A Citizen's Guide to Indiana

Jeffrey McCall had a column in the Lafayette Journal & Courier that made me think of a passage from John Perry Barlow’s “Economy of Ideas.”

McCall was writing about what big money sports represent for media corporations:

Sports television is great for the mega media corporations. Live game broadcasts are virtually DVR-proof, meaning fans watch the games as they happen. Thus, viewers can’t skip the commercials, as they often do when they view recorded sitcoms or dramas.

That phenomenon was anticipated by Barlow who was reflecting on the changing nature of copyright in a digital age. Barlow had observed back in the mid-90s that copyright really regulated the bottles instead of the wine. Now that the nature of the container was changing – becoming digitized and not analog – it would pose a problem.

I believe one idea is central to understanding liquid commerce: Information economics, in the absence of objects, will be based more on relationship than possession.

One existing model for the future conveyance of intellectual property is real-time performance, a medium currently used only in theater, music, lectures, stand-up comedy, and pedagogy. I believe the concept of performance will expand to include most of the information economy, from multicasted soap operas to stock analysis. In these instances, commercial exchange will be more like ticket sales to a continuous show than the purchase of discrete bundles of that which is being shown.

The other existing, model, of course, is service. The entire professional class – doctors, lawyers, consultants, architects, and so on – are already being paid directly for their intellectual property. Who needs copyright when you’re on a retainer?

In fact, until the late 18th century this model was applied to much of what is now copyrighted. Before the industrialization of creation, writers, composers, artists, and the like produced their products in the private service of patrons. Without objects to distribute in a mass market, creative people will return to a condition somewhat like this, except that they will serve many patrons, rather than one.

The live sports event fits the real-time performance model. It commands attention in a predictable fashion. People will often wait through the ads to see the event in real time. That’s why it commands a premium from cable subscribers.

A certain amount of confidence is necessary to get anything done, but I’ve often observed that certainty can be a debilitating learning disability. You have to have some humility and doubt in order to entertain the possibility that your beliefs might be wrong and receive the information necessary to correct them.

There is an article about Tony Bennett in the Indianapolis Star having to do with allegations he misused state resources for political purposes. The particulars of the allegations are of the sort that are probably legitimate public policy concerns but which the parties level against each other frequently enough that it’s tough to get worked up about them. But what struck me was the e-mail from Bennett to his staff:

The email said: “Below is a link to Glenda’s forum in Bloomington. It is 1:35 minutes. I would ask that people watch this and scrub it for every inaccuracy and utterance of stupidity that comes out of her mouth.”

“Utterance of stupidity that comes out of her mouth” strikes me as beyond the pale.

Update: I had not read the original e-mail chain (pdf). Turns out, the sentence I highlighted has a spelling error. “Utterance of stupidity that comes put (sic) of her mouth.”

Sheila Kennedy has a good post on why Gov. Pence’s embrace of “market driven” health care is misguided.

When Pence announced his negotiated one-year “deal” with the federal government to continue “Healthy Indiana” in lieu of expanding Medicare (a “deal” that leaves some 400,000 Hoosiers without healthcare), he insisted that “Consumer driven healthcare is the path to the future.”

She notes, “Economists define a market transaction as one involving a willing buyer and willing seller, both of whom are in possession of all relevant information.”

The consumers in these transactions very rarely have all the relevant information. Sheila also observes that it is not the patient and doctor negotiating the transaction; rather that it’s the insurer and the doctor negotiating the transaction. I’d go a step further; often the doctor isn’t negotiating the transaction either – it’s a hospital or a doctor’s group representative — I don’t remember the last time a doctor gave me a straight answer in a deposition about the cost of anticipated future surgery.

Consumer driven plans probably work tolerably well for straightforward, elective procedures. But in most cases, the decision to get health care services is made under duress. What is really happening, I believe, is that Americans are being priced out of health care, their utilization rates are dropping — not because they don’t need the help, but because they can’t access it — and their health is suffering.

For citizens whose wages have been stagnant for decades facing health care prices that have been rising dramatically over the same period, this is how they can be made to bear the cost when they are out of money: by, almost literally, contributing their pound of flesh.

A good column at Strike! Magazine for your Labor Day entitled “On the Phenomenon of Bullshit Jobs.” (h/t Tipsy) The author considers the phenomenon of our continued toil despite our technological ability to probably do what needs to be done with 3-4 hour work days. Instead, most of us, particularly in the West, spend endless hours doing work that is essentially bullshit. He sees this system as benefiting the people who control most of the resources and as being effective in keeping civil unrest to a minimum in a system from which those people benefit.

