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by Rob Horning

5 Aug 2009

Economist Bryan Caplan, a health-care reform skeptic, argued that health insurers’ concern for their reputation would prevent them from abusive practices like rescission, when coverage is revoked once patents need expensive care. Insurers are so concerned about reputation, he argues, that German insurers defied the Nazis and demanded the right to pay damages to Jews after Kristellnacht. Paul Krugman’s skepticism about the almighty power of reputation prompted Caplan to wish for a chart that would expose companies’ rescission rates (funny that didn’t turn up so easily) and later to elaborate on the wonderful powers of reputation in a competitive free market.

When we wanted a new house built, we gave 10% of the purchase price to the builder upfront.  The builder gave us a contract almost devoid of legal remedies - practically everything was at the builder’s “sole and absolute discretion.”  A few months later, we moved into our house.  99% of the details were exactly right, and they fixed the rest for free.  Why would the builder treat us so well?  Altruism?  Ha.  Legal remedies?  Ha.  Even repeat business is a stretch.  What are the odds we’ll ever ask them to build a second house for us?  The only answer that makes sense is reputation.

Caplan sneers at altruism, but is altruism so different from the professionalism we expect from doctors when we assume they are not keeping us sick to bleed more money out of us in office visits and so on? Altruism, human decency, professional dignity all matter in many of our exchanges, even though it is hard to find a place for them in a formula-driven rationalistic economic analysis of how capitalism functions. In fact (as the film The Corporation depicts) the firm may function to disperse that altruism and mitigate motives other than profit. Responsibility is spread throughout the corporation so no one has to feel particularly guilty about its cutthroat doings—as when sick patients have their coverage yanked from underneath them. Individuals within the firm can focus on their responsibilities to the hierarchy rather than to customers or society without feeling like unreasonable monsters. (Proprietors of small businesses have to face more of the brunt of the moral consequences of their practices, which makes it harder for them to fend of behemoths like Wal-Mart.) Damage to a brand’s reputation can be combated by the same forces that might publicize it, and a corporation is usually going to have more resources for this than those it has wronged.

Arnold Kling, Caplan’s co-blogger at EconLog, raises another problem with the reputation idea as it pertains to health care. “Reputation matters when exit matters. That is, if people will switch suppliers based on word of mouth, then reputation will be important.” But under the current system we don’t do that. And most people don’t have a problem with their insurers until they need to actually use the coverage, at which point it will be too late to switch.

UPDATE: Tyler Cowen makes another good point.

Reputation affects market practices, but possibly reputation is part of the problem.  It’s relative reputation which matters.  The operative reputational incentive is not always: provide a better product to get more customers.  Sometimes the reputational incentive is: customers tolerate bad treatment, because established reputations suggest they will receive equally bad treatment elsewhere.

This seems to imply the cycle of relative reputation can push all competitors downward.

by Mehan Jayasuriya

5 Aug 2009

In classic Radiohead fashion, Thom and the boys unleashed a new track on an unsuspecting blogosphere today: “Harry Patch (In Memory Of)”. The song is a tribute to Harry Patch, the British supercentenarian who was the last living World War I veteran to have fought in the trenches. Patch passed away at the ripe old age of 111 on July 25th and is set to be buried tomorrow at Wells Cathedral in Somerset.

While a fitting tribute, the track is something of an anomaly in the Radiohead catalog—it’s easily the most purely orchestral they’ve ever penned. Built atop a foundation of weepy strings (arranged by Jonny Greenwood), the song marries orchestral sweep with a pronounced undercurrent of existential dread. Structurally, it sounds a bit like a distant cousin of “You and Whose Army?”, were that song’s guitars swapped out for a string section. While the lyrics are all Patch quotes, many of the lines feel like classic Yorke constructions (“They came up from all sides,” “I’ve seen devils coming up from the ground”). Patch, who became an outspoken critic of war late in his life, apparently had a “profound effect” on Yorke, who urged listeners not “to forget the true horror of war” in a post to the deadairspace blog.

“Harry Patch (In Memory Of)” premiered on BBC Radio 4 this morning and is now streaming in its entirety on the BBC website. The track can be purchased from the W.A.S.T.E. shop for £1, with all proceeds going to UK veterans’ charity, the Royal British Legion.

by PopMatters Staff

5 Aug 2009

Frank Turner
Poetry of the Deed
(Epitaph/Xtra Mile)
Releasing: 8 September

The new album from the British folk-punk singer whose tunes are firmly within the tradition of Joe Strummer and Billy Bragg. Fine company indeed.

SONG LIST
01 Live Fast Die Old
02 Try This at Home
03 Dan’s Song
04 Poetry of the Deed
05 Isabel
06 The Fastest Way Back Home
07 Sons of Liberty
08 The Road
09 Faithful Son
10 Richard Divine
11 Sunday Nights
12 Our Lady of the Campfire
13 Journey of the Magi

by Zane Austin Grant

5 Aug 2009

It seems it is impossible to be a moral citizen in Mega-City One, the dystopian future city for which Judge Dredd serves as law enforcement and quick judiciary.  Pretty much everyone is breaking a law, often even those who are filing complaints, so any time one gets near a ‘Judge’, they are probably going to receive a relatively harsh sentence.  Young perpetrators, or “Y.P.s” as the judges call them, receive equally cruel sentences for their misdemeanors.

Writer John Wagner and artist Ron Smith addressed the issue of graffiti and youth crime in two 1981 issues of 2000 AD, the comics magazine that to this day serializes the ‘Dredd’ stories.  Following the teenage Marlon Shakespeare through his school days, in which he attends a compulsory class about his future titled ‘unemployment’, he is instructed to find a hobby and stay out of trouble.  After all, finding a job in a city with an 87% unemployment rate is highly unlikely, another class lesson.  The hobbies of his family are absurdly boring, so Marlon has decides to be the biggest ‘scrawler’ (graffiti artist) in the city. Using the tag name ‘Chopper’, Marlon gets into a graffiti war with a rival scrawler who goes by ‘The Phantom’. 

The art war escalates from skyscrapers to monuments, until the final scene in which the two scrawlers plan to tag the Statue of Judgement, a giant statue of a judge that overshadows the Statue of Liberty.  In the panel above, Chopper finds out the surprising identity of his rival and the meaning of resistance in his ungovernable police state before tricking the Judges in a surprise ending.

by PopMatters Staff

5 Aug 2009

Flaming Lips fan will dig Stardeath and White Dwarfs who have just released their latest video. Band leader Dennis Coyne is the nephew of the Lips’ Wayne Coyne and they trade in a similar brand of psychedelic pop.

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Moving Pixels Podcast: Our Own Points of View on 'Hardcore Henry'

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