Category: Law

The public choice economics of Star Wars: A Straussian reading

The only spoilers in this post concern the non-current Star Wars movies.  Stop reading now if you wish those to remain a surprise.

The core point is that the Jedi are not to be trusted:

1. The Jedi and Jedi-in-training sell out like crazy.  Even the evil Count Dooku was once a Jedi knight.

2. What do the Jedi Council want anyway?  The Anakin critique of the Jedi Council rings somewhat true (this is from the new movie, alas I cannot say more, but the argument could be strengthened by citing the relevant detail).  Aren’t they a kind of out-of-control Supreme Court, not even requiring Senate approval (with or without filibuster), and heavily armed at that?  As I understand it, they vote each other into the office, have license to kill, and seek to control galactic affairs.  Talk about unaccountable power used toward secret and mysterious ends.

3. Obi-Wan told Luke scores of lies, including the big whopper that his dad was dead.

4. The Jedi can’t even keep us safe.

5. The bad guys have sex and do all the procreating.  The Jedi are not supposed to marry, or presumably have children.  Not ESS, if you ask me.  Anakin gets Natalie Portman; Luke spends two episodes with a perverse and distant crush on his sister Leia, leading only to one chaste kiss.

6. The prophecy was that Anakin (Darth) will restore order and balance to the force.  How true this turns out to be.  But none of the Jedi can begin to understand what this means.  Yes, you have to get rid of the bad guys.  But you also have to get rid of the Jedi.  The Jedi are, after all, the primary supply source and training ground for the bad guys.  Anakin/Darth manages to get rid of both, so he really is the hero of the story.  (It is also interesting which group of “Jedi” Darth kills first, but that would be telling.)

7. At the happy ending of “Return of the Jedi”, the Jedi no longer control the galaxy.  The Jedi Council is not reestablished.  Luke, the closest thing to a Jedi representative left, never becomes a formal Jedi.  He shows no desire to train other Jedi, and probably expects to spend the rest of his life doing voices for children’s cartoons.

8. The core message is that power corrupts, but also that good guys have power too.  Our possible safety lies in our humanity, not in our desires to transcend it or wield strange forces to our advantage.

What did Padme say?: “So this is how liberty dies, to thunderous applause.”

Addendum: By the way, did I mention that the Jedi are genetically superior supermen with “enhanced blood”?  That the rebels’ victory party in Episode IV borrows liberally from Leni Riefenstahl’s “Triumph of the Will”?  And that the much-maligned ewoks make perfect sense as an antidote to Jedi fascism?

Let’s toast the commerce clause

In the twentieth century, the constitution’s commerce clause was twisted to the point of absurdity in the quest to expand government.  It’s rather heartening, therefore, to read that the commerce clause has actually been used appropriately to prevent states from discriminating against in-state and out-of-state shippers of wine.

Professor Bainbridge, of course!, has more.

Terror Alerts, Police and Crime

If you look at a simple correlation between crime per capita and police per capita you get this:
Terroralert

Police cause crime!  Some of the Foucault-inspired may buy into that conclusion but it’s really no surprise that places with a lot of crime have a lot of police.  Estimating the true effect of police and crime from observational data is difficult because police and crime are determined jointly.

Ideally, to estimate the true causal effect of police on crime, we would run an experiment, randomly picking weeks in which we increased police presence and observing the effect on crime.  Experiments like this, however, are expensive and some might say unethical.  If we look carefully, however, we might find natural experiments – times when police presence increased for reasons that are random with respect to crime. 

Jon Klick and I look at just such a natural experiment in a paper published in the most recent JLE, Using Terror Alert Levels to Estimate the Effect of Police on Crime (subs. required, free version).  When the terror alert system kicks up a notch the police in Washington, DC put more police on the streets.  We find that crime in DC drops significiantly during these high-alert periods, especially in the National Mall area where most of the prime terror-targets are located.  Street crimes like auto theft and theft from automobiles show especially large decreases when more police hit the street.  We find no evidence that tourism or other demand side factors account for the decline in crime.

Revolutions (Again)

Jeffrey Rosen’s NYT Magazine piece on possible libertarian Supreme Court Justices was surprisingly reasonable (the photographer, however, must have been a real statist).  It’s funny, however, how frightened the center is of Epstein, Barnett, Greve et al.  Consider this:

…Epstein was promoting a legal philosophy far more radical in its
implications than anything entertained by Antonin Scalia, then, as now,
the court’s most irascible conservative. As Epstein sees it, all
individuals have certain inherent rights and liberties, including
”economic” liberties, like the right to property and, more crucially,
the right to part with it only voluntarily. These rights are violated
any time an individual is deprived of his property without compensation
— when it is stolen, for example, but also when it is subjected to
governmental regulation that reduces its value or when a government
fails to provide greater security in exchange for the property it
seizes.

