Re: Bureaucracies, genomes & vaccines

Eliezer S. Yudkowsky (
Fri, 09 Jul 1999 01:20:22 -0500

John Clark wrote:
> Hash: SHA1
> Robert J. Bradbury <> On July 05, 1999
> >In a highly competitive environment, you cannot make the
> >investments necessary for long term R&D projects.
> Nonsense. In a highly competitive environment you must make
> long term R &D projects or you're dead.

Why blame it on the government? Actually, this is the stock market's fault. With everyone after you for short-term profits, nobody can...

We all have our personal boogaboos, but Bradbury has a point. The problem is neither monolithic government nor monolithic investors, but monolithic companies and consumers with incomplete information. To quote Quidnunc:

"If one of your competitors, or a new entrant into the market, offers a deal marginally better than yours you will, naturally enough, lose market share. In today's physical world, you can expect a few weeks to react; in tomorrow's instant market, you have seconds before your share of new deals drops to zero."

By junking all R&D, you can shave a cent off your selling price and get all the products on the market. The problem is similar to the reason that an oversupply can sometimes cause people to sell at a loss - if there are 1001 sellers and 1000 buyers, then maybe 1000 sellers are selling at a break-even price, but the last seller has a motive to sell at less than break-even to minimize the loss. The solution to this one is (a) complex barter to make demand increase with supply; (b) a ubiquitous futures market.

The solution to the R&D suboptimization problem is (a) completely informed consumers; (b) patent monopolies used to fund further research; (c) separate R&D companies or separately traded ("investable") R&D divisions.

           Eliezer S. Yudkowsky
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