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16 May 07:09

China fact of the day

by Tyler Cowen

Before the Communists came to power in 1949, China had only 22 dams of any significant size. Now the country has more than half of the world’s roughly 50,000 large dams, defined as having a height of at least 15 meters, or a storage capacity of more than three million cubic meters. Thus, China has completed, on average, at least one large dam per day since 1949. If dams of all sizes are counted, China’s total surpasses 85,000.

The source is here, via Udadisi.

16 May 01:44

Meant for Each Other: Open Borders and Western Civilization, by Bryan Caplan

Last night I debated Stephen Balch of Texas Tech's Institute for the Study of Western Civilization.  Here's my opening statement.


Meant for Each Other: Open Borders and Western Civilization

The Institute for the Study of Western Civilization has a powerful statement on its webpage: "Western civilization has remade the world. Most of the West's inhabitants live lives of which their ancestors could only dream: doubly long, rich in diet, teeming with comforts and diversions, and, most of all, endowed with the gift of liberty--not just for a privileged few, but for the many." 

Reading this passage, I found myself, as Keynes told Hayek, "not only in agreement, but in deeply moved agreement."  Unfortunately, the Institute's fine words embody a major oversight: In the current world, Western civilization still only belongs to the privileged few.  Most of the world's inhabitants are not born in Western nations - and Western nations' laws make it almost impossible for more than a tiny minority to immigrate to prosperity and freedom.

My position: The world's nations - including of course the United States - should abolish their immigration laws.  Anyone willing to pay for transportation should be able to travel here legally, anyone willing to pay for housing should be able to live here legally, and anyone who finds a willing employer should be able to work here legally. 

If I can't sell you on this radical open borders position, though, I won't get mad.  Instead, I'll be an economist, trying to bargain you into as much deregulation of immigration as you can stomach.

Why should we grant foreigners the rights to travel, live, and work where they want?  The same reason we should grant these rights to women, blacks, and Jews: They're human beings and they count.  Is this asking too much?  No.  I'm not proposing that we give foreigners homes or jobs.  I'm proposing that we allow foreigners to earn these worldly goods from willing native landlords and employers.  Under current law, housing and employment discrimination against foreigners isn't just legal; it's mandatory.  Why?  Because the foreigners chose the wrong parents.  How horrible is that?

Of course, plenty of horrible-sounding things are actually good.  Like amputating a leg with gangrene.  Are immigration restrictions like that?  Maybe.  So let's consider the leading complaints about immigration.  For each complaint, I answer two questions.  First, how real is the problem?  Second, assuming the problem is real, are there cheaper and more humane remedies than lifelong exile from Western civilization?

The leading complaint is probably that mass immigration leads to poverty.  Virtually every economist who's thought about this reaches the opposite conclusion: Open borders would massively enrich the world.  A typical estimate is that free migration would DOUBLE global GDP.  Why?  Because the status quo traps most of the world's labor in dysfunctional economies where people produce at a fraction of their full potential.  Moving a Haitian to the U.S. easily increases his output by a factor of twenty.  Hard to believe?  How much could you produce in Haiti?

Would a massive influx of foreign labor drive down native living standards?  It depends on what the native does.  Immigration of workers who produce what you produce hurts you.  Immigration of workers who produce what you consume helps you. 

New immigration is like new technology.  Driverless cars will be bad for taxi drivers, but enrich everyone else.  The net effect, as the history of Western civilization plainly shows, is clear-cut: Mass production is the mother of general prosperity.  Still worried?  There's a cheaper and more humane remedy than keeping foreigners out: Charge them an admission fee or surtax, then use the proceeds to help displaced native workers.

The second most popular complaint is that mass immigration is a massive burden on taxpayers.  Milton Friedman himself famous declared, "You cannot simultaneously have free immigration and a welfare state."  The social science, however, tells a different story: The average immigrant pays about as much in taxes as he uses in benefits. 

If this seems hard to believe, consider two things.  First, other countries have already paid for adult immigrants' education, so we don't have to.  Second, a lot of government services - most obviously defense and debt service - can be consumed by a larger population for no extra charge.  Still worried?  There's a cheaper and more humane remedy than keeping foreigners out: Make them eligible to work but not collect benefits.

Another complaint, which I suspect has great resonance at the Institute for the Study of Western Civilization, is that immigrants harm our culture.  The data on English fluency is fairly clear: While many first-generation immigrants are not fluent, second-generation immigrants almost always are. 

Broader measures of culture are harder to pin down, but I'll say this: Western culture already dominates the global marketplace.  Nationalists around the world use cultural protectionism to "level the playing field," but most local cultures keep losing.  The obvious reason: Western culture is better, so people around the world choose it when it's on the menu.  Part of the reason it's better, I hasten to add, is the West's openness to awesomeness.  Anything good can join the Western bandwagon.  That's why Arabic numerals are a triumph of Western civilization. 

My challenge to the fans of Western culture: Given its current global success, imagine how much more dominant Western culture would be if people around the world were free to vote with their feet for whatever culture they prefer.  Still worried?  There's a cheaper and more humane remedy than keeping foreigners out: Admit anyone who passes a cultural literacy test.

A final common complaint is that immigrants will vote for bad policies - transforming our country into one of the dysfunctional societies they fled.  Here, the data do show that the foreign-born are more economically liberal and socially conservative; they are, in a word, less libertarian.  But the difference is moderate, and the foreign-born have very low voter turnout anyway.  Furthermore, there is good evidence that ethnic diversity reduces native support for the welfare state.  This is a standard story about why the U.S. welfare state is smaller than Europe's: We're a lot more diverse, and people don't like supporting outgroups.  The net political effect of immigration, then, is unclear.  The data, moreover, show little effect.  For every California, there's a Texas.  Still worried?  There's a cheaper and more humane remedy than keeping foreigners out: Admit them to live and work but not to vote.

I won't sugarcoat things.  Free migration is a radical change.  But radical change in the direction of human freedom is as Western as Shakespeare.  Freedom of religion was a radical change.  Abolition of slavery was a radical change.  Ending Jim Crow was a radical change.  Before they were tried, people feared that such radical changes would destroy Western civilization.  After the changes were tried, though, people realized that state religion, slavery, and mandatory discrimination were never compatible with Western civilization's commitment to individual freedom. 

