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Google in Sicko Storm - Welcome to democracy google style

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mouser:
quick note: thanks everyone for keeping this discussion at a consider level and largely free of political antagonism -- a real pleasure to read the differing positions, i'm enjoying hearing the different views and enjoying that people don't seem to have fallen into that common scenario where they think they have to "win" an argument.

Lashiec:
Oh, it's true! I forgot the politics! Something must be happening in me! Or maybe I have enough politics in my everyday life ;D

CWuestefeld:
Thanks for the increasing quality of the discussion. We're past the bare assertion of value positions.

Jimdoria correctly refuted my "definition" of economics. His definition is undoubtedly more complete and correct than what I'd said. When I noted "As I see it, economics tries to understand (and predict) why a person, given a range of choices, will opt for a particular one.", I just intended to indicated that this was the aspect important to me, not that this is the totality of the concept.

Since my last post, several writers have voiced their dismay for the degree to which the electorate is informed, and the responsibility that corporate marketing may have for this. As it happens, some research has been done on "voter irrationality", and there's a recent book The Myth of the Rational Voter: Why Democracies Choose Bad Policies that's quite accessible, dealing with the topic. Here's an intro to an excerpt:
In theory, democracy is a bulwark against socially harmful policies. In practice, however, democracies frequently adopt and maintain policies that are damaging. How can this paradox be explained?

The influence of special interests and voter ignorance are two leading explanations. I offer an alternative story of how and why democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational—and they vote accordingly. Despite their lack of knowledge, voters are not humble agnostics; instead, they confidently embrace a long list of misconceptions.

Economic policy is the primary activity of the modern state. And if there is one thing that the public deeply misunderstands, it is economics. People do not grasp the "invisible hand" of the market, with its ability to harmonize private greed and the public interest. I call this anti-market bias. They underestimate the benefits of interaction with foreigners. I call this anti-foreign bias. They equate prosperity not with production, but with employment. I call this make-work bias. Finally, they are overly prone to think that economic conditions are bad and getting worse. I call this pessimistic bias.

In the minds of many, Winston Churchill's famous aphorism cuts the conversation short: "Democracy is the worst form of government, except all those other forms that have been tried from time to time." But this saying overlooks the fact that governments vary in scope as well as form. In democracies the main alternative to majority rule is not dictatorship, but markets. A better understanding of voter irrationality advises us to rely less on democracy and more on the market.
http://www.cato.org/pub_display.php?pub_id=8262
--- End quote ---
And here's another essay by the author, followed by some arguments against its thesis: http://www.cato-unbound.org/archives/november-2006/

Regarding my claim at the impossibility of (successfully) engineering an economy, I don't think that your counter-example of mercantilism is apt. This was not an attempt engineering from the ground up; it was tweaking the existing order. Your other examples (tariffs, fed interest rates, etc.) are more examples of making adjustments around the edges rather than a sweeping structural change, let alone whole-cloth construction.

Even so, it's still playing with fire. Look back to the biological analogy. We understand a lot about how our bodies operate, but it's still incredibly complex. Yet we attempt to hack the system through pharmaceuticals, etc. When we do, we're walking a fine line. Chemotherapy, for example, is a tightrope walk in killing a tumor without killing its host. We encounter unintended consequences all the time, a famous example being the handicapped babies born to mothers who used thalidomide to control morning sickness.

Attempts to steer the market run afoul of similar problems (and I'm struggling to tread lightly, staying clear of endorsing specific policies). The odd state of American healthcare insurance, for example, can be pretty much laid at the door of quirks in the tax code left at the end of WWII. Prior to that, health insurance wasn't normally provided by an employer, but wage controls during the war forced employers to compete on other benefits, and the tax code exemption for health insurance led to health coverage becoming an expected benefit from employers; without our current expectations of this, we may be more inclined to look in other directions to solutions to this current dilemma.

Grorgy wonders how one can discuss economics without involving public policy. It's a good question given the tenor of modern political discourse, but I think it's off base. Economics can tell us what to expect, but it can't provide the answer to moral and values questions. Much of science is like this; Robert Oppenheimer could help build the atomic bomb, but couldn't decide on whether its actual use was appropriate. More recently, there was debate over an increase in the federal minimum wage. Economists generally agree that increasing the minimum wage will lead to an increase in unemployment (although the degree of the effect is the subject of debate). Economists can warn us of this danger, but they can't tell us which option is "right" given our values as a nation.

