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About this site

Here we'll explore the various economic and financial principles that impact the business of technology, keeping up to date on the various ideas, theories, trends and numbers, dispelling the silly buzzwords, slogans and fads and generally trying to understand how recent developments affect this industry going forward and may help divine what's going on and where things may be headed. Among the topics we'll touch on: regulatory issues, intellectual property, network effects, the general economy, productivity and more.

About this editor


Arnold Kling has a Ph.D. in economics from MIT; founded homefair.com, one of the very first commercial websites, in 1994; separated from Homefair in January 2000 after it was sold to Homestore; is author of Under the Radar: Starting Your Internet Business without Venture Capital

and is an essayist. Please send any comments, as well as suggestions for what we might point to from this page, to us at econ@corante.com

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THE BOTTOM LINE: the economics of IT

By Arnold Kling

Posted Monday, March 31, 2003

Wartime Media

Glenn Reynolds is not impressed with the TV networks.

the networks' reports have been a thousand points of disorganized light, the equivalent of the random pixels of television "snow." And like television "snow," the effect can be hypnotic, but little information is actually conveyed.

Meanwhile, I have subjected the Iraqi military to a fantasy press conference.

. . . . . .

Posted Sunday, March 30, 2003

Digital Identity

It's a tough issue, as this essay by Jamie Lewis illustrates.

Identity is contextual. It has many aspects. Customer-centrism is only one aspect of the digital identity infrastructure we need. So, it stands to reason that the identity infrastructure will be polycentric: flexible, dynamic and capable of pivoting and changing according to the context. We need both the individual, customer-centric identity that Doc asked for and the tools that allow enterprises to do what we, as customers, want them to do, which is play by the rules. And we’ll get the government identities whether we like it or not. Always choose the best tool for the job, and let go of the fantasy that we’ll have one ring to rule them all.

Along the way, he makes the point that an identity that is completely controlled by the individual is not likely to work for situations such as government-issued passports or a corporate employee handling large financial transactions.  "Doc" in this context is Doc Searls

. . . . . .

Posted Friday, March 28, 2003

Gary Hart Blogs

Here's the first post.

I cannot promise to be as skillful at this as many of those who have made the blogger universe such an important part of the internet. However, I'm committed to using the Internet as a vital tool to engage people on critical policy matters and the future of our country.

Former Senator Hart already appears to be far more skillful than his counterparts among Presidential contenders.  His blog is a genuine MT-powered affair, including a linkroll (only left-of-center sites listed--he does not list EconLog), and even allows comments(!).  A webmaster moderates the comments, but there still is a shameful amount of flaming going on.  I feel embarrassed for the Internet community that so many of the comments are mindless and bitter.

. . . . . .

Shirky on the Wireless Last Mile

Clay Shirky is spot on, as usual.  He points out that people will not pay premium prices for "perfect" connectivity.  Instead, they will put up with imperfections. 

One of these visions is the one everyone wants -- ubiquitous and convenient -- and the other vision is the one we get -- spotty and cobbled together.

Call the first network "perma-net," a world where connectivity is like air, where anyone can send or receive data anytime anywhere. Call the second network "nearly-net", an archipelago of connectivity in an ocean of disconnection.

He gives many examples of "perma-net" concepts, including satellite Internet service and third-generation wireless, that appear to be financial failures. 

I would argue that fiber-to-the-home is another instance where what the engineers say all of us should want is not what many of us want to pay for.

Very compelling essay.

. . . . . .

Posted Thursday, March 27, 2003

Back to the Future

Or is it forward into the past?  AOL used to be a proprietary online service, whose features included well-known magazines, whose content could not be found on the Web.  Now we have this.

Beginning Sunday, the popular magazines People and Entertainment Weekly will no longer offer content on their Web sites for free. Content will be accessible only to magazine subscribers and AOL members

As if anybody cares.  If even one person is so upset over not being able to access this precious "content" on the Web that they choose to subscribe to AOL or to any of these magazines, I'll be amazed.

Yes, I know that the Wall Street Journal online has a paid subscriber base.  But some folks have to read the WSJ for professional reasons.   It's not so easy to make the business case for subscribing to People on line. 

UPDATE:  Brad DeLong writes,

If we are representative, it's going to work. The Nine-Year-Old really likes the "Time for Kids" website...

One of us is not representative.

. . . . . .

A War Protester's Experience

Here's mine.

. . . . . .

