Saturday Salon – an open thread


Here’s an open thread for all those ideas, links and arguments that don’t fit anywhere else.

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Paul Bamford
Paul Bamford
10 years ago

Frist!

Gavin R. Putland
10 years ago

No takers? OK: Nothing came of my submission to “Australia – alone and friendless“, dated May 24, 2010. So here it is — warts and all.

A replacement for RSPT, PRRT and company tax

If we in Australia, alone and friendless, are to compete in the global economy, we must get rid of taxes that feed into prices of exports and import replacements. If we are “alone and friendless” also in the military sense, it is all the more important that the tax system, on which our defence forces depend, does not unnecessarily damage the productive sector of the economy, on which the tax system depends!

PRINCIPLES

In microeconomics, rent is a cost of doing business, and profit is the surplus left over after all costs, including rent, have been paid.

In macroeconomics, it’s the other way around. Normal profit — comprising the risk-free return (the price of time-preference), plus insurance (the price of [quantifiable] risk), plus economic profit (the price of [unquantifiable] uncertainty) — is a cost of production, because if the capital employed in an industry does not yield its normal profit, it will not be replaced and new investment will go elsewhere. Competition tends to reduce profit to the normal level. Consequently, sustained super-normal profits indicate some sort of protection from competition. The return to that protection is economic rent. Thus, in macroeconomics, economic rent is the surplus left over after all costs of production, including normal profit, have been paid.

As normal profit is a cost of production, any tax on normal profit is also a cost of production, and will either be recovered through prices of exports and import replacements, or shift production to some other jurisdiction in which costs of production are lower. Thus Australia’s corporate income tax stands condemned.

In contrast, a tax on economic rent, as long as it does not take more than the rent, does not increase costs of production, but merely reduces returns to privilege. Thus it does not feed into prices or damage the productive sector of the economy.

The resource super profits tax (RSPT), like the existing petroleum resource rent tax (PRRT), is a rough approximation to a tax on the economic rent due to the limited supply of minerals.

Some critics of the RSPT focus on the roughness of the approximation — as if that were a reason to prefer existing taxes which don’t even try to target economic rent, but which blatantly punish productive effort. Other critics allege that minerals belong to the States rather than Commonwealth — conveniently forgetting that any advantages conferred on the States by their respective mineral resources will be cancelled by horizontal fiscal equalization (HFE) in the distribution of Federal grants. Still others complain that the tax is retrospective because it applies to future profits of existing projects, and retrospectivity repels investment by creating an apprehension of sovereign risk. That’s funny; the GST likewise applied to existing enterprises, yet I don’t recall the big end of town bleating about retrospectivity or sovereign risk in the GST debate. Or does the retrospectivity of the RSPT consist in the non-deductibility of past “losses” relative to the allowance for corporate capital — the premise being that a tax is retrospective if it doesn’t allow retrospective negative gearing?!

More constructive critics ask: If taxing economic rent is such a good idea, why shouldn’t we do the same to other industries that benefit from government-created licences and privileges? We should! And why shouldn’t we tax economic rent at a still higher rate, in order to get rid of the tax on normal profit? We should! In so doing, we would reduce the incentive for rent-seeking, of which Paul Kelly writes: “governments face a constant war against almost unlimited financial demands on the state by citizens and lobby groups that morph into vote-buying election techniques that, through time, constitute a sovereign risk.”

(Unfortunately the fruits of past rent-seeking have been converted into massive PR budgets that can be turned against any government that threatens to end the rorts. The remedy is electoral reform that stops money from deciding election results.)

If we tax economic rent at a still higher rate, we must be all the more careful to apply that rate only to economic rent and not to the necessary returns to labour and capital. How do we make that distinction? In the case of listed companies, I answer: Let the market decide!

MARKET CAPITALIZATION AS A TAX BASE

If a listed company receives economic rent, or information promising economic rent, its share price will rise. I therefore suggest that company tax, PRRT and the proposed RSPT be replaced by a holding tax of so many percent per year on the above-par component of the share price, payable by the company.

Let us try this suggestion against Adam Smith’s canons of taxation (Wealth of Nations, Bk.V, Ch.II, Pt.2):

“I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Check. A company’s share price reflects its success, hence its capacity to pay. If the phrase “under the protection of the state” refers to benefits of government policy, it is especially applicable to that part of the share price which reflects the return to privilege.

