Comments on: Deadweight losses

By: Leo Casey

Leo Casey — Thu, 25 Mar 2004 23:51:48 +0000

>> Leo, Funny that you suggest I engage only in theory while ignoring my quite concrete example where ‘voice’ doesn’t produce the changes that its proponents suggest it should. < < Your sweeping generalizations about American public education, made from afar, are not exactly what I would call a “concrete example.”

By: Sebastian Holsclaw

Sebastian Holsclaw — Wed, 24 Mar 2004 21:31:51 +0000

But they are also the ones with the best ‘voice’. And even if you hate my legislator example, surely you understand that the public schools in the US have not been successful—they aren’t responding to voice, they aren’t responding to practicially anything.

By: Jason McCullough

Jason McCullough — Wed, 24 Mar 2004 20:05:38 +0000

“Almost every legislator who can afford to opt out of the public system does so.” That’s because they’re the rich elite, not because they’re uniquely positioned to see what’s wrong with it or something in their official capacity. It’s entirely overdetermined by income. I’m not sure what adding “legislator” does.

By: Sebastian Holsclaw

Sebastian Holsclaw — Wed, 24 Mar 2004 20:05:26 +0000

Leo, Funny that you suggest I engage only in theory while ignoring my quite concrete example where ‘voice’ doesn’t produce the changes that its proponents suggest it should.

By: Dan Simon

Dan Simon — Wed, 24 Mar 2004 19:04:06 +0000

I don’t understand why the market dominance of Microsoft’s browser acts as any kind of barrier to innovation. A browser isn’t an end-to-end system—anyone is free to market a browser with whizzy new features that IE doesn’t have. If it’s attractive enough, users will buy it, and the new browser will make its developers rich. Or are you claiming that the problem is that Microsoft undercuts competitors by giving away IE for free, thus encouraging clients to make do with a mediocre alternative rather than pay for some innovative would-be competitor? Putting aside whether this argument applies to browsers (or whether it makes any sense at all), you might want to consider its implications a bit more carefully. The claim that “good enough” software given away for free discourages innovation, and that free software therefore should be prevented from achieving a dominant position in the market, may not be quite as objectionable to Microsoft as you might think.

By: Leo Casey

Leo Casey — Wed, 24 Mar 2004 18:42:51 +0000

>> Very idealistic concept of voice. I wonder if Hirshman has actually had to work with government bureaucrats on a day to day basis. In the US, public education is a classic example of a government-run institution which is almost completely unresponsive to the ‘voice’ of the parents. Almost every legislator who can afford to opt out of the public system does so. They would be the ones with the very most ‘voice’ yet they still adopt an ‘exit’ strategy. That suggests to me that ‘voice’ isn’t all it is cracked up to be. < < This is the argument put forward by market fundamentalists who want to privatize public schools, most notably in the “rational choice” text of Chubb and Moe, “Politics, Markets and American Schools.” It never seems to dawn on these folks that when you start out with a explanatory model based on a conception of human beings as entirely self-interested, instrumentally rational beings—that is, as beings that are perfectly aligned with laissez-faire markets—it is not all that difficult to come up with a conclusion that markets are the only effective means for the delivery of public goods such as education. It is an argument which, taken to its logical conclusion, would completely replace the citizen with the consumer, the public with an aggregate of private interests, democracy with laissez-faire markets. It is most interesting that arguments for the privatization and marketization of public education almost always operate from first principles, how markets function in theory, and never discuss the actual operations of such experiments in the real world, such as in New Zealand or in Pinochet’s Chile, under the direction of Milton Friedman. Nor is any attention paid to the consequences of the massive privatization and marketization of American health care over the last three decades. If this was done, than it would become manifestly clear that if there is any idealist notion in these discussions, it is that of the sovereign consumer, shaping public service through laissez-markets, so that the service is delivered more efficiently and with higher quality. Tell that to the consumers of HMO health care.

