Category: Innovation
David Kelley gave a talk on Ayn Rand vs. Friedrich Hayek On Abstraction. (If you want to read Mr. Kelly’s paper on point click here) This is a very important talk and explains the difference between Austrian economists and free market (objectivists). It also helps explain why Austrian economists who say they are for free markets are against patents, which are property rights in one’s invention.
Ultimately, Hayek is a warmed over Platonist. According to Hayek our perception and reason are limited (Plato). It is this limit to reason that is Hayek’s justification for a free market. Basically, Hayek argues that because our reason is limited it is sheer folly to suggest that central planning can ever work. Rand on the other hand sees no limit to reason and notes that reason is man’s basic tool of survival. But each man must reason for them self. To force (central planning) someone to do something against their reason is immoral and eliminates the creativity and ingeniousness of everyone subject to the central planning decree. This means we have a small group of people attempting to “solve” problems instead of many people and the people making the decision are not the ones that feel it’s effects. As a result, central planning is an open loop process, which as any engineer knows is a very inaccurate process. In addition, central planning does not take all the variables into account, since only each individual can know exactly what their circumstances and needs are.
I believe Austrians gravitate to Hayek’s ideas because it saves religion (Christianity) from reason and the free market. Hayek’s ideas on the limits of reason puts him in the company of Kant, Hume and Plato. Hayek in that sense is both anti-reason and anti-science, which leaves plenty of room for religion.
It also explains why Austrians do not understand patents. Property rights to Austrians are based on social convention or utilitarianism but not based on reason. According to the Austrians we have property rights (privileges, arbitrary grants) because of tradition or because they believe (not know – reason is limited) it results in the best use of resources. As Hakek states:
[M]orals, including, especially, our institutions of property, freedom and justice, are not a creation of man‘s reason but a distinct second endowment conferred on him by cultural evolution.
Patents were once characterized as monopolies (see English history), so Austrians cannot reason out the difference between what were called patents before the Statute of Monopolies and what are patents today. For Rand, creation is the basis of property rights and all human creations start with one man’s mind. Because of this Rand made it clear patents/copyright (Intellectual property) are the basis of all property rights.
For more see Defending Capitalism: Ayn Rand vs. Hayek
More specifically on Hayek’s concept of Abstraction:
If Hayek’s ideas had any validity, then a person whose eyesight was restored after being blind from birth could immediately (visually) identify an apple or red, which we know is not true. If Hayek’s ideas were true then we would have to have some inherent understanding of the double slit experiment in quantum mechanics or the idea that time slows down as we approach the speed of light, but this is clearly nonsense.
Earth Day was created in the Nixon administration and the first was in 1970. This day violates the 1st Amendment by the Federal Government “respecting an establishment of religion.” Environmentalists are often portrayed by the Media as lovable, good natured people; people who only want to save some adorable furry creature and pick up trash. Environmentalist groups target new technologies claiming that they are dangerous or unproven. For instance, they killed off the nuclear power industry. The policies they advocate are anti-innovation and have destroyed advances in 
medicine, food production, power generation, vaccines, and more. These policies have resulted in the deaths of more people than Hitler, Stalin, and Moa combined. These deaths are not the result of good intentioned policies gone wrong; these are the purposeful goals of environmental groups. Environmentalists have consistently proven that they are willing to lie in order to achieve their objectives. Being “Green” is worse than being a Nazi, worse than being a Marxist; BUT these policies do work hand in hand with these statists philosophies.
I will briefly outline three environmentalist policy areas where environmentalists have lied about the science and even more important than lying, these policies have killed millions of people.
DDT
Silent Spring by Rachel Carson resulted in the banning of DDT.
Deaths Caused by DDT Ban
In 1970, the U.S. National Academy of Sciences estimated that DDT saved more than 500 million lives during the time it was widely used. http://www.wnd.com/2004/07/25428/ Banning DDT has resulted in about 100 million deaths, many of whom were pregnant women and children. By comparison: Hitler killed about 6-7 million, Stalin killed around 10-14million, and Mao killed between 60-68 million.
FYI: The ban on DDT is why the US is currently having infestations of bed bugs; most people born after 1940 thought these were eradicated like polio.
Lies about DDT
Carson claimed DDT thinned the eggshells of birds resulting in fewer offspring that endangered raptors existence. This was based on 1956 study by Dr. James DeWitt, published in the Journal of Agriculture and Food Chemistry. However, DeWitt’s study actually showed that 50 percent more eggs hatched alive from the birds subjected to DDT than the non-DDT group. Other claims suggested that raptor populations declined because of the use of DDT; however, raptor populations were failing before the introduction of DDT. In fact, the Audubon’s Eagle counts from 1941 to 1961 actually increased when DDT was mostly widely used. All the latest evidence shows, Carson’s claims were nothing but outrageous lies.
Goal of Banning DDT was to Kill People
Alexander King, founder of the Malthusian Club of Rome, wrote in a biographical essay in 1990:
“My own doubts came when DDT was introduced. In Guyana, within two years, it had almost eliminated malaria. So my chief quarrel with DDT, in hindsight, is that it has greatly added to the population problem.” http://jiminmontana.wordpress.com/2012/01/15/environmentalism-the-green-religion-of-dehumanization/
Dr. Charles Wurster, one of the major opponents of DDT, is reported to have said,
“People are the cause of all the problems. We have too many of them. We need to get rid of some of them, and this (referring to malaria deaths) is as good a way as any.” http://jiminmontana.wordpress.com/2012/01/15/environmentalism-the-green-religion-of-dehumanization/
Nuclear Power
Anti-Nuclear power activists claimed that nuclear power generation would result in the deaths of thousands of people. This movement was able to kill off the nuclear power industry in the United States after the Three Mile Island accident in which no one was killed and the average person within ten miles of the accident received the equivalent on one chest x-ray of radiation.
Deaths Caused by Nuclear Power Ban
The main alternative to nuclear power plants,to date ,have been coal fired plants. For each person killed by nuclear power generation (including deaths due to Chernoybal), 4,000 die from coal. The previous data is adjusted for how much power is produced by each method of power generation. http://www.the9billion.com/2011/03/24/death-rate-from-nuclear-power-vs-coal/ The number of people killed per year in the US because of this change is at least 10,000. These deaths are mainly due to particulate pollution (nuclear power has no particulate pollution). This figure also includes an increase in the number of mining deaths, and increases in the number of deaths due to the extra transportation required to move coal compared to transporting uranium. In the United States alone: this environmental pogram has resulted in at least 300,000 deaths. Why has this not made headlines??! While the rest of the world has not followed the U.S.’s lead completely, the anti-nuclear movement has definitely retarded the development of nuclear power plants around the world. As a result, a reasonable estimate of the deaths worldwide because of this environmental policy is at least 600,000.
Nuclear power plants represent a huge reduction in air and water pollution. Real reductions in pollution are the result of advancing technologies, not regulator schemes such as the EPA. In fact, regulatory agencies can be credited with increasing pollution levels compared to what it would be without their influence.
The largest one time event fatality toll from energy production was in 1975. 30 dams in central China failed in short succession due to severe flooding. An estimated 230,000 people died. The fatalities from hydroelectric power far outnumber deaths from all other energy sources. http://www.newscientist.com/article/mg20928053.600-fossil-fuels-are-far-deadlier-than-nuclear-power.html Of course, hydroelectric power is one of the environmentalists’ favorite sources of power.
Lies about Nuclear Power
The number one lie about nuclear power is that an accident could result in the death of thousands of people. There is absolutely no evidence for this claim. Another related boogey man of the environmentalists is that the half lives of the byproducts from nuclear power lasts tens of thousands of years. What if the half life were infinite? Wouldn’t that be worse? If the half life were infinite, the elements (compounds) would be stable. Longer half lives mean that there is less radiation. Nuclear power plants accelerate the natural radioactive decay of uranium, so leftover fuel rods are less radioactive than the mined material.
Another lie of environmentalist s that nuclear power plants are too expensive to make economic sense.
