Why intellectual property is such a confusing concept

[PPH]

ps: and as for short-term products which dominate today's market, I think it is even more superficial to say that people are making their own choices and that this is just my opinion and my own values, superimposed on other people.

I once again want to stress that this is not just my subjective personal liking. If you are building a house and you build it in a way that it is estimated to serve 50 years and another person is building a house that is estimated to stay around for 500 years, the greater value of the second house is not a matter of personal opinion.

This is not true: a house that can stay around for 500 years is more expensive. You are forgetting the tradeoffs in all your analysis. And tradeoffs are important: they are a consequence of the scarcity of resources without which none of these problems would exist. There is no objective way of saying tha the 500-year house is better than the 50-year one.

When I am saying that long-term products are more beneficial to society, those are not just my subjective likings and values, it is reasoning, based on reality.

Not so. They are more beneficial all other things being equal, which is a condition that doesn't occur in reality. Again: tradeoffs.

A company that is focused on short-term profit, and most companies are working for short-term profit, since long term profit is too uncertain to be estimated and thus too large a risk, will inevitably tend to create short-term products. By these I mean, say, making laptops that are guaranteed to break in 2-3 years. Creating a program and then releasing a new version with no backwards compatibility, etc.

Companies seek to survive in the long term too.  There is no basis for saying companies seek short term profit. If that were true, investments would never be made.

As for what people want, it is also important to note that if you have limited choices, you of course will want something among those limited choices. But it does not mean that people do not want something else, something that they have no means to produce.

=)

Of course people have limited choices. That's called "scarcity". Choices are limited by reality, by nature. I'd like to fly like Superman, but as that is not possible, I content myself with walking.

And because the industry values profit above all, usually people do not get what they would really want. They get what they get and they accept it because they do not have much choices.

No. That's the very reason why people *does* get what they want. In a free market, profits can only be made by providing people with what they want.

It is like with TV:
- Why do you show so many soap operas?
-Well, people like them! Look, they are all watching them.

But are people actually given a choice of what to watch on TV? Of course, not. They watch it just because it is there. And although people might choose not to watch, for many various reasons people would tend to watch what's there rather than not watch anything.

But Louigi: TV shows that kind of stuff because that's what most people want. If it weren't, a TV channel could make lots of money by offering what people really want and thus selling lots of ads at the expense of the other TV-owner's stupidity.

[uncloned]

But Louigi: TV shows that kind of stuff because that's what most people want. If it weren't, a TV channel could make lots of money by offering what people really want and thus selling lots of ads at the expense of the other TV-owner's stupidity.

No, that's not entirely true

there is another rather cold calculation you are forgetting about:

how much money is the show producers / sponsors are willing to pay to produce the show versus the amount of return expected. Day time TV does not have the highest number of people watching.

soap operas are exceeding cheap to make compared to say.... Star Trek NG with all of the computer graphics and special effects. (And STNG is really just a sci fi based soap opera)

Have you not noticed that prime time TV is much better in quality than day time TV?  If you haven't - get sick and stay home and watch day time TV for a couple or three weeks (happened to me) - at least here in the states day time TV is abysmal unless you are a toddler.  

And that is saying a lot since TV, in general, is pretty bad. TV doesn't at all compare to theater movies  - even the made for TV movies are usually not as good. Every once in a while a stand out occurs usually because the actors or plot is especially good - not because the camera work is. And then the stand outs get a larger investment roughly in proportion to the size of the audience.

So, no, demand is not met unless it can be done at a profit. If it can't be done at a profit it won't happen from the private sector. The internet is the exception here - the pre-bubble bursting internet developed a new business model - give it away free - and it was indeed new. The people who invested made their money back though.... by doing IPOs IF they had a business model and product that investors thought would succeed - such as Google.

The fact of the matter with few exceptions (think of the economy beyond the internet) a capitalistic society is not going to have serious business people giving away much of anything for free unless there is a perceived way to a profit. Its just a fact. Demand is only part of the story.

you need demand, investors, and a business model that yields a profit.

like the fire triangle if one is missing it won't happen.

