Like all economic dilettantes (i.e., those whose command of economics does not include having graduated summa cum laude in the discipline at an institution in the top 1% globally), the author of this piece makes the first-year-undergraduate error of failing to differentiate between accounting and economic profit.
That is, failing to understand that marginal cost includes a normal rate of return on capital.
So while 'sunk costs are sunk', required rate of return times the dollar value invested in the capital stock is part of the ZPP (zero-pure-profits) condition that characterises competitive markets. The author writes as if people who pour money into productive processes just think "Oh, that toll-road we built? Yeah, all that money's gone now... our marginal cost pricing algorithm should only include maintenance costs'n'shit".
That small piece of typically-journalistic inaccuracy aside, I am on the author's side here.
People who are bleating about things like copyright infringement need to understand that the marginal cost of production of a digital copy of a movie, is as near to zero as makes no odds.
The viewing experience of a digital copy does not include THX (or $8 popcorn or pre-movie ads), and is identifiably a different product to paying $20 for a seat in a movie theatre. (Also, I guess that watching something in one's own home affords the opportunity for watching things in the nude, and a quick one off the wrist should the material warrant it... neither are things that you ought to do in a theatre)
They also need to bear in mind that rates of return on production of movies etc include a significant political premium, due to the the current monopoly-IP framework (whereby the output of some industries is protected against competition, due to bribes-paid, or possession of footage-of-politicians-in-underage-hooker-orgies).
As Cory Doctorow has quipped: if your business model involves trying to make a monopoly profit on a good or service that is made out of bits, you're making a mistake as stupid as building a house on the side of an active volcano.
Here endeth the lesson: the economic way of thinking is best left to people who maintained an interest in it long after the maths got too hard for you.
Given that the NSA has 1500 analysts in Washington alone, that amounts to 3 'radicals' per DC-based analyst - and taken over the whole team-sheet of the US-Stasi machine, each apparatchik would have to monitor a fraction of a person.
So maybe you're right... that's WAY too much work for the type of second-rate dimwit whose highest-value alternative is working as an 'intelligence' (HA!) apparatchik.
Depends on when you start the clock. 'Bob' doesn't sound very American to me - Americans tend to have names like 'Goyakla' and 'Tȟatȟáŋka Íyotake': 'Bob' definitely sounds like someone recently off the boat, in the broad scheme of things.
Maybe you're talking about the names that white invaders of the US gave their "anchor babies".
Also - not for nothin' - but 'Englishness' or 'Americanness' or 'Frenchness' depends on the geographical location (at the time) of the woman from whose birth-canal you emerged, not on what your parents named you. (There are caveats to this, of course: if the peak-sociopath political vermin of a country have rules about who may and may not enter, and the vagina is attached to someone without authorisation, then you might be born stateless).
"... has the power to transform the world into whatever form the winners choose to create".
There has never been a shortage of men who want the power to transform the world - we call those men megalomaniacs, and they are attracted to political life like flies are attracted to buckets of rotting fish. But their actual underlying aim is not 'national greatness' or any of the other eyewash that is used to gull the public: the aim is self-enrichment and empowerment: they don't give a rat's äss if the world burns, so long as their share of it is increased.
Generally they spend their entire life on high-end welfare - either in the officer-corps military, or in the bureaucracy... or at the highest-end, in a 'private sector' firm whose entire budget comes from contracting to government. During this time, they tell each other how smart they all are - and this nonsense is repeated unedited by journalists (who, to a man, have only a shallow dilettante interest in their claimed area of expertise: they rely critically on the 'Murray Gell-Mann Amnesia Effect').
As Viet Nam, Iraq, and Afghanistan have shown, the political-parasite sociopaths are actually pretty awful at working out how to win things. The victims' resolve plays a large role in determining who 'wins' - as does terrain, supply route vulnerability, and technological change.
Not that this matters, however: the aim is generally not to 'win', but rather for self and cronies to become rich beyond the dreams of avarice. After all, a bunch of people became fabulously wealthy as a result of all this slaughter (and here's a hint: it's not the trailer-trash whose highest-value use is as a grunt for the Death Machine).
