One of the podcasts that I listen to regularly is "The Glenn and Helen Show" with Glenn Reynolds of Instapundit.com and Helen Smith of drhelen.blogspot.com. One of their very first podcasts, over a year ago, was with one of the producers of one of my favorite movies and series of all time, Serenity and Firefly, a man by the name of Tim Minear. Between simply missing it and having no time, I've had it downloaded to my desktop for months and never listened to it. I'm actually kind-of glad that I didn't listen until now, because it wouldn't have stuck in my memory that he was just beginning work on a show called "Drive", but that show has begun advertising for a premier in April. I knew Nathan Filion was in it, but I wasn't sure if I would see him in something without either Tim Minear or Joss Whedon. Definitely will give this a chance now.

Now, we'll see whether I'm near a TV set.

I just finished chapter 8 in Chris Anderson's The Long Tail, where he talks about the changing economic pressures that the "long tail" of e-commerce evokes.

Basically, his premise is that, since e-commerce doesn't increase cost with inventory and marginal cost of increasing variety of inventory (ie. you don't have to carry more copies of an album to sell more of them, because you can just digitally copy the music file and adding a second album doesn't take up much room on the server's hard-drive), there's no longer "scarcity", but abundance (this I don't disagree with) and that traditional economics can't understand that.

This isn't true. Economics is the study of, in short, how people share (or don't share) scarce resources. Economics doesn't break down when there's abundance; it stops caring. In fact, a great interest of mine is the economics of air purification on space stations built and maintained by private industry, like in the movement driven by the X-Prize Foundation. Air on Earth is abundant; it's not useful to economize it or to apply Economics to rationing it. Air in space, where it must be actively purified when it's used and resupplied at great cost when it leaks into space, is another story and Economics has a greater interest in understanding the social forces involved there.

He also states that the reason that Economics fails to understand abundance (which it doesn't) is because it assumes a "zero-sum" game and, to support this, he cites the two worst (well-known) economists in the field, Malthus and Marx. The failure of their predictions is entirely rooted in this false assumption. Economics doesn't assume that there's a fixed amout of money in the world. There may be a fixed number of, say, chairs, but there isn't a fixed amout of value. If the market suddenly wants a lot more chairs, the value of those chairs has increased on its own and didn't do so at the expense of the value of everything else. In fact, the main point of Economics is to ensure ways that the number of chairs in the near future will go up, so there isn't a fixed number of chairs indefinitely. The current "abundance" is simply taking the time factor away.

And taking the time factor away is a big deal. The abundance we enjoy in the American economy is a result of good Economics to produce abundance; the internet provides those forces the ability to move their their theoretical conclusion instantly. The question now becomes: what is scarce? It doesn't make sense to price that which isn't scarce, because there's nothing to be rationed and rationing is the purpose of prices. So, what needs to be rationed? "Mind-share" is a term being thrown around, meaning that marketing is now the new pricable commodity. But a large part of The Long Tail is devoted to the, correct, premise that the new, most reliable key to mind-share is now word-of-mouth and recommendations by trusted recommenders, which can't be controlled and probably won't be sold at a price.

In the end, my instinct is that "quality" is going to be the biggest rarity in this age of plenty. When everyone can participate, the barriers of being heard are no longer the publishing of material, but in publishing something so good that people are willing to sacrifice to obtain it. And for the majority of music listeners, now that music is plentiful, it is no longer just the music lovers who have access to it. And only the music lovers will still be willing to pay for it. So, while music may be plentiful, what is widely available is likely to be worth the price paid. While the old industry infrastructure is still in place, but before we have good controls on piracy and copying copyrighted material, we will see some quality still, but declining. Everyone will have what won't be worth having and, judging by what is being produced today, no one will notice. When I first heard Metallica's S & M (yes, a play on words, it's actually "Symphony & Metallica"), I swooned. I had to pull over while the radio played it and then was late getting home because I rushed to the music store to buy the disc. I don't hear anything like that on KBPI in Denver; I'm not even convinced these musicians even know how to change chords. While there isn't any money in recording because it's "abundant", none of it will be worth listening to.

Maybe this is a matter of me not taking advantage of the "long tail's" recommendations system, where I could find music being made that compliments my own strange criteria. However, Economics doesn't break down with abundance. And there is still scarcity, but the scarcity that exists has moved and industry is still investigating where that is and how to exploit it. In meantime, stay away from the radio.

On another note, I know I promised to post on Unstoppable Global Warming, but I didn't have the time. I'll get to it soon.

"Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good." - Thomas Sowell, Is Reality Optional?

That quote alone may have dicated my next read.

I just finished Unstoppable Global Warming: Every 1,500 Years (on Thomas Sowell's recommendation in a recent article, coincidentally). Interesting stuff. I'll talk about it tomorrow, if I have time; I just flew in to town, so no time now. In short, I may no longer be in the Bjorn Lomborg, "It's not worth the effort" camp and moved to the, "I can't believe, after Nuclear Winter and DDT, people still fall for this crap" camp.

Do you ever suspect you might not be very mature? I'm watching a rerun of Virginia Madsen's interview on Craig Ferguson (actually, I also watched the first run of this episode a few weeks ago; not much else to do on the road) and I looked her up on IMDB. Is it wrong that, of all the entries in her filmography, I'm most excited that she was Raven's mom on Teen Titans? I just watched that episode the other day.