[Louigi Verona]

PPH, a lot of what you say is reasonable commentary, I just have to provide some general info on what I mean and some things I did not mention. I would also like to comment several of your statements on which I have a difference of opinion and sometimes even first hand information.

1. Tradeoffs.
This is a very complex question. I would just briefly outline it, so you can see that in my analysis tradeoffs are part of the equation.
The problem lies in the general philosophy of society. If you go a century back, you would find out that people had a very different line of thinking. Something, that is considered normal and common today back in the days was rare and even non-existent.
One thing you would notice if you study history, that non-capitalistic societies generally had a different sense of time, that is they were in a habit of perceiving the present as a longer period of time. This is what today is known as long-term thinking (see Long Now Foundation, for instance, in wikipedia).
What it means is that to you short present was not +/- 2 weeks and long present +/- 2 years, but something along the lines of +/- 100 years and +/-1000 years. That means that people had a different perspective on the decisions they were making, since it was common for them to consider consequences of their actions for a longer period. They do something and have to understand what will be with what they do or how will that affect life in, say, 500 years.
Obviously in the capitalist world analysis on such large periods of time seems unreasonably and even crazy.

Long term thinking affects all parts of life. Including technology.
If you look at how, say, buildings are built today and how they were built a century ago, you would see that the expenses were not more back then, but the technology was more long-term. So building a house that would stand 500 years is not necessarily a matter of more expensive materials, it is a matter of long term thinking.
My wife is an architect and she tells me a lot about those things. If you have a friend who is  good architect, talk to him. And he would tell you that a lot of modern buildings are build, basically, in a short-term fashion. A lot of them are not expected to stand there forever. In fact, building companies would prefer to build so that their services are always required.
Same, for instance, with laptops. I don't know if you know this, but most sensitive parts of a modern laptop are usually placed in such a way that if you spill tea on your keyboard you are guaranteed to kill your laptop. And will have to buy another. This is capitalism and short-term thinking for you.

2. Companies and long-term.
Same with large companies. I am lucky enough to observe this, being part of a large international company and having the opportunity to know some of the planning from the highest bosses.
What these large companies call "long-term" is 2 years max. They cannot plan more than 2 years because the capitalist market cannot be predicted so far.
Thus, all their decisions are short-term, because for a long-term thinker 2 years is not a serious period. But decisions which these companies make have consequences far beyond 20 years. It's just not many people care to follow those.
So no, companies unfortunately do not care for any serious long-term thinking.
As for their survival, you wouldn't believe it, but for a Big Business company survival is not a serious problem, since their large capitals allow them to very well survive even through very difficult times with no special planning.

3. People get what they want.
In a free market - yes. Capitalist market is NOT a free market, my friend. Capitalist market is ruled by large companies (and if you read up, you will find out that any capitalistic market eventually gets big companies, this is a matter of economical laws, I did not make that up). So when I am speaking about choices, I am not speaking about being able to fly. In fact, this comment really misses the point - scarcity and product choices which I am speaking about have nothing in common in this context.

4.

TV shows that kind of stuff because that's what most people want. If it weren't, a TV channel could make lots of money by offering what people really want and thus selling lots of ads at the expense of the other TV-owner's stupidity.

First of all, you very often mention stupidity. Manipulating peoples' behaviour has nothing to do with everybody's level of intelligence. It is possible simply because people are social and exchanging information and responding to it is part of our nature. That means that the situation around us can influence us even without us knowing it. There are many examples to show this, the more obvious being how different cultures have different thinking patterns and even different moral codes - what is considered normal for them is not considered normal for us.
Of course, in exchange we influence society.

Second, you obviously do not know how TV funding works. No offence meant, but it has almost nothing to do whether TV shows are what people want and sometimes it is not even a matter of whether a lot of people watch it.

Also, my former argument stands - if people have no choice what to watch they would tend to watch what is there, not being offered an alternative. In the Internet age alternatives are there and we face a more decentralized system.
Additionally, the methods of measuring the popularity of shows are deeply flawed and producers have a very distorted understanding of what shows people actually like.

[PPH]

But Louigi: TV shows that kind of stuff because that's what most people want. If it weren't, a TV channel could make lots of money by offering what people really want and thus selling lots of ads at the expense of the other TV-owner's stupidity.

