Tag: consumer

Intellectual Property: Enemy of Freedom and Society

By TJ Roberts | United States

You cannot own an idea. Although intellectual property is an idea Americans codified into their constitution, we must see that the idea of intellectual property is an idea that comes into direct conflict with the idea of freedom and human progress. It is important that humanity moves beyond the scourge of intellectual property so that we may live in a world that is no longer held back by corporate protectionism and inconsistent property law. But beyond that, lives are at stake in this fight.

Intellectual Property Violates Real Property

Lockean Property Norms

Perhaps the most important case against intellectual property is in its opposition to society’s property norms. The most prominent principle of property is the homesteading principle, which John Locke describes in chapter 5 of The Second Treatise on Government. In the Treatise, Locke explains that the Homesteading Principle is the idea that property can be justly acquired by two means: original appropriation and voluntary exchange. With original appropriation, the first user of a previously unowned resource becomes the de facto owner of the property. With voluntary exchange, justly acquired property may be exchanged between consenting senders and receivers. This is why theft is condemned. If I take your wallet from you without your consent, then the exchange was not voluntary and therefore violates Lockean property norms.

What is important to realize as well is that scarcity is fundamental to property. You cannot be the owner of a non-scarce good. In The Economics and Ethics of Private Property, Dr. Hans-Hermann Hoppe explains that in a realm of scarcity, property norms must be established. If, somehow, all scarcity ceased to exist (this would have to include scarcity in ourselves), then property norms would not be necessary. But in this world, scarcity is the cornerstone of Lockean property theory.

Ideas are Not Scarce

Since one cannot own a non-scarce good, it is the burden of the advocate of intellectual property to prove that ideas are scarce. If they do so, then intellectual property (IP) is legitimate. It is clear, however, that ideas are not scarce, and are therefore not subject to the restrictions of private property.

Consider a world in which only one person knows that two plus two equals four. If that person reveals this knowledge to someone else, that person knows that two plus two is four and the teacher still knows this. In other words, one’s acquisition of this knowledge did not inhibit another person from gaining the same piece of knowledge, and it did not degrade the knowledge the teacher originally had either. Because of this, knowledge is not scarce. Since knowledge is not scarce, we are not able to subject ideas to property norms.

Intellectual Property Assaults Private Property

Suppose I wrote a pamphlet and I sold it to you. For the law to tell you that you cannot reprint my pamphlet and sell it to others is to tell you what you cannot do with your private property. This is prohibitive on the sovereignty of the individual and private property. This is not, of course, meant to condone plagiarism. In “Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense,” patent lawyer Stephan Kinsella shows that IP “theft” is not plagiarism. Plagiarism wouldn’t run rampant without IP. One possible alternative to intellectual property is Creative Commons, which protects the fact that you created your work all the while not restricting your work to the bureaucracy of American intellectual property law.

Intellectual Property Holds Back Progress

One of the unique benefits of a market economy is that it incentivizes innovation. The consumer is in charge and their needs and desires frequently change. Competition, therefore, is essential to a prosperous market. Intellectual Property, however, holds back competition and protects those at the top. Imagine how much better technology would be if tech companies weren’t constantly under the threat of lawsuits from their competitors. If the focus changed from protecting one’s market power to providing a quality product for their customers in order to grow in the market, the world would have higher quality products at much lower costs.

Of course, progress has occurred in society, but that has happened in spite of intellectual property, not because of it. If we didn’t have intellectual property, software would be significantly cheaper as the potential costs of copying it would drastically decline. Inevitably, the only way for software companies to make a profit would be to provide a better product than their competitors since they won’t be able to artificially increase prices if they want to stay in business. If we abolished intellectual property, we would see a new age of progress.

Intellectual Property Has a Body Count

In 2016, Martin Shkreli raised the price of a life-saving medication to $750 per pill. This led to immense public outrage. But their rage was misplaced. The reason Shkreli was able to do this wasn’t corporate greed, but because of intellectual property. If people were able to copy the drug and sell it to compete with Shkreli’s company, such a price hike would have put him out of business.

This is just one of the innumerable symptoms of the disease of intellectual property. American IP law forbids competition against new ideas, especially medicines. Since a generic is effectively illegal for years after a cure is discovered, the poor are frequently left unable to pay for these life-saving medications. The abolition of intellectual property would save lives, allowing not only for prices to fall as competition rises, but also for quality of products to rise as innovation increases.

