Book prices

Originally Posted by bithub

You've used this argument a couple times now, but there is a massive flaw in it. Take my country (USA), and try to use this argument.

The total tax revenue of the US is 2.6 trillion. The total GDP is around 14.2 trillion. In other words, tax revenue is a small percentage of the country's total GDP. How can tax dollars be used to replace innovation portion of the 14.2 trillion? Just take the pharmaceutical industry alone. If we get rid of patents, large companies have no incentive to invest tons of money developing a drug that can be immediately replaced by generics. So your proposal is to create incentive through tax dollars.That's 1.7 billion for a single drug! Tax dollars simply cannot cover the massive cost of innovation.

Well, the price of developing the drug would be the same right? However, rather than paying for this up-front at the counter, people pay through taxes. There is no difference in the amount of money needed, the difference lies in how the money gets there.

Besides, 2,6 trillion is only an 18% income tax, that will not be sufficient no, such a proposal requires higher tax rates than that.

But since socialists have approximately the same social status as a heroin-addict in the states, this will not happen. I'm just theorizing.

It's probably a mistake to say that would be the only difference though. Paying taxes sucks everywhere, but if you keep taxes high like that, then you have to contend with what economists call brain drain. Some people who can figure this stuff out will want to go to a place where they can earn more of their keep. So at least if we continue to poorly teach math and science to everyone, we can still import sufficient scientists.

I'm just saying, even if we wanted to be more socialist, it would be bad if we just jumped into the pool with everybody else. I don't see how anyone is magically better educated, with a higher standard of living, and a healthier lifestyle just because of socialism. Rich Republican Catholics tend to do better on their SATs than the public school kids.

Originally Posted by whiteflags

Rich Republican Catholics tend to do better on their SATs than the public school kids.

I must be the exception to that rule, or maybe I just got a public education back when it was still worth something. I hear a lot of talk about making schools better, and people throw money at the problem, but I never see class sizes going down or teacher count going up?

7-15 kids in a class is the optimal number, more than that and you are wasting money because you aren't getting the education for the dollar regardless of the fact you can cram more kids in. If the goal of public education were to educate, average class size would be 11 kids, but it isn't. The goal is to make consumers who are smart enough to buy the goods, but not smart enough to design them, because intelligent educated people seem to have a problem with being told what to do and what to buy.

Originally Posted by whiteflags

It's probably a mistake to say that would be the only difference though. Paying taxes sucks everywhere, but if you keep taxes high like that, then you have to contend with what economists call brain drain. Some people who can figure this stuff out will want to go to a place where they can earn more of their keep. So at least if we continue to poorly teach math and science to everyone, we can still import sufficient scientists.

And thus we arrive at the conclusion: Socialism vs. Capitalism?

This ofcourse, is an endless debate. My view is that i simply don't want our money to govern us, i want us to govern our money, but i doubt anything constructive will come from this, so i'll leave this one for now.

I'm just saying, even if we wanted to be more socialist, it would be bad if we just jumped into the pool with everybody else. I don't see how anyone is magically better educated, with a higher standard of living, and a healthier lifestyle just because of socialism. Rich Republican Catholics tend to do better on their SATs than the public school kids.

Socialism can be just as bad, if not worse, than any other political ideology, if poorly implemented. I don't think anyone will argue that point. Socialism does not magically make the world a better place.

I paid over $50 bucks for The C++ Standard Library a few years ago. Lost it in high school (I think). :-/

Can't decide if it's worth buying again (and using more). I'm still lost when it comes to much of the STL.

Originally Posted by bithub

The total tax revenue of the US is 2.6 trillion. The total GDP is around 14.2 trillion. In other words, tax revenue is a small percentage of the country's total GDP. How can tax dollars be used to replace innovation portion of the 14.2 trillion? Just take the pharmaceutical industry alone. If we get rid of patents, large companies have no incentive to invest tons of money developing a drug that can be immediately replaced by generics. So your proposal is to create incentive through tax dollars.

A study by the consulting firm Bain & Company reported that the cost for discovering, developing and launching (which factored in marketing and other business expenses) a new drug (along with the prospective drugs that fail) rose over a five year period to nearly $1.7 billion in 2003.

