Not that this has anything to do with technology, but whatever.

So the health insurance thing has been nagging me a bit lately, as I walk 1.5 miles to connect from the Santa Monica bus to the LA Department of Transportation DASH service, which are both unaffected by the transit strike, and also as I pay 20% more for the same products at Gelson's that I would normally buy from Von's. Whose responsibility is it to make sure that people get good health care? Why is the cost of health insurance skyrocketing? What can be done to stabilize the situation?

Well, it's obvious that health care is in several ways a market failure. It's an industry with a very distorted demand curve, because the demand for health, for *life*, is extremely inelastic. People will pay what it costs, to the extent that they have the money. This means that the price at which total revenue starts to decrease due to drop in demand is much higher than for other types of goods.

Further distorting the demand curve is the disconnect between prices and consumers created by the insurance industry. I was on a particular medication for a year and a half before I learned that the $10 I paid every other month for my bottle was less than 1/50th of the cost to my provider. I found this out entirely by accident; one day, a computer glitch left me without coverage, and I happened to go refill my perscription that day. When I got to the counter and they said "That'll be $558" I nearly had a heart attack.

If I had had to pay for that medication out of pocket, would I still have gone on it? It's hard to say. At the time I started on it, I probably could have afforded it, if I lived in a cheaper apartment and cut other expenses. Would I have stayed on it as long? I don't know. But what is certain is that the price never entered into my decision as a consumer, because I didn't have to pay for it.

So as we gain new technologies that allow us to live longer, healthier lives, and to survive or completely avoid an increasing array of diseases (my kids will be vaccinated against chicken pox... seems like they're missing out on a rite of passage), the insurance system leaves those who are covered feeling entitled to the best medical care money can buy... so long as it's not *their* money. So why is this?

We come to our second big problem... the value of life. Though civil courts every day put dollar figures on the lives of children and parents and community leaders and gang members, we all admit that life, generally speaking, is priceless. When I insure a house, two things go into calculating the premium: risk, and value. A $1 million house in the same environment as a $500k house will have a higher premium, because it will cost more to replace. A $500k house in a wildfire zone will cost more to insure than the same house in a boring urban area.

But when it comes to insuring our health, only risk can be taken into account, because there is no replacement for health. If we could value lives in the same manner as other goods, we might take into account the number of years the person can normally expect to live, the amount of education and natural talent they have, the number of people who depend on them, and so on. This would mean that my mother, a retired 60-year-old breast-cancer survivor and former smoker (38 years), with only one 29-year-old daughter, is less "valuable" than myself, a relatively healthy youngish person who will, if all goes well, have a master's degree and a heck of a career in transportation planning, along with a very young child in the next year or so. Yet it costs *more* to insure people who, in the most callous sense, are "less valuable," because the very things that make one valuable lower their risk of disease.

There is no simple resolution to the issue, as far as I can tell. We will not suddenly start "valuing" people's lives differently, nor will individuals stop demanding the best health care available at a price they can afford. But we can recognize that health care *is* a market failure, and regulate prices in new ways. Perscription drugs are a good place to start. It's true that it costs a great deal of money to develop these drugs, and there is a certain amount of risk involved. But how much of the resulting price does it take to repay that investment, with appropriate interest? Drug companies should be accountable for their pricing. Part of the FDA screening process should include an accounting of what the company's costs to develop the drug were, and a pricing system based on expected demand, production costs, initial investment, and appropriate profit should be devised. Sure, they should make money, even good money. But there should be a limit to how much they can make. The market won't limit it naturally, so this limit has to be imposed.

This model could potentially be extended to doctor's fees, lab tests, and many other areas, but in all cases would require careful analysis to ensure that the prices still yield quality coverage with low potential for fraud.

It's not enough to say that people should have access to good health care. Something has to be done to actually ensure that access. While 60,000 low-income children are wait-listed for health insurance in Florida, 700 retired MTA mechanics hold the entire transit system hostage with a strike that doesn't affect them, so that they can retain their practically free health coverage. The cheapest and potentially most rewarding people to keep healthy are left by the wayside over those who are the most expensive and offer the lowest return on investment. It's clear that something has failed, and we need to fix this soon.

An idea popped into my head today, and I wanted to put it down somewhere before it got too heavy and fell out. It comes out of thinking, "What would it take to get someone to develop an OS version of GIS (Geographical Information Systems)?" Some may know, and others may not, that there's pretty much one company who makes GIS software (ESRI). It's hideously expensive, and not that great either. And while version 3.x is available for a variety of platforms (including Unix), the newest line, 8.x, is only available for Windows-NT based systems. (Apparently Microsoft threatened to create a competing product [which is MS-speak for steal their code] if they didn't introduce that limitation.)

