A sure sign that this is completely, utterly, decoupled from market forces is the way that a 5M-person streaming platform (which likely has negative margins or is struggling to make profit) is expected to pay $0.45/user, while Netflix is expected to pay 1.5 cents per user.
I would guess that this is because the larger the number for major players, the more incentive they would have to invest in supporting open standards (or try and get a standard of their own).
This is evidence that the patent system is not doing what it's supposed to be doing imo.
I sometimes wonder what the consequences would be of stipulating that patents had to be uniformly licensed to all interested parties without exception. Also that you couldn't decline to offer a license - you had to set reasonable terms and then accept all takers unconditionally.
I realize that's never going to happen and would probably have lots of unintended consequences. It's just a thought experiment after all. I find it interesting to think about because R&D can still be recouped under such a model which ... is kind of the entire (supposed) point of the system. Allegedly.
If nothing else we would presumably have seen mass market epaper and 3D printers much sooner.
It is commonly known as ‘Fair, reasonable, and non-discriminatory (FRAND)’. Some standards organisations will only accept contributions where a patent owner agrees to license them under FRAND terms.
> I sometimes wonder what the consequences would be of stipulating that patents had to be uniformly licensed to all interested parties without exception.
Isn't this the definition of FRAND which nearly the entire interview with the lawyer from the article is about?
Yes but I wonder what the result of applying something substantially similar to that to the entire patent system without exception might be. Also I had in mind "uniform" in addition to "reasonable", ie holders would be permitted only a single set of license terms at a single rate with zero difference regardless of size, volume, etc. Maybe being permitted to change the terms on offer at the end of every 5 year period or so. Or something vaguely like that anyway.
It's really just a thought experiment about how you might kill patent trolls as well as the asymmetric advantages that large corporations enjoy while still maintaining the spirit of funding the R&D done by participants of all sizes.
> "free market" is often used as a dogma against companies that are actively harmful to society
This is a predominantly America-specific piece of propaganda, and it's pretty recent.
Adam Smith's ideas are primarily arguments against mercantilism (e.g. things like using tariffs to wield self-interested state power), something he showed to be against the common good. The "invisible hand" concept is used to show how self-interested action can, under conditions of *competitive markets*, lead to unintentional alignment with the common good.
Obviously that's a significant departure from the way it's commonly used today, where Thiel's book has influenced so many entrepreneurs into believing Monopolies are Good.
But the history of this is very Cold War-influenced, where "free markets" were politically positioned as alternatives to the USSR's "planned economy", and slowly pushed to depart further and further from Adam Smith's original argument about moral philosophy.
The government is a rare example of an extremely strong monopoly and not just a duopoly or a company holding significant marketshare. And yet people never seem to criticise it on those grounds despite it suffering from all of the same problems that corporate monopolies are accused of.
The amount of political control individuals have in a democracy is much less than people think. I get to vote every few years for a small preselected handful of representatives, none of whom represent me or my views, and that vote is usually meaningless anyways. In my political life none of the parties I have voted for have won an election. So tell me how much control of the government do I have? How much do any of us have? Especially when the government itself often goes against the wishes of their voters anyways. The reason democracy is preferable to a dictatorship is because it prevents the government from doing things which are widely unpopular, like committing acts of genocide and political violence. But that's it really.
Remember, governments have a monopoly in areas of life that impact everybody constantly. Private monopolies do not, in every case you can simply ignore them and not purchase their products, and by doing so you exert more control over them than you do casting a meaningless vote every few years.
The idea of democracy being will of the people is pure fantasy. It's useful to prevent governments from doing really bad things, that's it. It doesn't even matter who you vote for, broadly speaking. Just that you are able to exert that pressure.
It has been funny to watch the rise of "China is beating us" rhetoric against the steady backdrop of "mercantilism is obsolete/bad" dogma, because the elephant in the room is that China has been running a textbook mercantilist playbook.
Looks to my uneducated eye like China has been enforcing competitive markets internally, with consistent economic policies. Meanwhile the US has stopped enforcing antitrust altogether and keeps violently changing its mind about economic policy every four years.
And then externally Chinese policy is oriented around suppressing the value of its currency, which is basically a monopolist's tactic--artificially lowered prices in order to crowd out competition.
I think that's mercantilist-ish, but kind of a modern version?
It's definitely the opposite of what the US does, the currency is the world reserve and therefore drives the price of the dollar above what it would be without trade, which I guess makes exporting from the US much more difficult?
Anyone who is an expert in global economics please correct me here :)
I mean they did execute a wealthy banker a couple years ago. So I think the mercantile class occupies a different place in society there than in America
> Thiel's book has influenced so many entrepreneurs into believing Monopolies are Good.
Haven't read his book, but the idea that monopolies are good isn't typically made in a vacuum, it's made relative to alternatives, most often "ham-fisted government intervention". It's easier to take down a badly behaving monopoly than to change government, so believing monopolies are better than the alternatives seems like a decent heuristic.
