Pictured: A Rice University professor in the near future
Image source: CC BY 2.0

According to Vardi, sometime around the year 2045, you won't have a job any longer because the robots will have taken it away from you.

In recent writings, Vardi traces the evolution of the idea that artificial intelligence may one day surpass human intelligence, from Turing to Kurzweil, and considers the recent rate of progress. Although early predictions proved too aggressive, in the space of 15 years we’ve gone from Deep Blue beating Kasparov at chess to self-driving cars and Watson beating Jeopardy champs Ken Jennings and Brad Rutter. Extrapolating into the future, Vardi thinks it’s reasonable to believe intelligent machines may one day replace human workers almost entirely and in the process put millions out of work permanently.

Perhaps in the future, while some of us work hard to build and program super-intelligent machines, others will work hard to entertain, theorize, philosophize, and make uniquely human creative works, maybe even pair with machines to accomplish these things. These may seem like niche careers for the few and talented. But at the beginning of the Industrial Revolution, jobs of the mind in general were niche careers.

Given the economic, political and social importance of that finding, many have tried to reproduce it, but failed. A post by Mike Konczal on The Next New Deal blog explains how three researchers finally succeeded -- with surprising consequences:

In a new paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadsheet. This allowed Herndon et al. to see how how Reinhart and Rogoff's data was constructed.

They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don't get their controversial result.

The three errors in the original work by Reinhart and Rogoff finally came to light when they allowed other researchers to examine their model and the data they employed in it. It then became clear that the model was flawed, and that not all the relevant data had been included in the calculation. Neither was obvious from the result alone.

This reinforces a point we have made before. Alongside the results of their work, academics also need to release the datasets and any mathematical/computational models that they have used to derive them. Without those additional resources, it is not possible for other researchers to reproduce the results, which may -- as turns out to be the case for Reinhart and Rogoff's famous paper -- contain fundamental errors that completely undermine the conclusions drawn from them.

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Follow me @glynmoody on Twitter or identi.ca, and on Google+

When medical care becomes a matter of life and death, the money demanded by the health care ecosystem reaches a wholly different order of magnitude, churning out reams of bills to people who can’t focus on them, let alone pay them. Soon after he was diagnosed with lung cancer in January 2011, a patient whom I will call Steven D. and his wife Alice knew that they were only buying time. The crushing question was, How much is time really worth? As Alice, who makes about $40,000 a year running a child-care center in her home, explained, “[Steven] kept saying he wanted every last minute he could get, no matter what. But I had to be thinking about the cost and how all this debt would leave me and my daughter.” By the time Steven D. died at his home in Northern California the following November, he had lived for an additional 11 months. And Alice had collected bills totaling $902,452. The family’s first bill — for $348,000 — which arrived when Steven got home from the Seton Medical Center in Daly City, Calif., was full of all the usual chargemaster profit grabs: $18 each for 88 diabetes-test strips that Amazon sells in boxes of 50 for $27.85; $24 each for 19 niacin pills that are sold in drugstores for about a nickel apiece. There were also four boxes of sterile gauze pads for $77 each. None of that was considered part of what was provided in return for Seton’s facility charge for the intensive-care unit for two days at $13,225 a day, 12 days in the critical unit at $7,315 a day and one day in a standard room (all of which totaled $120,116 over 15 days). There was also $20,886 for CT scans and $24,251 for lab work. Alice responded to my question about the obvious overcharges on the bill for items like the diabetes-test strips or the gauze pads much as Mrs. Lincoln, according to the famous joke, might have had she been asked what she thought of the play. “Are you kidding?” she said. “I’m dealing with a husband who had just been told he has Stage IV cancer. That’s all I can focus on … You think I looked at the items on the bills? I just looked at the total.”

In December, when the New York Times ran a story about how a deficit deal might threaten hospital payments, Steven Safyer, chief executive of Montefiore Medical Center, a large nonprofit hospital system in the Bronx, complained, “There is no such thing as a cut to a provider that isn’t a cut to a beneficiary … This is not crying wolf.”

Actually, Safyer seems to be crying wolf to the tune of about $196.8 million, according to the hospital’s latest publicly available tax return. That was his hospital’s operating profit, according to its 2010 return. With $2.586 billion in revenue — of which 99.4% came from patient bills and 0.6% from fundraising events and other charitable contributions — Safyer’s business is more than six times as large as that of the Bronx’s most famous enterprise, the New York Yankees. Surely, without cutting services to beneficiaries, Safyer could cut what have to be some of the Bronx’s better non-Yankee salaries: his own, which was $4,065,000, or those of his chief financial officer ($3,243,000), his executive vice president ($2,220,000) or the head of his dental department ($1,798,000).

