Quotulatiousness

December 12, 2024

The Canada Post strike is achieving one thing … strangling the use of cheques

Filed under: Business, Cancon, Technology — Tags: , , — Nicholas @ 04:00

In The Line, Phil A. McBride outlines the one palpable achievement of the postal workers’ strike in the likely fatal blow to the use of paper cheques in Canada:

Bank of Montreal sample cheque

For more than a century, Canadian businesses have been using cheques and the post office to send and receive money across the country and the world. It’s easy: you write a cheque, you put it in the mail, the recipient deposits the cheque at their bank, you wait five business days for it to clear and voila — you’ve got the money.

Except, right now, of course, that’s not happening, due to the ongoing postal strike. In fact, a great number of cheques that are in the mail are stuck there, leaving businesses and Canadians with money stranded in transit. I am increasingly convinced that this strike will be remembered in the future as the death of cheques in Canada, at least as a major medium of business exchange.

The banks won’t miss cheques, if so. Cheques are expensive. In 2015, Scotiabank estimated that the writing and processing of a cheque cost anywhere between $9 and $25. In 2023, approximately 379 million cheques were issued for a combined value of $2.9 trillion dollars. That’s an average value of $7,650.00 per cheque, at an averaged cost of $6.44 billion dollars to the banks and their customers. Very little of that cost is incurred if a payment is made electronically.

But it’s not just the money. Cheques are prone to fraud. Cheques can be counterfeited, signatures can be forged and cheques can be written against accounts that can’t cover the amount they’re issued for. The customer is responsible for sending and receiving them, which means they are prone to loss or interception, which adds further time and cost to an already expensive process.

As a business owner, I happen to agree with the banks: I don’t like cheques. I’m made to wait five business days to access my money, and that’s after I’ve waited for the client to issue the cheque and for the postal service to (once upon a time) deliver it to my office.

Today, all of Canada’s charter banks, as well as most Credit Unions, offer many options for electronic payment. Electronic Funds Transfer (EFT), Interac Electronic Money Transfer (EMT), debit cards, credit cards, even SWIFT wire transfers for international payment. All of these institutions have the ability allow for multiple layers of approval that satisfy corporate accounting, security and reporting requirements. All of these forms of payment are faster, cheaper and more secure than cheques — in most cases, I get access to my money inside 24 hours, rather than waiting for a full week for a cheque to clear.

So why has the cheque endured as long as it has?

Some combination of “If it ain’t broke, don’t fix it” and “It’s always been done this way”.

December 11, 2024

Norway finds the perfect tool to drive away those pesky entrepreneurs

Filed under: Business, Europe, Government, Technology — Tags: , , , , — Nicholas @ 03:00

Don’t you just hate having all these bothersome start-up companies in your country, creating new jobs and new investment opportunities? Norway sure does, but good news: they’ve found an almost perfect way to not only deter existing entrepreneurs but to punish those who try to leave after they’ve been successful:

Norway is a fantastically beautiful country, but lately they’ve decided they want as few new companies as possible.
“Norway” by Nouhailler is licensed under CC BY-SA 2.0 .

Norway’s entrepreneurs are disappearing. In the past two years alone, 100 of Norway’s top 400 taxpayers, representing about 50 percent of that group’s wealth, have fled the country to protect their businesses.

In Atlas Shrugged, Ayn Rand paints a vivid picture of a dystopian society where government overreach and socialist policies kill innovation and demonize entrepreneurs. Present-day Norway mirrors this scenario in unsettling ways. The Nordic countries have long operated on an egalitarian ideal—citizens pay high tax rates for a generous safety net and effective public services. But Norway has taken the ideal to destructive and bizarre extremes.

Norway spends 45 percent more than Sweden on healthcare per capita with approximately the same health outcomes. Norway spends 50 percent more than Finland on primary and secondary school with worse results. And it splurges on green virtue-signaling with, for example, a $3.2 billion offshore wind project that industry experts believe is financially unworkable. That $3.2 billion, by the way, is roughly equivalent to the total revenue raised by the wealth tax.

To socialist politicians in Norway, entrepreneurs are mere piggy banks to be raided for ever more spending. When confronted with the reality that you can’t pay taxes with money you don’t have, the response is a vague moralism like “those with the broadest shoulders must bear the heaviest burdens.” Any dissent is waved away, deemed invalid because. . . free healthcare.

