WhatsApp indeed.

Mark Zuckerberg recently had Facebook purchase a mobile computing software program called “WhatsApp” for $19 BILLION dollars. I feel a lot like Dr. Evil when I write that.

As all of the news coverage will tell you, this is for a free service – it makes no money directly.

This is two conundra in one. How can something be worth $19 billion dollars? And how can something that is worth so much money be available to individuals for free?

I’m going to take the second question first, because it’s simpler. There are two reasons that this mobile computer program is available for free. First, this product was never an economic good in the way that nearly 100% of the people in this country think of the goods that they produce and consume. It was not something that was grown, like a carrot, or built, like a car, and brought by its producer to a marketplace to be exchanged for money with someone who wanted the object. Here, the good that was produced was produced as an investment good. It, like many other tech products, was funded by speculators. (We generally call them venture capitalists, to be polite.) In the case of WhatsApp, the company was given $8 million by some wealthy people in 2011 and then they didn’t have to worry about money again for the next few years. In other words, the good was free to people because the actual good itself was not directly the holder of exchange-value.

Second, while $8 million is certainly quite a bit of money to have to spend over three years, it also reveals how fundamentally cheap it is to produce this good (the one that is worth $19 BILLION dollars. Sorry, mind still blown.) How do you make software? You have programmers make it. Good, capable programmers who type diligently into their laptops for many months, trying to make their code as good as possible so that the software always works regardless of what phone it’s being used on. You have a few designers make it look as cool and appealing as possible. You have a couple of project managers who make sure all of the bugs are being worked out in the most efficient possible way. You have someone who answers the phones and responds to angry emails and tweets encouraging things at potential users.

These people are doing fine work. However, what they’re doing is creating an idea – a complicated idea, but also just an idea, in the sense that a newspaper article is an idea. It is possible for intellectual property like this to be distributed for free because the cost of distributing any one unit of it doesn’t add meaningful additional costs to the production process. For goods made out of actual physical materials – something which actually costs a producer something for each unit made – you can’t make it free because you would sink deeper into the red with each unit you gave away. It’s clearly a lot simpler to produce a free OpenOffice than a free OpenMilk.

The physical intangibility of intellectual property begins to get at the first question as well, the problem of how this particular good could be worth $19 billion. To begin to answer the first question, if you had to make something out of actual physical materials, you could never produce $19 billion of value out of $8 million of expenditure. While it’s possible that good-quality labor and savvy entrepreneurship could double or quadruple value  – heck, maybe multiply the value of those physical inputs tenfold – they simply cannot multiply it 2375 times.

The only things that can do that are things which have become entirely unmoored from their original relationship to the value of someone’s work as added to physical materials. Something can increase in value that dramatically only if it’s not really connected to the value of the work itself, but to its value as a chip in an extremely high-priced poker match.

For most of us, money is real in the sense that we produce a certain amount of it with an hour of our work. The value of that hour of work becomes fought over, ferociously and in public, when we struggle over raising the minimum wage or arguing that unions are forcing employers to pay too much for their employees.

Money is also real when we spend down the savings we’ve created from our earnings. The hue and cry about the inability to cover sick people who can’t afford health insurance draws on this imagery that our fingernails are scraping the bottom of our pocket. The money that we put in was simply the source of our collective hourly labor, the only money there is, they argue – and now it’s nearly gone.

To check the business pages, this evidently isn’t a concern for certain kinds of transactions. This money is closer in form to chips changing hands in a poker game. A very, very high-stakes poker game, played in mysterious fancy buildings all over the world. It’s so unreal, it’s hard to connect it to our real money in our real economy. But when you become inured to the scale of these events occurring in these mysterious, fantastical places in our broader economy, you forget to connect the dots.

me

$19 billion = the value of one free mobile phone app.

$3.4 billion = the annual cost of running all of the state-level public programs in Maine. All of the schools, all of the social services, all of the roads, prisons, courtrooms, elections; regulating all of the private activity in a way that makes sure we have clean air and clean water, for 1,329,000 people.

