I live in two worlds. One has www in front of it. I must admit I don’t like the imaginary place that’s become the ironclad version of reality for most people. The jackanapes who rule the Friendface planet are the worst people extant, if you ask me. By the way, if you’re reading this, you asked me.
I don’t like the invertebrates who run the Intertunnel. I’ve decided they need a name. Let’s coin the term right here and now: The Wobblies. The Website Wankers of the World have united into a Voltron of suck, and they rule this alternate ecosystem that’s taken over the real world. They don’t care if anything productive happens in the brave new world they’ve created. As long as they lord over the nonproduction, of course.
Sippican, “Minor Swing by Minors”, Sippican Cottage, 2016-11-05.
August 13, 2018
August 9, 2018
July 4, 2018
June 30, 2018
Enriching the public in ways that do not show up in the GDP calculations
Tim Worstall looks at the calls to regulate the big tech firms and points out that we already get a very good deal on “free stuff” that isn’t reflected in standard economic statistics:
It won’t have escaped your attention that rather large numbers of people are calling for the regulation of the tech companies. The Amazon, Google, Facebook (Apple and Microsoft often added, just because they’re large) nexus have lots of power over markets and thus therefore – well, therefore something. My own prejudice here is that certain people just cannot look at centres of power and or money without insisting that they, the complainers, should be the ones exercising that power and determining the disposition of that money. Thus much of the drive for “democratic” regulation of the economy more generally, the self proclaimed democrats being the ones who would end up with the power. The advantage of this analysis being that it does describe reality, the same people do end up making the same arguments about different companies over time. Mere prominence brings the demand for control.
The economist on this subject is Jean Tirole. His Nobel was for exploring this very subject, tech companies and the two sided market. Google, for example, sells the search engine to us and us to the advertisers. The tech here is different, obviously, but the underlying economics is the same as that of the free newspaper.
Tirole’s a new book out and there are a number of interesting points to be had from it:
Yes, on the whole consumers tend to get a good deal, because we use wonderful services — like Google’s search engine, Gmail, YouTube, and Waze — for free. To be certain, we are not paid for the valuable data we provide to the platforms, as for example Eric Posner and Glen Weyl remind us in their recent book Radical Markets. But on the whole, our living standards have substantially improved thanks to the digital revolution.
From which we can extract a few points. We’re richer, we really are. Substantially richer and yet in a manner that normal economic statistics entirely fail to capture. As Hal Varian has pointed out, GDP doesn’t deal well with free. Near all of those benefits of the digital revolution are coming to us for free and so aren’t recorded in that GDP. So, we’re richer yet the numbers say we’re not. In that is much of the explanation of slow economic growth these days, even of slow real wage growth. We’re just not counting what is happening to our living standards.
But we can and should go further than that. If the above is true then we’re very much less unequal than we’re recording. Stuff that’s free is, obviously enough, distributed rather more evenly among the population than extant monetary incomes. You, me and Bill Gates all have access to exactly the same amount of Facebook at the same price. We’re entirely equal in that sense. Bill’s actually poorer concerning search engines, stuck for emotional reasons with Bing as he is while we get to use Google or DuckDuckGo. Our standard measures of inequality are wrong both because of the undermeasurement of new wealth and also the extremely equitable pattern of the distribution of that new wealth.
May 23, 2018
April 19, 2018
The mis-measurement of the digital economy
In the Continental Telegraph, Tim Worstall explains why our current statistical model does not adequately reflect the online world’s contribution to our economy:
To give my favourite current example. WhatsApp is used by some billion people around the world for some to all of their telecoms needs. It turns up in economic statistics as a reduction in productivity.
That’s mad.
In more detail, WhatsApp is free to use and carries no advertising. That means there’s no sale associated with it. We measure consumption at market prices – a price of $0 means no consumption. Consumption is one of the three ways we measure GDP – each of the three should be the same as the other two but isn’t because lying about taxes.
The other two calculations are all incomes, or all production. Things that are sold at no price do not add to production given that we measure it at market prices.
