We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

Cut off by your gas company for wrongthink? What’s stopping you drilling your own North Sea well?

– Tim Newman, nicely describing why certain strains of libertarian thought are self-defeating.

76 comments to Samizdata quote of the day

  • Mr Ecks

    Cutting you off for wrongthink or not obeying state edicts is one of the reasons they want smart-meters –so they CAN cut your house etc off w’out having to put a whole area out.

    Don’t get one.

  • John B

    ‘ Cut off by your gas company for wrongthink? What’s stopping you drilling your own North Sea well?

    – Tim Newman, nicely describing why certain strains of libertarian thought are self-defeating.

    Straw Man alert.

  • Straw Man alert.

    Wrong, you clearly do not know many libertarians. If I had a pound for every libertarian who has responded to highly effective de-platforming by the left, not just in the media but via payment systems like Visa/Mastercard/PayPal, with “they are private companies, they’re perfectly within their rights to do what they want, just set up your own alternative if you disagree with them.”…

    I thought as much myself for a while until I realised this was suicidal.

  • William H. Stoddard

    Of course, that same argument arises if you are cut off, not by a private company, but by the state.

  • Schrodinger's Dog

    OK, so what do we going do about this?

    The internet has a distributed architecture which, in theory, offers the possibility of a similarly distributed network of businesses and opinions. In practice, it’s coalesced round perhaps half-a-dozen behemoth companies which now wield immense power and are subject to almost no regulation. Indeed, they’re mostly exempt from regulation on free speech grounds, which is ironic, as they’re becoming increasingly hostile to free speech. They seem to be totally on board with the liberal left, woke agenda and almost totally opposed to everything libertarians believe in. How long before Samizdata truly lives up to its name, and is an underground, possibly illegal website?

    Right now the right and libertarians are comprehensively losing the culture war. Sometimes I wonder if we’re even fighting it. So what are we going to do?

  • Mark

    “Of course, that same argument arises if you are cut off, not by a private company, but by the state.”

    When its difficult to tell the difference between the two isn’t that fascism?

  • When its difficult to tell the difference between the two isn’t that fascism?

    Kinda sorta, yeah.

  • Nico

    @Schrodinger’s Dog:

    The Internet schminternet. The Internet is a mostly private network run by large tech companies that are run by leninists. Already wrongthink gets you deplatformed on social media and platforms like youtube. Next up: you’ll get deplatformed by CDNs. Next up after that: the DNS registrars will deplatform wrongthink. And finally, if that’s not enough, pressure will be applied to network providers to deplatform you. A lot of this has already happened. CDNs have deplatformed “the chans”, for example.

    Samizdata is too small, so it is very appropriately named, but also there’s little for Samizdata to accomplish.

    I hate to think of what happens when push comes to shove, but it takes two, and one party is hellbent on getting there. Lord help us.

  • Nullius in Verba

    “Wrong, you clearly do not know many libertarians. If I had a pound for every libertarian who has responded to highly effective de-platforming by the left, not just in the media but via payment systems like Visa/Mastercard/PayPal, with “they are private companies, they’re perfectly within their rights to do what they want, just set up your own alternative if you disagree with them.”…”

    As in: “Bake me a cake…”

  • MadRocketSci

    My own two cents in this regard:
    https://www.amssolarempire.com/Documents/MailServerTutorial_draft0.pdf

    I have no idea what to do about payment processors yet. Start your own website though.

    1. Get a linode server, or set up your router to port forward to some box in your house. (Literally anything can be a server these days if it can run linux)
    2. Get a domain name at a registrar like namecheap.
    3. Set up apache2/php/mysql
    4. Install your own wordpress/blogging/forum software.
    5. If you’ve sacrificed enough SAN points to the penguin gods, you can use my tutorial to set up your own mail-server.

    That should at least distance you from having an infected platform provider censor you if you come up for review in the committee of public safety. You might still face trouble from your payment processor or registrar getting leaned on, but that should be a bit of a higher bar. Also, you’ll have control over your own data so you can move and set up elsewhere as needed.

    I’ve had in the back of my mind for a while to start slinging code at some kind of encrypted peer-to-peer messaging/mail application. Haven’t had the time yet. Bragging about things you haven’t done yet is poor form, but if anyone else has the time, go for it. If we could just dial each other’s IP addresses and talk directly to each other, no platform, no nonsense, no monkey social games – that might help put sand on this dumpster fire. Anti-social media: The wave of the future?

  • MadRocketSci

    PS: I’m fresh out of fucks to give for FAANG – If they get smashed in some anti-trust action, I’ve got a tiny libertarian violin somewhere, but I’ll have to dig it out from under the pile of articles on petty censorship and principle devoid totalitarian paranoia. Tech companies made their fortunes in an open world that they’re now trying to destroy. We can build new search engines/social sites from the 90s era level of internet freedom, we can’t recover our freedom if they manage to turn our PCs into telescreens.

  • MadRocketSci

    Reminds me a lot of a trilogy that I read 2 books out of 3 on: John Wrights “Golden Age” trilogy. I don’t exactly *like* John Wright, but I have to give him artistic credit for depicting an extremely *ethical* society that’s somehow totally devoid of *virtue*. It’s also an extremely *libertarian* society that somehow manages to be totalitarian at the same time due to institutional capture.

    I thought it was unrealistic, that there must be some self-contradiction in the makeup of his horrible world. Maybe he’s closer to right than I want to believe of men and human nature.

  • Eric

    I have no idea what to do about payment processors yet. Start your own website though.

    1. Get a linode server, or set up your router to port forward to some box in your house. (Literally anything can be a server these days if it can run linux)
    2. Get a domain name at a registrar like namecheap.
    3. Set up apache2/php/mysql
    4. Install your own wordpress/blogging/forum software.
    5. If you’ve sacrificed enough SAN points to the penguin gods, you can use my tutorial to set up your own mail-server.

    That’s a lot of effort to create a website nobody will ever see when Google de-ranks you for holding opinions it doesn’t like. Also, your #2 could be a problem if you’re sufficiently hated by the woke brigade.

  • Nico

    Eric is on the money. Setting up a web site is easy enough, but not worth the bother if you won’t be found by anyone or, if you are found, you are then censored by any of the several services you’ll depend on utterly, which are: your cloud/CDN provider (if applicable), your DNS registrar/registry, your ISP (if applicable because you’re not using a cloud).

  • John

    I don’t really disagree with the general case of the original post & quote, but… and, I know it is not reasonable for everyone, I was amused by the fact that since I have LP I choose regularly (roughly semi-annually) between gas companies based on price and service. I like not being tied to a monopoly provider. In sum, if you had a competitive gas provision industry instead of a monopoly, there would be (or at least could be) alternatives to drilling your own gas well. (Which, btw, is a route some of my neighbors have taken…)

    The internet has similar dynamics but is the poster child for network effects which makes it more difficult. It is possible to build parallel alternative networks, but it becomes problematic as soon as you want to connect to the rest of the world. This is an issue even without any wrongthink issues. The existing companies with whom one must connect are not interested and in many cases have gov granted monopolies. An alternative to Google etc. is a much easier nut to crack by comparison to the problems at the lower levels of the OSI model.

  • Nullius in Verba

    “I’ve had in the back of my mind for a while to start slinging code at some kind of encrypted peer-to-peer messaging/mail application.”

    There’s a bunch of dark web stuff around already. For keeping your stuff out of the public eye, it’s easy enough to do. But the real problem isn’t a technical one, it’s social. You can have your own private websites and forums and email lists in the dark corners of the internet, but that’s not the issue. If you’re to win the argument, you need access to an audience. You need to get your message to the masses. And for that, you need the masses to be interested in listening.

    If 40% of Google’s or Facebook’s or Twitter’s users were to get pissed off at their behaviour and make their feelings known, they’d respond. But their users don’t. Most people don’t care about anybody’s free speech but their own, and most people’s free speech is not significantly threatened. The censors are careful to move piecemeal, taking down one minority view at a time.

    But consider what happened before the record companies gave up on their old business model, and tried to shut down music piracy. There was a huge market for peer-to-peer networks for sharing data illegally, and the market provided solutions. If lots of people want it, if there’s lots of money to be made providing it, then it will be provided. For that matter, Google and Facebook would provide it. They only do what they do because they get burnt PR-wise worse if they allow free speech than when they don’t. The left’s activists are more vicious, better organised.

    But you also need a message that’s politically palatable. If you make it about free speech specifically for extreme right-wing views, you’ll get lukewarm if any sympathy from the middle ground and the moderate left. The argument is all about the views being censored, not the censorship principle. If you make it about free speech, as an abstract principle, and concentrate on how everyone has some views that are unpopular, and everyone is vulnerable to ostracism and social exile, you have a lot more people who can get on board. The hard part is getting people to see beyond their own factional interests, and value free speech as an abstract principle, for everyone.

    “That’s a lot of effort to create a website nobody will ever see when Google de-ranks you for holding opinions it doesn’t like.”

    So use a different search engine.

    What would happen if everyone who cared about this stopped using Google? And made it known why?

    Is the problem with Google, or with the public?

  • bobby b

    MadRocketSci
    June 21, 2020 at 8:00 pm

    PS: I’m fresh out of fucks to give for FAANG – If they get smashed in some anti-trust action, I’ve got a tiny libertarian violin somewhere, but I’ll have to dig it out from under the pile of articles on petty censorship and principle devoid totalitarian paranoia. Tech companies made their fortunes in an open world that they’re now trying to destroy. We can build new search engines/social sites from the 90s era level of internet freedom, we can’t recover our freedom if they manage to turn our PCs into telescreens.

    This. In spades. Revoke their artificial government-granted immunity from lawsuit for libel, etc.)

    (But, didn’t GAB get knocked down by their registrar? Isn’t that why they ended up with the .ai address? They finally found a registrar in Anguilla who would register them?)

  • Pete the Other

    I’ve had in the back of my mind for a while to start slinging code at some kind of encrypted peer-to-peer messaging/mail application. Haven’t had the time yet.

    I’ve been thinking of using (bringing back?) INN. As you say though, a starttls capability (which I don’t think it currently has) would be a useful addition.
    Spam prevention is the big difficulty though; how do we (automatically, at least to some extent) distinguish one cry for freedom from 10,000 porno/drugs/d**k enlargement messages? And in a way that doesn’t require enormous server resources or vast offices full of underpaid censorship drones? Very unfortunately, that’s at least partially what led to the rise of the big Internet social media outfits.