That's 1.7 billion for a single drug! Tax dollars simply cannot cover the massive cost of innovation.

I am not too sure what the "innovation" refers to here, or how much of that $1.7 billion was spent on advertising, paying consulting firms like Bain & Company, and providing executives with absurd paychecks. It sounds to me like the old adage: If you stuff enought monkeys into a skyscraper full of typewriters, something interesting will come out of it eventually. Certainly, there is plenty of medical technology innovation that goes on outside of the US pharmaceutical industry. I'd also be curious as to how much the new swine flu vaccine cost to develop; I don't think it was $1.7 billion. Even converted to today's dollars, I guarantee things like insulin and the polio vaccine cost nothing close to that. This is a grotesque product of late 20th century corporate capitalism.

Vis. "The Brain Drain": to where, exactly? Also, I somehow do not see Banting and Best or the Curries as people who stood around navel gazing because they weren't going to get a $40 million dollar bonus, or being concerned about the next shareholder meeting. Those kind of "brains" need a drain, the kind found at the bottom of a bowl with handle on it.

Well if you think of it in terms of millions of dollars, and smarmy guys who own stock, you're not going to get the point of the argument.

Let's say you make $50/hour as in a skilled position and you pay 30% of that in taxes. In another country where taxes are lower, you don't need to gross more to make a higher paycheck. So, the idea is that it motivates people to find employment somewhere else if that is possible. Lower taxes are also supposed to keep businesses in your country compared to elsewhere, but that also depends on the availability of labor, knowledge, and other capital.

It's one of the few things I understood about economics, so I thought I would bring it up. Since no one really wants to talk about it I feel like a prick though.

@abachler: I wouldn't say you are the exception. You named the problems I think America has in its education system, but I have always viewed the major difference between ours and other systems in the world to be a matter of discipline. I'm sure if studying were a form of worship, or at least if parents were a little more strict about it nation-wide, much of the problem would be solved.

Originally Posted by whiteflags

Let's say you make $50/hour as in a skilled position and you pay 30% of that in taxes. In another country where taxes are lower, you don't need to gross more to make a higher paycheck. So, the idea is that it motivates people to find employment somewhere else if that is possible. Lower taxes are also supposed to keep businesses in your country compared to elsewhere, but that also depends on the availability of labor, knowledge, and other capital.

Oh I understand the theory and it is an overly simplistic one. First off, that is exactly the reason my dad emmigrated: he is from Denmark, wanted to make money for himself and not pay taxes. He did, he was in fact quite successful. Not, however, as successful as his brother, who does exactly the same thing (they are both mechanical engineers who came to own their own manufacturing plants), but stayed in Denmark, where the taxation rate is twice as high, but he managed to make more money anyway. The idea that you are going to do better somewhere else is always speculation.

Now, getting slightly more hariy and realistic than the theory, there could be some more complex reasons to explain this: eg, that he was a businessman and an immigrant here, whereas his brother was a businessman and a native there. Perhaps life turned out to be more complex than the theory would imply.

Also, while people are of course highly motivated by cold hard cash, there are also "quality of life" issues that cash may not be a complete compensation for. These are harder to quantify, universalize, and agree on upon in the same way as the value of a dollar, but none-the-less it cannot be denied they exist. I am sure there are places you could move where you will pay little or no taxes, and where the cost of living is lower, etc. but just because that is the case does not mean you will automatically pack your bags.

Basically, I think the real significance of this theory is that of a politcal scare tactic. If you are truly worried about having an educated work force, you should work on the educational system, instead of relying on one where most people cannot get much of an education and therefore the natives that do can demand a disproportionate pay scale. There will be no "brain drain" from the United States -- there is simply not enough brain to drain at this point.

You might be able to start a "selfish pig" drain, on the other hand This one could get clogged up fast! Do not mistake nitwits who collect large checks because they made it thru "a good school" with people who are actually intelligent and innovative/creative. I would love to see the G8 or whoever open their borders completely and start a contest to see who can attract the most self-interested, least charitable population they can: slash all public spending and have the government pay corporate bonuses as an added incentive. Now that's nation building!

