Clvr.Tv
Rss Feed
Linkedin button

Archive for March, 2010


Aligning Unions with the Knowledge Economy

The importance and influence of unions has declined dramatically over the last thirty years.  While more than one-third of employed people belonged to unions in 1945, union membership fell to 24.1 percent of the U.S. work force in 1979 and to 13.9 percent in 1998.  Is there a way that unions, especially blue collar traditional unions, can increase their membership, align themselves with the knowledge economy, and help the U.S. become more competitive?

Unions are often perceived as lining their own pockets at the expense of non-union workers, the companies they work for, and the country’s interests.  Perhaps the greatest accomplishment of American unions was the AFL-CIO support for Poland’s Solidarity Union in the 1980s.  This support was a significant reason why the Iron Curtain fell.  This support for Solidarity shows that American unions are not Marxist.  I believe that it is possible for Unions to reorient their focus while still protecting their traditional role of protecting worker’s rights.  America’s shift to a corporatist society since 2000 is providing unions with a historic chance to revive their importance and help their country.

How can unions seize this opportunity?  They need to focus their efforts on the most important asset in a knowledge economy, intellectual property.  Unions have generally opposed the patent reform bills being proposed by Congress because they believe the bills will hurt America’s competitiveness and therefore the availability and quality of work for their members.  Now they need to become agents for inventors and refocus their lobbying efforts on strengthening our patent laws and demanding the other countries provide strong intellectual property laws.  Forcing other countries to respect our patent laws and strengthen their patent laws will keep quality jobs in the US and also help these countries to develop a culture of innovation rather than a culture of imitation and theft and long term poverty.

How can unions become agents for inventors and serve their traditional members?  Unions have the advantage of a large number of members with strong mechanical skills that have numerous potential inventions.  Unions should nurture the inventive interests of their members by providing education about patents and the invention process.  They should also provide funding for their member’s inventions and act as agents for these inventions.  In return, the unions would receive a portion of any royalties.  Unions have an inherent advantage over their members taking these projects on themselves.  One advantage they have is a large installed base for the inventions of their members.  They already have a mechanism for communicating with their members including training classes.  This significantly reduces the risk of bringing an invention to market that would be used by their members.  In addition, unions have a ready source of funds for development.  The retirement funds of unions need to be invested.  A very small slice of these retirement funds could be used to fund the invention program.  From start-up funding experiences we know that most of these inventions will fail or only be moderately profitable, however a few will be spectacularly successful.  By spreading the risk over numerous inventions, the union can obtain above average returns with less risk than their members attempting to commercialize their inventions directly.

Besides the direct financial return from any inventions the union decides to pursue, an invention development program would increase their membership.  If just one union member becomes moderately wealthy because of an invention their union decided to represent, the news would spread like wild fire and result in flood of new union members.  In addition, the union can use their member’s inventions as a bargaining chip in contract negotiations.  For instance, an invention on a better, cheaper, or faster way of installing electrical wiring could be used as a bargaining chip with the automakers or building contractors.  The union could provide a bid using or not using the invention.  If the company chose not to select the union’s bid with the invention, then the union could deny the company from using the invention.  If the union won the contract a portion of the payment would be for royalties for using the invention.

I would suggest that unions focus their initial inventing efforts on tools that their members are likely to use.  These tools could be branded and sold to the general public as well as to union members or the companies that they work for.  This would be the least risky inventions to pursue.  I would not suggest that union’s make the tools themselves as this would result in a conflict between representing their members and being a manufacturer.  However, they could use these invention to negotiate employment contracts in the companies that they select to make the licensed product.

If the unions adopt an invention agent model as part of their portfolio of services they provide for members it would:

* Increase their membership; provide a return on the knowledge of their members

* Increase the productivity and quality of the products made by the companies that work with the unions

* Improve the image of unions in the mind of the public

* Provide a counterbalance to the corporatism that is infecting the US

* Keep quality jobs in the US.

For more information on creating an invention company see The Next Big Thing http://hallingblog.com/2010/02/19/the-next-big-thing/ and Jump Starting a Secondary Market for Patents http://hallingblog.com/2009/11/16/jump-starting-a-secondary-market-for-patents/

 
Da Vinci Institute: Night with a Futurist

Dale Halling will be speaking at the Night with a Futurist event at the Da Vinci institute on April 5, 2010 at the Madcap theater.   As a patent attorney, Dale Halling deals with start-up entrepreneurs on a daily basis.  He began noticing a significant difference between the types of projects his clients were involved with in the 1990s and 2000s. Clients, in the 90s, would come into his office with plans to build businesses that were disruptive or revolutionary.  The technologies underlying these companies held the potential to completely redefine a market.  Some of the ideas would increase the available bandwidth by 10x for minimal costs or allow data searches that were 10-100x faster than existing technologies.  It was very exciting talking with these entrepreneurs.  Their energy was infectious and the potential implications of their work was mesmerizing.  However, the tech downturn of 2000-2001 changed all that.