Heck, for good measure:

nne

$19 billion = the value of one free mobile phone app.

$13.95 billion = the annual cost of running all of the state-level public programs to support all 3,276,000 people in northern New England.

What is the solution to this? Should we allow states to become venture capitalists, so we too can make ridiculous piles of money out of somebody else’s poker game?

Or can we, at bare minimum, recognize that there are connections between the money we work for and the money that other people are able to use for speculating on free mobile apps?

It’s really the same money. For people who don’t make their money through producing a good or a service, this money has been sheltered both legally and quasi-legally through favorable tax law. For people who make their money through a salary or hourly wage, well, you just haven’t been playing with high-enough stakes to win those concessions. Run that equation through a few hundred million times and you get the current wealth distribution.

WhatsApp with that? Seriously.

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Boys and Girls

Some of today’s thoughts about gender roles.

Male pelvis, female pelvis. Image credit: Smithsonian Institute

1. I woke up this morning with an idea for a mobile app. In my mind it was called “Dadabout” or “Dad About Town” and it would resolve the problem that there is no good male-focused counterpart to the local mom’s group. 

Lest you doubt that this is actually the case (and you probably don’t), I just scanned the Meetup pages for relevant numbers, and while Meetup thinks there are around 40,000 “Dads Meetups” members in the world, the largest groups in this list are actually groups focused on single parents. The whole of NYC produces the largest dads’ group to be aimed specifically at men, with 930 members. On the distaff side in NYC, meanwhile, there are over 3,000 members in the “First Time Upper West Side Moms” group alone. Based on personal qualitative research I can also tell you that dads are similarly underrepresented in library storytimes, tumbling workshops, and karate dojo waiting rooms. 

So without groups, how do dads find other dads to chat with while their kids run around? I think there’s a space here for a good tech-enabled solution. While in-person playground friendship development is pretty easy for women, men are more apt to be on the receiving end of a hairy eyeball than a conversational overture. But what if fathers had a geo-location based social network that allowed them to see other fathers in the vicinity of a playground, and could indicate that they were planning to be there? Fathers could co-locate and chat instead of standing mutely around at scattered playgrounds. It would solve the gender-related small-numbers problem without requiring a single dad to pick up a phone.

Then, thinking about this idea a little bit more I started considering the stereotypes of men at playgrounds. Then I started thinking that a service like this might need to publicly advertise that it verifies and screens users in order to pass muster. And then I started thinking about how something that allowed men to know where another person’s children would be might itself be seen as a threat. And then I thought, there’s no exit from this problem, is there? By including a system to prove users were “good” fathers, the service would implicitly criminalize involved fatherhood, with the specific exception of fathers who’d been individually cleared.

And then I got tired, and decided that we only have a few more years of playground monitoring; we’ll just stick it out.

2. Today’s Washington Post came with a section cover-story on being “genderqueer at the gym.” The author is someone who was born female and now identifies as someone in a gray area between male and female. The story concerns the mixed feelings the author has about the public gym. On the one hand, the gym is a great place to get big and impress other people. The author describes enjoying the performance of masculinity through assertive weightlifting, conscious of being territorial over space and not having to say “please” or “thank you” like a woman would. On the other hand, the gym is an oppressive space because the author is still compelled to use the woman’s changing room, against preference. 

I would not presume to tell the author that they appear simply to be male-identified and that they should go for it and just call himself male. However, it was really disappointing to hear someone consider themselves to be genderqueer and still express such an incredibly reductive perspective on what it is to be female. Women are “elliptical addicts” who exist behind a “pink veil.” Female qualities are submission, smallness, cooking, and dancing. Even bio-men whom the author describes are identified as genderqueer because they wear “fabulous pink dresses.”

I know I shouldn’t read too much into what one person who is obviously on hir own journey has to say, but these are descriptions of the performance of a stereotype of femininity. To the extent that the author rejects them for hirself, zhe shares the experience of myself and many of my female friends: the desire to frame ourselves as self-determining and autonomous social beings. The problem of being trapped in reductive stereotypes of femininity is a problem that’s obviously shared beyond the genderqueer community.