I have to say, I'm a bit skeptical of the Oil Trust idea in Iraq. If I understand this Capitalism thing, it's pretty much based on the idea that money is bunk. It's not money that's valuable; it's value that can be represented by money. Milton Friedman finally put the capper on this; he finally proved that inflation (more money) doesn't do much for the economy, it's value that leads to money creation. Tax cuts are different from government money because it's not a hand-out; it's allowing people to keep the money they've earned by producing value.

The Iraq Oil Trust idea seems to be providing money for the valuable service of being a citizen. Frankly, that's not so very valuable, at least as I see it. Honestly, I'm not sure I like the idea of the government as trustee any better than I like the idea of government as CEO. It seems inevitable that the government will award some kind of weighting mechanism to their constituents, benefiting the majority or the powerful again. Which, as I recall, was the whole thing we didn't want happening.

What incentives is this going to provide? Lets look at citizenship as stock ownership where the stock isn't tradeable. Or would it provide an advantage to ethnic groups that reproduce more (I honestly don't know enough about Shiites or Sunnis to know one way or the other)?

Here's my thought, which is completely undoable for political reasons: privatize the oil fields, but only to companies not based in Iraq. No companies owned by foreign states. No Iraqi citizen can own shares in Iraqi oil fields for 15 years (or something). All fields must employ Iraqis for, say, 80% of the labor. No Russian, Iranian, Chinese, Venezuelan, or companies based in similar countries, and no American companies; I know, we're not like them, but really we can't afford to be seen as the "War for Oil", not that we'll ever convince the Left, in whatever case. But, the point of this is them, not us, so we'll take it. In the end, American oil companies are pretty good at their jobs; it's the Iraqis loss to exclude them, but what must be done, must be done. The point in the end is to get the profits of the country and out of reach of any of the factions (as much as possible). The UAE may be a good place to look for candidate companies. Any economy built around one single commodity is a serious problem. When the economy is based around trade and commerce instead, the oil industries will have a healthier place to come home to later. And, if the government has, perhaps, a 5% non-voting share in the fields, not for distribution but for government operating costs, they can keep taxes on the people low.

So many people forget that wealth does not come from natural resources but from economic freedoms. Look at Hong Kong and Singapore; they have no natural resources at all, the pinnacle of this proof, yet they are wealthy. It distresses me a little when George W. Bush says that Democracy will free the Middle East. It's not really true; it's Capitalism that will free the Middle East. Unfortunately, I don't get the impression that Capitalism is a big priority for the Important Actors. In all fairness, they're coming off of a Socialist regime, living in a region where even the "arch-conservative" regime in Iran is Socialist.

I'll have more thoughts on the peace-keeping abilities of Capitalism in my next post, but I'd like to propose this plan even if all I learn is why it's not a good idea. I like what Austin Bay's saying here, but I'm going to keep my skepticism about this.

It's been a while since I've posted. One of the drawbacks of traveling 6 days a week.

I had an exchange in the comments of this post a few days (a week?) ago. What Neu Mejican is missing is one of the most important part of Free Markets. Just because something happens consistently or spontaneously doesn't mean that it's good for all parties. Everything happens "spontaneously"; I mean, I believe in divine intervention, but I'm not convinced that God directly intervenes in the GDP of Brazil. Events can only be assumed to be mutually beneficial (at least on average) when both parties consent to the relationship. The fact that government involuntarily "regulates" industry consistently is actually a support for small-government beliefs.

The trouble is that there are other options. For instance, the insurance industry in Florida is heavily regulated ever since hurricane Andrew because so many insurance companies were too poorly capitalized to cover the losses to their clients and declared bankruptcy instead of paying out. The state ended up buying up those policies and ended up in the insurance business. Now, they're smart enough to know they don't want to be in the insurance business, so as I understand it, they said, "everybody has to be properly capitalized to do business here and we'll price ourselves higher than the top 10 insurance companies." Unfortunately, with the increased number of hurricanes and the reinsurance requirements, the top 10 insurance companies no longer sell hurricane insurance in Florida; no one knows what to charge. Now, my Dad is pissed because the state turned over his neighbor's policy to a private company for over $1000 a year less than his rates, but not his. He's not willing to change to private insurance, of course, but it's the unfairness that gets to him.

I can't help but think there's a better solution, however. Why isn't there an industry stating "such-and-such a company has certified your insurance company has the money and will definitely back you up." Auditing firms with standards that are unrealistic will never have their standards met and auditing firms that are too easy have no meaning to their brands. The government's role is now reduced to trademark enforcement (you don't want people impersonating an auditing firm's Seal of Approval), which it's good at. It's a model that worked well for Sun when Microsoft tried to push their own version of Java the way the pushed their own version of JavaScript on Netscape. Sun successfully sued for trademark infringement and Microsoft had to rename their Java variant J# (I think I have the right Microsoft product). And, Microsoft had to implement a JVM according to Sun's standard so that Java would run on Microsoft machines. I'm not aware of such a system, so I can only assume there's a reason. What could that reason possibly be?