In 2012, the Institute for Justice — a public-interest law firm advocating libertarian causes — looked at the number of occupations that require licensing. Specifically, the institute looked at occupations typically filled by lower- and middle-income workers. These are not your airline pilots, your certified public accountants and your neurosurgeons; they’re the nations interior decorators, auctioneers and florists. (Yes, you read that right: In at least one state, these occupations cannot be practiced without a license.)
Why, you might ask, is the state requiring a license to decorate an interior? Are customers at risk of death from collapsing piles of pillow shams? Must we fear that they will be blinded by the decorator’s decision to pair fuchsia chiffon drapes with a chartreuse brocade sofa? Do we worry that without the threat of losing their license to keep them on the straight and narrow, these fly-by-night operators might be tempted into purchasing furniture from unlicensed auctioneers, and sourcing their floral arrangements from black-market florists?
Well, no. Mostly, these regulations benefit folks who are already plying the trade. They get helpful state legislators to protect them from competition by instituting tough licensing requirements. Their income goes up; the consumer’s wallet suffers. And people who want to follow their dreams into the industry get shut out if they lack the time to study for the licensing exams, the capital to pay the licensing exam fees (which can run in to the hundreds of dollars), or the social capital to know how to work the system.
Megan McArdle, “You’re Gonna Need a License for That”, Bloomberg View, 2016-05-17.
June 13, 2016
QotD: The absurdities of many occupational licenses
May 31, 2016
QotD: The minimum wage
In truth, there is only one way to regard a minimum wage law: it is compulsory unemployment, period. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.
Murray Rothbard, “Outlawing Jobs: The Minimum Wage”, 1998.
May 28, 2016
QotD: “Farm-to-table” food
We all love farm-to-table food, don’t we? The freshness, the warm sense of environmental sustainability, the delights of spending your money in the local economy. Of course we all love it.
Or … maybe we just think we love it. An exhaustive investigation by a Tampa Bay Times food critic reveals just how little of the food advertised as organic, locally sourced, non-GMO fare actually fits that description. The article is a slightly painful read, as restaurant after restaurant sheepishly tries to cover for their, um, “menu anomalies” by explaining that they totally used to buy some stuff from a local producer, then they forgot to change the chalkboard when they switched suppliers, and besides, the bus was late and the dog ate their homework. Some of these claims may even be true, but given the ubiquity of these “anomalies,” it’s hard to believe that there isn’t considerable calculation behind these unidirectional mistakes.
And it’s not hard to figure out why: Consumers don’t really want to buy farm-to-table food. What they want to buy is the moral satisfaction of farm-to-table food.
A consumer who is actually looking for vegetables picked no later than yesterday morning and trundled to their table at the peak of freshness probably isn’t going to be satisfied with the corn that just spent a few weeks bouncing around in the back of a truck somewhere; the products will be noticeably different in flavor. On the other hand, for a consumer who’s just looking for moral satisfaction — well, the nice thing about selling intangible qualities is that there’s no discernible difference to the consumer between being told that they’re consuming locally grown foods and actually doing so.
Megan McArdle, “Dining Out on Empty Virtue”, Bloomberg View, 2016-04-15.
May 21, 2016
May 17, 2016
Charles Stross updates a classic WW2 field guide – a dot-com sabotage manual
Many people have noted that the sabotage techniques listed in a Second World War espionage manual seem to have somehow migrated into a lot of management texts in the last few decades. Here he imagines what an updated version of the manual might look like:
In 1944, the Office of Strategic Services — the predecessor of the post-war CIA — was concerned with sabotage directed against enemies of the US military. Among their ephemera, declassified and published today by the CIA, is a fascinating document called the Simple Sabotage Field Manual (PDF). It’s not just about blowing things up; a lot of its tips are concerned with how sympathizers with the allied cause can impair enemy material production and morale […]
So it occurred to me a week or two ago to ask (on twitter) the question, “what would a modern-day version of this manual look like if it was intended to sabotage a rival dot-com or high tech startup company”? And the obvious answer is “send your best bad managers over to join in admin roles and run their hapless enemy into the ground”. But what actual policies should they impose for best effect?
- Obviously, engineers and software developers (who require deep focus time) need to be kept in touch with the beating heart of the enterprise. So open-plan offices are mandatory for all.
