May 1, 2013
A guest post from (Roughly) Daily…
It’s May Day– the occasion for fertility festivals, Soviet pride… and in over 80 countries, International Workers’ Day. So it’s a nifty moment to revisit the observations of the young Karl Marx. Living in Paris with his new wife in 1844, Marx first became acquainted with the conditions of the working class. He observed that they were “utterly crude and unintelligent” but also that “the brotherhood of man is no mere phrase with them, but a fact of life.” This early piece was not published until 1959…
It is true that labor produces for the rich wonderful things—but for the worker it produces privation. It produces palaces—but for the worker, hovels. It produces beauty—but for the worker, deformity. It replaces labor by machines—but some of the workers it throws back to a barbarous type of labor, and the other workers it turns into machines. It produces intelligence—but for the worker idiocy, cretinism.
The direct relationship of labor to its produce is the relationship of the worker to the objects of his production. The relationship of the man of means to the objects of production and to production itself is only a consequence of this first relationship—and confirms it.
When we ask, then, what is the essential relationship of labor, we are asking about the relationship of the worker to production.
Till now we have been considering the estrangement, the alienation of the worker only in one of its aspects, i.e., the worker’s relationship to the products of his labor. But the estrangement is manifested not only in the result but in the act of production—within the producing activity itself. How would the worker come to face the product of his activity as a stranger were it not that in the very act of production he was estranging himself from himself? The product is after all but the summary of the activity of production. If then the product of labor is alienation, production itself must be active alienation, the alienation of activity, the activity of alienation. In the estrangement of the object of labor is merely summarized the estrangement, the alienation, in the activity of labor itself.
What constitutes the alienation of labor?
First, the fact that labor is external to the worker, i.e., it does not belong to his essential being; that in his work, therefore, he does not affirm himself but denies himself, does not feel content but unhappy, does not develop freely his physical and mental energy but mortifies his body and ruins his mind. The worker therefore only feels himself outside his work, and in his work feels outside himself. He is at home when he is not working, and when he is working he is not at home. His labor is therefore not voluntary but coerced; it is forced labor. It is therefore not the satisfaction of a need; it is merely a means to satisfy needs external to it. Its alien character emerges clearly in the fact that as soon as no physical or other compulsion exists, labor is shunned like the plague. External labor, labor in which man alienates himself, is a labor of self-sacrifice, of mortification. Lastly, the external character of labor for the worker appears in the fact that it is not his own, but someone else’s, that it does not belong to him, that in it he belongs, not to himself, but to another. Just as in religion the spontaneous activity of the human imagination, of the human brain, and the human heart operates independently of the individual—that is, operates on him as an alien, divine, or diabolical activity—in the same way the worker’s activity is not his spontaneous activity. It belongs to another; it is the loss of his self.
As a result, therefore, man (the worker) no longer feels himself to be freely active in any but his animal functions—eating, drinking, procreating, or at most in his dwelling and in dressing-up, etc. And in his human functions he no longer feels himself to be anything but an animal. What is animal becomes human and what is human becomes animal.
- from Economic and Philosophic Manuscripts of 1844.
On a more contemporary note: economist Gary Shilling and financial journalist Henry Blodgett on the “Marxist” answer to today’s economic conundrum.
And on a lighter note, check out Cosmarxpolitan.
As we punch in, we might send well-composed birthday greetings to two authors: Joseph Heller was born on this date in 1923. His darkly-comic classic Catch-22 is rightly celebrated as an antiwar novel… but might well also be praised for its scathingly satirical look at organizational life.
And Terry Southern was born on this date one year later, in 1924. Best remembered as a novelist and screenwriter– Dr. Strangelove, The Loved One, The Cincinnati Kid, Easy Rider, Candy, and The Magic Christian, among others– Tom Wolfe credits Southern with inventing New Journalism with the publication of “Twirling at Ole Miss” in Esquire in 1962.
March 31, 2013
Do we humans “own” our own genes?
The more than 40,000 patents on DNA molecules have allowed companies to essentially claim the entire human genome for profit, report two researchers. Their study, published March 25 in the journal Genome Medicine, raises an alarm about the loss of individual “genomic liberty.”
