Wednesday, October 17, 2007

Ku Klux Klan

This is not come out because Stetson Kenndy was courageous or reolute or unflappable, even though he was all of these. It happened because he understood the raw power of information. the Ku Klux Klan ─ much like politicians or real-estate agents or tockbrokers ─ was a group whose power was derived in large part from the fct that it hoarded information. Once that information falls into the wrong hands (or, depending on your point of view, the right hands), much of the group's advantage disappears......

......Information is a beacon, a cudgel, an olive branch, a deterrent ─ all depending on who wields it and how. Information is so powerful that the assumption of information, even if the information does not actually exist, can have a sobering effect. Consider the case of a one-day-old car.

They day that a car is driven off the lost is the worst day in its life, for it instantly loses as much as a quarter of its value. This might seem absurd, but we know it to be tru. A new car that was bought for $20000 cannot be resold for more than perhaps $15000. Why? because the only person who might logically want to resell a brand-new car is someone who found the car to be a lemon. So even if the car isn't a lemon, a potential buyer assumes taht it is. He assumes that the seller has some information about the car that he, the buyer, does not have ─ and the seller is punished for this assumed information.

And if the car is a lemon? The seller would do well to wait a year to sell it. By then, the suspicion of lemoness will have daded; by then, some people will be selling their perfectly good year-old cars, and the lemon car blend in with them, likely selling for more than it is truly worth....

Chaper 2, Freakonomics, Steven D. Levitt & Stephen J. Dubner

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