Monday, December 15, 2014

Is Uber's fee hike during the Sydney cafe hostage-taking exploitative price gouging?

Higher prices reflect greater urgency of a service for some people; the ones who will pay the higher fare are also the ones who need it the most. This is a problem if such a sum could not be afforded by those in need, but the fact that drivers respond to higher salary bids for their services, is simply reality. 

Ignoring the supply/demand dynamic just because of something like the Sydney hostage-taking emergency would make for more wanton rides at the expense of those who really do need the ride on that occasion.

Outrage and incomprehension over (non-inflationary) price increases also discourage other entrepreneurs from entering the market to serve as alternative competition, which is essential to bringing down prices without running into a supply problem.

But we can learn from this situation that customers via financial institutions, and/or Uber itself can pool an emergency fund by which passengers with little means to pay are helped during emergencies. But as any fund costs something, this will be reflected in higher prices during normal times.

Sans curtailment of freedoms, high profitability equals high value/satisfaction of wants. And this principle helps us see a form of regulation more effective than what is legislated by supposed people’s representatives.

Wednesday, December 10, 2014

The OECD, against inequality, wants more of the same

The Organisation for Economic Co-operation and Development (OECD) recently came out with a paper showing that inequality leads to weaker economic growth. Most people, including the OECD itself, take this to mean a failure of ‘trickle-down’ policies of which the Reagan and Thatcher administrations of the 1980s are supposed to represent. Governments must then step in to redistribute wealth, which the OECD asserts does not hinder growth,
provided these policies are well designed and implemented.

Redistribute how?

The OECD does not provide guidance as to whatever that means. It really does seem that the OECD merely presumes state redistribution to be more effective in growing an economy.

Why the inequality? 

The paper casually brushes off the cause of inequality as the natural outcome of free exchange. It is as though we have to take for granted that all this time, the market, in its leaving by the wayside those with less means, created this growing disparity in incomes. Only now is the state going to come in to save the day.

The state all along

What would the OECD make of the then-record federal spending during the ‘trickle-down’ Reagan years, a record long and far surpassed by succeeding presidents? Or Reagan’s appointment of Federal Reserve chairman Alan Greenspan who took the ongoing policy of inflation to new heights? The fact that the established corporate interests (the ‘1%’) are the primary recipients of this expanding liquidity could be argued to be the single largest contributor to inequality.

The state is the opposite of the solution

Before increasing taxes on the cronies who feed off the middle class and poor, how about first get rid of the (legislated) cronyism itself? Less sources of corruption that way. But then, what is to fund the OECD?

Friday, December 5, 2014

Foreign workers don't steal jobs

Foreign workers don’t ‘steal jobs.’ The current employment level is not an impassable barrier where one’s employment means another’s dismissal.

Immigrants in developed countries get jobs because they often don’t bid as high for salaries*. This allows employers to hire more, and the added employment makes for greater productivity. This in turn results in higher real incomes for wage earners and greater capital to invest for employers, some of whom will happen to be foreign.


Open borders is a two-way thing!

Just as one community is open to jobs for foreigners, another community is open, or should be open. Funny how one could lament foreigners job theft in one instance and in the next bemoan ‘brain drain.’ Opportunity does not stay put.

Protectionism as a way to ‘get even’ for the protectionism of another country only doubles the harm. 

Imagine if you were limited to employment/purchases in your street. Would it make you feel richer to “keep the money locally?” 

There’s a reason why people acquire services from other streets, other cities, other countries. It’s because it maximizes the division of labor.


The real problem (not those foreigners)

What you should look at are real barriers to employment, including minimum wages, union abuse of state privileges, and all taxes and regulations, including misguided anti-foreigner protectionism. Basically everything you’ve been conditioned by the politically privileged to believe was good for society. 

These all inhibit capital accumulation and make for less specialization, and we see an endless cycle involving poorer-quality products/lower real incomes/less profits/less capital/less
  jobs/cries for state protection.

_______________

*But salaries in one community don’t go so high or so low that employers, whether locally or abroad, don’t take advantage. This process of evening out is as natural as osmosis.

Friday, November 28, 2014

Why Taylor Swift is wrong about Spotify

From theguardian.com
There is something very wrong with an industry that seeks to curtail access to its product rather than ease it.

Cutie Taylor Swift recently removed her songs from Spotify, in the belief that such a music streaming service does not compensate fairly.

Swift’s error comes down to two false premises:
1.       Music has some definite value independent of context; and
2.       Copyright is the basis of remuneration in the music industry.