After 2002, the start-up companies he came into contact with were all looking for narrow niche markets.  Instead of trying to make dramatic changes to technology and go public, these companies were looking to develop incremental changes and be bought out by an existing company.

He started wondering if other people in the tech world were seeing similar trends.

Recent innovations like the iPod, the tremendous amount of money Intel was spending to build their next microprocessor plant, and the social media industry are certainly innovative, but they are not capable of altering the entire economy like the Internet of the 90s.  The Internet in the 90s affected almost every business in the U.S.  It drove PC sales, retail, electronics, telecommunications, professional businesses, marketing, newspapers, and much more.  It also redefined whole areas of life, with email, online shopping, and online advertising. It was impossible to escape the effects of the Internet unless you crawled under a rock.

The personal computer revolution of the 80s had a similar effect.  The iPod has been cool, but hasn’t affected the whole economy.

So what’s behind all this? The changes have seemed subtle from the outside, but the ripple effects have been huge.

Join us as we take a hard look at how the face of innovation has changed, and what we can do to turn it around.

EVENT: Night with a Futurist
DATE: April 5, 2010 – Monday
TIME: 6:30pm-9:00pm
WEBSITE: http://www.davinciinstitute.com/events/433/night-with-a-futurist-monday-april–5-2010

LOCATION: MADCAP Theater, 10679 Westminster Blvd, Westminster, CO 80020
DIRECTIONS: Driving Directions

COST: $25, Members: Free, SuperMembers: Free
REGISTER: Register here

PHONE: 303-666-4133

TOPIC: “The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation”
SPEAKERS: Dale Halling, Allison Taylor, Catharine Merigold, Gene Branch, Mike Schmidt, Thomas Frey

 

Here is an interesting article.  David Murrin suggests that the passage of the health care bill is a signal that not only is the American Empire coming to and end but it is the end of the Western Empires.

The passage of the health care law shows that the US empire is declining because it illustrates the fact that people expect the state to take care of them, David Murrin, the co-founder of Emergent Asset Management hedge fund manager, told CNBC.

See the full interview.

 
Pat Choate: Technology Theft as a Business Strategy

Dr. Patent Choate has an excellent article in the Huffington Post, please read the full article, that shows that patent reform is really about patent theft by some of the largest technology companies.  As Dr. Choate explains:

America’s largest big tech corporations are now using a business technique called “efficient infringement,” which means that they calculate the benefits of stealing someone else’s patented technology against the possibility of getting caught, tried in court and being forced to pay damages and penalties. If the benefits exceed the costs, they steal.

The sad thing about the large technology companies cited in the article is that they all grew faster in the 90s when we had strong patent laws than in this decade.  Their desire to weaken the patent laws dooms them and the rest of the country to slow or nonexistent growth.  Ultimately, their actions will result in technological stagnation in the US.

Dr. Choate then give the specific example of how the large financial services companies conspired to steal a start-up’s, DataTeasury’s, patented technology.  Then they used their lobbyists to get a clause inserted into the so called “Patent Reform” bill that would have given all the defendants in the DataTreasury case immunity.  As the article explains:

Bank of America, Wells Fargo, and about a dozen other banks refuse to deal with the little company. Instead of paying up, those remaining banks have played dirty. In 2007, Washington lobbyists working for the banking industry had an amendment inserted into a pending patent-reform bill that would have granted legal immunity to all of DataTreasury’s defendants. The amendment died on the floor of the U.S. Senate after the press exposed the story.

As Dr. Chaote’s excellent book “Hot Property” vividly points out, lack of enforcement of intellectual property rights destroys innovation.  I particularly enjoyed his example of how Mexico’s failure to enforce copyrights has ensured that Mexico does not and will not have a recording industry – music or movies.  Theft always looks like a quick way to wealth, but it ultimately destroys the source of wealth creation.  These high tech companies would rather destroy America’s wealth than have to compete in the market on the basis of the technology they can develop.

