The Liberal Order

One More Video Clip

Given the dispute within the economics blogsphere about Alex Tabarrok and Tyler Cowen's graceful criticism of Paul Krugman, I thought that Krugman's response was apropos to this clip from Thank You For Smoking. Krugman has decided that acting like Ann Coulter or Michael Moore within the economics profession is good strategy. Tyler's comments were exactly correct.

 

Ice Cream Politics
Thank You for Smoking — MOVIECLIPS.com

 

 

 

Social Media Sucks At Driving Traffic to Your Website

Quite simply, when it comes to driving traffic to your website, social media sites like Twitter and Facebook kind of suck at it, at least according to a study done by a company called Outbrain.

Once the study is taken into account, even the Drudge Report, a much smaller operation by comparison, out does Twitter and Facebook combined. It should be noted that the king of traffic referrals is, of course, Google. So much so, in fact, they are lapping the rest of the field.

Comfortably.

Story here. 

Public goods? Maybe not, but certainly a perverse effect of publicly providing an excludable good.

Tyler Cowen is criticized in this Economist blog post for his seeming failure to understand that economies of scale don't always apply to the provision of publicly provided goods since not all publicly provided goods and services are "public" goods. But look at pictures the blog post's author uses to apparently make his or her point. What these pictures show me is that the problem is not too little provision of roads or beaches or museums, which seemingly more spending is deemed able to alleviate the undersupply, but instead it's failing to understand that whenever you price at zero scarce goods or services you will always observe a shortage. The fallacy is not Cowen's inadequate understanding of what constitutes a public good - I'm very confident he's up on that one. No, the fallacy is the continuing insistence that government can provide free goods and services. No it can't! It can never provide free goods and services, and rarely provides any good or service efficiently. 

Rally in DC

If, just like this Jonathan Rauch article spells out, the Glenn Beck rally in Washington, DC emphasized why we don't need all the top-down command and control influence from politicians in Washington (or elsewhere for that matter), and that emergent orders occur spontaneously to better serve the interests of society, doesn't an anti-Glenn Beck rally that is organized spontaneously via the internet simply bolster his argument? 

Social Networking Changes the Politial Lanscape

Jonathan Rauch describes the Tea Party movement and how it is a spontaneous order with no leader and serves the interests of its members. It's a fascinating read.

As public choice economics tells us, leadership serves its own interests at the expense of others, and that is why we leave as much to the market with its spontaneous order and as little to the public sector with its lack of competition in order to bring about a peaceful social order that best serves the interests of the people and not the interests of mostly the politically connected. This story gives a great account of how the Tea Party movement has achieved this, though I don't know if it's sustainable.

But also consider how firms are becoming more horizontally organized through networks and less vertically organized through hierarchies. Social networking is just beginning its transformation of social ordering as we know it today.

HT: Russ Roberts

What Do People Do Most Online?

Americans spend nearly a quarter of their time online on social networking sites and blogs, up from 15.8 percent just a year ago (43 percent increase) according to new research released today from The Nielsen Company. The research revealed that Americans spend a third their online time (36 percent) communicating and networking across social networks, blogs, personal email and instant messaging.

Story here.

HT: Craig Newmark

Social Networking

Twenty years ago, the saying went something like, "If you don't have a web site, you're not in business." Today it's more like, "If you're not networking through social media, you're not in business."

And all of that explains why an Arlington County company named New Media Strategies reached out last year to a popular Brooklyn blogger named Aly Walansky. Founded 11 years ago by former political pollster Pete Snyder, NMS was one of the earliest digital PR firms to focus on word of mouth. NMS employees, most in their late 20s or early 30s, sit wired and caffeinated in a newsroom-like setting, tapping away at computers with double monitors to contact bloggers and Tweeters so they can offer everything from behind-the-scenes access to clients to free stuff. NMS represents, among other corporate giants, Chrysler, NBC, Intel, Sony Pictures and Domino's.

Last year, Domino's launched a new recipe for its pizza. To help the company, NMS identified hundreds of bloggers who influence what people eat and offered many of them coupons so they could try the new pizza for free. Snyder says there was no quid pro quo: Bloggers could say whatever they wanted about the product. Walansky, who often reviews food and beauty products, liked the new recipe -- as did almost every blogger the company contacted. NMS also offered Walansky a Domino's gift card so she could run a giveaway contest on her blog.

"To all my pizza lovers out there: Domino's has a new pizza recipe, and it's delicious!" Walansky wrote on her blog. "Everything has been upgraded -- the dough, the sauce, even the cheese, and we are grateful." Walansky's endorsement and contest got nearly 200 readers to add their own comments.

GM Is A Sucky Company

In the very very early days of the internet, Carla Virga used it to broadcast to the world her strong displeasure with the poor quality services of Terminix and the inept response to her complaints by this company and its parent company Servicemaster.

Others have followed, and some are finding that the companies with whom they've experienced poor service are now responding to their web criticisms in order to protect their reputations.

GM is now in the game, actively searching for critical comments on the web by its aggrieved customers.

GM has a new team of customer service agents scouring social media Web sites, such as Twitter and Facebook, looking to reach out to people who've complained about problems with their GM vehicles and offering help to them.

All right, let's try it. GM, your company sucks and here's why. I've owned a 1974 Chevy Vega and a 1985 Oldsmobile Omega. You owe me big time. Shoot me an email and tell me how you're going to make amends. 

Dan Klein's book, Reputation, offers an applicable quote: "Time wounds all heels."

The World Is Becoming Increasingly Smaller

Gordon Tullock once wrote, "Where the market is broad and there are many alternatives, you had better cooperate. If you choose the noncooperative solution, you may find you have no one to noncooperate with." (See Tullock. "Adam Smith and the Prisoners' Dilemma." Quarterly Journal of Economics, 1985: page 81.)

Freya Svensson is demonstrating just how broad that market is by showing just how small our world has become due to the vast means of communicating her problems over the internet (and see here). Ms. Svensson is letting everyone who will listen know how Volvo has apparently chosen the non-cooperating route.

Here is her latest video:

HT: Autoblog



The New Business Model