The smell of chicken, the sound of music?

I want to share a parable of sorts that I was told as a child:

Long ago, there was this poor man.  He had a wife and two children.  He worked in a quarry for one piece of silver a day.  This was just enough money to buy a loaf of bread and some milk each day to feed his family.  Each day, he would get up at sunrise, to work at the quarry.  After six hours of work, he would get an hour off for his lunch, then he would work another six hours, before going home.  During his hour of lunch time, we would take his lunch, a small chunk of bread, to the market, and he would sit near the stall of a fried chicken vendor and enjoy the aroma of the chicken, while eating his bread.  One day, the vendor approached the man.  He pointed out that he had seen this man eating his bread near the stall, every day, for a long time.  He asked why the man chose to walk to the market and eat there each day, instead of staying at the quarry (the rock dust on his clothing made the man's occupation obvious).  The quarry worker told the vendor that he enjoyed the smell of the fried chicken while he ate his lunch.  The vendor suddenly got hostile.  He told the quarry worker that he had worked hard to make that chicken.  He demanded that the quarry worker pay him a silver piece for smelling the chicken.  The quarry worker laughed at him.  Several days later, the quarry worker was summoned to court.  The fried chicken vendor was there.  The judge informed him that the chicken vendor had accused him of theft.  When the vendor was allowed to speak, he reasoned that the quarry worker had benefited from his labor by smelling the chicken and thus owed him something of value in return.  He argued that, since the quarry worker had been smelling his fried chicken for many years, it was not unreasonable to charge him one silver piece.  He demanded that the quarry worker pay him something of equal value to the benefits received.  When the vendor was done speaking, the quarry worker was dumbfounded.  Being uneducated, he could not think of any argument against the chicken vendor, even though he was certain the vendor's demands were unfair.  An old wise man who had been observing the proceedings then stood and asked the judge if he could present a fair resolution to the case.  The judge, also unsure of the situation, agreed.  The wise man approached the quarry worker and asked him for a silver piece.  The quarry worker handed him the only silver piece he had, the previous day's pay.  The wise man held it up and asked the chicken vendor if he could see the shadow the coin cast on the floor.  The vendor acknowledged that he could.  The wise man then said, "You may take it and leave."  The judge agreed that this was a fair resolution, the silver piece was returned to the quarry worker, and the vendor left with only the knowledge gained from seeing the shadow of the coin.

This story is interesting, because nearly everyone can see the justice in the outcome.  It is immediately clear that the demands of the vendor are unreasonable.  After all, who can own a smell?  We can see the absurdity of the demand, even though the vendor is clearly correct that the smell was produced as a result of his hard work.  We can also see that the quarry worker did indeed benefit from the smell produced by the work of the chicken vendor.  The argument of the vendor is almost flawless.  Why then do we consider it unfair that he demand compensation for his work?  It is just a smell.  It is not a physical object, and it does not improve the quarry worker in any way.  The only material value that the quarry worker can get out of it is that it might make his bread more palatable.  It is possible that it gives him temporary pleasure, but this is only of value while he is actually smelling the aroma.  Once he goes back to work, the benefits are gone.  The smell of the chicken does not give any lasting benefits.  Similarly, the vendor might enjoy looking at the shadow of the coin, because he obviously likes money.  Seeing the shadow might give him temporary pleasure, just like the smell of the chicken might give the quarry worker temporary pleasure.  Just like the smell though, the vendor cannot take the shadow of the coin with him.

The moral of this story is that immaterial things do not have material value.  Immaterial things only have value as they are being experienced.  They have no value before or after the experience, only during.  Some might argue that pleasurable experiences can increase happiness.  This is true.  I would like to see someone try to put a material value on this.  The first problem with this is that it is completely subjective.  The chicken vendor smells the chicken every day, all day long.  If the pleasure from the smell of the chicken does indeed result in lasting increases in happiness, then the vendor should be the happiest man alive.  As such, it seems to me that it could be argued that the vendor is already getting the full benefits of the smell and thus should not expect compensation from anyone else.  If, however, the vendor is so sick of the smell that it results in decreased happiness, how then can we decide on a fair price?  The guy in the next stall over might also be sick of the smell, or he maybe he likes fried chicken so much that the smell will never get old for him.

What it comes down to is that the smell is just information.  Furthermore, it is information that has no inherent value.  A person who has smelled the chicken cannot use the knowledge of what it smells like to gain any profit.  Since there is no way to predict the affect of the smell on people, we cannot even claim that the smell improves happiness, and even if we could, there is no way we can accurately rate the value of the happiness it might bring.  In the story, the outcome was completely fair, because the vendor was "paid" with equally valueless information: what the shadow of the coin looked like.

Is there a way that we could make the smell more material, so that it could be considered to have material value?  First, to do this we would have to make the smell difficult to obtain.  If we cannot do this, then there is no way to assign a value.  The guy in the stall next to the chicken vendor will never pay for the smell, in any form, because he can get it for free.  In light of modern patent and copyright law, this might seem unfair to the chicken vendor, but it is actually an integral part of a free market system.  It is both unreasonable and unfair to attempt to force people to pay for a resource that is freely available.  It would be like trying to charge people for the air they breathe.  Air is required for our survival, but it cannot be assigned a value, because the supply is saturated.  The vendor would have to stop making chicken in the market, and he would have to prevent anyone else from making chicken there.  Second, he would have to attach the smell to a physical object.  This is necessary because the smell must have some means of  being transported.  Again, no one is going to pay much for it if they cannot use it as they please.  He could enclose his stall, so that no smell escapes, then he could charge a fee for entry (or, an hourly fee for being in the stall).  He would get few or no customers though, because most people are not willing to pay for valueless information, if the information will then be denied because they are no longer willing to pay for it, or can no longer afford it.  The solution to this would be for the chicken vendor to prevent anyone else from producing the fried chicken smell, then make something like scratch and sniff stickers with the smell.  Even this solution has problems though.  It clearly interferes with the freedom of other fried chicken vendors.