 

The passage of the health care bill is the end of the American experiment with freedom.  This experiment with freedom created the greatest country in the world that propelled the world out of the Malthusian trap into unprecedented wealth.  This wealth and more importantly freedom was more widely distributed and benefited more people than any other time in the history of the world.  You no longer have the right to “pursuit of happiness.”  Here are some of the consequences of the health care bill:

1) Bankruptcy:  The US will become insolvent in the next decade.  By insolvent I mean either the US will renege on the terms of some of its debt or we will have double digit inflation.

 2) Constitution: The Constitution is now a meaningless piece of paper.  Any pretence that the government is limited has died.  The government can enact any legislation requiring anyone to take actions that government deems in its interest.  The government does not work for you, you work for the government; your only purpose is to serve the government.

3) Medical Innovation is Dead: This law ensures that we will have essentially no innovation in medicine.  The US is the only major country that invests in pharmaceutical research.  Most countries have been free riding on US medical research for years.

Here is a timely speech by Ronald Reagan on point

 http://www.youtube.com/watch?v=qXBswFfh6AY.

 
White House Proposes Innovation Prizes

According to Information Week Government, the White House is encouraging innovation prizes.  Innovation prizes have always been the substitute for a patent system as a way of spurring inventions.  Unfortunately, they tend to become politicized and are much more expensive than a patent system.  For instance, see the excellent book Longitude: The True Story of a Lone Genius Who Solved the Greatest Scientific Problem of His Time.  In that case, the brilliant clock maker was squeezed out of winning the prize for accurately determining longitude by the politically more connected astronomy community.  The patent system is self funded and provides infinitely more return than innovation prizes, such as the NSF, NIH, etc.  Unfortunately, Congress has stolen over $1Billion in user fees from the Patent Office over the last couple of decades.  As a result, the Patent Office is understaffed and now takes around three years to provide an initial examination of a patent application.  Instead of spending money on innovation prizes, the White House should return the $1Billion in user fees with interest back to the patent office.

 
The Ballad of the Patent Troll

This videoby Alexander Poltorak takes on a number of the myths associated with patent trolls.  The video explains the hypocrisy of large companies complaining about “Patent Trolls.”  It also makes an interesting point that patents are not a tax on innovation but a tax on copiers (non-innovators).  While I do not agree with all the points in the video, it makes a valuable contribution to the discussion about the value of patents.

 
Accounting Inhibits R&D

Accounting rules for R&D result in companies and nations under investing in research and development.   Since increases in real per capita income are the result of increases in our level of technology, this accounting error actually results in all of us being poorer.  The point of R&D is to create inventions, whether products or processes, that are useful.  R&D that does not result in inventions may be interesting intellectually, but does not increase our wealth- so the rest of the post will discuss investments in inventions as opposed to the more nebulous concept of R&D. 

 Creating an invention without obtaining legal title to the invention is like building an office building without obtaining title to the land and building.  Without legal title to the office building, you cannot finance the building, sell the building, or lease the building.  In other words, without legal title to the office building its economic value is significantly reduced.  The same is true of inventions.  Inventing something without obtaining legal title to the invention means that you cannot license (lease) the invention, cannot sell the invention, and cannot finance the invention. 

There are couple of ways to obtain title to an invention.  You can either obtain a patent on the invention or you can keep the invention a trade secret.  Many inventions are not amenable to trade secret protection.  As a society, it is better if people obtain patents instead of keeping their inventions a trade secret, since a patent allows other people access to the knowledge associated with the patent, allowing them to use this knowledge to build other inventions.

 The present accounting rules for the costs in creating an invention and obtaining title to the invention result in an immediate expensing of these costs.  While this may be helpful from a tax point of view, it causes these costs to appear superfluous.  Note that the rest of this post is concerned with accounting as an accurate measurement tool for the operations of a business and is not concerned with tax law, which has caused so many perversions to accounting and business generally.  Our present accounting systems never show  internally funded inventions produce any value. 

 

 
Study Shows Strong IP Key to VC Back Company Success

An article in IAM (Intellectual Asset Management), reports (please read the full article) on a study on the relationship between the success of venture backed companies and their intellectual property portfolio.  The study states

Success in the venture capital industry is an exit: an acquisition of, or an initial public offering (IPO) by, a portfolio company. Analysis shows that across all sectors a significantly higher percentage of venture capital backed winners (companies that have been acquired or have gone public) have patent portfolios as opposed to losers (companies that are out of business).