Earlier this year, instead of scaling back the tax blowout, the government doubled down, not only increasing the wealth tax but adding a vise grip on business owners in the form of an “exit tax” on unrealized gains as well. That means if you move from Norway, you’re immediately liable to pay 38 percent of the market value of your assets. It doesn’t matter if you have no cash on hand, if your assets are risky and could plummet in value, or even if your company fails after you leave—you still owe the tax. (Luckily for me, I left before this tax became law.)

The intent is to corral entrepreneurs inside Norway, impeding them from heading for the exits. The inevitable result: They’ll leave even before starting their businesses. After shooting itself in one foot, the government is now aiming a bazooka at the other one.

December 10, 2024

Countering the “Managerial Revolution”

Filed under: Books, Bureaucracy, Business, Economics — Tags: , , , , , , , — Nicholas @ 04:00

Tim Worstall discusses the rise of the managerial class — described in 1941’s Managerial Revolution by James Burnham — and how detrimental to individual enterprises and the wider economy managerialism has been:

This, rather joyously, explains a lot about the modern world. We could go back to the mid-1980s and the bloke who ran the ‘baccy company written up in Barbarians at the Gates. In which he, as CEO, had a fleet of private planes, the company paid for his 11 country club memberships and so on. His salary was decent, sure, but the corporation rented him all the trappings of a Gatsbyesque — and successful — capitalist. Until the actual capitalists — the barbarians — turned up at those gates and started demanding shareholder returns.

Or we can think of the bureaucratic classes in the UK in more recent decades. Moving effortlessly between this NGO, that quasi-governmental body and a little light sitting on the right government inquiry. All at £1500 a day and a damn good pension to follow.

Or, you know, adapt the base idea to taste. There really is a bureaucratic and managerial class that gains the incomes and power of the capitalists of the past without having to do anything quite so grubby as either risk their own money or, actually, do anything. They, umm, administer, and the entire class is wholly and absolutely convinced that everything must be administered and they’re the right people to be doing that.

You know, basically David Cameron. Met him once, when he was just down from uni. At a political meeting – drinkies for the Tory activists in a particular council ward, possibly a little wider than that. Hated him on sight which I agree has saved me much time over the decades. And I was right too. There is nothing to Cameroonism other than that the right sort of people should be administering — the managerial revolution.

Sure, sure, we used to have the aristocracy which assumed the same thing but we did used to insist that they could chop someone’s head off first — show they had the capability. Also, they didn’t complain nor demand a pension when we did that to them if they lost office.

But the bit that really strikes me. France — and thereby the European Union — seems to me to be where this Managerial Revolution has gone furthest. Get through the right training (the “enarques“) and you’re the right guy to be a Minister, run a political party, manage the oil company, sort out the railways etc. You don’t have to succeed or fail at any of them, you’re one of the gilded class that runs the place. Because, you know, everything needs to be run and one of this class should do so.

The divergence or even active conflict of interests between the owners and the non-owning managers is part of the larger Principal-Agent Problem.

Microsoft has launched a publishing arm called “8080 Books” – AI-generated books anyone?

Filed under: Books, Business, Technology — Tags: , , , — Nicholas @ 03:00

Ted Gioia notices that Microsoft and other tech companies are moving into book publishing, likely as a way to generate some additional revenue from their vast investments in artificial intelligence ventures over the last several years:

I never expected Microsoft to enter the book business.

But on November 18, this huge tech company quietly announced that it is now a publisher. But there was an interesting twist.

Microsoft is “not currently accepting unsolicited manuscripts”.

Let’s be totally fair. Nobody at Microsoft claims that it plans to replace human writers with AI slop. But this company has invested a staggering $13 billion in AI — it’s their top priority as a corporation.

So what you do think their goals are in the book business?

If you’re looking for a clue, I note that Microsoft’s publishing arm is called 8080 Books. Yes, they named it after the 8080 microprocessor.

How charming!

And just a few hours after Microsoft announced this move, TikTok did the exact same thing.

According to The Bookseller:

    ByteDance, the company behind the video-sharing platform TikTok, has announced that it will start selling print books in bookshops from early next year, published under its imprint, 8th Note Press. 8th Note Press will work in partnership with Zando to publish print editions and sell copies in physical bookstores starting early 2025.

Here, too, nobody is claiming that they will replace humans with bots. But why would a company that has built its empire with online social media have any interest in the slow and stodgy business of selling printed books on paper?

Oh, by the way, TikTok’s parent is investing huge sums in AI. The company has even found a way around export controls on Nvidia chips. Just a few weeks before entering the book business, ByteDance’s sourcing of AI tech from Huawei was leaked to the press.

And as if these coincidences weren’t enough to alarm you, another AI publishing development happened at this same time — but (here too) with very little coverage in the media.