Intellectual Property Is the Enemy of Progress

In other words, intellectual property has failed the people. It is nothing more than corporate protectionism that flies in the face of Lockean property norms that has a very real cost to humanity. If we want a society that can advance quicker, allows for competition to drive prices down, and allow for a society based on consistent property norms, then we must reject the protectionist sham that is intellectual property.

Recommended Reading

Against Intellectual PropertyStephan Kinsella

Goods, Scarce and NonscarceStephan Kinsella and Jeffrey Tucker


This post was originally published in LIFE.

Get awesome merchandise. Help 71 Republic end the media oligarchy. Donate today to our Patreon, which you can find here. Thank you very much for your support!

Advertisements

The City of Chicago Will Now Tax ‘Amusement’

othman Mekhloufi | United States

 

The Amusement Tax

The City of Chicago is now levying taxes on amusement, entertainment, or anything remotely fun-oriented.

The City of Chicago’s Department of Finance, rather than the City Council, issued a new tax ruling called an “amusement tax”. This tax would subjugate any residence within the official city limits of Chicago to pay a 9% tax, in addition to sales tax, on anything which is remotely related to amusement; whether it be streaming movies on Netflix, playing video games, or going to a football game, such a tax would apply.

Here is the following list of all the assortments to be taxed according to the ruling itself.

“Any exhibition, performance, presentation or show for entertainment purposes, including, but not limited to, theatrical, dramatic, musical or spectacular performance, promotional show, motion picture show, flower, poultry or animal show, animal act, circus, rodeo, athletic contest, sport, game or similar exhibition such as boxing, wrestling, skating, dancing, swimming, racing, or riding on animals or vehicles, baseball, basketball, softball, football, tennis, golf, hockey, track and field games, bowling or billiard or pool games; any entertainment or recreational activity offered for public participation are on a membership or other basis including, but not limited to, carnivals, amusement park rides and games, bowling, billiards and pool games, dancing, tennis, racquetball, swimming, weightlifting, bodybuilding or similar activities; or (3) any paid television programming, whether transmitted by wire, cable, fiber optics, laser, microwave, radio, satellite or similar means.”

With this ruling, there are also some exceptions. All venues held in auditoriums or theaters with a maximum capacity of not more than 1500 people are exempt from the 9% amusement tax. However, these venues must be in person live performances to be exempt from the tax. This exemption does not apply to movies or sporting events.

Currently, Chicago’s sales tax, with all jurisdictions considered, is the highest in the entire nation at 10.25%. With this amusement tax being set at 9%, it is also compiled onto Chicago’s default sales tax of 10.25%; meaning that the population of Chicago is not only stuck paying an astronomically high 10.25% sales tax, but they are also required to pay an additional 9% tax on any assortments in relation to the amusements previously listed.

The Impact on the Wallet

The economic repercussions of such a new tax would be quite negative for the City of Chicago. Said economic repercussions would revolve around the primary negative effect of margin loss. The government is now levying more taxes from the people via two separate sales taxes, one at 10.25%, and one at 9%. Because of this, less money will be the pocket of the populace. When the populace has less money in their pockets, they will have less money to spend. Because the populace will have less money to spend, businesses will lose out on customers, as well as profit. When it occurs that businesses lose out on customers, and income, one primary negative effect on the economy would take place; that being, margin loss.

This margin loss will always have two sets of negative economic sub-repercussions. The first set of sub-repercussions are unemployment, cutting of wages, as well as the cutting of work hours which fits into the internal-labor subsection. The second set of sub-repercussions are and the hiking of prices which fits into the consumer subsection. Meaning, that with such a tax, prices would in fact increase, and jobs, work hours, as well as wages,  would all be cut.

The Impact on Employment

Let’s take a look at the first set of sub-repercussions; unemployment, the cutting of wages, and the cutting of work hours. Due to the fact that businesses will be losing margin due to fewer customers, they will always want to mediate that margin loss. To mediate this margin loss, businesses have two choices; either begin to raise their prices, or cut spending somewhere within the company. Usually, when spending is being cut, it is centered around wages and not other essentials of the company. This is due to the fact that if companies were to cut spending for such essentials, the product, and or service being provided would degrade in terms of quality. In turn, this would only result in furthermore margin loss due to the general premise that no consumer populace wants to purchase an inferior product with poor quality.

