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The grand theory on the economics of free
  • Vote Up0Vote Down
    MetzMetz
     
    January 2012
    From techdirt.com. Redistribution free under creative commons license



    The Grand Unified Theory On The Economics Of Free

    from the have-fun-with-it dept

    Ok. I'll be the first to admit that I've taken the long way around in going through my series of posts exploring the economics of goods when scarcity is removed. What I had thought would be a series of 5 or 6 posts, turned into something much longer -- but each week people came up with new questions or discussions or objections, and so I tried to spend some time digging down on various pieces of the economics at hand. However, what I haven't done is tie it all together in one single spot. In the last couple of weeks there's been tremendous confusion among people from Scott Adams to CNN to various others that have made it abundantly clear that the one thing I've failed to do is put the whole concept together in a single place. That's resulted in people being confused about what I'm actually saying -- where they only pick up a tiny piece of the argument or confuse it with the arguments made by others. So, while I still think it was important to go through the details, now is as good a time as any to pull the whole theory together (with some links back to the previous articles in the series).

    First off, and this is key, none of what I put forth is about defending unauthorized downloads. I don't download unauthorized content (never have) and I certainly don't suggest you do either. You may very well end up in a lawsuit and you may very well end up having to pay a lot of money. It's just not a good idea. This whole series is from the other perspective -- from that of the content creator and hopefully explaining why they should encourage people to get their content for free. That's because of two important, but simple points:

    If done correctly, you can increase your market-size greatly.
    If you don't, someone else will do it correctly, and your existing business model will be in serious trouble
    If that first point is explained clearly, then hopefully the second point becomes self-evident. However, many people immediately ask, how is it possible that giving away a product can guarantee that you've increased your market size? The first thing to understand is that we're never suggesting people just give away content and then hope and pray that some secondary market will grant them money. Giving stuff away for free needs to be part of a complete business model that recognizes the economic realities. We'll get to more details on that in a second.

    From a high-level perspective, though, the reason that giving non-scarce products away for free will increase your market size goes back to the same Thomas Jefferson quote that we kicked the series off with:
    If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.
    What Jefferson noted is the wonderful feature of a non-scarce, or infinite, good that it is effectively a free resource. Once created, it costs nothing to give to someone else, and you still retain the original. In fact, economists have finally realized that this is the very key to economic growth and progress. The infinite resource known as an "idea" that improves what was already there is what increases the size of a market. Or, putting it another way, that infinite resource of a new idea makes an existing scarce resource more valuable. It's easy to understand that when it's an idea applied to, say, a machine making it more productive -- but it also applies to any infinite resource appropriately bundled with any scarce resource.

    The way it works is actually quite easy and fits in with the same basic economics that's always been in place. Knocking down the barriers of artificial scarcity opens up tremendous new opportunities -- just as knocking down the artificial scarcity known as "protectionism" helps to grow markets by creating new opportunities. In this case, those new opportunities have only increased in number as we've gone digital, making more content infinite in nature. Where some people have trouble is that those new opportunities may be in different places than the existing opportunities -- and those new opportunities may not all be capturable by the creator of the content. Indeed, there will be some externalities created by the free flow of an infinite resource. However, the total amount that any content creator can capture is still much larger than it was before. It's one of those cases where getting 20% of a huge pie is much better than getting 90% of a tiny pie.

    You just start by redefining the market based on the benefits of what you're providing, rather than the specific product you're selling. If you're focused on selling the benefits, then discovering a better way to sell those benefits is seen as a good thing, rather than a threat. You then break down the different components that make up those benefits that you're selling -- and you begin to recognize that every bundle of goods and services that make up the benefit you're selling has components that are scare as well as components that are infinite. In fact, if you look closely enough, you realize that any scarce product you buy actually has infinite components while any infinite good you see also tends to have scarce components.

    Once you've broken out the components, however, recognizing that the infinite components are what make the scarce components more valuable at no extra cost, you set those free. Not only do you set those free, you have every incentive to create more of them, and encourage more people to get them. You break them into easily accessible bites. You syndicate them. You hand them out. You make them easy to share and embed and distribute and promote. And, yet, all the while, you know exactly what scarce resources those non-scarce goods are tied to, and you're ready to sell those scarce resources, recognizing that the more people who are consuming the infinite goods, the more valuable your scarce resource is.