Nuclear power is not intrinsically expensive. What drove nuclear plant costs up were environmentalist delays (caused by anti-nuclear “interveners” and the high interest financing rates—both perpetrated by those who wanted to kill nuclear power, and who now complain that nuclear costs too much. Source: Electric Power Research Institute
Goal of Banning Nuclear power was to Kill People?
There does not appear to be any environmental wacko comments to this effect; certainly it has been the result and since the environmentalism movement believes there are too many people-well, it seems this was likely part of their goal in killing off nuclear power.
Global Warming
Man made global warming or Anthropogenic Global Warming (AGW) is the latest hoax being thrust upon us by Environmentalists, who I have already shown, have a very poor track record.
Deaths Caused by Global Warming Hoax
The United States is spending about $10 billion a year on Global Warming research. http://frontpagemag.com/2011/01/28/the-black-hole-of-global-warming-spending/ I think it is safe to say that at least $100 billion has been spent worldwide on Global Warming over the last decade. It costs about $20 to provide infrastructure for clean water for one person. According to WHO, 30,000 deaths occur every week from unsafe water and unhygienic living conditions. Most of these deaths are children under five years old. That is over 600,000 deaths per year because of poor water infrastructure. If the $10 billion being wasted on Global Warming research were instead applied to water infrastructure, this could save 50 million lives. The Global Warming Hoax has cost the lives of at 6 million people.?
How AGW Advocates Have Lied
“The latest data released by the Met Office, based on readings from 30,000 measuring stations, confirms there has been no global warming for 15 years.” http://www.dailymail.co.uk/news/article-2096277/Global-warming-James-Delingpole-claims-green-zealots-destroying-planet.html#ixzz1xP61Eo2b
It is well known that the main driver of the temperature on Earth are the variations in the amount of solar energy the Earth receives. “Experiments at the CERN laboratory in Geneva have supported the theory of Danish physicist Henrik Svensmark that the sun — not man-made CO2 — is the biggest driver of climate change.” http://www.dailymail.co.uk/news/article-2096277/Global-warming-James-Delingpole-claims-green-zealots-destroying-planet.html#ixzz1xP61Eo2b
The biggest greenhouse gas is water vapor – over 95%, but you never hear about this from AGW advocates. http://www.creators.com/opinion/walter-williams/environmentalists-wild-predictions.html
“Natural wetlands produce more greenhouse gas contributions annually than all human sources combined.” http://www.creators.com/opinion/walter-williams/environmentalists-wild-predictions.html
Below, IPCC (Intergovernmental Panel on Climate Change -UN) Experts comment on the IPCC, which is the group at the UN that has been saying a consensus of scientist s “believe” in Global Warming http://ukipscotland.wordpress.com/2011/10/04/fifty-ipcc-experts-expose-global-warming-lies/
Dr Vincent Gray: “The (IPCC) climate change statement is an orchestrated litany of lies.”
Dr. Lucka Bogataj: “Rising levels of airborne carbon dioxide don’t cause global temperatures to rise…. temperature changed first and some 700 years later a change in aerial content of carbon dioxide followed.”
Dr Richard Courtney: “The empirical evidence strongly indicates that the anthropogenic global warming hypothesis is wrong.”
Dr Eigil Friis-Christensen: “The IPCC refused to consider the sun’s effect on the Earth’s climate as a topic worthy of investigation. The IPCC conceived its task only as investigating potential human causes of climate change.”
Goal of AGW
The goal of AGW is to kill capitalism and as a result kill millions of people. Patrick Moore, a co-founder of Greenpeace explained. (Environmentalism today is) more about globalism and anti-capitalism than it is about science or ecology….
“Ultimately, no problem may be more threatening to the Earth’s environment than the proliferation of the human species.”
— Anastasia Toufexis, “Overpopulation: Too Many Mouths,” article in Time’s special “Planet of the Year” edition, January 2, 1989. http://newsbusters.org/blogs/geoffrey-dickens/2012/04/19/earth-day-special-medias-top-25-wackiest-environmental-quotes#ixzz1xPBuQJxp
“Today, life on Earth is disappearing faster than the days when dinosaurs breathed their last, but for a very different reason….Us homo sapiens are turning out to be as destructive a force as any asteroid. Earth’s intricate web of ecosystems thrived for millions of years as natural paradises, until we came along, paved paradise, and put up a parking lot. Our assault on nature is killing off the very things we depend on for our own lives….The stark reality is that there are simply too many of us, and we consume way too much, especially here at home….It will take a massive global effort to make things right, but the solutions are not a secret: control population, recycle, reduce consumption, develop green technologies.”
— NBC’s Matt Lauer hosting Countdown to Doomsday, a two-hour June 14, 2006 Sci-Fi Channel special. http://newsbusters.org/blogs/geoffrey-dickens/2012/04/19/earth-day-special-medias-top-25-wackiest-environmental-quotes#ixzz1xPCThQaU
“My own doubts came when DDT was introduced. In Guyana, within two years, it had almost eliminated malaria. So my chief quarrel with DDT, in hindsight, is that it has greatly added to the population problem.” http://jiminmontana.wordpress.com/2012/01/15/environmentalism-the-green-religion-of-dehumanization/
Dr. Charles Wurster, one of the major opponents of DDT, is reported to have said,
“People are the cause of all the problems. We have too many of them. We need to get rid of some of them, and this (referring to malaria deaths) is as good a way as any.” http://jiminmontana.wordpress.com/2012/01/15/environmentalism-the-green-religion-of-dehumanization/
“A total population of 250-300 million people, a 95% decline from present levels, would be ideal,” Turner stated in 1996.[1]
A leading environmentalist, Dr. Eric R. Pianka advocated the elimination of 90 percent of Earth’s population by airborne Ebola in front of few hundred members of the Texas Academy of Science who rose to their feet, and gave him a standing ovation.[2] Dr. Pianka attempted to deny this, but the evidence was overwhelming including his student evaluations.
Environmentalism is a Religion – and that religion is anti-human and EVIL
[1] Ted Turner Repeats Call For Population Curb, by Paul Joseph Watson Prison Planet Monday, April 28, 2008 http://www.prisonplanet.com/articles/april2008/042808_ted_turner.htm
[2] Meeting Doctor Doom, By Forrest M. Mims, III, The Eco-Logic Powerhouse http://www.freedom.org/board/articles/mims-506.html.
The Supreme Court is hearing oral arguments in the Association for Molecular Pathology v. Myriad Genetics No. 11-725 case that revolves around the myth that you can patent a person’s genes. Typical of the idiocy surrounding this case is the article by the AP, which states that this case is about monopolies for human genes. The author proves not only their lack of understanding of the science, but also the fact that they do not know that patents are a property right. (For more on Patents, Property Rights and Monopolies see below) A number of books have also pushed the agenda that 
human genes are patentable. The CAFC’s ruling in this case sets the record straight.
CAFC ruling under reviewed
The ruling in the 2012 version of this case was very similar to the ruling in 2011 that I discussed in my post Association of Molecular Pathology v. USPTO. Below I provide what I think are the most interesting excerpts from the opinion.
Composition claims are all eligible under 35 USC 101.
They (The isolated strands of DNA) are obtained in the laboratory and are man-made, theproduct of human ingenuity. While they are prepared from products of nature, so is every other composition of matter. All new chemical or biological molecules, whether made by synthesis or decomposition, are made from natural materials. For example, virtually every medicine utilized by today’s medical practitioners, and every manufactured plastic product, is either synthesized from natural materials (most often petroleum fractions) or derived from natural plant materials. But, as such, they are different from natural materials, even if they are ultimately derived from them. The same is true of isolated DNA molecules. PP. 38-39
The highlight portion points out a general rule of patent law (actually nature) – all inventions are combinations of existing elements, these elements are formed from natural materials. You cannot create something from nothing – it’s called conservation of matter and energy. Unfortunately, this simple rule of physics is often ignored by the courts – probably because most of them do not have a scientific background and are therefore unfit to rule in patent cases.
A composition of matter is not a law of nature. P. 51
The anti-patent crowd has been trying to expand laws of nature to include anything that occurs naturally. A law of nature is something that explains a host of data and can be used to accurately predict how things will behave in nature, such as gravity. Using a counterbalance in an elevator uses gravity – a law of nature, but it is not a law of nature.