Swift’s ignorance is all too apparent in this paragraph from her Wall Street Journal op-ed (if it weren’t already apparent by being published by WSJ, haha):
Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album's price point is. I hope they don't underestimate themselves or undervalue their art.
Even though Swift claims to be open about finding out “what an album’s price point is,” she is already presuming it to be much higher than what she’s being paid through streaming sevices. Moreover, a ‘free’ (she actually means affordable) service does not automatically mean the absence of entrepreneurial opportunities. What if Google charged for their service, arguing that internet searches are “valuable”?

As for deciding some “price point,” how does she know that current prices – including the availability of music through Spotify – are not precisely such a deciding of said price point?

(Actually I’d contend that prices are highly distorted. But do read on.)

And it is not Swift, nor her label, that ultimately decides prices. It is the consumer.

How to compensate, and how much?

Copyright is a logically flawed concept*. Music piracy is not so much the cause of music sales dropping, as it is an indication that the ‘official’ music industry, focused on protecting intellectual monopolies in a more and more decentralized world, has yet to adjust its business model.

Perhaps the real thing to fear for Swift isn’t accessible, free music – there’s that hot new technology called radio after all – but of sales depending much less on pubescent girls.

With music production and distribution becoming more affordable than ever, opportunities abound for a larger number of talented individuals than ever before. What the music industry loses in superstars as dictated by record executives pandering to common denominators, it will more than gain in addressing niche markets.

And the price of music could never be too low that musicians, unsatisfied with listeners’ bids, will all quit the biz. The number of musicians, and the prices paid for their services, will always be reflective of music’s marginal utility to people. The prevailing prices are neither just nor unjust, they are merely indicative of preferences.


Related article: Copyright and record companies: Living in the past
Kinda ironic how I used Taylor Swift as an example in this much earlier article (June 2012), when discussing possible avenues of profit for musicians in a copyright-less world.

______________

*Copyright presumes that third parties can be held liable for an agreement between two parties as to the use of properties through which the copyrighted material is accessed and distributed. There is an inherent conflict between supposed ‘intellectual property’ and physical property, in that the former involves control over the latter, even when no physical property is taken from or manipulated of the supposed copyright holder.
When people say such piracy is theft, ask them: Where’s the theft? Could ideas be stolen at all? Is there a fundamental difference between ideas and opinions you tell people, and ideas as stored in digital form by which music is disseminated? Perhaps copyright violations are a kind of thoughtcrime?

Wednesday, November 26, 2014

Let people choose their verdicts

This Ferguson trial where the cop who killed black dude Michael Brown has really provoked outrage, primarily because people feel the issue of race was ignored, or that there was no due process, or that the killing was not about mere self-defense. Whatever the reason, wouldn’t it just be great for a real ‘people’s court’ where EVERYBODY’S opinion counts?

Choose and act accordingly

That’s how it would be in a competitive court system. People would be free to accept or reject any court’s decision, and act accordingly. That is, everyone would be free to outcast/boycott those found guilty of actions they find offensive. This isn’t quite possible at the present, what with much of land, particularly roads, being ‘public property.’

And if you and your neighbor disagree on a particular case, you can either agree to disagree or avoid each other, but most likely, you’ll find a middle-ground compromise association with them.

But people are stupid!

But if people, even stupid people, can choose their verdicts, and thereby shun innocent convicts and condone sociopaths, won’t that make for a really divisive society? I’d argue, not any more divisive than present society.

In the first place, most people have similar moral sensibilities. There are some controversial issues, such as at what point during or after conception ‘life’ begins, or whether kids should be spanked. But generally, people like peace, and avoid violence. Such an agreement on what constitutes ‘moral,’ even a very broad-strokes agreement, would make for a broad-strokes agreement in legal matters as well.

Competition versus monopoly

More importantly, judgments in a competitive environment would entail both complainant and defendant, as consumers, choosing a private court with a reputation for fairness, whose decisions would be respected by both parties and the public. In short, standards for judging a case would be raised, and transparency a selling point. It won’t matter how rich a defendant is by which he wishes to bribe a judge, if Court A stands to lose profits to a more transparent and reputable Court B.

And instead of being pissed off about this or that court for a blatantly unfair decision, people would simply cite a more reasoned-out decision by another court’s legal luminaries. Of course, the quality of the reasoning would have to depend on the intelligence of the people, who may not be very intelligent, but this is no less a problem in today’s monopolized court system, albeit the latter having less accountability.

I think with the dawn of social media, the possibility of competitive courts, that is, competitive opinion givers, is becoming greater.

Thursday, November 20, 2014

Do not watch ‘The hunger games: Mockingjay’

I just watched ‘Mockingjay: Part I.’ Nothing happens. I had read the book, but I still don’t’ know what happened in the movie.

