren't capable of thinking cooly and rationally about but this one, unlike, say the calculus, invites pariahdom).

    I debated this with guest blogger Teresa Fels a long while ago and we sort of came to the tentative conclusion that there is a strong pragmatic case for going after users of child porn if it's far too difficult to go after the producers - sort of a second best enforcement strategy that may be the most efficient taking into consideration the alternatives. On a purely principled basis too, Barns isn't completely correct to say that paying for child porn (as opposed to accidentally stumbling on free child porn and then browsing for a few minutes out of prurient curiosity) is a victimless crime - if X is illegal and X is input into production of Y then paying for Y is in effect to induce the commission of the illegal act, X). Having said that, the 'pragmatic' case for going after users of child porn may well be weakened if the 'collateral damage' to other parties including invasion of privacy suffered by parties who may well be on the borderline and don't deserve the full opprobium that is heaped on them for such a serious offence is substantially large. Furthermore, it may well be that my original assumption about it being easier to target users than producers is wrong. Since I haven't seen any definitive empirical evidence on the effectiveness of a supply driven versus a demand driven policy, I have to see this as far from being a cut and dried case. What is clear is that it is exactly the sort of hysteria that is likely to greet Barns' arguments that encourages policymaking on these matters in a data-free zone.
    Iain Murray has just been sacked for blogging:

    My employment was terminated this morning, with this blog stated as the reason. I was somewhat surprised by this as my previous boss had been happy for myself and a former colleague to run blogs. They took up little work time, about as much as other employees take up with cigarette breaks, and were useful to get work-related ideas into shape for writing up for wider audiences. When my employer expressed his concern, I immediately offered to stop updating the blog forthwith. However, this was not enough and I was fired on the spot. As there is a procedure for disciplinary firings that follows a path of oral and written warnings, I was also surprised that this was not followed. It appears that my employer considered this serious misconduct, on a level with theft and sexual harrassment, thereby justifying an immediate termination

    I haven't read much of Murray's stuff before but he doesn't strike me as an extremist in any shape or form who might bring disrepute to his company. Nor do I know exactly what Murray used to do but if it's anything like mine (i.e. output driven - producing reports by particular deadlines) which it sure sounds like I don't see any reason why even his blogging during so called 'working hours' would affect his performance. If you do that, you make up for it by staying later at work. For instance, my work patterns are unconventional to say the least but perfectly compatible with my doing my job well - if I've got a lot on, I work a short day during the daytime (6-7 hours), break for dinner and whatnot and then work into the wee hours of the morning. If I only put in 6 hours one day, I make up for it with 11 hours the next. In output driven jobs, work patterns shouldn't matter if the employee has sufficient self-discipline. If he was doing some sort of 'on call' work it would be different.

    There are arseholes and then there are good bosses and Murray obviously drew an arsehole. Not only does my boss know about and approve of my blogging and interests in Hayek, he informs newly hired managers who are likely to share my interests about my blog.

    Wednesday, January 15, 2003
    The joys of blogging
    Brendan O'Neill, who is a blogger himself, writes a thoughtful piece and necessary corrective to the triumphalism of some bloggers. I agree with most of what he has to say. There are lots of very smart people in blogging and blogging at its best can tackle many often ignored and esoteric issues in a deep and thoughtful way that is sometimes lacking in the mainstream papers but for a lot of blogs, having mainstream news or other published material to peg off helps a lot. He also tackles the vexed issue of 'Fisking':

    If bloggers want to spend their time fact-checking the traditional media's ass, that's fine - and some of them even do it entertainingly. But when that becomes a major focus of blogging, it hardly points to a 'radical transformation' of the 'journalistic culture'. Blogs come across less as a revolutionary vanguard remaking journalism into something new and dynamic, and more like traditional journalism's poor cousin - putting it down, picking holes in its arguments, and generally having a good old moan about the Fisks and Krugmans of the world.

    I stand by my previously stated opinions on this. Fisking that is well done is no mean feat - let's sit back and enjoy it. but The Federalist Papers it ain't.

    Tuesday, January 14, 2003
    On labels
    My posting below on the Oz's alleged media bias got mentioned in the January 14 edition of the Crikey newsletter but I have one little quibble:

    Crikey also noticed that today's opinion page was the least right wing we've seen in weeks so maybe the flurry of new conservative additions to the columnist line-up will be toned down.

    Conservative Jason Soon has taken up the issue on his Blog but one swallow doesn't make a summer:

    Aargh! Call me an eclectic libertarian if you must, or a classical liberal, a liberal consequentialist or a fellow traveller of libertarians, hell you can even call me an old Whig, or a dynamist, but just don't call me a conservative.

    Now it could be that Crikey arrived at his conclusion that I was a 'conservative' because I disputed his claim of right wing bias and therefore must approve of the Windshuttle position on Aboriginal deaths or the 'invade Iraq' stance but that's a fallacy. The truth or lack thereof of the claim of right wing bias is independent of one's opinion on the desirability of that bias.

    As I've made clear in past posts, I take a completely realpolitik position on invading Iraq. In the absence of evidence of terrorist links, I don't think the costs of a war and subsequent destabilisation are worth it though I grant that if a link exists I would be all for it.