- Teams are better than individuals and everyone has to be aware of the valuable contributions of employees in other roles. So let’s team every programmer with a sales person — preferably working the phones at the same desk — and stack-rank them on the basis of each pair’s combined quarterly contribution to the corporate bottom line.
- It is the job of Human Resources to ensure that nobody rocks the boat. Anyone attempting to blow whistles or complain of harassment is a boat-rocker. You know what needs to be done.
- Senior managers should all be “A” Players (per Jack Welch’s vitality model — see “stack ranking” above) so we should promote managers who are energetic, inspirational, and charismatic risk-takers.
- The company must have a strong sense of intense focus. So we must have a clean desk policy — any personal possessions left on the desk or cubicle walls at the end of the day go in the trash. In fact, we can go a step further and institute hot desking — we will establish an average developer’s workstation requirements and provide it for everyone at every desk.
This would explain some of the management policies at a few places I’ve worked at over the years…including the software company where I first met Charlie.
May 13, 2016
QotD: The boring efficiency of North American freight railways
The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital. It is operated privately, and runs without taxpayer subsidies. And, it is by far the greatest rail system in the world. It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s). But here is the real key: it is almost all freight.
As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world. Europe and Japan are not even close. Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan. As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States. For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.
You see, passenger rail is sexy and pretty and visible. You can build grand stations and entertain visiting dignitaries on your high-speed trains. This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.
But there is little efficiency improvement in moving passengers by rail vs. other modes. Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars. Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full. I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.
The real rail efficiency comes from moving freight. As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves. Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail. One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.
Freight is boring and un-sexy. Its not a government function in the US. So intellectuals tend to ignore it, even though it is the far more important, from an energy and environmental standpoint, portion of transport to put on the rails.
Warren Meyer, “The US Has The Best Rail System in the World, and Matt Yglesias Actually Pointed Out the Reason”, Coyote Blog, 2016-05-02.
May 9, 2016
Coming all-too-soon: your own data as a (paid) service
James Pinkstone talks about the time he discovered that Apple Music had helpfully deleted over 100 Gb of his music files on his local hard drive:
What Amber explained was exactly what I’d feared: through the Apple Music subscription, which I had, Apple now deletes files from its users’ computers. When I signed up for Apple Music, iTunes evaluated my massive collection of Mp3s and WAV files, scanned Apple’s database for what it considered matches, then removed the original files from my internal hard drive. REMOVED them. Deleted. If Apple Music saw a file it didn’t recognize — which came up often, since I’m a freelance composer and have many music files that I created myself — it would then download it to Apple’s database, delete it from my hard drive, and serve it back to me when I wanted to listen, just like it would with my other music files it had deleted.
This led to four immediate problems:
1. If Apple serves me my music, that means that when I don’t have wifi access, I can’t listen to it. When I say “my music,” I don’t just mean the music that, over twenty years (since before iTunes existed), I painstakingly imported from thousands of CDs and saved to my computer’s internal hard drive. I also mean original music that I recorded and saved to my computer. Apple and wifi access now decide if I can hear it, and where, and when.
2. What Apple considers a “match” often isn’t. That rare, early version of Fountains of Wayne’s “I’ll Do The Driving,” labeled as such? Still had its same label, but was instead replaced by the later-released, more widely available version of the song. The piano demo of “Sister Jack” that I downloaded directly from Spoon’s website ten years ago? Replaced with the alternate, more common demo version of the song. What this means, then, is that Apple is engineering a future in which rare, or varying, mixes and versions of songs won’t exist unless Apple decides they do. Said alternate versions will be replaced by the most mainstream version, despite their original, at-one-time correct, titles, labels, and file contents.
3. Although I could click the little cloud icon next to each song title and “get it back” from Apple, their servers aren’t fast enough to make it an easy task. It would take around thirty hours to get my music back. And even then…
4. Should I choose to reclaim my songs via download, the files I would get back would not necessarily be the same as my original files. As a freelance composer, I save WAV files of my own compositions rather than Mp3s. WAV files have about ten times the number of samples, so they just sound better. Since Apple Music does not support WAV files, as they stole my compositions and stored them in their servers, they also converted them to Mp3s or AACs. So not only do I need to keep paying Apple Music just to access my own files, but I have to hear an inferior version of each recording instead of the one I created.