The research team examined two types of patented DNA sequences: long and short fragments. They discovered that 41 percent of the human genome is covered by longer DNA patents, which often cover whole genes. They also found that, because many genes share similar sequences within their genetic structure, if all of the “short sequence” patents were allowed in aggregate, they could account for 100 percent of the genome.
Furthermore, the study’s lead author, Dr. Christopher E. Mason of Weill Cornell Medical College, and the study’s co-author, Dr. Jeffrey Rosenfeld, an assistant professor of medicine at the University of Medicine & Dentistry of New Jersey and a member of the High Performance and Research Computing Group, found that short sequences from patents also cover virtually the entire genome — even outside of genes.
“If these patents are enforced, our genomic liberty is lost,” says Dr. Mason, an assistant professor of physiology and biophysics and computational genomics in computational biomedicine at the Institute for Computational Biomedicine at Weill Cornell. “Just as we enter the era of personalized medicine, we are ironically living in the most restrictive age of genomics. You have to ask, how is it possible that my doctor cannot look at my DNA without being concerned about patent infringement?”…
Indeed, the Supreme Court will next month consider a case in which a diagnostic company is being sued for testing whether specific genes (BRCA1 and BRCA2, two key breast and ovarian cancer genes) are present in a patient. This is somewhat different from the better-known tension between proprietary and generic drugs, where the argument is over how much of a premium the inventing company should be able to charge, and for how long, to recoup its risky investment. In this case, the test procedure isn’t the issue (it’s relatively simple– and public domain– chemistry); what’s at issue is what’s being tested: while the DNA being tested is, of course, the patient’s, the plaintif has patented the isolation of those specific types of gene– or more specifically, those types of gene, identified as those types of gene.
If it sounds weird, it’s because it is. Still, it has very practical– and painful– implications: any test for or donation of or research on those specific genes, the plaintif argues, they belong not to the patient, but to the company– whatever the source of the genes. The defendant, and other similar companies, offer their tests for hundreds of dollars; the plaintif charges thousands… a price it means to protect with its patents. To wit, one of the reasons that medical expenses in the U.S. continue to skyrocket.
There’s a chilling effect on research as well: these days researchers pursuing novel treatments often follow leads to genes that they find are patented… and abandon their research, as the barriers presented by the patent– both procedural and financial– are preemptory.
It get’s weirder still: one company, which patented a method of cow breeding, discovered that their patent covers a large percent of the human genome– Christmas in July! DNA can readily cross species boundaries– and thus, so do patents.
But messiest of all, there’s been such a rush to patent, and such a willingness on the part of the PTO to grant (and leave it to the courts to figure out), that the human genome is a thicket of overlapping, conflicting patents– a morass that could generate decades of litigation (and legal fees of hundreds of millions of dollars, before we even get to damages).
Just as running into a “patent block” can divert a researcher’s quest for a cure, so the prospect expensive litigation acts as a damper on innovation: smaller companies simply can’t afford the ante, so the onus of R&D and new product introduction in IP-heavy fields shifts increasingly to larger enterprises. Leaving aside that mega-c0mpanies are often slower and less creative than smaller, nimbler companies anyway, these larger companies now have to divert huge resources to fighting “patent wars” (as we’ve seen in the electronics sphere, while this starts with litigation, it quickly extends to amassing patent portfolios to use as weapons). So perhaps most damaging of all, the emergence of patents as disputed “toll gates” slows the pace of innovation– especially of the introduction of innovation into the marketplace– as the courts play a more and more central role. It’s one thing to wait a bit longer for a slightly-enhanced smartphone; it’s another to wait an extra year or two for a medical treatment that that might save thousands of lives.
And then, of course, there’s the question of whether or not we own the constituent parts of our own bodies, whether or not we own ourselves.
We can only hope that when the Supreme Court takes up the gene testing case (The Association for Molecular Pathology, et al. v. Myriad Genetics, Inc. et al.) next month, they have the sense to follow Dr. Mason’s advice:
“I am extremely pro-patent, but I simply believe that people should not be able to patent a product of nature,” Dr. Mason says. “Moreover, I believe that individuals have an innate right to their own genome, or to allow their doctor to look at that genome, just like the lungs or kidneys. Failure to resolve these ambiguities perpetuates a direct threat to genomic liberty, or the right to one’s own DNA.”
Read the full story here.
