by Nina Paley
Thu, Jul 21st 2011 7:47am
by Mike Masnick
Thu, Apr 21st 2011 10:49am
from the what's-next,-that-automobiles-are-killing-jobs-in-the-buggy-whip-industry? dept
"A few short weeks ago I came to the House floor after having purchased an iPad and said that I happened to believe, Mr. Speaker, that at some point in time this new device, which is now probably responsible for eliminating thousands of American jobs. Now Borders is closing stores because, why do you need to go to Borders anymore? Why do you need to go to Barnes & Noble? Buy an iPad and download your newspaper, download your book, download your magazine. Chicago State University, in my Congressional district, in Freshman class, they're not being given textbooks any more. They're all being given iPads as they enter school. President Wayne Watson is hoping for a textbookless campus within four years, where this state university they no longer have textbooks! Well what becomes of publishing companies and publishing company jobs? What becomes of bookstores and libraries and all of the jobs associated with paper? In the not too distant future, these jobs simply won't exist."Now, to be fair, I think he's trying to make a slightly different point than most are getting from this, but doing an incredibly bad job of it. This can certainly be read as a traditional luddite screed against iPads. Later in the speech, he admits that the iPad may have made life more efficient for Americans.
What is true is that disruptive innovation does shift around jobs. No one denies that, and I think that's the point he was trying to make, and then arguing that Congress should be helping those displaced workers. Of course, instead, it comes off as an anti-iPad screed. Separately, it comes off a bit as an anti-Chinese screed, because later in the speech he bitches about the fact that the iPad is made in China, so they get the "benefits" of it while Americans do not.
Of course, that's simply wrong. As Gary Shapiro points out in his article (linked above), the Chinese get very little of the value of the iPad, and the reason the jobs are there is because they're low cost jobs:
The Chinese believe their people only get a few dollars of the iPadís cost, as the profits, research and development, and many of the components are sourced from outside China. The Chinese only get paid for the lowest value assembly their workers provide. Most Americans do not want this type of repetitive assembly work Ė and if Apple used Americans to make their products, the products would be much more expensive and less accessible to most Americans. Yet, devices that access the Internet allow the poorest among us to have access to a wealth of education and information.But the key point that Rep. Jackson appears to be totally missing is how the iPad and other technology innovations create a ton of new jobs in the US as well. Technology disruption does that sort of thing. Automated phone switching was supposed to be horrible in that it would put all those human operators out of work... but it also enabled the internet, which now certainly accounts for much greater employment opportunities.
Rather than complaining about the iPad, or saying that it's killing jobs, why isn't Jackson encouraging more such innovation which creates new jobs?
by Mike Masnick
Tue, Mar 22nd 2011 9:33am
from the when-you-treat-hackers-badly... dept
from the fun-with-stats dept
A few years ago, the folks at CCIA smartly took the copyright industry's exact methodology and showed that for all the claims of how much copyright contributed to the economy, exceptions to copyright contributed even more. While the copyright maximalists totally missed the point and attacked the methodology -- not realizing that, in doing so, they had undermined their own methodology -- the point was made. If you believe the claims from the copyright industry, then you also have to believe that the exceptions are more important. The methodology is the same, so either neither are right or both are right.
It looks like Rick Falkvinge, of The Pirate Party, has now done something similar on the "job loss" side of things, and concluded that, using similar methodology to the industry reports, for every job "lost" by copyright infringement, the positive ripple effects in the other direction mean that 11.8 new jobs are created. So if we accept the claim that 1.2 million jobs can be lost due to infringement, it would mean that a separate 14.2 million jobs were created elsewhere.
The report broke down the "creative industry," by noting that (contrary to copyright maximalist claims), most of that industry doesn't actually rely on copyright to make money. In fact, certain "creative" industries could be seen as "copyright-inhibited." For example, advertising. As we constantly hear from copyright maximalists, various sites are making big bucks by using advertising in association with file sharing. So based on the industry's own argument, it seems that the advertising market is clearly copyright-inhibited, and it would grow if there was greater infringement. After going through the numbers, it was determined that the majority of GDP, by quite a bit, are likely in the "copyright-inhibited" arena.