No, that's not entirely true

there is another rather cold calculation you are forgetting about:

how much money is the show producers / sponsors are willing to pay to produce the show versus the amount of return expected. Day time TV does not have the highest number of people watching.

soap operas are exceeding cheap to make compared to say.... Star Trek NG with all of the computer graphics and special effects. (And STNG is really just a sci fi based soap opera)

Have you not noticed that prime time TV is much better in quality than day time TV?  If you haven't - get sick and stay home and watch day time TV for a couple or three weeks (happened to me) - at least here in the states day time TV is abysmal unless you are a toddler.  

And that is saying a lot since TV, in general, is pretty bad. TV doesn't at all compare to theater movies  - even the made for TV movies are usually not as good. Every once in a while a stand out occurs usually because the actors or plot is especially good - not because the camera work is. And then the stand outs get a larger investment roughly in proportion to the size of the audience.

So, no, demand is not met unless it can be done at a profit. If it can't be done at a profit it won't happen from the private sector. The internet is the exception here - the pre-bubble bursting internet developed a new business model - give it away free - and it was indeed new. The people who invested made their money back though.... by doing IPOs IF they had a business model and product that investors thought would succeed - such as Google.

The fact of the matter with few exceptions (think of the economy beyond the internet) a capitalistic society is not going to have serious business people giving away much of anything for free unless there is a perceived way to a profit. Its just a fact. Demand is only part of the story.

you need demand, investors, and a business model that yields a profit.

like the fire triangle if one is missing it won't happen.

I'm not sure I understand what you're saying here. It seems to me prime time is better because more people watch it. One could argue that it's the other way round, but in that case, producers would just improve the quality of the rest of their shows so more people would watch everything. Prime time is prime time because more people are at home, watching TV.

Competition for prime time is greater: the best sponsors are there. So, the quality is naturally better.

Doesn't TV follow the model you describe? Channels give programs away for free and earn money by charging for publicity?

[PPH]

PPH, a lot of what you say is reasonable commentary, I just have to provide some general info on what I mean and some things I did not mention. I would also like to comment several of your statements on which I have a difference of opinion and sometimes even first hand information.

1. Tradeoffs.
This is a very complex question. I would just briefly outline it, so you can see that in my analysis tradeoffs are part of the equation.
The problem lies in the general philosophy of society. If you go a century back, you would find out that people had a very different line of thinking. Something, that is considered normal and common today back in the days was rare and even non-existent.
One thing you would notice if you study history, that non-capitalistic societies generally had a different sense of time, that is they were in a habit of perceiving the present as a longer period of time. This is what today is known as long-term thinking (see Long Now Foundation, for instance, in wikipedia).
What it means is that to you short present was not +/- 2 weeks and long present +/- 2 years, but something along the lines of +/- 100 years and +/-1000 years. That means that people had a different perspective on the decisions they were making, since it was common for them to consider consequences of their actions for a longer period. They do something and have to understand what will be with what they do or how will that affect life in, say, 500 years.
Obviously in the capitalist world analysis on such large periods of time seems unreasonably and even crazy.

Long term thinking affects all parts of life. Including technology.
If you look at how, say, buildings are built today and how they were built a century ago, you would see that the expenses were not more back then, but the technology was more long-term. So building a house that would stand 500 years is not necessarily a matter of more expensive materials, it is a matter of long term thinking.
My wife is an architect and she tells me a lot about those things. If you have a friend who is  good architect, talk to him. And he would tell you that a lot of modern buildings are build, basically, in a short-term fashion. A lot of them are not expected to stand there forever. In fact, building companies would prefer to build so that their services are always required.
Same, for instance, with laptops. I don't know if you know this, but most sensitive parts of a modern laptop are usually placed in such a way that if you spill tea on your keyboard you are guaranteed to kill your laptop. And will have to buy another. This is capitalism and short-term thinking for you.

I think we can basically agree that producers guide the production process by demand, but for some exceptions, which I will explain below. So, in general, they produce what people ask for. If the general philosophy of society is short term, then producers produce short term stuff. So, if there actually is a problem, it's not that they produce according to demand instead of according to what is good for society. They actually have no choice: they must attend demand. The problem then is that people demand short term stuff.