Mercy Hospital is owned by an organization under the umbrella of the Catholic Church called Sisters of Mercy. Its mission, as described in its latest filing with the IRS as a tax-exempt charity, is “to carry out the healing ministry of Jesus by promoting health and wellness.”.... The overall chain had $4.28 billion in revenue that year. Its hospital in Springfield, Mo. (pop. 160,660), had $880.7 million in revenue and an operating profit of $319 million, according to its federal filing. The incomes of the parent company’s executives appear on other IRS filings covering various interlocking Mercy nonprofit corporate entities. Mercy president and CEO Lynn Britton made $1,930,000, and an executive vice president, Myra Aubuchon, was paid $3.7 million, according to the Mercy filing. In all, seven Mercy Health executives were paid more than $1 million each. A note at the end of an Ernst & Young audit that is attached to Mercy’s IRS filing reported that the chain provided charity care worth 3.2% of its revenue in the previous year. However, the auditors state that the value of that care is based on the charges on all the bills, not the actual cost to Mercy of providing those services — in other words, the chargemaster value. Assuming that Mercy’s actual costs are a tenth of these chargemaster values — they’re probably less — all of this charity care actually cost Mercy about three-tenths of 1% of its revenue, or about $13 million out of $4.28 billion.

Steve H.’s bill for his day at Mercy contained all the usual and customary overcharges. One item was “MARKER SKIN REG TIP RULER” for $3. That’s the marking pen, presumably reusable, that marked the place on Steve H.’s back where the incision was to go. Six lines down, there was “STRAP OR TABLE 8X27 IN” for $31. That’s the strap used to hold Steve H. onto the operating table. Just below that was “BLNKT WARM UPPER BDY 42268” for $32. That’s a blanket used to keep surgery patients warm. It is, of course, reusable, and it’s available new on eBay for $13. Four lines down there’s “GOWN SURG ULTRA XLG 95121” for $39, which is the gown the surgeon wore. Thirty of them can be bought online for $180. Neither Medicare nor any large insurance company would pay a hospital separately for those straps or the surgeon’s gown; that’s all supposed to come with the facility fee paid to the hospital, which in this case was $6,289.

His bill — which included not only the aggressively marked-up charge of $13,702 for the Rituxan cancer drug but also the usual array of chargemaster fees for basics like generic Tylenol, blood tests and simple supplies — had one item not found on any other bill I examined: MD Anderson’s charge of $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.

Wright said the hospital’s lawyers had decided that discussing Steve H.’s bill would violate the federal HIPAA law protecting the privacy of patient medical records. I pointed out that I wanted to ask questions only about the hospital’s charges for standard items — such as surgical gowns, basic blood tests, blanket warmers and even medical devices — that had nothing to do with individual patients. “Everything is particular to an individual patient’s needs,” she replied. Even a surgical gown? “Yes, even a surgical gown. We cannot discuss this with you. It’s against the law.” She declined to put me in touch with the hospital’s lawyers to discuss their legal analysis.

“We think the chargemaster is totally fair,” says William Gedge, senior vice president of payer relations at Yale New Haven Health System. “It’s fair because everyone gets the same bill. Even Medicare gets exactly the same charges that this patient got. Of course, we will have different arrangements for how Medicare or an insurance company will not pay some of the charges or discount the charges, but everyone starts from the same place.” Asked how the chargemaster charge for an item like the troponin test was calculated, Gedge said he “didn’t know exactly” but would try to find out. He subsequently reported back that “it’s an historical charge, which takes into account all of our costs for running the hospital.”

“One of the benefits attending physicians get from many hospitals is the opportunity to cruise the halls and go into a Medicare patient’s room and rack up a few dollars,” says a doctor who has worked at several hospitals across the country. “In some places it’s a Monday-morning tradition. You go see the people who came in over the weekend. There’s always an ostensible reason, but there’s also a lot of abuse.”

But once you get into the details, there's a lot of debate over the happiness data. One big divide: Should you ask people how they're feeling right now, or how they feel about their life in general?

