Tag: illustration

The Difference Between Free Market Conservatives and Worshippers of the Gods of the Marketplace.

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As regular readers know, I frequently deride those who continue to put their faith in a creed of deregulation despite empirical evidence that this is not suitable to all occasions as worshipers of of the “gods of the marketplace,” after the Rudyard Kipling Poem The Gods of the Copybook Heading (with a fine sense of irony that Kipling would be closer ideologically to the folks I criticize). This leads some to imagine that I am “anti-market” or “pro-regulation” or some other ideology that places process over outcome, rather than a pragmatic sort who believes that the job of public policy is to use all available tools to achieve the goals of prmoting the general welfare, securing domestic tranquility, etc., etc.

I recently came across an illustration of the difference in, of all cases, a collection of Darwin Award Winners (Darwin Awards Iv: Intelligent Design for anyone that cares). The book contains the tale of a “winner” who was a passionate anti-government type who refused to wear a seat belt in protest against mandatory seat belt laws. A car he was in in skidded and flipped over. The the driver and one passenger who were wearing seat belts survived. Our protesting friend was thrown from the car and died.

It occurred to me that this story nicely illustrates the difference between those who favor a free market approach and worshipers of the Gods of the Marketplace. A smart Libertarian may believe that the government has no right to order people to wear seat belts. But, evaluating all the evidence of how seat belts save lives, will voluntarily wear a seat belt even if not required. After all, it would be foolish to put one’s life at risk simply because the government wrongly orders people to do what you think makes good sense.

But an ideological driven soul, indifferent to empirical evidence and elevating process over substance, refuses to wear a seat belt because the government says you should, and therefore wearing a seat belt must be the wrong or inefficient result and believes it the positive duty of all anti-government believers to refuse to wear seat belts.

Now go read the dissenting statements of McDowell and Tate in the Comcast decision, the McCain Tech Policy, or any of a dozen or so speeches by elected representatives or pundits who get their economic education from reciting bumper stickers about free market economics they don’t understand. Then ask yourself, are these guys actually evaluating the evidence and accepting the result? Or are they driving with their seat belts off?

Stay tuned . . . .

Testing 1, 2, 3. Check. Check. …. Waiter?!

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I’ve been working with some test harnesses for our Croquet worlds. It’s been a real pain working outside of Croquet: getting things to happen across multiple platforms. Moving data around. It’s all so much easier in a virtual space that automatically replicates everything.

Anyway, we finally got it working enough that there are several machines in Qwaq’s Palo Alto office that are all running around as robots in a virtual world, doing various user activities to see what breaks. Being (still!) in Wisconsin, I have to peek on these machines via remote. I’m currently using Virtual Network Computing (VNC), but there’s also Windows Remote Desktop (RDP). These programs basically scrape the screen at some level, and send the pictures to me. So when these robots are buzzing around in-world, I get a screen repaint, and then another, and then another. And that’s just one machine. If I want to monitor what they’re all doing, I have to use have a VNC window open for each, scraping and repainting away. Yuck. If only there were a better way….

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The Economics of Telco Deregulation: Califronia Dreaming, Economic Realities, and the “Reverse Ramsey” Pricing Model

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This article in the LA Times on the impact of telco price deregulation in California is a good illustration of the complex nature of the economics of competition and deregulation, and why it’s so friggin’ important for regulators and the public to understand this stuff. In 2006, the California PUC decided that voice service faced sufficient competition to phase out price regulation. In theory, competition would lead to lower costs and increased services and would remove the invariably stultifying impacts of regulation.

The result has been an increase in the availability of services and an overall decrease in the cost of service, but not in the way that ordinary folks understand or that regulators professed to expect from deregulation. Most customers have, in fact, increased the amount they pay for telecommunications services overall. But because they buy larger bundles of services that profess to discount the price of each element in the bundle, the average cost per service is lower although the amount of money paid has gone up. That might seem a good value trade if it were driven strictly by consumer choice. But consumer choice is driven by the decision of telcos to increase the cost of stand alone services. So people not looking to bundle do so because it is “cheaper” while poor people who cannot afford the higher price for the bundle get a real price hike with no value added.

Example: Feldco the Telco raises the price of basic local voice from $10 to $20, and raises the price of additional services taken a la carte from $5 to $10, but I offer a package of basic voice and five additional services for $30 (which I tell you charging $5 for voice and $ 5 for each additional feature). Any customer that can afford to upgrade to my bundled package will do so, because the “value” of the bundle (at my new prices) is $70 and you are getting it for $30. So even though you upgraded and are paying me more, the cost of basic voice (calculated as part of the package) just dropped by $5. What a savings! of course, the customers who cannot afford the additional $10 a month for the bundle experience a real price increase of $10.

Basically, the problem of wealth inequity that we have seen in every other sector of the economy — where the highest earners have enjoyed the greatest increases — is now mirrored in California’s telecommunication service market. How did this happen? Do we care? And what does this tell us about the future of the metered internet, wireless competition, and the ever popular video competition?

Answers below . . . .

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