by Mike Masnick
Thu, Dec 2nd 2010 8:46pm
from the this-is-a-mistake dept
For a little while, it had seemed like media companies had moved away from such positions -- and I had hoped it was a sign that they had realized what a mistake it was. Instead, it seems like the concept was merely lying dormant. AdAge reports that the role of the Chief Digital Officer is making a comeback within media companies. Thankfully, the AdAge article at least suggests that the new rush to hire such positions often indicates that a company "is behind." Of course, what it doesn't really acknowledge is that hiring a "Chief Digital Officer" probably isn't going to solve the problem. It's more of a sign that the business isn't really thinking digitally at all.
by Mike Masnick
Fri, Oct 1st 2010 10:27am
from the history-lessons dept
Earlier this year, for example, he (along with his co-author for the book, David Kline), wrote a piece for the Harvard Business Review, claiming that patent system delays are costing millions of jobs. To support the claim that patents do create jobs, there's the following:
In contrast, we know that patents create jobs -- sometimes many thousands of them. Just consider the job-creating effects of Steve Wozniak's 1979 patent for a microcomputer, for example, or Larry Page's 1998 patent for Google's search engine. Then there's Jack Kilby's 1959 patent on the semiconductor integrated circuit, which gave birth to a semiconductor industry that directly employs 185,000 people just in the U.S. today, as well as contributing to jobs throughout the larger $1.1 trillion global electronics industry.Note the implicit (totally false) assumption made there: that these products and jobs were entirely a result of these patents. This is false. In all three areas, there was tremendous work being done among competitors in the same fields, and the innovation that happened was not because of the patents (in fact, all of the patents discussed had almost nothing to do with the later success of the technologies in question). If you look at the history of the semiconductor industry, the PC industry and the search business -- all were built on widespread sharing of ideas among different researchers, rather than hoarding it and using patents to keep others from the market.
Larry Page's search engine work was really based on Jon Kleinberg's research at MIT & Cornell which was openly shared, and which Page built on. When others copied Google's ranking mechanism, Google never sued or, as far as I can tell, even threatened to sue. And most of the "jobs" created by Google came about not because of the patented search ranking mechanism, but because of Google's execution in the marketplace, and its creative decisions on how to implement more "user-friendly" advertising. It appears as if Google barely valued the patent at all.
As for the the PC industry, Wozniak's "microcomputer," was very much based on a sharing culture around the Homebrew Computing Club in Silicon Valley, where plenty of development was going on entirely outside of what was happening in the patent world. What made Apple a success wasn't its patents, but the incredible focus and salesmanship of Steve Jobs. And, of course, it's notable that it wasn't long before the big jump Apple made was due to Steve Jobs directly copying the graphical user interface that was first invented at SRI and then redone at Xerox PARC (by folks who had seen it/worked on it at SRI). Jobs saw it at PARC and copied it. Note what was important here: the real revolution and job growth came from the open sharing of info, and better execution, not from patents or patent licensing.
Finally, as for the example of Jack Kilby, that may be the worst of them all. After all, while Kilby patented the integrated circuit in 1959, his integrated circuit, was based on germanium. Just a couple months later, Robert Noyce came out with his patent application for the integrated circuit... based on silicon. The fact that I live in Silicon Valley rather than Germanium Valley should suggest how much the world actually valued Kilby's original patent. Separately, the fact that multiple inventors (and there were more) were reaching the same conclusion shows that it wasn't patents that drove this innovation and the corresponding job growth, but the natural progression of the needs of the market.
We see this all the time. Patent system supporters want to credit patents for things that had nothing to do with patents. Just because a company that innovates gets a patent, it doesn't mean that it was only because of the patent that the innovation occurred. Quite frequently, the patent has absolutely nothing to do with it. Northhaft quotes some company execs who claim that they can't move forward with a product without a patent, but that's entirely self-serving. Who doesn't want a gov't granted artificial monopoly on their product? But the idea that they can't move forward? Hogwash. Separately, the main guy that Northhaft quotes to support this claim, talks about the need to get money to bring a drug to market, claiming that "It can cost a billion dollars to bring a new drug to market." First of all, this myth of how much it really costs to bring a drug to market has been debunked multiple times -- and the biggest reason for the specific cost is a separate regulatory issue, which has nothing to do with patents.