  • bobby b

    “how do we (automatically, at least to some extent) distinguish one cry for freedom from 10,000 porno/drugs/d**k enlargement messages?”

    Do these messages actually make someone money somewhere? Are there people willing to send money to an internet address on the hopes that they’ll get porn (which is already free on the internet), drugs (which are available down the street anyway) or organ enlargement (which I’m trying to picture – an appliance? a mantra? an herb?)? Spam obviously pays – there’s so much of it that it must – but who is stupid enough to make it pay? Where are all of these dumb-as-rocks people?

  • APL

    PdH: “I thought as much myself for a while until I realised this was suicidal.”

    Wow! The tectonic plates really are shifting.

    Mr Ecks: “Don’t get one.” [‘smart’ meter]

    Couldn’t agree more. One more step toward the Chinese social credit system.

  • Nullius in Verba

    “Do these messages actually make someone money somewhere?”

    I’ve long suspected that at least some of them are part of a clandestine communication network. 😉

    What you do is to take your message, encrypt it to produce a random string of numbers, and then translate that into a sequence of spam messages. The simple way to do that is a template with binary alternatives, each encoding one bit. “Dear [Sir/Friend], [Would you/Wouldn’t we all] [like/love] to have [a huge/an enormous] …” Even better, have lots of alternatives to slot into each place. Then add spelling mistakes, which greatly increase the number of possibilities. Crude templates are liable to lead to grammatical errors, but those can be easily explained away. For the more sophisticated, those natural language generators are ideal for this. Then you send the resulting message out to ten thousand random recipients, along with your network of secret agents.

    Any of the random recipients receiving one dismisses it as spam and bins it. Anyone seeing this traffic dismisses it as spam and ignores it. But the secret agents convert it back into numbers, decrypt it, and read the message. Even if anyone suspects, they can’t tell which of the ten thousand random recipients it was intended for, and some of them are Important People, they can’t have them all rounded up and shot merely for getting spam, can they? (Or if they do, the next ‘mail shot’ (hur hur) goes out to the assassination target list.) It’s hidden and untraceable communication, right out in the open.

    “And in a way that doesn’t require enormous server resources or vast offices full of underpaid censorship drones?”

    ‘Spam’ is what Free Speech looks like!

    And you distribute the ‘enormous server resources’ across your network of users – that’s the point. If every user donates a bit of disk space and a bit of processing to the network, and you’ve got a million users, that’s a lot of storage and processing. It works like a chain letter – it spreads and recruits resources exponentially. “Dear Sir, would you love to have an enormous spam-filtering server…?”

  • Sam Duncan

    NiV: I wouldn’t be surprised. A distributed botnet is hardly an unusual idea these days (we know that most spam comes from them), and if you take away the cloak-and-dagger part of using reasonably plausible public messages, you’ve basically got a variation on blockchain: everyone gets every message, but only the intended recipient can read the ones for him. And, since your method is a pretty obvious extrapolation from some of the systems intelligence agencies were already using before the internet (classified newspaper ads, for example), I’m beginning to wonder which came first.

  • Stonyground

    “Where are all of these dumb-as-rocks people?”

    There used to be a website called something like ‘u ok hun’ that just posted examples of idiocy lifted from various social media sites. I used to read it alternating between laughter and disbelief. There were people who were borderline illiterate. Someone had a kid that was lack toast intolerant. Some guy thought that the EU Referendum was about football. Someone who suggested that nuking North Korea would rid us of the Muslim threat once and for all. Those are just a few that I remember, there were reams and reams of that kind of stuff posted every day.

  • @ Stonyground: There is still a “u ok hun?” group on Mr Zuckerberg’s little device: https://www.facebook.com/uokhunni/

  • Fraser Orr

    FWIW, I don’t think this libertarian would suggest digging your own oil well. What he would suggest it getting a different gas supply company. However, often the problem is things like public utilities have no competition due to regulation.

    I agree that I am a bit tired of defending Google and YouTube’s right to control what is on their platform. But I continue to wonder why it is in the relatively free market of the Internet, that substantial competition has not naturally arisen. I know there are a few corners where such a thing exists. But why, for example, is Google advertising the only game in town? For sure I understand the benefit of being the search provider, but ads don’t necessarily rely on that, not entirely anyway. No reason to not have another network serve ads with a more liberal (hah!!) view of free speech. Ad servers simply match ad buyers to website producers. That is why, for example, there are still ads on Rush Limbaugh’s show and Tucker Carlson’s show, despite the vicious desire to destroy both. (Not that I fully endorse either man’s views, or course, but I do endorse their right to have them and speak them.) Who among us would not be happy to take 5% of the margin Google is making on their ads? It is a bottomless pit of money, and one of which the network effect Google has is rather limited.

    One can only wonder, for example, at Marissa Mayer’s total failure to exploit Yahoo’s position that would have allowed a decent competition against her old employer. I know she is as liberal as they come, but big money makes capitalists out of us all.

    So sure, perhaps the situation is dire enough that we libertarians should pitch our principles and demand anti trust law. We have been through this before with Microsoft. I wonder though if we should first examine the underlying causes. Why have market mechanisms not taken care of this in the normal way they do? You can, after all, rent your movies from places without the name “Blockbuster” over the door.

    FWIW, I agree that the challenge with “set up your own servers” is simply that the woke brigade can do lower, to your ISP or your DNS provider. One would think that the ISP would act as a common carrier and not editorialize, bits being bits. But one would also assume that of a search engine or a “chat with friends” platform, and that didn’t work. So who knows? A number of years ago I speculated that the central issuing authorities (such as DNS and IP numbers) could be a potential choke point in liberty. But that seemed a very far off notion in the days of the wild west of the Internet. It is a shame that they didn’t design it better so that no central authority was required.

    However, we do have something like this in TOR and other anonymizing protocols. Perhaps that is a hope for the future, or perhaps not since it has been so demonized as the haunt of criminals and thieves.

  • @NiV – Far too complex. Much easier to just send out the message with Spam content in the message text and an encrypted attachment. Send it to your 200 subscribers plus 10,000 other people and it would just get lost in the sheer volume of spam that already exists.

  • bobby b

    “But why, for example, is Google advertising the only game in town?”

    I’m told (by people who KNOW things!) it’s because setting up your site for income with Google is SO easy, SO seamless, SO well-targeted, and SO profitable compared to the competitors that the decision to go elsewhere simply means foregoing profit and convenience in exchange for ideology.

    Google did indeed build the better mousetrap.

  • However, we do have something like this in TOR and other anonymizing protocols. Perhaps that is a hope for the future, or perhaps not since it has been so demonized as the haunt of criminals and thieves.

    The problem with TOR is that it is not like Speakers Corner at Hyde Park (i.e. nominally there to enable free speech*), it is a literal Wild West with everything from drugs to stolen credit card numbers to kiddy porn, even though there are ALSO TOR services dealing with private email, hosting and other mechanisms to communicate without interference from the state.

    So while the suggestion of moving to a TOR platform to guarantee free speech is perfectly reasonable, your website is living in a pretty shitty neighbourhood with some unsavoury and often criminal neighbours.

    It also requires special software to access TOR in the form of the TOR browser, which might cause a few raised eyebrows sat on your desktop and a certain level of presumption from those seeing it that you are “doing something dodgy” (there being lots of dodgy things that you CAN do in TOR). Then again, knowledge of what TOR is, is not exactly widespread.

    * – although not so much any more…

  • Nullius in Verba

    “So sure, perhaps the situation is dire enough that we libertarians should pitch our principles and demand anti trust law.”

    I think this is another case of libertarians agreeing with their aim but not their methods. Like the way we too oppose authoritarian segregation by race, but disagree with authoritarian woke anti-racism, or we support raising up the prosperity of the poor, but want to do it through free markets and not the welfare state. It’s a matter of identifying libertarian methods to achieve the end, rather than going for the reflex authoritarian response.

    Like, let industry know how much extra you’ll pay for a platform that respects free speech. If enough people want it, someone, somewhere, will take on all the extra hassle that involves. Like letting politicians know how many more votes they can get by supporting free speech. The free market guides collective action through price signals. Send some.

    “It is a shame that they didn’t design it better so that no central authority was required.”

    There are technical ways of dealing with that. The problem with all of them is that they are comparatively hard to use, and nobody yet has had the money or motivation to write code and build the infrastructure to make it easier. However, if there is a demand, the market will supply. As they did when people wanted to share pirated music back in the days when that was illegal. The music companies tried for years to shut it down, failed, and eventually wised up and gave up, and changed their business model. If there’s a market for free speech, that can be provided too.

    “However, we do have something like this in TOR and other anonymizing protocols. Perhaps that is a hope for the future, or perhaps not since it has been so demonized as the haunt of criminals and thieves.”

    A lot of people seem not to know TOR was developed by the United States Naval Research Laboratory for protecting communications with US intelligence operatives abroad and supporting dissident networks operating in totalitarian regimes like China (but is of course just as applicable for the same purposes here). It was initially a US government project, that the US government has provided the majority of funding for. The Electronic Frontier Foundation did some development on it after the code was released by NRO, and it had support from other human rights groups, but it’s actually part of the US military’s fight for global freedom. Which is nice.

    Perhaps that is indeed hope for the future.

    “Much easier to just send out the message with Spam content in the message text and an encrypted attachment.”

    You’re assuming they’ve got humans looking for it. They don’t. They use software to search for suspicious traffic. And encrypted files attract attention.

  • Quentin Stephens

    If Facebook, Google et al censor or discriminate then perhaps they could be held liable for the stuff they let through? On the basis that they let it through when they could have stopped it.

  • Fraser Orr

    bobby b
    I’m told (by people who KNOW things!) it’s because setting up your site for income with Google is SO easy, SO seamless, SO well-targeted, and SO profitable compared to the competitors that the decision to go elsewhere simply means foregoing profit and convenience in exchange for ideology.

    And it was very nice of google to spend billions of dollars inventing all of that. Now that it is invented it can be reproduced at 1% of the cost. Software is not particularly expensive to create. What is expensive if finding what to do. Of course it is possible that there are some patent landmines in there. One of the many reasons I hate patent law is because it is so destructive to competition. But, generally speaking, purely software processes like online advertising are fairly immune to patents.