Imagine how you would react if the world's governments denied you the right to live and work where you please because you chose the wrong parents.  Does that sound like the glory of Western civilization to you?  I think not.  Western civilization cannot realize its full potential as long as Western governments require discrimination against most of mankind.  Open borders will bring Western civilization to the world by bringing the world to Western civilization.  Open borders and Western civilization are meant for each other.

(30 COMMENTS)
12 May 01:38

News outlets say US drone ban breaches First Amendment

by David Kravets

A coalition of more than a dozen news outlets is telling the Obama administration that its ban on the commercial use of drones—and "drone journalism" in general—goes against the First Amendment.

"This overly broad policy, implemented through a patchwork of regulatory and policy statements and an ad hoc cease-and-desist enforcement process, has an impermissible chilling effect on the First Amendment newsgathering rights of journalists," the media told the National Transportation Safety Board.

The filing was submitted in a Federal Aviation Administration appeal to a National Transportation Safety Board administrative judge's ruling that said the FAA illegally adopted the ban on the commercial use of small drones, and therefore the 2007 regulations are unenforceable.

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12 May 01:38

London police will soon wear video cameras

by Joe Silver

The London Metropolitan Police Service (MPS) is set to launch a one-year pilot project that equips cops with body-worn video cameras to be used during their interactions with the public. The pilot will include a total of 500 cameras distributed across ten city boroughs.

The 31,000-officer-strong MPS is not the first police department to deploy systems designed to track its officers. Across the pond, for example, the Boston and Los Angeles Police Departments have installed self-monitoring systems on police cruisers, while dozens of US police departments, including those in Fort Worth, Las Vegas, and New Orleans, have deployed wearable police cameras.

The MPS chose to purchase 500 Axon body-worn cameras alongside a backend management system from Taser International, a manufacturer of law enforcement products and electrical weapons. The body-worn cameras in question are small, battery-operated devices that can attach to sunglasses, a shirt collar, a cap, or a head mount and can record wide-angle, full-color views of the officer’s visual field, according to a press release. A red "flash" appears on such devices to indicate when the camera is activated.

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12 May 01:36

Console versions of Elder Scrolls Online delayed “about six months”

by Kyle Orland
Rowan Kaiser / Bethesda

The Xbox One and PlayStation 4 versions of Bethesda's fantasy MMO The Elder Scrolls Online are being pushed back "about six months" from its planned June 30 release date as the developer struggles to integrate the game's servers with Xbox Live and the PlayStation Network.

In a statement released today, Bethesda said that development on the console versions has been "progressing steadily" but that the company is "still working to solve a series of unique problems specific to those platforms." Specifically, "integrating our systems with each console manufacturer’s networks—which are both different from the PC/Mac system as well as different from each other—has been a challenging process."

As an apology to fans for the delay, Bethesda has offered a free character transfer for anyone who registers to play before the end of June from the PC/Mac versions of the game, which were launched last month, to the upcoming console versions. PC/Mac players will also be able to purchase either console version for a lowered price of $20 and receive 30 days of play time with that purchase.

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10 May 20:19

5 Ways US Medical Billing Is Way More F#@ked Than You Think

By C. Coville  Published: May 07th, 2014  If you're not from America, or you're young and healthy enough to have avoided doctors up to now, you may not have been exposed to the delights of this country's high medical costs. So here's a demonstration, in the form of a $243K bill for a three-n
10 May 01:13

A Proposal to Fingerprint the Ice-Cream Man

by Conor Friedersdorf

We'll all be fingerprinted in the end.

That's my prediction after seeing the support an elected official in Los Angeles County has received in his bid to make sure area ice-cream men and women are subject to background checks. "Ice-cream truck vendors are a prime example of someone that operates a business that caters to children as their primary clientele," Don Knabe reasons in a motion that passed the L.A. County Board of Supervisors. "We all have a duty and responsibility to protect our communities from situations and individuals that could put our children at risk." His solution? Subject ice-cream vendors and other people whose businesses bring them into contact with children to inkless, electronic fingerprinting as a condition of operating. The proposal was unanimously sent to county officials for review.

Practically speaking, the idea is suspect. 93 percent of juvenile sexual assault victims are abused by a family member or acquaintance, not a stranger. As well, the rate of serious violent crime against youths "declined 77 percent from 1994 to 2010," according to the Department of Justice.

More worrisome is the logic driving this proposal.

As a general proposition, the citizens of a free country should be presumed innocent, and spared having to prove their good character to the state, unless there is some cause to suspect them of being criminals. Narrow exceptions are probably necessary. I grant the compelling arguments in favor of background checks on guards at juvenile prisons and foster houses, given how common sexual abuse has proved to be in those settings, as well as inquiries into the backgrounds of folks working at nuclear power plants or researching epidemic viruses. 

I also grant the difficulty of line-drawing in this area.

But if mere proximity to children is reason enough to subject someone to mandatory fingerprinting and background checks, then few of us will be exempt for long. Ice-cream vendors almost certainly pose a lesser risk to children than boyfriends of single moms, teachers, next-door neighbors, or members of extended families. Over time that won't be lost on perennially intrusive bureaucrats.

Yet most Americans are opposed to quasi-universal background checks on principle. Even a national I.D. card is controversial. There are implementation problems too.

As J.D. Tuccille notes at Reason:

Criminal background checks aren't perfect tools.

Really, they're as fallible as any database, especially those run by government employees. Last year, the National Employment Law Project noted (PDF) that the FBI isn't so diligent about keeping its records current; about half of records are missing final disposition information. That means they reflect an arrest, but not whether a conviction resulted. As a result of such flaws, "more than 600,000 workers a year were potentially prejudiced in a job search as a result of the FBI’s failure to report accurate and complete information."

Fingerprinting ice-cream vendors may be a small, local controversy, but it is also one more illustration of the way that technology is changing the relationship between government and its citizens. Big Data makes it possible to mass-collect everything from private communications to biometric data. And what inevitably follows is a temptation to treat citizens as guilty until proven innocent rather than the reverse. Anyone might be a terrorist, or a child molester, so why not investigate everyone?

Our ability to resist this trend will help to determine whether the next generation of Americans have the rights and freedoms we enjoyed. Counterintuitively, we're ceding them to the state in a world that's already safer.