Originally Posted by whiteflags

Well if you think of it in terms of millions of dollars, and smarmy guys who own stock, you're not going to get the point of the argument.

What I hate is when retailers of anti-piracy stuff say things like -

Originally Posted by KEYLOK

Two weeks ago -
Remember, software piracy costs companies such as yours $48 billion dollars annually in lost license revenue.

Today -
Over $53 billion dollars per year is lost in revenue by companies such as yours due to illegal software downloads.

Wow thats 5% increase per week. At this rate piracy will exceed the entire world GDP by the end of next year.

My reply was -

Originally Posted by abachler

OK, which is it, because $5 billion is a big change. I haven't seen a fluctuation like that since the time I washed a pound of prunes down with a gallon of green beer.

I agree. It's just ridiculous to throw (up) those numbers without any sort of trustworthy source and when it's pretty much common knowledge there really is no clear way to measure the losses. Worse still when then the numbers don't even agree with each other. Makes the whole argument pathetic and impossible to be taken seriously.

As for public education system, dunno. It's not a sea of roses over here in Europe either. IMO, the problem is not on the schools themselves or what system is in place. But instead of a generation of parents who can no longer closely follow their kids education, and a generation of kids whose references have been moved away from adventure books and marbles to adventure games and cellphones. Cultural changes that may have an effect in general education levels we are yet to witness.

Can a society fall victim of its own success?

PS: This year in Portugal the government distributed some hundreds of thousands of modern laptops to students across the country completely free of charge with the exception of a 5 to 15 Euro monthly internet access payment on a 2 year contract. Essentially, ~90% of the school population on this country today has a laptop. Can you guess the use our students gave to it in a country where there is hardly any educational online content? And then people ask me to like Socialism.

Originally Posted by Mario F.

Essentially, ~90% of the school population on this country today has a laptop. Can you guess the use our students gave to it in a country where there is hardly any educational online content? And then people ask me to like Socialism.

They should have pre-installed Visual Studio and locked the system so no other software could be installed. Make the kids figure out how to write their own software.

And let me guess, they used it to download 'movies'

Originally Posted by abachler

And let me guess, they used it to download 'movies'

Wouldn't go that far. But would stay in the general vicinity. Credible internet piracy statistics by country would surely show an interesting steep increase in 2009 for a country like Portugal. And all sponsored by the government.

Originally Posted by Mario F.

Wouldn't go that far. But would stay in the general vicinity. Credible internet piracy statistics by country would surely show an interesting steep increase in 2009 for a country like Portugal. And all sponsored by the government.

Yeah well, you can't not let them have computers just to keep them from downloading music. What the govt should have done is secretly ttrack their use, then give the ones that pirated an F in social studies, whilgiving those that didn't an A, and maybe some grades in between for the ones that were very minor offenders. Like only doing it once gets maybe gets a B.

But of course then we are talking socialism of the 'national' type.

And ultimately, it did get them to learn to use the computers, so it was a success even if what motivated them was not the greatest.

I'd be mostly suspicious of this part:

Originally Posted by Mario F.

This year in Portugal the government distributed some hundreds of thousands of modern laptops to students across the country completely free of charge with the exception of a 5 to 15 Euro monthly internet access payment on a 2 year contract.

I assume this is with a private contractor*, since the Portuguese gov is probably not in the ISP business. So it looks like the EXACT OPPOSITE of socialism to me: the government is just subsidising more private ventures by giving the computers to kids so they can pay for service.

* just googled: yep. Also note that Microsoft and Intel "offered a discount" but still profited from this kind of "socialism" And the normal fee is actually "a one-year mobile broadband contract for €17 a month" Wow, some private enterprise totally cleaned up on this one! No doubt a double digit increase in revenue (if not literally double).

No.

All communications companies were partners (Vodafone, TMN, and Optimus). Five different brands were partners (Toshiba, 2 Portuguese assemblers, HP and Asus). Intel and AMD were partners. And there were also Microsoft and Linux offerings. The one exception indeed being the custom-designed Magalhaes (Magellan) laptop for the basic school students. Indeed it warranted a specific design for small kids and needed to be the same for everyone. And Intel presented the best project.

That's definitely something that didn't bother me or anyone else. For a socialist, you worry too much about the rich.