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Discussion: (28 comments)

  1. givemefreedom

    Venezuela video: Very powerful video of the very sad conditions that the Venezuelan people are enduring because of the socialist government. This will not and is not ending well for many people.

    It struck me when watching this video that We Are All Libertarians. Many of us do not realize it until the government has taken away all of our freedoms like they have in Venezuela.

    1. Much as I sympathize with the protestors, I have to disagree with the narrator’s description of the Venezuelan government as “illegitimate” if by that she means undemocratically elected. Chavez was first elected in 1998 and was re-elected multiple times even while he was so obviously laying the country to waste. His hand-picked successor Maduro was elected in April of last yr, and the Chavistas won the municipal elections just this past Dec largely on a platform of Maduro promising an “economic offensive” against private enterprise. This, unfortunately, is what democracy can look like in a society with a majority of ignorant, dysfunctional voters.

      “ A perfect democracy, a ‘warm body’ democracy in which every adult may vote and all votes count equally, has no internal feedback for self-correction. It depends solely on the wisdom and self-restraint of citizens… which is opposed by the folly and lack of self-restraint of other citizens. What is supposed to happen in a democracy is that each sovereign citizen will always vote in the public interest for the safety and welfare of all. But what does happen is that he votes his own self-interest as he sees it… which for the majority translates as ‘Bread and Circuses.’

      ‘Bread and Circuses’ is the cancer of democracy, the fatal disease for which there is no cure. Democracy often works beautifully at first. But once a state extends the franchise to every warm body, be he producer or parasite, that day marks the beginning of the end of the state. For when the plebs discover that they can vote themselves bread and circuses without limit and that the productive members of the body politic cannot stop them, they will do so, until the state bleeds to death, or in its weakened condition the state succumbs to an invader—the barbarians enter Rome.”
      ~Robert Heinlein

      1. Jon Murphy

        At the risk of interpreting, I think the narrator used “illegitimate” in the same sense the Founding Fathers did in the Declaration of Independence:

        Governments are established to protect the rights of individuals, and when it becomes destructive to that end, it is no longer a legitimate government.

        1. morganovich

          i think jon raises a very important point.

          “democratically elected” and “legitimate” are not synonymous.

          a democratically elected government could enslave 30% of the population and still get 70% support, 100% once they voted to disenfranchise the slaves.

          democracy is (at best) a sign of popularity, not legitimacy.

      2. Che is dead

        “Chavez was first elected in 1998 and was re-elected multiple times even while he was so obviously laying the country to waste.”

        While I agree with the idea that democracy, by itself, can be dangerous, you’re forgetting all of the steps that Chavez and his party took following his election to ensure that any future elections would more farce than plebiscite.

        He/they rewrote the country’s constitution, packed the supreme court, arrested judges who had the temerity to rule against him, shuttered independent media outlets, confiscated the businesses of his political opponents, used the states oil wealth to purchase the support of segments of the population, started “neighborhood watches” similar to those used by the communists in Cuba to intimidate anyone who might oppose him, and on, and on.

        Good Heinlein quote.

        1. Oh yeah, no disagreement there. Still, he acted like a tyrant and was then rewarded for his efforts by the corrupt majority because they were promised free stuff.

          In the US we call those kinds of voters “the 47%.”

      3. Chavez was first elected in 1998 and was re-elected multiple times

        The “re-elected” part can be disputed. There is a lot of evidence that he rigged the election guaranteeing his re-election. Because of this, calling his rule “illegitimate” is a good description.

        1. Sure, but it’s highly disputable whether he stole enough votes to win in all the elections he and his party subsequently won. The norm for Latin Americans is to favor big, centralized government, as demonstrated by their voting patterns in the US. Also, this is purely anecdotal, and maybe even irrelevant, but every Venezuelan(and the overwhelming majority of Colombians) I’ve met just love Obama.