09 May 18:52

The Cities Where Americans Bike and Walk to Work

by Derek Thompson

Maybe it's the high price of gas. Or the bougie obsession with healthy living. Or the emerging understanding that sitting in a car for an hour a day is literally killing you right now.

Whatever it is, Americans are 60 percent more likely to bike to work than a decade ago, according to new Census figures. About 800,000 workers pedal to the office every day. That sounds like a lot, compared to, say, the 40,000 people who take a ferry to work (true fact). But it's a pittance next to the 120 million workers who still prefer the gas pedal of their car.

The city most likely to bike? It's Portland, Oregon. In fact, the midwest and northwest dominates the top ten, which lacks any city from the northeast or the south. Interestingly: Workers in Los Angeles are more likely to bike to the office than workers in New York City. In fact, at 0.8 percent, NYCers are as (un)likely to bike to work as Atlanta workers. Since this data was collected across 2008-2012, it misses, but also explains the challenges of, the introduction of Citi Bike to the city.

There's an even cheaper way to commute without a car, and that's walking. On this measure, the east coast dominates the top ten. Although Americans are still much more likely to walk to work than bike, the ranks of walking commuters aren't growing. In fact, Americans are about half as likely to walk to work as we were in the 1980s: the national rate has fallen from 5.6 percent to around 3 percent. 

And the cities with the highest concentration of walkers and bikers combined? That would be Boston, Washington, D.C., and Madison. Finishing in the bottom 20 in both categories were Montgomery, Alabama, Laredo and Garland, Texas, and Chesapeake, Virginia. The strangest discrepancy: Newark finished in the top 15 in walking to work and in the bottom 20 for biking to work.

The big picture, though, is that that more than eight in ten people still drive to work (and mostly alone).








09 May 18:45

Offshore Wind Farms Could Supply Much of the U.S.'s Electricity (If They Ever Get Built)

by Todd Woody

When I flew into Copenhagen in 2007, the jet passed over a gleaming array of white wind turbines arranged in a necklace in the city’s harbor. Since then, Denmark’s offshore wind farm building boom has continued. Last December, for instance, wind farms supplied more half the country’s electricity demand.

In England, the London Array went online in 2012, its 175 turbines generating 630 megawatts of electricity from the Thames Estuary.

The United States, on the other, is generating not a watt from commercial offshore wind farms, despite 80 percent of its electricity demand coming from coastal states, according to the U.S. Department of Energy. In fact, the offshore wind capacity of the country has been estimated at 4 million megawatts, or four times the entire generating capacity of existing U.S. power plants. 

The nation’s first offshore project, Cape Wind, has been mired in litigation and bureaucratic red tape since 2001. Just on Friday, a federal judge dismissed the latest legal challenge to the 468-megawatt wind farm that would be built in Nantucket Sound off Cape Cod, Massachusetts.

The Energy Department took a small step on Wednesday, however, to spur offshore wind, awarding $47 million for three experimental projects to test new technology to take advantage of the strong winds that blow in coastal waters.

A New Jersey company called Fishermen’s Energy scored cash to build five, 5-megawatt turbines three miles off Atlantic City. The project will test a twisted jack foundation, which is a new type of offshore platform that is cheaper to make and install than traditional platforms.

On the West Coast, Seattle-based Principle Power will deploy five 6-megawatt turbines 18 miles off Coos Bay, Oregon, to test its semi-submersible floating wind turbine platform. Developing such technology is crucial if wind farms are going to be built in the deep waters off the West Coast, where anchoring platforms to the seabed would be prohibitively expensive. According to the Energy Department, more than 60 percent of the U.S.’s offshore wind capacity is in the deep ocean.  The Principle Power turbines, for example, will be installed in the ocean where depths reach 1,000 feet.

Even further from shore, Dominion Virginia Power will test a hurricane-proof design for two 6-megawatt turbines and platforms to be built 26 miles off Virginia Beach as well as demonstrate the viability of installing, maintaining and operating projects so far from land.

All the projects will deploy next-generation direct drive turbines from Alstom, Siemens and XEMC that use fewer moving parts than conventional geared turbines. Given the high cost of fixing turbines far from shore, the fewer breakable parts the better.

“The three projects selected today are aimed at deploying offshore wind installations in U.S. waters by 2017,” the Energy Department said in a statement.

But don’t hold your breath. 








08 May 21:54

What’s Libertarian About Gamers?

by Scott Shackford

As Reason's June issue attempts to show, video games can't really be classified as an odd little subculture in America anymore. They're as big a form of recreation and entertainment as anything available now, and after four decades, video games have proven they're here to stay.

But obviously, video game consumers have degrees of interest. Just as there's a difference between somebody who buys Miley Cyrus singles on iTunes versus somebody who shells out big bucks to attend her concerts, there's a difference between somebody who plays Candy Crush on a tablet every so often versus somebody who spends a weekend with friends slaying monsters in World of Warcraft.

So we decided to take a look at "gamers," people on the more devoted end of the player spectrum, to see if there were any political trends that were worthy of note. In our two most-recent Reason-Rupe polls, in December and April, we asked how frequently people played video games. Then we looked at the poll responses from those who identified as frequent gamers and compared them to the respondents who never played. Was there anything to learn? What should anybody attempting to court the "gamer vote" know?

Who Plays?

From our Reason-Rupe polling, 57 percent play games either frequently, occasionally or rarely. We'll be focusing mostly on those who say they play frequently, an average of 16 percent. For those who still operate on the belief the gamers are mostly male, set the sexism aside. The gender split is nearly 50/50, though we did not determine whether women and men liked to play the same kinds of games. Those who believe gaming is a hobby for the young, you're not wrong, but it's not the whole story. While 47 percent of frequent gamers were under the age of 35, nearly one in five gamers were over the age of 55.

Gaming the Parties

Political operatives looking to explore gamers as a voting bloc should know that gamers are more likely to identify themselves as independent than non-gamers and also are less likely to identify as Republicans. When independent gamers are pushed to identify leanings, they are more likely to lean leftward to the Democrats.

Mapping onto their partisanship, gamers are significantly less conservative and more liberal than those who never play video games. This can't be wholly accounted for by the fact that gamers trend younger. Even within age groups, gamers lean more liberal and less conservative than their non-gaming peers.