    Nonetheless, to your point, even if Google was the best option, what would one do were google not an option, because, for example, they didn’t like you for some reason? I doubt that Fox News serves their advertising from Google. There seems to be more and more people in that boat. And, as a businessman myself, another name for “people with problems” is “customer”.

  • Fraser Orr

    @John Galt
    The problem with TOR is that it is not like Speakers Corner at Hyde Park (i.e. nominally there to enable free speech*), it is a literal Wild West with everything from drugs to stolen credit card numbers to kiddy porn,

    Your comment made me smile a little, because that is EXACTLY what the web and the Internet more broadly were like about twenty years ago.

    There were plenty of pearl clutchers back then, but the people who created the web and the internet were, generally speaking, of a libertarian bent. Much, I suspect, like the people who create most of these anonymizing protocols.

    I read somewhere that the per capita murder rate in Dodge City during the era of Doc Holiday and Wyatt Earp was considerably lower than that of modern day Chicago. So pick your poison.

  • bobby b

    Fraser Orr:

    “And it was very nice of google to spend billions of dollars inventing all of that. Now that it is invented it can be reproduced at 1% of the cost.”

    I can steal your $80k 2020 Beemer with about three dollars worth of wire and strapping. Damn those theft laws! 😉

    (Okay, not here to argue for/against patent law . . .)

    I really don’t have a good grounding in patent law. I avoided it once I learned that every student pursuing it was already an engineer, and I wasn’t.

    So, I don’t know this – can Google protect the whole idea of matching ads to surfing history, and automatically populating ad spaces with ads, etc – or do they only protect the actual code used to set such a system up? If someone uses code in a different order, can they set up a different-looking but essentially-same-results system?

    I’ve seen things that make me think that we’ve gone overboard (or underconsidered) in areas of patent law – allowing someone to claim ownership of the entire concept of a “post” button, for instance – when we ought to only be protecting the actual coding work done to achieve it – and so I’m left not knowing if Google code is protected, or if the entire concept of advertising as set out by Google is what’s protected. I can see limiting things if it’s the latter.

  • Fraser Orr

    @bobby b
    I can steal your $80k 2020 Beemer with about three dollars worth of wire and strapping. Damn those theft laws! 😉

    Sure, I’m not suggesting that I steal Google’s code and then prevent them from using it. If you could take a photo of my Beemer, feed it into your 3D printer and get a copy of it, I’d be totally ok with that. In fact, it sounds like a really cool idea.

    I really don’t have a good grounding in patent law. I avoided it once I learned that every student pursuing it was already an engineer, and I wasn’t.

    I have dealt with a lot of patent lawyers, and I have read a lot of patents. My God, the idea that patents somehow reveal how to do stuff could only be written by someone who hasn’t ever actually read a patent. I’d rather read the phone book….

    So, I don’t know this – can Google protect the whole idea of matching ads to surfing history, and automatically populating ad spaces with ads, etc – or do they only protect the actual code used to set such a system up? If someone uses code in a different order, can they set up a different-looking but essentially-same-results system?

    I don’t know all the details, and certainly they have a creepy amount of information on you to target you. Targeting certainly makes ads better and more effective, but advertising is a matter of ROI. So if each ad gets you less “R” but your “I” is lower, then that is OK. What are the numbers? I really don’t know, and it surely varies a lot from product to product. But again, if there is a growing group of people who Google is simply defunding, then that seems like a pretty nice customer base to me.

    I’ve seen things that make me think that we’ve gone overboard (or underconsidered) in areas of patent law – allowing someone to claim ownership of the entire concept of a “post” button, for instance – when we ought to only be protecting the actual coding work done to achieve it

    But I am an engineer — or a software guy at least, and I can tell you that the realization of an idea is generally pretty straightforward, and certainly not innovative. (There are of course exceptions to that, but tracking cookies, history accumulation and pattern matching are not part of these exceptions.) And the question is what is the line to draw between that post button and a more specific idea that you think worthy of patents? And who gets to decide? Was One Click buying innovative enough? Enough to lock everyone out of it for 28 years? But I diverge. The question doesn’t resonate with me since I think all patents should be eliminated, both because they are morally wrong, and because they don’t even achieve the purpose that the Constitution sets out for them.

    FWIW, many companies now use alternative means to protect their “IP”. A classic one in this case would the the DMCA. They apply some simple crypto to their cookies, for example, and then if you try to access the data in the cookie you become subject to the DMCA rules. Printer ink cartridges use a similar trick. The crypto is not there to protect the data, but to protect the format of the data.

    Copyright… yeah there is a whole other subject.

  • The extent of Googles patenting with regard to advertising is breathtaking. If you had an idea relating to web advertising and wanted to see whether any of Googles patents already covers it you’d struggle, especially given the technical language in which patents are expressed.

    I had three patents and the only one which was of any value was stolen by a Chinese manufacturer and I was told it would cost me a fortune in legal fees attempting to enforce it and even if I got a judgement that supported my patent rights it would be impossible to enforce it. I bought one of them and it was a pretty good device (artificial cassette containing an SD card to play digital music on a car tape player), but it still made me angry.

    Likely the first thing you’d know of a patent in this area is Google’s lawyers sending you a letter claiming breech of patent and demanding payment in the form of a patent licensing fee.

    All-in-all, patents no longer work for the little guy and only work for the huge multinationals that can afford the litigation and enforcement costs.

  • Fraser Orr

    John Galt
    All-in-all, patents no longer work for the little guy and only work for the huge multinationals that can afford the litigation and enforcement costs.

    Tru dat. The myth of Crazy Uncle Fred inventing something in his garage and making his fortune because he is protected from the big guys with his patent (which he got by self filing using the NoLo “How To File a Patent” he got from the library), is just a big fat myth. Patents are a system to crush the little guy, not protect him. They are a tool to support big business against little business. Even if they weren’t so morally wrong, they would be wrong on utilitarian and pragmatic methodology (and the theory of patents is a purely utilitarian one as given in the Constitution.) They are just a big fat power grab, rent seeking in its purest form.

  • It’s even worse than that Fraser, because mostly they seem to be used to channel profits offshore in “Licensing” payments to Intellectual Property vehicles setup in low-tax / no-tax jurisdictions.

    All tax deductible of course…

    Mind you, money diverted from the jaws of government is a mixed blessing I suppose (Starve the beast and all that), but if I tried to do the same HMRC would be breathing down my neck with an investigation + fines + penalties and interest before you could say “Boo!”

  • +1 to the comments above on the cesspit of absurdity that is software patenting. (Full disclosure: I have s/w patents.) Beyond maybe assisting defence of your code’s copyright, the sole sane use of software patents is defensive.

    “You’re in breach of one of the many patents in our portfolio.”

    “THAT’S not a patent portfolio. [Shows own huge patent potfolio.] THIS is a patent portfolio. Want to bet you’re not in breach of one of ours?”

    [Patent troll takes alarmed look at portfolio, then flees.]

    This of course victimises the little guy who has no such “sure to have a case against them on something” patent portfolio, and empowers e.g. Google, who has just such a portfolio. I expect Google acquired this for defensively use – they are rich enough to be a target (by all means tell me if you know of aggressive use). I suppose that doesn’t alter the fact that their wokery could make them aggressive against a PC-fighting rival.

  • neonsnake

    Copyright… yeah there is a whole other subject.

    I think I’d really enjoy hearing your thoughts on copyright, Fraser. I’ve come over to your way of thinking on patents, but I’m less sure on copyright.

    At a very top line level, my initial response is “a copyright agreement can be a contractual agreement between two individuals”, so I have less of a problem with it.

    (That ignores structural issues, but still)

  • Fraser Orr

    @neosnake Re copyrights….
    My inner anarchist wants to say no to copyrights too. I mean who gets to own a number, right? But hold on to that thought. The case for copyrights is much stronger than the case for patents.

    “Inventions” do not just pop out of the ether. An invention happens when the precursors to the invention happen. And so invention is more a series of small steps forward each built on the shoulders of another. And there is an extremely important consequence to that — an invention happens when it is possible for an invention to happen, and so it is VERY, VERY common for multiple people to invent the same thing at basically the same time. The rush to the patent office is therefore a very unfair process. Excluding someone from using and profiting from something they invented just because some other guy filed a paper with the government first is deeply unfair.

    Copyrights are very different. The likelihood of someone coming up with a text exactly the same as JK Rowling’s Philosopher Stone is effectively zero. So the only way a republisher can publish it is by taking it. Copyright therefore forms a kind of contractural arrangement. When you buy the book you agree to the terms of sale which includes not taking the text and publishing it yourself. But I don’t want to rely too much on the contractual arrangement model because I think it has too many holes in it.

    So, I think the ideas surrounding copyright are sound. I think they could be much better implemented. I think copyrights are FAR too long, and I see no justification for restricting derivative works, which can be just as creative as the originals. (For example, Rowling’s lawyers squashed an independently produced encyclopedia of Harry Potter’s world. I see no justification for such a case, as long as the publisher doesn’t imply that it is officially authorized or such.)

    So, the case for copyrights I think is far stronger than for patents. I think though the specifics of the law on copyrights are too strong, and the penalties for breach are often excessive. I think the DCMA is a very bad law in particular, a lazy law in fact, and I think that what happened to Shawn Fanning was an completely unjustified.

    In my ideal world there would be no patents, but I think I’d have to grudgingly accept copyrights in a much weaker form.

  • Paul Marks

    The late United States Supreme Court Justice Scalia rightly said that VIEWPOINT DISCRIMINATION was the most important unjust form of discrimination facing the Western World.

    If you can be dismissed from job simply for expressing your political or cultural opinions, and NOT during work time (indeed even for things you have said YEARS BEFORE) then you are not free. Ditto if you can be denied basic things – such as payment services, or a bank account, because the powerful do not like your OPINIONS.

    And, yes, the time is coming when Big Corporations (following People’s Republic of China “Social Credit” system ideas) can just check your payment name (in our future “cashless society”) and not allow you to buy gas, or buy FOOD, if you have the “wrong” opinions.

    Libertarians, including myself, never really thought about this situation in the past – we ASSUMED (fatal mistake) that private business would not act like this.

    But we must not keep our heads in sand…….

    For example, when Mastercard went “Woke” people said “well use Visa” – but now Visa is “Woke” as well, for example denying service to Gab (the free speech social media site) on POLITICAL grounds. The Marxist education system has produced a generation of Woke Corporate Managers – people who do not even know it is Marxism that they are enforcing (after all a Corporate Manager tends to be a “good student” like blotting paper they absorb things and never question assumptions).

