J Thomas wrote:As typical of this sort of thing, you argue that there is no such thing as IP because it is a privilege provided by government. As if privileges provided by government do not exist!
Government privileges exist. So did segregation. That no more means the existence of 'intellectual property' than it means the existence of racial superiority.
So, you repeat a lot of sort-of logical stuff that does not describe reality, but that prescribes it. You believe the world works this way because you studied the theory in school and people told you it works this way. Then when you get the chance you parrot it back.
So, you say a lot of not-at-all logical stuff that fails to describe reality in any meaningful way. You believe the world works this way because you like being nonconformist. Then when you get the chance you spout out all the nonsense you can come up with.
If you have any issues with the basis of economic theory, please point out which part. Otherwise, you're just waving a finger and screaming, 'No! Wrong! It's all wrong because I said it's wrong and I don't think reality works that way!' Because I've already given an example of this reflecting reality; a restaurant start-up has little possibility at all of making economic profits, yet it can still receive investment money.
First, I did not say that monopolies are paragons of efficiency. I said that they concentrate wealth, which potentially provides capital for investment in new products or increased production of old products.
The Romanovs concentrated wealth, too. So did the Bourbons. So did the Soviets, ironically. The ruling class in an autocratic society concentrates the wealth, but that in no way 'provides capital for investment' (again, you don't understand the meaning of the word 'capital'). Free-market capitalism is actually a system that allows less concentration of wealth (as a share of the overall economy) when you compare it with every other system. The richest men in a capitalist society have a total wealth of less than a hundredth of the amount of money the country makes in a year, while the richest men in other systems can spend the entire output of the country on a palace.
You can argue that this lack of productivity occurs because they're not spending their concentrated wealth on the 'right' things, but come on, you think monopolists are going to spend money on improving efficiency? Quite the contrary, in fact, as Leibenstein pointed out in a paper on X inefficiency. Around the area where I live, a state-owned (or managed? But definitely monopolistic) utilities company has a building in a particularly expensive part of the city. Not exactly the most efficient use of resources, is it? It is observed that the utility monopolies are highly inefficient with how they spend their money; it really doesn't matter, since there are no competitors to offer a more efficient (and thus cheaper) deal.
And we need to disassemble industries when they become no longer useful. There are traditional chestnuts that people tend to use for examples of this. Buggywhips, which with the decline of the horse became specialty toys for perverts. Canals, which with the rise of the railroads became exercise trails etc. The issue is not whether there are many canals that go to the same place so you get free competition. The issue is that we just don't need them any more.
A free market will deal with those on its own. Let people have what they want.
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What you say makes sense. How would we find out whether it is true? In the days of wildcat banking, did the number of banks decline over time? I think banks tend to consolidate without government, but it does make sense that big companies can lobby better than small companies. Given multiple stories that make sense, how would we find out how much truth there is in any of them? I guess we could argue back and forth, and maybe the one with the more persuasive claims should be judged the winner? ;)
You 'think'. But you've no proof to back that up. Consolidation of agriculture occurred because of New Deal policies that benefited large farmers at the expense of the small ones. Consolidation of banking occurred with regulations of the banks that have occurred, likely because of policies during the New Deal (again). An Italian-American businessman who was the son of immigrants worked himself up in the banking industry, quit his bank's board when they wouldn't service what he saw as a growing market of immigrants, and founded the Bank of Italy in San Francisco in 1904 (later to become Bank of America). Think government would allow that today? How do you even start up a new bank these days with the status quo in bed with the Federal Reserve? Government is the largest cause of monopolization there is.
So we are agreed on that much, and we are agreed that it often happens this way?
This is progress. Now that we both agree on something, we can get a latte for $2.65. I think it's a plausible story we agree on. How would we find out how much truth there is in it?
I agreed that people don't like competition. I did not agree this was a good thing.
You give examples of nations that have improved their living conditions. You claim that these nations have markets that are "freer" than somebody. Or perhaps you claim that US markets are "freer" than british markets.
But consider the example of Mali. Mali markets are far freer than US markets because the Mali government is mostly incapable of enforcing much. The Mali economy has much improved since the government allowed foreigners to bring in hi-tech gold mining. The foreigners export large amounts of gold from Mali and pay the government a little for the privilege. And so the average income PPP is around $1,100 per year, but around half of the population spends less than $1.25/day. These figures are all rough approximations because the Mali government does not have the resources to collect precise data.https://www.google.com/publicdata/explo ... &ind=false
Perhaps there are other important factors to consider, and not just "freer" markets.
Nice misleading graph, there. I can put up a graph of North Korea, and that'd be just as helpful (probably not, though, since there's likely no data available on that). You do realise Mali was under a dictatorial regime until the 90s, right? The comparison is supposed to be that of growth, not the current state. It's clear that the freer countries have grew, while the more socialistic countries have done so less. Mali, rather than proving your point, works quite against it as it's GDP per capita has grown 109% from 1994-2011, compared to UK's 90% and France's 81%.
This always comes up. I ask how well a system works, and they answer "It's the *fairest* way, never mind whether it actually works." Communists, capitalists, single-taxers, you name it. They always think their idea is the fairest.
Nope. Nowhere did I say it's the fairest way. I happen to believe that free-market capitalism is the fairest way, one that will lead to an equitable distribution of wealth (more so than socialism, where all the wealth goes to the commissars and other assorted bureaucrats, that is). But whether or not it's fair, it's most certainly the freest system. But you're not challenging that, are you?
