A Beginner’s Guide to Austrian Economics

Posted by Kittyhawk 7 years, 4 months ago to Economics
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From the article:

The “Austrian School” of economics grew out of the work of the late 19th and 20th century Vienna economists Carl Menger, Eugen von Bohm-Bawerk, Ludwig von Mises, and Friedrich Hayek (though of course Austrian School economists need not hail from Austria). Austrians focus strongly on the analysis of individual human action. This is known as praxeology, the study of the logical implications of the fact that individuals act with purpose, from which all economic theory can be deduced. Austrians also note the correlation between greater economic freedom and greater political and moral freedom. This in part explains why Austrian economics is the intellectual foundation for libertarianism. Austrians rightly attribute the repeated implosions of mainstream Keynesian economics to the latter’s focus on empirical observations, mathematical models, and statistical analysis.
SOURCE URL: http://www.voicesofliberty.com/article/a-beginners-guide-to-austrian-economics/


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  • Posted by edweaver 7 years, 4 months ago
    If only all elected official would read and take this to heart we would stand a chance at getting our freedom back.
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    • Posted by Robbie53024 7 years, 4 months ago
      Politicians have no desire to understand economics, merely to use economic policies to advance their political aims. Most of which have nothing to do with freedom or prosperity for all, but rather control of the many by the few and benefits to those friends who help them.
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      • Posted by $ allosaur 7 years, 4 months ago
        A politician's number one goal--
        Do whatever it takes to convince voters to sustain my uninterrupted political career with its great health care plan and a retirement package.
        (Hey, I did not even think to use my cynical Comrade Citizen character for this baby. Well, I did after the writing).
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    • Posted by ISank 7 years, 4 months ago
      Agreed, I most assuredly prefer my Econ from an Austrian perspective, and how much greater of an economic engine this nation would be if we were not "all Keynesian now". I always have been a fan of the way
      Leonard Reed expressed it in
      I, pencil
      "The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth."
      And get several resources for my Econ class from cafehayek.com
      Aloha, have a great one!
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      • Posted by khalling 7 years, 4 months ago
        the problem with Austrian economics is that it does not recognize intellectual property rights. How many inventions are in the pencil? why were these components and systems invented? How quickly were they invented? How did the technology used to make a pencil get to the far corners of the world? This is a foundation to any economics lesson and Austrian economics refuses to see it as such. Productive New Year to you!
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        • Posted by ISank 7 years, 4 months ago
          Hear, hear to a Productive Year!
          I left my copy of Human Action in my class so I'm not sure just how much this aligns with the Austrians. As with much the argument comes down to what is the role of the State. I lean towards the libertarian ideal that only laws agreed upon are valid, and state forced IP laws overstep that role. If you and me agree on payment for ideas that's one of free association or voluntary action.
          Simple but it's one way to look at laws or boil down which are valid natural laws.
          Have fun
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          • Posted by khalling 7 years, 4 months ago
            This is an important point in defining the Role of the State. Whether you agree to privately contract security, mediation, courts, etc. the end result is always that there is the threat of force behind your rules. Two people , who are otherwise good friends, can disagree about property (any property). But if the mutually agreed upon arbiter sides with one person and the other refuses to acknowledge the decision-where are you? Even if the arbiters or police are privately paid for the threat of force if someone violates property rights (enforcement) is present. The society sanctions it and therefore, it acts as a government. Anarcho libertarians want to ignore this point, but it is pertinent to any discussion of intellectual property rights and capitalism.
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            • Posted by 7 years, 4 months ago
              If one party refused to abide by an arbitrator's decision, there are consequences short of force which can be applied. For instance, that person may find himself or herself dropped from arbitration insurance coverage, while the damages are paid by that individual's insurance company as a cost of doing business. The lack of insurance would then hurt the person in business and personal dealings.

              If you wish to call privately paid arbiters and police "government," you are free to do so -- but there is a big difference. If you don't believe you have received valuable service from your private service provider, you can cancel your contract and choose another provider. You can't do that with government, and that monopoly leads to abuses of power, lack of accountability or innovation, and inefficiency. Hiring any type of private service is voluntary and respects the individual's rights, while funding the government is done by force.
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              • Posted by khalling 7 years, 4 months ago
                this is for lesser remedies. If I come squat in your house while you are away and you come back to find me in your home-what is your remedy? That is force and your remedy is weak. What about assault? seriously-I show up and rape and pillage and take off. You shuffle insurance papers. this is fiefdom 101 stuff
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                • Posted by 7 years, 4 months ago
                  Force is appropriate in self-defense, of course. That's where the private police service or hiring bodyguards comes in - or the DIY method of learning martial arts, and/or owning guns, weapons or guard dogs.

                  But your proposed scenario (which I addressed) was a property dispute between friends, not someone squatting in your house or raping and pillaging. In the type of situation you initially raised, it could be handled much more efficiently by private insurance and arbitration services, as opposed to the current monopolistic police and court system.

                  When force is used against me, who exactly has the right to self defense - strangers representing the State, or me? Of course, it's me. If I own the right, shouldn't I have the right to either exercise or delegate it as I wish, rather than the State monopoly usurping my right?

                  The police and courts today will not protect us from assault, rape, or real property theft; the most they will do is sometimes find the guilty party and arrange some type of compensation long afterward (and sometimes not). If you think the police exist "to protect and serve," read about Joe Lozito bring stabbed by a serial killer while the police watched from safety, and then read about the Supreme Court decision that specifically said police have no duty to protect citizens.

                  A private police or security force could have all of the powers of the current State police, if we the customers wanted that. The difference would be that the private police would actually have specific contractual and moral justification as a person's chosen agent for self defense.
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                • Posted by Robbie53024 7 years, 4 months ago
                  Well, in some states, the squatters would have assumed rights of ownership.
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                  • Posted by 7 years, 4 months ago
                    Really? Where is that happening?