Now let's discuss media.  Movie theaters use one of the potential techniques I suggested for the fried chicken vendor.  They enclose their "stall" to prevent the "smell" from escaping.  Movie theaters are not much more than glorified stalls designed to allow paying customers to experience something with some of their senses, while preventing those who have not paid from experiencing that thing.  As I mentioned above though, for this to work, they also have to prevent any other "stalls" from offering the experience for free.  This is done with copyrights, in the case of movies.  Funny that it seems fair to do this for movies, but not for the smell of fried chicken.  Would it be fair to do this for fried chicken if this vendor had invented the product?  Now we have a dilemma.  Fried chicken is trivial, so it seems wrong to allow the government to impose such absurd limitations.  Movies take a lot of work to produce, so it seems more reasonable to impose these restrictions.  In fact, this particular contradiction actually exists in U.S. law.  Even though these are ultimately exactly the same thing, U.S. law forbids copyrighting or patenting of food recipes, but allows copyrighting or patenting of movies, music, writings, and a great number of other things.

Now let's look at this with reference to music piracy.  Why is music piracy so rampant in the world?  I have heard it argued that it is because people do not want to pay for things and will take anything that is available for free if they want it.  I cannot entirely discount this theory.  It is true that some people will steal if there is very low risk of getting caught.  That said, I think that most people have better ethics than that.  Most people can clearly see that shoplifting is wrong and choose not to do it, even though it is very low risk and extremely easy (in fact, most retail stores will not detain or press charges if they do not have continuous observation of a suspected shoplifter, because the person may have put the item down when not observed).  I think that music piracy is so rampant due to a combination of factors.  One factor is the freeness, and another is the convenience (bit torrent is even easier than I-Tunes).  The reason that people do not treat it like shoplifting, though, is that they do not see media piracy as the same thing as stealing.  The above story illustrates why.  Music has no material value.  Listening to a song imbues the listener with the knowledge of what it sounds like, but this knowledge has no functional value.  Music has value as it is being listened to, but not before or after.  As with the smell of the chicken, pleasure obtained during listening to music is completely subjective.  Some people love country music, while some people hate it, and this applies equally to every genre of music.  Some people do not like any music at all.  The only difference between the music and the smell is which sense is used to detect them.

So, here is where the problem lies with music:  The music industry used the scratch and sniff sticker strategy to monetize music.  They used copyright law to prevent other vendors from making the "chicken smell."  They attached the music to physical objects (vinyl records, tapes, CDs).  Then they sold the objects.  Using this strategy allowed them to include the perceived value of the music in the price of the physical object.  The internet made the inherent flaw in this strategy evident.  This strategy is not a free market strategy.  It relies on government intervention to work.  The problem is that the government only has so much resources, and further, it is not the government's responsibility to identify those who violate copyright, only to judge those that are accused.  The internet has allowed a huge number of unregulatable "vendors" to distribute the "smell" at no cost and in an extremely convenient way.  Since the media has been disassociated from the physical object, it is nearly impossible to regulate effectively.  The media is now free (as in freedom) information.  It is not chained to physical objects.  This means that music has become like the smell of the chicken, except that now it has a much more effective mode of transportation.

Let's look at data as a recipe for something (since it is really nothing more).  A computer program is a list of instructions, just like a cooking recipe.  An mp3 file is a more abstract recipe for generating sound.  Note that it is not the sound itself, it is just digital information that can be translated into a list of instructions for generating sound.  Similarly, digital movies are nothing more than a list of instructions for generating sound and video.  The only difference between this and cooking is that cooking requires that physical ingredients be consumed.  (Do not, however, think that this is a justification for treating them differently.  A patent is not much more than a list of instructions for a process, or for building and using a device, and exactly like a recipe, when building a patented object physical ingredients are consumed.  Like recipes to copyright, patents have an exception: mathematical algorithms cannot be patented, even though it could be argued that any process described in a patent can be boiled down to a simple mathematical algorithm.)

Anyhow, what this comes down to is that media piracy is so rampant because most people recognize the hypocrisy in charging for a sound or an image that has no lasting value.  This provides an ethical conflict that allows the desire for free and convenience to have highest priority.


I also want to cover an argument against my assertion that people will not pay for valueless information unless they are free to use it as they please.  First, there are always exceptions.  Not everyone has good judgment (and, our culture encourages poor judgment in this area).  Second, the obvious argument that people pay for video games on a subscription model is not a valid argument to claim that people will pay for valueless information.  Video games have repeatedly been shown to have educational value.  As interactive products, games also tend to continuously provide information (unlike a movie or song, games typically provide much more information, and well made games often provide different information each time they are played).  In fact, the interactive nature of games often creates a feedback loop that improves skills at the same time as encouraging the user to continue playing the game.  This leads to the third part, this does not apply to addictive substances or media.  Plenty of people pay subscription fees for pornography, even though the information has no value (and often has long lasting negative value).  This is because it causes dopamine addiction.  People acting on addictions cannot be considered competent customers.  (In some cases, games can also fall into this category.)

Lord Rybec

Morality of Government Social Programs

This post is aimed primarily at Christians and more specifically at conservative Christians.  I have probably mentioned it before, but I think it deserves mention here.  I am a conservative Christian (unless you are one of the misinformed people that do not believe Mormons are Christians).  I am not saying you should stop reading if you are not Christian, as this does apply, to a lesser degree, to most religions and maybe even some to Atheism.

