Thoughts on Intellectual "Property"

There are several arguments against things like copyright and patents, known to some as "intellectual property."

One that popped into my head, while listening to Stephen Kinsella's interview on the Tom Woods Show, was the difference between the nature of ideas, and any other type of thing in the world which enters into human action.

Clearly, ideas are not tangible. They can't be measured in any sort of quantitative way. They also, unlike scarce physical resources, don't need to be "economized" in any real sense of the word.

Now, theres much nit-picking that could already be done with the above sentences by the pro IP crowd, delusional, though, they may be.

But I don't want to get into all that here. What I want to show is the difference in the way ideas and property come about.

All property that is currently owned, was created or homesteaded at one point in time, by one person or persons acting as a unit. Whomever owns all the stuff now, land included, it can be traced back to a first owner. Even if it was later sold or stolen, or whatever, the first owner didn't need to buy or steal it.

When it comes to ideas, or technological know-how, or recipes, or however you want to put them, this same logical regression does not hold.

 Im not denying that someone chronologically came up with ideas before others, or that they aren't transferred, person to person. So then, how are they different?

Two separate individuals (not working together), cannot, by definition, homestead the same property. However, with ideas, two or more individuals can homestead the same exact idea, at the same exact time, completely unaware of each other. In fact, the founder of the Austrian School of economics, Carl Menger, was one of three men who independently discovered the idea of marginal utility. It would be nonsensical to say three different men discovered the North Pole.

Ideas are metaphysically different from other means employed by humans in action.

This is yet another hurtle for the pro-IP crowd to try to dance around.

Krugman: "Government inefficiency a myth"

Only Krugman would be bold enough to make such an outrageous claim, and only his followers would be so dumb as to believe it.

Government inefficiency is rare, and not even close to as bad as private companies, according to the high priest of liberalism.

In other news:

the FDA hasn't approved any advancements in sunscreen chemicals for 15 years. Skin cancer being the most prevalent form of cancer in America today; the EPA still hasn't fired anyone for watching 2-6 hours of porn per day; the VA has been covering up thousands of deaths and hiding actual wait times; the IRS "lost" 2 years worth of emails, between Lois Lerner and her pals, who were targeting anti-government activist groups; and earlier this year, our government suspended the debt ceiling, because when you're as efficient as they are ($17 trillion+ in debt), you need to borrow money indefinitely, and never pay it back.

Reply to Ronald Dixon on Corporate Tax Inversions

Ronald Dixon, columnist for the Mn Daily, is out with a new Piece discussing corporate tax inversions. I've tried twice now to post my reply on the Mn Daily website, but they won't accept it. Anyways, here it is:

It's a gold mine. Thank you, Ronald.

I'll begin with your first pronouncement:

"After fostering their business in an environment that allows them to thrive..."

Wait, isn't that why they're inverting their businesses in the first place? To be "in an environment that allows them to thrive"? If it were so great here, why would they leave? The reality is, these companies thrived IN SPITE OF the burdensome regulations put upon them by Government.

...[C]ompanies like Medtronic are ignoring their civic duty and dodging, in aggregate, billions of dollars annually in taxes."

Actually, corporations have a duty to their shareholders. That duty is to maximize profits. The fact that the Federal Government (and some states) "receive" tax benefits from this activity, is a by-product. They are not in business to "pay" taxes.

"Republicans have blamed this phenomenon on America’s allegedly high corporate taxes."

Way to give yourself away as a complete partisan. "Allegedly" we have the highest corporate tax rate in the developed world. Facts are not red or blue. Some countries are actually cutting their corporate taxes to attract businesses. Are they complete morons?

 "When we consider that corporate profits are at historically high levels..."

How are these profits so high? Could it be the federal reserve's historically low interest rate policy, as well as three rounds of quantitative easing? When interest rates go up, the game is over, and so are the profits. Even if everything else stayed the same, on paper, profits would go down, due to the higher cost of debt and a higher discount on asset prices.

Also, it's foolish to look at corporate profits in aggregate and conclude that government should restrict the behavior of consenting adults. Not all corporations are making record profits, and many who are, are only doing so because of government protections and subsidies. 

"... [W]e have reached Gilded Age-degrees of income inequality..."

Was 1929 the gilded ages? http://piketty.pse.ens.fr/files/capital21c/en/pdf/F0.I.1.pdf

 "...[T]rying to solve this problem by further pampering the rich will only exacerbate income disparities and further drive their disproportionate influence in politics and the economy."

