Subject: Re: The term "intellectual property" considered useful
From: "Ben Tilly" <btilly@gmail.com>
Date: Fri, 12 May 2006 21:05:22 -0700

 Fri, 12 May 2006 21:05:22 -0700
On 5/12/06, Stephen J. Turnbull <turnbull@sk.tsukuba.ac.jp> wrote:
> ObRef FSB:
>
> Ben, I think you're confusing the static state of being rich with the
> property of being efficient, either in a static or a dynamic sense.
> This is something that is common in free software advocacy as well.

I don't think so.  Read
http://www.economist.com/finance/displayStory.cfm?story id=1077523
again.  According to historical estimates by Dr Robert Fogel, the
economies of slave-owning states were 9% more efficient than the
economies of non-slave states.  I don't know how he measured
efficiency, but the fact that he got a Nobel Prize in economics
suggests that his definition was probably reasonable.

> In fact, confusing the static state of "having a nonrival good" with
> the dynamic process of producing it is the fundamental error we see
> repeated over and over again.
>
> The larger thread has made much of the distinction between
> "discovering" ideas and "inventing" them.  Having had the privilege of
> associating (at a great distance, but in the same lecture hall :-)
> with several Nobel Prize-winners over a couple of decades, I can tell
> you that at a philosophical level you can debate over discovery
> vs. invention, but at the economic level ideas are actively invented
> and innovated, not passively discovered and diffused.  The great
> thinkers not only "have" ideas; they *systematically* develop and
> propagate them.

I'd absolutely agree with this.

> That is, good producers of ideas, whether initially "discovered" or
> "created", have a *repeatable process* (yes, that's a reference to the
> CMM) for taking them some part of the way to the market.
> "Intellectual property" is not about rewarding "creativity"; it's
> about rewarding that process of communication.

Consider me the choir in so far as we're talking about intellectual
property as envisioned by Jefferson in the Constitution.  I'm a
hostile audience if you're talking about the actual effects of our
currently broken intellectual property system.

> >>>>> "Ben" == Ben Tilly <btilly@gmail.com> writes:
>
>     Ben> In that case, the South must have been stupid to not
>     Ben> voluntarily give up all their slaves!
>
> Exactly.

My point was that they knew their business better than you do, and it
is highly unlikely that they really were that stupid.

> More precisely, from the point of view of static efficiency, it had
> got to the point where wage labor was at least as efficient as slave
> labor.  That is why ethical slaveowners were freeing their slaves,
> and unethical ones were literally using them up in unsustainable
> exploitation.  But this was a destruction of capital, mathematically
> similar to any business that throws good capital after bad.

Not according to Dr Fogel.  But if it made economic sense to not have
slaves, don't you think that some smart person somewhere couldn't have
outcompeted his neighbours by using free workers, and then build on
that success to force them to change business models?

Incidentally to your destruction of capital comment, Dr Fogel's
estimates *also* showed that materially slaves were better off than
Northern factory workers.  That is they generally had better food,
clothing and housing.  (Of course I'm sure that this was small
consolation for them.)

> The reprehensible part was that the "capital" was human beings, each
> unique and irreplaceable; otherwise we could just shrug and say of
> such slaveowners "shirtsleeves to shirtsleeves in three generations,
> that's life."

This I absolutely agree with.

> Unfortunately, the fact that there is an economically better
> sustainable state doesn't mean you can get there from here without
> bearing substantial cost and risk.  The mechanisms for sharing that
> risk are even today poorly developed.  What was economically good for
> The South may not have been clearly economically good for individual
> Southern slaveowners.  It seems likely that economic myopia played a
> large role in the persistence of slavery.

If the South is considered to include all inhabitants thereof, then
I'd agree that there was an economically better sustainable state.
(If for no reason other than the fact that the slaves undoubtably put
great value on their freedom...)  If the South is considered to
include all members who were free before Abolition, Dr. Fogel's
estimates demonstrate to my satisfaction that there likely was
unlikely to be an economically better sustainable state.

> And then, of course, there's always been a cachet to being "landed
> gentry" as opposed to "grubby merchant".  So in the sense that "being
> a planter" was valued per se, it may have been economically (though
> not morally) justifiable to continue the slave system.
>
>     Ben> My impression says that the starving Irish went to the North,
>     Ben> not the South.  Therefore they would not have been an
>     Ben> economic factor in the South.
>
> I assume you are aware that interregional trade was even then huge?
> Don't you realize that your argument is isomorphic to "starving
> programmers in Shanghai and Calcutta would not be an economic factor
> in San Jose?"

You assume correctly.  What I was trying to say is that the presence
of starving Irish in New York did little to affect the economics of
growing cotton in the South, and did little to change what other
industries made sense in the South.

Of course once I've said that, I realize that I was wrong.

Starving Irish in New York who were willing to work for low wages in
textile factories increased the profitability of the textile industry,
and therefore increased the demand for cotton.  Which *increased* the
value of slavery in the South.  So there was a connection - it just
happens to be opposite what Robin thought.

>     Ben> The cotton gin, by removing the most labour-intensive part of
>     Ben> producing cotton made the potential profit of growing it much
>     Ben> higher.  Which increased the value of the complementary job
>     Ben> of actually PICKING the cotton.  Therefore it made slavery
>     Ben> more profitable and sustained it.
>
> That is true, but wage labor may have been even more productive yet,
> dollar for dollar.  Google for "efficiency wage".

The fact that Southern states were more economically efficient than
Northern suggests that wage labour was not more productive.  The lack
of successful plantations that did not use slave labour points in the
same direction.

>     Ben> This strongly suggests to me that slavery was economically
>     Ben> worthwhile for the slaveowners.
>
> In the sense that they had a pile of capital that they could run into
> the ground, yes.  Being rich is always economically worthwhile in that
> sense.

Thomas Lord pointed us at
http://eh.net/encyclopedia/article/ransom.civil.war.us, which includes
the price of slaves over time.  The fact that the price was constantly
rising suggests that they were not losing money on their slaves.
(Unfortunately their figures don't include inflation estimates,
without which it is hard to really say whether slaves were rising or
falling in value.)

>     Ben> (Until, that is, Union soldiers showed up.  But then the
>     Ben> slaves became sharecroppers, and the overall improvement was
>     Ben> minimal.)
>
> Sez Ben.  One would think you measured everything in dollars, and
> cared nothing for freedom.  ;-)

The question at hand was whether slavery made economic sense.  I
measure what makes economic sense in dollars.

The question of whether it should have been abolished is not, however,
an economic question.  In THAT question, freedom makes a great deal of
sense.

Cheers,
Ben