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From:   "Paul L. Allen" <pla@softflare.net>
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Date:   Tue, 8 Jan 2002 22:55:53 +0000
To:   email@greglondon.com
Subject:   Re: tpog

On Tue, Jan 08, 2002 at 12:19:01PM -0800, email@greglondon.com wrote: > On Tue, 08 January 2002, "Paul L. Allen" wrote: > > On Sat, Dec 29, 2001 at 08:51:11AM -0800, email@greglondon.com wrote: > > > On Fri, 28 December 2001, "Paul L. Allen" wrote: > > > > Everyone in a commodity exchange enters a transaction for their > > > own personal profit, gain, advantage. > > > > And in a free market. It's just that money and relatively fixed > > prices obscure the fact. > > motivation is irrelevant to the notion of energy being conserved. Motivation is everything since value is purely subjective. > > > In your scenario, my concept of "energy being conserved" is absent > > > because you did not mention a free market, an availability of buyers and > > > sellers of sheep and pigs. If such a market existed, and if your > > > premise that pigs and sheep are of approximately equal meat and > > > approximately equal labor to raise them, then a free market would > > > find that hogs and sheep are being bought and sold at approximately > > > the same price. > > > > Now consider this. A sheep and a pig of approximately equal meat. A > > carpenter who likes both and thinks that they are each worth 5 days of > > his labour. But now the sheep farmer is a lot more efficient than the > > pig farmer and can raise 20 sheep for the same effort that the pig > > farmer needs to raise 10 pigs. > > you just changed the premise of your previous argument. > you previously said "approximately equal amounts of meat and > equal amounts of labor to raise". Same scenario, different initial conditions representing different *individuals*. > > If all three treat the sheep and the pig as of equal value then the > > sheep farmer gets the better deal by far. If the sheep farmer values > > his sheep in terms of the labour used to produce them then the other > > two get the better deal. > > and, again, you ignore a Free Market as well. > if sheep are easier to raise than pigs, Which I did not say. I discussed the relative ease with which individuals can raise them. I made it clear in my initial example that the sheep farmer is useless with pigs and the pig farmer useless with sheep. If both had equal facility with both animals then neither would attach greater value to the one he could not rear efficiently and neither would consider a trade. It is only because of their specialization and therefore division of labour that they can both benefit from an exchange. > and people like to eat mutton more than bacon, > then, you'll likely have more sheep herders > than pig farmers. Markets play a part. But however much people prefer mutton to bacon, if you can only raise pigs you're stuck with that. > the only way your sheep farmer gains an advantage > is if he can somehow prevent anyone else from > raising sheep. i.e. if he can maintain a MONOPOLY. > Otherwise, the sheep farmer will be forced by > competition in a Free Market to sell mutton based > on his cost of labor, which will be less than > the labor cost of bacon. Sheep farmers round here sell their animals at below the cost of labour because despite being the most expensive meat in the shops they are being paid virtually nothing. There have been cases of farmers taking animals to market, not selling them and finding that in the meantime some other farmer has dumped his animals in their vehicle because it was cheaper to do that than bother carting them home and feeding them. Yet around here lamb sells for around twice the price of pork. This is a sheep farming area, not a pig farming area. Your concept of energy being maintained doesn't work in theory and doesn't work in practise. > your scenarios all look at the individual actors > as if they are the only people in the world. > when you throw in a Free Market, then competition > forces the cost of labor to be the main factor > in the cost of goods, and therefore, a balance is > maintained. See above. A free market brings the price to some sort of statistical average of what people are willing to pay and the costs of production. Somebody whose production costs are far lower than the competition benefits far more from that average price. Nothing is being conserved. It just comes somewhere near to averaging out. There is a big difference. In a conserved quantity things would have to balance exactly. > > Or consider crappyco and superco that both make bricks. If they both > > charge the same price then superco, which is far more efficient, makes > > a much bigger profit than crappyco which is very inefficient. If > > superco reduces prices to make a less substantial profit then crappyco > > eventually goes under. > > the conservation of energy idea already assumes that > everyone will tend to operate in a field where they > are most efficient. Yes, a pig farmer trying to > raise sheep will be inefficient, but he either learns > to adapt, or he goes under. That is not a conservation of "energy." That is called specialization and division of labour. It does not conserve what you can obtain from your labour but optimizes it. Without specialization a farmer would have to do everything, most of which he is