Also: would people buy a laptop designed to survive 20 years when they can buy a cheaper one that lasts 3 years? I know the answers depends on how cheaper, etc. But it's not that simple.

Long term thinking and short term thinking affects, indeed, many things. The tradeoffs between long term and short term are also taken account by the market. In a free market, such choices manifest themselves on interest rate. Of course, in reality, that happens only to a certain degree, because governments control the money supply and generally keep interest rates artificially low. The funny thing is that low interest rates send the signal that people are thinking long term, not short term. So, actually, government intervention should be causing the opposite thing from what you say is happening (of course, that doesn't last forever; the current crisis resulted from this kind of manipulation of the money supply).

Also, the argument "X manufacturing companies prefer to build X that break up fast so that their services are always required" doesn't hold. Some companies build long term stuff for people who are willing to pay for it. If a company deliberately produces bad stuff, it can't survive.

Now, there are exceptions. Suppose, for example, that government subsidizes laptop manufacturing companies. In that case, companies can get away with making bad stuff because they still profit from the money government gives them (and takes by force from the people). Like you say, we don't live in a free market. But that is the king of thing where you should look for answers when you think something is wrong. Patents are a perfect example of that: patents are government granted monopolies.

2. Companies and long-term.
Same with large companies. I am lucky enough to observe this, being part of a large international company and having the opportunity to know some of the planning from the highest bosses.
What these large companies call "long-term" is 2 years max. They cannot plan more than 2 years because the capitalist market cannot be predicted so far.
Thus, all their decisions are short-term, because for a long-term thinker 2 years is not a serious period. But decisions which these companies make have consequences far beyond 20 years. It's just not many people care to follow those.
So no, companies unfortunately do not care for any serious long-term thinking.
As for their survival, you wouldn't believe it, but for a Big Business company survival is not a serious problem, since their large capitals allow them to very well survive even through very difficult times with no special planning.

You like to thing of an example and then extrapolate your conclusions to the whole universe. That doesn't work. Just because your company plans for 2 years ahead it doesn't mean all companies do. Also, the fact that they plan for two years ahead because it's not possible to plan for more doesn't mean they don't take decisions based on the long-term. Companies don't engage in, for example, capital consumption, because they know that's bad in the long term. Farmers, for example, don't produce as much as they could because that would ruin the soil and they would lose in the long term (except, of course, artificial incentives cause them to do it).

Big companies can survive through difficult times (especially if government takes money from the people to give it to them, like int he USA), but they can also get broke if they consistently fail for a sufficiently long time.

3. People get what they want.
In a free market - yes. Capitalist market is NOT a free market, my friend. Capitalist market is ruled by large companies (and if you read up, you will find out that any capitalistic market eventually gets big companies, this is a matter of economical laws, I did not make that up). So when I am speaking about choices, I am not speaking about being able to fly. In fact, this comment really misses the point - scarcity and product choices which I am speaking about have nothing in common in this context.

For me, capitalism makes "privately owned means of production". Free market and pure capitalism would be identical. Maybe you use another definition. In a free market (pure capitalism), the consumer rules. In a mixed economy, the consumer rules together with the government. Now, it is common for Big Government to be in concert with Big Business. This generates lots of problems, some of which may be the ones you are complaining about. But for that to happen, there must always be some kind of forcing on the consumers. This, indeed, happens: subsidies, prohibitions, competition regulations, control of the money supply, etc.

First of all, you very often mention stupidity. Manipulating peoples' behaviour has nothing to do with everybody's level of intelligence. It is possible simply because people are social and exchanging information and responding to it is part of our nature. That means that the situation around us can influence us even without us knowing it. There are many examples to show this, the more obvious being how different cultures have different thinking patterns and even different moral codes - what is considered normal for them is not considered normal for us.
Of course, in exchange we influence society.

True. You never argued against my argument that if people could be manipulated to such a degree, society would break down, and it hasn't.

Second, you obviously do not know how TV funding works. No offence meant, but it has almost nothing to do whether TV shows are what people want and sometimes it is not even a matter of whether a lot of people watch it.

