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February 17, 2013



Have you read 'Capital as Power' by Nitzan and Bichler? (http://bnarchives.yorku.ca/259/) Any thoughts?


I had long believed that neoclassical economics was right to ignore such considerations because they were marginal side-effects that could easily be eliminated with a bit of political will.
The financial crisis made plain clear that those effects are not marginal, and at the core of the system rather than on the side. Still, I thought neoclassical economics was naive (like Baylis).
Now I've started to believe that neoclassical economics is just here for justifying the balance of power (and it works!), very much like the catholic church successfully did for centuries.


It seems more likely this is someone whinging that they deserve to get paid for a rather minor innovation, someone who failed in competition with another company selling much the same thing.

Chris -- why don't you point out that patents are just government granted monopolies, often on the obvious or hardly novel?

Luis Enrique

I dunno. Mainstream economic encompasses public choice, models of lobbying etc. the idea of politicians giving cosy contracts to supportive corporations is hardly heterodox thinking. I agree thought that too often some economists over emphasise ability, which I guess is what it boils down to.

P.s. if the banks had not been bailed out, do you think more or fewer innocent workers would have lost their jobs in the recession? Do you really think banker power is the main reason the banks got saved when HMV doesn't?


You could actually argue that patents don't even benefit powerful companies, never mind small inventors: Bessen and Meurer calculate that the cost of patent litigation exceeds the profits from patent licencing for all but the pharmaceutical industry. (http://arstechnica.com/features/2008/07/book-review-7-08/) So it's the lawyers (and 'patent trolls' who are winning.

Naturally this is disputed:

Walt French

Stateside, anyway, the cozy relationship between the Federal Reserve Bank and the industry has been sanctioned for about a century now.

It was NEVER popular, and only a weird compromise allowed it to come into being. Populists — or more accurately, I claim, “demagogues” — ran hard against the US Fed in the last presidential campaign.

Certainly the Bush and Obama Administrations claimed, consistently with Orthodox Economics, that a collapse of the banking system could have shut down the entire economy, and that even a small probability of such a collapse was enough to justify the efforts they undertook.

Imagine going about your day with the ATM's all bearing “Sorry! Temporarily Not Available!” notices on-screen, and your merchants all posting “Cash purchases only” signs. My personal opinion is that the risks of this scenario were quite a bit higher than the maybe 1% that would've justified the undertaking.

Not that we should love it, but we might look at it as other than a power play.


Intellectual property is not just non-rival. but copyright and patents makes it excludable.

A combination of anti-rival but excludable is a licence to print money for the most sucessfully marketed products (marketting trumps merit e.g. movies).

Anti-rival and non-excludable become public goods.

Bill Gates ?

Bill Gates wrote a Basic (computer language BASIC) Interpreter.


"Because DRI was late in porting its system to that processor, SCP hired programmer Tim Paterson to create one. It called this system QDOS, for “Quick and Dirty Operating System.” Gates bought the rights to QDOS for $75 000 and hired Paterson to modify it into MS-DOS; that’s what he licensed to IBM for its PC as PC-DOS."

Not bad for 75,000USD and a contract with IBM, and better marketing than IBM (Windows vs OS/2).

See also:



Chapters 2 and 3 are online


To extend the prior comments on the bank bailout, I agree that the bailout was primarily about maintaining core infrastructure for the status quo, and also that the bankers have extracted rents due to their control of that infrastructure.

We may have been better off to allow the banks to collapse, but it would have been a radical move and the mainstream opponents of the bailout seem to deny the radicalism of their preferred policy.

Jeremy Scott Wings

Reliable supplier, best source and discount price.


But an economy in which people distrust each other will be a poorer one, and one in which everyone bones up on the details of the law is one in which they have less time to devote to their true specialism, with the result that we have less division of labour and lower productivity.

And speaking as an inventor, I can attest that that's exactly as it is. A shame perhaps, but the stark and unvarnished nature of human society. This article omits that other aspect of the subject, immorality and criminality which also is a large factor in the mix that is 'Power, skill and Wealth'.

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