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Mr. Stolyarov’s Thoughts on Human Augmentation Cited by Frank Swain of BBC Future

Mr. Stolyarov’s Thoughts on Human Augmentation Cited by Frank Swain of BBC Future

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The New Renaissance Hat
G. Stolyarov II
September 25, 2014
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I am pleased to have had my thoughts included in “Cyborgs: The truth about human augmentation” – an excellent new article by Frank Swain on BBC Future. Mr. Swain had previously interviewed me about my illustrated children’s book Death is Wrong, which led to his article “How to live forever” being published by BBC Future in April 2014.

This time Mr. Swain asked me to help debunk common myths about human augmentation, and here is an excerpt from the article that conveys my reply.

“Some would express fear that emerging augmentations would create an arms race, that threatens to leave behind those who choose not to be augmented,” agrees Gennady Stolyarov, who told me in April that death was not inevitable. “But this assumes everyone will seek to compete with everyone else.”

Stolyarov foresees a different outcome. Instead of relentlessly optimising ourselves to a model of perfection, he predicts an explosion of diversity. “Different people would choose to augment themselves in different ways, stretching their abilities in different directions. We will not see a monolithic hierarchy of some augmented humans at the top, while the non-augmented humans get relegated to the bottom,” he reasons. “Rather, widespread acceptance of emerging technologies would create a future where a thousand augmented flowers will bloom.”

I prefer Stolyarov’s vision of the future, and it’s one I subscribe to. Mass literacy didn’t result in everyone competing to read the same books, it created a market for everything from pulpy romance novels to weighty tomes on ancient history. People explored the ideas they felt expressed themselves. There’s no reason to think future human technologies won’t play out in the same way. 

Read Mr. Swain’s insightful article for an account of his own experiences as a cyborg living today, and for a great discussion of the potential that technological augmentation offers for humans to overcome current limitations and extend their abilities beyond historical boundaries.

Ludd vs. Schumpeter: Fear of Robot Labor is Fear of the Free Market – Article by Wendy McElroy

Ludd vs. Schumpeter: Fear of Robot Labor is Fear of the Free Market – Article by Wendy McElroy

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The New Renaissance Hat
Wendy McElroy
September 18, 2014
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“Report Suggests Nearly Half of U.S. Jobs Are Vulnerable to Computerization,” screams a headline. The cry of “robots are coming to take our jobs!” is ringing across North America. But the concern reveals nothing so much as a fear—and misunderstanding—of the free market.

In the short term, robotics will cause some job dislocation; in the long term, labor patterns will simply shift. The use of robotics to increase productivity while decreasing costs works basically the same way as past technological advances, like the production line, have worked. Those advances improved the quality of life of billions of people and created new forms of employment that were unimaginable at the time.

Given that reality, the cry that should be heard is, “Beware of monopolies controlling technology through restrictive patents or other government-granted privilege.”

The robots are coming!

Actually, they are here already. Technological advance is an inherent aspect of a free market in which innovators seeks to produce more value at a lower cost. Entrepreneurs want a market edge. Computerization, industrial control systems, and robotics have become an integral part of that quest. Many manual jobs, such as factory-line assembly, have been phased out and replaced by others, such jobs related to technology, the Internet, and games. For a number of reasons, however, robots are poised to become villains of unemployment. Two reasons come to mind:

1. Robots are now highly developed and less expensive. Such traits make them an increasingly popular option. The Banque de Luxembourg News offered a snapshot:

The currently-estimated average unit cost of around $50,000 should certainly decrease further with the arrival of “low-cost” robots on the market. This is particularly the case for “Baxter,” the humanoid robot with evolving artificial intelligence from the US company Rethink Robotics, or “Universal 5” from the Danish company Universal Robots, priced at just $22,000 and $34,000 respectively.

Better, faster, and cheaper are the bases of increased productivity.

2. Robots will be interacting more directly with the general public. The fast-food industry is a good example. People may be accustomed to ATMs, but a robotic kiosk that asks, “Do you want fries with that?” will occasion widespread public comment, albeit temporarily.

Comment from displaced fast-food restaurant workers may not be so transient. NBC News recently described a strike by workers in an estimated 150 cities. The workers’ main demand was a $15 minimum wage, but they also called for better working conditions. The protesters, ironically, are speeding up their own unemployment by making themselves expensive and difficult to manage.

Labor costs

Compared to humans, robots are cheaper to employ—partly for natural reasons and partly because of government intervention.

Among the natural costs are training, safety needs, overtime, and personnel problems such as hiring, firing and on-the-job theft. Now, according to Singularity Hub, robots can also be more productive in certain roles. They  “can make a burger in 10 seconds (360/hr). Fast yes, but also superior quality. Because the restaurant is free to spend its savings on better ingredients, it can make gourmet burgers at fast food prices.”

Government-imposed costs include minimum-wage laws and mandated benefits, as well as discrimination, liability, and other employment lawsuits. The employment advisory Workforce explained, “Defending a case through discovery and a ruling on a motion for summary judgment can cost an employer between $75,000 and $125,000. If an employer loses summary judgment—which, much more often than not, is the case—the employer can expect to spend a total of $175,000 to $250,000 to take a case to a jury verdict at trial.”

At some point, human labor will make sense only to restaurants that wish to preserve the “personal touch” or to fill a niche.

The underlying message of robotechnophobia

The tech site Motherboard aptly commented, “The coming age of robot workers chiefly reflects a tension that’s been around since the first common lands were enclosed by landowners who declared them private property: that between labour and the owners of capital. The future of labour in the robot age has everything to do with capitalism.”