First, ask yourselves if it is morally right for governments to take money from their subjects (in the form of taxes) to protect them from criminals.  If you don't know what I am talking about, governments spend tax money on police, prisons, and sometimes even rehabilitation facilities and mental wards for this purpose, not to mention other forms of law enforcement.  Most people I know have no problem with governments doing this, and many even think that the U.S. government is not doing enough to protect them.  Also, ask yourselves if it is morally right for a government to enforce religious laws, or laws with a religious basis.  As you ask yourself this, consider certain parts of the Ten Commandments, for instance, "Thou shalt not steal," and "Thou shalt not kill."  In fact, I cannot think of many U.S. laws that are not based on Christian moral laws found in the Bible.

Now, let's discuss government social programs.  Most conservative Christians are strongly opposed to government social programs (except, rather hypocritically, Social Security).  Why is this?  I actually am not sure, but I will try to think of some potential reasons anyway.  One argument I frequently hear is that it is wrong for the government to take their hard earned money and give it to other people.  One guy told me that it takes away the free agency of those with the money, because it forces them to give to the poor, instead of allowing them to choose how to use the money.  Some people say that poor people deserve what they get, because they are obviously lazy otherwise they would not be poor.  I have heard it compared to theft.  Most conservative Christians use arguments that all come back to a feeling that it somehow violates their freedom, for the government to use tax money to help those in need.

The first argument, that it is wrong for the government to take their money and give it to other people, is clearly flawed.  In fact, this is the only thing that the government does with tax money.  Tax money is given to police officers in the form of wages.  It is given to contractors to build prisons, roads, military bases, tanks, Humvees, aircraft, and all sorts of other things.  Our government does not save any tax money (actually, they pretty much always spend more than they get), so they cannot be reasonably accused of hoarding it.  Now, note that the one thing these all have in common is that the government gets some value out of the money, in labor or goods.  If you think this is the difference though, consider also that the government donates money, without any explicit obligation, to 3rd world countries, to feed people who are starving.  They even donate money, in the form of weapons, and sometimes even troops, to help warring countries, again without any explicit obligation.  Is this morally wrong?  Is it morally wrong for the government to spend our money to help people in other countries?  Maybe you would say that it depends on our business relationship with those countries.  For instance, you might say that it was not immoral to help out Kuwait, because we were buying oil from them, and if they were captured, it might increase the price of that oil, or even make it entirely unavailable to us.  Is any of this really that different from helping U.S. citizens when they need it, though?  Some of the poor in the U.S. can, and will, escape poverty, if they are given a leg up in the form of financial help.  These people will ultimately become tax payers and will most likely eventually pay enough in taxes to pay back their welfare benefits.

The second argument is absurd.  If using tax money is immoral because it deprives the payer of their agency to choose how to spend it, then it is equally immoral to prevent a murderer from killing, or a thief from stealing.  If a man wants to murder someone, but the government imprisons him, is this not taking away his agency to choose what he does?  You might say that his actions would have hurt someone, while the tax payer's actions would not have.  Aside from the fact that there is no way to know this (the tax payer might have used the money to hire a hit man, or to get drunk and beat his wife), would it not result in harm if the money was not given to the people that need it to survive?  The only difference is intent.  In court, the difference of intent is the difference between 1st, 2nd, and 3rd degree murder.  The harm was still done, and the fault still exists.  Intent cannot reverse the harm done.  Laws are designed to limit agency to reduce harm done and to increase fairness.  A law that does not limit agency is pointless, so this argument really just does not make sense.

I hope that the argument that the poor deserve poverty has been sufficiently debunked by our recent recession that no one still believes it.  With over 8% unemployment (which does not count those who are unemployed and still want jobs, but who have given up searching), it should be clear that a significant portion of the population who are in poverty are people who are trying to get jobs.  Claiming that these people deserve poverty because they are lazy is a foul lie.  In addition, out of those who are not employed and are not looking for jobs, many are single parents.  In fact, I would also include in this category couples with children, where one is disabled and the other cannot work much because someone has to care for the children and the disabled spouse, parents where their spouse is lazy and they are stuck caring for children and the lazy spouse, as well as anyone living in a place where there are no jobs available nearby and they cannot afford to move somewhere where jobs are available within a reasonable distance.  Most people who fall into the category are already working more than 40 hours a week caring for other people, and it is a shameful travesty of justice that we allow them to remain in poverty given how hard they are working.  I would even argue that most of these people are doing work that is much more important and valuable than anything that anyone working regular profitable jobs are doing (what do you think is more important, managing one large business, or raising the children who will eventually be expected to take over jobs including your job, the jobs of the entire government, and every other job in the U.S., not to mention a bunch more that have yet to be created).  If you still believe that not working a normal job justifies poverty, you need to read my opinion on the Death Penalty.

As far as arguments that compare Social Welfare to theft, the government has a legal right (according to an amendment to the U.S. Constitution) to tax us.  Thus, according to the law, taxing us is in no way theft.  While the Constitution does strictly limit how this tax money can be used, and the limitations do not include any allowance for it to be used for social programs, violation of the Constitution is also not theft.  Furthermore, any fault for such misuse of tax funds is not the responsibility of the entire government.  It is the responsibility of the President (who has sworn to protect and uphold the Constitution) and the Supreme Court (who's job it is to review laws and determine if they legal according to the Constitution).  It is in no way theft though.