          1. morganovich

            paul-

            colombia and venezeula are actually a very interesting case study in opposites lately.

            colombia has had a major redo of the constitution moving to a far more decentralized state and a great deal more libertarian in it’s bent, and in the late 90’s agreed to a number of budgetary reforms that slashed deficits and spending.

            this has resulted in a massive boom, taking their stock market from 1000 to 15,000 in 10 years (2001-2010).

            Venezuela, well, we know what happened there.

            i would not paint these two states with the same brush.

            over the last 10-20 years, they have been moving in dramatically different directions with, as one would expect, dramatically different outcomes.

            this freeing up of markets and decentralization has created a huge boom in colombia.

            http://www.tradingeconomics.com/colombia/gdp

            gdp has tripled since 2005.

            perhaps it is because they are a small economy, but this massive boom seems to have largely been ignored by most media.

          2. Morg,

            Totally agree with you on Colombia’s performance that occurred under the great Uribe. He also beat the piss out of the FARC and ELN(with alot of assistance from the US) which gave alot of confidence to the Colombian people and foreign investors. That helped alot with the economic situation. I’m actually in Medellin right now and this place is booming. I see development projects going up everywhere. However, I’m not at all sure the Colombian people are intellectualizing it as a triumph of markets. I think they just got lucky in having the right leader in Uribe.

            For example, I was in Bogota a couple weeks ago and the city has gone downhill fast in the past few yrs after they actually elected a Marxist and former terrorist turd Gustavo Petro to the mayor’s office. It’s really too bad because the city had turned around under the previous 2 mayors. He followed the radical leftist playbook with predictable results. it was so bad he was actually recently removed from office by the Colombian inspector general for incompetence. Uribe showed them the way and yet the citizens of the nation’s capitol and largest city went and shot themselves in the foot by elevating one of his enemies to the 2nd highest office in the country.

          3. morganovich

            paul-

            i fear we may get an interesting replay of bogota in NYC over the next few years.

  2. morganovich

    2. i predict postmates will be out of business in a year. loads of folks (like kosmo etc) already discovered this biz model does not work. the logistics are too fraught. so, you have to go to boulevard, pick me up a couple of desserts, and then come to me. the planning and route issues on this make the traveling salesman problem look easy.

    then you have a horrendous capacity utilization problem. everyone wants things at the same times of day (dinner, lunch).

    these systems cannot generate enough revenue to make sense as massively multipoint to massively multipoint also results in lots of “deadhead” time and trips.

    also:

    they actually seem to have gotten the opportunity cost idea wrong.

    the hour it takes them to deliver it is not my opportunity cost.

    the 20 minutes it would take for me to go get my lunch myself is.

    if they are missing on that, they are not going to solve a MMP to MMP traveling salesman problem correctly.

    firms in sf and nyc tried this several times in the 90’s and all failed for the same reason:

    if you charge enough to cover the actual utilization weighted costs, no one will use it.

    1. I’ve often wanted a service like this in other places I’ve lived, but then I’m unusual. SF and NYC are rich enough that I don’t see why “no one will use it,” as they’ll be able to cut costs compared to doing it yourself. As for their taking an hour versus 20 minutes if you buy lunch yourself, that doesn’t matter as long as you schedule it ahead of time, ie you know when you’re going to have lunch and plan ahead. Yes, they’re not going to “solve” the traveling salesman problem, but with the massive amount of computing power that is so cheaply available these days, they could easily compute solutions that are workable, if perhaps not optimal. As for capacity utilization, dynamic pricing is the solution for that, just as Uber is doing.

      I agree with you that if they do not really tackle the logistical complexity and apply appropriate economic solutions, they’re not going anywhere. But the problems aren’t as difficult as you make out, it’s just that many who tried this before were pretty clueless. ;)

      1. morganovich

        sprewell-

        these services emerged in that late 90’s in both place (guys like kosmo).

        they have already had the problem of “no one will use it at prices that make sense”.

        these guys will too.

        my point on 20 minutes is that is what it would take YOU to go get lunch. that is your opportunity cost. the 1 hour metric is simply irrelevant. however long it takes them to get it to you, you can plan for it in advance, but it only saves you the 20 minutes you would have spent.

        the problems are EXCEEDINGLY difficult. ask any mathemetician.

        consider:

        you get a call, you have to call a restaurant (any restaurant mind you) place the order, then go get it, find parking (possibly pay for it), pick it up (assuming it’s ready), take it to another random location before it gets cold, find parking, possibly pay for it, get into the building, deliver it, and then go looking for another task. how many times can you do this in an hour?

