The Wailing of the 1 Percent and Its Defenders

[n2doc]

Posted by Matt Bruenig on September 18, 2013


Harry Binswanger wrote a post over at Forbes that lit up the internet yesterday. In it, he claims that really it is the 99 percent, that should give back to the 1 percent, from whose teet we apparently all suckle. Needless to say, the argument that unfolds is a total train wreck.

Binswanger’s theory is, like Greg Mankiw’s, a kind of desert theory. Desert theory, broadly speaking, claims that individuals are owed compensation equal to what they produce. Like Mankiw before him, Binswanger hasn’t the slightest idea what it would actually mean to operate an economic system on that basis.


The Problem With Intellectual Property

Binswanger’s modern archetype of a brilliant one-percenter is Steve Jobs, whose earnings are actually a wonderful example of deep problems in desert theory. Jobs made most of his fortune off of a government welfare program called copyright (and patents). Under this government welfare program, the state uses the police and the courts to prevent people from making copies of certain things. The goal of this state intervention is to create copying monopolies in order to allow copyright holders to capture monopoly rents from consumers. The theory is that creating these government-issued monopolies incentivizes certain kinds of creative production.

In addition to violating the usual slate of libertarian prohibitions on state action, copyright—or more specifically the problem it seeks to solve—presents serious challenges to desert theory. A desert theory person can have two takes on copyright. The first is that it shouldn’t exist at all. If that’s your view, then most of Steve Jobs’ earnings were actually a kind of government-assisted theft. The second take is that it should exist because this soft intellectual production deserves compensation. If that’s your view, that means you admit the laissez-faire market is a total failure and cannot compensate intellectual production without government intervention.

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http://www.demos.org/blog/9/18/13/wailing-1-percent-and-its-defenders

[LongTomH]

1. Actually, most of what people give credit to Steve Jobs for is actually the work of......

.....people like Doug Engelbart.

In contrast to Binswanger and Ayn Rand's "virtue of selfishness" worldview, Doug Engelbart decided, early in his career to "focus on making the world a better place, especially through the use of computers."

He never received any royalties for his mouse invention. During an interview, he said "SRI patented the mouse, but they really had no idea of its value. Some years later it was learned that they had licensed it to Apple Computer for something like $40,000."