Subject: Re: Chaordic Commons
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: Thu, 11 Jul 2002 12:46:22 +0900

>>>>> "L" == L Jean Camp <Jean_camp@harvard.edu> writes:

    L> It is unfortunate that you find the theoretical description of
    L> property rights including patent, licensing, and copyright hard
    L> to understand.

Will you please stop that?  You can't hurt _me_ with insults, except
by distracting my attention from those of your points that are correct.

    L> Microsoft had endowment from an initial contract from IBM which
    L> created strong network and lock-in effects.

Er, that's _not_ an "endowment" to _Microsoft_, at least not by
economic definition or common understanding.  IBM had the strong hand
there; they could have enforced a different contract.  They made a
mistake.  Microsoft made a very skillful bargain, then worked hard to
exploit the rights they _acquired_ from their partner in the contract.

Thus, as far as I can tell your definition of "endowment" can be used
to justify any intervention whatsoever, as long as you judge the
existing situation to be "suboptimal".

    L> The current allocation is arguably not optimal because of the
    L> effects of the market given the potential for this endowment.

NB, you really need to define "optimality" in this context; I don't
think there is general agreement on a scale of values by which to
measure it.

Even if we agree on some usage of "optimality", it seems to me that
you (and Ms. Gordon) have fallen prey to the fallacy of arguing from
_one_ realization (the history that led to current reality) to general
principle.  The neoclassicals' faults are many, but at least they long
since recognized this "ex ante, ex post" problem.  The problem is to
design _today_ an economic mechanism that will lead to "good" results
over the (unforseeable) _future_.  The neoclassicals understand this.

It's tempting to say "that's too hard a problem to solve," and adopt
the reverse perspective, assuming that if we could only correct the
mistakes we see in the past, things would be much better in the
consequent "today."  But this is _also_ a "mechanism".  The "poster
child" for the "ex post adjustment" mechanism is Japan, 1950-1985.  We
all know what followed that.  There is good reason to suppose that the
Japanese experience of the '90s (and '00s!) is more relevant to high
tech industries like software than the Japanese experience of the
immediate postwar decade.

It's easy to identify "suboptimality" in the _past_.  It's much harder
to come up with a satisfactory policy to avoid it in the _future_.
Saying "let right-minded people decide" is plausible, but the
consequences need analysis---and I don't see that analysis coming from
you.  There's also the small problem of getting the "right-minded
arbitrators" past the Microsoft lobbyists.  :-)

    L> Much more unpacking and I'll have moved right in so I hope this
    L> was enough to be helpful.

A veritable cornucopia.  But what I was missing was the simple
statement that Microsoft's "endowment" was that original sharp
contract with IBM.  We have progressed from lack of understanding to
outright disagreement.  :-)


-- 
Institute of Policy and Planning Sciences     http://turnbull.sk.tsukuba.ac.jp
University of Tsukuba                    Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
 My nostalgia for Icon makes me forget about any of the bad things.  I don't
have much nostalgia for Perl, so its faults I remember.  Scott Gilbert c.l.py