A Very Big House In The Country

I came across the existence of Longleat Safari Park in England. It’s one of those drive-through safari parks. What's weird about it is that it's on the grounds of a historic stately mansion. Of course, you have to wonder how that happens: A safari park isn't really what you associate with British aristocracy. Okay, you might imagine a rich British person with a private collection of exotic animals, but that's not what this is. Picture a huge and luxurious Victorian house in the English countryside; then imagine the camera shifts a little to the side and you see a middle-class family in their sedan watching the monkeys converge on the car looking for handouts, and the family is going from delight to a slight panic as more and more monkeys show up.

And yet, this cultural juxtaposition isn't that unusual. I remember going to an amusement park called Alton Towers, which is also on the grounds of an old estate. It seemed a little weird; I mean, I realize they need to put the theme parks and Safari parks somewhere in England, and they also have historic Manor houses. And since there's not much room, they could be side by side. But you'd think the historic Manors would want nothing to do with the entertainment of the common people. You know, build a tasteful wall between them. At the very least, don't name the park after the house.

But apparently, running a massive luxurious house is all fine and dandy when it's the nineteenth century and you have tenant farmers paying rent, and you're not paying any taxes, and there aren't many factories to outbid you for your workers. But in more modern times, these big houses became unaffordable even for the wealthy, and many were torn down or sold off. Others had to find new sources of income, and that's how a few of them came to have attractions for the masses on their grounds. Even at Alton Towers, the amusement park wasn't enough to make ends meet: the interiors of the house were sold off, and only the stone shell of the building remains. 

Anyway, part of the reason for my interest in this concept is that I just read Pride and Prejudice, which mostly takes place in such homes. One of the odd aspects of the setting is that the heroine’s family, the Bennetts, are on the poor side of rich. They may lose their house and their income, and probably end up in a Dickens novel. So you have to keep reminding yourself throughout the book that even though their cohorts look down on them, they're still much better off than most in that era. 

But now that I've seen the fate of such houses, I can't help but wonder what became of (spoiler alert) Elizabeth and Mr. Darcy's descendants. By now Mr. Darcy's estate at Pemberly is either gone, or maybe  home to Europe's third largest water park. 

Yes, I know, it's actually a good thing that these houses are no longer focused on a wealthy few. And this is a win for society: the welfare state and market forces combining to deliver a deserving comeuppance to an exploitative system. 

Maybe it's my English blood, but it still feels sad to see an end as undignified as Pemberly Splash Xtreme (Liz Darcy VII, proprietor.)

Get The Parity Started

It’s amazing how the colour of a product makes such a difference in price. In our world where there’s often not much differentiating one product from another, the colour can make all the difference. Of course, I’m going to use examples from cars and technology, but you can find examples everywhere.

That’s the reason why cars have taken a turn for the gray in recent decades. It’s affected by what car buyers desire in their own cars, but also their concern for resale value. So they’ll prefer an inoffensive gray car that they can easily flip a few years later, not the green one that might turn off other buyers. I suspect it’s also that car companies know people are very choosy, and colour won’t win them many sales unless it’s absolutely perfect, but an offensive colour will lose them many, so they stay neutral. Personally, I think that’s a shame; I like colours, but I’m not married to any in particular. So I’d like to have a nice colour for the sake of some colour in my life, even if it’s not my favourite. But I seem to be in the minority on that, so gray it is.

I’ve also seen the colours having an effect on prices in the technology business. I’ve been looking for an external hard drive, and Samsung makes their external drives in traditional black, but also in blue and red. I’ve noticed that one colour is sometimes on sale, but not the others. They’re identical other than the colours, so I’m assuming that when one falls behind in sales, some algorithm somewhere decides it’s time for a discount. It’s hard to believe that colour can have that kind of effect on the purchase of something few others are going to see, but apparently it does.

But then I went looking for a game controller. They’re traditionally gray or black, but often available in other colours. So after my experience with the hard drives, I wasn’t surprised to find that the red XBox controller was five dollars less than the original black. I was set to order it and congratulate myself on my colourful frugality, but then I saw it: A pink controller, for fifteen dollars less than the original.

That’s ironic, because of this concept called, the “Pink Tax.” That’s the phenomenon where products aimed at women are more expensive than similar products aimed at men, even though they hardly differ. Often, the only difference is that they’re pink, hence the name. They aren’t really more expensive because they’re pink. After all, pink paint and dye is not particularly expensive. Instead, it’s factors like how much consumers want and need products. I’m assuming that because women are under more pressure to look good, their hygiene products are more expensive because of higher demand.

So in other contexts, pink might cost more, but the roles have been reversed here. You might be surprised to see them even trying to sell something pink in the world of video games, but let me remind you: 

1. Surveys show female gamers are now close to 50% of the market.
2. We are just coming out of The Year Of Barbie. 

Having said that, it appears things weren’t working out the way Microsoft marketing wanted, and the pink controllers were deeply discounted. I don’t know, maybe the Barbie-gaming crossover wasn’t as much as they’d hoped. But I suspect the real reason is that female gamers may choose the black or the pink, while the males will only buy the black.

(And if you’re wondering, I only saw one colour that was more expensive than the original black controller: a dark purple. Purple seems to be having a moment right now.)