By: Mark

Mark — Wed, 24 Mar 2004 18:01:34 +0000

Hi Chris, I said: “It’s not the poor quality of the Outlook application that is the cause of this [spreading of viruses] but rather its ubiquity.” Then you said: “Hmm. I don’t think it’s quite as simple as that.” I agree. Of course the nature of the software is a factor. If Outlook didn’t have the virus-sending feature then that would solve everything. My point was that the virus problem wouldn’t be as pronounced if Outlook usage wasn’t as widespread. If there was more variety of applications then the virus writers would have to write adaptations to each in order to have the same effect. It would take too much effort. At present, targeting only Outlook and Windows is sufficient to cause serious problems to the entire network.

By: Sebastian Holsclaw

Sebastian Holsclaw — Wed, 24 Mar 2004 17:22:54 +0000

“For Microsoft, the only sense in which we can talk of “voice” is an expression of consumer dissatisfaction which it is entirely free to mostly ignore, given its quasi-monopolistic position in the market; for public education and public health, there are democratic political processes, both representative and participatory, through which “voice” can play a role in the formulation of policy and the delivery of the service.” Very idealistic concept of voice. I wonder if Hirshman has actually had to work with government bureaucrats on a day to day basis. In the US, public education is a classic example of a government-run institution which is almost completely unresponsive to the ‘voice’ of the parents. Almost every legislator who can afford to opt out of the public system does so. They would be the ones with the very most ‘voice’ yet they still adopt an ‘exit’ strategy. That suggests to me that ‘voice’ isn’t all it is cracked up to be.

By: Leo Casey

Leo Casey — Wed, 24 Mar 2004 17:04:20 +0000

>> Can you please clarify? With Exit, the institution no longer has your patronage. With Voice, the institution still has your patronage, only now they also have your dissatisfaction. (Sorry if this is an oversimplification.) < < >> It seems that the threat of lack of patronage is much more potent than the mere threat of dissatisfaction. < < You read “voice” too narrowly, as a simple expression of discontent or unhappiness. “Voice” can also be read as participation, directly or by representative proxy, in the decisions which govern public institutions, and Hirshman discusses this meaning. The import of this second meaning of voice is that there is a crucial distinction to be made between a private entity, providing a private, consumer good, such as Microsoft, and a public entity, providing a service which is a public, as well as a private, good. For Microsoft, the only sense in which we can talk of “voice” is an expression of consumer dissatisfaction which it is entirely free to mostly ignore, given its quasi-monopolistic position in the market; for public education and public health, there are democratic political processes, both representative and participatory, through which “voice” can play a role in the formulation of policy and the delivery of the service. The market funbdamentalism of libertarians is premised on denying the efficacy of this second sense of “voice” in the provision of services which are public goods, and insisting that it is only as a consumer, and not as a citizen, that one can effect the larger world. But in point of fact, combinationss of citizens, through organized, self-conscious political vehicles, have much more impact than aggregates of disparate consumers. The public is more than the aggregate of different private interests, and the public good needs more than the “invisible hand” of laissez-faire markets to be realized.

By: Keith

Keith — Wed, 24 Mar 2004 14:28:53 +0000

Personally, I think the only reason most people stick with Microsoft’s overrated products is because that’s what comes on the machine. It bennefits the manufacturer and MS to bundle everything together as it draws in lazy consumers who think searching for freeware and shareware is too technical or time consuming. MS browsers and Word processors work well enough so why bother? The answer is simple: you can get faster, more user friendly and efficient programs for free or next to nothing but it takes effort. Not a lot of effort but not a lot of effort is nore than most people are willing to put forth. So they use what they’re given and complain when it crashes on them. As a side note, I just finished purging all Microsoft products from my laptop. Grant it, I’m a Mac user so it wasn’t that hard. AppleWorks 6 instead of MS Office 10, Safari as my main browser with Mozilla’s Camino as my backup (for the.02% of websites that don’t support Safari). If you go to versiontracker.com, the process of purging MS apps becomes so much easier. You could do it on a saturday afternoon and it might cost you $50 if you go for the flashy shareware.

