The attack on Wal-Mart essentially comes down this: opposition to economic progress, defined as greater availability of goods and services people want at ever lower prices that indicate an ever wiser use of resources in the service of society. It is hardly the first time such progress inspired opposition. The history of 19th century economic expansion serves up many examples. FULL ARTICLE
Source link: http://archive.mises.org/4822/wal-marts-of-an-earlier-age/
Wal-Marts of An Earlier Age
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Patents here can thus act like the grant of monopoly to the East India Company of which the boston tea party is remembered.
The problem is that I, in the US will have action taken against me if I violate patents. The Chinese will not. The playing field is not level. It would be if we both honored patents, or both disregarded them. I’m sure the above manufacturer would be able to work if he could use other inventions without paying the royalties or licensing fees.
If IP isn’t truly property, then we are being restricted from engaging in free trade by not being able to freely use inventions of others here. If IP is truly property, then the Chinese are engaging in theft, so it isn’t properly free trade either.
Stimulating new ideas and investment isn’t necessarily a good thing if it diverts resources away from more productive tasks. The Fed’s artificially low interest rates encourage risky investments too, but you will find plenty of articles on mises.org detailing why that is a disasterous policy.
So true, PR. People seem to think that investment, or at least many kinds of investment, are objectively good and should be “encouraged.” Just look at the rhetoric from advocates of public schools, financial aid, national science programs, etc.
JB admits that patent law forces (his own word) people to do things they otherwise wouldn’t. That he sees this as a good thing is probably a good indication that he’s not amenable to arguments from morality.
“market democratization” strange concept. It sounds like an oxymoron.
“I’m not sure where this opinion comes from, but you have obviously never gotten a patent. Average time to get a patent is 2-3 years – the examiners have made me re-do my claims on EVERY patent I have ever applied for. The review process is time consuming and thorough.”
How does this disprove my assertion that getting a patent is a race?
“This shows me that you have, most likely, never been through the patent review process. There are ways to prove you were the first inventor.”
What? How? What is the magical method by which you can prove that no one invented it? Are you going to sneak into everyones house and see what they have been working on?
“I have actually done this with other intellectual property – do you think the “highest bidder” just forgets about the IP because they bought the idea? No, they do the same thing I would have done if I would have held the idea – they get IP on the idea they buy from me and then develop it and market it. In the end, I can take a percentage of sales or a flat royalty of 1% IF the patent issues and IF we ever get any sales.”
So again, this just shows why we shouldn’t have a patent system. This argument work against you.
“This not a valid analogy. Please refute my explanation of how I believe the patent system stimulates new ideas and investment.”
Are you familiar with Bastiat’s SEEN and UNSEEN?
“You do not address my concerns with patents increasing the chances for recouping capital or why that is important to a business deciding whether or not to invest capital in a new idea. ”
It’s a monopoly grant, you get it? Their investment in it prevents someone else’s.
Read this:
http://www.cato.org/pubs/journal/cjv14n2-6.html
What happens to investment in telecoms after AT&T’s patent expires? Why did Bell get to beat Elisha Gray? Why was Edison prevented from entering the telecom biz? Why did Bell get to patent an idea of a German engineer, Reis?
Don’t come back and argue that Bell’s technology inspired telecom entrepreneurship after Bell’s patent expired.
“Why would any business invest in an idea that they believed there would be a good chance of not getting back their capital investment in?”
I wonder about the genius who patented the cat exercise device of using a laser pointer. What is the investment here? Going around and preventing five year old boys from discovering this on their own?
The fact that there is a plentitude of sites devoting to silly and down right stupid patents shows that the people who issue them are alcoholics and junkies.
“Why the communist view on sharing the benefits that come to individuals from ideas being invested in and turned into reality?”
That’s kinda funny. The individual (in the natural order) is under no obligation to reveal his ideas, nor is he prevented from sharing under a restrictive NDA.
You are the communist advocate. The patent system grants monopoly privilege after the idea is shared. It promotes a “can look, but can’t touch” attitude. You are advocating state violence in enforcing ideas.