So here's my thought: start up a non-profit company that is geared towards creating applications for government agencies (which tend to have the most specialized needs) and other large companies. The process goes like this:

• Agency or company comes to non-profit OS software developer with specs for a program they need. It may be an existing program that they want ported to an Open Source model, or something entirely new.
• NPOSSD bids the job based on how much it will cost to build it (remember, no profit margin).
• Here's the fun part: now the two companies, in drawing up the contract, establish a licensing fee that seems reasonable. Subsequent people who want a license to the same software will pay this fee.
• The entity that originally funded the project will get 90% of any collected licensing fees as a dividend, until their entire cost is repaid (accounting for present value and market interest rates). The remaining 10% will go into unfunded R&D work at the NPOSSD.
• In the event that multiple entities want to split the costs of production, the dividend will be similarly split in proportion to what each paid.

It's crazy, but it just might work. Certainly it would be something of a safety net for governments that want to adopt a preferential policy towards Open Source. It's basically a high-risk low-yield investment, since there's no guarantee you'll get any of it back... but you might get it all back with interest. Now to write up a proposal, I guess ;-)

"The U.S. has an *enormous* installed base of poorly-designed neighborhoods."

    -- CidHighwind

...and into all the other industries. It's time to stop the segregation of technology as a separate department. As high-tech solutions become more and more essential to everyday business, there is a greater need for tech-savvy people in "ordinary" jobs.

I was thinking about this as I was chatting with my supervisor at LACMTA (Los Angeles County Metropolitan Transportation Authority) today. I was relating to him the difficulties I had in completing a task because of outdated software and inadequate hardware. The Catch-22 is, if you don't have the people who know how to use the stuff, there's no point in buying advanced hardware or software... and if you don't have the advanced hardware or software, what's the point in hiring people to use it?

Now I'm an intern there, and I know how to use the stuff because in a former life I ran a Computer Services department or four at Kinko's. But in spite of the dot-com bust and the general job market issues, tech professionals don't seem to be flocking to more mundane office jobs.

Well, it's time they did. Next time you're laid off, just think... "What do I really want to do?" Then do it. Maybe, like me, you'll need to get another degree first or something (seems Transportation Planning isn't something people usually learn on the job), but it will be worth it... for you, and for your world. Yeah, the one you live in, that one. (No, not the one inside the little box. The one that delivers pizza when you can't tear yourself away from the box.)

It occurs to me that magic, by definition, doesn't exist. The definitions presented by the dictionary are distinctly unsatisfying; most refer to the occult or supernatural. But when it comes down to it, something is "magic" if it simply cannot be.

All kinds of things (for example, predicting the future, influencing the weather, or instantaneously appearing and disappearing) are dubbed magic. We name a thing magic if we cannot tell how it could possibly happen. Either we know it to be impossible on the face of it (levitation, invisibility, etc.) or we know that it can be done, but not without certain prerequisites that aren't currently present (moving from one location to another without travelling the space in between, for example).

It has been argued that we need magic. I won't disagree; one of my favorite quotes is "Logic gives man what he needs; magic gives him what he wants" (Tom Robbins in Another Roadside Attraction). But in terms of what stock we put in it, it's important to recognize just what we categorize as magic. It seems that, for all practical purposes, magic is the same as imagination. It just now occurred to me that they even seem to share a common root... I'll have to crack open the OED on that one sometime. We do, I think, need the ability to conceive of and comprehend the impossible; otherwise, new things never become possible. But knowing the difference between imagining a way to cure cancer with crystals and actually believing that you can do it, right now, can be a life and death matter.

There is still a lot in this world we don't understand. Most of it has to do with how we work; we're still quite foggy on just what makes us self-aware, intelligent, or even alive. We can say "this is alive" and "this is not alive," but we don't know how to go from one to the other (without using a currently living organism to process the non-living matter, anyway). But calling such a thing "magic" can be misleading. It implies, to many people, that it not only isn't possible for us to do now, but that it never can be understood; that its very nature is supernatural, which of course is a paradox.

Ok, done babbling, back to calculating mortgage payments for my math homework that was due last week... and I'll be dreaming of some magical way to have all my homework done while I read /.

