The Economics of Spam

Unfortunately, it is nearly impossible to know in advance whether or not any particular email will result in a property rights violation. It is not until the recipient reads the email that he decides if the sender has his consent. And of course, depending on the circumstances, he may have various incentives to claim that his rights were violated no matter what that actual decision is.

By extension, any human interaction, not just email, involves this ethical ambiguity. A door-to-door salesman will likely end up simply wasting your time as you tactfully attempt to tell him you are not interested. But there is a chance that he might be selling something you desire. The same situation holds for anyone who rings your doorbell - you might desire to interact with him or not, but this cannot be known ahead of time. By having a door, you are allowing people to ring your doorbell, even though there is chance you might realize after the fact that you did not want them to ring it.

Taken to extreme limits, even stopping someone in the street to ask them a question might be a violation of their rights. Any sound waves penetrating the auditory canal of another person without his consent is a violation of his rights. Lest you think I am being overly esoteric, consider the stress induced by having to shake off a beggar or pollster.

Does the ethics of consent mean that no one can interact with any other person because there is a chance that you might not have his consent?

Fortunately, in order to move beyond the state of nature into a civil society, cultural norms such as asking, "Pardon me, but do you mind if I ask you a question?" became widely accepted with tacit approval. Asking that initial question of enquiry is seen as a negligible offense necessary for social interaction to take place. And in most places, it is indeed considered a rights violation to persist when permission is initially refused.

Similarly, the more interesting question to me is not whether or not spam is a violation of property rights, but rather - given the desire for human interaction, how can we prevent people whom we do not consent to sending us email from sending it, and vice versa?

One solution comes not from cultural norms or common law, but from economics: creating a price to access your mailbox. You would filter out people based on how much they were willing to pay you to read their mail. You could charge your friends nothing, and everyone else, say 50 cents. Mass emailings would become expensive rather than nearly free, turning advertising into a tangible cost to the advertiser, as it is in nearly all other media. For most people, using email would be a break-even proposition, as they send about as many emails as they receive. Such a system would require cryptographically created anonymous digital currency. The technology exists, even if the end product has not achieved market penetration.

Whether or not spam is a property rights violation is less important than what we do about it. Most of us have certain goals in common, including a way to stop spam while allowing meaningful emails to get through. Ethics is limited in finding the solution; economics is more relevant.

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I would just like to know

I would just like to know WHY my 'regular' email, through Comcast, cannot filter spam and junk email as well as my gmail or my hotmail account when I pay for their service -- and the other 2 I don't.

I do expect that the day will arrive when we pay for email, either the server or in some form of taxation for the 'priveledge.' :no:


Jonathan, the link to the

Jonathan, the link to the Friedman article doesn't work.

Michi, one possible reason why Gmail and Hotmail are better at filtering junkmail than Comcast or any email service provided by your ISP, for that matter, is because Gmail and Hotmail have wider user-bases. Once they identify the content of a spam message for one email user, they can effectively prevent that same message from being sent to all of their other users. The same effect is not as powerful for ISP email accounts, which tend to have relatively smaller user-bases.

Comcast provides email as an

Comcast provides email as an afterthought to their primary internet business (ISP), while Hotmail and GMail are trying to sell themselves on their email service. Comcast will keep you as a customer even if their mail service sucks, but Hotmail and GMail won't.

And everyone pays for email, just not on an email-by-email basis. I don't think forms of e-stamps or e-payments will fly. People hate micropayments; all attempts at micropayment systems have failed pretty miserably (mostly because of the high up-front costs for negligible gains or benefits). $0.50/email is outrageous (in light of the fact that email is almost costless to send), and no hacker would stand for that; there would be numerous end-arounds, so much so that the exercise would be meaningless.

I can't think of scenario where pay-for-mail stamps would emerge absent a government imposed solution (which would shortly be shirked and subverted). What we'll more likely see is club-good type email whitelist services, where people pay in to a "guarantor" that the person on the other end is not a spammer.

hah, you beat me to it.

hah, you beat me to it. :furious:

Michi, I would just like to


I would just like to know WHY my â??regularâ?? email, through Comcast, cannot filter spam and junk email as well as my gmail or my hotmail account when I pay for their service â?? and the other 2 I donâ??t.

Did you know that you can enable or disable the Comcast email spam filter? I only found this out yesterday from the cable bill advertising insert.

Access at comcast.ORG. Your account is entirely separate from that at comcast.COM. My filter was defaulted to ON and I have had at least a factor of 10 to 50 times less spam on Comcast than on Earthlink.

Regards, Don

Jonathan, the link to the

Jonathan, the link to the Friedman article doesnâ??t work.

Thanks. Fixed.

Don, No, I didn't know that


No, I didn't know that -- thanks! I wasn't even sure there really was a spam filter. There's that button to hit to 'report spam' and I was beginning to believe it was just there as a feeble attempt to placate their customers.

I hope I never see another viagra ad again!


Thanks, also Micha and Brian. I wondered how that worked.

As Brian says, there are

As Brian says, there are serious issues with the stamp scheme. The insidious thing about spam is that its victims are a very dispersed interest. It imposes tiny costs on many people, hence no individual has incentive to do much work to stop it. This suggests to me that the solution must come from larger groups that have concentrated the interest some, like ISPs, rather than individually-changed habits like email stamps.

I hear gmail / yahoo mail do very well at filtering spam. Its all about a large corpus.

Don, Thank you much! Not a


Thank you much! Not a single viagra ad or offer to refinance my home in my mailbox this morning!


I think a lot of the

I think a lot of the problems could be solved simply by replacing SMTP with something that requires user authentication on outgoing mail.

Stormy, That is an excellent


That is an excellent idea!


I'd really rather not see a

I'd really rather not see a "pay for email" scheme. How are you going to handle such a system? We'd need anonymous digital cash first, and I don't see that happening in the near future. It would also require a fundamental change in the email infrastructure, which I also don't see happening.

The solution to the problem is more intelligent filtering of email. A digital secretary, if you will. People who use email regularly generally get too much email anyway. I get email from various automated processes on the machines I administrate. I also get automated messages from services I subscribe to. I'm also subscribed to a couple dozen mailing lists. Without decent sorting as well as spam filtering, my email would be completely useless.

If this is what you want, then choose a provider that gives it to you! The competition will result in the best solution to the problem long-term.

I don't see filtering as a

I don't see filtering as a long-term solution. For every programmer working on a new filter, there are exponentially more hackers and spammers working on new ways around the filters. And with so many false positives, most people end up looking through their junk mail folders anyway, somewhat defeating the purpose of the filters.

The problem with fee-for-email and changing the email infrastructure is network effects, i.e. the chicken-and-egg problem. Fee-for-email won't work until micro-payments become widespread, but micro-payments won't become widespread until there is a killer-app, like fee-for-email (not to mention the problems with the credit card company oligopoly, which is itself a network effect). And again, now that email is widespread, changing the email standards is difficult to do because you can't communicate with those who have not yet changed.