Look at the list of things that were net-negative for the people in the countries that undertook them, but that enriched a parasitic clique beyond anybody's wildest dreams:
France in Mexico in the 1800s; France in Indochina and the Maghreb until the 1960s; the Soviets in Afghanistan in the 1980s; England in Afghanistan in the 1830s (and during the Maori Wars in New Zealand); Napoleon's march to Moscow.
There has not been a high-end welfare queen who has failed to be enriched by their war-thirst, since Varus at Teutoberger Wald or Crassus at Carrhae.
Smedley Butler nailed it in 1935: war is a racket.
" There's only so much you can 'fix' something before it becomes obvious that it's never going to work, and needs to be replaced by something else."
You are assuming that the stated purpose of the 'something', is its actual purpose. That's a false premise.
If you want to spend your entire life completely unsurprised by government policy 'failure', remember two simple sentences:
① there are no failed policies: if a policy fails its publicly-stated aims, its actual aims were not those; and ② the actual primary aim of every policy is to transfer wealth to the political class and its cronies.
So guess who was not remotely surprised that ObamaCare led to massive premium hikes for those who would supposedly benefit from lower premiums?
And when the policy failure results in a call for higher budgets (e.g., public education producing stupid children; war producing more terrrrrrrism; green initiatives producing Solyndra-style scams) remember this third thing (which is tied to ②)...
③ it is only possible to 'fail upwards' in a government bureaucracy - because the tax base underwrites the losses.
Not only that, @Uriel-238... how is it that with all the supposedly 'gifted' retards looking into literally every byte that travels along any fibre-optic trunk, nobody from .gov can track down (much less prevent) the groups who have undertaken massive data-theft? (e.g., Target etc).
Anyone who thinks that the failure to protect the financial details of 100 million people has no national security implications, has rocks in their heads.
And yet recently there have been a dozen large-scale infiltrations of systems and exfiltrations of terabytes of data, and the security-theatre complex has NFI whodunnit.
The security apparatus is a scam from top to bottom - which should be no surprise since it's part of government, which is a scam from top to bottom.
A hint as to the low quality of personnel: while I admire Snowden for what he did, when it comes to talent he is on a par with the rest of the security-theatre retards... his educational history screams 'second rate' (which is part of the reason why his 'getaway plan' was so poorly thought out). And the best they can do on the hacker front is third-tier retards like 'Mudge' (he was a third-rate nappie and a laughing stock in the hacker phyles 20 years ago, and being in .gov's gentle arms won't have made him any better).
The really REALLY sad thing is that people actually believe that 'the NSA employs some of the brightest security people out there'.
There is almost no part of that phrase that is not horribly wrong. The entire intelligence apparatus - the alphabet-soup of agency acronyms - is staffed at every level above entry-level, with second-tier talent. The work environment is basically hostile to talent. To the extent that there is such a think as an intelligent patriot (the lack of intelligence required to believe in nonsense like the indispensability of the nation into which you were born, almost makes that a null set), thsoe who enter the maw of the intelligence/national-security-theatre scam quickly realise that it's a rotten barrel, and leave after 2 years.
Ask yourself this: if these clowns are so 'bright', why is entry-level for the NSA at GS5 ($48k a year) when a good analyst AT LITERALLY ANYTHING can pull in $100k working part-time in a real job?
Name me one event of geopolitical importance, that the security-theatre has uncovered before it was too late. Go all the way back to the Soviet and Chinese nuclear weapons test; the debacle in VietNam; the fall of the Berlin Wall... September 11, ISIS, the ramifications of 'regime change' in Iraq... these clowns have not got a single important thing right, ever.
Drop the stupid fiction that the 'intelligence' sector is full of Jedi-Mentats: it's full of triangulating second-raters, who are technically on a par with a middle-ranking second year undergraduate.
OK, so Louie didn't release his special under a CC license, but it was absolutely bereft of
(1) ties to a 'label';
(2) DRM or any other type of copy-protection.
I could have downloaded that bitch from UseNet, but I CHOSE to pay $5 - ALL of which went straight to Louis CK's Paypal account.
LouisCK 'grossed' well over a million bucks, $5 at a time, from folks who could ONLY buy his thing on the web... and thus probably had the chops to know how to get it for free if they chose to.