But while they may lean more liberal, that doesn't necessarily mean gamers are fans of a centrally planned government to deal with everybody's problems. Gamers agree with non-gamers in supporting free market solutions over government intervention when possible, 52 to 43 percent. Gamers also believe (57 percent) that government is often an impediment in people's ability to succeed. And 54 percent disagree with President Barack Obama's views on the role of government.

Don't Tell Me How to Play

If there's any one trend to take away from a poll looking at gamers it's that gamers don't like to be told what to do with their lives. Again, they may describe themselves as liberal, but they do not like government policies that control individual life choices, like what products they can purchase or consume. Video games are all about making choices, right? That's one mentality that does carry over in real life (unlike the fear that games make people more violent). Our polls show that many government bans on products or activities like caffeinated energy drinks or online gambling are already disliked by Americans, regardless of gaming habits. But for gamers, this dislike of nanny-style regulation is enhanced—upgraded if you will. For every single poll question where we asked whether the government should allow people to own, consume, or use certain products or services that are currently a focus of debate, gamers are more likely to say yes than non-gamers. In only one question did gamers support a government ban, for 3D-printed guns. But even then, 42 percent of gamers still supported allowing people to print them, compared to 26 percent of non-gamers.

Probably the biggest gap was the gamer support for allowing use of bitcoin as a currency—55 percent for gamers; 30 percent for non-gamers. This example is particularly interesting because a majority of gamers and non-gamers alike knew very little or nothing at all about bitcoin. But non-gamers appear more likely to call for government regulations or a ban on a product they've never heard of than gamers.

Unsurprisingly, Gamers Love Tech Advancements

If Amazon begins using drones to deliver products someday, gamers think that's an awesome development, far more than non-gamers. The numbers are practically reversed. Gamers love the idea of drone deliveries, 54 to 32 percent. Drone deliveries make some non-gamers nervous. Only 39 percent saw them as a positive development.

Showing that more liberal side mentioned earlier, gamers are more likely to support subsidies for alternative energy subsidies, nearly 20 percentage points higher. Gamers favored subsidies to solar, wind and hydrogen companies, 69 percent to 25 percent. Non-gamers barely reached 50 percent.

Gamers Concerned About Police Power, Accountability

Though gamers may love the idea of having Four Loko and marijuana delivered to them by drones so they can focus on improving their Call of Duty skills, they are much more reluctant than non-gamers to give police the authority to use them and are more concerned than non-gamers about militarization of police (though even non-gamers are concerned about the trend). Seventy percent of gamers think drones and miitary tools in the hands of police goes too far. Only 57 percent of non-gamers agreed. 

Furthermore gamers are much more likely to believe that police are not held accountable for misconduct. Only 33 percent of gamers think police are punished for misconduct, compared to 51 percent of non-gamers. Though three-quarters of gamers have a positive view of the police, they're much less likely to believe the bad apples are properly disposed of.

Methodological Note

Data on gamers demographics, political affiliations, and views of government come from the combined December 2013 and April 2014 surveys allowing for increased precision. Questions about government allowing or prohibiting various activities and products, and Amazon delivery drones, come from the December 2013 survey. Questions about Bitcoin, alternative energy subsidies, and police abuse come from the April 2014 survey.

08 May 21:51

Video Games Every Libertarian Should Play

by Peter Suderman

Deus Ex Deus Ex: Deus Ex is a science-fiction role-playing game set against the backdrop of an ongoing debate about the safety and ethics of human augmentation. Players take the guise of Adam Jensen, a corporate security officer tracking anti-biotech militants. The game's cast will be familiar to anyone who has followed similar debates in real life: uncompromising anti-science radicals, moderates who favor regulation, self-interested political players, scheming corporate leaders, and apolitical scientists. The noirish story has no heroes, but it does subtly highlight the value of biological modifications. The key to winning: enhancing Jensen-and yourself.

Fable III: Fable II offered a vast open world in which nearly everything from homes to stores to weaponry was for sale, and violence and other actions impacted local prices, so virtual entrepreneurs could buy low and sell high. Fable III adds politics to the mix. Players are effectively required to campaign for the office of king by making promises to win over the game's citizens. But winning the people doesn't mean winning the game. After assuming the throne, players must either keep those promises-a task that usually turns out to be difficult, if not impossible—or take the game world in a whole new direction, risking the wrath of an unhappy citizenry.

Fallout 3: A post-apocalyptic role-playing game set in a bombed-out, futuristic Washington, D.C., known as the Capitol Wasteland. Warring tribes of wannabe authority figures fight for control, thugs and scammers try to take your guns and your money at every turn, super-intelligent robots try to reengineer society, and the whole place is overrun with mutants. In other words, it's a lot like the Washington, D.C., we all know and love today. Fallout 3 is also one of the most expansive, open, and darkly funny games ever made.

L.A. NoireL.A. Noire: L.A. Noire offers a down-to-the-lapels re-creation of Hollywood shortly after World War II. Players take the role of an earnest police investigator moving up the ranks by solving cases. The game's most memorable innovation is the way it handles "interrogations" of suspects. Players must determine, based on the suspect's behavior, whether someone is lying. But unlike most video game challenges, there's no system, no trick, to mastering it. In the end, it's a mix of thorough prior detective work and subconscious intuition; even then, it's easy to be wrong. The subjective nature of the game play highlights the uncertainty of much police work. Sometimes even good players-or cops-make big mistakes.

Papers, Please: Indie game Papers, Please puts players in the role of a customs official in a fictional Eastern European country. Players must analyze the paperwork of each person attempting to pass through a border checkpoint. As the game progresses, the paperwork review process grows more complicated. At first passports are enough, but soon documents like work visas, entry permits, and immunization records also require examination. There are bribes, and special exemptions for diplomats, and wrenching personal stories from potential immigrants. It's all timed. Failure means fines. At the end of each day, players return home to ration the pittance earned on food, rent, heat, and sometimes medicine for the family. Bring home too little, and you'll watch them die off.

BioshockPlayers fight their way through the ruins of an Art Deco underwater city set up as a kind of sci-fi anarchist utopia—where biological modification is plentiful, looters are treated as scum, and the pursuit of individual desire and accomplishment is considered life’s most noble goal. The villain is clearly intended as a riff on Ayn Rand’s super-individualists, but in a mid-game twist, he shows he’s not simply a bad guy. The revelation elevates Bioshock from satirical, action-driven homage to Rand into a clever riff on the perception of individual freedom and the nature of choice.

