The Economics of Rioting

This week, I discovered the Freaknomics podcast. I read the book in one of two economics classes I took in college and, though I disliked the teacher who assigned the book quite a bit, I absolutely fell in love with economics in general and the book itself as well. The cold, strictly fact-based analysis of the world through the lens of economic principles appeals to me, even as I’ve become somewhat of a bleeding heart liberal in the last few years.

This is also why I got so excited to read this analysis of the London Riots from The Globe and Mail. I think like everyone else, I was blown away but what happened in the UK and unable to make sense of it. But this cynical approach seems right on to me:

Too many riots were bad for business, they allowed, but so were too few – a sign that government had become soft and inefficient. Prudent government squeezed until the mob rebelled, then increased spending just enough to prevent extensive property damage. Optimal social policy was a matter of dialing in the appropriate frequency of riots.


The Riot Index permits no adjustment for ideology or morality. It seeks no causes and is indifferent to explanations. What it does do, however, is to accept without question that liberal social policies quell social unrest.

According to its logic, the fact that Britons are now struggling to make sense of good old-fashioned mob violence only proves that liberalism has gone too far – that the mob has been a stranger too long. The conclusion may be distasteful, but the underlying premise – that austerity causes riots and spending forestalls them – is well supported by historical evidence.

I love that idea of British society not recognizing a mob when it sees one because it’s simply been too long. And I also love that the author points to the vehemence of British politicians denying their austerity programs caused the violence “makes it more obvious”.

Economic principles dictate that humans are, by and large, rational. Rational used to mean strictly logical, but now also applies to an internal logic; humans make choices that are rational to them, based on the data they are reviewing, even if those choices don’t seem rational to others. The rioters aren’t animals or sub-human without any thought behind their actions; these kids of riots, in fact, required organization. Once in a while you get truly irrational people who just like to watch things burn, but not thousands acting in concert.

I also read on this quiet, muggy Sunday morning a column from the Washington Post explaining why, though the same anger present around the world exists in the US, people are not rioting:

although movements carry anger, anger doesn’t make a movement — organizers do. Anger helps, of course; it’s a resource that organizers can stoke, channel and exploit.

The key word in that sentence is channel; the author argues,

James Madison, the genius behind the Constitution, envisioned a system of government that would embrace dissent and offer malcontents the hope, however distant, that they can get what they want by working through it. Protesters who start in the streets envision themselves, or at least their causes, entering the halls of power.

I’ll admit: I’m a sucker for early American history, and this rings true for me. Above all the anger, Americans have this deep seated belief that, ultimately, change is made, if not best made, within the system.

I suppose that means the problem today, according to many and maybe myself, is that the system has been corrupted so that belief isn’t well-founded. If that’s the case, only when more Americans understand exactly what kind of laws and policies are in place that prevent the system from truly working for them, will they riot. But more likely, I think, they’ll simply work to eliminate those broken pieces of the system.


Social Media and Emergency Management

I’m married to an EMT who would prefer to live off the land in Maine somewhere, so survival and emergency planning are frequent topics of conversation in my house. And whenever an emergency situation of any sort comes up around the world, like the riots in London, we talk about it, the response of the authority (or lack thereof) to it, and how we think we would respond to it.

Part of that discussion, for me, always involves social media. Twitter especially but almost every web application you can think of has impacted how emergencies of all kinds around the world play out. For example, the Metropolitan Police in London are using Flickr to crowdsource the identification of suspects involved in the rioting. In May, representatives from FEMA attended a Senate hearing on the use of social media in emergency situations – which is pretty forward thinking for the Senate in my opinion.

That’s not to say social media has replaced traditional methods of emergency communications – I’m terrified that people could think to tweet instead of call 911 for example – but, as it has in so many ways, social media is augmenting what we already do and opening up channels of communication. Which is a good and important thing: the more people who receive information from the CDC, and the more people who provide information about the situation on the ground back to the CDC, for example, the better.

Thinking about social media in this light creates an interesting juxtaposition between the life-saving usefulness during an emergency situation of the same intrusive technologies we worry about. Take, for example, the use of Google Earth as an emergency response viewer, instead of as a creepy way for Google to catalog images of your neighborhood.

The social web is new territory and our expectations and definitions of privacy are changing as we explore it. Does posting a suspect’s face on Flickr presume guilt instead of innocence, for example?

Something About Privacy

The issue of maintaining privacy online is a tricky one for me. In the first place, I’m part of Gen Y and we love the Internet and being engaged online. That mandates giving up a certain degree of privacy. On top of that, I lean toward over-sharing – I believe, in most cases, everyone is better served by honest conversation about everything; keeping topics taboo serves no one’s best interest. So I’m ok with having a pretty public life.