For me, even when I put aside traditional symbols of masculinity, pink is not one of my favourite colours. I don’t mind it, as long as it’s taken in reasonable quantities. You know, less than the Barbie-aisle-at-Toys-R-Us levels. And whatever need I have to reaffirm my masculinity is tiny compared to my desire not to over-spend on electronics, so: I ordered the pink controller.

It’s not much of a consolation for high-priced women’s products, but there are times when the Pink Tax turns into, let’s say, the Pink Subsidy. And I’m pleased to be gaming with both confidence in my masculinity, and an extra fifteen dollars in my pocket.

Put On My Thinking Cap

Normally, I’m a believer in the concept of the salary cap. But I’m now noticing things that are kind of unexpected. Basketball has a salary cap, but teams are thinking more and more in terms of building through big fee agent signings. The most extreme example being when the Knicks traded young superstar Kristaps Porziņģis so they’d have more money to go free agent shopping this summer. In contrast, Baseball has no salary cap, yet dozens of free agents remain unsigned at the start of spring training because there’s little interest from teams.

How did we get here? Mainly it is a result of the NBA’s relatively low maximum on individual salaries. That is, it’s low compared to the total salary cap, and the small number of players on a basketball team, and the very small number of players who make a difference in a superstar-focused sport. It’s a real distortion of the market: if salaries were free (other than the limit of the salary cap) star players would be paid much more than they are now: In the NBA, a superstar is a huge advantage, so teams would be paying large percentages of their cap for one player to build around. That would drive the salaries of star players through the roof, with the result that no team would be able to fit more than one or maybe two under their cap. Super teams with many superstars wouldn’t exist.

The irony is that now things are looking bad for small teams. As others have pointed out, if a player can only make so much money from salary, then that means there’s a big financial advantage to play on a team that’s either in a big city or is already successful, so they’ll have more chances to do endorsements and supplement the salary. So strangely, while the salary cap may help smaller-market-teams compete, artificially keeping the maximum salary low is hurting them.

It’s a very different dynamic than other sports: in baseball and hockey, there’s a huge emphasis on youth. In baseball, young players are a way for small-market teams to compete without breaking the bank, and in hockey, it’s a way to get value out of the cap. You wouldn’t see anything like the Knicks trading a young star to get cap space so they can sign veterans. On the other end of that trade, people were complimenting the Mavericks on getting two great young players to build around. But I’m wondering what good that is. They may end up getting crushed by a hastily-assembled team of veterans.

Meanwhile, baseball had its own strangeness: no one wants to sign free agents. That’s strange in a sport that used to be dominated by rich teams with expensive players. Many people are blaming this on collusion, a conspiracy of the owners agreeing not to sign anyone. That's happened before, so it's hardly tinfoil hat territory.

But I have to disagree. I don't have much faith in the morality of team owners either, I just think there's a simpler explanation. The fact is that with modern statistics, we know that a good-but-not-great player will only add two or three wins for a team. And while it’s true that more wins generally means more fans (and thus more money) a small improvement like that won’t make a big enough difference to be financially worth it. Say you’re a .500 team: signing one of these “good” free agents would mean spending $10 million a year to go from 81-81 to 83-79. There’s no way that makes financial sense. Sure, you could pay for several of these players to improve the team enough to get into the playoffs, but then you’re talking about spending about $50 million a year just to get into the wild card game.

Baseball’s high costs and hard-to-make playoffs have lead to an all-or-nothing approach by the teams, in which they either spend big to make a great team, or emphasize the farm system to slowly groom a winner. That means the market for mid-range free agents is very small. Teams waiting for the youngsters to develop don’t want free agents because they aren’t trying to win at the moment, and once those youngsters are ready, they don’t want many free agents, because they have a team full of young, talented, and inexpensive players. And the few rich teams have spent most of their money on superstars, and have little need for good players. So if you’re a good player at age 30, there simply aren’t many people looking for your services.

So now the business of sports is even stranger than it normally is. Basketball has a salary cap but may be about to grind into a no-parity rut, while Baseball has no salary cap, but is very frugal, but still has no parity. And I continue to think that the NHL may actually have the best system.

We Built This City On Reasonable Land Prices And Tax Incentives

Amazon.com is looking at adding a second headquarters. That's pretty impressive; so many companies haven't felt the need to leave their own main office. But then, I guess Amazon isn't like most tech companies in that they have a whole lot of world-wide logistics to take care of, and at some point you can't do all that from one campus in one place. So now they want a second headquarters; it didn't work so well for the Roman Empire, but they're going to try anyway.

What's amazing to me is watching various cities jockey for the position, and the tech/urbanist pundits try to handicap the race. All we know is that it will be in the U.S. or Canada. Presumably it will be some distance from their current HQ in Seattle. Good transportation is a must. There's also an assumption that high costs will take New York, Los Angeles and the San Francisco Bay Area/Silicon Valley out of the mix too. And since CEO Jeff Bezos is pretty hands-on, it will also have to be a place where he has or is willing to buy a home

It's an interesting question, and reminds us of how geography still has meaning in tech. The media talks about tech as though it all happens in Silicon Valley. And while it is remarkable how concentrated the industry is, the fact is that there are a number of smaller tech centres around the U.S. Amazon's current home in Seattle is one (also home to Microsoft) but there's also Austin, Washington D.C. and Boston, among others.