Revolution in Media Affairs, Con't

It used to be that when I saw something in the dead-tree Washington Post that I wanted to link to, I went to the Post's web site to find it.  But I can find it more quickly by searching Google news.

. . . . . .

The Winners from Telecom Regulation

Trust me, it's never the consumer.  Here's a story in the Washington Post about implementing the new rules for getting local phone companies to allow competitors to use their facilities.

The final regulations are likely to include more than 400 pages of detailed rules that have generated millions of dollars in legal and lobbying fees.

When the game is played on the lawyers' home field, they always win.

. . . . . .

Posted Wednesday, March 26, 2003

Revolution in Media Affairs

I'd completely forgotten about the weekly news magazines.  David Warsh has a reminder, to let us know that they are dying.

For current news, I still think you can't beat The Command Post.  (I wonder if they will keep the site going after the war.  They've earned brand identity the way CNN did in the first Gulf War.)  They've blown Drudge out of the water (in terms of timeliness.  I don't know about hits).  They're more comprehensive than cnn.com and other mainstream media web sites (which admittedly they feed off). 

By the time the news comes on TV, I feel like I saw it hours ago on the web.  By the time I get my morning paper--the formidable Washington Post, no less--it feels like I'm seeing stuff from last week. 

For more on the revolution in media affairs, see brother Peterson, of course.

. . . . . .

AOL Pitches Product to Shareholders

It's an integrated messaging concept, that they say they've already determined will be a hit with consumers.  But this press release is aimed at convincing shareholders that You've Got Revenue.

AOL Voicemail is designed to add value to members' daily lives whether they use AOL over a dialup connection or the AOL Broadband service over any high-speed connection.

Members using a dial-up connection with only a single phone line (61% of all Internet consumers, according to a recent survey conducted by Digital Marketing Services), can use the service to manage incoming phone calls while online without logging off, so that they never miss an important call because they are online.

And AOL Broadband subscribers can use AOL Voicemail to get additional value from the always-on nature of broadband connections - making it the easiest way to quickly check and manage all of their communications.

AOL's customer research is strong enough that if they say this is something that consumers want, they know what they are talking about. But my guess is that they need to give consumers a free trial period to get them hooked.

. . . . . .

Spam War Sitrep

I have found that Bayesian spam filter POPfile seems to top out at 97 percent accuracy.  More importantly, it still labels about one legitimate email a week as spam.  So I am keeping my rule-based filters in Pocomail, which add another layer of filtering, even though the rule-based filters by themselves are much less effective than POPfile. 

You can think of my email as being sorted into four buckets. 

1.  My largest bucket is email that is spam according to both sets of filters. I've had enough experience to convince me that such email is never legitimate, and I delete this mail in batch, with two mouseclicks, without opening.

2.  My next largest bucket is email that is legitimate according to both sets of filters.  It is about 99.5 percent legitimate.  I open all of that email.   

3.  The third largest bucket (about 2-4 percent of my email) is email that is legitimate according to the rule-based filters but spam according to the Bayesian filters.  I evaluate these emails individually, based on the subject and sender, and I delete almost all of it without reading.  Only 1 or 2 messages a week in this bucket turn out to be legitimate.  If that number were 0, I could dispense with rule-based filtering altogether.

4.  The smallest bucket is email that is legitimate according to the Bayesian filters but spam according to the rule-based filters.  Before I got Popfile, I was deleting a lot of this email without reading it, just because it was so troublesome to sift through the rule-based spam bucket for the occasional mistake.  

So even though Popfile itself is only 97 percent accurate, when combined with the rule-based filters the accuracy approaches 100 percent.  I'm happy.

Based on that, I would not be bullish on the prospects of a "challenge-and-response" approach to email, as described by John Markoff.  That approach, which involves sending an automatic response to an email that requires the sender to authenticate himself or herself, is clumsy.  What if somebody sends me an important email, and then has to sign off their computer?  It could be hours or days before I see the message.

I continue to favor Bayesian filtering, although I think that the people who design Bayesian filters could learn something from rule-based approaches.


. . . . . .

Posted Monday, March 24, 2003

A War News Blog Emerges

The command post quickly climbed (emerged?  emergenced?) to the top of the charts at Daypop.  Sic transit gloria, Instapundit.

. . . . . .