No? Isn't TV based on ads? If not, enlighten me Also, I don't intend to get offended here. This is just a friendly discussion between friends. And I generally do not chose to take offense.

Also, my former argument stands - if people have no choice what to watch they would tend to watch what is there, not being offered an alternative. In the Internet age alternatives are there and we face a more decentralized system.
Additionally, the methods of measuring the popularity of shows are deeply flawed and producers have a very distorted understanding of what shows people actually like.

Or they can not watch TV. I almost don't. The methods for measuring rating may be flawed, but in the end, its the profits that really indicate whether the company is working well or is not.

[PPH]

Just one more thing: there is no economic law that says that in a capitalist system big companies get bigger and bigger. I read a lot about economics. You say that if I read up I will realize that. Well, just this year I've read half a dozen books en economics. Studying economics is one of my main hobbies nowadays.

[Louigi Verona]

Well, I think we pretty much defined our differences, beyond which it is difficult to discuss anything - basically, we just view things differently.

The problem then is that people demand short term stuff.

I cannot agree. When I am buying a laptop, I want it to work for years and years, not fail in 24 months.

Also: would people buy a laptop designed to survive 20 years when they can buy a cheaper one that lasts 3 years? I know the answers depends on how cheaper, etc. But it's not that simple.

You are assuming, as with the house example, that a laptop that would work longer is much more expensive to produce. But I challenge that. I do not believe that much more investment is needed to put sensitive parts in more secure places, it is a matter of desire from the manufacturer. Older computers are generally more reliable as they were not aimed at mass market.

Also, the argument "X manufacturing companies prefer to build X that break up fast so that their services are always required" doesn't hold. Some companies build long term stuff for people who are willing to pay for it. If a company deliberately produces bad stuff, it can't survive.

I do not understand why it doesn't hold. Fist of all, it is true - this is something I know as a fact, at least this is true for ASUS laptops. This is a deliberate design scheme aimed at making more short-term profit. It is not considered illegal.
Special orders for companies to build long-term stuff - never heard about it. Obviously not for a common person.
Third, you are often mentioning as an important argument that if a company produces deliberately bad stuff, it won't survive. But short-term is not necessarily bad. It is just short-term. If you spill tea on your laptop, technically it is your fault, the laptop as a computer is working fine. Besides, marketing never focuses your attention on the short-termness of things. And sometimes short-termness would manifest it in plans of the company to release and promote a new product, while there is no actually reason to do that since the old product is quite fine and can be used for decades. Like with software. And instead of updating and fixing the existing software, they leave all the old bugs unfixed and instead put out a new product, with a new learning curve and new bugs, some of which will never be fixed.

You like to thing of an example and then extrapolate your conclusions to the whole universe. That doesn't work. Just because your company plans for 2 years ahead it doesn't mean all companies do. Also, the fact that they plan for two years ahead because it's not possible to plan for more doesn't mean they don't take decisions based on the long-term.

Company I am working in closely works with other major companies and we have a lot of info on lots of huge companies in the IT and devices departments. We know their planning because it directly affects our work.
And any seemingly long-term thinking of companies in one field usually is balanced off with extreme short-thinking on the other. If profit depends on exploiting our planet's resources, the company will not be thinking long-term here. Of course, they will plan like 10 years ahead, but in case of planet resources proper long-term period is at least 100 years - at the very least.
From what I've seen - business is an activity the goal of which is profit. And any seemingly long-term actions from a company are there only to increase it's own profit which in most cases creates short-term strategy in some other field the company is in.
I underline - 10 years is not long-term, long-term is at least 100 years.

Big companies can survive through difficult times (especially if government takes money from the people to give it to them, like int he USA), but they can also get broke if they consistently fail for a sufficiently long time.

This is a general statement that is true for any enterprise, yes.

The TV thing. The cost of ads depends on prime time. Prime time is a time when people are more likely to watch TV. At that point - believe it or not - the amount of watcher does NOT really depend on what kind of material is shown. People watch ANYWAY. They put TV in the background, they go clicking around the channels - even if it's complete crap, during prime time millions of people tune in. There are a lot of reasons why this happens.

