The Economist is still thriving

I was greatly relieved to learn from Michael Hirschorn’s piece in The Atlantic that The Economist, my preferred news source and one of my favorite publications in general, is not going to go under any time soon and is in fact prospering while the rest of the ‘old media’ crumble. The reasons Hirschorn gives for this are not surprising: The Economist has managed to monopolize a niche market with a combination of Olympic editorial standards, a cosmopolitan and intelligent eye, forthright opining and not least a sly marketing strategy with which the Economist brand has acquired an unsurpassed cachet of intelligence and worldliness, whether or not it deserves it. Hirshorn’s criticism of the newspaper is also spot on:

At its worst, the writing can be shoddy, thin research supporting smug hypotheses. The “leaders,” or main articles, tend to “urge” politicians to solve complex problems, as if the key to, say, reconstituting the global banking system were but a simple act of cogitation away.

Too true, although the tendency towards overconfident consul (and frequently sloppy science reporting) are only small blots on their otherwise exemplary record.

Reading Hirschorn’s piece, I began to wonder what it is about the “global news digest” model that I find so appealing. I gave up reading the local Australian boradsheets a long time ago, but have never quite been able to articulate what it is I disliked about them, only that it consistantly felt like I was being told things I neither wanted nor needed to know.

Skimming through the Sydney Morning Herald, for example, I am struck by not only the quality but the irellevance of so much of the content. A fair proportion of local or national news reporting is made up of “minor but exciting event” stories: factory fires, natural disasters, competition winners, murders, and so forth. It is not obvious why these things are reported in a general medium such as a newspaper. A factory fire has very little effect on anybody except people who have a direct connection to the factory in question, and they would presumably know already – so why report it in a national newspaper?

There are two explanations usually given for this kind of reporting. The first is the ‘news as entertainment’ model – we like these stories for their shock or titillation value, and the fact that they actually happened has relevance only as a thin excuse for their publication, or as an extra kick of excitement – “based on a true story!” The second is that such reports make readers aware of events which are common or becoming more common and hence may one day affect them, although of course they have the opposite effect: such stories only bias our perception of the actual probability of such events. If we genuinely wanted to be able to correctly anticipate the probability we will be murdered, for example, we would demand that newspapers never publish stories of gruesome murders, lest they influence our perception of the real risk, and instead report regularly on the crime rate in the driest possible terms. We would read specialist journals or trade magazines reporting on events that do have direct relevance for us – perhaps forensics experts would pick up the latest copy of Gruesome Murders Weekly – but by and large the big broadsheets would only contain a digest of recent legislation and statistical trends.

It would be a presumptuous mistake to think that The Economist serves this role. We readers may be smug with the sense that we are rising above such trivia by reading a pure digest of truly important global events, but The Economist is no such thing. Last week I read a detailed account of the issues surrounding logging and property rights in the Brazilian Amazon. How is this any more relevant to me than the latest factory fire? At least the factory fire story has entertainment value. Why is it that I feel the topics on which The Economist reports are so much more interesting and important? More importantly, why do so many people feel the same way that the newspaper is thriving in spite of market conditions?

It is entirely possible that the whole thing comes down to pure status signaling. Cosmopolitanism and knowledge about world affairs are, at least in Western society, very strong signals of high intelligence and status. If I can be permitted to indulge in some armchair psychology, this is because “knowledge of world affairs” is a powerful synergy of two other status symbols. In-depth knowledge about a narrow subject can signal intelligence, but it also can carry negative connotations – nobody wants to be the nerd. However, when this knowledge is in the domain of world affairs, you are simultaneously signaling a connection to the domain of global leadership, of important people doing important things, which (especially for males) is a very strong signal of high social status and neatly counters the downside of heavy domain-specific knowledge. In this model, The Economist serves simultaneously as a token of this high-status signal and a source of information and conversational topics with which to repeatedly send it. Its forthright editorializing thus serves a dual role, as a signal to the reader of the newspaper’s self-confidence and as a steady source of informed opinions for the reader to adopt.