    So, the simple bulletpoint version:
    Redefine the market based on the benefits
    Break the benefits down into scarce and infinite components.
    Set the infinite components free, syndicate them, make them easy to get -- all to increase the value of the scarce components
    Charge for the scarce components that are tied to infinite components
    You can apply this to almost any market (though, in some it's more complex than others). Since this post is already way too long, we'll just take an easy example of the recording industry:
    Redefine the market: The benefit is musical enjoyment
    Break the benefits down (not a complete list...): Infinite components: the music itself. Scarce components: access to the musicians, concert tickets, merchandise, creation of new songs, CDs, private concerts, backstage passes, time, anyone's attention, etc. etc. etc.
    Set the infinite components free: Put them on websites, file sharing networks, BitTorrent, social network sites wherever you can, while promoting the free songs and getting more publicity for the band itself -- all of which increases the value for the final step
    Charge for the scarce components: Concert tickets are more valuable. Access to the band is more valuable. Getting the band to write a special song (sponsorship?) is more valuable. Merchandise is more valuable.
    What the band has done in this case is use the infinite good to increase the value of everything else they have to offer. They've increased their marketsize by recognizing how they can use the infinite goods as a free promotional resource and made the value of the overall ecosystem around them more valuable. Rather than playing small shows in tiny clubs that don't pay very well, they get to play large venues with bigger covers. It's certainly true that there are some externalities -- where some people will enjoy the music for free without ever taking part in paying for the scarce components. But, when done right, you've increased your market so much that it more than covers the difference. Compare this solution to that of a band that sticks to the old way: they are then limited in the audience that will hear them -- especially as more and more bands give their music away for free. Fewer people will be interested in going to their concerts or buying their merchandise or joining their fan clubs -- when the benefits are so much greater for following other artists that actually give their music away for free. The end result really is a much bigger market with much greater benefit by expanding the market by using infinite goods to make the scarce goods more valuable.

    So there you have it. After many months, one single summary of the economics of "free" and how it can be used to anyone's advantage. It's not about defending unauthorized downloads. It's not even about getting rid of copyright -- just recognizing that copyright holders can actually be better off ignoring their own copyrights. It's very much about showing the key trends that are impacting all infinite goods -- and pointing out a clear path to benefiting from it (while making life more difficult on those who refuse to give up their old business models). And we're giving it to you all... for free. So, enjoy.
     
  • 15 Comments sorted by
  • I suppose that makes sense in the case of an artist. But what about an inventor?

    Most people aren't good enough at different things to both create new machines AND go into business producing them. If someone invents a new machine, and gives the plans away for free, they'll be immediately cut out of the business model. Unlike an artist, no one needs the inventor around to invent the machine again. It's already been invented and will forever after provide the same benefit no matter who builds it. What reason does an inventor have to avoid patent protection, which guarantees them the opportunity to license their invention to the producers for a certain amount of time? If they give the invention away, who's going to come looking to give them money for something else?

    I could see an argument for those who produce machines (or stock components) to hire people to invent new machines, then the company could give the designs away for free because anyone who wants to build them needs to come to the company to get the expertise or components. But that does nothing to encourage the far greater number of non-professional inventors to do anything on their own.

    I have a hard time seeing how non-artists can benefit from giving their IP away for nothing.

    Even then, it seems like releasing one's music under an open license might help you make more money as long as you keep working, but it completely cuts out the possibility of a retirement plan. Some of the greatest music in the world is still being played, and the artists and their children are still receiving royalties for it. If that music's license was free, no one would need to pay them any money. Is the idea that artists should release their music as free-to-copy but not free-to-play-for-an-audience? If so that's really a pretty minor change. It's just the age-old standard adapted to the internet age.
     
  • Vote Up0Vote Down
    MetzMetz
     
    February 2012
    Are we not giving away our plans for free here? Are there not open source enterprises already in operation? Look at the printerbot guy, ultimaker, or makerbot industries. All open source, all quite successful.
     
  • Well, OSE is a non-profit and their charter dictates giving away designs. Also, all the stuff OSE is working on is out of patent and can't be re-patented. "The Printerbot guy" derived his design from an open source design, so it's not an invention and can't receive patent protection. Same thing with Ultimaker and Makerbot. Also, I don't think "quite successful" means what you think it means. Arguably Makerbot is successful, but it's also brand new and hasn't proven anything about the sustainability of an open-source-based business plan.