I've always been a little mystified by how tech companies choose to locate. The usual explanation is that they cluster together in these areas because they have to go where the talent is. But the counter-argument to that is that you're also going where other employers are. Whether you're in an area with lots of potential employees and lots of companies, or few potential employees and few companies hiring them, you'll probably end up with the same quality of employees. And the less-competitive job market has the advantage that less competition won't drive wages up.

But the truth is that there are many other reasons that tech companies huddle together. For instance, venture capitalists work closely with their investments, so they're much more likely to back a company that's local to them.

But we're not talking about a startup here, we're talking about a company that already has a reputation and a ton of money. So I figure they have a lot more freedom to go anywhere they want. They could probably go somewhere that doesn't normally have a big supply of tech employees, and just assume that their presence will draw applicants to the new place. Even the cultural accoutrements of tech employees will probably follow. That could be a boon for cities that are stuck in a rut, perhaps held back by a staid old populace unwilling to try new things. But add a bunch of young cosmopolitan folks with money to spend and you'll soon have all the ethnic restaurants and art installations you want. Having grown up in a culturally conservative city, I'd always fantasized that a tech company relocated there and disrupted the culture. Well that could be about to happen.

But that brings up the big disadvantage of winning the Amazon sweepstakes. You don't just get the good parts of Silicon Valley, like jobs and sushi. You'll get the bad parts too, like gentrification. Dropping a bunch of well-paid employees into a city will take supply and demand in unpleasant directions. As the San Francisco Bay Area found, just because you have a really advanced economy: 1. the people who already lived there aren't going anywhere, and 2. You're going to need people who do less glamorous jobs, who don't make a lot of money. So whoever wins the new headquarters won't fix all their problems, they'll just get lots of exciting new problems to work on.

Survival Of Whoever

Evolution and Capitalism have a lot in common. They can produce highly efficient solutions to problems, they're ruthless, and they act slowly. It's also weird what they each choose to hone to ultimate efficiency. Did you know that an eagle's eyeball is warped slightly so that whatever is at the centre of its field of vision appears magnifed? But on the other hand, manatees.

And what about peacocks? Five million years ago, one female had a tail-feather fetish; now look at them. Meanwhile, they're are so many living things that obviously need fixing. You just have to look at your own body for examples (asuming my blog is only read by humans.) As any sports fan can tell you, the human knee could use a good redesign.

But it's the same with capitalism. It can produce efficient solutions to problems. There are companies like Amazon and Walmart that have developed highly efficient systems to move items around the world. But then there's that phone cases and printer cartriges kiosk at the mall that no one ever seems to buy anything from. It's capitalism's panda, eating one plant, not really interested in breeding, yet somehow hanging on and surviving.

And both capitalism and evolution can be agonizingly slow. A lot of human health problems, from knee injuries to sinus infections, are a result of our bodies not being adapted to walking upright, even though we started doing that five million years ago. And there are so many products that need work. Like, when you buy a package of six muffins at the local grocery store, they come in a plastic tray. The label has a sticker wrapped around it. But because the plastic case doesn't have flat sides, the sticky side of the label is exposed in several places. That means it ends up sticking to any bread or produce bags that come near it.

Eventually, the design will be fixed. But that's only motivated by the supermarket losing enough business, just like evolution is only motivated by creatures' survival rates. So our sinuses might cause us pain, but it won't change unless it causes people to die. Say, they get eaten by a lion because they were distracted by pain. But even that might be faster than lost sales causing a change in the muffin tray design. So put some thought into the products you choose; you're helping businesses evolve.

State Of The Nation

Turkey's government survived a coup this week. It didn't seem to be a very well-organized coup, since they broke the number-one rule of coups: be successful or else. Having been unable to remove President Erdogan from power, he immediately started punishing anyone involved.

I'm not a big fan of the military seizing power, but that had me a little worried.  Erdogan has shown that he has few scruples when there's a chance to get ahead.  He angered western powers last year when the Turkish army used the fight against ISIS as a cover to attack Kurds, even though the Kurds are attacking ISIS. So when news came out that thousands were being arrested following the coup attempt, it was easy to be suspicious, especially when a lot of the first people arrested were judges, which seemed odd following a military action.  And in the days since, the crackdown has gotten bigger and bigger, involving people in more and more disconnected occupations, like journalists and teachers.

People were already worrying that Erdogan was trying to become a dictator, now it looks like he's just made a huge leap towards that goal.  It's hard to believe that Turkey was on the doorstep of joining the European Union only a few years ago, and were modernizing laws to fit in.  One thing they did was eliminate the death penalty, a move they are now planing on reversing.  That essentially sends the message that Erdogan and Turkey would rather have their strongman-cult-of-personality relationship than be in Europe.  It's easy to see how that's going to start a vicious circle, in which Turkey's decent into dictatorship fuels the fear-mongering about Muslims in Europe, which will lead to resentment in Turkey, and give the government more license to do things that piss-off Europe.

So too bad for Turkey. They had a pretty good run for a hundred years there.  The other country that seems to be imploding is Venezuela.  Their economy has been in trouble for a while, but the crashing price of oil has caused an economic disaster.  Not only are many people facing economic hardship, but basic structures of society are starting to fail: Electricity is being shut off periodically, and hospitals are running out of supplies.