08 May 21:49

"A Multiplayer Game Environment Is Actually a Dream Come True for an Economist"

by Peter Suderman

In October 2011, the Greek economist Yanis Varoufakis received an unusual email. "I'm the president of a videogame company," it began. The message was from the head of Valve Software, the influential video game design firm behind such industry-defining titles as the sci-fi shooter Half-Life and the first-person puzzle adventure Portal.

Varoufakis, who teaches economic theory at the University of Athens and also has a post at the University of Texas at Austin, had spent years working on game theory—the strategic and decision making processes that economists study, not the theory behind computer games. He also examined the complexities of linking multiple distinct economies. During the height of the Euro crisis in Greece, Varoufakis was often seen in the media explaining the meltdown and describing what might happen next in the currency-integrated Eurozone. Now Valve Software chief Gabe Newell was asking him to apply the same insights to the interlinked virtual economies of Valve Software's games.

After meeting Newell and other Valve staffers in Seattle, Varoufakis agreed to become the company's first official in-house economist. From early 2012 through the middle of 2013, he studied Valve's games, occasionally sharing his insights on the company blog in lengthy posts with wonky titles. (Sample: "Arbitrage and Equilibrium in the Team Fortress 2 Economy.") His work for Valve led to more media attention, including articles and interviews in The Washington Post, The Financial Times, and National Public Radio.

In February, Varoufakis spoke with Senior Editor Peter Suderman about what he learned as a video game economist, the failings of his chosen academic profession, and how computer games and virtual online worlds might be the future of macroeconomics.

reason: What does a video game company want with an economist?

Yanis Varoufakis: The moment that video game companies shifted from single-player to multiplayer games, without realizing it, they created a social economy. People interacting through the game have the opportunity not only to kill one another, but also to exchange stuff. Stuff that was valuable-or scarce, as an economist would say-within the virtual world.

In almost no time that sort of economy started creating, within the game, a lot of value, and also distributing it. If you have a kind of community involving millions of people who trade with one another, who engage with one another, and who can even create value through production processes-for instance, designing some shield or some garden and sending it through the store of the community to other players-all of a sudden, these video game companies realized that they have an economy in their hands.

reason: So the interest for economists is that you have a confined space to learn about how people behave within economies. And the interest from gaming companies is that they inadvertently created economies that they needed some expertise on.

Varoufakis: A multiplayer game environment is a dream come true for an economist. Because here you have an economy where you don't need statistics. And elaborate statistics is what you use when you don't know everything, you're not omniscient, and you need to use something in order to gain feeling as to what is happening to prices, what is happening to quantities, what's happening to investments, and so on and so forth. But in a video game world, all the data are there. It's like being God, who has access to everything and to what every member of the social economy is doing.

reason: You have the perfect knowledge that every central banker wishes he or she had.

Varoufakis: Indeed. Every congressman, every senator, every regulator, every banker, every Treasury official. It's equivalent to being omniscient, being able to see and know everything that goes on in the economy. And that's amazing.

reason: You've said that you were not really a gamer before working with Valve. What did you learn about video game worlds? What surprised you?

Varoufakis: The most poignant observation was the speed with which these economies evolve. Within a year, you have an evolutionary process that can replicate what happened out there in the outlying economies, in terms of creating a complex web of exchanges and sound economic systems. And the outlying economy took centuries. I didn't expect to see institutions spontaneously generating within these social economies so fast and so furiously, and therefore creating a growth rate that the real world would love to replicate.

I also learned something else which I'm very grateful for. We economists are very much disposed toward our models, and our models assume that economic choices converge very quickly toward some kind of equilibrium where demand equals supply and where prices tend to their natural level and so on and so forth. Well, that's not how the real world works. We should have known that.

In the video game world it's quite astonishing to watch. Quickly, collective aggregate behavior converges at equilibrium and then disequilibrates itself. Then some other equilibrium comes and then goes away. It's the speed and the irregularity of behavior around some equilibrium and the speed with which new equilibria are being formed.

reason: So is there a real world lesson that you can draw out from having seen this irregularity pop up in virtual economies?

Varoufakis: Absolutely. Let me put it very brutally and very bluntly: Our best economic models-from the Federal Reserve or the U.S. Treasury or the International Monetary Fund or the Organization for Economic Development-are really not worth the trouble of putting together. Because they are presuming a kind of equilibrium stability and convergence toward equilibrium, because it makes our models look better. It is not something that is replicated in the real world.

reason: You once wrote that because of its heavy reliance on statistics and on this sort of simple modeling, economics can resemble "computerized astrology." That's pretty harsh. Could you talk a little bit more about that judgment and whether you think that studying economics in a virtual world-where you're not just looking at a model, you're looking at real behaviors and real interactions amongst thousands or millions of people-offers a way out of an economics stuck in a model-bound world?

Varoufakis: If we think of ourselves as empiricists who judge the value of the theory on the basis of how well it predicts, then we should have ditched economic models years ago. Never have our models managed with data to predict the major turning points, ever, in the history of capitalism. So if we were honest, we should simply accept that and rethink our approach.

But actually, I think they're even worse. We can't even predict the past very well using our models. Economic models are failing to model the past in a way that can explain the past. So what we end up doing with our economic models is retrofitting the data and our own prejudices about how the economy works.

This is why I'm saying that this profession of mine is not really anywhere near astronomy. It's much closer to mathematized superstition, organized superstition, which has a priesthood to replicate on the basis of how well we learn the rituals.

Video game communities, social economies, give us something that we never had as economists before. That's something of an opportunity, a chance to experiment with a macroeconomy. We can experiment in economics with individuals. We can put someone behind a screen and experiment on the subject, and ask him or her to make choices and see how they behave.

That has nothing to do with macroeconomics. Macroeconomics requires a different scenario. You conduct controlled experiments with a large economy. We are not allowed to do this in the real world. But in the video game world, we economists have a smidgen of an opportunity to conduct controlled experiments on a real, functioning macroeconomy. And that may be a scientific window into economic reality that we've never had access to before.

reason: What a lot of these discussions come down to is that you can never in macroeconomics have a real counterfactual. Do you think that video games offer a meaningful solution to that problem, where we might actually be able to solve, or if not solve, get useful knowledge, about macroeconomic policy, whether it's stimulus, whether it's other spending and taxation policy, whether it's Fed policy?