>Haven't read his book, but the idea that monopolies are good isn't typically made in a vacuum, it's made relative to alternatives, most often "ham-fisted government intervention". It's easier to take down a badly behaving monopoly than to change government, so believing monopolies are better than the alternatives seems like a decent heuristic.
What? How is the first alternative poor government instead of multipolar competing companies? When was the last time a Monopoly was actually broken up in the US? ATT/Bell 50 years ago? lol
A Monopoly implies an organization powerful enough to stop competition. Seems like this solution that relies on competitors is fatally flawed. If there are enough competitors to meaningfully compete then there isn't a monopoly.
This seems like a classic straw man argument. Plutocratic oligarchs have been making the argument that private monopolies are better than representative democracy at basically any societal function for decades without any actual data.
This seems like a classic straw man argument. Plutocratic oligarchs have been making the argument that private monopolies are better than representative democracy at basically anything for decades.
Economic behavior is inherently game theoretic - agents take various actions and get some positive/negative reward as a result. Whether an agent's reward is positive or negative and of what magnitude, depends on the strategies employed by all agents. If some agents adopt new strategies, the reward calculus for everyone involved can completely change [1].
Over the past few centuries, countless new economic structures and strategies have been discovered and practiced. The rewards for the same action today and in the past can be completely different due to this.
So to me, if someone claimed more than a few decades ago that certain economic strategies and structures are good or bad, its simply not worth listening to them, unless someone reconfirms that the old finding still holds with the latest range of strategies. In that case, the credit and citation goes to that new someone, not the ghosts of the past.
Game theory is just math. As with any math, the calculations can all work out, but that says nothing of how it reflects nature. All you can say is that if the axioms are all true, then this is the necessary outcome. Look for string theory as a cautionary tale here.
Game theory assumes rational systems. But we have over 6 decades of behavior science which contradicts that fundamental assumption. Economic behavior is not necessarily rational, and subsequently it is not inherently game theoretic. You will find plenty of dogmatic, idealistic, superstitious, counter productive, etc. behaviors in an economy. You need psychology, and not just math, to describe the economics which happens in the real world.
Game theory definitely does not require rational agents. Game theory says there are agents with certain specified strategies. Whether a strategy is rational from the underlying theory of value the agent adopts is completely separate matter. For example, its very common to study agents who always do one action no matter what others do or what the reward function is. Hard to call such actors rational, but that does not stop as from studying them.
When I said rational I meant it in this way. That rational agents will perform in a way in which maximizes their utility (or reward function). In psychology we call this theory homo economicus[1]. Regardless of theories of value, perceived rewards, and utilities, human beings have biases, prejudice, superstition, dogma, etc. etc. In real economies these non-strategic behaviors are consistently observed. This is why I say that economics are not just game theories, they are psychology, sociology, religion, as much as they are zero-sum games between actors.
> Hard to call such actors rational, but that does not stop as from studying them.
This is precisely why I object to your first post. “Shut up and do the math” has not done the wonders which string theorists had hoped. Game theory is a perfectly fine way to mathematics, and to study certain strategies, but it tells us nothing about the nature of economies in the real world.
> if someone claimed more than a few decades ago that certain economic strategies and structures are good or bad
As you point out, it is all game theory.
But things that arrange for the game to be more beneficial to everyone, that align our interests more, deserve to be called "good", regardless of their inability to universally do so.
The latter would be an impossible bar for anything.
Where I find things frustrating, is when someone thinks because something is "good", it somehow becomes "enough". (Think, capitalized versions of different economic schools of thought.)
Just game-theoretically, suppose you bet $100 on some disaster.
That disaster causes $10,000,000 of harm, but only causes you $90 of harm individually.
You've gained $10, but your $10 gain is a millionth of the harm caused.
Generally-speaking, there's an enormous asymmetry between the cost to create/build and the cost to destroy. So now we have a mechanism by which individuals have a financial incentive to cause harm...
Don't these markets create a mechanism for society to race to self-destruction?
Search for "assassination markets", which is a longish treatment of this idea. Specifically, people collectively can bet large sums of money that X will not be killed Thursday at 5pm. And anyone can take the other side at insanely good odds...
Prediction markets advertise insider trading as a feature, and enforcement of financial crimes is a racket anyway. If you know the right people, make the right campaign contributions, laws just don't apply to you.
Pessimistically, i imagine that's what they meant by "enormous asymmetry between the cost to create/build and the cost to destroy". Like its a lot easier to destroy an art piece in a museum than to create one.
Yeah exactly like this. I like being able to approve/deny requests or "learn" from a good run and apply that policy to later runs so I can leave them unattended and know they can't access anything aside from what I approved.
I would guess that this is because the larger the number for major players, the more incentive they would have to invest in supporting open standards (or try and get a standard of their own).
This is evidence that the patent system is not doing what it's supposed to be doing imo.
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