Posts Tagged economics

The singularity is nigh

The singularity is, by one definition, the first point at which an artificial intelligence equivalent to that of a human is created. There are several ways this could happen, but there is one that I find particularly interesting and that I which I envisioned in a kind of post-apocalyptic story some time ago. Recently, I learnt that a rudimentary first step in realising this future has been taken by science: scientists have mapped the brain of a worm and used it to control a robot.

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Are car guards a form of charity?

In South Africa we have an interesting phenomenon: car guards. These are people who stand in parking lots and parking spaces generally, typically wearing a neon vest, “looking after” your car. Typically they receive (at least part of their) income as donations from the motorists whose cars they have kept safe.  I have encountered car guards for years and I realised I actually know little about them.

I suspect international readers may find this concept hard to understand and I refer you to this comical video by a South African comedy duo.  Despite the comedic element, the portrayal is fairly accurate. As in this video, car guards are almost always male, but unlike in the video, they are also almost always black.

Many car guards are hired by the owners of the premises. I am not sure of how much protection they actually provide. I have never heard of a car guard actually stopping or attempting to stop a theft.  That does not mean, however, that car guards do not prevent attempts – like visible policing they may make thefts less likely. For the most part, however, their role seems to be to help motorists get into and out of tricky parking spots. These men are not security guards – they are not armed and I suspect most are not trained to deal with proper criminals.

Many “car guards”, I suspect, take advantage of the fact that anyone with a neon vest has a legitimate claim as guarding any otherwise unattended parking facility. Car guards have become so ingrained in daily lives that we hardly even think about paying them. Much like providing a tip to a waitron, it has been customary and we feel guilty if we shirk this duty.

In so far as car guards are not actually providing a useful service, they effectively represent a form of charity, a means of creating employment not unlike asking people to dig holes and fill them up again. This is probably not entirely fair and we must consider that South Africa sits with a glut of unskilled labour that is not being put to productive use (our youth unemployment rate is notoriously high). Car guards represent one way of giving an income, one that is earned, at least in some measure, to a portion of our unskilled labour force.

The question of whether this is good or bad is moot. It is certainly better than having a larger supply of beggars. The fact that this country has no better way of employing much of its population is the problem.  It’s also probably true that the South African public has come to expect car guards: we want them there.

I leave you with some questions. If you have something to say about any of them, please leave a comment:

  1. Do you know of any research on whether car guards do reduce car thefts?
  2. Do you feel safer with a car guard nearby?
  3. Have you heard of a car guard preventing a theft?
  4. How do you feel about paying car guards?
  5. Do you think there are more “productive” means employing a larger part of our population?

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Food wars (Part 2)

In a previous post I briefly discussed the difficulties of trying to eat healthily with all the pseudo-scientific claims about what is healthy. The topic of food ethics is, perhaps, even more convoluted. Vegetarians, vegans and environmentalists all have a view. There is Fair Trade and non-GMO (Monsanto is evil, apparently). With all this clamour there are so few unambiguous truths and I feel I would need several PhDs and two lifetimes to be able to sift through it all.

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Dutch Capitalism – not always very capitalistic

A Chinese colleague of mine once claimed that Maoism (a form of communism) is better implemented in the Netherlands than China. I don’t know enough about Maoism to be able to argue for or against this, but sometimes the Dutch system of capitalism is very anti-capitalistic. Take, for instance, a practice known as “koopzondagen”.

These are Sundays on which shops open for business. Until recently I just thought shops chose to be closed on Sundays, except for the koopzondagen. In Amsterdam this appears to be the case. But it is not so in the rest of the country. Local governments (or municipalities – I am not sure which) have the power to regulate whether shops can open on Sundays or not. Thus it is that in Tilburg there have been shops opening on Sundays despite this not being allowed (after some debate it has been decided to allow them to open).

I could hardly believe it when I heard this. Why would you not allow shops to open on Sundays? If you are of certain (dogmatic) religious bent you could argue that it respects the Sabbath. But Dutch people are not. Perhaps it is a legacy of the Dutch religious past that they have not done away with yet.

