From: Lee Daniel Crocker (lee@piclab.com)
Date: Fri Dec 06 2002 - 15:22:05 MST
> (Damien Sullivan <phoenix@ugcs.caltech.edu>):
> On Fri, Nov 15, 2002 at 10:00:32AM -0500, Dickey, Michael F wrote:
>
> Say someone owns all the farmland in a country. A million people might give
> him $10 for the right to grow food on his land. Or $100, if he raises the
> rent. Does that person deserive the $100 million? He's not doing anything,
> he just controls the land. Similarly Gates controls the right to copy MS
> software.
It may be more difficult to see the economic benefit of rents, but
they exist nonetheless, and outlawing them would just make things
worse. The owner by himself is unlikely to be able to produce
revenue from the land--he needs farm labor and expertise, etc. So
if a farmer can produce $20 of revenue from a piece of land that
he can rent for $10, both benefit. If the owner arbitrarily raises
the rent to $100, then he just won't get any farmers to rent it and
it will lie fallow and unproductive.
What often happens, of course, is that farmers save their money or
take out loans or pool with others to buy the land so they can save
the rent. But that is also a risk: they must commit resources to do
that that might have come across better opportunities, so for many
farmers it's better just to keep renting. For example, it makes it
much easier for them to change from one plot of land to another if
conditions change.
"Ownership" is just a means of determining allocation. In a free
market, assets will tend to be used by those who can produce the
most revenue from them regardless of who owns them, because title
and rents will just get passed around until the most efficient
outcome is reached (modulo a few irrational actors).
Of course IP is a different beast entirely. The owner and 100
farmers can all use the same piece of IP at the same time, and IP
law isn't about orderly allocation, but about protecting markets.
-- Lee Daniel Crocker <lee@piclab.com> <http://www.piclab.com/lee/> "All inventions or works of authorship original to me, herein and past, are placed irrevocably in the public domain, and may be used or modified for any purpose, without permission, attribution, or notification."--LDC
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