“II. The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person.”

Check. As the price of shares in each tranche is known from moment to moment, and as the issue price (“par”) of each tranche is a matter of record, a tax on the above-par component of the share price is certain provided that one specifies the tax rate, the times when the tax base is measured, and the times when the tax is paid.

“III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it.”

Check. The timing can hardly be less convenient than that of any other tax presently remitted by companies, while the manner of payment would be far more convenient, as the entire process could be automated.

“IV. Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state.”

Check. By comparison with the taxes that it would replace, a tax on the above-par component of the share price would fall more heavily on economic rent and therefore have less deterrent effect on productive activities. Newly floated companies would not pay tax until their share prices rose above par. Due to automation, the tax would involve negligible collection costs and compliance costs. A multinational could be required to float its Australian operation separately for the purpose of valuation, and a “par” price for that float could be “deemed” for transitional purposes. The resulting compliance burden would be instead of, not in addition to, the present burden due to corporate income tax.

The proposed tax would act as an auto-stabilizer on share prices, because the market would respond to the tax implications of the share price.

Unlisted companies and sole traders would continue to pay the old income tax, and to incur the associated compliance costs in lieu of the compliance costs of public listing. If that’s an incentive to list, merge, or work for someone else, so be it. If a newly listed company, being exempt from tax on the “par” value of its shares, feeds higher taxable dividends to its shareholders and higher taxable capital gains to its former owners, so be it.

The concentration of the tax burden on economic rent rather than normal profit may be regarded as a substitute for dividend imputation — if personal income tax is retained. But that’s a big “if”.

A REPLACEMENT FOR PAYE INCOME TAX

Personal income tax is paid on the labour embodied in local products, including exports, but not on the labour embodied in imported products up to the point of importation. In contrast, a consumption tax is payable on imports but not on exports. Hence replacing personal income tax with a consumption tax makes a country more competitive. Conventional “wisdom” holds that such a step would be regressive, and that it would devalue past savings by raising prices. That is true if gross wages and salaries are held constant while the tax system is changed, but not if net wages and salaries are held constant. In the latter case, the abolition of PAYE income tax is a saving to employers, so that if the revenue is replaced by a consumption tax remitted by the same employers, there is no need for them to raise prices. (The full story is a bit more complicated but leads to a similar conclusion.)

Let me be the first to admit that because a consumption tax suppresses domestic demand, it’s not as good as a tax on economic rent. But it’s better than an income tax, which suppresses domestic supply! Speaking of which…

A REPLACEMENT FOR PAYROLL TAX

Due to the higgling of the market, the incidence of payroll tax is similar to that of personal income tax (albeit without the redistribution of income within the employee class), so that it would be similarly beneficial to replace payroll tax with a consumption tax. An earlier article explains how to do this while restoring the fiscal independence of the States. Again there would be negligible effect on prices, because both payroll taxes and consumption taxes are remitted by employers.

And don’t forget Canberra’s great big payroll tax disguised as a superannuation contribution. That’s a good candidate for replacement by a tax on economic rent, as explained in another article (which assumes that the tax on economic rent would be on-budget, although it could easily be taken off-budget in imitation of the super contribution).

ISSUES RAISED BY OTHERS

Concerning the “Islamic threat”: The financial moral hazards that led to the GFC do not exist under an Islamic financial system, because lenders are not allowed to share in the profits or rents of a venture without also sharing in the risks and losses. Oh, yes, opposition to usury is as much a part of Jewish and Christian tradition as of Islamic tradition. The difference is that Muslims still take it seriously while Jews and Christians don’t! Speaking of whom…

The speculative moral hazards that led to the GFC do not exist under a Jewish system of land tenure, because you can only buy a 49-year lease, and the approaching end of the lease prevents large “capital gains” on the lease-transfer price. Oh, yes, Leviticus 25:23 is as much a part of Christian and Islamic tradition as of Jewish tradition. The difference is that Jews still take it seriously while Christians and Muslims don’t!

Those are the unstated reasons why we in the “Christian” West are encouraged to fear Muslims, and why a renewed outbreak of “Christian” Judeophobia is closer than you think. I’m a Christian, in case you’re wondering; but facts are facts.