Varoufakis: In one word: potentially. I don't think we can yet.

In order to be able to run these controlled experiments within the video game world in a manner that will result in meaningful conclusions regarding depression economics, recession economics, and so on and so forth, we need to wait for people to engineer the creation of labor markets and financial markets within these video game communities. But I have no doubt that it's going to happen.

These video game communities are evolving so fast that there will be markets for credit, and very soon, production. I think in EVE Online and other games, there are already such labor markets. Once video game communities have developed full-fledged financial and labor markets, then quite simply the answer will be yes.

reason: In the last few decades we've started to see a shift in economic research toward experiments, with economists designing little cooperation games that can be played in labs in short rounds and that sort of thing. A lot of that still seems to be pretty small-scale. I'm wondering how these big, persistent commercial game worlds can inform or interact with that sort of research.

Varoufakis: Well, they give us an opportunity to liberate ourselves from the smallness as you posit. There was one experiment that took me 10 years to complete from inception to execution to collecting the data to writing up the paper. A decade for one little paper!

reason: That's a long time.

Varoufakis: My sample size was 650 subjects. When I looked at some of the games, I had millions and millions of deviations per hour, and it was all in real time. I didn't even need to collate it. Watch it in front of your eyes; you'll be liberated from smallness.

But in the experimental economics that we've been carrying out as academics outside the video game world, we have a lot more control. Even though we have a small sample size, and it took ages to get the whole thing going, at least we control precisely the conditions. No commercial video game companies are going to give the economists complete free rein of allowing him or her to control the environment.

This is a trade-off. The challenge for academic economists who are working with video game economies is how to maximize the degree of control they have over the experiment that they conduct without damaging the enjoyment that players get from playing the game. 

08 May 21:39

Offensive Speech

by John Stossel

Last week, when the NBA banned racist team owner Donald Sterling, some said: "What about free speech? Can't a guy say what he thinks anymore?" The answer: Yes, you can. But the free market may punish you. In America today, the market punishes racists aggressively.

This punishment is not "censorship." Censorship is something only governments can do. Writers complain that editors censor what they write. But that's not censorship; that's editing. 

It's fine if the NBA—or any private group—wants to censor speech on its own property. People who attend games or work for the NBA agreed to abide by its rules. Likewise, Fox is free to fire me if they don't like what I say. That's the market in action, reflecting preferences of owners and customers.

But it's important that government not have the power to silence us. We have lots of companies, colleges, and sports leagues. If one orders us to "shut up," we can go somewhere else. But there is only one government, and it can take our money and our freedom. All a business can do is refuse to do business with me, causing me to work with someone else. Government can forbid me to do business with anyone at all.

Of course, government never admits it's doing harm. Around the world, when government gets into the censorship business, it claims to be protecting the public. But by punishing those who criticize politicians, it's protecting itself. 

That's why it's great the Founders gave America the First Amendment, a ban on government "abridging the freedom of speech." But I wonder if today's young lawyers would approve the First Amendment if it were up for ratification now. 

There is a new commandment at colleges today: "Thou shalt not hurt others with words." Students are told not to offend. At Wake Forest University, for instance, students cannot post any flyers or messages deemed "racist, sexist, profane, or derogatory." 

The goal is noble: create a kinder environment. But who gets to decide how much "hurt" is permissible? Recently, a fourth-grade teacher in North Carolina was ordered to attend sensitivity training after teaching students the word "niggardly." When the power to censor lies with the people most easily offended, censorship never stops. 

A few years ago, I asked law students at Seton Hall University if there should be restrictions to the First Amendment. Many were eager to ban "hate speech." 

"No value comes out of hate speech," said a future lawyer. "We need to regulate flag burning ... and blasphemy," said another. One student wanted to ban political speech by corporations, and another was comfortable imprisoning people who make hunting videos. 

Only when I pulled out a copy of the Bill of Rights and slowly wrote in their "exceptions" did one student finally say, "We went too far!" 

So does free speech mean that we must endure hateful speech in the public square? No.

I'll fight it by publicly denouncing it, speaking against it, boycotting the speaker. That's what the NBA's employees and customers demanded, and quickly got. 

What convinced me that almost all speech should be legal was the book Kindly Inquisitors: The New Attacks on Free Thought, by Jonathan Rauch. He explains how knowledge increases through arguments. 

Rauch is gay. In an updated afterward to his book, he points out how quickly the world has changed for people like him. Twenty years ago, "gay Americans were forbidden to work for government, to obtain security clearances, serve in the military ... arrested for making love, even in their own homes ... beaten and killed on the streets, entrapped and arrested by police for sport." 

This changed in just two decades, he says, because there was open debate. Gay people "had no real political power, only the force of our arguments. But in a society where free exchange is the rule, that was enough."

Fight bigotry with more speech

08 May 21:35

Bill Clinton Also Hyped the Bogus Iranian Threat

by Sheldon Richman

Bill ClintonTragically, President George H.W. Bush passed up a chance for a rapprochement with Iran because, after the Soviet Union imploded, the national-security apparatus needed a new threat to stave off budget cutters in Congress. Iran became the "manufactured crisis," according to author Gareth Porter's new book by that title.

Doubly tragic, Bush's successor, Bill Clinton, compounded the dangerous folly by hyping the bogus threat. Why? That might be a good question for progressives to ask possible presidential candidate Hillary Clinton, who enjoys basking in her husband's supposed presidential successes.

Porter writes,

That ramping up of pressure on Iran by the Clinton administration was still driven by the same bureaucratic incentives that had appeared at the end of the Cold War, but it shifted into overdrive because it was linked to support of the Israeli government's drive to portray Iran as the great threat to peace in the world.

Clinton's advisers saw the threat of nuclear proliferation as the path to beefing up the national-security apparatus. It was perfect for justifying new weapons systems and a continuing role as world policeman.

Moreover, the military focus on Iran, Porter adds, "dovetailed with the Clinton administration's move to align its Iran policy with that of the Israeli government of Prime Minister Yitzhak Rabin." Before assuming power, Clinton signaled his intention to be "more explicitly pro-Israel than the Bush administration had been." To that end, he selected Martin Indyk as his campaign's Middle East adviser. Indyk had been an adviser to former Israeli prime minister Yitzhak Shamir; a researcher at the chief pro-Israel lobbying organization, the American Israel Public Affairs Committee; and cofounder of AIPAC's spinoff think tank, the Washington Institute for Near East Policy. (Today, Indyk is President Obama's chief envoy to the failed U.S.-sponsored Israeli-Palestinian talks.)

