Newton, The Moon

The First Time

The Art Scene

If the Suit Fits ...

Limerick of the Day #108

Adam Smith said supply and demand
(What he called "the invisible hand")
Will achieve the effect
Markets will self-correct.
What "correct" means we don't understand.

Flea Market Economy

Lots of people talk about free market economy. They claim that if government would just leave things alone, the law of supply and demand would act to set prices, achieve employment and create a better life for everyone. Even people who don't believe in anything supernatural may buy into the magical powers of supply and demand.

The theory, laid out by Adam Smith in The Wealth of Nations (1776), is that when there's plenty of something, the price goes down because the cheapest seller will attract the most customers. On the other hand, when something's scarce, prices go up because a seller will be able to find buyers who will pay more. When the corn crop is harvested, corn is cheap because everyone's selling corn, and you can shop around for the cheapest. But if you somehow save some of your corn, you can sell it for a higher price in February, because there won't be much corn around.

The big leap is the idea that these natural up and down changes in price will lead to a good outcome. It turns out this is true because in the Free Market mentality, a good outcome is defined to mean "natural up and down changes in price." For instance, not only will some people sell corn cheaper, but some will invent better corn in order to charge more. See? Isn't that great for society? Of course, if they can't really make better corn, they'll just touch up the photo and say it's better. Works just as well.

But there's a dark side. There are some things this simple theory ignores, such as:

1) Cheating - some companies will lie about their products or use inferior materials, even contaminated foods.  The Free Market's response:  Don't worry.  These companies will go out of business once the word gets out.

2) Public Service - Some products, like drugs that can cure illnesses, should be inexpensive and widely available, even if market forces don't lead to that. The Free Market's response: The drug maker gets to control the supply and price.

3) Disasters - If you stake your life on the corn crop, and it's wiped out by an outbreak of corn blight, you're out of luck.  Sure, corn prices will go up, but you don't have any to sell.  The Free Market's response: Tough luck.  You should have had a backup plan.

4) Redundancy - The very idea of competition means multiple people and companies trying to do the same thing. Can you imagine if all the iPhone and Droid engineers got together, what kind of incredible kick-ass phone they could make? Or if the drug companies pooled their resources to cure cancer? The Free Market response:  Not going to happen.

5) Extra forces - Supply and demand don't cover everything.  If marijuana were suddenly legalized, the supply might not change right away, but demand would probably go up.  In spite of that, prices would sure as hell go down.  Also, things like copyrights, patents, etc. only have value because of laws.  If the laws are changed, all bets are off.

6) Wealth Concentration - Finally, a free market always leads to increasing wealth concentration. It has to. As backwards as it sounds, people with more money can always get things cheaper.  You pay $1 each  for a half dozen ears of corn for dinner.  Total cost: $6.00.

A rich person might buy a thousand ears for $0.25 each, and then sell 994 of them for $0.75.  Now their corn is free, and they've even made $497.00!

Rich people can also wait out bad markets. Trying to sell a house during a recession?  No problem.  Just close it up, live in one of your other houses and wait till the market improves.

So the rich keep getting richer, just as the saying goes.  And the rest of us?  We wind up rummaging through the attic and the basement, looking for stuff to sell at the flea market.

Copyrights And Wrongs

Copyrights are very trendy these days, so I'll hop on the bandwagon. The idea is that as soon as you create something ... a drawing, a novel, a comic, a blog post, whatever ... as soon as you do that, you own all the rights to it. Shocking, huh? You don't even have to register it or put a "©" on it, 'cause it's yours. Of course, you might want to register it and do the "©" thing to get some protections.

A lot of people think everything on the internet should be free. Music, movies, e-books, images, etc.  They figure if it can be downloaded, why pay for it? Some people even say "Information wants to be free." What a crock, right? Information doesn't want anything. (Actually, that's only part of a quote from Stewart Brand, who in the same breath also said "Information wants to be expensive." He was talking about the dilemma posed by technology, not trying to liberate everyone's copyright-protected stuff.)

But here's the weird part. Even if writers and artists and musicians could somehow protect their creations from being illegally copied, after some period of time, they just flat out lose ownership of those things anyway. Of course, it's a hundred years after they die, but still, why shouldn't their great great grandchildren have the benefit?

If I, by dint of hard work, plant an orchard, my descendants can keep selling the apples forever.  (By the way, Wikipedia's blacked out today to protest some stupid anti-piracy law or something, so I can get away with saying a dint is a unit of measuring hard work. I worked 2 dints today.) But anyway, my children and their children and theirs and so on can keep selling those apples.

On the other hand, if I put that same dint or two of work into writing a novel or painting a picture, then after I've been dead for a hundred years (or however long Disney has managed to jack it up by then), the government says "Too bad.  You don't own this anymore, so anyone can print and sell your book or sell posters of your painting and not owe you or your great great grandchildren a nickel for it."  What's up with that?

Why the Wealthy Deserve It

Waiting

In Hermann Hesse's Siddartha (1922), the protagonist lists one of his skills as "waiting." This is clearly a lost art in our society. People run red lights, cut in line, and grow furious if their multi-gigabyte downloads take more than a couple of seconds. We insist on reading email and texting while having breakfast ... while driving. We use DVRs to skip commercials, and single cup coffee makers to get near instant caffeine doses. We upgrade our electronics every year or more.

My employer may have found a way to counter this tendency. They may have found the way to teach patience.

This is a privately held company that places a premium on employee satisfaction. They go to great lengths to provide every benefit and accommodation employees might require. Among these, they offer a continuous supply of a wide variety of beverages. I work in one of three buildings on the main campus, and on each floor of this building, there are roughly 200 employees. For each floor, the beverage choices include skim, low-fat and regular milk, decaf and regular coffee, four flavors of iced tea, three kinds of seltzer, apple, cranberry and orange juice, lemonade, six varieties of soda and technologically purified water. In all, 23 different beverages for the 200 employees on each floor.

And four bathrooms.

On Death and Voting

In her 1969 book, On Death and Dying, Elisabeth Kübler-Ross outlined five stages of coping with death:

1. Denial ("Can't be.  I've never felt better!")
2. Anger ("What!  Outrageous!!  I been waiting for the iPad 3!")
3. Bargaining ("I'll eat really healthy starting tomorrow!  No, wait.  Monday.  I'll start Monday.")
4. Depression ("Crap.")
5. Acceptance ("Oh, well.  Better clean up my hard drive.")

In some ways, the Republican nomination race has followed the same progression.  Think about it.

1. Denial ("Hey!  Michele Bachmann is pretty smart!")
2. Anger ("Oh yeah?  Then take Herman Cain!")
3. Bargaining ("How about Newt?  He had the whole Contract with America thing.")
4. Depression ("Santorum? Huntsman? Paul? Anybody?")
5. Acceptance ("Well, I guess it's Romney, even though he looks like one of those pictures that comes with a new frame when you buy it.")