IBD’s Take on the Apple E-Book Lawsuit

I am quoted in an otherwise-excellent writeup on the Apple e-book case in Investor’s Business Daily.

In Which I Actually Agree with Sen. Orrin Hatch

Sen. Hatch, on libertarians, in a recent NPR interview:

“These people are not conservatives. They’re not Republicans,” Hatch angrily responds. “They’re radical libertarians and I’m doggone offended by it.”

Then Hatch, a former boxer, turns combative. “I despise these people, and I’m not the guy you come in and dump on without getting punched in the mouth.”

Given how offended I am by his big-government establishment conservatism, glad to see the feeling is mutual.

North Korea Missile Launch Fails

Kim Il Sung’s 100th birthday would have been this week — April 15, officially. As part of the celebration, the current regime launched a rocket into space. Or, they attempted to. The three-stage rocket broke up into four pieces and fell into the ocean.

The buildup to the launch scared a lot of people. The rocket was supposed to put a satellite into orbit that could have been used to spy on North Korea’s enemies. Worse, North Korea’s two previous rocket launches were accompanied by nuclear tests shortly thereafter. That means the regime is likely trying to figure out a way to launch nuclear weapons across long distances to its enemies, with the U.S. high on the list. Scary stuff for us Americans. Despite the failure, a nuclear test is still entirely possible within the next moth or so.

It isn’t terribly surprising that the launch failed. But even if it succeeded, one shouldn’t be afraid. One reason is that North Korea is poor. They do have the world’s fourth largest army, at well over one million strong. But the country’s population, not taking into account recent famines and defections, is only 23 million.

More to the point, photographs of those one million-plus soldiers show them lacking such basic provisions as socks — this in a country with a climate similar to New England’s. And it’s not just socks that are lacking, but also food. A popular propaganda slogan reads, ‘Let’s eat two meals a day.” Many North Koreans are lucky to eat even that much. This is the potential enemy. Quake in the boots that they don’t have.

Should the worst happen, North Korea is not a formidable opponent. Better, there is little reason why conditions would ever come near to a breaking point.

The reason lies in public choice theory. Everyone knows that people behave in their own self interest. Public choice theorists say that governments do, too. It isn’t rocket science; pardon the expression.

Kim Jong-Un and the rest of North Korea’s elites know full well their technological and strategic disadvantages. And their primary goal isn’t to reunite the Korean peninsula, or to make foreign conquests. What they want is self-preservation.They have it pretty good with their cognac and movie screenings and their three meals a day, and they would like to keep it that way. That’s why they will not launch a nuclear attack.

Self-preservation is also the reason for their recent bellicosity. Kim Jong-Un is brand new to the world stage, and he needs to assert his authority. The best way for him to do that is make a big international display. But displaying is not the same as deployment. Like a peacock, the North Korean regime displays impressively, but it has no teeth.

Again, the regime’s first priority is self-preservation. To start a war — especially a nuclear war — is regime suicide. Its only ally is China, and they are reluctant at best. South Korea has three times the North’s population. Japan has five times as many people. Even if the U.S. doesn’t get involved, and it probably would, the North’s current regime would topple. And the North Korean regime knows that.

Lord knows who would replace the regime should it come to that. The replacements could well be even worse; liberalism is a foreign concept north of the 38th parallel. But the current elites live a relatively cushy life, and they will not endanger that. So don’t be scared. I’m not.

In the meantime, fear for the safety of North Korea’s rocket scientists. Something tells me they’ll end up in Camp 14. That’s North Korea’s equivalent of Kolyma, the harshest camp in the old Soviet gulag. I sincerely hope I’m wrong. But as many as 200,000 people are currently imprisoned in North Korea’s gulag — that’s about one percent of the country’s population.

Right now, as you read these words, scientists are probably being tortured. Please think of them. And don’t fear for your safety. Fear for theirs.

CEI Podcast for April 12, 2012: Apple, E-Books, and Antitrust


Have a listen here.

Yesterday the Justice Department sued Apple and five major publishers over their e-book pricing model, alleging price fixing. Associate Director of Technology Studies Ryan Radia thinks the lawsuit is a mistake, and should be dropped.

Modernity is Amazing

Saroo Brierly was a poor child in India. While out begging with his brother, he fell asleep on a train and woke up 900 miles away from home. After some close calls, he found his way to an orphanage and was adopted by an Australian couple. Twenty five years later, he is now a successful businessman. But he always wondered where he came from, and how his family was doing. He couldn’t even remember his village’s name.

In any other point history, that probably would have remained a mystery for the rest of his life. But with the help of Google Earth and Facebook, he was able to locate his hometown and reunite with his family. We truly live in wonderful times.