So now "pamper" means: to not steal from. Got it. How would it exacerbate income disparities? What if they take the money they saved on taxes and invest it in new production?

"Alternatively, there are two solutions that will require companies to pay their fair share of taxes."

"Fair share." That's rich (no pun intended). What about the people who literally pay no taxes, and actually consume much of the recourses taxed away from productive individuals? Are they paying their "fair share"? 

"First, Congress should act to close the tax loophole that allows these companies to claim foreign status, whereby enjoying all of the benefits of operating domestically while dodging the tax costs. A business should be unable to have its cake and eat it too."

You've got it backwards. It's the government that is trying to have someone's cake and eat it too. 

These corporations still pay taxes on the income they make in America. The only difference is, the money they make abroad is now only taxed by the country it was made in. They no longer have to pay Uncle Sam for the money they make outside the US. And why should they? Even if we accept your premises, it doesn't follow that they should give the government a cut for the money made in other countries.

"Second, we should follow the advice of former Secretary of Labor Robert Reich and treat all income made in the U.S., whether it’s from domestic or international companies, the exact same, especially in an era when a business’s nationality has become blurred and ultimately meaningless in the 21st century."

If I'm reading Reich correctly, his solution would have the exact same effect as the corporate inversion. The corporations would pay taxes on what they make here, and not on what they make abroad.

Bottom line is, corporate inversions are actually good for the economy. Many U.S. corporations have a ton of cash sitting outside the country, because to repatriate it would mean paying almost 40% tax. It's much cheaper for them to just borrow the money they need for short-term domestic investment. So corporations are forced to hold cash or invest those foreign profits abroad. With an inversion, the corporation can bring that money back to the U.S., and invest. It's really the federal government holding the money hostage. They won't let the money into the country, unless they get their cut.

The most important point you are missing, though, Ron, is that corporations don't pay taxes. People do. The corporation is like a middle man. 

Think about it.  If that money didn't go to the government, where would it go? Either the corporations workers, customers, or shareholders (most likely a combination; it would be different for every business, depending on the specific market conditions they face).

What we need to do is abolish the corporate tax; America will become a Mecca for business again. Remember, Ron, more people bidding for labor equals higher paying jobs.

Road "Work"

Maybe it's a coincidence that every time I see road construction, there are several idle workers. It's possible.

The Best of Peter Schiff

Schiff vs Galbraith

Schiff vs Congress

Schiff vs Occupy

Schiff vs Cornell West

Schiff owning everyone's ass on cspan

Peter Schiff Calls it Quits

I was very saddened by the announcement, today, that this will be the final month of the Peter Schiff Show.

This show is, by far, the most entertaining libertarian show/podcast in the world. Schiff is the Mike Tyson of the Austro-libertarian movement. He might not always be perfectly in line with Pure Libertarianism, but he's as rabid as they come. Like Tyson, there's almost nobody you'd rather see in a fight (debate). He throws hay-makers and is completely fearless.

Another great thing about Schiff is he actually enjoys talking to people who disagree with him better than people he agrees with. He's openly challenged Nobel laureate, Paul Krugman (Schiff purposely mis-pronounces it "Kruggman") to a debate, several times, to no avail. He regularly invites people on his show that he knows he will have heated arguments with, and I don't recall anyone getting the better of him.

I started listening to Schiff a bit after I had already began learning economics, and I have only minor quibbles with very few of the things he says. I think I was already an Anarchist before I started listening to his show (Schiff is a small government guy). But, his analysis of the housing bubble and financial crisis were indispensable for a lot of Austrians, since Schiff is a finance professional, rather than a bookworm economist. I knew almost nothing about financial markets before listening to his show (I don't know that much now, still, but a lot more than before).

Schiff's perfect blend of personality and wit is a scarce thing in economics/financial media. Besides Murray Rothbard, I can't think of any economist who's more entertaining to listen to speak on arcane subjects.

So, here's to Peter Schiff.  Economist, entrepreneur, goldbug, eater of Keynesian souls.

Thanks for all the time you gave, Peter. I'm sure we can expect many more great things from you.

Reply to Ronald Dixon on subsidized internships

(This reply was posted at the Mn Daily site, about a week ago. Mr. Dixon has yet to respond.)

