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Consumers do not want or expect to pay for Internet content, according to this survey by Jupiter Media Metrix.
When the respondents were asked what they would be willing to pay for if free content vanished, 63 percent replied "nothing." No category -- not music, not news, not games, not sports, not education -- drew more than single-digit responses from those willing to spend.
Another illustration of the problem that I call, "Information wants to be free, but people need to get paid." I think that we have yet to see the most promising revenue models emerge. For alternative models, see Kevin Kelly or my essay, The Club Vs. the Silo.
Discussion Question. If you had to pay your Internet Service Provider a separate fee for connectivity (email, instant messenger) and a separate fee for content (Web access), would you stop paying for content?
In National Review Online, S. T. Karnick writes
There is only one suspect that has had the requisite means, motive, and opportunity to ruin American education...Phonics, memorization, multiplication tables, and the like have been pushed aside for theory-based alternatives such as whole language learning, the New Math, participatory learning, and values clarification, all based on theories of psychology and instruction prevalent in the nation's schools of education.
Karnick's point is that curriculum reform is based on untested theories. I have noticed the same thing. If the Food and Drug Administration were as unscientific as the education bureaucracy, there would be no drug trials at all--the approval of new treatments and medicines would be based entirely on trends, fads, and the whims of bureaucrats.
(For more on vouchers, see If We Can’t Choose Our School, Why Should We Be Able To Choose Our Grocer? by James Miller or Efficiency, Entrepreneurship, and Education by yours truly.)
Discussion Question. Introducing school choice and vouchers would make schools accountable to parents, but by itself it would not lead to scientific evaluation of curriculum reform. Is an FDA-like process warranted for schooling practices?
A recent Commerce Department study suggests that minorities are crossing the "digital divide."
Between August 2000 and September 2001, Internet use among Blacks and Hispanics increased at annual rates of 33 and 30 percent, respectively. Whites and Asian American and Pacific Islanders experienced annual growth rates of approximately 20 percent during these same periods.
My hypothesis is that as people start to use the Internet, they become less receptive to the victimology rhetoric that is embedded in a phrase like "digital divide." My guess is that the Blacks and Hispanics who are using the Internet are less likely to identify themselves as helpless losers who need government programs to overcome their victim status.
Discussion Question. How important will computers and Internet access be in enabling minorities to make economic gains?
Should libertarians be happy about government support of nanotechnology research? Yes, says Reason's Ronald Bailey.
"The small has become as limitless as the large," declared National Science Foundation (NSF) Director Rita Colwell in her keynote kickoff to the NSF’s Small Wonders: Exploring the Vast Potential of Nanoscience conference held in Washington, D.C., this week.
No, says TechCentralStation's Ryan Sager.
State funding of science assumes that private industry is not as wise or as clever as government bureaucrats are - a contention hardly worth dispelling. When there is huge profit to be made from technology that will improve cell phones, computers, telecommunications, fabrics, and medicines, and has potentially thousands of other applications, the market will lead the way.
Economic theory would say that generic research is a public good that deserves some government subsidy. However applied research to develop products for the market is best left to private firms.
Discussion Question. How could one decide which nanotechnology research projects are generic or basic research, and which are applied research?
In an article in the Milken Institute Review, authors Charles J. Zwick, Robert A. Levine, and Peter A. Lewis argue that Social Security is not in crisis.
the trustees [of Social Security] point out that in 40 years there will be only 2.1 workers for each retiree, as compared to 3.3 workers today.
What they do not explain is that this represents an increase in liabilities per worker of only 1.15 percent a year -- far less than...the average of 1.8 percent achieved over the past 40 years.
In other words, the fact that Social Security will eat up almost 2/3 of the increase in productivity for the next 40 years is not a cause of concern. I find it difficult to agree with that point of view. Note that in the past, when the demographics were moving the other way, Social Security did not eat up any of the productivity increase.
Discussion Question. As a higher fraction of national output goes to pay Social Security benefits, what happens to the fraction of output that is available for investment?