But really, it was careless of me to bother watching it without reading a review or thinking it through more thoroughly. This borefest is what you get when you divide a final book installment into two, as has been the trend since ‘Harry Potter’ and ‘Twilight.’

I think this gimmick for the sake of suckering suckers like me into paying for two movies instead of one, is in its dying days. Never before has it been done so blatantly and unconvincingly, with scenes stretched out and otherwise-outtakes making it to the final cut. It couldn’t be just me that watched this first part of ‘Mockingjay’ and thought, “That’s it?” And I swear it will be my last time to patronize such a lame practice.

Is that my only complaint about the movie? Not really. All the drama seems artificial. Jennifer Lawrence’s hysterics appear an attempt for another Oscar. And when the music swells during a ‘moving’ scene, it does not impress. Of course how could it? Nothing happens after all. The only value this and the ‘final-talaga-pramees’ movie will have is from Philip Seymour Hoffman’s last role.

Whether or not the (actual) finale is an improvement, I won’t even bother watching, which is in protest not of the movie producers but of author Suzanne Collins herself, whose attempt to shock or make profound was badly done even in the book.


Related stuff:

Monday, November 17, 2014

Against net neutrality, just because of my stupid market ideology

“What? You’re against even net neutrality?! You really are ideologically blind.”

I can imagine someone saying this about my stance on the issue, where proponents of net neutrality see the current ISP oligopolies as enemies of freedom.

Of course I’d like my provider to give me access to as much internet content as possible, and as fast and affordable as possible. But net neutrality legislation is barking up the wrong tree (free markets).


WHAT IS WRONG?

The right tree is existing anti-competitive telco regulations that maintain the status quo and prevent more relevant businesses from coming in to respond to what consumers want (cheaper and better services). What’s more, the lobby industry favors established players, at the expense of newer and less politically connected entrepreneurs. The current system is hardly a free market.

State regulations and an overly powerful legislature perpetuate oligopolies as we see them today. The problem is not that businesses are motivated by ‘profit.’ Because, all people are driven precisely by the desire for more value for their money, whether as consumers or investors (why else are advocates of net neutrality calling for it?). Hell, even the satisfaction of helping another person through charity is profit.

We should ask instead: How do we make both parties in ISP-consumer transactions profit as much as possible?

And thus, we grasp the real solution: break existing legislative barriers to competition.


THE EASY WAY

But why not just adopt standards for ISPs? That shouldn’t cost anything extra, right?

Actually, the cost of legislated regulation is not immediately apparent. We have to ask why existing ISPs would find it more profitable to block or slow down certain internet content, and find it more costly to satisfy the consumer best.

Take away ISPs’ existing means of profit without addressing the main problem of oligopoly and this just raises costs without making competitive alternatives available.

Bad internet service is not a violation of anybody’s rights. If so, everyone before 1994 was a victim. No, it just means that cronies are abusing the political privileges granted them by a na├»ve populace.


IDEOLOGY

So my anti-net neutrality stance is not just a matter of trying to be ideologically consistent, or anti-government for being anti-government’s sake. In fact, reliance on the state, which plainly put is the belief that the threat of violence fosters community, is itself a false ideology to be cast off. But I don’t shove that in an opponent’s face, in ad hominem fashion, to dismiss their argument.

If I oppose nagging as a way to interact with family and friends, is this a ‘mere ideology’ that ‘doesn’t work in the real world’? So it is with my ideology opposed to both:
election and legislation – the presumption that a policy, as long as it is thought to be a good idea by a majority supposedly represented by legislators, is justification enough to violate other people’s freedoms.

In the words of Dwight Schrute, False.


Related article:

Monday, October 27, 2014

‘Family ties’ and political dualism

From tvshowsondvd.com
Michael J. Fox was the star of ‘Family ties,’ where he played diehard Republican Alex P. Keaton. Back in the 1980s, when I first saw the show, I had no idea about the issues discussed, nor of how the concept of a family with political differences yet united in love, appealed to Americans, making the show a huge hit during the Reagan years.

Watching it 25 years later, I can say that ‘Family ties’ has its flaws, but overall is still worth watching for some good laughs, and also, its educational value as to 1980s sensibilities. One thing that bugged me though is the manner in which, in the person of Alex Keaton, the show seemed to equate an interest in economics, finance, etc. with a love of money, or greed. From my experience, this just isn’t so.

Money

Economics, in particular banking, has been a source of fascination for me the past eight years, not out of any extraordinary pleasure derived from money – which after all is just one economic good of millions, simply scapegoated for its nature by-definition of relative exchangeability – but because of its social relevance, what it says about people and their relationships with one another.

