Tag Archives: political economy

Facebook’s Targeted Ads

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Facebook is upset with Apple because the latter, with the privacy changes (improvements?) it has made to its upcoming iPhone software, will greatly hinder the former’s ability to generate targeted ads on apps outside of Facebook’s.

Note, though: Facebook can’t deliver targeted ads without first tracking us.

Apple’s move, then, to the extent Facebook’s characterization is accurate, can’t be all bad on two counts: users won’t be limited in what they see regarding specific products or products in general, which is what targeted ads do, and users won’t be tracked as effectively, which is another purpose of ad targeting.

But, Facebook complains, Apple’s software changes

will affect its Audience Network business….

It’ll affect one of Facebook’s business models.

Willy Sutton’s business model was to go where the money is. Go there often. Maybe he should have been left alone, too.

A Bilateral Trade Agreement

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Antony Phillipson, Great Britain’s Trade Commissioner for North America, offered an assessment of the current state of the trade negotiations occurring between the US and the UK in a recent Wall Street Journal Letter.

Among other things, Phillipson had this:

US tariffs on UK steel, aluminium, and significant exports like Scotch whisky raise prices for US consumers and are an unhelpful backdrop to negotiations. We are pushing for a settlement to the Airbus-Boeing disputes and removal of all retaliatory tariffs.

The Brits, along with the EU at large when they still were a member state, the OECD, and the G-7, were offered a completely tariff-free regime, years ago, by President Donald Trump.

The Brits, along with the rump EU, the OECD, and the G-7, have yet to respond to that offer.

So, Commissioner Phillipson, what is your answer?

Safety and Efficacy

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Scott Gottlieb and Mark McClellan had some thoughts on drug trials in the context of the current Wuhan Virus (my term, not theirs) situation. For the most part, they’re right. There’s one aspect of their op-ed, though, that I want to comment on.

…if we don’t know what works, and what doesn’t, we’ll waste time and money on treatments that won’t help and may harm. Even if a vaccine is discovered and approved, the pandemic won’t end unless most Americans get vaccinated, which will require confidence in the product’s safety and efficacy.

The FDA currently must determine both safety and efficacy. That’s misplaced, though, and it misuses both time and money, and it misidentifies the money involved.

The FDA should be intimately involved in determining a drug’s or vaccine’s safety; we don’t need a market of snake oil salesmen claiming the safety of their wares.

But we don’t need Government involved in free markets. The free market here is that of patients and their doctors; they should be free to use—an extension of the Right to Try concept—drugs to mitigate the virus’ infection or likelihood of infection, and they should be free to use vaccines to achieve longer-term protection from the virus as soon as those chemicals have been shown safe.

The right to try given safety also would answer one of Gottlieb’s and McClellan’s concerns about numbers of trials and trial size: there are lots more patients and doctors in the market than would be participating in FDA-supervised trials, every one of those patients and doctors would be volunteers, and their data would be both more broadly based and available much faster than via an FDA-supervised trial or the series of them that might be necessitated by questions arising from a given trial.

Another of Gottlieb’s and McClellan’s concerns is that waste of money. Their concern proceeds from the assumption that it’s the government’s and pharmaceutical companies’ money being wasted. In Gottlieb’s and McClellan’s paradigm, that’s true. But in a free market—those patients and doctors—it’s the patients’ money being spent; it’s their assessment of whether their money is being wasted. Pharmaceutical companies will recoup much, if not all, of their expenses through their sales, and Government need not be involved at all.

Apple vs Epic

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Some of you may have heard of the video game Fortnite, which Epic makes for the cell phone market and sells through Apple’s app store. Associated with that is Epic’s move to make in-app sales—purchases of other products made from within an app—without having to pay the 30% commission Apple charges for in-app purchases via an app that was sold through Apple’s app store.

Some of you may have heard of Apple’s subsequent decision to block Fortnite sales through its app store and of the ensuing antitrust hoo-raw over Apple’s move.

The hoo-raw is centered on government intervention into what should be a free market: government antitrust law and the use of the government judiciary branch to press the beef.

That’s wrong, however legal the beefing might be.

I consider Apple’s use of its facility, here its app store, to be entirely withing Apple’s right to control its property, regardless of how widespread third-party use might be. Walmart, for instance, is not legally required, nor is it morally obligated, to sell any particular third-party product that wants shelf space. To provide space, or not, is a purely business decision, whether the space is physical for physical goods or virtual for electrons.

On the other hand, there’s nothing preventing Epic from selling its output through other facilities than one provided by Apple. There’s nothing preventing Epic or other app producers from forming their own individual app stores or from banding together to form a collective app store or collection of app stores.

Along with that, there’s nothing wrong with app developers selling their output exclusively to or through Android device producers and eschewing Apple device compatibility altogether.

That’s what a free market does. It’s what should be occurring here. Don’t bother with antitrust litigation; instead, set up separate app stores.

As an aside, Alphabet’s Google Play charges the same 30% for the same in-app purchase process, but the current beef only involves Apple. If there is a legitimate legal beef here, maybe it’s in the two biggest players in the app sales business charging the same price. It’s hard to believe that the two entities have sufficiently identical cost structures that they would arrive, naturally, at the same market price.

Student Debt

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In an article about Progressive-Democratic Party Presidential candidate Joe Biden’s plan for reducing student loan-centered debt, The Wall Street Journal asked

What do you think would be an effective way to reduce student loan debt in the US?

Getting government out of the way of the economy so graduates can get jobs and pay their debts is the first and most critical step.

For the future, we need to require colleges and universities to publish the median and mean first-five-year annual incomes for their various majors.

In addition, we need to require colleges and universities, either individually or as consortia, to be the sole lenders of last resort to their students

We also need to remove government altogether from the student loan industry, as lender, as loan guarantor, and from any other role.

Finally, the only legitimate way for graduates to reduce their student loans short of repayment is through ordinary bankruptcy. We need to force our government to eliminate its ban on bankruptcy discharge of student debt.

Biden’s “plan” unfairly singles out private colleges/universities by not having their students’ debts ameliorated, a deliberate attempt to punish them; he’ll only mitigate the student debts for graduates of public schools and those who were cheated (under his definition of cheating) by for-profit schools.

Even worse, by making it so students don’t have to repay all of their debt through his forgiveness bit, Biden will greatly diminish, if not destroy, the student loan market, shifting the whole thing onto the backs of taxpayers, unless the methods outlined above are enacted.