Just like it is still challenging to publicly and socially perform involved fatherhood, it is still challenging to publicly and socially perform self-determination as a woman. As we collectively “genderqueer” society by removing limits on what sex will determine our opportunities to be, we’ll have to make genuine new combinations of traits and embrace all of them. 

3. I haven’t seen Frozen yet and I don’t have a strong interest in doing so, but I understand that the movie is seen as one of the “better” Disney movies for girls. I saw Dana Stevens’ article today on Slate about how she wished that the big, liberating musical number for one of the female protagonists didn’t involve the character getting made over into a more-seductive version of herself.

There was the predictable anti-feminist blather in the comments thread; Slate doesn’t seem to do much comment-moderation for anti-feminist vitriol. However, there was also a less mean-spirited argument that this character’s visual sexualization was a representation of her maturation, and that sexuality is an aspect of female power. This argument is consonant with “sex-positive feminism,” a perspective that identifies a woman’s decision to perform traditional sexiness as an empowered choice if she personally chooses it.

Disney is often criticized for its depictions of girls and women – both for the sexualization and the diminution/disappearing of female bodies. However, Disney depictions of girls and women are so challenging not merely because they tell stories we don’t like but because they are child-oriented distillations of broad social beliefs. As a member of a society that has produced Miley Cyrus, it’s hard to escape the conclusion that youthful sexuality appears to be a potent and important form of power.

So what do we do with this? Is Disney the message, the bad model to attack? Or is it just the messenger?

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Minimum wage

 

My favorite thing about my new commute scenario, in addition to the gas savings, is that I have a daily hour of book reading time on the bus. I finally got around to reading The Spirit Level: Why Greater Equality Makes Societies Stronger. I ordered it a long time ago but it never got to the head of the line because course prep, grading, and project-specific reading came first. But then, the bus!

The Spirit Level is a book about how inequality negatively affects everyone within a society, particularly from the perspective of public health. Life expectancy, morbidity rates, homicide, mental health, teenage pregnancy, crime – and even softer measures like levels of social trust — all trend in worse directions in concert with national or state levels of inequality. The authors present all of these trends together and demonstrate pretty effectively that once a society gets to a certain level of economic development, getting richer doesn’t actually appear to improve these central components that really describe quality of life. Rather, economic growth that increases inequality can create a social environment that’s worse for everyone — including the well-off.

It’s a great book without necessarily always being a good book. It provides too little information about the correlations between inequality and the quality of life variables and too much evolutionary psychology at the end, even after the authors themselves point out that the specific causes of inequality are idiosyncratic and ultimately beside the point. Nonetheless, the assertion that we should think about all of our individual social issues as manifestations of the single overarching problem is very powerful, especially when explored as a series of example variables. If you were moved by Robert Reich’s Inequality for All, you will love this book – it provides a more data-focused, less narrative-driven account of the same problem. (And if you’re intrigued but lack the luxury of a half-hour bus ride to work, here’s the TED talk.)

OK, so far this post is not at all about the title line I typed in when I began to write. However, it is, in fact, a serious reason why we should all get much more interested in the minimum wage for entirely self-interested, non-altruistic reasons.

Namely, a higher minimum wage means that less of our tax dollar will be needed to support the working poor.

The recent public conversation about the minimum wage keeps getting pulled into an eddy about whether a minimum wage increase would reduce the number of people – particularly young people – hired by companies who hire a lot of minimum-wage workers. Depending on your level of interest in the specifications of economic models,  you can dig into a number of arguments that both support and oppose the hypothesis. It appears not to create massive change one way or the other.

However, what is noncontroversial at this point is that raising the minimum wage does decrease poverty. And when poverty levels are decreased, fewer people need state support.

