Here’s a video chat I did today with Americans for Prosperity – Virginia. My thanks to Benjamin Knotts for hosting the discussion. We talked about my recent book (Evasive Entrepreneurs) and my last one (Permissionless Innovation). We also discussed my new proposal with Matt Mitchell and Patrick McLaughlin to create “Fresh Start Initiatives” to address rules suspended during the COVID crisis.  Watch the 30 min video here:

I was honored to be asked by the editors at Reason magazine to be a part of their “Revolutionary Reading” roundup of “The 9 Most Transformative Books of the Last 45 Years.”  Reason is celebrating its 45th anniversary and running a wide variety of essays looking back at how liberty has fared over the past half-century. The magazine notes that “Statism has hardly gone away, but the movement to roll it back is stronger than ever.” For this particular feature, Reason’s editors “asked seven libertarians to recommend some of the books in different fields that made [the anti-statist] cultural and intellectual revolution possible.”

When Jesse Walker of Reason first contacted me about contributing my thoughts about which technology policy books made the biggest difference, I told him I knew exactly what my choices would be: Ithiel de Sola Pool’s Technologies of Freedom (1983) and Virginia Postrel’s The Future and Its Enemies (1998). Faithful readers of this blog know all too well how much I love these two books and how I am constantly reminding people of their intellectual importance all these years later. (See, for example, this and this.) All my thinking and writing about tech policy over the past two decades has been shaped by the bold vision and recommendations set forth by Pool and Postrel in these beautiful books.

As I note in my Reason write-up of the books:

The past 45 years have seen remarkable advances in information technology: the Internet, mobile communications, ubiquitous news and entertainment options, and much more. What made these and other innovations possible was a general openness to the unplanned, the unpredictable, and even the uncontrollable. In our willingness to embrace a world of uncertainty and incessant change, we found unparalleled technological abundance. No two books more eloquently captured and celebrated the information age than Ithiel de Sola Pool’s Technologies of Freedom and Virginia Postrel’s The Future and Its Enemies.

And I conclude by noting that “While plenty of tech pundits and academics cling to… stasist thinking today, Pool and Postrel’s books continue to provide beacons for a better world, free from the top-down, technocratic mentality and prescriptions of the past. At least thus far, permissionless innovation has largely trumped the precautionary principle in tech policy. Let’s hope the dynamist vision can hold the line for another 45 years.”

Head over to Reason to read the rest of my essay as well as all the other excellent books that contributors have recommended as part of the symposium.  There are some really great selections in there.

And if you care about the future of technological freedom and human liberty and progress more generally, please do read (or re-read) both Pool and Postrel’s books when you have a chance.  They changed my life and they will change yours, too.

Someone should consider making a movie about wasteful state-based film industy subsidies. It has become quite a cronyist fiasco in a very short period of time.

Some background: State and local tax incentives for movie production have expanded rapidly over the past decade. These inducements include tax credits, sales tax exemptions, cash rebates, direct grants, and tax or fee reductions for lodging or locational shooting. In 2002, only five states offered such inducements for movie production. By the end of 2009, forty-five states had some sort of incentives in place to lure film producers.

In 2010, the film industry received an estimated $1.5 billion in financial commitments from these programs. Unsurprisingly, these incentives have proven very popular with movie studios. Of the nine motion pictures that were nominated for Best Picture at the Academy Awards in 2012, five had received taxpayer-funded rebates, tax credits, and subsidies by state governments. “The Help” received a Mississippi spending rebate of $3,547,780 and “The Tree of Life” received $434,253 from Texas. In February 2012, Best Picture-nominee “Moneyball” received as much as $5.8 million from the state of California. It had grossed over $75 million at the box office. More recently, the biopic “Lincoln” received roughly $3.5 million in tax incentives from the Virginia Film Office.

Many state and local governments offer these inducements in the hope of attracting new jobs and investment; other simply seek to bill themselves as “the new Hollywood.” As William Luther of the Tax Foundation notes, “From politicians’ point of view, bringing Hollywood to town is the best of all possible photo opportunities—not just a ribbon-cutting to announce new job creation but a ribbon-cutting with a movie or TV star.” But it seems as if the glamor and prestige associated with films and celebrities have trumped sound economics since there is no evidence these tax incentives help state or local economies.

“Based on fanciful estimates of economic activity and tax revenue, states are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars,” noted a 2010 Tax Foundation study. “In return, they attract mostly temporary jobs that are often transplanted from other states.” Studies of specific state incentive programs confirm this finding, almost universally finding miniscule revenue gains for every dollar of film subsidies offered. The adjoining table, derived from a meta-survey of film incentives studies by the Center on Budget & Policy Priorities, illustrates how much revenue was lost per net job created by film tax credits as well as how little revenue each program generated for every dollar of state revenues awarded.

The only two studies that have revealed positive results for such film incentive programs were both conducted by Ernst and Young on behalf of the New York and New Mexico film offices. All others have shown consistent negative returns. (If you exclude those two Ernst and Young studies that were done for the film offices, the average revenue gained across those other programs is just 16 cents for every dollar of subsidy granted to the film industry. Stated differently, that’s an 84% net loss for these programs. Truly astonishing numbers.)

Recently, some states have begun abandoning or limiting film incentive programs or at least taking a hard look at their effectiveness. Iowa, for example, suspended its film program in 2009 after an investigation revealed a scandal involving much waste and abuse. Ten criminal cases were brought and seven people were eventually convicted. Michigan Governor Rick Snyder has also started reining in its film program as evidence has mounted that it has failed to create local jobs and has cost the state a great deal of tax revenue. Check out yesterday’s excellent New York Times article by Louise Story for all the gory details.

