Three Economic Nobel Laureates In A Row Recognizing Power Of Infinite Goods

from the this-is-a-good-thing... dept

Thu, Oct 15th 2009 4:22am — Mike Masnick

With the Nobel Prize in Economics being awarded to Elinor Ostrom (as well as Oliver Williamson) this year, plenty of people are noting that Ostrom's seminal work has to do with how the concept of "the tragedy of the commons" isn't really true in many cases, and how that "commons" can often self-regulate itself. And, Ostrom definitely recognizes how this applies to the "commons" that is the public domain. I didn't want to comment right away on this. While I've read Ostrom's work in the past, I wanted to revisit some of it, to refresh myself on it.

But what comes out in reading through her work is that she recognizes that government intervention -- such as with monopoly rights -- really doesn't make sense in many situations of "public goods." In a recent discussion on this site, people pointed to the concept of a "public good" as something that needs government intervention -- and I noted that more recent economic analysis showed that wasn't true at all. Ostrom's work is much of what kicked off that line of analysis (Coase deserves credit as well...). Her key finding was that in commons situations, the players can often work out perfectly reasonable solutions on their own, that don't involve regulatory efforts to put up fences or restrictions. The idea that a commons will automatically get overrun simply isn't true in practice. And that's exactly what we've seen in areas where there isn't intellectual property protections. The supposed fear of a "tragedy of the commons" never seems to show up. Instead, the markets adjust.

What struck me as really interesting, however, is that this is the second time in three years that the Nobel committee has awarded someone whose research highlights this point. In 2007, the award went to Eric Maskin, who has done work showing why patents can often be harmful (his focus was on software) -- again, suggesting that government intervention can be harmful in cases of "public goods." And, while it's less tied to the reasons why he got his Nobel or his core areas of research, last year's award winner, Paul Krugman, has recently come around to recognizing that "infinite goods" or public goods aren't a problem, but a potential opportunity as a market shifts.

It's nice to see the Nobel committee helping to get these ideas out there -- and highlighting the research that debunks the old wisdom that the answer to any public good is to create a gov't regulated monopoly system, rather than letting the market work out a solution on its own.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: commons, economics, elinor ostrom, eric maskin, nobel prize, public goods, tragedy of the commons

34 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 15 Oct 2009 @ 4:57am

Because lately, winning a Nobel prize really means anything.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 5:03am

Once again, the stretch. She talks about the commons, but isn't in any way suggesting that illegaly placing things into the commons is good. Your "infinite goods" these days are in the majority not their legally.

Good try Mike, keep up the good work!
[ link to this | view in thread ]
Chronno S. Trigger (profile), 15 Oct 2009 @ 5:15am

Re:
This argument is to get those illegal infinite goods to become legal, ether by fixing copyright or showing the copyright holders that it's better.

Good try, AC, keep up the reading comprehension.
[ link to this | view in thread ]
Fred, 15 Oct 2009 @ 5:45am

Yeah, but no... Read the book again!
I see you coming to the US Health care reform.
So tell me where did Ostrom took her idea?

Not exactly the health care system, right?
She did her model from local industries, primarily harvesting resources (I am talking lumber and fish here).

Her model might work at a more rural scale. So to save money the Government could stop providing health care to agglomeration smaller than 10,000 inhabitants and let them figure out how to attract health care (and all the technologies)
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 5:50am

Re: Re:
My reading comprehension is fine. I just know where Mike is going with this. Next month there will be a link "Even Nobel laureates agree that everything should be infinite and free", support some other hair brained scheme to make people think that putting content their don't have the rights for online is somehow good and legal.

hey, all the cool kids are doing it.
[ link to this | view in thread ]
Richard (profile), 15 Oct 2009 @ 5:52am

Re:
Once again, the stretch. She talks about the commons, but isn't in any way suggesting that illegaly placing things into the commons is good. Your "infinite goods" these days are in the majority not their legally.

What is right and what is legal are not necessarily the same thing - especially when the definition of what is legal is the result of lobbying by the kind of thugs that are attracted to the intellectual monopoly industries. (People who want to be able to sell something forever and yet still have it.)

There is however a really good reason for not putting things into the commons illegally - we do not want the owners/authors of these things to get the benefit of it!

What we actually want is for them to be forgotten!
[ link to this | view in thread ]
John Fenderson (profile), 15 Oct 2009 @ 6:30am

Re: Re: Re:
"I just know where Mike is going with this."

Then why not wait for him to actually go there instead of putting words into his mouth? Because, honestly, you do just come off as having low reading comprehension.
[ link to this | view in thread ]
stat_insig (profile), 15 Oct 2009 @ 6:31am

Re:
GET OVER IT!!!