It is undisputed that Myriad’s claimed isolated DNAs exist in a distinctive chemical form—as distinctive chemical molecules—from DNAs in the human body, i.e., native DNA. P. 44
The critics of patenting human genes miss this point. The claims do not cover native DNA, they cover DNA that does not exist but for the intervention and ingenuity of humans.
Claims 1 of the ’999, ’001, and ’441 patents, as well as method claims 1 and 2 of the ’857 patent—all of which consist of analyzing and comparing certain DNA sequences—not to be patent-eligible subject matter on the ground that they claim only abstract mental processes. P. 55
I strongly disagree with this statement. Myriad clearly showed that the analyzing step requires machines that are clearly described in the specification. Even if a doctor had the print out of the results of analysis and then he compared the results without a machine, then this is contributory infringement. The only justification for the CAFC’s decision is hyper technical analysis of the claim that requires a recited machine in the claims. This sort of overly formal interpretation does nothing to protect the property rights of inventors, but does advance the interests of entities that want to steal other people’s inventions.
We once again, even in light of Mayo, arrive at the same conclusion of patent-eligibility because at the heart of claim 20 is a transformed cell, which is made by man, in contrast to a natural material.
By definition, however, performing operations, even known types of steps, on, or to create, novel, i.e., transformed subject matter is the stuff of which most process or method invention consists. All chemical processes, for example, consist of hydrolyzing, hydrogenating, reacting, etc. In situations where the objects or results of such steps are novel and nonobvious, they should be patent-eligible. P. 61
The idiots at the Supreme Court have attempted to break claims down and determine if each step is new. You can’t create something from nothing and a step which is completely new does not meet the requirements of 35 USC 112. This form of interpretation of the claims was specifically rejected by the 1952 Patent Act under 35 USC 103. But the anti-patent Justices on the Supreme Court are not interested in logic, the Constitution, or the law. They are only interested in forcing their policy visions on the American public.
Patents and Monopolies
Patents: Monopoly or Property Right a Testable Hypothesis
If patents are a monopoly, as some suggest, then it should led to certain outcomes. A close examination shows that none of the supposed monopoly effects result from granting patents.
Monopoly/Rent Seeking vs. Property Rights/Intellectual Property.
This post explains the characteristics of a monopoly and a property right and poses three questions to show the difference. Patents fit all the characteristics of a property right and none of a monopoly. Note that professional license, such as a law license has some of the characteristics of a monopoly.
More on the Myth that Patents are Monopolies.
This post contains a number of quotes from philosophers explaining that patents are not monopolies.
Property Rights, Possession and Objects
This post explains the difference in the concepts of property rights, possession, and objects. Most economists and patent detractors confuse these concepts. The origin, definition, and legal basis of property right are explained.
The Myth That Patents are a Monopoly
This post compares the definition of a monopoly to the rights obtained with a patent. It shows that the rights obtained with a patent do not confer a monopoly.
The en banc rehearing of this case is considering whether the presumption of validity applies to under 35 USC 101. The statute involved in this question is 35 USC § 282 which states:
(a) In General.— A patent shall be presumed valid. Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims shall be presumed valid even though dependent upon an invalid claim. The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity. (Emphasis added)
CLS Bank argued in their brief that validity and eligibility are different and 35 USC 101 is directed to the latter. Nothing in the statute suggestions that there is a distinction between eligibility and validity. How can a patent be valid and not meet the requirements of 35 USC 101? It can’t. When you turn the question around you see the absurdity of this position. In addition, the reason for a Patent Office is to review inventions to determine if they are eligible for a patent. If the courts are going to ignore the determinations of the Patent Office, then we should just have a registration system. In every other area of law the courts are extremely deferential to administrative agency decisions, but not with patents. Ask yourself why this is. I would suggest the reason is that every other administrative agency increases the power of government, but the Patent Office increases the power of the people. It is patently unfair that an inventor has to defend their patent, two, three or more times and on multiple issues. If the EPA or the FCC or the FTC, etc. had to survive this scrutiny or legislation in general, almost none of the laws or regulations passed in the last decade would stand. It is time to end the double standard that gives a pass for every regulation that increases government power, while forcing private people to jump through hoops. In fact it is time to reverse the process, as the Founders intended.
NO RATIONAL person would buy CLS argument that there is a difference between validity and eligibility. But that does not mean the Judges on the CAFC or Supreme Court will not buy into CLS argument.
For more on the earlier decision CLICK HERE.
This paper is exploratory not definitive. Comments and input is greatly appreciated. My interest in the comparison between Rand and Locke started when I wrote my book The Decline and Fall of the American Entrepreneur. My investigation was spurred on by reading the excellent book The Power and the Glory: The Key Ideas and Crusading Lives of Eight Debaters of Reason vs. Faith, by Burgess Laughlin. In my opinion, John Locke is often misrepresented by both his supporters and detractors. I admit that I do not have the time or energy to review Locke’s original writings in depth at this time. Your input is appreciated.
Charles Murray has suggested that Ayn Rand’s ideas are just a rehash of Locke, Nietzsche, and Adam Smith.[1] I reject this out of hand. Nietzsche’s uberman influenced Rand’s fictional characters, but she rejected Nietzsche as her philosophical ideas matured. Adam Smith’s book Theory of Moral Sentiments is not consistent with Rand’s ideas at all. He wrote this book before he wrote The Wealth of Nations and the two do not appear to be entirely consistent with each other. As a result, it is hard to pin Smith down on his ethics and epistemology. The differences between Rand and Locke are more subtle.
My book mainly discusses patent law in terms of Natural Law or Locke, because that is the historical basis for the founding of the US and US patent law. Readers of my blog State of Innovation may wonder what this has to do with patent law. My answer is everything, since this is about the fundamental basis of property rights.
Metaphysics
In my opinion all philosophers fall either into camp of Aristotle or Plato. Aristotle’s metaphysics is that we can trust our senses and there is only one universe or as Rand stated it A is A. Plato’s metaphysics is that there is more than one world and our senses cannot be trusted to understand them or that our senses only give us a vague impression of the real world. Rand and Locke are both Aristotelian in the realm of metaphysics.
Some people may object that Locke advocated there was a deity. Locke did appear to make somewhat contradictory statements on god and faith, but he was writing at a time in which you could have your head cut off for being on the wrong side of a religious debate. Locke appeared to be a deist and believed;
His philosophy on human progress proposed the following: a) human beings can progress by acquiring knowledge, b) reason and action are subject to natural law, and c) the mind (as consciousness) is subject to scientific inquiry (Smith, 1997).[2]
A Deist believes in god or a deity that created the laws of the Universe and has no effect thereafter.
Epistemology
John Locke’s epistemology was Reason. Reason is the means of integrating and conceptualizing perceptions by means of logic. It is distinguished from rationalism which starts with reveled truths and then applies a logical system derived from these assumptions. This is distinguished from empiricism which holds that man’s only source of knowledge is his senses without any recourse to concepts. The logical positivists did us one favor in showing that all logical systems are based on either an assumption, such as Euclidean geometry’s idea that a straight line goes on forever and two parallel lines never intersect, or based on an observation.
Some people argue that Locke was an empiricist.[3] Locke was attempting to use the techniques of science to analyze ethics and political philosophy. (Note that he also defined the metaphysics and epistemology used by science.) People who argue that Locke was an empiricist usually argue that modern science is based on empiricism. This is incorrect based on the definition given above. Science builds on observation, but it is highly conceptual and many discoveries in modern physics derive from following the logical consequences of theory. For instance, the Higgs Boson particle was first predicted by following the math of field theory and now may have been verified by experiment. Locke was not an empiricist either, based on the definition given above. He is widely quoted as having said “logic was the anatomy of thought”, which would be inconsistent with empiricism.