                    I guess it would make sense in someplace like Detroit, if there are many owners abandoning their property.
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                    • Posted by Robbie53024 7 years, 4 months ago
                      I don't remember exactly, but remember reading somewhere that a family went on vacation and came home to some squatters living in their house. The police could not evict them until after a court hearing on who really had claim to the property - regardless of who was paying the mortgage, evidently.
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                      • Posted by 7 years, 4 months ago
                        I've heard of situations like that, which is similar to when tenants stop paying rent, and it still takes months and a bunch of money to evict them. That's been pretty standard in the legal system for a while; you have to address anyone known to be living there and any "unknown person(s) in possession." There's the old adage, "Possession is 9/10ths of the law." But I don't think a court has then ever awarded a squatter the house, after it gets around to hearing the matter.
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                        • Posted by Robbie53024 7 years, 4 months ago
                          Probably not, but that can take awhile, meanwhile they are in possession.

                          There was a "nanny" sometime in the past year who refused to perform her duties and refused to depart the premises. Same thing.
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        • Posted by plusaf 7 years, 4 months ago
          Gosh, khaling... why does your comment remind me of "You didn't build that"?

          At some point is an IP 'invention' of a shipping box for pencils (to enable them to be shipped around the world...) an 'invention' worthy of a patent?

          Sort of like, Why is Disney essentially getting In Perpetuity copyright to Mickey Mouse and ALL derivatives of it.... FOREVER?

          No limits? That pushes my skepticism button.
          Sorry...
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          • Posted by dbhalling 7 years, 4 months ago
            You are confusing two points. The question is whether it is an invention, not whether you or some other subjective standard decides it is worthy. An invention is an human creation with an objective result. I see all the time people denigrating other people's inventions because they do not understand their industry. How things are shipped can be the difference between a profitable product and one that will not sell. I doubt you understand the industry for the invention that you are putting down. I would call that arrogant ignorance.
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            • Posted by plusaf 7 years, 4 months ago
              Well, that felt kind of rude...

              But thanks for your constructive criticism, knowledge and information-sharing and willingness to help educate me...

              (---not)
              Oh, wait... your comment was an abject ad hominum, wasn't it?
              Thanks, and Happy New Year to you, too.
              :)
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              • Posted by khalling 7 years, 4 months ago
                you are anti-patent. It is not an Objectivist position and it's frustrating when we agree on much else. Your statement above about Disney is emoting and also incorrect. Copyrights do not go on forever. For an individual it is life plus 70 years I think. For a corporation it is 100 years. I would disagree with copyright law, because property rights should be constrained by one's life. Dead people can't own stuff. and Corporate assets change hands along the way as well. This is legal procedural stuff though, not a moral argument for intellectual property rights which is what you bound together in your statement above.
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                • Posted by plusaf 7 years, 4 months ago
                  Thank you for assuming that I know nothing about IP rights. I'm not a patent or copyright attorney, but I've looked into and thought about some of the issues. Do I need a Degree in the subject or some other letters after my name in order to comment?

                  And as for your 'legal procedural' comment, do you recognize that most 'legal' decisions are rooted in 'moral arguments' on the self-same subjects?

                  As I've noted in my Laws and mentioned here many times, 'you can tell when someone has run out of logical arguments for their side of the discussion when they flip the issue into a "Moral" one.'

                  Same thing, if you can see it... And your point on corporate rights bears the same burden of proof... where is the "logic" of choosing '100 years' as the sunset time for corporate copyright? That's often called 'favorite number' effect. It is an arbitrary choice, though usually 'founded' on some kind of Consensus, which, in addition, is not == Truth.

                  And Happy New Year to All!
                  :)
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                  • Posted by khalling 7 years, 4 months ago
                    I am simply responding to your statements. The number of years is procedural. I am in agreement it doesn 't make sense. I said the number is more in line with other countries. This is for copyrights which are treated differently than patents whose time period is significantly shorter. All property rights have a moral basis, including IP rights.
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          • Posted by khalling 7 years, 4 months ago
            actually I wasn't even thinking about shipping. I was thinking about dissemination of technology. Societies generally don't prosper from trade secret. We went almost 2000 years to "re-discover" cement. I am also thinking about chinese inventions that the western world had to "re-discover." Re-inventing the wheel. In our modern world, those countries with the strongest patent systems have the most dissemination of technology. and the reverse is also true. Your first comment strikes me as odd. Most in here know I am a strong supporter of entrepreneurs.
            To your last statement. copyrights vs patents. They are completely different standards. While I disagree how we changed our copyright laws, they were done in such a way to "harmonize" with the rest of the world. This is a concept I disagree with.
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        • Posted by 7 years, 4 months ago
          Can there be no true free market solution (an alternative to government coercion, inefficiency, and cronyism) that effectively protects intellectual property the same or better? I hope there is, because I also think it's important. I've seen private contracts proposed as a solution; perhaps a contract for sale can specify that the item is for personal use only, include a non-compete clause with specified damages, and state that the terms carry with any resale.
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          • Posted by dbhalling 7 years, 4 months ago
            All property rights are protected by the government. There is no difference in the government stopping someone from stealing your corn or your invention.
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            • Posted by plusaf 7 years, 4 months ago
              and, db... one point of view (mine) is that pretty much ALL of what we consider our Body of Laws has its roots in Consensus among members of the society or culture by enough of them getting together to agree to state the laws, abide by them and create legal and police frameworks in order to Enforce Them!!

              Government can't 'stop' someone from stealing my corn or my invention, but the Legal System can, out of consensus, create process and mechanism to punish someone (or some organization/corporation) who/which has been proven in a court of law to have broken Those Rules (established by Consensus)!

              Are you hinting that copyright and patent laws spring from some sort of Natural Law?!

              Interesting....
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              • Posted by dbhalling 7 years, 4 months ago
                No laws are not about consensus, they are about logic. All valid property rights are the result of the fact that you own yourself and therefore own those things you create.

                Absolutely, Patents are part of natural rights. Natural Rights start with the fact that you own yourself and therefore you own those things you create. John Locke. Locke's ideas of Natural Rights were incorporated into US common law by Sir William Blackstones Commentaries on the Law. Blackstone is clear that both patents and copyrights are founded on this basis.
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              • Posted by Robbie53024 7 years, 4 months ago
                If you're really interested in learning about this, you might spend and hour or so reading this paper - http://www.stephankinsella.com/wp-conten...

