Why Bucharest’s Internet is so fast

Bernie SandersHere’s my latest article on the FEE website, on Internet in Romania.

The editor asked me to write a piece on this topic, because of Bernie Sanders’ tweet that Internet speeds in Bucharest are faster than the average speed in the US (which is true). I was flattered by the request and started researching the article right away. I joked to my friends that if you wanted to know about Internet in Romania, obviously I was the person to come to.

What I learned about the ad hoc networks in Romania’s major cities was fascinating; they have lots of competition, while we’re lucky to have a choice between the government-franchised cable company and the government-franchised phone company. The headline writer chose to play on the irony of Sanders’ endorsing a free-market solution, though I thought the solution itself was the really fascinating part. Mentioning Sanders draws more readers than mentioning Bucharest, I suppose. :)

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New article in The Freeman

The Freeman has a new article of mine, under the title “Fantasy Bookstore Fights Fantasy Economics.” (I submitted it under the less showy title “Independent Businesses and the Minimum Wage.”) It discusses the recent history of Borderlands Books, which nearly succumbed to a minimum wage increase; I’m hoping that this close-to-home example helps fans to understand that people can’t be made better off by prohibiting them from working for what their work is worth to an employer, and that employers aren’t “evil” for not raising wages.

This sentence was an editorial addition: “Fans of bookstores realized, perhaps too late, that for the industry to survive as a whole, the bookstore must be profitable as a business venture, rather than a charity case.” This seems to suggest that Borderlands is a “charity case” for seeking sponsorships, which it isn’t at all, any more than my two crowdfunding campaigns to publish Files that Last and Tomorrow’s Songs Today were.

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Your doctor doesn’t care about you

Recently I had routine outpatient surgery to remove a scalp cyst. I’ve had a number of these done before, so I didn’t consider it a huge deal. Today, though, I got a bill telling me that my insurance covered less than half the cost, and I owe hundreds of dollars. This is annoying because on the one hand, the options for avoiding these situations are few, but at the same time I wasn’t paying attention. While I was working at Harvard I had top-class insurance coverage, which meant I never owed more than a few dollars, and I got careless. I still have insurance, but it’s a lower level of coverage.

The problem is that our health care system has turned into one where the patient isn’t the doctor’s customer or even the insurance company’s customer, but the product. Lopsided tax incentives, and now Obamacare’s tax on the uninsured, pressure everyone to get insurance from their employers if at all possible, and laws require that they provide very broad coverage. People believing that they’re entitled to have their medical bills paid (the recent righteous demands for mandating birth control coverage are a case in point) add to the push. Today I talked to someone who told me his health insurance should be free. I said, “You want me to pay for it.” He said, “No, I mean free!” Magical thinking is America’s leading political philosophy.

Doctors assume you’re covered by insurance and don’t take the cost into account when making referrals. The doctor who performed the procedure is a plastic surgeon; if I’d been thinking more carefully, I’d have realized that would mean a large bill and asked some questions. For the cyst before that, I was in a hospital operating room, with an anesthesiologist standing by doing nothing, but I was at Harvard at the time and my insurance paid everything but a token copayment. Or maybe the insurance compensation was so low because the doctor performed the procedure in his office instead of an operating room and I’d have been better off financially with the full surgical team. It takes a greater expert than me to know. In any case, the lack of economic connection between patient and payment have made costs rise at escape velocity.

Have you ever tried to get a quote from a doctor? I need to push harder for that next time, but from what I’ve heard, it’s impossible to get one that’s more precise than a factor of ten between the low and high ends.

For me a bill that size is an inconvenience. For people with no income at all, they may not get great treatment, but their bills will be paid for. The people who get squeezed the worst are self-employed people with low incomes, such as a lot of musicians. It’s not uncommon for them to get stuck with huge bills that threaten to ruin them financially. Upper middle-class progressives have driven medical costs up with their “I wannit” philosophy, and the people in the lower income brackets get hit hardest.

I need to learn how to ask the questions that doctors don’t want to answer. It has to be possible to grab some measure of control back, even if it takes a lot of work.

Guessing Social Security

Which way will Social Security go? Will it run dry if it follows its present course, or is it in fine shape? You can find predictions for both, backed up by figures. While I’m more inclined to believe the pessimistic prognoses, I really don’t have the knowledge to pick one with confidence.

It really doesn’t matter, anyway. Social Security isn’t a business that will go broke if it can’t meet its obligations. Its “trust fund” is an accounting fiction consisting of the government’s obligations to itself. The real bottom line is that the ratio of people collecting to people paying increases with people’s longevity. This means that recipients will get less or people being taxed will pay more. If the trust fund goes broke, Congress will abandon the model, converting Social Security from a nominal Ponzi scheme to an overt welfare program. For most purposes, it’s already the latter.

This means that barring a major economic collapse or political shift, we can expect to get back some of our money if we live long enough. We shouldn’t count on those numbers which the government sends us in the mail, though. Congress can change things according to the political winds.

It would be logical to increase the age at which people start collecting; when Social Security started, people at age 65 were mostly within a few years of death, but now people often live to 80 and beyond. The AARP, however, has put its lobbying muscle behind keeping the age the same, and most political decisions follow the logic of getting re-elected, not the logic of economics. Maybe it will remain possible to start collecting at age 65 but will be a really bad idea. This is already true to a degree.

I’m not counting on Social Security in my retirement plans. If I manage to get back some of my money, that’s an extra. I’ve made sure to save enough that I won’t starve without it.

