Aside

Torture and Republican Values

By

I find myself increasingly astonished that the Republican Party has embraced torture whole-heartedly, and is rapidly defending it. I would not have expected it; indeed, the conservative movement with its push for “family values” should, surely, reject torture out of hand – because it goes against those very values. So why has the Republican Party embraced a post-modern argument which denies the validity of values? For comparison purposes, compare what the Republicans would be saying if the Democrats had tortured people. I imagine it would be something along the lines of: “Look at that! Just like the Democrats to sacrifice the few in a wrong-headed attempt to ‘protect’ and ‘help’ the majority. We stand against torture, because we – unlike the Democrats – have our values. Torture has never been an American value, and it never will be – the point of values is that they don’t change simply to make your life more convenient.”

The Coase Theorem

By

I’ve been coming across a few references to the Coase Theorem, some of which dismiss it out of hand as unrealistic. Perhaps they’ve never read The Problem of Social Cost, but complaining that the environment depicted is unrealistic is not, in itself, a criticism of the theory. Indeed, that is largely Coase’s point – that, in an environment with zero transaction costs, you will always end up with an ideal outcome; but the fact of the matter is that there are never zero transaction costs. Indeed, at the start of section VI, Coase states “The argument has proceeded up to this point on the assumption (explicit in Sections III and IV and tacit in Section V) that there were no costs involved in carrying out market transactions. This is, of course, a very unrealistic assumption.” Coase then goes onto outline how transaction costs – that, those things which exist in the real world – prevent social welfare from being maximized. Indeed, the Coase Theorem is more about stating that transaction costs lower social welfare than it is saying that an optimal outcome will come about via negotiations between two parties.

Newspapers Cannot Afford to Reduce Supply

By

I touched over this in a previous post, but Nick Carr’s argument that newspapers should reduce supply is absurd. His argument seems to stem from the fact that multiple newspapers cover the same story – often using the same content. Unfortunately, he doesn’t consider the consequences of deliberately “reducing supply” when the barriers to entry are near-nonexistent. Bloggers will step in to fill the gap, providing news and commentary as newspapers reduce supply. If this wasn’t immediately obvious – because it’s been happening – consider that in order to reduce supply newspapers will necessarily have to cut staff. Where will that staff go? Most will enter other industries; but enough – and probably the best – who love journalism and think they can make money will self-publish. That is, they will start a blog. And they will bring domain expertise, writing experience, and so on to their blogs – which Google, as an unbiased middleman will treat the same as newspapers. Quality content will rise to the top – whether it comes from newspapers or not. Frankly, I think that newspaper companies as firms are on their way out – with the internet, inter-market transactions are cheap enough that you don’t need the economies of scale from having a firm. So, until someone figures out how to obtain economies of scale out of blogs, we’ll see a proliferation of small content-creators: journalists, analysts, etc as bloggers. But supply will never decrease. If anything, it will increase, junk and all, only to be aggregated and filtered by the middleman, Google. Trying to reduce supply will only cede the market to the bloggers.