[Cartoon by Chris Madden and published by Biopoliticaltimes.com; via Dark Daily]
March 25, 2013
Cameron has continued Blair’s resistance to any U.K. integration into the financial regulatory regime… and the UK has emerged as a champion tax haven and money laundry– one that, in the future, seems unlikely to be feeling much competitive pressure from Cyprus for Russian deposits.
March 20, 2013
On the heel of Pew’s new report on the “State of the Media 2013,” there’s been a good bit of hand-wringing over the future of journalism in general, and of newspapers in particular. And not without reason: in 2012 newspapers lost $13 dollars in print ads for every $1 dollar they’ve gained online (ads and subscriptions combined). And that’s had a sad but understandable effect; as Pew reports, “estimates for newspaper newsroom cutbacks in 2012 put the industry down 30% since its peak in 2000 and below 40,000 full-time professional employees for the first time since 1978.”
But as Matt Yglesias argues at Slate, what’s tough on the industry we’ve known might not be so bad for the society it’s there to serve. The pessimism is…
…not wrong, exactly, but it is mistaken. It’s a blinkered outlook that confuses the interests of producers with those of consumers, confuses inputs with outputs, and neglects the single most important driver of human welfare—productivity. Just as a tiny number of farmers now produce an agricultural bounty that would have amazed our ancestors, today’s readers have access to far more high-quality coverage than they have time to read.
Just ask yourself: Is there more or less good material for you to read today than there was 13 years ago? The answer is, clearly, more…
In any case, it’s worth remembering that the future of newspapers has been a subject of contemplation for over a century… and as Smithsonian‘s Paleofutures blog reminds us, of predictions that have rarely been right.
Many of us here in the 21st century like to think of the newspaper as this static institution. We imagine that the newspaper was born many generations ago and until very recently, thrived without much competition. Of course this is wildly untrue. The role of the newspaper in any given community has always been in flux. And the form that the newspaper of the future would take has often been uncertain.
In the 1920s it was radio that was supposed to kill the newspaper. Then it was TV news. Then it was the Internet. The newspaper has evolved and adapted (remember when TV news killed the evening edition newspaper?) and will continue to evolve for many decades to come.
Visions of what newspapers might look like in the future have been varied throughout the 20th century. Sometimes they’ve taken the form of a piece of paper that you print at home, delivered via satellite or radio waves. Other times it’s a multimedia product that lives on your tablet or TV…
Visit “The Newspaper of Tomorrow: 11 Predictions from Yesteryear” for an instructively humbling trip back to the future.
March 9, 2013
A guest post from (Roughly) Daily…
Readers experience DRM– digital rights management– everyday, as a feature of the software they use and the entertainment they consume; it turns out that one doesn’t buy the services and experiences one thinks one’s buying; one rents them– on restrictive terms specified by the provider. Those providers take their rules very seriously indeed: they monitor their customer’s behavior for transgressions, sue their customers whenever they suspect a violation (c.f., here and here, for instance), and work surreptitiously with governments to extend their controls abroad (e.g., here).
Their success-to-date hasn’t gone unnoticed by those selling atoms as opposed to bits. Monsanto, for example, patents its seeds and licenses them to farmers, so that those farmers can’t use the seeds from their crops to replant– as for centuries they have– they must repurchase (or relicense). And like the litigious software and entertainment giants, Monsanto aggressively protects its interest through law suits.
Where might all of this end? A group of eight designers competing in The Deconstruction, gave us a peak:
The DRM Chair has only a limited number of use before it self-destructs. The number of use was set to 8, so everyone could sit down and enjoy a single time the chair.
A small sensor detects when someone sits and decrements a counter. Every time someone sits up, the chair knocks a number of time to signal how many uses are left. When reaching zero, the self-destruct system is turned on and the structural joints of the chair are melted…
[TotH to Hexus]
As we decide to stand up, we might recall that, while dentures date back (at least) to the Etruscans circa 7,000 BCE, it was on this date in 1822 that Charles M. Graham of New York City received the first US patent for artificial teeth.
Filed in Competition and Industry Structure, Driving Forces, Economic, Information Industry, Media and Entertainment, Political, Scenario Planning, Social, Technological
Tags: copyright, dentistry, dentures, drm, DRM chair, history of dentures, humor, intellectual propery, IP, patent
March 7, 2013
It took 5 1/2 years.
