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June 2008

Markets are hard to forecast

"Top 30 Failed Technology Predictions".

Including the well-known:

“There is no reason anyone would want a computer in their home.” — Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC), maker of big business mainframe computers, arguing against the PC in 1977.

And at least two that I hadn't seen before:

“The cinema is little more than a fad. It’s canned drama. What audiences really want to see is flesh and blood on the stage.” -– Charlie Chaplin, actor, producer, director, and studio founder, 1916

“[Television] won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” — Darryl Zanuck, movie producer, 20th Century Fox, 1946.

Still more on the famous file-sharing paper

I've posted about the famous Oberholzer-Gee and Strumpf JPE paper on file-sharing--and Stan Liebowitz's questioning of it--before (here and here).

There's now a third round in the controversy. The German newspaper Handelsblatt has a story today titled "No Comment, Please" accompanied by the following blurb:

Steven Levitt, Editor of the Journal of Political Economy, uses a questionable tactic to block an undesired comment. The subject of the criticised article was a hot topic. On closer look, everything about the case was unusual.

Read the whole thing.

It's sad that it falls to a German newspaper to cover this, but then I've come to expect very little of the U.S. mass media.

Notes as I prepare my new "Closer Look at Capitalism" course

For those of you keeping score at home, it's N.C. State's EC305. There will be ongoing, irregular posts about my preparation.

I plan to gather an eclectic set of the most seemingly powerful arguments against capitalism. (The quality of a defense should only be measured against the best offense.) One such piece I've run across and will probably assign the students to read is "The Parable of the Shoe Salesman".

What John's story reveals is that capitalism does not reward people who create wealth. It rewards people who own wealth. It does not reward initiative and hard work and productivity - unless by the ownership class. It rewards owners as much as possible, and employees as little as possible. 

Leaving aside at least three basic questions--1) Was John really fired because he was making too much money?, 2) If he was as productive as described, why didn't some other greedy, money-grubbing firm hire him?, and 3) "Owners" usually bear more risk: why shouldn't their rewards be higher (and lower, though we don't typically hear as much about those instances)?--I will present some evidence that contradicts the claim that employees are rewarded "as little as possible". Consider, for example, the estimated 10,000 "Microsoft millionaires".

I plan to assign a number of eloquent defenses of capitalism. I've got a bunch, but one really fine piece--fine both because it focuses on four really relevant points and because it is concise--is George Leef's "The Four Mistakes of Nonlibertarians".

(Googling it, I see that E. Frank Stephenson at Division of Labour linked to it about a year ago. To folks who read both blogs, I apologize for the repetition. But if you don't read Division of Labour--I suggest that you do--or FEE's publications--I suggest that you do--Leef's piece may be new to you.)

Boston vs. L.A.

The NBA Championship prompted a Boston Globe writer to compare Boston and L.A. Not surprisingly, he concludes Boston is much better.

By contrast, no one's ever accused LA of being a bastion of brainiacs. Los Angeles boasts USC, the football factory that gave us O.J. Simpson, and UCLA, whose formerly great basketball team has made three consecutive Final Fours and lost each time.

(Hey! Some of us graduated from UCLA.)

And the writer didn't even mention L.A. legendary traffic, exemplified by this woman's nearly three-hour--one way--commute.