Monthly Archives: April 2014

Unicorns Attack Free TV

Ever heard of a company called Aereo? Yeah, didn’t think so. Up until last week I had never heard of it either, but this little company may be forging the way toward increased competition, lower prices, and more consumer choice in the oligopolistic televised media industry. That is assuming of course the nine kings and queens of the royal court (aka the US Supreme Court) consider the interests of 300 million consumers when they reflect upon the merits of a case as old as the republic itself: who shall receive the court’s tip of the hat, the protectionist rent-seekers or the upstart innovator?

In this 21st century replay of Gibbons v. Ogden, Aereo plays the role of the audacious entrepreneur challenging the state chartered monopolies (played here by NBC, ABC, & CBS). In Gibbons v. Ogden it was about who had the right to navigate the river-waves, now it concerns tapping the air-waves and surfing the web. Aereo is providing a service to consumers who prefer to watch their local TV stations over the more convenient medium of web-attached devices (thereby foregoing the hassle of dealing with antennas and converter boxes). Consumers are in essence renting antenna time from Aereo and having this content directed to their device. You’d think the big three media companies would be pleased – Aereo is expanding their viewership! But alas that is not the case. Because Aereo is redirecting these free over-the-air transmissions they have not been paying a tribute to the big three for the content. This stands in stark contrast to the hefty sums forked over each year by cable and satellite providers (and which are naturally passed on to the consumer). If Aereo is permitted to exist it might set a precedent that would allow an unwinding of the decades old law that made an arbitrary distinction between “public” vs. “private” broadcast (which is why cable companies must pay rebroadcast fees but we are free to record and time-shift content while enduring scary FBI warnings on our DVDs.).

The justification used against Aereo is that they are violating the copyright of the big three – rebroadcast without consent. This would be fine if copyright were an actual real form of property – the only problem is, it is not. Copyright, patent, & trademark are all artificial creatures of the state; they are the unicorns of rights. They are a state grant of monopoly privilege. Utilitarian opinions built upon notions of “encouraging” certain types of behavior by such monopolistic grants are as wrong-headed as any “ends justify the means” arguments. Whereas IP cannot exist absent state enforcement, true property rights, not being an invention of the state, can. The recognition of rights in property is the only alternative to violence when settling a conflict over the control of scarce and rivalrous material. Two parties resolving such a dispute do not necessarily rely on a state. Enforcement of IP, however, is impossible without state violence.

Ideas, assemblages of words or sounds, are neither scarce nor rivalrous; therefore, it is nonsensical to claim property rights in them (akin to claiming such a right in one’s name). A state enforced fiat decree to the contrary is no more legitimate than the decree that a man may be property. Indeed, man as property fails on the rivalrous test; rivalrous goods can be conveyed, a man’s soul cannot. If someone copies your creative work and that upsets you, beat them at their own game by copying the manner in which they are employing it. That’s how competition in a free market works, no state necessary. If your business model necessitates men with guns then there is something wrong with your business model.

Now, given that even the supposed champion-of-the-little-guy-mr-progressive-democrat-Obama has come down on the side of the big media conglomerates, my feeling is that Aereo will likely lose this case. There is just too much money at stake, and in the crony-capitalist cesspool that is Washington DC, “we the people” have allowed the growth of a dystopian system that enables moneyed interests (warfare, welfare, and cronyisms) to rule us all.

Speech, Money and Means

Elections, campaigning, voting; these are all creatures of the state. To the extent the state itself is illegitimate, it is wasted effort to debate the legitimacy of internal rules of an illegitimate entity (a bit like arguing over the moral distinction between thieves that pick locks vs those that break down doors). So discussions concerning whether the government should limit political donations to this amount or that amount is entirely academic; there is no right or wrong answer given the larger context that compelling all to accept the outcome of an election is the true affront to individual rights (that is, the right to choose with whom one will associate).