Now, I want to discuss the underlying concern of all of these arguments.  All of these arguments come back to the idea that spending tax money on Social Welfare somehow violates the freedom of the tax payers that fund it.  We have already established that the government has the right to directly tax the people, through a Constitutional amendment (and, amendments cannot be declared unconstitutional, because they are part of the Constitution, and thus define themselves as Constitutional).  The government technically does not have the right (Constitutionally) to spend tax money on Social Welfare, but it is hard to argue that it violates the freedom of the people, when a majority of the people appear to support these programs.  Our government is based on a democratic system.  Democratic freedom is ultimately defined as the right for people to be governed as they see fit (this is based on many publications written around the time that the Constitution was actually written).  In a democratic system, this is accomplished by designing the government and its laws based on the desires of the majority of the people (because it is impossible for each person to be governed exactly how they want to be, when the population is greater than one).  In short, if the majority of the people want tax money to be spent on Social Welfare, then it is a larger violation of freedom to refuse their desires than to spend the tax money on Social Welfare.  You might consider government Social Welfare programs to violate your freedom, but your opinion is not the only one that matters.

Next I want to look at the religious implications of Social Welfare.  I have already hinted at where this is going.  Now it is time to discuss it.  Since the U.S. is still a vast majority Christian, and this article is designed for Christian readers, I am going to focus on Christian religion.  The Bible has a lot of commandments besides the ten brought down from the mountain by Moses.  Many of our laws are based on those first ten commandments.  Many are also based on an earlier part of the Bible where God granted Adam and Eve (and ultimately everyone) free agency.  Most of our laws are designed to mediate agency such that everyone has an equal share.  There is no specific commandment in the Bible against imprisoning someone against their will, however, this is a clear violation of another person's freedom, so we have a law against it to protect agency.  Many conservative Christians, however, ignore the laws that go beyond agency and the Ten Commandments.  Jesus Himself decreed that people should "clothe the naked," "feed the hungry," and do a great deal of other similar things.  This is Social Welfare.

Does the government have the right or responsibility to enforce Christian commandments regarding Social Welfare?  Most arguments I have heard say "no."  The most common arguments are first, that the government does not have the right to enforce religious laws and second, that it deprives the giver of the blessings if they are forced to give.  The first argument is clearly wrong, given that nearly every U.S. law is a religious law, that is being enforced by the government.  If fact, by this argument, I could start a new religion, make a law for that religion that is the same as a government law, and the government law would immediately cease to be valid.  It should be fairly obvious that the claim that the government has no right to enforce religious laws is absurd.  The second, that it deprives the giver of blessings, is also questionable.  This argument depends on the assumption that Jesus decreed His Social Welfare laws to give people an opportunity to obtain blessings, not because He believed that wealthy people have an obligation to help those in need.  This would imply that all of the commandments are intended to be selfish, for instance, that not murdering is not about protecting the potential victim, but about getting blessings for the potential criminal.  I hope you see how clearly absurd this is as well as I do.

If the "welfare" commandments Jesus decreed are designed to help the poor and not to give blessings to the rich, then the claim that forcing the wealthy to give to the poor is wrong because it deprives them of blessings is invalid.  In short, blessings are a beneficial byproduct of giving, not the objective and thus should not even be considered in this argument.  (Besides this, I think this claim is a lie.  I believe that someone who willingly gives, even if they are compelled to do so, will get any blessings associated with giving.  The only people who will not get blessings are those who would not have given if they had not been compelled to give.  I think the Bible even says as much.)  Given that these religious laws are designed to help and protect people, just like the Ten Commandments, I find no religious reason that the government should not use tax money to provide for the needs of those who cannot afford to do so themselves.  In fact, I find that it is equally acceptable for the government to provide Social Welfare as it is to outlaw murder and theft, from a religious perspective.  Further, I don't see why conservative Christians, who claim to believe and follow the commandments given in the Bible, don't strongly support adding this commandment to codified law.  It seems hypocritical that Christians should support laws banning same sex marriage (a position which, contrary to the claims of certain people, is supported in the Bible), but not support laws enforcing commandments concerning welfare given by Jesus Himself.

There is still the issue of Constitutionality.  This is the only valid argument against government Social Welfare.  The Constitution gives an explicit list of powers the Federal Government has, and Social Welfare is not included in that list.  (Note, however, that all other powers not explicitly prohibited by the Constitution are granted to the states.  This means that the states do have the Constitutional right to create Social Welfare programs.)  There are two ways of getting around this.  Obviously, an amendment could be made adding the right of the Federal Government to create Social Welfare programs to the above mentioned list.  The second, and in my opinion much better, way would be for all Social Welfare programs to be managed per state.  Not only would this be entirely legal, it would also help those programs to be better tailored to the situations within each state (one problem with Federal welfare programs is that they cannot keep up with differences in cost of living between different states and even different regions within states).

This is a call to all Christians to reconsider your positions on government Social Welfare programs.  I am not asking you to become liberals (and I certainly do not consider myself liberal even though I support well managed welfare), but rather, I am asking you to think for yourselves.  Welfare is not a purely liberal subject, but if conservatives don't start playing a serious part in the discussion of how to best do it, it will be controlled entirely be liberals.  We need to make welfare a bipartisan effort.  I think that this is the only way to create a truly good welfare system.  If we don't do this, then we will be pushing away the poor among us, and other, really important conservative issues will ultimately die with the loss of their support.

Lord Rybec

Heathcare Costs

A dentist I know told me of an experience he had a few years ago with a local hospital.  This dentist did not have the facilities for certain more invasive dental procedures, so he would rent an operating room from the local hospital whenever he needed to do this procedure.  He only performed the procedure every few years, so this worked well for him.  On the occasion a few years ago, a friend of his family needed this procedure.  He rented a room at the hospital and performed it.  When he got the bill from the hospital, he was very surprised to see that the bill was somewhere around three or four thousand dollars (I forget the exact figures).  The last time he had rented a room for this procedure, which was several years before, the bill for the room had been around twelve thousand dollars, three to four times the cost.  He asked a hospital employee why the price had dropped so dramatically.  He was informed that it had not dropped.  The difference was insurance.  Specifically, the previous patient had  been insured.  The current patient did not have insurance, so he got the lower, discounted rate.