And I like what Penelope Trunk has had to say about privacy vs. celebrity: privacy, as she paraphrased Ashton Kutcher, is the new celebrity in this web 2.0 world where anyone can be a 5-minute sensation. I, like most people, fall into the category of people who can benefit from having less privacy. I want to benefit by being known online as a good writer and thinker of interesting thoughts.

But having a baby on the way has made me think differently.

At our baby shower last weekend, cousins from out of state said “Put pictures on Facebook as soon as you can! We can’t wait to see the little guy!”

But when I do that, I’m giving control of these images of my newborn son to Facebook and Mark Zuckerburg, who seems to truly not care about privacy. Maybe because he adheres to the same philosophy as Trunk, in which case what am I worried about? Who knows what kind of digital wonders my son will see in his lifetime. Everyone puts baby photos on Facebook these days; he’ll be in good company if shit ever does hit the fan.

At the same time, I do think there are other ways to share photos online without handing over almost limitless information to advertisers. And I’m not the only one with an icky feeling: Germany is protesting the use of facial recognition software on Facebook.

Maybe I’m foolish, but I trust Google a helluva lot more than Facebook. At least they provide a rich preferences page where you can see what they know about you, and thus what in turn advertisers know about you.

I do recognize the benefits of targeted advertising in theory – I only hear about products and services that might actually be useful to me – and maybe the icky feeling I have about how intrusive that is just means I’m part of Gen Y and can, however vaguely, remember a world without the internet.

Which is something Baby Williams will never be able to say.

Drunk on the Internet

For real you guys: I’ve ingested an insane amount of information today. Now I know what Baby Boomers talk about with “information overload”, except it’s not overwhelming in a negative way; it’s more like my head is full os so many thoughts and ideas and images that I’ve got this fantastic high going on right now.

Often, my husband and I fantasize about running away from it all to our own little farm in Maine somewhere or, my preference, a gorgeous mostly deserted island. I tell him romantically that I could survive anywhere as long as I had him…and an internet connection.

They say you have an addiction when your behavior negatively impacts other areas of your life. I don’t think I’m addicted (but of course an addict would say that) but if I was, Google Reader was my gateway drug. I love Google Reader more than any other web app I use. Except maybe Twitter. Between the two of them, I’m almost never out of something to read or see. When there is a lag – usually on Friday nights when most of the world is out and about and my nine-month pregnant self is at home glued to my Blackberry –  I whine about it to my husband, who helpfully suggests I read one of the books I’ve piled around the house.

But books are so OLD and SLOW.

Anyway, I’ve got just over an hour before a social engagement where I’ll have to talk to people face to face so I intend to ride this high out a little longer.

The hangover is going to be a bitch in the morning I bet.

I Don’t Mind Paying More for Netflix

This post from the Harvard Business Review today sums up exactly how I felt when Netflix emailed me to say they’d be raising the price of my current package by 60%. Eddie Yoon provided just the language I was looking for:

But as a consumer, I have no problem being generous to companies that have a track record of being exponentially more generous to me.

He explains that generous companies are those that provide great value consistently and lists all the ways Netflix has become increasingly awesome since it’s inception. And though Yoon, like me and everyone, doesn’t necessarily like parting with his hard-earned dollars, he says he is certainly willing to pay for goods or services that are worth it. He says this:

Netflix’s history of generosity proves to me that they will take my money and invest it in an ever-improving product.

And this:

Sure, I would like my favorite products and services to be cheaper, but I would really like them to be improved to make my life better.

And I wholeheartedly agree with both sentiments. That’s what I mean when I say he provided the language I was looking for.

My family lives on a very tight budget, especially now that I’ve lost my my full-time job and that we’re expecting our first child. We’ve cut ruthlessly into our monthly expenses, but continue to pay $12 per month for The Economist and set aside as much money as possible for food, not only so we can afford to get sustainable, high-quality products, but also so we can afford to go out once a week at least because that’s something we love to do. In those instances, we’re paying for our priorities.

So we’ll pay almost whatever Netflix asks because the enjoyment we get out of our membership are worth it to us. Besides, like Yoon said, we hope eventually we can replace our irritatingly expensive cable subscription with just Netflix and, even if we can’t, we trust that Netflix is going to at the very least continue to provide a great service.

It’s this concept of value that gets lost on the web these days. Even in the wild west environment of the web, there are things worth paying for. It’s great that you can get almost any album or movie for free online somewhere, but I don’t mind paying at least $10 for the latest record from a favorite artist, because that artist provides me with something worthwhile. The least I can do is pay him or her for the trouble.