With that said, however, I would like to touch on a common philosophical misconception that has been reignited with the recent Supreme Court decision in McCutcheon v. FEC. In this decision the Supreme Court struck down limits on total donation amounts to candidates and political committees (while retaining certain other limits). The predictable knee-jerk response then ensued from the progressive media outlets: Unrestricted giving means our democracy is for sale! More money in politics means only the well-funded candidates will win elections! Money is not speech! Ok, stop right there. The first two assertions are at least plausible (although plenty of examples abound where the more well-funded candidate lost), however denying the essential connection that money and speech have is to engage in intellectual dishonesty

What does the right to free speech entail? (Before I continue, for clarity’s sake “speech” is shorthand to describe any action that externalizes the thoughts or ideas of an individual). Does free speech mean we should be able to speak for free? No. It means that it is impermissible for anyone (which includes government) to aggressively interfere with an individual’s exercise of speech (assuming the speaker has not voluntarily agreed to limit that right under contract). Conversely it does not obligate anyone to assist an individual in his speech efforts. That is, speech is a negative right. If one wishes to spread their speech more efficiently, they may employ their own means (money, printing press, radio station, etc.) or they may ask others to assist them in their effort by providing them with those same means.

Speech is a means to an end. That is to say, we exercise speech in order to achieve some end. Means themselves often require other means to achieve them. For example, I buy gas (means) to use my car (means) to drive to work (means) to earn money (means) in order to buy food (means) to keep me alive (end). In a campaign the candidate’s end is to make the public aware of his candidacy and persuade them to cast their vote for him. This is done through speech from the candidate to the public. Speech is most efficiently disseminated using tools (print, radio, TV, etc) and those tools can often only be obtained via monetary trade. So, perhaps money is not literally speech in the same way that gasoline is not literally food, but in both cases the former is a direct link in the causal chain of means to achieve the latter end. To deny the significance of money as it relates to speech is to deny the legitimacy of utilizing any means to achieve some end.

For those concerned with the possible distorting effects of money in politics I would suggest ending the fixation on limiting money and rather focus instead on what the money is buying: power. If we commit to limiting the power of government over our lives, we will find the appeal of purchasing such impaired power likewise diminished.

Who is the customer?

Outsourcing, public-private partnership – this is the Trojan horse of the political entrepreneur that will fool the political class every time into believing salvation from inefficient government lies within. For those familiar with how markets are actually supposed to function, the irony is clear: only harm shall spring forth.

One of the more insidious “partnerships” is that of the outsourced private prison and probation services. The Georgia legislature has recently passed HB 837 which has expanded the authority of private probation companies while simultaneously decreasing public oversight of their operations. In Georgia, if one is convicted of a misdemeanor  (anything from shoplifting to traffic citations) and cannot pay the assessed fine in full, then one is turned over to a private probation company (basically a glorified collection agency) which then collects the fine, along with their monthly fee of course. Under the new law, if fines are unpaid then those convicted may be thrown in jail or electronically monitored all the while accruing greater fines. The original probation period may be “tolled” or extended indefinitely until the fine is paid in full. Inability to pay will land one in prison. Essentially Georgia has reestablished debtor prisons. Herein lies a perverse incentive; inability to pay translates into larger fines. The public courts and the private companies then share in this growing revenue stream. Ironically they make more money off of those with the least ability to pay.

“But criminals must make restitution, surely you’re not suggesting that just because someone is “poor” they should not be compelled to answer for their crime?” No, I’m not suggesting that at all (although I do seriously question whether traffic violations rise to the level of “crime”). To understand why outsourcing leads to distorted incentives, ask yourself, who is the customer? Is it the state, or is it the lawbreaker? In fact, it is the lawbreaker. The state intercedes and poses as the customer, which diverts the stream of responsibility. The probation company is not answerable to the real customer, so they have no incentive to serve them.

Now you may be scratching your head trying to figure out why the lawbreaker should be the customer. Allow me to explain. Assuming that an actual rights violation has occurred (e.g. petty theft), then there is a victim and a perpetrator. The conflict is between those two parties and no one else. It can then be resolved by use of an arbitration (court) proceeding to uncover fault. Assuming the thief is at fault, he has an obligation to make all parties whole (the entity that apprehended him, the court that adjudicated the facts, and of course the victim). To simplify things we’ll assume the insurance carrier of the victim has made all parties whole. Now the insurance carrier has a rightful claim against the thief. It seeks to be made whole. Stated differently, the thief has a debt obligation to that insurance carrier. If the thief cannot pay immediately, then those two parties can come to a mutual agreement as to how that debt will be discharged. They are not constrained by any “laws” – they may agree to whatever they wish. There are many options, but one option could be a voluntary arrangement with a private “prison” (if you can call it that) that would discharge the debt to the insurance carrier in exchange for a certain amount of labor. The thief would have many of these private prisons to choose from and he is under no obligation to choose this path at all – therefore such private prisons would compete for such a labor source, enticing their customers with favorable terms. Indeed, conditions would most assuredly be far more favorable than in any public or private prison system today. After all, if they don’t please their customers (the voluntary “prisoners”) then they won’t be in business for long.