By: Steve

Steve — Wed, 24 Mar 2004 12:49:50 +0000

“I’ve experienced two forms of health care in my life: the American, private, messy, bug-ridden health care system, and the American Military public, messy, bug-ridden, underfunded health care system. I prefer our private system. Well, that’s such a very large distribution from which to draw your conclusions.” Larger than your’s I’d warrant. steve

By: nick

nick — Wed, 24 Mar 2004 06:17:03 +0000

I’ve experienced two forms of health care in my life: the American, private, messy, bug-ridden health care system, and the American Military public, messy, bug-ridden, underfunded health care system. I prefer our private system. Well, that’s such a very large distribution from which to draw your conclusions. Returning to the non-hijacked discussion: the problem with Microsoft’s dominance of the basic browser market is that it has, undoubtedly, got lazy. On the one hand, it’s thrown all of its development efforts into the bloated, pay-as-you-go MSN Explorer, in an attempt to compete with AOL. (Coincidentally enough, there’s actually competition in that specific area of everything-but-the-kitchen-sink dial-up/email/browser applications.) On the other hand, while IE has market dominance, it has shitty shitty standards support, which infuriates developers who now have browsers which render pages as they’d expect, but have to design around the bugs and inconsistencies in IE because that’s what people get with Windows. IE has damaged the development of better sites. It’s not just to be seen from the side of the browser user.

By: Brian Weatherson

Brian Weatherson — Wed, 24 Mar 2004 04:41:54 +0000

Again, I just want to second Jason’s comments. The individual health consumer can have plenty of choices even if the govt provides universal insurance. In Australia I had plenty of choices as to which doctors I went to, and I would frequently change if I didn’t like one of them. (Or, more commonly, if they weren’t open at the hours I decided I wanted to see a doctor.) When I was covered by my parents health-care this would occasionally include using privately funded doctors, but when I was ‘paying’ it was always doctors being paid by the govt general insurance. In those days I had plenty of choice, a lot more choice than I’ve ever felt like I’ve got in America even with what I take it is pretty good health coverage by American standards. I wonder if there’s any polling on people who have lived under many different health care systems about which one they prefer. I certainly found it was better being (my kind of) consumer in Australia than America, but maybe my experiences were quite atypical.

By: asg

asg — Wed, 24 Mar 2004 02:56:34 +0000

At least with browsers you have a choice, for IM’s the situation far, far worse. Not only is there is no choice, the product’s upgrades are – once installed – actually downgrades. So that’s where the competition should be. What the heck are you talking about?! Instant messaging software right now is where browsers were in 1995! Off the top of my head I can think of five competing instant-message software apps: MSN Messenger, AOL IM, ICQ, Jabber, and DBabble. I know Sun has a Java one as well. And that’s not counting the gazillions that have been designed purely for intranet use. If you don’t think the IM market is competitive then I wonder what market is!

By: Jason McCullough

Jason McCullough — Wed, 24 Mar 2004 02:01:09 +0000

“A monopoly on health care insurance would be a very large control of payments in a single governmental entity. It would have all the inefficiencies discussed above for insurance. And it would cause all sorts of problems with health care services even if they were not directly controlled by the government. To put it in Microsoft terms: Microsoft does not contol the software market. It only controls a very large portion of the operating system market. But this control lets it push around just about everyone in the more general software market. The insurance market drives a huge portion of health care payments. The rest of the health care industry could not survive without money, which the government would then control.” This would make sense if it was in the cards for the government to refuse to let you choose your providers, which would reduce competition in teh provision of health care providers. Which it isn’t. You’ve also got to compare it to our current “private” system, where virtually everyone who has a remarkable restriction of choice in who the insurer will let them use.