Finally, why don’t we add more value to our minerals before exporting them? We would if we didn’t tax the wages, salaries, payrolls and normal profits of the value-adders!

CONCLUSION

Nevertheless, our “elected representatives” won’t be falling over themselves to implement any of the above, because politics, as Ambrose Bierce said, is “a strife of interests masquerading as a contest of principles”, in which any genuine matter of principle, including national security, counts for nothing.

David Wilkie
David Wilkie
10 years ago

Let us renew our comittment to righteousness.

Though the lot of you might back down and start again over.

So lets start with Venus.

Venus

Venus

We never knew you.

David Wilkie
David Wilkie
10 years ago

Another way to start over is to admit that the Norwegian is a conservative:

.
.
10 years ago

Gav – a VAT, a LVT and a royalties tax replacing all other taxes. Why people are so enamored with out current shitty system is beyond reason.

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

Don, it’s funny to use the word ‘conservative’ in that context. Wouldn’t it be better to say something like ‘identifiably of the right’?

NG

Sancho
Sancho
10 years ago

“Conservative” and “right-wing” tend to be used interchangeably in American discourse, so it’s becoming more common here, too.

It would be nice to keep the distinction.

Pedro
Pedro
10 years ago

Arrgh, that follow up tick has done a lazarus.

I should think a modern conservative is now going through a rapid evolution as the baby boomers become the new old fogies.

Pedro
Pedro
10 years ago

Recalling the various comments about the US spending chart, it might be worth considering these:

http://www.cbo.gov/doc.cfm?index=12376

It’s the future, stupid!

observa
observa
10 years ago

Well Gavin Putland we’re pretty much on the same wavelength re the taxation of capital and labour but I’d simply point out that reliance on CO2E and resource taxing generally solves your economic rent problem and how to tax same. Go back to unfenced, hunter gatherers and there was negligible economic rent to tax nor the need for it. Fast forward to a well fenced, modern, industrialised complex and the picture changes dramatically, yet the constitution of our marketplace, largely set by the nature and impact of taxation has not kept up with that, particularly with the slow awakening of the Spaceship Earth paradigm. If slow to awaken, it certainly came on with a rush with the AGW doomsday scenario and the complete lack of healthy skepticism over a ‘new kid on the block’ theory. Far too many were prepared to accept ‘the science is settled’ meme far too readily and are suffering the fallout now with some serious scientific challenges. Lots of egg on lots of faces and the Al Gores of this world are not happy chappies by all accounts. If their science wasn’t settled their policy prescriptions (largely more tax and control) were most unsettling.

Against that background and with the real Spaceship Earth paradigm in mind, it makes great sense not to penalise capital and labour in any way from pursuing a better environmental future, but only raise the private cost of each individual turning ‘our’ natural environment to their personal wants. ie to better reflect the truer social cost. Simply put that means resource use(rent?)taxing in general, to the exclusion of all other outmoded forms of taxation. When you turn your attention to that, you can clearly see that the fencing off and private utilisation of land, whilst ameliorating the problem of the tragedy of the common, can also produce the tragedy of the privates in total. As you say there should be some form of economic rent tithing on land use as a resource, unless of course it is kept in natural trust for us all, now and for future generations. Indeed if such economic rent taxing can actively protect and push back against turning such natural environment to immediate private or collective wants, then that is a critical and most desirable outcome of any tax reform.

That was always the problem I had with the warmists and their blind addiction to policies with such awful externalities, for so little atmospheric outcomes post Copenhagen. AGW has blinded so many to the attainable and obvious all about them. Perhaps the unsettling science coming thick and fast now will make them take stock of that and concentrate more on real outcomes. I’m an eternal optimist that there is a third way to all this providing the left/green quants can accept price and markets work best and the other side accepts concern for the environment is here to stay. It’s the specific constitution of our marketplace, via the considered design and impact of taxation that holds the key to that essential compromise.

haiku
haiku
10 years ago

Best to give the above from Observa a quick flick through Google Translator via Hungarian, Danish and Welsh, then back to English. Readability has improved, albeit from a low base:

