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Journal: On government regulation and lobbying 2

Journal by Ironica

I posted this here: http://slashdot.org/comments.pl?sid=1318879&cid=28869075 and decided I liked it so much, I wanted to save it, and point to it every time someone starts saying that we shouldn't have regulation of blah blah blah.

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In a TRULY free market, the government wouldn't have power to establish currency, protect ownership, extend licensure... all sorts of things that the economy depends on.

The "hypothetical free market" requires perfect information, perfect competition, and perfect mobility. As none of these are feasible to attain, government regulation is required to simulate them or compensate for their lack. For example, legal definitions of what "organic" produce is, and establishment of certifying bodies (which are private enterprises, but have some sort of charter or something from the government that establishes their certification as adequate for usage of the term "organic") help compensate for the lack of perfect information about farming practices. Without them, someone could say "Yeah, my produce is organic!" after spraying it with tons of pesticides, and you wouldn't really have any way of verifying that unless you traveled out to their farm yourself and watched them for a while... or brought your own lab kit to the market.

So, markets that work on the scale we expect them to will always require SOME amount of regulation, and insofar as there is such regulation, there will be disagreements about how that regulation should be put in place. Some methods would favor the producer or the consumer. Hence, there's a business interest in attempting to shape the regulatory process.

I'm all for making lobbying illegal... but that, some say, is over-regulating the market.

User Journal

Journal: Ways to identify aliens attempting to infiltrate Earth 2

Journal by Ironica

1) They have perfectly ordinary and reasonable first names, but last names that appear to be semi-random assemblages of letters in a vaguely pronounceable order. (These are probably approximate transliterations of their true alien names.)

2) Dislike for pizza and ice cream, but strange affection for haggis.

3) Internet presence appears to date back to 1997, but hits only reference memes from 2005 or later.

When I find out more, I'll let you know.

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Journal: Putting one's money where their OS is. 7

Journal by Ironica

Recently, as I was rebuilding my computer after some sort of horrific malfunction, I found myself looking for Windows XP cracks. Our Windows 2000 burned CD doesn't work properly, and I didn't want to burn an authentication tick on my laptop WinXP disc. So I searched, and came up with nothing particularly useful. I ended up installing an Ubuntu bundle, and so far so good. Good thing we quit playing WoW again.

But as I browsed, I came across a message board discussing how to crack XP, with several people posting "Gah thieves! Just buy it already!" I found myself wanting to post back (though I refrained, having insufficient desire to create a new account on a random message board and bump a thread that's been dead for months). I wanted to say, "You know, I don't want to crack XP because I'm cheap. I want to crack it because I'm BOYCOTTING MICROSOFT."

So then I was thinking, how could I prove it? I mean, I'm morally opposed to giving MS any money, but how does one tell that this is truly my motivation, and not simply an excuse to make me feel better about "stealing" software? And then I hit upon the solution: donate the cover price of the pirated software to an Open Source project of my choice!

So, when I get PowerPoint back up and running somewhere, I'll find out how much it's "supposed" to cost, and donate that money to... something. Mozilla, probably, or Ubuntu (it's very shiny!). And I encourage all 1.5 of the people who read this to do the same, for any pirated MS software they are running.

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Journal: My .sig, since folks keep asking...

Journal by Ironica

Just curious: do you have a citation for that quote?

Yep... Joel Stein in the April 18, 2003 issue of Entertainment Weekly.

The full quote is:

"I found the most convincing part to be the working stiffs," said Valenti of the PSA, "the guys who have a modest home and kids who go to public schools. They make $75,000 to $100,000 a year. That's not much to live on. I don't have to tell you that," he said, vastly overestimating the U.S. poverty level and what I get paid for this column.

Funny part is, when they started actually showing the PSAs before movies, apparently they dropped the ones starring Ben Affleck, and only went with the "working stiffs."

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Journal: The problem with how we teach people technology 7

Journal by Ironica

When you learned to drive a car, you probably knew a little about it. There's an engine, it burns gas, that causes the wheels to go around. The gas pedal must have something to do with that burn rate. The brake makes the wheels stop.