Evidently, this is common practice for hospitals.  It is actually not that uncommon for private practices, though typically much less dramatic.  Our chiropractor in Alaska charged between $60 and $70 when our visits were covered by insurance, but gave us a discount, charging only $35, when our visits were not covered (actually, part of the discount was because we were students; he does not give this discount to insurance companies though).  Other practices that we visited will typically give uninsured patients a 10% to 20% discount.

While it might not be obvious, this is a major problem.  The reason that most hospitals do this is because they know that uninsured patients cannot afford the higher price, so they give a lower price.  This is not because they want to be fair or kind to uninsured patients.  This is because patients that do not have much money are more likely to make payments for a smaller bill than for a bill that seems impossible to pay off.  You might think that hospitals recoup their losses for this by charging insured patients more.  This is also not true.  At $3,000 for a room rental for a 2 hour operation, the hospital is not loosing money.  Actually, given that the room would not have even been occupied if it had not been rented, they are profiting $3,000 subtract maybe $100 (probably less) for a janitor to clean the room afterwards.  Charging $12,000 for the room is extortion.

Why is this a problem?  First, it increases premiums for medical insurance.  This is bad, but it is not the part I am most worried about.  My problem is that Medicare and Medicaid are insurance, so they get the higher rates.  This may not bother some people, since this money comes from taxes, and taxes come from rich people (actually, this is a false assumption; the majority of taxes come from the middle class).  Consider, however, how many people need medical aid, but who do not qualify for Medicare.  If hospital costs for Medicare patients were the same as those for uninsured patients, we could afford to put 3 to 4 times more people on Medicare, without increasing taxes.  (Similarly, if hospitals were required to give their uninsured patient discounts to everyone, insurance prices could drop dramatically, which would allow many uninsured people to afford health insurance.

There is one more thing about this that makes it even worse.  Obamacare is going to aggravate this problem.  Most insurance companies will not pay the entire bill.  This dentist said that his earlier patient had been required to pay a $5,000 copay of the $12,000 out of pocket.  Had this patient been uninsured, the out of pocket cost would have been $2,000 less.  Forcing poor people, who are not eligible for Medicare, to buy health insurance will actually increase their out of pocket health care costs, at least for hospitalization.  Of course, we could pass a bill requiring insurance companies to reduce their deductibles and copays, but this would further increase the price of insurance, so people would pay the added cost either way.

Obamacare has attempted to solve a lesser problem, while ignoring the real, bigger problem.  Before any insurance reform is going make a positive difference, we need to address the issue of medical costs, and especially the extortion of insurance companies.  Now, I am not saying that the insurance companies are good, or that they do not deserve it, but added costs for insurance companies ultimately leads to more expensive insurance.  The insurance companies are not going to suffer from this, their customers will.  When you consider the effect this has on Medicare, the people who need the insurance the most, those who do not qualify for Medicare, but cannot afford private insurance, will be the ones who suffer the most.  I believe that the biggest selling point for Obamacare was that it would help this specific class.  Ironic, isn't it?

I suggest that a good solution to this would be to prohibit hospitals from giving discounts based on insurance status.  Instead, they should be encouraged to give discounts based on income status.  This will help Medicare the most, since Medicare patients typically have the lowest incomes.  The Medicare money saved by doing this will allow Medicare to be extended to shrink or even close the gap of those who do not qualify for Medicare, but cannot afford insurance.  Lower income people who can afford insurance may be able to get lower rates, since their health care costs may be lower.  This by itself might be enough to make Obamacare obsolete.  This is much simpler than Obamacare, and it would be much more effective, because it attacks the root of the problem, instead of just trying to cover the problem up.

Lord Rybec

Minimum Wage Drives Inflation

Many years ago, I was attending the Alaska State Fair with a friend.  One of the buildings was full of booths for various organizations: mostly businesses, with a few political organizations.  One booth was run by an organization campaigning for increasing minimum wage (I no longer recall if it was State or Federal).  My friend decided to tell them why minimum wage should not be increased.  He told them that increasing minimum wage would drive inflation.  The two people in the booth quickly and deftly tore his argument to shreds.  My friend did not loose the argument because he was wrong though.  He lost it because he did not have a strong enough understanding of economics to back his claim.  His argument is actually supported by a great deal of evidence, and even a simple philosophical argument can show that it must be true.

Our philosophical argument starts with the obvious fact that businesses must raise prices when costs increase.  If a business has a large amount of money or resources saved, it might be able to delay raising prices, but most businesses either do not have much savings, or just do not choose to delay price increases for very long.  The only exception to this rule is a business that can find some way of offsetting cost increases by cutting costs elsewhere (but then, net costs did not actually increase, did they).  You might argue that some businesses are already charging high enough prices that an increase in costs would not force them to raise prices.  If you did, I would argue that such businesses have already pre-emptively raised their prices for that particular cost increase (and, even these businesses will probably raise their prices at a cost increase, to maintain their high profit margin).

Employee wages are a cost.  I would love to see anyone try to argue against this claim.  So, given this and the fact that businesses raise prices when costs increase, if wages increase, then prices will increase.  From this it follows that if minimum wage increases, then prices will increase.  (There is an exception to this as well.  If all businesses pay enough more than minimum wage that none are affected by an increase, then prices may not increase.  If even a few percent of employees have wage increases though, ripple effects will raise prices for all businesses.)  When average prices increase, we call this inflation.  Thus, increasing minimum wage drives inflation.  This is our philosophical argument showing that minimum wage drives inflation.

