Liberty on the Rocks™ Denver

A Grassroots Freedom Movement

Could Micropayments Save Newspapers?

ari | October 31, 2009

At last month’s media panel, somebody (I believe Adrienne Russell) mentioned the idea of micropayments for online media content. Such payments might help save the newspaper industry as well as help fund better bloggers.

The idea is that readers would pay a small fee — say a quarter or fifty cents — to read an article online. A popular story that drew a hundred thousand readers could do quite well for a publication.

Consider how the Wall Street Journal presents its news stories. It gives you the headline and the opening sentences, then asks you to subscribe. But I don’t subscribe to that paper, because I rarely want to read one of its news stories (and its opinions are available for free). But, if I could pay a small, one-time fee to read the occasional story, I’d probably pay that paper a few dollars per year. That’s not a lot, but multiplied by a few hundred thousand extra readers it could add up. Indeed, newspapers could offer monthly subscriptions for regular readers as well as micropayments for occasional readers.

At the media panel, Greg Moore of the Denver Post said a couple of things of particular interest to this issue. First, he said that newspapers might have to print less frequently. Second, readers would have to pay for online content, eventually, for newspapers to survive and thrive. I can envision a newspaper that goes to press, say, Wednesday, Friday, and Sunday. The print edition would be stuffed with ads, comics, classifieds, crosswords — stuff people like to touch and feel. They would be big, perhaps nearly as many pages as seven days runs now, so subscription rates could at least stay even while production and distribution costs dropped dramatically. This would be the answer to traditionalists, who actually enjoy getting their hands dirty reading the paper. (I would as soon eat dinosaur eggs for breakfast.)

Under such a scheme, the Post would raise revenue from print and online ads, print and online subscriptions, online only subscriptions, and micropayments for individual stories. Publications that used micropayments would probably want to make some significant portion of its content available for free.

Bloggers (the kind with actual readers) and strictly online publications might also be able to employ micropayments for more ambitious stories.

The key to micropayments, of course, is to make them easy. A PayPal account might get the job done, or perhaps PayPal could adapt its existing program to make micropayments easier. Most people aren’t going to pay a small fee to read an article unless it’s as easy as clicking a button or maybe two.

One publication that has already combined ads, micropayments, and subscriptions is The Objective Standard. The publication shows the first part of an article online for no cost. To read the entire article, one must subscribe or “Purchase a PDF of this article” for, in this case, $4.95. (Micropayments for journal articles or specialty articles can be higher than for regular newspaper stories.)

The more I think about it, the more I love the idea of micropayments. Don’t saddle me with a long-term commitment. I have enough of those. Don’t litter my screen with pop ups and flashing lights trying to sell me crap. (That said, a third option to a subscription or a micropayment might be to watch, say, a thirty second video advertising some product before reading the article. I notice that Fox already does this for online video.) Just give me the option of paying a small fee to read something that interests me.

This article has been brought to you at no cost by FreeColorado.com.

“Federal money?”

David K. Williams, Jr. | October 31, 2009

Tina Griego’s column in today’s Denver Post, Poverty task force a study in dedication, shows how easily all of us have bought into the government scam.
She writes
[Colorado state Representative Ken] Summers intends to sponsor a bill seeking greater outreach to people who are eligible for food stamps but not receiving them. It would encourage partnerships with nonprofits in order to draw down federal money.

What is “federal money?” It is money taken from you, sent to Washington where they take a cut to pay themselves, then sent back to you.
“Federal money” is your money.
The scam is that the government has convinced us that it is their money.

We can just print more money

David K. Williams, Jr. | October 31, 2009

From today’s Denver Post

The federal government reported Friday that Colorado created or saved 8,094 jobs through grants, loans and contracts funded by the American Recovery and Reinvestment Act.
Problem is, the figure is wrong, according to an analysis of recovery.gov data by The Denver Post.
For example,
Although a Colorado Springs Head Start program reported it had created or preserved 269 jobs, the real number was three, according to an interview with a program manager.

But do not worry. Those figures on the cost of nationalized health care are sure to be accurate.
Furthermore,
. . . figures for stimulus awards in Colorado, as with an earlier data release, are inconsistent, inaccurate or incomplete so far.