    I'm not saying people can't give their IP away if they want to. I'm just saying that one example of an artist increasing their fan base is irrelevant to pretty much all other forms of IP.

     
  • Re: Sustainability of an open-source business plan.  Take a look at Linux.  The software itself is free, but companies like Red Hat and Canonical make money by selling service and support, or in the case of IBM, by selling hardware.

    An example of what an OSE-based business could do is customize an instance of the GVCS or the individual machines for a particular circumstance.  Someone who has done it multiple times would have experience, which someone else doing it the first time on their own would not.  Experience would be the scarce commodity, even if the hardware plans are free.  Another example is free plans for other devices and end products besides the GVCS set itself.  The more such plans exist, the more things you can do with a shop full of GVCS machines, so the more value that shop has.  So the set of people with such shops would be willing to contribute their own plans to the collective archive, because they get back 100 times as many plans from everyone else.
     
  • Vote Up0Vote Down
    MetzMetz
     
    February 2012
    Exactly. This is what the article is talking about. The economics of free, and Infinite abundance. I will have to say Marcin has elaborated on this subject in his early writing quote extensively.

    Artists who give away digital copies of their work, make money by selling the scarcity. The scarcity is access, live performances, physical tangible goods.

    Open source enterprise is the same way. I can give away plans for a improved cinva ram CEB press, and still make money. Just as a bakery can give away recipes how to make bread, people will still buy bread.
     
  • Right...but my question was, "
    Most people aren't good enough at different things to both create new machines AND go into business producing them. If someone invents a new machine, and gives the plans away for free, they'll be immediately cut out of the business model. Unlike an artist, no one needs the inventor around to invent the machine again...
    I could see an argument for those who produce machines (or stock components) to hire people to invent new machines, then the company could give the designs away for free because anyone who wants to build them needs to come to the company to get the expertise or components. But that does nothing to encourage the far greater number of non-professional inventors to do anything on their own. "

    You haven't answered that objection yet. Yes, AN ENTERPRISE can make money that way. How does a single inventor make money that way? What incentive does he have when he doesn't personally know anything about business, and has no interest in running a business? That's why patents and licenses were created. They allow someone to focus only on inventing new things while the government takes care of enforcing their right to make money off of the IP for a couple decades. 
     
  • @Matt - you are still stuck with scarcity thinking.  Who is paying me to develop the prototype drill press and modular construction panels I am doing?  Nobody.  I'm retired and don't need to make money off it.  I'm doing it because I want to.  Who pays Linux programmers?  If you look at the software commits, around 80% are from employees of companies making money off Linux related things, the other 20% is from interested volunteers.  Programmers as a group make decent money, so they can afford to do things on the side.

    Given a functioning ecology of the OSE type, people won't NEED to make money to support themselves.  They will be self-supporting, and can devote time to inventing stuff if they want to.  You only need money to trade for things you don't have.  If you make your own stuff, you don't need money.

    As a practical matter, an OSE type ecology won't be a single person thing in the near future.  The ~50 or so machines take too many skills and resources to build and operate, so they will likely be set up as an independent village or a community project within a larger town or city, with each person concentrating on a few things they do best or want to do, and trading for the rest.  Within such a project, there would be room for designers doing custom work and inventing things part time.  So that whole lonely inventor in a garage thing is just a fantasy.
     
  • The author stated in his summary, "...the economics of "free" and how it can be used to anyone's advantage." (emphasis mine). 

    Perhaps he overstated his own point, but he's not here to defend it. You guys have been defending what I consider an overstatement, specifically, that ANYONE can benefit from giving "infinite resources" away for free. The reason I think the author stretched too far in his summary is that in his introduction he said, "This whole series is from the other perspective -- from that of the content creator and hopefully explaining why they should encourage people to get their content for free."

    That's great. But most of the world doesn't create content. Only a few people in the world create articles, and music, and video...even fewer of them attempt to make a living off of it. He also said, "You can apply this to almost any market (though, in some it's more complex than others)." Perhaps he intended the sentence to mean "anyone within the category I defined in the introduction." Additionally, in the body he said, "Set the infinite components free, syndicate them, make them easy to get -- all to increase the value of the scarce components. Charge for the scarce components that are tied to infinite components." This is exactly the sort of strategy I was picking apart with reference to someone who invents a new machine. In that market, the inventor has no way to "make money off of the scarce components" unless he goes into business selling the raw materials/labor required to manufacture the invention. 

