You may have heard of the popular computer game World of Warcraft (WoW), which recently released its fifth expansion, which adds more quests, dungeons, and other content, in November. WoW has over 10 million players and there are few signs of this slowing down, which is impressive for a game originally released in 2004. What you might not have known is that there are complex economic and social structures in place everywhere in the game. But do these systems mirror real life in any meaningful way? I’d argue that making profit in WoW’s auction house reflects on one’s understanding of a free market since it employs similar principles. One Manhattan College professor recently likened playing WoW to a religious experience since it “tests a person’s’ ethics and values, and also gets them to think about things like environmentalism and moral issues.” I’m not sure if I’d attend a WoW church service, but the game is a great example of a virtual economy and being kind (or unkind) to your neighbor. (more…)
“Blessed are those who find wisdom, those who gain understanding, for she is more profitable than silver and yields better returns than gold.” –Proverbs 3:13-14
In Episode 5 of For the Life of the World: Letters to the Exiles, Evan Koons asks about the purpose of knowledge, wondering whether it’s simply a means to greater levels of self-fulfillment, or if there’s something more. “Is knowledge just a tool that we use to leverage to get more stuff?” he asks.
On the contrary, as he goes on to learn, “knowledge is a gift, and like all gifts in God’s oikonomia, it points us outside of ourselves.” As we participate in the Economy of Wisdom — whether through education, research, or innovation — we have a remarkable opportunity to love greater and serve better, further uncovering the mysteries and abundance of God, and sharing the wonder of his glory with the world around us.
Economists continue to affirm the creative power of human collaboration in generating new ideas, innovations, and discoveries that on the whole have improved our quality life and created enormous opportunities. Why, then, do Christians so often forget the breadth and depth, the aim and end of this core feature? For indeed, when paired with the whole-life transformation found in the Gospel and the Holy Spirit, which includes the renewing of our minds, such collaboration takes a whole new shape. Christians have unique call and contribution to this area, so if we hope to spread life and abundance to those in need across all areas of society, materially, socially, spiritually, and otherwise, having a rightly aligned perspective on the basic purpose of knowledge is essential. (more…)
Writing on September 22 in the Wall Street Journal, Devlin Barret and Danny Yadron reported,
Last week, Apple announced that its new operating system for phones would prevent law enforcement from retrieving data stored on a locked phone, such as photos, videos and contacts. A day later, Google reiterated that the next version of its Android mobile-operating system this fall would make it similarly difficult for police or Google to extract such data from suspects’ phones.
It’s not just a feature — it’s also a marketing pitch. “It’s not technically feasible for us to respond to government warrants for the extraction of this data,” Apple’s website says.
This would not protect all data, however:
Apple acknowledged it could still hand such data over to law enforcement that users back up on the company’s iCloud servers. And police can access some iPhone data without Apple’s help, because phone firms keep call logs and Apple doesn’t control data from third-party apps.
The FBI has not taken this news well, in more ways than one. Amy Schatz reports for re/code,
New encryption technologies on smartphones will make it harder for law enforcement to solve crimes or stop terrorists, Federal Bureau of Investigation director James Comey said Thursday in a speech asking companies including Google and Apple to reverse course. (more…)
I have spoken in the past in favor of net neutrality, writing,
Whoever is responsible for and best at enforcing it, net neutrality had this going for it: it was a relatively stable, relatively open playing-field for competition…. [T]he fact that companies tried to get around it via copyright protection privileges shows that it was, in fact, doing something to enforce freedom of competition. Now, without it, there is an opportunity for concentration of power…. As [Walter] Eucken illustrated, concentration can lead to instability, and instability leads to popular calls for state regulation, which tend in practice toward cronyism. Certainly, such a trajectory is not inevitable, but it is now more likely, giving good reason for pause at the idea that we do not need net neutrality — or something like it — in the future.
This week, House minority leader Nancy Pelosi voiced her support for net neutrality as well. So why would I object? Because the measures that Pelosi proposes give much more power to the government, following the trajectory outlined above in the direction of over-regulation. (more…)
Christians colleges aren’t usually known for being on the cutting-edge of technology. But The King’s College, an evangelical college located in New York City, is leading the way by becoming the first accredited college in the United States to accept Bitcoin for tuition and other expenses:
“The King’s College seeks to transform society by preparing students for careers in which they help to shape and eventually to lead strategic public and private institutions. Allowing Bitcoin to be used to pay for a King’s education decreases our costs while simultaneously allowing our students to be a part of this exciting new technology,” said Dr. Gregory Alan Thornbury, President of The King’s College.
Coin.co CEO Brendan Diaz added, “Over the past year, the Coin.co team has led the effort to enable U.S. colleges, universities and other major institutions to accept Bitcoin without incurring any currency risk. Coin.co is proud to be working with The King’s College, and to be a part of pioneering the use of Bitcoin for education.”
