Pirates: Rational Profit Maximizing Entrepreneurs of the Sea

January 24, 2012 9 Comments

Pirates are awesome.  Economics: also awesome.  The combination?

Check out this report: The Economics of Piracy.  It uses data from 1500 Somalian pirates to look at the future of international piracy.  An excerpt:

Pirates would appear to be the very essence of rational profit maximizing entrepreneurs described in neo-classical economics. Expected profits determine decisions based on the information available. The supply of pirates, therefore, is closely related to the expected benefits of being a pirate and the associated risk adjusted costs.

Yep. You read that right. Pirates are economics bad-asses.

The paper, which looks primarily at Somalian pirates, explores piracy in several arenas, and concludes that incidents of piracy will substantially expand in the coming years, primarily due to the rising income disparity betwen pirates and non-pirates.

How big a problem is piracy? In 2010, the cost of piracy to the international community was between $4.9 and $8.3 billion.  Off the coast of Somalia, the total income to pirates, from piracy, was between $75 and $238 million in 2010.

Thinking about hitting the high seas as a Somalian pirate? You can expect to earn between $168,630 and $394,200 over a five year career. If you choose the next best legal alternative, you’ll probably make $14,500 – over your entire working life.  At those prices, piracy doesn’t look so bad.

To combat piracy, the paper recommends the formation of a Global Contract Group, as well as new developments to asymmetric law and law enforcement.

Check it out.  Worth a read.

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The Future of the Internet: Regulation (Part 3 of 3)

July 9, 2011 2 Comments

Today, at the World Future Society 2011 Conference, I joined members of the Weiner, Edrich, & Brown team on a panel about Youth Trends.  I identified three trends related to the internet and social media.

Disclaimer: I am a Googler, however, nothing in this post has been influenced by confidential information or is a commentary on any insider knowledge about any of the topics I might be addressing.

First Trend: Real Names
Second Trend: Reputation

Regulation

The last two trends related to increasing accountability.  Organizations are holding end-users accountable for real names and for confirming their identities.  End-users are holding organizations accountable for their actions, and making decisions based on the reputation of those organizations.

The third trend deals with regulation – governments holding organizations accountable for their actions.  Going forward, the internet is going to be a much more regulated space.  It will be far less of a Wild West, and much more of a New York; a big, full, mature city, with regulations guiding actions of both organizations and end-users.

The European Union is at the forefront of this regulation.  On May 25th, the EU implemented a law surrounding cookies, which are essentially technology tracking devices.  The privacy law, often referred to as a “do not track” law, requires websites within the EU to obtain a visitor’s consent before installing a cookie in their browser.

The EU also has been discussing a “Right to be Forgotten” law.  The law would require websites in the EU to allow users to demand that organizations delete all of that user’s data, whether it’s personal data or unflattering photos.  The EU has been throwing this idea around for a few years; Viviane Reding, the Vice-President of the European Commission, gave a speech about this concept in 2010.  You can read a transcript of her controversial speech here.

The United States has been getting onboard with the “Right to be Forgotten” initiative.  While some of the policy specifics differ with those of the EU, “the EU and U.S. already agree on some general concepts, such as the idea that privacy safeguards need to be designed into Web products from the start.” They also both agree that all end-users should have the “do not track” option.

As any technology does, the internet is growing up.  We’re starting to figure out how it can be useful, harmful, or fun.  The next steps in that evolution are real names, reputation, and regulation.

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The Future of the Internet: Reputation (Part 2 of 3)

July 9, 2011 2 Comments

Today, at the World Future Society 2011 Conference, I joined members of the Weiner, Edrich, & Brown team on a panel about Youth Trends.  I identified three trends related to the internet and social media.

Disclaimer: I am a Googler, however, nothing in this post has been influenced by confidential information or is a commentary on any insider knowledge about any of the topics I might be addressing.

(First Trend: Real Names)

Reputation

Increasingly, internet users are considering the reputation of organizations before they put their data into those organizations’ websites.

In the early days of the internet, few organizations had been around long enough to have an established reputation of any sort.  Not only that, but the implications of giving your information, or data, to a website weren’t clear.  Some might argue the implications are still not clear.

