5 ms·

I suspect Gates doesn't really understand what capitalism is. All of his fortune has been built on the back of legislative protection. And - specific to charity

by cratuki 19y ago

I suspect Gates doesn't really understand what capitalism is. All of his fortune has been built on the back of legislative protection. And - specific to charity - I have several times noticed Microsoft gaining positive media for the 'charity' of giving away free software that costs it nothing to give, and which only has value in that form due to an arbitrary ruling from the relevant government. Here are some good starting points for helping the world's poor: 1) End the practice of propping up corrupt foreign governments with aid 2) Stop subsidising first world farmers and thereby killing the markets for the second and third world (including flow-on effects coming from ludicrous things like ethanol subsidy) 3) Governments cease support for rent-seeking measures like copyright and patents. 4) Abolish government-enforced wage floors which subsidise the low income earners at the expense of the genuinely poor by preventing business from finding employment for them. 5) Don't make environmental policy until recorded facts genuinely point to a need for it. Everywhere around us the invisible hand of the state is interfering in our lives through pork-barrelling schemes that benefit those close to power at the expense of the rest. The big lie is in the claim that we have now is capitalism. Even in the United States, what we first world countries have now is better referred to as 'mixed economies'. They have elements of capitalism but are some distance from actual capitalism.

davidw 19y ago
Some good points, although I would take a more nuanced view in some cases. For instance (and trying to keep this somewhat related to hacker news, lest it degrade into a political debate): Intellectual property was and is a compromise designed to foster the private provisioning of what are essentially "public goods" (http://en.wikipedia.org/wiki/Public_good http://en.wikipedia.org/wiki/Public_good). It's easy to argue that the compromise has tilted too far in favor of producers, but abolishing those protections instead of limiting them might be a step too far in the other direction.
- curi 19y ago
  How is intellectual property a public good issue? It's easy to, for example, sell a book to a single person, with a contract written to protect the author (from distribution of copies, or whatever). A public good issue is, say, when you build a dam that helps an entire flood valley, and people living there can get the benefit of your work without paying you, by refusing to agree to any contract with you. I don't see that an author faces that kind of issue. Enforcing a contract is another matter, and has become very hard for some types of intellectual property, but that is different than a public good problem, in which no one is breaking the law.
  - davidw 19y ago
    Books aren't the "problem": digital content is. Digital content is certainly non-rivalrous - if I download a copy of a movie, it's not affecting anyone else's ability to use their own copy. The tricker one is excludability. It's sort of possible with digital goods, but it doesn't work very well, and it appears to be working less well the more people get access to fast connections and lose their qualms about copying things. It's a tough problem. People like Stallman would like to have the government step in and take charge (if I've understood his position correctly), but I think that's a terrible solution. You could just leave things to "Coasian solutions", which is what a lot of open source software seems to be (the Apache web server, for instance), but you would probably never get stuff like the things Apple produces in that case. Custom software, governed by contracts between two parties, probably wouldn't suffer as much.
    - curi 19y ago
      OK, I just don't think that the difficulty of enforcing certain legal contracts, should be conflated with a public good problem. It's fundamentally a different kind of issue. Music downloaders are not free riders. They've broken the law (at least the uploader has clearly broken his contract with the artist not to do this). In a classic public good case, like the flood valley and dam, the difficulty is that people who own property in the valley, and break no laws by continuing to farm there, benefit from the flood control that the dam owner can't prevent from affecting their property. Which is only a problem because it gives them an incentive to get their neighbors to pay for the dam, while not doing so themselves.
      - davidw 19y ago