Tech startup Spines raised $16 million in seed financing for an AI publishing business that aims to release 8,000 books per year.

Here, too, the company says that it wants to support human writers. Maybe it will run a new kind of vanity publishing business. But is that a sufficient lure to attract $16 million in seed financing?

It’d be a rearguard action, but it’d be nice to have a requirement that publishers disclose when published works are partly or wholly AI-extruded, wouldn’t it? It would certainly help me to avoid buying books or magazines where AI hallucinations may occur in key sections …

December 9, 2024

QotD: The downfall of Boeing

Filed under: Books, Business, History, Politics, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

Boeing was once a young startup, founded by the eccentric heir to a timber fortune. Through a mixture of luck, derring-do, and frequent cash injections from its wealthy patron, it managed to avoid bankruptcy long enough for World War II to begin, at which point the military contracts started rolling in. Along the way, it developed an engineer-dominated, technically perfectionist, highly deliberative corporate culture. At one time, you could have summed it up by saying it was the Google of its time, but alas there are problems with that analogy these days. Maybe we should say it was the “circa 2005 Google” of its time.

There’s a lot to love about an engineer-dominated corporate culture. For starters, it has a tendency to overengineer things, and when those things are metal coffins with hundreds of thousands of interacting components, filled with people and screaming through the air at hundreds of miles an hour, maybe overengineering isn’t so bad. These cultures also tend to be pretty innovative, and sure enough Boeing invented the modern jet airliner and then revolutionized it several times.

But there are also downsides. As any Googler will tell you, these companies usually have a lot of fat to trim. Some of what looks like economic inefficiency is actually vital seed corn for the innovations of the future, but some of it is also just inefficiency, because nobody looks at the books, because it isn’t that kind of company. Likewise, being highly deliberative about everything can lead to some really smart decision making and avoidance of group think, but it can also be a cover for laziness or for an odium theologicum that ensures nothing ever gets done. Smart managers steeped in this sort of culture can usually do a decent job of sorting the good from the bad, but only if they can last, because you see there’s a third problem, which is that almost everybody involved is a quokka.

Engineers, being a subspecies of nerds, are bad at politics. In 1996, Boeing did something very stupid and acquired a company that was good at politics. McDonnell Douglas, another airplane maker, wasn’t the best at making airplanes, but was very good at lobbying congress and at impressing Wall Street analysts. Boeing took over the company, but pretty much everybody agrees that when the dust had settled it was actually McDonnell Douglas that had taken over Boeing. One senior Boeing leader lamented that the McDonnell Douglas executives were like “hunter killer assassins”. No, sorry bro, I don’t think they were actually that scary, you were just a quokka.

Anyway, the hunter killer assassins ran amok: purging rivals, selling off assets, pushing through stock buybacks, and outsourcing or subcontracting everything that wasn’t nailed down. They had a fanaticism for capital efficiency that rose to the level of a monomania,1 which maybe wasn’t the best fit for an airplane manufacturer. And slowly but surely, everything went off the rails. Innovation stopped, the culture withered, and eventually planes started falling out of the sky. And now the big question, the question Robison just can’t figure out. Why?

John Psmith, “REVIEW: Flying Blind by Peter Robison”, Mr. and Mrs. Psmith’s Bookshelf, 2023-02-06.

    1. This is how you know this story took place in an era of high interest rates!

December 5, 2024

Ontario’s housing market squeezed by the 35.6% combined tax rate on new builds

Filed under: Bureaucracy, Business, Cancon, Government — Tags: , , , — Nicholas @ 04:00

The housing situation in Toronto and the rest of the province has been very tight for years. Lots of would-be buyers chasing the proportionally smaller number of new houses being built. This drives prices higher, but no matter how much of the final price is the builder’s profit margin, the government gets nearly four times as much on every new house sale:

The National Post previously reported that at least a third of a new home’s sticker price in Ontario was comprised of taxes, but an updated report, courtesy of the Canadian Centre for Economic Analysis (CANCEA), now puts the figure at 35.6 per cent.

(It gets even better when it comes to affordable housing — but more on that later.)

The Increasing Tax Burden on New Ontario Homes: 2024, which was commissioned by the Residential Construction Council of Ontario and released by CANCEA on Tuesday, is eye-opening for reasons beyond the fact that a compendium of largely superfluous taxes and production levies has reached 35.1 per cent of the final purchase price of a new home in the city of Toronto. It’s 35.5 per cent in the outlying 905 region, and 34.5 per cent in Ottawa.