He also gave a breakdown of where the first million went.
And the special itself was good. "Word of mouse", bitchez.
When Joe Rogan releases his standup special, I will buy the shit out of that too - even though it will be uploaded on zero-day.
Now if Carlos 'el ladron dos chistes' Mencia tried to hawk some of his shitty stolen material, I would torrent that shit (then delete it before I watched it).
And yes, my Spanish is terrible - but so is Carlos Mencia (who is only a pretend-Hispanic anyhow).
"I am serving my country, I should not have to go home and cry after a day of honorably serving my country."
You have got to be kidding me - these whip-kissing retards try the 'Duty to Country" schlock?
I sincerely hope that they ALL get cancer from Chertoff's pornotron scanners; anybody who participates in this security-theatre (designed to impress COMPLIANCE upon the State's livestock) is a subhuman.
AJ - the point is, if a machine existed that could copy a loaf of bread (at no cost to the baker OR the person doing the copier), then the 'correct' price for that loaf of bread is ZERO.
The cost of production of one additional unit of any DVD/CD/MP3/AVI... ANY digital content - is zero.
In a competitive market, prices equal marginal costs. Not average costs, MARGINAL costs.
That is one of the things that most people don't understand about economics - the supply curve is that portion of the marginal cost curve which is above average cost.
If there is no portion of the marginal cost curve that is above average cost, then the optimum level of supply is zero, and anybody providing output is guaranteed to make a loss... unless they can co-opt the State and its armed goons to extort protection money from consumers.
There is ONE caveat to this - and that is if producers give consumers the CHOICE to 'yield' some of their consumer surplus: that is, if individual consumers have the possibility of paying a greater-than-market price for a good, voluntarily.
Every consumer who buys a thing, values the thing higher than the price they pay... maybe a little higher, maybe a lot higher, but they always think that they GAIN from the transaction. In the jargon, they obtain 'consumer surplus'; it is not the same for each person, and is not the same for each unit purchased by any one person.
Those who value the thing a LOT higher than the price they pay, can often be encouraged to DONATE a portion of their 'consumer surplus' - that is what Nine Inch Nails understood.
If bread was able to be photocopied, nobody would starve - but nobody would want to be a baker unless they could encourage SOME people to pay more than the bread was WORTH.
Either that, or 'innovation' in bread would cease immediately: there would be no incentive to produce new and interesting types of bread. Bread would still exist though.
Likewise with 'art': first of all, 'artists' always claim that they are driven by some Muse to do what they do... if their own lines of crap are to be believed, they're 'not in it for the money'.
Well, cool. Be "not in it for the money" and I guarantee that you will get 'not money'.
Once they have gone to the trouble of writing whatever half-assed pseudo-poetic pap they churn out, the cost of production of every subsequent digital copy of the master is ZERO. Everything above that is either voluntary ceding of consumer surplus, or extortion backed by government goons.
Pop artists are not philosophers or intellectuals: they are grifters who try and parlay a set of not-remotely-rare skills (playing an instrument and writing schlock poetry) into a career.
From Presley to KISS to Justin Timberlake; from Little Richard to Prince to LL Cool J; they have produced a 'social contribution' of exactly ZERO. There are no externalities to be remedied (even for music that I like).
Even if there was some sort of significant social 'good' produced, nobody has the right to force consumers to pay more than marginal cost for a good. No extortion is ever right.
The point is, artists are NOT the ones who profit from copyright - LABELS profit.
The internet is a terrific tool for undermining the parasitic shitbags who interpose themselves between creators of content and viewers of content.
Every industry, every political system has a layer of bullshit artists - parasites whose job is to raise prices in order that they can pocket the difference between the cost of production and the (rigged) final price.
There are any number of examples of musicians who create content, provide it at whatever price the viewer is willing to pay (including "zero"), and make more than enough to cover their expenses (Nine Inch Nails are the most-cited example).
The marginal cost of a digital copy of a CD or DVD is ZERO, or as near to zero as makes no odds. Under a competitive system, prices equal marginal costs.
If artists can find people who are prepared to pay more than marginal cost, then that is perfectly alright - effectively, some consumers are prepared to voluntarily donate some of their 'consumer surplus' to the artists as a gesture of goodwill.
