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05/22/2005

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Professor Becker says (1) Internet commerce should be untaxed because it is an industry that should be encouraged to grow, and (2) Spam should not be regulated, because though it is a severe problem for the Internet, some technological solu... [Read More]

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Franois

"Robert Merton, the late outstanding sociologist of science, demonstrated that the main way plagiarism and dishonesty are policed in research is through the incentives provided other researchers to discover and expose such malfeasance."

Excuse my ignorance, could you please precise where he did so? I would be interested in reading the actual argument in Merton's words, but I don't know where to look for them.

Joe Merchant


Spam presents a problem that might be typical in a society without government - you may ask a spammer to please opt you out - but that merely informs him that you have read his mail, and thus, are an active mark - likely better than 95% of addresses on his e-mail list. Thus, he can now sell you as a "certified active" address to 100 other spammers.

There are no effective spam police, so you must deal with the problem yourself. I use two options: one, I avoid revealing my "private" e-mail address in public forums, and two, the address I do reveal in public is actively spam-filtered for me by yahoo - they are not perfect, and I likely lose the occasional non-spam message in that account, but such is life.

As long as the basic mechanisms of sending e-mail (SMTP) do not require strong identity of the sender, you will continue to have the spam problem.

I would welcome a revision to SMTP which allows recipients to "opt out" of receiving essentially anonymous e-mail - unfortunately, BetaMax and VHS are slugging it out again in this arena, and the final winner is far from clear.

Gabriel Mihalache

I for one dislike arguments based on externalities because of the inability to objectively measure certain effects, and therefore the potential for misuse (consider for example Mises's argument against quantitative methods in Economics, which I don't fully endorse, but which illustrates the point) I'm sure this object is raised often, but in this particular case, that of spam, it seems strangely true.

For example, if the negative externality caused by spam is a function of time, then various people value their time differently. A 13 hours-workday executive will value his hour more than a senior retiree.

It might be unfashionable of me to say this, but involving the State's regulatory-coercive power in wealth distribution (via externality compensation in this case) is a Pandora's box, especially if the State is the one both measuring the cloth and doing the cutting.

TheWinfieldEffect

Listen, some people dislike spam, but whatever the fraction is (e.g., 1/1000) of people LIKE spam. Deleting "grow your penis larger" or "time shares in the Everglades" e-mails annoys me, but there is someone out there who perks up and says to himself, "Boy, I'd love to grow my penis! Add me to the list!" and he has a girlfriend who implores him to stop working so much at the office and take a trip to the Everglades where they've a cyber-procured time-share.

Let's call this guy Roland and his girlfriend Rolanda. And let's say that everyone else who is contacted by these e-mails is feels annoyed, but the annoyance is ephemeral and the opportunity cost of deleting the annoying e-mail is has an average value in the cents. By contrast, the penis-lengthening pills and the time-share in the Everglades are priced to go at millions of dollars. Not only that, but Roland and Rolanda value the time-share and the penis pills in the billions. It seems pretty clear in this situation that there is no problem with spam: because the benefits clearly outweigh the costs. Becker does not even deal with an scenario similar to that above. Instead he makes a non-sequitur:

BECKER: "[M]y reluctance to interfere with the dynamics of the growth of the internet largely explains my opposition to taxation of transactions and other activities on the internet. I fear that the additional regulation of the internet that would inevitably accompany efforts to enforce taxation of transactions by either American states or the federal government would have a negative effect on internet growth in the United States."

By internet growth, I presume Becker means an increase in the number of users of the internet, not an increase in the gains from trade in internet sales. The reason I called this a non-sequitur is that such a concern has nothing to do with taxing the internet or the negative externalities hypothetically caused by spam: if one is interested in growing the number of internet users, one would make a positive case for subsidizing the internet, providing free broadband access, regulating the telecommunications industry to upgrade its technology (or wipe out its oligopolistic nature), or providing cash-prizes for innovation (paid out by the government).

I think it's a rather basic argument to make that it's easier to subsidize a group of people to do the right thing than to tax a group of people for doing the wrong thing, because people will line up for free money, but will run like the Dickens away from the tax collector.

Matt

Bill Gates has proposed creating a stamp-system for e-mail similar to snail mail. A typical e-mail would cost a penny to send, for example. This might reduce spam, but I'm not sure anyone (myself included) would like the idea of having to pay for each e-mail. At the same time, if e-mail stamps substantially eliminated the amount of spam we receive, it might be an attractive option.

That said, the biggest problem an unregulated internet presents as I see it is not taxation issues or even spam, but rather a social world that provides a convenient meeting place for deviant behavior.

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