Ironically, Motherboard points to one critic of capitalism who defended technological advances in production: none other than Karl Marx. He called machines “fixed capital.” The defense occurs in a segment called “The Fragment on Machines”  in the unfinished but published manuscript Grundrisse der Kritik der Politischen Ökonomie (Outlines of the Critique of Political Economy).

Marx believed the “variable capital” (workers) dislocated by machines would be freed from the exploitation of their “surplus labor,” the difference between their wages and the selling price of a product, which the capitalist pockets as profit. Machines would benefit “emancipated labour” because capitalists would “employ people upon something not directly and immediately productive, e.g. in the erection of machinery.” The relationship change would revolutionize society and hasten the end of capitalism itself.

Never mind that the idea of “surplus labor” is intellectually bankrupt, technology ended up strengthening capitalism. But Marx was right about one thing: Many workers have been emancipated from soul-deadening, repetitive labor. Many who feared technology did so because they viewed society as static. The free market is the opposite. It is a dynamic, quick-response ecosystem of value. Internet pioneer Vint Cerf argues, “Historically, technology has created more jobs than it destroys and there is no reason to think otherwise in this case.”

Forbes pointed out that U.S. unemployment rates have changed little over the past 120 years (1890 to 2014) despite massive advances in workplace technology:

There have been three major spikes in unemployment, all caused by financiers, not by engineers: the railroad and bank failures of the Panic of 1893, the bank failures of the Great Depression, and finally the Great Recession of our era, also stemming from bank failures. And each time, once the bankers and policymakers got their houses in order, businesses, engineers, and entrepreneurs restored growth and employment.

The drive to make society static is powerful obstacle to that restored employment. How does society become static? A key word in the answer is “monopoly.” But we should not equivocate on two forms of monopoly.

A monopoly established by aggressive innovation and excellence will dominate only as long as it produces better or less expensive goods than others can. Monopolies created by crony capitalism are entrenched expressions of privilege that serve elite interests. Crony capitalism is the economic arrangement by which business success depends upon having a close relationship with government, including legal privileges.

Restrictive patents are a basic building block of crony capitalism because they grant a business the “right” to exclude competition. Many libertarians deny the legitimacy of any patents. The nineteenth century classical liberal Eugen von Böhm-Bawerk rejected patents on classically Austrian grounds. He called them “legally compulsive relationships of patronage which are based on a vendor’s exclusive right of sale”: in short, a government-granted privilege that violated every man’s right to compete freely. Modern critics of patents include the Austrian economist Murray Rothbard and intellectual property attorney Stephan Kinsella.

Pharmaceuticals and technology are particularly patent-hungry. The extent of the hunger can be gauged by how much money companies spend to protect their intellectual property rights. In 2011, Apple and Google reportedly spent more on patent lawsuits and purchases than on research and development. A New York Times article addressed the costs imposed on tech companies by “patent trolls”—people who do not produce or supply services based on patents they own but use them only to collect licensing fees and legal settlements. “Litigation costs in the United States related to patent assertion entities [trolls],” the article claimed, “totaled nearly $30 billion in 2011, more than four times the costs in 2005.” These costs and associated ones, like patent infringement insurance, harm a society’s productivity by creating stasis and  preventing competition.

Dean Baker, co-director of the progressive Center for Economic Policy Research, described the difference between robots produced on the marketplace and robots produced by monopoly. Private producers “won’t directly get rich” because “robots will presumably be relatively cheap to make. After all, we can have robots make them. If the owners of robots get really rich it will be because the government has given them patent monopolies so that they can collect lots of money from anyone who wants to buy or build a robot.”  The monopoly “tax” will be passed on to impoverish both consumers and employees.

Conclusion

Ultimately, we should return again to the wisdom of Joseph Schumpeter, who reminds us that technological progress, while it can change the patterns of production, tends to free up resources for new uses, making life better over the long term. In other words, the displacement of workers by robots is just creative destruction in action. Just as the car starter replaced the buggy whip, the robot might replace the burger-flipper. Perhaps the burger-flipper will migrate to a new profession, such as caring for an elderly person or cleaning homes for busy professionals. But there are always new ways to create value.

An increased use of robots will cause labor dislocation, which will be painful for many workers in the near term. But if market forces are allowed to function, the dislocation will be temporary. And if history is a guide, the replacement jobs will require skills that better express what it means to be human: communication, problem-solving, creation, and caregiving.

Wendy McElroy (wendy@wendymcelroy.com) is an author, editor of ifeminists.com, and Research Fellow at The Independent Institute (independent.org).

This article was originally published by The Foundation for Economic Education.

The Strengths and Weaknesses of “Atlas Shrugged: Part III” – Video by G. Stolyarov II

The Strengths and Weaknesses of “Atlas Shrugged: Part III” – Video by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
September 16, 2014
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Mr. Stolyarov reviews the final installment in the “Atlas Shrugged” film trilogy.

Although Mr. Stolyarov favorably reviewed the first two installments, in his view the third film fails to do full justice to the culmination of Ayn Rand’s magnum opus, where one would expect to witness the coalescence into an integrated worldview of all of the philosophical and plot pieces that Rand meticulously introduced during the first two parts. Atlas Shrugged: Part III is not without its merits, and it is inspiring in certain respects – especially in its conveyance of Rand’s passionate defense of the creator-individualist. However, the film is also not a great one, and the creators could have made Rand’s source material shine consistently instead of glowing dimly while occasionally emitting a bright flicker.