        3?

        and how many hours a day is the system going to be really active?

        4?

        how can you make money at $5 X 3 = $15 an hour.

        you have to pay the driver/rider then deal with overhead etc.

        and those are the peak hours. the rest are going to be $5-10.

        and we have not even dealt with adverse selection yet. i am not going to order from the lunch place close to me.

        i think you are falling into the “it’s not that the problem is hard, it’s just that the last guys were dumb” trap.

        the problem is REALLY hard.

        kosmo, webvan (who had a much easier problem), urbanfetch, and dozens of smaller ones ALL failed and for the same reasons.

        there was no utilization weighted price that made financial sense and was attractive to customers.

        i remember this same craze last time and i watched all these companies, had several pitch me for investment, and know why they failed.

        the traveling salesman problem is extremely NP hard and this problem makes it look like 8th grade algebra.

        new node pop up unpredictably all the time, locations shift all the time, and route optimality is impossible to forward predict. the time per action is high and selection for service is adverse.

        rates for 1 hour courier services are 2-7 times these prices, averaging about 3.5X.

        this is a reflection of the real costs and courier service is easier, as packages tend to be smaller and you are not dealing with unpredictable kitchen back ups, store lines, etc.

        http://www.godspeedcourier.com/rates.html

        1. morganovich

          spre-

          you are making a “this time is different” argument about a probelm that is not any different.

          all the same logistical problems persist, and expectations, if anyhting, have risen, not fallen.

          most of these “other markets” already deliver.

          i was including dinner in my 4 peak hours, 2 for lunch, 2 for dinner.

          these “workable solutions” you imagine simply do not exist at these prices. i have seen this movie too many times already to suspect a new ending.

          i think you are ignoring all the things that make this a money pit, not an opportunity as well as underestimating how much easier it is to run a courier business AND how much tech they use.

          i have never invested in the space because the problems are endemic to it and tech is not going to solve them.

          you can optimize all you want, but pick up, travel, delivery and delay times do not go away.

          i have watched some very smart folks try to run businesses in this space and all fail for the same reasons that postmates will.

          no matter how well you do it, it’s just a bad model.

      2. Morg,

        these services emerged in that late 90′s in both place (guys like kosmo).

        they have already had the problem of “no one will use it at prices that make sense”.

        these guys will too.

        Tech and expectations have changed a lot since the ’90s, I don’t see that past experience as particularly meaningful.

        my point on 20 minutes is that is what it would take YOU to go get lunch. that is your opportunity cost. the 1 hour metric is simply irrelevant. however long it takes them to get it to you, you can plan for it in advance, but it only saves you the 20 minutes you would have spent.

        That was my point too, that the one hour is irrelevant, but they are still saving you the 20 minutes.

        the problems are EXCEEDINGLY difficult. ask any mathemetician.

        I don’t look to “mathemeticians” for guidance on these issues, closed-form solutions are usually laughably obtuse. Optimizing logistics like this is extremely parallelizable, perfectly suited for “big data” number-crunching.

        consider:

        you get a call, you have to call a restaurant (any restaurant mind you) place the order, then go get it, find parking (possibly pay for it), pick it up (assuming it’s ready), take it to another random location before it gets cold, find parking, possibly pay for it, get into the building, deliver it, and then go looking for another task.

        The parking issues can be worked out by having deals in place with the stores or workplaces, which these guys already appear to have in many cases. Most of the logistical issues you lay out can be streamlined with the proper use of technology.

        how many times can you do this in an hour?

        3?

