"is a society that sends so many of its brightest college graduates into a capital markets monkey pit maximizing welfare?"
It's not "Society" that is sending people into jobs in banks, it's individuals making individual decisions to accept individual contracts. That's their right, as it should be and there is no act of theft involved.
I don't understand why this chap feels that he should object to that. Nobody's forcing him to do it.
The paragraph that begins "It helps that investment banking has a low barrier to entry" doesn't make a point, nor does the one following.
As with most of the west, the quoted opinions misunderstand the core strengths of western style of government. The issue of giving people a greater say in their society is of little consequence. If it was critical then the most successful nations would have something like the Athenian model of democracy. The strength of the parliamentary dictatorship models we like to think of as democracies draw their strength from a structure which plays powerful personalities against one another in a model that is non-violent and relatively cheap compared to known alternatives [1]; it gives these personalities motivation to find fault with one another rather than collude [2]; and it providers a resent mechanism for the situation that develops when the ruling grouping begin to take things for granted.
That evolution of the Westminster system is a narrative example I particularly like because it is one of the main models. The story is dominated by reforms aimed to prevent concentrations of power. Magna Carta, church separation (a change of convenience the the ruler of the time but - ultimately beneficial thanks to further developments under Elizabeth I that cemented religious freedom - retained), The Republic (a deliberate but failed attempt at beneficial reform - discarded), evolution of the bicameral parliament to add impediments to overbearing governments left in control of the lower house, evolution of the doctrine of separation of powers.
Novelties such as policy elections do nothing to supply the necessary mechanisms. And they don't give particularly good outcomes - you only need to see the sorts of rubbish that people in the street consider to be important when they vote for someone to see that mainstream people are ill-equipped to make well informed decisions about complex policy arrangements. It is heresy to say this.
[1] The state in Australia with no upper house is the one that is most notorious for corruption and general shonkiness; it has a department to prevent corruption that costs twice what an upper house would.
[2] One of the disadvantages of this is that both sides have an interest in increasing the size of government. Ron Pauls are thin on the ground everywhere.
I suspect Gates doesn't really understand what capitalism is. All of his fortune has been built on the back of legislative protection. And - specific to charity - I have several times noticed Microsoft gaining positive media for the 'charity' of giving away free software that costs it nothing to give, and which only has value in that form due to an arbitrary ruling from the relevant government.
Here are some good starting points for helping the world's poor:
1) End the practice of propping up corrupt foreign governments with aid
2) Stop subsidising first world farmers and thereby killing the markets for the second and third world (including flow-on effects coming from ludicrous things like ethanol subsidy)
3) Governments cease support for rent-seeking measures like copyright and patents.
4) Abolish government-enforced wage floors which subsidise the low income earners at the expense of the genuinely poor by preventing business from finding employment for them.
5) Don't make environmental policy until recorded facts genuinely point to a need for it.
Everywhere around us the invisible hand of the state is interfering in our lives through pork-barrelling schemes that benefit those close to power at the expense of the rest. The big lie is in the claim that we have now is capitalism. Even in the United States, what we first world countries have now is better referred to as 'mixed economies'. They have elements of capitalism but are some distance from actual capitalism.
Some good points, although I would take a more nuanced view in some cases. For instance (and trying to keep this somewhat related to hacker news, lest it degrade into a political debate):
Intellectual property was and is a compromise designed to foster the private provisioning of what are essentially "public goods" (http://en.wikipedia.org/wiki/Public_good). It's easy to argue that the compromise has tilted too far in favor of producers, but abolishing those protections instead of limiting them might be a step too far in the other direction.
How is intellectual property a public good issue? It's easy to, for example, sell a book to a single person, with a contract written to protect the author (from distribution of copies, or whatever).
A public good issue is, say, when you build a dam that helps an entire flood valley, and people living there can get the benefit of your work without paying you, by refusing to agree to any contract with you. I don't see that an author faces that kind of issue.
