Transactional Costs (and Hidden Flaws)

Katherine Mangu-Ward offers up a seemingly great metaphor for how government contracts waste money in her most recent editorial for Reason:

Imagine you want a cone of mint chocolate chip ice cream. You walk into an ice cream store and say, “How much for mint chocolate chip, please?” They either say, “That’ll be $3,” or, “We don’t have that flavor right now. Try the shop next door.”

[The U.S. government] stands in the middle of the street and shouts, “I WANT ICE CREAM” until someone who makes a related product–pudding, say–comes by and says, “I might be able to make you some ice cream. What were you looking for?” Then the government says, “Great, we will draft hundreds of pages of specifications for the ice cream, and send officials to your R&D facility, your factory, and your distribution warehouses to supervise and advise you while you make it. That way we can be sure to get the ice cream we want. Also, you can’t hire any foreigners and you can only make the ice cream with American ingredients. At the end of the process, you can add up all the costs you incurred to make our special ice cream, charge us the full amount, and then add a little extra on top so that you make a profit.” Four years later, the government gets a $1,263 cup of slightly melted fudge ripple.

Lockheed Martin and Boeing are the bespoke pudding peddlers. SpaceX and Orbital Sciences are Haagen Dazs and Ben & Jerry’s.

A few problems, though, that the ice cream overgeneralizes. To begin with, the government is rarely asking for a product that already exists. Compounding that, they’re often seeking technology for military or other secretive applications; the government has the ability and wallet to buy a wide range of already existing airplanes, but they want the flying fortress that is Air Force One, and they pay a premium to make sure nobody gets their hands on the plans.

Then again, current contracts with Lockheed Martin or Boeing still put the government in a situation in which they’re trusting a private contractor to handle secret information, and for all that Mangu-Ward suggests that the government “supervises and advises,” it’s fairly clear from the multitude of over-budget and past-deadline projects that they’re not actually keeping their eyes on the ball, nor holding their contractors liable. To use the ice cream example, this is akin to asking Ben & Jerry’s to cater your wedding, having a terrible experience, and then continuing to hire them anyway, a non-competitive situation that doesn’t exactly inspire the best work and is basically as far from capitalism as it gets.

Reason suggests that we have a wonderful marketplace; our government really should make use of it, at least so far as to lower the costs from its more “trusted” partners.

How to Beat Yiannopoulos

I’ve seen a lot of articles posted lately about how Simon & Schuster needs to back down and immediately cease their publication of Yiannopoulos’s upcoming book, Dangerous. That, my friends, is censorship, no matter how angrily Leslie Jones and a wide variety of celebrities or liberals sugarcoat it. Yes, it’s true that Yiannopoulos is provocative, and liable to rile up the easily impressionable people from the right wing, whether you call them Neo-Nazis or the alt right. But if S&S doesn’t publish the book, someone else surely will, and while they might not have the outreach of S&S, the publicity they’ll get from a banned book will surely propel that book into the homes of every “deplorable” that you’re misguidedly trying to protect. All the profits from sales of that book will go directly back into the sort of right-wing enterprises that you’d like to be protected from. Here are some better options.

  1. S&S publishes the book. They use some of their profits to fund books that offer counterpoints or which enhance the conversation. Make sure you buy those books, because in the end, S&S is going to publish whatever makes it the most money, and if you don’t buy books, you can’t really criticize them for catering to those who do.
  2. A few brave readers from the left read through Yiannopoulos’s treatise, word for word, and pick it apart. I’m not talking about minor grammatical critiques, mind you. I’m talking about taking the scope of his argument and dissecting it, pointing out the major factual errors and leaps of logic. You don’t defeat something by ignoring it; you shine light on it.
  3. Nobody talks shit about Yiannopoulos’s work unless they’ve read it. This is one of the biggest issues. It’s very easy to call out Ann Coulter or Bill O’Reilly or any number of other right-wing talking heads whom you hate from their appearances on shows that you do watch. But if you don’t actually know the work in question, don’t try to argue how bad it is. Don’t express shock and horror that someone is actually reading it, unless you know firsthand how bad it is. (And even then, since you’ve presumably read it, don’t make an attack on the reader’s character. Try to engage in a discussion of ideas. That’s the point of literature.)