Winners are many times more likely to hold intellectual property than losers. Although the presence of intellectual property portfolios is not perfectly correlated to success or failure, this indication alone should support executive and investor focus on the role of intellectual property in their decisions and actions.

While having intellectual property increases the probability of success, those who manage intellectual property will have an even higher probability of success. In certain sectors, such as healthcare, data demonstrates the value of higher quality portfolios. In other sectors, such as telecommunications or information technology, the effect is less prominent – although still clearly and demonstrably present.

IAM summarizes it this way:

In fact, according to the metrics applied by IP Vision, 86% of the VC-backed winners (ie, companies that are acquired or go to an IPO) they identified had strong as opposed to typical intellectual property assessments. In other words, while a healthy IP position may not guarantee that a start-up technology company is going to be successful, it is going to find it a whole lot harder to succeed if it does not have one. And ,crucially, it is not just ownership of IP that is important, it is understanding the IP that is key.

The article also explains

[A] healthy IP position may not guarantee that a start-up technology company is going to be successful, it is going to find it a whole lot harder to succeed if it does not have one. And,crucially, it is not just ownership of IP that is important, it is understanding the IP that is key.

If you want to learn how to create strong intellectual property portfolio see my post IP Strategy Document That Amazes Investors .

 
Worldwide Patent Backlog

According to Intellectual Property Watch, the worldwide patent backlog “could impose £7.6 billion (about USD$11.3 billion) in annual expenses on the global economy within the next five years if nothing is done to fix it, according to a new economics study from the United Kingdom released this morning before directors of several top global intellectual property offices.”  Personally, I know this significantly underestimates the damage done by dysfunctional patent systems around the world.

The article suggests that patent harmonization is necessary to reduce the backlog.  However, harmonization has done nothing to reduce the backlog of unexamined patent applications to date.  In addition, all harmonization programs have been attempts to weaken the US patent system and give away our technology.  The article suggests that hiring additional examiners has not worked to reduce the patent backlog.  Of course, if the US government took its constitutional duties seriously they would prioritize the patent system instead of trying to take over health care, or spending billions on green projects or social engineering projects.

What is needed to reduce the backlog of unexamined patents is a reciprocity system.  Under reciprocity if an inventor received a patent in Canada they would obtain some patent rights in the US and vice versa.  This does not require harmonization, so it does not hurt the rights of US inventors.  “About 50 percent of patent applications seen in the US come from overseas,” according to David Kappos, Director of the US Patent and Trademark Office.  The US Patent Office is just repeating the work done in other patent offices of other countries.  While not all of these countries can be counted on to perform a thorough examination, many can.  It makes no sense that your patent is only valid in one country but can be invalidated by prior art anywhere in the world.  It’s as if you lost the rights to your car when you drove it into Canada.  Reciprocity would also encourage more investment in technology, which is the only way to increase real per capita income.

 
Hot Property

Hot Property by Pat Choate

This excellent book by Pat Choate will both frighten and upset you.  For instance, Dr. Choate relates the shocking tale of a woman from Alabama who received a counterfeit antibiotic for a routine infected ingrown toenail and almost died.  Counterfeit medicines kill and injure people every year.  The U.S. is not immune to counterfeit medicines entering our market as the story of the woman from Alabama shows.  Counterfeiting medicines has become a major criminal enterprise.  The reason for this, according to Choate,  is  the risk of getting caught counterfeiting legitimate medicines is significantly less than distributing and selling illegal drugs.  In addition, the margin for counterfeit medicines is often higher than the profits obtained selling illegal drugs (and less dangerous).

The pharmaceutical industry is not unique in dealing with counterfeits.   According to a FAA report,  176 aircraft accidents were the result of counterfeit parts between 1973-1996.  Almost every industry in the U.S. is under attack by pirates making counterfeit products.  The tales of counterfeit music, software, and movies are well known, but there isn’t a personal harm component.  It is past time that we deal with piracy issues effecting our citizens’ security.

A number of these pirates operate with the tacit or even explicit support of their governments.  Dr. Choate documents the long history of state supported industrial espionage.  Often foreign governments target certain technologies that both increase their commercial and military might.  Our government has not prioritized stopping commercial pirates or industrial spies and the United States citizens are all poorer for their negligence.  In some cases, there is even domestic industry that profits from the pirates’ activities at the expense of our long term future.  These domestic industries lobby hard for inaction on the part of our government.  For instance, the retail industry often turns a blind eye to trademark and copyright violations and other forms of counterfeit products.

