Category: Current Affairs

Is file-sharing dead?

The recent RIAA lawsuits have severely blunted the practice of file-sharing. The music industry has gone after the on-line users who share copyright-protected songs. The movie industry may someday follow suit. Although the number of people prosecuted has been small, the negative publicity has caused many people to shy away from Kazaa, Grokster, and other services.

I don’t know of any good estimates of how much file-sharing has gone down in recent times. All parties to the disputes have incentives to fudge the numbers. But based on conversations and anecdotal observations, combined with written sources, I find it plausible that file-sharing has declined by at least a third.

The days of file-sharing, however, are far from over. First, a judge just ruled that the RIAA cannot petition Verizon for the names of potential file-sharers. CNN.com reported as follows:

…in a strongly worded ruling, the appeals court sided with Verizon, saying a 1998 copyright law does not give copyright holders the ability to subpoena customer names from Internet providers without filing a formal lawsuit.

This ruling should come as no surprise. After all, why should the RIAA have a special right to petition Verizon for the names of potential copyright infringers? I hold some copyrights too. I and many others could petition Verizon for the information concerning various account holders. Without any legal standard of proof privacy is meaningless. More significantly, Verizon would end up swamped under the requests. Imagine various hackers and cyberpunks flooding Verizon with identity requests just to make the reporting system unworkable.

Even if this ruling is reversed, or John Doe suits prove effective in generating the names, file-sharing is likely to return in force. Anonymous networks are becoming more popular rapidly. Read the analysis of Clay Shirky. Right now users are not sure whether these networks are useful or trustworthy. But that information will spread rapidly. Within a year, we will know whether the Palestinian file-sharing network is indeed reliable. If that source of files turns out to be crooked, something else will arise to take its place.

Consider the whole problem in terms of consumer option value. File-sharers have not given up on the idea. They are waiting to see when and how they can start sharing files again. When the proper time comes, they will return in full force.

Addendum: Here is a Washington Post article on the decision. Hit and Run links to the full decision.

If you can’t price the roads…

Ban elephants. That is what the Thai Prime Minister has decided.

Thaksin Shinawatra says elephants brought in from the countryside cause road problems in an already congested capital city. In his national weekly radio address, he said he had told the Interior Ministry and the Bangkok Metropolitan Authority to “not let elephants into Bangkok”. Scores of domesticated elephants – estimates range from 60 to 250 – roam Bangkok streets with their handlers, begging for food or promoting the sale of ivory trinkets. They sometimes get hit by vehicles or fall into drains. Many of the elephants, extensively used for logging, were made redundant by a 1989 ban on the industry. Thaksin said financial backers purchase elephants and then rent them out to the tourist-tout handlers.

Traffic jams in Bangkok are considered to be among the world’s worst. It can take four hours to cross town, which is one reason why many Thai cabs come equipped with bathroom facilities. At six p.m., in the middle of rush hour, downtown traffic goes less than a mile an hour, on average.

Here is a discussion of Thai traffic problems, and their solutions. More mass transit, rerouting one way roads, and road pricing are the most promising alternatives to the status quo. Banning elephants is not mentioned, which leads me to suspect that the Thai Prime Minister is using them as a scapegoat (or should I say scape-elephant?) for the problem.

Don’t even ask about Thai traffic in the monsoon season.

Saddam’s seizure and good news about the dinar

I have heard numerous scenarios of how the capture of Saddam might prove counterproductive for Iraqi reconstruction. Perhaps the Shiites no longer need U.S. protection from a Saddam return, and they will cease to support us. Perhaps the American public will now demand a premature withdrawal of U.S. troops from the country.

The market appears to disagree with these fears. Since the capture of Saddam, the Iraqi dinar is up nearly eight percent, as reported by The Financial Times. Since mid-November the currency is up sixteen percent. To be sure, this price is a managed float. Nonetheless the price is set in a daily bank auction, combined with information taken from the street markets. It is commonly conceded that the market is a good barometer of Iraqi political expectations about the future of the country.

French strikers hard at work

Walking around Paris, I came across the following in The International Herald Tribune:

“The government wants to correct France’s image,” said Christophe Beaux, technical adviser for the Ministry of Economy, Finances and Industry. “Our image has been stained by cliches,” Beaux said. “The bad publicity generated by the 35-hour workweek, by workers going on strike, gives people the impression that French people do not like to work.”

Those cliches and bad publicity will just kill your reputation, won’t they?