You get different answers depending on what you ask. Which one is more important is a squishy, philosophical question.

In the U.S, in order to be counted as unemployed, you have to be out of a job and looking for work. But what counts as looking for work? Checking Craigslist? Sending out three resumes a week? Five?

"It's actually kind of a hard question," says Justin Wolfers, an economist at the University of Michigan. "It's very subjective."

Yet every month, a single unemployment number is released.

Yesterday, Reuters news service ran an article about a rating of eleven countries based on their enforcement of intellectual property rights. The index was prepared at the behest of the U.S. Chamber of Commerce by a group called The Global Intellectual Property Center, and it ranks the U.S. at the top of the list in terms of strong IP protection (23.73 points on a scale from 0 – 25). But what is interesting is who scored lowest (out of the eleven countries that were ranked). The four “worst” countries for providing the strong IP protection important to the Chamber of Commerce were the four countries known as BRIC — Brazil, India, Russia and China.

So what else do we know about these four nations? In fact, why were they originally grouped together under the acronym BRIC? The answer is that the term was coined because these four countries were the fastest growing emerging economies, showing growth rates between 5 and 9 percent in their gross domestic products (compared with US growth averaging 3.2 over the past 65 years). The source of these averages for the BRIC nations is this report from PriceWaterhouseCoopers, dated February 2012, which contains this conclusion: “We expect the BRIC economies to continue to drive world economic growth in 2012.”

So the four countries driving economic growth are also the four countries with the weakest IP protection regimes, amongst those 11 rated by the Chamber of Commerce report. Doesn’t the conclusion seem simple, that weaker IP enforcement is part of the picture for economic growth?

[I]P protection is, at least a double edged sword. Piracy can reduce revenues, but it also helps to create distribution channels and grow markets. So creative industries seeking to grow in the digital economy need to do more than try, futilely, to eradicate piracy, they need to seek ways to shape their markets and their marketing to exploit the audiences that it can create.

So, slippery as such conclusions can be, I feel comfortable with these two assertions. First, creative people and creative industries can thrive without strong IP protections. In fact, if you are continually looking to the government to increase IP enforcement on your behalf, your industry is probably already in bad trouble. Second, it is perfectly possible to over-enforce IP rights to the point where creativity and economic growth are stifled. There is good evidence that the US has passed that point, and the example of the BRIC nations should suggest to us that we need to reverse our course.

• Robots: The idea here is that automation has meant fewer jobs, and thus has held down wages and kept the supply of workers high. This is an old argument, of course, but perhaps one worth thinking about. We'll discuss it more below.
• Robber barons: That is, monopolists. The argument here is that when you see an aggregation of wealth to "capital," it suggests that the free market is somehow "stuck," and one possible reason is that the "owners of capital" have effectively created monopolies, allowing them to retain more than a free market might allow, via monopoly rents.

Barry Lynn and Philip Longman have argued that we're seeing a rapid rise in market concentration and market power. The thing about market power is that it could simultaneously raise the average rents to capital and reduce the return on investment as perceived by corporations, which would now take into account the negative effects of capacity growth on their markups. So a rising-monopoly-power story would be one way to resolve the seeming paradox of rapidly rising profits and low real interest rates.

Printed photos, which once came in “wallet size,” have been replaced by an endless roll of snapshots on my phone. Business cards, one of the more archaic forms of communication from the last few decades, now exist as digital rap sheets that can be shared with a click or a bump.

As for cash, I rarely touch the stuff anymore. Most of the time I pay for things — lunch, gas, clothes — with a single debit card. Increasingly, there are also opportunities to skip plastic cards. At Starbucks, I often pay with my smartphone using the official Starbucks app. Other cafes and small restaurants allow people to pay with Square. You simply say your name at a register and voilá, transaction complete.

But wait, what did I do with all of the other cardlike things, like my gym membership I.D., discount cards, insurance cards and coupons? I simply took digital pictures of them, which I keep in a photos folder on my smartphone that is easily accessible. Many stores have apps for their customer cards, and insurance companies have apps that substitute for paper identification.

Copyright is not quite like other types of property. It has some similarities, to be sure, but at its root it is fundamentally different than tangible property like fields and houses and cars and computers. And that's because it is non-rivalrous in consumption. Copyright is a special kind of economic good and special kinds of rules should therefore apply to it. Among those rules, you should have those that take into account that you can have too much copyright....