Yet this does not seem an entirely satisfying explanation. I frequently disagree with The Economist’s editorial positions, and this does not diminish my appreciation of the newspaper – if anything, it assures me that I am able to process even their reporting with a critical eye. I appreciate The Economist’s unabashed position-taking all the more because I do not feel I am being pandered to as a reader. When it comes to status signalling, readers may have as much to gain as they do to lose: I have met more people who seem to use disdain for The Economist’s cachet as a countersignal for their own anti-elitism than I have those who profess to read it themselves. Whatever the secret to The Economist’s success, I hope they keep it.

Review: John Brunner’s “The Squares of the City”

I love novels about cities that manage to compellingly capture both the social mileau and the individual people who comprise it.

There are unfortunately too few of these. Kazuo Ishiguro’s The Unconsoled, one of my favorite books, is the best example of this narrow genre. The Unconsoled is usually noted for its experimental style, a blend of magical realism in the image of Salman Rushdie’s with Ishiguro’s own elegant prose. Maybe it is no coincidence that John Brunner’s The Squares of the City, a not unlaudable “city novel”, is also an experiment, which succeeds more than it fails.

Brunner’s gimmick is that the novel is a fictionalization of a real-life chess game, with the pieces represented by characters, and all the moves corresponding to a progression in the plot. It is too easy to see how this would hamstring an author, and indeed Squares fails in exactly the ways you would expect. The plot, which for the first two thirds of the book manages to work these moves into a compelling political intrigue, falls apart completely in the final act when the author is forced to play out the endgame: characters threaten each other, maneuver and die in a sudden and impossible to follow storm of activity which is weakly tied into the overall arc. The denouement is both surreal and unsatisfying.

Despite this, Squares is a good read. Although the stage suffers from a crowd of minor players, the central characters are charming and surprisingly real. Brunner coyly eschews cliche: the protagonist is an introspective and intellectual traffic engineer, hardly a heroic archetype; his main foil, a stunning Latina widow, never quite becomes a love interest. Although the author explicitly groups the characters into “black” and “white” teams, the political struggle which forms the novel’s centerpiece is textured and morally ambiguous. Wisely, Brunner never tells us how it is resolved. Stylistically, Squares is also a success. The use of chess as both a central metaphor and recurring motif is deftly handled, and the apparently pragmatic prose frequently conceals sophisticated description and observation. Brunner’s occasional detours into the hard details of traffic engineering or government propagandizing are charming rather than jarring.

Above all, Squares succeeds as a city novel. Like the unnamed Central European city in The Unconsoled, Brunner’s Ciudad de Vardos, a recently constructed ‘ideal’ city in a fictional South American nation, is a major character and palpable presence in the book. Vardos’s squares, streets, offices, villas, plazas and slums are vividly imagined and are as one in the reader’s mind with its citizens, bureaucrats, artists, villains and heros. This is not least because, by a clever plot device, many of the residents had a direct hand in the city’s design and construction. The slow but inevitable embroilment of the protagonist, an outsider, into Vardos politics and society is matched by the reader’s. Unfortunately, the collapse of the plot in the final act disrupts this deep and satisfying involvement.

Read Squares if, like me, you love a good city novel and want something thoughtful and vivid. Don’t read it if you are deterred by overt experimentation, or think you are picking up a political thriller.

Image: “chess in the park“, by Duchamp. Shared under CC Attribution 2.0 Generic license.

A basic understanding of probability is the beginning of wisdom

Imagine you are seated at a table with two bowls in front of you. One contains peanuts, the other tablets of the illegal recreational drug MDMA (ecstasy). A stranger joins you, and you have to decide whether to give them a peanut or a pill. Which is safest? You should give them ecstasy, of course. A much larger percentage of people suffer a fatal acute reaction to peanuts than to MDMA…

New Scientist, via Overcoming Bias. (As an aside, I was also quite pissed off about NS’s recent cover).