                Some here are going to rail against it (particularly those who derive their livelihood from the current system), but it presents some interesting arguments.
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                • Posted by 7 years, 4 months ago
                  You said, "Some here are going to rail against it (particularly those who derive their livelihood from the current system)..." Actually, it says in the article you linked that Kinsella himself was a patent attorney. I think we should give the Hallings (and everyone else here) the benefit of the doubt, and assume that they are searching for truth just like we hopefully are, and just like Kinsella presumably was. I haven't read enough yet to judge whether he found it
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                • Posted by dbhalling 7 years, 4 months ago
                  Right. Robbie you are not interested in logic Kinsella is an anarchist. His idea of property rights is based on the flawed idea of scarcity. I know more about Kinsella's positions that you will know in a lifetime
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                  • Posted by 7 years, 4 months ago
                    I think the "anarchist" label is irrelevant, but I also found Kinsella's assertions about scarcity being the source of value, and about labor and ideas having no value worthy of protection, illogical.
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                    • Posted by dbhalling 7 years, 4 months ago
                      The reason the anarchist part is relevant is that Kinsella does not care how much evidence you present him, he is committed to the idea of having no government above all else.
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                      • Posted by 7 years, 4 months ago
                        I had the impression he was arguing that, with or without government, IP deserved no protection. He also quoted non-anarchists who were against IP but in favor of government. Rather than dismiss someone because of a label, I prefer to address his or her argument.
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                • Posted by plusaf 7 years, 4 months ago
                  Well, I could only get about 1/3rd or so through that before I went into 'left-brain overflow,' but I recognized several arguments I've come up with on my own to make some of the points!

                  dbhaling might do well to look at how often and in what contexts the word 'arbitrary' keeps appearing in that link.

                  And though the concept might occur somewhere in the parts of the writeup that I hadn't gotten to, I think the author might agree with my position/belief that 'ownership' of tangible properties comes only with the ability to defend it from someone else taking it from you. Suing them after the fact of theft is a socially-agreed-upon remedy. Keeping 'your land' as your own, and particularly on a national level or scope, depends on the strength of your defensive forces being able to repel any and every invader that wants to take it from you... even if you've "won" it by force from someone else in the past.

                  Thanks, Robbie! Most of that argument thread skirts the issue of 'agreement' and 'social contract' that I kept trying to raise. I have problems with "Natural Laws" being used to justify things when even Natural Laws 'exist' based on "Agreement" between folks that believe in them!

                  I forget... is that a truism, tautology or just a Catch-22?
                  :)
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                  • Posted by Robbie53024 7 years, 4 months ago
                    I've always had a problem with "natural rights," myself. What's so "natural" about them? The history of mankind is replete with counter-examples and very few supporting examples, so I find it hard to accept such as "natural."

                    There are some merits to the scarcity approach. The oceans were essentially "free" to all until navies became able to patrol and control them, at which time they began to be less and less that wasn't controlled - thus scarce. Similarly, the North American continent was "free" - non-homesteaded - at a time when all of Europe had already been totally homesteaded. There was no need for property rights/law in the earliest years of the westward movement since there was so much open land (let's not get into a discussion of whether the natives "owned" that land as at this point it is moot). Only after home-steading was applied did property rights begin to have meaning.

                    As for IP, it seems logical that an individual who creates an idea should retain the rights to that idea, and I would say that they retain such rights for their life-span. As such, they can license the ability to utilize the idea or even sell those rights outright (which then brings into question the timespan of such rights should be enforced). What I do not agree to is that the individual who first comes up with an idea can claim sole ownership over another individual who comes up with the same idea totally independently. Yes, that brings up the question of "how do you know it was totally independent?" but that seems immaterial to the basis of the issue. If one person who comes up with an idea owns the product of his mind, why shouldn't a second person with the same idea not own his product? Some here will say that rarely occurs, but I would say the rate of occurrence is immaterial. If it does occur at any frequency, then it is a real and fundamental flaw to "natural rights."

                    btw - that does not negate that those rights may be "God given." My view is that God did bestow those rights on mankind, but the free-will of man subverts those rights of their fellow man.
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                    • -1
                      Posted by dbhalling 7 years, 4 months ago
                      Why am I not surprised. Natural Rights requires you to think, which you have stated that you do not value. BTW Natural Rights are what the US was founded on not your belief in some ghost.
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                      • -2
                        Posted by Robbie53024 7 years, 4 months ago
                        What makes you such a vile and spiteful person?
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                        • -1
                          Posted by dbhalling 7 years, 4 months ago
                          What makes you incapable of reason and logic?
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                          • Posted by plusaf 7 years, 4 months ago
                            Ok, ok, cut the shit... both of you. you, together and separately, have taken this part of the thread down a sewer hole with those last three comments.

                            From MY personal, engineering, Socratic, atheistic and whatever-the-fuck other perspective, "Natural Rights" is a whole category which comes under the umbrella of my oft-stated "It's All By Agreement" Laws...

                            Natural Rights are 'rights' agreed-upon by a consensus/majority/whatever of a culture/society as to what 'natural rights' ARE!

                            They're not 'inscribed in stone' or scientifically researchable or analytically provable by anyone on Either Side of such a discussion, so, imnsho, to assert that they Exist Of, For or By Themselves is some kind of extreme act of hubris or illogic.

                            Sort of like "God Exists Because See, This Book Says So... "

                            Ditto, "Natural Rights."

                            Now, cut the name calling and down-voting each other because you're in hard disagreement!

                            I disagree that Robbie's "I've always had a problem with Natural Rights..." constitutes 'spam,' which, I understand to be one of the few criteria in The Gulch for down-voting a comment. I consider insults to be almost always spam unless they're accompanied with some kind of link, reference or reasoning behind the disagreement.

                            Happier New Year, guys... ?
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            • Posted by Robbie53024 7 years, 4 months ago
              There's a huge difference. One that you continually refuse to acknowledge. If somebody plants corn on their property they have a claim to the property, and all that generates from it. If one person comes up with an idea, and another person totally independently derives the same idea, they both are the "owners" of that idea. The fact that the idea originated in a different time or a different location should be immaterial to the issue. If I derive an idea from my own mind, it is mine whether anyone else derived that same idea before me or not. You cannot claim that one derivation is property, but the other is not, merely because someone somewhere also had the same idea. That would be the same as saying that just because I planted corn on my property, you don't own the corn on your property.
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          • Posted by Robbie53024 7 years, 4 months ago
            The true solution is to continue to innovate. There was a time when IP protection was not necessary as communication and the ability to copy were not wide, thus a natural monopoly existed. This is similar to the situation with workers in an age of apprenticeships - unions weren't necessary as apprentice workers were the natural lineage of the business.

