Coyote Blog

Via Megan McArdle:

"We need to stand up to the special interests, bring Republicans and Democrats together, and pass the farm bill immediately," Barack Obama

Self-parody in action.

I have been kind of amazed at the backlash at Amazon over its showdown with Macmillan Publishing.  As I understand it, Apple, with its new iPad, had adopted a strategy of wooing publishers by offering promises of higher retail prices, an offer Amazon basically refused to match.   This dynamic (with retail discounters pleasing customers but ticking off manufacturers and product suppliers) is not at all new to retail.  I am sure a lot of manufacturers wish Wal-Mart was never invented, but they have to try to play ball with them because Wal-Mart wields so much power with customers, in large part because of their pricing.

In this sense, I have always thought of Wal-Mart and Amazon as my agents, using the power of my and other consumer's volume to pound manufacturers on price.  They serve the same role as, and in fact are more effective than, a buying cooperative or consumers union.

So my agent, Amazon, had to go to the mattresses with a publisher on its pricing.  This happens in all negotiations -- if you are not willing to walk out the door, then at some point there is a limit to your bargaining power.  I was ready to applaud them for it.  Sure, they had selfish interests of their own, but who cares?  That is how capitalism works -- through the alignment of incentives, people who really don't even know me or really care if I live or die work hard to create value for me  (this is the opposite of big government, where people who claim to care about me deeply work really hard to destroy value).

Anyway, the clients that Amazon represents apparently lost faith quickly, and decided they were more freaked out by a couple day blackout than increased retail prices.  Wimps.

Postscript: I understand the debate is a bit more subtle, with Macmillan arguing that they want price flexibility over a range from $6-$16 (or whatever) for e-books rather than a hard cap at $9.99.  Trust me, though, any inference that this approach roughly averages Amazon's approach is so much chin music.  Most sales would be for new books at the high price, with low-volume books at the lower price  (something, by the way, Amazon already does).  The average sales price is higher in the Macmillan approach, and I don't blame them for trying.  And Apples is just trying to differentiate itself, and attempting to lock up publishers into exclusives or sweetheart arrangements fits their proprietary business model.   So I am not crying foul, I simply was rooting for Amazon because I felt my interests as a consumer lay with them in this dispute.   And I am wondering why so many people see it differently.

Ilya Shapiro:

Well of course they aren't "” but that's constitutionally irrelevant:  Corporations aren't "real people" in the sense that the Constitution's protection of sexual privacy or prohibition on slavery make no sense in this context, but that doesn't mean that corporate entities also lack, say, Fourth Amendment rights.  Or would the "no rights for corporations" crowd be okay with the police storming their employers' offices and carting off their (employer-owned) computers for no particular reason? "” or to chill criticism of some government policy.

Or how about Fifth Amendment rights?  Can the mayor of New York exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he'd like to move his office there?

So corporations have to have some constitutional rights or nobody would form them in the first place.  The reason they have these rights isn't because they're "legal" persons, however "” though much of the doctrine builds on that technical point "” but instead because corporations are merely one of the ways in which rights-bearing individuals associate to better engage in a whole host of constitutionally protected activity.

That is, the Constitution protects these groups of rights-bearing individuals. The proposition that only human beings, standing alone, with no group affiliation whatsoever, are entitled to First Amendment protection "” that "real people" lose some of their rights when they join together in groups of two or ten or fifty or 100,000 "” is legally baseless and has no grounding in the Constitution. George Mason law professor Ilya Somin, also a Cato adjunct scholar, discusses this point here.

A friend of mine from Princeton days writes:

... and you seem in favor of the Supreme Court decision in Citizens United vs the FEC, I was wondering how you feel about being a customer or supplier or competitor of large businesses who can spend far more than your business to influence the rules of the game.

From what I read, I am sure you have a compelling answer, but I would be scared to death. (Maybe that's why I work for a large corporation [Target] instead of attempting to run my own business.)

I thought this was a pretty good question, and I answered:

1. I try hard not to make utilitarian arguments to Constitutional and rights issues.  As an example, I am sure we might have less crime if the police were empowered to incarcerate anyone they wanted without trial, but we don't do it that way.
2. I worry most about corporate lobbying (e.g. by Immelt at GE) and this is unaffected by this ruling - it was legal before and after.   This decision allows corporate advertising, which is public and visible, which I can at least see and react to, as opposed to back room deal making.
3. Libertarians certainly worry about your question, and why many of us fear that what we are creating in this country is a European-style corporate state, rather than socialism.  To a libertarian, the answer is not less speech, but less government power to pick winners and losers in commerce.

Peter Leeson has an article on Medieval trial by ordeal that is getting a lot of attention.

Modern observers have roundly condemned ordeals for being cruel and arbitrary. Ordeals seem to reflect everything that was wrong with the Dark Ages. They're an icon of medieval barbarism and backwardness.

But a closer look suggests something very different: The ordeal system worked surprisingly well. It accurately determined who was guilty and who was innocent, sorting genuine criminals from those who had been wrongly accused. Stranger still, the ordeal system suggests that pervasive superstition can be good for society. Medieval legal systems leveraged citizens' superstitious beliefs through ordeals, making it possible to secure criminal justice where it would have otherwise been impossible to do so. Some superstitions, at least, may evolve and persist for a good reason: They help us accomplish goals we couldn't otherwise accomplish, or accomplish them more cheaply.

