“capitalism”
42 posts under this tag.
Free trade is when a trade doesn’t need the consent of anyone but the traders.
A trader is an owner of property to be traded.
The above definitions after this inspiring but somewhat muddled definition of free trade. I particularly like the second, satellite definition because it safeguards the first: If you want to contort a party into a trade and still call it free, having to specify exactly what it is this party owns can make the contortion clearer—all sorts of patronizing, noble-sounding words can be used to camouflage deception, but to own is a very strong word that makes us pay attention and rightly so.
It’s claimed that government is a legitimate party in sex trade (say, prostitution) because it has to defend public morals, clients and prostitutes, but what is it that gov’t owns? Clients’ and prostitutes’ bodies and money? Public morals? Gov’t is also claimed a legitimate party to international trade (say, immigration) in the name of protecting domestic industry, but what is it that gov’t owns? Domestic industry? Employers’ or employees’ time and money?
Human beings are not just more mouths to feed, but are productive and inventive minds that help find creative solutions to man’s problems, thus leaving us better off over the long run… Every time a calf is born, the per capita GDP of a nation rises. Every time a human baby is born, the per capita GDP falls?
Julian Simon
For those armchair observers of the breathtaking world of quants and structured finance, as myself, Technology Review’s current issue carries a wonderfully didactic and gripping introduction, The Blow-Up: (pesky but FREE registration required).
“How many think spreads will widen?” she asked.
The hands of about half the smartest people on Wall Street shot up.
“And how many think they’ll narrow?”
The other half—equally smart—raised their hands.
“Well,” she said. “That’s what makes a market.”
If they didn’t know, nobody could.
Focused only in securitization, When it goes wrong, from The Economist (YubNub’s “eco“), is also a good overview and glimpse:
..it is hard to overstate the effect that securitisation has had on financial markets. Until the early 1980s, finance hewed to an “originate and hold” model. Banks generally held loans on their balance sheets to maturity; some debts were sold on loan-by-loan, but this market was small and lumpy. This began to give way to an “originate and distribute” model after America’s government-sponsored mortgage giants issued the first bonds with payments tied to the cash flows from large pools of loans.
Wall Street built on this innovation, and securitisation took off soon after, then paused before exploding in the 1990s.. It was given a lift by America’s savings-and-loan crisis, which encouraged mortgage lenders to jettison their riskier loans, and by new technologies, such as credit-scoring, that facilitated loan-pooling. Around 56% of America’s outstanding residential mortgages were packaged in this way, including more than two-thirds of the subprime loans issued in 2006. Thanks largely to securitisation, global private-debt securities are now far bigger than stockmarkets.
Answers.com (YubNub’s “a“), btw, is invaluable in navigating jargony fields like finance.
What structure would you give to Mexico’s 2006 GDP, the wealth it generated in a year? Just gather your prejudices, take a guess, and try to put it into numbers.
Mexico’s 2006 GDP Structure
A fairly unique thing about democracy and capitalism is that —as opposed to, say, monarchy or theocracy— both are formal systems for collective decision making, both specify clear rules for obtaining and aggregating the ends of differing individuals.
As such systems, they both necessarily hinge in what we shall refer to as ballots. Usually the paper in which votes are cast, we will here use the word ‘ballot’ to mean ”an external expression of preference.” The key part is ‘external’. Externality has problems all its own but is also our only hope of finding out what others think—telepathy, guessing, and revelation are our other options.
In democracy, votes are the ballots. In capitalism, it’s money. In democracy, a clinic will be built if the majority of voters vote in its favor. It will keep in operation as long as people don’t vote it out of existence. In capitalism, a clinic will be built if enough people pool the money for its construction and it will keep in operation as long as it makes a profit—that is, as long as it ends up receiving more money than it gives away.
Seeing votes and money as instances of the same concept begs an intriguing question: How then do they differ? How is a vote different than a buck? What specific changes do you need to make to a vote ballot to turn it into a money ballot?
Hace ya casi un anho de la FIL y yo apenas subo este cuentito que tan simpatico se me hizo. Libertarianismo para ninhos.
«En el pais de la colmena,
el guardia para a la abeja:
“¡Su carné!
¡El permiso de zumbar,
el permiso de volar,
el permiso de libar
y el permiso de melar!
¡Pronto y deprisa!”
Y a Abeja le da la risa:
“¡A ver!
¡Su permiso de silbar!
¡El permiso de multar!
¡El de parar a la gente
y el de ser tan repelente!”
En el pais de Colmena
¿quién se ríe?
El guardia, la abeja y yo.
Y este cuento se acabo.»