I don't want to get into a semantic discussion, but I am not completely comfortable with calling copyright property. Simply saying property. I don't even like the phrase intellectual property. I prefer intellectual privilege. I think copyright is a privilege, because it's created by statute, it doesn't exist in a state of nature, it's not recognized by common law. It's purely the creature of statute and you can't say that about the sorts of property rights we enjoy in our persons and in our farms and our cars and computers. Those rights, the rights in those forms of tangible property... you can't deny they're protected at the common law. And many people, me among them, would say that they're protected in a state of nature....

Important ramifications follow from what you call copyright. Me? I like to say it's a privilege that has certain property-like aspects and indeed the best things about copyright -- and there's a lot to like about copyright -- are those features that most resemble property. It's alienable, you can transfer it to other people, you can go to the copyright office and check to see who owns the copyright. There is something like trespass afforded to people who suffer wrongful use of their property. Wonderful things. That's the best thing about copyright.

I was just talking to someone who works out here in Southern California in the local regional air quality control board, and we got into this conversation, and he said "we don't call them property, we don't even call them privileges, we call them permits" I said "well you can buy and sell permits" and he said "there are some things that are like property, but we don't call them property, because we don't want the state thinking, for example, we can't change the rules without suffering a takings claim." And that's true of copyright as well. Look, if Congress decides tomorrow, that we're going to just stop copyright -- they won't, but they might say, per some of the suggestions, of our reformers in our book -- we're going to tinker around the edges, and maybe, just once, around the edges, trim back the restrictions. If they did that, would they face a takings claim? No, no! It's just not part of common law...

Let's recognize, that if you take that approach to copyright, you pretty quickly run into a tough paradox. And it's that the Constitution, says that "only for limited times" shall lawmakers protect these works of authors. So if you're a fan of real property, intangible property, as I am, you don't want to hear about lawmakers saying "we're putting a fuse on your property rights in your house or your car or your computer. We're going to let you have property rights for, oh, maybe 20 years and then 'poof' it's gone, anybody can take it." No, we would take exception if the federal government said that policy with regard to our 401ks or our houses or cars, and for good reason. Yet that's the policy we have copyrights, and it's by design. It's in the Constitution. It's as if the Constitution had a clause that said 'oh also, property rights in your farms and factories and houses -- yeah, we're going to end all those after 34 years.' That's not how they treat tangible property. We're glad of that. And yet that is how we treat copyright and I think we should be glad of that.

1. Reinstate the Founders’ Copyright Act,
2. Withdraw the U.S. from the Berne Convention,
3. Develop misuse doctrine into an escape from copyright,
4. Focus copyright policy on consumers’ costs, not producers’ profits, and
5. Reconceive “IP” as “Intellectual Privilege.”

How can misuse doctrine open an escape from copyright? The doctrine bars claims of copyright infringement that arise under conditions of misuse. It does not, however, bar claims premised on violations of common-law rights, such as trade secrets or the contractual terms of a license. In effect, misuse doctrine corrects the overweening power that results from combining copyright privileges with common-law rights, by negating only the former. Suppose for instance that a copyright holder wrongly tried to squelch rights protected by the First Amendment and the fair use doctrine by including in its license a clause forbidding public criticism of the work. A court might remedy that misuse by denying the considerable enforcement powers afforded by the Copyright Act even while leaving the underlying contract in force. In practical terms, the dispute would become a matter of state contract law rather than federal legislation. Repeated applications of the same doctrine in other cases would eventually encourage the development of business models premised solely on contract law, tort law, trade secret law, and other common-law devices. Misuse thus opens an escape from a world where copyright comprehensively regulates access to expressive works to one where only common-law rules apply

Pizzaright – the exclusive right to sell pizza – is a new kind of intellectual property right. Pizzaright law, if adopted, would make it illegal to make or serve a pizza without a license from the pizzaright owner.

Creating a pizzaright would be terrible policy, of course. We’re much better off letting the market decide who can make and sell pizza.

The Pizzaright Principle says that if you make an argument for expanding copyright or creating new kinds of intellectual property rights, and if your argument serves equally well as an argument for pizzaright, then your argument is defective. It proves too much. Whatever your argument is, it had better rest on some difference between pizzaright and the exclusive right you want to create.