But do not worry. The data in your medical records under nationalized health care will be fine.
“You’ve got compliance issues and you have data-quality issues,” said Michael Balsam, an executive with Onvia, a Seattle company tracking stimulus spending.
But do not worry. These issues of basic competence will not affect nationalized health care.
None of this matters, however, because there is an upside!
Some economists and researchers said the government deserves credit for passing the stimulus package, no matter what numbers eventually are documented.
“We’re down 100,000 jobs compared to a year ago, so if this effort has done anything to save some jobs, to keep some people working, that’s good, that’s the upside,” said Gary Horvath, marketing analyst at the Colorado Leeds School of Business.
Mr. Horvath now carries the banner for the fine academic tradition of the University of Colorado most recently carried by Ward Churchill.
Mr. Horvath uses the “if it saves just one person, it’s all worth it” logic. This line of thought results in the conclusion, reached here by Horvath, is that no matter the cost, if ANY good arises, then it was money well spent.
So, when the Pentagon buys a $5 hammer for $1000, there is an upside. The Pentagon got its hammer.
And we get nailed.

On risky Wall Street investments

David K. Williams, Jr. | October 31, 2009

Most people should not attempt walking across a high-wire.

However, if a net is placed under the high-wire, the downside to failure is almost nil.
Therefore, people will be more likely to try something they should not attempt and otherwise would not.

An example of corporatism

David K. Williams, Jr. | October 30, 2009

This Colorado statute is a perfect example of corporatism.

How much do you want to bet that who ever lobbied for this program had a fleet of old trucks ready to be retired; and was planning on buying a new fleet that qualifies for this government subsidy… er, I mean “qualifies to take this money out of your bank account.”

———————————————————–
C.R.S. 42-1-304. Green truck grant program – created.

(1) There is hereby created in the governor’s energy office the green truck grant program to provide grants to qualified recipients for reductions in truck emissions and energy usage by:

(a)

(I) Reimbursements of twenty-five percent, not to exceed fifty thousand dollars to a qualified recipient, of the overall cost incurred by a qualified recipient in purchasing or installing fuel-efficient technologies and emission-control devices approved by the United States environmental protection agency’s smartway transport partnership program, or any successor program, to reduce fuel consumption and emissions of greenhouse gases and other harmful air pollutants from trucks.
(II) The total of all reimbursements issued by the office to qualified recipients pursuant to subparagraph (I) of this paragraph (a) shall not exceed five hundred thousand dollars in a fiscal year.

(b)

(I) Providing grants of up to five thousand dollars per qualified recipient for the retirement and scrapping of a 1989 or older model year truck that is:

(A) Documented to have been in use for at least ten thousand miles during the calendar year preceding the qualified recipient’s application for the grant; and
(B) Donated to an established auto parts recycler, as defined in section 42-4-2201 (1), or a scrap metal recycler, that operates pursuant to all laws, rules, and regulations of the state and the United States environmental protection agency regarding recycling.

(II) The total of all grants issued by the office to qualified recipients pursuant to subparagraph (I) of this paragraph (b) shall not exceed two hundred fifty thousand dollars in a fiscal year.

(2)

(a) The office shall administer the grant program and shall award reimbursements and grants as provided in this part 3. Reimbursements and grants shall be paid out of the green truck grant program fund created in section 42-1-305.
(b) The office shall adopt policies for the implementation of the green truck grant program. At a minimum, the policies shall specify the procedures for applying for a reimbursement or grant, the form of the reimbursement or grant application, and the information to be provided by the applicant.
(c) The office shall review each reimbursement or grant application received from a qualified recipient and shall make a determination as to whether the reimbursement or grant should be awarded and, subject to the limitations in paragraphs (a) and (b) of subsection (1) of this section, the amount of the reimbursement or grant. If the office determines an application is missing any information required to be included with the application, the office may contact the applicant to obtain the missing information.

(3) Nothing in this section shall be construed to prohibit or restrict the ability of an auto parts recycler, as defined in section 42-4-2201 (1), from recycling any part of a scrapped vehicle for use as a replacement part.

Source: L. 2009: Entire part added, (HB 09-1298), ch. 417, p. 2315, § 3, effective June 4.

