Club Troppo

Well I can’t say I really agree with the criterion of quality – but anyway, at least by our intrepid old friend Joel’s lights file sharing hasn’t harmed music making.

Recent technological changes may have altered the balance between technology and copyright law for digital products.   While file-sharing has reduced revenue, other technological changes have reduced the costs of bringing creative works to market.   As a result, we don’t know whether the effective copyright protection currently available provides adequate incentives to bring forth a steady stream of valuable new products.  This paper assesses the quality of new recorded music since Napster, using three independent approaches.   The first is an index of the quantity of high-quality music based on critics’ retrospective lists.

The second and third approaches rely directly on music sales and airplay data, respectively, using of the idea that if one vintage’s music is better than another’s, its superior quality should generate higher sales or greater airplay through time, after accounting for depreciation.  The three resulting indices of vintage quality for the past half-century are both consistent with each other and with other historical accounts of recorded music quality.  There is no evidence of a reduction in the quality of music released since Napster, and the two usage-based indices suggest an increase since 1999.   Hence, researchers and policymakers thinking about the strength of copyright protection should supplement their attention to producer surplus with concern for consumer surplus as well.

Download more here.

It is by no means the first time that people blinded by faith or ideology have pursued false premises to absurd conclusions – and, like their religious and political predecessors, come to believe that those who disagree are driven by ‘woeful ignorance or intentional disregard’.

Economists – in government agencies as well as universities – were obsessively playing Grand Theft Auto while the world around them was falling apart.

John Kay

There’s something maddening about watching people of great intelligence doing really, really, (and obviously) stupid things. Enter Freshwater economics. Quiggin’s book Zombie economics takes shots at lots of freshwater nonsense. But this essay by John Kay is very hard to beat as a kind of psychoanalysis of what’s wrong with it all. Read it and be amazed. Is there any other discipline like this – well I guess one could say that deconstruction was like that. But then I make no claims to understand deconstruction.

And note there’s a rogue paragraph in the piece which gives far too much away – as skewered by Paul Krugman.

Some of the better passages of Kay’s essay are reproduced above and below.

The distinguishing characteristic of their approach is that the list of unrealistic simplifying assumptions is extremely long. . . . They loosely resemble the world, but a world so pared down that everything about them is either known, or can be made up.  Such models are akin to Tolkien’s Middle Earth, or a computer game like Grand Theft Auto. (Continued)

It was a sign of things to come perhaps. As the All Blacks performed their pre-match war dance with its stamping, grunting, eye-bulging and tongue lolling, the camera cut away to a shot of Australia’s Radike Samo. His face shiny with perspiration, was framed by a ‘do that looked at that moment like a fright wig or the result of an unusually positioned Van De Graaff generator. The effect, to say the least, was comical. At the Pub I was in, the crowd burst into laughter. It was a bad omen for the Wallabies, and no-one in the Pub even attempted a chorus of Aussie Aussie Oi Oi Oi to counteract the bad mojo. It was a lost cause.

It’s been a problem for years. What to do about the Haka. Countering strategies have been tried. The turning of the back, or the Campese gambit, but this is often condemned as unsportsmanlike, and that’s not an accusation that at least we Aussies are willing to wear.

(Continued)

The Lodge in Canberra, the official residence of the Prime Minister will be closed for repairs for the next 18 months. Several figures, including Jeff Kennett, former NCDC head Tony Powell and Andrew Carr of the Lowy Institute deem this an exercise in turd polishing. A new, architecturally inspired and inspiring building should be built. They argue that we should view this not just as a house for a politician, but a building that plays an important role in Australia’s Governance and diplomacy.

Indeed, by the accounts of others (unaccountably I am yet to be invited to dinner) very little can be said in favour of the existing building. A building that sets itself on fire during functions, or leaks in the meals of visiting dignitaries or merely gives them asbestosis would probably have a negative. The semiotics of the Neo-Georgian styling aren’t the best. A bastard child of a foreign style awkwardly transplanted to an Australia that ill suits it.

But what kind of architecture would be useful in showing off Australia to the world in a way that works in our interests? Surely not something grand or flashy. Any tin pot dictatorship can, and does do that. It doesn’t seem to impress anyone. A more sensible option would be mixing indigenous styles with clever environmental design. A showpiece of knowhow instead of power.

But I’d be really tempted by a display of ostentatious humility. The major reason the ostensibly temporary Lodge has never been replaced is a fear that the public would never accept the expenditure on a politician’s house. The cost would be negligible compared to  government expenditure over the lifetime of the new building (likely many generations), but this reluctance is also a strong symbol of the power Australians have over their government representatives. Elsewhere in the Westminster tradition the dingy and dirty dwelling on Downing Street is a similar symbol.