A statement that "the right wing has a monopoly on IQ in this country" may be only the second most outrageous comment in this David Gelernter interview with The American Spectator (even though on the Web the interview appears on TechCentralStation). He also says
The browser and the Web site are obsolete; just a chaotic bunch of links stuck together...
The hyperlinks at the heart of the Web are ultimately bad, because breadth instead of depth is a recipe for intellectual disaster. The idea that the instant you get bored with somethin--click and it disappears and you're somewhere else--brings out all the worst overtones in our culture. Our shrinking attention spans, our superficiality, our unwillingness to come to grips with real issues, our insistence on bite-size chunks of everything. Wiring things together with hyperlinks is not an organizational strategy. It's a nonstrategy.
If you want a slightly different opinion, on either politics or the Web, try David Weinberger, at either his Journal of Hyperlinked Organizations or at the web site for his new book, Small Pieces Loosely Joined.
The Web, a world of pure connection, free of the arbitrary constraints of matter, distance and time, is showing us who we are - and is undoing some of our deepest misunderstandings about what it means to be human in the real world.
I agree with Weinberger on this one. If Gelernter wants to explore ideas in depth, then he should stick to books. If he is opposed to glib sound bites, then why does he manufacture them for the interview?
Discussion Question. When you are clicking through sites like this one, do you consider it entertainment, education, both, or neither?
Economists speak of the "demographic transition," in which economic development eventually leads to slower population growth. Jeffrey Sachs argues that one indication of diversity within the Islamic world is that some countries have undergone the demographic transition while others have not.
In some parts of the Islamic world, most notably in the Arabian peninsula, the fertility rate remains very high. A woman in Yemen will on average give birth to more than 7 children in her lifetime. In Saudi Arabia, the average is over 6 children. In other parts of the Islamic world, the fertility rate is far lower and has declined in recent decades, signaling a major shift in cultural norms. In Tunisia, the average fertility rate has dropped from 6.2 in the 1970s to 2.3 today, just slightly above the 2.0 average in the US. Similarly, in Turkey the fertility rate fell from 5.2 in the early 1970s to 2.7 in the late 1990s. In Indonesia, the decline in fertility rates was about the same.
Discussion Question. If the demographic transition is a sign of economic development, then these data suggest that Yemen and Saudi Arabia are underdeveloped, in spite of the oil wealth in the region. Does that seem reasonable?
The music industry acts as if the current business model is the only one that is viable. They argue that music file sharing systems will destroy the incentive to create new music. Some alternative business models are listed by Kevin Kelly.
- A generator box breeds background music tailored to your personal tastes; the music is supplied by third-party companies that buy the original songs from the artists.
- Because you like to remix dance tunes, you buy the versions of songs that are remix-ready in all 24 tracks.
- You'll pay your favorite band to stream you its concert as it is playing it, even though you could wait and copy it at no cost later.
He lists many more.
Discussion Question. Is it possible for Congress to protect the current business model without inhibiting the emergence of newer business models?
Hal Varian points out that more transparent accounting is necessary.
A venture capitalist I know once complained that "the S.E.C. only sees options as an expense, whereas we see a powerful incentive mechanism." Well, if that's true, then companies should want to brag about what great incentives they have in bold type at the front of their corporate report, not hidden in footnotes at the back.
Varian's sensible position contrasts with those of John Doerr and T.J. Rodgers.
Discussion Question. If Silicon Valley's prosperity depends on the ability to hide employee stock options in footnotes, how durable is that prosperity?
A couple months ago, Forbes had a piece on barriers to riches in the Middle East. An Egyptian who started a business in the United States explains
"All it takes is $150 here to make a corporation, a couple of thousand to rent office space and a couple of thousand for bond. In Egypt, it costs half a million Egyptian pounds, $150,000, for a license to begin the same business,"
We take it for granted in the United States that you can incorporate a business quickly and for little cost. In many other countries, the bureaucratic approval process is lengthy, with a need to bribe several layers of officials.
Discussion Question. If the United States makes it much easier to start a business than other countries, and the United States allows immigration, what do you expect to happen to the entrepreneurial culture in other countries?