Krugman Smears SuperFreakonomics

ari | October 29, 2009

Steven Levitt and Stephen Dubner certainly don’t need my help defending their new book SuperFreakonomics. They’re doing a great job of it themselves. However, I do want to draw my readers’ attention to the debate surrounding the book and recommend the book itself.

The first thing to note about the book is that it contains five chapters plus an epilogue (about monkeys). The main text of the book runs through page 216 (while notes and such run through page 270). The fifth chapter mostly concerns climate change, though it also rambles into topics such as auto thefts and AIDS, and it runs from page 165 to 209. The book covers a wide range of topics from prostitution to hospital sanitation. But the part about climate change is what has the critics riled up.

Though the debate has since seen more developments, I want to focus on Paul Krugman’s attack on the book in his blog post, Superfreakonomics on climate, part 1, published October 17.

Krugman claims that “the first five pages” of the chapter on climate change “are enough to discredit the whole thing… [b]ecause they grossly misrepresent other peoples’ research, in both climate science and economics.”

The chapter opens with the “global cooling” story — the claim that 30 years ago there was a scientific consensus that the planet was cooling, comparable to the current consensus that it’s warming.

Um, no. Real Climate has the takedown. What you had in the 70s was a few scientists advancing the cooling hypothesis, and a few popular media stories hyping their suggestions. To the extent that there was a consensus, it was that there wasn’t much evidence for anything, and more research was needed.

Krugman puts much more trust in the politically subsidized computer models projecting human-caused global warming than I do, but he legitimately points out that global warming now has much more scientific support than global cooling did decades ago. Uncle.

So where do Levitt and Dubner claim that global cooling was the consensus in the 1970s? They don’t say that. Krugman just made that up. Talk about grossly misrepresenting other people’s research.

What Levitt and Dubner do is quote two old articles about global cooling to begin their chapter. Through the course of their chapter, Levitt and Dubner make precisely the same point that so excites Krugman: global cooling soon lost support whereas global warming now has widespread scientific support.

On to the next point. On page 169, SuperFreakonomics states, “The economist Martin Weitzman analyzed the best available climate models and concluded that the future holds a 5 percent chance of a terrible-case scenario — a rise of more than 10 degrees Celsius.”

Krugman replies,

Yikes. I read Weitzman’s paper, and have corresponded with him on the subject — and it’s making exactly the opposite of the point they’re implying it makes. Weitzman’s argument is that uncertainty about the extent of global warming makes the case for drastic action stronger, not weaker. … Again, we’re not even getting into substance — just the basic issue of representing correctly what other people said.

So where do Levitt and Dubner imply that Weitzman’s paper urges weaker action on global warming? They don’t imply that. Krugman just made that up. Because it’s “just the basic issue of representing correctly what other people said.”

Indeed, just two paragraphs later, Levitt and Dubner quote another economist who favors spending over a trillion dollars per year to address the problem. Perhaps that’s not sufficiently “strong” action for Krugman, but it seems pretty strong to me.

Krugman more recently complains that Levitt and Dubner don’t include arguments from Weitzman’s paper that Krugman wishes they had included. But so what? Krugman is welcome to write his own book on climate change. Levitt and Dubner use the information from Weitzman fairly to set up their question, “So how should we place a value on this relatively small chance of worldwide catastrophe?”

Levitt and Dubner’s broader point is that it’s far cheaper and much faster-acting to geoengineer cooler temperatures than it is to dramatically curb carbon emissions. Read the book for details, or read Levitt’s post on the matter.

You might also want to check out replies from Levitt and Dubner to other environmentalist critics.

Our authors do raise an interesting question: given that geoengineering seems like it would solve potential problems of global warming much faster and much cheaper, why are most environmentalists so dismissive of the idea? I think my dad and I provide the answer in our recent op-ed: environmentalists “see untouched nature as intrinsically valuable. They have no problem with natural climate change, smoke, or chemicals. They just dislike anything that people do to alter nature.”

Environmentalists favor carbon reduction because that reduces human interaction with the rest of the environment. Environmentalists oppose geoengineering because it increases human interaction with the rest of the environment. And that preference has exactly no basis in science.

In the end, the mere fact that Paul Krugman blasts SuperFreakonomics should interest readers in buying and reading the book.

