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The Spirit of Radio
The Lott-Levitt dispute is a distraction but John Lott's Freedomnomics has plenty of interesting economics. I liked this bit regarding free-riding and the early history of radio:
...free-riding problems initially seemed almost insurmountable in providing radio service....some peope doubted there was any way to make listeners pay. In 1922, Herbert Hoover, then Secretary of Commerce, declared: "Nor do I believe there is any practical method of payment from the listeners." Others assumed that radio transmissions would eventually be funded by paying subscribers, but no one could devise a method for limiting broadcasts to subscribers' receivers. Consequently, some believed that government would have to provide the service...
So what happened? Did private businessmen throw up their hands and invite the government to run the industry? Was society denied the benefits of radio because no one could solve the free-riding problem? Of course not. The problem was eventually resolved in 1922 when AT&T discovered that it could make money by selling radio advertising airtime....With enough at stake, companies find amazingly creative ways to solve free-riding problems.
Posted by Alex Tabarrok on June 27, 2007 at 07:10 AM in Books | Permalink
Comments
Is another example of 'free riding' making a book with a very similar cover and title to another bestselling book about microeconomics in the public domain?
When you happen to be suing the author of that book for libel?
Posted by: hmmm at Jun 27, 2007 8:38:43 AM
"amazingly creative?"
Was advertising unheard of in 1922? I don't think so.
Posted by: Bernard Yomtov at Jun 27, 2007 9:54:58 AM
When trying to argue for the ability of markets to maximize social utility, it seems to me that TV and radio advertising, and mass media in
general, constitute poor examples, as many many reasonable people are dubious as to whether we are actually better off with than we would be without
mass media.
Posted by: michael vassar at Jun 27, 2007 10:14:31 AM
I'm afraid this does not rise to a level of brilliance or insight to
inspire me to buy a book from this disreputable author. The guy can't
get a job because of his personal conduct. So, we are supposed to help
him out by buying what does not appear to be all that good of a book?
Fuggedaboudit.
Posted by: Barkley Rosser at Jun 27, 2007 10:14:58 AM
Who is Mary Rosh?
Posted by: fustercluck at Jun 27, 2007 10:48:27 AM
hmmm beat me to the punch. Lott talking about free-riding is hilarious.
Posted by: eriks at Jun 27, 2007 12:08:40 PM
Barkley,
You refer to Lott as "this disreputable author", on what basis do you impune his charactter (for his entire body of work, for one particular controversy, what)?
I have both bought and read Freedomnomics and fully agree with Tyler that it "has plenty of interesting economics." What I think is most interesting is his emphasis upon the role that reputation plays as a counter to corruption. I found his discussion of the optimal penalty for various types of crimes very "interesting econimcs."
Tyler may be right that the "Lott-Levitt" dispute may be a distraction (I'd be with Tyler in being largely disinterested in watching lawyers josting in defamation hearings), but I do think that the contrast between Freakonomics vs. Freedomnomics in terms of emphasis upon reputation is anything but a distraction. This point drives another book I read recently and found full of "interesting econmics": "The Company of Strangers: A Natural History of Economic Life" by Paul Seabright.
Posted by: indiana jim at Jun 27, 2007 1:06:43 PM
Indiana Jim, this post is by Alex!!!!!!!!!!!!!!
Posted by: Tyler Cowen at Jun 27, 2007 1:28:33 PM
Tyler,
My mistake; sorry. Also apologies to Alex; its either that I have not had sufficient caffine or a senior moment, or both.
Posted by: indiana jim at Jun 27, 2007 2:14:44 PM
as many many reasonable people are dubious as to whether we are actually better off with than we would be without mass media.
Who would those people be?
Posted by: TGGP at Jun 27, 2007 2:58:41 PM
...mass media in general, constitute poor examples...