Posted Sunday, March 23, 2003

Trading Off Connection Quality

Dan Bricklin points out that people might adopt voice over IP even before the quality of the connection meets that of conventional telephony.  I just like this illustration:

Back in the 1970s, we went to much trouble to create printers that were "letter quality". . .
Then along came the fax machine. With the push of a button, you could send a copy of a typewritten page over the telephone to another machine anywhere. It revolutionized business. And after all that work making computer printouts look "real" and not like they were from some basic dot-matrix printer, all sorts of important documents were being read, signed, and used in commerce, with a "quality" that was worse than the most basic printers of the early PC years. Even when they could use the "high quality" fax resolution setting, most people didn't. The advantages of instant delivery were too great, and the content was acceptable in this different form. Innovation was not stopped by a need to meet the quality standards of the past.

. . . . . .

Posted Thursday, March 20, 2003

Noticed by the Suits

Zimran got noticed by the Heritage Foundation, which sent out an email to "influential bloggers."  The result:

Do I want opinions from the Heritage Foundation? No, I am very satisfied with my current sources of opinions. The idea of broadcasting or picking through policy points with think-tanks frightens me.

He was more appreciative of being cited by Forbes as one of the top five economics bloggers. 


. . . . . .

Human Error and Computer Security

Back in the 60's, when Ralph Nader got his start by criticizing auto safety, some wags joked that the most dangerous part of a car was the nut behind the wheel.  Evidently, this is true for computer security as well.

The survey shows human error - not technical malfunction - to be the most significant cause of IT security breaches in the public and private sectors.

I don't think that this comes as a surprise to experts in the field, such as Bruce Schneier.


. . . . . .

Posted Wednesday, March 19, 2003

David vs. Microsoft

While attending a wireless soiree, Alan Reiter was able to get help with Microsoft in fixing a mouse problem with his computer.  But he complained about problems with the way wireless Internet access worked--or didn't--at the site. 

According to a tech savvy source -- there are serious problems with interference among hotspots installed by T-Mobile and many exhibitors.  My source, who is an expert in implementing hotspots in large buildings, just happens to be at Wireless 2003 and just happens to have a handheld spectrum analyzer.

Clearly, none of the Davids were there to explain that there is no such thing as interference.

. . . . . .

Posted Tuesday, March 18, 2003

Weinberger on Anonymity

David Weinberger says this on The Right to Anonymity

A world in which that default is maintained is a better world than one in which our every click is tracked, our every purchase becomes a datum to be turned against us, our every download is assumed to be shoplifting. Anonymity has been and should be the default. It should be allowed to emerge as an actual right.

I disagree that the default on the Net is anonymity.  Look at cookies.  Look at bots that harvest email addresses. 

I would say that the default on the Net looks more like this:

1. Most people think that they have more anonymity than they really have.

2.  People who really value their anonymity use special tools (e.g., spammers who use email spoofing programs to hide their true email addresses).

I don't think we have the choice of going back to an Eden of anonymity, if there ever was one on the Net.  I think that there is much to be said for moving in the direction of David Brin's "mutually assured surveillance," where it may be easy for you to find out something about me, but impossible for you to do so clandestinely.

. . . . . .

Telecom Post-mortems

There is a meme propagating, with Brad DeLong among its spreaders, that says that Worldcom failed because it did not understand Moore's Law, and that capacity in Telecom grew faster than expected. 

Be careful about swallowing that argument.  Worldcom's over-estimate of demand was probably much more important than any under-estimate of supply.

The best explanation I've heard for Worldcom's failure is this:  Bernie Ebbers ran around in the late 1990's saying that Internet traffic was growing by a factor of 10 every year.  That means 1000 percent in three years (not even counting compounding).  Instead, by 1998 or so it was growing by a "mere" factor of 3 every year, or 27 percent after three years.  If you borrow to the hilt to finance a network to carry 1000 units when the demand is only 27 units, you get into trouble.

UPDATE:  See Andrew Odlyzko's piece.

"Insatiable demand for bandwidth" was one of the key and most destructive
mantras of the Internet bubble.

. . . . . .

Voice over WiFi

Gizmodo reports here and here about devices that could allow you to use WiFi to send voice calls.  This might be a concept in 2003, but a reality in 2004, in which case it would be very disruptive.  Folks like Verizon who are looking to play offense in the data transmission market could instead find themselves playing defense in the mobile phone market.

. . . . . .

Posted Monday, March 17, 2003

Fuel Cells for Smartmobs

Both the New York Times and Lynne Kiesling are talking about them.  If you believe the Times,

Fuel cells that last far longer than do rechargeable batteries would free laptop computer users and television camera crews, for example, from the need to lug heavy and expensive backup battery packs.