Note, however, that the French proclivity for strikes should not be attributed to laziness. (Here is some more systematic data: Excel file, html, comparing the French to other countries. Of the G-7, only the Canadians strike more.) In fact many French strikes are hard work. French strikers are more likely than most striking nationals to march, blockade, destroy, or otherwise make their displeasure public. This tendency stems from the centralized nature of the French economy and governance. A few tractors or transport strikers can shut down large parts of the country and thus suffice to grab national attention. French strikers are working hard in their quest for rents.

Addendum: French diplomats are now at strike, this should make at least Andrew Sullivan happy.

Do the French favor diversity?

Read Jacob Levy on the new French measure to ban private individuals from wearing conspicuous religious symbols in the classroom. This would include Islamic headscarves, Jewish yarmulkes, and “large” Christian crosses. Don’t even ask about the Sikhs, who are obliged to wear turbans as their hair grows long. Here is a brief excerpt from Jacob’s analysis:

The proposed law is really quite repressive. One item that hasn’t been much mentioned in the English-language press is that it also prohibits wearing any visible political symbol (buttons and badges and so on). One article I read about that proposal in Le Monde last week made quite clear how arbitrarily that will be enforced, with school administrators drawing their distinctions between what is and what isn’t political. An AIDS ribbon? An anarchist’s A button? A button in support of SOS-Racisme? One administrator said that that wouldn’t be prohibited, because anti-racism, isn’t a political value but a republican value. But the ban clearly isn’t restricted to a bright-line rule against partisan affiliations, either. It is going to leave tremendous discretion in the hands of principals to ban what they dislike and allow what they like.

Here is more:

It is, always, all about France and the French state, never about the conflicting obligations in conscience felt by committed religious believers.

Chirac’s announcement– which was not a surprise– referred to ‘the Islamic veil, under whatever name one gives it.’ This is a recurring rhetorical device of the laicitists. There are, as far as I know, no reported incidents of French Muslim schoolgirls attending school actually veiled. French Islam is not, as a rule, that conservative. What is at stake is headscarves, and the incessant use of “voile” instead of “foulard” is an attempt to elide the difference between committed believers and fundamentalists.

Worst of all, it is estimated that about 2/3 of the French public support this measure. The only bright side is that France’s reputation in the Arab world is likely to take a big hit.

Facts about dogs in Paris

1. Parisians own about 200,000 dogs.

2. Those dogs leave behind approximately ten tons of droppings every day.

3. In the average year, it is believed that six hundred people break a limb slipping on such droppings, or when trying to pick the droppings up.

4. A brigade of sixty green motorcycles drives around town, picking up droppings. Of course they reach only a small percentage of the total.

5. There is a sizeable fine (about five hundred dollars) for leaving droppings behind. In a recent year only four people had to pay the fine.

6. The core problem is the absence of a Parisian police force. The only police in Paris are the Police Nationale. They consider it beneath their dignity to enforce such laws.

7. The city of Paris cannot control its own bylaws for security, traffic, or sanitation.

8. Only towns with less than ten thousand inhabitants are allowed to have their own police forces. Larger police forces would be considered a threat to national power.

9. There is something to be said for federalism after all.

The facts are from the stimulating Sixty Million Frenchmen Can’t Be Wrong, by Jean-Benoit Nadeau and Julie Barlow. If you are looking for a book to explain how France works, here is a good place to start.

Cultural diversity in France

I am in Paris as the American representative to a UNESCO conference on cultural diversity. Approximately twenty scholars and public figures will be attending, but I expect to have the strongest sympathies for cultural free trade.

From my point of view the timing for this conference could not be better. The French like to charge that American mass culture has no respect for diversity or minority points of view. But recently a French panel recommended a ban on religious attire in French public schools. Headscarves, skullcaps, and “large” crosses would not be allowed. Apparently sufficiently small crosses would be OK, Stars of David would be OK too, again provided that they are not too conspicuous. Many people in France expect that this measure will pass into law, Chirac just endorsed it. French Muslims, of course, are irate. Note that many French Jewish schoolchildren have been afraid to wear religious attire to public school for some time, mostly for fear of being beat up. Randall Parker offers commentary and numerous links on all of these issues.

The French also failed this week to rewrite the veto powers written into the Nice agreement of 2000. More specifically, the French and Germans cannot push through any EU reforms they wish. Instead, the Polish and the Spanish, both allies of the U.S. I might add, keep enough voting rights to have veto power. This development, of course, favors the rights of the smaller countries, although there is now talk of a financial punishment for Poland and Spain. Now I am waiting to see what happens when one of the smaller EU countries fails to meet the three percent rule for deficits, just as the French and Germans have failed to do.