Which brings us to the third notable item: “the exclusive right”. This is what we would refer to colloquially as a “monopoly”. The copyright industry has been tenacious in trying to portray the copyright monopoly as “property”, when in reality, the exclusive rights created are limitations of property rights (it prohibits me from storing the bitpatterns of my choosing on my own hardware).

Within two months, 24 movies had signed up to film in Michigan — up from two the entire year before. The productions estimated that they would spend $195 million filming there, and in return they would be refunded about $70 million in cash.

Before long, residents were rushing out on their lunch breaks to catch a glimpse of celebrities like Drew Barrymore, who was filming her movie “Whip It” in Ann Arbor, and Clint Eastwood, who was shooting “Gran Torino” in the Detroit area. Even Michael Moore, who was filming a movie about corporate welfare called “Capitalism: A Love Story,” sought and received incentives.

Ms. Granholm declared the city in a financial crisis in February 2009 and appointed an emergency manager, Fred Leeb. The city’s budget was $54 million a year, but it was overspending by an estimated $7 million to $12 million. Pontiac was also still weighted down by old incentives it had given to businesses like G.M.

The movie studio was an added challenge, since it was seeking financial incentives from the city — not to mention from other branches of the government. It won redevelopment tax credits from the federal government and separate aid from the state that included incentives for technology companies that hire residents.

Job creation became a point of contention with beleaguered Pontiac, which was being asked to waive virtually all property taxes for the studio. The investors claimed that thousands of people would be employed, but Mr. Leeb said that when he asked for job numbers to be written into the contract, the investors refused. “We started seeing some backpedaling,” said Mr. Leeb, who added that the negotiations featured “knock-down, drag-out fights.”

Over the objections of some local officials, the state agreed to use the state workers’ pension funds to guarantee the bonds. If the investors failed to pay, the retirees would be on the hook.

The studio had created only 200 positions by the summer of 2011, according to correspondence between the company and local officials. And when temporary construction workers were excluded from the tally, Pontiac’s records show, the studio reported only two employees in 2010 and 12 the next year.

The city later had problems collecting some of the taxes because Disney operated through a separate business entity that was difficult to track down, he said.

“This is a glamorous industry if you want to talk about Hollywood, but it’s not very glamorous for the municipality that wants to collect something,” Mr. Schimmel said. Pontiac, he said, was outgunned.

Disney declined to comment.

When the bill for the studio’s bond interest came due in February this year, it paid only a portion, $210,000. The state pension fund had to pick up the remaining $420,000....

In August, the studio defaulted on the entire $630,000 payment on the bond, despite a decision by Mr. Snyder to temporarily allocate some film incentives.

Rather, it's because, as a property right, copyright is a critical element within the GOP's market-orientation. Markets simply don't work without property rights. You can't have contracts, or licensing, if you don't have clear and enforceable property rights. ALL business models, not just "new" business models, rest on property rights.

Further, because the GOP believes in innovation, copyright is a natural fit, because copyright incentivizes and encourages the creation, distribution and promotion of new information. The alternative to copyright isn't free information, but less creation, less widely distributed and marketed.

The people who create expressive works deserve to own them and benefit from them. So do the companies that finance and purchase these works for commercial exploitation.

Many modern copyright scholars and commentators have embraced a severe utilitarian view of copyright. In this view, the sole justification for copyright is the benefit that creators provide to society. Society would benefit most if creators worked for free, but, alas, we cannot always convince them to do so. Copyright is thus an unfortunate necessity, given to creators to induce them to provide society what it needs. The labor or welfare of creators has no importance under this view—they and their works exist to serve the good of the greatest number.

As between creators (along with those who finance and/or purchase the rights to their work) and others, who has a better claim to control and exploit a work of authorship? Of course, to a dedicated IP utilitarian, this question is irrelevant. Nobody deserves anything; society takes what it needs, subject to the need to persuade the producer to keep producing what the takers want. While such a churlish and ungenerous view of creators is apparently acceptable to some, many would find the implications chilling.

One of the favorite claims of copyright skeptics is that creators routinely oppose new technology because it “disrupts their business model.” On the contrary, it is often the case that the businesses utilizing the new technology are the ones who feel entitled — entitled to profit off the exploitation of established rights without compensating creators merely because they are using new technology. In this case, creators do “deserve” compensation. This isn’t a prize at the bottom of the box, it’s one of the foundations of a just capitalist society.

the myth that “content industries hate technology” fails for several reasons. It requires fabricating a group (“the content industry”), ascribing a broad characteristic to it (“hates technology”), and then pulling together disparate quotes from anyone who has stated a concern over some new technology as proof of the theory.