Of course, Venezuela has already had its popular leader who fancied himself a dictator, Hugo Chavez.  He never quite made it to absolute control.  He also died three years ago, but his leadership is still being felt.  While his policies were nice to the poor, they were often poorly thought out.  The big hint that something was wrong came a few years ago when news came out that Venezuela was importing coffee.  If you know your geography, you know that Venezuela is right next to Colombia, and thus should have no trouble growing lots of coffee. But when Chavez fixed the price of coffee, farmers couldn't make money off it, and looked for other crops.

This is a good example of the effect of a government's competence. We think of a dictator as damaging his country through abuse.  That's a big problem, but they can also hurt through disorganization.  Take Zimbabwe's Robert Mugabe, and North Korea's Kims.  They've done lots of harm to citizens branded political enemies.  But they've arguably caused more human misery through their mismanagement of the economy.  Zimbabwe suffered through hyperinflation, and North Korea is the only industrialized society to have a famine.

It's not clear how Venezuela is going to get out of this, either. The government is trying to fix things to help their citizens, but the nation itself is close to defaulting on their debt.  As with many countries with oil, they've come to rely too much on the wealth that comes from the resource: the drop in price erases a large section of the economy overnight.

Both Turkey and Venezuela looked to be part of the wave of rapidly-industrializing economic success stories, but now they've lost their way severely.  It illustrates just how fragile our societies can be.  They rely on a lot of checks and balances, agreements, and collective will to keep them going.  Though most countries have been quite resilient, pushing them too far can send them careening into disaster.  It's something to think about at a time when so many people have decided that our circumstances are bad enough that we must make radical changes.

Who Needs Tickets?

Tickets to events are a situation where the rules of capitalism are fairly clear: You have an item - the ticket - of which there is a finite supply. So - in a completely free market - the demand for that item would determine the price. If everyone were okay with that arrangement, the tickets would be sold through some sort of auction system, thus guaranteeing all the tickets get sold, and at the maximum price.

But people aren't okay with that. For whatever reason, we feel that tickets should be within reach of the average fan. I guess that's because sports is seen as being for the young and young-at-heart, and the arts are seen as being above base things like money. Of course, you don't have to look far to see inconsistencies in that. Sports cars are also for the young and young-at-heart, but no one feels a moral need for them to cost the same as normal cars, rather than what the market will bear. Also, we're okay with the original ticket price being high; well, we're not okay with it, but we don't regard it as the same level of immorality as scalping.

So we insist on fixed ticket pricing, and the determination of who gets one of the limited number of tickets is done randomly. Or it's determined by passion, as measured by camping in front of the box office or waiting by the computer for the second they go on sale. And this arrangement is what enables scalping in its many forms. That concept is stepping in and grabbing that extra money off the table that the original vendors aren't allowed to.

But it should be noted that the capitalist and emotional sides of this issue aren't necessarily at odds. After all, concerts and sports events have the problem that more people want to attend than will fit. Most people would agree that it seems fair if the most passionate fans attend. Capitalism is all about deciding who gets scarce resources, and in an ideal world, it would work here too. Those more passionate fans will be more willing to spend money on the tickets, and will out-bid those who are less passionate, and thus would rather spend some of their money elsewhere

But that assumes everyone has approximately the same amount of money. And as we all know, that's not the case. The huge difference in wealth distorts the market: an upper-middle-class but borderline fan will easily out-bid a dedicated fan on minimum wage, since the small slice of the wealthy person's entertainment budget will be greater than the entirety of the poor person's entertainment budget.

This week, we saw these principles taken to new extremes with the Tragically Hip farewell tour. On the capitalist side, the supply is extremely limited, since it's the final tour, and Gord Downie's health will limit the number of concerts. But on the human side, a final tour is the time when it feels more important than ever that attendees be determined by passion rather than wealth. Those expectations have come face-to-face with a ticket industry that has edged closer and closer to being an unrestrained market. Although it happens all the time, this particular time that our weird sorta-free-market ticket system let the rich out-pay the passionate, it seemed so much worse.

Turn On, Tune In, Drop Out

A while back, I discussed the possibilities of a basic guaranteed income. Now venture capitalist Sam Altman, on the Freakonomics podcast, has addressed the idea, coming down in favour of it. The interesting (and headline-grabbing) aspect of his defence came when he poopooed the concern that guaranteed income would take away the incentive to work. He said that society would continue to function even if 90% of people just get high and play video games.

The strange thing is, I find that believable. It's part of a question that many people have asked one way or another: how much of the work done in our society is actually necessary? I know, that sounds painfully cynical, but come on, have you worked in an office? On top of that, consider the amount of work that goes into cancelling out someone else's work, such as advertisers promoting competing products. Generally, we think of that as the lesser of two evils, the greater evil being a completely planned economy, where even more waste will go into bureaucracy and self-serving decision making. But even still, it's depressing when you think of how many careers go into it. Those lives could be just as well spent high in Hyrule, as far as overall productivity goes.

However, I do still have some concern with this reasoning: they're essentially saying that there are enough people with passion who would work without material incentive that we could keep society going. In many aspects of life, that's true. Most artists work despite the structure of capitalism, rather than because of it. And open-source software shows that programmers are willing to do work without pay, though usability experts apparently don't.

But what about farmers? Lots of people would probably farm anyway, they get enjoyment and satisfaction from growing things. After all, we have the term "hobby farm" for a reason. But would there be enough people, working hard enough, to feed us all? We urbanites don't really appreciate how much farming has industrialized over the past century. Yes, automation is a possible answer. Indeed, it's a possible answer to all concerns about post-work societies, but I'm not sure it will become that advanced fast enough. After all, we're talking about hobby farmers growing food to feed seven billion (or eight or nine by the time these changes come about.)

