Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Thursday, July 12, 2007

Math Can Set Art Free

In case you needed any further proof that governments in general will, in a vacuum of public opinion, side with corporate interests at the expense of the public good... consider copyright terms.

US Constitution, Patents

Rufus Pollack has written an excellent paper performing a rigorous mathematical cost analysis of copyright terms, seeking to find the optimum term to maximize the amount of welfare derived from creative work, this of course being the correct reason to have copyright (and patent) law in the first place, as expressed in the US Constitution:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries...

This expresses well the balance between too short a term of exclusive right for creators -- decreasing incentive to create, and thus decreasing welfare through that lost work -- and too long a term -- decreasing welfare through work rendered unavailable or artificially costly, not to mention the loss of contribution of the public domain to the creation of new works.

Pollack encodes all of these dynamics (and many more) in his mathematical model and comes to two conclusions. First, as the costs of production and reproduction decrease, the optimal copyright term decreases. This makes complete sense to me, but hey, it's nice to have math on your side. If you want theorize a bit, you can certainly see how this artificial imbalance attempts to right itself in the rampant online copyright violation we see today with vastly decreased cost of distribution. At the least, this suggests that any copyright laws made should err on the side of being too short.

Second, taking some input values for rate of cultural decay and the discount rate of works from the real world, he concludes that the optimal term of copyright today is about 14 years. Making the most conservative of assumptions, the maximum is about 52 years (and the minimum is around 3 years given liberal assumptions). Interestly, the original term of copyright in the US in 1790 was ... 14 years. Perhaps a bit aggressive given the technology of the day, but at least they were planning ahead! Of course copyright terms today are typically lifetime + 50-70 years. Most of the works created in the 20th century remain out of the public domain. How did this happen?

Copyright law falls into a realm of policy (much like, say, space-bourne weaponization policy) that has very little immediate effect on a given citizen, but great effect on the business of certain corporations. This gives government free rein to push through copyright extensions that bring in campaign dollars and cost virtually nothing in public disapproval -- if government is willing to ignore the negative impact to the public welfare at large.

Tuesday, May 22, 2007

On War

It's not the most entertaining place to start a blog, but I have to start somewhere:

Many people, by now, are pretty familiar with the (recently-unheeded) Powell doctrine of overwhelming force. But looking back to earlier military theory on which this doctrine is based, I discovered that General Carl Von Clausewitz' "Vom Kriege" (On War), published in 1873 is available in its entirety online.

It's incredibly meticulous and well-informed, arising from the General's experience during the Napoleonic Wars, and probably not worth reading in its entirety unless you're a student of military theory. I did, however, find the wide-ranging first chapter on the "nature of war" to be incredibly interesting. In it, the author lays out the fundamental algebra of war -- clashes of diverse combinations of means, motivations and goals that have played out in conflicts in the 20th, and now the 21st century.

But the bit that struck me most was part of his dismissal of three idealized conditions that would lead to a perfect, logical war. Addressing one of these, he says:
"[War] does not consist of a single instantaneous blow."

In theory, the entirety of this kind of war would be concentrated into the preparation for the single decisive battle to be fought, with neither side launching the attack until victory could be ensured (defined by Clausewitz as the forced submittal of the enemy to the will of the attacker). This kind of war was impossible in the 19th century, but was made reality by the nuclear-driven Cold War of the 20th.

But how then is this kind of war won? Clausewitz algebra dictates that war can only be won (in the world before ICBMs) with the real application of force (not just its threat), but also that war can only be prosecuted when the political objectives to be achieved are sufficiently great enough to justify the expenditure of resources, and that both are sufficiently supported by political will (the realpolitik term that we'd now call "popular support"). In the case of the Cold War, where the entirety of war was concentrated into the preparation, means and will were combined into a single term: money. Economics "won" the Cold War, when the Soviet Union gave way beneath the burden of military spending and low productivity. Because the means and will of our enemy were the very things we sought to defeat, physical war was averted by the USSR's inability to fight it.

This to me represents an extreme case of another way to look at war, increasingly relevant in the modern world: economic war. Clausewitz calculates strength by "the sum of available means and the strength of the will". Increasingly in the technologicaly-driven US military, the means are economic, not human, and so we can (if we're sufficiently cynical) begin making direct monetary cost-benefit analyses of potential wars, assuming we have perfect understanding of the true cost of a given war. If anything has been responsible for the steady decline in the scope of war since WW2 (and I believe it has been a steady decline), it has been that the cost-benefit analysis has been increasingly unfavorable as globalization has taken hold. If the US were to attack China today, even if such a war were known to be "easy", the advantage to be gained would be far outweighed by the damage to Chinese industry that increasingly supports our own economy.

Now the battles to be fought between developed nations are bloodless and conducted between dispassionate corporations, where win-win outcomes are as viable as victory and defeat. If the world is ever to achieve an enduring peace, it may be through the marketplace's inherent favor of efficient and predictable vectors toward progress.