not good at. He would have to build barns, make carts, raise horses for power, raise sheep, pigs, grow wheat, etc. With specialization he can trade some pigs to somebody in return for building a barn. The farmer gets a better return from his labour. That simple fact that two individuals both trying to do everything can specialize and trade and thereby get more in return for the time the spend is why your conservation of energy idea is fundamentally flawed. Things may appear to be roughly in balance but that is not the same as a true conservation law. > > There is no objective value on anything. It depends not only on > > individuals but on circumstances. An expensive entertainment centre > > with TV, stereo and the full works is valueless except as a doorstop > > in a country where there is no electric power. > > the idea of conservation of energy does not place > intrinsic value in the thing itself. Then what is conserved? Some new derived quantity? Money? Labour? None of these things are. The money in circulation depends entirely upon how much the banks decide to issue. The amount of labour needed for a particular standard of living has decreased through the centuries. > it indicates the energy being traded by buyer and seller > are of approximately equal value in the market. > Your entertainment center will have no buyers in > a place with no electricity. So what it boils down to is "price." And for any given item and any given individual that price is either too high to contemplate buying or too low to resist buying. Futures markets exists to allow people to speculate on what people are willing to pay on a future date versus what that thing will cost on a certain date, both of which may vary drastically. > the conservation of energy idea says nothing about > a situation where there is product but no sale. > It only says that where a transaction occurs between > buyer and seller in a free market, there is a > conservation of energy. We clearly will not agree on this one. No market is truly free. But if it were there will still be no absolute conservation. > > Another example of value not being conserved is local shops. They may > > charge more than big supermarkets further away but when you take > > travel time and fuel costs into account they work out cheaper. The > > simple act of distribution adds value to a product. > > travel costs would be part of the buyer's costs, > and no buyer would burn $10 dollars of travel time > for a $10 widget if they can buy the same widget > locally for less than $20. Precisely. Bang goes your free market. Geographic factors play a part. Had you ever lived in an isolated village you would realize this. A geographic monopoly is not a true monopoly because there are alternative suppliers. But they work out more expensive for some people. > I think you are confusing intrinsic value with > what I'm trying to say. I have said there is *no* intrinsic value to anything. Only a subjective value placed on it. There are production costs, true. But as the Communists found, if you make more shoes than a nation of Immelda Marcoses could wear then people will not buy them even at cost price because they already have more than they need. Then burn down a couple of shoe factories and suddenly the price shoots through the roof because of scarcity. Things do not have intrinsic or objective values. They have subjective values which are influenced by all sorts of factors. > > > Therefore, your barter between pig and sheep farmer conserves energy. > > > > Only in a very simplistic view of the transaction. In reality there > > could be a great disparity in the labour involved yet each thinks the > > transaction is still worthwhile. They both gain but not to the same > > degree. > > > > Unlike mass/energy, value is not a conserved quantity. > > see above. See above. > > You are confusing a statistical average with the thing itself. > > you are definitely confusing intrinsic value with what I'm describing. > "Thing itself" implies intrinsic value. Since the statistical average is an average (of sorts) of what people are willing to pay, I was clearly talking of the item's subjective value to each individual when I spoke of the thing itself. The item has NO intrinsic value. Ask the Indians who were paid for Manhattan Island with some glass beads. There is no objective, intrinsic value to anything, only a subjective value to individual. > > In any > > transaction your "energy" is not conserved and does not balance. All > > sorts of intangibles affect the perceived value of both items exchanged. > > To a millionaire a Rolls Royce is cheap; to a tramp a car of any sort > > way beyond his means. > > internal/subjective qualities are irrelevent. > I'm talking about strictly objective measures during a > transaction between buyer and seller on a free market. When a broker buys shares for a client he pays one price for them and charges the client another. You cannot even point to an objective value for many things. Even a kit-kat has a different price at the wholesaler than in a corner shop. The well-known elasticity of demand shows that there is no objective value to anything even in a monopoly. Increase your price and you get a higher unit profit but sell fewer units; decrease your price and you get a lower unit profit but sell more units. You cannot conserve something that