Darabuc, La vieja Iguazú
...Is how Peter DruckerWP drives it home. “It” here was not originally the free market, though what a great defense for it it makes, no? Drucker was illustrating, rather, his brave belief that strong people always have strong weaknesses, that it is foolish to concern oneself with what a man cannot do instead of what he can, that the man who “leaves least to be desired” is invariably the mediocrity, that one builds on strengths, not on weakness. Moreover, that making strength productive and weaknesses irrelevant is “the unique purpose of organization.” A great short book, The Effective ExecutiveAM.
And enjoy it you should. If you’re not a thief or a politician you earned it, which, being clear about it, is just a handy way of saying that you did stuff that Other People voluntarily value enough that Apple is willing to exchange an iPhone for your stuff (confident that it can then exchange it with Other People for what it itself really wants). The iPhone is yours and yours alone to enjoy. You earned it. You owe nothing to anyone—not, particularly, guilt.
What is more, both you and Apple, by freely exchanging only for how much each could get from each other, are subtly but importantly cementing the worldwide enterprise that has made it possible for the output of 4 Hindu villagers to seem tiny by comparison.
Fascinating Economist article on the music industry’s new developments. Very reminiscent of Dyson’s thoughts on intellectual property:
“[...it] is dead; long live intellectual process. Long live service; long live performance.”
and anime’s general stance towards piracy:
“If it succeeds, milk it; if not, try something different. And if the fans are into file sharing (which they are), keep the lawyers leashed and find a way to make piracy work for you.”
Seven years ago musicians derived two-thirds of their income, via record labels, from pre-recorded music, with the other one-third coming from concert tours, merchandise and endorsements, according to the Music Managers Forum, a trade group in London. But today those proportions have been reversed—cutting the labels off from the industry’s biggest and fastest-growing sources of revenue. Concert-ticket sales in North America alone increased from $1.7 billion in 2000 to over $3.1 billion last year, according to Pollstar, a trade magazine.
Frustrated record companies have responded by trying to get their artists to spend more time promoting records and less time touring and endorsing products, says Jeanne Meyer of EMI, another big record label. “Sometimes you’ve got a tug of war going on,” she says. Yet the more labels spend on marketing pre-recorded music, the more they raise their artists’ profiles and boost their other, more lucrative, sources of income. Pre-recorded music, no longer the main cash cow, increasingly serves merely as a marketing tool for T-shirts and concert tickets. The best seats for The Police’s world tour this summer cost over $900; the group’s entire catalogue on CD costs less than $100.
The shift away from recorded music is due in part to the recognition that touring and merchandise are more lucrative. But it may also be a consequence of internet piracy, as free downloads give music fans more money to spend on other things. Jwana Godinho, the director of Música no Coração, a concert promoter in Lisbon, thinks many music lovers have a “mental budget” that they are prepared to spend on music, and have switched their spending from CDs to tickets and merchandise.
The logical conclusion is for artists to give away their music as a promotional tool. Some are doing just that. This week Prince announced that his new album, “Planet Earth”, will be given away in Britain for free with the Mail on Sunday, a national newspaper, on July 15th. (For years Prince has made far more money from live performances than from album sales; he was the industry’s top earner in 2004.) Outraged British music retailers were quick to condemn the idea. As far as the record industry is concerned, it is madness. But for the music industry, it could well be the shape of things to come.
I’ve always hated, with a passion, moral-indignation ads against piracy—not only because they’re manipulative but because they’re stupid. And the best defense for piracy may be how hard it is to make an argument against it that doesn’t stink of moral indignation—if maudlin pleas are the best you can do, you’re probably rotten. (On a related sidenote, I found it mighty interesting when The Economist circuitously referred to Kazaa as “a file-sharing program that was widely used to download music without paying for it”—as much as ads want to make us believe pirating is stealing, there are crucial differences, which is why such circumlocutions are essential.)
To solve intellectual property’s malaise I’ve long sought for grand economic solutions (new innovative schemes or perhaps even a new concept of property rights) rather than grand political ones (which are just, ugh, imposed moral rules). While there has been plenty of both, I’m starting to see these days that maybe the solution will be simply to move on. Piracy is just another (admittedly extreme) form of commodificationWP. You don’t fight commodification by outlawing it, you take the next thing that hasn’t been commodified yet, you offer value however you can, you move on.
Herbal Essences has always been one of the prettiest shampoos out there but their new color me happy line is something else. Not only is the industrial (blobjectyWP) and graphic (modern art noveau) design stunning, their personified, casual copy is like nothing I’ve seen before. Fascinating.
|
RSS
email
