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Comment by beefield | Hacker News Reader

It's not that new idea. See Intellectual Property in its many forms. For some reason, when we try to figure how to manage abundant resources, only solutions we come up with are to make them artificially scarce. Which makes really little sense. But then, economics is a "science"[1] of scarcity, not abundance, and somehow economics is the main science used to solve how the society should be arranged.

[1] I have a strong feeling that economists have missed the memo from Popper regarding what is modern science. There seems to be quite a lot of unfalsifiable assumptions lying at the bottom of economics, starting from the utility maximizing agent.

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> But then, economics is a "science"[1] of scarcity, not abundance, and somehow economics is the main science used to solve how the society should be arranged.

I have an economics degree. I'm not claiming to be an economist here at all, but I'm mentioning it because it's relevant to what I'm about to say here: What I learned throughout my undergraduate education is that economics is a social science built upon the _presumption_ of scarcity.

Classical economics doesn't apply if you break that invariant. We need something else if we achieve post-scarcity, and I'm not sure that it'd be another existing mainstream economic school of thought.

Note that I'm not disagreeing with you - your point is valid. I'm agreeing on the "create artificial scarcity" response that you're observing. I suppose what I'm trying to say is, whatever other unfalsifiable assumptions you're pointing at in economics shouldn't matter because the broken scarcity invariant breaks the rest of it. Trying to use an economic argument in a post-scarcity scenario is, to me, applying the wrong tool for the job in order to preserve a specific interest. That's my opinion, anyway, and I'm sure someone else who has more experience or education in the field beyond my 4 year degree 20 years ago could tell me I'm wrong.

There will always be scarcity of time.

And intelligence, skilled labor, organizational capacity, and especially wisdom.

...and, as long as we don't revert our 'farming' practices to pre-industrialization means, lack of soil health.

> There seems to be quite a lot of unfalsifiable assumptions lying at the bottom of economics, starting from the utility maximizing agent.

That and other elements of rational choice theory are not unfalsifiable. In fact, some of them were from the outset not merely falsifiable but known false but tentatively held as useful approximations over large populations. In fact, in the scientific part of economics (and other social sciences; rational choice theory has wide impacts), the debate has long been over whether the rational choice model is a still even useful reference point against which to mark variations, given the extensive degree to which it has proven false. (OTOH, a number of higher-level phenomenon predicted by they model have proven predictively useful even though the lower-level model is known false.)

Of course, some of economics (e.g., the Austrian school) is overtly driven by a normative ideological agenda rather than pursuing descriptive, empirical science.

>That and other elements of rational choice theory are not unfalsifiable.

>Of course, some of economics (e.g., the Austrian school) is overtly driven by a normative ideological agenda rather than pursuing descriptive, empirical science.

This is actually one reason the Austrian school criticises the neoclassical school. The neoclassical school is just as much founded on ideological assumptions as the Austrian school (main difference is cardinal vs ordinal utility), as it's impossible to have a "theory of value" without some underlying philosophical notion of value. However the neoclassical school hides this value system under so many layers of maths in an attempt to convince people it's a real, objective science like physics or chemistry.

There is a form of economics that makes testable predictions with a reasonably high degree of accuracy, and isn't based on any underlying ideology: it's called "quantitative finance".

> as it's impossible to have a "theory of value" without some underlying philosophical notion of value.

But mainstream empirical economics, including (but not limited to) the neoclassical school, does not have a theory of value. It makes predictions based on hypotheses of how individuals act given the existence of individual subjective value systems. There are plenty of valid criticisms to be made, but this is just projection by the Austrian school.

You can layer an infinite number of possible idealized value systems on top of any mainstream economic theory to get a policy theory (and there's almost as many of those that have been layered on it as people making policy recommendations incorporating mainstream economic analysis, but that is a separate layer.

> There is a form of economics that makes testable predictions with a reasonably high degree of accuracy, and isn't based on any underlying ideology: it's called "quantitative finance".

QF is to economics as meteorology is to climatology.

>But mainstream empirical economics, including (but not limited to) the neoclassical school, does not have a theory of value.

It does; it assumes utility exists as some concrete thing that can be compared between individuals. The fact you weren't aware of that just shows how good mainstream economics is at hiding this. https://en.wikipedia.org/wiki/Utility#Discussion_and_critici...