    I confess I don't place a particularly strong weight on the prospect of innocent Iraqis being killed if we go to war - I know I should but I don't though of course it would be regrettable. But it would be a price worth paying if the alternative was a lack of physical security in the rest of the world and the risk of the lives of people I know and place a higher weighting on being lost - but this dilemma only arises if there is evidence of a terrorist link and an attack is therefore justified. So far there isn't such evidence and it doesn't look like there ever will be (hell, they can't even produce the smoking gun) thus the dilemma doesn't arise for me. Incidentally see this article for a good example of genuine realist thinking on Iraq.

    As for Windshuttle, my views are contained in a post further below. I don't have any particularly strong stake in the debate - at the end of the day, whomever is right, a lot of Aborigines were killed and dispossessed, this doesn't set a good precedent for a society based on the protection of property rights and appropriate amends should be made including symbolic amends if it genuinely makes people feel better and able to get on with their lives.

    A friend and colleague comments thus:
    'yipes! if they think you are a conservative, what do they call a "real" one?'

    Monday, January 13, 2003
    The Oz moves further to the Right?
    In recent weeks, Crikey and some readers of left wing blogs have detected a "right-wing bias" on the Australian's opinion page. But take a look at today's page and it's hardly what you'd call dry. Indeed, with the exception of Tim Blair's column on users of four-wheel-drives, the page is dripping wet. Occupying over two-thirds of today's page are:

    *Leading US neo-marxist and veteran dissident commentator Gabriel Kolko writes exclusively in the page's lead article on the perils of a Pax Americana in the context of a looming American invasion of Iraq (The article includes a huge illustration of a half buried Uncle Sam);

    * and left-wing Sydney University historian Dirk Moses trashes Keith Windschuttle's thesis on the fabrication of Aboriginal History.

    Mind you, these two left-wing articles continue a trend on the opinion page. In recent months, the page has published dissenting articles on a war with Iraq from the likes of former British foreign secretary Douglas Hurd (Jan. 6), Harvard academic Stanley Hoffman (Jan. 3), former defence official Allan Behm (Dec. 23), Oxford tutor Neil Clark (Oct. 28), Monash academic Shahram Akbarzdeh (Dec. 13), Arena co-editor Guy Rundle (Oct. 9), shadow foreign minister Kevin Rudd (Jan. 9), Deakin academic Scott Burchill (July 22 and Sept. 18), La Trobe historian David Day (Oct. 4) and former DFAT chief and diplomat Dick Woolcott (Oct.3 and Aug. 5), among others in recentn months.

    So it's clear that the page is more than fair to opponents of a Bush-Howard war. True, the paper's foreign editor Greg Sheridan regularly defends the Bush-Howard line on Iraq, but apart from him, there ain't many pro-Iraq war articles on the Australian's opinion page. If the page can be accused of displaying any sort of bias, it's clearly a bias AGAINST a war in Iraq.

    Bear also in mind that last week, the page was the only opinion page in the nation to publish an extract from Labor backbencher Laurie Brereton's controversial speech attacking Labor for failing to distance itself from the Howard Government's "gung-ho" pro-US Iraq policy -- an extract which included the former shadow foreign minister's attack on "Rupert Murdoch's pro-US, pro-war The Australian newspaper". And what about Bali victim father Brian Deegan's open letter to the PM two months ago? (Deegan, you may recall, blamed John Howard's support for US Iraq policy for the death of his son Josh.) Where was his letter published? You guessed it: on that so-called right-wing pro-Howard opinion page at The Australian.

    As for the Windschuttle debate, again, the page can't be accused of displaying any sort of "right-wing bias", given that it's published a wide variety of views trashing Windschuttle's work. In recent weeks, the Australian's opinion page has allowed over 900 words to historians Henry Reynolds (Dec. 14), Lyndall Ryan (Dec. 17), Bain Attwood (Jan. 6), and (today) Dirk Moses to trash Windschuttle's controversial thesis. The only article in defence of Windschuttle was antrhropologist Roger Sandall's (Dec 23).

    So much for right-wing bias on the The Australian's opinion page.

    However, one of Crikey's speculations is more credible, namely that:

    Or is it a case of canny market positioning by Switzer, with the Fairfax press perhaps being abandoned by readers who are sick of the perceived left-leanings their papers have developed in recent times?

    Well, duh, Crikey. Economic self interest is frequently a better explanation for most things than ideology. Controversy sells, and ideological uniformity is boring and doesn't sell as well because boring doesn't sell. My prediction is that what we are seeing at the Oz is a phasing out of the duller writers of whatever ideology (including hopefully Angela Shanahan) while provocative, even slightly 'extreme' (well, alright, Shanahan was extreme in her own way too but hardly a wordsmith) thinkers like Guy Rundle will stay on - because this sells papers.

    So did the Oz publish Windshuttle because of some sinister anti-black armband history among its editors or because it wanted to be the first to publish Windshuttle and then create a buzz on its op ed pages by publishing refutations of Windshuttle? You decide.




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