Post Economics

Collaboration

Monday, February 12th, 2007

Ross Mayfield on how to destroy the Silicon Valley:

But if you want to destroy the advantage of the the Valley, work in the collaboration industry.

That’s “destruction” in the best sense — enabling other locales to be just as good.

But I’d go further — if you want freedom, work in the remote collaboration industry (writ large), which is slightly different from the entire collaboration industry. The more remote collaboration is effective, the more location, and jurisdictions, can be treated as subjects of arbitrage rather than held in esteem by bound subjects.

Far more promising than going to sea or buying an island.

I’m also saving Mayfield’s very next post on entrepreneur hindsight — generally excellent, but for this:

Maybe because in hindsight all risks are clear, but I always find myself regretting not taking bigger risks earlier. For example, open sourcing the Socialtext code was something we waited on until the company had strong footing. Partially because we thought there would be cannibalization, partially because we were understaffed to really engage with the community. But I believe if we bought this bullet earlier in the history of the company we would be reaping better rewards. As a planning exercise, now I always try to ask two questions: “How could we take more risk?” and “What risk can we take that creates the greatest amount of options?” I find there is always a way to do a little more, in particular by getting past instinct to control prevalent in so many entrepreneurs.

Another item to cite the n’th time someone has tired reasons for not opening their source.

Open source can of course be thought of as a remote collaboration technology.

Say’s law and bandwidth

Monday, February 12th, 2007

Ed Felten asks How Much Bandwidth is Enough? (emphasis added):

It is a matter of faith among infotech experts that (1) the supply of computing and communications will increase rapidly according to Moore’s Law, and (2) the demand for that capacity will grow roughly as fast. This mutual escalation of supply and demand causes the rapid change we see in the industry.

Funny how that seems to happen.

Thus far, whenever more capacity comes along, new applications are invented (or made practical) to use it. But will this go on forever, or is there a point of diminishing returns where more capacity doesn’t improve the user’s happiness?

There’s always a point at which purchasing more bandwidth doesn’t make sense given the price of bandwidth and other goods. But will there ever be a point at which more bandwidth, even at zero price, has no utility? I doubt it.

There is a plausible argument that a limit exists. The human sensory system has limited (though very high) bandwidth, so it doesn’t make sense to direct more than a certain number of bits per second at the user. At some point, your 3-D immersive stereo video has such high resolution that nobody will notice any improvement. The other senses have similar limits, so at some point you have enough bandwidth to saturate the senses of everybody in the home. You might want to send information to devices in the home; but how far can that grow?

Human sensory system? The home? By the time there is enough bandwidth to max out the human sensory system and auxiliary devices humans will not be important on the scene.

Paying to create

Thursday, January 25th, 2007

Lucas Gonze writes the musician industry has never been better, citing a LA Times story:

While the U.S. recording industry continues to slide […], the other side of the music world businesses catering to those who create the music has nearly doubled over the last decade to become a $7.5-billion industry.

My emphasis. Read Gonze’s explanation of the ellipsis.

This highlights how backwards it is to cripple technology and law, ostensibly to ensure creators can get paid — creators eagerly pay to create.

Another quote from the article:

“We are looking at the first creative generation,” Henry Juszkiewicz, co-owner of Gibson Guitars, said last week as he was surrounded by instruments in his firm’s display room at the convention, which ended Sunday. “The cost of creative tools has gone down. And now you have the ability to share with other people your creation. These two fundamental, solid changes are allowing the younger generation to be actively creative.”

The NAMM musical industry group, which sponsored the convention, contracts with the Gallup Organization for a poll every three years. The most recent found that the number of instrument players ages 18 to 34 grew from 24% in 1997 to 32% in 2006.

It also found that last year about half of American households had at least one person who owned a musical instrument, up from 43% in 1997.

Note what the Gibson Guitars guy did not say — that people are buying more instruments in hopes of making money.

