November 29th, 2010

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How Big Is Porn?

I frequently argue that porn is not nearly as big a business as others imagine. Forbes actually takes a look at this and basically agrees. From a money perspective, porn is simply not a significant driver of economic activity.
http://www.forbes.com/2001/05/25/0524porn.html

This is not to say that porn is without economic value. But it's effects are often exaggerated. It is often claimed, for example, that porn is a primary driver of adoption for technology such as internet access and VCRs. This is about as sensible as claiming that the proliferation of cell phones is a function of dial-a-porn. Yet these claims are routinely made and broadly accepted because porn is widely available on any platform.

In fact, the exaggeration of porn is a fairly common phenomenon. Many people think of porn as an important driver of free speech litigation. This is only true if we stipulate that folks such as Lenny Bruce practiced pornography. Yes, there is "the People v. Larry Flynn." But that case is actually much less important as a free speech case than one would imagine from the fact that there is a movie about the Penthouse case.

My bottom line is that people, for various reasons, like to believe that porn is more important than it is. It confirms something about human behavior for them. But the evidence is simply not there.
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Link Harvest: Krugman Sort of Gets It

Krugman tries to come to grips with the "long night" in economic policy, in what he sees as the collapse of the intellectual foundation of economics combined with political and economic instability.
http://krugman.blogs.nytimes.com/2010/11/26/the-instability-of-moderation/

His points are valid, but he misses what I consider are two key factors.

1) The importance of cognitive dissonance. It is astounding how resistant people are, and what lengths they will go to, in order to avoid the unpleasant realization that they were fundamentally wrong about something. This ensures that we will have a very long period where people are simply incapable of learning from mistakes. On the plus side, it does mean you can sneak some positive reforms through by disguising them, and can create the policy equivalent of a perception distortion field.

2) The influence of money. Intellectual rigor in policy and in academia did not simply wither, it was actively assaulted and destroyed. Numerous industries and individuals financed a large number of assaults from numerous directions, all driven to results oriented conclusions. That the vast majority of these assaults shared a single, useful intellectual framework helped to re-enforce the overall effectiveness of the corruption of the field.