My friend Jonathan Dingel has more on the Columbian trade agreement. He quotes Bernard Gordon on the proliferation of non-trade-related provisions in “free trade” agreements:
These cases highlight the problems of incorporating non-trade issues into trade agreements. Labor and environmental standards began the practice, but no clear end-points now exist. That recalls Jagdish Bhagwati’s famous warning that “the spaghetti bowl effect” (by which he meant overlapping rules of origin) would make FTAs hopelessly complex and impossible to administer. Today we would add the “Christmas Tree Effect,” the term used in Congress for the many items, each individually attractive though unrelated to a bill’s main purpose, that are added to satisfy special interests. Similar baubles and ornaments characterize today’s world of proliferating FTAs, and will be sought by powerful negotiating partners. Along with the profoundly dangerous capacity of FTAs to revive a world of blocs, they are among the best reasons to maintain instead the global trade system.
I should note that there’s a lively debate among free traders about the relative merits of bilateral versus global trade agreements. My esteemed colleague Dan Griswold has argued that under the right conditions, bilateral agreements can help jump-start broader liberalizations. But I think both sides should be able to agree that loading these agreements up with terms that have no detectable connection to trade is a bad idea.
The Administrative Law Review at American University will hold a pretty interesting symposium next Friday on media regulation and the legacy of Red Lion v. FCC. Don’t let their horrendous program design scare you (PDF), they have some top notch speakers scheduled, including Cass Sunstein. Check out TLF’s Red Lion coverage over the years here.
This is just a test post to see if our new spiffy site has a problem with embedded videos. By the way, we have a new spiffy site. Thanks much to PJ Doland for his help getting it up. That’s what she said.
http://www.youtube.com/v/am7iJFaCR7g&hl=en
Mike is completely right. It’s absurd that we let so few highly skilled workers into the US. I don’t really have anything to add to his excellent points, but I was amused by some of the comments in that post. First a good example of the kinds of problems the low H1-B cap creates:
My wife and I are highly skilled British workers (me in IT and my Wife in Microbiology). We chose to emigrate to Australia over the US because of this short-sighted, protectionist attitude. Australia has a points system that allows anyone in if they meet the point’s target, dependant on their profession. The points awarded to each industry and profession is varied according to the economic demand. Trying to plan a move to the States wasn’t worth the hassle of waiting for a ‘lottery’ visa application.
I now earn more than many Australians because they have jobs that need done and not enough people to do them. This is partly to a fast growing economy (no recession here) and an aging population where people are retiring.
And this guy gets the award for the biggest non-sequitur of the discussion:
Why is the tech industry so special? In every other industry, a lack of skilled workers results in companies paying HIGHER SALARIES to draw those skilled workers in. That causes people to flood schools seeking education for those areas so that they can graduate and fill the industry needs, eventually resulting in a somewhat lower salary overall, because the demand and supply are more even. THAT is capitalism. THAT is how it has always been.
But somehow when it comes to the tech industry, the answer isn’t related to supply and demand. When it comes to the tech industry, they artificially bend supply and demand to the corporate side’s favor by importing extra supply.
The guy above who says that he moved to AUS instead of the US because of our “protectionism” (what the hell are you talking about? the problem is a LACK of protectionism) has some deeply flawed logic. If he moved to the US, he wouldn’t keep that fantastic salary he’s getting in AUS right now, because he would be competing with the flood of imported labor.
I hope I don’t have to point out the numerous illogical aspects of this argument. But one of the things I find striking about this is the implicit xenophobia on display. Because of course, the
British guy is probably white and speaks impeccable English, so he’s obviously not part of the problem. It’s those other people, that menacing “flood of imported labor” that we need to be worried about. It’s apparently lost on him that Indian, Chinese, and Korean workers are human beings who need to support their families just as much as British people do.
A final point to be made is that the tech sector
isn’t special. For decades, we’ve been dealing with job losses in the manufacturing sector. Wages have been depressed somewhat by both free trade agreements and high levels of immigration, legal and otherwise. Economists have pointed out, correctly, that these changes benefit consumers by allowing companies to produce better products at lower prices. Precisely the same argument applies to the tech sector, and it’s disappointing to see my fellow geeks stoop to demagoguery and thinly disguised xenophobia when it comes to facing competition in their own industry.
I’ve got a new piece up at Ars taking a look at three amicus briefs in the Bilski case, which could give the Federal Circuit the chance to rein in patents on non-physical “inventions” like software, business methods, financial strategies, tax planning advice, etc.
At Matthew Yglesias’s suggestion, I’m perusing the terms of the US-Colombia trade deal. As Matt points out, a lot of this stuff has little or nothing to do with trade. I’ve already pointed out the problems with including provisions in “free trade” agreements dictating changes in Colombia’s copyright and patent laws. But it seems to me that’s far from the only non-trade-related provision in the agreement. For example:
An Open and Competitive Telecommunications Market: Users of Colombian telecom networks are guaranteed reasonable and nondiscriminatory access to the network. This prevents local firms from having preferential or “first right” of access to telecom networks. U.S. phone companies obtained the right to interconnect with Colombian dominant suppliers’ fixed networks at nondiscriminatory and cost-based rates.