Can’t you just hear the fear?  ‘Sir, all this talk of "economic" liberties, that is wild, crazy talk.  Irresponsible, I say.  Serious people shouldn’t go around promoting this kind of thing – it’s liable to stir up the population.  Why sir, your views, they reek of revolution.’ 

Let the Dog(s) Out

Operation Falcon, a dragnet put together by the U.S. Marshals and local police agencies, netted 10,000 fugitives last week.  Cool.  But note that that there are millions of unserved arrest warrants.  The Washington Post was one of the few newspapers to get the story right:

Criminal-justice experts said that by apprehending
thousands of fugitives in a matter of days, the operation underscored
the low priority that law enforcement agencies often give to locating
people who have jumped bail, violated parole or otherwise evaded state
and federal courts.

"The dirty little secret is that there usually is not
enough effort and manpower put into apprehension of fugitives," said
David A. Harris, a law professor at the University of Toledo who
studies criminal-justice issues. "Most fugitives are aware of this, and
it makes the system a joke. . . . It’s never been a top priority."

I would add only that the commercial bail system, backed by bounty hunters, does a much better job than the public system in ensuring court appearances and capturing fugitives.  The long arm of the law belongs to the bounty hunter.   

Arrow, Becker, and Levitt on Grokster

How is that for heavyweights?  You can add William Landes, Kevin Murphy, and Steve Shavell — among others — to the list.

Here is their Amicus brief on the Grokster case coming before the Supreme Court.  (Here is a more general list of amicus briefs on the case.)  Their bottom line, however, is general rather than concrete:

They argue that indirect liability often makes economic sense.  If a file-sharing service can distinguish and police illegal files at low cost, that service should not be able to hide behind the 1984 Sony Betamax decision (i.e., the mere existence of non-infringing uses for a technology implies no liability).  Furthermore we should consider whether P2P services offer real benefits above and beyond fully legal alternatives, such as iTunes.  They stress that previous courts have failed to ask these key questions.

I’ve argued similar points myself, but my doubts grow.  I worry we cannot find a standard of indirect liability with clear lines.  Just how easy must it be to monitor illegal behavior and how hard must Grokster try?  Most likely all the variables lie along a relatively smooth continuum.

And who else can be indirectly liable?  File-sharing through iPods, email, blogs, and instant messaging is larger than you think.  36 million Americans admit to having shared files in this manner. 

"All these internet technologies share this common mass-copying capability: e-mail, web servers, web browsers, basic hard drives," said Jason Schultz, an attorney with the Electronic Frontier Foundation, which represents StreamCast Networks. "There’s no principal distinction between (P2P) and other internet technologies in the way it’s designed.

Read more here

Is the question which level of technology can police illegal file sharing and copying most easily?  This might not be Grokster at all, since they have only an indirect link to the downloaded files.  Such a "least cost" approach might result in a monitoring chip put into all hard drives.  Yikes. 

Does Grokster supply any economically useful product that the legitimate services don’t?  Well, how about free files for those who wouldn’t otherwise pay for them?  If we approach the problem in a utilitarian manner, we can’t flinch from this conclusion.

My current best guess is that an economic approach — however correct in general terms — won’t come up with any new solutions we can live with.  We may be stuck with the Sony case after all.

The War on Drugs

Becker and Posner both argue against the War on Drugs.  Becker writes:

After totaling all spending, a study by Kevin Murphy, Steve Cicala, and
myself estimates that the war on drugs is costing the US one way or
another well over $100 billion per year. These estimates do not include
important intangible costs, such as the destructive effects on many
inner city neighborhoods, the use of the American military to fight
drug lords and farmers in Colombia and other nations, or the corrupting
influence of drugs on many governments.

The best economics piece on this issue is Drug War Crimes a short book by Jeffrey Miron published by Independent Institute where I am the director of research.  Miron demonstrates that the war on drugs greatly increases the violent crime rate (just as it rose during alcohol prohibition) and that the policy is not very effective in reducing consumption.

One interesting reason why the drug war reduces consumption less than people imagine is that prohibition reduces some costs.  Drug sellers, for example, do not pay social security taxes for their employees, they do not follow minimum wage laws and they do not obey costly FDA regulations.  On net prices are still pushed up by the threat of prosecution but the lack of taxes and regulations is a countervailing factor.

Tomatoes and the force of law

This last week my home state of New Jersey made the tomato the official state vegetable [NB: this is the same state that named an NJ Turnpike rest stop after Vince Lombardi].  But isn’t the tomato a fruit?  In defense of its action, the state cited an 1887 U.S. Supreme Court ruling that tomatoes were subject to tariffs on vegetables.  Supposedly tomatoes can qualify as a vegetable because they are served with dinner and not as dessert.