The report needed only 16 pages to elucidate how bureaucratic machinations aren’t just gouging prospective homebuyers, but homeowners, too — especially the estimated 1.2 million whose mortgages, according to the Canada Mortgage and Housing Corporation, are due for renewal in 2025.

Read closely enough, CANCEA’s report makes a strong argument that, effectively, Canadians work for the government rather the other way around.

For example, CANCEA’s report demonstrates that 70 per cent of aforesaid taxes on new homes “consist of direct fees on the home, such as DC (development charges) and other fees”.

“For homes priced at $450,000,” which aligns with median income, “… the tax burden rises sharply to 45.2 per cent,” says the report, which also notes that economics often force developers to build smaller units that are insufficient for families.

November 29, 2024

QotD: Why nothing gets done in the Current Year

Filed under: Bureaucracy, Business, Government, Quotations, Technology, USA — Tags: , , , — Nicholas @ 01:00

… we do gain a lovely illustration of why nothing ever really gets done in this modern world. Sure, the politicians have demanded more [advanced logic] chips in a country that doesn’t have any spare chip technicians — TSMC has had to import their own from Taiwan — and so on and so on. But there’s also this:

    Having pumped billions of dollars into building the next generation of computer chip factories in the US, the Biden administration is facing new pressure over the health and safety risks those facilities could pose. Environmental reviews for the new projects need to be more thorough, advocates say. They lack transparency around what kinds of toxic substances factory workers might handle, and plans to keep hazardous waste like forever chemicals from leaching into the environment have been vague.

    A coalition of influential labor unions and environmental groups, including the Sierra Club, have since submitted comments to the Department of Commerce on draft environmental assessments, saying that the assessments fall short. The coalition’s comments flag lists of potential issues at several projects in Arizona and Idaho, including how opaque the safety measures that manufacturers will take to protect both workers and nearby residents are.

This is not a serious complaint. This is actually the national association of environmental studies writers spotting a gravy train passing by and desiring to dip their ladle in. And that’s all it is too. But it’s also that excellent example of why fuck all ever gets built. We’ve an entire — and politically powerful — class that makes their living producing the hundred tonne reports that accompany building anything. And they’re not going to allow anything to be built unless they get paid for writing hundred tonne reports. And, to complete the circle, if every activity requires a hundred tonne report then fuck all will ever get done.

There was, back a time, a law passed about blood minerals. The law said anyone who might use them must write to all suppliers to ask if they do. Then those said anyones must tell consumers whether they do. This cost $4 billion just in the first year. From what I’ve heard — and might take the trouble to prove one day — the bloke who led the campaign for the law requiring the letters now runs a very profitable consultancy advising large corporates on how to write the letters. $4 billion spent by society so that one bloke can gain a minor summer place in the Hamptons. This doesn’t make us richer as a whole, it’s pissing the wealth of the nation up the wall.

Carthage, it’s the only solution. The biggest problem who is who the hell would buy our nice new stock of enslaved environmental bureaucrats? Razing, salt, ploughs, these are easy but who’s mad enough to offer a positive price for the last part of the process?

Tim Worstall, “Why Fuck All Ever Gets Done In This Modern World”, It’s all obvious or trivial except …, 2024-08-28.

November 26, 2024

Crony Capitalist Canada – “Conservative Leader Pierre Poilievre … has vowed to protect Big Dairy just like every other party leader”

Filed under: Bureaucracy, Business, Cancon, Government — Tags: , , , , , , — Nicholas @ 03:00

In the National Post, Chris Selley discusses the latest attempt to further protect the outrageous profits our dairy companies make by overcharging Canadians for milk, butter, cheese, and other dairy products:

That unelected senators should not overrule the will of the House of Commons has always struck me as a rule most Canadians could agree on, whatever they think ought to happen with Canada’s upper chamber. Senators can propose amendments to bad bills, rake ministers over the coals at committee, call witnesses the House wasn’t interested in for whatever reason, raise red flags that haven’t yet been raised, all to the good. But gutting a bill, as the Senate has done with proposed legislation that would protect supply management in Canadian dairy, poultry and eggs even more than it’s already protected, is not kosher.

Not all violations of this policy are equally appalling, however. When the House of Commons is clearly not operating for the benefit of Canadians, when its focus demonstrably isn’t the public good but rather coddling and currying favour with special interests, it behooves the Senate to intervene as strenuously as possible while still at the end of the day respecting the lower chamber’s democratic legitimacy.

