The Informationist, a blog written by Bruce Abramson

Homesteading the Future

Great piece celebrating the anniversary of The Homestead Act in today's WSJ.  I really like articles that describe history, but make me think about the future.

Here's a challenge to today's policy makers: Find a contemporary equivalent to the Homestead Act.  All else aside, the Homestead Act is precisely what a poverty-abatement program should be: It created opportunities for all willing to sieze them.  No one was entitled to anything, but anyone willing to move and to work was handed an unparalleled opportunity.  What would it mean to homestead the information age?  Our success at answering that question is the key to our own future national success.

 

Why Quality Expert Witness Work Matters

So Oracle won its big battle with Google.  Sort of.  In Phase I of the fight over whether Android made inappropriate use of Java, a jury ruled today that Google did, in fact, use Oracle's copyrighted products without authorization.  The jury could not, however, determine whether Google did anything wrong because it could not rule on fair use.  Was it fair or improper for Google to use Java as it did?  We don't know.  And since what Oracle really wanted was damages, it's not clear how to proceed with the damage assessment phase (which might be Phase II, or might be deferred until after the patent component of the case).

If the jury couldn't determine the fair use issue, it stands to reason that the two sides were equally persuasive--or unpersuasive.  Whose job is it to get this information out?  Typically, that task falls to an expert witness.   

TROLLS, WIZARDS, AND THE PITFALLS OF PATENTING

Cross-posted at Breitbart.com.

 

Patents are back in the news.  In the past few weeks alone, Microsoft bought AOL’s patent portfolio for $1 billion, then resold much of it to Facebook for $550 million. Twitter pledged to use its patents only defensively, and to give its employee-inventors a say in the company’s future patent litigation strategy.  Controversial trials, appeals, rulings, and awards continue—prompting the Wall Street Journal to publish Andy Kessler’s call for curtailing the rights of non-practicing entities (NPEs), also known affectionately as “trolls.”

Happy Birthday, Israel!

Happy Yom Ha’atzmaut!  Israel’s Independence Day.  On this date (on the Jewish calendar) in 1948, the world witnessed one of history’s greatest expressions of national renewal and self-determination.  Like many new nations, Israel was born under fire; it exists today only because its local militia was able to secure stability when the imperial power withdrew.  Israel’s accomplishments—all achieved under that same fire—have been remarkable.  Despite heavy odds and constant provocation, it has managed to thrive as a free, open, democratic, liberal state.  A decade ago, when I watched the IDF respond with humanity and humility to the most barbaric wave of terrorism that the developed world has seen since WWII, I swelled with pride.  Its actions allowed me to look deep into my own Jewish traditions and wonder what it was that gave us this strength.  Israel at 64 truly does stand as a light to the nations—far too many of whom are much happier in the dark.  Happy Birthday, Israel!

 

App Development and Aftermarkets

Cross-posted on Forbes.com.

Zynga made news last month when it announced its new gaming platform. The asserted goal is to make social gaming easier. The actual goal is to wean Zynga’s gamers away from Facebook.

Understanding this actual goal is critical. The tense but symbiotic relationship between Zynga and Facebook epitomizes the contemporary software industry. Facebook, along with Apple (the iPhone), Google (Android), Microsoft (Windows), and perhaps a few others, build platforms. Almost all other software companies—including, until now, Zynga—develop apps that run on top of those platforms. In economic terms, these app developers operate inaftermarkets that exist solely because of the platform developers. What many app developers fail to realize, however, is that aftermarkets also operate at the sole discretion of the platform developers.

The Aftermarket Economy

Cross-posted at Breitbart.com's BigGovernment

So Facebook filed its IPO papers, and the numbers are eye-popping.  The company appears to be worth about $100 billion, or a bit more than the GDP of Tunisia.  Others shade it a bit lower, but one thing is certain: it’s good to be Facebook.

Facebook is special because, in network economic terms, its product is a platform, and successful platforms are few and far between.  For all its bells and whistles and features and privacy policies, Facebook remains—at heart—a place that people hang out.  As the proprietor of a popular hangout, Facebook gets to write the rules guiding all the folks who think it’s a good place to pitch their businesses or to make some sales.  In network economic terms, these businesses operating inside Facebook’s business comprise an aftermarket.

Play-by-Play of the Nevada Caucus

Cross-posted at Breitbart.com's BigGovernment.

A couple of years ago, after the bubble crashed, my wife and I decided to buy a condo in Vegas.  There were many reasons behind that decision, but Sin City is known for delivering the unexpected.  And so, political junkie that I am, I suddenly found myself eligible to participate in an early, swing-state, caucus.  Las Vegas had taken me into virgin territory.

The Law & Economics of Aftermarkets

Coming up tomorrow (Tuesday 1/31): my one-hour intro to the law & economics of aftermarkets.  If you or someone you know plans to make money selling aps for the iPhone, Android, Facebook, or any other proprietary market, you need to know this stuff!

http://rimon.eventbrite.com/

A (Very) Personal Note

My father died Friday night.

Suddenly.  Unexpectedly.  Without any warning. 

An athletic, vibrant man just shy of his 73^rd birthday, blessed with a clean medical report and no history of illness, he went from perfect health to dead in under five minutes.  He and my mother had just finished their Shabbat meal and cleared the table.  He sat down to study.  Something in his heart exploded.  He was dead before he hit the floor.

What Government Should be Doing in the Markets

Cross-posted at Brietbart.com's BigGovernment

It’s hardly a secret that the 2012 election is shaping up as a contest between free markets and big government.  And while the choice seems clear in the current political environment, it’s important to recall that government does play a critical role in the development and maintenance of functioning markets.  Yet, as Tea Partiers, Occupiers, and Ron Paul acolytes all note, government has both abdicated that critical role and inserted itself where it does not belong.

If markets were magical places that flourished whenever government disappeared, Somalia would be the world’s leading economy.  Markets are sophisticated mechanisms that enable informed parties to exchange resources, voluntarily, to mutual benefit.  There’s a lot packed into that sentence.  For markets to work, participants must trust the system.  They must believe that they have—or least can access—the information they need to make informed decisions.  They must feel free from coercion—both explicit coercion and unacceptable take-it-or-leave-it offers.  They must trust the inherent fairness of the system, and they must believe that it is possible to enforce the rules of the marketplace by sanctioning cheaters.  The closer an actual market comes to meeting these needs, the better it will function.  The further a market drifts from these goals, the more likely it is to fail.  It is thus absolutely critical that someone—presumably the government—serve as the market referee and the guarantor of market enforcement.

First and foremost, market participants must believe that courts will honor contracts and property rights fairly, dispassionately, and smoothly.  Contracts allow strangers to exchange promises; property allows people to focus on matters in front of them without worrying about possessions that may be out of sight.  In the absence of enforceable contracts and property rights, people could never travel far from home, leverage their assets, or exchange current payment or performance for a promise of future delivery with anyone unfamiliar.  In short, a society that distrusts its courts cannot progress beyond a tribal or a village economy—even if it employs tribal or village markets.