Post Economics

CC6+

Wednesday, December 17th, 2008

December 16 marked six years since the release of the first Creative Commons licenses. Most of the celebrations around the world have already taken place or are going on right now, though San Francisco’s is on December 18. (For CC history before 2002-12-16, see video of a panel recorded a few days ago featuring two of CC’s founding board members and first executive director or read the book Viral Spiral, available early next year, though my favorite is this email.)

I’ve worked for CC since April, 2003, though as I say in the header of this blog, I don’t represent any organization here. However, I will use this space to ask for your support of my and others’ work at CC. We’re nearing the end of our fourth annual fall public fundraising campaign and about halfway to our goal of raising US$500,000. We really need your support — past campaigns have closed out with large corporate contributions, though one has to be less optimistic about those given the financial meltdown and widespread cutbacks. Over the longer term we need to steadily decrease reliance on large grants from visionary foundations, which still contribute the majority of our funding.

Sadly I have nothing to satisfy a futarchist donor, but take my sticking around as a small indicator that investing in Creative Commons is a highly leveraged way to create a good future. A few concrete examples follow.

became a W3C Recommendation on October 14, the culmination of a 4+ year effort to integrate the Semantic Web and the Web that everyone uses. There were several important contributors, but I’m certain that it would have taken much longer (possibly never) or produced a much less useful result without CC’s leadership (our motivation was first to describe CC-licensed works on the web, but we’re also now using RDFa as infrastructure for building decoupled web applications and as part of a strategy to make all scientific research available and queryable as a giant database). For a pop version (barely mentioning any specific technology) of why making the web semantic is significant, watch Kevin Kelly on the next 5,000 days of the web.

Wikipedia seems to be on a path to migrating to using the CC BY-SA license, clearing up a major legal interoperability problem resulting from Wikipedia starting before CC launched, when there was no really appropriate license for the project. The GNU FDL, which is now Wikipedia’s (and most other Wikimedia Foundation Projects’) primary license, and CC BY-SA are both copyleft licenses (altered works must be published under the same copyleft license, except when not restricted by copyright), and incompatible widely used copyleft licenses are kryptonite to the efficacy of copyleft. If this migration happens, it will increase the impact of Wikipedia, Creative Commons, free culture, and the larger movement for free-as-in-freedom on the world and on each other, all for the good. While this has basically been a six year effort on the part of CC, FSF, and the Wikimedia Foundation, there’s a good chance that without CC, a worse (fragmented, at least) copyleft landscape for creative works would result. Perhaps not so coincidentally, I like to point out that since CC launched, there has been negative in the creative works space, the opposite of the case in the software world.

Retroactive copyright extension cripples the public domain, but there are relatively unexplored options for increasing the effective size of the public domain — instruments to increase certainty and findability of works in the public domain, to enable works not in the public domain to be effectively as close as possible, and to keep facts in the public domain. CC is pursuing all three projects, worldwide. I don’t think any other organization is placed to tackle all of these thorny problems comprehensively. The public domain is not only tremendously important for culture and science, but the only aesthetically pleasing concept in the realm of intellectual protectionism (because it isn’t) — sorry, copyleft and other public licensing concepts are just necessary hacks. (I already said I’m giving my opinion here, right?)

CC is doing much more, but the above are a few examples where it is fairly easy to see its delta. CC’s Science Commons and ccLearn divisions provide several more.

I would see CC as a wild success if all it ever accomplished was to provide a counterexample to be used by those who fight against efforts to cripple digital technologies in the interest of protecting ice delivery jobs, because such crippling harms science and education (against these massive drivers of human improvement, it’s hard to care about marginal cultural production at all), but I think we’re on the way to accomplishing much more, which is rather amazing.

More abstractly, I think the role of creating “commons” (what CC does and free/open source software are examples) in nudging the future in a good direction (both discouraging bad outcomes and encouraging good ones) is horribly underappreciated. There are a bunch of angles to explore this from, a few of which I’ve sketched.

While CC has some pretty compelling and visible accomplishments, my guess is that most of the direct benefits of its projects (legal, technical, and otherwise) may be thought of in terms of lowering transaction costs. My guess is those benefits are huge, but almost never perceived. So it would be smart and good to engage in a visible transaction — contribute to CC’s annual fundraising campaign.