Rand’s epistemology was Reason also. One difference is Rand’s refutation of Kant’s epistemology that emotion is a valid path to knowledge and his attempts to limit reason. However, Locke came before Kant and therefore could not have commented on Kant. Ayn Rand spends a lot of time explaining how concepts are formed and how they relate to the real world or specific instances. An example is reproduced below:
The same principle directs the process of forming concepts of entities—for instance, the concept “table.” The child’s mind isolates two or more tables from other objects, by focusing on their distinctive characteristic: their shape. He observes that their shapes vary, but have one characteristic in common: a flat, level surface and support(s). He forms the concept “table” by retaining that characteristic and omitting all particular measurements, not only the measurements of the shape, but of all the other characteristics of tables (many of which he is not aware of at the time).[4]
It is my understanding that Rand is explaining in modern language the concepts of Aristotle or refining them. This seems consistent with John Locke’s epistemology.
Ethics
This is where we see the major differences between Rand and Locke. In my brief survey of Locke’s ethics, I found two competing concepts for Locke. One is his ideas about Natural Rights and the other is a hedonistic perspective on ethics. Locke’s hedonistic perspective on ethics is in conflict with Rand’s selfishness and I would suggest in conflict with Natural Rights.
Locke’s hedonistic ethical views start with the idea that people naturally want to maximize their pleasure and minimize their pain. Locke’s Natural Rights starts with the idea that moral laws are divine, but he does state these divine laws are discoverable by reason. This second part makes it consistent with his deist metaphysics. He does not seem to reconcile these two competing ethical systems.[5] I will focus on Locke’s Natural Rights ethics.
Locke’s formulation of Natural Rights starts with his concept of man’s rights in a state of nature.[6] In a state of nature a man owns himself. Since he owns himself he has a right to defend himself. Man also has a right to those things he creates, which is where the right to property comes from. From these concepts the moral repugnancy of slavery follows as well as most of traditional criminal law, contracts, and property law. Locke does not explicitly state that man is an end in himself like Rand, however ownership in one’s self certainly implies this. To the extent we focus on Locke’s Natural Rights, Rand and Locke are not in conflict and I would suggest Rand’s ideas are a refinement and provide a deeper insight. Like Relativity and Quantum Mechanics expand our knowledge over Newtonian physics, but are not in conflict with it.[7]
Ayn Rand’s ethics starts with idea that human life has value and ethics is the actions necessary to allow man to live. By live she does not mean mere existence, but thriving. Everything else she derives from an evolutionary point of view.[8] In Galt’s speech she states,
There is only one fundamental alternative in the universe: existence or nonexistence—and it pertains to a single class of entities: to living organisms. The existence of inanimate matter is unconditional, the existence of life is not: it depends on a specific course of action. . . . It is only the concept of ‘Life’ that makes the concept of ‘Value’ possible. It is only to a living entity that things can be good or evil.
From this she defines focuses on man and his unique tool of survival, which is his mind.
In order to sustain its life, every living species has to follow a certain course of action required by its nature. The action required to sustain human life is primarily intellectual: everything man needs has to be discovered by his mind and produced by his effort. Production is the application of reason to the problem of survival.[9] (Emphasis added)
It is reason that requires an ethics of individuality, where each person’s life has value separate from the species. This is not true of other organisms.
Man’s mind is his basic means of survival—and of self-protection. Reason is the most selfish human faculty: it has to be used in and by a man’s own mind, and its product—truth—makes him inflexible, intransigent, impervious to the power of any pack or any ruler. Deprived of the ability to reason, man becomes a docile, pliant, impotent chunk of clay, to be shaped into any subhuman form and used for any purpose by anyone who wants to bother.[10] (Emphasis added)
Thus Rand ends up with an ethics in which each individual person is their own end. The exercise of their mind is the means by which they attain values to live. In order to achieve their values they must not only think but act. In order for this to be true, man must own himself, which is the starting point of Locke. The main difference between Locke and Rand is that Rand starts with a scientific or metaphysical basis of the nature of man to derive her ethics. Locke starts with the assumption that each man owns themselves, but Rand proves why this must be true. Her starting point is that every living organism must value its life or go extinct. Note there are ethical systems that do not value human life, so this cannot be taken as a given. We will explore these more later. The second biggest difference between Rand and Locke is she shows the central place of reason and the mind in man’s existence. Evolution had not been discovered at the time of Locke, so he could not use it to develop his ethics. Another major achievement of Rand was to debunk the supposed is-ought dichotomy.
In answer to those philosophers who claim that no relation can be established between ultimate ends or values and the facts of reality, let me stress that the fact that living entities exist and function necessitates the existence of values and of an ultimate value which for any given living entity is its own life. Thus the validation of value judgments is to be achieved by reference to the facts of reality. The fact that a living entity is, determines what it ought to do. So much for the issue of the relation between “is” and “ought.”[11]
This issue was supposedly first raised by David Hume who lived after John Locke died. As a result, this was not a problem which Locke could address. In fairness to Hume, Rand starts with one assumption or observation in order to solve this problem, mainly that a living entity has to value its own life. As I pointed out earlier it is impossible to have a logical system that is not based on at least one assumption or observation.[12]
I have suggested that a deeper understanding of these issues can be had by understanding that evolution is the application of the second law of thermodynamics (entropy) to living organisms. Note I am not the first person to suggest that evolution and entropy are related. Applying entropy concepts to living organisms is fraught with potential logical errors. I have attempted to avoid them in my writings, but in passing these around I have found that even my most ardent supporters found them a little difficult to get through. My most well received post along this line is Sustainability isn’t Sustainable. My other posts on point can be found below.[13]
Life is a fight against entropy. Entropy as applied to economics is the concept of diminishing returns. It shows that inventions are the only way to overcome entropy – production without invention leads to the Malthusian Trap. As a result, this idea is consistent with Rand’s idea that the mind and reason are the primary means of survival but refines this to the understanding of the critical role of inventions.
Why is this important? Because the intellectual battle today is against those people who have combined an incorrect interpretation of entropy with Kant’s emotion driven epistemology. These people do not believe human life is valuable, in fact they believe humans are evil because they believe we accelerate the entropy of the Universe. Other living species do not harness and use energy (outside their physical body) so they do not accelerate the entropy of the universe and therefore are not evil. These people advocate the death of at least five billion people as a moral good. The basis of their morality is founded on a flawed understanding of entropy and physics. For more information see The Pseudo Scientific Basis of Environmentalism. Defeating this evil philosophy intellectually is vital to anyone who values human happiness.
Property Rights
Locke formulation of property rights is based on the Labor Theory of Property, which is commonly stated as when you mix your labor with natural resources you obtain property rights in your creation. This has been purposely mischaracterized and attacked by Locke opponent. Adam Mossoff has an excellent paper on point entitled Locke’s Labor Lost. Locke’s concept of property is that your productive effort crates a property right in the thing you created. One problem or misinterpretation of Locke’s theory of property rights is that labor means physical labor. This is most likely a mischaracterization, but leaves open the question of whether intellectual property such as patents is property.
Rand’s theory of property rights is that they derive from your right to life.
The right to life is the source of all rights—and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.[14] (Emphasis Added)
But Rand’s understanding that man’s mind is the most important tool for survival causes her to put intellectual property rights as primary.
Patents and copyrights are the legal implementation of the base of all property rights: a man’s right to the product of his mind.[15] (Emphasis Added)
Ayn Rand’s more detailed understanding of man leads to the primacy of man’s mind and reason as his tool of survival. This leads to a deeper understanding of property rights and the primacy of intellectual property rights. My refinement of Rand’s ideas leads to the primacy of property rights for inventions.
Conclusion
Locke and Rand are not in conflict philosophically, but Rand provides a coherent ethics based on the fundamental nature of man and living organisms, which Locke did not. Rand’s main difference in her epistemology is to dispense with the need for a deity, even one whose only effect was to create the world and her tackling of Kant’s emotion is a path to knowledge. I see the relationship between Rand and Locke as the difference between Newton and Einstein or Algebra and Analytic Geometry; refinement not opposition. I believe that Rand’s ethics can be further refined by understanding how entropy and evolution are related. This leads to a slightly different understanding of property rights, but more importantly provides a direct argument against the religion of environmentalism and the related we are running out of natural resources Malthusian economic argument.
[1] Ayn Rand’s Critics, Capitalism Magazine, by JAMES VALLIANT, http://capitalismmagazine.com/2011/08/ayn-rands-critics/, accessed 3/20/13.
