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Comment by projectramo | Hacker News Reader

There is a theory that all above market profits are generated by government granted monopolies.

So, for instance, software is protected by patents, oil and gas is protected by mineral rights, drugs are protected by patent law, entertainment is protected by IP rights, and so on.

In so far as there is competition, it often arises when the rent-seeking motivates people to disrupt the government protection by making it useless.

In software, people have lived with that since the beginning because it moves so fast. But even in slow moving fields like energy, we see new tech rendering the old protections less important.

I am not saying society has not paid a steep price for rent seeking behavior but that it has been part and parcel of all capitalism forever, and not unique to the American experience.

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That theory falls under the Econ 101 fallacy -- assuming perfect information dispersal, instant job-switching, instant production ramping..

"First, let's assume the cow is a sphere".

> "First, let's assume the cow is a sphere".

It is worse than that, because at least physics is validated by experimental data.

Much of (macro in particular) Economics is a set of axioms that are seldom predictive.

And yet, people swear by them as though they have the same validity as physics. I never really understood that mentality.

That's because they're what people _believe_ - their politics - an act of faith not dissimilar from religion. The set of econ axioms people espouse demonstrates their own world view - what they stand for.

In a previous age, these would be moral principles and social norms - now it's political beliefs.

This is an interesting point, and I've been giving this a great deal of thought. The United States is surprisingly religious for a developed Western Nation, and my theory is that if people can be brainwashed into accepting things "on faith", then that can be extended to other things as well, such as facts. Maybe that can explain the huge numbers of climate change deniers, anti-abortionists and other anti-intellectuals in the US?

Beliefs ~= identity. Cite "Democracy for Realists".

Because the monopolies have exerted pressure on public education, including universities, to churn out advocates for the corporations bottom line.

With no basis in reality, we've brainwashed people to believe the bottom lines of the elite are to be protected. That's the outcome sought of our educational system.

It fascinates me how, on the one hand, we complain about how lazy people are. How much inducement the proles need. "Oh they're just lazy. Push em harder."

If we need to push people that hard, perhaps "economy of effort" is built into the species. It's a weird cognitive dissonance.

"They want something for nothing! But I want to maintain my elite status built upon your efforts!"

But that challenges the basis of elite power. If we all quit producing for them, they lose. So we're "induced to produce" under the constraints they define: no food, shelter, healthcare.

This is unfortunately too close to the truth. One thing I would like to add though is that despite the fruits of labor accruing disproportionately to the elite, the system has managed to lift up everyone else as well, right? So the system does work, and I wonder what would happen if it was changed to be more egalitarian....

> the system has managed to lift up everyone else as well, right?

By some measures, all of which fail to account for the fact that relative deprivation is a substantial source of experienced disutility.

Its true, but I'm not sure whether I would choose to be born in a Cholera ridden mid 1850's London or the Ghettos of Inner-City Houston today. We've solved some problems and now face others of course, but my question is whether the earlier problems were of a different kind...

One thing I would like to add though is that despite the fruits of labor accruing disproportionately to the elite, the system has managed to lift up everyone else as well, right? So the system does work [...]

That really depends on the definition of »works«. If one is satisfied with the people doing the heavy lifting being a bit better off while a few overseeing everything are extremely better off, yes, then it works.

Sure, but that's not a unique byproduct to this system. In fact, I think an argument can be made that it's a designed byproduct. We could uplift many more, but we don't. A little bit of uplift, but not too much, or the wheels come off for the power brokers.

There are a other systems that we have at least some historical evidence to show will produce even better outcomes for the majority.

The problem is those are undermined almost as quickly as they are brought up. See post about brainwashing people to protect the bottom line.

People point to places like Venezuela and USSR as examples of socialism not working, for example. While ignoring that both those states were not managed by the working class (as classical socialism typically calls for), but elite masters, their bank rollers, and external forces pushing them to abandon their ways for western capitalism (economic sanctions, cutting off access to necessary trade).

> Because the monopolies have exerted pressure on public education, including universities, to churn out advocates for the corporations bottom line.

Not only that, we fail to realize the continuing incentives for them to act in that way, even when acting as "researchers". Here is a highly relevant Propublica investigative piece on academic economists as consultants: https://www.propublica.org/article/these-professors-make-mor...

Because roots of these theories are in Physics. Psychology > Biology > Chemistry > Physics.

Yes. Macroeconomics is secular theology. The global economy is so vast and interconnected that basically none of the theory can be scientifically tested.

Apparently at Renaissance Technologies they love hiring astronomers because as an astronomer you are used to modelling systems that are completely beyond human scale based on data from observations that cannot be repeated.

No one would argue that astronomy isn't a science. Traditional university macroeconomics is a different beast. Comparison with astrology is apt.

It might have something to do with that the education for being an astronomer starts with years of postgraduate pure mathematics ...

> "First, let's assume the cow is a sphere".

"There is a story that has been going around about a physicist, a chemist, and an economist who were stranded on a desert island with no implements and a can of food. The physicist and the chemist each devised an ingenious mechanism for getting the can open; the economist merely said, 'Assume we have a can opener'!"[1]

Yanis Varoufakis, after the drama surrounding his (very) brief term as Greek's Minister of Finance describes[2] the problem simply and plainly: "Understanding economics well impedes an understanding the economy." His continued explanation why [ibid] might be the ultimate example of how easy it is to sell bullshit as long as you dress it up properly with the trappings of math/stat/logic.

[1] https://en.wikipedia.org/wiki/Assume_a_can_opener

[2] https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355

Lots of innovation in tech happened despite patents because of ideologues like Stallman and the gpl/open source movement which left lots of software which could be used to disrupt monopoly. Not because it moves fast. If people were playing that game companies like Google would not exist or at least be much much slower in growth and what they have been able to accomplish.

The goal of a capitalistic government is still unfortunately to have a wholly predictable economy. There is competition, but only until a winner is declared, i.e. a monopoly is granted. After this the rents that the winner charges can be raised and lowered freely, but in a controlled manner, in order to manage where and when the value is actually generated.

This gets weird with software businesses as these companies tend to insulate from losses relatively well. This coupled with the fact that in some markets there is no way to generate additional value without a huge public investment happening upstream (utilities) is why a lot of VC goes so crazy for it. Keeping the cash flowing is the only way to avoid being taxed profusely – All you can do in some situations is raise rents and spend hastily, for better or for worse.

Software isn't protected by patents - it's just IP laws as well. You can't patent software in general. Maybe the look and feel of your product, but not the functionality.

Maybe it ought to be this way, but it's clearly not. MP3, GIF, patent trolls, and the Eastern District of Texas are all well-known examples of software patents.

In the US methods of doing things can be patented. That includes software. Look up MP3, LZW compression, or perhaps IBM's 2100 algorithm patents over the fifteen years from 2001 to 2016.

It's being narrowed, but it still exists. Until rather recently many courts would recognize "do well understood process X, but on a computer" as patentable.

http://blogs.gartner.com/doug-laney/patents-for-algorithms-h...

https://news.ycombinator.com/item?id=8310084

http://www.legalmatch.com/law-library/article/what-cant-be-p...

Maybe it's just me, but as far as my experience goes, the App store and Google Play, and to a much lesser extent Steam have done much, much more killing my ability to make a profit on software than patents ever have.

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