Stiglitz, Chapter 4 [May 3] (Now with 1 less error)

It's not surprising that I found this chapter particularly interesting. Anything about intellectual property turns my head, from vintners fighting over trademarks in naming new wines to Myriad's rather fascinating licensing policies. Professor Harris's Biopolitics class actually goes through much of the back material regarding patent pools and compulsory licensing when it comes to these medical advances, so I was already at least somewhat familiar with the issues here.

With stats like this [2005], it's simple to see that pharmas do have a serious influence on Congress. On a personal note, I'm glad to see that Sen. Frist is mentioned here (why yes, I did just link to that unimpeachable academic resource known as Wikipedia). The former Senator had the honor of representing my state for quite some time, and I have the much reduced pleasure of being related to him. And if all vote-buying nights are as vicious as this, I'm sure the pharmaceutical industry will keep its influence for a long time. I certainly can't say I'd definitely have the stomach to resist that treatment.

Going on a tangent from Singer's scarce mentions of copyright here... While not nearly as important as the abuses going on with patents and how that's costing people their health and their lives, I think copyright is a vital subject to go over, even--especially--on the international scene. I'm sure our CTO agrees, as the university gets letters from the RIAA on a regular basis, and has had to resort to blocking otherwise benign file-sharing software like BitTorrent and (is it true?) IRC. And then there's Google's online library debacle; this article examines Microsoft joining the dogpile action there, possibly aiming for some favor among publishers taking the digital route AND strengthening the anti-Google coalition. Part of the whole problem is that so few people know exactly what Google is doing--many think they do, while others know they're at least half in the dark. Does Google even know? The RIAA has interesting tactics it uses when dealing with "thieves," including threats, harassment, leaning on ISPs to provide data, supporting illegal and harmful DRM software (hi, Sony!), and eliminating sites promoting their hot money-makers. Nevermind the effect of Warner trying to censor Dean Gray's mashup of Green Day's (get it?) "American Idiot" album, "American Edit." (By the way, American Edit is a fantastic album, and, in my opinion, far superior to American Idiot.)

That's more or less what my thoughts are a day after reading Chapter 4. I'm sure there will be more to come later.

Singer

I was rather interested to note that Singer totally dismisses inequality in incomes as a non-problem. Last term, I was in Prof. Eastwood's Social Revolutions class, where a couple of the points we discussed time after time was the domestic political instability rooted in classes with inequal incomes. Revolutions like the Glorious Revolution, the French Revolution the Russian Revolution, and even to an extent the Iranian Revolution of '79 came after relative periods of economic prosperity (though the policies the Pahlavi Shahs put forward in Iran came at the cost of an unstable, externalities-dependent economy) where income brackets may have even begun moving closer together. While Singer was undoubtably thinking of incomes moving apart, this too plays a role; "economic crisis" is one of the precipitating factors in several theories of revolution. Incomes previously moving closer together move apart... And something like envy rears its green-eyed head. While this doesn't cause revolutions, it is a contributing factor.

Globalized Justice

In this post, Sante raises an interesting question regarding internationalized justice, and Professor Dickovick brings up Pinochet in comments below.

If it were possible to try ordinary citizens of other countries for commiting crimes against your citizens, why not members of foreign governments, as well? It would be a blow to diplomacy in international relations' current structure; what kind of changes would it take to if not eliminate the global tension that would generate, then lessen it?

Q&A, Wolf, Stiglitz, Singer [April 26th].

Carriage returns are when you skip to the next line using enter (or, like on the older keyboards, the return key). In old blogger, you had to use HTML, or your nicely spaced entry would turn into a wall of text.

A note on Jon Stewart's Interview with Friedman on The World Is Flat: that might not be such a radical idea. After all, the economic concept of the production gap between more developed nations and less developed nations states that the latter's growth rates will necessarily be higher (at least, in many cases) than those of the more developed nations, leading to a serious game of catch-up. If that has already more or less happened across the board (leaving out, say, the land-locked African nations), then the world is flat.

I was interested in Wolf's discussion of information asymmetry in Chapter 4; he lists as an "upshot" of principle-agent clashes in corporations the vulnerability of corporations to "managerial incompetence, self-seeking, deceit or malfeasance"; while this is to some degree true, these companies are often pushed out of the economy only after they've done massive damage, like Kenneth Lay's Enron scandal. Sure, the company is doing some measure of repayment now, but it's hard to say how much damage the scheming that went on did to individual investors and those affected by their creative energy policies. Along those lines, Wolf admits that getting rid of unhealthy competitors means the government needs to back off on bailing these companies out--that means fewer subsidies, as hard as that is for people whose livelihoods depend on them. Supporting failed industries weakens the collective market.

It's also information asymmetry that allows college graduates to make more money on average than laborers with no more than a high school degree or GED.

On to Stiglitz; I have to admit, all I know about Mumbai comes from emails desperately soliciting assistance with bank accounts, which is to say there are many rich widows and widowers over there. But the contrast of the events in Mumbai and Davos (as described by Stiglitz) was interesting, and the results not uncommon. I have taken classes where the blame for any harm caused by globalization is placed squarely on developing countries, and read books by "paranoid" authors like Klein who place the blame on complacent consumers and greedy corporations, and sat through lectures exhorting the necessity of 100% participation from all parties in order to even out the playing field and share the benefits of this flattening world with everyone. Though Stiglitz doesn't say so in this first chapter, the implication on page 8 about perceived wellbeing is that believers in globalization's success are, at least in part, relying on GDP to support that idea. GDP is not and never has been an indicator of individual well-being. It is simply too broad to allow that use.

Both authors agree that it is absolutely necessary that trust be developed--trust of the people in regards to each other and the government, and even the government's faith in itself to work properly; this implies, as Stiglitz points out, that a change in mindset is necessary. The U.S. has strong property rights for hard and soft assets (including ideas), which encourages investments; developing countries must develop the same if not equivalent rights and protections and shed the corrupt systems and bureaucrats that lead citizens to operate a market beyond the government's purview. And, finally, according to Singer's thoughts on the Golden Straitjacket, the government really must trust itself enough to shrink the bureaucracy as a whole and keep its hands out of the market.

Testing

Grand opening.

Do we have real carriage returns now?

Something interesting.