I'm having trouble seeing where Jimdoria is coming from when he objects to my point about scarce bandwidth and Google playing for advertisers. First, contrary to his claim that "no such scarcity exists", there is most certainly a scarcity. The amount of information that can be displayed in any set of Google search results (or any other place from which we get information) is certainly limited; even if that part weren't limited, the amount that can be transmitted into our homes, or actually read by us, is limited as well. And since it's scarce, there will be competition for access to the resource. Honestly, I get the idea that he's coming at the argument from the point of view that the movie's point is self-evidently correct, or at least so honorably intentioned as to be beyond challenge. So any viewpoint that has the temerity to challenge it must be, prima facie, evil and not deserving of our attention. Perhaps you can explain why you're not put off by a film production company making money screening propaganda, but a search engine stating that they're happy to air counterpoints is unethical. Would it be OK if it were Yahoo! or Microsoft in the Google role? What if it were Disney or Sony in the movie production role?

Its curious that people would advocate governmental regulation as a means of curbing potential corporate abuses. It may be true that our system of checks and balances was intended from vesting too much power in one place, preventing corruption of the system. But those seeking the regulation generally also decry the use of deep corporate pockets in influencing political policy; so long as you acknowledge the possibility of this, why would you want to cede more control to the corruptible bureaucrats?

Jimdoria claims that there's no counterbalance to corporate power. On the contrary, the consumers hold far more power than the corporations. Imagine that the next edition of 60 minutes or 20/20 showed hidden camera footage of Nike sneakers being assembled from, say, the skin of babies purchased from their parents in India and Africa. Even ignoring legal issues, how long do you think Nike would survive? Contrast this with the political solution in a democracy, where you have to wait years for the next election, and then run afoul of laws preventing you from even a truthful ad exposing how Senator X has done some evil deed. The comparison is clear: free-market justice can be swift and complete, when it's dealing with something that the consumers care about.

Jimdoria:
I offer an alternative story of how and why democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational—and they vote accordingly.
--- End quote ---

Wow. This strikes me as incredibly nihilistic. It also reminds me of a headline that ran in The Onion at one point: "American People Ruled Unfit to Govern" However, this Cato-quip is just a theory. What if you substitute "misinformed" for "irrational"? Seems to me it would still hold together. Anti-market bias could be not understanding "the invisible hand" or it could be just not believing in it. But I'm right there with him on the anti-foreign bias. I do think Americans are fairly xenophobic, to their ultimate detriment. I attribute this to geography more than anything, though.

Americans equate prosperity with employment not production? Could this be due to the fact that there are far more wage-earners than factory-owners in America? It's certainly not due to the fact that Americans understand that labor is the true source of all value  ;) As for pessimistic bias... this is a tricky question. Yes, people can be irrationally pessimistic. On the other hand, gains in the economy over the last few decades have not led to corresponding increases in wages or the standard of living for most people, they have led to increased stratification of wealth. If you work for someone else for a living, and if you don't own stock, you probably have a legitimate reason to be pessimistic. It seems to me the burden of proof is on the theorizer to show that pessimism is an irrational response.

You make some good points about Google search results. I think we're just using slightly different definitions of bandwidth. From this post, it seems you're talking more about attention bandwidth than ability to push bits over the wire. And you're right - there is fierce competition for those top spots on Google's results list. A whole cottage industry now exists to coach companies how to get their site listed on that first screenful.

Honestly, I get the idea that (Jimdoria's) coming at the argument from the point of view that the movie's point is self-evidently correct, or at least so honorably intentioned as to be beyond challenge. So any viewpoint that has the temerity to challenge it must be, prima facie, evil and not deserving of our attention.
--- End quote ---

Honestly, I am baffled as to where this came from. I haven't seen the movie, so I'm in no position to comment on its content or accuracy, and I don't recall that I did so... (scanning old posts...) Nope, I haven't really commented on the movie in this discussion at all, except to say that it's propaganda. How did you draw this conclusion?

I am not put off by the screening company making money because Michael Moore is well known as a producer of propaganda. His movies usually have a particular viewpoint that they advance fairly ruthlessly. Nobody considers them neutral or unbiased sources of information. I do have that expectation of a search engine.