More recently, Northhaft, along with former CAFC (the appeals court that tends to love patents) judge Paul Michel wrote an equally ridiculous op-ed piece for the NY Times where they suggested not just having the USPTO hire a bunch more workers, but also a plan to federally subsidize all patents for "small companies", such as patent trolls. I'm not joking:
To encourage still more entrepreneurship, Congress should also offer small businesses a tax credit of up to $19,000 for every patent they receive, enabling them to recoup half of the average $38,000 in patent office and lawyers' fees spent to obtain a patent.They also claim that hiring more patent examiners to approve more bad patents would "create, over the next three years, at least 675,000 and as many as 2.25 million jobs." What's this based on? "Our guess." Uh huh. Notice that they don't bother to point out the massive amount of research showing that patents have been a net negative on the economy and jobs for quite some time now.
In both articles, Northhaft relies heavily on the Berkeley Patent Survey, which asked a bunch of companies about the importance of patents. We wrote about this study a few months ago, highlighting how it showed that most tech companies don't find patents all that valuable at all. Northhaft twists the study around, claiming that it shows that patents are necessary. That's based on a subtle misreading of the study, where many entrepreneurs did claim that they believed their patents were important in securing funding. Not in their success, mind you. Not in the actual innovation. But just in securing funding. Thankfully, Brad Feld, Jason Mendelson and Paul Kedrosky -- who are actually involved in the venture capital industry -- wrote a response in the Wall Street Journal, where they pointed out that Northhaft was quoting the study out of context, and even quoted Pam Samuelson, who was the co-principal investigator of the study, and said:
"Two-thirds of the approximately 700 software entrepreneurs who participated in the 2008 Berkeley Patent Survey report that they neither have nor are seeking patents for innovations embodied in their products and services. These entrepreneurs rate patents as the least important mechanism among seven options for attaining competitive advantage in the marketplace. Even software startups that hold patents regard them as providing only a slight incentive to invest in innovation."Separately, they point out that Northhaft carefully quotes the study only showing what entrepreneurs think investors want, rather than looking at what investors actually value or what was actually instrumental to companies' successes.
So yet again, it appears that Northhaft is claiming things that don't match up with reality. There's no doubt that patents have helped Northhaft make money. But getting a gov't granted monopoly is a market-limiting function, not a market enhancing one. Competition is what drives innovation, and patents only serve to drive out competition. Of course, that's good for patent holders, but bad for everyone else. If we want to encourage the economy to grow, the last thing we should be doing is subsidizing even more bad patents and monopolies on the building blocks of innovation.
by Mike Masnick
Fri, Sep 17th 2010 5:22pm
from the not-again dept
This year's study, of course, was no different than in past years, so we'll point you once again to the explanation we put together in 2008 of how the BSA blatantly misleads with statistics.
Beyond the basic report, though, the BSA likes to dribble out other ridiculous claims based on the same report from May. The latest, is the blatantly false and simply laughable claim that "reducing software piracy would inject $142 billion into the global economy and create nearly 500,000 new jobs. This is wrong. Not only is it wrong, it's been widely debunked a variety of times. There are two key (but related) problems. The first, is that IDC/BSA count "ripple effects," which they don't seem to realize mean double, triple or quadruple counting the same dollars. But, more importantly, they only count those "ripple effects" in one direction. That is, they look at how they believe software companies would make more money (and then hire more people and pay more taxes) if there was less software piracy, but they don't even pretend to cover how paying for such software would mean tons of others would employ fewer people and pay less in taxes.
And, if you dig into the details, as Glyn Moody recently did (amusingly, after having to dig through many, many different reports to finally discover IDC's questionable methodology), you realize that reducing software piracy actually would probably do more harm than good for jobs and tax revenue in many areas:
One thing that is always omitted in these analyses is the fact that the money *not* paid for software licenses does not disappear, but is almost certainly spent elsewhere in the economy (I doubt whether people are banking all these "savings" that they are not even aware of.) As a result, it too creates jobs, local revenues and taxes.Of course, a bunch of folks have been pointing out these kinds of problems with IDC's research methods and with the BSA's claims about them for the better part of a decade. At what point do people start actually holding IDC and the BSA accountable for blatantly lying with stats?
