Monday, August 25, 2008
The wikipedia article contains a lot of good information on the rationale behind rebates and why companies use them (other than just because they hate us).
Wikipedia Article on Rebates
Monday, May 26, 2008
Very good article on "free" and how it works in the marketplace. The author makes several extremely exact and concise statements that are worth sharing at length.
"...you give away the infinite goods, not the scarce goods. Your time is a scarce good. No one is saying that everything needs to be free -- they're saying that infinite goods will be free, because of it's very nature in economics."
I've been noticing an interesting trend lately. While more folks aren't totally averse to the idea that they need to somehow embrace "free," they're mishandling what they do with "free" and then going on to complain how "free" doesn't work. The basic problem is this: they hear about the importance of "free" and so they give something away for free. But they don't have a business model around the free content. They don't understand the economic forces at work. They just give stuff away and pray... and then whine when nothing happens. As we've pointed out before, no one says that "free" by itself pays the bills. You need to have a more complete strategy than that -- and it involves a lot more than "give it away and pray."
There are two big take homes that stand out from the article - first the business take home: you have to tie a real business model to free. What you give away for free could be most easily viewed as a marketing expense to sell something else. YOU STILL HAVE TO SELL SOMETHING. Broadcast television uses free to sell advertising, some bands use free to sell attendance at live performances, software companies can use free to create a large user base to whom you can then sell support services - or you can give away a free piece of software to get your non-free piece of software in front of the consumer.
The second big take home relates to societal development. Infinite goods are defined as those having zero or near zero marginal cost (the cost to produce an additional unit). These goods have value to the people who consume them (music, art, literature, software) so every unit that is created adds to the "wealth" of that person and society. Think about that for a second...the colossal amount of wealth that is created by this cumulative volume of goods and information - and it is carried forward and enlarged perpetually. The sheer size of it is mindboggling, and unrepresented in any official economic statistic that I have ever seen. It's existence and accessibility instantly makes the world a wealthier place, but that's just the beginning. All those goods and information have the potential to act as a massive economic multiplier. Take publicly available educational resources - with broadband internet access one reasonably has access to all the information and discussion one needs to attain undergraduate proficiency and often graduate level proficiency in almost every field. So by eliminating the marginal cost of the actual university attendance, the only cost in obtaining that level of proficiency is time. And it just so happens that a tremendous amount of time is available.
To me that is tremendously exciting...we are fast approaching a point when anyone in the developed world has the opportunity to rise to the upper limits of their ability. We're not that far off from the point where ignorance becomes purely a choice. And with the right focus in development efforts, there is absolutely no reason we could not start opening that opportunity to every citizen of the world. Free does nothing by itself - adding the right model to leverage it can change the world.
Tuesday, May 13, 2008
A little reminder of just much energy is running loose in the world. If only we could hook that sucker up to the electrical grid. There's plenty of near free energy out there...we just need some clever soul to figure out how to harness it. Then maybe we can get off the crude crack.
Speaking of which - check out this incredible car slated for release in the EU in 2010. 80 to 120 mpg depending on the model!
And not to throw cold water on that exceptional car above, but we should remember that the savings from shifting from a 15mpg car to an 18mpg car are greater than shifting from a 50 to a 100..as counter-intuitive as that seems at first blush.
Monday, May 12, 2008
A phenomenal article/book excerpt on the the world we're headed toward - a post-American one, and why that's not such a bad thing. Covers the hows and whys for the tremendous advances that other countries have experienced over the last 10 years and does a great job of putting current events into perspective compared to events of the past 50 years.
While America's time of unmatched dominance in most categories is coming to a close, the author projects the positive attitude that I think is going to be critically important to the success of this country over the next 50 years. If we continue to embrace globalization and let it spur us to greater innovation and achievement we really have bright days ahead. However, if we isolate ourselves, and become protectionist in violation of the rules we've been pushing for decades...I have no doubt that this country will enter a vicious cycle of stagnation.
Thursday, May 08, 2008
How many ineffectual wars can this country afford to run?
A related article with a variety of point of views from one of my favorite writers:
Freakonomics Blog:On the Legalization or Not of Marijuana
Monday, April 28, 2008
Sunday, April 27, 2008
My intent is to focus on my primary areas of interest (economics, economic development, and personal liberties) and chronicle my amateur attempts at establishing a "Gentleman's Farm."
I am hopeful that old friends and new will drop by and join the conversation, especially around the more discussable topics!