[2] RESEARCH ON JOHN LOCKE’S INFLUENCE ON THE PHILOSOPHY OF DEISM DURING THE AGE OF ENLIGHTENMENT, Robert Waxman, http://www.robertwaxman.com/id85.html, 3/18/13.
[3] The Empiricist John Locke, http://nmalbert.hubpages.com/hub/The-Empiricist-John-Locke, 3/18/13.
[4] “Concept-Formation,” Introduction to Objectivist Epistemology, 11–12
[5] Locke’s Moral Philosophy, Stanford Encyclopedia of Philosophy, http://plato.stanford.edu/entries/locke-moral/, accessed 3/20/13.
[6] The state of nature concept has been much maligned by Marxists and others. They have purposely distorted his argument into an anthropological statement. This clearly was not Locke’s intent and shows an intellectual dishonesty on the part of Marxists.
[7] For those people who do not know, Relativity and Quantum Mechanics are in complete agreement with Newtonian physics except in the realms of very fast systems, very high gravitational fields, and very small distances. This is part of how we know they are correct.
[8] It is surprising that Rand was indifferent on the idea of evolution. Her ethics is clearly based on the same concepts. I believe the reason for this is she was worried it would lead to erroneous ideas about Determinism.
[9] What Is Capitalism?” Capitalism: The Unknown Ideal, 16
[10] The Comprachicos,” Return of the Primitive: The Anti-Industrial Revolution, 84
[11] “The Objectivist Ethics,” The Virtue of Selfishness, 17
[12] This is a favorite argument of Christians. They believe it shows morality is impossible without god. This is inconsistent with both Locke and Rand.
[13] The Science of Economic Growth 1-3, http://hallingblog.com/the-science-of-economic-growth-part-1/, http://hallingblog.com/the-science-of-economic-growth-part-2/, http://hallingblog.com/the-science-of-economic-growth-part-3/; and
The Pseudo Scientific Basis of Environmentalism http://hallingblog.com/the-pseudo-scientific-basis-of-environmentalism/.
[14] “Man’s Rights,” The Virtue of Selfishness, 93
[15] Rand, Ayn, Capitalism: The Unknown Ideal, Signet, New York, 1967, p. 130.
In an opinion piece on Fox News entitled “America’s patent system is all wrong for today’s high-tech world”, Mr. Forbes argues that “patent holding entities that do not produce anything in the way of devices or technology are disrupting the free market and stifling innovation for consumers.” Patent pools were first created during the sewing machine patent wars in the 1850s. (For more information see Adam Mossoff’s excellent paper The Rise and Fall of the First American Patent Thicket: The Sewing Machine War of the 1850s.[1] ) During the sewing machine wars it was found that overlapping patent rights made it impossible to produce the best sewing machine for the customer. As a result, a patent pool was created to clear these rights and allow manufactures to produce state of the art sewing machines. A patent pool is nothing more than a clearing house for people’s rights in their inventions, much like ASCAP works for copyrights. Patent pools allow for the efficient division of labor between inventors and manufactures and reduce wasteful litigation. In this sense they are similar to how title insurance works for “real” property.[2] Patent pools were and are a free market device that allows for the efficient clearing of property rights by contract. Patent pools combine people’s right to their property with their right to contract. Both of which are part of a free market. It is disappointing that Mr. Forbes who styles himself a free market proponent has missed these obvious facts.
Mr. Forbes uses the standard rhetoric of the antitrust laws. These laws are not part of the free market, and were championed by people who opposed the free market and property rights, such as Teddy Roosevelt. The FTC’s attack on patent pools and licensing in the 1970s did more damage to the economy than the 911 attackers did. For more information on the FTC’s traitorous attack on US property rights see Jobs, the Economy and Patents.
The article states a number of other fallacies. For instance, Mr. Forbes repeats the idea that there were too many dubious software patents issued. Any objective study of this issue has shown that it is nonsense. For instance, see the paper Of Smart Phone Wars and Software Patent.
The article also asserts that patents that are about to expire necessarily have a lower market value. First of all the market determines the value of patents, not Mr. Forbes arbitrary dictates. Second, patents that are older and cover technology on which numerous other inventions are built are more valuable because they are building blocks. Algebra is not less valuable today than it was when it was discovered, it is more valuable because other areas of math build on that knowledge.
Mr. Forbes suggestion in his conclusion that patents are regulations shows a profound ignorance of property rights and the free market.
America’s patent system is all wrong for today’s high-tech world
[1] My only complaint with Mr. Mossoff paper is that he suggests that a patent thicket existed. A patent thicket cannot exists in a free market, at least as the term was originally defined. There are a number of papers on point, if you want a link to them let me know.
[2] Real property in law refers to land and permanent structures. This is similar to the use of real in math to refer to real numbers. Imaginary numbers are real in that they exist as do patents, other intellectual property and personal property (Cars, tools, etc.).
Fox News has an article, Wright brothers flew 2 years after Gustav Whitehead, Researcher Claims, that suggests that Wright brothers did not invent the airplane. The article is correct; the Wright brothers invented the system that allows for controlled, powered flight. Their plane used wing wrapping, but their patent application made it clear that they could use control surfaces (ailerons, elevators, and rudders). Rudders were known before the Wright brothers. The article suggests that Whitehead was the first person to achieve powered flight, but this is clearly incorrect. There were numerous people before Whitehead and the Wright brothers who had achieved powered flight. Others had also understood the need for a rudder, but only the Wright brothers understood the need for all the control surfaces.
I decided to investigate if Whitehead had any unique control surfaces? Since most people do not understand what the Wright brother invented, this information is difficult to come by. But as best as I can tell Whitehead had a rudder and shifted his weight in the aircraft to control the plane. This was not unique when Whitehead undertook his flight. In other words Whitehead’s flight was a demonstration of what was known, not an invention.
This article is typical of the ignorance in the debate about invention and patents.
For another example of this ignorance see Did Edison Invent the Light Bulb?
I would like to believe these are innocent mistakes – but I don’t. I think they are a coordinated attack on the patent system and individual inventors. The goal of this attack is to suggest that no one invents anything and therefore the patent system is unfair and should be eliminated.
Reason Magazine has released a video, entitled How Patent Trolls Kill Innovation. The magazine banner states that they support “Free Minds and Free Markets” but this video relies on the same irrational, emotion driven logic as the media. I cannot point out all the errors in this video, but below I will highlight some of the major points. Before I do that , let me show some of the sleazy attempts by Reason Magazine to use emotion and hidden assumptions to advance their argument, instead of reason and logic.
Emotion and Faith
*The video starts with the hidden assumption that patents are not property rights – faith not reason.
*The video uses the phrase “patent trolls” to immediately define who is right or wrong without actually proving their case – an emotional appeal.
*The video selects a small entrepreneur to narrate their story – using the typical liberal tactic of pretending this is a fight between a small virtuous entity against a big faceless entity. The reality is that so-called “Trolls” sue large entities much more often than small businesses. Emotional appeal, not reason.
*The video uses an “expert”, Julie Samuels, from a biased source, (Mark Cuban’s lobby group) who has no qualifications in the subject. She has a degree in Journalism and Law, which means she is NOT A PATENT ATTORNEY and does not have the technical skills to understand the underlying technology of patents. Faith not reason.
Title Search
The video never asks if Austin Meyer did a patent search and clearance opinion before building and selling his software. You would not build a house without doing a title search to make sure you owned the land. Given Mr. Meyer’s surprise that he was being sued for patent infringement, he almost certainly did not undertake this simple due diligence step.
Using Other Peoples’ Property
Mr. Meyer complains that he may have to pay the patent holder for the life of his product. Yes, that is what happens when you use someone else’s property. This is like a steel manufacturer complaining that they have to continue to pay for coal or pay rent for a building they do not own.
Note that the underlying technology is critical to Mr. Meyer getting paid, but he doesn’t want to pay for it.
East Texas
The anti-patent crowd always complains that these suits are brought in East Texas. If someone refused to pay you rent for staying in your house, would you chose the slowest court in the country or a faster court? Federal Court for the Eastern district of Texas has been one of the fastese to bring invention squatters to justice.