Enforcing a contract is another matter, and has become very hard for some types of intellectual property, but that is different than a public good problem, in which no one is breaking the law.
Books aren't the "problem": digital content is. Digital content is certainly non-rivalrous - if I download a copy of a movie, it's not affecting anyone else's ability to use their own copy. The tricker one is excludability. It's sort of possible with digital goods, but it doesn't work very well, and it appears to be working less well the more people get access to fast connections and lose their qualms about copying things.
It's a tough problem. People like Stallman would like to have the government step in and take charge (if I've understood his position correctly), but I think that's a terrible solution. You could just leave things to "Coasian solutions", which is what a lot of open source software seems to be (the Apache web server, for instance), but you would probably never get stuff like the things Apple produces in that case. Custom software, governed by contracts between two parties, probably wouldn't suffer as much.
OK, I just don't think that the difficulty of enforcing certain legal contracts, should be conflated with a public good problem. It's fundamentally a different kind of issue.
Music downloaders are not free riders. They've broken the law (at least the uploader has clearly broken his contract with the artist not to do this). In a classic public good case, like the flood valley and dam, the difficulty is that people who own property in the valley, and break no laws by continuing to farm there, benefit from the flood control that the dam owner can't prevent from affecting their property.
Which is only a problem because it gives them an incentive to get their neighbors to pay for the dam, while not doing so themselves.
Actually copyright exists so that producers don't have to simply rely on contracts, and so that the people doing the copying have breached law and not just the person who breached their contract. The alternative is restricting access to copyrighted material via harsh contracts and supervised access.
As a copyright producer of both music and software I really feel copyright protection is moral and just. The damages awarded for copyright infringement for personal use are clearly ridiculous and should be seriously limited. Also I think both copyrights and patents terms should be reduced and the originality threshold for patents has to be increased. Each patent term should be determined separately with reference to how expensive something has been to bring to market and how novel it is.
Your argument in favor of copyright amounts to "As someone who benefits from foo, I support it," or (rearranged slightly) "I support foo because I benefit from it."
If copyrights are a proper balance, everyone benefits, because more things are created. Without the ability to at least make a living by selling IP, lots of things we currently enjoy/find useful might not exist.
That of course is not to say that the balance is a good one right now, still, it's not just the producers that benefit, it's the public who gets access to things the producer creates because he/she has a means to make some money from it.
I think you're over generalizing I don't listen to music so music IP does not seem to benefit me in any fashion. As to books Shakespeare freely coped from others works which breaks our concept of copyright and he lived without such protection. Yet he has been thought of as the greatest author the western world has ever known for a while.
In my option IP law does little to promote the creation of quality works instead it promotes churning out low quality crap because you must pay before you can view. IMO you could produce a much more effective system by limiting the High Definition version of a movie while not protecting a standard definition copy of a movie. Thus you could watch any movie for free but you would need to pay to see it in HD or in theaters.
You could do the same thing with books and movies. You're free to download a text file but if you want the pictures or fancy formatting you need to buy it. Ditto for low bit rate MP3 vs. lossless copies.
No that's just my context. The extremely abridged version of my argument in that comment is that the alternative to copyright law is some version of contract law and controlled access. You can't force producers to freely release their work, and I doubt you want to stop people entering into contracts with each other.
Sure, good point, but consider that the IP laws that exist in the first place are an attempt to make property out of something where 'property' doesn't really exist in the physical sense. In the case of a book or a song in the era of records, it was a pretty good solution, as enforceable property rights were a pretty good way of encouraging people to produce material that even then could be copied without too much trouble. These days though, that compromise seems to be creaking under the strain of new technology, and is due for a revision.
I'm not sure what the answers are, but I still like the idea of looking at it as a compromise between producers and consumers that should give something to each one. Giving nothing to the producers will discourage production of those kinds of goods. Give too much power to the producers in an age where copying is so easy means using fairly heavy-handed and invasive government power to enforce their rights.