A country that values the freedoms of its people and its economy (as the Dutch do) cannot allow such a nonsensical system to continue. There are many consumers that would  like to shop on Sundays, many shops that would like the freedom to open on Sundays and many people willing to work on Sundays. Everybody benefits. Many shops may choose to stay closed on Sundays and this is fine. But it should be their choice.

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We are all thieves: the cost of piracy

I used to download tons of movies, series and software (and occasionally games) and I convinced myself that it was not doing any harm. But it was. Piracy is a problem, both ethical and economic.

  1. As long as people pirate with impunity there will be pressure to enact legislation that will restrict what we can do on the internet. We saw this with SOPA, when even Wikipedia protested. However, next time such efforts may fail. I like a free internet. Piracy threatens internet freedom. This is not the fault of the multimedia companies: they have a right to seek legislation to protect their revenue.
  2. Freedom may also be restricted in other ways. The DRM on games has become increasingly restrictive and I refuse to buy ebooks partly because the DRM is annoying. There may come a point when movies are no longer sold on DVDs. Instead, perhaps, everything will be streamed in encrypted format using special software to make it harder to copy.
  3. The arms (and legal) race between product providers and piraters (which is most noticeable with games) is a cost to society.
  4. The makers of a product should have a right to receive revenue from the use of that product. You may argue that such revenue is unfair (for instance if the producer has monopoly power), but the solution is not to pirate. If you want a product, you should pay for it. If products are priced too highly, then this is a case for some kind of anti-trust commission or the government could consider subsidies.
  5. Piracy impedes the natural functioning of the economy. The more people there are who are unwilling to pay for movies and series, the harder it is to produce good quality movies and series. The industry will fail if it cannot profit. I do not know how profit figures look at the moment, but it is probably television channel subscriptions and cinemas that keep the industry going. What happens when people stop their channel subscriptions? The younger generation is far more technological and far more likely to download rather than pay. Will they change their habits when they grow up?
  6. It does not matter if downloading pirated media is legal in your country. The ethical and economic implications are the same.

As a Christian, I think piracy is unethical. As an economist, I think it is dangerous. Electronic media is a good with a positive externality when produced – lots of people get to use it for free. Too little is usually produced of such goods. At the moment, I think it is inertia that is keeping the system going. Perhaps soon a tipping point will be reached where there are too few people willing to pay.

I have sympathy with the fact that some people really cannot afford to buy movies or series. And renting is expensive (at least it is in the Netherlands). But the problem is, how poor is poor enough? I am by no means rich (but that depends on your perspective), but by buying second hand and old movies and some of the cheaper series, I have gotten by. First see what you can buy legally before just hitting “download”.  Perhaps, if you have access to broadband internet and a computer you are rich enough.

Piracy is probably also responsible for the demise of DVD rental stores. There are few left in the Netherlands. They are probably suffering everywhere. That these stores are going out of business is not bad per ­sé. Schumpeter’s creative destruction says such things must happen. And replacement business models are on the rise, but they are at risk of dying in infancy.

Piracy has both highlighted and a consumer need and made it harder to profitably fulfill that need. Consumers want what they want when they want it. On demand. And they want a large selection. Pirate Bay provides this. You search for what you want. You download it. No fuss. Pay on demand services such as offered by Amazon and iTunes allow much the same thing. But they will only work if people are willing to pay rather than simply downloading. At the moment, in the Netherlands, people are not willing to pay and on-demand services are not popular.

I think perhaps the best solution is something akin to that offered by, which allows you to stream videos for free, but with ads. They also have a subscription service with more content. Hulu is currently only available in America and Japan but I hope that it will expand to other regions as well.  Hulu’s solution only works in places with high bandwidth, of course.

I understand there is certain grandeur, a nobility, to the idea that all content and information should be available freely. However, such freedom comes at a cost.  I cannot comment on the intentions of creators of Pirate Bay and Napster or even Aaron Swartz. Perhaps they were noble. But the path market failure is paved with noble intentions.

(I admit I do not know all there is to know about the current market for digital media, so if I have said anything nonsensical, please leave a comment.)

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What would you pay for immortality?