* * *

Which is not to say that the book is perfect. Apparently I’m the outlier in reading the book from the beginning, but my issue with it arose much earlier, in the introduction, pages 2 and 3.

Levitt and Dubner write that “1 of every 140 miles is driven drunk, or 21 billion miles each year.” The “total number of people killed in alcohol-related traffic accidents each year” is “about 13,000.”

Here comes the sketchy part: “The average American walks about a half-mile per day outside the home or workplace. … If we assume that 1 of every 140 of those miles are walked drunk — the same proportion of miles that are driven drunk — then 307 million miles are walked drunk each year.”

The upshot is that, given “more than 1,000 drunk pedestrians die in traffic accidents,” it’s more dangerous to walk drunk than it is to drive drunk.

But whey should we “assume that 1 of every 140 of those miles are walked drunk?” The notes offer no clue about this. Offhand it seems like a wildly implausible assumption.

First, a lot of people go on long walks every day, and typically people don’t get drunk before they exercise. So that skews the averages. Second, when people are rip-roaring drunk, it can seem very hard to walk down the street but very easy to turn the ignition key. So I suspect that the fraction of miles walked drunk is much lower than what our authors assume — which bolsters their point that drunk walking is dangerous.

Regardless of the exact risks, as someone who used to abuse alcohol, I can confirm the author’s broader point that getting drunk can be generally dangerous, and traffic fatalities hardly exhaust the list of potential harms.

Rosen 0, Longo 0

ari | October 28, 2009

Some readers may have noticed that my blog posts feed into the People’s Press Collective. How this process works is a mystery to me, and I’m not even sure whether my posts automatically feed into it or whether they must pass through a human gatekeeper. At any rate, I think it’s a useful site, and I like all the contributers I know. That said, I disagree with the occasional post there.

A recent post by “AnCap” — a.k.a. Justin Longo of Complete Colorado (and I’m not spilling any beans here) — is quite interesting even though fundamentally wrong.

Longo’s main point is that radio host Mike Rosen often compromises free-market principles in the name of “reality.” I can attest this is true. Rosen often has expressed a belief that what’s good in theory may not work in practice. Therefore, he often jettisons principles for the sake of pragmatism. For example, Longo notes, Rosen supported the TARP “stimulus” corporate welfare. As Longo paraphrases, Rosen is “still reluctantly for TARP because doing nothing would have been far worse.”

Longo is correct that Rosen’s position violates free-market principles. Moreover, Rosen is simply wrong: “doing nothing” would have been far better than forcibly transferring wealth from the productive economy to political boondoggles. Robert Higgs makes this case.

The more fundamental point that Rosen misses is that restoring a truly free market would be a lot better than “doing nothing.” Advocates of free markets are not for the status quo: we are for replacing today’s mixed economy with liberty. As my dad and I reviewed, politicians caused the mortgage meltdown. Since then they have been worsening the recession and delaying recovery through massive wealth transfers, new and capricious economic controls, and continuous threats of more of the same.

As Longo reviews, Rosen believes that free market reforms today are “not on the table.” What Rosen neglects to notice is that what’s on the table is what we put on the table. Free market reforms are not on the table today because practically all Republicans have busily renounced free markets in favor of more political controls. But that’s not quite true; despite the Republican war on free markets, some free market reforms are on the table thanks to the efforts of a small but dedicated few devoted to liberty, such as the idea to expand Health Savings Accounts. (This reform appears to be hidden under a napkin, but at least it’s on the table.)

True, cultural changes can be long and arduous. But we can’t achieve positive change unless we fight for it. Just look at what the abolitionists achieved in a span of years. Rosen creates a self-fulfilling prophesy by presuming that free market reforms are off the table. Pragmatists content themselves to gnaw on the scraps tossed to them by those with the ambition to take a seat at the table.

Yet Longo’s deeper critique of Rosen illustrates precisely what’s wrong with the libertarian movement. Rosen plays the “pragmatic libertarian” to Longo’s “dogmatic libertarian.” This is precisely the problem I observed in the Libertarian Party a few years ago — and the reason I left the party and no longer count myself a libertarian.