            When communication and copy ability rose to a point where investment couldn't be recouped without some sorts of protection, IP laws were needed. Similar to when unions were needed in the nineteenth and twentieth centuries to protect workers from the overwhelming power of the business.

            Today, communication and the ability to copy are so ubiquitous that IP protection is moot. The legal system is inadequate to truly protecting IP, and so convoluted that by the time the legal process has worked its process, the IP is out of date. No, today the best answer is to continue to innovate, not to seek to block others from leveraging the technology. Again, similar to unions - no longer needed for their original purpose (but linger on due to their power, but even that is being diminished slowly but surely).
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            • Posted by 7 years, 4 months ago
              You said, "Today, communication and the ability to copy are so ubiquitous that IP protection is moot." I think you may be right, it's nearly an honor system today to buy the CD or DVD instead of getting it free online. I hadn't delved into the issue of IP in many years, but there are a lot of interesting ideas here for compensation without the need for government: http://wiki.mises.org/wiki/Without_Intel...
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      • Posted by Robbie53024 7 years, 4 months ago
        Yes, cafehayak should be a daily visit for all freedom loving and thinking people.
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        • Posted by dbhalling 7 years, 4 months ago
          Hayek himself was an apologist freedom, not a true supporter of freedom. See David Kelley's paper on Rand vs. Hayek
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          • Posted by Robbie53024 7 years, 4 months ago
            I've read it. He's been misconstrued. The passage that gets misunderstood is about socialism - his caveat was that if ALL interactions and reactions could be known (they can't) then socialism could work. He knew that it couldn't work, but those who want to denigrate him point to that point and declare Hayak a proponent of socialism. Nothing could be further from the truth.
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  • Posted by ProfChuck 7 years, 4 months ago
    If faced with a choice between objective thought and maintenance of political power the politician will inevitably chose power. Power is as seductive as a beautiful woman and as addictive as cocaine as a result loss pf power is anathema to the politician. The Austrian school of economics is closely related to the concept of spontaneous order. Hayek understood this and the earliest observation of this phenomena is in Adam Smith's "invisible hand". The notion that a tendency toward order is a natural phenomena threatens the justification for centralized planning which, in turn, jeopardizes the politicians power base. It is not surprising that those that lust for power will deny Hayek in favor of Keynes.
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    • Posted by Robbie53024 7 years, 4 months ago
      So true. Smith and Hayek understood that a system free of overt control will naturally regulate itself. This is due to the function of prices and profits. Prices point the way to allocation of resources, and profits are the mechanism for innovation.
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  • Posted by dbhalling 7 years, 4 months ago
    I have a number of problems with Austrian economics, but the problems vary depending on who the economist is. For instance Hayek justified freedom because of the limits of reason (see David Kelley's paper Hayek vs. Rand). Mises was fundamentally a subjectivist and morally neutral.

    Mises praxeology is inherently subjective and glorifies this point. Real per capita increases in wealth are the result increasing levels of technology. The only way to increase man kinds level of technology is by inventing. Austrians say almost nothing about this.
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    • Posted by justin_mohr_show 7 years, 4 months ago
      Austrians say plenty about that. They don't use the word technology because all it is really is an increase in productivity. An economy grows simply because of productivity increases. We become more efficient so it takes less time to complete tasks and at the same time we are using less resources. So there doesn't need to be an incentive for anyone to just invent and create new technology. It all happens naturally because of the profit motive and Entrepreneur's "selfish" desire to make money and solve peoples problems. People who can solve the most problems for the greatest numbers of people are "the rich." My podcast episode, "The Power of the Entrepreneur," explains this sort of logic I'm explaining here.
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      • Posted by dbhalling 7 years, 4 months ago
        Increases in productivity are not the same thing as technology. They are related but the personal computer was not invented to increase productivity.

        Inventions do not happen naturally. There is absolutely no evidence for this point of view. The only reason we escaped the malthusian trap was because of property rights for inventions.. And only increases in technology can make use wealthier. Without Patents there is no incentive to invent, because it is always cheaper to copy other people as history shows.
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        • Posted by justin_mohr_show 7 years, 4 months ago
          My point is when you embrace capitalism ( property rights) people invent things to make life better for people and therefore they make a profit for solving problems. As for the computer, look at Microsoft and Apple. Steve jobs started in his garage and worked his butt off producing a product he hoped would change the world. And Apple has to a degree. So did Steve jobs just make new technology just for the sake of new technologies sake? No, he wanted to make money and build a business. And people only buy new technology if it will make them better off. So therefore, a new technology makes you better off because you are more productive and more efficient. Looking at this from a business perspective, if you don't adopt to new technology eventually you won't be able to compete. So technology comes about from capitalism. So progress does not come just simply because of new technology, but because of capitalism.
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          • Posted by $ winterwind 7 years, 4 months ago
            Um, I disagree with one point. Steve and Steve were working in their garage, true, when they heard about a little company in Utah that was farther along that they were. They flew to Utah, picked Sphere Corporation's best brains [including the Wizard's], and went back to California and "invented" it. Sphere went down with $1M in orders because they couldn't get financing. The bankers just would not believe that anyone would want a computer on his desk.
            Just to set the record straight. and if you do some reading, theft was part of their business model.
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            • Posted by khalling 7 years, 4 months ago
              I'd like to know more about that. It is my understanding that this was the crux to selling the concept. no one saw the value in a personal computing device. They literally were selling it as Rolodex for recipes in the kitchen
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          • Posted by dbhalling 7 years, 4 months ago
            If by capitalism you mean protecting the property rights of inventors then that may be true, but that is not what the majority of Austrians support. Most Austrians are not for free markets, they are for anarchy. Capitalism is based on property rights.

            People only invent things in significant quantities if they have property rights in their inventions. People invent things to make a profit, not to improve productivity. Focusing on productivity does not lead to inventions.
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        • Posted by EskimoBro 7 years, 4 months ago
          Actually computers were invented to increase productivity. They were actually created thousands of years ago and the first one was called the abacus, a device that allowed for more efficient calculations. An invention? Yes. An increase in productivity? Yes. Do all inventions increase productivity? I would say no, (slot machines, video games, etc.) But in a way they do make the lives of people better off or they wouldn’t invent them in the first place.