    Chanting “it is only censorship if the government does it” will end up with no liberty at all.

    People will either have to NEVER say what they believe (at it can be used against them – even years later), or STARVE TO DEATH.

    If libertarians are worthy of the name (“liberty”) we have to seriously think about a situation where private companies are more interested in people having the “correct” social, political and cultural opinions then they are anything else.

    “Go Woke and Go Broke” – not if you control most large corporations, as well as the education system and the mainstream media, and you have unlimited amounts of CREDIT MONEY thrown at you, the endless subsidies to the Credit Bubble banks and the pet Mega Corporations.

    By the way – the Conservatives in Britain and the Republicans in the United States are of no help. When the Marxists attack these establishment “Conservatives” do not rush to defend Freedom of Speech – on the contrary they rush to shove a knife in your back (I have personal experience of this). And Tucker Carlson has shown just how bad most American Republicans are – how they will do NOTHING to defend the people who vote for them and fund them.

    President Trump might (just might) help you – but he has no political party to back him up. The Republicans generally could not give a damn about Freedom of Speech – or even about small business people have their stores burned, and being hacked to death if the resist looters. The looters (BLM) that Big Business gives vast sums of money to. Yes BIG BUSINESS FUNDS THE MARXIST LOOTERS. They do – “but that is impossible”, well it it happening.

    Establishment Republicans just join in the chant of “racist, racist, racist” against the very people who vote for them and fund them.

    They will not defend you, they will not help you, they will leave you to be persecuted, robbed and murdered.

  • neonsnake

    In my ideal world there would be no patents, but I think I’d have to grudgingly accept copyrights in a much weaker form.

    Thanks Fraser (for the whole post, not just the part I quoted).

    That’s, pretty much, where my head’s at as well. Whilst I think patents are immoral, I can see a moral case for copyright, but also that the “actually existing laws” are suspect as hell.

    Patents appear to me to be a (government-sponsored) way of being paid several times over for one piece of work, whereas copyright seems to be (in theory, if not in practice) a way of ensuring your right to being paid for your day’s work – and (my own inner anarchist coming out) doesn’t need to involve the government, I think.

    The “grudging part” in my case is to do with non-fiction (or non-art), I think. I’m very much in the camp that the heavy lifting should be done locally (ie. The physical stuff) but that the “soft” lifting, the thinking, the theory, should be global and shared to all communities. Information wants to be free, and all that…

    (Yeah, I cut off the rest of the quote deliberately 😉 )

  • It is said that everyone is conservative about what they themselves know.

    I have experienced how incapable the legal profession is at distinguishing what is and is not sane to treat as a software patent. Therefore I am critical of software patents.

    Although I know the courts have sometimes really messed up hardware patents (e.g. the true inventor of television was ripped off by a large company with good lawyers exploiting the ignorance of a judge who had no ability to judge hardware technicalities), I believe in hardware patents.

    If anyone with specific hardware-patent experience can show me that my last sentence above is just an example of my first sentence above – or is not, by all means inform me.

  • Fraser Orr

    Niall Kilmartin
    If anyone with specific hardware-patent experience can show me that my last sentence above is just an example of my first sentence above – or is not, by all means inform me.

    How exactly are software patents different than hardware patents? I think it is self evident that patents are bad, but the “self” there refers to me, not you, so let me try to take your perspective. I looked up “End Software Patents” to see what the objections put forward are at this link

    He lists three problems:

    * Software patents block standards
    * Software patents block individuals from taking part in development and distribution
    * Software patents create legal and financial risks that most companies can’t afford.

    So which of these doesn’t also apply to hardware patents? As I said in my comments above, invention is not something that happens in a vacuum. Invention is rather a process, where first we discover how to smelt iron, then we discover how to cast iron, then we discover gasoline, then we discover how to refine gasoline, then we discover the crankshaft, then we discover how to seal bearings with lubricants, and then we do a thousand other things, and finally when all these are invented we invent the internal combustion engine. And then once that (and a thousand other things) come to be we invent the airplane. And so forth.

    However, at each stage we invent the new thing when the precursors are invented. So inventions don’t just appear at random times, they appear when they first can actually appear. Consequently, people frequently invent the same thing at the same time. So why is it just that you and I both invent the engine at the same time, but you are excluded because I filed first? That is, if you will excuse the pun, patently unfair.

    So, patents are a terrible idea in many dimensions, both from a moral point of view (they are government granted monopolies), and from a utilitarian point of view — despite what they tell you, patents hinder innovation, not help it. And finally from a practical point of view the patent system is captive to massive farms of lawyers cranking out patents in the basement of mega corps, throwing up barriers to competition from upstarts who can’t pay the membership fee into the club of “I have more patents on trivial crap than you have, therefore I can always find something to sue you over.” The big boys are both in the club, and so mutual assured destruction brings about detente. Pity the poor schmuck with a great idea, and no money for lawyers.

  • Nullius in Verba

    “The rush to the patent office is therefore a very unfair process. Excluding someone from using and profiting from something they invented just because some other guy filed a paper with the government first is deeply unfair.”

    Agreed. But the patent system is designed to deal with inventions being public goods, which if you get rid of patents you will need to propose another solution for.

    A ‘public good’ is non-rivalrous (using it doesn’t reduce the amount available to everyone else) and non-excludable (you can’t provide it to some people and exclude others). Many inventions cost time, effort, and money to produce. You have to buy equipment, do experiments, build prototypes, research markets, recruit investors, and while you’re doing it you can’t be working for money on anything else. Having invested all this effort, you of course want to make a profit from it, to get a return on your investment. But the moment another manufacturer sees your invention, he says “What a brilliant idea!”, and produces and sells it for less than you can, since he only has to get back the manufacturing costs, he has no development costs to cover.

    So there is no profit in inventing or producing any product that is far easier to copy than it is to produce in the first place. So in a profit-oriented world, you get far less invention than would be optimal. There’s a strong demand, but nobody will supply it if they can’t make a profit out of it. The market price is the price to produce copies, but you can’t get to there because the barrier of the cost to invent it is in the way. How do we circumvent this barrier?

    The government solution is crude and inefficient. They grant a temporary monopoly in exchange for making the information publicly known. This enables an inventor to make some profit from it, and so motivates them to invent, while releasing the invention into the pool of common knowledge for us all to build on, and eventually supplying it to the world at the cost-to-copy. But without a functioning market, we can’t know what price to set, so the government sets a fixed price of however much you can make from it in a fixed period. But the period is set arbitrarily, the same for every invention, whatever it cost to invent. This leads to bizarre results where inventions that are made at a trivial cost (like one-click buying) are granted huge rewards, and inventions that are more expensive to create than the limit (like pharmaceuticals for the poor) are still barred from access.

    So we could very much do with somebody inventing something better, and enable us to get rid of patents and copyrights.

    Got any ideas?

  • An excellent summary of the conundrum of innovation, NiV.

  • bobby b

    Fraser Orr
    June 26, 2020 at 5:07 am

    ” . . . and no money for lawyers.”

    My definition of Hell.

  • Fraser Orr

    @Nullius in Verba
    Many inventions cost time, effort, and money to produce. You have to buy equipment, do experiments, build prototypes, research markets, recruit investors, and while you’re doing it you can’t be working for money on anything else.

    But how exactly is that different than anything else? Determining the best features in a piece of software, for example, is an extremely expensive process. So by this view you’d have to agree that the One Click patent is a good idea.

    The cost of producing a product certainly includes the cost of innovating, but, generally speaking, the bulk of the cost is in the engineering itself by which I mean the cost of going from an idea, a set of features, to a working product, to a efficient and effective manufacturing process.

    So the evil stealing copier still has all that cost, and while he is going through that engineering process the innovator has a very large first mover advantage in which time he can recover his innovation cost.

    Does that work for everything? No, certainly not. Not having patents would certainly mean that some inventions would be economically infeasible. But that is to only look at one side of the coin. Having patents also means that some inventions don’t get made either.

    Let me give you a simple, specific example of this. When I was younger I had nasty hay fever and a drug called Claritin was my friend. (For some reason I don’t suffer from it as much today as I did before — one of the few things that got better in my body as I got older…. 🙂 Claritin was patented in 1980 and made Schering Plough a lot of money. However, it become OTC in 2002 and generic forms became available, crashing the price. However, Schering Plough had an improved version of Claritin called Clarinex and they kept it off the market until 2001 when they released it to compete with their own drug, and the generics that followed. So for probably 15 years Schering Plough did not allow us access to this invention (which they discovered many years before) because the patent system incentivized them to do so.

    Other start ups could not take the innovation that Schering Plough had done and add more innovation on top, (for example, discovering Clarinex themselves), because the patent system made this effectively impossible. This is the downside to patents. This is how they actually reduce innovation.

    I chose a drug patent here because it is often cited as the best case example for patents because the development cost is so much larger than the marginal manufacturing cost. But even here, in the prime example of patenting, you can see how we lose out because of the patent system. You can see this also with much earlier patents. The number of patents for improvements to Watt’s steam engine exploded, almost to the day after his patents expired.

    The premise of patents, as given in the US Constitution for example, is that we trade the disadvantage of a government monopoly for the benefit of stronger incentives for inventors. However, to the best of my knowledge there are really no studies whatsoever to demonstrate that this is true, that is to say that the cost of the former is less than the benefit of the latter. That is shocking. For two hundred years we have had patents based on this premise and nobody has tested if it is true? In fact there are several studies that indicate the opposite is true. That patents are not only destructive intrinsically but that they on net REDUCE innovation, not increase it. I used to have the links handy but don’t have them right now. I have posted them in Samizdata before though (because I go on endlessly about this subject and bore the pants off people.)

    I haven’t even touched on the utterly dreadful way the patent system is implemented. How it massively advantages large companies over small, how it is used by them to maintain their position of strength given their sclerotic inability to innovate compared to their spunky up and coming competitors. Or ridiculous nightmare that is the USPTO, their insane rules, their spectacular inefficiency and capriciousness, and all the other things that come with any Government program that so heavily manipulates and controls the market. Or, for example, the fact that patents last about 30 years, in industries where 30 weeks is a long innovation cycle.

    Or more fundamentally the myth that patents are about protecting the little guy from the big guy, when in practice exactly the opposite is true.

    For my part, unless there is overwhelming evidence to the contrary, I err on the side of freedom. I err on the side that the government shouldn’t grant monopolies to anyone and we should allow the rough and tumble of the market to work it out.

