On 8/10/98, Albert Henderson <noblestation[_at_]compuserve.com> wrote:
>
> Dan L. Burk <burkdanl[_at_]shu.edu> wrote:
> >
> > Albert Henderson <NobleStation[_at_]compuserve.com> wrote:
> > >
> > > Since when is "breaking even" an incentive to invest?
> >
> > First, plese note that the language of "breaking even" is yours,
> > not mine, and you appear to be using it in a colloquial sense that
> > inaccurate for this discussion. But, to the extent that you may be
> > referring to the concept of pricing at marginal cost, it has been
> > an incentive since the concept of "investment" was developed --
> > probably c. 4000 BCE, or even before.
>
> The plain English "breaking even" to describe "beyond recouping
> their investment" or "pricing at marginal cost" is not inaccurate.
It is if you are using the term "breaking even" to exclude the cost of using money, which you apparently are.
> The opportunity to reap minimal profits or major losses is no
> invitation to invest. Investors risk losses only for the chance at
> major profits. Why should I kid around with esoterica when I want
> to communicate?
I don't know. Why should you?
With regard to the question of profits, the source of your confusion once again appears to be failure to distinguish accounting profits from economic profits. "Profits" in the sense that you appear to use the term are simply the cost of using capital (or sometimes labor). When the investors are paid off, the business in fact should in fact do no more than "break even."
> > > What is it that singles out "content-oriented" publishers for
> > > criticism while "conduit-oriented" information technology firms
> > > are encouraged to make all the profits they can?
> >
> > I'm afraid that I don't follow this question at all, particularly
> > the loaded language in the last line. Can you explain yourself
> > further?
>
> Xerox Corporation and others that enable unauthorized, illegal
> copying boast _profits_ far beyond the _gross_sales_ of any
> publisher.
In the first instance, I fail to see what your loaded language about "unauthorized, illegal copying" has to do with the comparison you are attempting to make. Xerox enables authorized and legal copying as well as unauthorized and illegal copying. I suppose that next you will want to compare publishers profits with those of General Motors, because some criminals drive their vehicles.
In the second instance, even assuming that your representation concerning revenue is accurate, it makes no sense to compare the profits of Xerox, or any other firm, with the "gross sales of any publishers," for reasons that you yourself pointed out above.
> David Packard (of Hewlett-Packard) even sits as co-chair of the
> President's Committee of Advisors on Science and Technology and
> enjoys a general waiver of normal conflict-of-interest restrictions.
> No publisher sits in such a powerful insider position as far as I
> know.
Why is this in any way relevant to the discussion?
> > > Their profits are larger than any publishing company by several
> > > orders of magnitude -- far beyond "recoupting their investment."
> >
> > First, as I noted to a previous post in this thread, assuming
> > that your representation is accurate, you are probably confusing
> > accounting profits with economic profits. Second, if the firms in
> > question are doing more than "recouping their investment" then
> > they will either 1) shortly be undercut by a competitor, until
> > either they lower thier price to the marginal cost of production or
> > they go out of business, or 2) they have an unwarranted degree of
> > market power due to some competitive failure, in which case they
> > are subject to regulation under antitrust law to correct the
> > problem.
>
> You call patent rights an "unwarrented degree of market power
> due to some competitive failure?"
I suggest that you carefully re-read the paragraph above, or, if necessary, have someone assist you in carefully re-reading it. You will find that I do not call patent rights an unwarranted degree of market power due to some competitive failure, nor in fact do I mention patent rights at all.
> If you are against copyrights, I guess you might as well be against
> patents for the same reasons.
You are once again indulging in inferences that are unsupported by anything except your own biases. At no time have I stated that I am "against copyrights." Hence, it cannot follow that I am "against patents for the same reasons," since no such reasons exist.
This archive was generated by hypermail 2.2.0 : Mon Mar 26 2007 - 00:35:31 GMT