The Clinton administration implemented the "dual containment" policy against Iraq and Iran. But Porter reports that Robert Pelletreau, the Middle East policymaker in the State Department, acknowledges "that it was 'pretty much accepted in Washington' that the policy had originated in Israel."

Was there a case against Iran to justify the policy? The administration charged Iran with abetting international terrorism, beefing up its armed forces, and seeking nuclear weapons. But was there evidence?

Porter's book is a heavily documented brief showing that Iran never had a policy or took steps to acquire nuclear weapons. It sought a uranium-enrichment capability in order to produce fuel for its civilian nuclear program, but it did not seek weapons. Moreover, Supreme Leader Ali Khamenei had issued a fatwa condemning nuclear weapons as a sin against Islam.

As for Iran's military, the government sought to acquire medium-range missiles, but this was entirely consistent with its defense needs: Saddam Hussein of Iraq was a standing threat (he had launched an eight-year war complete with chemical attacks and missile strikes on Iran's cities, including Tehran), and Israeli leaders often spoke of the need for a preemptive strike against the Islamic Republic, like the one staged in 1981 against Iraq's nuclear-power reactor at Osirak.

And terrorism? "Reflecting both the hostility toward Iran within the national security bureaucracy and the influence of the Israeli line on its Iran policy, the Clinton administration also adopted the same a priori assumption that Iran was a threat to the issue of terrorism," Porter writes. In other words, Clinton didn't need evidence. Porter provides several examples of Iran being falsely blamed for terrorism committed by someone else. The pattern of blame without evidence persists.

Finally, why were Israel's leadership and American supporters so determined to put Iran at the center of U.S. foreign policy, especially when Israel's government had previously, if covertly, cooperated with the Shiite Islamic Republic on the grounds that both countries had a common enemy in Sunni extremism? Porter's detailed and documented chapter on this aspect of the manufactured crisis concludes, "The history of the origins and early development of Israel's Iran nuclear scare and threat to attack Iran over its nuclear and missile programs highlights a pattern in which both the [Yitzhak] Rabin and [Benjamin] Netanyahu governments deliberately exaggerated the threat from Iran, in sharp contradiction with the Israeli intelligence assessment. The ruse served a variety of policy interests, most of which were related to the manipulation of U.S. policy in the region."

This article originally appeared at the Future of Freedom Foundation.

08 May 21:34

Truvada: Chill Pill or Party Drug?

by Scott Shackford

Would taking a pill every day make people less responsible?Did you know that there's a pill you can take that greatly reduces your risk of contracting HIV? Chances are, unless you're in a major risk category, you probably don't.

The drug is named Truvada, created by Gilead Sciences. It has been around for years as part of the treatment regimen for those already infected with HIV. But more recently, researchers have discovered its usefulness in preventing the disease's spread as well.

In 2012, the Food and Drug Administration (FDA) approved the use of Truvada as a daily medical regimen for those without HIV looking to avoid infection. The system of using the drug as an HIV version of birth control is known as pre-exposure prophylactic, or PrEP.

The drug is a boon for anybody having unprotected sex (though Gilead encourages users to still engage in safer sex practices, and the drug doesn't protect from other types of diseases) or for anybody who is uninfected who is in a relationship with somebody who has HIV. The drug isn't cheap, costing thousands of dollars per year, but because of the FDA approval it is covered by some health plans.

The drug hasn't really taken off as a form of HIV prevention and has instead become embroiled in controversy that should seem familiar: Detractors argue that, among other things, a pill version of HIV prevention encourages irresponsible sexual behavior. Taking what appears to be a major role in opposition to Truvada is Michael Weinstein, president of the AIDS Healthcare Foundation (AHF). AHF is responsible for pushing the recently passed Los Angeles ballot initiative requiring porn actors to wear condoms.

Weinstein was out of the country and unavailable for comment, but he was quoted by the Associated Press in April criticizing the use of Truvada as a preventative drug. "If something comes along that's better than condoms, I'm all for it, but Truvada is not that," he said. "Let's be honest: It's a party drug."

Those last two words—"party drug"—symbolized and helped fuel the argument by detractors that a daily pill was an irresponsible method of preventing HIV transmission. Weinstein's characterization of the drug and its users prompted a petition to try to have him removed as president of AHF.

But this latest quote isn't anything new for AHF's opposition to Truvada. AHF had been opposing the quick FDA approval of this PReP system back in 2011. They even used to have a site devoted to criticizing the medication, called nomagicpills.org, but it no longer appears to be working.

Other HIV groups have shown much more support for the PrEP system. The CEO of the San Francisco AIDS Foundation lauded the FDA's approval in 2012, calling it "a new era in HIV prevention." The opposition to the medication has taken on a moral tone, and the Associated Press noted a negative social connotation to the drug, a gay version of "slut-shaming." One HIV counselor in San Francisco responded to the attitude toward those who take the drug by embracing it, offering T-shirts emblazoned with #TruvadaWhore.

Some of the criticisms of Truvada—that success depends on taking the pill daily, that it encourages irresponsible sexual behavior, that it may fail—seem rather strange coming from AIDS activists who want to keep condoms the primary form of infection prevention. After all, the same potential flaws can be ascribed to condoms.

Given Weinstein's campaign to force condoms onto porn actors, it's worth looking to see whether the adult film industry had considered PReP. Diane Duke, president of the Free Speech Coalition, the trade association for the adult film industry, says they were currently in discussions about whether to add Truvada's PReP system to the health protocols for actors.

"PReP has a significant amount of promise," Duke says, "not just for performers, but for everyone." As a former worker at Planned Parenthood, Duke says she sees similar judgments against those who use Truvada that she saw against women who used birth control. She argues that there's no reason to believe users of the drug would be any less responsible than anybody using any other form of prophylactic.

"For those who choose to use Truvada PReP, it will be just as well thought out as women taking birth control," she says. "Any moral judgment on somebody taking care of themselves is absurd."