Everything else that I’ve heard people suggesting is just outright bullying. It’s motivated from a place of fear and good intentions, sure, but it still comes down to suppressing the fundamental right of someone to express their opinion and someone else to agree with it. Besides, wouldn’t you want to know what your right wing rivals are thinking and talking about? Wouldn’t that make it easier to work against their agenda?

The Beginner’s Guide

Most of my friends tell me that 2016 was a terrible year. Celebrity deaths, political catastrophe, and more. So here’s a New Year’s Resolution: Stop ascribing your own personal beliefs to what others experience. Not only is a cigar sometimes just a cigar; to some people, it will always and only ever has been a cigar.

It may help if you play through The Beginner’s Guide, and it would be helpful if you did so before reading any further.

What I wrote above is nonsense. All that life is, all that we experience, is a matter of how we process. What’s important is that we realize we might sometimes be wrong, and that we do not force our conclusions upon others. To me, The Beginner’s Guide is a deeply personal attack on criticism, one that carefully uses Davey Wreden’s narrative to coerce players into adapting a certain belief about Coda, the purported developer of the anthology of “games” that you’re walking through, before pulling the rug out from under players.

But Wreden isn’t asking people not to think, not to engage. He’s just warning you not to ruin something for other people because it’s not your cup of tea. I personally prefer that a game has so-called “lampposts” or the Mario-like goals that clearly celebrate the end of a level, and I wouldn’t want to engage in an endless cleaning simulator. Whether it’s realistic or not, I’m opposed to the sort of endurance puzzles found in Jonathan Blow’s games, but I can understand a creator’s prerogative to utilize them, especially if the design is metaphorical, with a roomful of ideas accessible only after a lengthy and arduous climb. Sometimes a game is work (and I’m not talking just about grinding).

In the Age of Oversharing, we feel useless if we’re not “contributing” to a conversation, and within that metric, we feel devalued without external validation, those bright and shiny likes. Literary criticism is filled with those who feel they must make their mark by finding some new insight or interpretation, no matter how contrarian, and we are so afraid of being wrong that we’ll constantly change the conversation, redirect the focus, so that we never have to worry about how we might look.

This is about me. Perhaps it’s about you, too. It’s about the prison we build for ourselves by feeling obligated to conform to standards–in the case of The Beginner’s Guide, the pressure not to simply be weird for weirdness’s sake or to have familiar, playable conventions so as to be salable. It’s about accepting that not everything is for us.

Ruth Ozeki’s “A Tale for the Time Being”

I’m not entirely sold on the framework of this novel, which has a novelist named “Ruth” stumbling across the diary of a sixteen-year-old Japanese-American girl, but at least it earns its place on account of the surprising, late-game introduction of quantum mechanics; that is, an outside observer is necessary. Or as Derrida might have put it, because a reader cannot help but put their own interpretation on what they read, the reader often becomes, to some extent, the writer. I appreciate that; I only wish that the Ruth sections more organically connected to or reflected the deeper meanings present in Nao’s narrative. It’s not until the very end, when Ruth encounters a form of “reader’s block” that the two worlds really connect.

On the whole, though, the book can be reduced to one single thought: life is nothing but a connection of moments (6,400,099,980), and all it takes is a shift in a single one of them in order to create an entirely different universe. This doesn’t excuse the bullying that Nao or her grandfather received (and, to a certain extent, the passive dismissal of her father’s ethical concerns), but it does suggest that there might be healthier responses than suicide. Or, as Kimmy Schmidt once put it–and I’m paraphrasing–if you can get through the next second, then you can get through the second after that, too, and the next, and before long, you’re through a minute, an hour, a day, a week, and a year. You just need to have a purpose for holding on, and that’s what Nao is in search of when she begins writing her diary between the spine of Proust’s In Search of Lost Time. It’s why, perhaps, she’s able to cast off her book at the end of the book, for Ruth to find: she no longer needs to fixate on the past, because she’s found it.