Income, well, there’re 200 or so engineers at Facebook who work on it (I checked with Facebook itself). Say their salary is $250k a year each. Probably too low but we’ve got to use some number or other. $50 million then. That’s incomes added to GDP.
So, in our three methods of calculating GDP – they should all be the same but that doesn’t matter here – we’ve value of WhatsApp (more accurately, WhatsApp adds value of $x each year to the global economy) of $50 million. Or $0 or $0.
April 15, 2018
April 10, 2018
March 30, 2018
March 29, 2018
March 24, 2018
March 22, 2018
March 19, 2018
January 31, 2018
QotD: “Enhancing the user experience”
Once upon a time, computers weren’t all constantly connected to the intertubes. What we call “air-gapped” these days was the normal state of machines back in the desktop beige box days.
Back then, when you bought a program it came in a cardboard box on physical media. You would install it on your computer and it would work the same way from the day you installed it to the day you stopped using it. Nobody could rearrange the menus on WordPerfect or change the buttons in Secret Weapons of the Lufwaffe … Good times.
Nowadays, half the software you interact with doesn’t even reside on your PC. Further, there are whole departments at, say, Facebook or Blizzard or Google whose entire job is to “enhance the user experience”. If they’re not constantly dicking around, adding and removing features, changing what buttons do, moving things around … then they’re not doing their jobs.
We have incentivized instability.
Tamara Keel, “Tinkering for tinkering’s sake…”, View From The Porch, 2018-01-10.
December 1, 2017
Censorship on the web
At City Journal, Aaron Renn explains why some of the concerns about censorship on the Internet are not so much wrong as misdirected:
The basic idea of net neutrality makes sense. When I get a phone, the phone company can’t decide whom I can call, or how good the call quality should be depending on who is on the other end of the line. Similarly, when I pay for my cable modem, I should be able to use the bandwidth I paid for to surf any website, not get a better or worse connection depending on whether my cable company cut some side deal to make Netflix perform better than Hulu.
The problem for net neutrality advocates is that the ISPs aren’t actually doing any of this; they really are providing an open Internet, as promised. The same is not true of the companies pushing net neutrality, however. As Pai suggests, the real threat to an open Internet doesn’t come from your cable company but from Google/YouTube, Twitter, Facebook, and others. All these firms have aggressively censored.
For example, Google recently kicked would-be Twitter competitor Gab out of its app store, not for anything Gab did but for what it refused to do — censor content. Twitter is famous for censoring, as Pai observes. “I love Twitter, and I use it all the time,” he said. “But let’s not kid ourselves; when it comes to an open Internet, Twitter is part of the problem. The company has a viewpoint and uses that viewpoint to discriminate.” (Twitter’s censors have not gotten around to removing the abuse, some of it racist, being hurled at Pai, including messages like “Die faggot die” and “Hey go fuck yourself you Taliban-looking fuck.”)
Google’s YouTube unit also censors, setting the channel for Prager University to restricted mode, which limits access; Prager U. is suing Google and YouTube. YouTube has also “demonetized” videos from independent content creators, making these videos ineligible for advertising, their main source of revenue. Much of the complaining about censorship has come from political conservatives, but they’re not the only victims. The problem is broad-based.
Yet sometimes Silicon Valley giants have adopted a see-no-evil approach to certain kinds of content. Facebook, for instance, has banned legitimate content but failed to stop Russian bots from going wild during last year’s presidential election, planting voluminous fake news stories. Advertisers recently started fleeing YouTube when reports surfaced that large numbers of child-exploitation videos were showing up on supposedly kid-friendly channels. One account, ToyFreaks, had 8 million subscribers — making it the 68th most-viewed YouTube channel — before the company shut it down. It’s not credible that YouTube didn’t know what was happening on a channel with millions of viewers. Other channels and videos featured content from pedophiles. More problems turned up within the last week. A search for “How do I …” on YouTube returned numerous auto-complete suggestions involving sex with children. Others have found a whole genre of “guess her age” videos, with preview images, printed in giant fonts, saying things like, “She’s only 9!” The videos may or may not have involved minors — I didn’t watch them—but at minimum, they trade on pedophilic language to generate views.