References

– “The Accomplishments of ‘Atlas Shrugged: Part I’” – Article by G. Stolyarov II
– “Rejecting the Purveyors of Pull: The Lessons of ‘Atlas Shrugged: Part II‘” – Article by G. Stolyarov II
– “The Strengths and Weaknesses of ‘Atlas Shrugged: Part III’” – Article by G. Stolyarov II

The Strengths and Weaknesses of “Atlas Shrugged: Part III” – Article by G. Stolyarov II

The Strengths and Weaknesses of “Atlas Shrugged: Part III” – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
September 13, 2014
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In my reviews of Part I and Part II of the Atlas Shrugged film trilogy, I expressed largely favorable reactions to those films’ message and execution. Naturally, I was eager to see Part III and the completion of the long-awaited Atlas Shrugged trilogy. After I watched it, though, my response to this conclusion is more muted. The film fails to do full justice to the culmination of Ayn Rand’s magnum opus, where one would expect to witness the coalescence into an integrated worldview of all of the philosophical and plot pieces that Rand meticulously introduced during the first two parts. Atlas Shrugged: Part III is not without its merits, and it is inspiring in certain respects – especially in its conveyance of Rand’s passionate defense of the creator-individualist. However, the film is also not a great one, and the creators could have made Rand’s source material shine consistently instead of glowing dimly while occasionally emitting a bright flicker.

Strength 1: There is now a complete film series spanning the entire story arc of Atlas Shrugged. What Ayn Rand herself and many successive filmmakers could not achieve, producers Harmon Kaslow and John Aglialoro have been able to bring into existence. For decades, admirers of Ayn Rand’s work have lamented that no Atlas Shrugged movie had been made. The fact that this particular lament is obsolete constitutes major progress for Objectivism (where the rate of progress is admittedly extremely slow).

Weakness 1: Part III is, in my view, the most poorly executed of the three Atlas Shrugged movies, even though it had the potential to be the best. The extreme brevity of Part III – a mere 90 minutes, compared to 102 minutes for Part I and 112 minutes for Part II – orphaned many of the events of the film from their contexts, as compared to the meticulous rationale for each of Ayn Rand’s decisions in the novel. John Galt’s speech – which received some 70 pages in the novel – had been cut to bare bones and lacks the deep, rigorous, philosophical exposition that Ayn Rand saw as the substance and culmination of the novel.

Strength 2: As was the case with the previous installments, the film’s creators conveyed a plausible sense that the events of Atlas Shrugged could happen in our own world, or at least in a world that greatly resembles ours, as opposed to the world of 1957. In this sense, the film’s creators succeeded in conveying the universality of Atlas Shrugged’s moral message.

Weakness 2: Changes in directors and the entire cast for every single one of the Atlas Shrugged films greatly detract from the continuity of the story, especially for viewers who may watch the films back to back, once all of them are available on DVDs or other media.

Strength 3: The reactions to Galt’s Speech by Ron Paul, Sean Hannity, and Glenn Beck added authenticity and relevance to the film and reinforced the message that the conflict between value-creators and “looters” (cronyists or purveyors of political pull) is very much present in our era. In addition, whether one agrees or disagrees with these notable figures, it was amusing to see them in a dramatization of Ayn Rand’s literary world.

Weakness 3: The film fails to do justice to many important plot elements in Part Three of the book. Hank Rearden – my favorite character from the book and the most compelling character in Part II – barely makes an appearance. Cheryl Taggart’s suicide is only expressed in retrospectives of her realizations that drove her to this desperate act – while she is not actually shown taking any steps toward it. The fate of Eddie Willers at the end of the film is almost completely unaddressed, with a mere intimation that the protagonists have another man in mind for whom they plan to stop – but no validation that this would indeed be Eddie Willers. The treatment of Eddie Willers in the novel is ambiguous; Ayn Rand leaves him beside a broken-down Taggart Transcontinental train engine, abandoned by the railroad workers. He might be rescued, or he might perish – but he has not yet been invited into Galt’s Gulch. The film creators neither pose the ambiguity nor attempt to resolve it. For me, the fate of Eddie Willers – a sincere, moral, hard-working man who respects the achievements of heroic individualists but is not (according to Rand) one of them – is a key concern in Atlas Shrugged. I think Rand treated him with undeserving harshness, considering that people like Eddie Willers, especially if there are millions of them, can be tremendous contributors to human flourishing. The film creators missed an opportunity to vindicate Eddie and give him some more serious hope of finding a place in the new world created by the inhabitants of Galt’s Gulch. In Galt’s Gulch, the film shows Dagny explaining her plan to have a short railroad built to service Francisco d’Anconia’s new copper mine. But who would actually physically build the railroad and do the job well, if not people like Eddie Willers?

Strength 4: The film’s narrator does a decent job at bridging the events of the previous two installments and the plot of Part III. The events in the film begin with Dagny Taggart crash-landing in Galt’s Gulch, and even those who did not read the book or watch the preceding two films would be able to follow how and why she got there. The film is also excellent in displaying the corruption, incompetence, spitefulness, and callous scheming of the crony corporatist establishment that Rand despised – and that we should despise today. The smoky back-room scene where the economic planners toast to the destruction of Minnesota is one of the film’s high marks – a memorable illustration of what the mentality of “sacrificing the parts” for the whole actually looks like.

Weakness 4: While moderately effective at conveying narratives of events and generally decent in its treatment of ethics and politics, the film does not do justice to the ideas on metaphysics and epistemology also featured prominently in Atlas Shrugged. Furthermore, the previous two films were generally superior in regard to showing, in addition to telling, the fruits of the creative efforts of rational individualists, as well as the consequences for a society that shackles these creators. In the Part III film, many of the scenes utilized to illustrate these effects seemed more peripheral than central to the book’s message. Much of the footage hinted at the national and world events that take place in the book, but did not explicitly show them.