  • So for probably 15 years Schering Plough did not allow us access to this invention (which they discovered many years before) because the patent system incentivized them to do so. (Fraser Orr, June 26, 2020 at 3:15 pm)

    But in the absence of a patent system they would not have been incentivised to develop it in the first place – so instead of waiting 15 years for an improved drug you’d have waited forever for any drug.

    My issue with software patents is not any of the ones your link suggests. It’s the issue demonstrated by the existence of patent trolls and the widespread use of defensive patenting by large companies. The law is very bad at extracting the idea that might actually merit a software patent and distinguishing it from the surround. Thus patent trolls can threaten, and (less despicably) defensive patent portfolios can defend, because no-one can have a clear idea whether the case would be legitimate or insolently dishonest or what.

    My impression is that hardware patents are more able to be given objective legal definition. But if anyone has experienced a hardware patent where the question of whether the patent was infringed has the same “toss a coin” aspect (i.e. even if all involved are being honest), then do tell.

  • Nullius in Verba

    “However, Schering Plough had an improved version of Claritin called Clarinex and they kept it off the market until 2001 when they released it to compete with their own drug, and the generics that followed. So for probably 15 years Schering Plough did not allow us access to this invention (which they discovered many years before) because the patent system incentivized them to do so.”

    No, they didn’t release it for 15 years because it probably cost them a billion dollars to develop each drug, which they had to get back somehow. You calculate the price you can sell it at by dividing the development cost by the number of doses you can sell during the time you have the monopoly for. The more you can sell, the longer the monopoly lasts, the lower the price, and the more consumers benefit sooner. If you release the new and better drug before you have paid off the development cost of the last one, you lose, big time. The only way you could do that and survive would be to charge more for the drug for a shorter period, or if someone was willing to pay off the outstanding debt on the old drug in order to get early access to the new drug. If you add the outstanding debt payments to the price of the new drug, not enough people can afford to buy it.

    Without the patent system, neither drug would have been developed. You’d have been still sneezing, because nobody in business is going to spend two billion developing two new drugs that they can’t ever get back. So you end up with no drugs. With patents, you get both drugs, initially at a high price, eventually very cheaply, but only after a time delay of many years.

    The fundamental problem is that drugs are very expensive to develop, very cheap to analyse and manufacture, so how do you get customers to pay for the former and not just the latter?

    “Or more fundamentally the myth that patents are about protecting the little guy from the big guy”

    Patents are about protecting the big guy, with the resources and capital to develop a new drug, from the little guys, who are able to analyse and manufacture but not invent and safety-test a new drug, primarily for the benefit of the sick consumer, who would like someone to develop new drugs. Patents are really about protecting inventors from free riders, so they’re willing to invent.

    Using patents is certainly easier for big companies with lots of money for lawyers, like everything is easier for big companies with lots of money for lawyers. That’s an unrelated problem. It’s not one patents are especially aimed at addressing.

    “For my part, unless there is overwhelming evidence to the contrary, I err on the side of freedom. I err on the side that the government shouldn’t grant monopolies to anyone and we should allow the rough and tumble of the market to work it out.”

    I agree. All you have to do is tell us a free market-based way for the drug company to get back it’s billion dollar investment in the development of a new drug without patents, in a way that guarantees to match actual development cost to money made, and I suspect even the drug companies will cheer. Efficiency improvements benefit everyone, and patents are undoubtedly inefficient compared to a free market. And I suspect they don’t like having to employ lawyers, either.

    Or you can stand on principle, say no monopolies, and no we can’t think of a way to for drug companies to get back development money, and you’ll get no life-saving drugs. Maybe that’s a better world? I’m not saying it is or is not, but the rest of society doesn’t seem to think so.

  • Fraser Orr

    @Niall Kilmartin
    But in the absence of a patent system they would not have been incentivised to develop it in the first place – so instead of waiting 15 years for an improved drug you’d have waited forever for any drug.

    Why do you think that is true? People produce products all the time without patent protection and many of them are extremely expensive to develop. FWIW, a very large amount of the cost of drug development is to do with regulation and testing. So, in my mythical no patents world, if you develop cancer drug C, spend a billion dollars testing it, and get approval, then I take it and copy it, I see no reason why I should be able to use the testing that you did, and to which you hold copyright, to get my copy approved. Of course it would be better if drug testing was approved by private means, but that isn’t the world we live in. So I have two choices: either I can redo all the testing, or I can perhaps license your tests by which means either the drug gets more extensive testing, or you recoup some of your costs.

    I have worked a little in the development of adverse affects monitoring software (basically software where drug trial users record any “adverse effects” they have from the drug.) I can tell you that most drugs are really retesting existing drugs for new purposes (where the cost is all testing) or for new substances the generation of the new substances is usually done by small companies and university labs, which don’t have he massive resources to do the testing, and then sold to larger companies under some sort of licensing agreement. So again, most of the cost is in the testing.

    The law is very bad at extracting the idea that might actually merit a software patent and distinguishing it from the surround.

    So you are in favor of some types of software patents? Just that you think the bar is set too low? FWIW, I highly recommend reading some patents if you haven’t done so, they are freely available online. I have had the misfortune of reading many, and they are full of things that are just plainly obvious. For example, here (from a discussion in wikipedia on novelty in patents) is a discussion of a claim:

    In a Jepson claim, the conventional parts of the claim elements are placed in a preamble, such as “In a grease gun comprising a cylinder enclosing a piston longitudinally movable in said cylinder, said cylinder having a nozzle at a distal end thereof,” which is followed by a transitional phrase such as “the improvement comprising,” which is followed by a recitation of the element or elements constituting the point of novelty, such as “said nozzle having a fluted opening at a distal end thereof.”

    If you read patents they are full of this the kind of turgid crap. But lets look at this. The first (non-novel) part is the cylinder with the piston — this is not patentable. But the novel part is said nozzle having a fluted opening at a distal end thereof. Do you think there is much novel about sticking a fluted end on a grease gun? I don’t. I think any engineer trying to solve whatever problem this is for would think of that in ten seconds. And that is because inventions are natural extensions of existing work. They are made when the situation arises that they can be made and need to be made.

    Like I say I have had the misfortune to read dozens of patents and they, hardware patents, are full of trivial nonsense like this. Bristling with it. I will grant you that software patents are even worse. But that doesn’t make these hardware patents all that great. And it is this pile of trivial nonsense that allows these massive companies to crush their rivals and keep us all the poorer for it.

  • neonsnake

    I’ve read, somewhere, that the advantage in economic terms is based on being first to market, not on having a patent. The incentive to innovate is based on being first to market, not first to file.

    Whilst it *feels* logical to say that no-one will bother to innovate unless they’re granted state-backed monopolies to clear the running track for them and them only, I’m not convinced that reality matches the theory.

    This isn’t an easy one. There’s arguments on both sides; I personally believe that patents are a form of protectionism, one of the big ones, alongside tariffs and other suchlike, that makes it unreasonably (and immorally) hard to compete, but I get that others don’t. Here’s a good article laying out all sides.

    So, it’s not necessarily cut and dry, but maybe doubtful.

    And, to paraphrase…if in doubt, err on the side of liberty.

    If nature has made any one thing less susceptible than all others of exclusive property, it is … 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.

    (Jefferson)

    More plainly:

    “You want your invention to yourself? Then keep it to yourself.”

    (Tucker)

  • The law is very bad at extracting the idea that might actually merit a software patent and distinguishing it from the surround.

    So you are in favor of some types of software patents (Fraser Orr, June 26, 2020 at 7:24 pm)

    No I’m dubious about all software patents because I feel the problem is innate to the domain.

    Hardware patents can indeed patent the trivial. My classic example is the one that patented the idea of having a mobile phone’s aerial come out of its base instead of its top. The novelty aspect of a patent can be almost insolently trivial. But that patent has a clear meaning. If hardware patents could exclude the trivial, could they have clear meanings and be legally sane?

  • Fraser Orr

    @Nullius in Verba
    The only way you could do that and survive would be to charge more for the drug for a shorter period

    But that is exactly what happens now. New drugs are spectacularly expensive. For example, some chemotherary drugs can cost $20,000 a month. But, as I mentioned above, the real cost of drug development is not finding new molecules, it is testing and certification. I’ll briefly reiterated what I said the Niall above: most new drugs are not new at all, but repurposed drugs used for different purposes. Many other new drugs are extremely small tweaks of existing drugs. In the case of new molecule development, this is usually done in many small labs, tiny start ups or universities, and then licensed to mega drug companies. The drug companies do the testing and licensing (because most of that billion dollars is danegeld to the FDA and its international counterparts.)

    So the point is most of the cost of drug development is the testing and certifying, and I see no reason why a drug tested and certified by you can just be copied by me without repeating (or licensing) the testing and certifying you did.

    However, if the molecule is free to copy and reuse, I can adapt it, change it and repurpose it for different uses. I still have to do the testing and certifying, but the cap on innovation is taken away.

    The fundamental problem is that drugs are very expensive to develop, very cheap to analyse and manufacture, so how do you get customers to pay for the former and not just the latter?

    That isn’t true. What is expensive is testing an certification. I have had some experience working in the medical industry, so I could tell you some stories. But let me give you one small example. I worked for Baxter Healthcare on an autopheresis device. You stick to needles in an artery and a vein (I think, I don’t remember the exact physiology), and you suck the blood out, spin it in a centrifuge, extract the plasma, mix the red blood cells with saline, and push them back in again. This allows you to extract blood plasma without red blood cells. Since red blood cells can take several weeks to replenish, it means you can only donate (or sell) blood ever eight weeks, but you can sell plasma three times a week. (A lot of students make good money doing this, in those states that make the sale legal. My memory is that they were paid $80 a donation, which is pretty nice cash.) Of course blood plasma is bristling with useful substances that are used in many medical applications.

    So the device I build wasn’t the autopherisis machine, it was a device that plugged in the back onto a connector, and which read and recorded the data produced by the machine, with additional things about recording patient details etc. It was really a fairly simple machine. Of course being medical it was massively over engineered, but that is another matter.

    The point I wanted to make about this “stories from Fraser’s life” thing is the compliance aspect. This relatively small device had a “compliance team” assigned to it, and I saw the documentation. It literally was binders and binders of paperwork that filled a small room. Now of course nobody at the government ever read a single page of all this crap, but it cost a fortune to produce. The documentation cost VASTLY more than the engineering. If you are interested…. that is one of the reasons healthcare is so expensive in the USA.