If it weren’t for reading about the Great Depression, I don’t think I would have come to appreciate the market for what it is, and ultimately realize the implication that the state is the representation of the worst of humanity.

False either-or

The prevalent Republican-Democrat or liberal-conservative paradigm, as seen in shows like ‘Family ties,’ is indicative of most people’s limited understanding of political economy, where the rich are attacked for “working only for the money,” as though:
1) Other workers didn’t prioritize the size of their salaries;
2) Money had inherent qualities; and
3) Acquiring money from another was necessarily to the other’s detriment.

Little effort is made to distinguish the various means of acquiring money or any other good. Actually, there are only two different means of acquisition: exchange, and forcible taking. And practically all the ‘wicked corporations’ who are supposedly only after the money can actually be found to use the second means, of forcible taking, through political privilege.

Greed is neither good nor bad. The further question is if greed manifests through violence, or cooperation. Scapegoating moneymaking itself makes for the worst policies, as entrusted to the state.

How you defend, not what you defend, matters most

The funny thing is, most people, depending on whether they are liberal or conservative, are right half the time, siding with freedom. To put it simplistically, ‘fiscal-conservative, social-liberal’ is the best combination. I say ‘simplistically’ because oftentimes, when one is right, their reasoning is all wrong, and makes for inconsistent ceding to forces of unfreedom.

For example, those who support free speech or are against state censorship would yield when it comes to the issue of libel or slander, thinking that it is right for the state to lock up people on account of what they say. Or those who support free trade think it’s all right to have a central bank – which is actually the most enslaving of institutions.

Why err on the side of freedom? Educate yourself why

More consistent reasoning comes about from education on markets, property rights and law. Like with libel, the matter of whether something is libelous or not is moot, if the rights of the owner of the property used as avenue for expressing the contentious statements, is given precedence.

People should associate as they please, and thus face the consequences of doing so in the most fair manner. 

Sha-la-la-la.

Friday, October 24, 2014

Metro Manila traffic: Just ban the LTFRB already

From philstar.com
The traffic problem in Manila is not really about ‘colorum’ buses or overpopulation. These are effects, or perceived effects, of a monopoly on traffic regulation held by the LTFRB.

There is a seeming need for an agency to limit vehicles, especially in major roads like EDSA and C5. Such prohibition seeks to curb supply, in the face of unrelenting demand for these vehicles. 

But instead of seeing ‘colorum’ or non-licensed transportation as a cause of traffic, we should recognize it as nature’s way of adjusting to those in power who ignore the real problem: insufficient resources*.

Those damn bus lines

Another issue is the congestion of roads by buses that are mostly empty yet blocking whole lanes. The knee-jerk reaction would be to call for more bans or restrictions on buses. It seems so obvious: The less buses, the less traffic, right?

But we should ask rather: Why are these bus lines able to profit from such a seemingly unprofitable practice? Why does such wasteful behavior pay? The answer lies in artificial ‘anti-colorum’ restrictions.

If there were more competitors to meet existing demand and take some of the market share, there would be more incentive on the part of all players involved to invest in a way that balances or maximizes both spatial demands and fuel use. Ironically, further tightening the existing LTFRB restrictions would increase empty buses on the road.**


Solution: Free roads

The problem is not limited to just traffic management. The size of capital in a community, its manner of upholding property rights, as well as cultural preferences, are related to the issue. But even just taking a decisive step such as abolishing anti-competitive regulation would save us a lot of trouble, frustration, and wasted time. Could it really get much worse?

If all transportation companies were allowed free reign, this will involve entrepreneurial miscalculations, especially at the beginning. But then, once sufficient knowledge is transmitted as to profitability and non-profitability of certain investments, we can expect not just a more rational use of roads, but lower costs too, which happens in any decentralized industry.

The real regulator is competition.

Just to make it clear. I’m not proposing some wild, new idea. The facts are agreed on easily. The main bone of contention is how such facts are interpreted. And this article would serve its purpose even if it merely crushes our existing biases.

End note: Sobra na ’yan, UBER na ’yan

Needless to say, the LTFRB’s attempt to stop Uber is just another confirmation of the agency’s dinosaur status. Better to cooperate with rather than fight technology. Of course, cooperation in the case of the LTFRB means its quick and painful death.