Now, it seems to me that when we force
American telecommunications companies to provide “the right to interconnect” with competitors “at nondiscriminatory and cost-based rates,” many libertarians denounce it, with good reason, as “infrastructure socialism.” I don’t know anything about Colombia’s telecommunications market. Perhaps they’ve got a less competitive telecommunications market than we do, or maybe I’m misreading the details of the proposal. But the broader point is that this has absolutely nothing to do with trade, free or otherwise. Whether or not mandatory interconnection is good policy, a trade agreement seems like a lousy forum for deciding on it. At most, the rules should say that any interconnection policies Colombia might enact should apply equally to domestic and foreign firms, but it sounds like they’re going considerably beyond that.
There’s lots of other stuff in here that has nothing to do with free trade. There are the now-obligatory environmental and labor standards. There’s “Trade Capacity Building,” which appears to involve giving US taxpayer dollars to Colombian businesses. Even the stuff I’m inclined to think are good ideas on the merits, such as “Fair and Open Government Procurement,” don’t seem to have any obvious relationship to the standard arguments for free trade. If the Colombian government wants to squander Colombian taxpayer money on inefficient domestic contractors, that’s not a good thing but it’s also not a trade barrier.
Of course, there are some genuine trade liberalizations in there, and they may be significant. But as special interests pile more and more unrelated provisions into these agreements, I think it becomes harder and harder to expect people to support them simply based on fundamental arguments about comparative advantage. Whatever arguments might be made in favor of “state-of-the-art protections for digital products such as U.S. software, music, text, and videos” or “programs for small and medium-sized enterprises and farmers, and programs for improvements in transportation infrastructure and telecommunications,” they certainly have little to do with anything David Ricardo wrote.
This essay by Josh Chasin over at the MediaPost’s Metrics Insider Blog is the best piece I’ve read on behavioral marketing & privacy in a long time. I like this analogy, in particular:
Let’s say you are a tall, dashing, smartly dressed Chief Research Officer at a major Internet audience measurement company, and you walk into Nordstrom’s. A sales clerk you recognize comes up to you and says, “Hey, your wife’s birthday is coming up in a few weeks, and we just got in those sweaters she likes. Should I put a couple of them away for you in her size and color?” Now let me ask you. Does this hypothetical Chief Research Officer perceive this to be: (a) an egregious violation of his privacy, causing him to immediately rush home and write his state assemblyman; or (b) another example of Nordstrom’s world-class customer service? If you answered (b), then you’re tracking with me so far.
So how come if this exact same thing happens on the other side of the screen, it stops being outstanding customer service and turns into a violation of privacy?
Great question! And yet some over-zealous privacy advocates make this stuff out to be the coming endtimes and call for comprehensive regulation using scare tactics and twisted logic, as Chasin notes:
If Big Brother barges into your home at midnight and takes you away because someone doesn’t like the books you’ve been reading, that’s an invasion of your privacy (and way worse.) But if the ads you see on Yahoo are increasingly relevant to your life, that’s not an invasion of privacy. That’s just the digital version of that nice lady at Nordstrom’s. Let’s not confuse the two.
Exactly.
The Washington Post was ecstatic. Having won six Pulitzer Prizes for journalism, it featured the news on the front page of yesterday’s edition, accompanied by a photo of applauding Post staff. And they certainly deserved credit – the half-dozen prizes were the second-most won by a newspaper since the annual awards began in 1917.
But one thing was missing in the Post photo: a newspaper. There’s a computer screen in the foreground, being watched by the applauding staffers. And a TV in the background. But there wasn’t an actual newspaper to be seen.
The photo says a lot about the changing face of journalism, and the rise of electronic media. The traditional newspaper is quickly losing ground to newer forms of communication, notably the Internet. Only two weeks ago, the Newspaper Association of America reported that print advertising had plummeted in 2007 by almost 10 percent, the largest one-year drop ever.
But despite these changes, the Pulitzer remains largely a paper-and-ink affair, limited mostly to traditional newspapers. To its credit, the Pulitzer committee did change the rules a few years ago, allowing online journalism to be considered. Thus, a number of winning entries have had significant online components. But – except for the two“breaking news” categories – the rules still require that stories appear in print as well as online.
Continue reading →
Communications Daily ($) cited my recent post comparing Google’s limited objectives for the 700 MHz auction with the expansive objectives it outlined to the Federal Communications Commission last summer, and it included the following reaction to my comments from Richard Whitt of Google:
Whitt said in response that Haney had misread his company’s comments from last summer. “We consistently have argued that the open access license conditions adopted by the FCC would inject much-needed competition into the wireless apps and handset sectors, but would not by themselves lead to new wireless networks,” he said Monday. “Only if the commission had adopted the interconnection and resale license conditions we also had suggested — which the agency ultimately did not do — would we have seen the potential for new facilities-based competition.”
Another way to look at this is if there wasn’t any potential for new facilities-based wireless competition without the interconnection and resale license conditions Google wanted, why would Google have submitted bids for the spectrum which it might have won and had to pay for?
I do agree that prior to the FCC’s adoption of two of the four open platform principles Google proposed the company consistently premised its commitment to participate in the auction on the FCC adopting all four principles. I also agree Google was clear that it believed all four principles were necessary to promote competition.
Then it participated in the auction anyway.
Continue reading →
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