Besides this, we have plenty of evidence that supports this claim.  I am not going to build a strong case for this, but I will quote some statistics that support the claim that increasing minimum wage does not improve the situation.  I wrote a paper last year comparing compensation of average US workers with the compensation of slaves in various ancient and older civilizations.  During my research for this paper, I found that from 1960 to 2010, wage increases for the lower 99% of US wage earners averaged to around 75% (the upper 1% wages increased by 250%, which comes out to almost 77% for all wage earners), while average inflation was 659%.  These figures do not necessarily imply that minimum wage increases were responsible for the disparity, but they do clearly show that increases in minimum wage were nowhere near enough to keep wages fair.

Our philosophical argument clearly supports the claim that minimum wage increases drive inflation.  The empirical evidence that I presented clearly shows that minimum wage increases have not significantly improved the situation of US wage earners over the last 50 years.  From this it is clear that increasing minimum wage is not enough to keep US workers out of poverty, because businesses will just raise their prices to compensate and then use the added costs as an excuse to raise them a bit a more.

I also wanted to discuss unions driving wage increases, but I do not have much time.  Unions driving wage increases is straight up harmful.  The US steel workers union has pushed up wages for steel workers and has demanded longer paid breaks to a point that it is cheaper to import steel (which is extremely heavy and thus costly to ship) than to buy domestic steel.  Unions increase wages of small pockets of the population, and the rest of the population ends up paying for it.  Steel workers comprise a very small percentage of the US population, but their absurdly high wages cost everyone in the US, because steel is used in a great deal of our products.  Besides this, union officials also take wages from union dues, which further add to the cost of unions.  I would spend more time in this if I had it, but I think this should get my point across.

Anyhow, minimum wage increases, or any kind of forced wage increases, drive inflation.  The economics of this is not as complex as people imagine, but most people either believe this or not, without actually looking at the numbers or the logic behind it (even our government representatives do this).  The solution to this should be fairly obvious to an economist.  For any product (including labor), a supply and demand chart can be drawn.  On the chart, there is a point where supply and demand cross.  This point is the equilibrium point, where both supply and demand will tend strongly towards.  Artificially increasing or decreasing the price of a commodity (labor, in this case) will alter the balance.  Setting a price floor (minimum wage) will increase supply, but decrease demand, resulting in surplus (unemployment, for labor).  Setting a price ceiling will do the opposite, raise demand, and lower supply.  It is obvious that the government has a responsibility to make sure that businesses are paying people fairly, and minimum wage is an obvious solution to this, but this necessarily causes unemployment and, as shown above, drives inflation, because of the imbalance it causes in supply and demand.  The obvious solution is to set a price ceiling on labor (a maximum wage) that counteracts the effect of the minimum wage.  If we did this, we could increase minimum wage, and decrease maximum wage to a point where everyone is paid fairly.  This will ensure that everyone gets a wage that they can live on, but will also leave a range of possible wages so that more valuable workers can be paid more for their work.  CEOs that currently make $5,000 an hour won't like this, but I would guess that a vast majority of Americans would be happy to see these leeches get what they deserve (which is more like $50 or $100 an hour, if that).

Lord Rybec

Intellectual Property and Tangible Property

On August 22, 1995, the U.S. government granted some person authority over the usage of all laser pointers throughout the country.  I don't know the name of the person, but I do know that this decision was neither reviewed by Congress, nor the President.  Likewise, the person granted this authority was neither elected by the people of the U.S., nor by any representative subset of the people of the U.S.  The authority was arbitrarily granted by previously approved U.S. law.

The specific authority granted to this person was the authority to grant or withhold permission for people in the U.S. to use their laser pointers to entertain and exercise cats.  Since this date, it has been illegal for any person residing within the United States of America to use a laser pointer to cause a cat to exercise, without the express permission of this person.  The U.S. laws that grant this person the right to control how other people use their personal property are none other than the patent laws.

I am guilty of patent infringement.  I got my first laser pointer in 1999.  The first thing I did with it when I got home was to torment our cat with it, infringing on patent number 5,443,036.  Of course, I was not aware that anyone had patented this practice, but according to the law, I am still guilty of patent infringement.  Since then, I have infringed on this patent many more times.  I learned of my infractions only a year ago, and while I have not had time to commit any more, I would happily do so if I had the time.

I do not intend on ever requesting permission to use the so called intellectual property of the person who has this patent.  This example makes it clear that patent law infringes on the right to ownership of tangible property.  Besides that, I would submit that patent law infringes on another of the fundamental rights that our nation was founded upon.  Patent law infringes on the right to fair representation in government.  The authority granted to the above mentioned person was approved by a patent clerk, not by any elected representative.  Right, ultimately the law that granted the clerk the authority to make the judgment can be traced through representatives of the people, but I do not think it is just to allow any person to seize authority over the physical property of others merely by inventing something that can be made with that property, or by inventing a process that requires the use of that property.  The process of granting such extensive power over the personal property of others should require at least the direct vote of elected representatives, if not the direct vote of the people themselves, on a per case basis.  Any government that grants such arbitrary power over the property of others without the explicit consent of those governed can reasonably be considered an oppressive government.  Admittedly, the U.S. government is still one of the most free and least oppressive on Earth, but when it comes to ownership rights of physical property, it is doing a very poor job of effectively protecting them.

Lord Rybec

Welfare

I would like to start with a disclaimer: I am not trying to bash the idea of welfare.  As I have stated before, I find it morally wrong to sentence people to pain and suffering (starvation) for not being able to earn a living wage, and I would even submit that it is morally wrong to allow people to starve because they are unwilling to work to earn a living, unless there is not enough to go around.  That said, I would like to explain some of the problems with our implementation of welfare in the U.S.