The return of piracy

Ninety-five per cent of the world’s cargo travels by sea. Without the merchant marine, the free market would collapse and take Wall Street’s dream of a global economy with it. Yet no one, apart from ship owners, their crews and insurers, appears to notice that pirates are assaulting ships at a rate unprecedented since the glorious days when pirates were ‘privateers’ protected by their national governments. The 18th and 19th-century sponsors of piracy included England, Holland, France, Spain and the United States. In comparison, the famed Barbary corsairs of North Africa were an irritant. Raiding rivals’ merchant vessels went out of fashion after the Napoleonic Wars, and piracy was outlawed in the 1856 Declaration of Paris (never signed by the US). Since the end of the Cold War, it has been making a comeback. Various estimates are given of its cost to international trade. The figure quoted most often is the Asia Foundation’s $16 billion per annum lost in cargo, ships and rising insurance premiums.

The International Maritime Bureau (IMB), which collects statistics on piracy for ship owners, reports that five years ago pirates attacked 106 ships. Last year they attacked 370. This year looks worse still. In the first nine months, there were 344 attacks, up from 271 for the same period in 2002. Twenty crewmen have been murdered so far this year, up from six a year ago. If violent crime increased more than 300 per cent in five years in New York or London, the public would demand urgent police action. At sea, where the only lives lost are those of poor seafarers from the Third World, no one cares.

Here is the full story. The U.S. government is not making this a priority, but the next major terrorist attack may well be seaborne.

Bad Science Poisons Our Children’s Brains

The Natural Resources Defense Council has got mercury on its mind. They write, “Mercury Poisons Our Children’s Brains” explaining:

Mercury is a potent neurotoxin that, like lead, especially threatens the brains and nervous systems of fetuses and young children. A number of neurological diseases and problems are linked to mercury exposure, including learning and attention disabilities — which are a growing problem — and mental retardation. Mercury also might be linked to the recent increase in autism, Parkinson’s disease and Alzheimer’s disease…one in every 12 women of childbearing age has mercury in her blood above the EPA “safe” level…Toxic mercury emissions from power plants put 300,000 newborns each year at risk for neurological impairment.”

Frightening isn’t it? Lets take a closer look before sending the NRDC a check. How was the EPA’s safe-level arrived at? There are three major studies of mercury and neurological impairment in children due to consumption of contaminated fish. One study found no effect, one was ambiguous, the last found some mild impairment (You would never notice the impairment on an individual level and can detect it only in a large sample. Not to be ignored if it exists, but we are not talking about Downs children). To be on the safe side, the EPA focused on the one study that found an effect. Within that one study there was some uncertainty about how much mercury caused a problem so the EPA took that study’s lower bound (the lower bound of the 95 confidence interval for the statisticians in the audience.) Finally, to really be on the safe side, they divided the lower bound by ten!

Now notice how the charlatans at the NRDC twist a number of true facts to make a big lie. It is true that mercury can cause neurological impairment and it is true that 8% of women have blood mercury greater than the EPA safe level but you would never learn from the NRDC that the EPA safe level is more than ten times smaller than levels that have ever been found to cause mild impairment and that even the existence of such impairment is open to question. Throw in a few warnings about how learning disabilities are a “growing problem” and, for all the readers who don’t have children, don’t forget to mention the “recent increase” in Parkinson’s and Alzheimers and you have a perfect example of advertising masquerading as science. (Ever notice how many public interest groups sound like used car salesmen? Sale! Sale! Sale! Buy now before its too late!)

The NRDC wants emission levels cut by 90% in three years, an approach that would cost billions of dollars. The Bush administration wants to cut levels by 30% over the same time period, which would have a marginal cost of virtually nothing because of other regulations scheduled to take effect in anycase, and by 70% over a somewhat longer time frame. Naturally, the NRDC thinks this is evil. This time, I agree with the administration.

I have cribbed from CEIs Joel Schwartz and AEIs Lutter and Irwin.

Going too far in Italy

The Italian Communist Party recently put a rider in a bill to ban all child labor in advertisements. The main goal was to disrupt the government but now it appears that the bill will pass. If so, babies will no longer be allowed in Italian television ads. One in three Italian TV ads uses a baby, although (because?) Italian women are having so few babies. 1.2 children are born per woman, well below the replacement rate, and one of the lowest rates in the world. Some companies are wondering how they will publicize diapers. The source is the Weekend Financial Times, this French Internet Cafe makes linking very difficult.

The new Medicare bill

I am growing tired of attacking this bill, but here is another good link, from The Boston Globe, for my other writings on the topic scroll down through the last two weeks. The authors write:

In the name of greater free-market competition, the legislation offers massive new subsidies to the pharmaceutical and insurance industries. In the name of providing greater protection, it threatens Medicare’s guarantee of universal benefits. (Indeed, it even provides more than $6 billion to support Health Savings Accounts outside of Medicare, risking the fragmentation of the broader insurance risk pool.) And in the name of greater cost containment, it encourages the expansion of private plans that have, to date, not saved Medicare money, while creating new budgetary rules that could very well make Medicare less equitable and affordable down the road.