08 May 21:31

Inventing a Failure

by By PAUL KRUGMAN
Republicans’ response to health reform’s success is to close their eyes and sling bad statistics.
08 May 19:46

WaPo projection on likelihood of GOP Senate takeover: 82 percent

by Guy Benson

Toast?


Not eighty-three, mind you.   Eighty-two percent.  Because this is science.  That level of presumed precision deserves to be met with skepticism, but Republicans will happily take it — if only to wield it as a cudgel to further demoralize Democrats.  We’re still six full months out from November’s midterms — a proverbial eternity in […]

Read this post »

08 May 18:16

Kaiser: Employers getting ready to dump workers into ObamaCare

by Ed Morrissey
Jack

We'll see what ends up happening.

Plus, Burwell gets opening round of questions today.


Who didn’t see this coming? According to Kaiser Health News, employers are increasingly looking at the benefits of getting out of the health-insurance delivery process. Fueling this interest are ObamaCare-related spikes in health-insurance premiums, plus the opportunity to fix costs and reduce vulnerabilities presented by employees who develop serious health issues: Can corporations shift workers with […]

Read this post »

08 May 18:01

Study: Just seven percent of journalists now identify as Republicans

by Allahpundit

Change.


I know, I know: “That many, huh?” Newsbusters points out that the ratio of Democrats to Republicans in the media has ballooned over the past 10 years from 2:1 to 4:1. True, but the real story here is independents: Fact: The wider public is also much, much more likely to call themselves independents these days […]

Read this post »

08 May 17:04

Report: Nintendo said no thanks to partnership with Activision for Skylanders--a franchise now worth $2 billion

Jack

Oops.

According to a new report, Mario factory Nintendo had the opportunity to partner with Activision to make the first Skylanders game a Nintendo-exclusive, but ultimately said "no thanks" to the venture. That's according to a Polygon report, which goes into depth about the origins of "toys-to-life" Skylanders series, now worth a whopping $2 billion.

According to the report, Activision was actively seeking out a partner for the first Skylanders game, 2011's Spyro's Adventure, and thought teaming up with Nintendo could be a good idea. Developer Toys for Bob traveled to Nintendo of America's headquarters and demonstrated an early version of the game.

"[Nintendo] spent a long time looking and looking," Toys for Bob cofounder Paul Reiche said. "They were just like 'we have never seen anything like this before.' I've always wondered about the full meaning of that comment [laughs]."

Nintendo and Activision would go on to sign a limited co-marketing deal, but Nintendo reportedly wasn't ready to go any further.

"We have no idea why," Reiche added. "Clearly, they have got properties well suited to this world. Why it is that they didn't rush in here will probably haunt them for the rest of their days."

It seems Nintendo isn't soured on the "toys-to-life" idea overall, however, as the company released a Skylanders-style game, Pokemon Rumble U, last year for the Wii U. Just like Skylanders, players can buy real-world toys and integrate them into the game world using the Wii U's NFC technology.

Also in the interview, Reiche says he was surprised that Disney responded so quickly to what Toys for Bob and Activision were doing with the Skylanders series with its own game, Disney Infinity, released last year. He still maintains that Nintendo could have left Disney in the dust.

"Nintendo could have kicked Disney's ass," Reiche said. "If I was running Nintendo I would have jumped on this."

Eddie Makuch is a news editor at GameSpot, and you can follow him on Twitter @EddieMakuch
Got a news tip or want to contact us directly? Email news@gamespot.com
08 May 15:17

What Health Insurance Might Do

by By ROSS DOUTHAT
A new study strengthens liberalism's health care case.
08 May 05:54

Disney Gives Electronic Arts Exclusive Rights to Star Wars Games

by Chris Kohler
Electronic Arts will be the exclusive provider of games based on the Star Wars series, Disney and the game developer announced jointly today.
08 May 02:13

Nintendo Misses Wii U And 3DS Sales Targets, Posts $229M Loss

by Paul Tassi, Contributor
Nintendo has just posted their financial results for the last fiscal year, and many of their projections fell short of their own expectations. Nintendo revised many of their forecast numbers downward in January, but the final results fell below even those altered projections in most areas. Worldwide sales ended up at [...]
08 May 01:47

How Healthy Is Your Heart? This Simple Test May Tell, Study Says

by Melanie Haiken, Contributor
An unhealthy heart: This simple five-minute test can detect cardiovascular disease.
08 May 01:22

iBuyPower Just Launched A Palm-Sized Intel Powered Gaming PC

by Jason Evangelho, Contributor
For the last year and half, the Gigabyte Brix has been slowly popularizing the concept of ultra-small form factor gaming PCs. Companies like Maingear followed with the Steam Machine-inspired Spark, and now iBuyPower is stepping into the ring with the Hexa.
08 May 01:19

Dwolla -- Real-Time Payments For 25 Cents

by Tom Groenfeldt, Contributor
Jack

Interesting.

Dwolla offers a way to pay fast and cheap.
07 May 23:21

Battle Intensifies for Local and Same-Day Delivery Service by Amazon and Its Rivals

by Robert Bowman, Contributor
The battle for fast, local delivery of items ordered over the Internet is heating up. Amazon.com, Inc., Google, Inc., eBay Inc. and the ride-sharing service Uber have all recently launched services that are intended to bypass traditional couriers, and lock in fickle customers. Amazon has introduced Prime Pantry, a bulk grocery delivery [...]
07 May 23:13

EA Net Revenue Down, Releases No 'Titanfall' Sales Numbers

by Paul Tassi, Contributor
EA just wrapped up their latest earnings report, and it was a mix of good, bad and strange news. The headlines aren't great. Net revenue is down in Q4 in 2014, sitting at  $1.12 billion as opposed to $1.21 billion in the same quarter last year. For the entire financial [...]
07 May 10:17

Forget Piketty -- Data Fascism Is the Bigger Threat

by Rich Karlgaard, Forbes Staff
Fickle but not stupid.
02 May 16:42

Man Found Dead Inside an Industrial Fortune Cookie Dough Mixer

by Michelle Dean

Man Found Dead Inside an Industrial Fortune Cookie Dough Mixer

I have, on at least one prior occasion, said that I hoped to one day die in a giant vat of cookie dough. A terrible story out of Houston, in which a 26-year-old man was found dead inside a giant industrial-sized fortune cookie mixer on Sunday, makes me feel like I should take it back.

Read more...