Battery life is one of the most important constraints on the wireless revolution.  I once joked that you would need a battery the size of a cantaloupe to support all the functions that people seem to want in a phone/PDA.  So if this is a viable technology, it is a big deal.

Incidentally, Slate's Paul Boutin suggests that the design of Intel's latest Centrino chip was guided by a need to conserve battery power.  Another illustration of the significance of this issue.

. . . . . .

Bet Against Convergence

Peter Lewis writes,

Sony and Microsoft don't even know how to explain to Ma and Pa and the kids why they should want their PC to communicate with the TV. Stop someone on the street and ask, "Are you frustrated because you want to stream video from your PC to the video monitor in your bedroom?" Chances are you'll get slapped.

His phrase "a solution in search of a demand" sounds like something I would say.


. . . . . .

Evolution or Devolution?

We'll have to see what this means.

The Evolution Data Only (EvDO) network will allow users of compatible wireless devices to download large files such as spreadsheets, inventory lists and even video in a matter of seconds while on the go. Verizon Wireless plans to launch the service in the late summer, with coverage initially limited to an area inside the Capital Beltway. The service will also be launched in San Diego around the same time.

I wonder whether this is an efficient use of spectrum, or an inefficient use.  It's not the decentralized, bottom-up approach that the Davids are talking about (meaning Reed, Weinberger, and other Davids).

UPDATE:  The answer, according to Gizmodo, is "inefficient." They call it EvDon't.

. . . . . .

Off topic, On War

I wrote this.


. . . . . .

Posted Sunday, March 16, 2003

Dynamic Pricing for Wireless?

Eli Noam takes a number of positions on how wireless should work.

1.  He thinks that spectrum should not be divided up--"no more than the colour green, the note C flat or the right to raise one’s voice."

2.  But if spectrum were free, people would overuse it--overgrazing the commons and all that.

Therefore, you need a pricing system that charges people when spectrum use gets congested.

This, of course, conflicts with the simplicity of the end-to-end system.  Now, the network has to look at packets and prioritize them based on payment. 

It could be that you need some form of dynamic pricing, but I think economists tend to get too enamored of complicated peak-load pricing schemes.  I think that it would be ok to have spectrum divided up, as long as some large blocks are available.  Then different owners can experiment with different ways of dealing with peak load issues.

Thanks to Kevin Werbach for the pointer.


. . . . . .

Complex Mail Transfer Protocol?

SMTP stands for Simple Mail Transfer Protocol.  Many proposed solutions for spam would have the effect of replacing SMTP with something more complicated.  Perhaps this group will do that.  While a Complex Mail Transfer Protocol might be effective at curbing spam, it will have high costs and potential unintended consequences.

. . . . . .

Tech Review on Synthetic Life

To me, this is a lot scarier than surveillance.

they are attempting to write entirely new genomes from scratch.  In essence, they hope to create new synthetic forms of life, the likes of which have never before existed...

Having never taken so much as high school biology, I'm not qualified to comment.  Anyway, this is brother Gayle's specialty.

. . . . . .

Technology Review on Surveillance

Compared with this blog, there are some things that are just flat-out better, and more worth reading.  One of them is Technology Review.   The latest issue has a lot of postable material.  For example, the cover story is on surveillance.

"Nanny cams," global-positioning locators, police and home security networks, traffic jam monitors, medical-device radio-frequency tags, small-business webcams...Extensive surveillance, in short, is coming into being because people like and want it.

What is happening is a kudzu-like spread of diverse surveillance technologies. For example, the article cites a survey by the American Management Association which shows that over three-fourths of major U.S. corporations use some form electronic monitoring of employees.

Ray Kurzweil uses the phrase "stones in a stream" to describe people who think that they can stop the flow of technology.  I think that phrase applies to Privacy Luddites.

. . . . . .

Posted Friday, March 14, 2003

Yahoo Launches Suicide Application

Yahoo used to have more clues than this.

will feature content from News Corp.'s Fox network, Viacom's CBS and Walt Disney's ABCNews.com, according to sources close to the portal giant. The service will carry a monthly fee of $9.95 or a slightly higher charge of $14.95 for a sports package.

What woodhead wants to pay for that? 

Actually, the article says that a competing service from RealNetworks has attracted 900,000 woodheads.  I'd like a put option on the audit for that number.