Whatever you may think of the "social utility" of the mass media, the use of advertising to pay for radio does appear to constitute a very good example of companies in a market solving a free rider problem. One can, and should, distinguish the question of whether and when the market can solve free rider problems, from the question of whether the mass media are ultimately "good for society".
Posted by: Constant at Jun 27, 2007 3:46:25 PM
indiana jim,
Well, the "Who is Mary Rosh"? posting is an indication. I do not know specifically what
happened at AEI, but I have heard what was alleged here. The guy is visiting somewhere,
but seems unable to get a permanent job these days. I have heard tales of very unpleasant
behavior towards colleagues.
The Mary Rosh bit has to do with his adopting a phoney identity in cyberspace, and I think
it was "Mary Rosh," in any case it was a female name. This phoney identity, female, claimed
to be a student of Lott's, and proceeded to praise him to the skies as a great teacher, human
being, and this and that. I don't know about you, but I happen to consider this unethical in
the extreme.
Actually, I had half planned on noting here that we might any minute see a "Jeannie Sue"
claiming to be a grad student at "George Madison University" who would claim that she and
her office mates had read the book and thought it was the greatest thing since The Wealth of
Nations, and how there is some secret blog where one can get 11 copies of it for the price
of 10, and so forth, you get my drift.
For that matter, is that really you, indiana jim? And for that matter, the claim that Lott
is making a big deal about the role of "reputation" is beyond hilarious and even more reason
not to buy, much less read, the book. Talk about someone in the profession whose reputation
is in the toilet, and far down into it! I think I'll pass, thank you.
Posted by: Barkley Rosser at Jun 27, 2007 3:58:54 PM
Barkley,
You just trashed a man without providing a single verifiable source. Of course, you are under no obligation to do so, but from my perspective you don't come out looking to good yourself. (I read about Lott and "Mary Rosh" when it happened and know the details, but that is beside the point.)
"Actually, I had half planned on noting here that we might any minute see a "Jeannie Sue"
claiming to be a grad student at "George Madison University" who would claim that she and
her office mates had read the book and thought it was the greatest thing since The Wealth of
Nations, and how there is some secret blog where one can get 11 copies of it for the price
of 10, and so forth, you get my drift."
No. I don't get your drift. Are you insinuating that Alex Tabarrock or Tyler Cowan (or both) would post under pseudonyms with the intent to fool us into think they have ardent supporters, or are you insinuating that Lott would show up here and do something similar?
And when you say "I had half planned on noting here..." you are, actually, "noting here" so to speak. Does that mean your so noting was half-unplanned?
Posted by: Michael Giesbrecht at Jun 27, 2007 6:49:08 PM
Barkley,
You can always verify that it is really me by hitting the email facility on the "indinan jim"; you deduced my identity some time ago and it is not secret either. I'm just having fun with the
indiana jim post-name. There are people who do not feel comfortable posting with even their email addresses transparent; I'm cool with that too (for them), but it is not useful in my case because I prefer to write things that I know I can be held accountable for. The transparency causes me to resist the urge to take cheap shots that couldn't be backed up in various ways.
Posted by: indiana jim at Jun 27, 2007 7:09:12 PM
"Consequently, some believed that government would have to provide the service"
Sweet -- I have been conjecturing for some time that too many people are willing to decide the following is a legitimate intervention strategy:
1) Identify market failure (any one will do)
2) Identify policy (ignore any private responses to (1))
3) Declare victory (nevermind actual outcomes)
The actual existence of radio and used car sales should be enough to question that line of thinking, but it does not.
Posted by: Eric H at Jun 27, 2007 8:10:53 PM
Eric H,
You should also have a look at Ronald Coase's paper "The Lighthouse in Economics"; as you say "sweet".
Posted by: indiana jim at Jun 27, 2007 8:30:14 PM
Um, Michael, if you claim to be "aware" then claiming that somehow I am suggesting
that either Alex T. or Tyler C. are somehow posting under p-nyms here is absurd.