Perhaps most maddening though,  is our government’s policy of giving away our technology.  For instance, Dr. Choate shows that during the Clinton administration and continued in the Bush II administration,  we failed to protect the technologies of our domestic inventors.  Our government gave away many of the most important safeguards in our patent system to the Japan and  Europe and received almost no concessions from them.  For instance, we now publish our patent applications at 18 months for the whole world to see and providing the opportunity to steal our technology.  We fought hard in the GATT trade negotiations to require other countries to strengthen their intellectual property laws and enforcement.  In return, we significantly reduced our tariffs on textiles and apparel.  This has decimated our textile and apparel industries; but these countries have not come into compliance with the requirements for strengthening their intellectual property systems.  We could bring suit against these countries in the WTO (World Trade Organization) and force compliance, but for some reason we seem uninterested or unwilling to require these nations to uphold their part of the bargain.  I am a strong believer in free trade, but stealing intellectual property is not free trade-  it is just theft, pure and simple.   Theft of real property results  in underinvestment in real property.  It follows that  theft of intellectual property results in underinvestment in technology,  making  us poorer in the US, which in turn makes the whole world poorer.

An interesting point that becomes clear in Hot Property,  is  the Reagan Administration took intellectual property rights, particularly patent rights, more seriously than any subsequent administration.  Reagan understood that our technological innovation has always been the key to our wealth.

 
“Mr. Watson. Come here. I need you.”

March 7 is the anniversary of Alexander Graham Bell’s patent on the telephone.  There is a common misconception that Bell received the patent over Elisha Gray because he was first to the patent office by several hours.  This is incorrect.  The United States has always had a first-to-invent patent system not a first-to-file system.  Let’s hope it stays that way.  (Congress is considering changing our patent laws to a first-to-file system, which would be disastrous for independent inventors and small companies.)  As a result, it was irrelevant who filed their patent application first. 

 Eventually a number of patents related to the telephone were all involved in an interference, which is a proceeding to determine who was the first true inventor.  According to an article in the New York Times dated October 24, 1884, there were originally fourteen parties involved in the interference but only six remained:  William L. Voelker (two patent applications), Thomas A. Edison (five applications), Elisha Gray (four applications), John H. Irwin & James W. McDonough (one application), and Alexander Graham Bell (two applications).  These patents appear to have covered eleven patentably distinct aspects (counts) of the telephone.  One count was directed to the speaker diaphragm, another count was directed to transmitting reproducing sound by increasing and decreasing the strength of an electric current.  Bell did not win on all counts. 

There are number of things that are interesting about this article in the New York Times.  For instance, the writer did not feel compelled to explain to his audience what an interference was or what a count in an interference was.  I cannot image this being the case in any general interest publication today.  Only in a publication specifically directed to patent attorneys would this be true today.  It is unlikely that any generally interest publication or even industry specific publication would carry an article on a patent interference.  Clearly, inventors and patents were held in higher regard in the late 1800s than today.

Another interesting point: there were many patents involved in the invention of the telephone.  These overlapping rights had to be resolved to create a functioning telephone system.  Any  number of patent critics today seem believe we are unique in having multiple patents that apply to a product or system; but at least since the invention of the steam engine it was common to have these overlapping rights.  Despite today’s critics , our ancestors were able to deal with these issues and move technology forward.  Why is this such a hard concept to reconcile?

 
Another Confused Libertarian on Intellectual Property

Timothy Sandefur is another Libertarian confused about intellectual property – see his article.  He suggests that Adam Mossoff’s article on Natural Copyrights and Ayn Rand’s thoughts on intellectual property are incorrect.  Mossoff and Rand have the better argument.  First of all it is clear that intellectual property rights are consistent with Locke’s view of property rights.  You own yourself and therefore you own the product of your labor mental or physical.

Portuguese Claim to Sea

The argument about the Portuguese claim to the sea is an attempt to condemn Locke by a misapplication of Natural Rights theory.  The Portuguese did not improve the sea.  According to the Portuguese argument when I drive over the road I own the road or if I walk over land I own the land.  Using a misapplication of Natural Rights theory is a red herring argument.

Non-Exclusive Nature

Patents do not keep you from thinking about the invention and in fact it is a purpose of patent law to encourage the dissemination of knowledge associated with inventions so that other inventors can improve upon these inventions.  Patents only restrict you from making a physical version (or threatening to do so – offer for sale).  An infringer of a patent is no longer making a non-exclusive use of the invention when they make it.  They have taken a part of the potential market for the invention.  This market is neither unlimited or non-exclusive.