With this, we can determine that a margin loss, for whatever reason it may be, will indeed result in a spending cut. Said spending cut will be focused on wages. More specifically, when implementing this, hours will be cut, some individuals within the company may be laid off, and many wages will be reduced all to minimize for the loss in margin caused by economic government intervention.

Don’t Forget About Prices

Considering the second set of sub-repercussions, the hiking of prices, this also comes with its own extended economic repercussions. Other than the fact that cheaper goods mean best for everyone on both sides of the transaction, the hiking of prices comes with its own furthermore economic disparities. When prices are hiked to mediate a loss in margin, an even higher amount of margin loss will occur. This is due to the following reasons; when a company raises its prices for whatever reason it may be, and in our case, margin loss, the populace will be less incentivized to purchase said product, and or service.

Because of this, sales will go down even more, and the company suffers even more margin losses. For instance, a 2014 study conducted by YouGov found that nearly 1 in 5 of Netflix subscribers polled would cancel their subscription if the price went up by $1 a month. Nearly half of those polled would cancel their subscription if the price went up by $2 a month. If these increases in subscription prices would happen due to a loss in margin, Netflix would experience even more margin loss as it loses even more customers due to price hikes.

As we can now see that not only do price hikes burden the consumer populace as everyone enjoys cheap goods, but they also cause margin loss in companies which, if it were to be on such a large scale, would cause unemployment, cuts in wages, as well as cuts in work hours as previously explained.

Many may claim that the amusement tax rate may only be 9%, and at such a small rate, it would not cause any actual negative economic repercussions as previously mentioned. However, this amusement tax is estimated to levy $189 million in the year 2018. Not only this, but the amusement tax’s levy margin has been trending upwards since 2017 when it took in a measly $168.7 million compared to the $189 million of 2018. With the amusement tax raking in hundreds of millions of dollars a year, and with it only trending upwards, we can truly determine that such a large amount of money being taken out of the economy will indeed cause the economic hardships previously mentioned.

Although these economic repercussions have not been extremely severe in Chicago due to the fact that the amusement tax is only centered within one jurisdiction; if the western world continues this trend of large government economics, and a similar policy begins to be implemented on the federal level, the economic repercussions previously listed would scale to a very large extent affected millions across the board.

In reality, with such a tax, we would only cause economic hardships; unemployment, cuts in wages and work hours, as well as hikes in prices across the jurisdiction in which it was applied.


Get awesome merchandise. Help 71 Republic end the media oligarchy. Donate today to our Patreon, which you can find here. Thank you very much for your support!

Featured Image Source

The Market Forces Companies to Care For Consumers

By Andrew Lepore | United States

The law of utility maximization through cost-benefit analysis holds true to human action in the market as the theory of gravity holds true to physics.

Utility maximization simply means every individual wishes to maximize the benefit they receive for every dollar, and for every moment of their time. Every consumer wish is to maximize the value they receive with the lowest cost.

The consumer navigates through the unlimited number of goods and services to satisfy their needs desires. It takes place when you’re buying anything, as you are always attempting to determine if the cost of something is worth the benefit received. For example, you might like sushi more than hamburgers, but you can get twice is full for less of a cost by buying a hamburger compared to sushi, so your cost-benefit analysis determined the benefits for purchasing the hamburger outweighs the benefits for purchasing the sushi.

On the same token, The same analysis is taking place when hiring a service provider or choosing a place to shop. Say for example grocery store A has a slightly smaller selection and bad customer service but low prices. And Grocery store B has a much larger selection, better customer service, but higher prices. Depending on the time and circumstance, you will choose one over the other.

A rational individual will purchase a good or service if the benefit they receive from that service is equal to or outweighs the cost of it.

The utility maximization model is based on four assumptions:

  1. Consumers are assumed to be rational, trying to get the most value for their money.
  2. Consumers’ incomes are limited because their individual resources are limited. They face a budget constraint.
  3. Consumers have clear preferences for various goods and services, thus they know their MU for each successive units of the product.
  4. Every item has a price tag. Consumers must choose among alternative goods with their limited money incomes.

This praxeological action taken by the consumer is what drives competition. It is what drives an individual to pick one service provider over another even if they offer slightly better prices or slightly more quality services. This, of course, forces companies who provide bad services at high prices to either compete and get better or go bankrupt. It’s a bit like Darwinism except we’re not tearing each other apart in the jungle.

Utility maximization through cost-benefit analysis is one of the underlying functions of human action in the market. Not only that, but it allows for a symbiotic relationship between service providers and consumers. The service providers who supply the most benefit at the least cost will be the ones who the consumers will choose and therefore will be the ones who succeed.