How about janitors? Garbage collectors? You could argue that without work requirements, the way we approach the distribution of work might change. Using garbage collectors as an example: if 90% of us are smoking pot and playing video games, and the other 10% are working, but not at a breakneck, nine-to-five pace, we might not mind taking our trash out to the dump ourselves. We also might not mind cleaning up our own workspaces, instead of expecting people to specialize in cleaning buildings on an industrial scale. Or maybe our standards of cleanliness in the office might drop down to the standards of cleanliness most of us have in our homes.

That's an interesting thought experiment: modern society has generally gained efficiency by having people specialize in jobs. But perhaps a future post-industrial society might undo that change. The only way empowered people might get unpleasant work done would be to spread it out among all of us.

David Signs With Goliath

In investing, there's a concept called selling short, which allows you to make money on a stock that you think will go down in value. Sometimes I wish there were a way to make money off things in everyday life that decline in value.

Take, for instance, Blue Jays season tickets. Yes, I'm glad I didn't buy them during their playoff run, only to see the hype and hope come to a crashing halt this week when David Price signed with rival Boston. It's nice to know I didn't waste money on those tickets, but it's hard to feel smug given that I couldn't afford them anyway.

At the time the Jays traded for Price in the final year of his contact, sports pundits/killjoys warned everyone that it was unlikely they'd be able to sign him beyond this season. So I'm sure that those pundits are currently tut-tutting fans for being disappointed. But that misses the point.

In baseball - as in all non-salary-capped sports leagues - there's two ways to be successful, business-wise:

• Low-income, low-costs - don't spend much on players, meaning that your expenses are low, and you make money despite having less success, thus fewer fans, thus less income.
• High-income, high-costs - you spend big to build and maintain a winner. That costs a lot, but you make up for it by having more fans, thus more income.

For some teams, the decision is made for them: a team in a smaller city can't pay big, because even a successful team won't bring in enough money to pay for high end salaries. You have to hope you can succeed by developing talent quickly (like this year's World Series winners, Kansas City.) But more likely you'll languish at the bottom (like Kansas City in the previous two decades.) On the other hand it's hard for a team in New York or Los Angeles to justify sitting on their big pile of cash while watching the team lose year after year.

But for cities in the middle, like Toronto, it's not clear which direction to go in. To make matters worse, the two strategies tend to be self-perpetuating: is hard to sell a low-budget loser to fans used to competing, and its hard to convince a cheap team to start spending in the hope that fans will open their wallets.

It's kind of forgotten now, but the Blue Jays were in that big budget category in their World Series years; although those teams were mostly built on drafts and trades, they also bought free agents to fill in weaknesses and departures, and had one of the highest payrolls in the Majors. Now, of course, they don't, and occasionally people ask, when did everyone decide Toronto was a small market?

The answer is probably sometime around when then-owners Labatts was bought by Interbrew, and became less interested in paying big for ballplayers. But however it happened, they've been caught in that small-market vicious circle for a while now, and its hard to get out of. That's why we Jays fans with an eye on economics were overjoyed for this year's turn around: it wasn't just the fact that they were winning, and the positive vibes of a full SkyDome had returned. It also seemed like they had jump-started the big-market set up. The team took chances to bring in big names, and the fans responded with attendance and ratings. Suddenly, there's no risk: the guys writing the checks know the fans will respond.

And that's why the Price deal stings. It's not just seeing a player leave. It's losing him after we just signed Happ, a good-but-not-great pitcher who has already had one stint with the team, and left without most of us noticing he was gone. And it's the fact that Price's going to one of our two big-spending division rivals. The message could not possibly be clearer: last year was an aberration, and everything is back to the way it had been during our playoff drought, with the Yankees and Red Sox buying whatever they need, while we take mediocre players and hope for a miracle.

I realize there are plenty of reasons why this could be bad for the Red Sox, like the fact that they're going to be paying a 37-year-old pitcher $30 million in 2022. But for now I'm not optimistic. But hopefully this post will prove to be as accurate as last week's "Donald Trump has finally gone too far" article, in which case the Jays will probably sign Zach Grienke.

The Dismal Science-Fiction

Here's a discussion starter: If you could take any technology from Star Trek and make it real, what would it be?  Would you choose warp drive? Phasers? Transporters?   I'd take a different choice than most people: I'd want the replicators.

If you're not familiar with them, they're the machines that instantly construct anything the crew needs.  When Captain Picard goes into his office and says, "Tea, Earl Grey, Hot," and a hot cup of tea appears in the alcove in the wall, that's the replicator.

I don't think they've ever made it clear, but I've always assumed that there has to be a way to reverse it too. Like maybe Picard puts the empty cup back in the replicator and says, "recycle," and it dematerializes and gets added back to the big heap of generic stuff in a back room of the Enterprise that the replicators make stuff out of.

But I digress.  If you're wondering why I would chose a technology of convenience over the chance to explore the universe or destroy my enemies, it goes back to the show's economics.  Or lack thereof.  The Star Trek future has no money, which is something that many people think is unworkable no matter how mature and advanced our species gets. 

