#sam bowman

[T]he lawsuits have a contradictory logic about what market Facebook is supposed to be monopolising, and what companies it is constrained by. The lawsuits' logic is that Facebook does not just compete with sites with very similar News Feed-type functionality like MySpace or Bebo, it competes with other social media sites too. Instagram is a bit like Facebook, but it's no more similar than, say, Twitter or TikTok, with which Facebook has other things in common. If Instagram can be considered a competitor to Facebook, so too must Twitter and TikTok - and perhaps Slack, Discord, Twitch, YouTube, Snapchat, Reddit and many of today’s other popular social-networking services as well.

This is also true for WhatsApp, which faces competition from iMessage (45% of Americans use iPhones) and SMS text-messaging, as well as the messaging options offered by other social media sites.

So the lawsuits face a conundrum: if Facebook's market is narrow, and it is a monopolist in that market, then it is unproblematic for it to buy services in other markets since they wouldn't ever compete with it anyway. But if Facebook is in the same market as Instagram, then Facebook is not a monopolist, since lots of other healthy competitors exist in that broad market too. If Instagram and WhatsApp were competitors of Facebook’s when Facebook bought them, they must face lots of competition from other, similar products now.

[W]hile we tend to think of inalienable legal rights as being the most strong and fundamental ones, often rights are much more valuable if they are alienable - if we can give them up. Being able to give up a right, for example by selling it, makes it more like a piece of property. An artist who can alienate their right to a copyrighted creation by selling the rights permanently can earn more than if they may only lease the rights for a period - and this is still a degree of alienation compared to if she could not give up her rights at all...

In the UK and some other countries people can veto new housing developments near them either directly, by objecting when they seek planning permission, or indirectly, by lobbying local politicians. They cannot give up their right to do these things - it is inalienable - so, like the author who can never credibly sell the rights to their book, they cannot easily "sell" their objections to new developments, and there are strict rules against local government auctioning it on their behalf.

The result is another missing market, and likely far less development than would be optimal from the point of view of nearly every single person involved. If a new construction was valuable enough that the proceeds could be used to buy the willing participation of everyone affected by it, then with a well-functioning market for consent, almost everyone could be made better off...

Inalienable rights are deadly. You cannot alienate your right to your kidney - it is simply illegal to sell one no matter how much you'd like to, even though this could increase supply from willing donors and save lives.

With two potential targets, the team separates and makes a horrifying discovery.

Posting this for new viewers and possible readers

Scott Sumner’s Adam Smith Lecture

Last week Scott Sumner gave a lecture in London on the causes of the Great Recession and Market Monetarism. I had the honour of introducing Scott and you might me hear interrupting Scott near the end of the presentation. Scott made a lot more sense than I did.

Watch Scott’s Adam Smith lecture here.

Enjoy.

HT Sam Bowman

My friend Sam Bowman, Research Director at the Adam Smith Institute, has written a letter to the Financial Times calling for the introduction of a nominal spending targeting in the euro zone. This is from Sam’s letter:

…While supply-side reforms are…