When he was running for governor, Paul LePage described one of the employees he supervised at Marden’s as his welfare “poster child” because she rejected a $2 raise rather than lose eligibility for MaineCare to cover herself and her children. (Feel free to pause for a moment to reflect on the irony of Paul LePage being concerned about someone maintaining her MaineCare eligibility.) The reason that this was an issue at all, of course, was that this woman spent all of her time in very low-wage employment. When we fail to require a reasonable minimum wage, we get people working – and yet we still collectively need to support them in order for them to have the basics of food and health care. As many have pointed out, we collectively subsidize companies that pay low wages through offering state assistance to their employees. A low minimum wage may possibly mean more people working but in jobs where they are likely to require continuing public assistance.

And what kind of benefits do states which choose lower minimum wages get? In theory, if a low minimum wage is so effective at increasing employment we should see lower poverty rates. Yet when we look at the correspondence between state-level minimum wage levels and poverty levels, that’s not what we see.

min wage

Poverty levels from the US Census, information on state minimum wage laws from NCLS

The trend line indicates that states with lower poverty levels tend to have higher minimum wages, while the states that have no state minimum wage also tend to have higher than average levels of poverty (with the exception of New Hampshire.) In practice, all states are bound to ensure compliance with the federal minimum wage of $7.25 as a bottom bound to wages, but it’s clear that higher minimum wages are certainly not hurting anyone.

Higher minimum wages are associated both with lower levels of poverty and higher median incomes.

min wage income

Higher median incomes, meanwhile, are very strongly associated with lower poverty levels.

poverty median income

It’s decent wages that get people out of poverty, not just “having a job.” Making sure that companies provide a decent minimum wage allows us all not to be in the position of covering those gaps.

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Reefer Madness!

Came across these maps from Business Insider while tooling around on Slate.

Pot Use Past Month

Murder FBI Crime Statistics

Take a look at the state-level patterns across these two phenomena. Not to say anything causal, naturally, but it appears that if you want to avoid being murdered you might want to head to a state where your neighbors aren’t afraid to toke up.

Despite this (and other) lack of evidence for any real public safety consequences from marijuana use, the criminal consequences of pot possession continue to be heavy – particularly for people of color. Dylan Matthews did an eye-opening review of marijuana use and arrest statistics by race for the Washington Post. National surveys demonstrate that  black people are less likely than white people to be marijuana smokers.

neverused_marijuana_by_race

However, blacks are several times more likely that whites to be arrested for its possession.

marijuana_arrest_rates_by_race_year

Decriminalization is one route to reducing some of our criminal justice system’s tremendous racial disparities.

Luckily, if cross-state murder rates are indicative of anything, it appears likely that we can enact those laws without unleashing the very devil himself.

  

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You must change your life fourteen times

Archaic Torsos by David Shapiro

You must change your life fourteen times.
Change your way of living like writing.
You must change your method and your mind. You
Have to transform life fourteen times. Change life.
It has become necessary to change your life.
And now you’d better change it: you, yourself.
It’s up to you to exchange your life. Change, change!
Alter your life, patch and re-shape your life.
“A change came o’er the spirit of your change.”
You might shuffle the cards spin wheels change wheels.
You must convert resolve revolutionize your dissolves.
You might change life itself. And you might change.
You must change. You must not outlive your life.

***

That was one of my favorite and best-remembered of the poems I read in college, and very appropriate for the college life period. It came back to me while I was at Thomas and made me feel brave about teaching unfamiliar courses; I posted it on my bulletin board to similarly inspire passing students. (I’m willing to take the “under” on whether anyone actually noticed it. Professors’ bulletin boards are one of those places where inspiring messages go to die.)

Eventually, however, the power of the poem seems to have inspired me to think about different ways to apply my interests and talents. Readers of this blog will be aware of how much I enjoy using public data to examine state-level policy and politics. I was lucky enough to be offered a position with the Sunlight Foundation helping states and municipalities better connect with their constituents through providing online access to public data.

As a researcher, I learned first-hand how convoluted it can be to gain access to certain kinds of government information which is supposed to be public. I’m now going to be working to help make that data more accessible for all of us. Making public information truly public will let us leverage the power of our collective distributed intelligence, allowing more people to provide data-informed perspectives on policy.