Audio-video streaming of recycled TV is not a killer application on the Internet.  It's a suicide application.

. . . . . .

AOL for the Tech-savvy?

Sounds like an oxymoron.

AOL Communicator integrates features from two of AOL's most popular services -- instant messenger and e-mail -- and is targeted at heavy users of e-mail, including college students, small business owners and techies.

It includes better spam filters also.

The problem is that my daughter goes to college, the college gives her a broadband Internet account and an email address, she downloads an instant messaging client, and now she is weaned off AOL.  I don't think AOL Communicator will make her go back.

Its even worse than that for AOL.  Even in the high schools where I teach part time, every year fewer and fewer of my kids have AOL email addresses.  It's mostly hotmail and yahoo.

. . . . . .

I've been Weinbergered

Earlier, I made a comment on the challenge that spam poses for the World of Ends principle.  Weinberger responds that the end-to-end principle

doesn't say that no services can ever be built into a network, only that it's generally better to move services closer to the edge. So, as Arnold suggests, perhaps that means that spam needs to be trapped by the ISPs. I don't know if that's the case, but it could be. 

I don't know if that's the case, either.  In fact, my instinct is that as costly as spam is to ISP's, the costs of fighting it may be higher.

A commenter at Weinberger's blog points to a piece by Robert Cringely proposing to charge for email.  The commenter writes, 'I find strange someone as apparently market oriented as Kling doesn't see end user "charging" for access as the solution.'

Except that I did see it as a solution, more than three years ago

suppose that you were charged 10 cents for every email message that you send, but that the recipient of a message could push a button that says "waive the charge." In that case, people who send unwanted email messages to millions of people would be charged hundreds of thousands of dollars, and people who only send email to friends and associates would be charged nothing. 

Except that more recently I began to understand the end-to-end principle and to appreciate the simplicity of email.  Now that I am somewhat more educated, I think that the cost of implementing this idea probably would exceed the cost of spam.

. . . . . .

We Win

The war between Internet journalism and traditional journalism is over.  We win. 

Bookmark this piece by James Grimmelman on a conference on Digital Rights Management.  Next time some clown says that traditional journalism is superior, email the link and then ask that clown to show you something of that caliber done by a professional journalist.

(Note the clever way I used "we," as if the rest of us somehow get to bask in Grimmelman's reflected aura)

. . . . . .

Posted Thursday, March 13, 2003

Running into Interference

David Reed reports on the impact of being Weinbergered and slash-dotted.

[Radio engineers] use approximations to the physics involved. Their approximations (ideas like "fading" and "interference") become real in their minds and textbooks. And in turn, the approximations are too complicated, so they get replaced by approximate models of the approximations ("fading probability distributions" that model "fading" as if it were a real random phenomenon, rather than a phenomenon of certain kinds of antenna-detector-modulation system choices). They believe in their approximations. They are rules of thumb that help them get a job done. And in that sense, they are useful.

And it's apparently quite exciting to folks whose experience with radio systems is somewhat limited. Exciting enough to generate angry mail and postings.

I'm not a radio engineer, and for some reason I've always been willing to believe Reed's views, which I characterize as "interference is in the ear of the receiver." 

Where things get dicey is the issue of legacy hardware.  On the one hand, Reed will say that ultimately all those old dumb receivers have to go.  On the other hand, Weinberger assures us that we will still be able to use our old TV sets. 

According to Reed and others, there are technologies that will allow new software-defined radios and older receivers to co-exist.  But I get the feeling that these technologies would be characterized as being in the not-quite-ripe stage.

. . . . . .

World of Intermediaries

My response to Weinberger-Searls is this essay.  I offer five clues for geeks, including

(1). Intermediaries add value.

It is true that traditional intermediaries, such as
newspapers and music publishers, employ business models that are incompatible with the Internet and destined to fail. However, the Internet does not mean that the destiny is for producers to launch creative works directly to consumers.

. . . . . .

Legacy Business Models

New brother Brockmeier points to this interview with John Perry Barlow.  I would describe it as being mostly about the conflict between companies with legacy business models--the music industry and the movie industry, primarily--and Internet users.  In spite of some Lessig-esque hyperbole about "private totalitarianism," the interview is worth reading.  Barlow concludes,

I'm afraid that what we're gonna see is two separate entities. One of which will look like interactive television and will have all of the commercially made available material that has been produced. And the other which will be an open-source Freenet and will have little access to the previous works of humanity.