Public-private partnerships will always be corrupted by perverse incentives if the company providing the service is not directly accountable to the customer.

Debate Over?

Proponents of AGW (Anthropogenic Global Warming aka human caused climate change) are getting a bit nervous. A number of recent polls suggest they are beginning to lose the battle for the hearts and minds of the public. Granted, still about half of Americans believe in AGW, but that number is declining. So how do the champions of climate change choose to turn this tide? By engaging in a positive information campaign? By answering the questions of their critic’s head on in a forthright, open, and honest manner? No. Rather than shine a light they hand out blinders. More and more of them outright refuse to engage in any kind of debate (e.g. Gavin Schmidt refused to even sit at a table on air with a slightly skeptical fellow climatologist on The Stossel Show). And it’s not just scientists playing this game; the state apologist media eagerly snuffs out any hint of dissent. The Los Angeles Times refuses to publish letters to the editor that hold a skeptical position on AGW. The BBC refuses to air debates on the topic. Michael Mann (of “ClimateGate” fame) attempts to suppress those that would question his scientific conclusions regarding climate change by seeking the protection of the state. To wit, he convinced a judge that it is a violation of his rights for such skeptics to “question his intellect and reasoning.”

But it is the latest tactic that is the most frightening. Some have proposed to throw into the state’s dungeons those that have the audacity to publicly not conform to the officially sanctioned viewpoint on AGW (see here and here . Yes, you read that correctly: many now desire to make it illegal to publicly question AGW. Well I suppose that is one approach to winning an argument: gag your critics. Even the most contentious science-centered public debate of the 20th century, evolution vs creationism, never drew calls from either side to criminalize the opposing view. What are those pushing the AGW agenda so afraid of? If the science is so overwhelmingly on their side they should be able to wipe the floor with the skeptics. And by skeptics I mean genuine science-based skepticism, not conspiracy theorists. There are actual legitimate scientific questions concerning the magnitude, rate and quality of expected changes as well as the extent to which human activity has contributed to those changes.

Climate change will be to the 21st century what Keynesian economics was to the 20th century: a “science” backed justification to expand the power of the state.

They claim the science is settled and thus debate would be pointless, however their behavior reveals this to be a spurious excuse. They scorn not solely skeptics but likewise those in 100% agreement with their scientific conclusions – when, that is, such individuals (i.e. Bjorn Lomborg ) have the temerity to question the conventional wisdom of proposed ameliorative solutions. It’s not about the science; it’s about what many want to do in the name of science. Climate change will be to the 21st century what Keynesian economics was to the 20th century: a “science” backed justification to expand the power of the state. If those in power can slap the science label on their political ideology in order to shut down all debate, then even the fantasy that democracy can solve all problems will not long endure. No vote necessary dear citizen, science says we’re right.

“The suppression of uncomfortable ideas may be common in religion and politics, but it is not the path to knowledge; it has no place in the endeavor of science.” (Carl Sagan, Cosmos, pg 91).

Science is supposed to be a process of uncovering truths about the natural world. It is always open to the possibility of revision in light of new information or insights. To suppress new information or insights is to short circuit any hope of moving closer to the truth. Maybe the skeptics are wrong, maybe they are right, but simply telling them to “shut up” is not how science works. Science should never be rejected – but scientists, whose behavior runs counter to the scientific method, should be rebuked. Although Carl Sagan was one of the earliest proponents of the dangers of climate change, he, as a scientist, would be aghast at the current state of debate on the subject: “The suppression of uncomfortable ideas may be common in religion and politics, but it is not the path to knowledge; it has no place in the endeavor of science.” (Carl Sagan, Cosmos, pg 91).