I guess I agree with the proposition that pervasive shared superstitions allow the populace to be more easily governed, or more rightly, make it easier for rulers to exercise power over the masses through leverage of shared superstition.  Whether it improves our well-being is an entirely different matter, but for a certain type of intellectual (I have no idea if Leeson is among them) more government power = well-being.  The author cites oath-swearing as a modern superstition that allows us to be governed more easily, but I am not sure that is correct as I think the power of oaths today are driven by peer-pressure and mass response to publicly broken oaths as well as perjury laws.  A better example of modern superstitions that allow easier exercise of power include things like global warming catastrophism.

I am not a medievelist, except as a hobby, but I would offer a couple of rebuttals to specific points he makes:

• I think he overstates the cost savings of ordeals.  There were prominent folks in the Catholic Church that had doubts about ordeals long before they were banned, and ordeals were typically used as a last result when fact-finding and other methods didn't work.  We have to be careful comparing costs.  One lord gathering evidence for a few days might be, as a percentage of the government's resources, as costly then as a 1-year OJ trial is today.
• Trials were not broken because they were too costly, they were broken because the law was bad.  There was no such thing as a state prosecutor, so all criminal actions were basically private actions, and they tended to have a rough version of loser pays.  For example, if one accused his neighbor of a capital offense, and the neighbor was acquitted, then the accuser suffered the punishment - ie death.   As a result, the state was left without an effective tool to prosecute crime, and in fact most justice was private justice (ie vengeance of family and friends) and never saw a court, ordeal or other sort.
• I had a great Medievalist professor at Princeton that I am totally blanking on his name right now [update:  William Jordan, now apparently department head at Princeton].  He used to argue, I think compellingly, that all ordeals had an element of discretion.  Sure, you had to grab the rock in the boiling water, but the real test was that your wounds would be bound and then several days later inspected by the clergy to see if it was festering or not.   This is obviously a judgment call, and thus 1. gave the priests the power to be the effective jury for these actions and 2.  gave the priests a substantial amount of power  (as well as money, since they made good coin charging for ordeals).  [update:  A better summary of Leeson's work says that Leeson is arguing the same thing.  See here]

Update: Intriguingly, from a review of Jordan's book  "the Great Famine," a story I also discuss in my climate videos

The early 1300s must have seemed like the end of the world to the unfortunate inhabitants of Europe: brutally severe winters gave way to lightning storms and torrential, crop-destroying rains in spring, followed by cold summers and then bitter winters again. "The whole world was troubled," wrote one Austrian chronicler; yet that was only the beginning. Princeton University historian William Chester Jordan reconstructs the terrible decades when climatological change led to famine, disease, rampant inflation, and social breakdown across the European continent, a time when every prayer for relief was met by even crueler turns of fate.

Damn those 14th century oil companies!

The Tampa Rail blog has responded to my post criticizing Phoenix light rail (which the Tampa folks used as a glowing example of rail success).  Remember I wrote, in part:

Look, I don't think I have ever argued that Phoenix Light Rail was run poorly or didn't have pretty trains.   And I don't know if moving 18,000 round trip riders a day in a metropolitan area of 4.3 million people is a lot or a little (though 0.4% looks small to me, that is probably just my "pre-web" thinking, whatever the hell that is).The problem is that it is freaking expensive, so it is a beautiful toy as long as one is not paying for it.  Specifically, it's capital costs are $75,000 per daily round trip rider, and every proposed addition is slated to be worse on this metric (meaning the law of diminishing returns dominates network effects, which is not surprising in this least dense of all American cities).

Already, like in Portland and San Francisco, the inflexibility of servicing this capital cost (it never goes away, even in recessions) is causing the city to give up bus service, the exact effect that caused rail to reduce rather than increase transit's total share of commuters in that wet dream of all rail planners, Portland.  Soon, we will have figures for net operating loss and energy use, but expect them to be disappointing, as they have in every other city (and early returns were that fares were covering less than 25% of operating costs).

Of course, as with all government issues, the ultimate argument is that I am some sort of Luddite for actually demanding definable results for billion dollar government spending

Sorry Coyote, save for the topic matter I'm afraid I'm just not going to be much fodder for you. We're years past 'it's an expensive tax thing'.

We know that. We know rail like any capital project is expensive to execute and expensive to maintain - in dollars. But anyone who raises the math to me will wind up with the same big 'so what'. Community investment doesn't bother everyone the same way and different people see different value. There's no way you or I cold supernaturally understand the net benefit for or against light rail. We must simply choose to believe and pick our sides.

If you believe that just because rail is expensive they aren't worthwhile, you need to explain every public vote that has gone for implementing and expanding rail systems around the world even though most operations are publicly subsidized.

Gotta run'em well, and, over time, integrate with a city, but LR is a carefree mobility solution in areas where people choose to support and pay for it.

See, they are well past my neolithic argument, into their little post-modernist world where aesthetics and political correctness trump any actual need to demonstrate money is being used well.  Though it is interesting to see him resorting to faith as a justification.

I have two words for this person -- "opportunity cost."  On one hand, the money for this project must be taken out of private hands to build the rail line -- even leaving out the substantial individual liberties questions here, there is still some obligation to demonstrate the money is better used than it would have been in the private hands from which it is taken.  Ditto, by the way, for the stimulus bill.   On the other hand, to the extent that one wishes to spend government money to move people from A to B, one needs to demonstrate that this method is better than others.  I would argue high speed rail fails both tests.

Update: Joel Epstein and I have a go around the same issues in the Huffpo comments.