Subject: Re: Examples needed against Soft Patents
From: Ben Tilly <btilly@gmail.com>
Date: Tue, 28 Dec 2004 19:16:31 -0800

On Tue, 28 Dec 2004 16:06:37 +0900, Stephen J. Turnbull
<stephen@xemacs.org> wrote:
> >>>>> "Ben" == Ben Tilly <btilly@gmail.com> writes:
> 
>     Ben> Can you offer me concrete examples where groups have actually
>     Ben> [organized to protect themselves]?

I wouldn't summarize the elided text that way.  Certainly my intent was
to ask if any large groups have wound up creating effective
organizations to protect themselves where people generally belonged
to the group because of the desire for the public good, rather than for
some other kind of incentive.

That is, I was looking to have you support what I saw as a claim that
large groups necessarily will spontaneously organize to protect their
interests if they see the oncoming threat as big enough.  And I
provided examples where societies did not manage to organize in
the face of clear impending doom.  (Mass starvation in one case,
mass unemployment in the other.)

> The FSF, the LPF, the OSI.  The (core) GNU Project.  NATO, the Warsaw
> Pact.  The (original) Mafia.  Friends of the Earth, Sierra Club,
> Greenpeace.  The Enclosure Movement in Britain.  The gangs in LA.  The
> Kyoto Protocol and CTBT signatories.  The WTO.  The UN.  The League of
> Nations.  The EU.  The United States of [various examples].  APEC,
> ASEAN.  OPEC.  Many labor unions.

None of which fit my description, for varying reasons.  A couple are
small groups, and I was asking about large.  Most of these
organizations offer concrete individual benefits for being members
of the group so don't accomplish what I doubted.  Most of these
organizations are not organized to deal with something that I'd call
"impending doom".

I stand by my claim that, even in the face of clear impending doom,
the need for a public good will not by itself get most people to
actually do anything useful about it.

> Some successful in accomplishing their goals, others not.  All are
> formal organizations, composed of (at the time of organization, at
> least) mutually sovereign members.

And most are organizations where members have reasons to
belong other than "the cause".

>     >> The fact that free riders benefit is of interest only to those
>     >> who habitually build walls around their gardens just to spite
>     >> their neighbors.  But the fact that you can look at my garden
>     >> won't stop _me_ from cultivating it.
> 
>     Ben> This statement misses the critical point.
> 
> No, the whole point is that there _is_ a critical point (hypersurface,
> actually).  _Some_ groups, on one side of the surface, can and do
> form.  Some are successful, others not.  The factors determining
> success only partially overlap those determining formation.  Groups on
> the other side of the surface don't form, and almost by definition fail.

Your point might be that there _is_ a critical point.  My point (and
I was the one making a point first) was not that.  My point is that it
is a bad strategy to try to motivate a group by pointing at the big
public good that you're hoping to provide.

[...]
>     Ben> That is, the analysis applies even with something like
>     Ben> information orsoftware where my use does not diminish what is
>     Ben> available for others to use.
> 
> My point here is that the network externalities may be _positive_,
> requiring a large group to get the total benefits over the hump of the
> initial investment.

By hypothesis, the network externalities are positive in the case
of a public good (that's the "public" in the name).  But in the
analysis the size of the total benefits are irrelevant to figuring
out whether it will happen fairly spontaneously.  The question is
whether any small group will achieve enough return to justify
their solving the problem.

>     >> (2) transaction costs tend to dominate benefits of organizing
>     >> large groups unless network externalities are strongly positive
> 
>     Ben> Not necessarily a factor.  Even if you assume that there are
>     Ben> no transaction costs, the problem remains.
> 
> _None_ of the factors are necessary, but all apply to some situations.

In some situations, the color of the sky applies as a relevant factor.

The basic analysis that I'm referring to totally ignored transaction
costs.  The concept is neither required nor useful for understanding
that basic analysis.

Now it may be that bringing in transaction costs and defining them
in a particular way is useful to be able to generalize the analysis,
and figure out how it applies in some cases.  I can't speak to that.

But it wasn't relevant for what I was trying to communicate.

>     Ben> The difficulty is that every individual may be better off
>     Ben> trying to be a free rider than they are contributing to a
>     Ben> solution.
> 
> Sure.  However, the applicability of the analysis to reality breaks
> down when the incentive to free ride is low and the social benefits
> are high.  Cf the extreme difficulty experimenters face in reducing
> the incidence of the use of the cooperative strategy in the Prisoners'
> dilemma game, or even in getting people to demand 99% of the pie in an
> ultimatum game (player A chooses a fraction between 0 and 1, the
> fraction is revealed to player B, B says "yes" or "no", if "yes" A
> gets the fraction of the pie he proposed and B the remainder, if "no"
> both get zero).