Maybe this humility can be used in diplomacy, and as an advertisement for democracy. . I tend to think that over the long run democratic government is better at providing stability and prosperity, and that peace and prosperity abroad is good for Australia. The best way to promote democracy is demonstration. Any building would only have a minor effect on the dignitaries themselves given they will already know enough about Australia, but it might have an effect on the public abroad .I’ll note two stories from China. It might be only one of many relationships we need to manage, but it’s important. The first is the goodwill received by the new US ambassador to the PRC merely by purchasing his own coffee – something implausible for senior CCP figures. The second is this description of Australia by race car driver and world’s most popular blogger Han Han in which he describes government buildings here as indistinguishable from public toilets. Like every other “criticism” of Australia in the article, it is actually a criticism of the fuss, power and expenditure of Chinese governments. Australian humility in  government buildings makes it look good compared to a government that struggles not to appear plutocratic and remote. Any goodwill garnered might pay off in diplomacy.

Having a building that leaks, spews asbestos and may catch fire may be too extreme a way of showcasing this modesty, even if it’s effective. But modest aesthetics should be put into the design brief for any replacement. We could end up with a mansion that showcases the best in energy and water efficiency technology, but one that looks like a cottage.

Ever since I’ve been being invited to the Prime Minister’s Science Prizes I’ve regarded it as a great privilege to attend – even if I have to fly myself to Canberra and back. Almost invariably the people who win the prizes are just turned on by what they’re doing, hugely good at it and a lesson to us all. My favourites are the prizes for school teachers.

My favourite this year was Brooke Topleberg a primary school science teacher. The video above is instructive but the speeches are usually even better – alas, though they were filmed they’re not up on YouTube from what I can see.

Anyway one highlight was that Brian Schmidt was a guest and we got to show our appreciation for his recently awarded Nobel Prize. But blow me down. Now I don’t know about you but I reckon winning a Nobel Prize is worth a standing ovation. I looked around and couldn’t see anyone standing. And to my shame I stayed down myself.

I often find I feel like giving standing ovations when I really want to show how fantastic I think something is. But usually don’t want to look silly so wait – and then the moment passes. Anyway things changed at my daughter’s final music concert. The musical director Mrs Cousins had been desperately ill and indeed in a coma for many weeks a few months previously – it was literally touch and go. But she’d made it through and had recovered enough to be presented at the concert. As she hobbled up to the stage I thought “bugger this” and just rose to my feet and clapped. It took a surprising few seconds but a few more people rose and then the thing was pretty much done and dusted with most people giving her a standing ovation.

Anyway our newest Nobel Laureate did at least get a pointedly lengthy bout of applause when he was presented to us at the dinner and in the break after entree I circulated and asked most people I met “So what does it take to get a standing ovation in this country?” What is it with our concern for conformity – we’re not an ungenerous lot? Everyone agreed and some said they’d wanted to stand but had done what I’d done.

But this story has a happy ending. After the main course Brian Schmidt was invited to address us – which he did with great aplomb. And as he was introduced I simply stood up in my place and gesticulated all around to get up off their arses and show the guy how happy we are about what he’d achieved. And as I looked around it was clear that I wasn’t even the first one to stand.

Another standing ovation successfully delivered!

On my recent trip to the US it was fun that my previously measly Oz dollars bought nearly US$1.10. But another thing that illustrated was what a poor deal we get on many global goods and services. Before I went I investigated getting noise cancelling headphones. I didn’t want heavy things to carry so ended up with Sony earplugs – which I’d been told were not much good. I was right. Bose noise cancelling headphones perform really impressively but I didn’t want to carry an additional fat paperback sized parcel with me – and I didn’t want to pay AUD$500 for them (OK $495).

Likewise I swore that once Apple released a Macbook air that was small enough for me (11″) I’d buy it. But I couldn’t get it with 250 Gigs with all the Australian Apple salespeople telling me there wasn’t room on the unit for 250 Gigs like the 13″ unit. Well that wasn’t true in the US so I bought one there (I’ll post about my unsure journey from Windows back to Mac – I’m not so sure it’s better). And it was a good deal cheaper. And in the Mac store there were Bose noise cancelling earphones. The price US$299! They were the very same ones.