Yes. The Peace and, sometimes, the literature prizes are politically motivated. But most of the science prizes go to the eligible people (there are significant omissions, but the winners have made a significant contribution).
[ link to this | view in thread ]
Hanity, 15 Oct 2009 @ 6:32am

Re:
Yep - George W should've received one.
[ link to this | view in thread ]
Enricosuarve, 15 Oct 2009 @ 6:44am

Re:
My thoughts exactly, although in fairness perhaps she promised to consider possibly doing something dead good for the field of economics at some point in the future, maybe.
[ link to this | view in thread ]
..., 15 Oct 2009 @ 6:50am

Re: Re:
"doing something dead good "

???
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 7:21am

The thing is if patents weren't so engraved in our medical system everyone would recognize, just like in the case of software, how much harm patents are causing to medicine because most patents would seem as ridiculous as software patents are now. If patents were as engraved in our software system then intellectual property maximists can claim that they do a lot of good and it would be harder for us to know the ridiculous nature of these patents because all advancement would be hindered by patents but because all advancement is under patent it would be harder to see that advancement occurs just fine without patents and that had patents existed on certain designs/ideas/etc... many advancements obviously would not have occurred or advanced.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 7:23am

Re: Re: Re:
"hey, all the cool kids are doing it."

What about, "hey, patents are bad because the evidence shows they're bad and because there is no reason to suggest they are good and plenty of good reasons to suggest they are bad."
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 7:25am

Re: Re:
You mean Obama. (BTW, I'm not an intellectual property maximist).
[ link to this | view in thread ]
Ryan, 15 Oct 2009 @ 7:41am

Re: Yeah, but no... Read the book again!
Can't quite tell what your point is...are you just saying that Ostrom's principle doesn't apply in health care for whatever reason?

Ostrom has developed generalized principles of social behavior to describe how systems of players will self-regulate with standards of behavior. All of us want good health care cheaply - why is it so hard to believe that we won't develop those methods ourself without the government holding our hands? Most of the current health care/insurance problems are a result of government regulations anyway.
[ link to this | view in thread ]
scarr (profile), 15 Oct 2009 @ 7:46am

Re: Re: Re:
Where has this site ever claimed putting content you don't have the rights for online is legal? In fact, such a claim would be completely contrary to their claims that copyright needs to be reformed.
[ link to this | view in thread ]
Enricosuarve, 15 Oct 2009 @ 8:11am

Re: Re: Re:
Common expression in the UK - if you need help figuring out what it means then I suggest you troll over to Google, I can't be bothered to educate your dumbass

mmmk?
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 8:50am

Re: Re: Re: Re:
Mike doesn't wait for the various bad guys of the IP world to go there before he jumps all over them. He also has a strong track record of attempting to turn opinion into fact. Just pointing out the inevitable uses of this opinion piece. Today's opinion is tomorrows linkable "fact".
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 8:56am

Re: Re: Re: Re: Re:
Unfortunately it's the mainstream media that has a problem of turning opinion into fact. Like how they try to argue that 20 year patents are good for medical/pharmaceutical advancement as fact and how they try to argue that our intellectual property laws, only designed to serve the rich and the powerful, are good as fact with zero evidence to back it up. How they censor all the counter arguments and evidence that disagrees with them. The mainstream media and big corporations, with their lobbying efforts to control the government/FCC to serve corporate interests at public expense and to control what we get exposed to, has committed and continues to commit a crime to humanity. These people should be thrown in jail for life for their atrocious lies and brainwashing that they spread to the public.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 8:58am

Re: Re: Re: Re: Re:
Oh please, if it were up to you Mike would be censored because you know your views don't stand up to his and the public will not believe your bad logic over his good logic in the face of a free marketplace of ideas. But of course you think you're superior to the public and hence only your views should be broadcasted and those that disagree with you should be censored.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 9:59am

Once again, the stretch. She talks about the commons, but isn't in any way suggesting that illegaly placing things into the commons is good.

The stretch, the relevant omission, the the opinion-as-fact, all of them the rusty hinges to which most TechDirt posts noisily and endlessly pivot...
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 10:03am

The fact is, healthcare does exist today in a form without patents. Researchers are free to come up with an incredible drug and not patent it. There is nothing stopping them from doing so. Why do you think it doesn't really happen?

What most here want to do is force others into their way of thinking, even though they are not the ones that are actually doing the thinking.

Feel free to use your brains and come up with a great new drug and don't patent it. Nothing is stopping you, except for the fact that oh, that is right, you don't have the brains for that. Lets make someone else do that.

You can't look at the state of healthcare and determine if patents are good or bad, because you can't look at our healthcare system devoid of patents. Would it be better if there were no patents? You can have an opinion but it is just that because you don't know if new drugs would be invented without the promise of patent protection. Get rid of patents and you might just be getting rid of new drugs. To argue that it wouldn't is fine, but it is incorrect to say that facts back up your argument.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 10:47am

OFFICIAL TechDirt FIELD MANUAL FOR REPLYING TO PATENT SUPPORTERS:

STEP 1: Reference the pre-patent, Italian pharma industry. Cite the Boldrin and Levine paper.

STEP 2: Hear calls for more citations, actual evidence, peer reviews etc

STEP 3: Cite the Boldrin and Levine paper again.

STEP 4: Listen to the opposition saying that the Boldrin and Levine paper is not properly backed up, is packed with hearsay and faulty statistical analysis and lacking in evidence

STEP 5: Cite the Boldrin and Levine paper again.