does not have an objective existence in the first place. You can observe that statistically, for the most part, it often behaves as though there were some conserved quantity but that is an entirely different matter. > > > Trade Secrets still exist. And for situations where a business > > > believes they can apply them, they would do so. > > > > So it is not the case that patents were the boon you describe. They > > were an inducement for somebody to gamble on the certainty he would > > have complete protection for a period of time AND the certainty that > > after that time he would have no protection at all against being able > > to keep his trade secret for a much longer period. > > I don't know if I ever used the word "boon". For a gift (the "gift" of patent law) to have any effect the recipient must view it as having value. > > > If the idea is for company internal use only, then they would > > > be wise to use Trade Secrets. However, if a company wishes to > > > design a better mousetrap and sell it to the world,then the only > > > way to protect their invention is via a Patent. > > > > Unless the construction of the mousetrap involves a process which is > > not obvious from the finished article. Historically patents arose > > because of trade secrets on processes. As you point out, if the > > device itself can be readily duplicated once seen then there can be no > > trade secret and therefore NO NEED for a patent system to induce the > > manufacturer to reveal a non-existent secret. > > if the mousetrap is a new design, never seen before, > a patent is absolutely needed as the only means > for the inventor to recoup design costs. If, and only if, there are no processes involved in the construction that can be kept secret. Unlikely with a mousetrap but not impossible. For instance, the machinery to assemble it may rely on some non-obvious trick that nobody else has ever thought of. Something that in itself is worthy of a patent. But something that is more valuable as a trade secret if you think nobody else will figure it out. > trade secret laws wont protect a new mousetrap design. > once the public buys one trap, the design is public. But the processes used to manufacture it are not public. > only patent law will grant the inventor a monopoly on the design. If, and only if, there are no novel processes used to manufacture it. Like, say, explosive forming of aluminium parts where before they would have to have been laboriously formed by other means and where stamping was inadequate. > you NEED patent law for this situation. I did not say that you did not need patent law when the entire secret behind the manufacture of a device is evident from the device itself. Which is why before patent law inventors would not bother pursuing something that could easily be duplicated and looked for other things to invent or stopped trying to be inventors. Those who did find things where the secret was embodied in a process rather than a design were quite happy without patent law. It was those people whom patent law was targeted at because people who tried to keep secret a mousetrap that anybody could duplicate were doomed to failure so did not bother. > The design is secret, and can be applied > for patent protection, and once granted, > the design can be sold to the public > while the manufacturer maintains a monopoly > on the design. I did not say that patent law does not have that advantage but that it is incidental. Patent laws were not conceived of with that primarily in mind. They were conceived of to tempt those who already had successful trade secrets. > > > Same goes for a writer who wishes to sell copies of his book > > > on the open market.Once someone buys a single copy, Trade Secret > > > law would be insufficient to protect the author. > > > > Copyright law is another matter. Before printing the matter never > > arose. Books were copied by scribes and you paid the scribe to do the > > copying not the author for the content. Authors wrote not for payment > > from sales of their books but because they were paid to or as a hobby. > > > > > The Public did not need Patent and Copyright laws. > > > The manufacturers and authors needed them. > > > > Totally untrue. If you look at the reasons given for the creation of > > patent laws > > you'll have to give me a URL to some of these reasons. Try searching for the US Constitution for starters: To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. For more background you'll have to dig further into the writings of Paine, Jefferson, Franklin et al. But the key here is that it is not a gift given without expectations. The expectation is that it will promote the progress of science and useful arts. Do the further digging and you will find that the reasoning in the US and elsewhere was that whilever somebody could maintain an effective trade secret there was no chance of anybody learning something useful from that secret and that if they could be induced to gamble on the patent then knowledge would advance more quickly. > > you will see that it was for the benefit of the public. > > Without copyright laws the public would have far fewer books. What > > you see as a law to make authors happy I see as a law to keep the > > public happy by giving incentives for people to become authors. > > Without copyright laws most authors would find other means