Coddling and currying favour is exactly what C-282, a private member’s bill from Bloc Québécois Luc Thériault, does: It proposes to make it illegal for a future government to lower the tariff rate for foreign products in supply-managed industries. You could call it the “no to cheaper groceries act.” Some senators wish to neuter it, such that it wouldn’t apply to any existing trade deals or deals already in negotiation. Bloc Leader Yves-François Blanchet had originally demanded the bill passed as one condition of keeping the Liberals afloat (although his deadline to do so has passed).

Fifty-one MPs of 338 opposed the pricey-groceries act at third reading. I would have said “only 51” except that’s a shocking number: 49 Conservatives and two Liberals, Nathaniel Erskine-Smith and Chandra Arya. It’s almost reason for hope … except of course that Conservative Leader Pierre Poilievre voted for it, and has vowed to protect Big Dairy just like every other party leader. It goes without saying that Prime Minister Justin Trudeau not only supported it, but has come out against the Senate’s amendments.

“We will not accept any bill that minimizes or eliminates the House’s obligation to protect supply management in any future trade agreement,” Trudeau reassured Blanchet in the House on Wednesday. ” No matter what the Senate does, the will of the House is clear.”

I mean, what elected politician in Ottawa gives a shit about Canadians being gouged on grocery staples every week? They’d rather get the support of the milk, poultry and egg crony capitalists than help ordinary Canadians, and they’re terrified of being portrayed as anti-Quebec in an election year. Spineless cowards, the lot of them.

November 17, 2024

QotD: “Here we have a game that combines the charm of a Pentagon briefing with the excitement of double-entry bookkeeping”

Filed under: Business, Gaming, Quotations — Tags: , — Nicholas @ 01:00

D&D was invented in 1974 by one Gary Gygax, whose father was a violinist for the Chicago Symphony Orchestra. (This strikes me as significant, somehow.) Gary moved at an early age to Lake Geneva, Wisconsin, where he founded TSR Hobbies, the maker of D&D.

Although Gygax left the company in the mid-1980s, TSR today continues to crank out D&D rule books, D&D miniature playing pieces, and all sorts of other D&D paraphernalia in quantities that make one wonder about the nation’s mental health. By means of a cunning stratagem (I asked somebody at the office), I managed to get my hands on a couple of those sacred rule books, and let me tell you, R. buddy, this game is weird.

The basic idea in your run-of-the-mill Go Fish-type game is to get all your opponent’s cards or all his checkers or some other readily grasped commodity. Not so with D&D. Here is a quote from Mr. Gygax on the subject: “The ultimate aim of the game is to gain sufficient esteem as a good player to retire your character — he becomes a kind of mythical, historical figure, someone for others to look up to and admire”. If what you’ve been playing up till now is Parcheesi you ain’t ready for this.

To play D&D you need at least two acolytes, who play under the guidance of a vaguely Mansonesque personage called the Dungeon Master (DM). By means of various murky protocols involving the use of charts and dice, each player establishes the persona of the “character” he or she will manipulate in the game, who typically ends up (if male) being an antisocial cutthroat of some sort, or (if female) possessed of large, grapefruit-like breasts. I deduce the latter from studying the illustrations in the book. Admittedly I was looking at a very old edition. Perhaps the newer ones are more PC. It’s always the way. Apart from predictable characteristics like strength and intelligence, players also have to determine such baffling minutiae as their likelihood of contracting communicable diseases or becoming infested by parasites. Why these things are important I have no clue. I’m just telling you what the rule book says.

The preliminaries having been dealt with, the players are led through an imaginary dungeon devised by the DM in search of treasure or some such. On the way, they will encounter various obstacles and evil creatures, which they will have to defeat or evade.

The concept seems simple enough. It’s the application that throws me. There are two main problems: (1) there are one billion rules, and (2) the game requires nonstop mathematical finagling that would constipate Einstein. The rule book is laden with such mystifying pronouncements as the following: “An ancient spell-using red dragon of huge size with 88 hits points has a BXPV of 1300, XP/HP total of 1408, SAXPB of 2800 (armor class plus special defense plus high intelligence plus saving throw bonus due to h.p./die), and an EAXPA of 2550 (major breath weapon plus spell use plus attack damage of 3-30/bite) — totalling 7758 h.p.” Here we have a game that combines the charm of a Pentagon briefing with the excitement of double-entry bookkeeping. I don’t get it.

If you want to know more about Dungeons & Dragons, you can find D&D paraphernalia at many hobby and game stores. For the location of the outlet nearest you call 1-800-384-4TSR. Contrary to what you might think, all calls to this number are NOT immediately reported to the police.

Cecil Adams, “What’s the deal with Dungeons and Dragons?”, The Straight Dope, 1980-09-26.