I consider it unethical because it amounts to "bait and switch". Google has built a business and a reputation based on accurate, unbiased search results. This is the service I expect from them, and I'm willing to look at advertising to pay for it, provided the ads are kept separate from the "editorial" results. But if they are secretly gaming their own results behind the scenes, they are abusing the trust that forms the basis of our relationship.

Microsoft, Yahoo, Disney & Sony have never to my knowledge chosen "Do no evil" as one of their guiding principles. Google did, so I expect it from them. Establishing a relationship built on trust, and then abusing that trust for personal gain falls well inside my personal definition of "evil".

Your assertion about consumer vs. corporate power is disingenuous. Consumers have power when they act en masse, but you ignore the enormous power corporations have to prevent this from happening. Your Nike analogy is kind of a strange choice, given that Nike has been accused of exploiting both child labor and slave labor, and yet their sales have continued to be strong, even during the times when these accusations were being made and validated. Revelations of Nike's unsavory labor practices in much of the major media were met with gigantic advertising and promotion campaigns, celebrity endorsements, and a public relations effort to convince the public that the problem had been taken care of while keeping the status quo mostly intact. Faced with abundant evidence of wrongdoing and abundant, readily-available alternatives to their product, the marketplace shrugged and kept buying Nike's shoes.

I guess forced labor and child labor are not repugnant enough, hence the need for your human skin analogy.... but even then I wonder. There's also the example of a certain auto maker whose expensive, finely engineered cars continue to sell well despite the company's history manufacturing devices for mass execution. I'd be more specific, but I fear doing so would invoke Godwin's law and shut down the thread.  :-[

Free market justice can be swift and complete, if it's dealing with something consumers care about. But this is a mighty big if, and often it is well within the ability of corporate interests to control this factor. To my mind, justice that hinges on the attention spans of a highly fickle, easily-manipulated mass of anonymous strangers is a very questionable kind of justice.

Finally, Senator X, as evil as he may be, is a public servant and at least some record of his evil deeds is available to me as a member of the public. Corporate records are private property and are not similarly available to me, meaning that if CEO Y is even more evil, I'll probably never find out about all the evil things he's done to me and my community, or be able to hold him to account for them. Again, the fact that our public institutions are not accountable enough is no reason to hand over their functions to a system that is even less accountable.

Besides, this last bit compares the theoretical, ideal-world, best case scenario for the free market against the messy, real-world, worst case scenario for the other side. Hardly sporting, old chap. And are you really asserting that people are irrational when they vote, but perfectly rational when they buy stuff? I find that a very odd worldview. :-\

steeladept:
Jimdoria claims that there's no counterbalance to corporate power. On the contrary, the consumers hold far more power than the corporations. Imagine that the next edition of 60 minutes or 20/20 showed hidden camera footage of Nike sneakers being assembled from, say, the skin of babies purchased from their parents in India and Africa. Even ignoring legal issues, how long do you think Nike would survive? Contrast this with the political solution in a democracy, where you have to wait years for the next election, and then run afoul of laws preventing you from even a truthful ad exposing how Senator X has done some evil deed. The comparison is clear: free-market justice can be swift and complete, when it's dealing with something that the consumers care about.
-CWuestefeld (July 16, 2007, 04:15 PM)
--- End quote ---
I think part of what you missed here is that you speak in terms of the entire consumer market.  In the aggregate, you are correct that the market holds sway over the corporations.  However, if you are to assume that the consumer market is working via their moral values as posted earlier in the same discussion, then you must also understand that the aggregate value is all that matters, and not any subset of those values.

To put in more concrete terms.  If it is seen that Nike is doing as proposed, but the values of Europe, for example, did not find that offensive; it is quite possible that Nike would survive, and indeed thrive.  Couple that with appologists and local anti-establishment sentiments, and not only would they survive, but they may well increase as these persons embrace the product due to the story.  So the over-ridding values of the sub-market have no significant impact even as they try to sway corporate policy. 

Situations like this can only be mandated by public policy (the merits of this mandate not withstanding), and is what is most commonly seen in most free-markets today.  Often these regulations can be seen as protective and/or anti-free-market; but in a global market, there is no way a consumer or even a significant sub-group can hold sway.  It is only when the TOTAL market (or significant portion thereof) deems this to be against THEIR values, does the "consumer" hold any sway over the corporation.  Given this, and the known diversities of same said market(s); most corporations are in-fact without counterbalance, if not technically without counterbalance.

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