In sum, film tax credit cronyism puts taxpayers at risk without any corresponding benefits to them or the state.  Glamor-seeking and state pride seem to be the primary motivational factors driving state legislators to engage in such economically illogical behavior. It’s like “smokestack-chasing” for the Information Age, except in this case you don’t even have a factory left in town after your economic development efforts go bust. This cronyist activity benefits no one other than film studios. States should end their film incentive programs immediately.

Additional Reading:

• William Luther, Movie Production Incentives: Blockbuster Support for Lackluster Policy, Tax Foundation, Special Report, no. 173 (January 2010), at 7, http://taxfoundation.org/sites/taxfoundation.org/files/docs/sr173.pdf
• Robert Tannenwald, State Film Subsidies: Not Much Bang For Too Many Bucks,  Center on Budget & Policy Priorities (Dec. 9, 2010), http://www.cbpp.org/cms/index.cfm?fa=view&id=3326
• Joseph Henchman, More States Abandon Film Tax Incentives as Programs’ Ineffectiveness Becomes More Apparent, Tax Foundation Fiscal Fact, no. 272 (June 2, 2011), http://taxfoundation.org/article/more-states-abandon-film-tax-incentives-programs-ineffectiveness-becomes-more-apparent.
• Louise Story, Michigan Town Woos Hollywood, but Ends Up With a Bit Part, New York Times (December 4, 2012), http://www.nytimes.com/2012/12/04/us/when-hollywood-comes-to-town.html?_r=0.
• Will Wilson, Oscar Night Secret: Tax Breaks for Films Go Undisclosed in Many States, Stateline, Feb. 22, 2012,  http://www.pewstates.org/projects/stateline/headlines/oscar-night-secret-tax-breaks-for-films-go-undisclosed-in-many-states-85899375403
• Carten Cordell & Kathryn Watson, How Steven Spielberg’s Lincoln Benefited from Crony Capitalism, Reason, Nov. 15, 2012, http://reason.com/archives/2012/11/15/how-steven-spielbergs-lincoln-benefited.

A recent article by Lisa Carley in the New York Wine Examiner reports that Amazon is suspending plans that would have allowed wine producers to sell direct to consumers.  The culprit? State regulations:

One of the main reasons why this program has been put on hold is the complexity of wine-shipping laws within the United States, and that fact that the major wholesalers spend millions of dollars on the state level to keep it difficult for the consumer to have access to wine they want at good prices.

About 35 states permit some form of direct shipment to consumers, but laws vary greatly. In Virginia, consumers can order wine from any winery or retailer licensed in any state, as long as the seller registers with the state of Virginia and collects taxes. In Maryland, direct shipment of wine to consumers is still a felony. Montana limits the total amount of wine any consumer can order to 12 cases per year, which means most wineries won’t ship there because an individual winery has no way of knowing how much wine the consumer has ordered from other sellers. I’m not making this stuff up; check the Wine Institute’s compendium of state laws.

In several studies, Alan Wiseman and I found that consumers can enjoy significant savings on higher-priced wines if they order online.  (The savings disappear for wines priced under $20 per bottle because of shipping costs.) The Internet also gives consumers access to wines that they might not find by simply walking into a store.   

It would be a shame to see Amazon’s idea die. Currently, a winery or retailer that wants to ship directly to consumers has to figure out and comply with each state’s laws. It makes a lot of sense that a single retail sales portal could consolidate and continuously update this information, then set up a system that lets any seller market its wine direct to consumers in states where that’s legal, in compliance with all state laws.

When I open the Washington Post in the morning and find a headline like, “Banned Books, Chapter 2,” I assume that I will be reading about yet another attempt by certain conservative or religious groups to ban books from local libraries that they find objectionable, unethical, or sacrilegious. How ironic then that the debate over banning books that is currently unfolding in my home county of Fairfax County, Virginia, is being led by liberals. My ongoing series about “Liberals Abandoning the First Amendment” has been focusing on Lefties getting weak-kneed about free speech principles that they have traditionally supported, but this one takes the cake.

Here’s what is going on here in Fairfax according to Michael Alison Chandler of the Post:

During a week that librarians nationwide are highlighting banned books, conservative Christian students and parents showcased their own collection outside a Fairfax County high school yesterday — a collection they say was banned by the librarians themselves. More than 40 students, many wearing black T-shirts stamped with the words “Closing Books Shuts Out Ideas,” said they tried to donate more than 100 books about homosexuality to more than a dozen high school libraries in the past year. The initiative, organized by Colorado Springs-based Focus on the Family, was intended to add a conservative Christian perspective to shelves that the students said are stocked with “pro-gay” books. Most of the books were turned down after school librarians said they did not meet school system standards. Titles include “Marriage on Trial: The Case Against Same-Sex Marriage and Parenting” and “Someone I Love Is Gay,” which argues that homosexuality is not “a hopeless condition.” “We put ourselves out there . . . and got rejected,” said Elizabeth Bognanno, 17, a senior at West Springfield High School, standing before a semicircle of television cameras outside her school. “Censoring books is not a good thing. . . . We believe our personal rights have been violated.”

Now let me be perfectly clear about something. I find the themes of some of these books as distasteful and intolerant as many on the Left do. But I also find Hitler’s “Mein Kampf” distasteful and intolerant and yet I would never call for it to be banned from a library. In fact, I absolutely want it there. I want to make sure that people see what such hatred and intolerance can lead to. And I want people to aggressively respond to it and express their opposition to such thinking.  But they can only do that if they can read it for themselves.

It troubles me greatly that liberals — the supposed defenders of First Amendment and those typically most opposed to the idea of banning books — would fall into this trap based largely on the fact that they find the books in question to be distasteful or offensive.  As is always the case, the solution to bad speech is more speech, not censorship.

By the way, here is the website for the National Banned Books Week effort.  Do yourself a favor and read one of them.