That is fine (noble, even) and I have done that myself from time to time. But I understood what I was doing: paying more than marginal cost, and giving up (part of) my subjective evaluation of how much it was worth TO ME.
To insist that everyone pays more than marginal cost undermines the fabric of a genuinely competitive economic system. It is the behaviour of monopolists, and monopoly is always and everywhere subject to being 'undermined' by the market... which is why the first port of call for any monopolist (when they face market pressure) is to call in the state and its goon squads.
Caedite Eos.
Cheers
GT
Techdirt has not posted any stories submitted by GT.
(untitled comment)
That is, failing to understand that marginal cost includes a normal rate of return on capital.
So while 'sunk costs are sunk', required rate of return times the dollar value invested in the capital stock is part of the ZPP (zero-pure-profits) condition that characterises competitive markets. The author writes as if people who pour money into productive processes just think "Oh, that toll-road we built? Yeah, all that money's gone now... our marginal cost pricing algorithm should only include maintenance costs'n'shit".
That small piece of typically-journalistic inaccuracy aside, I am on the author's side here.
People who are bleating about things like copyright infringement need to understand that the marginal cost of production of a digital copy of a movie, is as near to zero as makes no odds.
The viewing experience of a digital copy does not include THX (or $8 popcorn or pre-movie ads), and is identifiably a different product to paying $20 for a seat in a movie theatre. (Also, I guess that watching something in one's own home affords the opportunity for watching things in the nude, and a quick one off the wrist should the material warrant it... neither are things that you ought to do in a theatre)
They also need to bear in mind that rates of return on production of movies etc include a significant political premium, due to the the current monopoly-IP framework (whereby the output of some industries is protected against competition, due to bribes-paid, or possession of footage-of-politicians-in-underage-hooker-orgies).
As Cory Doctorow has quipped: if your business model involves trying to make a monopoly profit on a good or service that is made out of bits, you're making a mistake as stupid as building a house on the side of an active volcano.
Here endeth the lesson: the economic way of thinking is best left to people who maintained an interest in it long after the maths got too hard for you.
Re:
So maybe you're right... that's WAY too much work for the type of second-rate dimwit whose highest-value alternative is working as an 'intelligence' (HA!) apparatchik.
Re: Re: Re: The other smokescreen
Maybe you're talking about the names that white invaders of the US gave their "anchor babies".
Also - not for nothin' - but 'Englishness' or 'Americanness' or 'Frenchness' depends on the geographical location (at the time) of the woman from whose birth-canal you emerged, not on what your parents named you. (There are caveats to this, of course: if the peak-sociopath political vermin of a country have rules about who may and may not enter, and the vagina is attached to someone without authorisation, then you might be born stateless).
Re: Re: They need better geeks.
There has never been a shortage of men who want the power to transform the world - we call those men megalomaniacs, and they are attracted to political life like flies are attracted to buckets of rotting fish. But their actual underlying aim is not 'national greatness' or any of the other eyewash that is used to gull the public: the aim is self-enrichment and empowerment: they don't give a rat's äss if the world burns, so long as their share of it is increased.
Generally they spend their entire life on high-end welfare - either in the officer-corps military, or in the bureaucracy... or at the highest-end, in a 'private sector' firm whose entire budget comes from contracting to government. During this time, they tell each other how smart they all are - and this nonsense is repeated unedited by journalists (who, to a man, have only a shallow dilettante interest in their claimed area of expertise: they rely critically on the 'Murray Gell-Mann Amnesia Effect').
As Viet Nam, Iraq, and Afghanistan have shown, the political-parasite sociopaths are actually pretty awful at working out how to win things. The victims' resolve plays a large role in determining who 'wins' - as does terrain, supply route vulnerability, and technological change.
Not that this matters, however: the aim is generally not to 'win', but rather for self and cronies to become rich beyond the dreams of avarice. After all, a bunch of people became fabulously wealthy as a result of all this slaughter (and here's a hint: it's not the trailer-trash whose highest-value use is as a grunt for the Death Machine).