> That and other elements of rational choice theory are not unfalsifiable

Can you give an example what could you do to prove me that you do not maximize your utility? I mean, regardless how stupid thing you come up, I can always say "but that's what you chose to do, so that obviously was your preferred course of action and obviously you were then maximizing your utility"

I really hope there is discussion whether rational choice is useful, but the problem is that that discussion does not (yet) descend to the level of MBA economics and below. And that is unfortunately the level where politics are made.

Lots of times.

Sometimes I oversleep accidentally, as an obvious example.

Or when I make short-term decisions like being lazy and laying on the couch watching trash, that hurts my long term utility and prevents me from maximizing it.

Or all the times where I'm not smart/awake enough to choose the option that will maximize my utility.

> For some reason, when we try to figure how to manage abundant resources, only solutions we come up with are to make them artificially scarce.

There are other solutions that have been seriously considered or proposed. For example in copyright one idea is to allow things to be freely copied and have some rich entity pay creators. This was how it was done a long time ago, with the rich entity usually being a king or a ruler of a city-state or a wealthy lord.

Another idea is to pay creators via some tax on something that is roughly correlated with copying. An example would be a tax on blank tape.

A problem with these approaches is deciding who gets paid and how much. In the tax approach not many people seem to like the idea of the government deciding which artists should get funded. The usually way to avoid that is to have it based on how many copies are made. But then you need some way to get that data.

You could do it via some kind of polling. That was probably the only way back when copying was mostly physical, such as copying a record to a cassette tape. Nowadays when it is mostly digital you could do it by server side monitoring on download/streaming sites and/or device-side monitoring of playback--but then you are getting into areas that will worry many people for being an opening to more general surveillance.

For ordinary physical goods we don't have these problems--a free market (even the poor approximation of a free market that we have) works pretty good for determining what to produce. But that only works if the goods have certain properties, which copies of art do not have. (If anyone wants more information, look into excludable vs non-excludable goods and rival vs non-rival goods).

The approach of current copyright law is to legally give copies those properties so that the market can determine what art gets produced and how much the artist makes. This is a tradeoff, because it does mean that the consumer pays more for copies than the "correct" free market price (marginal cost of copying).

The other approaches mentioned above tend to make the tradeoff the other way--the consumer pays marginal cost of copying, but less art gets produced than consumers would like.

There's not really any way to avoid having either underproduction or underutilization when it comes to easily copyable art. Once you realize this things make a lot more sense.

If you implemented a Land Value Tax, all of the surplus value provided by something would be captured by that tax, and you could then subsidize a part of the positive externality using that tax.

One way to do so with IP/information/open source software, would be to give everyone access to just about all IP, but then when a surplus value is not known and needs to be accessed, you give people an option of what they value it. Get a statistically significant sampling group, then pick some percentage of the sampled group should get access, say 95%, and then query them using a Vickrey auction system what their true value is. The people who have the lowest 5% value don't get access to that item for some period. For everyone above 95%, they all pay that bottom 5% price for access to it, not their bid, like a Vickrey auction.

In this way only 5% of the sampled group, which may be 1% of the population lose access, and yet you still get to figure out the range of values throughout the population for that thing because Vickrey auction's incentivize that you bid your true value. Take some weighted average of the bid values and subsidize the IP owner with those funds.

I wonder how people would value openssl...

> The other approaches mentioned above tend to make the tradeoff the other way--the consumer pays marginal cost of copying, but less art gets produced than consumers would like.

One can infer a smaller supply of art, assuming standard economic assumptions. Some human activities seem to me not to be driven by these assumptions. Stories of artists who create what they seem to be driven to create, not what potential customers want at that moment.

Time is a scarce resource, both for creators and consumers. Some of us get more time than others, but we each get 24 hours per day; in that respect there is equality.

Under what conditions or assumptions might there be "enough" art created and copied?

> This is a tradeoff, because it does mean that the consumer pays more for copies than the "correct" free market price

Important to keep in mind that it's not just a tradeoff because it increases marginal cost, it's a tradeoff because it outright restricts the creation of new content.

In creative industries, it means that creators are sometimes unable to build on or adapt creative work to apply to new situations or to expand on artistic ideas. Many market consequences extend from this restriction for better and for worse -- there's a reason why Nintendo games don't work on PCs or have certain accessibility features, there's a reason why backing up save data for many of their games is still a giant pain in the neck, and it's because it's illegal for other companies to create those features for Nintendo games.

