Re: Fear of Life (was Microsoft, Automation)

Dan Fabulich (
Sun, 03 May 1998 03:50:24 -0400


ChuckKuecker wrote:
>Who is going to purchase a product no one has ever seen, on the say-so of
>the designer? People want to see what they are buying actually work, unless
>they are really stupid..

There's ways around this, too. Currently we have fraud laws for this sort
of thing. Under a more anarcho-capitalistic system, an arbitrator could
enforce a contract by which inventors trying to sell a working idea could
be forced to pay the cost of a failed enterprise if the idea failed. (ie
"If this is snake oil, this here arbitration company will recompense you
what it costs you, at my expense.")

>Before you get paid for developing an idea like we did, you need to find a
>market, or develop one. After we do all the hard work, we can then produce
>and sell our products, or sell the rights to the patents to others, who then
>have the same rights.
>Without the patent, anyone who wants to make knock-off copies of our product
>is free to do so, and piggyback on our market research and development. We
>sweat, they gain.

Well, the problem is this: under a lf-capitalist market, invention has
lots of positive externalities. After all, you DO gain from the invention,
just as much as your competitor did, but you also had to bear the cost of
invention. When you give the inventor monopoly status, however, you cut
off those positive externalities and allow the inventor to set prices
arbitrarily high without fear that some pesky competitor will offer the
same product at a lower price.

So it seems to me that we're choosing between an accidental good and,
apparently, a deliberate bad.

>Anyway, it's darn hard to encrypt a mostly physical device..We don't have
>the replicator, yet..

The encryption is used for the invention, for the sales of the first idea,
not for the product. The premise that you could have lots of people know a
piece of information and still sell it as if you were the only one is one
of the fallacies which copyright tends to prop up.

>What is to stop anyone who wants to reverse engineer the product and tool up
>to make copies? Their overhead is now less by all the time spent in the
>original development, so they can sell for less. This would quickly dry up
>any investment capital for R+D of anything other than software with strong
>encoding. Who wants to risk development time and money if anyone is welcome
>to steal it?

You still benefit from the invention in the form of the new market you've
just created or in the increased demand for your products. The fact that
your competitor will also benefit does not detract from this. Thus, so
long as you still make a profit from the invention, it's still worthwhile
to pay for it.

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