          And you are right in a roundabout way that inventions do not happen naturally. They occur when an individual (inventor) believes that there is a better way of doing or solving an existing problem. As it turns out this process is constantly occurring because people are always finding better ways to solve existing problems. So in a way it is happening naturally but it is only because people see a better way of solving existing problems. But this is more of a focus on specific words rather than the concept.

          So you might ask why would a person invent something in the first place if they know somebody else is going to copy and sell their idea? Let me ask you, would you rather buy a knockoff or the real deal? Would you rather buy Rearden’s Metal from Hank or would you rather buy someone else’s knockoff of it? I know I would rather buy it from Hank if they were both the same price but if they weren’t the same price, then I would consider value vs. price in my buying decision. But is it that bad that people can buy the same goods for lower price? Or is it that bad that there are multiple companies competing for my money?

          In order to support copyright laws you must by definition also support a restricted flow of knowledge in the economy. Copyright laws at a basic level are the creation of a legal monopoly on ideas and inventions. In order to support copyright laws you also have to support some degree of stagnation in the economy. When you prohibit ideas from flowing freely, you are slowing down technological growth in the economy. Government regulations and copyright laws have one thing in common, they both slow down growth in an economy.
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          • Posted by $ blarman 7 years, 4 months ago
            I'm going to quibble here because your definition of a computer is way too simplistic to be real. An abacus is an adding machine - a precursor to the computer. A computer is a programmable tool - much more than an abacus. The Babbage differential engine was the actual first "computer" in any real sense.
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            • Posted by EskimoBro 7 years, 4 months ago
              I was expecting this to come up. I didn't want to go into detail about this on my last post because it was getting long enough as it was. And yes, the abacus seems a little too simple to be referred to as a computer but it is indeed a computer (not my definition). The Babbage differential engine is nothing more than one of the more notable intermediate inventions/improvements upon existing computing technology.

              But throwing that aside, the computer was created to help people carry out more advanced calculations quicker and easier than could be done by previous inventions. It didn’t just go from the abacus to the computer we see today. In between the two were inventions of other computing devices that used mechanical pieces that performed the functions of calculations (the Babbage differential engine). It was a process of invention after invention, improvement after improvement that eventually lead to the digital programmable computers we see today. And the use of using digital inputs and programming was just an improvement from the existing technology of using analog inputs.

              As everything became digital, calculations were able to become increasingly complex through the use of programming. It didn’t take long before you had people (innovative programmers) looking at other ways of using programming to create other functions with the computer. Before you knew it, people were writing programs and computer games from nothing more than advanced versions of this original technology.

              And now today we are able to do so many advanced functions on these computers that no one would have imagined 100 years ago. So when we look at the computer today, it is often hard on how to see how it all came to be. Was the computer created so you could play games on it or surf the internet? Absolutely not. Its origins were for computing and number crunching but with a little bit of innovation, people were able to think of many other functions and uses for it.
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              • Posted by $ blarman 7 years, 4 months ago
                So I'm going to quibble with you again. Computing is always in terms of binary/discrete inputs. The components (vacuum tubes) may have been analog in operation, but the computations and logic were always based on deterministic data points: digital data points (one's and zero's). The transistor's improvements over the vacuum tube were in size, energy use, and discretion: the transistor required only a fraction of the power to operate, occupied a fraction of the space, and gave more discrete and invariable output states than a vacuum tube. (The transistor could also be used as an amplifier, but that is another topic). The underlying logic, however, wasn't affected. With analog components, you were measuring to see if something was a "one" or "present" if the voltage topped a certain standard measure. With digital components, the ceiling and floor of voltage outputs was far easier to differentiate, enabling more discrete identification and processing further down the circuit and resulting in more predictable and precise outputs.

                And I still reject the notion of an abacus as a computer. It does not perform the calculations - the human does. You can't give the abacus an instruction and tell it "go" and receive a result. The slide rule is the same, and I don't think anyone is going to dispute the notion that the slide rule is far more complex than an abacus. I would also note that neither the abacus nor slide rule is programmable - the key capability of a true computer. The real productivity of a computer comes in its flexibility to be reconfigured to handle different types of problems. An abacus fails this as well, but was the point of Babbage's original engine. Lastly, what we shouldn't overlook is that critical to the functioning of the engine was the development of binary logic - the true work of genius of Charles Babbage and Ada Lovelace.
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                • Posted by EskimoBro 7 years, 4 months ago
                  Thanks for commenting back blarman I really do appreciate the in depth explanation. In terms of the modern day computer, you are exactly correct. The Babbage differential engine is known as the device that started / inspired modern computing.

                  But the abacus is still a computer. A computer is a device that was used to aid in calculations. I think the only part we differ in opinion is to whether a computer has to be able to automatically calculate given a certain set of inputs. For a computer, I would answer no. For a modern computer, I would answer yes.

                  I take it you must be an engineer or something closely related to it. Anyways again thanks for the post and I look forward to many more conversations like this. Also thank you! I learned a lot from reading your posts and doing some of my own digging around.
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                  • Posted by $ blarman 7 years, 4 months ago
                    Computers are my day job and my hobby since I was about seven. My Dad was a EE major back when he still had to use a slide rule (I just used it as a sword) and punch cards to write programs. I've been doing computers professionally for 20+ years.

                    "A computer is a device that was used to aid in calculations."

                    If that is the case, our toes are computers, are they not? So are lines of sticks. Thus I can't accept such a simplistic definition and I don't know of anyone involved in Computer Science that would either. It's your choice, of course. I would simply caution that you will likely receive a similar response from anyone in the field given such an assertion.
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                    • Posted by EskimoBro 7 years, 4 months ago
                      I'm actually involved in the field as well. I have a degree in EE and work with substation design and protection. But just to clarify, just because a person has a degree in a specific field doesn't automatically mean they're an expert and know more than anyone outside of that field.

                      You brought up some really good points about fingers and sticks. My question to you is, at what point between the abacus and the modern computer did these devices actually became known as computers? They were all built from improvements off each other. I'm still trying to figure this question out for myself as well and honestly I don't have a solid explanation for it either way. Depending on how you search for it online, you can get info for and against an abacus being considered a computer.

                      I'm sorry this has gone into such a long drawn out conversation. And unfortunately (fortunately) I have never used a slide ruler before, I missed out on that as well!
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                      • Posted by $ blarman 7 years, 4 months ago
                        "just because a person has a degree in a specific field doesn't automatically mean they're an expert and know more than anyone outside of that field."