But it always made sense to me, because of the replicators.  If you can produce anything you want whenever you need it, then you no longer need money.  Economics is a way of forcing people to produce before you can consume.  But if production has no real cost, and most things are automated, then there is no need to force people to work.  Or to put it another way, economic systems (whether capitalist or communist or anything in between) exist to deal with the fact that there isn't enough stuff to go around; so if there is enough stuff for everyone, then there's no need for an economic system. 

I realized all this during one of my many hours watching the various Star Trek series in university.  It seemed pretty clever to me, but it turns out it's called post-scarcity economics.  Trek assumes that in a world where work is not required, people still would want to work just for personal enlightenment.  But the point is that the non-economy would still work even if most people sat around watching holographic soap-operas.  You'd just need enough people voluntarily working to do the work of programming, debugging, and improving the machines that do production.

The New York Times has an article about an economist who believes all of this is possible, and probably the only aspect of the show we're likely to see any time soon.

I think he's got a point.  It's surprising how close we already are to a post-scarcity society.  In information-related fields, we already have the needed technology; that is, we can reproduce anything that consists only of information (text, audio, video, software) as easily as Picard's tea.  Of course, those things haven't become free because people still have to eat and sleep, and we can't reproduce food and housing as easily as information.  I'm willing to believe that if we could produce those necessities of life that easily, there would be plenty of creative types producing original work even without any economic incentive.  Writers would still write, singers would sing, and programmers would program.

But for all of this to work, we need to make food like we copy files.  And that's why I'd want to see replicators for real.  Getting to that life of abundance would do more good for us than exploring the universe.  Yes, I know we're not likely to see a machine that can materialize things one atom at a time, but I'm hopeful that we could have machines that could produce things almost as easily.  If 3D printing advances as fast as computer technology has, who knows?

Reading The Lettuce Leaves

Today, I bought lettuce. The selection was pretty poor, with only a few, wilted heads available. I'm assuming that's a product of the ongoing drought in California. I’m not sure how many people are aware of how much we rely on California for food. We think of it as being all about the entertainment and technology industries, and other than that, it’s all surfing, earthquakes, and mountains. But they also produce half of America’s fruits and vegetables. That makes me wonder: what is the rest of the U.S. doing? If California provides food and ideas, and China makes stuff, what are the other 49 states spending their time on?

But back to dry, dry California. It’s slowly dawning on people that there isn’t going to be an easy solution anytime soon, so they’re going to have to think about where they can cut water use. And a lot of people are looking at agriculture. It uses most of California’s water.

The Economist, for instance, demonizes farmers for taking so much water for something that makes up such a small part of the state’s economy. That sounds good, as long as you don’t remember that it’s providing half the country’s fruits and vegetables, so perhaps that is worth forcing someone in Anaheim to water the lawn every-other week.

We allocate resources in our society with a mixture of capitalism and government policy, and the result often doesn’t make that much sense. In this case, it seems to be the worst of both worlds: water use doesn’t make sense according to cold economic equations, and it’s not exactly environmentally conscious either. This is one of those cases where it becomes hard to tell the political sides apart. Conservatives would point out that deregulating water prices would lead to more efficient use, because water would be too expensive for water-intensive uses. And that would probably lead to reduced water use, and benefit the environment, which liberals would like. But it would also price the poor out the market, which they wouldn’t like. And once that Anaheim suburbanite can’t water the lawn, conservatives will sour on the idea too. So this is one of those frustrating issues where we can’t use a knee-jerk solution, and will actually have to think about it.

Red Red Wine

Rumour has it that once again, the Ontario government may open up sales of alcoholic beverages to supermarkets. You'd think this would be a fairly popular thing outside of the remnants of Canada's temperance movement. But there's actually a lot of criticism: it'll be harder to get alcohol in smaller places, they'll concentrate on main brands, rather than the wide range you get on dedicated wine and beer stores.

Those aren't necessarily bad arguments. But they are arguments that can be made about virtually any product. For example, if we mandated that crackers had to be sold in government-approved stores instead of supermarkets, they'd have a nice selection of imported and craft crackers, and small towns would be assured of basic service from their local C.C.B.O. (Cracker Control Board of Ontario) store. There'd be negatives of course: it would be inconvenient buying your soup and crackers at different stores. And if you don't like the service, you're out of luck.

The fact is, we in Canada have made the general principle that goods and services should be provided by private businesses unless there's a compelling reason for the government to do it. I don't have a problem with re-examining that philosophy: if you think we'd be better off with the government providing all or most services, put that argument forward.

But the fact is that isn't a very popular point of view. So it's frustrating to see this more-or-less decided point re-opened and re-argued. Given how economically conservative our society has become, there shouldn't be this much opposition to deregulating alcohol sales. Or conversely, given how much opposition there is to deregulating alcohol sales, other conservative economic initiatives shouldn't get the wide support they do.

Either way, it seems a lot of us have difficulty recognizing patterns or thinking in the abstract. We have to learn to think through the consequences of of our guiding principles, and use those principles to guide our decisions so that we don't start from scratch in reasoning out every question.

Minimalism

There's a proposal in Switzerland to have a minimum income for all citizens. That is, a cheque from the government for all adults, no means test, no questions asked.

On the surface, it seems like a crazy idea based purely on quixotic ideology and no sense of reality. But it's actually being taken seriously by a lot of people, even some on the right side of the political spectrum.