The author points out that the “market” has a relatively limited demand for poet-artists; and a seemingly endless demand for corporate law specialists. He would doubtless include my job in the list of bullshit jobs and, depending on the day, I might agree. Certainly, I can’t claim that what I do is productive; but, when I am doing my job well, it is at least preservative in nature from the perspective of my clients.

I think a lot of the non-productive jobs the author sees are devoted to administering resource allocation. Some times these jobs aren’t bullshit since the efficient allocation of resources minimizes waste and allows the productive jobs to produce more and better things. Other times, these jobs are devoted to addressing disputes about who gets what stuff. That’s often what my job is — when I’m working on defense litigation, reviewing endless boxes of paper for evidence or potential evidence; the heart of it is that someone has gone to court and demanded an order that my client give them money. My client wants to keep its money. And, so, they pay me money with the hopes that I can make it so they won’t have to pay out even more to someone else.

In those cases, I’m not creating value; but maybe I’m preserving value from destruction. I get paid reasonably well for that. Arguably, I produce more value from something like this blog where I get paid nothing. One difference is that, when I’m getting paid, I’m generally preserving value for specific persons with resources to defend. Whereas, when I’m creating value (to the extent what I do here is valuable), the utility is abstract and it is for an amorphous group of people who can get similar value elsewhere for free.

In any event, a lot of the bullshit jobs probably have something to do with what Marx was talking about with his ideas concerning abstraction of labor that I never really understood.

Ball State scholars, Michael Hicks, Srikant Devaraj, Dagney Faulk, Dick Heupel, and Sharon Canaday recently released a paper entitled The Causes of State Differences in Per Capita Income: How Does Indiana Fare? (pdf) Yesterday, Brian Howey offered the opinion that Indiana’s jobs problems are perhaps the result of challenges and limitations at the local government level rather than state economic policy.

The Ball State Report noted that per capita income for Hoosiers ranked 21st in the nation in 1950, 30th in 1980, and 40th as of 2010. There is a verse in the Bible (Mark 4:25) which says “For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath.” Howard Bloom likes to use that verse as a way of describing the algorithm by which groups allocate their resources. The group devotes its resources to those parts of the group that appear to be having success as a way of ostensibly maximizing success. You don’t waste your scarce resources on losing strategies.

Hicks and Howey offer the following (from the Howey column):

Hicks explains: “This is a really a local, not state problem. Almost all our local economic policies target business investment, and masquerade as job creation efforts. We abate taxes, apply TIFs and woo businesses all over the state, but then the employees who receive middle-class wages (say $18 an hour or more) choose the nicest place to live within a 40-mile radius. So, we bring a nice factory to Muncie, and the employees all commute from Noblesville.”
. . .
[The General Assembly has] passed tax caps that have crimped city budgets. The hope was that municipalities would consolidate, but what’s happened has been cuts in parks budgets and a curtailing of school bus service. So when cities compete for that new corporation, and the executives survey a city with shabby parks and kids walking to school in 10 degree weather, they go elsewhere.

Hicks said, “As Americans became richer, schooling and community amenities matter more. This is an iron law of economics, that the share of income we spend on some goods rises as we get richer. Education and amenities (like health care and recreation) are two of these things. So, the Midwest built its small towns long before the quality of a place made much difference in migration or incomes. Today, quality of place matters deeply, and we are, in many places, unprepared to deal with it.”

(emphasis added). The highlighted portions brought to my mind Bloom’s biblical algorithm. The employees with money go to communities that are not deteriorating. The executives choosing new business locations choose communities with parks and schools that are not in disarray. People with resources and choices want to allocate those resources in places that appear to have winning strategies.

This is why Indiana’s relative per capita income matters. The authors of the Ball State study are quick to point out that Indiana’s absolute standard of living has improved. The problem, however, is that we have put ourselves on the wrong side of the economic snowball. Those who have are going to put their resources in places that have. We’re putting ourselves on the “hath not” side of the equation; and, if we’re not careful, even what we have will be taken from us. If our economic policies appeal to low end employers, our people will get low end jobs where the value of our production is taken from us and distributed to the people and places on the “hath” side of the equation. The Ball State study shows that there is a large gap in household incomes for those who migrate out of the state versus those who migrate into the state; with poorer families moving in and wealthier families moving out.

The Ball State study also took a look at county level differences; comparing the per capita income in 2010 to the national average over time. The average LaGrange County per capita income in 2010 was the same as the national per capita income in 1964: lagging behind by nearly half a century. Only Hamilton and Boone Counties were ahead of the curve; with per capita incomes at the estimated national average for 2019 and 2018 respectively. Indiana as a whole is at 1996 levels.

Government power is fairly centralized in Indiana, with the General Assembly meddling significantly in local affairs. At some point, there will likely be a renewed battle for local control; with the areas having better prospects seeking to limit their connection to State mandated policies that yoke them to the areas with poorer prospects.