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Arguing in My Spare Time, July, 2000 -

Title DateStarts WithEnds With
The Second Derivative07-13If you know calculus, there is a relatively simple way to describe the contrast between believers and skeptics concerning the new economy. My guess is that Yahoo's investors do not understand the concept of the second derivative.
World War Internet08-03Recently, some major icons of the Internet have suffered setbacks. Earlier this year, the euphoria in the stock market broke. was savaged in a Lehman Brothers analysis of its convertible debt, and eventually the message got through to thickheaded investors. Unless we confuse the state of World War Internet with the behavior of Internet stock prices, there is good reason for optimism about how the war is proceeding. For the most part, we are winning in the battle zones that one would have considered most promising. Many of the victories have been spectacular. There is no reason for despair.
Autoregressive Models08-24Several aimst readers have recommended to me "The Age of Spiritual Machines," by Ray Kurzweil. Earlier this month, I finally got around to reading it. Somehow, it feels to me like we're approaching a limit in the process of innovation. Call it adoption drag or cultural friction. Maybe it is not as big a deal as it appears. Maybe there are other offsetting factors. But my guess is that Kurzweil's "law of accelerating returns scenario" is not much more reliable as a forecast than the "doomsday scenario" was 25 years ago.
Mark McGwire Strategy in a Lou Brock Era09-13Last night, I attended a panel discussion of "trends in venture capital." The panelists, all of whom were from the VC community, said in effect, "Since March, everything has changed. . . except for our basic approach." The name of the game in VC investing is still fools selling to greater fools. It's still the Mark McGwire model. Instead, I think that the right strategy today is to play 1960's-style baseball. Put the ball in play and cause havoc.
Efficiency, Entrepreneurship, and Education10-20Sometimes, you will hear a governor talk about the need to entice more entrepreneurs to his state. In my opinion, if you really want to bring entrepreneurs into your state, you should enact a school voucher program that enables entrepreneurs to compete with public schools on a level playing field. You will hear people scorn vouchers by saying that "there are not enough private schools." The point of this essay is that with plausible adjustments the market could make every school a private school.
Equity, Entrepreneurship, and Education10-24Many people appear to oppose school vouchers on equity grounds. However, it is difficult to pin down this argument. With a voucher system that varies the amount of the voucher based on parents' income and on learning disabilities, we could arrive at a system that is more equitable.
In Search of a Collective Conscience10-31what if God announced to us that starting in the year 2010, total annihilation of mankind would result from ANY instance of one of the following:

  • Handgun violence
  • Marital infidelity
  • Spam email
If this essay has some recommendations that are surprising to the reader, then you are not alone. When I first began to consider the problem, I cannot say that I anticipated that the solution would take this shape. That may be a sign that I will change my mind fairly soon.
Bobos in Camden10-31There were many currents and eddies running through the conference. For example, many speakers were calling attention to the public policy vacuum that exists concerning the Internet and new technology. At the same time, there was considerable skepticism about the desirability of trying to use centralized hierarchies, including governments, to fill that vacuum. You'd think that being a minority of one in such a distinguished group would make me start to re-think my position, as expressed in my review of Kurzweil or in The Second Derivative.

But as Robert Metcalfe said, no one ever changes their mind.

Techno-mysticism11-13Michael North and George Gilder are ideological bookends for the philosophy that I call techno-mysticism. This is the view that the diffusion of information technology is an inevitable and uplifting process. The thesis of techno-mysticism is that high bandwidth will bring the people of the world closer to one another. My worry is that it will accentuate differences. In particular, people who are culturally well-suited for taking advantage of the technology may lose connection with those who are not.
Comparative Advantage Plays11-28Yesterday, we accepted our first delivery from Peapod, an "Internet grocer." The economic issues that will determine whether or not this type of service can succeed have almost nothing to do with the Internet. Conceivably, these trends may have made it economical to run a business that is based primarily on comparative advantage rather than absolute advantage. If so, then my guess is that the Peapod model would have emerged without the Internet. If it works, it works using fax machines.
Some Keynes for Bush12-20Last week, our neighbors told us about a frustrating experience shopping at Sears. They were dismayed by the stupidity of the sales clerks and other staff. Although I expressed my sympathy, I remarked, "As an economist, I find your story heartening. It says that times are good. In a recession, you would find college graduates working as Sears clerks." In conclusion, I believe that a large, temporary revenue-sharing program would be a good approach for fighting a recession. This form of fiscal stimulus would quickly find its way into the economy. Unfortunately, I suspect that there is little chance of any Keynes getting through to Bush.