Surging stock prices and steady home-price increases have finally allowed Americans to regain the $16 trillion in wealth they lost to the Great Recession. The gains are helping support the economy and could lead to further spending and growth.
The Federal Reserve says household wealth amounted to $66.1 trillion at the end of 2012. That was $1.2 trillion more than three months earlier. And it was 98 percent of the pre-recession peak.
Private economists calculate that further increases in stock and home prices this year mean that Americans’ net worth has since topped the pre-recession peak of $67.3 trillion. Wealth had bottomed at $51.2 trillion in early 2009.
Some economists caution that the regained wealth might spur less consumer spending than it did before the recession.
Caution, indeed. While the total figures look terrific, the details are a little more troubling. And more troubling, as it turns out, than we think…
In a 2011 study, economists Dan Ariely and Michael Norton asked Americans what their ideal distribution of wealth would be. Then they asked what the respondents thought the actual distribution of wealth was. Less equal than their ideal, came the answer. The reality…
Here are the implication for wealth of that reality animated in a short justly-viral video:
So that increase in wealth– it’s up in that top 20% quartile, most of it, in the top 10% The balance of folks? Well, the other breaking news this week is that “household deleveraging” may be over– that”s to say, American households are borrowing again… this reality is much more democratically-spread. And it’s frighteningly-scaled…
The same NY Fed report that brings those tidings– ostensibly good for the economy, as more borrowing means more spending– breaks down that debt, paying special attention to student loans– which have effectively tripled over the last eight years, to nearly $1 Trillion. Note that “Student Loan” is the relatively small red section of each bar in the chart above. Still, as the Fed notes:
Deferrals and forbearance [borrowers given temporary "grace"]… mask the true delinquency rates on student loans. Overall, about 17 percent of borrowers are at least ninety days past due on their educational debt, but when we remove the estimated 44 percent of all borrowers for whom no payment is due or the payment is too small to offset the accrued interest, the delinquency rate rises to over 30 percent. These student loan delinquencies and overall large student debt burdens could limit borrowers’ access to (and demand for) other credit, such as mortgages and auto loans. In fact, our data show that the growth in student loan balances and delinquencies was accompanied by a sharp reduction in mortgage and auto loan borrowing and other debt accumulation among younger age groups, with the decline being greater for student loan borrowers and especially so for those with larger student loan balances. In addition, we find delinquent student borrowers much more likely to be late on other debts.
(Why have student loans grown so quickly? Here’s an explanation.)
But surely the fact that most household debt is mortgage debt is an encouraging sign– after all, mortgages are a route to building home ownership equity. Well, for some they surely are. But while the numbers have improved a bit since the post 2008 trough, there are still over 27% of all mortgage holder “underwater” in the U.S.– with mortgage obligations that exceed the value of their homes. There’s no equity there.
Which is all simply to observe that, while the aggregated “good news” that we’ve been hearing this week is better than hearing that everything is down, it’s no cause to celebrate an end to our concerns. As Ariely and Norton demonstrate, most of believe that income and wealth should be more evenly distributed than it is. And given that we live in a consumer economy– as or more dependent on “consumptivity,” the ability of the population to purchase, as on productivity– our economic future demands it.
Stocks are up; aggregate household wealth is up– but for way too many, the American Dream is a nightmare.
Over at Harvard Business Review‘s blog, there’s a provocative post by James Allworth: “How Corruption is Strangling U.S. Innovation.”
If there’s been one topic that has entirely dominated the post-election landscape, it’s the fiscal cliff. Will taxes be raised? Which programs will be cut? Who will blink first in negotiations? For all the talk of the fiscal cliff, however, I believe the US is facing a much more serious problem, one that has simply not been talked about at all: corruption. But this isn’t the overt, “bartering of government favors in return for private kickbacks” corruption. Instead, this type of corruption has actually been legalized. And it is strangling both US competitiveness, and the ability for US firms to innovate.