Amid these strengths and weaknesses remains an opportunity to continue the discussion about the undoubtedly crucial implications of Ayn Rand’s message to today’s political and societal climate – where there looms the question of how much longer the creator-individualists who power the motor of the world can keep moving forward in spite of the increasingly gargantuan obstacles placed in their way by legacy institutions. Any work that can pose these questions for consideration by wider numbers of people is welcome in an environment where far too many are distracted by the “bread and circuses” of mindless entertainment. Atlas Shrugged: Part III is a film with intellectual substance and relevance and so is worthy of a relatively short time commitment from anyone interested in Ayn Rand, Objectivism, philosophy, and current events. However, those who watch the film should also be sure to read the novel, if they have not already done so, in order to experience much greater depth of both plot and philosophical ideas.

Arguments Against Eminent Domain and Its Use for the Benefit of Private Parties (2005) – Article by G. Stolyarov II

Arguments Against Eminent Domain and Its Use for the Benefit of Private Parties (2005) – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
July 26, 2014
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Note from the Author: This essay was originally written in 2005 and published on Associated Content (subsequently, Yahoo! Voices) in 2007.  The essay earned over 8,300 page views on Associated Content/Yahoo! Voices, and I seek to preserve it as a valuable resource for readers, subsequent to the imminent closure of Yahoo! Voices. Therefore, this essay is being published directly on The Rational Argumentator for the first time.  
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~ G. Stolyarov II, July 26, 2014

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The power of eminent domain has had a lengthy history, first originating in the Middle Ages and becoming enshrined in British common law. It is included in the U.S. Constitution as a means of government appropriating private property if this appropriation serves a “public use.” However, under the 5th Amendment, the government is obligated to provide “just compensation” for any property thus taken, which is usually interpreted to mean that the government must pay the market value of the property to the owner from whom it is taken.

Recently, however, governments at all levels have begun to stretch these powers to encompass one private party’s land being taken for the benefit of another, especially if the other is a larger business that has the potential of bringing in greater tax revenues. This is a measure of questionable constitutionality, and even far more questionable morality. It is desirable to abolish such seizures of private land for the purposes of redistribution to other private entities, and to at least limit eminent domain powers to seizures that will only be directed toward benefiting government projects and infrastructure. That is, the power of eminent domain might still be invoked to build a public road or school, but not a shopping mall or apartment building. The arguments in favor of this restriction are overwhelming, even though it does not go as far as complete eminent domain opponents such as myself would like.

First, for somebody who values property rights, private property is an absolute, not to be contingent on “the public interest.” If the individual sees the benefits of keeping his property as outweighing those of selling it, he can either refuse to sell it or ask for more compensation. Anybody but the owner should be allowed to take the property only with the owner’s consent.

Often, current governments do not even give market value to “compensate” for seizures, but, even if they did, there are subjective values that owners associate with their property which are hard to quantify and which only the owners themselves can enumerate accurately. As the story of certain homeowners in the 2005 Supreme Court case of Kelo v. New London shows, some of them have built their dream homes out of places that were run-down when they first purchased them. And, after they had invested their lifetime’s work into those houses, the houses were condemned by the government. Surely, a coercive demand that they accept “market value” is not sufficient to compensate such a deeply personal investment.

Furthermore, “the public interest” is a collectivist notion, which ignores the fact that only individuals exist and that invoking “the public interest” in fact implies that the government should coercively back some private interests over others.

The policy of eminent domain has, recently, been used with blatantly power-hungry justifications. Business X brings in less tax money than Business Y might, so X must be demolished to give way to Y. Y is also a larger business that might create more jobs, so this justifies putting out of work those individuals who are currently employed by X. The flaw with this reasoning is that it views individuals as fungible, or substitutable for one another. It should not matter how many other individuals benefit from a government policy if it ruins the livelihood and property of even one innocent person. Individual rights are absolute.

Advocates of eminent-domain redistribution of property to private parties will attempt to state that the government can actually bring about “efficiency” through the use of eminent domain power to achieve “urban renewal.” However, economic theory from Adam Smith on has shown that the free market achieves any goal more efficiently than the government. A business that thrives because of government favors through eminent domain is not thriving because it functions better than others in market competition. As a matter of fact, that business might well not be favored by supply and demand, and has therefore not been able to acquire the land it seeks under a mode of free, voluntary market exchange. Therefore, its owners are seeking to gain what they have not earned by expropriating it from those who have earned it.

The kind of eminent domain supported by the Supreme Court in Kelo v. New London is pure legalized theft. It is time to recognize it as such.

 

Answers to Some Frequently Asked Questions on Road Privatization (2009) – Article by G. Stolyarov II

Answers to Some Frequently Asked Questions on Road Privatization (2009) – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
Originally Published September 12, 2009
as Part of Issue CCVII of The Rational Argumentator
Republished July 24, 2014
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Note from the Author: This essay was originally published as part of Issue CCVII of The Rational Argumentator on September 12, 2009, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator.
~ G. Stolyarov II, July 24, 2014
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I recently received a series of questions pertaining to my articles, “The Necessity of Road Privatization” and “How to Privatize the Roads.” I make my answers available to the public, as I have heard the same questions frequently posed to advocates of turning roads over to free-market competition.

Issue: Unavailability of Electronic Technology

Question: “You suggested that electronic tolling can be used for private roads, but what if this technology is not available for some countries? If the technology were not in place, would privatization still be desirable?”