    Again, I will restate that many people who can invent something new cannot run a business. That's why patents provide them a legal monopoly so they can sell licenses to the sort of people who can run a business selling scarce components.

    I don't have a problem with the idea of artists giving their work away for free. Whatever. Not only is it irrelevant to everything important that happens in the world, they probably can increase their total revenue through growing a fan base that will pay to see them perform live. At least intuitively it's a strategy worth considering.

    As for people who don't need any more money, and have no interest in accumulating it, those people would have been giving their work away for free anyway. In fact, those people have been giving their work away for all of human history. Talking them out of "scarcity thinking" is blue on black. Preaching to the choir. For this theory to have any significance at all you (or that author) need to explain how it changes things. At the moment, it sounds like it doesn't change anything at all. The argument that AFTER the world's economy changes, inventors won't NEED legal protection to make money because they won't care about money anymore is facile. That argument means this theory only applies to "anyone" AFTER things change. It is not changing anything itself. 

    OSE is a non-profit. It is specifically chartered to give things away for free. In fact, if it ever does turn a profit, it will be required to dump that money back into its charitable activities. It isn't ALLOWED to keep the money it accumulates over expenses. That's a big part of why I'm contributing to its activities. There's no way a for-profit organization would ever produce a tractor that lasts 100 years, let alone an entire alternative economy. The way I see it, this kind of activity can only be done by people who already have resources to spare (like me) and little-to-no interest in making a lot of money. 

    At any rate, I think the place where this guy comes closest to addressing my objection is when he says, "Where some people have trouble is that those new opportunities may be in different places than the existing opportunities -- and those new opportunities may not all be capturable by the creator of the content. Indeed, there will be some externalities created by the free flow of an infinite resource." This looks like hand-waving to me. His theory is not universal, but he'd like it to be interpreted that way. It's pretty simple, if there is an exception to your theory, you don't get to call it universal.
     
  • Vote Up0Vote Down
    mjnmjn
     
    February 2012
    most of the world doesn't create content. Only a few people in the world create articles, and music, and video

    Actually, I don't completely agree with this statement.  850 million people create new content every day on FaceBook.  Naturally, it depends on what your definition of "content" is.  Crap is easy to produce and not everyone cares what movie I watched last night, but it is still content.  This is, in fact, the basis of one of the complaints about FaceBook (now in the IPO process).  FaceBook profits off of the content that I create.

    I will restate that many people who can invent something new cannot run a business.

    Can't disagree with that.  The skill set of the inventor is often very different than the entrepreneur.  The concept of patents and copyright have value, perhaps more so in the past than now.  Originally, they were intended to foster innovation, improvements, etc.  In some ways, that's no longer true.  Patents are bought and added to a portfolio - never to be actually produced.  There are now AI applications who's sole function is to search for new ideas so that they can be patented - not produced - just patented.

    patents
    provide them a legal monopoly so they can sell licenses to the sort of
    people who can run a business selling scarce components.


    There's more to it than that, however.  Our technology base is now on the verge of very inexpensive replication.  It hit publishing (copying), music and video (digital downloads), and software (easily copied) first.  The idea of open source is that there are some things that benefit society if they are FREE (in both senses).  The very success of the internet can be attributed to Apache HTTPD (web server) - which was free from a very early stage.  How much value did Netscape, Microsoft and others add to the concept?  Not enough.

    3D printers suggest the possibility of "print" physical objects.  The technology is still very, very limited (small plastic objects), but work is underway to change that.  Setting aside the scarcity of petroleum-based plastics for the moment, let's look briefly at the IP of a mug.  As humans, we have a need to drink fluids (water, at the very least).  While cupped hands can be used (leaky, at best), we have developed a tool called a cup.  The cup itself is not protected under patents - it is an abundant idea.  Personally, I think that all 3D printers should come with a set of object models that include a "cup".  Next, however, I design a truly elegant cup.  It is unique, but I'd like to make it available to others.  At the moment the design is complete, it is a very scarce resource.