Put another way, if people had to pay for their unlicensed copies of software, they would need to find the money by reducing their expenditure in other sectors. So in looking at the possible benefit of moving people to licensed copies of software, it is also necessary to take into account the *losses* that would accrue by eliminating these other economic inputs.
One important factor is that proprietary software is mainly produced by US companies. So moving to licensed software will tend to move profits and jobs *out* of local, non-US economies. Taxes may be paid on that licensed software, but remember that Microsoft, for example, minimises its tax bill in most European countries by locating its EU headquarters in Ireland, which has a particularly low corporate tax rate....
So in addition to causing money to be taken out of the country (and hence the local economy), licensed software would probably also bring in far less tax than money previously spent on local goods and services, which would generally pay the full local taxes.
Another factor that would tend to exacerbate these problems is that software has generally had a higher profit margin than most other kinds of goods: this means any switching from buying non-software goods locally to buying licensed copies of software would reduce the amount represented by costs (because the price is fixed and profits are now higher). So even if these were mostly incurred locally, switching from unlicensed to licensed copies would still represent a net loss for the local economy.
Similarly, it is probably the case that those working in the IT industry earn more than those in other sectors of the economy, and so switching a given amount of money from industries with lower pay to IT, with its higher wages, would again *reduce* the overall number of jobs, not increase them, as the report claims.
by Mike Masnick
Thu, Sep 16th 2010 8:33am
from the at&t-deserves-more-for-their-money dept
So what's this new report that Bradley insists is "seemingly well-researched"? It's one of the most laughable reports I've seen to date, claiming that Google isn't just a monopoly, but that it's destroying jobs and the economy (pdf). Get ready for Cleland's brand of ridiculously factless assertions combined with his notoriously bad math.
The report starts out by blaming the Justice Department for not blocking various Google acquisitions or filing antitrust charges against the company. Cleland seems to not realize that the purpose behind antitrust actions is to protect consumers, not just break up big companies for the hell of it (that's what Europe is for). The presentation then goes into all sorts of consultant-speak charts that don't say anything actually significant but scream "oh no, Google is evil," without actually providing anything to back that up.
There's an amusing slide where Cleland then takes a bunch of quotes out of context to actually suggest that efforts to make the web surfing experience better for users is somehow evil because it also benefits Google. In Cleland's world, apparently, all things are a zero sum game, and there's no way that something could be both good for users and Google at the same time. In fact, that seems to be the key to the entire presentation: what's good for Google must be bad for the world... because it's also good for Google. How else can you explain why Cleland highlights Hal Varian's comments about how a "fanatical" focus on customer service (along with scale, speed and data analysis) is somehow a bad thing?
Amusingly, Cleland then goes back to the debunked well by suggesting nefarious Google "human raters" push down links to competitors. This is one of Cleland's pet theories that he just discovered a couple months ago, and thought he was brilliant for it. The only problems is that it wasn't (as he claimed) a new admission from Google, nor was it what Cleland claimed it was. As Danny Sullivan pointed out all the way back in 2007, Google has been public about its "human raters" since 2004, and it's a standard QA job -- not some nefarious job of someone quashing the competition. If you run a search engine, wouldn't you have people on staff whose job it was to look at results and make sure they were actually good for users?
On the areas where Cleland is accurate -- that Google's real customers are advertisers and that the current workings of Google are something of a "black box," that just seems to me to be a huge opportunity for other companies to step in, rather than some dangerous situation that requires government intervention.
But where Cleland really goes off the deep end is his "economic" analysis of the situation, where he claims that Google is creating a deflationary spiral. It kicks off with an almost amusing font-based attack on the concept of "free" (highlighting each time the word is mentioned) as being some evil concept made up by those who seek to destroy the world. It's as if we're back in the ancient Greek civilization and Cleland has just come across the concept of "zero" and declared it to be heresy. And then there's this:
There's no net economic growth, job creation or property value creation in a "free" Internet sector model, only a deflationary price spiral; net negative growth, property devaluation, job losses, and monopolization.No, really. Stop laughing. The above statement is about as economically clueless as they come. It suggests absolutely no knowledge of basic economics, the economics of growth, the economics of innovation, the basic concepts of complementary goods and market equilibrium. It assumes, like many in the entertainment industry -- despite massive evidence to the contrary -- that when the price of an information good is pushed to zero, that it somehow leads to less overall economic output, rather than more. Tragically for those who believe this, there is no evidence to support such a claim. That's because they never seem to take into account the ancillary markets that are aided by information reaching its equilibrium point.
