Rethinking Traditional Economics In An Age Of Intellectual Property
from the time-to-recalibrate dept
Andy Kessler, who likes nothing better than forcing people to rethink the status quo, has dropped in a submission about his latest Wall Street Journal op-ed piece explaining why economists who are worried about too many people being employed leading to inflation are living in a time before intellectual property economics became clear. Kessler argues that with intellectual property being our main output, traditional economics don't apply in the same way: "How much does it cost for another copy of Windows. Zilch. Stressed about prices? Take another Xanax, it costs almost nothing to make. Same for Lipitor. Their high costs go to fund FDA trials, not factories. How much does it cost to enable another Google search? Music download? Email? Phone call? Nanocents. The output gap of intellectual property is almost infinite. Full (and high wage) employment in research jobs is what we want." This is the very concept behind things like "increasing marginal returns" that show that intellectual property, when opened up frees up the economy to do more, not less. So, the more we can encourage that, the better off our economy is. Unfortunately, it's taking a while for economists to realize this -- and apparently those economists all read the Wall Street Journal. Kessler reports: "Hate mail running 2:1. A good sign!" Indeed.
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Not quite
Newer drugs (and sometimes even old drugs) often do have significant material costs. The manufacturing process for pharmaceuticals often have very low yields, because chemical reactions typically produce racemic mixtures of mirror-image "L" and "R" molecules. One stereoisomer is the compound we want, while the other one may be harmful. Separating the molecules may require expensive processing; often, no cheap methods have been discovered yet. Repeat this process a few times, and you have a combination of low yield and high cost. Other processes may be very slow, or require very fine tuning. The raw materials going into the reaction may be expensive too.
Over time, there is a statistical tendency for the manufacturing process to get cheaper, but it may also go up, if the materials go into short supply (due to natural shortages or regulation).
Remember, chemistry is not computers.
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What if computer prices go up?
Already, some nations (Europe and Japan) have high fees for disposing of computers, and they are predicted to go up. We may look back on the early 21st century as the golden era of computers, when the middle classes could afford to buy disposable computers. Maybe kids of the future can look forward to $10,000 desktops and $4,000 hard drives.
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Re: What if computer prices go up?
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Re: What if computer prices go up?
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Re: What if computer prices go up?
Could we have a new generation of... nanoparticle-induced psychosis?
I sure hope so. Drunks and smokers aren't as fun as they used to be.
;^)
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