    At this point in time, there is a branching of possibilities.  I can seek to profit from my creativity or I can make a gift of this wonderful cup to the world.  We currently live in a world that (sadly) requires us to have an income.  It is very, very difficult to live in our world without money (as many poor people can attest).  OSE seeks (in part) to build a Resource Based Economy.  The transition from a Money Based Economy (MBE) to an RBE will be very difficult and not likely achieved in our lifetime, but we have the opportunity to lay the foundation needed to create the possibility.  In an RBE, I might choose to give away my new cup design.  After all, I have benefited from similar decisions by many other people.  I have models that allow me to print many of the basic things I need in my life.  Our village has many machines that allow houses, vehicles, and farm tools to be made inexpensively based on OSE designs.  I work in the communal farms and I get a share of the food produced.  In fact, almost all of my needs are met.  So really - why do I need a bit of money that I might earn from selling the patent or design rights to my super-cool cup?

    Unfortunately, we are not at that point.  As you point out, Matt, I actually do need a way to make a living for myself.  If I get an offer from Copco or Oxo for the rights to my oh-so-elegant cup, why not take it? I could certainly use the money - me and the rest of the 99%.  If that is your reasoning, it's quite understandable, but it doesn't lead to an RBE.  It fosters the continuation of the MBE.  Personally, I'd rather make a very small contribution (in the grand scheme of things) that leads us in a direction that I'd like my grandchildren (or theirs) to enjoy.  Freedom from artificial scarcity when abundance lies all around us.  This is a decision each of us must make.

    - Mark

     
  • >Set the infinite components free, syndicate them, make them easy to get -- all to increase the value of the scarce components
    >Charge for the scarce components that are tied to infinite components

    Yep, that works. Using my own experience as an example, I provide free how-to info for an open source car, including component drawings. I do the prototyping and testing and give away the data, and also sell the components that are labor intensive when made in small lots. Since I make these components 20 to 200 at a time, I can sell them profitably for less than what would be minimum wage for folks making them in ones and twos. Among the benefits are a complete lack of customer grumbling re prices, fast feedback on true market value (since if I charge too much they'll make their own), not much motivation for my competitors to copy me, and freedom from inventorying the infinite components--all I have to stock is the scarce stuff.

    I've never seen The Grand Unified Theory On The Economics Of Free written down before, but I'm all for it, and believe it could serve OCE well. It's not worthwhile to stock all the steel to make a backhoe, but it might be in everyone's best interest if OCE can provide builders with the bucket teeth.
     
  • Vote Up0Vote Down
    MetzMetz
     
    February 2012
    @jackmccornack my point exactly. Take the printerbot, or makerbot people. They sell kits and give the plans away for free. Many people will buy the electronic components just because making one arduino processor is beyond most peoples skills or capabilities, however the other hardware like threaded rod, gears, etc can be made oneself, or purchased from many sources all competing not just on price, but on location. Makes no sense to buy a super cheap priced part from New Zealand when I can buy one locally for a slightly higher price, without the customs fees, and shipping costs.
     
  • As Dr. Bowyer pointed out after he invented the RepRap, "It doesn't make any sense to keep secret a thing that can reproduce itself, because you'll only ever sell the one." 3D printers, particularly self-reproducing designs, are an anomaly. 

    Also, arguably the reason Makerbot and Printrbot are open source is that they were directly based on previous open source designs...so it might technically be illegal for them to no be open source. Switching the example to Arduino is still skirting around the issue. Yes, anyone who can build an Arduino can make money...however, if you can invent an Arduino, but can't build one, how do you make money?

    I'm not saying I don't support the idea. I'm just saying it isn't a panacea. 
     
  • Interesting observations, Matt, and I agree that self-replicating devices are an anomality. What works for RepRap doesn't necessarily work for other businesses...which I guess is why Monsanto wants you to buy new corn seeds every year. Then again, there's still a market for live chickens.

    >however, if you can invent an Arduino, but can't build one, how do you make money?

    I'm not convinced you can invent an Arduino (or anything else) if you can't build one. Maybe you build it by hiring other folks to work from your drawings, but I don't count anything as invented until it's functional and it has to be built before it can function. It may not be your hand on the drill press, but you'll be the World's Greatest Expert on whatever you've invented and if you're giving away the information, you're the person who folks will turn to when they get lazy, get over their head, or just have better things to do than make that one tiny complex widget that is essential to your invention.

    >I'm not saying I don't support the idea. I'm just saying it isn't a panacea.