This is one scenario, in which the entertainment industry never adapts to the Internet.  If this scenario plays out, then in my view it leaves Big Media owning Seinfeld re-runs and Classic Rock, but with no meaningful role in the future.  Instead, new creative works will be developed by other businesses using revenue models that do not rely on controls over distribution of copies.

. . . . . .

Spam and the World of Ends

The World of Ends would seem to imply that the only weapon against spam is end-user filtering.  Any attempt to stop spam at the network level would require opening up packets and looking at them, which violates the world-of-ends principle.

Fighting spammers at the network level does not work, as this Washington Post story points out.

"The spammers are evil folks," said Matt Korn, America Online Inc.'s vice president for network operations. "As hard as we're working, they are working 24 hours a day. That's the level to which this battle has escalated."

Perhaps we should think about the issue differently.  The problem is that businesses pay spammers to send spam.  Presumably, they do this because it is profitable.  Presumably, this is because there are woodheads out there who buy goods and services from spammers.

Perhaps instead of trying to attack the problem by going after spammers, what we should be doing is going after the woodheads.  It is almost impossible to enforce a law against sending spam.  So we should try to pass a law against responding to spam.

What I propose is that any American who makes a purchase based on unsolicited email be fined $10,000 and jailed for 30 days.  The law would be enforced by undertaking random audits of companies that are successful at attracting business by using spam.  The law would be highly publicized by internet service providers and corporate CIO's, who have a strong interest in reducing the volume of spam.  Thus, everyone with an Internet account would be on notice that purchasing from a spammer can get you in trouble.

If we can deter Americans from responding to spam, then spammers will stop routing spam to domains in the U.S.  That's my solution.

. . . . . .

Posted Wednesday, March 12, 2003

Shirky Asks Important Questions

Clay Shirky's latest missive on social software is long on questions, short on answers.  His point is that we have not really come up with satisfying software for human networks.  I would say that the proof of this is that the use of computers in education is a disaster.  Learning is a social process, and the software absolutely does not support that. 

Pulling a random quote from Shirky,

designers of social software have more in common with economists or political scientists than they do with designers of single-user software, and operators of communal resources have more in common with politicians or landlords than with operators of ordinary web sites.

In other words, social software encodes mechanisms and rules for interpersonal transactions.  Because software writers are used to constructing rules for data processing, they are out of their element in designing social software.

. . . . . .

Posted Tuesday, March 11, 2003

Stealth Blogging

I have to keep checking the left-hand column of the Corante blogs--you never know when another one will sneak up on you.  We now have one on neurotechnology, called Brainwaves.  The issues that come up, such as "cognitive liberty," make my head hurt--but no doubt a cure is on the way.  And we have a rapid-fire bioinformatics blog, called Living Code.

OH!--and here's another one that I just noticed!  It's called Open Mind, and it's about Open Source code.  So you can follow all the lawsuits and whatnot.  You do realize, don't you, that if it weren't for Microsoft as a unifying devil, the Open Source community would fracture into the worst kinds of bitterness and sectarian strife?  That's what happens when you substitute dogma for markets.

. . . . . .

- Lessig

Sometimes, I think that the best way to understand technology and economics is to take anything that Lawrence Lessig says and put a minus sign in front of it.  For example, David Weinberger quotes Lessig as saying,

"We have never in our history have had a time when fewer interests have controlled more of the creative process."

I cannot think of a single quantitative measure that would support this statement.  It is 180 degrees wrong.  The variety and low cost of creative works available today is mind-boggling.

Lessig lives such an ideological bubble-boy existence that he can make charges like this stick.  He gives people a villain that they can hate ("Big Media"), and that turns out to be more important than giving people facts.

. . . . . .

Posted Monday, March 10, 2003

Supply-side Economics?   Anyone?  Anyone?

Surely, if there is a sequel to Ferris Bueller, it will finish off supply-side economics for good.  Meanwhile, there is my essay.

The new "litmus test" for supply-siders appears to be the belief that government deficits do not increase interest rates. [Wall Street Journal editorial writer] Susan Lee is accusing [Council of Economic Advisers Chairman n. Gregory] Mankiw of heresy in that regard.

In making the case that larger government deficits do not lead to higher interest rates, Lee gives several somewhat mutually inconsistent arguments.

. . . . . .