I didn’t sign up for the free Apple Music trial when it was introduced because I have a data cap on my internet connection: just a few hours of listening to my own music might well make a big dent in my internet usage for the month. That would be ridiculously wasteful. Even so, every now and again, iTunes cheerfully lets me know that this or that song from my collection can no longer be played (and has deleted it) with no chance to fix it on my part. When it’s a song I recorded from the original CD (and I still have the CD), it’s merely an inconvenience. When it’s a song I paid Apple to download, it’s much more than that. It implies that everything I’ve downloaded from Apple is actually just a rental with an indeterminate-length rental period.
It is, however, a sign of the future:
For about ten years, I’ve been warning people, “hang onto your media. One day, you won’t buy a movie. You’ll buy the right to watch a movie, and that movie will be served to you. If the companies serving the movie don’t want you to see it, or they want to change something, they will have the power to do so. They can alter history, and they can make you keep paying for things that you formerly could have bought. Information will be a utility rather than a possession. Even information that you yourself have created will require unending, recurring payments just to access.”
When giving the above warning, however, even in my most Orwellian paranoia I never could have dreamed that the content holders, like Apple, would also reach into your computer and take away what you already owned. If Taxi Driver is on Netflix, Netflix doesn’t come to your house and steal your Taxi Driver DVD. But that’s where we’re headed. When it comes to music, Apple is already there.
April 14, 2016
Why there’s very little “free trade” involved in the TPP
ESR explains why the Trans-Pacific Partnership is such a huge monstrosity of regulations, crony capitalist favours to big business, anti-consumer intellectual property rules, and other mercantilist interventions in trade:
Today there’s a great deal of angst going on in the tech community about the Trans-Pacific Partnership. Its detractors charge that a “free-trade” agreement has been hijacked by big-business interests that are using it to impose draconian intellectual-property rules on the entire world, criminalize fair use, obstruct open-source software, and rent-seek at the expense of developing countries.
These charges are, of course, entirely correct. So here’s my question: What the hell else did you expect to happen? Where were you idiots when the environmentalists and the unions were corrupting the process and the entire concept of “free trade”?
The TPP is a horrible agreement. It’s toxic. It’s a dog’s breakfast. But if you stood meekly by while the precedents were being set, or – worse – actually approved of imposing rich-world regulation on poor countries, you are partly to blame.
The thing about creating political machinery to fuck with free markets is this: you never get to be the last person to control it. No matter how worthy you think your cause is, part of the cost of your behavior is what will be done with it by the next pressure group. And the one after that. And after that.
The equilibrium is that political regulatory capability is hijacked by for the use of the pressure group with the strongest incentives to exploit it. Which generally means, in Theodore Roosevelt’s timeless phrase, “malefactors of great wealth”. The abuses in the TPP were on rails, completely foreseeable, from the first time “environmental standards” got written into a trade agreement.
That’s why it will get you nowhere to object to the specifics of the TPP unless you recognize that the entire context in which it evolved is corrupt. If you want trade agreements to stop being about regulatory carve-outs, you have to stop tolerating that corruption and get back to genuinely free trade. No exemptions, no exceptions, no sweeteners for favored constituencies, no sops to putatively noble causes.
April 13, 2016
QotD: Why do gasoline prices rise at the moment crude oil prices rise?
One part of the explanation is that gasoline refiners are likely now switching to the production of summer-grade mixes, which are more costly to produce than are winter grades. But even if such switching is not taking place, we nevertheless expect prices at the pump to rise the moment crude-oil prices start to rise regardless of the prices that gasoline retailers paid for the fuels that they are currently selling. Furthermore, it’s good that prices at the pump rise as soon as crude-oil prices start to rise.
The reason […] is that markets are forward looking. If crude-oil prices start to rise today, this fact means that crude oil is today more scarce, relative to anticipated demand, than it was yesterday. Given this reality, we want consumers to start immediately to economize further on their use of gasoline, and we want refiners to have adequate incentives to refine enough gasoline to satisfy consumers’ anticipated future demands. Rising prices at the pump today promote both of these desirable responses.