        Sure, good point, but consider that the IP laws that exist in the first place are an attempt to make property out of something where 'property' doesn't really exist in the physical sense. In the case of a book or a song in the era of records, it was a pretty good solution, as enforceable property rights were a pretty good way of encouraging people to produce material that even then could be copied without too much trouble. These days though, that compromise seems to be creaking under the strain of new technology, and is due for a revision. I'm not sure what the answers are, but I still like the idea of looking at it as a compromise between producers and consumers that should give something to each one. Giving nothing to the producers will discourage production of those kinds of goods. Give too much power to the producers in an age where copying is so easy means using fairly heavy-handed and invasive government power to enforce their rights.
budu3 19y ago
I agree with some of your points. The most important problems to be tackled are corruption and political stability.
Prrometheus 19y ago
Kudlow had a response to this: http://corner.nationalreview.com/post/?q=YWI5ZDVjODBkZDI2YWM1N2Y0M2MzYjdkOTE0MmQxMjk= http://corner.nationalreview.com/post/?q=YWI5ZDVjODBkZDI2YWM... Excerpt: It appears Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people up from poverty and into the middle class over the last decade or so. Think China. Think India. Think Eastern Europe (and maybe even France under Sarkozy). Gates wants business leaders to dedicate more time to fighting poverty. But the reality is that economic freedom is the best path to prosperity. Period. The Heritage/WSJ 2008 Index of Economic Freedom clearly shows that free-market countries are prospering mightily. Per capita GDP is closely related to, and positively correlated with, market economies. The fact is that free-market economics is spreading like wildfire. State socialism is on the decline. Unsurprisingly, the study also shows that the least-free economies are mired in poverty. We're talking North Korea, Cuba, Zimbabwe, Iran, and others.
- tx 19y ago
  This does not make any sense: Mr. Kudlov, who wrote this article for NRO is replying to non-existing arguments. Gates did not favor non-free economies, therefore there is absolutely NO REASON to mention Cuba and North Korea. Moreover, Gates did not argue benefits of free markets, why bring in China, India and Eastern Europe? Gates merely says "capitalism is great let's see if we can make it work better for the poor". Gates isn't even hinting that it should be done at someone's expense. Basically Kidlov did not even care to read the original article. Thus, after removing these obviously misplaced sentences and paragraphs, NRO's article basically turns into a lonely link to WSJ without any corresponding commentary.
mdemare 19y ago
I completely agree with point 1 and 2, completely disagree with point 3, 4 and 5. 3 will lead to cheaper medicines in the short run, but much less research in the long run, which is bad for everybody. 4 is mostly a problem for western european countries with high unemployment like France and Germany. It's irrelevant to the world's poor, who don't work in the legal economy anyway. Environmental policy is not especially harmful to the poor, and whether or not recorded facts genuinely point to a need for it will always be extremely contentious. I'd add: better legal protection of property in poor countries, and less bureaucracy. A must-read in this area is "The Mystery of Capitalism: Why It Succeeds In The West And Fails Everywhere Else." Major eye-opener! http://www.amazon.com/Mystery-Capital-Capitalism-Triumphs-Everywhere/dp/B0002X7VWU/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1201206920&sr=8-1 http://www.amazon.com/Mystery-Capital-Capitalism-Triumphs-Ev...
- run4yourlives 19y ago
  My feelings exactly, except I have little sympathy for the pharmaceutical drug cartels. There are a lot of other examples though.
curi 19y ago
How do you figure that all of Gates' fortune was built on the back of legislative protection? Microsoft got in legal trouble for bundling IE with windows, for example. Which was the Government working to hurt MS in favor of its competitors.
- davidw 19y ago
  Correct - MS' fortune came from the network effects of their system, but they had to be successful in the first place for those to work in their favor. This book has some good history of "the early years", when it wasn't clear that MS would be the winner that took all: http://www.squeezedbooks.com/book/show/10/in-search-of-stupidity-over-twenty-years-of-high-tech-marketing-disasters-second-edition http://www.squeezedbooks.com/book/show/10/in-search-of-stupi...
- cturner 19y ago
  Copyright is legislative protection.

