e-gold has always been an interesting company – an alternative value-transfer system that’s not attached to government currency because it’s backed by gold. The payments business charges much more than my gut tells me the service should cost; any competitor in this market should be welcome. And I’m no expert in monetary policy, but I know that fiat money (“this has value because the government says it does”) is dangerous because it relies on the credibility of the government that issued it, and because governments regularly inflate their fiat currency by printing or minting more of it. This diminishes the value of the currency in our hands.

But money is a sensitive area – governments are pretty protective of their prerogatives – and e-gold hasn’t always done such a good job making the case for itself. Suspicions about the use of this service may have culminated recently in an indictment against e-gold officials alleging conspiracy to launder money and various regulatory infractions, which met with a strenuous response from them.

Now e-gold is going to tell it’s story, putting a human face on what they’re trying to do. No, it’s not this video. They’ve started a blog. It should be interesting and educational. I’m listening to an interview with e-gold’s Chairman, Douglas Jackson, right now.

The idea of an asset-backed, non-governmental value-transfer system is very attractive to me, and an indictment is not a conviction. I think it’ll be worthwhile to get e-gold’s side of the story, and they definitely need to tell it in Washington, D.C.

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Relatedly, Ingram has an interesting post on whether Rupert Murdoch should make the Wall Street Journal‘s website available for free:

I know that many newspapers have looked to the Journal as a model for what a paper can do online, because it is one of the few that has charged for its content from the very beginning and built what appears to be a successful business doing so. But does it make sense now? This Wall Street Journal story notes that Murdoch commissioned a study that looked at what going free would mean for the paper, and from that he concluded that while readership would grow by a factor of 10, advertising would likely only grow by a factor of five, and the loss of subscription revenue would effectively make the whole thing a wash. In other words, maybe’s it’s not worth it.

It’s not clear whether the study looked at the short run or the long run, but it seems to me that if the short-run financial outcome is anywhere close to a wash, then it’s stupid to keep the paywall. Because the biggest harm a paywall does is dramatically limit a site’s long-term growth potential. People who currently like the Journal enough to pay for it will likely keep doing so. But given the massive amount of information out there, most people just leaving college are likely to opt for one of the Journal’s free competitors.

Moreover, being free brings a wealth of ancillary benefits that don’t show up in the bottom line right away. As a blogger, I almost never link to stories behind paywalls because I can usually find a free version of the same story. My impression is that other bloggers tend to act the same way. So as the blogosphere becomes an increasingly important source of traffic, paywalls will become more of a liability. If Murdoch can eliminate the paywall and completely replace the lost revenue with ads, that seems like a no-brainer to me.

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Via Matthew Ingram (I’m catching up on RSS feeds), Jack Shafer has makes an important observation about today’s prestige newspapers: their staffs are significantly larger than in the glory days of the 1970s. Although Shafer’s original piece overstated the case, the numbers are still significant: The New York Times has apparently grown from 500 reporters and editors to 750, while the Washington Post has grown from 340 to 550. In other words, each is about 50 percent larger than it was in the 1970s.

Shafer then quotes Post and Times officials explaining why news would suffer from a reduction in headcount to 1970s levels. Apparently fluff stories are bigger revenue drivers than they were in the 1970s, so the hard news headcount would have to be cut below 1970s levels to keep the paper profitable.

But I think this dramatically underestimates how much easier a reporter’s job is today than in the 1970s. There’s a wealth of original materials available online that makes fact-checking easier. There’s a massive distributed reporting system called the blogosphere that helps reporters dig up leads and provide instant feedback. There are people all over the place with cell phones capable of capturing photos and even video. There are sites like YouTube and Flickr that help aggregate and organize this wealth of material.

Obviously, there are still some stories where there’s no substitute for picking up the phone and calling sources, or for hopping on a plane to see a story first-hand. We still need some reporters to do that. But the job of a reporter these days is far more oriented toward synthesizing and summarizing the material that’s already out there. Much of the information is already out there, and the job of a reporter is simply to translate sometimes technical source documents into plain English.

Moreover, one of the points Shafer make is that the Times and the Post relied far more on wire stories in the 1970s than they do today. There’s no reason to think there’d be much loss in story quality if reporters did more of this today. The Times could cut its staff covering technology and instead feature content from CNet or Wired (obviously, they’d want to feature some of CNet’s less geeky or esoteric content, but I’m sure CNet would be happy to produce some less-geeky stories to accommodate them). Many large web properties already do this, but there’s every reason to think this process could continue without significantly harming the quality of news coverage.

The next decade may bring wrenching adjustments for reporters used to secure positions at large newspapers, but there’s little reason to think that the quality of news will suffer as a result. Quite the contrary, thanks to the Internet, the average American has access to far more and better news than he did 20 years ago. Any diminution of the quality of newspaper reporter will be small compared with the benefits of being able to choose from dozens of high-quality news sites.

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