Patent Trolls
The video makes the implicit assumption that non-practicing entities (NPE) are evil. However, Edison was a NPE, as was Tesla, as was almost every great inventor in the last 200 years, as our most major corporations, as most of our Universities and Government labs. Our Founders looked at the issue of requiring inventors to practice their invention in order to keep their patent and rejected it. They voted for a FREE MARKET system where people could be independent inventors, just like writers do not have to be publishers in order to obtain or keep their copyrights. This is consistent with Adam Smith’s division of labor theory.
The video takes the stand that if you buy the patent rights instead of being the inventor,this is somehow evil. First, all corporations buy their patents – often by paying wages. Corporation don’t invent so they have to buy their patents. Second, we do not argue just because you didn’t build your house you cannot rent it out .
Old Technology
Mr. Meyer states in the video that the technology he wants to use is old, from the 80s. If this were true, Mr. Meyer would be free to use it. But, instead, he wants the updated version of the technology that ensures he gets paid, he just doesn’t want to pay for it.
The Patent Should Not Have Issued
Neither Mr. Meyer nor the so called expert, Julie Samuels, are patent attorneys. They are NOT QUALIFIED to evaluate the scope of the claims of a patent. It is interesting how lay people (I include attorneys who are not patent attorneys in this definition) believe they can just read a patent and evaluate it, but they would never try to do the same thing with a Warranty Clause in a contract or an Indemnity Clause. No one would believe a Journalism major or an attorney (non-technical) is qualified to comment on software technology; but somehow they are qualified to comment on patents on software? This is like asking a plumber to comment on the design of a Nuclear Power Plant.
Patents and the Free Market
Patents are property rights, just like a property right in a farm. The basis for all property rights is creation. Inventions are clearly creations. Property rights are part of the free market. Those countries that are the freest economically have the strongest patents laws, are the most innovative, and have the highest standards of living. REASON MAGAZINE is pushing a point of view that is much more consistent with a Marxist’s labor theory of value than Capitalism.
REASON MAGAZINE is neither promoting REASON or FREE MARKETS in posting this video.
At first glance the Koontz v. St. Johns River Water Management District case does not appear relevant to patent law. It is a Fifth Amendment regulatory takings case revolving around wetlands and private property. But as I will explain in more detail below the underlying problem in both these cases is a lack of understanding of property rights. The facts of the Koontz case according to Fox News are
Coy Koontz in the 1970s bought a parcel of land, the majority of which later was classified a wetland. When he sought a permit to develop a portion of it in the 1990s, the Florida agency in charge of the area said Koontz would need to take steps to remediate the damage he would cause.
Koontz offered to give the agency 11 of the 15 acres, in exchange for a permit to develop the remaining land. In addition, the state government said he would need to undertake other improvements. Options ranged from numerous changes to the original plot to paying for enhancement of 50 government-owned acres miles away from the Koontz plot.
Though Koontz continued to offer the 11 acres, he refused to go along with the government’s other requirements and decided to sue.
Antonin Scalia’s comments at oral argument illustrate this lack of understanding of property rights. “I can’t see where there’s a taking here,” Scalia said, adding, “Nothing’s been taken.” Ronald Reagan must be rolling over in his grave – he appointed Scalia (For more of Scalia’s outrageous thoughts see The Soviet Union’s Constitution Was ‘Much Better Than Ours’). Scalia’s thought process, as best I can understand it, is that Koontz still has legal title to his land and his land is still there – it was not taken. Judge Scalia seems to not understand the difference between property rights, possession, and the object. (For more information click here) Property rights define a relationship between a person and an object or thing. When Mr. Koontz acquired title to the land, it did not have lien or an easement that required him to give up a part of land or pay for the enhancement of government land. The government changed his rights in the land. The Fifth Amendment states “nor shall private property be taken for public use, without just compensation.” Mr. Koontz right to develop his property and his right to enjoyment of his property have clearly been altered without compensation. The government has taken these rights in his land for public use, so it is clearly a taking.
Scalia has also shown an appalling lack of understanding of patent law and it is because he does not understand property rights. Property rights derive from the fact that a person owns their self and therefore they own those things they create. Patents are property rights that the inventor gets because they created a new invention.
Mr. Koontz attorneys work for the Pacific Legal Foundation. This group does good work protecting economic freedom, but they also do not understand property rights either. At least one of their lead attorneys believes intellectual property should not exist – see Another Confused Libertarian on Intellectual Property . These people believe that property rights exist or should exist only because they result in more optimum economic outcomes. Really, they should call they them ‘property privileges’ or ‘property expediencies.’ Their commitment to so-called property rights only lasts until they are convinced they know what better to do with your property.
So what we have is a case in which the supposed defenders of property rights do not understand them. What do you think the likely outcome will be?
Patent and Property Rights
When the so-called defenders of property rights, believe they are just a political expediency that produces the best outcome for the collective, you can bet they will never support patents, which are property rights in an invention. I have seen patent attorneys attempt to use this line of reasoning with patents. They are happy to have people characterize patents as a monopoly, but think this is irrelevant because they can show patents are good for the economy. These people do not understand the philosophical battle over patents or the definition of a monopoly. They believe that because the anti-property rights crowd believe in monopolies for electrical and water systems, they will be in favor of monopolies for inventions. However, they forget that in the electrical and water systems case the anti-property rights crowd supports this because it increases government power, not for the bogus efficiency argument. But patents increase the power of the individual, not the state. So it does not matter how well you can show that patents are important for economic growth and improve everyone’s life, they will not favor it because it increase the power of private citizens.
Property rights are derived from the right to own oneself. If you do not own yourself, you are not free and do not live in a free society. If you own yourself, then you own that which you produce, including inventions. The patents are monopolies argument is without any merit from a historical, definitional, and empirical point of view. Understanding that patents are property rights is the key to both solving the patent problem and the Koontz case.
For more on patents and monopolies see.
Monopoly/Rent Seeking vs. Property Rights/Intellectual Property .
This post explains the characeristics of a monopoly and a property right and poses three questions to show the difference. Patents fit all the characteristics of a property right and none of a monopoly. Note that professional license, such as a law license has some of the characteristics of a monopoly.
Patents: Monopoly or Property Right a Testable Hypothesis
If patents are a monopoly, as some suggest, then it should led to certain outcomes. A close examination shows that none of the supposed monopoly effects result from granting patents.
More on the Myth that Patents are Monopolies.
This post contains a number of quotes from philosophers explaining that patents are not monopolies.
Property Rights, Possession and Objects
This post explains the difference in the concepts of property rights, possession, and objects. Most economists and patent detractors confuse these concepts. The origin, definition, and legal basis of property right are explained.
The Myth That Patents are a Monopoly
This post compares the definition of a monopoly to the rights obtained with a patent. It shows that the rights obtained with a patent do not confer a monopoly.
People who believe that software should not be patentable often argue that there are only so many combinations of instructions that can be made. Since the universe of instructions is limited all possible combinations are conceivable and therefore obvious and of course each instruction acts in a predictable manner. If we used this line of reasoning for music, which only has thirteen unique notes[1] (all of which act in a predictable manner), you would assume that over the course of history every song has been written. And yet we find that people keeping coming up with new songs. It is very rare for two songs to be the same or even similar unless the second composer had access to the first composer’s song. With so few basic building blocks, much fewer than any high level computer language, how is this possible. We hear the Free Software Priests tell us it happens on the time in the world of software. Perhaps a little math can help us unravel this conundrum. The number of possible combinations for combining thirteen notes at one time is 6.2 billion. Now it would be fair to say that some of the combinations would never be found in any musical score, but this is just for one note in time. If we assume the average song is three minutes longs at 100 BPM (Beats Per Minute), which at the lower middle range of a metronome, and a unique combination of notes is played every beat, then we end up with 1.8 trillion possible songs. It is not too surprising, given this that artists do not simultaneously create the same song and that we have not run out of songs.
