3 ms·

Perfect Competition Is Bad for Growth

2 points by brownbat 12y ago

bediger4000 12y ago
This article is slanted to an owner's point of view: the firm can't make huge profits if there's perfect competition. The rest of us do want perfect competition, and the author admits that, albeit rather deep in the article: But perfect competition does maximize the combined consumer and producer surplus from a given product. The author also believes in a falsehood: Nullifying patents (or any other kind of intellectual property) would crush the incentives to innovate, and we’d never get any new products. This isn't true. Holland and Switzerland deliberately industrialized without patents (http://www.amazon.com/Industrialization-Without-National-Patents-Netherlands/dp/0691041970 http://www.amazon.com/Industrialization-Without-National-Pat...). This article therefore advocates for setting "intellectual property" controls too far towards the owner/firm's favor.
- thirstywhimbrel 12y ago
  > This article therefore advocates for setting "intellectual property" controls too far towards the owner/firm's favor. I don't think that's an accurate read of the article. If you make it to the last paragraph it just says there are no right answers. and argues against both abolishing all IP and against perpetual rights for rightsholders. If anything, the sin of the article is that it stakes out a completely pedestrian claim (IP should exist and apply for limited times) after dressing it up with a provocative intro. That aside, there is some practical wisdom that could have been extracted from the provocative intro. When you're making a pitch, you have to explain to the investor how you're angling for monopolistic rents. Or, ok, maybe you don't use the "m" word, but you dress it up more softly as why you're uniquely positioned or skilled to help serve the market / seize this new opportunity. It all boils down to the same thing though: why shouldn't they just invest in Walmart?

3 ms·

Perfect Competition Is Bad for Growth

2 points by brownbat 12y ago

bediger4000 12y ago
This article is slanted to an owner's point of view: the firm can't make huge profits if there's perfect competition. The rest of us do want perfect competition, and the author admits that, albeit rather deep in the article: But perfect competition does maximize the combined consumer and producer surplus from a given product. The author also believes in a falsehood: Nullifying patents (or any other kind of intellectual property) would crush the incentives to innovate, and we’d never get any new products. This isn't true. Holland and Switzerland deliberately industrialized without patents (http://www.amazon.com/Industrialization-Without-National-Patents-Netherlands/dp/0691041970 http://www.amazon.com/Industrialization-Without-National-Pat...). This article therefore advocates for setting "intellectual property" controls too far towards the owner/firm's favor.
- thirstywhimbrel 12y ago
  > This article therefore advocates for setting "intellectual property" controls too far towards the owner/firm's favor. I don't think that's an accurate read of the article. If you make it to the last paragraph it just says there are no right answers. and argues against both abolishing all IP and against perpetual rights for rightsholders. If anything, the sin of the article is that it stakes out a completely pedestrian claim (IP should exist and apply for limited times) after dressing it up with a provocative intro. That aside, there is some practical wisdom that could have been extracted from the provocative intro. When you're making a pitch, you have to explain to the investor how you're angling for monopolistic rents. Or, ok, maybe you don't use the "m" word, but you dress it up more softly as why you're uniquely positioned or skilled to help serve the market / seize this new opportunity. It all boils down to the same thing though: why shouldn't they just invest in Walmart?