Look at the list of things that were net-negative for the people in the countries that undertook them, but that enriched a parasitic clique beyond anybody's wildest dreams:
France in Mexico in the 1800s;
France in Indochina and the Maghreb until the 1960s;
the Soviets in Afghanistan in the 1980s;
England in Afghanistan in the 1830s (and during the Maori Wars in New Zealand);
Napoleon's march to Moscow.
There has not been a high-end welfare queen who has failed to be enriched by their war-thirst, since Varus at Teutoberger Wald or Crassus at Carrhae.
Smedley Butler nailed it in 1935: war is a racket.
Re: "It is difficult to get a man to understand something...
You are assuming that the stated purpose of the 'something', is its actual purpose. That's a false premise.
If you want to spend your entire life completely unsurprised by government policy 'failure', remember two simple sentences:
① there are no failed policies: if a policy fails its publicly-stated aims, its actual aims were not those; and
② the actual primary aim of every policy is to transfer wealth to the political class and its cronies.
So guess who was not remotely surprised that ObamaCare led to massive premium hikes for those who would supposedly benefit from lower premiums?
And when the policy failure results in a call for higher budgets (e.g., public education producing stupid children; war producing more terrrrrrrism; green initiatives producing Solyndra-style scams) remember this third thing (which is tied to ②)...
③ it is only possible to 'fail upwards' in a government bureaucracy - because the tax base underwrites the losses.
Re: Where's the friggen metadata?
Anyone who thinks that the failure to protect the financial details of 100 million people has no national security implications, has rocks in their heads.
And yet recently there have been a dozen large-scale infiltrations of systems and exfiltrations of terabytes of data, and the security-theatre complex has NFI whodunnit.
The security apparatus is a scam from top to bottom - which should be no surprise since it's part of government, which is a scam from top to bottom.
A hint as to the low quality of personnel: while I admire Snowden for what he did, when it comes to talent he is on a par with the rest of the security-theatre retards... his educational history screams 'second rate' (which is part of the reason why his 'getaway plan' was so poorly thought out). And the best they can do on the hacker front is third-tier retards like 'Mudge' (he was a third-rate nappie and a laughing stock in the hacker phyles 20 years ago, and being in .gov's gentle arms won't have made him any better).
Re: Re: "It is difficult to get a man to understand something...
There is almost no part of that phrase that is not horribly wrong. The entire intelligence apparatus - the alphabet-soup of agency acronyms - is staffed at every level above entry-level, with second-tier talent. The work environment is basically hostile to talent. To the extent that there is such a think as an intelligent patriot (the lack of intelligence required to believe in nonsense like the indispensability of the nation into which you were born, almost makes that a null set), thsoe who enter the maw of the intelligence/national-security-theatre scam quickly realise that it's a rotten barrel, and leave after 2 years.
Ask yourself this: if these clowns are so 'bright', why is entry-level for the NSA at GS5 ($48k a year) when a good analyst AT LITERALLY ANYTHING can pull in $100k working part-time in a real job?
Name me one event of geopolitical importance, that the security-theatre has uncovered before it was too late. Go all the way back to the Soviet and Chinese nuclear weapons test; the debacle in VietNam; the fall of the Berlin Wall... September 11, ISIS, the ramifications of 'regime change' in Iraq... these clowns have not got a single important thing right, ever.
Drop the stupid fiction that the 'intelligence' sector is full of Jedi-Mentats: it's full of triangulating second-raters, who are technically on a par with a middle-ranking second year undergraduate.
LouisCK much?
(1) ties to a 'label';
(2) DRM or any other type of copy-protection.
I could have downloaded that bitch from UseNet, but I CHOSE to pay $5 - ALL of which went straight to Louis CK's Paypal account.
LouisCK 'grossed' well over a million bucks, $5 at a time, from folks who could ONLY buy his thing on the web... and thus probably had the chops to know how to get it for free if they chose to.
He also gave a breakdown of where the first million went.
And the special itself was good. "Word of mouse", bitchez.
When Joe Rogan releases his standup special, I will buy the shit out of that too - even though it will be uploaded on zero-day.
Now if Carlos 'el ladron dos chistes' Mencia tried to hawk some of his shitty stolen material, I would torrent that shit (then delete it before I watched it).