Answer: Road privatization is desirable no matter what the technological level of the society adopting it. There are several justifications for this:

1) In a private, competitive road market, the requisite technologies for providing easy, convenient access to roads for customers will develop quickly, as entrepreneurs will be motivated by profit to invest in them. After all, if customers must spend a lot of time waiting at toll booths to get on the road, they will take their business elsewhere.

2) At any level of initial technology, it is possible to have superior organizational and logistical methods that maximize user convenience. For instance, if we assume no electronic technology whatsoever and physical cash collection as the only feasible means of obtaining payment, we can still conceive of entrepreneurs having large numbers of toll booths at each checkpoint to ensure that customers can pay quickly and be on their way. Alternatively, entrepreneurs can always charge road users regular membership fees and issue members identification papers that would be checked anytime the user enters the road. It is not always possible, of course, to predict the specific form an organizational innovation will take. However, tens of competing producers, each working under the hard budget constraint of a private enterprise, are much more likely to come up with innovative, efficient solutions than a monopoly producer with a soft budget constraint.

3) Historically, some of the first major roads in the United States – the turnpikes of the late 18th and early 19th centuries – were privately built and operated, in an era long before today’s advanced technology. The roads functioned quite well for their time, facilitating inter-state commerce and the westward migration of large numbers of settlers. Private roads have existed with much more primitive technology than is available anywhere today, and so there is no reason to suppose that a given technological level is required for them to be viable. Technology certainly improves quality in this area, as in virtually all others, but the laws of economics function in a society of any level of advancement.

Issue: Different Ownership and Different Rules

Question: “If every road is owned by different people and different rules are imposed, would it not be too confusing?”

Answer: Standardization of rules often happens to a significant extent in private markets. For instance, railroads standardized many of their practices in the 19th century by mutual agreement of private railroad companies. In any business, it is useful and profitable to enable the customers to rely on some common and well-known elements and practices, and it is quite likely that many rules of the road will be extremely similar. On the other hand, this similarity will not be of the rigid, ossified sort that currently exists on government roads – where the rules are uniform and immutable, irrespective of how well they actually work in facilitating safe and efficient roadway use. Entrepreneurs would be free to experiment with new rules and arrangements, and if consumers do not like a particular arrangement, they would always be free to use a competing road. Entrepreneurs will be aware of this and so will hesitate to adopt measures that would be difficult for users to understand and to follow. Roads that do things differently and continue to attract traffic will likely need to prominently advertise the aspects that make them unique, so that potential users are well aware of the peculiarities in advance and in a concise, easy-to-understand manner. The best road innovations will take hold among other entrepreneurs and will eventually become part of a new set of evolving standards.

Issue: Private Road Monopolies

Question: “Can a road monopoly be allowed to charge exorbitantly if there’s no alternative to a place?”

Answer: It is extremely unlikely that any individual business would be able to purchase all possible access routes to a given place, as this would be extraordinarily expensive. If any alternative route exists, and a non-coercive monopoly currently charges exorbitant prices, this will be a strong signal for competitors to enter the market, buy up land on the alternative route, build their own roads, and charge lower prices than the former monopolist. If there is a single provider of a road to a particular place, even the potential of this kind of competition would keep such a provider charging reasonable prices.

In the odd event that competition does not enter the field, people might simply choose not to go to the place for which the only road requires an exorbitant fee for its use. In this case, many individuals will come to see the benefits of going to the place in question as being outweighed by the costs, and so the place will cease to become popular, and the road provider’s revenue will diminish greatly. At that point, the road provider will either need to lower its prices to attract more business or go out of business entirely.

It is important to recognize that a road monopoly is precisely what exists virtually everywhere in many countries today. This monopoly, unlike to transitory monopolies that may sometimes occur on the free market, is supported by law. The consequences of a coercive monopoly in the provision of any good are easy to foresee and identify: lower quality at a higher price. It is reasonable to believe that taxpayers are already being charged exorbitantly for the use of government roads today.

Click here to read more articles in Issue CCVII of The Rational Argumentator.

Writers Can Prosper Without Intellectual Property (2010) – Article by G. Stolyarov II

Writers Can Prosper Without Intellectual Property (2010) – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
Originally Published January 13, 2010
as Part of Issue CCXXXI of The Rational Argumentator
Republished July 22, 2014
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Note from the Author: This essay was previously published as part of Issue CCXXXI of The Rational Argumentator on January 13, 2010, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator. The fundamental concepts in this article remain sound, but the specific references to content sites – such as Associated Content, Helium.com, and Today.com – which previously allowed writers to monetize their works, are now obsolete, due to the closures of these sites. This should be a lesson to writers: utilize external sites for revenue generation if you need to, but always keep all of your writings hosted on sites you control as well!
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~ G. Stolyarov II, July 22, 2014
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(This article was originally published by the Ludwig von Mises Institute. A free MP3 audio file of this article, read by the author, is available for download.)
***

It is commonly supposed that, whatever its moral and theoretical standing, intellectual property is necessary for creators of written works to make a living and – even more importantly – to continue to create. Here, I will set aside the theoretical status of copyright, which is amply discussed in Stephan Kinsella’s Against Intellectual Property and Michele Boldrin and David Levine’s Against Intellectual Monopoly. I will focus on existing and emerging possibilities for writers to earn a living in a world where no copyrights exist.

By way of real-world examples and suggestions based on observations of existing and historical practices, I seek to assure writers and other intelligent laymen of all persuasions that writers would not starve, and writing would continue to flourish, if copyrights disappeared off the face of the Earth tomorrow. I hope to foster an appreciation of the breadth of human creativity and the multitude of possibilities for innovative endeavors.