The reason why you are not watching TV today is because Internet is an alternative source of socializing and information. This is why TV today is loosing it's position. FYI, I in fact do not even own a TV

[PPH]

I cannot agree. When I am buying a laptop, I want it to work for years and years, not fail in 24 months.

You took my phrase out of context. This was hypothetical:

"If the general philosophy of society is short term, then producers produce short term stuff. So, if there actually is a problem, it's not that they produce according to demand instead of according to what is good for society. They actually have no choice: they must attend demand. The problem then is that people demand short term stuff."

I never said people want laptops that don't last more than 2 years. It's quite obvious that, other things being equal, people will prefer the one that lasts more.

You are assuming, as with the house example, that a laptop that would work longer is much more expensive to produce. But I challenge that. I do not believe that much more investment is needed to put sensitive parts in more secure places, it is a matter of desire from the manufacturer. Older computers are generally more reliable as they were not aimed at mass market.

Well, but then your opinion is based on belief rather than on fact. I don't claim I know how much it would cost to produce laptops that last more. But one thing is certain: if it were possible to make laptops that last more with negligible additional costs, companies would do it, because it would be a business opportunity.

Also, my personal experience with laptops is different from yours. By the way, my mother as a laptop that is at least seven years old and works perfectly. And I have one over which I spilt a glass of water and survived.

I do not understand why it doesn't hold. Fist of all, it is true - this is something I know as a fact, at least this is true for ASUS laptops. This is a deliberate design scheme aimed at making more short-term profit. It is not considered illegal.

It's not true for Toshiba laptops. And aren't ASUS laptops cheaper? Wouldn't that be an example of my point? How do you know it's a deliberate design scheme? Can you read people's minds? And what about economic theory? If this is a deliberate scheme, the produce will have to change it or face bankruptcy at some point.

Special orders for companies to build long-term stuff - never heard about it. Obviously not for a common person.

I can think of many things that last: TVs, fridges, cars, washing machines, desktop computers...

Third, you are often mentioning as an important argument that if a company produces deliberately bad stuff, it won't survive. But short-term is not necessarily bad. It is just short-term.

I was referring to short term. You seem to consider it bad in your arguments. This is not really the point. My claim is as above: companies can't survive if they don't provide what the consumers want, unless special conditions exist, such as lack of competition and impossibility of competition to arise because of legal barriers.

If you spill tea on your laptop, technically it is your fault, the laptop as a computer is working fine. Besides, marketing never focuses your attention on the short-termness of things. And sometimes short-termness would manifest it in plans of the company to release and promote a new product, while there is no actually reason to do that since the old product is quite fine and can be used for decades. Like with software. And instead of updating and fixing the existing software, they leave all the old bugs unfixed and instead put out a new product, with a new learning curve and new bugs, some of which will never be fixed.

You generalize and think know better than people who took the concrete decisions. Sometimes the state of a piece of software is such that it's better to throw it away and make a new one. I've seen it. If a company releases a new product, it's because it thinks people will buy it. Marketing can help, but it won't do any good if the new product is worse.

Company I am working in closely works with other major companies and we have a lot of info on lots of huge companies in the IT and devices departments. We know their planning because it directly affects our work.
And any seemingly long-term thinking of companies in one field usually is balanced off with extreme short-thinking on the other. If profit depends on exploiting our planet's resources, the company will not be thinking long-term here. Of course, they will plan like 10 years ahead, but in case of planet resources proper long-term period is at least 100 years - at the very least.
From what I've seen - business is an activity the goal of which is profit. And any seemingly long-term actions from a company are there only to increase it's own profit which in most cases creates short-term strategy in some other field the company is in.
I underline - 10 years is not long-term, long-term is at least 100 years.

Long term and short term is relative and different for each case. For technological companies, it's probably shorter. For environmental considerations, 100 years might be long term indeed. But for other things, not. At any rate, all companies want to survive in the long term.

This is a general statement that is true for any enterprise, yes.

The TV thing. The cost of ads depends on prime time. Prime time is a time when people are more likely to watch TV. At that point - believe it or not - the amount of watcher does NOT really depend on what kind of material is shown. People watch ANYWAY. They put TV in the background, they go clicking around the channels - even if it's complete crap, during prime time millions of people tune in. There are a lot of reasons why this happens.