Before commenting on their adoption of cryptocurrency for tuition, let me express my admiration for TKC. I’m a fan of the school’s president, Dr. Gregory Alan Thornbury, and our friend and Acton contributor Dr. Anthony Bradley, who is a professor of theology and ethics at the school. I applaud the college for being savvy enough to accept Bitcoins—and would advise students to be savvy enough not to pay their tuition with them.
The reason, as I’ve pointed out before, is that Bitcoins are no longer completely fungible.
With those ten words, the IRS has made it more difficult — if not impossible — for bitcoin and other virtual currencies from gaining widespread, mainstream acceptance as a currency for commercial transactions. Because they are now treated as property, virtual currencies are considered, like stocks, bonds, and other investment property, as capital assets and will be subject to capital gains tax.
But why does this hinder bitcoins use a currency? The answer is fungibility: Bitcoins are no longer completely fungible.
Last year I wrote a series of blog posts about what Christians should know about Bitcoin. In response, one astute reader pointed out an odd juxtaposition: my conclusion seemed to imply that Christians should avoid Bitcoin “at all cost” and yet the Acton Institute accepts donations in Bitcoin. “I really want to know the rationale behind this,” he said.
Well, the rationale is easy enough to explain: Not everyone at Acton agrees with me. Like other nerds who have an interest in the intersection of economics, liberty, and technology, many of us at Acton disagree about the merits of Bitcoin. (I’d offer to place a gentleman’s wager on the future of the crypto-currency, but they’d want to bet using Bitcoin. Either way – whether it increased in value or went defunct – I’d end up the loser.)
Opinions are still divided, but the evidence that Bitcoin is doomed to failure piles up almost every day. Over the 8 month span from October 2010 to June 2011, the market value of Bitcoins skyrocketed 9667-fold from a value of $0.06 to $29. Later, when I wrote my series last April, a single Bitcoin was worth less than $100. Today, it is worth $660, and that’s after falling from a high of $1,100 in November 2013. A currency that can fluctuate from $0.06 to $1,110 in a three-year period is not a currency – it’s a speculative bubble.
Of course, we Bitcoin doomsayers have been waiting for the bubble to pop for some time now. We also tend to think that every new drop is a sign of it’s impending doom. Fellow naysayer Jonathan Last is sure, this time, that the end of Bitcoin is near:
When looking for solutions to humanity’s problems, conservatives and libertarians tend to prefer turning first to free markets rather than government. The reason for such a preference is often misunderstood, and can be difficult to explain since it appears paradoxical: free markets are often better at serving human needs than governments because free markets make it easier to fail.
As Arnold Kling explains, the best way to deal with failure depends on the institution. An individual needs to fail with a fallback position, a small startup firm needs to fail quickly, and a large, established firm needs to fail gracefully. But government, says Kling, cannot do any of these things well.
Of the many things that governments do poorly, failing is probably the worst. That is why governments rarely produces significant innovations. To produce innovative ideas, products, processes, or services requires testing what works and adjusting what doesn’t until you find the right formula. In a free market, the actions of consumers provide a signal to individuals and firms that they are doing well – or that they are failing.
If a company is failing, they have an incentive to adjust — and are pressured by competitors to adjust quickly — in order to give the customer what they need. They are often faced with a brutal, binary choice: innovate or fail. Government agencies, in contrast, tend to lack such feedback mechanisms and the ability to adjust quickly precisely because they have a low fear of failure. Even if they are unable to innovate and serve the needs of their “customers” they will likely stay in business due to bureaucratic inertia.
“Most CEOs now spray the word ‘innovation’ as if it were an air freshener,” says Dennis Berman in the Wall Street Journal, “A little spritz can’t hurt.” A prime example, notes Berman, is what Kellogg’s CEO John Bryant described as one of their company’s most important “innovations”: a peanut butter Pop-Tart.
Most of us would probably agree that a new flavor of breakfast pastry isn’t as innovative as, say, the iPhone. But how do we know? What exactly is innovation?
As David Brier explains, innovation is about “seeing and connecting the dots.”
At Forbes.com, Jerry Bowyer interviews George Gilder on his new book Knowledge and Power (HT: AOI Observer). The long Q&A, titled “George Gilder Has A Very Big, Economy Boosting Idea” is very much worth a read. Here’s a snip:
Jerry: “So the market system is the operating system at best, but it’s not the user. That the entrepreneur uses an operating system called the market economy: there’s hardware to it, there’re rails and canals and buildings and factories; there’s software to it, in the sense that there’s operating system software equivalent to DOS or Windows or Linux or whatever, but that thing just lies there dormant until a user sits down at the keyboard and starts changing things, and that user’s the entrepreneur.”
George: “That’s right. And those operating systems themselves in turn were generated by other inventors and entrepreneurs and programmers. Every logical scheme and every machine requires an oracle, as Turing put it. The only thing Turing could say about that oracle, and he italicized it, is that it cannot be a machine. A machine is an orderly system, and all information is disorder; it’s disruption; it’s surprise.” (more…)