        It all depends on the distance of the various tasks, which could be bundled and streamlined by the software.

        and how many hours a day is the system going to be really active?

        4?

        It depends on whether they can break out of the niche of lunch delivery, it could go all day if they can penetrate enough types of delivery markets.

        how can you make money at $5 X 3 = $15 an hour.

        $5 is the minimum, $12 is the maximum, which brings it more in line with the courier whose prices you listed. I don’t know why they’d want to put in a maximum, sounds like a dumb limit.

        you have to pay the driver/rider then deal with overhead etc.

        and those are the peak hours. the rest are going to be $5-10.

        Not necessarily, dinner delivery could also be big, not to mention all kinds of other packages.

        and we have not even dealt with adverse selection yet. i am not going to order from the lunch place close to me.

        Why not? They mention a guy who orders from the juice joint down the street. ;)

        i think you are falling into the “it’s not that the problem is hard, it’s just that the last guys were dumb” trap.

        the problem is REALLY hard.

        I disagree, particularly with modern technology and proper pricing. Perhaps these guys aren’t doing it completely right, but I see no reason it can’t be done.

        kosmo, webvan (who had a much easier problem), urbanfetch, and dozens of smaller ones ALL failed and for the same reasons.

        there was no utilization weighted price that made financial sense and was attractive to customers.

        Those companies had a whole host of other problems, such as building out too aggressively, etc. You may be right that customers are often irrational about pricing, choosing to waste an hour of their time at their $45/hour job, when they could pay someone $25 to outsource their errands. User education will likely be necessary.

        i remember this same craze last time and i watched all these companies, had several pitch me for investment, and know why they failed.

        One big difference this time is also the rise of mobile tech, which lets you track the package in real-time and make all these decisions on the go. There’s a reason why food trucks didn’t really take off until after the mobile boom, which opens up entirely new avenues.

        the traveling salesman problem is extremely NP hard and this problem makes it look like 8th grade algebra.

        new node pop up unpredictably all the time, locations shift all the time, and route optimality is impossible to forward predict. the time per action is high and selection for service is adverse.

        Like I said before, you can still compute workable solutions, “optimality” is for brain-dead academics. ;)

        rates for 1 hour courier services are 2-7 times these prices, averaging about 3.5X.

        this is a reflection of the real costs and courier service is easier, as packages tend to be smaller and you are not dealing with unpredictable kitchen back ups, store lines, etc.

        godspeedcourier.com/rates.html

        I doubt these courier services are doing any number-crunching, let alone using straightforward, incremental tech like mobile devices. The tech lets you bring the costs down and raise quality, just as it has everywhere else in the economy.

        You’ve obviously looked into this more than I have, as I have little experience with this sector, but I think you’re underestimating the opportunity here because of your previous bad experiences.

        1. morganovich

          response got nested above this.

          sorry.

      3. you are making a “this time is different” argument about a probelm that is not any different.

        all the same logistical problems persist, and expectations, if anyhting, have risen, not fallen.

        I’ve mentioned two big technological changes in the ensuing decades, mobile and “big data,” ie cheap computing. The problems might not have changed, but we have new tools with which to address them. :)

        most of these “other markets” already deliver.

        Most don’t and those that do often don’t do it well. You could roll up many of those existing delivery markets with better service.

        i was including dinner in my 4 peak hours, 2 for lunch, 2 for dinner.

        Oh, I thought you were counting another two for package delivery during work hours, which could certainly be rolled up by a good package delivery service.

        these “workable solutions” you imagine simply do not exist at these prices. i have seen this movie too many times already to suspect a new ending.

        Perhaps not at these prices, but certainly cheaper than the courier who you linked to.

        i think you are ignoring all the things that make this a money pit, not an opportunity as well as underestimating how much easier it is to run a courier business AND how much tech they use.

        i have never invested in the space because the problems are endemic to it and tech is not going to solve them.

        you can optimize all you want, but pick up, travel, delivery and delay times do not go away.

