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Laurence Lessig's rant against the music industry is sounding like a broken record, so to speak. In Who's Holding Back Broadband? he cites with approval a statement by FCC Chairman Michael Powell,

"Broadband-intensive content," the chairman said, "is in the hands of major copyright holders." These copyright holders have been hesitant to free their content to the net. Their slowness, in turn, has slowed broadband technologies in general.

The assumption here is that the music distribution industry has been effective in protecting copyright. If you follow the law, as Professor Lessig does, you would be impressed by the ability of the music distributors in passing extremely protective legislation. However, if you follow the Internet, you realize that music is flowing freely in spite of the legislation.

Contrary to Paul Krugman's assertions (see below), America is not polarized over the issue of tax cuts. America is much more polarized over single motherhood. The way I see it,

Former Clinton advisor William Galston sums up the matter this way: you need only do three things in this country to avoid poverty--finish high school, marry before having a child, and marry after the age of 20. Only 8 percent of the families who do this are poor; 79 percent of those who fail to do this are poor.

It is interesting to juxtapose Wilson's conservatism with that of W. Michael Cox and Richard Alm, who wrote Myths of Rich and Poor. They argue that the incidence of poverty is overstated, in part because the income distribution in the United States is highly fluid. On p. 73, they report that

Only 5 percent of those in the bottom fifth in 1975 were still there in 1991.

If Wilson is right that poverty is caused by teenage motherhood, and Cox and Alm are right that most poverty disappears over time, does that mean that teenage motherhood is reversible? I'm confused.

One cynical thought is that perhaps divorce and unwed motherhood are what economists call "luxury goods." One hundred years ago, only rich people could afford them, but now most people can. That does not mean that everyone has a taste for luxury. I am ok with my old-fashioned marriage, just as I am ok driving my sedan with 100,000 miles on it. Unwed motherhood, like a brand new Sport-utility vehicle, is expensive. I know people whose income is in the poverty bracket driving brand new SUV's, but I am not moved to write a Wilsonian diatribe about that.

They have been trying to discover a treatment for AIDS, but activists intend to thwart their evil plans. In Patent Nonsense, Roger Bate and Richard Tren write

When drug companies develop a new cancer treatment, they are lauded as heroes, but when they devote millions to HIV research, they are accused by activists of having “blood on their hands.” ...

It is time that governments and activists do more to encourage new drug development. There’s one sure way to do that. Assure the drug companies that their colossal investment and intellectual property rights will be protected.

I can come with alternatives to the patent system to reward drug research. For example, the government could award large prizes for drugs that come into widespread use. But until an alternative is in place, the attacks on drug company patents by AIDS activists only serve to reduce AIDS research.

Hal Varian is cheerful about the collapse of the dotcom boom. In High Tech Will Rise Again, he predicts that

a generation of Web-savvy techies...will now spread Internet productivity gains outside the technology industry.

What Varian is saying is that the dotcom craze caused a misallocation of talent toward flawed business models, and the collapse of the Internet Bubble will release this talent to help improve productivity in the rest of the economy. I agree with his assessment, but it depends on people finding new jobs reasonably quickly, before a downward spiral of higher unemployment and lower demand develops too much momentum.

In an article on Argentina on the verge of currency devaluation, The Washington Post describes how traumatized the citizens are by memories of hyperinflation ten years earlier. Considering that the 1930's hyperinflation in Germany still casts a shadow on that country today, this trauma is not surprising. Hyperinflation represents a serious betrayal of trust by a government. It is something akin to letting crime run rampant.

The Argentine solution to hyperinflation ten years ago was to rigidly tie their peso to the U.S. dollar. This peg no longer is a good idea. Plenty of countries are able to conduct monetary policy in such a way as to avoid hyperinflation without fixing their exchange rate. However, the Argentinians interviewed for the story do not seem to think that their government will be able to pull it off.

Paul Krugman argues that class warfare is alive and well in America the Polarized.

[Political scientist Dr. Keith Poole] suggests that the most likely source of political polarization is economic polarization: the sharply widening inequality of income and wealth.

Krugman cites familiar data that since the 1970's the gains at the top of the income distribution have been much higher than gains in the middle. Although income comparisons are misleading (lifetime wealth is the preferred indicator), the basic story of widening inequality is correct.

The Krugman-Poole thesis is an excellent explanation for the phenomenon of wealthy communities on the two coasts voting for right-wing Republicans, while middle America votes Democratic. In other words, Krugman's political theory has the famous Red and Blue map exactly backwards.