Here is the link.  I believe the blog is by Craig Newmark’s daughter, it is worth a look.

Copyrighting Storms

Writing in the Financial Times, James Boyle makes an interesting comparison between how Europe and the U.S. treat government produced data, everything from "ordnance survey maps and weather data, to state-produced texts,
traffic studies and scientific information."

On
one side of the Atlantic, state produced data flows are frequently
viewed as potential revenue sources. They are copyrighted or protected
by database rights. The departments which produce the data often
attempt to make a profit from user-fees, or at least recover their
entire operating costs….The other side of the Atlantic practices a benign form of
information socialism. By law, any text produced by the central
government is free from copyright and passes immediately into the
public domain.

Surprisingly, it’s the US which practices the "benign form of socialism."

Take weather data. The United States makes complete weather data
available to anyone at the cost of reproduction. If the superb
government websites and data feeds aren’t enough, for the price of a
box of blank DVD’s you can have the entire history of weather records
across the continental US. European countries, by contrast, typically
claim government copyright over weather data and often require the
payment of substantial fees. Which approach is better? If I had to
suggest one article on this subject it would be the magisterial study
by Peter Weiss called “Borders in Cyberspace,” published by the
National Academies of Science. Weiss suggests that the US approach
generates far more social wealth. True, the information is initially
provided for free, but a thriving private weather industry has sprung
up which takes the publicly funded data as its raw material and then
adds value to it. The US weather risk management industry, for example,
is ten times bigger than the European one, employing more people,
producing more valuable products, generating more social wealth.
Another study estimates that Europe invests €9.5bn in weather data and
gets approximately €68bn back in economic value – in everything from
more efficient farming and construction decisions, to better holiday
planning – a 7-fold multiplier. The United States, by contrast invests
twice as much – €19bn – but gets back a return of €750bn, a 39-fold
multiplier. Other studies suggest similar patterns in areas ranging
from geo-spatial data to traffic patterns and agriculture. “Free”
information flow is better at priming the pump of economic activity.

Link addded.  Thanks to Paul van Hoek for the pointer.

Why is the Eiffel Tower uglier?

The Eiffel Tower is uglier than ever before; it now has new and garish flashing strobe lights.  And why?

The Eiffel Tower’s likeness had long since been part of the public domain, when in 2003, it was abruptly repossessed by the city of Paris. That’s the year that the SNTE, the company charged with maintaining the tower, adorned it with a distinctive lighting display, copyrighted the design, and in one feel swoop, reclaimed the nighttime image and likeness of the most popular monument on earth. In short: they changed the actual likeness of the tower, and then copyrighted that.

As a result, it’s no longer legal to publish current photographs of the Eiffel Tower at night without permission.

Here is the story.  Here is my previous post on why the French take copyright so seriously.  We can’t blame it all on the French, however, "the cloud" a publicly owned  artwork in Chicago’s Millenium Park is also copyrighted and apparently protected from photographs by security guards.

Honesty about illegal file-sharing

The Supreme Court has been hearing a major case on file-sharing.  Should Grokster and other web-based file-sharing services be held liable for contributory copyright infringement?  Forget about the law, what does the economist say?  Yes "fair use" provisions are excessively stringent, but here are three reasons why I cannot accept the radical anti-copyright position.

1. In ten year’s time, what will happen to the DVD and pay-for-view trades?  BitTorrent allows people to download movies very quickly.  Note that DVDs already account for more than half of Hollywood domestic revenue.  Furthermore the process will be eased when TVs and computers can "talk" to each other more readily.  Yes, I am familiar with Koleman Strumpf’s excellent work showing that illegal file-sharing has not hurt music sales.  But a song download can be a loss leader for an entire CD or a concert tour.  Downloading an entire movie does not prompt a person to spend money in comparable fashion.

2. Perhaps we can make file-sharing services identify (and block) illegally traded files.  After all, the listeners can find the illegal files and verify they have what they wanted.  Grokster, sooner or later, will be able to do the same.  Yes, fully decentralized and "foreign rogue" systems may proliferate, and any identification system will be imperfect.  But this is one way to heed legitimate copyright suits without passing the notorious "Induce Act."

3. I question the almost universal disdain for the "Micky Mouse" copyright extension act.  OK, lengthening the copyright extension does not provide much in the way of favorable incentives.  Who innovates with the expectation of reaping copyright revenues seventy-five years from now?  But this is a corporate rather than an individual issue.  Furthermore economic research indicates that current cash flow is a very good predictor of investment.  So the revenue in fact stimulates additional investment in creative outputs.  If I had my finger on the button, I still would have pushed "no" on the Mickey Mouse extension, if only because of the rule of law.  Privileges of this kind should not be extended repeatedly due to special interest pressures.  But we are fooling ourselves if we deny that the extension will benefit artistic output, at least in the United States.