The popular, copyright-inspired model of revenue generation for writers entails contracting with a publishing company for a combination of payments: (1) a modest initial advance on the written work, typically paid at or prior to publication, and (2) a continual stream of royalties, typically paid as a proportion of the written work’s earnings. The royalties comprise the greatest share of revenue for most “traditionally” published writers under the copyright system; most authors and publishers within this system perceive copyright as necessary to ensure that the royalties continue for a prolonged period of time.

Even without copyright, there is a first-mover advantage to simply having released a work to market before anyone else could. Moreover, if the work is reasonably priced and attractively presented, there would be little reason for potential buyers to feel dissatisfied with it in a manner that would render it lucrative for competitors to enter the market.

For competitors, the investment of publishing the book and the considerable risk in competing with an established producer would cause them to think twice before undertaking this venture. Unless the original publisher has failed significantly in packaging, marketing, and pricing the book, its first-mover advantage is likely to last far into the future.

As for digital downloads of the book, considerable evidence exists that these do not cannibalize hard-copy sales. Indeed, book sales have skyrocketed since the emergence of easy copying possibilities on the Internet. Downloads likely also furnish a marginal gain to the author’s reputation in excess of the marginal costs of any revenue foregone directly due to a download – especially if those who download a book today would likely not have purchased it if it were not available for free online.

But suppose that the defenders of copyright are correct in their assumption that the first-mover advantage is ephemeral. Suppose that this advantage could not be relied on as the competition seized on a good work and began to market it at equally advantageous, or more-advantageous terms than the initial publisher. What other recourse could writers have?

1. More Frequent Publication of New Works

If there is a first-mover advantage that lasts several months or years, irrespective of whether intellectual property exists, then a given author who chooses to adhere to the “traditional” publishing system could pursue the strategy of writing and publishing a new work every time the first-mover advantage of the previous work has been exhausted. This would lead to a necessary change in expectations: an author could not expect to live off the royalties from a single work – even a widely popular work – forever but would need to keep creating in order to maintain his revenue stream.

Nonetheless, this is not far off from the current situation; after all, most published books do not sell nearly well enough to assure the authors even a modest stream of lifetime earnings. Moreover, such a system would incentivize creation of further works.

Indeed, prior to the introduction of copyright, European classical composers found it necessary to continually create music, as their older and already-famous pieces were often performed internationally without any compensation given to them. Even so, some of these composers managed to be phenomenally prosperous as well as prolific.

The most famous composer of the early 18th century, and one of the most prosperous, was Georg Philipp Telemann (1681-1767), who is thought by some to be the most prolific composer in human history, with over 3000 works to his name. Telemann’s status is rivaled by Simon Sechter (1788-1867), who wrote over 8000 works, many of them short fugues, and who endeavored to create at least one short composition every day. Neither composer lived under a copyright regime.

Indeed, virtually all of the big names of classical music – Bach, Vivaldi, Haydn, Mozart, Beethoven, Schubert, Chopin, Brahms, Berlioz – composed without copyright and were not dismayed when their works were performed without their participation or consent. Composers through the Romantic era would often borrow passages from their peers and predecessors and develop creative orchestrations and variations thereof. This was not considered to be theft but rather the ultimate compliment: a demonstration that a composer had been able to cultivate a musical idea that could now thrive independently of his efforts.

If composers could set still-unmatched records of productivity without copyrights while managing to earn a living, imagine what writers could do in an environment that did not give them the hope of forever subsisting off past accomplishments.

2. Larger Initial Advances

Writers seeking to publish their works via the “traditional” system could come, in an environment of no copyright, to expect larger initial advances from publishers as a tradeoff for smaller, less stable, and generally diminishing royalty streams. There is no reason why this could not be lucrative for publishers. The publisher could pay the writer a larger one-time fee, getting in exchange the first-mover advantage over the competition.

When the competition catches up and resorts to publishing a book that has been well received by the public, the original publisher has at least the potential of competing on even terms with regard to expenses; the competitors would not need to pay a substantial fraction of their earnings to the author, and neither would the original publisher.

The tremendous proliferation of British novels in the United States during the 19th century can give us a glimpse of what such a world might be like. British authors had copyright on their works in Britain since the enactment of the Statute of Anne in 1710, and American authors had copyright on their works in the United States since the passage of the Copyright Act of 1790.

However, as the era of international copyright had yet to be inaugurated (via the Berne Convention of 1886), British authors did not have copyright on their works in the United States; instead, they typically sold the rights to a first printing of their work in the United States. Thereafter, the original US publishers of these authors would not owe them royalties and would therefore not be obligated to pay this additional expense, putting them on par with potential later publishers of the same works. The British authors made more money selling their works in the US in this manner than they did under the copyright and royalty system in Britain. Moreover, their works became significantly more popular in the United States than those of their American contemporaries.

3. Patronage 2.0

Some of the greatest works in history have been created by writers and artists working under the patronage system, in which wealthy and influential individuals supported creators in exchange for a consistent and high-quality output, often used to advance the patrons’ interests and public image. The historical patronage system also exhibited numerous genuine flaws, including significant restrictions on the creativity of artists by overbearing patrons. Yet the flaws of the system were due not to the institution of patronage per se, but to the structure of preliberal, preindustrial Western societies.

Patrons were extremely scarce, and most of them had financial resources not due to personal merits or economic achievements, but due to political power. For writing in particular, this was a hindrance, as writing for a patron typically meant avoiding the expression of ideas that would upset the established political order, on which the patron built his wealth and power. On the other hand, if one’s patron was subversive of the established order, like the Earl of Shaftesbury (1621-1683), the patron and sole patient of John Locke, some radically provocative work could result.

