Any price above the marginal cost produces dead-weight loss. Dead-weight loss causes less value to be created than is possible.
What we need is a system that subsidizes the value created by the inventor, without any restrictions for the rest of society. Without any restrictions will allow every innovation to maximize the value that it is able to create. Currently an innovation can be hampered because the person who created that innovation is not the one best able to utilize that innovation.
One way to accomplish this is through an Innovation Prize Model while Patents and Copyrights be abolished. The way it would work is that once you've come up with some innovation, you have a choice. You can either keep it secret, or you can reveal the secret. If you reveal the secret, the government could grant you a 30 year bond based on the value of this innovation. The bond will have a minimum value, and if it's discovered within the 30 year window that the innovation is more valuable than previously suspected, value will be added to that bond. You would then have an option, to keep the bond for the 30 years, or you could sell a portion of this bond to others to instantly get cash. There could be a market for these that made it easy to trade and discover expected values.
It's clear from the dead-weight loss portion that overall value will be much higher than the existing scenario, so this payment will be much higher than any profits that copyright holders currently accrue.
A land value tax with citizen's dividend reaches all of the goals he is trying to hit here, without any of the very obvious drawbacks. Just do that instead.
It's probably cleaner to directly couple those that want it, so that those that want to decouple can be left to the academic path. It's pretty normal to hear from people that when they entered the workforce they learned way more than what they learned at college. Let's incentivize this. Governments should directly subsidize education.
Instead of getting student loans and going to college for 4 years where you don't accomplish much, companies should directly offer high school students 4 year full paid internships. At the end the student needs to go through a test from an expert in that field, possibly a professor lead examination, and to the degree that they pass the company and student share in a large prize. If they pass that test, they officially get the degree.
Doesn't this just kind of become kind of allow companies to direct the research towards their ends and the education be damned though? I wouldn't be opposed to this sort of thing intrinsically, but I worry about the incentives here.
This aligns the incentives. Education provides positive externalities that the market will not provide.
> allow companies to direct the research towards their ends
So long as they hit the requirements to reward the prize, I don't much care what else the students are driven to do. One might ask how does this differ from when a company hires a fresh graduate? In fact, I wouldn't mind also applying this system to those that have degrees, and are trying to advance in their careers.
My only concern is that the students would then be able to be hire-able by other companies in their field. If that answer is mostly yes, the system is working as intended. If it's not, the requirements would be raised until they are.
Keep in mind that this allows, and protects, the academic channel to do their own thing. Right now they are pulled by those that don't care about academia because they want a job and know having the credential is how they get it.
If we begin doing this, and as a result, none of the academics can get a job as they are all filled by the 'embedded' students, I don't mind seeing how that shifts everything.
Governments can always offer prizes, and any model that sufficiently meets the criteria of the prize would win it and claim a large cash prize. Once claimed, the model would then be free to all forever.
This is where prizes come in. If you create a drug and keep it secret, the government can grant you a large prize as an offer to reveal your secret.
This is a much better compromise. The company will end up with more money(and faster!) as a result of this prize than under a patent system - since the patent system induces dead-weight losses, and the government will end up with more lives saved.
That is just an inefficient way to spend taxpayer money than straight up paying researchers from the government’s accounts.
The US has an enormously large higher education system with all the expertise and manpower to facilitate large trials of novel medicines. The only thing missing is political will to spend the money, so instead, Eli Lilly or Novartis or Pfizer etc spend investor’s money to do it.
And then taxpayers pay for it in a super convoluted way.
Prizes pay for working results. Grants pay for possibilities. Grants are therefore riskier, and thus we allocate less resources to them.
Since the people with the money don't understand the science, these possibilities must then be assessed by bureaucrats, and this causes our best to spend half of their time writing proposals instead of working and researching. A complete waste of time. Let the people who know the most about their subject freedom to take risks, and then they are given the spoils of their rewards if they are proven correct.
Prizes are much more efficient than grants. Prizes should be given to academics according to the value they produced. I have no issue if the academics choose to spend some of the windfall profits of their prizes on trials.
> Since the people with the money don't understand the science, these possibilities must then be assessed by bureaucrats, and this causes our best to spend half of their time writing proposals instead of working and researching. A complete waste of time.
What part of this changes when a company is paying for the research, and why can't that same part be used in a government office? It's not like drug company CEOs and CFOs are also world class medical researchers. And if the funding decisions are entirely done by a CTO who is, then why would this model not be possible in a government office?
Ultimately someone needs to pay for all of the trials that don't work, and someone needs to do a cost/benefit/likelihood analysis on any research to decide whether it will be funded or not. With a public funding scheme, the benefit analysis could be based on public health interests. With a private company funding scheme, it has to be based on profitability. In healthcare, there is usually a huge gap between these two, unlike other more traditional markets.
Yes, businesses have the same flaw with a bit of better incentives.
With a prize based approach, what you want is for researchers to make small targetted gambles early in their career, earn their prize profits from those gambles, and work their way up into bigger gambles. There's nothing crazy about this scheme, it's how businesses have formed for hundreds of years. If a company wants to buy equity in the prizes of an independent researcher, I see no issue with this.