                        A degree establishes that the person has a verified level of competence in that topic that is of notable difference from the common man. Does this exclude other individuals from enlightening themselves? Of course not. But let's be realistic - that is the exception rather than the norm and should be treated as such.

                        For me, a computer must be a device able to take an input and generate an output autonomously. It can't be an "aid". That was why Babbage's engine was so revolutionary. The engine was set up (programmed) to accept an input, process it, and generate an output, but was not reliant on the person to provide the processing power. That's the differentiation I would make. If you set up Babbage's engine to a crankshaft powered by a diesel engine, it could operate without human interference consistently and without error while still churning out useful (and variable) results. Take a human out of the pairing with either abacus or slide rule and there is no similar utility.

                        And BTW - my dad showed me how to use a slide rule one time, and you're not missing out on anything - as long as we still have power. In the event of a global EMP, I may just have to ask him to break it out again for me...
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                • Posted by dbhalling 7 years, 4 months ago
                  I am sure you are aware of this, but there were analog computers.

                  I agree with the abacus
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                  • Posted by $ blarman 7 years, 4 months ago
                    There were computers using analog components (vacuum tubes), but there has never been a computer I am aware of using analog logic (I'd love to see a definition of such). Many people confuse the two and think that the advent of "digital" computers was a change not only to the components, but to the logic as well. The way it was used in certain posts led me to believe there was significant confusion on the matter that could be cleared up.
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                    • Posted by Robbie53024 7 years, 4 months ago
                      What would you call the logic of a slide rule? It's certainly not digital.
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                      • Posted by $ blarman 7 years, 4 months ago
                        Both a slide rule and an abacus function on a Base 10 system, where any digital system functions on a Base 2 system. That would be the primary difference in logic. That's why I commented that I'd love to see someone define an "analog" system of logic. Analog systems deal in ranges. Are there "degrees" of truth? ;) Verbal communications can be considered a basic analog system - especially when you start looking at languages based on intonation such as Chinese, Korean, etc. But how you'd incorporate that into a mechanized system (or what problems you would need to potentially solve with it) I have no idea.

                        Have you ever tried doing math in Base 8 (octal) or Base 16 (hex)? Talk about a complete mind shift. Same thing applies with binary/digital logic - it requires its own rules and computational constructs. Babbage's engine was really only a physical construct that used binary logic. The genius was in not only outlining the rules for the binary logic structure, but incorporating them into a physical manifestation/invention that proved the concept.
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                      • Posted by dbhalling 7 years, 4 months ago
                        Interesting question. I think blarman is talking about being built directly on the rules of logic - and and or statements. Of course digital computers have many functions that are not just logic statements, such as shift registers.

                        Clearly logic is used to design slide rules and analog computers but does not use AND and OR statements.
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                        • Posted by $ blarman 7 years, 4 months ago
                          Even shift registers are logical instruments. Everything a computer does is based on one of a series of basic functions called gates, and a shift register is just a series of "NOT" gates and transistors. Most logic is based on two inputs turning into a single output.

                          Here's a quick list of the more common ones (the XNOR and EOR are REALLY situational):

                          NOT - inverts input: 0 becomes 1, 1 becomes 0
                          OR - when either input is true, output is true: 0 + 1 = 1, 1 + 0 = 1, 0 + 0 = 0, 1 + 1 = 1
                          NOR (~OR) - when either input is false, output is false: 0 + 1 = 0, 1 + 0 = 0, 0 + 0 = 0, 1 + 1 = 1
                          XOR (eXclusive OR) - only when one of the two inputs is true is the output true: 1 + 0 = 1, 0 + 1 = 1, 1 + 1 = 0, 0 + 0 = 0
                          AND - when both inputs are true, output is true: 0 + 1 = 0, 1 + 0 = 0, 1 + 1 = 1, 0 + 0 = 0
                          NAND (~AND) - when both inputs are false, output is false: 0 + 1 = 1, 1 + 0 = 1, 1 + 1 = 1, 0 + 0 = 0

                          http://en.wikipedia.org/wiki/Logic_gate
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                • Posted by Robbie53024 7 years, 4 months ago
                  Neither can you give a command to most computers and they go and create a result. Unless you have voice recognition on your machine, try to get an answer just by asking your computer to give you one to a question.

                  What would you call a slide rule? It's not digital and it is operated by a human. Programming is merely a set method of converting an input to an output. The same is true of an abacus and a slide rule. It's only that the conversion is done by the human interacting with the logic.

                  Having worked a slipstick way back in the day, I can attest that it was doing the logic, not me. I merely followed the rules of moving the slider.
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              • Posted by dbhalling 7 years, 4 months ago
                The personal computer was not invented for this reason. It was created because people thought it was fun.

                Inventions and productivity are not the same thing. And inventions always come first.
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                • Posted by justin_mohr_show 7 years, 4 months ago
                  Of course inventions come first! You can't be more productive with a computer until it has actually been created. My point this entire time has been there never needs to be a focus on just inventing new things. Inventions are the result of Capitalism! You're right technology and productivity aren't exactly the same thing but are very close indeed. All I have been pointing out is I think your sole focus on inventions are the key to everything is slightly misplaced. But I think we agree on most things. haha
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                  • Posted by dbhalling 7 years, 4 months ago
                    The only way to increase real per capita income is to increase you level of technology. Capitalism properly defined includes property rights for inventions. Without them we would still be in the Malthusian Trap
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                    • Posted by justin_mohr_show 7 years, 4 months ago
                      Ok we are talking in circles here. Capitalism is what has got us out of the Malthusian trap. That's the issue boiled down.
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                      • Posted by dbhalling 7 years, 4 months ago
                        So capitalism includes property rights for inventions? This is not the standard Austrian position today.
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                        • Posted by justin_mohr_show 7 years, 4 months ago
                          That's where we differ. I'm saying IP is not a property right like I have been talking about. So that's where we disagree and I'm not going to change your mind on it and you won't change mind so I guess we can agree to disagree.
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                          • Posted by dbhalling 7 years, 4 months ago
                            IP is absolutely a property right. The basis of property rights is the fact of creations. This is Locke's formulation and this is incorporated into common law by Blackstone's Commentaries on the law.
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                          • -1
                            Posted by Robbie53024 7 years, 4 months ago
                            What db is never able to provide an answer to is independent people coming up with the same idea without knowledge of one another. He insists that the first individual is the only owner. This is irrational based on his own premise that he owns himself and by derivation owns the fruit of his own mind.
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                            • Posted by khalling 7 years, 4 months ago
                              exact concurrence of invention is virtually impossible. Regardless it is a legal discussion, not an ethical discussion.
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                              • Posted by EskimoBro 7 years, 4 months ago
                                How about spears, bow and arrows, boats, and musical instruments? These are some of the inventions that were made by different people and are found across all types of ancient civilizations in which never had contact with each other. Same inventions, different inventors.