Another point that I would make is that this is not your father's (or Karl Marx's) version of class warfare. Instead of talking about the division of earnings between labor and capital, Krugman's class warfare is about whether income taxes and government spending should be a slightly higher fraction of GDP.

Jakob Nielsen is patting himself on the back for predicting that the phenomenon of users paying for content would increase in 2001, with the give-away model and the advertising model declining. However, in my opinion Nielsen had a bad year, because he remains the last champion of micropayments, an idea that Clay Shirky demolished by pointing out that it flounders on the shoals of "mental transaction costs."

In response to Shirky, Nielsen now writes that

A true micropayment system would operate invisibly...the browser will have to display a warning, and users can set their individual threshold for the amount of money they feel comfortable spending without an explicit confirmation.

Excuse me? You are going to save me the trouble of having to decide whether content is worth paying for by invisibly adding charges to my bill, as long as those charges are below a certain threshold? That's a comforting thought. What about the cost to me of auditing that bill every month?

I agree with Nielsen that the current subscription models, which are patterned after the dead-trees world of one subscription per publication, are annoying. You want to be able to read articles in different newspapers without incurring "roaming charges." However, I believe that the solution is subscription networks, where a flat rate can give you access to a variety of content. Maybe you can start that micropayment meter running after I've used up my allotment of "free" service on a flat-rate subscription network. But I'd probably just prefer to pay a higher flat rate for a "premium plan."

In August of last year, Brad DeLong wrote a review of William Easterly's The Elusive Quest for Growth. Easterly is a World Bank economist whose book received a boost when his bosses clumsily attacked him.

Easterly's book describes the failure of past efforts to promote development in the poorer nations. DeLong, who calls his review "The Last Crusade," agrees with the dismal assessment, and he remains pessimistic.

It is clear that the neoliberal policy prescriptions--try to make government honest and smaller (so it doesn't have its fingers in as many economic decisions), try to keep the macroeconomy stable, and boost world trade and thus cross-border economic links as much as possible--affect only a small proportion of these requirements for successful economic development. Neoliberal policy prescriptions have little ability to create governments that energetically invest in collective goods, a political system that enforces accountability, a national consensus for growth, and a commitment by donors to reward success only.

Two months later, in October, DeLong was nonetheless arguing for pressing the growth crusade forward, because he sees it as a way to thwart terrorism. In Dealing with the Islamic Reformation, he wrote

When governments cannot provide the very basics--law and order, education, hospitals, famine relief, the promise of a job, the promise of a standard of living better than ones parents saw--false prophets who promise a Puritan paradise and the imminent arrival of the reign of God have an easy time finding followers for their message. Nation-building cannot be something we "don't do." Nation-building and economy-building must be at the very heart of the long-run enterprise.

I am doubtful of the thesis that economic inequality breeds terrorism. I am more open to the idea that political backwardness is conduciveness to both terrorism and economic backwardness.

Longevity is one indicator that shows us to be rich. Long Live Us, a piece by Diane Katz for National Review Online says

Americans are living longer than at any time in history -- 76.9 years, on average...Life expectancy in America circa 1900 was a mere 48 years (an improvement, nonetheless, over the Stone Age's typical 25-year lifespan).

She argues that this is due to progress "fueled by free minds and free markets." She cites other indicators of progress against disease and infant mortality.

An interview with Paul Romer by Reason Magazine's Ronald Bailey discusses economic growth, science, and markets. Romer is a Stanford economist and a proponent of "new growth theory," which emphasizes the accumulation and application of knowledge as a source of economic growth. One issue that Romer discusses in the interview is the tension between markets and science

To the extent that you’re using the market system to refine and bring ideas into practical application, we have to create some kind of control over the idea. That could be through patents. It could be through copyright. It might even be through secrecy...

But there are other stages in the development of ideas. Think about the basic science that led to the discovery of the structure of DNA. There are some kinds of ideas where, once those ideas are uncovered, you’d like to make them as broadly available as possible, so everybody in the world can put them to good use. There we find it efficient to give those ideas away for free and encourage everybody to use them. If you’re going to be giving things away for free, you’re going to have to find some system to finance them, and that’s where government support typically comes in.

In the next century we’re going to be moving back and forth, experimenting with where to draw the line between institutions of science and institutions of the market.

Or, as I like to put it, "A central economic paradox of our time is that information wants to be free, but people need to get paid."