Cleland then goes on to claim that Google "reduces employment." How?
"because Google views people as inherently inefficient relative to Internet automation, and because Google views customer service personnel as unnecessary, and most sales and marketing personnel as redundant."Where to start? I think pretty much any company views automation as more efficient than people when that's the case. But, unlike what the Luddites predicted, automation actually resulted in more jobs. Perhaps Cleland should ask the telcos who pay him his salary about their views on automation. After all, AT&T used to employ tens of thousands of operators to physically connect lines when anyone wanted to make a phone call. And they automated that away -- obviously killing off so many jobs. Oh wait... actually, automated switching was so much more efficient that it created millions of new jobs, and entire new industries... including the internet.
As for Google's dislike of customer service, I've hit Google hard on that point multiple times, because I believe that it's a big Achilles' heel for Google, and a huge opportunity for others to woo folks away from Google. But just because Google doesn't like to hire customer service people, it seems like a massive stretch to suggest that this automatically means Google reduces employment. Furthermore, last I checked, Google's sales and marketing force is ridiculously large. It's hardly "redundant." In fact, I've often wondered why Google needed as large a sales force as it has. A year or so ago, I was on a panel discussion with some other bloggers in front of Google's sales and marketing team, and I'm pretty sure it's the largest audience I've spoken to -- and I've spoken to some pretty big audiences. Honestly, it feels like they could make a few more people "redundant."
And, um, why does Cleland ignore the tons of jobs that now exist in the world because of Google who are not actually employed by Google? There are entire industries who exist in large part because of Google. Cleland then accuses Google of "double and triple counting" its own economic impact, but this is especially laughable from the same guy who tried to count internet connections multiple times in one of his attacks on Google.
All in all, this "report" given away for free (oh wait, did Scott Cleland just devalue research and kill off jobs?!?) is just the latest in Cleland's self-debunking charade of ridiculous arguments. The thing is, there are plenty of legitimate complaints about Google, but wrapping them all up in such a ridiculous and easily debunked report actually does significantly more favors for Google than anything else. It suggests that the companies who pay Cleland can't come up with any serious arguments, so they have him come up with such laughable ones. This is really unfortunate. It would be good if more people actually held Google to account for its mistakes and problems with the way it's done business at times. But these exaggerations hide those real issues. Unfortunately, for whatever bizarre reason, Congress keeps calling on Cleland to present at various hearings -- and today, Cleland will be pitching this garbage to the House Judiciary Subcommittee on Courts and Competition Policy. DC politics as usual. You don't need facts, you just need to smear others louder and more ridiculously than anyone else.
by Mike Masnick
Thu, Jun 10th 2010 1:05am
from the didn't-work dept
In late March Mr Corrons was preparing for a meeting at Panda's Bilbao lab with a journalist and took a moment to dodge downstairs to get a drink. On the way down he passed two young men coming up.Instead, they asked him for a job, saying that the shutdown of the botnet had "robbed them of their livelihood." Apparently, the two guys started following Corrons on Twitter, sending messages his way and commenting on his blog, before asking for work again. They finally brought in one of the guys for an interview, noting that they wouldn't hire anyone involved in criminal activity. The guy responded that he hadn't been charged with anything. However, Corrons also quickly realized that the guy barely had any technical skills -- pointing out that he didn't write the bot, he just ran it:
One asked if he was Luis Corrons. He said yes while wondering who they were.
They introduced themselves which left him no wiser. Then, one of them said; "I'm Ostiator and this is Netkairo."
"It was then I realised these guys were the ones that were arrested in the Mariposa case," he told the BBC. "I thought they wanted to teach me a lesson."
"He got really annoyed at that moment, when we told him he was not good enough," said Mr Corrons. Subsequent discussion revealed just how poor their skills were.So, for the script kiddies out there, perhaps before asking for a job from the security researchers who bring your botnet down, you do a bit of work to make sure you have the actual skills.
"They were given the botnet with all the stuff they needed," said Mr Corrons. "Using it was like using any other program."
by Mike Masnick
Mon, Mar 29th 2010 2:44pm