The Swiss proposal calls for $2,800 a month. Working it out how affordable it would be in Canada is complex because of our two levels of government, but here's my quick calculations:  Adjusting for price differences (Switzerland is expensive) it would cost $173 billion in Ontario.  Ontario's budget is $127 billion, and Canada's budget is $279 billion, with Ontario making up 38% of Canada's population.

This may seem like a lot of money. But here's where it gets interesting, and less lefty. The basic income would replace a huge number of other expenditures: welfare, employment insurance, pensions. And that's before we even get to some more unexpected things, say the arts. If a person has a backup income, there's no need to get a further government payment to pursue an arts career.
On top of all this there's the bureaucratic efficiency. I'm loathe to mention that, because a promise of saving money through efficient bureaucracy is usually the crutch of desperate politicians with no real ideas. But if you've just replaced much of the government with a big machine that prints cheques, then you probably can expect some savings.

So there's a strange appeal to some on the right. If your libertarianism is motivated more by ideology than as a premise for lowering your taxes, then this will have an appeal. Even icon of conservative economics Friedrich Hayek liked the idea. In the end it does give people freedom and choice, while reducing the bureaucracy. Essentially it's reducing the size of government, without reducing its fiscal size. It's libertarianism a Keynesian could love.

Just to be clear, I'm still not sold on this idea. We don't know what effect this is going to have on work incentives. There's also the fact that we're applying a "just enough to get by" income on some people who deserve more, like people who would work, but have physical or mental reasons they can't. And then there's the fact that this set-up makes the "Robin Hood" nature of the welfare state is particularly apparent, which will rub many the wrong way.

But I still think it's interesting to consider, because you can think of it as an ideological compromise between the individual agency of conservatism and libertarianism, and the safety net of liberalism and socialism. Really, it's no surprise the idea has found traction in Switzerland, since it seems to be one of the few countries that holds both sides as integral national values.

King Tim

When I first heard that Tim Hortons and Burger King were in talks, it seemed odd. After all, Timmie's was previously merged with Wendy's, and that didn't work so well, resulting in them splitting up about ten years later. What benefit could there be to teaming up with another burger chain, this one being in a long-term decline?

An explanation I've seen in the media is that it would benefit Tim Hortons' underwhelming American expansion. The idea is that Burger King had plenty of expertise in dealing with the American market. But is not knowing the market really the problem Tim's has in the US? Because it seems to me that it's more to do with entrenched competition from Starbucks, Dunkin et al. Or to put it another way: by that logic there must be a lot of out-of-business mom-and-pop stores lamenting that if only they had better understanding of the American market, they could have survived against Walmart.

But growth is such a strong desire in business that it seems to override all other considerations. If I was a Timmies shareholder, I'd personally prefer they didn't pursue a long-shot expansion that will likely end in tears, even if the alternative is settling for the same returns in the future.  The odds just seem too long to be worth the huge costs.

Now that the deal is complete, we see that a big motivation is that Burger King wants to do an inversion. That's a tax-avoidance strategy where a big American company takes over a company in some other country, then reorganizes such that the big American company is a subsidiary of the foreign company, and thus pays its corporate taxes in the other country. In the past that's happened in countries that have gone out of their way to lure foreign investment, like Ireland. But Canada? Socialist, high-tax, bureaucratic, success-hating Canada?

So that's a positive we can take out of this. We may be losing our favourite food chain, and gaining technical ownership of a chain we don't really like, but at least we can take pride in out business-friendly-ing or neighbours. And from now on I'd better not hear any more Canadian conservatives trying to shame us into believing that we have unsustainably high taxes that will drive business away.

Working In Theory

This week there was a conference in London on Inclusive Capitalism. The concern is a popular one these days: the sense that economic gain is not evenly spread, there is unpunished corruption, and that only the rich are getting richer.

Usually, this issue is raised by activists on behalf of the poor, but the problem is now big enough that all but the most dogmatic within the business community are starting to consider it a problem. And that was the attitude here: the wealth gap was presented as a threat to capitalism itself. The premise being that if too many people decide that the system doesn't work for them, then they'll push for a different system. Thus there is an incentive for companies to behave more amicably towards people: play nice or the game will be changed.

It's hard to disagree with that logic. But there's a doubt I have about it's ability to change the world: the central tenet of capitalism is that people need a personal incentive to work. That is, it's not enough to tell people that it's the right thing to do, nor is it enough to say that it will be best in the long run to work for society's sake.   And yet, that's what these people expect businesses and their executives to do: make a sacrifice today that will offer no personal or immediate payoff, just for long-run survival or the overall good of society. So as much as I appreciate their goals, I don't think this attitude will change business, any more than I expect people to work without pay.

A Second Act In An American Life

As you can probably guess, I have mixed feelings about Bill Gates. I admire the great philanthropist Gates for his tremendous generosity and willingness to bring new approaches and enthusiasm to efforts that had become moribund and cynical. But I hate the businessman Gates, with his mediocre and over-marketed products and business strategies of questionable legality. But we don't have to worry about the latter, now that he's retired and the founder's company founders.

The philanthropist Gates released his annual letter recently, in which he makes the case for aid to the developing world. It's a refreshing read, not just for its optimistic tone, but for the practical approach he brings to the subject. He doesn't fall into the rigid ideologies or extremism that dominate current politics, and faces it with intellectual honesty.

