muz : The patent system is actually killing the research. Scientifics are totally underpaid, and it's awfully difficult to find credit for fundamental research.
This isn't due to the patent system. It's the way that businesses have been working for the last decade or two.
The purpose of a company is to maximise their returns for their shareholders. The incentives to those running the company are directly tied to
current share price and year-on-year dividends. If you can maximise these for, say, five years, you can make enough in bonuses and other rewards to retire and never think about money again.
This means most companies have been obscenely short sighted. Blue sky research and undirected R&D (eg, exploring a new technology rather than developing a specific product) are hard to evaluate as they apply to current share price, and so don't actually gain anything for a CEO who is planning to bail out of the company a couple of years down the line. On the other hand, pouring money into advertising and maximising a current product - and so market share and share price - has a massive return for those at the top, even if it leaves the company at a disadvantage in the future.
The most obvious example of this was
Bell Labs being effectively gutted and sold off for the reputation. The work that was done there is still collecting Nobel prizes, but the sorts of returns they were getting don't count a great deal in the short term market, so there was no real reason to keep them on for anything beyond their PR advantage.
There are a few obvious exceptions to this. Computer hardware sees a fair investment in the underlying scientific fields from the relevant companies. My field is magnetic materials. Most companies that work with hard disks and storage (including Seagate and Hitachi) have huge blue sky R&D. This is simply because new technologies come into being so quickly - from theoretical concept to lab demonstrations to prototype to product - that you can't ignore it from a company standpoint. One company stands still and the others leave them behind. Also I like to think these companies still have enough technical knowledge at the top to not fall into the usual traps, but I'm not confident in that.
The only real solution to this would be to skew... well, not the market as much as the incentive system to businesses. Tie CEO's and other executives' rewards to the long term health of the company over decades. That forces a long term view and added focus on the R&D aspects to ensure that the company maintains an edge into the future. I don't think this would be too hard to set up, but there is no way it will happen. It would require stock in companies becoming long term investments on the same scale, and with the way the stock markets work today that would wipe out something like half of the economy of most first world nations, along with what remains of our banking system. Probably not the best tradeoff.
The thing is, it is patents that let these companies make money. Some stuff is a little absurd (check the chemical make-up of some magnetic materials in hard disks and you'll see a lot of variations on the same basic recipe, because the optimum formula was patented...) but without the patents the R&D could never be paid for at all.
As for scientists being underpaid, I'm not going to argue (physics grad student here).
tl ; dr: Competition is fundamentally flawed in the IP buisness. Therefore applying free market is illogical.
I think there is a simpler argument that explains the same thing.
In full here but I'll summarise.The free market works for private goods. That is, goods that are rival (there is a limited amount and if I have one that is one less for you) and excludable (you can control who has access to the good). For non-private goods it doesn't work as well, simply because those two qualities are central to the way it works.
The most obvious problem is common goods; rival but non-excludable - a limited amount but no way to control who gets it. This is where government regulation tries to add in artificial controls over who gets it (laws about pollution, overfishing, etc) which work to create a market. My favourite example here are carbon exchanges, where you have an entirely artificial market to regulate a common good where the market previously didn't apply at all. But that's an entirely separate debate.
Club goods (non-rival, excludable) aren't particularly important most of the time. Arguably the market applies here because they are excludable, but because they are non-rival my view is that the market here is pretty much arbitrary. That is, the optimum distribution of the good depends entirely on your market philosophy. If your view is simply that monetary profit should be maximised then you can find an optimum point of exclusion. If you want to maximise social good then you will probably want to minimise exclusion (or at least find a different optimum point). I think that this area has some applicability in, say, healthcare debates, but again, that isn't relevant to this thread.
Pure public goods are the nasty ones. These are non-rival and non-excludable.
Most IP falls into this area. My knowing something, or having a copy of a book/program/video/song doesn't mean you can't have another copy. Similarly it's very hard to control access to IP once it is in the wild. Again, there are attempts to change this, using stuff like DRM and anti-piracy legislation, but those are attempts to create an artificial market force.
The bigger problem here is that this is a relatively recent advance. For the most part in history IP and content has been a club good. It's been easily excludable. Since the internet though it's been insanely hard to regulate access. Most content based industries based on controlling access to IP (eg, the music industry, publishing industry, etc) are finding that their business models simply don't work anymore. That is where all the pushes for DRM and legislation come from - attempts to artificially keep afloat a market that just got torpedoed under the waterline.
For what this means, read that post at Charlies Diary and the comments. The S/N ratio is pretty fantastic there. In particular trying to work out new markets and way of monetising IP (particularly art) without depending on excluding access.
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Topic: (Intellectual Property) How do you convince someone? (Read 5607 times)