“The US has the strongest IP laws in the world and has so for the last 100+ years – when I look at the last century and see how much creativity came about in a country like the US versus any other country that did not have strong IP laws, I tend to believe there is a correlation between strong IP law and creating new products and ideas.”
Well, there is a strong correlation between crime and new ideas. Environmental laws and new ideas, and basically more state predation with new ideas. Don’t commit the basic logical fallacy.
Just look at how many ideas were simply stolen from people of different countries.
Creativity is the regretful mother of strong IP laws. Strong IP laws only restrict creative abilities.
So, to the broader question, in these scenarios, effectively, the organized prevention of a walmart entering into a market, asks the people who want lower prices and fewer choices to subsidize the people who want additional choices and care less about prices. This was the subsidy I referred to.
You could have avoided all that by just saying that some anti-Walmart demagogues are in reality elitist a$$-oles
As Cliff points out, the skilled former competitors of mass marketers find a market for their goods, now considered “upscale.” There is a market for the local and unique if the quality is worth the price to the customers.
If you don’t like Wal-Mart, McDonald’s, P. F. Chang’s, Olive Garden, or Macy’s; shop somewhere else. I do.
The following is the body of an email I am about to send to Professor Thies:-
Although this article is interesting, the argument seems to have several
gaps in it. For one thing, it claims to bring out the essential argument
against Wal-Mart. While I cannot state whether the arguments I have seen
against it are correct, I have to say that many of them do not go along
the lines you address.
But there are two more important gaps. The first is that you have not
shown that the Wal-Mart case is truly comparable to the specific
examples you bring out from earlier times. The second is that,
historically, many of the examples you leave out were NOT such unmixed
successes as you make out – in fact, some were definitely harmful, at
least to some people. It appears that you are making selective use of
examples. In particular, things like the plight of the weavers in 19th
century Britain showed that it was quite possible for people who suffered
in the short run to fail to reach some long run gain at all. We have to
look out for cases like this rather than to assume blithely that ipso
facto there never are any rocks ahead.
I should also mention that not everybody considers increasing involvement
with the outside world as valuable in itself. For many, it is only a
means to personal ends, and it brings with it the burden of having to
interact with the outside world – it reduces the convenience of devoting
one’s attention to personal concerns. It has a downside of opportunity
cost.
I invite your comments on these further issues.
As a tech industry insider and inventor I can assure anyone claiming that patents have any value in promoting progress that nobody in the industry R&D departments gives the flying f*ck about patents — the actual inventors (engineers and scientists) only bother with them because HR departments reward them with petty cash. In all my nearly quarter century-long carrer I never saw a decent engineer who’d run to a patent office rather than tell anyone who’d care to listen about his latest ideas.
Every piece of hardware out there violates dozens of patents. Heck, if I still had titles to my patents and decided to exercise them, the Internet would have to be shut down. No, it is not a joke, this is a simple statement of fact. In fact I’m kind of glad that my old indiscretions are safely lost in the murky waters of liquidations and corporate turf wars. I stopped patenting anything when I realized that my own old patents are coming back to bite me – and when I grew older and wiser and got interested in the ways of the world beyond chips and code.
Companies accumulate patent portfolios to raise barriers to entry against potential competitors and to use them as a mutual-assured-destruction option against overly litigous competitors. Every time there’s some kind of disagreement between large corporations regarding some business practices which boils over to the legal realm, the patents are dragged in. It never failed to force a settlement. Defending against claims of violating few hundred patents can ruin financially any company short of IBM-Cisco-Microsoft league, even if these claims are totally without merit.
As for VCs… oh, they do want patents, as well as your firstborn and the liquidation preferences, too. They also have f*cking up the technical founders (who are suspected of being unreceptive to the idea of turning a business of product development into a pump-and-dump scam) as modus operandi. Been there. Any inventor is well advised to stay clear of VCs until he has built his own business and can take VC money without giving them abiliy to fire him.
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