Ronald, I just wanted to let you know, you're my favorite columnist in the Mn Daily. Probably because you discuss the subjects I am most interested in, and because I strongly disagree with almost everything you write.

Ok, enough with the praises. Let's review.

Your solution to the alleged problem of under employed students, is to have the federal government subsidize interns.

There are many things in your article to take issue with, but I'll *try* not to nitpick too much.

First, where did you get the statistic of 45% for working students? It sounded reasonable when I initially read it. Then I went to see if I could find the post WW2 stats for the students working during college. I didn't find any data on that, but I did find that your number, 45%, as far as I can tell, is way off (according to a quick google search, so correct me if I'm wrong). It's more like 70-80% or students who work.

Second, and much more to the point; don't students have to apply/compete amongst each other for these coveted unpaid internships?

There are limited unpaid internships to be had. Basic economics tells us that, all else being equal, if you offer more for something (in this case interns) more will be supplied. If we are prepared to offer PAID internships, many more students will apply. And, since you aren't proposing that we subsidize the businesses expense of having to babysit many more interns, there will be even more competition for the same scarce internship opportunities.

Another small quibble I must voice, is in regards to your comment on "shrink(ing) the wealth gap". Now, it's my understanding, and, I think it's safe to say, everyone's understanding, that college grads make more money compared to non college grads. Your solution then, would seemingly widen the "wealth gap", if you intend to tax average working people to help future, wealthier, working people make more money. 

(Of course, your reply would be to "tax the uber rich", but that's another can of worms we need not get into.)

Another strange assertion you make, is that "grants are often extremely limited." I'll give you a pass, since you couldn't have read the article which was printed in the same edition as your thought provoking article. According to Blair Emerson's Lawmakers push for Pell Grant changes, 25% of U of Mn, twin cities campus students receive Pell grants.

The article really comes full circle, though, when towards the end you spill the beans and tell us:
"Many colleges and universities, including individual departments at the University of Minnesota, provide this funding."

So, the solution you've suggested already exists, but it isn't alleviating the "problem" because it's provided by the University (where do they get their money?), and not the federal government? 

You want the federal government to "...grant additional funding to colleges ...under the condition that the use the money to provide stipends to ...unpaid internships."

Papa Gov: You want more money? 

U of M: Umm, duh, I can't get enough!

Papa Gov: Here, take this. Oh, but you have to use that for internships.

U of M: Forget it then. I've got internship money up the wazoo (according to Ronald Dixon).


Pushing for a "federal solution" that "may remove the obscurity of these funds" isn't even close to practical, economically or politically. I mean, are you gonna lead a grassroots movement all the way to DC, through congress and all? That's ridiculous. (Although, I'm sure BO would have no problem ordering this from his throne.)

If you want to inform people about funds which already exist, there's about a million better ways to do it (including the school newspaper). That you would even entertain the idea of the federal government removing anything from obscurity is flat out hilarious. My guess is, many problems within the university already stem from a bloated bureaucracy. Involving the most bloated bureaucracy of all, would be a disaster. Actually, it already is. But that's a topic for another day.

My very own Paul Krugman!

I am quite fond of the economist Robert P. Murphy's blog, Free Advice. Anyone who is familiar it would know that Murphy has a passion for exposing the beloved Paul Krugman, a darling of the left, and author of a popular blog over at the NY Times, for the dogmatic statist that he really is.

Well, lucky me (!), in the University of Mn's newspaper, there is a student, Ronald Dixon, who writes a regular column, and he's as statist and Keynesian as they come! But (and again, lucky me), being as young and impressionable as he is, there might be hope for this kid to start thinking straight (unlike Krugman).

So I've decided that instead of fuming over his regurgitated Krugman droppings, I will respond to him, here and at the Mn Daily's site. I'll probably email my responses to Mr. Dixon, as well.

Now, one might think that I am picking on young Ronald, but I don't think its that bad. His bio reads: "I am a rising third-year senior that is studying Political Science and Communication Studies. Apart from writing for the MN Daily, I am also the Head Debate and Speech coach for Maple Grove High School and I volunteer/intern for various causes."

See. That's a much better résumé than I've got. He's not helpless.

I think it will prove fruitful for both of us.

This is only a test.

The intent of this blog is simply to practice the writing and espousing of ideas. I do not expect anyone to read this, but if one might be so unfortunate as to come across High Time Preference, be warned: I don't know what I'm talking about.