Hillary Clinton

The Death of the VCR Is a Time To Reflect on Disruptive Technologies That Pols Hate

The RNC and DNC were rife with protectionist, zero-sum economics. That will get us absolutely nowhere as a country.


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Note (2:40 P.M.): I cleaned up numerous typos and dropped words after first posting this. Also, some minor word changes throughout and the addition of a great video at the bottom of the post.

Last week, Ed Morrissey reminds us solemnly over at The Fiscal Times, the last maker of VCRs threw in the towel and stopped producing the thing. "After nearly 60 years," writes Morrissey (whose main gig is as a honcho at Hot Air), "and 40-plus years as a mass-produced consumer product, the last manufacturer could not ignore its obsolescence any longer, created by innovation and open-market principles."

Before we move into the meat of Morrissey's column, let's reflect briefly on just how great an invention the VCR was. If you're old enough (say 40-plus) to remember its heyday, the VCR radically transformed your cultural life by putting all sorts of movies, TV shows, and other stuff into your grasp. As I wrote nearly 20 years ago in a story about what I called cultural proliferation:

Omnipresent video rental stores give virtually everyone access to a film library that a few decades ago even a millionaire wouldn't have been able to afford.

One gets a sense of this by considering the offerings of the typical Blockbuster store. Not only is Blockbuster the country's biggest chain (with about 4,500 stores nationwide), it's arguably one of the blandest and most restrictive in terms of aesthetic judgment. Blockbuster leans heavily toward the highly commercial fare alluded to in its name. And yet it's still got a huge and generally impressive selection of films—the typical franchise rents between 7,000 and 10,000 titles—even as its family-oriented policy creates a niche for stores that carry edgier fare, including pornography. According to The New York Times, most Blockbuster franchises have at least two competitors within a couple of miles, suggesting that cultural markets are often not zero-sum games, in which growth for one vendor is loss for another—or, more important, for the consumer.

But VCRs do more than simply allow viewers to watch more TV or film. They profoundly alter the terms of production and consumption. On the production side, movie studios now make roughly as much money from video sales as they do from box office receipts. By providing an after-market, VCRs allow producers—whether large or small, major-studio or independent—to take more risks by giving them a second chance to recoup their investment (that's one reason why there were 139 U.S.-produced independent films released in 1997, 100 more than a decade ago). Additionally, there's a robust market for old TV shows, documentaries, and the like, as well as for direct-to-video materials, ranging from porn to children's series starring the Olsen twins (themselves perhaps a form of porn).

On the consumption side, VCRs allow viewers to watch programs at their leisure, or to effectively watch several shows at once.

That was writte in 1999. The VCR is dead and video-on-demand offerings are infinitely more varied and available. More important, the tools by which we can all appropriate, reappropriate, and even misappropriate mass culture now reside on everyone's cell phone and laptop (and just about everyone has one or both of these marvelous machines). Yesterday, I spoke with Robert Smigel, best-known as the creator of Triumph the Insult Comic Dog. Smigel's earlier work involved taking found audio (say, of Larry King talking with H. Ross Perot on CNN) and then animating it so the context was hilariously and brutally inappropriate. Today, virtually anyone can pull off a version of that (though rarely as funny or piercing). That's not just good for laughs, it allows for something that Orwell and other dystopians could never quite grasp: Technology ultimately liberates the masses more than it allows overlords to direct and control our lives. The audience, presumed to be dumb receivers of whatever messages were beamed into or onto them by leaders, corporations, and others, has more power over media than ever before. The Frankfurt School of mass communications is dead! Long live the oppositional and empowered audience that can take media and transform it into whatever we want.

The VCR was one of the great, cheap machines that accelerated this process, as it allowed tape-dubbing culture to expand and explode in a way that was impossible before. And of course the VCR's introduction to consumers was fought tooth and nail by the movie industry, which shortsightedly saw it as an existential threat (in fact, of course, it turned out to be a boon to Hollywood's bottom line). Fanning hysteria about mass piracy and people refusing to leave the comfort of their living rooms to go to movie theaters, Jack Valenti, the longtime head of the MPAA, likened VCRs and blank video tapes to the Boston Strangler and used his political connections first to forestall home-video recorders and then to get a tax levied on blank tapes.

But now the VCR is dead—like the video store, too. Remember when Blockbuster was seen as a sinister monopoly that would soon use its market power to limit our selection and choice of fare in pursuit of its bottom line? Good times.

Morrissey's Fiscal Times column is actually about "How iPhones and Uber cut the red tape and expanded the economy" and it's absolutely essential reading after both the Republican and Democratic National Conventions, where speakers of both parties took for granted zero-sum economic thinking. Hillary Clinton and Donald Trump proceed from the assumption of a fixed pie of goods and services and thus their solutions to almost everything are about squeezing out better deals for America at the expense of other parties. This is not wrong in a small way but in a spectacular way. It leads to policies that try to freeze technological and commercial innovations which challenge established interests. On the Democratic side, Hillary Clinton and Bernie Sanders are outspoken critics of Uber and other "sharing economy" services, claiming they exploit workers. On the Republican side, Donald Trump and others seem oblivious to any sort of economic activity that doesn't take advantage of political connections. That's not the sort of leadership we need in the 21st century.

Morrissey writes:

An entire generation only understands "long distance charges" as an ancient relic. Telephone companies have to compete for service at the local level. The smartphone most of us carry wasn't even a dream at the time of the divestment in 1984. But even before all that took place, AT&T itself notes that consumers woke up the next day in a free market "to discover that its telephones worked just as they had the day before."

The smartphone itself figures into a new technological challenge to an existing, protectionist market – taxis. Thanks to the proliferation of both smartphones and GPS services, new services like Uber and Lyft have emerged, blending social-media technology and the demand for hired transportation into brand-new choices for consumers….

A former taxi driver himself, Morrissey sympathizes with the plight of hacks who have to hustle more than ever to make a buck in places such as New York City. But, he says,

The important point to note, though, is that the market itself grew over the last five years since Uber and Lyft entered the Big Apple. "In April, taxis and ride-sharing services together provided nearly 614,000 trips per day to people in New York City," Newman reports from the Morgan Stanley study. "That's 25 percent more than five years ago." Furthermore, most Uber and Lyft drivers work part-time to supplement their income. "So thousands of people still driving a cab feel the job is lucrative enough to do it full-time."…

Time and time again, we have discovered that reducing regulation and intervention in markets and allowing providers to innovate increases consumer choice, lowers cost, and expands markets. Local governments may belatedly learn this when it comes to taxis – and we can only hope that the federal government will figure it out soon when it comes to health insurance, energy, and any number of other over-regulated markets.

Sing it, Brother Ed, sing it. 

Technological innovation, combined with wise public policy that reduces regulatory costs and lowers barriers to entry, is the path to an expanding economy and more opportunities and higher standards of living for all of us.

Yet we live in a weird moment in which the leaders (and increasingly the rank-and-file) of both major parties refuse to believe in growth as a possibility. Instead, they posit protectionist trade barriers as a way to "secure" current jobs and they talk about punishing American employers who move jobs overseas or seek better deals that result in lower costs for customers. Like Sens. Bob Casey, Jr. and Sherrod Brown at the DNC, they bitch and moan that employers have forsaken the Rust Belt for cheaper places domestically and abroad to make stuff. They are arguing over crumbs left behind rather than thinking about how to move into the future.

We go along with that sort of thinking at the cost of a future that's better than the present.

Related vid: "8 Great Libertarian Apps That Make Your World Freer & Easier To Navigate"

(Released a little more than a year ago, many of these apps have already been superseded by better ones…)