IP law also has the consequence of drastically raising the barrier of entry to creating new IP, since assets and universes can't be reused or repurposed without contracts.

And of course, this also has the consequence that certain utility innovations can't happen -- E-Readers in particular have been hobbled for a long time, not just because of patent law but because existing platforms are allowed to make it illegal to transfer legally purchased books into different ecosystems. This reduces market competition in the space, artificially driving up the cost of not just the content itself, but also much of the hardware used to consume that content. There are a lot of things we could build in the E-Reader space around universal annotations, accessibility features like live-reading, etc. IP law restricts a lot of that stuff, you may not build a competing E-Reader that reads EBooks purchased on Amazon.

This obviously has consequences for the market itself; by embracing IP law, we have chosen to effectively kill off and completely eliminate competition in several areas of the free market, while making it illegal to build some meta-layers on top of platforms without enormous amounts of capital and negotiation power.

But it also obviously has cultural consequences since building on top of existing work and sharing cultural experiences (including stories) is something that is basically built into our DNA as human beings.

So we can debate whether there are advantages to IP law and whether they're wortwhile, but I do want to push back a little bit on the idea that marginal cost is the main consequence of Copyright. It's not, Copyright is a choice we've made to artificially eliminate certain parts of the market and to make certain projects and innovations practically impossible to build by anyone other than the biggest players in the market. It's not just about books getting more expensive, Copyright is a system with real tradeoffs, it increases the production of a specific kind of art at the tradeoff of drastically reducing the production of other kinds of art, and at the cost of shaping how art gets distributed and consumed and what things we can do with it, even privately.

I've seen socialists advocate for a "public Spotify" that offers free streaming for all music and pays artists itself, likely with significant subsidies; lots of governments want to subsidize the arts, and such a service would be an excellent way to do so.

It doesn't seem like that bad of an idea, if we take as given that a government service could actually provide as a good of a product as the modern streaming platforms do.

18F would kill that!

Stream count fraud would be much more offensive if the money being paid out was taxpayer money.

> The other approaches mentioned above tend to make the tradeoff the other way--the consumer pays marginal cost of copying, but less art gets produced than consumers would like.

This is what proponents of IP claim. Many even think it is so obvious that there is no need for evidence, but anyway, I'd be keen to see some evidence for the claim.

I can think of a handful of immaterial goods that are not under IP (e.g food recipes and financial innovations). What is common on those is that I am quite happy with the amount available of those immaterial goods (what comes to financial innovation, one might argue that there have been a bit too much of that at some point of our history)

Problem is your entire argument is based on assumptions with absolutely no scientific base. Why do you assume there is an economic problem in producing content? Why does it need solving? I call bullshit, there is no inherent trade off to balance. My theory is that we could remove all intellectual property laws and once the dust settles only objectively good things would come out of it.

It’s not a bit more scientific than your argument. I do believe it’s true. But that is precisely my point. Whatever theory underlies IP and it’s benefit to society is entirely based in speculation.

The "value" that economics maximizes is wealth-weighted (in the sense of who gets to determine what is valuable and what is not).

Understanding this fact has led me to a thousand and one horrible "that's a feature, not a bug" realizations.

In my mind resolving this is the next level for democracy.

> For some reason, when we try to figure how to manage abundant resources, only solutions we come up with are to make them artificially scarce.

If resources truly do not have scarcity, there is no need to manage them. The need to manage a resource comes about only when it is scarce.

This strikes me as diluting the point to irrelevance. The vast majority of resources are abundant only provisionally when they are well-managed.

In fact, I can't think of any resources so abundant that they need no management. Even the oceans and the sky must be managed now, eh?

> The vast majority of resources are abundant only provisionally when they are well-managed.

That's not abundance at all, its just scarcity.

> In fact, I can't think of any resources so abundant that they need no management.

Yes, scarcity is universal, which is why the idea of “post-scarcity” or resources that need managed in a categorically different way because they don't experience scarcity are nonsense.

> In fact, I can't think of any resources so abundant that they need no management.

Digital data.

Ah, good point.

There's a huge subfield, called behavioral economics, in which economists study the ways human behavior deviates from utility maximization. It's been around for 70 years or so.

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