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Fahrenheit 451 as the future of books?

Books are going through their most serious change since the development of movable type. It’s now cheaper and easier to distribute them electronically than by physical copies. In fact, it’s too easy to suit publishers. In the absence of inhibiting technology or legal fears, anyone can make huge numbers of copies and distribute them. This creates an obvious problem for publishers and authors: How do they make any money?

There are two main approaches. One is to trust readers to pay rather than grab free copies; the other is to create technical barriers to copying. Both have serious problems.

The trust-based approach assumes some people will go for the free copies, but enough will pay to keep the authors fed and the publishers making a profit. The problem is that when people see they can get something without paying, quite a large number of them will. The paying market may shrink over time, as people notice that more and more of their friends aren’t bothering to pay. The protection-based approach (DRM) assumes sufficient powers of enforcement to keep people from circumventing protection. Serious protection is impossible; the words have to be delivered to the user in the end, so people just have to figure out how to tap into the output stream and make a permanent copy.

Both approaches reward breaking the rules. People who take copies of unprotected books get them for free. People who take copies of protected books get that, as well as the benefit of having a copy which isn’t dependent on the publisher’s continued support to remain readable.

The idea of lending a book doesn’t work well with e-books. You can lend a physical book, because it can be in only one place at a time. With an e-book, you still have it, so it’s meaningless to talk about returning it. All you can really do is give out a copy with a promise that the “borrower” will observe some kind of restriction. It’s easy to forget those promises, even easier than it is to forget to return a book. Most large publishers won’t sell e-books to libraries, and those that do provide a copy that expires after a certain number of checkouts.

The biggest problem with books with DRM restrictions is that they will inevitably become useless after a while. Even with the best of intentions, it’s silly to suppose that Amazon will support today’s DRM on the computers of 2112 (if there’s even an Amazon then). Every book issued with DRM will go down the memory hole in a few decades or less. It will take longer than that for them to go out of copyright. If DRM becomes the default way of issuing books, that will add up to major cultural amnesia.

Actually, though, the books won’t disappear, because lawbreakers won’t let them. There will be people making illicit unprotected copies. Perhaps law enforcement can keep them off the public Internet, but it can’t keep them off people’s private computers or keep people from exchanging them covertly. This is a scenario right out of Fahrenheit 451, with “firemen” destroying all the copies of books they can find but being unable to stamp out the underground that keeps them alive.

It’s not the only possible future, though. Music distributors have mostly given up on DRM and haven’t gone bankrupt. However, this works because musicians have live performances as a source of income, and they can consider every illicit copy of their recordings as advertising. Can the book publishing industry find a comparable channel to monetize free riders? One possibility is selling subscriptions which give readers special privileges, such as access to discussion forums in which the authors participate.

I strongly suspect that e-books will make the existing model of book sales obsolete, whether they use DRM or not. Publishers can try as hard as they want to create technical and legal impediments, but that just won’t work. The tougher the restrictions, the more inconvenience and resentment they’ll create. Something different will have to develop.

Personally, I avoid “buying” downloads with DRM. The “buy” button is a lie; read the fine print, and you’ll see that the content is licensed, not sold. Recently I “bought” a TV episode on iTunes because I was so eager to see it that I didn’t mind the $3.99; when it finished downloading it was unplayable because it used a codec requiring hardware I don’t have. If iTunes could figure that out after downloading the movie, why couldn’t it warn me before charging my credit card? Hardware incompatibility can happen even without DRM, of course, but I’ll take that as a lesson.

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Buy local?

When I visit a town and see “Buy local” signs in the stores, I’m vaguely amused. They’re telling me, if I take them seriously, I shouldn’t shop there but should wait till I go home. “Buy local” is a zero-sum game. My local business is most people’s out-of-town shop.

Why should I make a special effort to “buy local,” anyway? Are the shops in my home town more virtuous than in yours? Not that I’ve noticed. Does buying local mean more jobs and more money coming back around to me? It’s an extremely attenuated effect at best.

“Buy Local” usually means to buy at small locally owned shops, not at local shops that are part of big chains or franchises. But both bring employment, and big chains may hire more people than a small shop on a shoestring budget. When I buy at a chain store, that doesn’t mean money is leaking out of my town. Money goes out, but it also comes in. Local stores also send money out of town, unless they’re selling strictly home-grown and homemade goods, have locally made furnishings, deposit their money in a local bank, etc. If they have to pay higher wholesale prices because they’re small (and pass the costs on to you), then they’re actually sending more money out of town.

Sometimes I’d rather deal with a particular business even if I have to pay higher prices. I might like the people who run it and the service they provide, or I might admire what they do outside their dealings with me. I might just not like the big store, if they’ve been spamming me or otherwise acting obnoxious. But this has nothing to do with whether they’re local or not. A lot of my favorite vendors are websites based in distant places.

There are cases where favoring a local shop makes sense. If there’s a business nearby which offers something that’s otherwise hard to find, then I’ll make a point of buying there even in cases where I don’t have to. For instance, decent bookstores are hard to find around Nashua (Barnes and who? The ones who sent me 300 pieces of spam email?), so I make trips to the Toadstool Bookshop in Milford, NH, fairly often. I like having a place not too far from home where I can browse through real, dead-tree books. The point isn’t that it’s local, but that it’s a unique value which I want to keep. My own purchases don’t really do a lot for them, but my recommendations and their ripple effects might. Saying “Shop there because it’s a good store to have around” is a lot more convincing than “Shop there because it’s local to you.”