The first problem with U.S. welfare, and possibly the most corrupting, is that promise of welfare benefits can be used by political candidates to bribe the middle and lower classes.  This is essentially buying votes.  Many Americans, especially conservatives, think that the lower class is composed mostly of people who are too lazy to work.  This is not true.  A significant portion of the lower class have jobs, and many of them have multiple jobs.  These people are working to earn a living, but their wages are so low that they still need welfare to survive.  What can they do when offered an obviously corrupt political candidate that promises to feed them immediately, or a rather less corrupt candidate who promises to make better jobs available sometime in the next 4 years?

The second problem is based on the above statement that lower class wages are so low that even full time work is not enough to live on.  Besides the obvious cause of greedy employers, part of the cause is welfare itself.  Welfare causes inflation.  This is primarily true of welfare given to people who are not working for any income.  Economists often recognize this, but they miss something more insidious.  Welfare also decreases wages.  This may seem absurd at first, but consider this: If employers do not pay enough for an employee to survive, that employee will either find a better job, or will starve and die.  Neither of these scenarios is good for employers, as either way they will have to hire and train new employees, or they will be understaffed.  This is a fairly strong incentive to pay fair wages.  Now though, the government is covering some of the slack with welfare.  If a household of three is getting $350 a month in food stamps, that is $4,200 a year less that the employer has to pay for that family to survive.  Businesses benefit more from food stamps than individuals because of this.  Even worse though, the businesses benefiting are not the high end businesses that are advancing technology and improving civilization.  The businesses benefiting are businesses like WalMart, McDonald's, and Home Depot.  They are the businesses that already underpay their employees.  So really, the U.S. welfare system is driving inflation and subsidizing the lowest, most depraved businesses.

The third problem is one that most people are already aware of.  The U.S. welfare system is a trap.  To get on welfare, a person has to be below a certain level of poverty.  This level of poverty is low enough that people can be above it, but still not be able to support themselves.  Getting onto welfare is easy for people in that gap.  They can just quit their jobs or cut their availability so they get less hours of work.  Getting out is extremely difficult.  Much of the lower class has discovered that as they try to get out of poverty they reach that point where they no longer qualify for welfare, but they still cannot survive without it.  So they carefully skate the line so they have the largest income they can without loosing their welfare benefits.  Many people accuse these members of the lower class of taking advantage of the welfare system.  What else can they do though?  Should they keep trying to get out of poverty, and starve to death for the next two or more years that it takes?

The forth problem is cost of living.  The Federal government has no business administrating welfare, because it is impossible for them to do it effective at a reasonable cost.  State governments have the resources to determine fair welfare for their residents at a fairly low cost. The Federal government does not have these resources, because they do not operate at a state level and cannot do so efficiently.  Since cost of living varies widely across the U.S., it is necessary that welfare benefits be determined regionally to be fair and effective.  The cost of doing this, for the Federal government, is is extremely high compared to the states.

These are only a few of the problems with the U.S. welfare system, but they are the worst, and they are the ones that are causing our welfare system to fail.  The conservatives are right that our welfare system needs fixed, but their solutions are often very short sighted.  Liberals say that there is nothing wrong with our welfare system, or that it can be fixed merely by increasing its scope; they are wrong.  Each of these problems needs to be dealt with individually.  There is no single fix-all solution to this problem.  And, there is a problem.

Lord Rybec

Patent Entrapment

There are companies in the U.S. that subsist entirely on collecting patents and then waiting for someone to infringe so they can sue them.  Many of these companies obtain most of their patents by buying them from other failing businesses, not by patenting their own new technologies.  In the '90s, businesses that used this practice were called "patent trolls" and were looked down on by real tech businesses like Microsoft.  Now, however, this practice is industry standard for the tech industry.  Businesses that used to decry patent "trolling" as unethical and foul are now the ones that subsist most heavily on it.  There is evidence that Microsoft makes more of its revenue in patent infringement settlements than in sales of its software.

Most people today believe that patents are intended to give inventors complete control of their "intellectual property" and to allow inventors to make as much profit as possible from their inventions.  This is actually blatantly false, but even assuming it were true, there are major ethical problems with patent trolling and even with just selling patents.  Selling a patent eliminates any control inventors have over their inventions.  This violates the idea that patents should give inventors control of their inventions.  Even selling exclusive rights to use patented technology for a limited time is a violation of this principal.

That said, this is not the concern.  According to the U.S. Constitution, patent and copyright are only authorized "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"  As a matter of fact, the term "intellectual property" itself is a misnomer.  The Constitution does not authorize any kind of ownership of inventions, ideas, or any other non-tangible work.  Based on the ultimate legal definition of patents in the U.S., the purpose is not to give control to the inventor, but rather to benefit society by promoting technological and scientific progress.

Patent trolling does not promote science.  It does not benefit society either.  Selling patents or exclusive rights to use patents may promote progress, but only when the buyer is going to immediately use the patent to create new technology that benefits society.  When the buyer is going to sit on the patent waiting for someone else to infringe, it is not promoting any sort of progress, and ultimately it is harming society.  It does this by incurring attorneys fees and adding additional costs to the production of the new technology.  It also does this by causing fear of litigation in smaller technology businesses that cannot afford the expensive patent searches required to make sure they are not infringing on something.  These things actually hinder progress and harm society.

These are not the only ethical issues with patent trolling though.  There are similar practices in the realm of physical property that are illegal, but due to the ethereal nature of ideas, making a valid comparison is hard.  As a result, our legislators do not even bother to try.  The first similar practice is entrapment.  Entrapment occurs when someone places another person in a situation to commit a crime, then encourages them to do so, with the intent to press charges against them.  An example is when undercover police get involved in a protest with the intent to incite a riot, so that they can then arrest the rioters and press charges against them.  The defining factor is the encouragement.  An example of something close to entrapment, but not quite the same is bait cars.  In some cities, police will leave an unlocked car with keys on the seat or in the ignition in a less desirable neighborhood.  They will watch the car until someone attempts to steal it, then they will chase the person down and arrest them.  This is not entrapment because the police are not actively encouraging theft.  If they had sent out an undercover officer to point out the car and tell people to steal it, or if they had left a sign on the dash encouraging theft, then it would be entrapment.