Here is yet some more from this depressing story:

To be sure, politics usually requires compromises. But what’s shameful about the present bill is just how deeply the compromises — or, more accurately, the concessions to knee-jerk beliefs and private interests — undercut the stated goal of the bill: drug coverage for seniors. By our back-of-the envelope calculations, the roughly $400 billion in new spending over the next 10 years (not to mention the $140 billion in new premiums paid by Medicare beneficiaries themselves) will buy only about half as much coverage as a sensibly designed bill could. This is not only because of the subsidies for private health plans and for Health Savings Accounts, but also because of the higher overhead costs of private plans (about five to six times higher than for traditional Medicare) and the 20-to-30-percent higher prices for drugs that seniors will have to pay because Medicare is forbidden from using its bargaining power to negotiate better deals.

Indeed, a significant proportion of Medicare beneficiaries will almost certainly be worse, not better, off under the bill. This includes several million low-income seniors who will lose the generous coverage they now enjoy under state Medicaid programs. It also includes millions who already have pretty good drug coverage through their former employers — coverage which will likely be dropped, despite the bill’s subsidies for employers that retain coverage.

I don’t accept the authors’ implication that our main health care policy goal should be to subsidize seniors, most of whom are relatively wealthy. But it should not be to subsidize pharmaceutical companies either. Read the whole story to learn just how much special interests shaped the final legislation.

Why is there a shortage of flu vaccine?

Dr. Rangel offers one hypothesis:

Years ago there used to be several makers of flu vaccine but that number has fallen to just two. Why? These days the government buys and distributes most of the vaccine and it pays for it below cost. When profits from the vaccine dried up most of the other companies moved on and the two that were left produced only what they thought the nation would need based partly on how much the government usually purchases. Because the profit margin is so thin on vaccines, producing more than was needed would cost these companies millions. In a single payer system could this happen to other drugs? Do we want to find out?

Read his whole post on why national health insurance and single payer systems are bad ideas. Here is another juicy bit:

This problem of completely eliminating the free market would extend to the other sectors of the health care industry from testing to diagnostic equipment to innovative treatments and surgical techniques and on and on. Essentially what happens to an economic system when the government takes over and eliminates any free market is that the quantity and quality of goods and services in this industry goes down. Part of the reason is because competition and innovation are lost. The other part is that the single payer underpays in order to contain costs. Dr. Woolhandler doesn’t seem to understand that this happens when she was asked if rich and middle-class people would accept a single payer system.

Yes our medical care costs more, but that is for two reasons. First, our current mixed public/private system has a variety of screwy incentives. Second, we devote unprecedented amounts of time and money to patients in their last year of life.

Here is the clincher:

Actually waiting lists for medical care in countries with nationalized health care are on the average of six to seven hundred thousand and waits for elective surgery can last four years! Her solution like any other socialist responding to criticism of poor quality in nationalized health care is to raise funding, i.e. raise taxes. But how high? Tax rates in the UK are already among the highest in Europe and the NHS still suffers serious problems with quality and efficiency. Some European countries have tax rates as high as 60%. In these cases health care is not really “free”. It’s only free if you have little or no income, pay little to no taxes, and use a lot of health care services.

Amen.

The future of dieting

Economist Ed Glaeser, a trim man, is a vigorous partisan of the Atkins Diet. Nonetheless he argues that McDonald’s brings social benefits, not social costs:

Glaeser’s rationale for suggesting that convenience foods are a social good is that, to judge from consumer behavior in the marketplace, people seem to prefer saving time to being thinner. And in economics, by and large, getting what you want is a good thing. Glaeser notes that until relatively recently, cheaper food (in terms of money as well as time) made us taller and healthier. Only in the past 25 years or so have diminishing returns set in.

Now that less is more when it comes to increased calorie intake, Glaeser expects the marketplace to correct the excesses he attributes to self-control problems. For one thing, food technology can’t advance much farther, “short of direct injection,” whereas weight-loss technology is only in its infancy, with vast room to grow. Glaeser can understand the need for regulation in the schools, or if food companies are misleading people. But he says: “I don’t think anybody ate at McDonald’s and thought it was good for them. I take a dim view of these lawsuits.”

Thanks to newmarksdoor.com for the link, and Daniel Akst for the article itself. See also Alex’s post on Three Oreo Cookies.