> then why would this model not be possible in a government office
I see no issue with governmental workers, or those from a university medial research center, or any other persons who can achieve the results from receiving this prize.
> someone needs to pay for all of the trials that don't work
The researchers. They are the one taking the risk. They are the one who would get the rewards. Skin in the game.
> With a public funding scheme, the benefit analysis could be based on public health interests.
Yes, we should directly pay the organization, or persons, based on the value they generate from their own. The bigger the public health interest, the more they should be paid. Right now we give a tiny piece to these people, and thus harm our incentives. Fully fund the results. It's risk-free.
I'm still not getting how the funding of trials that don't succeed is supposed to happen. Individual researchers don't have the money to fund a serious drug trial on their own. So even if someone put a prize of 100 trillion dollars for curing pancreatic cancer, and you had an idea for a drug that you think can easily do that, but you'd need 10M dollars to actually synthesize and trial it, how do you go from here to there? Sure, you could sell equity in your prize, but how do you convince people to buy it?
Whatever you do, you can't get around the fact that the people with medical knowledge need to convince the people who have the money to invest in them before any research can take place. There is simply no way to get rid of the pitching to bureaucrats step here, not even in the most idealized societies - research just needs too many resources for any one individual to control.
You're not trying to get individuals to complete work that requires thousands of participants. You're trying to get it so that those one level below currently working on such projects can make it pencil out.
You're trying to give individual researchers, who believe they have a chance at a new strategy, to take their new strategy and sell equity to the prize they might win to a new firm.
You don't even have to go that far from the original question. If instead of the entire world being a single game, if you have hundreds of millions of sub-games where 9 random people are placed within, what should you do?
Surely some of those groups are going to be filled with selfish red pickers. Should the kind coordinating players still go blue? All the red pickers are going to lie that blue is sensible. I suspect that more coordinators will die in this way than the always blue pickers if every coordinating player went red.
So now the full-world version only has the law of large numbers on their side, but they have no way of knowing just what percentage of the population is a selfish red picker. Going for team blue is the much riskier option that can yield catastrophe.
Why would a red picker ever lie about it? If I can get all 8 of my fellow players to pick red then we’re all safe. If it’s a button I’ll just break the blue button or wire it to red.
A selfish player will claim that they will coordinate with the group, and then vote red in private. A coordinating player will pick what the group chooses, whether that be red or blue. You are talking about a coordinating player here. Yes, in this case if all players agree to red, it's obvious you should all pick red. It's completely safe.
Your concern can easily be addressed by having a 100% tax on the value of land and then distributing this tax money through a citizen's dividend.
But this isn't all that related to the productivity dividend. That's more natural by setting banks to have a full reserve requirement. At that point new innovations would yield deflation, which would be harmful. The Fed would then have to step up and be the creator and distributor of new money. That money would then be the UBI, distributed equally to all.
You can't literally tax 100%, but this matters little: you just have to tax a sizeable fraction of land rent and this has as an outsized effect on land values due to capitalization, which vastly improves the effectiveness of the real estate market as a whole. You see this today partially, where states with high property tax rates tend to have broadly lower real estate costs.
Landlords should be pushing for an LVT so that in a downturn that can sync up all at once it is the local government that needs to take that hit. It makes no sense that they currently are the ones to take on society level risks. The LVT is a de-risk to their business. In a downturn they would have no capital losses, and instead only see land taxes fall.
For those that don't know, an LVT causes land prices to drop, where a tax on 100% of the rental value of the land would cause land prices to fall to zero. This would allow landlords who were able to own many more properties, and could use their funds building out extensive retail spaces, and have many tenants pay them rents.
The disconnect here is that they built it this way, but still call it a question and answer site and give a lot of power over to the person who created the question. They get to mark an answer as the solution for themselves, even if the people coming from Google have another answer as the solution.
If they were to recreate the site and frame it as a symptom and issue site, which is what the interview described, that would yield many different choices on how to navigate the site, and it would do a lot better. In particular, what happens when two different issues have the same symptom. Right now, that question is closed as a duplicate. Under a symptom and issue site, it's obvious that both should stay as distinct issues.
What we need is a system that subsidizes the value created by the inventor, without any restrictions for the rest of society. Without any restrictions will allow every innovation to maximize the value that it is able to create. Currently an innovation can be hampered because the person who created that innovation is not the one best able to utilize that innovation.
One way to accomplish this is through an Innovation Prize Model while Patents and Copyrights be abolished. The way it would work is that once you've come up with some innovation, you have a choice. You can either keep it secret, or you can reveal the secret. If you reveal the secret, the government could grant you a 30 year bond based on the value of this innovation. The bond will have a minimum value, and if it's discovered within the 30 year window that the innovation is more valuable than previously suspected, value will be added to that bond. You would then have an option, to keep the bond for the 30 years, or you could sell a portion of this bond to others to instantly get cash. There could be a market for these that made it easy to trade and discover expected values.
It's clear from the dead-weight loss portion that overall value will be much higher than the existing scenario, so this payment will be much higher than any profits that copyright holders currently accrue.
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