The problem with a valid comparison of bait cars to patent trolling is that physical objects have implied ownership, while ideas have implied non-ownership.  A person taking a bait car knows that they are doing something wrong.  When a physical object is left unattended, it does not imply that it is not owned.  Sometimes, if the owner of the object cannot reasonably be identified, as in lost cash, it is not considered unethical to keep it if a reasonable effort has been made to find the owner, but even then, it is assumed that the object is owned.  Ideas work the other way.  If there is no obvious owner, then ideas are assumed to be unowned.  This is actually why patent law exists.  In the case of ideas, "ownership" is the responsibility of the "owner."  If a person has been granted exclusive rights to the use of an idea (this is what patents grant), they have the responsibility for making it known.  This is opposite from the bait car, where ownership is implied.  As such, it should be treated oppositely for the case of entrapment.

What I am saying is that the patent owner has the responsibility for making ownership of the patent known.  First, the patent owner should make the patent information easy to find.  Patent searches through the Patent Office are very difficult, because there are so many patents to wade through.  Just searching for one patent can take a patent lawyer months, which will accrue far more cost than even most medium sized businesses can afford.  If a patent owner wants to protect their patent, they should make it easy to find.  Companies, like Microsoft, that go to great lengths to obscure and hide their patents should not be allowed to sue over infringement, because they did not make any effort to make ownership known.  Hoarding and obscuring patents with the intent to sue when they are infringed on is approximately equivalent to entrapment by encouraging someone to steal something so that you can arrest them.  It is completely unethical, and inventors should be protected against it.

I also briefly mentioned that hoarding is bad for scientific progress and is harmful to society.  Patents were intended as temporary monopolies granted to inventors so that they would have an incentive for inventing and for developing their inventions.  This extended to selling rights to someone else who would then develop the technology, paying the inventor enough to encourage further invention.  The keys here are encouraging further invention, progressing science, and benefiting society.  When patents are hoarded and not developed, they do not progress science or benefit society.  Sometimes they may encourage the inventor to invent new things, but this practice discourages other inventors from inventing, because the threat of litigation from patent trolls is always looming.  So, ultimately patent hoarding does not progress science (it actually does the opposite, because it prevents others from building on the patented inventions), it does not benefit society and even causes harm, and it discourages inventors from inventing new things.  Patent hoarding does the exact opposite of what patents were originally intended for.  I propose that a good solution for this would be to impose an early expiration on any patent that is not in active development.  I think that one or two years would be a good time frame.  If a patent owner does not actively develop a patented idea for two consecutive years, the patent should expire and permanently enter the public domain.  Active development should be defined as having a significant amount of resources dedicated to development of the idea continuously.  If resources are only given to development intermittently, it should not count, because this could be abused by having a few development teams rotating through unused patents.  Further, active development should require that progress be made.  If a company spends millions of dollars for two years, developing a patent, and has not made significant progress, it should be assumed that the company is either cooking their books in an effort to retain an unused patent, or is not capable of developing the patent within a reasonable time frame.  In this case, the patented idea should be placed in the public domain to allow others to try to use it to progress science and benefit society.  Lastly, the company should be entirely responsible for proving that they are making progress in developing the patent and that they are expending significant resources in its development.  If they cannot do this, then they should loose the patent rights, and it should revert to the public domain, so that others can have the opportunity to progress science and benefit society by developing the idea.

These may seem like extreme ideas.  They definitely violate the false idea that patents are intended to protect the inventor or give inventors control of their work.  These are, however, the ideas that allowed our nation to become one of the most economically strong and powerful nations in the world.  Straying from these ideas has dramatically increased the cost of innovation and has dramatically decreased the incentive to innovate.  This, in turn, has increased the cost of technological goods.  Over time, this has caused harm to our economy.  The United States is no longer the clear economical leader of the world.  In fact, we are beginning to loose out to China, a communist nation that we believed would crash decades ago.  China's economy has improved so much that outsourcing work to China is approaching more expensive than hiring U.S. workers.  This is especially true of engineers.  Even if most of the engineering jobs that have been outsourced return to the U.S. though, we are still wading in a mire of patent war filth, facilitated by laws that promote patent hoarding.  As more and more patents are filed, fewer and fewer new inventions will be viable.  If we cannot get this under control, our engineers will suffocate under the pile of unused patents just waiting to sue them, while China and other countries that do not care about U.S. patents will out play us on every front.  On the other hand, if we alter patent laws to fulfill their original purpose, we could quickly become the most technologically advanced nation on Earth, by a very wide margin.  Our economy could have an unprecedented recovery and then keep improving at the same rate.  We could develop viable, low cost space travel in a very short time.  Really, we could easily reach our former glory, and we could bring the rest of the world up with us.

In case I have not made myself clear, this is a major problem.  This is probably a significant factor in our recent recession, and it is very likely that solving this problem would quickly end the recession, regardless of the other causes.  I am not saying that the other causes should not be fixed, and I am certain that if they are not, they will eventually cause more and worse recessions.  I do think that fixing this problem would fix enough of our current situation to get us out of it.  I am certain that if we do not fix it, it will not take long before a majority of the cost of our technological products will be legal fees (this is already true of many devices), this recession will take a long time to recover, and we will have recurring economic problems until it is fixed.

Lord Rybec