« November 2007 | Main | January 2008 »

December 2007

Sowell's "random thoughts"

Another great "Random thoughts on the passing scene" column from Thomas Sowell. My favorites:

You may scoff at the Tooth Fairy if you like. But the Tooth Fairy’s approach has gotten more politicians elected than any economist’s analysis.

Now that Congress has violated the First Amendment by restricting free speech with “campaign finance reform” laws, in the name of getting the influence of money out of politics, have you noticed any less influence of money in politics?

And this great one, with which I concur 100%:

I believe in libertarian principles but not in libertarian fetishes. In any context, the difference between principles and fetishes can be the difference between night and day.

This blog has long been interested in the issue of extending the human lifespan and, particularly, with those people who, astonishingly, oppose it. (Not just for themselves but for everyone.) Ron Bailey masterfully refutes some of the opposition's arguments.

And with all due respect to John Weidner at Random Jottings, the currently low birthrates of demoralized, Liberal Western Europe does nothing to change my opinion.

Beyond politics, and beyond some of the terribly trivial stuff our politicians pay attention to, this is as brutally sad and tragic an article as any you'll read today. This month. This year. Next year.

The inmates who spoke to The Chronicle hoped that their stories would dissuade younger generations from following in their footsteps. Their stories, and those told in the court files, show that Oakland killers share many characteristics.

They are young. Most killed before their 25th birthday.

A majority grew up without a father - he was either murdered, incarcerated or abandoned his children.

Mom is typically absent, too, either because she's working several jobs for minimum wage or because she's also lost to the streets through drugs, prostitution or prison.

Many of the convicted killers were quasi-homeless in grade school, moving every 90 days on eviction cycles, or bouncing between friends' and relatives' homes, where they slept on recliners and couches and floors.

Inside the home is pure chaos. Typically, they live with a third-generation relative, an elderly grandmother or aunt, who also opens her home to several other wayward relatives. They all pile into one home, bringing their boyfriends and girlfriends and their children. There's no particular person in charge, no house rules, and people come and go.

Often it's in these houses where young boys first learn how to hold a gun, how to break a rock of cocaine into dime and nickel bags for sale.

Link via Instapundit, via Clayton Cramer.

An example of how to fight "network externalities"

An interesting issue in the economics of antitrust is this: how can a firm trying to sell a product embodying a new standard compete successfully against an old, established standard? For instance, suppose your firm has developed a PC operating system that is much better than Windows. You ask Windows customers to buy it, but each customer responds something like this: "Yeah, we dislike Windows and we would love something better, but we get benefits from using the same product as most other people. There's more software available, there's more support, and it's easier to exchange files with people who use the same OS."

If all the potential customers think like this, then--allegedly--nobody will want to switch and your much-better product will never sell. This problem, often referred to as the problem of "network externalities", is supposedly serious enough that the antitrust authorities should take account of it. (And they rightly, therefore, sued Microsoft.)

But as anyone using Excel today rather than Lotus 1-2-3, or who is listening to music CDs rather than 8-track tapes, knows, the problem can be solved. For discussion see a number of the recent writings of Stan Liebowitz and Steve Margolis. (Winners, Losers & Microsoft is a good start.)

Finally, I come to the point of this post. One of the ways for entrants using a new standard supposedly can compete, as detailed by Liebowitz and Margolis, is to invest heavily up front. For instance, they can give the product away to early adoptors, or give away complementary products. (One of the early electric companies gave way light bulbs.) I'm always looking for empirical support for the theories I believe, though, so this offer on Amazon is interesting: buyers of a new-standard HD DVD player can get 10 new--count 'em, ten--HD DVDs free with purchase.