If you do not have compulsory patent licensing with court-set fees, then why should any one patent troll--or even the holder of a rare real patent--stop short of demanding the company's entire profit?
In practice, there are often substitutes for whatever it is that the patent owner has a patent on - if someone has a patent on making wheels out of metal and won't let you license that patent at a reasonable price, you can still make wheels out of wood or stone instead even if they're not nearly as good. So there is a limit to the amount of revenue that a patent holder can demand.
Additionally, if the patent holder and the licensee don't agree on a price, neither of them gets anything, so they each have an incentive to make an offer the other will accept. The game theory of bargaining over a fixed surplus applies here.
There's one more scenario that often occurs in real life: often both sides of a potential patent fight are licensing different patents to each other. If Alpha Corp demands exorbitant licensing fees from Beta Corp, Beta Corp can threaten Alpha Corp with similar licensing fees that would cancel out any increased revenue Alpha Corp could extort from Beta Corp. As a result, neither side ever actually wins a patent fight, so they don't start.
Patent trolls are particularly likely to become predatory because, since they don't manufacture anything, they don't actually use anyone else's patents and are therefore immune to this kind of retaliation. In the United States, it seems as though one of the more common ways to avoid paying a predatory patent troll is to assert that you are not actually infringing upon a vaild patent (because what you are doing is slightly different from what was actually patented or because the patent should never have been granted in the first place) and force the patent troll to attempt to enforce its patent in court.
I have an objection to the section titled "supply and demand are always equal". In my Econ 101 textbook, "quantity supplied" and "quantity demanded" are always equal; the terms "supply" and "demand" only referred to supply curves and demand curves. Maybe this is a nitpick, but I think it's an important one. I'd like to propose some rather significant edits to that section and to the following one about subsidies, but is this the kind of page where it's okay for changes to come from anyone, or is it important that it stay "by Eliezer Yudkowsky"?
And yet you will observe that in all public political discourse that makes it onto TV, all the sober talking heads in business suits are talking as if by subsidizing people with $120 checks we are causing their bank accounts to go up by $120, rather than talking about how many new universities or doctors or houses the $120 checks will cause to exist.
On the bright side, the discourse might be getting a little bit better in places. Some years ago, a California politician proposed helping renters by making rent tax deductible. The proposal was immediately mocked as being a giveaway to landlords.
It's not agreed among economists which countries today might be suffering from too little aggregate demand, and working under capacity. The economists in my preferred school suspect that it is presently happening inside the European Union due to the European Central Bank being run by lunatics.
This may have been true in 2017, but post-COVID inflation suggests that it's not true anymore.
Are there really people in the world who can do nothing that anybody else with money wants?
Yes. These people are often called "disabled", "retired", or "children". For example, a person with severe Alzheimer's disease or schizophrenia is unlikely to be able to produce much of anything at all. Most people, if they live long enough, will eventually suffer enough damage from aging that they semi-voluntarily remove themselves from the labor force. Similarly, your average two-year-old probably isn't going to be productively employable either, regardless of the wage, because it would cost more to supervise them than they would be able to produce. However, most people who are of prime working age and unemployed are not, in fact, disabled to the point where even in an ideal world there would be nobody that would want to pay them to do something.
If Wisconsin is trading cheese with Ohio, and then Michigan becomes much better at producing cheese, this can harm the economy of Wisconsin. It should not be possible for Wisconsin to be harmed by trading with Michigan unless something weird is going on.
Was "Wisconsin" supposed to be "Ohio" in the second sentence? Or are you contrasting between Wisconsin trading with Ohio and Wisconsin trading with Michigan?
In practice, there are often substitutes for whatever it is that the patent owner has a patent on - if someone has a patent on making wheels out of metal and won't let you license that patent at a reasonable price, you can still make wheels out of wood or stone instead even if they're not nearly as good. So there is a limit to the amount of revenue that a patent holder can demand.
Additionally, if the patent holder and the licensee don't agree on a price, neither of them gets anything, so they each have an incentive to make an offer the other will accept. The game theory of bargaining over a fixed surplus applies here.
There's one more scenario that often occurs in real life: often both sides of a potential patent fight are licensing different patents to each other. If Alpha Corp demands exorbitant licensing fees from Beta Corp, Beta Corp can threaten Alpha Corp with similar licensing fees that would cancel out any increased revenue Alpha Corp could extort from Beta Corp. As a result, neither side ever actually wins a patent fight, so they don't start.
Patent trolls are particularly likely to become predatory because, since they don't manufacture anything, they don't actually use anyone else's patents and are therefore immune to this kind of retaliation. In the United States, it seems as though one of the more common ways to avoid paying a predatory patent troll is to assert that you are not actually infringing upon a vaild patent (because what you are doing is slightly different from what was actually patented or because the patent should never have been granted in the first place) and force the patent troll to attempt to enforce its patent in court.
I have an objection to the section titled "supply and demand are always equal". In my Econ 101 textbook, "quantity supplied" and "quantity demanded" are always equal; the terms "supply" and "demand" only referred to supply curves and demand curves. Maybe this is a nitpick, but I think it's an important one. I'd like to propose some rather significant edits to that section and to the following one about subsidies, but is this the kind of page where it's okay for changes to come from anyone, or is it important that it stay "by Eliezer Yudkowsky"?
On the bright side, the discourse might be getting a little bit better in places. Some years ago, a California politician proposed helping renters by making rent tax deductible. The proposal was immediately mocked as being a giveaway to landlords.
This may have been true in 2017, but post-COVID inflation suggests that it's not true anymore.
Yes. These people are often called "disabled", "retired", or "children". For example, a person with severe Alzheimer's disease or schizophrenia is unlikely to be able to produce much of anything at all. Most people, if they live long enough, will eventually suffer enough damage from aging that they semi-voluntarily remove themselves from the labor force. Similarly, your average two-year-old probably isn't going to be productively employable either, regardless of the wage, because it would cost more to supervise them than they would be able to produce. However, most people who are of prime working age and unemployed are not, in fact, disabled to the point where even in an ideal world there would be nobody that would want to pay them to do something.
Was "Wisconsin" supposed to be "Ohio" in the second sentence? Or are you contrasting between Wisconsin trading with Ohio and Wisconsin trading with Michigan?
Nm, the longer explanation later in the page answered my question.