Thursday, September 28, 2006

How governments accumulate power

I came across this description recently.

The Chicago School of economics favored and still favors the theory of "regulatory capture." Under this theory, an industry or some portions of an industry cultivate government to obtain laws and rules that favor the industry.

The government trades favors for what it wants. Politicians gain political contributions, side payments, and votes for being seen to control the industry. The industry captures the regulators. End of story.

[Gary North] called the first step of obtaining favors "baiting the trap." But matters do not stop there, he pointed out. The trap is set when the industry becomes comfortable with its subsidy, tax break, tariff, exclusive position, license, or whatever. It then begins to extract monopoly rents and to lower product quality.

This then leads to further steps such as public outcry and a government demand for the industry to police itself. Then come crisis, further regulatory intervention, and eventually a government stranglehold over the entire industry via a panoply of boards and price controls. This is when the trap is sprung. The market is replaced by government power and bureaucrats. Government, its aim being control, traps and captures the industry.

In the shorter term, the interest groups use the state against the public. In the longer term, the state and its bureaucrats rule the roost. In the end, the government bureaucracies expand. Paperwork and soft jobs rule the industry, innovation and competition are eclipsed, and the public suffers from poor product quality and high prices.

This summarizes the argument made in "Walking into a Trap", an essay by Gary North, that originally appeared in 1978 in The Freeman, on the threat to American medicine posed by the State.

Sunday, September 24, 2006

Internet pollution

Spyware, parasites and unscrupulous search engines that encourage the creation of bogus websites for Click Fraud are increasingly polluting the web.

Download this list of hosts, read the instructions and modify your PC settings to prevent this internet pollution. No more recycled ads on third party websites. Goodbye, cookie trackers!

Thursday, September 21, 2006

Why are you satisfied?

Comcast called me yesterday for a customer satisfaction survey. I think they know via cable box that I have not connected my TV or watched any channels so they are calling me every two days to ask if I am happy. When I told her I was "satisfied, rating 5 on 5" she asked me: "Why are you satisfied?" That was a new one. I had to say "I am satisfied because I am not unsatisfied."

Opens up a Pandora's box of vexing philosophical issues.

Apparently this is not so uncommon.

Before and after.

It is but a short way from yesterday's star trader to world's biggest loser today. How does one lose 6 billion dollars? The mind boggles.

Monday, September 18, 2006

America's biggest export is...

.. the dollar.

Watch this space for more on the topic. "Green Paper Flight".

Sunday, September 17, 2006


Elitism is the natural consequence of freedom -- under any metric, some will always be superior to others.

For this reason a community centered on egalitarian, non-elitist principles cannot thrive.

This explains among others, phenomena like: why plutocracy is the inevitable result of starting with either democracy or socialism, why corporations with flat organizational structures quickly develop heirarchies, etc.

Needs more thought.

Cathedral and the Bazaar

The canonical example of bazaar style development, Linux, allows anyone to modify source code, but pre-designated individuals, who are presumably competent, are the only ones authorised to make these changes permanent. Eg., if you want to change something in the kernel of the operating system, you have to successfully make a case to Linus.

Wikipedia lacks this quality control by domain experts, leading to a lack of polish. One co-founder, Larry Sanger, who devised the details of Wikipedia's neutrality concept, is starting an improvement over wikipedia called Citizendium.

Sunday, September 10, 2006

The rise of Fascism

After the US government revealed some weeks ago that it was spying on its citizens and running torture camps abroad, private sector has joined in on the fun -- Hewlett-Packard hired investigators to illegally spy on the activities of its own board members, many reporters and their families.

Where will this lead to and when will it stop?

Monday, September 04, 2006

Too many "realtors"

Is it really impossible to sell or buy real estate without the intermediary activity of a realty agent? Is "realtor (TM)" really a true professional, like a journalist, a doctor or an engineer? Is it justifiable to charge a fixed 6% of sales price for every transaction independent of the amount of time or effort involved? Does a real-estate agent really spend time trying to get you the best sale or purchase price, or is he primarily concerned with making a quick buck on a fast deal?

One attorney, David Barry, is fighting a crusade against some aspects of this bogus industry. In a recent article, "Nine Pillars of the Citadel", he estimates that in a truly competitive and efficient real-estate market, the commisions would be 50% lower, the average realty agent would make 30% more and there would be 83% fewer realty agents.

Sunday, September 03, 2006

Cultural attitudes

Recently, on three different occasions I had the opportunity to share a table with an Israeli and an Indian each time. Six different individuals, and I had the opportunity to watch their attitudes as they discussed friends, family, country, work, vacations, etc.

The difference in cultural attitude was strikingly stark -- Jews have a strongly ingrained value that "you shall not play down your race", the Indians were more than glad to bad mouth their homeland. As an example: The Jews speak their mothertongue at home and bring up their children strongly in the Jewish tradition, but the Indians seem to prefer to speak English at home, rather than their mother-tongue. Small data set to generalize from but: Wow!

Does this not say something about survival of the race vs individual?

The internet and webcams.

When buying a webcam, make sure it has a light that turns on whenever the camera is on, and which cannot be turned off in software.

"Why," you ask, "would I need this?"

For an answer, read this article, titled "Google researchers use ambient audio to augment the television experience."

Head spinning yet? 10ms today, how long tomorrow? Audio today, video soon? Google today, who next?

And when other companies follow the lead of this stellar "do no evil" leader, to what extent will they do so? Perhaps, the next generation of Yahoo and Google toolbars, or even Microsoft Windows, will have this spying feature integrated into them?