There are people who (or claim to) have accepted their mortality. They are perfectly comfortable with the idea of dying. They may be Christians certain of their salvation or atheists certain of nothingness (which as one of my atheist friends has pointed out is not something to be feared because you won’t be around to experience it). I am not one of these people. Death – no matter where it leads – is scary and I would like to avoid it. There are people who think that we may able to do just that pretty soon, for instance Aubrey de Grey in this Ted talk.

Throughout time people have been obsessed with the idea of immortality. And it always comes at a cost.

Would you make a pact with the devil? (In the Coldfire Trilogy by C.S. Friedman the Neocount of Merentha ritually sacrifices his family to dark forces to attain immortality). Even if this were possible, I do not think I would do this. I don’t want to be evil.

Would you become a vampire? I would consider this. What would I give up: food, sun, heat, fertility. I would need to find a way to drink blood without killing anyone, of course. But all in all, it’s a bargain I could make.

Would you give up your future wages? Probably not all of your wages. But if life-extension therapies were possible,  they would come at a cost. If they were privately funded, a payment of a part of one’s future wages seems likely (this could also be via a loan you take out). I would do so. My guess is, though, that should rejuvenation therapies be invented there would be a period in which only the rich can afford them – during this time the cost of the therapies would relate to willingness to pay – i.e. they would be extremely expensive because some millionaires would give up much of their wealth.  But eventually the therapies would be seen as a right, and government would step in, set up some kind of insurance, probably with taxation funding everything.

Would you give up movement? What if the only way to be immortal would be to become a brain in a jar, hooked up to some computer that accepts your input? If I could be ensured of enough stimulation, I would in fact consider this, if I were near the end of my life. But think, if the stimulus were turned off, what hell would you be living?

Would you give up an organic body? Robin Hanson, an economist, thinks that we may soon be able to copy human consciousness into machines. So technically, not you, but a robot copy of you could live forever (in fact many millions of robot copies of you could live forever). Would you care about this robot-you? Would it have a soul? It would think like you, feel like you, act like you. Would it be alive?

Would you accept living in harsh conditions? I mean would you be willing to take a drastic drop in your living standard. This may be because you have to give up much of your future wages. In the world envisioned by Hanson, living standards would fall because these robots could potentially be mass-produced, drastically increasing the supply of labour.  You may find yourself a miniaturised robot confined to work in a kind of farm with billions of other little robots. You may never see nature again. To live forever, I would be willing to accept rather drastic reductions in lifestyle, I think.

Would you give up your faith? Living forever does not quite fit with the Bible. Being able to copy the human conscience into machines seriously undermines faith. I think this is a bit of a reverse Pascal’s wager: if living forever being possible means there is no God, then it’s better to try to live forever. If you fail, you could still go to heaven (That is, unless God decides to punish the doubters, but I don’t think God works like that). Otherwise, you’re still alive. If you’re an atheist, this is not a problem for you. But for theists, faith may be an integral part of their lives. An immortal life without meaning – is that a life at all? Nevertheless, I would rather wrestle with the existential implications of a very long-lived life than have no life at all. I would, after-all, have a very long time to figure things out.

Would you give up those closest to you? What if your spouse felt the path to immortality was wrong, immoral, or for some reason the therapies would not work on them? Would you carry on your life alone? I think I would. Life goes on, after all.

I do not know if humans will ever be able to achieve an indefinite lifespan. I am also not particularly keen on being the first guinea pig for these therapies. However, if they become viable, and if I can afford them, I will be standing in line. I am of course just presenting just one point of view (a mostly rational one, I think). I find the religious questions raised by the possibility of immortal or artificial life interesting, but I am not about to give up Faith any time soon.

If the devil offered me forever
	I would consider
If I could pay for a drink from the water of life
	I would sell all I had
If I had to give up bread and drink your blood instead
	I could do that
If I had to live in a body of metal and circuits, without limbs
	I would, if it delayed oblivion
If I had to leave you behind, if I had to leave everyone behind
	my heart would break, but I would do it
I would take
	eternal life
	jump into the singularity
even if it cost me
	Faith and Heaven
		yes, even the reality of my soul

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