Justice Department Should Drop Apple Lawsuit

The Justice Department sued Apple and five major publishers this morning over their e-book pricing policies. Under their current contracts, a book’s publisher sets the price, and Apple gets 30 percent of the revenues. DoJ believes this is collusion. In a CEI press release, Wayne Crews and I explain why the lawsuit is a mistake, and should be dropped. Here’s Wayne:

“The complaint against Apple seems to be that collusion and smoke-filled rooms paved the way to a deal by which Apple gets a 30 percent cut of the publishers’ e-books sold for Apple devices, while other vendors are forbidden from selling below that pre-specified price. Such ordinary business deals, you see, involve a now-disparaged free market instrument called a ‘contract.’

“This arrangement appears to have been a normal response to Amazon’s deep discounts of e-books below physical book prices. DoJ’s solution is presumably to stop free enterprise, and allow Amazon to dominate e-books? Now, thanks to DoJ getting involved, competitors need not respond to to Apple and the publishers to better serve consumers and shareholders.”

And here’s my take:

“Given Amazon’s much larger share of the e-book market, Apple is hardly in a position to price its products uncompetitively. If consumers feel overcharged, they can easily give their business to Amazon or Barnes & Noble instead – possibly by using Apple’s own products!

“Five years ago, the e-book market didn’t even exist. Now it has a variety of competitors, each of whom are trying out new, different, and evolving business models. Consumers are much better positioned to reward good pricing models and punish bad ones than are Justice Department attorneys.

“This lawsuit is further evidence of how poorly smokestack-era antitrust policies fit our information age economy. E-book manufacturers and publishers are trying and discarding different business models at a fast rate as they figure out what works and what doesn’t. By the time the wheels of justice slowly creak to a verdict, Apple, Penguin, Simon & Schuster, and the other defendants will have long since moved on to some other pricing policy. The Justice Department should admit its mistake and drop the lawsuit.”

Wayne also has more to say in his latest Forbes column.

TSA Agent Faces Child Pornography Charges

According to the Boston Herald, this is not the first time this has happened:

At least two other TSA officers assigned to Logan have faced sex charges in the past two years. Sex charges against others have been reported in Virginia, New Hampshire, Nevada, Georgia and other states.

Pictures of North Korea

North Korea is allowing journalists into the country so they can document the celebration of Kim Il Sung’s centennial. The Atlantic posted a haunting collection of new photographs here.

In 37 pictures, about the only smiles to be seen are in portraits of Kim Il Sung and Kim Jong Il.

Sources of Economic Error

George Mason University economist Peter Boettke has a new working paper out that not only tells Economics in One Lesson author Henry Hazlitt’s life story, but goes into great detail about the ongoing tension between pure academics and public intellectuals. Here’s how Boettke describes Hazlitt’s view on why so many people favor bad economic policies. In a prescient anticipation of public choice theory, sometimes it’s on purpose:

[P]ersistent error haunts economic reasoning not only due to the intellectual shortcomings of men. The problem of the special pleading of interest groups in economic affairs means that the inherent intellectual limitations of man are multiplied a thousand times over in the discipline of economics as opposed to physics, mathematics or medicine. Interest groups rely on fallacies to agitate for policies that benefit them at the expense of others.

Peter Boettke, “The Public Intellectual as Economist: The Case of Henry Hazlitt (1894-1993),” p.22.

Regulation of the Day 217: Etiquette

Civility is at the very heart of civilization. Those two words, along with other words such as “city” and “citizen,” come from the Latin “civitas,” which means a body of citizens bound by common laws and rules. In other words, civilized people agree to be nice to each other. Think of how both you and the cashier usually say “thank you” when you buy your morning coffee, even if you’re complete strangers. Getting along in modern life would be impossible without at least passable manners.

Which brings us to today’s Regulation of the Day. La Toba, Spain’s mayor, Julian Altienza Garcia recently issued a 65-plank Courtesy Charter making it illegal to commit tactless acts in public from burping to slurping soup. To this writer’s knowledge, La Torba does not have a reputation as a bastion of barbarity.

The charter even contains a mandate of sorts – children are required to spend some time with their grandparents on a regular basis. It is not known how Spain’s Supreme Court would rule if they were to decide on the grandparent mandate’s legality.

Some of the other offenses include:

  • Nosepicking
  • Touching your genitals
  • Flatulence
  • Yawning without covering your mouth
  • Coughing without covering your mouth
  • Talking with your mouth full

None of these breaches of decorum are punishable beyond a dirty look and a wag of the finger. People convicted of other minor offenses will, however, be able to have their fines waived if they take etiquette courses. Mayor Garcia defends his Courtesy Charter, saying “It is a compendium of basic rules of politeness that are being lost and should not be forgotten.”

He’s right that manners are important. They shouldn’t be forgotten. And it certainly is useful to have a written etiquette primer. In fact, many already exist. You can look here, here, here, and here, for starters. But even if Mayor Garcia’s job description is as broad as he believes it to be, his constituents would be better served if he turned his attention to more pressing matters than other peoples’ boogers.