Now, imagine that we all treated that "under the hood" as a black box, and that typical people commonly confused the engine with the carburetor. Some cars would even come with holographic stickers closing the hood shut, so you couldn't open it without voiding the warranty. When someone teaches you to drive a car, they say:

"Turn that key. Now, press in this button and move this lever until it clicks four times. Turn the wheel about 60 degrees, and slowly press on the right pedal. Turn the wheel back 60 degrees, but slowly... SLOWLY! See, you almost ran into that car! Now give it a little more gas... I'm sorry, I didn't mean to fall into jargon. Press harder on that right pedal. Use the big one on the left when we get to that white line on the pavement up there."

This is how people are taught to use computers. Click this, press that, drag here, type there. Meanwhile, when the computer tells them it's running out of memory, they start deleting stuff from their hard drive to free up space, because they don't know the difference between RAM and the C: drive.

If we (meaning, those of us who know this stuff) all took a different tack, instead of teaching people procedurally how to get through a particular function or application, we might have a much easier time educating folks about not running trojans. But as long as we (again, speaking to the community that has the knowledge) keep acting like people can't and shouldn't be taught this stuff in the way that we learn EVERYTHING ELSE, we'll keep having this problem.

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Journal: Another new non-profit OS support idea

Journal by Ironica

So I came up with an idea to fiscalize the dispersed demand for open source alternatives to proprietary software packages. (That's economist-speak for a way for folks to put their money where their mouth is.)

The idea is this: create a bounty program for particular projects. The best way would be to tack this onto an existing, respected OS organization, such as OSDN, but could be a free-standing non-profit entity. People would be able to:

- Create a bounty for production of a particular OS project
- Contribute to bounty funds for existing projects
- Place specific restrictions on their bounty contribution (i.e. must support a particular platform, needs to be distributed under a particular license, etc.)
- Suggest and vote on criteria for evaluating applications submitted for bounty consideration
- Review and vote on whether a particular package meets criteria and will be awarded the bounty

Funds would be collected from contributors at the time they decide to contribute. Lower bounds on contributions would be set by transaction costs; upper bounds don't seem necessary. Funds would be collected into a semi-liquid investment account (like a money market account) so that the money would accrue interest while the bounty is out. Costs to run the program would be collected from interest earnings on accounts, and the remainder of interest would be proportionally divided among the various projects.

Built from the ground up to be a flexible, communal framework, it would be possible to have fairly complicated reward schema. For example, if a particular submission met many of the criteria but not all (for example, had a great engine and lots of good features, but a lousy UI) the contributors to the bounty could elect to award a percentage to the project, and reserve the remainder for necessary improvements.

Since contributors have already put their money in the pot, there's less incentive to "hold back" awards if a good project comes along. If contributors merely pledge, but don't actually cough up the money until they've got the project in hand, they can say "Well, nah, this doesn't really qualify" and keep their money, while using the product.

Contributors and submitters could be any entity, including individuals, groups of people, academic institutions, or private companies.

So far I'm not seeing a drawback to this solution. People who want to see an OS port of a particular application could put up however much it's worth to them, and the projects that have the greatest demand and value to the community would get the most attention. OS developers would receive some financial reward for contributing their time and code. Small developers might decide to release a product as OS just because of the publicity they'd get from garnering the bounty, especially if they're trying to compete directly with an established proprietary product.

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Journal: The problem with health insurance 4

Journal by Ironica

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.

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Journal: A new business model 2

Journal by Ironica

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 ;-)

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Journal: Geeks need to get out of the IT industry...

Journal by Ironica

...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.)

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Journal: The Nature of Magic 1

Journal by Ironica

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 /.

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Journal: Open Source and the Market Economy

Journal by Ironica
So my journal entry yesterday made me think a bit about Open Source and the market economy. I read an article linked from /. that referred to OS as "intellectual community property," which sounds suspiciously like public goods. Hm, could they be on to something?

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.

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Journal: Digital Information as a Public Good

Journal by Ironica
First off, let me explain that I'm a first year MA student in Urban Planning at UCLA. That puts this in context a little bit.

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.

If at first you don't succeed, you must be a programmer.

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