Your argument about two people having two separate copies of the invention ignores the property right involved in patents.  The property right is not in the physical item.  When you steal my invention by making an unauthorized copy, you have initiated force not the patent holder.  This is similar to me stealing apples from your orchard.  I have not initiated any force against you, it is only when you call the police or come out with your shotgun that force is initiated.

The exclusive nature of real property is illusionary at best.  You only occupy and exclude the space you are presently in.  You do not occupy your whole apple orchard all the time.  If I take an apple from your orchard that you are not presently holding or eating then there is nothing “naturally” exclusive about your ownership of that apple.  If you own more land than you can farm or otherwise take advantage of and I decide to plant crops on that land I have not hurt you.  You have initiated force against me when you kick me off your land and you inhibit productive enterprise.

The non-exclusive nature of intellectual property is a confused argument.  If you are talking about physical exclusion then you should only own real and personal property that you are presently using, which would destroy the concept of  property rights generally.  If you are talking about the legal right to exclude others from using your property, then you have to be consistent with your definition of the legal right involved.  Intellectual property is not about physical ownership, so making a copy of another invention is a clear breach of the property right.

Simultaneous Invention

In your statement about “innocent” simultaneous inventors that, “but because you make it to the patent office first, you get the patent on that thing, and can therefore forbid the other person from making or selling his thing” is wrong.  The US is a first to invent country (at least so far) not a first to file country.  So just because someone beats you to the patent office does not mean they receive the patent.  However, you do make a strong point for why we should not change our patent laws to a first to file system.

More generally, the definition of an inventor is the first person to discover a new invention.  Only the first person adds to the store of human knowledge.  The second person is just clever.  If a person living in India rediscovers Calculus he is not the discoverer of Calculus because he did not add anything to the store of human knowledge.  In addition, there are an infinite number of potential inventions and increases in technology are the only way to increase our standard of living.  As a result, we want people to invent not to copy other people’s inventions.

Fair Use

Copyrights protect the artistic expression of an idea.  They do not protect every component of a written work for example.  Fair use is just a statement of this fact.  So copying a small portion of work is not a violation of the owner’s copyright because you have not taken their expression of the idea.  This is why one of the factors of fair use is how much of the work did you copy.

Intellectual Property and Free Markets

You state, “natural copyright is very dangerous to the free market, in that it proposes to forbid entrepreneurs from legitimate and praiseworthy uses of their liberty.”  Actually, the exact opposite is true.  By undermining intellectual property you are undermining the very basis of property rights and liberty.  The empirical evidence also shows that whenever a government refused to protect intellectual property rights they also do not respect other property rights or the mechanisms of a free market.

Locke’s Natural Rights

Natural rights theory is not only the historical and logical basis for property rights but explains most common law crimes.  The natural rights labor theory of property explains why slavery is immoral.  If you own yourself, then no one else has the right to own you.  It also explains why murder and manslaughter are immoral, why stealing is immoral, why assault and battery are immoral and why we have laws against all these actions.  The natural rights labor theory defines how property should be allocated and how people come into possession of property morally and legally.  The labor theory explains all of our basic criminal law and all of our basic property laws.  What does scarcity explain?  It offers no justification for why slavery, murder, manslaughter, assault and batter and theft are immoral, except that they are inefficient at allocating resources.  Thus, all of these crimes would be allowed if they were efficient at allocating resources.  Scarcity does not explain who has ownership in property or why they should have ownership in property.  It merely explains that private property ownership is an efficient manner in allocating scarce resources.

In science, the theory that has the greatest ability to explain the widest number of facts is considered to be the correct or better theory.  Here the “scarcity” theory of private property requires the additional assumption that it is preferable to have efficient allocation of resources.  However, it fails to explain how the resource should be initially distributed, it does not explain how property law determines ownership and has no power to explain criminal law.  Trading scarcity for the labor theory of property is like trading the theory that “what goes up must come down” for Newton’s Law of gravity.  The fact of the matter is that the proponents of scarcity have confused cause with effect.  A system of private property results in efficient allocation of resource, but it is not the reason for private property – it is the effect of private property.

For more information see Scarcity – Does it Prove Intellectual Property Rights are Unjustified? http://hallingblog.com/2009/06/22/scarcity-%E2%80%93-does-it-prove-intellectual-property-is-unjustified/

 

Subscriber Count

16

Advertise Here

Your Ad

could be right

HERE

find out how

Donations

Coming Soon
 

Subscribe