    So, I lost my train of thought, what was my point — oh yeah, the cost is in the regulation and the very expensive process of testing the drugs. And there is no reason to imagine that a copier can simply duplicate all of that. They can either redo the expense themselves or they can license it from you.

    Patents are really about protecting inventors from free riders, so they’re willing to invent.

    That is the theory, it is not at all the reality of what happens in the real world patent system. Instead large companies have floors full of lawyers cranking out patents on the eminently obvious, and then they use them, just like a patent troll, to extract royalties, or crush their competitors. If I remember rightly, Microsoft gets $15 in royalties for every android phone — for what? Some miscellaneous patents they picked up along the way. Google bought Motorola Mobile for ten billion dollars almost exclusively for their patents. I mean these large companies make patent trolls look like JV players.

  • Nullius in Verba

    “The incentive to innovate is based on being first to market, not first to file.”

    That might be true if developing the manufacturing process is the hard part.

    Consider the music business, for example. You have to spend years learning to play, write a song, compose the music, practice it, perform it, refine it, go to the recording studio and record it, edit it, market it, and distribute it.

    The first copy comes out the door, any 12 year old kid can rip the CD, make a million copies, and distribute them to all their friends for free in less than an hour. Why would anyone pay *you* for your work, when they can get the same music for free from some kid on the internet?

    So in theory, you might sell one copy. How much do you have to charge for that copy, to make back the cost of producing it?

    You are, automatically and by definition, the first to market. So explain to me, how does that help the working musician?


    The longer the delay between getting to market and the first competitor catching up, the more you can make and thus the less you need to charge to get back your development costs. Without patents, you can only produce those items for which the delay is long enough. But if the product you want costs a billion to develop, and takes only a few months to figure out how to copy, what then? How much would you have to sell in those few months?

    “This isn’t an easy one. There’s arguments on both sides; I personally believe that patents are a form of protectionism, one of the big ones, alongside tariffs and other suchlike, that makes it unreasonably (and immorally) hard to compete, but I get that others don’t.”

    Yes, it is. You’re seeking to gain a legislated monopoly, to exclude the competition.

    The usual argument against Protectionism is that the free market is more efficient, and more beneficial for the consumer, and Protectionism thus rips off the consumers to the tune of the difference between what the preferred supplier charges and what the competition charges. Absolutely true. But free markets don’t work very well for public goods – it’s a known failing. So public goods tend to be heavily under-supplied compared to the utilitarian optimum.

    There’s no need to point out how bad it is. Economists already know, and agree. What we need is some better way to fix the problem it addresses.

    So like I said, if you can find a way to design a free-market mechanism to allocate prices to public goods and externalities, and thus replace the bad, horrible, awful methods currently used to get round the failing, the world shall be forever in your debt. Have you got any ideas?

  • Fraser Orr

    @Niall Kilmartin
    If hardware patents could exclude the trivial, could they have clear meanings and be legally sane?

    That sounds like an “if I were King” question. “If I were king I’d design a perfect patent system”, but the reality is that you aren’t, and neither am I, or is anyone, so patents are subject to the usual distortions of the legal process. Your complaints about the patent system are not bugs, they are features — features to satisfy the grasping hangers on who parasitically live off the whole mess.

    And irrespective of corruption, graft and rent seeking, just on the plain facts, your idea of “trivial”, banal, obvious, overbroad and so forth may well be quite different than mine.

    But back to your point — there are plainly some truly innovative ideas purely in the realm of software. For example, the invention of overlapping windows with direct interaction type systems at Xerox was truly innovative, later being bought by Jobs, and copied by Gates. O how about many data compression algorithms like MPEG? Thousands of man hours by some of the world’s smartest people developed this. Or what about relational databases? Again, massive investments, but smart people. Or, to get out of that world but stay with software, how about AutoTune. You might not like it, but it is a true, out of the blue idea that is purely in the realm of software.

    So, I say again, if you think truly innovative hardware things can be patented, why not truly innovative software? If you strip away the trivial and banal in one, why not do the same in the other?

    I really don’t see the difference.

  • Fraser Orr

    @Nullius in Verba
    The first copy comes out the door, any 12 year old kid can rip the CD, make a million copies

    Copyright and patents are completely different things. As I discussed earlier, I am grudgingly in favor of the copyright system, though it definitely needs a lot of fixing.

    In fact there are four different types of intellectual “property”. I put the word “property” in quotes because they really don’t resemble other kinds of property at all. So, to call them that is a kind of manipulation-with- words type of spin to assume one’s conclusion. However, the four types of “intellectual property” are trademarks, copyright, patents and trade secrets. All four are completely different in nature, and to group them together as if they were the same is a mistake.

  • neonsnake

    You are, automatically and by definition, the first to market.

    That’s copyright, though, not patents. And the reality is that we have a large and thriving indie scene, propped up by live gigs, and lately by livestreamed gigs which attract £10-£15k per evening.

    Copyright is subtly different, in that it’s not about rivalrous goods, and again, the reality belies the theory. It’s not perfect, which is why Fraser and I are both “grudging” about it, but it’s not the same thing. Most importantly, the reality is that consumers are prepared to pay money directly to the producers, once they know how to.

    But if the product you want costs a billion to develop, and takes only a few months to figure out how to copy,

    But that doesn’t appear to be the case. Being first to market doesn’t appear to be a one-time thing; it appears to be continual. It’s not that you have a short and desperate window, it gives you a permanent (ish) 30% market share.

    And the thing is, even beyond any utilitarian POV…it’s still immoral. It two people spend a similar amount of money, but someone started one week ahead, and filed the patent one week ahead, and thereby prevented the other from using the product of their investment, that’s immoral. It’s still one of the big 4 protectionisms. It’s still using the state against your competitors. It’s still special pleading and rent-seeking.

    It’s still immoral.

  • Nullius in Verba

    “For example, some chemotherary drugs can cost $20,000 a month.”

    That’s cheap.

    Say it costs a billion to develop. You have 30 years to sell it, or 360 months. There are 150 people per year who need the drug for a year each because it is for a very rare condition. $1,000,000,000 / (360*150) = $18,500 a month. Now suppose there was no patent, and somebody else couuld sell the same drug for $50 a month in six months time. So you’ve got six months to get your billion dollars back. Now the cost you have to charge is a million dollars a month. Except no it isn’t, because while you might have got 150 people to pay $20,000 a month for the drug, far fewer are going to pay a million. So the cost is spread over fewer shoulders, and the price rockets even higher.

    “So, I lost my train of thought, what was my point — oh yeah, the cost is in the regulation and the very expensive process of testing the drugs.”

    Agreed. So one solution is to announce we’re going to stop testing drugs for safety and effectiveness?

    “And there is no reason to imagine that a copier can simply duplicate all of that. They can either redo the expense themselves or they can license it from you.”

    You don’t even need a photocopier. All you need to do is reference it.

    There are several problems with this idea. One is that insisting on multiple retesting requires us to spend a lot of time and money doing nugatory work that we already know the answer to. That’s inefficient. A second is that it achieves the same effect under a different legal guise – we’re still stopping anyone else manufacturing it legally but instead of calling it “patents” we’re calling it “safety regulation”. Only, there’s obviously no safety reason for insisting on everyone doing their own testing when it’s the same drug, so it’s just ‘patents’ by another name. Thirdly, it doubles the price for each company producing it. Instead of spreading their development costs over n sales, they’re in competition and so spreading them over n/2 sales, so both have to charge twice as much (no surprise, given that the overall costs to mankind of developing the drug have doubled with double-testing). And fourthly, it won’t fool anybody. Everyone knows the drug is safe, having seen the original get licensed. So they’ll cheerfully buy the knock-offs made in China, because they know it’s really the same stuff a lot cheaper.

    It’s a hard problem.

  • Nullius in Verba

    “Being first to market doesn’t appear to be a one-time thing; it appears to be continual.”

    Oh, you mean that people will always buy the first one to get there, because they’ve heard of it, even if the others are waaaay cheaper?

  • neonsnake

    Say it costs a billion to develop.

    That’s an enormous “say”. That’s our point, remove patents, and that “billion” drops dramatically.

    Information wants to be free, remember?

  • neonsnake

    Oh, you mean that people will always buy the first one to get there, because they’ve heard of it, even if the others are waaaay cheaper?

    Always? 70% won’t. 30% will. A 30% share, in retail, is HUGE.

    But, broadly, yes. They will. They’ll buy the one they’ve heard of, not the upstart, even if cheaper. Even if waaaay cheaper.

  • bobby b

    Niall Kilmartin
    June 26, 2020 at 8:45 pm

    “Hardware patents can indeed patent the trivial. My classic example is the one that patented the idea of having a mobile phone’s aerial come out of its base instead of its top.”

    Let’s be fair. (As I said before, I’m no int-property maven at all, but I’m willing to throw my ignorance out there.) There are two separate problems with the patent system that are being merged here.

    The first is the conceptual problem, which I think is being fairly discussed here. Should we protect the interests of people who devote time and effort and money into developing something useful and wanted? (Guess which side I come down on.)

    The second is the process – the system – that we have developed to administer those interest protections. That’s an entirely different subject – one that needs attention even more so than the first – but we ought not conflate the arguments.

    You develop some new hardware, or process, and then you complete the patent app. The engineering section sets out, in clear engineerese (?!), what it is about your offered improvement that is new, that fits the definition of what is patentable, and that deserves the protection of the system. You word this as expansively as possible so as to increase the chances of getting your patent.

    Your app is routed to one of the many not-so-well-trained, not-so-well-versed-in-new-tech patent intake clerks who check it over for form. They’re the ones who make the decision that “a mobile phone’s antenna coming out of its base” satisfies the legal definition of what can be patented. That’s where the system falls down, because such a claim does NOT fit the definition of what can be patented under laws on both side of the Atlantic.

    So, everyone gets their patent, including for things that ought not be patentable. The philosophy is, we’ll catch those errors in the trial process – when someone seeks to enforce a patent, that’s when we’ll put the claimed innovation to the test. Many patents are dissolved at this stage.

    But, as usual, the process is the punishment. If Microsoft sues me because I breath air and one of their patent apps snuck through the process and gives them a patent on lungs, they’re going to lose at the end of the contest period – the patent should never have been issued – but I’ll be broke well before that happens.