This whole line of reasoning also degrades what the creator of a song does. It suggests that they just string together random notes and then decide which random group sounds is pleasing. To listen to each of these possible combinations would take 10.8 million years. Even if one in a thousand of these combinations was a useful song that would require fifty hours of listening and then having the discernment, intelligence, and diligence to pick it out of that random group. Something I bet only a skilled musician could do with any meaningful success rate. So it is clearly absurd to suggest that just because the number of unique notes in music is very limited that it takes no or even ordinary skill to create a quality song. It is even more absurd in the case of software. The number of instructions in high level software is in the hundreds or more. While each instruction may not be unique changing the variables on which it operates makes it different. So clearly software has many more building blocks. But the Free Software Priests might complain that most software is executed one instruction at a time. This is true, but even a slow processor, such as the 80386 could execute three Million Instructions Per Second (MIPS) so in comparison to the thirteen unique notes at 100 BPM we are talking about more than 1.6 million unique combination per beat. Clearly the numbers get astronomical. The Free Software Priests (FSPs) are pedaling their own Kool Aid in order to steal other people’s work or cover up their inadequacies as programmers.
PS. Chemistry is made up of only 102 elements. How long do you think it would take you to discover a simple element like methane by randomly combining elements? There are at least 108 million possible combinations and this hardly covers the problems of how to create these combinations. The FSP are not dealing in logic and reason, they are dealing in propaganda that hides their anti-property, anti-individual, anti-reason thesis.
[1] In one octave there are only 13 notes including sharps and flats. Other octaves are just harmonics of these notes.
According to the website China Briefing, China now files more patent applications per year than the US. This is just one more sign of how far the US had fallen technologically. Just twelve short years ago the US was the economic and technological leader of the world, today it is quickly slipping into the abyss of has been countries. Detractors will point 
out that patent applications do not necessarily correlate to meaningful technological advances. This may be true in the short run, but this is not the only indicator that the US has lost its way. There are a plethora of warning signs the Sun is setting on what was the greatest nation in the history of the world, including a steeply declining economic freedom rating, and the fact that China is likely to have a larger economy than the US sometime in 2020s. Our President is too busy pandering to dictators around the world and acting like Santa Clause with other people’s money to notice. We have traded greatness for the USSA.
It is quite common for Austrian Economists and others to suggest that the Federal Reserve created a Tech Bubble (Dot-Com Bubble). If by a technology bubble they mean that real wealth was not created in the 90s this is nonsense. First of all the price of gold fell from 1998 until around 2001. The price of gold is one of the best indicators of inflationary policies. Second, the Fed started raising interest rates in June of 1999 from a Fed Fund Rate of 4.5% to 4.75%. This persisted until January of 2001, when the Fed Fund Rate stood at 6.5%. This is hardly an accommodative monetary policy. Third, industrial production grew by about 42% from the end of the recession in the early 1990’s to the end of the recession in 2001. Fourth, median household income increased by 34% in the 1990’s. Fifth, the stock market had real gains even after the bust of 2000. In the 00s, industrial production actually fell from the end of the recession in 2001 to the end of the recession in 2009, median household income declined, the price of gold soared, the Fed lowered interest rates to zero, the stock market did not grow at all. To lump the 1900′s with the housing bubble of the 2000′s is wrong and misleading.
The facts just do not support the Bubble myth of the 90s. Real wealth was created in the 1990’s. The stock market had probably gotten ahead of itself, but the Fed’s attempt to engineer a soft landing just made the correction worse. This caused Congress to get involved and pass Sarbanes Oxley that destroyed the IPO market. They also made changes to the patent laws – weakening them, changed the accounting rules on stock options – requiring a phantom expense, eliminated pooling of interests accounting for mergers – making it less attractive for technology startups to merge. But for these stupid policy changes, the technology market and economy would have started growing again. In any large group of people, the only way to increase the per capita income/wealth is to increase the level of technology. US policies since 2000 have stifled technological innovation.
The so-call Dot-Com bubble is a myth. Misdiagnosis of what happened in the late 1990’s has resulted in bad policy decisions. Jack Kemp exposed this issue in Criminalizing Corporate Behavior http://www.jewishworldreview.com/cols/kemp.html.
Dot-Com Bubble Myth, Dot-Com Bust, Tech Bubble
The Supreme Court agreed to review the case Association for Molecular Pathology (AMP) and ACLU v. USPTO and Myriad Genetics (Fed. Cir. 2012). Myriad holds a patent for identifying certain mutations in the BRCA genes that correlate with an increased risk of breast and ovarian cancer. Myriad’s stock dropped nine percent on the news. This is the market’s way of saying they don’t believe the Supreme Court will uphold Myriad’s property rights. The Supreme Court has displayed a shocking lack of understand of patents and property rights. For instance, their decision in Mayo Collaborative Services v. Prometheus Labs., Inc. (Supreme Court 2012) if followed logical would hold that only magic is patentable. If I were handicapping this I would say there is a 75% chance that the Court will hold all the claims do not meet the requirements on 35 USC 101 (Patentable subject matter). This will be devastating to the biotech industry, 
probably wiping out billions of dollars of value in a single day.
This case revolves around the myth that you can patent a person’s genes. A number of books have been published on this theme and I have explained why this is nonsense in my post Patenting Life. The CAFC’s most recent decision discussed below also explains why this is not true.
The only issue involved in the Myriad case is whether the claims are patent eligible under 35 USC 101. In the Mayo case the Supreme Court mixed the concepts of 35 USC 101 (patent eligibility) with novelty (35 USC 102) and nonobviousness (35 USC 103). No doubt we will see more of this confused statutory interpretation by the Court in this case. The only minor justification for this confusion is that 35 USC 101 states the invention must be NEW and useful. However, 35 USC 102 clearly defines novelty (new) in detail and any invention that meets the requirement of 35 USC 102 should be considered NEW under 35 USC 101. This is something that should have been fixed in the America Invents Act that was just passed in 2011, but the drafters were too busy passing out goodies to Wall Street, pharmaceutical companies and large companies generally to actually worry about improving the clarity of statute.
CAFC ruling under reviewed
The ruling in the 2012 version of this case was very similar to the ruling in 2011 that I discussed in my post Association of Molecular Pathology v. USPTO. Below I provide what I think are the most interesting excerpts from the opinion.
Composition claims are all eligible under 35 USC 101.
They (The isolated strands of DNA) are obtained in the laboratory and are man-made, the product of human ingenuity. While they are prepared from products of nature, so is every other composition of matter. All new chemical or biological molecules, whether made by synthesis or decomposition, are made from natural materials. For example, virtually every medicine utilized by today’s medical practitioners, and every manufactured plastic product, is either synthesized from natural materials (most often petroleum fractions) or derived from natural plant materials. But, as such, they are different from natural materials, even if they are ultimately derived from them. The same is true of isolated DNA molecules. PP. 38-39
The highlight portion points out a general rule of patent law (actually nature) – all inventions are combinations of existing elements, these elements are formed from natural materials. You cannot create something from nothing – it’s called conservation of matter and energy. Unfortunately, this simple rule of physics is often ignored by the courts – probably because most of them do not have a scientific background and are therefore unfit to rule in patent cases.
A composition of matter is not a law of nature. P. 51
The anti-patent crowd has been trying to expand laws of nature to include anything that occurs naturally. A law of nature is something that explains a host of data and can be used to accurately predict how things will behave in nature, such as gravity. Using a counterbalance in an elevator uses gravity – a law of nature, but it is not a law of nature.
It is undisputed that Myriad’s claimed isolated DNAs exist in a distinctive chemical form—as distinctive chemical molecules—from DNAs in the human body, i.e., native DNA. P. 44
The critics of patenting human genes miss this point. The claims do not cover native DNA, they cover DNA that does not exist but for the intervention and ingenuity of humans.
Claims 1 of the ’999, ’001, and ’441 patents, as well as method claims 1 and 2 of the ’857 patent—all of which consist of analyzing and comparing certain DNA sequences—not to be patent-eligible subject matter on the ground that they claim only abstract mental processes. P. 55
I strongly disagree with this statement. Myriad clearly showed that the analyzing step requires machines that are clearly described in the specification. Even if a doctor had the print out of the results of analysis and then he compared the results without a machine, then this is contributory infringement. The only justification for the CAFC’s decision is hyper technical analysis of the claim that requires a recited machine in the claims. This sort of overly formal interpretation does nothing to protect the property rights of inventors, but does advance the interests of entities that want to steal other people’s inventions.