The corruption to which I am referring is the phenomenon of money in politics…
Allworth goes on to provide a series of examples from arenas– the automotive industry, intellectual property, accommodation and transport, telecom– that illustrate his point all-too-painfully well. For example…
When Walt Disney penned Steamboat Willie — the first cartoon with Mickey Mouse in it — copyright lengths were substantially shorter than they are now (but still enough such that it gave encouragement to Walt to create his famous character). And yet somehow, it seems that every time that Mickey is about to enter the public domain, congress has passed a bill to extend the length of copyright. Congress has paid no heed to research or calls for reform; the only thing that matters to determining the appropriate length of copyright is how old Mickey is. Rather than create an incentive to innovate and develop new characters, the present system has created the perverse situation where it makes more sense for Big Content to make campaign contributions to extend protection for their old work.
It’s not just copyright, either — the same mentality has been driving draconian legislation such as SOPA and PIPA.
And finally, if you were in any doubt how deep inside the political system the system of contributions have allowed incumbents to insert their hands, take a look at what happened when the Republican Study Committee released a paper pointing out some of the problems with the current copyright regime. The debate was stifled within 24 hours. And just for good measure, Rep Marsha Blackburn, whose district abuts Nashville and who received more money from the music industry than any other Republican congressional candidate, apparently had the author of the study, Derek Khanna, fired. Sure, debate around policy is important, but it’s clearly not as important as raising campaign funds.
Allworth didn’t go on; but he could have. He could have elaborated on the abuses in each of the sectors he identified; there’s certainly plenty of material. And he could have added other sectors– financial services, for obvious example. But his important point is well made. (Readers of this blog will recognize the concern, as it’s been a continuing theme here; see “Beware the Land of the Giants,” “Thinking the Unthinkable,” “To Promote the Progress of Science and the Useful Arts,” et al.)
What’s fascinating– and encouraging– to me is that Allworth’s piece is running at HBR. Lord knows, it’s only too important for that audience: the “corruption” that Allworth describes is poisonously bad for the whole economy and for all of the businesses in it– even for those fearful incumbents whose reflexively greedy moves seem to them to yield short-term return.
* “Power does not corrupt. Fear corrupts… perhaps the fear of a loss of power” -John Steinbeck
December 6, 2012
In 2001, Jim O’Neil of Goldman Sachs coined the term “BRICs” to designate the leaders among developing economies: Brazil, Russia, India, and China. And for a decade the moniker served, as these four countries grew hell bent for leather.
But two of the BRICs have hit the skids…
One notes that the two decelerating economies are those of the two more democratic states in the quartet… which raises the question: are Russia and China pulling away from Brazil and India in a fundamental way, or is it simply easier for more authoritarian governments to create the illusion of continued real growth when in fact the fundamentals are weakening?
FWIW, my bet is on the latter. See, for instance, The Moscow Times‘ “How Putin is Turning Russia into One Big Enron” and Michael Pettis’ “A fat guy starts a marathon and injects himself with crystal meth a few miles in. That’s China right now.“
December 6, 2012
Why can’t you get a good seat at a concert or a sporting event at a reasonable price? The famously-curmudgeonly– and equally-famously-insightful– music business insider Bob Lefsetz explains:
Concert tickets are so expensive because of income inequality.
Yes, the Internet allows scalpers and StubHub (the same thing?) to reach a national audience, but in the old days supply exceeded demand to an even greater extent and despite the presence of scalpers, prices were never this high.
The difference is now there’s a whole class of people who can afford these high prices. They don’t really care what the price is, they just want to be inside, separating themselves from the hoi polloi. Not just anybody can be inside!
So we’ve got a dividing line. Between rich and poor. And there’s not much territory in between. Which is why everybody’s fighting to be on the right side, the wealthy side…
But event tickets are simply a symptom, Lefsetz suggests, of something broader and deeper…
We’ve got a dividing line. Between rich and poor. And there’s not much territory in between. Which is why everybody’s fighting to be on the right side, the wealthy side… The rich can buy Senate seats; poor people can’t afford to go to college. Meanwhile, we’re fighting amongst ourselves, while those in charge are laughing behind the scenes. And since it all comes down to money, the rich have been embellished with all kinds of characteristics that are in many cases inaccurate. Rich doesn’t always mean intelligent and insightful, oftentimes it just means lucky. So, I ask you, how does it feel, to get such a raw deal? Only you can change it, because no one else cares, they don’t want to lose their place in line, they’re gonna kick and scream and refuse to fall back. America is not the land of giving, but taking. And you can’t take away that which someone already has. They’re protecting that turf, while they’re trying to take even more.
