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Re: Question About GNU General Public License

From: telford
Subject: Re: Question About GNU General Public License
Date: Thu, 22 Jul 2004 01:27:27 -0000

Alexander Terekhov <> wrote:

> (see "3 Economics")

This is a fair drift sideways from the mind/matter issue but
in misc.discuss anything is on topic *grin*.

The big problem in Doug's economic analysis is that we aren't
talking about one patent, we are talking about millions.
So many economic discussions of the patent system start with
this inventor who only wants to earn a fair days pay for a days
work and then they get their patent and live happily ever after
by making every user pay a royalty.

The fact is as soon as you say "a royalty" you are talking
complete crap. What you should be saying is "millions of royalties
with interconnections so mind bogglingly complex that only a large
consortium can ever hope to provide any resolution of who
really owns what, and even they they are going to hand the money
off to their cronies because thats how consortiums work".

Think of a highway, it needs construction and maintenance so you
decide it is fair to put up a toll gate to pay for the work.
Now the toll gate itself also needs construction and maintenance
so the toll has to cover [1] money for the highway, [2] money
for the toll gate, [3] money for someone to supervise that the
money [1] and [2] goes where you expect that it should be going.

In the case of patents, the toll gate is at least an order of
magnitude larger and more complex than the highway, and so 90%
of the money goes to toll gate maintenance and 10% goes to highway
maintenance. Add a little bit of corruption to the mix and the
highway probably gets about 5% of the total. This is where the
pop music industry has found itself.

One of the areas where Capitalism runs into nasty problems is
situations where usage monitoring is intrinsically difficult.
For example, lots of people enjoy walking on the beach, but some
people use the beach more than others. Is not acceptable to fence
the entire beach and charge a per-usage fee. The reason why not
is that the cost of fencing and policing is very high.

Another area where Capitalism has problems is where there is no
scarcity so the price for a commodity collapses (some see this
as a problem because low price means no profits to be made, others
don't see it as a problem because money is not useful unto itself,
only the commodities themselves are useful, money is merely a
medium of exchange). People who don't want to pay for water can
easily get a rain water tank, unless the law prevents ordinary
citizens from having such tanks (which happens in many places).
Mechanisms for artificial scarcity are common and in an economic
sense each mechanism pays for itself because of the additional
revenue that scarcity generates. I would argue that even though
these mechanisms look good from a financial perspective, they are
not contributing to society. What this implies is that if all
you measure are the dollars, you are not getting the picture of
what is really happening. Capitalism is based on the presumption
that money is a reliable indicator of human happiness and productive
activity -- this is a demonstrably wrong assumption.

Software falls under both of the above categories and the patent
system does not manage to resolve either difficulty (nor do any
of the patent advocates even accept that such difficulties exist,
the presumption is always that our society is desperately short
of creative/inventive talent which is completely contrary to any
observation you care to make).

In the case of our current software industry, there are OTHER
fundamental problems because the industry focus is getting sales
not providing support. There is no funding for reliability and
bug fixes, all the funding goes to features that might boost
sales. IMHO the patent industry just pushes even harder towards
the focus on features and away from support, bug fixes and
reliability. The patent industry gives people an incentive to
do things differently just for the sake of being different which
is building a maintenance nightmare.

This is another problem in Capitalism which is that Capitalism
thrives on wastage. More items thrown away is more sales and more
productivity. Software is designed to force the user to upgrade
by deliberately incompatible versions, same with electronic
equipment, computers, fashion clothing, popular music, just about
everything. Capitalism also thrives on ignorance: the less a
person can help themselves, the more services they will buy.

By the way, I'm not anti-Capitalist. I think that Capitalism has
a lot of good points but if you are going to use a tool you must
know the limitations of that tool. Capitalism works well in the
manufacturing industries and moderately well in agriculture
but that doesn't make it perfect for every organisational job we
ever come across. Only by having a clear picture of why Capitalism
fails in some circumstances can we be confident in applying it.

        - Tel

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