My only commment on this is to note that Tyler has censored previous comments I
have made about our dear subject. T.C. made it clear that he did not do so because
he thought that I had said anything inaccurate. No, he did not wish to be sued
by this individual that you think I am overly criticizing. Get real.
"indinan jim"? Well, I do believe you are who I think you are and not "Mary Rosh."
Given the complete b.s. handed out by "Michael Giesbrecht," whom I do not know from
a dog turd on the ground, it is a relief that you are you, and not some entity who
frightens the likes of Tyler Cowen with potential pointless, assinine, despicable,
and beneath contempt lawsuits. Have I made my case strongly enough?
Posted by: Barkley Rosser at Jun 27, 2007 10:57:44 PM
I apologize to Michael Giesbrecht. I have determined that there really is such a person.
I still find his remarks here "absurd," but the rest of my remarks directed at him were
uncalled for and inappropriate. I apologize.
Regarding John Lott, if he is paying attention to this thread. I will not say any of it
because I know the hosts here are peeing in their pants over this (that's right, Alex,
Tyler probably wishes you had left this particular topic alone), but I have much worse
things to say about you than I have said, all true. As far as I am concerned, people
should boycott your book. If you want to read about Lott's insights about "reputation,"
folks, I suggest you get the book from a library. Do not give this individual any more
money than he already has. He deserves nothing.
Posted by: Barkley Rosser at Jun 27, 2007 11:43:05 PM
My, my, Mr. Rosser is awfully hot under the collar ...
Posted by: Steve Sailer at Jun 28, 2007 1:10:37 AM
How can we know that the free rider problem was actually solved? How do we know radio wasn't in fact underprovided?
Just asking.
Posted by: Harald Korneliussen at Jun 28, 2007 2:44:29 AM
Steve S.,
Yes. And for that reason, and not to worry our hosts too much, I shall
so no more here about this matter. Feel free to think that the gentleman
in question deserves the Nobel Prize, if you wish.
Posted by: Barkley Rosser at Jun 28, 2007 3:41:10 AM
Valuethinker,
Parts of the first half of Freakonomics were brilliant economics. However, there were a number of places that struck me as gratuitously anti-capitalist/free market. For this reason I am glad that a critique has been written in Freedomnomics. A catch-22 seems to be troubling Barkley: he doesn't want Alex and Tyler pressured by writing on their blog the things that would explain his beef with Lott. To balance this he recommends that those curious about Lott's ideas read it in the library rather than buying the book; the merits of the messenger do not invalidate the merits of the message. I don't know Lott from Adam, but I do think that there are ideas in Freedomnomics that have merit and provide valid criticism to some poorly painted parts in Freakonomics. If I were considering a business venture with Lott, I'd give Barkley a call and ask him, as a personal favor, if he would share information; but since all that is at issue to me are the ideas in Lott's book the favor need not be requested.
Posted by: indiana jim at Jun 28, 2007 6:53:20 AM
I see from the cover image that Lott put his "Ph.D." on the cover.
Obviously he hasn't read Prof. Cowen's posts on counter-signaling.
"The bottom line: When it comes to titles, if the book lists "Ph.d." after the author's name, run the other way."
Posted by: The Other Brock at Jun 28, 2007 9:05:53 AM
One thing that Alex could comment on is Lott's claim that Helland and Tabarrok (2004) found that Right-to-Carry Laws reduced violent crime. This claim would come as a surprise to anyone who has read Helland and Tabarrok (2004).
Posted by: Tim Lambert at Jun 28, 2007 9:22:41 AM
The Other Brock,
Your selectively quoted the very next sentence in the post indicated, as it obviously has to, that this signal is imperfiect; the caveat posted that you omitted is:
"Gregory Stock's The Book of Questions is one notable exception to this rule."
Are you claiming that an imperfect signal is perfect? I hope not.
Posted by: indiana jim at Jun 28, 2007 10:41:00 AM