People have often argued that OS is the "solution" to the rather broken application of copyright to software. A common response to this is that "Open Source is not commercially viable." It's hard to argue with that. But, on the other hand, it's not entirely relevant.

In the US, we're used to thinking of everything from the market economy standpoint. We bought into Adam Smith's efficient allocation of resources (without noting the caveats about perfect information or perfect mobility... oops). So we have trouble conceiving of any other system of distribution.

In yesterday's journal entry, I mentioned the free rider problem. In a market-regulated economy, free riders bring the whole system down, because people see that someone's getting something for nothing, and they stop paying also. In the end, you have a suboptimal solution for everyone, even if every individual is acting in their own best interests (the prisoner's dilemma). That's the justification for government intervention in market failures.

Open Source is another kind of response to a market failure. It has the assumption of free riders. This is something that boggles the American mind. Instead of making something good because you can sell it, people make something good so that they have something good, and then let other people use it. This can indirectly increase their wealth; they may get a great job offer based on their OS work, for example. But since they don't immediately, directly see financial benefit from their work, there's an assumption that they won't do as good a job as they might if they were being paid for it.

The corollary to this assumption is that open source cannot produce as good a product as proprietary software. People say this, and ignore the fact that it doesn't appear to be true. With no large-scale marketing, no bundle licensing agreements, and no evil empire, Linux has a 26% market share in corporate back-office servers. It's not just the price, either; sysadmins are switching to Linux because of the stability, the ease of administration, and the security over Windows-based solutions.

Generally speaking, the OS model seems to produce a product that is superior in mechanism, but inferior in interface. The superior part isn't hard to figure; people are making this stuff because they want to use it, so they're motivated to make it work well. Add to that the concept of peer review -- your code is out there for all to see, so you want to make it look good. Did your mother ever say "Wear clean underwear in case you get in an accident?" Sort of the same thing, but less foreboding.

The interface is where OS falls behind, so far. Again, looking at how it's made makes this obvious: people who are good with software are making it to be used by people who are good with software. There's not much point to spending the effort to make it appeal to the lowest common denominator... not when you could spend that time and effort making it run .01% faster. ;-) Of course, the attempt to make it commercially viable by selling packaging and support is changing this, slowly. In time, the gap will probably close to a point that there's no real difference between using Linux and using a proprietary desktop or server operating system.

So, basically, they're right: open source can't work in a free market economy. It works outside of it. It's making a new economy, one that's desperately needed. /me cheers.

So this morning I was sitting in Introduction to History and Theories of Planning, and the topic of public goods came up. It's a frequent cause of discussion in planning circles. The definition of a public good that they've pounded into our heads has two parts:

1. It is impossible or unfeasible to control access to the good.
2. It is not consumed by use; it can be used by an unlimited number of people without being used up.

Economists sometimes describe public goods as an example of a market failure. Since it is not possible to consume or to control access to a public good, the market cannot regulate it through supply, demand, and pricing. People are liable to underreport their desire for the good, in order to avoid paying their fair share (the free rider problem) or it may be that no individual values the good enough to pay for it to be set up, though it may be beneficial to everyone (such as a symphony orchestra). In some cases, no individual *can* buy/create/establish a particular public good; imagine if United had to build their own airport in every city they wanted to fly to, or that you and your neighbors had to get together and lay a new sewer pipe.

Planners and other social science types often argue that market failures are areas where government can and should step in and regulate the situation, even in a free market economy. Through taxes and other assessments, governments can evenly distribute the financial burden of providing public goods, so as to ensure they are available to all that want or need them.

So it suddenly struck me that, according to the definition I provided above, digital information is a public good. Since the quality doesn't degrade as you create new copies, and the cost of copying is practically nil, it is not consumed by use. It is currently impossible to really prevent information from being shared, as well. Access can be controlled only through relatively extreme measures; for example, the military has installations that literally have no connection to the outside world via anything but the front door, so information can only be hand-carried out. Palladium is an enormous effort being put forth to control access to information, and there's no sure bet that it will actually work. It may simply make information harder for people to use legitimately to the same degree that it prevents illegitimate use.

So, what? Well, then, I would argue that government needs to take an active role in provisioning the public good of digital information. Exactly what form this role should take is a little more difficult; I just had this thought today, give me time. ;-) But certainly this would be a new role for organizations such as the National Endowment for the Arts, or a justification for regulating some software companies like public utilities. In any event, going on pretending that we can control access to digital information isn't going to solve anything. We need to think of it in a new way.