by cratuki 19y ago

davidw 19y ago

Some good points, although I would take a more nuanced view in some cases. For instance (and trying to keep this somewhat related to hacker news, lest it degrade into a political debate): Intellectual property was and is a compromise designed to foster the private provisioning of what are essentially "public goods" (http://en.wikipedia.org/wiki/Public_good http://en.wikipedia.org/wiki/Public_good). It's easy to argue that the compromise has tilted too far in favor of producers, but abolishing those protections instead of limiting them might be a step too far in the other direction.

curi 19y ago
How is intellectual property a public good issue? It's easy to, for example, sell a book to a single person, with a contract written to protect the author (from distribution of copies, or whatever). A public good issue is, say, when you build a dam that helps an entire flood valley, and people living there can get the benefit of your work without paying you, by refusing to agree to any contract with you. I don't see that an author faces that kind of issue. Enforcing a contract is another matter, and has become very hard for some types of intellectual property, but that is different than a public good problem, in which no one is breaking the law.
- davidw 19y ago
  Books aren't the "problem": digital content is. Digital content is certainly non-rivalrous - if I download a copy of a movie, it's not affecting anyone else's ability to use their own copy. The tricker one is excludability. It's sort of possible with digital goods, but it doesn't work very well, and it appears to be working less well the more people get access to fast connections and lose their qualms about copying things. It's a tough problem. People like Stallman would like to have the government step in and take charge (if I've understood his position correctly), but I think that's a terrible solution. You could just leave things to "Coasian solutions", which is what a lot of open source software seems to be (the Apache web server, for instance), but you would probably never get stuff like the things Apple produces in that case. Custom software, governed by contracts between two parties, probably wouldn't suffer as much.
  - curi 19y ago
    OK, I just don't think that the difficulty of enforcing certain legal contracts, should be conflated with a public good problem. It's fundamentally a different kind of issue. Music downloaders are not free riders. They've broken the law (at least the uploader has clearly broken his contract with the artist not to do this). In a classic public good case, like the flood valley and dam, the difficulty is that people who own property in the valley, and break no laws by continuing to farm there, benefit from the flood control that the dam owner can't prevent from affecting their property. Which is only a problem because it gives them an incentive to get their neighbors to pay for the dam, while not doing so themselves.
    - davidw 19y ago
      Sure, good point, but consider that the IP laws that exist in the first place are an attempt to make property out of something where 'property' doesn't really exist in the physical sense. In the case of a book or a song in the era of records, it was a pretty good solution, as enforceable property rights were a pretty good way of encouraging people to produce material that even then could be copied without too much trouble. These days though, that compromise seems to be creaking under the strain of new technology, and is due for a revision. I'm not sure what the answers are, but I still like the idea of looking at it as a compromise between producers and consumers that should give something to each one. Giving nothing to the producers will discourage production of those kinds of goods. Give too much power to the producers in an age where copying is so easy means using fairly heavy-handed and invasive government power to enforce their rights.

budu3 19y ago

I agree with some of your points. The most important problems to be tackled are corruption and political stability.

Prrometheus 19y ago

Kudlow had a response to this: http://corner.nationalreview.com/post/?q=YWI5ZDVjODBkZDI2YWM1N2Y0M2MzYjdkOTE0MmQxMjk= http://corner.nationalreview.com/post/?q=YWI5ZDVjODBkZDI2YWM... Excerpt: It appears Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people up from poverty and into the middle class over the last decade or so. Think China. Think India. Think Eastern Europe (and maybe even France under Sarkozy). Gates wants business leaders to dedicate more time to fighting poverty. But the reality is that economic freedom is the best path to prosperity. Period. The Heritage/WSJ 2008 Index of Economic Freedom clearly shows that free-market countries are prospering mightily. Per capita GDP is closely related to, and positively correlated with, market economies. The fact is that free-market economics is spreading like wildfire. State socialism is on the decline. Unsurprisingly, the study also shows that the least-free economies are mired in poverty. We're talking North Korea, Cuba, Zimbabwe, Iran, and others.

tx 19y ago
This does not make any sense: Mr. Kudlov, who wrote this article for NRO is replying to non-existing arguments. Gates did not favor non-free economies, therefore there is absolutely NO REASON to mention Cuba and North Korea. Moreover, Gates did not argue benefits of free markets, why bring in China, India and Eastern Europe? Gates merely says "capitalism is great let's see if we can make it work better for the poor". Gates isn't even hinting that it should be done at someone's expense. Basically Kidlov did not even care to read the original article. Thus, after removing these obviously misplaced sentences and paragraphs, NRO's article basically turns into a lonely link to WSJ without any corresponding commentary.

mdemare 19y ago

I completely agree with point 1 and 2, completely disagree with point 3, 4 and 5. 3 will lead to cheaper medicines in the short run, but much less research in the long run, which is bad for everybody. 4 is mostly a problem for western european countries with high unemployment like France and Germany. It's irrelevant to the world's poor, who don't work in the legal economy anyway. Environmental policy is not especially harmful to the poor, and whether or not recorded facts genuinely point to a need for it will always be extremely contentious. I'd add: better legal protection of property in poor countries, and less bureaucracy. A must-read in this area is "The Mystery of Capitalism: Why It Succeeds In The West And Fails Everywhere Else." Major eye-opener! http://www.amazon.com/Mystery-Capital-Capitalism-Triumphs-Everywhere/dp/B0002X7VWU/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1201206920&sr=8-1 http://www.amazon.com/Mystery-Capital-Capitalism-Triumphs-Ev...

run4yourlives 19y ago
My feelings exactly, except I have little sympathy for the pharmaceutical drug cartels. There are a lot of other examples though.

curi 19y ago

How do you figure that all of Gates' fortune was built on the back of legislative protection? Microsoft got in legal trouble for bundling IE with windows, for example. Which was the Government working to hurt MS in favor of its competitors.

davidw 19y ago
Correct - MS' fortune came from the network effects of their system, but they had to be successful in the first place for those to work in their favor. This book has some good history of "the early years", when it wasn't clear that MS would be the winner that took all: http://www.squeezedbooks.com/book/show/10/in-search-of-stupidity-over-twenty-years-of-high-tech-marketing-disasters-second-edition http://www.squeezedbooks.com/book/show/10/in-search-of-stupi...
cturner 19y ago
Copyright is legislative protection.