                                Were they made at the exact time? That's hard to say but I would argue that if they can be made independently without knowing of its current existence in the first place then yes it would be possible.

                                With the acceleration of new innovations happening today and all of the information of world at everyone's finger tips, I would say it would be even more possible now than ever before.
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                • Posted by EskimoBro 7 years, 4 months ago
                  Yes you are correct but I never once in any of my posts said anything about the personal computer being made specifically for productivity. They weren’t. That still doesn’t change the fact that computers were originally designed for calculations. If you go back to why computers were originally developed in the first place, you would see that it was for advanced number crunching. However, this eventually changed when personal computers started coming out on the market where they were focused at hobbyist and the like. My last two paragraphs in my previous post describe this.

                  As for inventions and productivity not being the same thing, I mention this in the first paragraph of my first post. And I agree, they are not the same thing.
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                  • Posted by dbhalling 7 years, 4 months ago
                    True, but I said personal computers and I would say the same thing about lasers. If you focus on productivity these inventions, which did increase our productivity would never have been made by an accounting mentality that focused on productivity.
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                    • Posted by EskimoBro 7 years, 4 months ago
                      So what causes these inventions to be created in the first place? If it isn't productivity than what is it? Again let me repeat myself, I do not think all inventions are created through trying to increase productivity.
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                      • Posted by dbhalling 7 years, 4 months ago
                        Yes invention are motivated by profit, but without property rights in inventions it is always cheaper to be a thief.
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                        • Posted by EskimoBro 7 years, 4 months ago
                          If you are saying that profits are the only thing that causes inventions to occur than you are contracting your earlier statement about personal computers being created for fun.
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                          • Posted by dbhalling 7 years, 4 months ago
                            What I am saying is that without property rights for inventions, the copier always gets the profits. Second I am saying that inventions are not motivated by increasing productivity - this is not the same thing as profits.
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                            • Posted by EskimoBro 7 years, 4 months ago
                              I feel as though I've been trolled this entire post. Every point I've brought up has been dismissed without reason and every question I've asked has gone unanswered.
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                              • Posted by dbhalling 7 years, 4 months ago
                                No you mis-characterized what I said. You cannot say inventions are about increases in productivity and suggest the two are the same. You cannot say that inventions will happen because there is a profit motive for them. The historical evidence is that without property rights then there is no profit motive or any other motive for inventions that would create our modern world
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                              • Posted by khalling 7 years, 4 months ago
                                wait a minute. eskimo, you are the new one here. I re-read the thread, every question you asked was answered. Perhaps you need to be more specific. btw, patent attorneys are not litigators. They are first engineers. Then they got a law degree. They are about creating not about tearing productivity down.
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                            • Posted by Robbie53024 7 years, 4 months ago
                              To Coca Cola please add McDonalds, Sears, FedEx, and Facebook. All of which employ specific technologies that are protected, but the fundamental business model is replicable by anyone, yet many try and do not succeed in copying.
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                      • Posted by Robbie53024 7 years, 4 months ago
                        You are correct, some are purely accidental. Most of the time that this occurs, it was in the search for some other productivity enhancing innovation.
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                    • Posted by Robbie53024 7 years, 4 months ago
                      The maser (precursor to the visible light laser) was in fact created to increase productivity - the productivity of exploring space. A student of the inventors further innovated on their invention and extended it to the visible spectrum. Since it is the same technology, merely using a different wavelength of radiation, should the student have even received a patent? This was in fact a foreseeable extension of the inventors of the maser (in fact they stated so in their papers).
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                      • Posted by dbhalling 7 years, 4 months ago
                        No it is not the same thing. This ignores the hard work and problems that had to be solved. Let's see if you can actually do some research and find out what those problems were.

                        This is exactly the sort of nonsense that suggests that no mechanical invention should obtain a patent because they are all made from the 8 simple machines.
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            • Posted by Robbie53024 7 years, 4 months ago
              Well, the root of computer is compute. And to compute is to calculate, so since an abacus allows one to calculate it is by definition a computer.
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              • Posted by $ blarman 7 years, 4 months ago
                Incorrect - see my quibbles below. An abacus is an aid only, it actually performs no calculations. The beads don't move themselves, they just allow a human to track the steps of a computation as an aid in coming to a final answer. The same applies to a slide rule.
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        • Posted by Robbie53024 7 years, 4 months ago
          Huh? The computer (all derivations of same) was created to "compute" faster - thus increasing the number of calculations per unit of time, the definition of productivity.
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      • Posted by Robbie53024 7 years, 4 months ago
        And well it does. Keep it up.

        What dbh and kh have a problem with is IP protection. As a patent attorney this is understandable, but it clouds their perspective.
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    • Posted by Robbie53024 7 years, 4 months ago
      And so, you prefer Keynes?
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      • Posted by dbhalling 7 years, 4 months ago
        No, I prefer a free market school of economics that is based on objectivity and reason. I do not think any school of economics is presently consistent with Obectivism, which is why Rand had such a tenuous relationship with many free market economists. I will pick Rand and Objectivism over any present school of economics.
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        • Posted by Robbie53024 7 years, 4 months ago
          AR isn't a school of economics. There is no "free market school" other than the Austrian School.
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          • Posted by dbhalling 7 years, 4 months ago
            Austrians are not pro free market they do not understand the basis of a free market which is property rights, reason, and A is A.
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            • Posted by Robbie53024 7 years, 4 months ago
              As I said, you let your vocation cloud all your analyses.

              "Proposition 6: Private property in the means of production is a necessary condition for rational economic calculation.

