Watson: Too cool not to share

(Austrian) Economics, Business, Technology
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Perhaps you have heard – the future has arrived. Tech-giant IBM recently pitted their super-computer/AI named “Watson” against the two best Jeopardy players on earth and Watson won.

I for one welcome our new computer overlords.

Check out this interesting video about this historic event. To me, these kinds of things are far more important in the long run than the stupid political movers and shakers that populate Washington and various other capital cities. The free market gets stuff done.

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Distill THIS! (or: How The State Gives Small-Scale Distilleries Nightmares)

Business, Corporatism, Statism
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A friend shares the following story:

I was talking with a buddy of mine last night: a lawyer currently working for the state, getting his MBA on the side. He’s been researching the possibility of setting up a distillery firm, and we talked about it for close to an hour. Very interesting stuff, and he’s got some great ideas for how to break into the market and his unique angle.

But the funny part is that probably 45 minutes of that hour was spent talking about his strategy in light of the manifold regulatory hoops and tax laws he has to navigate. Between licensing and taxes, which as you can imagine for hard liquor are absurd, his business model is 100% dominated by meeting the requirements of the state. Some examples: before you can boil an ounce of alcohol, you need local, state, and federal licensing in place. You can’t get the federal until you have the state and local in place, and getting all three takes anywhere from 8-24 months. The problem is that to fill out the paperwork you have to have the facility, equipment, stock, etc. all in place and ready to go; you can’t fill out paperwork for a nonexistent distillery. So he’s looking at having to hold a facility with the equipment for two years while the feds sit around.

You can’t just put up or rent any building, either. Your firm’s place of business has to be in a Class 3 piece of land, which basically means you have to set up out in the middle of nowhere or in a really depressed part of a city. (He lives very close to Baltimore, so he’ll be going for the latter.)

Distill THIS! (or: How The State Gives Small-Scale Distilleries Nightmares) Read Post »

At What Point Does a Scholarship Athlete Own Anything?

Articles, Business, Corporatism, Libertarian Theory, Political Correctness, Pop Culture, Statism
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“Pryor and four teammates were suspended Thursday by the NCAA for the first five games of next season for selling championship rings, jerseys and awards. They also received improper benefits — from up to two years ago — from the tattoo parlor and its owner.”

~ Article at ESPN.com

The situations of Ohio State University Quarterback Terrelle Pryor, leading rusher Dan Herron, No. 2 wide receiver DeVier Posey, All-Big Ten offensive tackle Mike Adams and backup defensive end Solomon Thomas should be pretty well known to the sports fans in our studio audience.  The sports airwaves have been chock-full with commentary on it for the last few days.  From a sports reporting standpoint, the coverage has often been quite good and pretty far ranging.  ESPN generally, and Pat Forde and Adam Rittenberg specifically, have covered the issue and the rather obvious duplicity of the NCAA in some detail.  For the overarching view of the issues, I recommend those columns.  To get an impression of my view of the duplicity of the NCAA, I highly recommend this video from Michael Smith.  Smith and I agree completely, the NCAA was duplicitous in its application of sanctions against these players and against The Ohio State University.  But there is more to it than that, and it is upon those differences that I will focus in this brief rant.

To make a long story short, and save the reader from wading through the MSM reporting, here is the synopsis.  These players sold and/or bartered with items and notoriety they had been given or “earned” in their capacity as football players at The Ohio State University.  Those benefits included both cash and services, in the fashion of tattoos from a local tattoo parlor in Columbus.  (No, I’m not making this up.)  They have been found guilty of “receiving improper benefits.”  Their punishment is:  being suspended for five games next football season.  They will all compete in the Sugar Bowl this season.  (No, you didn’t misread anything.  That is exactly what is happening.)

There are really only two issues of interest from my libertarian perspective.  First is the issue of ownership and its privileges. One would hope that rules imposed by the NCAA would somehow reflect an understanding of private property ownership.  Let us call that Standard One.  Secondly, there is the issue of rules and regulations.  If there is a rule in place that circumvents my ownership, e.g., an agreement, either implicit or definitive, that I will not receive “benefits” from ownership until such time as said agreement is no longer in place, what punishment fits the “crime” of breaking that contract?  One would hope that penalties levied by the NCAA would reflect some understanding of punishment that fits the crime in the most obvious sense.  Let us call that Standard Two.

These are the only questions that exist in the Ohio State Affair, or Tattoo Gate, as I will hereafter refer to it.  As anyone who has witnessed the amazingly transparent actions of the NCAA over the last few months can attest, what can be generally said about the imposition of NCAA sanctions is this:  The NCAA generally opts for a punishment that fails to meet either standard.  This case is no different.  In fact, Tattoo Gate is an object lesson in how to be damned certain that one’s actions meet no discernible standard at all.

If a person owns an item, the disposition of that item should be the business of that owner only.  In short, he can do whatever he wishes with it, including, but not limited to, sell it, give it away, bury it in the back yard, or burn it for warmth.  The obvious (read:  statist) exception of intellectual property aside, this seems pretty straightforward.  Clearly then, something else must cover the case of NCAA athletes.  This is where Standard Two comes in.  The NCAA apparently believes, and I’ll even agree with them for arguments sake, that the “contract of scholarship athleticism” precludes actions that might otherwise be appropriate for an owner of real property such as a championship ring or other soon-to-be-useless whatnottery.  Tattoo Gate is not about ownership.  Tattoo Gate it is about rules.

So then, a scholarship athlete cannot sell NCAA-sanctioned trinkets while participating in NCAA activities and/or while maintaining eligibility.  To do so constitutes the receiving of improper benefits and is justification for punishment.  Clearly, the players in question broke the rules.  Just as clearly, imposing a sanction of five games—approximately one-third of a college football season—is a hefty penalty.  Why then would the NCAA impose the penalty next season, effectively allowing the players and the team to benefit from their presence in a (high-profit-generating) bowl game?  That’s a very good question, and a question that no one seems able to answer.

If the infractions were egregious enough to warrant a large penalty—like five games—it would seem to warrant immediate imposition of said sanctions.  If it the infraction is minor enough to allow for imposing a sanction that won’t take place until next season (when at least two or three of those players could be gone to the NFL) it would also seem to not be worth mentioning.

What the NCAA has done, effectively, is harshly punish while simultaneously not punishing.  That’s an elegant implementation of justice and a fine example of what those of us who watch the actions of the NCAA have known for quite some time:  The NCAA is, in the vernacular, FOS.  (That means, loosely translated:  Full of Feces.)  Of course, many of us knew that before Tattoo Gate.  Didn’t you?

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How State Lotteries Make Markets Less Efficient

Anti-Statism, Business, Finance, Statism
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Someone sent me a link to this paper yesterday.

Prof. Harris argues that skilled traders, who consistently profit, do so by taking money from people who trade for extrinsic reasons, to hedge risks, increase their savings, or simply to gamble for entertainment.  He then points out an interesting implication:

If gamblers do indeed contribute to market quality in the long run by subsidizing information acquisition, an intriguing argument can be made about public lotteries.  Lotteries would appear to compete with financial markets for gamblers willing to lose money. Lottery gamblers subsidize the state through their voluntary participation in a negative-sum game. Financial market gamblers subsidize productive information acquisition.  Perhaps prices, and ultimately economic production, would be more efficient if gamblers gambled exclusively in the financial markets.

So there you have it — state lotteries make us worse off by wasting gambling money that would otherwise be productively spent.

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