of making a > > living and the public would suffer. Without patent laws all > > manufacturers would keep everything they could secret and the > > advancement of knowledge would be retarded. > > You seem to be missing the concept of "gift" here. > A gift is given with no expectation of reciprocation. Precisely. Neither patent law nor copyright law were a gift. They were exchanges made in the expectation of benefit. > The law gives the gift in the form of the promise of > patent/copyright protection to any inventor/author > who creates a new work. > > The law has no expectation of reciprocation in > giving that promise. i.e. the law does not force > anyone to invent or write anything. But it expects that it will "promote the progress of science and the useful arts." It is an investment in the future, not a gift. > When an inventor takes the public up on the promise > and invents something and patents it, they get > a 20 year monopoly on the invention. > > Then the invention, the knowledge, returns to its > natural state of "public domain". Bollocks. If it is a trade secret it was never in the public domain. If it is a novel idea that nobody had the wit to think of before it was never in the public domain. The entire intent of patent law was to bring trade secrets into the public domain after a limited amount of time as opposed to allowing them to remain secret until somebody else discovered them independently. Patent law was created to encourage the transition of information from being a trade secret to being public domain. > The inventor recieved a gift in the form of the monopoly. > Without the promise of patent protection, the inventor > would not have any protection of his invention except > what he could manage via trade secret laws. Which was perfectly adequate for many inventors. Which is why the patent laws were conceived. > The fact that the gift is of limited duration is irrelevant > to the fact that it is still a gift. I mention in my document > that a magazine subscription can still be a gift, even though > the subscription runs out after a year. A magazine subscription is a gift only if you get nothing in return. What the patent law gets in return is an item of knowledge which was previously secret being transferred in due course into the public domain. > The fact that the invention returns to the Public Domain It does NOT "return" to the public domain. It ENTERS the public domain. > does not detract from the fact that the inventor recieved > something that he could not have gotten any other way: > 20 years of patent protection is more a gift than > no patent protection at all. Only to inventions of design, not to inventions of process. > The fact that the Public can benefit from all this is > irrelevant from the fact that the inventor recieved a gift. The inventor gives in return the knowledge to the public domain. This is true even of design patents. If you suddenly conceive of a better mousetrap but realize that anyone can copy it then without patents you may not bother marketing it but keep it for your own use because you cannot make money on it. That knowledge is kept out of the public domain unless patent laws exist. That knowledge enters the public domain if patent laws exist and that is why patent law is not, and never can be, a gift. > Patent/Copyright protection is an open-ended promise > to anyone who wishes to take on making a new work. > > you can call it a Commodity Exchange over an extended > period of time, but, really, you're missing the subtle > distinction between Gift and Commodity. You are missing the understanding that if I have an idea that I tell nobody about then nobody can benefit from it and there is no knowledge to *return* to the public domain because it was never in the public domain in the first place. Patent law gives me a reason to release that knowledge if it is not something I can keep secret should I market a device based on it. > The Public gives the Gift of patent/copyright protection > to the Public at large, in hope that it might return to > them in some other form, but with no expectation or requirement > that anyone actually accept the offer. This is clearly going to get us nowhere. What sort of gift can be given to people who do not accect it? You cannot say it is a gift simply because it is open to all who choose to take it and give up the permanent right to their knowledge in return. I can open a newsagent and say that it is open to the public at large and that nobody actually has to buy a paper from me. That does not make it the papers a gift because I expect money in return. The patent law is not a gift to the public at large but an exchange transaction with those who choose to make use of it. > This is like a farming commmunity as a whole making > a promise of a Barn Building to anyone who wants to > start farming in the community, in the hopes that it > will benefit the community as a whole. Is it bollocks. The person applying for a patent is committed to paying the price 20 years on of allowing anybody to make use of his knowledge. > Both are gifts. both build community. > and neither example forces anyone to take up the offer. Nobody is forced to buy a newspaper from my newsagents either but those that choose to pay a price. > > > It is an enticement, yes. But it was an enticement offered > > > by the Public not because the