This one is more than about fairness. Concentration of capital leads to concentration of power, which leads to bad government. It sounds reasonable. If we were all equal and poor, we could not have a very intrusive government because we would be too poor to support one. So you are arguing that we are better off if capital does not get concentrated.
No, I'm arguing it's better if wealth does not have the ability to rent-seek from the government. But this will occur so long as the government is able to provide favours; therefore, the only solution is to prevent the government from having the ability to provide favours. Favours can be subsidies and regulations (tax cuts that don't apply to everyone are also subsidies in a way), and both must be done away with. After all, corporations actually favour many regulations because it keeps their competition out.
Is there anything in your idea of how things work that would keep capital from getting concentrated, beyond the natural tendency of free markets to keep anybody from getting rich relative to the norm?
Is there anything in alternative systems that keep capital from getting concentrated? Again, capitalism results in the least concentration of relative wealth.
This is an argument that we have gotten concentration of capital which led to concentration of power and so we have some utterly unproductive industries. I tend to agree with you. To my way of thinking, then, we need to find a way to concentrate capital for investment that does not lead to this bad result. Undoing the bad result we already have will also be a big challenge.
Concentration of wealth isn't necessary for investment, why do you think it is? In unfree markets, that may be so, but in a free market, even the working class can invest.
[*]Let's look at two ways free markets are easily more efficient: lobbying and governmental costs. Monopolies must rent seek, they need the government to preserve their power. Those in a free market? They can't force the government to do a damn thing. How many lawyers and politicians and administrators could you switch to useful work (they're most likely only suitable for flipping burgers, though) by making all markets free? There is an easy, visible efficiency boost right there.
You have not explained how this increase efficiency in your theory. It sounds like you are saying to eliminate the government including the courts, and that would increase the labor supply. But we don't have a labor shortage at the moment.
The presence or lack of of a labour shortage is irrelevant.The number of jobs is not a fixed quantity.
You have made another argument from theory. You have not shown that free markets would actually behave as your theory describes. We have seen that communist systems did not behave the way their theorists predicted they would. Is there any reason to think that if we ever actually tried free markets that they would behave in practice like your theories?
Point out what is wrong, then. What specifically. It's easy to see where communism goes wrong; it results in concentrated power of a few because increased government power causes that.
Further, you have not said why "efficiency" as you define it would be valuable. You seem to assume that it would be valuable, but you have not provided any evidence why it would be.
Because of the fundamental economic assumption of scarcity. You can find issue with that as you have with all sensible economics and rationality in general, but that doesn't change the fact it exists. Efficiency allows us to get more for less. Which results in fewer people starving to death or dying of easily curable diseases.
Agreed! Not that I fail to realize it, but I gave no proof it would work out that way. I argue that in the long run we need concentration of wealth for investment, and profits are one way to achieve that. But I have given no evidence for those claims.
You haven't argued that. You've stated that.
Whew! That one is a strain. It is another argument about fairness. I don't want to spend much time on it, but consider this analogous argument.
During evolution, the selected genes tend to spread through the population. There will be winners and losers. On average, most individuals will be losers because mostly their genes are not the best and will not win out over time. So it would be better for every population not to have natural selection and evolution. Better to stop all that because it is not fair. And in the economic metaphor, the best way to prevent evolution is with a free market that punishes inefficiency....
The economy is not a zero-sum game. This a wrong-headed, mercantilist argument.
Arariel wrote:There's no such thing as 'intellectual property'. End of story. Copyrights and patents are government-granted monopoly rights. Property is excludable. You cannot stop people from copying without a government.
There is no difference between "physical property" and "intellectual property". They are both concepts created by society and enforced by society's favorite enforcer - the government. If society decides that property is excludable and I decide to walk into your house and live there with you, what do you do? You call the police and they kick me out. If society decides the IP is excludable and I decide to rip off a publishing company be copying their work and reselling it, what do they do? They call the police and I get fined, or they sue me.
If society decides that property isn't excludable and I decide to walk into your house and live there with you, what do you do? You beat me up until I leave. If society decides the IP isn't excludable and I decide to rip off a publishing company be copying their work and reselling it, what do they do? They beat me up until I stop. And then depending on how this society views assault both you and the enforcers of the publishing company go to jail.
The only difference is that the concept of physical property is a couple of hundred years older than the concept of IP. It is therefore more deeply ingrained into our memetic code.
You can enforce property without government. You can't enforce 'intellectual property' without government. If I make a copy of a film onto a disc and hand it to a friend, they cannot prove it's been 'stolen' without searching my friend. If I steal an object, they can prove it's been stolen when they see it's not there. No one is made poorer when a copy is made. Someone is made poorer when something is stolen.
There's no such thing as 'intellectual property'. End of story. Copyrights and patents are government-granted monopoly rights. Property is excludable. You cannot stop people from copying without a government.
You cannot stop people from interfering with each other's radio waves without a government either. That doesn't change the fact that radio spectrum licensing is extremely useful (and necessary) in today's society.
Copyright, Patents, and so forth should be argued from a merit point of view. Every piece of society today is an illusion upheld by the government, some illusions are more useful than others.
I'm sure even if it were meritorious to enslave blacks and have them pick cotton, that would not be acceptable.