When end-users enter their information into a website, most are not sure where that information goes.  When users enter information into websites, they don’t really know where that information goes, or what the website does with it.  This could be for a variety of reasons.

  • End-users don’t read the privacy policies.
  • Privacy policies are written in legal-ese – even if end-users do read them, they aren’t elucidating.
  • Companies do not have policies surrounding end-user data.
  • Companies do have policies surrounding end-user data, and don’t want end-users to know what those policies are.

Google+ is a new social networking site, hosted, obviously, by Google.  The importance of company reputation, in the social networking space, can be summed up by this comic:

Up next: Regulation

Edit 7/17.  Check out this Doghouse Diaries comic on Legalese:

Filed under conference, Opinion, talk, trends, World Future Society Tagged with , , , ,

The Future of the Internet: Real Names (Part 1 of 3)

July 9, 2011 2 Comments

Today, at the World Future Society 2011 Conference, I joined members of the Weiner, Edrich, & Brown team on a panel about Youth Trends.  I identified three trends related to the internet and social media.

Disclaimer: I am a Googler, however, nothing in this post has been influenced by confidential information or is a commentary on any insider knowledge about any of the topics I might be addressing.

Real Names

The internet has traditionally been viewed as the Wild West of technology.  It has been an unspoiled frontier, waiting to be discovered, tamed, and understood.

Part of that mystery and allure has been the ability traipse around the internet anonymously.  Sites like 4chan, Omegle, and Chatroulette, are based on the anonymous nature of internet interaction. Even traditional chat clients like AIM, gaming websites like Kongregate, of social media outlets like Twitter, only ask for a username – a made up nickname – that doesn’t have to be your real name.

Increasingly, the internet is shifting towards a model based more on individual accountability.  Facebook has algorithms that attempt to detect whether or not you’ve put in a real name.  Google+ is asking users to input their real names, too. Right now, the internet is trending towards asking users for their real names.

This confirmation of identity has to be the next step in the evolution of the internet. Without confirmed identities, the internet will never act as a forum for highly secure transactions, such as serious banking or voting.

Of course, there will always be proponents of anonymity.  Christopher Poole is one such proponent. On the internet, he’s known as Moot. Moot is the founder of 4chan, and, more recently, Canvas, both of which are anonymous message boards.  A few years ago, he spoke at TED, creating a case for anonymity.  The video is definitely worth watching.

Up next: Reputation

Filed under conference, Opinion, TED, trends, World Future Society Tagged with , , , , ,

Statisticians: New Champions of the Future?

August 30, 2010 1 Comment

At the World Futures Conference, we were bestowed a large compendium of academic and scholarly journal articles, called Strategies and Technologies for a Sustainable Future.  It features numerous authors and topics from automobile future scenarios to creativity paradigms.  If one thing is true of conferences, it’s that they provide a plethora of reading material.  I’m just starting to dive into this particular tome now.

How are we measuring progress?  Generally, the answer is GDP: Gross Domestic Product.  But is that really the best way to determine how humanity is moving forward?  How do we really measure quality of life?

Jan Lee Martin, a futurist speaker and writer in Australia, says that economic, monetary measures don’t reflect quality of life. What we need, Lee Martin says, are new measurements that accurately capture what really matters to us.  So, what is that?  What should we be measuring?

Lee Martin included a chart from the OECD.  It shows what people have been measuring, since the 1920s, to determine quality of life. [Click the image for a larger version, in pdf format.]

Lee Martin lists a number of measurements that might be more useful to consider than the traditional economic metrics.  Among them, she lists:

  • Resiliance
  • Happiness
  • Fairness
  • Diversity
  • Democracy
  • Sustainability

Economist Simon Kuznets said, “A nation’s welfare can scarcely be inferred from their national income.”  Yet, we insist on using it as our primary measurement for progress.

To determine human welfare, what else should we measure?  Is this all-inclusive, too-inclusive, or lacking in some area?  What would you add?

Update: Found this on TED today.  Statistician Nic Marks asks why we measure a nation’s success by its productivity rather than the happiness and well-being of its people.

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