Repeat steps 1, 3 & 5 as necessary until Patent Supporters give up.

SUCCESS!
[ link to this | view in thread ]
Matt S (profile), 15 Oct 2009 @ 10:56am

Re: Re: Re: Re:
The first page of a google search for both "dead good" and "dead good idiom" reveals nothing about the meaning of that phrase.
[ link to this | view in thread ]
MCR, 15 Oct 2009 @ 11:41am

Re:
Actually, the developers/researchers that develop new medicines have no control over their work. They're financed by the pharms for their work, with a pre-arranged agreement that all works are owned by the company.

Big corporations love patents, hence everything created by research/development teams are patented. Not only do those corporations patents the end unit, but they get several patents on the different processes involved in arriving at the end unit.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 11:50am

Re: Re: Re: Re: Re: Re:
Nobody is calling for Mike to be censored, far from it. It is very entertaining and interesting to see some of the ideas talked about here.

However, Mike has a very bad habit of globbing onto a very small part of a bigger story or report, extracting information in a way that only makes his point of view. Often, those stories or links are also opinion, or in fact draw conclusions entirely different from what Mike tries to draw from them. That doesn't stop him from linking to his posts in the future, suggesting that his opinion posts are "fact", and sort of building a pyramid on semi-facts to create one big "fact" that is mostly opinion.

The whole deal with the UK music industry numbers is the best, because the only part of the industry growing faster than the rate of inflation in the UK is PRS Licensing fees! Mike hates the PRS, but he is more than willing to tag along if he can use the numbers to create a "fact" that isn't exactly true. Then he links to it later (he did yesteday) to try to debunk another story that goes against the techdirt party line.

So no, there is no desire for censorship. Rather, a desire to encourage the readers here not to become Mike dittoheads, but rather to actually go read the material and understand the issues, rather than just swallowing things whole.
[ link to this | view in thread ]
Lawrence D'Oliveiro, 15 Oct 2009 @ 3:06pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
He also has a strong track record of attempting to turn opinion into fact.

[Citation Needed]
[ link to this | view in thread ]
Mike Masnick (profile), 15 Oct 2009 @ 4:20pm

Re:
OFFICIAL TechDirt FIELD MANUAL FOR REPLYING TO PATENT SUPPORTERS:

Heh. That's funny. Especially since I don't use the Boldrin/Levine paper very much, because it only highlights one small point. There's much better research on the topic, and I usually point to about a dozen of that research before I ever get near Boldrin/Levine.

But, you know, when you're not big on facts in attacking me, I guess it's no surprise that you'd mess up your attack.

But, honestly, you'd think that the Masnick haters would at least have a bit more ammo than this. Guess when you have no argument, you resort to easily proven false ad hominems.
[ link to this | view in thread ]
Ostrom Fanatic, 15 Oct 2009 @ 4:30pm

Public goods are not the same as common pool resources; they share many characteristics, but also have serious differences--such as the subtractability of common pool resources. Some of Prof. Ostrom's most recent work is arguing specifically this point. Be careful in applying her theories and work directly to public goods situations and vice versa.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 6:26pm

Re: Re: Re: Re:
Wow, quite full of yourself.
[ link to this | view in thread ]
Anonymous Coward, 15 Oct 2009 @ 7:12pm

Re: Re:
*cough* UK story *cough*. nice of you to ignore that little nugget.
[ link to this | view in thread ]
Enrico Suarve, 16 Oct 2009 @ 5:11am

Re: Re: Re: Re: Re:
I am 100% full of me - if I wasn't I'd be someone else.

Or possibly a transplant recipient.
[ link to this | view in thread ]
Enricosuarve, 16 Oct 2009 @ 5:22am

Re: Re: Re: Re: Re:
Since you bothered to look it means 'ace', 'rather splendic', 'quite cool' but just short of 'fantastic' and generally considered to be quite a lot less great than 'fucking amazing'.

Was it really that hard to figure out? Who'd a thunk it?

Since the first page of a Google search for "dead good" shows 8 companies who have used it as part of their name, I wouldn't have thought so.
[ link to this | view in thread ]
Anonymous Coward, 16 Oct 2009 @ 4:59pm

Heh. That's funny. Especially since I don't use the Boldrin/Levine paper very much

...

LOLOLOLOL!

You have GOT be joking...

Of all the dead horses that have ever been beaten, there is none so pulverized, so abused, so reduced into so wet and indecipherable a mess as your corroborating evidence-deficient "Italian Pharma" example.

http://techdirt.com/articles/20090916/0406396211.shtml

http://www.techdirt.com/articles/20060 502/1217204.shtml

http://techdirt.com/articles/20091001/0410036386.shtml

http://techdirt.com/a rticles/20090925/0109176318.shtml

http://techdirt.com/articles/20090909/0412576143.shtml

http: //techdirt.com/articles/20090811/0341235843.shtml

http://techdirt.com/articles/20080115/013002.sh tml

http://techdirt.com/articles/20070321/021508.shtml

http://techdirt.com/articles/20070316/0 05250.shtml

...just to name a few.
[ link to this | view in thread ]