This misses the point. The error here is considering the companies as if they were a unit. The fact is, even if everyone watches TV at prime time, they have to choose one TV channel. So, if there are three channels, say channel A, B and C, and only B has shows people likes, everyone will tune B. This is not sustainable in the long run for A and C, because they won't sell ads in this situation. So, channels must seek a way of attracting viewers, or else they will lose money.

The reason why you are not watching TV today is because Internet is an alternative source of socializing and information. This is why TV today is loosing it's position. FYI, I in fact do not even own a TV

Yeah. I guess I prefer to discuss with my Internet friends

[PabloLuna]

Just one more thing: there is no economic law that says that in a capitalist system big companies get bigger and bigger. I read a lot about economics. You say that if I read up I will realize that. Well, just this year I've read half a dozen books en economics. Studying economics is one of my main hobbies nowadays.

The first multinational came from Netherlands when spice trade took place.  They achieved more because of:
-Scale economies
-Lower transaction cost

The reasons why big companies want to be bigger through mergers and acquisitions are:
-Scale economies
-Lower transaction cost
-Wider customer base, as absorbed companies had their own customers
-More control over market
-Higher profits due to bigger market share

[PabloLuna]

But I do think that it is possible to more or less form public opinion and public demand. At least to a certain extent. Of course you cannot market an absolutely useless product, a product can indeed be attractive and desirable at the moment, but useless in the long run.

You can say that if a person decides to buy a socially cool product, then he is getting what he wants, but in my opinion this is superficial argument.

There you are talking about "value".
In economy there is some debate about its meaning, as there are 2 concepts:
1.Exchange value:  Price people are willing to pay.  It is perceived value.
2.Usefulness value: Real price of assets.  Usually visible during times of crisis.

Shoes are covers for your feet.  Would you pay $1000 or $40 for a pair of shoes?  You may say socially cool shoes would worth $1000.  Would you buy shoes for $1000 in a time of crisis?  If you were the owner of the store, you may not be able to sell those shoes.  This is why during Christmas 2008, luxury article sales plunged 35%.

If you buy a $1000 pair of shoes and you intend to sell them, but crisis hit the door and people would only pay $40, where did all the money go?  It vanished.  $40 was the real value and the rest was just perception.

The difference between exchange value and uselfulness value is a toxic asset, or should we say "fake money" that exists only in your mind.

US economy is very fragile, because it was built on exchange value, so when "irrational exuberance" hits, perception changes too quickly, and money that never existed is just gone.  This is why herd behavior became so important for economists, because US economy was built on ghost wealth created out of perceived value.

For macroeconomical purposes, the use of exchange value poses serious practical problems, because it reflects value that does not really exist.

[Louigi Verona]

Everyone, please do keep in mind that economic "laws" are highly questionable in terms of their relation to reality. A "science" which takes the current social system for granted and tries to formulate general "laws" based on a static timeless model has little relevance outside an interesting intellectual experiment. Most economics are not science and too often contradict reality whereas a science should base its theories on observation and empirical data. So citing what economics say or do not say is not a strong argument for me.

[PabloLuna]

Microsoft Word and Office 'sales ban' begins
http://news.bbc.co.uk/2/hi/technology/8451459.stm

But in December last year, a panel of three judges rejected its arguments and upheld the original decision of a Texas court that ruled that Microsoft had infringed a patent belonging to i4i.

So citing what economics say or do not say is not a strong argument for me.

Economics is more like a pseudoscience which pretends to be an exact science.  Neoclassic economists make mistakes because their models use gaussian bells which acn only be used if variables are independent, but most are interdependent.

[Saga Musix]

Hands up, whose source code looks like this?

[PabloLuna]

Google Apologizes to Chinese Authors
http://www.nytimes.com/2010/01/12/technology/companies/12google.html?ref=business

[Louigi Verona]

I must say in this case I cannot agree with Chinese authors. Scanning their books and distributing them is hardly an offense. An offense for a real author would be when noone would want to distribute his work. But not to those authors. Why did they write those books then? I guess their interest is not really literature.