Futarchist Voter Guide

Sunday, November 2nd, 2008

Four years ago I used play money contracts traded at the Foresight Exchange to provide a Futarchist Voter Guide (though I didn’t call it that). This U.S. election cycle relevant real money contracts are traded on Intrade.

The first set was instigated and subsidized by Peter McCluskey. Two have attracted a fair amount of interest and seem to be informative. They have consistently indicated that a Democrat will result in a smaller (but still approaching US$1 trillion!) increase in the US federal government debt over one year and a smaller number of US troops in Iraq. (The others, regarding the movement of oil and interest rate futures on election day, have shown no difference between expected election outcomes.)


Above: Expected increase in US Government debt between 30 Sep 2010 and 30 Sep 2011 if party wins US presidency.


Above: Number of US troops in Iraq on 30 June 2010 if party wins US presidency.

Note that briefly in early September the contracts indicate lower debt and fewer troops in Iraq with a Republican candidate. I suspect this is due to McCain’s brief surge following the GOP convention — the implied outcomes above depend on election winner contracts, and with a much lower volume, presumably take awhile to fully respond to rapid shifts in election outcome expectations.

A second set of relevant contracts instigated by Polimetrics have unfortunately attracted almost no trading and probably tell us nothing. Note however they also reflect the brief McCain surge, at which point they implied a greater than 100% chance of growth, low unemployment, and lower crime with a McCain win. They have since reverted to showing essentially no difference between Obama and McCain. Note that each series only starts when there have been trades.


Above: Percent chance that economic growth averages 2.5% or more for 2009-2011 if individual wins US presidency.


Above: Percent chance the US unemployment rate is less than 5.0% at the end of 2011 if individual wins US presidency.


Above: Percent chance the number of violent crimes committed in 2010 is lower than the number of violent crimes committed in 2007 if individual wins US presidency.

Peter McCluskey has automatically updated pages showing implied outcomes for each set of contracts given their latest trades.

(I intended to make a page with frequently updating graphs, but got lazy when Peter published the aforementioned pages, and only collected the data until now, which is available in a spreadsheet.)

Addendum 20081103: See a slightly expanded version of this post at Midas Oracle.

Another trillion dollar fraud

Thursday, September 25th, 2008

Glenn Greenwald’s September 20 piece on the decision processes leading to the Iraq invasion and the current bailout is right on:

I don’t pretend to know anywhere near enough — in terms of either raw information or expertise — in order to opine on the necessity or lack thereof of The Latest Plan in terms of whether the alternatives are worse. But what I do know is that an injustice so grave and extreme that it defies words is taking place; that the greatest beneficiaries are those who are most culpable; and that the same hopelessly broken and deeply rotted institutions and elite class that gave rise to all of this (and so much more) are the very ones that are — yet again — being blindly entrusted to solve this.

Of course the non-financial toll of the Terror War makes it a far greater tragedy, but the financial tab of each will be of the same order of magnitude — US$trillions.

Although the US$0.7 trillion number being cited is apparently made up, Barry Ritholtz’s guess that it could end up costing US$1.5 trillion is entirely plausible, given the systematic underestimation by politicians of wars and public works. Ritholtz’s upcoming book on bailouts will presumably have data on the misunderestimated (really) cost of bailouts. Watch his brief WSJ video interview or on his own blog.

Stop the bailout, which will only prolong the pain and . Instead take this “crisis” as an opportunity to eliminate all of the various politically imposed causes of expensive housing.

If the rent seeking dinosaurs of finance die I look forward to new mortgage products designed to hedge risk rather than play chicken with politicians (see beginning of post for how well that turns out). Incidentally, see a recent post on what current housing futures say.

Free (and gratis) software vs. 25,000 cops

Sunday, July 20th, 2008

I’ve mentioned before that free software and its ilk decreases opportunity for taxation and regulation. Tim Lee wrote on the same topic a couple months ago. So I’m slightly pleased to see the argument endorsed by the Business Software Alliance, as told by Russell McOrmond (emphasis added to all quotes below):

The claims in the recent press release included the following:

Software piracy also has ripple effects in local communities.  The lost revenues to the wider group of software distributors and service providers ($11.4 billion) would have been enough to hire 54,000 high tech industry workers, while the lost state and local tax revenues ($1.7 billion) would have been enough to build 100 middle schools or 10,800 affordable housing units, or hire nearly 25,000 experienced police officers.