Mini-review: Mary Doria Russell’s The Sparrow and Children of God [SPOILERS]

[SPOILERS AFTER THE BREAK]

This defence of Australian internet censorship is more disturbing than the censorship itself

For those who have been living under a rock (i.e. not checking reddit) recently, the government here in Straya is planning to censor our internet access in a clumsy stunt aimed at cornering the “think-of-the-children!” vote. Veteran lefty Clive Hamilton’s defence of the filter, however, is no tabloid hack job: although he couldn’t resist including some choice examples of porn site copywriting, the worst spectre he bothers conjuring is “evidence” that “indicates” some porn-hound boys may develop “perverse attitudes towards girls, such as being disgusted by pubic hair.” Gasp.

Indeed, with such slim pickings for the knee-jerk moralists, it’s hard to figure out exactly who Hamilton is trying to convince. The thrust of his argument seems to be that the selfish libertarians who want the internet to stay free should not be allowed to get in the way of parents who “club together and decide that it is too difficult or untenable for them to protect children by themselves and want their governments to help them”. Exactly why the parents needs the government’s help is never made clear – even if they really are incapable of monitoring their children, in itself a strange assumption, why do they need the government’s help to do so, and why should it involve intruding upon the private lives of all Australians? If they are already clubbing together, why can’t they solve this “problem” on the level of civil society and voluntary participation, leaving the rest of us out of it? Particularly perplexing is this oxymoronic declaration:

[Parents] don’t want to be the household spy and policeman, forever looking over their children’s shoulders or checking to see what they have downloaded on their mobile phones. They want governments to help them.

A word to the wise, Mr. Hamilton: when your opponents are accusing you of authoritarianism, it’s best not to associate the words ‘household spy and policeman’ with ‘government’ in your response. Is he really suggesting that most Australian parents hold a deep desire for governments to take over an aspect of parenting – guiding the child’s media consumption – that requires enormous trust, discretion and communication with the child? And why on earth did he couch this assertion in words that make the police-state overtones of the censorship plan so explicit?

Hamilton’s piece descends almost into self-parody with this brazen admission:

I have deliberately not considered the question of whether it is feasible to effectively filter extreme and violent pornography on the internet.

Why not? Because, of course,

We need a community debate on the question of whether we should do it before we consider the question of whether we can do it because too many internet libertarians and industry spokespeople cover up their refusal to countenance any sort of regulation by insisting that it won’t work.

That’s right: we need to decide that something should be done before asking whether it is possible, in order to prove that the reality-based nay-sayers were only saying it was impossible in the first place because they thought it shouldn’t be done. Where does the (incredibly well-evidenced) fact that it really can’t be done fit into this decision-making rubric? Nowhere. Catch-22.

I can’t even tell who is trying to convince who of what anymore in this bizarre and scary debacle. I just want my usually sane and reasonably free country to give itself a good kick up the arse and close the book on internet censorship for good.

Sydney protest, December 13 (Facebook event)

More good words on the financial crisis

I’ve had to lash myself to the mast to avoid linking to every post Megan McArdle has written on the financial crisis, but this time I can’t help myself. Read this excellent post if you, like me, are made queasy by the prevailing ‘greedy bankers’ narrative but have been struggling to explain why.

How safe are we from theocracy, really? Quotes from the financial crisis

Not many sensible people waste energy worrying about the possibility of theocratic takeover in a major western democracy. We have a general optimism in the rationality and intellectual honesty of the people around us and at least some confidence in that of our political representatives. Keep this in mind as you read these three quotes on the subject of the financial crisis.

I am told ‘We don’t know who is responsible.’ Oh yeah? Well let me tell you that when things were going well, we knew who got bonuses. What a strange system…a crazy system which has been our system for years.

- French president Nicolas Sarkozy

(“I don’t understand this science business, and I don’t understand what it’s done for me, but those scientists have been getting rich off it for years, and I can understand that.”)

The idea of the absolute power of the markets that should not be constrained by any rule, by any political intervention, was a mad idea. The idea that markets are always right was a mad idea.

- French president Nicolas Sarkozy

(Straw man; US Financial regulation.)