____________________


There should be more road space available to people, and these people should be more spread out as opposed to concentrated in a rather tiny spot of the Philippines called Metro Manila. Why isn’t there more space then? But asking this points to a more general problem of poverty.
** But let us say for the sake of argument that the existing bus lines reduce the number of buses, and the non-licensed companies are wiped out. And let’s further assume the buses stop taking up whole lanes as they now do to the detriment and annoyance of other motorists. The imposed bus limit will signal reduced profitability in the sector, and ultimately discourage future investments, contrary to the actual prevailing demand for the services. The commuting public lose out. 
Personally, I doubt that any easing in traffic due to an imposed bus limit complied with, would offset the loss in productivity and comfort as a result. I could see how some people will stop using the roads on account of not having work to go to, since employment is dependent on capital accumulation, which in turn requires prior productivity. And all this hassle because of a disregard for the price system in favor of simplistic bureaucratic control. State interference does much to complicate and little to solve.

Wednesday, October 22, 2014

I tried Grabtaxi and Uber for the first time today

I tried Grabtaxi and Uber for the first time today. I don’t have the same comfort level as when I have a car of my own, but they are just about the most convenient substitutes.

I think I’d have to prefer Uber in terms of the riding experience, but the relative scarcity of Uber cars makes Grabtaxi more reliable in terms of availability.

Apart from the fun and ease of using an app as a means of obtaining transportation, is the security. Although Grabtaxi and Uber are far from crime-proof, I would feel more assured getting a ride through them as opposed to just a random taxi if coming home from the airport or some other venue in the wee hours of the morning. 

With the increased awareness we have of criminals’ modus operandi involving taxis, let alone other public transport, these options made possible through only-recently-profitable technology is a blessing. And what do you know? The state had nothing to do with it (Apart from its pesky coding scheme).


Related article: 
Is Uber exploiting its drivers?

Saturday, October 18, 2014

The minimum wage and scientific methodology

Scientific understanding is ultimately derived from a combination of ceteris paribus (all other things being equal) statements. Causal necessity can be established, even when it appears that the examined phenomena do not display one ceteris paribus statement or the other.

If employment increases after a raising of the minimum wage, it could never be assumed that the increased minimum wage caused the rise in employment, because (artificially) higher wage costs mean  decreased supply of jobs and lower demand ceteris paribus.

There must be other factors involved to explain the rise in employment, such as the discovery of new natural resources or the popularization of an avenue for jobs (e.g. the internet), the increase in jobs of which it must be assumed have offset the loss of jobs that have become obsolete from it. These additional factors themselves are also essentially ceteris paribus supply/demand/price relations.

To assume that it is the minimum wage itself that increases employment is to defy causation itself. Whatever peculiar instances are involved in one situation provide the explanations, which themselves require causal necessity.


Related article: 

Friday, October 10, 2014

10 different meanings of Facebook likes

Mark Zuckerberg, or whomever he got the idea of the Facebook ‘Like’ from, could not have possibly conceived of the myriad ways the mechanism has been used. That’s the beauty of social phenomena. To paraphrase Hayek, we know so little about what we imagine to be designed.

Here are several types of ‘Likes’ you may have at one time or another clicked.

The ‘Shut up already’ ‘Like’ – You’ve said all you had to say about a certain topic, and you want to cap the conversation with a friend who insists on justifying or elaborating on his earlier comments.

The hesitate ‘Like’ – You haven’t been that in touch with them recently, or don’t want them to think you’re stalking their profile, but figure their post is significant enough to ‘Like’

The ‘I know you were at the party’ ‘Like’ – Rather passive-aggressive, this ‘Like’ is a way of telling your friend that you know about their white lie

The insiders ‘Like’ – You’re a fan of something being referenced in the post, which trumps even your lack of closeness to the FB friend; it can also signify a desire to bridge the distance between you two.

The ‘Because we’re in a relationship’ ‘Like’ – A usually unspoken commitment to ‘Like’ most everything a significant other posts

The ‘Because you tagged me’ ‘Like’ – If they felt you were important enough to be tagged, you want to return the favor with a ‘Like’

The pity ‘Like’ – The post looks so bare, with none of their dozens/hundreds/thousands of friends having thought much of the post. Oh, what the hell.

The quid pro quo ‘Like’ – Either as a preliminary to asking some favor, or for their having liked something you posted

The acknowledgment ‘Like’ – Saying ‘Got it’ without having to think of how to phrase a meaningful reply.

And lastly:

You actually just like the post or comment

***

As to the future of the Facebook ‘Like,’ all we can really do is wait, and speculate. For example, I imagine each ‘Like’ to eventually be made likeable as well. And this will allow people to form a kind of binary code chain of ‘Likes’ being liked and ‘Likes’ not being liked, and this can go on perpetually, almost like cyberknitting, a kind of art.


Oh, and someone did something like this article before. Not that it’s such an original idea.