Where is Bill Gates when you need him ?

jabowery · Post by **jabowery** » Sat Jan 24, 2009 5:33 pm

MSimon wrote:It is only rent seeking when the government makes you buy.

In economics, rent seeking occurs when an individual, organization or firm seeks to make money by manipulating the economic and/or legal environment rather than by trade and production of wealth. The term comes from the notion of economic rent, but in modern use of the term, rent seeking is more often associated with government regulation and misuse of governmental authority than with land rents as defined by David Ricardo.

MSimon wrote:As long as you haver a choice it is not rent seeking.

Rent seeking is any non-positive-sum game to internalize positive externalities (public benefits). The classic private sector rent-seeking example is the increment of land value enjoyed by speculators due to the nearby infrastructure investment of others. The flip-side is pollution, which externalizes costs. In both cases, libertarian theory is that these these public effects can be internalized in a jurisdiction through a functional justice system. This is a grand goal to strive for but in the mean time, we have things like Gates and PCBs.

Gates clearly internalized the positive externality of the network effect of a standard PC architecture and Gates himself stated publicly that there was not room for more than one OS in the PC market -- non-positive-sum.

MSimon · Post by **MSimon** » Sat Jan 24, 2009 5:59 pm

jabowery wrote:
MSimon wrote:It is only rent seeking when the government makes you buy.
Quoting wikipedia:
In economics, rent seeking occurs when an individual, organization or firm seeks to make money by manipulating the economic and/or legal environment rather than by trade and production of wealth. The term comes from the notion of economic rent, but in modern use of the term, rent seeking is more often associated with government regulation and misuse of governmental authority than with land rents as defined by David Ricardo.

MSimon wrote:As long as you haver a choice it is not rent seeking.
Rent seeking is any non-positive-sum game to internalize positive externalities (public benefits). The classic private sector rent-seeking example is the increment of land value enjoyed by speculators due to the nearby infrastructure investment of others. The flip-side is pollution, which externalizes costs. In both cases, libertarian theory is that these these public effects can be internalized in a jurisdiction through a functional justice system. This is a grand goal to strive for but in the mean time, we have things like Gates and PCBs.

Gates clearly internalized the positive externality of the network effect of a standard PC architecture and Gates himself stated publicly that there was not room for more than one OS in the PC market -- non-positive-sum.

Rent seeking is any non-positive-sum game to internalize positive externalities (public benefits)

What we need is a government bureau to decide who is doing good and who isn't. And since Gates is so obviously evil the government can take all his money. Sounds good to me. What is my cut?

jabowery · Post by **jabowery** » Sat Jan 24, 2009 6:38 pm

MSimon wrote:What we need is a government bureau to decide who is doing good and who isn't. And since Gates is so obviously evil the government can take all his money. Sounds good to me. What is my cut?

If there is a problem with intellectual property law, does that mean Obama must appoint an "IP Czar" presiding over a "Ministry of IP" who decides who gets how much money for which IP?

Restating my position on "in place liquidation value" in terms of patent law reform so you may be able to better grasp the point:

"Obviousness" (more precisely "obvious to someone skilled in the art") is a key disqualifier for patent protection. Do you disagree with this criteria? I certainly hope not -- otherwise "invention" simply boils down to who has the largest staff of lawyers to churn out patent claims --a situation all-too-real for people who have had to actually work with the broken patent system which seems to disqualify only on "obvious to patent lawyers".

In place liquidation value represents the "obvious" value in an asset. If an asset has an "obvious" value, then it is liquid at that value. Do banks have to go to a government bureau to determine IPLV when evaluating your collateral's "obvious value" for a loan?

MSimon · Post by **MSimon** » Sat Jan 24, 2009 8:51 pm

"Obviousness" (more precisely "obvious to someone skilled in the art") is a key disqualifier for patent protection. Do you disagree with this criteria?

Most stuff is obvious after the fact. Lots of work for lawyers.

As I keep saying: the current system is not so hot. But I am loathe to change it due to unforeseen consequences. Which will become obvious in hind sight. There is no possible set of rules that can make people play fair.

My rule is simple: are you forced to buy MS software? Nope. There is Apple. There is Linux. And if you want you can roll your own.

I like property as something you own and you can sell or rent at your discretion. I dislike the idea of the government forcing a sale. However, if you think MS is worth more to you than it is to Bill Gates there is the NYSE.

jabowery · Post by **jabowery** » Sat Jan 24, 2009 10:22 pm

MSimon wrote:
"Obviousness" (more precisely "obvious to someone skilled in the art") is a key disqualifier for patent protection. Do you disagree with this criteria?
Most stuff is obvious after the fact.