Well Gavin Rutland is essentially the same frequencies in the capital and labor taxes, but we will identify exactly the tax-and resource-based CO2e usually solve the problem and how to tax the land rent the same kind. Go back unfenced, hunter gatherers, and the rent was not trivial, is a necessity. Fast forward to is not a good closure, modern, industrial centers and the picture changes dramatically, but the structure of our market is largely determined by the nature and impact of the tax has not kept pace, especially in the awakening slow pattern of spaceship earth. When you wake up, so of course came the rush of the AGW doomsday scenario, and the complete lack of healthy suspicion “new boy on the block” theory. Too many are willing to accept “the science is settled” meme is too easy, and now suffers from serious scientific challenges of precipitation. There is a lot of eggs, face many of the Al Gores of this world are happy to co Nappies accounts. If science is not settled by the political rules (mainly more taxes and control) the most unsettling.

In this context, the spacecraft and Earth real pattern in mind, it makes sense not to penalize, capital and labor in any way, a better environmental future, but only your own costs all round , “our” natural environment, their personal choices. there, to better reflect the true costs to society. In short, it means that resources (rent?) Ordinary taxation, the exclusion of all other forms of taxation obsolete. But if the point you can clearly see that the fence and out of private land use, while mitigating the tragedy of a common problem that can also produce a tragedy of the private. As they say, be a form of economic rents tenth of the land as a resource unless it is clearly seen in the natural confidence in all of us, present and future generations. Indeed, if the taxation of ground rent and actively protect against shunting occurs as the natural environment, individually or collectively for direct, this is critical and the most pleasing result of tax reform.

It was always a problem warmists dependence on such a blind and terrible policy externalities, the results in as little air in Copenhagen. AGW has blinded so many available and obvious to every one of them. Perhaps science is disturbing thick and fast, just make them weigh what is more emphasis on real outcomes. I am an eternal optimist, the third gives way to the left Quant / green can accept the price and the best-functioning markets and on the other side cared about the environment to live here. The specific composition of the market by designing and examined the impact of taxation, the key to compromise the key.

john walker
john walker
10 years ago

This link below reveals an extreme example of how 60s, 70s and 80s academic neo-Marxism (and fellow theoertical travellers) has created a lot of very unpleasant mind-sets in the academic sector. I would be very interested to hear what Troppos think.

http://www.theregister.co.uk/2011/02/17/orphan_works_revives_noble_savage/

Paul Bamford
Paul Bamford
10 years ago

An extreme and, dare I suggest it, a very isolated example. No great threat to intellectual property rights. Here is a genuinely troubling development in intellectual property law:

In a closely watched case, a federal appeals court ruled on Friday that genes can be patented, overturning a lower court decision that had shocked the biotechnology industry.

The Court of Appeals for the Federal Circuit, which specializes in patent cases, said that Myriad Genetics was entitled to patents on two human genes used to predict if women have an increased risk of getting breast and ovarian cancer.

The court ruled that DNA isolated from the body was eligible for patents because it was “markedly different” in its chemical structure from DNA that exists inside the chromosomes in the body. As a result, the isolated DNA is not simply a product of nature, which would not be eligible for a patent.

Fortunately:

The case may eventually reach the Supreme Court.

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

Yes, well we all know what a bastion of reason and dedication to the public interest rests on the bench of the US Supreme Court.

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

John,

The stuff you link to doesn’t seem Marxist at all. Thought it’s another pathology which is rampant Rousseauianism. One can sense the Noble savages living it up in their state of nature.

So I am as off-put by the language in which an exception for orphan works is argued – as you are. But releasing orphan works from the vice like grip of our dysfunctional copyright regime is the simplest commonsense.

And IMO the whole article you cite has a poisonous PC baiting tone which is every bit as odious as its PC targets.

Patrick
Patrick
10 years ago

Nick, ? What is the source of your resentment towards the US SC???

Paul Bamford
Paul Bamford
10 years ago

Nick @ 15 –

Good point – but at least it provides a small window of opportunity through which sense and reason might fly in and save the day.

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

Hi Patrick, I’m not well versed on it, but since at least Roosevelt (and he may well have had good reasons for it) the place has been much more a creature of politics and ideology than the high courts I’m familiar with – or was as a law student – in which I’d certainly include Australia and the UK. The way the Republicans appoint justices seems to be explicitly based on the ideological predispositions of the candidates and the content of past judgements – for instance on abortion. To respond in advance to what you might reply, my impression is that the Democrat appointments are more cognisant of merit. But these are inexpert impressions and you no doubt know the detail much better than me.

john walker
john walker
10 years ago

Nicholas

Rousseauianism is the father of Marxism , ‘we are born innocent , society is to blame” is the basis of all these things.