Read Bob’s post in it’s entirety (and subscribe to his eminently-worthy newsletter) here.
The phenomena Bob describes have, seemingly, crept up on us over the last few decades; only in the last few years have the polarization of wealth and income in the U.S., and their myriad follow-on effects, become topics of broad conversation. Even then, that dialogue has focused largely on issues of fairness (or on the hardship caused in its absence)– which is, of course, appropriate enough, but misses the devastating dampening effects that this inequality has on our national economic prospects (see, for example, here).
There’s work to do if we’re to stop the American Dream from becoming the American Nightmare. A good place to start: Rootstrikers.
image: Sold Out Events
November 26, 2012
Recently, the Head of the US Patent and Trademark Office resorted to Orwellian Newspeak: “The explosion of litigation we are seeing is a reflection of how the patent system wires us for innovation.” One character in Nineteen Eighty-Four, Syme, says admiringly of the diminishing scope of the new language: “It’s a beautiful thing, the destruction of words.”
Not so much.
Readers will know that I have argued for a more measured, balanced approach to Intellectual Property than has accrued over the last couple of decades, largely out of concern that the oligopolistic practices of incumbent rights holders will frustrate innovation and slow economic growth. (See, e.g., “To promote the Progress of Science and useful Arts?…,” “Patently Absurd…,,” ”Caution! Pile up ahead…,” or “I was aiming for my foot, but I seem to have shot myself in the thigh…,”)
There’s new evidence that this imperial behavior is bad for the for the very industry it’s meant to protect… if not necessarily for the oligarchs who are behind it… at least in the short run.
We’ve heard this one before, over and over again: pirates are the biggest spenders. It therefore shouldn’t surprise too many people to learn that shutting down Megaupload earlier this year had a negative effect on box office revenues.
The latest finding comes from a paper titled “Piracy and Movie Revenues: Evidence from Megaupload” (via TorrentFreak) from last month, conducted by from Munich School of Management (LMU) and the Copenhagen Business School (CBS). Here’s the abstract:
In this paper we make use of a quasi-experiment in the market for illegal downloading to study movie box office revenues. Exogenous variation comes from the unexpected shutdown of the popular file hosting platform Megaupload.com on January 19, 2012. The estimation strategy is based on a quasi difference-in-differences approach. We compare box office revenues before and after the shutdown to a matched control group of movies unaffected by the shutdown.
The study analyzed weekly data from 1,344 movies in 49 countries over a five-year period. Here’s the crux of the results: “In all specifications we find that the shutdown had a negative, yet in some cases insignificant effect on box office revenues.” Not all movies were negatively affected: “For blockbusters (shown on more than 500 screens) the sign is positive (and significant, depending on the specification).”
The researchers try to explain how big blockbusters gained but overall revenues dropped:
Our counterintuitive finding may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay. The information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences. ‘Traditional’ theories that predict substitution may be more applicable to blockbusters
Unsurprisingly, the dip in revenues was most visible for average size and smaller films, as people are most likely to see big blockbusters with their friends regardless of what happens on the Internet. Those flicks are less likely to require word-of-mouth promotion by people who used Megaupload to share movies.
Of course this is just one paper, and I’m sure more studies will be done that will dive deeper into the data. By then though, Megaupload’s successor, Mega, will have launched.
The emphasis is mine: while smaller producers suffer, the biggest studios, the purveyors of franchise blockbusters, are less affected… Competition recedes; a smaller and smaller number of larger and larger players have bigger and bigger shares of (what’s left of) the market– an altogether recognizable pattern of oligopolies. One concerned solely with shareholder value in those surviving behemoths can argue over whether, in the long run, this is a good thing. In the short run, some argue (from a shareholder value point-of-view), this is a good thing for the behemoths. But in the longer run, it is deadly: it chokes off the competitive innovation that keeps the entire industry relevant and attractive. In the not-too-distant future, the market will begin to shrink faster than an incumbent’s share can grow.
And for the “civilian,” the movie goer, it’s just plain bad: more massive sequels, less diversity. More Tron: Legacy and RoboCop 3; less Little Miss Sunshine and Precious. It’s no wonder that cable is eating the movies’ lunch.