You guys here in Australia haven’t been hit so hard. It’s because you have more regulation.

- American immigrant I overheard in Sydney

(“The lightening hit my place, but not yours. It must be because you have that lock on your front door. I hear those increase your security. You obviously knew what was coming.” See this excellent post from Megan McArdle.)

I’m not concerned that theocracy is imminent, but we’re not as safe from our own idiocy as we think.

Jamendo’s artist donations are paltry

Torrentfreak’s Ernesto crunched the artist donation numbers on Jamendo, the awesome Creative-Commons powered free music community:

Of the 423968 users, 1650 have donated something, little under 0.5%. In total, these users were good for 2712 donations adding up to just over $36,000. This translates into an average of little over $10 per donation. The largest donation on Jamendo thus far was 200 Euros ($250) [...] Jamendo currently has close to 10,000 artists (not all of them accept donations), and 648 of those received at least one donation.

(If you doubt Ernesto’s figures, see for yourself). Even factoring in Jamendo’s sharing of advertising revenue with artists, it’s pretty clear that there are not many indie musicians out there supporting themselves through Jamendo donations. It’s hard to draw general conclusions about this future of the music industry as this sample is heavily biased: Jamendo probably attracts more serious music lovers, who donate more than the average music consumer does or would, while there is large volume of utter crap on the site which never had much hope of drawing a profit, deflating the average donation per artist.

Nevertheless, I take this as weak confirmation of my belief that donations will never significantly replace old-media sales as a major pillar of artist profits. As Enernesto points out, a lot of minor and\or independent artists are realistic about this and choose to release their music through Jamendo or similar free channels in order to capture other benefits such as acclaim, merchandise sales and concert attendance. I’m not all that confident about the merchandise-and-concerts model either: there are only so many concerts even a die-hard music lover can go to. Many people have tried to convince me that only a handful of megastar artists were scraping massive profits from music sales anyway, and the inevitable (and largely complete) shift to free media will not affect the living wages of indie artists for whom it has always been a labour of love. I’ll believe it when I see the statistics.

In related news, I was intrigued by the decision of Magnatune, a creative-commons music store, to switch to a pay-what-you want model for their DRM-free all-you-can-eat subscription. I particularly loved the subtle bit of behavioural framing below the text box for the customer’s chosen price. It will be interesting to see how it pans out, although as far as I know Magnatune is not particularly open when it comes to sales figures. I was tempted to sign up myself, until I remembered that the limiting factor on my own Jamendo addiction was not catalogue range or quality, but time and bandwidth.

Great insights about the internet and the Coase theorem in this week’s EconTalk

Ronald Coase is easily my favorite economist, and one of my favorite thinkers in general. Among his many insights was the idea of “transaction costs”, or the cost of an economic transaction which may or may not be higher than the benefit accrued from that transaction.

Coase’s classic example was the firm. Under standard models of perfect competition, he pointed out, firms have no reason to exist. If the free market is always on average more efficient than centralised, command-and-control allocation of tasks and the means of production, it should be cheaper for an employer to contract out for a service rather than hire and organise a group of people to do it. Yet it is clear that a world where every internal task of a firm, from ordering to the mail room to payroll management, had to be accomplished by a tangle of individual contracts would rapidly grind to a halt.

The key, said Coase, are the transaction costs: the cost of organising each individual transaction with a private contractor is greater than the cost of hiring somebody to do it for you, even if hiring may result in a slightly less efficient worker. Coase also pointed out that there is a maximum limit where the decreased efficiency cost begins to exceed the transaction cost, which is why firms still outsource a lot of their activities. It is not efficient, for example, for a private school to run the graphite mine to make its pencils.