We once again, even in light of Mayo, arrive at the same conclusion of patent-eligibility because at the heart of claim 20 is a transformed cell, which is made by man, in contrast to a natural material.
By definition, however, performing operations, even known types of steps, on, or to create, novel, i.e., transformed subject matter is the stuff of which most process or method invention consists. All chemical processes, for example, consist of hydrolyzing, hydrogenating, reacting, etc. In situations where the objects or results of such steps are novel and nonobvious, they should be patent-eligible. P. 61
The idiots at the Supreme Court have attempted to break claims down and determine if each step is new. You can’t create something from nothing and a step which is completely new does not meet the requirements of 35 USC 112. This form of interpretation of the claims was specifically rejected by the 1952 Patent Act under 35 USC 103. But the anti-patent Justices on the Supreme Court are not interested in logic, the Constitution, or the law. They are only interested in forcing their policy visions on the American public.
We hold that claim 20 of the ’282 patent recites patent-eligible subject matter under § 101.
Conclusion
The Supreme Court is incompetent to hear patent cases and their jurisdiction over them should be removed by Congress.
Edwin Armstrong is the inventor of FM, the Regeneration receiver, Super Regeneration, Superheterodyne, and many others. This creative genius’ life was wasted fighting RCA who blatantly stole his patents for FM and the FCC arbitrarily moved the FM radio range from 44-50 MHz to 88-108 MHz, where it is today, just to destroy the network of radio stations Armstrong had built up. Channel 1 on you TV would be at 44-50MHz and this is why it does not exist. The failure of our government to protect property rights and the arbitrary power given the FCC, kept all of us from enjoying FM radio decades earlier, arbitrarily destroyed the investment of hundreds of people, and diverted Armstong from inventing, which probably deprived us of other great inventions. Mr. Armstong’s life encapsulates everything that is wrong with the United States today.
Here is a great article on Amrstrong http://www.k3dav.com/edwinhowardarmstrong.htm.
Of course the anti-patent crowd does not believe in genius, at least in the technical arts. Economist argue against that someone would of come up with these inventions because of market demand. First of all there is no “market demand” for something that does not exist. Second, all macroeconomic evidence shows that in the absence of property rights for inventions, technological change is glacially slow and mankind falls back into the Malthusian Trap.
The temperature on Earth is a heat transfer problem. This post will outline the basics physics involved. First of all you have to determine the sources of heat for Earth. The main source of heat for the Earth is the Sun (S). Much smaller sources of heating on Earth are the thermal heat from geothermal sources and stellar radiation. Geothermal energy has been decreasing over the life of the Earth and presently is likely too small to have any significant effect on temperatures. Stellar radiation probably varies over huge cycles as the Solar System orbits the Milky Way, but is still small compared to the Sun.
The next question is whether S varies as a function of time. The answer is yes. For instance, sun spots cause variations in S. Unfortunately, our physics does not allow us to model S(t). At best we only have a vague idea based on historical evidence and what we know about other similar stars. However, no one with certainty can say that the Sun’s output will not change radically the next year. We have data on the Sun’s output that at best goes back with any accuracy 800 years. Eight hundred years is not statistically significant compared to the 5 billion years of Earth and statistical modeling would still just be a guess. We know similar stars eventually expand to several times the Sun’s present size and its output changes radically. In addition, the amount of Solar radiation reaching Earth varies based on the variation in Earth’s orbit Milankovitch cycles. These can be predicted and show a strong connection with Ice Ages, although all the mechanisms are not known.
Some of the solar radiation that hits Earth’s atmosphere is absorbed and some is reflected. In addition, the Earth radiates some of its energy into space. The amount of solar radiation that is reflected varies over time based on the different spectrum of light hitting the Earth and based on changes in the Earth’s magnetic field and clouds. These variations are not well known and cannot be accurately modeled. The amount of solar radiation that is absorbed necessarily varies also. Things that affect the amount of absorption include clouds, greenhouse gases, absorption by the surface of the Earth and changes in Earth’s magnetic field. Of the greenhouse gases, water vapor makes up up 95% of the greenhouse gas effect – almost all water vapor in the atmosphere occurs naturally. CO2 represents about 3.6% of the greenhouse effect gases. However, only 0.117% of this is man-made. All man-made greenhouse gases consist of only 2.8% of the total. The whole theory of AGW (Anthropomorphic Global Warming) is based on this single factor.
Our model does not include the radiation of heat from the Earth, let’s call it E. All bodies radiate heat. Roughly the amount of heat radiated from Earth will be equal to the surface area of the atmosphere. However, the surface area of the Earth will vary based on the temperature and solar wind. PV=nRT. As the temperature rises the Volume and Pressure will increase. No one can accurately model this radiative cooling. In addition, there will be cooling because of the loss of matter.
So far we have the energy part of the equation. In order to convert this into a temperature on Earth we have to the specific heat of air, land – including the different geographic regions, and water. While it would be possible to determine some sort of average with some accuracy, this will not suffice because the air and water will move based on localized heating. This will cause variations in the surface temperature and the atmospheric temperatures, which would be difficult to relate back to the model and vice versa. No one can provide a good model for this term.
So what we have is an equation for the temperature on Earth T(t) which is the product of the Energy absorbed times the specific heat. The energy absorbed is a function of the energy hitting Earth, which includes the S – Sun output, stellar radiation and geothermal energy. We do not have an accurate model of the Sun’s output. We do not know if it will suddenly increase or decrease. The best we know is what has happened in the recent past. We do not know or have good model for the amount of energy that is absorbed. We do not know or have good model of the amount of energy emitted from Earth and we do not have a good handle on the specific heat or how to relate it to observed temperatures. Despite all this ignorance, we are to believe that the effect of man-made greenhouse can be accurately predicted. This is not science, it is guessing. To pretend we can predict average global temperatures within a tenth of a degree is absurd – it is debatable whether we can measure them with that sort of accuracy.)
Failures of AGW models:
1) They do not explain Ice Ages or subsequent warming periods. (I welcome comments, but if you support AGW you must provide a model that shows why ice ages occur or it will be deleted – I am not going to waste my time going down rabbit holes.)
2) CO2 levels generally rise after the Earth has warmed not vice versa. The likely reason for this is that the oceans hold enormous amounts of dissolved CO2. When the temperature of the oceans increase they release CO2.
3) No rational explanation is given for why AGW models focus on CO2 and other greenhouse gases, while ignoring the problems in their model.
4) The last 15 years have proven that AGW models are just plain wrong – but the excuse is we need more time. However, they were selective in their time periods in the first place. There was significant cooling in from 1965 to 1980, but they ignored this data and called anyone who pointed this out part of the Flat Earth Society.
5) There was significant warming from 1900-1940, but this is not correlated to increases in man-made CO2 and AGW models do not explain this.
6) The Japanese (IBUKU) satellite show that Industrial Countries actually are net carbon sinks.
7) The shows that AGW is a religion, it is not a science.
Supporters of AGW Lie, fudge data, or just make up data.
1) The 1st UN IPCC summary lied about what the scientists on the panel had said.
2) They lied about the temperature data in Climate Gate ignoring the Little Ice Age.
3) They claim that the number of polar bears is decreasing, this is just not true.
4) They claim the oceans are rising – this is not true.
5) They claim that the Greenland Ice Sheet is melting at an alarming rate – this is not true
6) They claim that the number of major weather events has increased – the evidence shows the exact opposite.
This list is almost endless, but I will stop here.
Supporters of AGW exaggerate the problems of a warmer Earth and ignore the Benefits
1) During the 5 billion years Earth has been around it has been in an Ice Age the majority of the time. Only during the recent warming periods have human civilizations thrived.
2) The North Pole could melt completely and the Earth’s Oceans would not be one millimeter higher.
3) A warmer Earth will produce more crops and reduce weather related deaths.
Supporters of AGW hate Humans
AGW supporters are the same environmentalists that will tell you there are too many people on Earth. Their solution to every problem is fewer human beings. There have been several very inexpensive solutions proposed on how to deal with Global Warming if it were true. The environmentalists were not interested in technological solutions, because are anti-technology, anti-human and EVIL.
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