Longo’s argument is worth examining:

If stopping an employee from negotiating a mutually agreeable wage with an employer is wrong because third parties do not have the right to infringe on voluntary transactions, then one conclusion we can draw is that the minimum wage is immoral. Now take that principle and apply it universally, to all parties, at all times, and to all contracts, decisions, and transactions. Think about it. Do you not like the outcomes you get in some scenarios? Too bad. Those are the consequences you must deal with when principles are applied universally.

Is it wrong to kidnap another human being against their will? Yes? Okay, now apply that principle to all parties, at all times, ever in history? Oh no! You mean we cannot conscript soldiers during war? You mean we can’t force people to sit on juries they don’t want to? Too bad. Those are the consequences you must deal with in order to claim you are principled.

I realize that applying basic principles universally is scary, as some of the outcomes we reach are sometimes outcomes we are uncomfortable with. However, applying principles universally is an important thought experiment that allows us to see whether we really believe in something or we don’t.

Let me close by suggesting just two principles I live by and apply universally. You are more than welcome to run millions of thought experiments in order to reach as many conclusions as possible with these two — warning: some outcomes will scare you.

First principle: You own yourself. No one else has a higher claim on you than you do.

Second principle: It is ALWAYS wrong to initiate force on someone else. (notice the use of the word initiate. Self-defense is absolutely moral).

As you can see, the second principle is really just a logical extension of the first principle. In my view, all we need is the first principle, as everything else is logically deduced from principle one.

Please apply my two principles universally — to all people at all times, ever in history. You will then see why I believe what I believe and how I reached my own conclusions over the years.

To Longo, it is simply “too bad” if libertarian theory, say, causes a death or the destruction of the planet. But obviously he doesn’t really believe that “principles” should be completely detached from consequences; he suggests in his final line that, on net, looking at “all people at all times, ever in history,” the principles he favors achieve the best results. Is that not why he believes what he believes?

The problem is that Longo’s principles aren’t principles at all; they are statements of dogma. A principle is a guide to action integrating vast knowledge about the real world. If a principle doesn’t work in the real world, that means it’s false. Contra Rosen, a principle is such precisely because it is tied to the real world. There is no split between theory and practice — provided that one’s theory is grounded in reality and one’s practice follows sound principles.

Longo claims that “everything else is logically deduced from principle one,” which is, “You own yourself. No one else has a higher claim on you than you do.”

Not only can very little be “deduced” from this claim, but the claim itself is, without principled grounding, completely arbitrary and implausible.

If we look at the course of human history, practically everyone has flat-our rejected the notion that “no one else has a higher claim on you than you do.” Most people have accepted the authority of a king, a priest or deity, a democracy, or some proclaimed moral leader.

So where does Longo’s “first principle” come from? It is certainly not intuitively obvious, it is not written in our genes, it is not written in the heavens.

For libertarians, this “first principle” — this fundamental dogma — is pulled out of nowhere. And that is the most basic problem with libertarianism.

Now, I certainly agree with the principle that a person properly directs the course of his own life. But this is a moral proposition that can only be grounded in the facts of human life and the nature of social interaction. One must prove it and determine its context, not just invoke it as some magical formula. (Proving it takes a lot of hard work that I am not prepared to undertake here, though I will note that in my view Ayn Rand made the most progress in developing the principle.)

But the statement “you own yourself” is not some sort of axiom. Indeed, it cannot possibly be an axiom. Ownership arises, conceptually, in the context of property, which arises only in a social setting. One could not even reach the idea of owning one’s self without the idea of owning some bit of property (a tool, a bowl of food, whatever). Why should I think that I own the stone ax that I made? What if the tribal leader thanks me for creating the ax for the tribe and graciously hands it over to the canoe carver? A lot has to go on conceptually to get to the point where I can think about owning some piece of property. And, as I’ve noted in brief, Leonard “Peikoff argues that ownership properly applies to external objects, and that ownership of one’s self doesn’t make sense.”

But let’s assume that we’ve developed some idea of self-ownership. What deductively follows from that? Practically nothing.