Happy Halloween, Techdirters!

Over the last twenty years, arguments for broader copyright have taken an increasingly mercantilist turn. Rather than argue for broader copyright in terms of more or better original works, proponents have begun arguing for broader copyright on the basis of revenue and jobs. Consumer copying is theft or piracy, proponents insist, depriving copyright owners of revenue and destroying jobs. In this article, I review these arguments and show that they are empty. While the Internet and digital technology has made widespread consumer copying a reality, broader copyright can be justified only if this copying has interfered with the creation and dissemination of new original works. But it has not. Using a hand-coded data set examining the number of new artists and cover songs in the top fifty of the Billboard Hot 100 chart in the first week of each month for the years 1990-2010, I show that while music industry revenue has fallen sharply since Napster opened its virtual doors, output in the music industry, both in terms of quantity and quality, has increased just as sharply. Part of the explanation for this seemingly paradoxical result, is that the digital revolution, while it has made consumer copying trivially easily, has also reduced costs, risks, and barriers to entry in the music industry. Yet, this cannot be a complete explanation.

To account for the rest, I offer a theoretical model and a simple explanation for why the incentives for music creation have remained sufficient in the face of widespread consumer copying: Consumers don't just love music generally; they love their particular favorite artists and their specific favorite songs. While consumers would like to get music for free, they know that they have to support their favorite artists in order to get and to continue getting the music they want. As a result, self-interest tends to ensure that consumers do not free ride too much. While the resulting market is unlikely to be perfect, legislation from Congress is not likely to improve the situation. Just as product markets fail in predictable circumstances, so too do political markets. When, as in the debate over broader copyright, proposed legislation benefits a concentrated interest group, such as copyright owners, at the expense of a dispersed interest group, such as copyright consumers, Congress is systematically likely to get the answer of how much copyright is optimal wrong, and badly wrong at that. In short, we have far more to fear from government intervention in the markets for original works than we do from leaving these markets alone.

While I recognize the political difficulty, and perhaps futility, of proposing a constitutional amendment limiting Congress's power in this area, I think it is time, and past time, to put such options on the table. It has been over two hundred years since our Constitution was written, and we have a much better sense today for where representative democracy works and where it fails. Because copyright benefits a concentrated and well-organized interest group at the expense of a dispersed group, establishing an optimal copyright regime is simply not something Congress has done or will do well. We should therefore limit Congress's power to act on this issue. At the simplest, such a constitutional amendment might follow Jefferson's suggestion and substitute "for no more than fourteen years" for the phrase "for limited times" in Article I, section 8, clause 8. Taking it a step further, an amendment might specify or limit the nature of the "exclusive rights" that Congress may grant. I fully recognize that such an approach would enshrine a set of rights that, even if optimal today, may not prove optimal for all time. Such an approach would almost certainly impose a set of legal rights that will not fit perfectly the needs of the future, as technology and markets change. Nevertheless, I believe that such an approach remains preferable to our current approach. Any welfare losses that may result from constitutionalizing today's optimal set of rights and imposing those rights onto the future would be less than the welfare losses that will result, and have resulted, from leaving the issue to Congress. Given how overbroad copyright has become, even an amendment barring Congress (and the states as well) from granting exclusive rights to authors for their writings altogether would be better than where we find ourselves today.

for the copyright industries to receive more revenue, consumers must pay more for works of authorship. Broader copyright, after all, does not generate revenue from thin air. It has to come from somewhere. If consumers have to pay more for works of authorship, they will have less to spend on everything else. Thus, more revenue for the copyright industries necessarily means less revenue for other sectors of the economy. If more revenue for copyrighted works means more jobs for the copyright industries, presumably less revenue everywhere else means fewer jobs elsewhere in the economy

We don't actually go after rents in the tax system. No one tries to remove the 90% of rents that people get if they're top basketball players. No one says 'well, gee, Charles Barkley, back in the day, when he was doing it, or Michael Jordan, or anybody now, we should have taken 90% of their income away, because it was all rent.' So the textbook says we should and it would be efficient if we could, if we're just looking to generate revenues for the government. But there's no practical application of actually trying to do any of that.

