[LINK] Re: OFF TOPIC Re: the rich and corporate parasites

Danny Yee danny@anatomy.usyd.edu.au
Thu, 27 Feb 2003 12:39:18 +1100


Deus Ex Machina wrote:
> if lowering taxes results in an increase in revenue whats the problem? 
 
But lowering taxes can't _necessarily_ result in an increse in revenue,
because when taxes reach zero so does tax revenue.  So there must be
a "maximising" point somewhere, with taxes above zero.  And I think
we're clearly below that point currently rather than above it (look
at the modelling done for the tax cuts that accompanied the GST).

This is all irrelevant, however, because maximising state revenue
isn't anyone's overall goal -- maximising GDP and/or other measures
of overall welfare is the holy grail, and the debate is over how and
which things should be done by the state in order to achieve that.

Getting back on topic, a link from Slashdot on patents:
	
	http://www.reason.com/0303/fe.dc.creation.shtml

        While others simply have assumed, with Romer, that the
        prototype of an intellectual product is nonrivalrous,
        Boldrin and Levine argue that the tiny cost of replicating it
        undermines the conventional model. Production is not subject
        to increasing returns, they argue, and competitive markets
        can work. "Even a minuscule amount of rivalry," they write,
        "can turn standard results upside down."

I haven't read the full paper it describes yet, but it's at
        http://levine.sscnet.ucla.edu/papers/pci23.htm

        We construct a competitive model of innovation and growth
        under constant returns to scale. Previous models of
        growth under constant returns cannot model technological
        innovation. Current models of endogenous innovation rely on
        the interplay between increasing returns and monopolistic
        markets. In fact, established wisdom claims monopoly power
        to be instrumental for innovation and sees the non-rivalrous
        nature of ideas as a natural conduit to increasing returns. The
        results here challenge the positive description of previous
	models, and the normative conclusion that monopoly through
        copyright and patent is socially beneficial.

Danny.