On 8/13/98, Albert Henderson <noblestation[_at_]compuserve.com> wrote:
>
> On 11 Aug 1998, Dan L. Burk <burkdanl[_at_]shu.edu> wrote:
> >
> > On 8/10/98, Albert Henderson <noblestation[_at_]compuserve.com> wrote:
> > >
> > > 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.
>
> Not at all. The cost of using money is better represented by the
> prime rate than by growth and earnings of investments.
This statement is nonsensical. The prime rate is, so far as anyone can tell, a completely arbitrary number made up by Alan Greenspan. If you are making reference to interest rates generally, then they represent the cost of using money for those purposes. The rate of return on other types of investments, such as equity, represents the cost of using money for those purposes, which are generally riskier.
> Interest on loans is tax-deductible. Are earnings?
How is the tax code relevant here?
> Any businessman faces choices of investing in X, Y, Z, or leaving
> his resources in the safety of government bonds. A chance at
> maximizing profit -- with pricing well above marginal cost --
> should be more compelling than other opportunities.
Yes, it unquestionably would be. It will also be subject to SEC and FTC actions for fraud and/or and antitrust action.
> Patents, copyrights, and other protections of property support such
> investments.
The fraudulent ones? Or the antitrust violations?
> > 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."
>
> You should say "if and when investors are paid off." The reality
> is that many publishing companies run in the red and authors'
> contributions to their copyrighted work far exceeds the income
> derived. Many properties end up as remainders or shredded paper.
Assuming that this representation is true, how is it relevant to other than to demonstrate that many publishers apparently offer goods that the public does not want at the price necessary to print and distribute those goods?
> Given the importance of the copyright industries to education,
> science, social, and cultural interests, I believe investors
> should have every encouragement possible under protection of law.
The system you are apparently suggesting ("every encouragement possible under protection of law") has been tried. In Britain, it was called "crown monopolies." We had a revolution prompted in part by it. I would much rather stick with "reasonable encouragement, where necessary." I am chary of artificial subsidies for goods no one really wants.
> > > 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?
>
> 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?
You are repeating yourself, sir. You have yet to offer any explanation as to 1) who, if anyone, singles out "content-oriented" publishers for criticism, 2) who, if anyone, encourages "conduit-oriented" information technology firms to "make all the profits they can, 3) how one could possibly tell the difference between the two types of firms you are referencing, and 3) how this has any imaginable relevance to the optimal term of copyright, which is what we were supposedly discussing in this thread.
> NB Packard joined PCAST in 1990 and I believe continued to serve
> until his death.
If true, why should we care?
> > > 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.
>
> The IT companies I mentioned depend on patent rights to sustain
> high prices and enormous profits. You re-read.
First, you have yet to show the relevance of these alleged high prices and enormous profits to the optimal term for copyrights. Second, given the extremely complex economics of patentable innovation, your representation that patents are the key to "high prices and enormous profits" in the IT industry is extremely suspect, and I would be curious to see any evidence you have to support that claim. And finally, to the extent that the supposed "high prices and enormous profits" are unwarranted for that industry, they are candidates for antitrust correction (which may now be ocurring in with Intel and Microsoft), which is fully consonant with my earlier statements on the subject.
> > > 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.
>
> On Wed, 29 Jul 1998, Dan L. Burk <burkdanl[_at_]shu.edu> wrote:
> >
> > They will, but why should they have to? The point is that the
> > consumer is better off if the good can be made available for
> > free, or nearly free -- and it can be, once it is created.
> > Consequently, consumers of the good should only have to pay for
> > it to the extent necessary to induce the creator to create it
> > in the first place. 100 or more years of monop=9oly rents are
> > probably not necessary to induce creation -- something less than
> > that will probably suffice.
>
> 'Nuff said.
Please particularly point out and distinctly show anywhere in the paragraph you quote where I state that I am "against copyrights" (Hint: the paragraph quoted states that I believe there is a strongd justification FOR copyrights, so this task may be difficult. Take your time. I can wait. I am waiting.
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