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Insightful quote: > The fundamental question came down to economics. Almost a societal economic structure question. The CPSC says table saws result in about $4

Insightful quote: > The fundamental question came down to economics. Almost a societal economic structure question. The CPSC says table saws result in about $4B in damage annually. The market for table saws is about $200-400M. This is a product that does almost 10x in damage as the market size. There's a disconnect—these costs are borne by individuals, the medical system, workers comp—and not paid by the power tools company. Because of that, there’s not that much incentive to improve the safety of these tools. Societally if there was an opportunity to spend $5 to save $10, we’d want to do that. But in this chain there's a break in people that can make those changes and people that are affected, so it’s not done.

skybrian 3y ago
Yes, there's an argument that society should be willing to pay up to the amount of the damage to prevent it. It's okay as far as it goes. However, that's equivalent to saying that if a safety improvement costs $1 to manufacture and saves $10 in damage, then the supplier should get the entire profit ($9). Although, he's just asking for $5. How generous! This is a form of value-based pricing - figure out how much the customer values a thing and use that to persuade them to pay a higher price. Salespeople really like value-based pricing arguments. Some safety measures are cheap, and suppliers can be bargained down. In the presence of robust competition, they could be bargained down to near the the cost of goods. But patents can result in a monopoly, along with monopoly pricing. How much should you pay for tires? How about brakes? A vaccine? In this case, I think he deserves to get rich from coming up with the idea, but there's still a lot of room for negotiation about how rich.
whatshisface 3y ago
That's clearly a false analysis - the size of a commodity market is determined as much by the equilibrium cost of making the goods as it is by the demand side. The cost of banning an inexpensive but essential part of your car would be far greater than the total number of dollars changing hands every year to purchase them.
- resolutebat 3y ago
  It's not false, it's just ignoring the additional dimensions. In the same way that the societal cost of banning cars would be much higher than the value of the car (because cars enable commuting, leisure, cargo transport etc), the societal value of table saws in creating furniture, houses, whatever is much higher than the retail price of the table saw.
avidphantasm 3y ago
The Federal government should start paying companies like this a hefty lump sum and take the patents by eminent domain. Same for drug patents.
- JumpCrisscross 3y ago
  > Federal government should start paying companies like this a hefty lump sum and take the patents by eminent domain This means seizing the ruling class gets to seize anyone's inventions. Nobody writing these rules intends that. But while we can forgive the first dozen attempts out of naivety and, later, stupidity, I'm not sure how we similarly excuse modern performances.
  - derefr 3y ago
    Patent expiration into the public domain is already “the ruling class seizing inventions” in the same sense (in the sense that it isn’t — in both cases, the goal is to make nobody profit from the patent any longer; not to transfer the profits to the government.) Patents only exist as a concept, as a way to construct an equitable compensation for invention, to incentivize invention, that allows the market to determine what the total compensation over the legal lifetime of the patent should be, by licensing it or refusing to at given prices. Insofar as an equitable compensation / patent “value” can be determined analytically on a one-off basis, you don’t need the patent system; the government can just buy out at that price, and the same goal will have been achieved.
    - avidphantasm 3y ago
      > Insofar as an equitable compensation / patent “value” can be determined analytically on a one-off basis, you don’t need the patent system; the government can just buy out at that price, and the same goal will have been achieved. Exactly. Ideally we wouldn't have patents, but would have a "Star Trek" luxury space communism economy. Until then, if an invention proves to be highly beneficial to society after a few years, I would entirely support governments buying out patents early. In the end, information is a public good (non-rival, non-excludable), so let's start treating it that way.
refurb 3y ago
That’s a terrible analysis. I assume the “cost” were injuries added up through remaining lifespan through lost work, etc. But you can’t do a cost-benefit analysis without counting benefits. So let’s add up all the benefits and value created by table saws.
- drak0n1c 3y ago
  True, it's not apples to apples to extrapolate downstream costs of accidents while not doing the same for the benefits. All manner of housing and construction would be much more expensive and slow without ubiquitous affordable on-site powered saws - not just reducing everyone's spending power, but also median quality of life with everyone's daily spaces severely limited by design/build potential.

skybrian 3y ago

Yes, there's an argument that society should be willing to pay up to the amount of the damage to prevent it. It's okay as far as it goes. However, that's equivalent to saying that if a safety improvement costs $1 to manufacture and saves $10 in damage, then the supplier should get the entire profit ($9). Although, he's just asking for $5. How generous! This is a form of value-based pricing - figure out how much the customer values a thing and use that to persuade them to pay a higher price. Salespeople really like value-based pricing arguments. Some safety measures are cheap, and suppliers can be bargained down. In the presence of robust competition, they could be bargained down to near the the cost of goods. But patents can result in a monopoly, along with monopoly pricing. How much should you pay for tires? How about brakes? A vaccine? In this case, I think he deserves to get rich from coming up with the idea, but there's still a lot of room for negotiation about how rich.

whatshisface 3y ago

That's clearly a false analysis - the size of a commodity market is determined as much by the equilibrium cost of making the goods as it is by the demand side. The cost of banning an inexpensive but essential part of your car would be far greater than the total number of dollars changing hands every year to purchase them.

resolutebat 3y ago
It's not false, it's just ignoring the additional dimensions. In the same way that the societal cost of banning cars would be much higher than the value of the car (because cars enable commuting, leisure, cargo transport etc), the societal value of table saws in creating furniture, houses, whatever is much higher than the retail price of the table saw.

avidphantasm 3y ago

The Federal government should start paying companies like this a hefty lump sum and take the patents by eminent domain. Same for drug patents.

JumpCrisscross 3y ago
> Federal government should start paying companies like this a hefty lump sum and take the patents by eminent domain This means seizing the ruling class gets to seize anyone's inventions. Nobody writing these rules intends that. But while we can forgive the first dozen attempts out of naivety and, later, stupidity, I'm not sure how we similarly excuse modern performances.
- derefr 3y ago
  Patent expiration into the public domain is already “the ruling class seizing inventions” in the same sense (in the sense that it isn’t — in both cases, the goal is to make nobody profit from the patent any longer; not to transfer the profits to the government.) Patents only exist as a concept, as a way to construct an equitable compensation for invention, to incentivize invention, that allows the market to determine what the total compensation over the legal lifetime of the patent should be, by licensing it or refusing to at given prices. Insofar as an equitable compensation / patent “value” can be determined analytically on a one-off basis, you don’t need the patent system; the government can just buy out at that price, and the same goal will have been achieved.
  - avidphantasm 3y ago
    > Insofar as an equitable compensation / patent “value” can be determined analytically on a one-off basis, you don’t need the patent system; the government can just buy out at that price, and the same goal will have been achieved. Exactly. Ideally we wouldn't have patents, but would have a "Star Trek" luxury space communism economy. Until then, if an invention proves to be highly beneficial to society after a few years, I would entirely support governments buying out patents early. In the end, information is a public good (non-rival, non-excludable), so let's start treating it that way.

refurb 3y ago

That’s a terrible analysis. I assume the “cost” were injuries added up through remaining lifespan through lost work, etc. But you can’t do a cost-benefit analysis without counting benefits. So let’s add up all the benefits and value created by table saws.

drak0n1c 3y ago
True, it's not apples to apples to extrapolate downstream costs of accidents while not doing the same for the benefits. All manner of housing and construction would be much more expensive and slow without ubiquitous affordable on-site powered saws - not just reducing everyone's spending power, but also median quality of life with everyone's daily spaces severely limited by design/build potential.