And thus, along with throwing around your own red herrings like "fair", you evade the issue.

if you think MS is worth more to you than it is to Bill Gates there is the NYSE.

Yeah guys like Chuck Moore are just full of hot air because they could have bought out Intel and MS.

MSimon · Post by **MSimon** » Sun Jan 25, 2009 12:24 am

jabowery wrote:
MSimon wrote:
"Obviousness" (more precisely "obvious to someone skilled in the art") is a key disqualifier for patent protection. Do you disagree with this criteria?
Most stuff is obvious after the fact.
And thus, along with throwing around your own red herrings like "fair", you evade the issue.

if you think MS is worth more to you than it is to Bill Gates there is the NYSE.
Yeah guys like Chuck Moore are just full of hot air because they could have bought out Intel and MS.

Ah. Envy. Bill Gates has too much money.

Gates saw his opportunity and took it. He had better lawyers and richer parents. So what? In the end Gates will still be a savvy businessman and Moore will be a computer genius. And in the end Moore will win out because physics favor's his approach.

The reason Moore languishes has nothing to do with Bill Gates. It has to do with K&R and Bell Labs. It has to do with processor designers who were making money and saw no need to try something.

It has to do with Moore keeping too many secrets when he signed on with FORTH Inc.

jabowery · Post by **jabowery** » Sun Jan 25, 2009 12:46 am

MSimon wrote:
jabowery wrote:
MSimon wrote: Most stuff is obvious after the fact.
And thus, along with throwing around your own red herrings like "fair", you evade the issue.

if you think MS is worth more to you than it is to Bill Gates there is the NYSE.
Yeah guys like Chuck Moore are just full of hot air because they could have bought out Intel and MS.
Ah. Envy. Bill Gates has too much money.

Mind if I Cc Chuck Moore on this exchange?

MSimon · Post by **MSimon** » Sun Jan 25, 2009 1:13 am

It is an open forum. Do what you like.

hanelyp · Post by **hanelyp** » Sun Jan 25, 2009 10:30 pm

MSimon wrote:My rule is simple: are you forced to buy MS software? Nope. There is Apple. There is Linux. And if you want you can roll your own.

My biggest gripe with Microsoft is their deliberate efforts to make it more difficult for software made by someone else to work alongside their software. So if you wanted to work with files in the format used by the microsoft majority, you had to use microsoft software. The network effect of being able to inter-operate with others is a powerful pressure.

Fortunately not so much of a problem any more, between the efforts of those who have reverse engineered microsoft formats, the EU rulling that as a predatory monopoly microsoft may not keep its formats secret, and a rising awareness of the importance of open data formats.

Microsoft has also been slapped for deals with hardware makers to exclusively sell desktop computers with a microsoft OS installed. It's still harder to find a new computer without microsoft installed, unless you want an apple.

I have my complaints against microsoft, but being massively profitable or holding a majority market share should not be enough to warrant penalties against the company.

jabowery · Post by **jabowery** » Sun Jan 25, 2009 11:27 pm

hanelyp wrote:I have my complaints against microsoft, but being massively profitable or holding a majority market share should not be enough to warrant penalties against the company.

The only people to put forth such ridiculous claims are those who want to tax income or sales.

The real measure of a company's management is how much it is returning on its assets compared to what others could do with the same assets. If anyone "skilled in the art" could do as well with the same assets/advantages, then there is no advantage to having the asset remain under present management.

Where some get confused is in thinking that taxing liquidation value at risk free interest rate is somehow going to reduce the incentives to put assets to their most productive use. When you attack the incentives of those who are most able to create wealth with truly meritless reward, you corrupt the decision-makers in the economy. A truly nasty business that results in tragedies such as we're now witnessing in the global capital markets and consequent human distress.

Another source of confusion is the idea that once a non-obvious practice is discovered, it becomes "obvious to those skilled in the art" in hindsight -- hence innovators are robbed of their incentive to innovate. However, this ignores the fact that the innovators would have a higher liquidation value than when they acquired the asset -- resulting in all other valuations being higher -- and since there is no capital gains tax, they, at worst, walk away with the entire capital gain tax free (in addition to having no taxes on their activities in achieving that capital gain).

I should add that invention is a special case in a growing technological civilization and so exempt inventor-owned patents from all fees -- and treat international violation of patents as violation of territory.