Race and international apartheid

Monday, January 22nd, 2007

I usually do not mention race when framing immigration controls as the international equivalent of (former) South African Apartheid — race lies on the South African side of the analogy. But the case of those opposing unfettered ability of all to move, live and work anywhere on earth without respect to nationality is not helped by the fact that race and racism is part and parcel of controls on movement, residency and work, as explained by The Guardian’s Gary Younge in The west persists in using race to decide who can cross its borders:

[W]hen translated into sterling, the mean income of a black Canadian is almost double that of a white South African. Yet a black Canadian is four times more likely to be stopped than a white South African.

Via Mark Brady.

Beneficial brain drain enhanced by weak intellectual protectionism

Friday, January 19th, 2007

Modern research on “” indicates it is mostly beneficial, which comports with my intuition, repeated here:

Over the long term I’d bet brains are not zero sum — a brain drain really just means increased returns to education. Mobility means more people in the developing world will pursue higher education. Add to that increased flow of knowledge and capital to the developing world from migrants and concern over “brain drain” sounds very much like yet another disingenuous excuse for keeping the current system of inter-jurisdiction apartheid in place.

The International Migration of Knowledge Workers: When Is Brain Drain Beneficial? highlights another way brain drain benefits all. Abstract (emphasis added):

We consider the welfare effects of the emigration of workers who produce a public good (knowledge). We distinguish between the knowledge diversion and knowledge creation effects of such emigration, and show that the remaining residents of a country can gain from emigration, even when tastes for knowledge goods exhibit a kind of ‘home bias’. In contrast to existing models of beneficial brain drain (BBD), our results do not require agglomeration economies, education-related externalities, remittances, return migration, or an emigration “lottery”. Instead, they are driven purely by the public nature of knowledge goods, combined with differences in market size that induce greater knowledge creation by emigrants abroad than at home. BBD is even more likely in the presence of weak sending-country intellectual property rights (IPRs), or when source country IPR policy is endogenized.

Very cool.

Via Katherine Mangu-Ward.

Don’t let (potential) rioters set policy

Friday, January 19th, 2007

Via a comment from author Philippe Legrain, a positive Financial Times review (copy) of his book Immigratns: Your Country Needs Them. I want to comment on two short excerpts:

Workers raise their own – and the world’s – income levels by moving from a low-productivity job in a poor country to more productive employment in a rich one.

Which should be enough to win over any modern human (non-neanderthal) to open borders. The ethical argument for open borders is even better.

Policymakers must take account of the many voters who disagree with Legrain, even if this is based on ignorance and prejudice. It is surely better to admit 500,000 immigrants annually and have social peace than 1m and riots.

The reviewer would deny 500,000 people opportunity every year in order to maintain “social peace”. I say let the skinheads and fellow travellers riot — and bring them to justice for any crimes committed. Neanderthalic potential rioters must not be allowed to stall the elimination of apartheid.

Wiki search advertising

Tuesday, January 16th, 2007

has launched. It’s a reasonable idea, searching Wikipedia and sites Wikipedia links to (recalling search engines that have used to seed crawls). It’s much faster than Wikipedia’s built in search, but doesn’t satisfy me, as its Wikipedia results are out of date and imcomplete (indicators of the former include turning up deleted articles and finding nothing for ‘wikiseek’).

I find it interesting that Wikiseek’s footer says:

The majority of the revenue generated by Wikiseek advertising is donated to the Wikimedia Foundation.

That’s nice — apparently Searchme, Inc., intends to use Wikisearch to demonstrate its vertical search prowess — and it inspires a potential non-intrusive revenue model for Wikipedia that precisely copies Mozilla’s: sell inclusion in the search box/search page.

This wouldn’t be worth the hundreds of millions annually that tasteful text ads on articles could be (and the ability to fully fund* the Wikimedia Foundation’s mission), but it would surely obviate the need for begging to cover the costs of running Wikipedia.

* If politicians can use that vacuous phrase to indicate they “support education” I can use it in support of funding free knowledge projects.