‘orphan’ works can contain just about anything that suits . The category is a not a rational clade category.

As for the article ,sure its ‘colored‘.

After more than a decade of fighting off ‘academic’ advice to Governments that I as a visual artist was too much of a helpless naive victim of the wicked commercial sector to be trusted with managing my own commercial rights. The idea of parts of the sector having quite conscious malice and intention to take my rights from me is a given

john walker
john walker
10 years ago

ps the subscription problem is back

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

But if you’re exploiting the rights to your work, they’re not orphan.

john walker
john walker
10 years ago

Slight Typo: should have read;
” The idea of parts of the academic sector having quite conscious malice”

john walker
john walker
10 years ago

Nicolas
That is not the case the test ‘exploiting the rights to your work’ is a violation of the Bern convention and the Stockholm convention contained within it.
Copyright is an individual right of control of usage ; the right to exploit or not exploit. The right to refuse to do business with people who do not inspire trust is fundamental, to the market system.

And any way much of the orphan stuff is about not having to check at all. Particularly if the rightholder is a small ‘Indie’ or sole trader.

From New York law schools
D is for Digitize Symposium
Bernard Lang is a scientist and IT bloke and very good on classification clade issues , please read.
Orphan Works and the Google Book Search Settlement: An International Perspective
http://www.nyls.edu/user_files/1/3/4/17/49/1080/55-1%20Final%20Lang%2011.30.10.pdf

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

John, I’m afraid I don’t have time to chase things up. I don’t accept your absolutism. You may think it’s a basic right – and I’ll certainly accept your right to think that. I don’t think you have absolute monopoly over your work. There are a thousand questions of fair use, when the right time for your rights to expire and the extent to which you’ve asserted them.

If you want to assert a temporary monopoly over your work, it may be far from the best possible situation (in terms of total social benefit if we’re thinking of your output as an economic output) but it’s fine with me. But the fact is that if we didn’t copy each other’s ideas we wouldn’t have made it far from the trees.

The very fact that ideas are non-rival means that the best possible arrangement for ideas should involve some hybrid between exclusivity (where necessary to encourage production) and open access (to optimise use), and that hybrid won’t be reached according to slogans invoking absolute entitlements and human rights.

There may well be a good reason to allow artists to have a monopoly in their work – but the devil is in the detail. For how long sd they have it, how widely sd we define their rights – to the physical object? to the image? to the ideas? etc etc.

I remain bemused by your concern with orphan works. By definition your works are not orphan. So you’re protected. But some great grand kid of May Gibbs (or someone more obscure) may find a way of making a few pennies from suing someone who’s started using her images on the net, when no-one cared for ages. Or more likely a rent seeking collecting society.

If you want to get in the way of people rescuing orphan works by imposing all sorts of bureaucracy and rent seeking on wonderful initiatives like the Google book project, then I strongly disagree.

I had a quick look at the document you linked to and like so much of the same kind of literature it takes place in a kind of legal echo-chamber. From my point of view – I could say an economic point of view, but it’s basic commonsense – the purpose of IP is to encourage the production of IP, and granting a monopoly in it can encourage its production in some circumstances. But it can’t do that, commonsensically enough by providing windfalls to those people who manage to lay claim on some IP that has been long forgotten by the producer but which some user has decided to try to make some use of. Orphan works should default to the public domain in the same kind of way that property left unclaimed against adverse possession reverts to the possessor.

Indeed, because it is so intensely practical – ie less abstract – property law often provides better, more flexible and pragmatic treatment of real property than is provided for in IP. You have a right to your own land, but that right isn’t absolute and doesn’t prevail over the social interests expressed in doctrines such as adverse possession, easements and compulsory resumption.

Patrick
Patrick
10 years ago

Nick@19, that’s a fair cop although the Mason court here had a real crack, and the UK is a lot more ‘activist’ than anything in Australia. That said I think the current court is probably the most ‘Australian’ as any we have seen in a while, right down to the deference to the executive balanced primarily (almost only) by strict observance of Constitutional restrictions.