But there’s an even deeper point: the value of something is not what the owner of that something paid for it or what it cost the producer of that something to produce it. Instead, the value of something is what people are willing to pay for it. And there’s nothing at all unfair or economically harmful about an owner of something selling that something for more than he or she paid for it. Suppose that today you buy 10 shares of Apple, Inc., at $100 per share. Further suppose that one year from today the price of Apple stock rises to $150 a share. Would you be wrong or unethical to sell your shares next year at $150 a share (or at any price higher than $100 a share)? After all, you paid only $100 a share to get them.
Of course you would not be wrong to sell your shares at a price higher than what you paid for them. What’s true for you and your Apple shares is true for all economic goods.
Donald J. Boudreaux, “Markets Are Forward Looking (And That’s Good)”, Cafe Hayek, 2016-03-18.
April 11, 2016
Clarkson’s Car Years – How Japan Took Over The World… And Then Lost It.
April 10, 2016
QotD: Big business
If you still believe big business is, as novelist and philosopher Ayn Rand famously described it, “America’s Persecuted Minority,” then you must be on the same amphetamines she was taking.
Conservatives have a nasty habit of being sympathetic to corporations, viewing them as a bulwark against government overreach. The reality is far different. If you’re a religious traditionalist in 21st-century America, big business hates your guts.
James E. Miller, “The Business End of Freedom”, Taki’s Magazine, 2016-03-31.
April 2, 2016
Canada’s new frontier in patriotism: ketchup
Colby Cosh gently pokes fun at the latest outbreak of manufactured patriotic fervor:
An enterprising Toronto man wants to sell us all “Ketchup Patriot” T-shirts, so that the virtuous among us might assert the correct position on the hot issue of whether it is right to eat products made with dubious foreign tomatoes.
This presents me with a dilemma: I agree with the many words already written in this space, and in the Financial Post, about the preposterousness of tomato isolationism; on the other hand, I am pretty sure our future as a country has less to do with mid-grade agricultural products destined for pureeing than it does to do with insta-auto-robo-printing of faddish social-signalling paraphernalia. You have to admire the spirit of enterprise wherever it emerges. The best answer ever given to Che Guevara’s philosophy was the Che Guevara T-shirt.
The “Ketchup Patriot” view favours French’s brand ketchup, which is now made from tomatoes grown in the area around Leamington, Ont. Leamington is practically a creation of the H.J. Heinz Co., which was a major employer there for decades, but fled to the United States in 2014. Few Canadians are employed in the growing of tomatoes, mind you: migrant workers flown into local dormitories and paid around $10 an hour seem to do most of the hard work on Leamington-area farms and in greenhouses.
French’s, best known for selling mustard, is owned by the Reckitt Benckiser Group PLC of Slough, Berkshire. This “Ketchup Patriotism,” the closer you look at it, becomes more and more a matter solely of dream terroir. Canadians don’t get the profits, don’t pick the tomatoes and don’t even can the ketchup — that happens in Ohio, although French’s, obviously aware that it has a whole country by the tail, has hinted at plans to open a new cannery somewhere in Ontario. All we do, for the moment, is own the land. This ketchup has a mystical Canadian essence, one I defy anyone to detect in a blind taste test.
One may not detect the “distinctive Canadian ‘terroir'”, but having actually tasted Heinz and French’s products, there’s a reason that Heinz is the default ketchup for most people.
March 30, 2016
“Craft” brewers that are actually owned by big breweries
Matt Allyn lists quite a number of craft breweries in the United States that are no longer independent or were never independent of the big brewing corporations:
It matters who owns your beer, says Carol Stoudt, founder of Stoudt’s Brewing, “The passion is lost when the people running a brewery don’t have ownership, and then quality suffers.” A bigger concern, one echoed by brewers like Stoudt and Dogfish Head’s Sam Calagione is that the larger companies also have the power to manipulate markets. The chief example, one cited by Calagione, is that corporate brewers will sell their craft-like ale well below the cost of true craft beer to push them off a bar tap line.
The Brewers Association trade group defines a craft brewer as small (less than six million barrels), traditional, and independent — with less than 25 percent ownership by a non-craft brewer.