The one place in policy where we can do something like that, is something like copyright. Because in copyright we can control the length or duration of the copyright, which largely controls the amount of rents that the creative individuals get. Now, it's an average, but that's something that we can do for them, that we can't do for almost any other occupation. And that's sort of the difference here. So we're talking about efficiency in terms of copyright. And what's different here is that the ownership rights that the copyright holder is given is not permanent, it's temporary. And we control how long it lasts by the law. Every other type of ownership, to a large extent, is not considered temporary, and you get to keep ownership as long as it stays in your property or your heirs' property.

Jerry Brito (JB): Let's say you wrote a book, and I want to use my printing press to make a copy of it. I can't do that.

Stan Liebowitz (SL): Right. Not without getting permission.

JB: Precisely.

SL: Absolutely. That's what copyright does. But that's essentially a property right. You can't come and use my car without my permission. That's what property rights do.

JB: Sure, but the reason we might want to cut off the rent in the copyright space, where we just want to cut it off where they've earned enough to induce them, whereas we wouldn't want to do that for basketball players, is simply that, in the copyright space, you're limiting what I can do with my property. My physical property. My printing press. I can't use my printing press to make a copy of your book. It's affecting me. Whereas Michael Jordan performing well, doesn't really affect me one way or the other.

SL: Well, you can print anything you get the rights to print. I don't think it affects your freedom any more than it restricts your freedom to drive my car whenever you want to.

JB: No, but when I drive your car, then you can't drive it. But if I use my printing press to make copies of your book, you still have your book.

SL: I no longer have the earning capacity that I have from writing the story.

JB: Which is why we have copyright. And the question is at what point should it end?

SL: That's right. And you're talking about the non-rivalrous consumption aspect of intellectual property.

JB: Exactly. At what point should the limit on my freedom be lifted?

SL: Because it's an issue where you want to have the freedom to generate revenues from an item that I created. That's one aspect of it. I'm not sure we should give you that freedom, just as we shouldn't give you the freedom to sell my car. I mean yes it's true that one's rivalrous and one's not rivalrous. But I create the story. Why should you be allowed to generate revenues on a story that I created?

JB: I guess I'm...

SL: What does that have to do with your freedom? We do view the property right differently on copyright than we do on other items, but I'm not sure we should. You claim there's a difference in freedom and I'm saying, 'no, just as you can't take my car without my permission, I don't see why you should be able to take my story without my permission.'

JB: Let's not get too deep into this, but I'd simply say...

SL: I mean you want the freedom to steal, is what you're saying.

JB: Well, no...

SL: It infringes on your freedom.

JB: No, no, no...

SL: If you consider an item, and we'll say let's treat it like other property, then yes, my story is my story. And you want to steal it.

Under a regime of competitive production of reproductions (no copyright), the equilibrium price of a reproduction is Pc (equal to marginal cost, MC) and the quantity of reproductions purchased is Qc. There is no profit earned in the market for reproductions since the market is assumed to be competitive.

Let's remember that the key point I'm trying to make is one that is not particularly amenable to economic analysis. I don't deny that it's efficient to sort of weaken copyright to a certain balancing point. What I'm saying is that we can do that, we have the tools to do that, and no one finds it particularly morally objectionable to weaken copyright to get to what is the proper balance. The point of my paper is that if we were doing it the way we're saying we would like to, we would be removing rents from the creators of copyrighted works, because that's how you get the balance that's most efficient. But we don't go reducing rents elsewhere in the economy, say from basketball players.

• Psychologists have pointed out that matching algorithms for long-term relationships are not significantly better than random. Dating algorithms aren't actually so bad at excluding potentially "bad dates" -- but that's not what most online dating services offer. [url]
• The Secret Diamond Club takes advantage of some economic tricks to try to match up rich men with attractive women. The real secret, though, is that it probably doesn't work at all -- and it preys on lonely people with money. [url]
• Recently, the Nobel prize for economics was awarded for work on matching markets. The Gale-Shapely algorithm has been used for matching organ donors and doctors with hospitals, but maybe someday it'll be used for finding romantic partners, too. [url]

But the road to Utopia all too often ends up detouring through the business district, and Web 2.0 has been no exception. By offering the means of production free to their users, other leviathan sites, such as Facebook, Twitter, and YouTube, have generated enormous amounts of content at almost no expense. Even better, this content is a gold mine for targeted advertising.