As the music industry is now learning... music is a service, not a product. Its short run as a product (records, tapes, CDs) was an artificial creation that still made some sense when bound to physical media (a product). No one really has a good solution yet, but it seems that information really doesn't like being a product.
Upvoted, because what you said was strictly true and possibly insightful. (Is it still insightful whether the person who coined it actually had the insight that the statement implies?) I'm not really sure what you meant to imply, however, so I hesitated before upvoting.
Actually, I think it would have been more insightful for me to say interpretation isn't free. Dissemination matters, but the interpretation is primary.
Information is inherently free because information is basically numerical, and anyone can (potentially) think of any number. However, information is only useful when the numbers are correlated with actions or objects. It's this correlation that is truly valuable, and the creation of the correlation requires resources (i.e. time and energy).
No, dissemination always consumes resources. I'm not just talking about the resources for sharing files, which are minimal. The real resources consumed are time and energy creating/discovering the information in the first place and putting it in a format that is usable. That's why people need some kind of guaranteed reimbursement for their discoveries and limited IP is a good idea.
I'm a little bit more concerned with software myself. Bands (good ones, especially) can perform to make money. Programmers can't, really. Locking everything up on a server, and only handing out web pages is one answer, I guess...
The uploader hasn't breached a contract under the current system. Copyright law makes contractual agreement unnecessary to the copyright holder. In essence, contractual terms are forced on everyone within the jurisdiction of copyright law regardless of any agreement by the parties to this so-called contract other than the copyright holder. In fact, even the copyright holder hasn't had a chance to determine whether or not agreeing to contractual terms is a good idea: he or she must explicitly declare relinquishment of "contractual" benefits to refuse the contract's terms, and the only means for negotiation of stronger benefits is a lawsuit.
There are not contracts that stand up in court under those circumstances. There clearly is no real contract here -- where "contract" assumes "agreement".
It appears Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people up from poverty and into the middle class over the last decade or so. Think China. Think India. Think Eastern Europe (and maybe even France under Sarkozy). Gates wants business leaders to dedicate more time to fighting poverty. But the reality is that economic freedom is the best path to prosperity. Period.
The Heritage/WSJ 2008 Index of Economic Freedom clearly shows that free-market countries are prospering mightily. Per capita GDP is closely related to, and positively correlated with, market economies. The fact is that free-market economics is spreading like wildfire. State socialism is on the decline. Unsurprisingly, the study also shows that the least-free economies are mired in poverty. We're talking North Korea, Cuba, Zimbabwe, Iran, and others.
This does not make any sense: Mr. Kudlov, who wrote this article for NRO is replying to non-existing arguments. Gates did not favor non-free economies, therefore there is absolutely NO REASON to mention Cuba and North Korea. Moreover, Gates did not argue benefits of free markets, why bring in China, India and Eastern Europe? Gates merely says "capitalism is great let's see if we can make it work better for the poor". Gates isn't even hinting that it should be done at someone's expense. Basically Kidlov did not even care to read the original article.
Thus, after removing these obviously misplaced sentences and paragraphs, NRO's article basically turns into a lonely link to WSJ without any corresponding commentary.
I completely agree with point 1 and 2, completely disagree with point 3, 4 and 5.
3 will lead to cheaper medicines in the short run, but much less research in the long run, which is bad for everybody.
4 is mostly a problem for western european countries with high unemployment like France and Germany. It's irrelevant to the world's poor, who don't work in the legal economy anyway.
Environmental policy is not especially harmful to the poor, and whether or not recorded facts genuinely point to a need for it will always be extremely contentious.
I'd add: better legal protection of property in poor countries, and less bureaucracy. A must-read in this area is "The Mystery of Capitalism: Why It Succeeds In The West And Fails Everywhere Else." Major eye-opener!
How do you figure that all of Gates' fortune was built on the back of legislative protection? Microsoft got in legal trouble for bundling IE with windows, for example. Which was the Government working to hurt MS in favor of its competitors.
Correct - MS' fortune came from the network effects of their system, but they had to be successful in the first place for those to work in their favor.
