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February 14, 2010
October 21, 2014
The topic at hand: in the case of a
legal mind like Richard Posner, the
bad-faith argument is raised to an art
form: One must admire the cavalcade of
out-of-context quotations, distorted
references, and straw-man arguments.
KRUGMAN_INCLINED
Back to Posner's Grand Critique of Paul Krugman,
published in the reflexive "Public Intellectuals: IMG_7121.JPG
A Study in Decline". IMG_7120.JPG
(Pay no attention
On p.101-3, there's a discussion of to these cryptic
something Paul Krugman was saying notations)
about amazon.com and the on-line
price discrimination.
It's a good idea to check with the
original when dealing with the You can read some (but
Posners of the world, so let's do at the moment, not all)
that... of Posner's critique
on-line here:
The original:
"What Price Fairness?", [link]
_The New York Times_ [link]
October 4, 2000
[link]
[link]
As usual, Paul Krugman's exposition is
admirably brief and clear, and it's
hardly worth the effort of summarizing,
but I'll give it a try:
Amazon has been charging different
prices of different customers for
the same products (movies).
Amazon insists that this was just
some sort of experiment in random
pricing, and denies it was targeted
against different users.
However, it's easy to imagine Amazon
or a company like Amazon doing this,
using it's knowledge of past
purchases to predict what a customer Before we lose track of
will be willing to pay in the future. what's actually important
here:
Krugman discusses how
this kind of differential Does that sound
pricing can help improve cool to you?
economic efficiency, and
points out that the cycle Do you like the
of publishing a hardback, idea of a retailer
then a paperback is pushing up the
intended to do something price when they
similar-- the early see a sucker like
product is sold with a you coming?
higher margin to make
more money off of people I find it tremendously
who want it more. funny that rather than call
this kind of individually
Krugman, however, calls targeted pricing "price
the hypothetical Amazon discrimination" people are
practice "undeniably calling it by the snazzy
unfair: some people pay sounding euphemism "dynamic
more just because of who pricing".
they are".
He then closes with a suggestion
that this practice may already
be illegal, pointing at the
Robinson-Patman Act.
Posner in his critique of all this
says that Krugman was reading the
Robinson-Patman act wrong (it applies
only to distributors), and goes on to
insist that there's nothing at all
wrong with Amazon using targeted
pricing--
There are two things that are striking
about Posner's representation of what
Krugman was saying.
One is very peculiar: from Posner,
you get the impression that Amazon This seems odd (to me),
definitely does this, but Krugman because I had the impression
made clear it was just a suspicion that Posner wanted to
that they were doing it. defend Amazon.
THE_LONE_TIT
The other is that Posner ever so
slightly distorts Krugman's claim
about the Robinson-Patman act, to
make it sound like a much bigger gaff.
Here's Krugman:
"In fact, dynamic pricing might already be
illegal. I'm no lawyer, but it looks to me as
if the Robinson-Patman Act, which outlaws
price discrimination across state lines
(though strictly speaking only if it hurts
competition), could be invoked to prevent
dynamic pricing. But it's a judgment call-- ..."
Here's Posner:
"He is wrong about the Robinson-Patman
Act. It does not outlaw price
discrimination; if it did, examples
that Krugman gives of commonplace,
unexceptional price discrimination in
the publishing industry, such as the By the way: I might be
price difference between the hardback inclined to assume that
and paperback versions of a book, a Judge Posner knows more
difference that invariably exceeds any about this than I or
difference in the cost of publishing Krugman, except that he
the two versions, would be examples of also saw no problem
unlawful activity." And so on. with the Supreme
Court's interference in
Got it? Krugman was the 2000 presidential
tentative, but Posner election.
elides that detail,
because he wants to This is not someone
complain about Krugman who's legal opinion
playing fast and loose is trustworthy when
with the facts when (And at least you're anywhere near
dabbling outside of his on this one a political issue.
own field. point, for
once Posner
Actually, you could is not
use this to make outside of
the opposite case: *his* own
when Krugman moves field. Or
from economics to not too far
the law, he gets outside.)
very cautious.
IMG_7119.JPG
In Posner's discussion of "discriminatory pricing"
(p. 103) he continually conflates charging different
prices for different products (hardback vs. paperback)
with charging different prices of different customers.
This is so transparently dumb with a
capital D, it makes one wonder where his
reputation for "brilliance" comes from.
Paul Krugman doesn't have any
trouble seeing the difference,
and I suspect neither do the
rest of us:
"So publishers try to sort
customers indirectly. Most books
are offered first in hardcover,
then some time later in
paperback. The paperback is Interestingly enough, they
cheaper to produce; but mainly might be able to get the
its lower price is a way of same result out of
pulling in price-sensitive releasing a product at one
customers after the juice has price, and then dropping
been squeezed out of the well it later... the point of
heeled and impatient." issuing a more durable
hardback edition is to
"But in the world of e-commerce, give the people who paid a
such crude market segmentation premium the *feeling* that
isn't necessary." they've gotten something
for their money.
Here's a good example of
Posner's fighting style:
"The consumer who has to pay full
fare to travel to a funeral is Here, the freedom to set
discriminated against because of prices is conflated with
his special need, and likewise "discrimination"...
the consumer who must buy the
hardback version of a book I doubt that
because he needs it for a course Posner would
and the paperback version has not take this very
been published yet. Maybe those Indeed, most of us far, because I
instances of price discrimination do not regard them suspect you can
are 'fairer' than what Amazon.com as unfair. use it to shoot
is doing. Krugman evidently down capitalism
thinks so. It is his claim that in it's
ordinary price discrimination entirety.
(though he thinks it unlawful!)
in undeniably fair and what Krugman has not
Amazon.com is doing is undeniably stated that he
unfair that is extravagant." thinks what Posner
is calling "ordinary
price discrimination"
is unlawful....
Posner has stated that
Paul Krugman *should*
think it's unlawful,
given Krugman's suggestion
that dynamic price
discrimination *may*
be illegal.
Got that? I realize it's
a mess-- and it could be
it's *intended* to be a
mess, you're not supposed
to be able to straighten
it out without more brain
work than it's worth.
It's a way for Posner to
get in a free hit: he
distorts some text that
you don't have in front
of you, then exaggerates
the position a little
more, and postures about
how it's all so
outrageously extravagant.
And then later, in still
another place, he can
claim that he's already
demonstrated at length
Krugman's intellectual
failings and reference
this book.
Now, it could be that
Posner really is a
deluded intellectual
light-weight, and he
really thinks that
this is all playing
fair.
I strongly suspect
that it's an entirely
cynical maneuver,
exploiting the
difficulty of tracing
literature references
for the sake of
scoring political
points.
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