Over in Utopia, the “workers” who generated all those articles, photos, tweets, and videos would get a cut of the profits they helped to generate. In the business district, however, users retain their amateur status, while the companies they labor for rake in billions. Worse, contributors don’t even own the content they create. The smallest of the small print in the terms of use, which you must agree to in order to get an account, states that the company can use your content as it sees fit.

Anthony De Rosa, a product manager at Reuters, calls this digital feudalism and laments that we “are being played for suckers to feed the beast, to create content that ends up creating value for others.”

Innovation has wreaked creative destruction on traditional content platforms. During the decade following Napster’s rise and fall, industry organizations launched litigation campaigns to combat the dramatic downward pricing pressure created by the advent of zero-price illicit content. These campaigns attracted a torrent of debate, still ongoing, among scholars and stakeholders — but this debate has missed the forest for the trees. Industry organizations have abandoned litigation efforts, and many copyright owners now compete directly with infringing products by offering licit content at a price of $0.

This sea change has ushered in an era of “copyright freeconomics.” Drawing on an emerging body of behavioral economics and consumer psychology literature, this Article demonstrates that, when faced with the “magic” of zero prices, the neoclassical economic model underpinning modern U.S. copyright law collapses. As a result, the shift to a freeconomic model raises fundamental questions that lie at the very heart of copyright law and theory. What should we now make of the established distinction between “use” and “ownership”? To what degree does the dichotomy separating “utilitarian” from “moral” rights remain intact? And — perhaps most importantly — has copyright’s ever-widening law/norm divide finally been stretched to its breaking point? Or can copyright law itself undergo a sufficiently radical transformation and avoid the risk of extinction through irrelevance?

Because some creators and distributors are now realistically motivated solely by non-pecuniary incentives while others are motivated by pecuniary ones, yet both groups often create the same “types” of works, segregating rights based on type of work (as does the current legal structure) is likely an inefficient means of incentivizing authorship and dissemination. Instead, copyright law could be altered such that copyright owners may choose to enforce one of two bundles of utilitarian-based rights: either the pecuniary-focused rights (reproduction, distribution, et al.) or the social-status-based rights (attribution and integrity). This structure would operate somewhat similarly to the current remedies structure, under which copyright owners can choose to pursue either actual damages (and/or lost profits) or statutory damages. Importantly, it would allow creators and distributors—who are in the best position to do so—to self-segregrate based on primary incentive type. Thus, such an enforcement structure may well be a much more efficient means of stimulating creative output than our current set of copyright laws.

If you take down your clothes line and buy an electric clothes dryer the electric consumption of the nation rises slightly. If you go in the other direction and remove the electric clothes dryer and install a clothesline the consumption of electricity drops slightly, but there is no credit given anywhere on the charts and graphs to solar energy which is now drying the clothes.

I deliberately avoid calculating that number, because if you start measuring something you start optimizing it, and I know it's the wrong thing to optimize.

All campaigns start with the best of intentions: “let’s do something creative, engaging, and unique!” But unless someone really senior from the agency or client side intervenes, the road for a campaign always leads to the media buyer and the dreaded spreadsheet, where the two most important columns are impressions and cost. Ironically, there’s usually some good stuff in campaigns, but they are thrown in for free as “value adds.” At some point, publishers decide that if all clients care about is impressions, then OK, we’ll give them impressions. The output is an industry that overproduces shallow, superficial, commoditized impressions. Why do we have so many bad sites that republish the same junky content–content that’s often made by machines or $1-per-post contractors? Why do sites intentionally try to get us to turn lots of pages with tons of top 10 lists, photo galleries, or single-paragraph summaries of someone else’s story?

"We want to make money when people use our devices, not when they buy our devices."

Bezos's we want to make money only when you use it framing works two ways. First, it explains the Kindle Fires' noticeably lower retail prices in a way that doesn't make them seem cheaper, only less expensive. It frames Apple's prices -- and profit margins -- as greedy. Second, it works as a sort of guarantee -- if you don't actually use it, we won't even make any money on it.

Apple's goal is to sell as many iPads as it can. Amazon's goal is to sell as many Kindle Fires as it can to a specific audience: active Amazon.com customers.

• Apple: High margin hardware (scarce); make just a little on digital goods (abundant).
• Amazon: Low margin hardware (scarce); make the real margins on digital goods sales (abundant)
• Google: Low margin hardware (scarce); make some margins on digital goods (abundant), but cross subsidize both with the ad business.