    That’s not a problem with the concept of patents. That’s a process issue. All we need to do is fund the employment of thousands of people who are capable and educated enough to discern the nugget of innovation in an app (or its absence). We need thousands more clerks at the app stage, and they need to know what they’re doing.

    So, I end up wanting the concept of patents to continue, but knowing that our current system is going to make that impossible.

    But . . .

    “Information wants to be free!”

    So does my wallet, but that doesn’t mean it’s honest to take it. 😉

  • Fraser Orr

    @Nullius in Verba
    Say it costs a billion to develop. You have 30 years to sell it, or 360 months. There are 150 people per year who need the drug for a year each because it is for a very rare condition. $1,000,000,000 / (360*150) = $18,500 a month.

    So you think taking the absolute worst case scenario (where only 150 take the drug) and extrapolate it everywhere is a fair approach? I don’t. I think I have already said that were we to have no patents then some things that would be invented under patent would no longer be invented. There is no doubt that that is true. But exactly the opposite is true too. Things that would never be invented under the patent system would be invented without patents. Because the new inventor is not entangled in a mess of patents that hinder every step they make. I create software products and I live in constant fear of tripping over someone else’s patent on something I have never even hear of, suing me out of business. How do you think that impacts my ability to innovate?

    And consider this, as I mentioned earlier, Google spent ten billion dollars buying Motorola for its patent portfolio. Imagine instead an innovative company like Google had spent that money on R&D? What did Google not invent so that they could buy that patent portfolio?

    Now suppose there was no patent, and somebody else couuld sell the same drug for $50 a month in six months time.

    But that is nonsense. It takes ten years to take a drug from molecule to market. And how come they don’t have to pay for testing and licensing the same as the originator? Perhaps they can shortcut it by licensing the testing done by the first company, but then the originator can get compensated. (Of course that is just one option.)

    Agreed. So one solution is to announce we’re going to stop testing drugs for safety and effectiveness?

    So that is a ridiculous assertion. I never said anything even vaguely resembling that. On the contrary, at some length I explained that the copier would have to go through the same testing and regulatory process as the originator. I could discuss here drug regulation and whether it is a net good or not, but I feel to do so would take us off on an unfortunate tangent.

    You don’t even need a photocopier. All you need to do is reference it.

    Not if the information is copyright and you have no right to reuse it. Plus, honestly, I think you might not understand how the process works. If, for example, you, Pfizer starts manufacturing one of its drugs in a new plant, that whole plant goes through a complete re-certification process. You can’t say “hey my drug is the same as Pfizer’s, therefore please approve it based on their research”. The FDA (or foreign equivalent) will not just take your word for it, you know.)

    There are several problems with this idea. One is that insisting on multiple retesting requires us to spend a lot of time and money doing nugatory work that we already know the answer to.

    But we don’t. How do you know a drug made by someone else is manufactured to the same purity standards, and is as effective as another “similar” drug? Plus I don’t think you can do the “waste of money” argument when you consider the massive costs patents place on the rest of the world.

    A second is that it achieves the same effect under a different legal guise – we’re still stopping anyone else manufacturing it legally but instead of calling it “patents” we’re calling it “safety regulation”.

    No, safety regulation is safety regulation — a determination by a certifying agent that the drug is safe (and, in some cases, effective). Patents are government granted monopolies. They bear no resemblance to each other.

    Thirdly, it doubles the price for each company producing it. Instead of spreading their development costs over n sales

    The costs of patents imposed on the economy is massive. I’m afraid you can’t begin to use a “it is cheaper this way” argument. If the second drug company wants to they can license the testing from the designers. In that case you end up at probably the same place as with patents. But you don’t have to do that. You can do other things, including innovating and making the drug better.

    And fourthly, it won’t fool anybody. Everyone knows the drug is safe, having seen the original get licensed. So they’ll cheerfully buy the knock-offs made in China, because they know it’s really the same stuff a lot cheaper.

    Well how is that any different than today? People buy cheap knock off drugs from China and India all the time. So I am not sure what your point here is.

  • bobby b

    As an afterthought, how do I go about protecting my property interests in any new live-saving drug that I develop in the absence of patent?

    It’s going to be clunky and unwieldy and expensive (for the drug-takers). Not one pill of mine is going to hit the streets (or the reverse-engineering lab of my competitors.) I’m going to develop a chain of clinics in which my drug is not only dispensed, but administered, and the patients are going to stay in there until the drug in their system can no longer be extracted and analyzed.

    And I’m still going to make my $20B – it’ll take longer – and no one is going to have the benefit of my invention unless they can afford my “here’s your pill and your costly hospital room for three weeks” prices.

    I don’t see that as an improvement on the human condition. DRM made things worse for everyone, and so will this. (Remember that DRM was developed because the legal system protection had failed.)

  • Fraser Orr

    A couple of follow up thoughts. I think part of the challenge here is an overestimate of what “innovation” really means.I work in fields that do innovation all the time and so I see it. For example, right now I am involved in a project which is creating a system (software and hardware) that will help surgeons dramatically improve the outcomes and recovery times of a very important class of surgeries. I have not seen the overall budget so I am not revealing any secret information, but I would estimate that the budget for the creation of this project, before sales and marketing costs is in the region of $30-50 million. Now what percentage of that is “innovation”? The innovation involves someone (in this case a surgeon) coming up with an idea, and then a progressive development of the idea with interested parties. That probably constitutes less than 2% of the cost of this development. The vast majority of the cost is in engineering. The process of taking an idea and converting it into a viable product, something that works correctly, that has been developed so that it can be manufactured and produced in sufficient quantities and so forth.

    Innovation is a very small part of product production, a very small part of the cost. Were some competitor to come along they would have to do all this engineering themselves. Would it cost 98% as much? It is hard to say. To all intents and purposes it would cost basically the same, give or take. But this company would have four years head start. Moreover, first mover isn’t just about extra years of billing, it is also about extra years of experience with customers and adapting to their needs.

    So I think the piece I see missing here is that innovation isn’t actually all that large a piece of the cost. This is why I have been banging on about testing and certification. It is an important part of the engineering cost, and so worrying about the cost of innovation doesn’t seem all that important. Coming up with a good idea isn’t all that valuable really. Good ideas are ten a penny. What is the real challenge in bring useful products and services to the market is the engineering cost of producing them.

    However, using patents to lock other people out of spending the dollars on the engineering? That is very important. Eliminating the beneficial effects of competition? That is devastating.

    It is also worth noting that surgeons are some of the most innovative people on the planet. They, on the other hand, freely share their knowledge, the new techniques they have developed, in medical journals. Apparently innovation can take place even when there are no patents in play.

    Another thing to consider is this: for the small guy, the guy who truly does innovate, and even spends all his dollars to fund the massively expensive engineering process, to that guy his patent is basically unenforceable. If some big guy comes along and steals his idea he probably doesn’t have the resources to sue, and moreover his suit would probably fail simply because the big company has six thousand patents in the same area, and they will find one to counter sue with, inevitably crushing him. The best outcome he can hope for is that the big company offers to buy him out at a big discount so that they can add his patent to their war chest, and be better positioned to sue the next schmuck that risks it all with his big idea.

    Some of bobby’s comments above are particularly significant. A patent isn’t really a protection, it is a tool with which to sue. Who the hell except the big boys can do that? As far as I know patent lawyers do not, generally speaking take things on on a contingency basis, and so if you have a great idea, ironically probably your most profitable route is to sell your patent to a patent troll who are set up to enforce it.

  • neonsnake

    So does my wallet, but that doesn’t mean it’s honest to take it. 😉

    Of course, but that’s because if I take your wallet, you no longer have access to it, or the contents. I’ve stopped you from using it.

    The same is not true of an idea – if I copy an idea, I’m not preventing you from using it, or from profiting from it.

    If you come up with wonder drug X, you get all the sales and profit, and brand loyalty, whilst I’m still scrabbling to replicate it. If you’re so inclined, you can charge exorbitant prices for the period when you’re the only game in town.

    But when my product hits the market, you have a problem. Assuming my costs are the same, I decide to undercut you. I’m still profitable, and so are you – just less so. So we enter a price war, and eventually the products end up being priced at “approaching” cost value.

    Many more people now have access to wonder drug X – an upside. You and me are making less profit per tablet – a downside.

    If we want to make more profits, so that we have spare $50 notes to light our cigars with, we’re going to need to innovate – either come up with more efficient ways of producing our wonder drug, or coming up with one that’s better, or cures a different illness.

    Many more people now have even cheaper wonder drugs! And a new one, as well! – an upside.

    We’ve had to work a bit harder and apply ourselves to making new drugs/more efficient methods – a downside.

    Competition is good for consumers. It’s only bad for the company – but meanwhile, that company is taking advantage of competition amongst the suppliers of whatever raw materials it’s buying in – so it’s happy for competition to exist on that side, and would hate for one of its suppliers to have a monopoly. It would be horrified!

    One the reasons I support free markets is that truly competitive free markets drive down the price of goods to “approaching” cost, which means that more people can afford more stuff.

    For me personally, it’s not about individuals becoming massively wealthy off the strength of one good idea (even if it was the case that Crazy Uncle Fred could do that). I don’t really care if they do – good for them! – as long as they’re not doing it by stifling competition.

  • I agree with bobby b’s distinguishing of two separate issues in this discussion in June 26, 2020 at 11:10 pm.

    My post Barking Parking Teslas incidentally says what I (and Milton Friedman) think of Fraser Orr’s suggestion we replace patents with government safety agencies. I’m with Milton, who proposed abolishing the government agency (not the patent system).

    Google bought Motorola Mobile for ten billion dollars almost exclusively for their patents. I mean these large companies make patent trolls look like JV players. … What did Google not invent so that they could buy that patent portfolio? (Fraser Orr, June 26, 2020 at 9:44 pm et seq)

    It was fear of the patent trolls, and knowledge that their wealth made them a preferred target, that made Google seek a defensive portfolio.

    (Of course, it was fear of what happened in the 30-years war that made Prussia become “not a state with an army but an army with a state”. Prussia acted defensively at first – then, ah, not so defensively. 🙂 )

    I’m not aware of Google acting like a patent troll (please tell me if you know a counterexample) but I see how Google’s ‘defensive’ patent portfolio has some potential to become another weapon in the PC war.