Of course the BSA’s concern for tax revenues is disingenuous, in a totally unsurprising fashion:

I guess any money not paid to BSA members just disappears and is not spent on other things in the economy that also involve jobs and taxes. In the real world we know that money not spent on software will more likely be spent on other things which are taxed the same — or even higher, given how BSA likes to also lobby to get software taxed at a lower rate than other products or services.

McOrmond also makes a slightly surprising claim about the BSA’s studies that I’d love to have verification of:

I know that people choosing legally lower cost software such as FLOSS are included as “piracy” in these studies. I guess my supporting FLOSS (both commercially and as an individual) could be blamed for their not being enough money to adequately equip the Canadian military in Afghanistan. I guess this makes me a terrorist sympathizer, by the BSA “logic”.

Regardless of whether FLOSS is counted as “piracy” in studies, the logic that it doesn’t directly facilitate the collection of taxes to fund military (or state schools, housing, or police) is pretty unassailable. Of course it could reduce costs and increase quality for each of these functions, as for anyone else.

Underprivileged Americans

Friday, June 6th, 2008

Keith Wolfe, Global Mobility Manager (cool title) writes on the Google Policy Blog:

Google hires employees based on skills and qualifications, not on nationality.

Great, Google doesn’t have an apartheid hiring policy. They aren’t actively doing evil. So they’re in a similar camp with South African businesses who didn’t want to hire based on race, but failed to stop Apartheid. Unfortunately, Google doesn’t mind pandering to neanderthals who think Amurricans deserve some kind of advantage:

Other commenters suggested that Google should fund education for underprivileged American students, to better prepare American students to fill technical jobs. We agree

Underprivileged Americans (by which they certainly and unfortunately mean U.S. citizens)? Please.

Google also says the cap on H-1B visas is “artificially low.” More pandering. Any cap at all is “artificial”, as is any limit at all on the legal ability of any human from working anywhere they’d like to for a willing employer.

Global mobility with no artificial restraints — abolish international apartheid. Surely Google can take a stronger stand than mine owners in South Africa did a century ago.

So, how could programmers make a living?

Saturday, April 12th, 2008

Richard Stallman in Gnu’s Bulletin Vol. 1 No. 1, February 1986:

There are plenty of ways that programmers could make a living without selling the right to use a program. This way is customary now because it brings programmers and businessmen the most money, not because it is the only way to make a living. It is easy to find other ways if you want to find them. Here are a number of examples.

A manufacturer introducing a new computer will pay for the porting of operating systems onto the new hardware.

The sale of teaching, hand-holding and maintenance services could also employ programmers.

People with new ideas could distribute programs as freeware, asking for donations from satisfied users, or selling hand-holding services. I have met people who are already working this way successfully.

Users with related needs can form users’ groups, and pay dues. A group would contract with programming companies to write programs that the group’s members would like to use.

In the intervening twentysomething years much practical experience has been gained, evidenced by large businesses employing many programmers following these models. Well, except for the last one, which has turned out to be insignificant so far, though perhaps there remains lots of experimentation before it plays out.

What the above misses is that most software is not created for licensing (commercial or public) and most programmers’ jobs do not depend on licensing, much as most musicians are not in the pay of the recorded music distribution business.

Commoditizing the cloud

Wednesday, April 9th, 2008

Doug Cutting on Cloud: commodity or proprietary?:

As we shift applications to the cloud, do we want our code to remain vendor-neutral? Or would we rather work in silos, where some folks build things to run in the Google cloud, some for the Amazon cloud, and others for the Microsoft cloud? Once an application becomes sufficiently complex, moving it from one cloud to another becomes difficult, placing folks at the mercy of their cloud provider.

I think most would prefer not to be locked-in, that cloud providers instead sold commodity services. But how can we ensure that?

If we develop standard, non-proprietary cloud APIs with open-source implementations, then cloud providers can deploy these and compete on price, availability, performance, etc., giving developers usable alternatives.

That’s exactly right. Cloud providers (selling virtualized cpu and storage) are analogous to hardware vendors. We’re in the pre-PC era, when a developer must write to a proprietary platform, and if one wants to switch vendors, one must port the application.