The Frontier Isn’t Gone, It Just Isn’t Where We Thought

Craig Axford | United State

In his famous 1893 essay The Significance of the Frontier in American History, the historian Frederick Jackson Turner lamented the 1890 Census Report’s conclusion that the “frontier line” beyond which large tracts of unbroken land could still be found had ceased to exist. “Therefore,” the report concluded, the frontier would “no longer have a place in the census reports.”

Turner believed, not without good reason, that America’s character was substantially if not entirely a product of its first century of westward expansion. He summed his thesis up early, writing in the second paragraph:

The peculiarity of American institutions is, the fact that they have been compelled to adapt themselves to the changes of an expanding people — to the changes involved in crossing a continent, in winning a wilderness, and in developing at each area of this progress out of the primitive economic and political conditions of the frontier into the complexity of city life.

With the frontier more than a century and a quarter behind us— at least according to the US Census Bureau — American institutions were perhaps never as challenged by the physical presence of a frontier as individuals are now by its absence. Without a landscape to test and define us, we are left to shape our own lives without the former environmental constraints imposed by a hostile natural world that needed taming. That’s a great luxury few before us have enjoyed, but not one that comes without personal cost.

Modern humanity has largely forgotten that not so long ago Mother Nature was a much greater imminent threat than it is today. We set aside “wilderness areas” and engage in activities like skydiving in large part because contemporary society is so safe it’s now necessary to seek out opportunities to experience a little bit of danger. From vaccination and seatbelts to chlorinated water and coffee cups with temperature warnings, civilization has successfully marshaled its resources to protect us from disease and injury. Distances that brought the pioneers of the 19th century weeks of hardship we typically travel in a weekend in air-conditioned comfort with time to spare for camping, hiking, mountain biking, or rafting. If we return to the office from these excursions Monday morning with a couple of visible scratches we feel we’ve proved our courage to our often envious co-workers.

The obstacles we must overcome no longer exist out there. Now it’s our own internal demons that we must conquer. The threats these pose are more subtle than mountain ranges or vast advances of desert. They play upon our capacity for self-deception and our skill as architects of elaborate rationalizations. Toying with our emotions they cause us to fear the other while assuring us that our own faults are actually strengths in disguise.

The unknown remains, as it always will. But on our home planet, the undiscovered places tend to be nooks and crannies rather than lost cities or unexplored canyons. To the extent, we pursue it the thrill of discovery is now much more personal than it is public. Those looking for fulfillment climb the peak because they have never climbed it before, knowing full well that hundreds if not thousands ascended it before them. It is their own curiosity more than humanity’s that they’re attempting to satisfy.

But for most of us, the experiences we settle for typically perform a much baser function. Instead of seeking meaning and sharing what we learn from the search, we record experiences as a means of keeping score. Selfies taken here and there serve to advertise things we got to do that others we know perhaps didn’t. Our smartphones provide both the soundtrack and the camera for a movie about ourselves we hope will get more clicks than whatever the proverbial Joneses may have posted. Many of us no longer even bother to edit the content we share, speaking whatever pops into our head or photographing ourselves whenever the mood strikes. Even our “leaders” are now increasingly getting in on the act. What we write isn’t as important as how often we write and how many people we get to follow us while we do it.

In a race that’s won by the person or group receiving the most attention, easy and shallow pastimes are a far more efficient means of generating material than activities requiring effort, planning, research and other forms of deep engagement. Unfortunately, attention will always be a poor substitute for meaningful relationships and banality will never be as fulfilling as pursuits that expand our horizons.

Frederick Jackson Turner concluded that the frontier had rendered “Movement” the “dominant fact” of American history during the country’s first century of nationhood. He argued that “the American energy will continually demand a wider field for its exercise…in spite of environment, and in spite of custom, each frontier did indeed furnish a new field of opportunity, a gate of escape from bondage of the past; and freshness, and confidence, and scorn of older society, impatience of its restraints and its ideas, and indifference to its lessons, have accompanied the frontier.”

Today there is no longer an opportunity to escape to fresh unsettled territory, but there are still frontiers galore for each of us to explore. In the absence of blank places on the map enticing us onward, we are faced with empty spaces within ourselves. It is our fear and ignorance that we must strive to overcome to find our “new field of opportunity.” For each of us, this frontier will offer somewhat different challenges and take unique shapes. But if we can transcend the easy narcissistic fixes that consumerism and social media invite us to indulge, who knows what we might be able to discover that’s truly worthy of sharing along the way.