For example, changes to the sales tax in Maine are pretty controversial. To know how I should feel about it, it would be really good to know how the change in sales tax is likely to affect different communities with different aggregate purchasing behavior. In Maine, I was able to find the person who had access to the state’s data about sales tax collection through a series of phone calls and emails (thanks again, Jerry!), but that was due to my specific knowledge of our state government structure and possibly partially to my credibility as a Thomas professor. Who I am should not determine whether I have access to information that all of us own.

Speaking of data and policy, it was bittersweet to see the coverage of my recent Maine Policy Review article on municipal budget changes in the wake of state funding cuts. (OK – very little bitter – almost all sweet! Just sad that I wasn’t home to buy the papers in person.) The piece was cut down into an opinion article for the Bangor Daily Herald on Saturday – with a healthy and almost shockingly ad-hominem free discussion in the comment section, which was a nice parting gift – and got a nice shout-out from the Portland Press Herald. The MMA fiscal survey for 2012 has just been made available, so I’m going to try to provide a brief update to my MPR analysis when I get a chance.

Until then, I’ll continue to provide periodic postings here. Stay warm, everyone!

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The Ghost of Christmas Present

Ignorance and Want

LePage proposal would end assistance to asylum seekers.

In this time of ice storms, sluggish employment, and reduced federal food assistance, our governor celebrates the season by cutting our state’s last-resort assistance to the poor. The logic? They are people who are escaping from war.

I heard the sentiment I felt reflected back quite eloquently as I listened to Dickens’ A Christmas Carol on my drive home today. Ebenezer Scrooge visits the working poor Cratchit family with the Ghost of Christmas Present and observes their celebration.

Then all the Cratchit family drew round the hearth, in what Bob Cratchit called a circle, meaning half a one; and at Bob Cratchit’s elbow stood the family display of glass. Two tumblers, and a custard-cup without a handle.

These held the hot stuff from the jug, however, as well as golden goblets would have done; and Bob served it out with beaming looks, while the chestnuts on the fire sputtered and cracked noisily. Then Bob proposed:

“A Merry Christmas to us all, my dears. God bless us.”

Which all the family re-echoed.

“God bless us every one!” said Tiny Tim, the last of all.

He sat very close to his father’s side upon his little stool. Bob held his withered little hand in his, as if he loved the child, and wished to keep him by his side, and dreaded that he might be taken from him.

“Spirit,” said Scrooge, with an interest he had never felt before,”tell me if Tiny Tim will live.”

“I see a vacant seat,” replied the Ghost, “in the poor chimney-corner, and a crutch without an owner, carefully preserved. If these shadows remain unaltered by the Future, the child will die.”

“No, no,” said Scrooge. “Oh, no, kind Spirit. Say he will be spared.”

“If these shadows remain unaltered by the Future, none other of my race,” returned the Ghost, “will find him here. What then? If he be like to die, he had better do it, and decrease the surplus population.”

Scrooge hung his head to hear his own words quoted by the Spirit, and was overcome with penitence and grief.

“Man,” said the Ghost, “if man you be in heart, not adamant, forbear that wicked cant until you have discovered What the surplus is, and Where it is. Will you decide what men shall live, what men shall die? It may be, that in the sight of Heaven, you are more worthless and less fit to live than millions like this poor man’s child. Oh God! To hear the Insect on the leaf pronouncing on the too much life among his hungry brothers in the dust.”

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Carrying All of Our Debt

‘Tis finals time here on the old factory floor. For those of us working with a student body that is largely first-generation college attendees we’re watching some especially critical dice rolls. Will students choose to focus on their final assessments? Will they be able to rearrange their work schedules to spend the extra time making sure they’ve got everything done? Will various children and other family members stay well enough not to jeopardize study schedules?

If the answer is yes, they will be likely to pass their courses and enroll in another semester, whittling down the requirements on the way to a four-year degree.