Here are the current “craft” brewers who don’t meet that ownership criterion:
10 Barrel Brewing — Anheuser-Busch InBev
Ballast Point Brewing — Constellation Brands
Blue Moon Brewing — MillerCoors
Blue Point Brewing — Anheuser-Busch InBev
Breckenridge Brewery — Anheuser-Busch InBev
Camden Town Brewery (U.K.) — Anheuser-Busch InBev
Cervejaria Colorado (Brazil) — Anheuser-Busch InBev
Dundee Brewing — North American Breweries
Elysian Brewing — Anheuser-Busch InBev
Fordham and Dominion Brewing — 40 percent owned by Anheuser-Busch InBev
Founders Brewing — 30 percent owned by Mahou-San Miguel
Four Peaks Brewing — Anheuser-Busch InBev
Golden Road Brewing — Anheuser-Busch InBev
Goose Island Beer Company — Anheuser-Busch InBev
Kona Brewing — 32-percent owned by Anheuser-Busch InBev
Lagunitas Brewing — 50-percent owned by Heineken International
Leinenkugel’s Brewery — MillerCoors
Magic Hat Brewing — North American Breweries
Meantime Brewing (U.K.) — SABMiller
Mendocino Brewing — United Breweries Group
Olde Saratoga Brewing — United Breweries Group
Portland Brewing Company (formerly MacTarnahan’s) — North American Breweries
Pyramid Breweries — North American Breweries
Redhook Brewery — 32-percent owned by Anheuser-Busch InBev
Saint Archer Brewing — MillerCoors
Shock Top Brewing — Anheuser-Busch InBev
Widmer Brewing — 32-percent owned by Anheuser-Busch InBev
March 29, 2016
Why did Apple suddenly grow a pair over consumer privacy and (some) civil rights?
Charles Stross has a theory:
A lot of people are watching the spectacle of Apple vs. the FBI and the Homeland Security Theatre and rubbing their eyes, wondering why Apple (in the person of CEO Tim Cook) is suddenly the knight in shining armour on the side of consumer privacy and civil rights. Apple, after all, is a goliath-sized corporate behemoth with the second largest market cap in US stock market history — what’s in it for them?
As is always the case, to understand why Apple has become so fanatical about customer privacy over the past five years that they’re taking on the US government, you need to follow the money.
[…]
Apple see their long term future as including a global secure payments infrastructure that takes over the role of Visa and Mastercard’s networks — and ultimately of spawning a retail banking subsidiary to provide financial services directly, backed by some of their cash stockpile.
The FBI thought they were asking for a way to unlock a mobile phone, because the FBI is myopically focussed on past criminal investigations, not the future of the technology industry, and the FBI did not understand that they were actually asking for a way to tracelessly unlock and mess with every ATM and credit card on the planet circa 2030 (if not via Apple, then via the other phone OSs, once the festering security fleapit that is Android wakes up and smells the money).
If the FBI get what they want, then the back door will be installed and the next-generation payments infrastructure will be just as prone to fraud as the last-generation card infrastructure, with its card skimmers and identity theft.
And this is why Tim Cook is willing to go to the mattresses with the US department of justice over iOS security: if nobody trusts their iPhone, nobody will be willing to trust the next-generation Apple Bank, and Apple is going to lose their best option for securing their cash pile as it climbs towards the stratosphere.
March 20, 2016
Apple software engineers threaten to quit rather than crack encryption for the government
It’s only a rumour rather than a definite stand, but it is a hopeful one for civil liberties:
The spirit of anarchy and anti-establishment still runs strong at Apple. Rather than comply with the government’s requests to develop a so-called “GovtOS” to unlock the iPhone 5c of San Bernardino shooter Syed Rizwan Farook, The New York Times‘ half-dozen sources say that some software engineers may quit instead. “It’s an independent culture and a rebellious one,” former Apple engineering manager Jean-Louis Gassée tells NYT. “If the government tries to compel testimony or action from these engineers, good luck with that.”
Former senior product manager for Apple’s security and privacy division Window Snyder agrees. “If someone attempts to force them to work on something that’s outside their personal values, they can expect to find a position that’s a better fit somewhere else.”
In another instance of Apple’s company culture clashing with what the federal government demands, the development teams are apparently relatively siloed off from one another. It isn’t until a product gets closer to release that disparate teams like hardware and software engineers come together for finalizing a given gizmo. NYT notes that the team of six to 10 engineers needed to develop the back door doesn’t currently exist and that forcing any sort of collaboration would be incredibly difficult, again, due to how Apple works internally.