Photo by Filip Mroz on Unsplash

Follow Craig on Twitter or read him at Medium.com

Other recent stories by Craig include: Epigenetics: Where Biology And Culture Meet & Are You Getting Enough Awe In Your Experiential Diet?

Innovation is Being Held Back, but Who’s Doing It?

By Mason Mohon | USA

The last decade or so has blessed the human race with technological innovations like we have never seen before. Apple celebrated the 10th anniversary of its iPhone with the release of the new iPhone X. Silicon Valley geniuses are constantly trying to come up with the next big thing and trying to get their tech on the market and widely used. A new vehicle model with new driving features seems to be releasing every year, and it is impossible to keep up. All of this innovation is pushing us to be able to do more than ever before, with technology allowing U.S. companies to outsource online jobs to India, where they can be done more efficiently and cheaper. Few would argue that this innovation is a bad thing, but are we stifling it? Are we at our fullest potential?

A basic rule of free-market economics is that consumer demand must be served. An entrepreneur or business firm cannot and will not continue to exist if it does not serve the needs of the consumer. If a business begins to provide a good or service that the consumers don’t want, said business will begin to lose resources and will cease to gain profits. If a business wants profit, it has to test the market and find out what a substantial amount of people actually want to have. That is one of the beautiful things about the free market. Demand of the consumers is met, and that is the only way any producer of anything can hope to make money. The people have needs and wants and they are met by the market. But what if these consumers want to work against innovation? What if the majority of consumers didn’t want or didn’t care for new technologies?

Let us say that most consumers do not see the potential a product has for them or for the world as a whole. They do not see the innovation, and a game-changing piece of technology ends up flopping. That would really suck, for we would miss out on a new technology. Is this a fatal flaw in the system? Could the consumers (who make up humanity) be holding back humanity?

We would have to look at what the problem in this situation is, though. If this issue would arise (or is arising), it is not a problem at all, but rather an opportunity. This is an opportunity for new technological innovators to show how they are changing the game. It is a problem of information arising, and the consumers need more information. A well-placed ad campaign and a good partnership could remedy the problem in no time. Chances are that the market would solve something like this, but only if it pushed hard enough.

An example would be the comparison between Samsung and Apple phone products. For a long time, my Samsung owning friends have joked with how primitive I was owning an iPhone, for Samsungs tended to be better on nearly every front. They were the better, stronger, more durable, and more innovative technology, but regardless, many stick with iPhones. It was recently discovered that Apple intentionally slows down old models of its phones when a new model comes out. When the iPhone X was released, very noticeable bugs came in the new operating system on my 6S plus. Samsung has not shown to be doing anything like this, which just adds a cherry on top for their technological superiority. Now, Samsung has an opportunity to make this issue with iPhones as big as they possibly can. People are staying with Apple iPhones for various reasons, but no informed person is staying with them because they are better. Here’s the chance Samsung! Now take it!

What would the alternative be, anyway? Should we put government bureaucrats in charge of allocating money to what is innovative? Should there be a federal agency to promote human development? No, because in short, government agencies usually suck at their jobs. The state should not be in charge of deciding what technology is worth promoting and what is not. The consumers and the market do a great job of sorting all of that kind of stuff out, as the above paragraph indicated. The state should not tell people that Samsung is better and promote Samsung, whether it be through regulations or subsidies. Any sensible person should be able to see that this should be the case.

It actually turns out that the state is the enemy of innovation. State taxes on big companies and corporations mean they have a lot less money to put into new technologies and serving the consumers more. Regulations make it hard to create new products and tariffs cause resources to become more expensive. Taxes in any part of the economy, whether it be capital gains, corporate, or income, tend to make people more present-oriented. This decreases foresight and causes people to care less about the future, making fewer long-term investments. This means that people will be less focused on the future and more focused on the present. This means fewer people oriented towards tomorrow, looking to change the world with the next big tech boost.

Humanity is getting better and better at creating new things each and every year. What we want to avoid is throttling that, and we want to make sure we can keep this growth going for the long haul. The way the free market is set up – to serve consumers – is not an impediment for this, even though it may sometimes seem like it. Rather, the government is the ultimate danger to human growth and flourishing. Once its barriers are taken back, we can see humanity reach new never before imagined heights.