But such APIs won’t be developed by the cloud providers. They have every incentive to develop proprietary APIs in order to lock folks into their services. Good open-source implementations will only come about if the community makes them a priority and builds them.

I think this is a little too pessimistic. Early leaders may have plenty of incentive to create lockin, but commoditization is another viable business model, one that could even be driven by a heretofore leading proprietary vendor, e.g., the IBM PC, or Microsoft-Yahoo!

Of course the community should care and build the necessary infrastructure so that it is available to enable a potential large cloud provider to pursue the commoditization route and to provide an alternative so long as no such entity steps forward.

Cutting has been working on key parts of the necessary infrastructure; read the rest of his post for more.

MIN US$750k for NIN

Tuesday, March 4th, 2008

The $300 “ultra deluxe edition” of , limited to 2500 copies, sold out in a couple days (I believe released Sunday, no longer available this morning). There are some manufacturing costs, but they don’t appear to be using any precious materials. So if an artist typically makes $1.60 on a $15.99 CD sale, profit from sales of the limited edition already matches profit from a CD selling hundreds of thousands of copies.

Then there are non-limited sales of a $75 merely “deluxe edition”, $10 CD, and $5 download, and whatever other products NIN comes up with around Ghosts.

The ultra deluxe success seems to me to validate the encouragement by some to pursue large revenue from rabid fans and collectors willing and able to pay for personalization, authenticity, embodiment, etc., rather than attempting to suppress zero cost distribution to the masses.

Speaking of distribution, click on the magnet to search for a fully legal P2P download of Ghosts, assuming you have the right filesharing software installed.

nin_ghosts_I-IV_mp3.zip (283.7 MB)

SanFran MusicTech Summit

Monday, February 25th, 2008

At today’s very well produced SanFran MusicTech Summit on a panel called “The Paradise of Infinite Storage” said that the existence of a recording industry protected by copyright is a very recent phenomenon and conjectured that one could take the position that all of the music created to this point is enough. I don’t recall whether he spelled it out, but the implication being that all music should be available for free and we shouldn’t worry about the creation of more music.

This really upset someone in the audience who identified themselves as representing songwriters for decades. This person righteously stipulated that music has value, musicians must be paid, and that if recording copyright is recent, so was the abolition of slavery. It is really he didn’t make reference to Nazis instead of slavery. Hmm, they did use slave labor.

Unfortunately Godwin said he did not agree with the conjecture and agreed with the vacuous statement that music has value (duh, consumers spend valuable time listening to music). But if the conjecture is not plainly correct, it is at least extremely weighty. Given that a vast amount of music exists and much more will be created regardless of protection, any harms done (e.g. to free speech and innovation) in the name of incentivizing marginal additions to this vast supply must be viewed with extreme skepticism.

There are basically two perspectives in the ‘Music and Technology‘ conversation. One’s priority is to ensure copyright holders are paid, with a strong preference for protecting existing revenue streams, and the other’s priority is to build cool stuff with new technology. Both were present in every part of this conference that I saw.

Probably the most significant example of the latter present was Lucas Gonze demoing the Yahoo! Media Player, which does a great job of playing media linked on a web page, with nice affordances for that environment.

Copypop

Saturday, February 23rd, 2008

Three times I’ve linked to the 2005 column If pirating grows, it may not be the end of music world about the music industry in China.

1: Witness massive production of art where expected profit from sales of copies and licensing is nil, both outside the content industry and where restrictions on copying are not enforced.

2: There is some very imperfect evidence from China that without copyright mass culture will still be star-driven and repulsive.

3: But we can also look to markets that started from a very different place, e.g., China.

A new BBC story, ‘Chaos’ of China’s music industry also says that pop stars earn through sponsorship:

The singer made about $2000 (£1,000) a month from music royalties and live shows with her band Mika Bomb when she lived in London.

But in China, her band Long Kuan Jiu Duan can almost double that by singing just one song at a commercial gig.

At these gigs, artists get paid a set amount by companies or promoters regardless of how many tickets they sell.

I assume a “commercial gig” is some kind of promotional event, but I’d like to read a more in depth look at the economics of pop music in China. (I have little doubt that the economics of music worth listening to is little different than in the U.S. — made for love at a financial loss or sometimes subsidized by grants or academic employment.)

This post is also an excuse to link to Let’s Do Like Them, which expresses one of my top peeves.