Jamendo ad revenue share with artists

Tuesday, January 16th, 2007

is one of the most interesting music sites on the net (in terms business, community, and technology — there’s no competition yet for the vastness and bizarreness to be found on archive.org, yet). They’re trying every Web 2.0 trick and have somehow managed to avoid becoming overwhelmed with crap. I’ve listened to dozens of the 2,100 albums on Jamendo. While only a small fraction of these have strongly agreed with my taste, just about everything (weighted toward electronica and French rock) sounds professional.

Now Jamendo has introduced an advertising revenue sharing program with participating artists.

jamendo revenue share

Several video sites are attempting variations on this theme (among them , Lulu.tv, and ), but as far as I know Jamendo’s is the first attempt in the audio space. One might think an audio site would have a harder time making web advertising work than a video site (videos are usually watched within a web page and can have clickable ad areas or bumpers even if not), but I gather that listening via (usually Flash-based) audio players embedded in web pages is increasingly common (and Jamendo upgraded theirs recently), as will be media players that “play” a web page in a browser interface.

One data point: although Jamendo heavily promotes download of high quality copies, primarily via BitTorrent, their statistics indicate that low quality http “streaming” has accounted for more bandwidth. There are many obvious caveats here, but I think all points above indicate that advertising-supported web audio should not be ruled out, even if it is granted that web video has more potential.

Digg Jamendo’s revenue share page.

A border wall is not one-sided

Monday, January 15th, 2007

Roderick Long:

A wall that can be used to keep people out can also be used to keep people in.

Do we really want to trust the U.S. government – meaning not only the present regime but all future U.S. regimes – with a tool of that nature?

Similar arguments have been made many times regarding handing over power to the security state, but this is the first I’ve heard it specifically applied to building jurisdiction border walls.

Meanwhile the proposed U.S.-Mexico border fence could cost $49 billion, 25 times forecasts last year (zero surprise). Perhaps waiving environmental rules for the fence will save a pittance while continuing the security state’s best tradition of degradation.

Russian neanderthal vanguard

Monday, January 15th, 2007

Tom Palmer points out new laws cracking down on immigrant employment in Russia with a post title comment “Lou Dobbsian Economics Put into Practice in Russia”.

Palmer’s post is accompanied with a picture of marching Russian neo-nazis — neo-communists? — skinheads in any case, with armbands that would be unambiguously nazi if not for a hammer and sickle where a swastika would be expected.

It’s probable that Russian politicians are balder in their anti-immigrant pronouncements and Russian police more brutal in their enforcement, but the laws don’t sound all that foreign.

BBC:

President Vladimir Putin spoke of the need to defend the interests of the native population.

Markets – often a source of employment for Russia’s army of immigrant workers – were singled out.

“Markets” means open air retail, I gather, but delicious nonetheless. Longer BBC article here.

Reuters:

Russia introduced new laws on Monday that experts say are intended to plug a hole in the country’s labor market while discouraging foreigners from settling there permanently.

The laws, passed by parliament last year, are designed to streamline the red tape foreigners have to go through to live and work in Russia legally but will also reduce their numbers.

One change will implement a gradual ban on foreigners working as traders in outdoor markets where immigrants dominate, causing friction with ethnic Russians.

‘We want to get rid of illegal immigration,’ said Denis Soldatikov, a spokesman for the Federal Migration Service.

Television pictures on Monday showed rows of locked shops at a market in the Far Eastern city of Vladivostok heavily dependant on traders from neighbouring China.

‘The move was harmful because it will undermine trade,’ Vitkovskaya said. ‘I only hope no one is going to abide by it.’

But deputy Federal Migration Service head Vyacheslav Postavnin disagreed, saying the markets will adjust.

‘There are Russians to be hired,’ he told Rossiiskaya Gazeta daily. ‘Market owners will make sure that their business continues.’

Whenever you hear similar from those closer to home think of the skinheads and look in the mirror.