Some creators were fortunate to find reasonable and enlightened patrons, but even these had idiosyncrasies that needed to be catered to. This bred extensive resentment of the patronage system and inspired a reaction and shift to its polar opposite: mass marketing to as broad a consumer base as possible. Yet this approach, too, has numerous evident shortcomings.

In our time, the fundamental flaws of the historical patronage system need no longer persist, because the distribution of potential patrons is so much greater. Indeed, most people who are established in “white-collar” occupations can afford to become patrons of the arts today. In addition, because of computers and the Internet, writing and publication cost very little except for the time and effort spent actually putting the words and ideas together. Not only has the capacity of most people to fund writers increased dramatically, but the exertions and materials required for writing have diminished considerably as well.

Any patronage system would necessitate some manner of creator compliance with the patron’s wishes; that is what the patron is paying for. However, with a large number of potential patrons on the market, a given writer does not need to feel dependent on financial arrangements with a particularly disagreeable patron; he is free to find another patron – or even to work for a multitude of patrons simultaneously.

Patronage can be expressed monetarily, but it need not be. In-kind patronage – such as that performed by numerous online magazines that publish essays by contributing authors – is another mechanism by which writers can find resources to support their endeavors.

4. Self-Patronage

“Self-patronage” is a concise way of expressing the concept of writing during one’s leisure time while pursuing another occupation as a primary income generator. If another person with an above-average income can serve as a patron for a writer, then it is just as easy for the writer himself to earn an above-average income in a profession of his choice and then use it to subsidize his writing.

This is a promising option for many writers today, myself included, and it should not be dismissed as a viable long-term model for the creation of quality output. Self-patronage is tremendously efficient; it frees the writer from having to get clearance from any external entity to write or publish what he pleases. Moreover, it frees the writer from needing to satisfy a mass audience; he can make his works as sophisticated, specialized, or controversial as he pleases. If they gain notice and admiration, this can result in some added bonuses for the writer; if they fail to catch on, he is not endangered in his livelihood and can always try again.

With the ability to publish for free on the Internet, writers no longer require access to large institutions or wealthy individuals in order to spread their ideas to a large audience. They do, of course, need to compete with a much larger pool of creators than has ever existed – and this may result in difficulties for quality work in getting notice commensurate with its merits. However, because self-patronage eliminates the costs of getting external clearance, a writer can be as productive as he is motivated to be. By releasing vast quantities of works, he greatly enhances the probability that one of these will be noticed and will motivate some readers to explore his other works.

5. Online-Content Sites

A remarkable development on the Internet in recent years has enabled hundreds of thousands of writers to earn modest income streams from advertisements that appear on the pages where their work is published. (In reading this section, some might wonder about the frequent mentions of my activity on the various sites to which I refer. This is done in part to comply with the Federal Trade Commission’s recent guidelines on the disclosure of writers’ institutional affiliations. Thank you, FTC, for requiring me to boast of my work more than I otherwise would have.) Large commercial websites typically contract with numerous advertisers and establish an infrastructure for writers to conveniently publish a variety of works. Associated Content, where I have been publishing my writings for over three years [2007-2010], [formerly paid] contributors both initial small advances for articles that pass editorial review and performance payments on the basis of how many page views contributors’ content receives. The performance payment is not enough to earn a living – $2.00 per 1000 page views – but several hundred articles can provide a decent supplement to one’s monthly income.

Helium.com, another site where I have published, [formerly invited] authors to write competing articles under a given title and then to rank other authors’ contributions. The authors who regularly participate [formerly received] a bonus based on the page views their articles receive. Yet another site, Today.com, the [former] host of my blog, The Progress of Liberty, [formerly paid] some bloggers a dollar for one post on any given day and supplements this with a performance payment based on visitation. Other commercial enterprises with a variety of compensation mechanisms have evolved over the last several years to enable layman writers to earn small revenues from their work without needing to have expertise in marketing or salesmanship.

The above methods of income generation, too, have their shortcomings in terms of which kinds of writing are most rewarded. But they are still in their infancy, and six years ago they did not exist at all. Within several decades at most, it will surely be possible for large numbers of authors to earn a living by writing and publishing their works on the Internet without being members of any syndicate or media organization’s staff – unless, that is, established interests successfully lobby governments for restrictions on creative Internet activities.

6. The Best Option

The best option for promoting a writer’s creativity while assuring him a stable and adequate income is a combination of the approaches above. Each approach, like most techniques in life, has its strengths and its shortcomings. For instance, patronage might result in the need to meet idiosyncratic tastes, while online-content sites that pay on the basis of unique visitors might incentivize writers to focus on breadth of appeal rather than depth. Self-patronage, on the other hand, is limited by the writer’s existing resources and technical training in other fields.

In a relatively advanced, quasi-market economy with widely available, remarkable publishing technologies, it is possible to viably combine these approaches for an overall strategy that keeps one both fed and writing. Moreover, as the marketplace continues to evolve, and technological possibilities combine with human creativity to render new options available, writers should be willing to experiment with yet more ways of delivering their content to audiences and receiving corresponding compensation.

As is typical with markets, it is virtually impossible to exactly predict the way in which patterns of behavior will emerge, especially as one looks out into the long-term future. But this should not discourage writers; indeed, it should highlight to them the importance of being open to new possibilities. They should not simply expect that existing business models – such as the copyright-based, royalty-heavy compensation system of “traditionally” published authors – will continue in perpetuity as a matter of right for the parties involved.

It is never necessary to cling to a single legal mechanism or institution as the sole path for any given peaceful and productive human activity. Human beings are much more inventive and resilient than the defenders of copyright would suggest.