On my way home I rented a movie on Apple iTunes – Mao’s Last Dancer. It was US$3.99 but even though I was in LA, I’d signed in under my old apple ID and it wouldn’t rent me the movie. I offered it to me for AU$5.99! At least this is a product of Australia’s policy idiocy of helping global monopolists carve out Australia as a market to milk optimally (for them) by prohibiting parallel imports. Can anyone tell me if Bose can get the same kind of protection or whether it just uses its existing monopoly over its brand to enforce its pricing strategy. Anyway, there are oodles of these examples. I recently bought David Deutche’s The Beginning of Infinity from Amazon for $28 or thereabouts – including postage. The Australian price at the time was $49,99 though I saw it at Readings the other day for $44. That’s ridiculous (though bans on parallel imports are some part of the reason).

Anyway, this kind of stuff should be easy pickings for the populist media – and likewise for some enterprising politician or two. Moreover I would have thought that with quite a few of the firms involved, one might be able to influence their behaviour – they’re very protective of their brands. Not too sure how long they’d hold out against a decent campaign like this: “Dear Amar, What does Bose have against Australians?”  ”Dear Tim, What do you and what did St Steve have against Australians?” Well who knows, but it’s worth a try.

The Occupy Wall Street Movement is growing: "The challenge for those of us who believe in market economics is how to restore business legitimacy", writes Peter Shergold.

The top one per cent: "One of the most striking successes of the Occupy Wall Street movement has been the ‘We are the 99 per cent’ idea, and more specifically in the identification of the top 1 per cent as the primary source of economic problems." John Quiggin.

Who are the top one per cent? According to Dave Gilson at Mother Jones, they’re not all Wall Street execs.

Why aren’t rich people hiring servants? The Atlantic’s Megan McCardle suggests six reasons why increasing inequality and unemployment in the US hasn’t led to a rise in the number servants.

Mary Poppins? "Some British nannies specify that they only fly business class — though many have use of the family planes", reports Robert Frank in the Wall Street Journal.

Did Steve Jobs give good advice? "’Find what you love and never settle for less’ is an excellent recipe for frustration and poverty", advises Will Wilkinson.

Good news, bad news: "Over the last couple of weeks, I’ve been struck by a series of good news stories that have accidentally been reported as bad news stories" writes Jeremy Williams at Post Growth.

Journalists are self-righteous hypocrites, says Mr Denmore: "Yes, freedom of speech and a free press are critical to democracy. But I find it hard to rally around the freedom flag when so many are silent in the face of journalism that uses spin and distortion and outright lies in aid of an agenda to smear the least advantaged and most voiceless in our community; of journalism that champions freedom without reference to relative power relationships." Mr Denmore on journalists’ response to the Bolt judgment.

Rudeness: British PM David Cameron thinks rudeness is on the rise. He wants government to help foster responsibility and stronger communities. But according to the Philosopher’s Beard: "This whole approach is based on a mistaken idea about rudeness, that there are rude people and normal people, and that something must be done about the rude people to make them more normal."

New post by me at CDU Law and Business Online.  An extract:

Moreover, yesterday’s behaviour by Murdoch’s Brisbane Courier-Mail of publishing edited extracts of a Liberal-National “dirt” file on Queensland Labor MPs rather suggests that it is high time for media behaviour to be placed under the microscope of public scrutiny.  The “Fourth Estate” has been defecating in its own nest for too long and is unlikely to receive much sympathy from the general community if government seeks to bring it to account. …

However, [Jonathan] Holmes implicitly assumes that formal government regulation and heavy-handed bureaucratic oversight are the only available alternatives to the current system of self-regulation of the print media by the Press Council, which Holmes himself (and just about everyone else) concedes is “slow and toothless”.   In fact there a range of possible options for achieving more effective oversight of media behaviour without undermining democratic freedoms.

PS I was tempted to use this image in the post at the official CDU site/blog but I resisted. I’m not quite ready for compulsory retirement.

Why is tax reform so hard? Reviews such as the Henry Review often point to ‘low-hanging fruit’ where efficiency gains can be made without any significant equity costs. One oft-noted example is property stamp duty, where the Henry Review recommended its replacement by land taxes. Taxes such as stamp duties, it is argued, discourage residential mobility and the most efficient use of the housing stock.

In general, tax theory tells us that the most efficient way to raise a given amount of revenue is to use a tax which does not distort behaviour. Taxes on transactions such as stamp duty and insurance taxes are rated as particularly distortionary because people can easily change their behaviour to avoid them. Taxes that are hard to avoid (eg land taxes) are much more efficient. Putting this another way, the change in behaviour as people respond to distortionary taxes means that the tax rates must be higher than otherwise in order to compensate for this inefficiency. Okuns ‘leaky bucket’ has to return more often to the well, the larger are the leaks in the bucket.

But if there is such consensus about tax efficiency, why has there been a distinct lack of political enthusiasm for replacing transaction taxes such as stamp duties with alternatives such as land tax (or even more ‘radical’ proposals such as death duties)?

(Continued)