There won’t be any more Roe v Wades for the foreseeable future, which is certainly a good thing from the perspective of judicial propriety and separation of powers.

Maybe that cheers you up!

observa
observa
10 years ago

Ok so I’m a bit weary back at kindy dealing with Vol1 and 2 of the BCA with additional State appendices that references the Timber Framing Code among another library full of Aust Standards to beat me over the head with in Court should the unfortunate happen. To give you an example a recent award of $140k went to an 11 yr old girl who walked thru a 1970 installed domestic door that had 3mm float glass in it, typical of the day and it nearly sliced her leg off. No excuses said the judge, it is the AS of today that is particularly relevant here and cop it sweet owner, landlord or whatever. Now where were we? Oh yes our much simpler tax system compliments of the same KISS principle mindset.

Distilling out economic rent in order to tax same? Sounds fine in theory a bit like cap and trade with carbon cops everywhere. Start with the 1000, nay 500 ‘big pollooders’ and work your way down to that ultimate nirvana espoused by one UK enviro minister who dreamt of us all with personal carbon credit cards. The stuff of left green quant wet dreams no doubt, but alas all those dumb slobs out there.

Now think of a simple example. Scratch farmer Bib in a mud hut in remote Africa and unemployed landscaper Bub in Struggletown Adelaide. They both reckon if they had a Bobcat and truck life would be easy so its Graman Bank, Ausaid or NEIS to the rescue with brand new ones, training in use, full tanks of diesel and a $1000 each for a refill or two. Just hang out their shingles and go for it. Now which one will most likely earn that economic rent so easily and why? I put it to you that economic rent is a product of lots more economic rent floating about the ether to facilitate individual rent availability here.

Simply put you can have the same expertise, the same capital equipment and the necessary fossil fuel catalyst to beat pick, shovel and barrow hands down, but not for long with our mate Bib. That extreme demonstrates the obvious interdependency of economic rent and the impossibility of distilling them out. That was the obvious obsession of the warmists with fossil fuels. To so many the root of all evil and why they were so amenable to grabbing onto dodgy dendro hockey sticks. Just another form of the usual power grab dressed up as higher moral concern for Gaia when it is overall resource use that needs careful consideration. Big on their proxies I suppose.

observa
observa
10 years ago

You do get some mixed blessings in the private sector-

“Centrelink must pay compensation to a man who smashed his hand through a glass doorafter he was told he had to wait in anunemployment office queue. The District Court has ruled that the CES, now known as Centrelink, should have foreseen that it would have angry and frustrated clients and therefore should have used strengthened safety glass in its front doors. The plaintiff was awarded more than $5000 compensation for a severe gash to his forearm after Judge Peter Nisbet ruled the Commonwealth had failed in its duty of care. Mr O’Callaghan would have received more than $10,500 compensation for pain, suffering and medical expenses if Judge Nisbet had not found that he was 50 per cent to blame for his injuries.”

Don’t forget to all rush out tomorrow and get your homes and renters up to scratch with- ‘Selection and Installation of Glass in Buildings'(AS1288) now won’t you…

john walker
john walker
10 years ago

“By definition your works are not orphan”
Not necessarily so. Definition ofdefinition is what this game is about: ‘it’ is definitely not a given. Under the various varieties of ‘solutions’ to the ‘orphan’ works ‘crisis’ just about anything and anyone could be an orphan.

Regarding the Google books settlement, Richard Epstein is widely regarded in America as an “Uber-distinguished legal scholar” His words on the settlement were: “Any mortal who reads the Google settlement, as I have, will be defeated by its obscurity and complexity.”
The settlement was rejected by Mr Chin because No representative group of existing authors can include authors who do not yet exist and thus the far reaching future restrictions of rights of the proposal were a fatal flaw.
The proposal was a recursive self referential paradox – it went round in circles for years.

The Google books settlement proposal was for the imposition of compulsory collective management on millions of right-holders all round the world and for the complete inversion of wide areas of common law understandings of individual economic rights. It was also for the payment of a lot of rent to a unrepresentative group of authors in order to represent the class of authors, to eventually redistribute to who ever was deemed suitably qualified.

We have had direct experience of a artificial ‘representative’ group of academics trying to claim a monopoly right to represent/manage us , it took 6 years of hard fighting.