November 12, 2024

“Nice business ya got there, Patreon. Wouldn’t want anything to happen to it …”

Filed under: Business, Media, USA — Tags: , , , , , — Nicholas @ 04:00

Above the paywall, Ted Gioia discusses Apple’s latest attempt to cut itself a nice big middleman’s slice of the indy creator market by putting the thumbscrews to Patreon:

Can Apple really charge a 30% tax on indie creators?

What Apple is now doing to indie creators is pure evil — but this story has received very little coverage. Journalists should pay attention, because they are under threat themselves.

Apple is now putting the squeeze on Patreon, a platform that supports more than a quarter of a million creators — artists, writers, musicians, podcasters, videographers, etc.

These freelancers rely on the support of more than 8 million patrons through Patreon, which charges a small 8-12% fee. Many of these supporters pay via Patreon’s iPhone app.

Earlier this year, Apple insisted that Patreon must pay them a 30% commission on all new subscriptions made with the app. In other words, Apple wants to take away close to a third of the income for indie creators — almost quadrupling their transaction fees.

This is the new business model from Cupertino, and it feels like a Mafia shakedown. Apple will make more from Patreon than Patreon does itself.

The only way for indies to avoid this surcharge is by convincing supporters to pay in some other way, and not use an iPhone or Apple tablet.

This is what happens when Apple decides to treat a transaction as an “in app payment” — as if an artist’s entire vocation is no different than a make-believe token in a fantasy video game.

But you can easily imagine how almost anything you do with your phone could be subject to similar demands.

I’ve been very critical of Apple in recent months. But this is the most shameful thing they have ever done to the creative community. A company that once bragged how it supported artistry now actively works to punish it.

November 8, 2024

The McDonald’s ice cream machines are always broken because of bad IP laws

Filed under: Business, Government, Law, Technology, USA — Tags: , , , , , , , — Nicholas @ 03:00

Even if you never to to a McDonald’s yourself, you’ve undoubtedly heard that the ice cream machines are always broken. I hadn’t really given it any thought — it’s been years since I visited one of the restaurants and I don’t eat much ice cream — but Peter Jacobsen explains the weird and infuriating reason for the phenomenon:

Image Credit: Magnus D via Wikimedia | CC BY 2.0

How could it be that the ice cream machines at McDonald’s are so consistently broken? It turns out that, until just recently, it was illegal to hire most people to fix them. To understand why, we’re going to have to take a detour into the world of intellectual property.

DMCA Woes

So why has it been illegal for McDonald’s to hire people to fix their ice cream machines? Well, that’s where the Digital Millennium Copyright Act (DMCA) comes in. If you’re familiar with the DMCA, this is probably confusing to you.

Generally the DMCA is a big concern on content creation platforms like YouTube. If someone uses copyrighted music, he or she gets DMCAed. This is slang for when a video gets its monetization redirected to the owner of whatever copyrighted content was used.

DMCA takedowns draw a lot of ire, because the law is clumsily applied and often even legitimate uses of copyrighted content (e.g., fair use) are punished.

But the DMCA extends beyond content creation, as chronicled by Elizabeth Chamberlain of iFixit, an organization dedicated to ensuring that product owners have the right and ability to fix their property. Many machines ranging from phones to ice cream machines utilize copyrighted software to function. Sometimes, this software limits product users more than they’d like.

For example, iPhone software locks users into particular user interfaces. If a user wants to customize past some point, he’s going to have to modify the software more than the company intends. This process, called jailbreaking, involves breaking through “digital locks”. The DMCA often interprets breaking these locks as a violation of the intellectual property of the copyright holder.

The problem gets even worse when you recognize that fixing things — say, McDonald’s ice cream machines — means breaking past those digital locks. This means anyone hired to repair the machine would need an official blessing from the manufacturer.

However, things have changed. As of October 18th, the opening of digital locks for “retail-level commercial food preparation equipment” is now exempt from this DMCA rule. McDonald’s will now be able to hire from a larger group of people to fix their ice cream machines.

DMCA has allowed a lot of intellectual property owners to collect unearned rents while neglecting the needs of the customers who’ve bought, leased, or rented things that incorporate their IP.

Note, this is only an exemption to the rule. The rule itself has not changed. Second, other regulations still hamper McDonald’s franchise owners from fixing their own machines. As Chamberlain points out:

    While it’s now legal to circumvent the digital locks on these machines, the ruling does not allow us to share or distribute the tools necessary to do so. This is a major limitation … few will be able to walk through it without significant difficulty.

    It is still a crime for iFixit to sell a tool to fix ice cream machines, and that’s a real shame … Without these tools, this exemption is largely theoretical for many small businesses that don’t have in-house repair experts.

