A reminder: CMMNA100 Review #2

Due October 30.

Steven Levy, Hackers.



In your review, be sure to comment on the “hacker ethic” and its appropriateness (or not) within the current mass media environment.  We wll discuss this hacker ethic along with other notions of ethics in mass media in our Tuesday class, based on Chapter 20 in the Vivian text.

And, speaking of wikipedia, take a look at this.

Deflation vs. Inflation.

This is an interesting period in the stock market, on Wall Street, in the USA, and, in larger contexts, regarding the philosophy of capitalism and the burgeoning “science” of economics.

While economic concepts are sometimes idiosyncratic and obscure, there are some fairly clear-cut, even binary, notions about which economics and economists would certainly hope to have some say and even, I would daresay, some understanding.  These basic and binary terms include deflation and inflation.  It’s very easy to tell which is which.  During deflation, prices go down.  During inflation, prices go up.

Most of the actions of the Federal Reserve System are, in fact, designed specifically to either limit or, upon occasion, encourage inflation.  Inflation is primarily measured according to the CPI, or Consumer Price Index.  Some would say that the CPI isn’t a good measure of inflation, or that the way we measure CPI isn’t a good way to measure CPI but nevertheless, that’s what economists do and that’s what economists use.

Now, since economics would be a science, it would hope to establish cause and effect relationships among important characteristics of an economy — like deflation and inflation.  In other words, economics would like to be able to tell us what causes inflation and deflation.  One of the things that is significantly and causally related to inflation and deflation, according to the economists, is money supply.  There are three ways money supply can be measured (M1, M2, and M3), but we won’t get into that — and economists don’t seem to to be willing to measure all of those (e. g., M3) much any more anyway.

The idea, the science, is that when the money supply is relatively large, there is likely to be inflation because money is plentiful.  When the money supply is relatively small, on the other hand, there is likely to be deflation because money is scarce.  Pretty simple, and one of the very basic laws of economics.

The Great Depression, for instance, was a period of deflation which was, according to the economists, caused in a big way by the Federal Reserve System doing something very wrong:  reducing the money supply.

Now, I really said all that to say this:  What do the economists say about NOW?

It’s a pretty important question, I think.

Does the science of economics predict deflation?  Does it predict inflation?

After all, we still have all those measurements of all those things that economists have used, up to this point, to build and promote their science.  Using those very same measurements and theories and laws of economics, what does economics the science have to say about this very basic and fundamental characteristic of our current economy?

Is our economy an inflationary economy?  Is our economy a deflationary economy?

Well, say the economists, according to The Science Of The Economics, and according to all our measurements and our spreadsheets and our historical analyses of The Great Depression and the inflation in post-war Germany and the deflation in 1990s Japan and all those things, here is our very best answer to your question:  We have no idea.

If prices go down, that will be deflation.  If prices go up, that is more likely to be inflation.


Buying and selling vs. informing

An update to our discussion in CMMNA400 today.

Like the Internet that underpins it, the Web has flourished because of its openness and its creator’s deliberate decision not to predict or prejudge how it would be used. As the Web took off, there was a debate within CERN about whether to try to profit from it. Berners-Lee argued strongly against this idea: without an open standard, he reasoned, there would end up being several incompatible forms of Internet media, backed by Microsoft, AOL and others. Making the Web royalty-free made it more attractive than any proprietary alternative. “Without that, it never would have happened,” he says.



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