Posted Saturday, March 8, 2003

Property Vs. Commons

The Winner is Property.  Momentarily amusing.  The site (Google-fight) was pointed to by Virginia Postrel.

. . . . . .

Posted Friday, March 7, 2003

The World of Ends Amendment

By now, you've probably seen this Searls-Weinberger piece.  It says, for example,

The Internet isn't a thing. It's an agreement.

Ed Krol, author of The Whole Internet Catalog, one of the first books on the Internet, emphasized this point.  He said that connecting to the Internet is like joining a church.  You are agreeing to abide by some formal rules and also expected to live up to some informal ones.

I would like to add my own amendment to the World of Ends.

Amendment:  The Internet is not Microsoft.  The Internet's destiny is not to be dominated by personal computers.

You see, in 5-10 years, we are going to look back at 2003 and say "We thought that was the Internet?  How could we have been so stupid?"

Because in 5-10 years, most of what we do with the Internet will not involve Windows (or Apple or Linux).  It will involve devices that we now don't think of as computers.  The action today is in cell phones, but my guess is that over the next decade we will see other form factors emerge. 

. . . . . .

Posted Wednesday, March 5, 2003

Tragedy of the Commons?

I would like to get a first-hand look at how the Spectrum Policy:  Property or Commons conference went.  However, the Linux Public Broadcasting Network, which supposedly is going to present archive video, changes its story every day. 

Meanwhile, here is a third-party report on the conference.

Both sides generally agreed there should be a combination of the two approaches and that more study will be needed to determine the best mix.

That tells me that the conference was dominated by academics and consultants.  Those are the folks who stand to gain from "more study." 

I think that if you want to see wireless networking reach its potential rapidly, you should go the property route.  It would get the Federal government out of the business of "studying" how to allocate spectrum, a process that I fear is going to last years.

. . . . . .

Victory over Spam?

I am just about ready to declare victory over email spam, thanks to POPfile

POPfile is a pre-processor for your email that can work as a front end to your regular email program (but it does not work with web-based email programs, like hotmail**except that it does--see below).  It uses Bayesian filtering, which means that it needs to learn from you how to classify email.  The more email you get, the faster it learns.  I get close to 100 emails a day, most of which is spam.

I am using POPfile with Pocomail  I had already set up rule-based spam filters in Pocomail, and I have kept those filters.  That way, even while I was training POPfile, I still had filters working.  However, now that POPfile is trained, I could disable Pocomail's rule-based filters, other than a filter to work with POPfile.  If you choose to use POPfile, I recommend sticking with your current email program, whatever it is, rather than switching to Pocomail.  Nothing against Pocomail, but now that I have POPfile I could be just as happy with Netscape mail or even Outlook Express.

When I say that POPfile is trained, this means that of the most recent 100 legitimate emails I have received, it has classified none of them as spam.  This is important, because you want the risk of Type I error to be low.  At the same time, of the last 500 spam emails, it has classified between 5 and 10 of them as good emails.  That is a very low level of Type II errors--much better than I have ever experienced with rule-based filtering.

Because so few emails erroneously show up in my "legitimate" email folder, it takes me very little time to delete spam.  Although spam is still costly for ISP's, I feel that with POPfile my personal cost of receiving spam is now negligible.

**To get POPfile to work if you have hotmail or yahoo mail, you need to install a "normal" email client, such as Outlook Express or Eudora.  Then you need to install something that converts webmail to client mail, such as Web2Pop.  Then you configure POPfile on top of that.   My guess is you could even get this to work on AOL, using the mail retrieval function on aol.com.  It appears to me to require a fair amount of Geek skills to do all this, but I have no first-hand experience.

UPDATE:  Kevin Werbach emails to tell me that he is not getting such good performance from POPfile, even though it has trained on 4000 emails.  My response is that it could be that POPfile improves more with calendar time than with the absolute number of emails.  A training data base that includes hundreds of typical spams may be no more meaningful that a data base that included only a few typical spams.  My guess is that regardless of how much email you receive, unless you train POPfile for at least 3 or 4 weeks, you will not see good results.

. . . . . .

Posted Monday, March 3, 2003

Intellectual Property as Metaphor

I describe various metaphors for intellectual property.  For example,

Music publishers who go after file swappers are like movie theater owners who won't let you bring your own popcorn to the theater. They are simply alienating their customers while trying to protect a revenue stream that they were not going to get, anyway.

. . . . . .

Copyright 2002-2003 Arnold Kling. All rights reserved. Terms of use

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