This is an interesting point that I hadn't thought of.  People are,
after all, designed to work well in fairly small social groups.  In
_The Logic of Collective Action_ it is also noted that there seems
to be an increment of energy below which people are willing to
act despite it not making rational sense.  The example that he
gave was voting.  Rationally we shouldn't bother, yet about half
of us do.

Also I've seen reference experiments where people act counter to
what economic theory predicts in trading.  However people who are
experienced traders follow what economic theory says is an
optimal strategy.  So even though most people may be "irrational",
those with applicable experience are likely to be more ruthless.

>     Ben> Somewhat trickier is when a small group can supply the good,
>     Ben> but none can on their own.  Then they can negotiate out a
>     Ben> solution, but will constantly be battling the fact that each
>     Ben> is under pressure to "cheat".  Negotiations will therefore
>     Ben> get complex.  Think OPEC for a classic example.
> 
> Sorry: I don't know how to treat "complex negotiations" other than as
> a transactions cost.  That was implicit; let me make it explicit here.

That complex negotiations generate a transactions cost I'll agree.
That it is the cost of the negotiation which causes it to fall apart I'm
not so clear on.

>     Ben> When no small group exists, then you've got the problem in
>     Ben> spades and no general solution exists.  Sometimes it has been
>     Ben> solved though.
> 
> As Russ phrased the issue, I took it that he believes that even a
> fairly small group has the incentive to lobby against software
> patents, and that the network externalities of such a lobby should
> cause it to grow (although he didn't express it that way).  He was
> wondering why that doesn't happen.

I strongly doubt that Russ has thought his beliefs out in this way.
I suspect that he believes that, "This is obviously important, why
aren't people addressing it when their payoff is so obvious and
the cost to each of them contributing would be so small?" 

That was the question that I was trying to answer.

Addressing the belief system that you give above is simple.
Most people see government as something that is big and hard
for them to move.  Therefore a small group that wants to solve
the problem may see it as being beyond their means and is
unlikely to work hard for that.

If a small group does tackle that job, then outsiders will look at
the group, decide that they're unlikely to succeed, and not join
even though they laud the goals of the group.

If by some chance the small group did manage to grow into a
larger group, then outsiders would tend to say, "They're going
to take care of it, I don't have to worry about it since it will
happen" - and not get involved.

This does not mean that the issue can't be addressed - in fact
it can be, and software patents have been warded off in a
number of countries.  However the obvious approach of
getting everyone to freely donate a fraction of what they'll get
in benefit is unlikely to work very well.

> To explain why not, you have to go beyond saying "the logic of
> collective action is an impossibility theorem".

I don't think that I was saying that.  I thought I was saying that
there is an economic theory for why people are apathetic.  I
further gave a brief outline of the main conclusions of this
theory, and a reference for a good popular treatment of it.

Knowing this theory, you can try to avoid some of the
obvious pitfalls.  Or, more likely, you can look at how other
public organizations work, and with a theory to guide you
about why what they do should or shouldn't work, you'll have
context to figure out how to replicate the successes and
avoid the possible failures.

>     Ben> You can view both these solutions [government and AAA-like
>     Ben> lobbies] as being fundamentally the same, just varying
>     Ben> whether to create individual motivations through a carrot or
>     Ben> a stick.
> 
> I see your point, of course, but on this list, I'd rather not draw
> such an equivalence.  The voluntary lobby that coheres by having a
> number of common interests is far more compatible with freedom as I
> understand it.

I don't want to look at things that way either, which is why I was
volunteering YOU to do it! ;-)

>     >> (3) competition (and thus shrinking the pie) from free riders
> 
>     Ben> It is not that free riders shrink the pie, it is that people
>     Ben> would individually be better off trying to be free riders
>     Ben> themselves.
> 
> In the case of the alleged logic for patents, it _is_ important that
> the free riders shrink the pie.  Even for free software: Russ McOrmond
> himself describes a business model based on achieving a satisfactory
> revenue commitment before releasing any work.

Huh?  Please explain.

My perspective says that it isn't how big the pie is that matters, it
is whether you can find a small group that captures enough pie
to be motivated by it.

>     >> (4) the dynamics of political organization are such that if we
>     >> as a subset cultivate our gardens together, we will typically
>     >> lobby the government for protection from "rose-eat-tulip"
>     >> competition, and probably for direct subsidy as well.
> 
>     Ben> And this is an endemic problem with no good solution.
> 
> That's not a problem, that's an explanation of why we rarely see
> successful purely voluntary lobbying groups like the FSF or LPF.

Point accepted.  It is not a problem, it is an explanation for why
we see a lot of things that I think are problems...

> Well, I guess it's a problem, too, but that's not why I brought it
> up.  :-)
> 
[...] 

Cheers,
Ben