    Right you are. Open Source doesn't work for everything. There's not much call for an open source railroad or an open source cement plant. The ideal situation for an open source hardware developer is an item in such little demand that it's not worth competing with you, is highly valued by the few that want it, and the only two ingredients in its construction are of equal worth: 55 gallons of concrete and a tiny complex widget--a widget you can make in lots of 20 for 10 times what it costs to make 1. Instead of buying cement from the old-economy cement plant near you, adding the widget yourself, and shipping finished products to your customers on an old-economy railroad, they get their cement locally and their widget comes in the mail.
     
  • Vote Up0Vote Down February 2012
    I think a more thorough and consistent approach to take here is from the other direction. The issue isn't that you can make money from freely giving away your ideas but rather that IP is unnatural and unsustainable.

    In order to have intellectual property you must have a massive bureaucratic machine that will issue patents, provide judicial system and then enforce them by threat of violence (all of this going against the decentralized philosophy put forth). Further more, because intellectual property is inherently unnatural you have to invent arbitrary constraints to take abstract concepts and redefined them as property. This results in things like absolutely ridiculous expiration terms which someone pulls out of there butt and decides that all patents or copyrights will be protected for the same length of time regardless of merit.

    Trying to legally define, resolve and enforce patents is like making sausage ;-)

    By saying you can own an idea also means that you own the piece of someones brain that is holding that idea but this is ridiculous. If someone is acting on their own free will of what is inside their head, how can you claim control over that by saying that they are working from your ideas. If you really think this through, intellectual property starts to seem rather absurd!

    Here is a very well thought out and researched paper on why intellectual property is... well, no property:

     
  • "I'm not convinced you can invent an Arduino (or anything else) if you can't build one. Maybe you build it by hiring other folks to work from your drawings, but I don't count anything as invented until it's functional and it has to be built before it can function."


    Well, that's more of a semantics argument. The point is that it was your mind that conceived of the thing and defined how to bring it into being. That's great for you if it's art, not so great for you if it's engineering. Anything engineered can be reverse engineered (just ask China). Once something is reverse engineered, nobody needs you anymore. Sure, it might take a copycat a little longer to pay their own engineer to become an expert in your widget, but they can afford to because they're going to make money mass producing your widget. money they are not going to send to you. The idea that an engineer is going to gain enough personal fame to make some kind of income off of it is laughable. No one cares about engineers. Steve Jobs overshadowed several people who actually contributed to the world simply because he refuese to put buttons on his widgets.


    I dunno, maybe it's possible. It just seems like it depends on the kindness of strangers...which isn't a thing I think economic theories should be based on.


    Yeah, I think that as open source hardware branches out it's going to run into a lot of situations in which the concept is largely irrelevant. The primary benefit from open source information is that you don't need to search for or pay someone to educate you on the technology. In order to realize that benefit, you need to have lots of that same situation happening over and over again. There aren't many cement plants in the world period, let alone many new ones, and the cost of the information is nothing compared to the cost of building and running the thing. So the marginal benefit just isn't there.


    "...IP is unnatural and unsustainable."


    Everything humans do that makes them humans, rather than just another mammal, is unnatural. Everything that living things do, that makes them different from inanimate objects, is unsustainable. Technically, as far as any of us know, the natural world is unsutainable. So...philosophically I don't see a problem.


    "In order to have intellectual property you must have a massive bureaucratic machine that will issue patents, provide judicial system and then enforce them by threat of violence (all of this going against the decentralized philosophy put forth)."


    I suggest separating the open source concept from concepts like economics and politics. They're interrelated only in the same way that a butterfly and a hurricane are interrelated. Open source has much more to do with spare capacity and an innate motivation to donate that capacity then it does with a cultural revolution. Nothing is ever going to change the fact that the government already exists, so a patent system isn't a big leap. Arguably it's a pretty damned useful thing as long as it avoids scope creep (but that applies to every tool).


    "By saying you can own an idea also means that you own the piece of someones brain that is holding that idea but this is ridiculous."


    Correct. Which is why patents don't say that a person owns an idea. They only say that a person owns the right to profit from the manifestation of that idea for a certain period of time in return for clearly defining that idea for the world. There are plenty of great (and profitable) ideas that aren't, and will never be, patented. Keeping the idea secret is more profitable because the person who came up with the idea owns the means of profiting from that idea. Patents are not a way to shackle honest, hard-working people. They are a way to induce inventors to reveal their inventions so the whole world can benefit from them. The carrot is a short-term legal monopoly on licensing/producing that idea.


    For what it's worth, I'm not going to read anything else by Mises until the person who refers to his work can actually explain it coherently.


     


     


     

     

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