Click here to read more articles in Issue CCXXXI of The Rational Argumentator.

Majoritarian Processes versus Open Playing Fields – Video by G. Stolyarov II

Majoritarian Processes versus Open Playing Fields – Video by G. Stolyarov II

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Putting innovation to a vote is never a good idea. Consider the breakthroughs that have improved our lives the most during the 20th and early 21st centuries. Did anyone vote for or ordain the creation of desktop PCs, the Internet, smartphones, or tablet computers?

It is only when some subset of reality is a fully open playing field, away from the notice of vested interests or their ability to control it, that innovation can emerge in a sufficiently mature and pervasive form that any attempts to suffocate it politically become seen as transparently immoral and protectionist.

All major improvements to our lives come from these open playing fields.

References
– “Putting Innovation to a Vote? Majoritarian Processes versus Open Playing Fields” – Essay by G. Stolyarov II
– “Satoshi Nakamoto” – Wikipedia
– The Seasteading Institute

Interview with Chuck Grimmett on Dogecoin – Video by Jeffrey A. Tucker and Chuck Grimmett

Interview with Chuck Grimmett on Dogecoin – Video by Jeffrey A. Tucker and Chuck Grimmett

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The New Renaissance Hat
Jeffrey A. Tucker and Chuck Grimmett
February 8, 2014

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Commentary by Gennady Stolyarov II, Editor-in-Chief, The Rational Argumentator:

Jeffrey Tucker interviews Chuck Grimmett on Dogecoin and emerging cryptocurrencies.

They engage in a fascinating discussion on the 2-month-old cryptocurrency Dogecoin. Some excellent points include the following:

(1) It is pronounced “doge” as in “Venetian doge”.

(2) This conversation would have seemed ridiculous 1 year ago and unimaginable 5 years ago, yet it reflects reality today. (Even I, upon initially finding out about Dogecoin, had the thought that truth is stranger than fiction recurring in my mind for an entire day without pause.)

(3) Dogecoin offers an excellent opportunity for testing Milton Friedman’s monetarist rule of building a predictable rate of inflation into the money supply.

Dogecoin_logoChuck Grimmett is the Foundation for Economic Education’s Director of Web Media. Get in touch with him on Twitter: @cagrimmett

Jeffrey Tucker is a distinguished fellow at the Foundation for Economic Education (FEE), CEO of the startup Liberty.me, and publisher at Laissez Faire Books.

This video is a production of Liberty.me.

Wow much dogecoin. Very competition. So money. – Article by Chuck Grimmett

Wow much dogecoin. Very competition. So money. – Article by Chuck Grimmett

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The New Renaissance Hat
Chuck Grimmett
February 8, 2014

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Dogecoin_logoI’ll admit, I was skeptical when I first heard about dogecoin. I even wrote it off. Part of my living comes from running various social media profiles, so I recognized the doge meme from having seen it at least 30 times a day since the beginning of 2013. “A bunch of redditors are, once again, taking things too far,” I told myself.  A cryptocurrency based on a meme? Yeah, okay.

Boy, was I wrong. Dogecoin has proven itself to be money. Here’s why.

First, what is money? The short answer is that money is as money does. More specifically, money is a medium of exchange, unit of account, and store of value that helps people trade for goods and services.

Now, before you go yelling that no one actually accepts dogecoin in your town or even in your state, let’s dig a little deeper. For any money, it is important to define exactly where it is a medium of exchange. My Turkish lira have little value outside of sentiment for me here in Irvington, N.Y. But in Turkey, I can exchange those pieces of paper for nearly anything.

So, where is dogecoin money? Right here on the Internet. DOGE (shorthand symbol for dogecoin) has spontaneously emerged as the Internet’s tipping currency. All across the Internet, folks are tipping fellow Internet-goers who create or share good content. From dogecoin.com, “Think of it as a more meaningful ‘like’ or upvote, with real value that can be used all across the Internet.” What I totally missed about DOGE in the beginning is that being based on a meme provided an instant bridge for the community that already existed to be introduced to cryptocurrency. Those people embraced it quickly and it took off. The small individual value relative to the US dollar or bitcoin means that people regularly send 10 or even 100 DOGE when they like a piece, which adds to the currency’s popularity and widespread use.

There is quite a debate raging on the forums about whether DOGE is a viable competitor to bitcoin or the US dollar for everyday purchases. It has already proven itself as the dominant Internet tipping currency. It even crossed over into the non-digital world when fundraisers collected 26 million DOGE, worth nearly $25,000 at the time, to send the Jamaican bobsled team to the Sochi Olympics. Additionally, the dogecoin community raised $30,000 worth of DOGE to help provide service dogs to children in need.

One of the great things about cryptocurrencies is that they provide a low cost way to have real currency competition. Each competes on different margins like security, number of coins to be produced, transaction times, and so on. Another major debate in the DOGE world right now is whether having a steady inflation rate in perpetuity with the number of coins is a good idea. Would DOGE be Milton Friedman’s cryptocurrency of choice to maintain stable prices into the foreseeable future?

I don’t know the answer to that, but I am so very glad that we finally have a mechanism by which to test theories like that in real time. Some currencies will win over their respective markets and some will fall into obscurity, and I’m ready for the ride.

Let a thousand currencies bloom!

Wow.

Like this piece? You can tip Chuck in DOGE:
DQsQVGmKm51iSR1BXDxbf7prZqHvjTShun

Chuck Grimmett is the Foundation for Economic Education’s Director of Web Media. Get in touch with him on Twitter: @cagrimmett

This article was originally published by The Foundation for Economic Education.