        You may be right that logistical planning isn’t the real hurdle, but managing the employees and business. I’m skeptical that tech can’t minimize most of those issues.

        i have watched some very smart folks try to run businesses in this space and all fail for the same reasons that postmates will.

        no matter how well you do it, it’s just a bad model.

        Perhaps you’re right and postmates’ pricing is too low, but I think it can certainly be done better and cheaper than the outdated courier services.

  3. morganovich

    8.

    i would like to pretend that “you’re my favorite kind of moral hazard” did not make me laugh out loud, but, alas it did.

  4. William Dunn

    Some more economic pickup lines from my friend and saucy Aussie Naomi Brockwell.

    Is that a fiscal stimulus in your pocket, or are you just happy to see me?

    I don’t know what I want less of, government regulation or the clothes you’re wearing

    I want the government out of my bedroom and you in it!

  5. Che is dead

    WTF? Where are the Venezuelan protestors Che Guevara flags?

    Sean! Oliver! What’s happening?

    “I am fine with all the political opposition to Chávez, as long as it’s done legally; there is a method by which you can protest — but now, the opposition is increasingly behaving like the Republican Party here in the United States, where is it is trying to block, criticize, destroy any attempt at negotiation or trying to do business and get on with it. . . .” — Oliver Stone

    “Libertarian” Oliver Stone explains:

    “Venezuela is a democratically elected government and those protesting right now are sore losers.” — Oliver Stone

    (Yes, he claims to be sympathetic to libertarianism)

    And check out this video: I am Ukrainian

    Again, no Che Guevara flags. And at the 1:10 mark the Lefts old nemesis makes an appearance.

  6. Benjamin Cole

    One reason rents are high in Williston: city fathers iutlaw farmers from pulling housing trailers onto their lots and creating instant housing.
    Farmland not zoned for housing. Fear of mancamps. Lots of Detroit hookers in ND if you read backpages…government, as usual, is the problem…

    1. The other issue may be sewage and health concerns. There is a maximum load one can put on a septic tank, and a minimum area for a drainage field. Farms are typically not on the municipal system. So you would have to put up a package sewage treatment plant as well. running the cost way up. Also not on public water supplies, so you also have water provision requirements.
      Letting things go without regulation could bring back typhoid and dysentery like happened in the old west boom towns.

      1. Benjamin Cole

        I agree—there is no right to pollute air and water other peole breath and drink, a fact conveniently forgotten in stupid GOP echo chambers.
        That said, a farmer with good septic tanks should have rights should be clear to do as he likes… raise power rates if there is too much demand…

        1. Actually I suspect it would mean a system like those sold at this site: http://www.deltaenvironmental.com/package.asp, which is a packages wastewater treatment plant. (I don’t know the details about this vendor…). But it may be that after all is said and done the economics might not work out anyway, since one does not know how long the boom might last. (the ones above do from 3000 to 500,000 gallons per day), and are also typically installed in subdivisions outside existing sewer network in Houston for example.

      2. morganovich

        “Farms are typically not on the municipal system. So you would have to put up a package sewage treatment plant as well.”

        actually, no, you wouldn’t.

        you could use the tanks in the trailers and RV’s and a fleet of pump trucks to come and empty them (a wonderful entrepreneurial opportunity for someone) and transport the waste to a treatment facility.

  7. Re Point #6: In addition Amazon need carry far less inventory than a brick and mortar chain. They have good enough It systems to enable the control of stock levels, and real time monitoring of inventory levels, note you often see x units in stock if stock is low relative to the expected ordering patterns. Now the automated picking systems, mean that the goods are brought to the packer who is told what box to select and how to pack it and how much bubble wrap to use.
    Sooner or later the warehouses may fulfill orders without the order being touched by a human at all.

  8. Wow, just finished reading that New Yorker article on Amazon, it’s laughably bad. :) I’d be embarrassed to have some of those lines attributed to me. It’s like someone took a rambling blog post and slapped it on their website. Not a good argument to be made for the necessity of gatekeepers when you’re cranking out crap like that.

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