And yes, my Spanish is terrible - but so is Carlos Mencia (who is only a pretend-Hispanic anyhow).
Diddums
You have got to be kidding me - these whip-kissing retards try the 'Duty to Country" schlock?
I sincerely hope that they ALL get cancer from Chertoff's pornotron scanners; anybody who participates in this security-theatre (designed to impress COMPLIANCE upon the State's livestock) is a subhuman.
Cheerio
GT
Re: Food (as Geoffrey Transom)
The cost of production of one additional unit of any DVD/CD/MP3/AVI... ANY digital content - is zero.
In a competitive market, prices equal marginal costs. Not average costs, MARGINAL costs.
That is one of the things that most people don't understand about economics - the supply curve is that portion of the marginal cost curve which is above average cost.
If there is no portion of the marginal cost curve that is above average cost, then the optimum level of supply is zero, and anybody providing output is guaranteed to make a loss... unless they can co-opt the State and its armed goons to extort protection money from consumers.
There is ONE caveat to this - and that is if producers give consumers the CHOICE to 'yield' some of their consumer surplus: that is, if individual consumers have the possibility of paying a greater-than-market price for a good, voluntarily.
Every consumer who buys a thing, values the thing higher than the price they pay... maybe a little higher, maybe a lot higher, but they always think that they GAIN from the transaction. In the jargon, they obtain 'consumer surplus'; it is not the same for each person, and is not the same for each unit purchased by any one person.
Those who value the thing a LOT higher than the price they pay, can often be encouraged to DONATE a portion of their 'consumer surplus' - that is what Nine Inch Nails understood.
If bread was able to be photocopied, nobody would starve - but nobody would want to be a baker unless they could encourage SOME people to pay more than the bread was WORTH.
Either that, or 'innovation' in bread would cease immediately: there would be no incentive to produce new and interesting types of bread. Bread would still exist though.
Likewise with 'art': first of all, 'artists' always claim that they are driven by some Muse to do what they do... if their own lines of crap are to be believed, they're 'not in it for the money'.
Well, cool. Be "not in it for the money" and I guarantee that you will get 'not money'.
Once they have gone to the trouble of writing whatever half-assed pseudo-poetic pap they churn out, the cost of production of every subsequent digital copy of the master is ZERO. Everything above that is either voluntary ceding of consumer surplus, or extortion backed by government goons.
Pop artists are not philosophers or intellectuals: they are grifters who try and parlay a set of not-remotely-rare skills (playing an instrument and writing schlock poetry) into a career.
From Presley to KISS to Justin Timberlake; from Little Richard to Prince to LL Cool J; they have produced a 'social contribution' of exactly ZERO. There are no externalities to be remedied (even for music that I like).
Even if there was some sort of significant social 'good' produced, nobody has the right to force consumers to pay more than marginal cost for a good. No extortion is ever right.
Caedite Eos.
Cheerio
GT
Re: just a thought (as Geoffrey Transom)
The internet is a terrific tool for undermining the parasitic shitbags who interpose themselves between creators of content and viewers of content.
Every industry, every political system has a layer of bullshit artists - parasites whose job is to raise prices in order that they can pocket the difference between the cost of production and the (rigged) final price.
There are any number of examples of musicians who create content, provide it at whatever price the viewer is willing to pay (including "zero"), and make more than enough to cover their expenses (Nine Inch Nails are the most-cited example).
The marginal cost of a digital copy of a CD or DVD is ZERO, or as near to zero as makes no odds. Under a competitive system, prices equal marginal costs.
If artists can find people who are prepared to pay more than marginal cost, then that is perfectly alright - effectively, some consumers are prepared to voluntarily donate some of their 'consumer surplus' to the artists as a gesture of goodwill.
That is fine (noble, even) and I have done that myself from time to time. But I understood what I was doing: paying more than marginal cost, and giving up (part of) my subjective evaluation of how much it was worth TO ME.
To insist that everyone pays more than marginal cost undermines the fabric of a genuinely competitive economic system. It is the behaviour of monopolists, and monopoly is always and everywhere subject to being 'undermined' by the market... which is why the first port of call for any monopolist (when they face market pressure) is to call in the state and its goon squads.
Caedite Eos.
Cheers
GT
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