So your chance of getting a McFlurry has improved, but you can’t quite celebrate a total win yet.

The battle against these DMCA laws isn’t limited to ice cream machines. The “right to repair” movement spearheaded by organizations including iFixit has already battled for exemptions for medical devices, consumer devices like phones and tablets, vehicles, and assistive technologies for people with disabilities.

November 3, 2024

The end of the “cheap streaming era” is at hand

Filed under: Business, Media, USA — Tags: , , — Nicholas @ 05:00

Ted Gioia explains why your streaming services are going to be jacking up their prices — if they haven’t already done so:

I got a request to explain why streaming subscription prices are so damned high — and getting higher.

This came in response to a chart I shared two days ago:

And it’s not just Disney.

All the streaming platforms are jacking up prices. I still subscribe to five different streaming services—down from six previously. Every one of them raised prices this year, and always by more than the inflation rate.

Here’s what Spotify is doing:

What’s going on? And will it continue?

I recently described this as an “endgame strategy” — but that might be confusing to readers.

Endgame is a term drawn from chess, where it refers to a body of wisdom about the final moves on the board. But business is like chess, so I frequently analyzed endgame situations back in my days at the Boston Consulting Group and McKinsey.

I now see these endgame strategies getting implemented in various media, entertainment, and streaming businesses. But almost nobody inside those businesses wants to talk about it.

So let me lay it out for you.

The Entertainment Industry Is Adopting an Endgame Mindset

You pursue an “endgame” strategy when demand for your business hits a wall, and it’s hard to attract new customers. The most typical endgame strategy is to cut back investment into new products and services, while raising prices sharply.

You’re willing to accept some loss of customers, because you’re now squeezing more profit-per-user out of your remaining consumers — who stick with you out of loyalty or habit or inertia.

These are your sheep, ready to be shorn.

Profit per customer is now the key metric driving your business. It’s more important than innovation or growth or artistry or any of those old fashioned ideas.

That’s why, for example, Netflix won’t share data on the number of subscribers anymore. They claim this is no longer relevant to their business model — and they aren’t lying.

Price increases are now the engine of their business.

November 2, 2024

QotD: UBI discourages low-income workers

Filed under: Business, Economics, Quotations — Tags: , , , — Nicholas @ 01:00

Not only does it have a high cost, UBI drains the labour force by discouraging work and boosting leisure time, says one big-picture study

Earlier this month, a cross-border team of North American economists published the results of a landmark study, probably the best and most careful yet done, of how low-income workers respond to an unconditional guaranteed income. Not so long ago this would have been a plus-sized news item in narcissistic Canada, for the lead author of the study is a rising economics star at the University of Toronto, Eva Vivalt. The economists, working through non-profit groups, recruited 3,000 people below a certain income cutoff in the suburbs of Dallas and Chicago. A thousand of these, chosen at random, were given a thousand dollars a month for three years. The rest were assigned to a control group that got just $50 a month, plus small extra amounts to encourage them to stay with the study and fill in questionnaires.

That randomization is an important source of credibility, and the study has several other impressive methodological bona fides. If you have an envelope to scribble on the back of, you can see that the payments alone were beyond the wildest dreams of most social science: most of the money was provided by the AI billionaire Sam Altman. But the study also had help from state governments, who agreed to forgo welfare clawbacks from the participants to make sure the observed effects weren’t obscured by local circumstances. Participant households were also screened carefully to make sure nobody in them was already receiving disability insurance. (Free money doesn’t discourage work among people who can’t work — or who absolutely won’t.) And the study combined questionnaire data with both smartphone tracking and state administrative records, yielding an unusually strong ability to answer difficult behavioural questions.

The big picture shows that the free cash — a “universal basic income” (UBI) for a small group of individuals — discouraged paying work, even though everybody in the study was starting out poor. Labour market participation among the recipients fell by two percentage points, even though the study period was limited to three years, and the earned incomes of those getting the cheques declined by $1,500 a year on average. There is no indication that the cash recipients used their augmented bargaining power to find better jobs, and no indication of “significant effects on investments in human capital”, i.e., training and education. The largest change in time use in the experiment group was — wait for it! — “time spent on leisure”.

Colby Cosh, “Universal basic income is a recipe for fiscal suicide (for so many reasons)”, National Post, 2024-07-30.

October 30, 2024

Zuckerberg’s bad bet on Virtual Reality

Filed under: Business, Media, Technology — Tags: , , — Nicholas @ 03:00

Ted Gioia notes the anniversary of Mark Zuckerberg’s worst financial decision — the plunge into virtual reality:

A big birthday happens tomorrow. But don’t expect a celebration.