              Economists and social thinkers had long recognized that private ownership provides powerful incentives for the efficient allocation of scarce resources. But those sympathetic to socialism believed that socialism could transcend these incentive problems by changing human nature. Ludwig von Mises demonstrated that even if the assumed change in human nature took place, socialism would fail because of economic planners’ inability to rationally calculate the alternative use of resources. Without private ownership in the means of production, Mises reasoned, there would be no market for the means of production, and therefore no money prices for the means of production. And without money prices reflecting the relative scarcities of the means of production, economic planners would be unable to rationally calculate the alternative use of the means of production.

              Proposition 7: The competitive market is a process of entrepreneurial discovery.

              Many economists see competition as a state of affairs. But the term “competition” invokes an activity. If competition were a state of affairs, the entrepreneur would have no role. But because competition is an activity, the entrepreneur has a huge role as the agent of change who prods and pulls markets in new directions.

              The entrepreneur is alert to unrecognized opportunities for mutual gain. By recognizing opportunities, the entrepreneur earns a profit. The mutual learning from the discovery of gains from exchange moves the market system to a more efficient allocation of resources. Entrepreneurial discovery ensures that a free market moves toward the most efficient use of resources. In addition, the lure of profit continually prods entrepreneurs to seek innovations that increase productive capacity. For the entrepreneur who recognizes the opportunity, today’s imperfections represent tomorrow’s profit. The price system and the market economy are learning devices that guide individuals to discover mutual gains and use scarce resources efficiently."
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              • Posted by dbhalling 7 years, 4 months ago
                Yes and Locke and Declaration of Independence on which this country was built said you own property because you own yourself and you created something, which includes inventions. The Utilitarian model of property rights does not explain why anyone gains ownership of anything. It is a failed concept and not surprisingly many of its proponents have become socialists.
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  • Posted by plusaf 7 years, 4 months ago in reply to this comment.
    You seem to lack politeness... Your comment "you have no understanding of logic" does absolutely nothing to advance this alleged discussion. And you downvote ME...
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    • Posted by dbhalling 7 years, 4 months ago
      It was not rude it was a fact. You think that law is based on consensus. You clearly no nothing about law. That would be a pure democracy. The US is not a democracy but a constitutional representative republic. Don't blame my pointing out your ignorance as lack of politeness. If you are going to comment at least take the time to learn the basic facts surrounding the subject.
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      • Posted by plusaf 7 years, 4 months ago
        Thank you... Now, would you please explain to me how 'law is [_not_] based on consensus'?
        Thanks...
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        • Posted by dbhalling 7 years, 4 months ago
          The Constitution was not based on consensus, it was based on logic. What mattered was who had a better argument not consensus. Just because there is agreement does not mean consensus. There is agreement in Euclidean geometry, but what is right and wrong has nothing to do with consensus.
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          • Posted by plusaf 7 years, 4 months ago
            Your very use of the term "right and wrong" in the context of "law" and "legal system" proves my point.
            Thanks.
            You (we) don't GET laws enacted until there IS a consensus of what IS "right or wrong" AND a majority (consensus) votes to enact and support the law/decision.
            I'm really surprised you can't separate those causes and effects and influences, but continue to call the process one of "logic."

            Whatever....
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            • Posted by dbhalling 7 years, 4 months ago
              You don't understand the difference between logic and consensus. Geometry is logic, science is reason and whether their is consensus is irrelevant. Whether there is consensus on contract law is irrelevant. You know nothing about law.
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              • Posted by plusaf 7 years, 4 months ago
                And you apparently can not imagine the aspect of Law that has its sources in Agreement Among Members of a Society or Culture about WHAT shall BE considered "Illegal" or not....

                Laws don't 'spring from the brow of Zeus.' They are written by humans to delineate acceptable versus unacceptable activities, and the acceptability or unacceptability of ANY such prescribed or proscribed activities ARE defined by consensus, whether any Logic (or lack of it) is involved!

                A nice example is the historic War on Drugs. There's LOTS of 'logic' that shows that the laws on the books today are not only ineffective but counterproductive compared to alternatives.

                BUT, the laws were enacted by people allowed to make such decisions based on who got elected to which position and what CONSENSUS the citizens they allegedly represented 'asked them to do.'

                I claim that virtually everything in the world of Law IS based on consensus, whether there's any Logic involved or not.

                Hell, if you look at the conspiracy theorists, the WTC buildings' collapses seem to be more frequently 'explained' by consensus reports than by strictly 'scientific' or 'engineering' logic at all!

                And yes, "I ARE an 'enjunear'!"

                :)
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  • Posted by EskimoBro 7 years, 4 months ago in reply to this comment.
    In order to believe that exact concurrence of invention is virtually impossible, you have to assume two things.
    1. That only one person at a time in the entire world can be thinking of the same solution to a problem at any given point in time.
    2. That inventions happen instantaneously.
    If you can’t agree with these two points then your point is nonsense. And quite honestly it would be pretty absurd to believe that these two would be true because history has shown that more than one person in the world can have the same solution to the same problem.
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    • Posted by khalling 7 years, 4 months ago
      give two groups of engineers the same problem they come up with different solutions. second, your points have nothing to do with moral basis in intellectual property rights-it's a utilitarian argument. smells of anarcho here
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  • Posted by Herb7734 7 years, 4 months ago
    How many Senators, Congressmen, Judges, and Presidential staff could pass a 101 test on free market economics? Judging by current performances, not very many. This, of course, leads to the question of how many of those persons understand and support the Constitution? Not many, judging by those who allowed the 4th amendment to be virtually nullified. Every person running for office or being appointed to office should have to take a test proving that they know and understand basic economics and the founding principals of the nation. Unfortunately, this won't prevent them from screwing up once elected, but at least they won't have any excuses.
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    • Posted by justin_mohr_show 7 years, 4 months ago
      I'm with you Herb. We have economic illiterates running our country! But I guess the big problem is the voters are economic illiterates!!! That's why I started my podcast. Sick of this madness!!!
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    • Posted by Robbie53024 7 years, 4 months ago
      Unfortunately, the US Constitution does not specify an economic system. It best relates to a free-market capitalistic system, but that is not enshrined in the document (unfortunately).
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      • Posted by Herb7734 7 years, 4 months ago
        That's true. All the more reason to learn a capitalism style free market economics system. I cannot imagine a socialistic economy coupled to the Constitution.
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