For those living creatures that are unable to form compacts not to harm others or to be harmed, there is neither justice nor injustice. It is the same for all tribes of men unable or unwilling to form compacts not to do harm or be harmed — Epicurus, Principle Doctrine 32

I think history will eventually say, Chris Anderson’s “The Long Tail” was an interesting book for the fact that it was probably one of the most damaging ever to be applied to the digital economy.  One is better off reading The Black Swan: The Impact of the Highly Improbable by NNT, Steven Strogatz Sync: How Order Emerges From Chaos In the Universe, Nature, and Daily Life, and Benoit Mandelbrot’s The Misbehavior of Markets: A Fractal View of Financial Turbulence – for a better idea of how bad power laws can be in economics. The “Long Tail” is very correct in that this is how the market works, it is incorrect in letting anyone think that you will get rich from it, and that it is “good for you”.

You might get lucky. You might lose your shirt. You might run around in the end of the Long Tail like a rat in a maze. Indeed, the rats in the maze are most content creators in Second Life.

If you all want a taste of history, then read the last book (Book 6) of De Rerum Natura by Lucretius, for his poetic retelling of the plague of Athens (David Sedley commentary), based on the Plague of Athens account of Thucylides.

Lucretius bears a message about Epicurus. From Book Six no. 17

He (Epicurus) understood that the pot made the flaw, and that by this flaw an inward corruption tainted all that came in from without as though it were a blessing; partly because it was leaking and riddled, so that nothing ever sufficed to fill it; partly because it preserved it befouled, as one may say, with a noisome flavor everything that it received, as soon as it came in. Therefore with truth-telling words he scoured the heart, he put a limit to desire and fear, he showed what was the chief good to which we all move, and pointed the way, that straight and narrow path by which we might run thither without turning; he showed what evil there was everywhere in human affairs, which comes about and flies about in different ways, whether by natural chance or force, because Nature had so provided, and from what sallyports each ought to be countered, and he proved that mankind had no reason to roll the sad waves of trouble within their breasts.

For Epicurus’ Swerve in Lucretius’ epic poem is exactly this phenomenon, too. Sadly, it is also Adam Smith’s Invisible Hand. It doesn’t lead to good markets, not without good money management, and right now, this especially does not exist in the USA with Bernanke at the helm.

If you want a taste of physics research, then check out the UPenn research on Brownian motion, where the scaling is asymmetrical. The good news about this is that Daniel Dennett’s Freedom Evolves is probably right about free will though. But too bad for Chris.

http://www.upenn.edu/pennnews/article.php?id=1035

I view “The Long Tail” as a plague now. I once liked it, but after seeing it used in practice everywhere, I see how bad it really is. Richard Dawkins is your man (The Selfish Gene) if you want to know how bloody nature is, tooth and claw.

Nature is not intrinsically good. It is not intrinsically evil, either. It is wild, untamed, rough, and undomesticated. The waves can rise high and crash suddenly like a tsunami. It sure as heck isn’t improving the human condition to go back to nature. We want freedom, but maybe not that much freedom. Justice is desirable too.

Seeing this book applied to currency markets is an even bigger disaster. No wonder Chris Anderson doesn’t like Second Life anymore.