There will be no party, no disco. There will be no cake, no clown, no bouncy house for the kids. No Marilyn Monroe cooing the birthday song.

Just dead silence. But make no mistake — this is a very expensive birthday.

Exactly three years ago, Mark Zuckerberg placed a huge bet on virtual reality. On October 28, 2021, he even changed the name of his company — from Facebook to Meta.

A new company was born. But that’s now a huge embarrassment.

The name Meta is a lasting reminder of the most foolish decision Zuck ever made — even worse than Facemash or those ugly T-shirts.

Of course, that’s not how he saw things three years ago.

“Meta’s focus will be to bring the metaverse to life,” the company announced. “In the metaverse,” Zuckerberg bragged, “you’ll be able to do almost anything you can imagine.”

There was a catch — the tech billionaire needed to convince millions of people to wear virtual reality headsets.

But they looked ridiculous — you literally had to wear blinders if you wanted to enter Mr. Zucker’s neighborhood.

The very next day, I declared that “Meta is for losers”.

“This will never be cool.”

Zuckerberg was “making the wrong bet”, I warned — and gave my reasons:

    The interface looks goofy and cartoonish. Instead of entering the gritty, exciting world of Blade Runner, you’re trapped inside a bad episode of Family Guy …

    And users will look creepy too. You need to lock yourself into a headset to get the full benefit of the metaverse — and there’s no way that Zuckerberg can make that look cool. The people who spend hour after hour in his metaverse will be the subject of jokes and mockery …

    They will be nerds and incels and the most disgruntled members of society, each desperate for escape.

Mark Zuckerberg eventually figured this out. But the company lost more than $20 billion over the next two years in a desperate attempt to convince normal people to abandon reality and enter his fake world.

Even as consumers resisted, Meta refused to admit it had made such a colossal mistake. Just last year, Zuckerberg still denied that he was abandoning virtual reality.

“A narrative has developed that we’re somehow moving away from focusing on the metaverse,” he told shareholders. “So I just want to say upfront that that’s not accurate.”

Then he did exactly that — retreating from the metaverse he had spent so much money building.

Fortune warned three months ago that Mr. Z’s metaverse “may finally be running out of cash”. Then in August, Meta cancelled the development of a next generation VR headset.

October 24, 2024

It’s called “piercing the corporate veil” and it’s a terrible idea

Filed under: Business, Europe, Government, Media, Politics, Technology — Tags: , , , , , — Nicholas @ 04:00

Tim Worstall explains why the EU’s latest brain fart is not just a bad idea in its own right, but a truly horrific precedent for the future:

Elon Musk at the 2015 Tesla Motors annual meeting.
Photo by Steve Jurvetson via Wikimedia Commons.

… But now, this, now this is even more important than that. We can deal with free speech by the judicious use of lampposts. This is worse:

    The European Union has warned X that it may calculate fines against the social-media platform by including revenue from Elon Musk’s other businesses, including Space Exploration Technologies Corp. and Neuralink Corp., an approach that would significantly increase the potential penalties for violating content moderation rules.

    Under the EU’s Digital Services Act, the bloc can slap online platforms with fines of as much as 6% of their yearly global revenue for failing to tackle illegal content and disinformation or follow transparency rules.

In English law that’s known as “piercing the corporate veil”. It’s also something we don’t do. Because that corporate veil is the very thing, the only thing, that makes large scale economic activity possible.

It has actually been said — and not just by me — that the invention of the limited company is the third grand invention of all time. Agriculture, the scientific method, the limited company.

Before the limited co everything was done through partnerships. Every individual involved in the ownership of something was liable for all of the debts of that thing. Which, when you’ve got 5 or 10 blokes trading isn’t that bad an incentive upon them to be honest.

Now think of large scale activity. We want a blast furnace — plenty of folk say Britain should have one after all. £3 to £5 billion these days. OK. No one’s got that much. So, we need to mobilise the savings of many thousands of people to go build it. But without limited liability that means all of those thousands are liable for all the debts — off into the future — of that blast furnace.

“Invest £500 in the new, new British Steel. And if we fuck up then in 10 years’ time they’ll come and take your house.”

Err, yes.

Large scale economic activity depends upon being able to separate the debts of one specific activity from the general economic life of all its backers. If this is not true then no one will invest in large scale economic activity. Therefore we won’t have large scale economic activity. Which would, you know, be bad.

« Newer Posts — Older Posts »

Powered by WordPress