The description of Copyright I gave is (roughly) borrowed from Shane Simpsons report to the federal Government.

Ps We do not have “fair use” in Australia. The correct term is ‘fair dealing’.

john walker
john walker
10 years ago

PS you used the word ” monopoly ” to describe copyright.

“the basic right of copyright itself, that is, the exclusive right of authors (or their assigns, i.e. publishers) to reproduce *their own works*. But to describe this as a ‘monopoly’ or ‘privilege’ is an abuse of language….” ” It is a right granted to absolutely everyone, and a right granted to everyone is not a privilege.”

john walker
john walker
10 years ago

In England printing was a monopoly of the Printers Guild , in 1695 this monopoly ended and there was a brief period of free for all mess, until the Queen Anne act of 1709 introduced a right that was available (theoretically at least)to any author .

300 years later virtually everybody, in the developed world, owns some bit of copyright, copyright is so pervasive and so complexly woven into society and law that projects to radically ‘reform’ copyright rights are projects involving radical questions of power. Enough said ?

observa
observa
10 years ago

The rise of the environmental psyche is a big topic with the left/right thread running right thru it muddying the waters but underlying truth will eventually mug both sides with reality or simply more evolving and settled science. Big topics mean it’s easy to wander and you know how it is with the internet at your fingertips but I’ll sketch my big picture, underlying ‘truth’ for you.

Pre 1969 the world’s a big place with Everests to conquer, etc and then one small step for mankind and we share the view of Spaceship Earth out that porthole and with ongoing satellite mapping the slow drip feed of Gaia(I’ll use that for all encompassing brevity)begins in earnest. We get the Club of Rome, Erlichs, etc in the 70s and a demographic bulge believes in throwing a few clay pots, spinning wheels and sackcloth clothes, etc until reality bites and its the mortgage and 1.8 kids, sorta like their Depression Generation oldies. Naturally there’s increasingly sophisticated financial intermediation to facilitate the bulge in family formation and takeover of the reins of power, but that will evolve further and eventually develop into one almighty Madoff Scheme unfortunately.

In the boomtime meantime we get the rise of Ronnie and Maggie and they ‘tear down that wall’ and naturally lefties everywhere are on the outer and have to go off and sulk in the shadows and lick their ideological wounds. But wait a minute, what’s this global warmening stuff and with their presumed gotcha moment they come roaring back with a vengeance, on a rather questionable new kid on the block theory and computer modelling. Still a GFC fallout certainly helps whet the general appetite for the notion capitalism has failed everyone and we need more Gummint controls and here they all are ready to fill the void. All in the name of Gaia of course. These loftier people don’t do things for personal gain.

There’s no doubt the right wanted to ignore the rise of Gaia consciousness for the obvious and took the more skeptical approach. As well markets don’t work if the very medium of voluntary exchange turns out to be funny money. However the left seized upon CO2 pollution with a fervour that belied the underlying science. Fossil fuels quickly became the root of all evil and if they could just command and control all that then they had nasty capitalism by the throat. However, there was always a risk that their CO2 proxy might fail them and it is under serious challenge at present. Science aside, if you’re to occupy the commanding heights you’ll be judged on outcomes and if Copenhagen didn’t ring alarm bells, the plethora of failed CO2 policies and their obvious negative externalities would mount up and here we all are.

Where’s that for me or perhaps Oz generally? Well that deep underlying concern for Gaia is alive and well but phoney ideology and concomitant policy, ignoring some obvious truths won’t cut it with the electorate. They’re smarter than that. Our policymakers have to speak to truth lest they be found out. Essentially markets work better than quantitative controls and elites picking winners, but by the same token the constitution of that marketplace is critical to push all individuals in the right direction. We don’t have that from either side at present and it’s a case of the least worse choice. At present that’s Tone over Julia because Julia’s mob stuffed it up badly, although a quantum shift to straight carbon and resource taxing makes a lot of sense. What’s sadly lacking is true countervailing market power for Gaia expressed here-
http://www.adelaidenow.com.au/property/news/business-sa-joins-call-to-save-hills-farm-land-from-urban-sprawl/story-e6frefgc-1226111292898?from=public_rss
Notice the concern for Gaia is certainly there but unfortunately the invisible helping hand is totally absent. For me that’s eminently fixable.

observa
observa
10 years ago

OTOH if the invisible helping hand for Gaia is absent then there’s nothing like the dead hand of omniscient elites and Gummint controls-
http://wattsupwiththat.com/2011/08/07/the-extraordinary-collapse-of-jatropha-as-a-biofuel/
but perhaps you have to be an agnostic to see it all in perspective?