Public needed it, but because > > > the Public felt that Patents and Copyright could serve the > > > Public Good. > > > > And there you agree with me that it serves the public good. These > > days somebody may decide to try his hand at being an author because of > > copyright whereas without copyright he would have stuck with his > > original job. Small manufacturers do still keep trade secrets; large > > manufacturers would like to but dislike the gamble that an employee > > might give it away. > > This does not detract from the fact that patent/copyright > is a gift. Copyright/patent law is given without any > demand for reciprocation. the law does not require anyone > to write or invent anything new ever again. That does not make it a gift. > > None of us ever do anything except for selfish reasons. Even if the > > reason is that by doing public good we feel better about ourselves it > > is still a selfish reason. See Mark Twain's "What is Man?" > > good grief man. To be human means to be driven. > Our drives of consciousness and subconsciousness > are the only things that separate us from dirt, > gas, and water. > > Just because we have drives doesn't mean we are not > at the same time capable of giving a gift. Of course we are capable of giving a gift. Because the giving of the gift pleases us. Therefore we are actually giving to ourselves. The pleasure of giving outweighs the cost of the gift. > If you give something with no expectation of > reciprocation and if it builds the human bonds > between you and the reciever, then you're looking > at a gift. Even by that very limited definition, which ignores motivations, patent law is not a gift. > if our drives reduce us to nothing more than > mechanistic drones doing nothing but satisfying > our own selfish needs, then you live in a very > sad world indeed. I live in a very pleasant world. One in which I understand my motivations. One in which I can take pleasure in giving yet know that my reason for giving is the pleasure it gives to me. None of us does anything that does not give us more than it costs us. > > The public acted, en masse, selfishly by passing a law to entice > > people to get a limited period of total protection for their ideas in > > order that the public could benefit by them. There was no "let's give > > these people a gift". Copyright was not about giving a gift to > > existing authors but to entice others to become authors. Patents were > > not about giving people a reward for having invented something but to > > entice them into revealing the secret. Neither were a gift given > > altruistically where no gift need have been given. > > where did altruism enter into anything? > I do not believe I used that word anywhere in > The Power of Giftware. Why am I bothering? As you define a gift the action is altruistic. You give for somebody else's benefit at your own expense. When I told you otherwise, that we act to maximise our own pleasure, you disagreed with me. > you're confusing internal drives with the objective > measures of whether a gift was given or not. I give a gift to my friend. My friend is happy. That pleases me. My friend has given me pleasure in reciprocation for the gift. "Gift" in your conception of it does not exist. Even gift as you more loosely apply it to patent law does not exist because the person taking out a patent pays a cost 20 years on. > It doesn't matter if the gift was given to make > the giver feel good or to qualify for a tax > exemption. The requirement for a gift is that > it is given with no expectation that the reciever > need reciprocate. Which disqualifies patent law entirely even by your definition of reciprocation. 20 years on a price is paid. Just because payment is deferred does not mean it is not a payment. Oh, and the cost of passing a patent law if nobody ever accepted it is a few man-hours drafting it. Not a great "gift" unless somebody takes you up on it and agrees to pay the price 20 years on. > > > The natural state of ideas is that they are free and only secrets > > > have protection. Patent and copyrights grant protection to inventions > > > and writings made Public. > > > > Patents *incidentally* are a gift to those new ideas which could not > > be kept secret if devices based upon them were publicly sold; the > > primary purpose is to make people reveal secrets that could be kept > > secret. Copright is not a gift at all but an inducement to enter into > > a specific form of labour for reward. > > what you call the "primary purpose" reflects the > gift coming back to the giver in a new form. Which is expected of patent law. You do not get a patent, which is the actual gift (not patent law but the patent iteself) unless you pay a price 20 years on. You do not get copyright in a book unless you write a book. It is the specific patents and specific copyrights that are exchanged, not the laws themselves. > what you call "incidental" is the objective measure > that shows that patent/copyright is a true gift. I'm wasting my time. I truly am. Please do not respond. This is pointless. If I thought there were some point in continuing then I would but I see further down that you are completely ignorant of contract law still. I see that the flaws I observed in tpog are unlikely to be remedied ever and give up. -- Paul
 
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