Consider. If I “own myself,” and “no one else has a higher claim” on me, doesn’t that mean I get to control my own actions? Fine. I want that nice-looking TV in the window, so I smash the window and take the TV. The libertarian will reply that the owner of the TV also owns himself, so I have violated his rights. But why should I give a rip about that, if self-ownership is the highest axiom? Go ahead and go own yourself; all I’m doing is taking is taking this TV. To get anywhere with this, we need a complex theory of property rights, and this is not a matter of spinning out deductions from some alleged axiom. We have to say something about why property rights are necessary for human flourishing and why we should adopt one particular theory of property rights instead of some alternative one (such as one in which a king decides who controls what property).

“Second principle: It is ALWAYS wrong to initiate force on someone else.”

Or, as one libertarian put the matter:

Children who willingly participate in sexual acts have the right to make that decision as well, even if it’s distasteful to us personally. Some children will make poor choices just as some adults do in smoking and drinking to excess. When we outlaw child pornography, the prices paid for child performers rise, increasing the incentives for parents to use children against their will.

In fact, some libertarians have argued that children have a “self-ownership” right to have sex with adults, which is absolutely abhorrent. The quote above seems to sanction child pornography, which is disgusting and despicable. With “principles” like this, who can blame those who “pragmatically” stray from the “principles?”

The general problem is that what counts as force, and what counts as the initiation of force, depends entirely upon our theory of property rights, which again depends on complex moral and legal theories.

Saner libertarians argue that parents may, after all, use force in some contexts when it comes to their children. For instance, if Johnny is playing in the street and refuses to move, a parent may properly pick Johnny up and put him in a safer place. Unquestionably this is the use of force. Whether it is the “initiation of force” depends on which ad hoc rationalization the libertarian confuses for a deduction.

To hint at the real solution, the concept of rights (including property rights) arises in a particular context: the context of rational (as opposed to insane) adults capable of peaceful interaction with others. But again this is the end result of a complex chain of theoretical knowledge, not some first “principle” pulled out of the sky.

Let us extend another of Longo’s examples. He argues that employers and employees should be able to voluntarily agree to a wage, and I quite agree in the normal context. But what if somebody decides to sell himself into lifelong slavery for a supply of drugs or a sum of money? Must we refrain from intervening in that transaction?

The sane libertarian will reply that contract law depends on certain conditions, and that selling one’s self into lifelong slavery could not possibly meet those conditions. Regardless, the conclusion does not simply spin itself out deductively. Principles must integrate a wide range of facts about the human condition, and they can only be applied by examining the particular facts of the case at hand in light of the broader facts identified by the principle.

Ultimately Rosen and Longo make the same error of detaching principles from practice. Rosen abandons principles to achieve what allegedly works. Longo says we must stick to “principles” even when they are scary in practice. However you flip the libertarian coin, you get ungrounded theory on one side and unguided practice on the other. The dogmatists and the pragmatists clash as codependents.

Where I think Longo is headed is that consistently applying principles can create short-term and narrowly defined problems. But the far more important insight is that properly derived principles are absolutely essential for a person’s success in life. Exercise might be momentarily unpleasant, but it contributes to general health. That union of theory and practice cannot come from libertarian dogma disguised as “first principles.” Obviously it cannot come from the pragmatic rejection of principles. It can come only from a proper understanding of what principles are, why sound principles necessarily work, and why successful action must be guided by principles.

Obama Joker Face (Parody) video

David K. Williams, Jr. | October 28, 2009

Seriously. This is awesome. Put together by El Presidente y hermana.

I’m proud to know these people.

(And for those not on the cutting edge of popular culture like some of us, this is the pop song being parodied.)

Principles are Universal, not Convenient.

David K. Williams, Jr. | October 28, 2009

Justin Longo, Executive Director of the Libertarian Party of Colorado, nails it in this PeoplesPressCollective post: “Principles are Universal, not Convenient.”

And where do subsidies come from?

David K. Williams, Jr. | October 27, 2009

The front page of today’s Denver Post announces “City lands solar plant – The world’s top maker of inverters will employ about 300 in Stapleton.”

An accompanying chart lists the government subsidies that helped lure the company.
It reads: “SMA Solar Technology should receive about $3.6 million, possibly more, in incentives for locating its new manufacturing plant in Denver.”
If the Post wished to be more accurate, it would read “SMA Solar Technology should receive about $3.6 million, possibly more, from your paycheck and others like you for locating its new manufacturing plant in Denver.”