Re: Fear of Life (was Microsoft, Automation)

ChuckKuecker (
Sun, 3 May 1998 12:06:29 -0500 (CDT)

At 03:50 5/3/98 -0400, you wrote:
>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.")

That sounds good to me..

>>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.

Please define these 'externalities'. I still don't see how I benefit to have
my market stolen from me..

If I set my prices arbitrarily high, I limit my sales to those for whom
money is no object. This is a very small market. If I charge a reasonable
price for my invention, based on its' costs and a fair payment to me for the
development, I should have more takers.

In the case of our products, the market is fairly small and specialized. One
competitior stealing our ideas and undercutting us would ruin the whole
works for us.

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

I still don't see the '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.

The rewards are for the initial creation of the information, not knowledge
of same. You seem to be saying that the creators deserve no rewards for
their thinking!

>>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.

I beg to differ. As I stated earlier, if the market is small, you are
seriously harmed by knock-off competetion.

If you build a mansion, will you be disturbed if I decide to move in with my
family and use it? If not, let me know where you live...

Chuck Kuecker