When People Change

(p. 462) People don’t change when you tell them they should. They change when they tell themselves they must. Or as Johns Hopkins foreign affairs professor Michael Mandelbaum puts it, “People don’t change when you tell them there is a better option. They change when they conclude that they have no other option.”

Friedman, Thomas L. The World Is Flat: A Brief History of the Twenty-First Century. New York: Farrar, Straus and Giroux, 2005.

Thomas Friedman’s claim here is plausible, but I find it surprising, given his strong push for a worker safety net when the worker loses a job to creative destruction. The safety net Friedman proposes, in this book anyway, is one that does incorporate some incentives to find a job, but sounds like it could be ‘gamed’ to delay the tough decisions that might need to be made. Hayek had some useful observations on this issue way back in his Road to Serfdom.

Incentives Matter: Piracy Will End Big-Event Films

KingKongPiracy.gif Source of image: the online version of the The New York Times article quoted and cited below.
Peter Jackson was the director of the financially risky “Lord of the Rings” film trilogy, and is currently directing a remake of “King Kong.” Property rights protection is primarily a moral issue. But it also has economic consequences. Property rights permit those who take risks to make money, which provides an incentive for them and others to take risks in the future. It also makes it more likely that large amounts of capital will be in the hands of those who have shown they know how to use it.

(p. 1) “Piracy has the very real potential of tipping movies into becoming an unprofitable industry, especially big-event films. If that happens, they will stop being made,” said Mr. Jackson in an e-mail message from New Zealand, where he is putting the final touches on his version of “King Kong.” “No studio is going to finance a film if the point is reached where their possible profit margin goes straight into criminals’ pockets.”

For the full story, see:
O’Brien, Timothy L. “King Kong vs. the Pirates of the Multiplex.” The New York Times, Section 3 (Sunday, Aug. 28, 2005): p. 1 & 7.