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

John I’m all in favour of the eighteenth century – probably the best one we’ve managed to rustle up in all these eons but I still prefer my IP law thought about.

Having a sensible policy regarding orphan copyright works doesn’t involve radical questions of power, just the removal of some radical silliness. These are rights that no-one has had enough get up and go to claim, and usually doesn’t know they have, though of course they’re now gumming up the works on the radical dissemination of a vast catalogue of treasures owing to some rent seeking copyright collecting agencies.

Radical questions of power indeed!

I love the fancy talk from whomever you quoted above saying a monopoly is not a monopoly because anyone can have one. Is one allowed to point out that most monopolies are businesses that got started and got themselves some monopoly power and anyone could have started them?

john walker
john walker
10 years ago

“These are rights that no-one has had enough get up and go to claim, and usually doesn’t know they have,”

Simply not true .

john walker
john walker
10 years ago

In practice orphan can often mean simply you have chosen not to register with a licensing/publishing ‘monopoly’.

And a sensible policy about orphans has been deliberately avoided because it would not need the sort of centralized registries (and powers) that the licensing industry needs. Thr GBS started as a question over fair use; Snippits and indexing it then changed into a centralized monopoly silencing of the whole world.

Questions of rights are questions of power.

john walker
john walker
10 years ago

“silencing” was one of those auto correct slips.

Curious… I have a valuable monopoly over my signature, do you regard that as a problem?

Google has long form on doing whatever it likes and then saying ” I meant no evil’

http://laboratorium.net/archive/2011/08/08/on_real_names

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
10 years ago

John, this is a bit like arguing with Rafe.

I’ve suggested that orphan works are a great opportunity and that copyright is simply getting in the way. In this case it’s generating large costs and no benefits. It should be handled in the way that we handle adverse possession in real property.

You respond with slogans – about rights, power and a link to someone complaining about some policy with Google +

We’re not making meaningful contact with each other and we should leave it there.

I’m very happy for you to go on using your signature.

Patrick
Patrick
10 years ago

You will agree with this post by Will Wilkinson, Nick:

America’s intellectual-property system is a travesty which threatens the wealth and welfare of the whole world. It may seem a recondite subject, but the stakes couldn’t be higher.

This recent episode of Planet Money, “When Patents Attack“, is an informative and entertaining primer on the way America’s patent system squelches competition, slows innovation, and enables egregious predation through the legal system. Please listen to this.

john walker
john walker
10 years ago

Nicholas

Fine , but ‘orphans’ are not necessarily orphans ….

Did you(or most Australian authors) know that you had opt out of the proposed settlement before (about) may last year or be redefined as an orphan covered by the setlement , with no future rightds

murph the surf.
murph the surf.
10 years ago

The Craig Thomson business looks set to rumble along aided by the probing of George Brandis.
Ken Parish linked to it on another thread where he mentioned a discontinued defamation case.
Was the case started to try and stop the publication of the information about Mr Thomson’s signature and driver’s licence used to authorise payments?
The development and revelation of the NSW ALP office paying some $90,000 in personal legal fees for Mr Thomson certainly looks questionable.Is this to help the Member for Dobell to avoid bankruptcy?
Aside from the nature of the choices Mr Thomson has seen fit to use union money for how could this scenario lead to a need for a by-election?

john walker
john walker
10 years ago

Nicholas
RIP

john walker
john walker
10 years ago

Google Books Settlement, 2008-2011

James Grimmelmann
11:55 PM
August 17, 2011

The Google Books settlement, a book collector whose audacious plan to remake copyright law was ultimately for naught, died today. It was caught in the blast from a recent court decision, and received fatal injuries. Ironically, the settlement, which had been seriously injured in the spring, had been rumored to be planning a comeback tour. In the end, however, doctors declared that its internal divisions were incurable. The settlement was a little over two months short of its third birthday, and is survived by millions of orphan works.