In this week’s episode of the EconTalk podcast, internet and organisational guru Clay Shirky describes how the internet is lowering Coasean transaction costs for many exchanges, to the point where ‘products’ that were previously impossible due to the cost of organisation can emerge. The value of this podcast is more in the lucid examples than in the insights, which are not entirely original. I particularly enjoyed Shirky’s description of the process by which Flickr co-ordinates individual activities to produce collections of photography which would have been prohibitively expensive in the pre-internet era. His analysis of Wikipedia also goes deeper than the usual vague references to ‘crowd-sourcing’, and he cleverly uses the unexpected success of voluntary, collaborative activities such as many open source software projects to point out the importance of new behavioural economics insights. Unfortunately, the podcast ends with a strange and poorly explained hope that creative commons-like vehicles can be used to better organise collective action in the real world. Isn’t that where the high transaction costs we are trying to escape were to begin with?

Australia to filter internet access

I made a conscious decision after the last federal election to stop following Australian politics. It took me a little longer than most Aussie children to realise that, like Australian history and Australian film, Australian politics is largely dumb, boring and irrelevant to daily life. So it was a little surprising to read today that our benevolent rulers plan to force ISPs to filter ‘illegal’ material from all internet traffic, and to block pornography and other ‘inappropriate content’ from users who do not specifically request an opt-out. This is idiotic for so many reasons I don’t even know where to start.

Firstly, let’s look at the practical aspects. As anyone who has come into contact with content filtering software at school or in a home knows, there is no way to filter internet traffic with any reasonable accuracy. Rivers of ‘objectionable’ data are going to get through, and lakes of perfectly unobjectionable content will be dammed behind insensate walls. If this ridiculous plan is actually implemented, this will result in incredible pressure on the government to ‘do something!’ about all the nasty stuff still getting through, and to ‘do something!’ about all the good, important stuff still getting blocked, which will drive the government to ‘do something!’ to make the filter more complicated, more expensive and a bigger speed hump for Australia’s already sluggish internet access. To top it off, for anybody who actually wants access to ‘objectionable’ material, there is no shortage of workarounds ranging from simple browser extensions to the old-fashioned methods of bringing smut across national borders. According to the government’s own report, none of the candidate filters work on non-web protocols such as P2P or instant messaging networks. In the worst case scenario, the government will thus begin cracking down on circumvention technologies themselves – and we all know how well that’s worked in the past. In short, any ‘great firewall’ will be both ineffective for its intended purpose, and a hassle to everyone regardless.

Second come the reasons for having such a filter at all. According to the current plan, there will be two blacklists: one covering illegal material, which will be universally applied, and one covering ‘not child-friendly’ material, which will be opt-out. What possible justification can be given for this second filter other than the most blatant, cynical populism? Anybody who wants to filter their children’s internet access can go out and buy an inaccurate, easily circumvented filter to install in their own homes. Why do we need an inaccurate, easily circumvented filter for every ISP? What if parents want more fine-grained control over their filtering? Who takes the blame when parents rely on centralized filters, and something slips though the net? What poor souls at the ISP will be forced to field tens of thousands of tech support calls from confused, angry parents? How is will the opt-out be administrated anyway? Will the government subsidise ISPs for the administration costs involved?

When it comes to the illegal blacklist, the ramifications do not need to be spelled out. I’ll simply say that anybody who thinks the chance of a ’slippery slope’ into Orwellian state censorship of thought is overblown should note that this is exactly what is being explicitly proposed. No slippery slope is required. Sedition is illegal under Australian law; the filter, as described, would universally block access to material critical of the government. Information about other illegal activities, such as drug use or euthanasia, could also be blocked. It would be naive to think the filter will meticulously remove all content of dubious legality; given that it is a purely populist proposition, it would be a counterproductive to introduce any drastically unpopular restrictions. On the fringes, however – and to many people sedition, drug use and euthanasia are decidedly fringe topics -  there is plenty of room for incredible restrictions on free speech which would go largely unchallenged by a majority of the population.

For what it’s worth, should the great firewall ever come to fruition, I pledge to post any and all circumvention methods I hear about to this blog. Let’s hope that it never has to come to that.

ADDED: Check out this blog, this activism site and this amusing parody site.

I’m putting in the poll below purely to try out the new WordPress polls thing. Have fun with it.