Though A Tale for the Time Being doesn’t outright say any of this, some of its parallels and metaphors hint very strongly at it. To begin with, there’s the question of how Nao’s diary washed up on the shore of a British Columbian island to begin with; Ruth’s husband posits that it was caught in a gyre of trash floating Limbo-like around the ocean until that one moment at which–perhaps dislodged by the ripple of a butterfly wing elsewhere, or more accurately, the tsunami that hit Japan in 2011–it was deemed ready to move on to the person who would be most receptive to reading it. But there’s also the existence of the diary itself, which although it purports to be chronicling the last days of a suicide, is actually doing the exact opposite by preserving her thoughts, her essence, in what the book describes as a Scheherazade-like delaying of death (i.e., immortality).

Why do we spend so much time trying to find the purpose of life? Life is, by definition, that purpose. It is only when there is nothing left to say that the book comes to a close.

10/24/16: on when we can’t afford success

Everything this author writes makes financial sense. That, more than anything else, is proof of why cold, hard economics alone cannot be permitted to run our government, why the banks must be tempered and–yes–regulated by external checks and balances. A businessman like Trump would gladly improve the revenue for a service by making it unaffordable to the poor, but would also ignore the fact that America was not founded on exclusivity, even if it has lately become obsessed with it. That’s not to say we aren’t a culture of ownership and entitlement, but while we can’t all drive an Aston Martin, almost all of us have the freedom to, in some form or another, drive.

Of Hamilton, then, this author has identified an actual problem: tickets are being scalped, and this largely benefits the scalper, not the producers of the actual product being sold. Let’s ignore that this is essentially true of the stock market itself, in which the people actually executing your trades are the ones most immediately profiting from it. Instead, the author believes that instead of making the act of scalping illegal, he feels that the theater itself should counter these scalpers by raising their prices accordingly, such that demand decreases to a point at which those who desire tickets can buy them directly from the theater. That’s a bit like if the government decided to stop drug dealers not by arresting them but by dealing the product itself at a lower rate.

The biggest issue I have with this article is that it implies that the best solution to any problem is the one that maximizes profit for the producer. That’s Shkreli logic. It’s ironic that this is used, of all things, on a show like Hamilton, which spends a great deal of time on the passage of government for the benefit of all. Wouldn’t a better solution be one that adds additional seats to the theater, or moves to a bigger venue? If Louie C.K. decided he were going to perform at the Comedy Cellar, he might be able to charge a premium for each ticket; by choosing a larger venue like Madison Square Garden, he is able to charge less money per ticket and yet still make as much of a profit, even factoring in overhead for the venue, the security, etc. Adding a second date would make it even easier for those who wanted to get a ticket to get one–just as making scalping illegal would help to prevent those fans from competing with those who want not to see the show, but to profit from it.

I’m not against compromise. When I attend Six Flags, I sometimes have to wait longer because people have paid extra for the privilege of waiting 50% to 75% less. When I fly on a plane, I have very little leg room and am often next to a squalling baby. Wouldn’t the best solution to Hamilton, then, be to find another compromise? Where once premium Orchestra seats were enough to satisfy the rich, with the poor increasingly relegated to nosebleed Balcony seats, perhaps we could offer more Livestream options. Those who want to see it up close and in person could go to the actual theater; those who couldn’t afford that might go to a neighboring movie theater. Everybody would still get to see the show–for a popular one, would get to see it many times over–and everybody would profit. Isn’t that, ultimately, what we want from America? A country where everyone wins?

Mind you, we’re talking about something like Hamilton, which only seems essential. What if we were talking about vaccines? If we could only manufacture 1,000 doses a day, would you really want the pharmacy setting prices based on the most money they could get from a customer? Assume, hypothetically, that these vaccines were transferrable (i.e., pills rather than an injection): would you want to have to stand in line along with those who had already received a dose and who were now simply trying to resell additional ones? This economist is in favor of scalpers, then, because they ensure that he–a member of the wealthy–will always be able to get a ticket. What happens, then, to all of those who *cannot* afford those rates? They become dependent on lotteries, on government-subsidized ticket initiatives, or they simply go without. Of course this economist favors that system; he’s basically describing America as it is, not as it is idealized.

 

 

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