One might be tempted to see his pragmatic approach as a product of his background in software. But I find that many people from science and engineering are actually quite ripe for the picking by simplistic ideology. The exact-science nerd is used to intellectual discussions that don't have a lot of vested interest at stake, and trends to have an unrealistically simple view of human psychology. Thus they fall prey to neat and tidy political ideas that are not rooted in the real world.

So I think gates does deserve credit for his humanitarian work, in which he makes me feel like they're is some how for the world.  I never thought I'd feel the developing world has a brighter future than Microsoft, but somehow he's done it.

From China Without Love

Today was Singles Day in China.  It's an unofficial holiday in which young people celebrate being single.  It's become so popular that it is now biggest online shopping day in the world, putting The West's Valentine's Day to shame. I feel a great satisfaction to see my single brethren win the game of global capitalism.

Most news stories about this are just seeing it as yet another piece of evidence that China is taking over the world. But you could also see it as evidence of China's demographic problems. Their One-Child policy is well known, and combined with male-preferring cultural traditions, it's led to selective abortions and far more sinister ways of ensuring that one child is male. Thus, China has a generation in which men greatly outnumber women, and a lot of single men.

Those are some disturbing overtones to this story, so I'm trying to look at the positive: the Chinese started a rather melancholy holiday as a joke, and they ran with it. I'd love to see more of this from China. During their ascent, they've been portrayed as either an unemotional machine, or as a cryptic, alien culture. But this makes them seem human, and likable.

It's a lot like Japan in the eighties. I grew up during their economic rise, and they were portrayed the same way in media. Today they don't seem scary at all. Their economic stagnation had certainly played a part in that, but the culture they expected had a lot to do with that too, from video games to anime to sushi. It's hard to fear people once you know that they created Hello Kitty.

I'm a Picker of Pixels and Writer of Hypertext

As with many people who attended the University of Waterloo, I took an economics course with Larry Smith.  He's not so much a lecturer as a stand-up comic whose material is all about economics. 

In one lecture, he talked about the size of the Canadian economy.  Thanks to our inferiority complex, we assume we're insignificant at everything, but we actually have the tenth largest economy in the world.  (And back when I was taking this class, we were ranked even higher, as the BRICS hadn't started passing us.)

So he asks the rhetorical question of how we became so prosperous, and answers it by saying that we are "hewers of wood and drawers of water," miners and farmers and so on.  He pauses, looks around, and asks, "Who wrote that down?  Scratch that out!  I can't believe you fell for that." and then he goes on to reveal that our economy has long been powered primarily by industry and services.

I keep thinking about that class whenever I see the latest round of Canada's Economic Action Plan ads.  Those ads have been criticized for a while for being thinly veiled Tory campaign ads on the public dime.  And there's also the fact that a party that emphasizes small government and fiscal responsibility is spending tens of millions of dollars to tell us about the new government programs they've created. 

But the recent ads are more focused on selling the Tar Sands to us.  It's not so much that they are trying to win us over on the environmental question, but that they're trying to get us to like the idea of a Canada focused on resources.  We're told about all the ways that not-so-resource-endowed areas of the country can contribute, usually by building things that the resource extractors can use.  It's not real convincing: I don't see Quebeckers getting excited about Alberta's oil just because they get to build the buses that the workers take to the drill site in Fort McMurray.

I'm not surprised that the Conservatives are going to bat for the oil industry, but I'm not clear on why they're insisting on promoting a big misconception about Canada's economy.  The ads even emphasize that the resource industry employs a million Canadians; that sounds good until you remember that there are 33 million of us.  Surely it would make sense to make us feel good about all aspects of our economy.  You know, tell us about how we're building cars that are burning the oil from Alberta.

Fiscal Bluffs

I haven't really kept up on the Fiscal Cliff issue.  So I guess I'm not really that different from most journalists.  There seems to be a lot of dumbing down and summing up going on.  And by that, I mean jumping to the worst possible outcome.  Many aren't even bothering to say it could dip the U.S. into recession, and just saying that the cliff will cause a new recession.  Most frustratingly, by saying it that way, it means they'll likely be right.

Here's what I think is happening here:  The (Republicans/Democrats) have spent years saying that it's very important to have (low taxes/government programs).  God forbid those other guys will get in power and (raise taxes through the roof/slash spending to the bone) - that would cripple the economy.  Of course, it's true that in order to give the public (low taxes/government programs) it'll require (less spending/high taxes).  But don't worry, that's not a problem; in fact, it may even be a good thing, since (rich people have money to burn/poor people have become dependent).

If either party had total control, they'd do something that a lot of people wouldn't like, but they'd be assuring us that it's not that bad.  But now we have a situation where the terrible thing that each party dreads is going to happen, but without the reassurance of the other.  For instance, Republicans have long said that the welfare state should be reduced.  Well now it is being reduced, but rather than tell us what a good thing that is, they're distracted by the prospect of higher taxes.  Likewise, many Democrats have suggested letting the Bush tax cuts expire.  Well, they're about to, but they can't celebrate, because many unemployed people are about to lose their benefits.  If only both parties would see the glass as half full.

Whatever your political affiliation, you have to realize that some big changes to the American budget are needed, at least assuming your mathematical affiliation is with reality.  Great news!  Those changes are about to happen.  Once the public's expectations have been readjusted, we can refine things to popular tastes later.  But for now, forcing a big shift in perspective could do us a lot of good.