This book has some good history of "the early years", when it wasn't clear that MS would be the winner that took all:
I'm a coder non-economist also, but have been look at this
for a few months and will take a shot at explaining it.
The way the fed aim to control interest rates is via the
amount of money that they issue into circulation. The
problem is that when the government puts more money into
circulation it waters down the value of the money already in
circulation, thereby encouraging consumption and some types
of investment, and punishes saving by putting money in the
bank. You buy goods so that you have physicals and not money
which is losing value. Thus, it's quite controversial when
a government institution participates in this way in that it
is effectively directing the market.
"Austrians School" economists get particularly upset by this sort of practice where a government manipulates the market in order to steer to an outcome because one of the tenants of that way of looking at the world is that free markets lead to better outcomes than when governments try to manage economies. Frederick Hayek labelled the confidence of being able to second guess the market and manage it towards a desirable outcome "the fatal conceit" and there's a great book about it. Hence the way that Ron Paul (also an Austrian) gets stuck into the federal reserve at each opportunity, particularly over stuff like rate rises.
The other aspect, and the reason that the current
instability is unsettling and that governments and
institutions are doing a lot more than usual to prop things
up is structural.
First - let's look at an example of a crash that isn't
structural. Back when the dot come crash happened it was
pretty simple: a whole lot of people had invested in stock,
the market changed its confidence in that stock, a whole lot
of people lost money. The banks took money in and paid it out and everything was fine. The market functioned. September 11 was the same even though trading floors had been taken out. None of these things changed the nature of market dynamics.
Now one that has been structural: Friedman blames the depression on the US Federal Reserve for failing to honour its responsibility to supply liquidity to banks who were short of it (as the UK government have recently done to try and get Northern Rock through).
The problem with the sub-prime situation though is that the
rot is to do with the core responsibility of banks: managing
risk. Banks take money in and loan it out, and make
judgements about repayment risk to make sure that they make
a net profit. But the change to banking culture that led to
the sub-prime crisis was this: it became popular to package debts in certain combinations and sell them off to a far greater extent than had ever been done before. So you could buy certain packages of debt that had been guaranteed to fit a certain level of exposure. Basically this represents large scale outsourcing of bank's core business. (That's a nasty way to put it though, because in fact when you loan money in any sense you're outsourcing risk to some extent and this has always happened, just not to the same extent.)
The sub-prime crisis over the last year has given everyone
in the banks the jitters because they've lost some confidence in the risk assessments made by banks they have previously exchanged risk with. Worse, they're not so sure about how much other banks know about their own risk and whether they're being entirely square with the market about it. Thus they start getting very more edgy than usual about short-term loans because the other party might not know what its position is or it might become susceptible to slight changes in the economy. And now the US (where most of the bad exposure was) is slipping into recession... meaning more people will fail on their home loans...
The real problem from subprime is that if the banks stop dealing with one another, you can be certain that economic activity will decline further. This will cause less people will be able to pay their mortgages. This will cause banks who are currently on the edge to slip. In other words - ouch. If there is a crash resulting from lack of confidence it will eclipse the actual value of money lost due to dodgy loans.
Thus, from a certain perspective there is some sense in 'the people' via their elected institutions throwing money at this problem, because even though we're not individually responsible for causing it, it's possible we may be able to buy our way out of it and come out ahead of where we'd be if we had to suffer the consequences of a banking collapse. The problem is - if it is inevitable, then we will have spent a whole lot of money for no good cause.
I can't help but think that monetarists have become too clever by half, and that it would be preferable if we were to all just resign ourselves to having ten year economic cycles. Things are much more highly geared now as a result of a prolonged period of good times and if it gets really nasty there will be a lasting effect in people's psyches that actually limits our ability to get out of it (much as there was in the depression where people saved money even when it was in their interest to participate in some consumption). But time will tell. :)
This is a pretty good explanation of the situation. At least as far as I can tell, being a coder who's recently tried to learn a lot about macroeconomics.