If the answer is no, they might not pass. They might not complete enough of their courseload to qualify for another semester of financial aid. They might not feel that they’re progressing quickly enough to be worth all of the sacrifices they’re making, all of the debt they’re accruing, all of the sleep they’ve lost and bosses they’ve pissed off. The end of the semester is when they decide to throw in the towel.

What I know, and what is not commonly enough known, is that these students are making decisions for all of us. These are the students who will increase our total pool of educated Americans – an outcome we all desperately need in order to complete our transition to a globalized economy. The students who will add to our collective educated workforce are not the students whose families would always ensure that they would complete college. It’s the students who are doing something different than their parents did, because they hope it will give them a better future than the one they’re looking at right now.

And to do that, they have to gamble with their own credit, and with a bill that’s many magnitudes higher than any that they’ve seen before. At higher family income levels, college finances are mainly managed by students’ parents. In the world I work in, this is not the case.

This is what this phenomenon looks like, under current college prices:

From D. Indiviglio, "Chart of the Day: Student Loans Have Grown 511% Since 1999." The Atlantic.com. http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/

From D. Indiviglio, “Chart of the Day: Student Loans Have Grown 511% Since 1999.” The Atlantic.com. http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/

Generally, we talk about entering into debt as a choice – and often a morally distasteful one. Debt has long philosophic associations with guilt, and modern debt-counseling services associate debt with immature traits like impulsivity and irresponsibility. However, for students whose families do not have the means to pay for college, they face a financial catch-22: either they assume a large amount of debt, or they face increased likelihood of a lifetime of low earnings and frequent unemployment.

These are two unpleasant options. What’s also too bad is that when students choose not to assume the personal debt, society at large loses. When an individual takes on that debt to complete college, we all gain an additional college-educated member of our community. We gain in collective skills, our location has additional skilled labor to attract employers, our unemployment rate and crime rate are likely to go down, and a “virtuous cycle” is initiated whereby the children of that person are also more likely to go to college.

This virtuous social outcome of the individual’s sacrifice is known in economics as “external benefit“: society at large benefits from an individual’s private actions. It is the job of governments to help markets “internalize” these benefits so that we get socially optimal outcomes. It benefits all of us, collectively, to have everyone who wants to complete a college degree do so because of the strong collective benefits to increasing our proportion of college graduates. The way that we have historically recognized this public benefit of higher education, and sought to support it, is through state-subsidized higher education.

Unfortunately, despite our crying need for more high-level education completion in this country, we are doing less and less of this. Between 2007-2008 and 2012-2013, 38 of the US states decreased their spending on higher education. Of the remaining 12 states, only 4 — Illinois, Alaska, Wyoming and North Dakota — increased spending on higher education at a rate that exceeded inflation.

state support

Data from the Grapevine Annual Compilation of State Fiscal Support for Higher Education, http://grapevine.illinoisstate.edu/index.shtml.

In many states, the only way to make up for these kinds of cuts has been to dramatically increase tuition levels. In Arizona, tuition at the state’s public universities nearly doubled (91%) between ’07-08 and ’11-’12. In California, during the same period public tuition rose 77%. (This is a particular tragedy since California has over 9.2 million potentially college-bound children, the highest number of any state in the country.) Only a handful of states saw an increase in tuition rates of less than 20% during the FY 08-FY 13 period.

How have students collectively responded to this? Undoubtedly, by attending college in lower numbers than they otherwise would. For those who do attend, they take on more personal debt.

Educating students under these conditions, their debt swirls around us like a kind of ethical test. Are we giving enough value? Is their investment worth it? I take this responsibility seriously and try to be sure that whatever I do, I am leaving them more employable, more savvy about what they can do to improve their chances.

But the real ethical test concerns our collective responsibility to the people who will be – or who will not be – bringing our country out of economic stagnation. When we cut support for higher education, we collectively decide to rest more and more of the weight of our transition on the shoulders of underresourced young people. And maybe they’ll make it, and maybe they won’t.

But we should all be more aware of what we’re implicitly asking from them at a social level. For those who try despite the high price tag, we should understand that students’ willingness to sacrifice their own money, uncertainty and financial risk actually puts us in their debt.

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