    However these are software patents. Hardware patents, drug patents – each domain has its current state of genuine-innovation versus trivial-patent practice and can-resolve versus toss-a-coin domain-versus-law understanding. No-one (unless I missed it) has yet described an example showing that other domains have the same undefinable-in-law problem that software patents do.

    That is not a criticism – people have every right to comment about their own concerns, not mine – it is a summary. And I note that I have not really described a detailed example myself – that would be very long – just asserted my domain knowledge. The idea “This kind of thing can’t be easily characterised (to non-domain-experts)” doesn’t lend itself to being characterised. 🙂

  • Nullius in Verba

    “The vast majority of the cost is in engineering. The process of taking an idea and converting it into a viable product, something that works correctly, that has been developed so that it can be manufactured and produced in sufficient quantities and so forth.”

    Some people would call that ‘innovation’, too. It’s a large part of what a patent protects. (Indeed, as I understand it, a patent can’t protect the idea, only the implementation of it.)

    But I wasn’t attaching my point to any particular definition of the word ‘innovation’ specifically. The issue is that there’s a costly process of designing something that works, that for many products – not all! – is far easier than that to copy once you’ve seen an example. It’s what’s known as ‘reverse-engineering’. Your engineers expensively figure out what to make the device out of, how to arrange the bits so it can be easily made, easily assembled, and so it doesn’t fall apart in use. They solve all the engineering problems. And then somebody else comes along and looks at it, and has the answers to all those questions at a stroke. They still have some work to do, but far less than the original developer did.

    Different sorts of products have a different balance between what’s hard to develop and what’s easily copyable. For some products it’s the idea, for others it’s the engineering, for others it’s the aesthetics and styling, for others it’s the manufacturing process. Music CDs are trivial to copy. A new microchip design is very definitely not easy to copy. What you see in your industry is not necessarily what everyone else sees in theirs. It’s another problem with the one-size-fits-all nature of patents and copyrights.

    But as I keep saying, that’s not the question. The question is how do you deal with the problem of public goods in a free market way? How do you pay for the development of stuff that’s expensive to develop but cheap to copy? It doesn’t help to just say “These specific examples are not really public goods.”

  • neonsnake

    Well, maybe all the people who would benefit from the good would chip in?

    Maybe a council would vote on it?

    Maybe the company that would benefit would have to cover the externalities?

    There’s a thousand different solutions, and one of our absolute hallmarks is that we don’t mandate one over another, we trust that human ingenuity will find a way, and that differing communities will find different ways.

    It’s not necessary to have all the answers, in order to point out a problem. And certainly in the case of statism, the moral bad of inhibiting competition by state means outweighs the issue.

    Again – we’re not required to have the answer. That’s what human ingenuity is for, and is a pillar of our thought. We also believe that there is not one answer, but many, each of which is relevant to the particular community that comes up with it.

    Indeed, to prescribe an answer would be…”wrong”…and would be anti-libertarian.

    A lot of the arguments about public goods assume that people are purely self-interested and selfish, something that is not borne out in reality. Some people are, sure, but we’re not really interested in those people. They’re not “our type”.

    I recommend a swift Google of “public goods and Bryan Caplan”.

  • Fraser Orr

    @Niall Kilmartin
    I agree with bobby b’s distinguishing of two separate issues in this discussion in June 26, 2020 at 11:10 pm.

    Sure, and I have tried to be fastidious separating the two issues above. But perhaps I was not successful. However, bobby b did not articulate the third issue which is — do they work? The patent bargain is you get thirty years of monopoly which makes invention more profitable, and therefore there will be more invention. This is the rationale plainly stated in the US Constitution (though they say it in fancier words.)

    But is that true? Does giving these monopolies encourage innovation (on net.) The answer is surprising — there have been very few studies conducted on this question, this foundational premise of the patent scheme, and their conclusions are either that there was either tiny effect or no effect, and several concluded that innovation was decreased by patent systems. I read these studies years ago, so don’t have them handy, but if that is true, it is pretty shocking. If you are granting a monopoly to someone then you had better be pretty damn sure that it is giving you what you want.

    It is also worth pointing out (and this falls more under the “the system doesn’t implement the idea well” category.) 28 years? I mean that might have been reasonable in 1790 when the first patent laws were passed, but 28 months is a long innovation cycle today.

    In regards to Bobby’s comparison to his wallet and his BMW (apparently the money is good for lawyers in MN 🙂

    The comparison is not at all valid because “intellectual property” does not have the same characteristics as regular property. Most importantly, bobby and I cannot own his wallet at the same time without one or both of us having less value out of it. This is a very important distinction and most property law seems to be based around this premise that one person’s loss is another’s gain. (Though IANAL).

    However, even Bobby and Niall themselves concede that they are not the same. Bobby does not get granted exclusive use of his wallet for 28 years (assuming he renews after 14 years.) He gets it forever. But we seem to accept that patents are not like that. They are fundamentally different than wallets and cars, and so applying analogies betwix them is not productive.

    But how is can patents slow down innovation? Consider this: James Watt patented the steam engine (actually he improvement to it) in 1769. The British Parliament actually passed a special act of Parliament to extend this patent out to 1800. Almost to the day his patent expired there was an explosion of new steam engine related patents. Why? Because i that 40 years innovation in the steam engine was completely put to a stop by anyone except James Watt. Nobody could invent new steam engine ideas derived from Watt’s idea simply because Watt had the steam engine all locked up. Imagine instead they had been innovating all that time. Forty extra years of innovation. But it is more than that. Ten years into this period would be new ideas that could be innovated on. And ten years after than the new new ideas innovated on. The nature of invention is exponential growth, so delaying it with patents doesn’t just slow things down a bit, it slows things down a LOT.

    Now I grant you that the incentive of extra money that the patent promised might have increased the motivation to innovate, but my point here is that there are two sides to the coin. Patents provide both an incentive to innovate and provide a hurdle to innovation. And we must look at the evidence to see which of these two forces dominates. The lack of studies tells you that “they” maybe don’t want you to know the answer. The studies I have seen are not at all favorable to the patent bargain.

    My post Barking Parking Teslas incidentally says what I (and Milton Friedman) think of Fraser Orr’s suggestion we replace patents with government safety agencies. I’m with Milton, who proposed abolishing the government agency (not the patent system).

    I’m not sure what the Barking Teslas issue is, and I must say I am curious 🙂 But my suggestion is not at all to replace patents with government agencies (who, FWIW, I would also like to privatize.) My point here is that that testing is simply a part of the engineering process, and going from an innovation to a product is far more to do with engineering than innovation, and both people must bear the cost.

    I might offer China as an example of this. Why is it that China can knock off these patented things? I mean obviously it is because China ignores the patents (and also partly because certain forced tech tranfers involve trade secrets — something that I absolutely should be protected by contract and license.) But I have worked with Chinese manufacturing firms before, and the truly terrifying truth is that they are light years ahead in that engineering process I mentioned. Why? Massive competitive pressures within places like Shenzen and Shanghai force them to be extremely effective and efficient. It used to be their labor costs were lower, which is much less true than it used to be, and for sure they are not burdened by massive American environmental rules. But let’s just put that aside for a second. Perhaps the lesson here is that patents allow sclerotic engineering. Under the protection of a patent, and without competitive manufacturing, the patent holder can run up the engineering cost and the product cost because they have very little reason not to.

    My lesson from producing consumer electronics is China is that we Americans (and Brits) should fear them not beause they have cheap labor, but because they are MUCH better at manufacturing than we are. And we can hide that problem under the protection of patents.

    Google bought Motorola Mobile for ten billion dollars almost exclusively for their patents. I mean these large companies make patent trolls look like JV players. … What did Google not invent so that they could buy that patent portfolio? (Fraser Orr, June 26, 2020 at 9:44 pm et seq)

    Sure, but that doesn’t really answer my question. If they didn’t have to, imagine what they could have created with all that money?

    I apologize. These comments are getting too long and time consuming.

  • bobby b

    Aside from everything else, quickly:

    “I apologize. These comments are getting too long and time consuming.”

    Don’t. They’re interesting, no one is ever forced to read more than they would like to read, and the internets aren’t going to run out of “d”s and “m”s any time soon.

    And if you meant that the comments are too time consuming for you rather than the reader – I’ll just add, thank you for taking the time.

    The problem (to me) of internet comments is that they hit the same argument highlights and headlines, over and over, and seldom delve into the whys. I’d rather read the whys. Then, it’s not just a bunch of people proclaiming positions, but rather people offering support and reasoning for their positions. That’s how we all learn.

  • NickM

    Fraser,
    I second bobby here. Yup, it was a long comment but it needed to be because this is a complicated and complex issue and a very important one.

    I had always thought law was dull. Then I wound up sharing a flat with a flat in 95/96 with an LLM student (I was doing MSc Astrophysics*). Her dissertation (for which she got top marks) was on IP in the fashion industry. It opened my eyes – an not just because it was on female swimwear garments (the title was, “Hands off my pants!” and was to do with something somewhat similar to the slightly earlier Apple/MS “look and feel” legal malarkey.

    I guess I’d been set-up aforehand for this interest by owning an Amiga up until a couple of years before. Amiga’s didn’t have a “desktop” – they had a “workbench” – and that (partly) saved Commodore legal grief from Apple. Worked much the same way but…

    Well, it makes ya think.

    *We were both in a QMC, London gaff in Stepney.

  • Fraser Orr

    I hope I am never a “your argument sucks, go read this massive paper to prove youself wrong” kind of commenter. I hate that and think it is really dishonest. So I have tried to set up the arguments against the patent system about and tried to defend them. But for those of you who are interested in reading a more in depth paper on the subject I’ll offer this link. It is from that hive of radical American anarchist thought, the Federal Reserve Board.

    https://s3.amazonaws.com/real.stlouisfed.org/wp/2012/2012-035.pdf

    It is 24 pages, so get a cup of coffee before you start.

  • bobby b

    FWIW, I’ve always tried hard to distinguish that logical dichotomy between “we need to reward the tireless inventor for his work, on a massive enough scale so that the incentive is always strong to improve the human condition”, and “here’s your patent system, isn’t it great!”

    I’d still fight hard for the first – pure Randian thought here – but you’ve just about convinced me that what we have doesn’t serve that first goal. I have theoretical knowledge of patents, not practical, so sometimes my arguments can ignore the practical.

    Printing your paper now for reading material tonight.

  • Nullius in Verba

    Following on from the dark web discussion at the top of the thread, I noticed this story just hitting the news. Just as a demonstration of what’s possible.

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