One detail that could use correction:
"The way the fed aim to control interest rates is via the amount of money that they issue into circulation."
It's kinda the opposite, actually. When you hear that the Fed's cut its interest rate, that means they've reduced what's called the Discount Rate -- the rate at which the Fed makes overnight loans to major banks. If you're a major bank, and you need some cash, you can get these overnight loans from the Fed or you can take money from other places, and your decision is probably based on whatever's cheapest. Since the Fed is always there as a last resort lender for banks, interest rates for other loans between banks and from banks to businesses will generally reflect changes to the Fed Discount rate. That's how the Fed rate has a rippling influence on liquidity supply throughout the banking industry.
Of course, the thing that's special about the Fed is that, unlike typical banks, it's not loaning out assets it has on deposit. It's creating new money when someone takes out a Fed loan, and it's destroying that money when the loan is repaid. Since this increases the money supply, it risks creating inflation if the economy isn't growing proportionately. High inflation is bad because it encourages spending your money now rather than investing it, and long-term growth depends on a lot of investments -- education, equipment, research, etc.
"Banking industry" is an insult to those who actually produce goods. Banks should be known as "facilitators", when doing their job properly, and all sorts of bad words when they don't -which is frequently, unfortunately.
> "Banking industry" is an insult to those who actually
> produce goods.
What do you think should be a use of industry? Is it OK to say "transport industry" despite the fact that what they do is a service?
Banks produce value through strategic use of risk calculation. They take in $100 and then lend out $90 for further wealth creation, and keep $10 on hand as liquidity so that if any of the owners of the $100 want any back they can get it. Thus, you have $190 of value passing around from a base of $100. You've just got to be careful not to loan too much out or you run out of liquidity and then the system stalls.
Should they need to? They should be free to scrape and represent, and ycom should be free to block them if they choose. When you pursue anti-rights relating to the ownership of information distribution you come to disgusting solutions like current copyright models.
It's always exciting to hear someone eager starting out. The only secret is to keep being interested and not give up on yourself. If you're looking for a fun problem to solve, try writing a brute-force sudoku solver. That could be fun in the context of a webapp. I'd also recommend getting a solid grounding in SQL and designing schemas. You can do a lot of this by brainstorming applications and then working out how you'd design the schema. You don't actually have to write it, and the process can be a good way to get a feel for whether an application will be simple or hard.
Looks cool but sample code doesn't work as marked on the page:
Traceback (most recent call last):
File "c:/temp/chart.py", line 6, in <module>
chart.download('hello.png')
AttributeError: 'SimpleLineChart' object has no attribute 'download'
Try 'download_graph' instead.
Still doesn't work for me, but that might be because we have a web proxy in place. Any suggestions? When I paste link into the browser it seems to work.
> Women studies are not among the "real" humanities
It can be, it just depends whether you base conclusions on a respectable level of evidence or non-falsifiable mumbo-jumbo. There's lots of bad work done in more established humanities as well. I'm often entertained by suggestions of such things as "modern techniques in history".
I have a macbook. It's solid but I'd avoid it for linux (which I've decided I prefer to osx) - the single-button trackpad alone makes it a bad choice for linux. If I were getting a new laptop now I'd get a high-end thinkpad with lots of RAM so I could use vmware effectively. I have a friend who has just done this and raves about it - he runs Ubuntu.
Some people can get X11 configured to do wacky things with the keyboard so you can run linux. I figure - why bother?
I love ubuntu, tis really good... and I am starting to get a feel from everyone's comments that if I go with MBP then I should stick to OSX ... so I guess I can either find an alternative like you said that would make me happy, and have my ubuntu, or switch entirely to apple and get a MBP
It's not "Society" that is sending people into jobs in banks, it's individuals making individual decisions to accept individual contracts. That's their right, as it should be and there is no act of theft involved.
I don't understand why this chap feels that he should object to that. Nobody's forcing him to do it.
The paragraph that begins "It helps that investment banking has a low barrier to entry" doesn't make a point, nor does the one following.