Dennis Wingo makes a curious statement in a comment to my April Fools post.

Space tourism is a wealth depleter, not a wealth maker.

Is there something unique about space tourism that makes it a “wealth depleter,” or is it true of tourism in general? If so, I suspect that the region around Orlando, Florida would find it a surprising statement. As would Hawaii, or much of the Caribbean. Or France.

I’ve had this argument before, once on the NASP program, with a second lieutenant who didn’t believe that something had value unless you could drop it on your toe (in defiance of the market, in which people part with their money every day for non-material items).

I often complain about politicians who are focused on creating jobs, rather than creating wealth, which is why we have a very expensive, and not very productive space program. But what is wealth? I don’t know what Dennis means by his statement, but I’m quite confident that he’s very, very wrong. Which society is wealthier–one in which no one travels anywhere, or one in which many do?

There is value in tourism–if there weren’t, people wouldn’t pay money for it (and travel and tourism are among the top three industries on the planet, measured in the trillions of dollars). A world in which people can afford to go into space, and indulge themselves in their desires to do so, is a world that is wealthier than a world in which they cannot. Moreover, the space passenger market is just the kind of market needed to drive launch costs down, and reliability up, which is a necessary condition for many other space activities that Dennis presumably would consider “creating,” rather than “depleting” wealth.

Truly, I find this statement utterly baffling.

Nathan Myhrvold, CEO of Intellectual Ventures, former CTO of Microsoft, is calling for the Supreme Court to hang firm on patent property rights in “Inventors Have Rights, Too!” in the Wall Street Journal.

Goliath is crying “Unfair! Take David’s sling away!” Without full rights there is no way for a small inventor to get a big infringer to the table to settle. Instead, they’ll stall and drown the little guy with legal fees. The courts would be put in the middle and have to decide all future licensing revenue. Is that the way we want to run an innovative economy?

If we prevented people who owned houses and cars from removing people who were infringing their rights there, it would be pretty clear that the rights would be worth a lot less.

But how should we grant these patents? Is it sufficient to stick a virtual flag in meme space like a 16th century explorer? Should there be a time window when many can make a filing after the initial filing and the patent right auctioned to the highest bidder with all of the filers getting a portion of the royalties?

—–Update 2006-03-30 09:21—–

The Economist weighs in too. They say save injunctions for “irreparable harm” which strikes me as a rotten standard. Either money is good enough and royalties can be decided in the courts or it isn’t and patent holders need a stick.

Nathan Myhrvold, CEO of Intellectual Ventures, former CTO of Microsoft, is calling for the Supreme Court to hang firm on patent property rights in “Inventors Have Rights, Too!” in the Wall Street Journal.

Goliath is crying “Unfair! Take David’s sling away!” Without full rights there is no way for a small inventor to get a big infringer to the table to settle. Instead, they’ll stall and drown the little guy with legal fees. The courts would be put in the middle and have to decide all future licensing revenue. Is that the way we want to run an innovative economy?

If we prevented people who owned houses and cars from removing people who were infringing their rights there, it would be pretty clear that the rights would be worth a lot less.

But how should we grant these patents? Is it sufficient to stick a virtual flag in meme space like a 16th century explorer? Should there be a time window when many can make a filing after the initial filing and the patent right auctioned to the highest bidder with all of the filers getting a portion of the royalties?

—–Update 2006-03-30 09:21—–

The Economist weighs in too. They say save injunctions for “irreparable harm” which strikes me as a rotten standard. Either money is good enough and royalties can be decided in the courts or it isn’t and patent holders need a stick.

Nathan Myhrvold, CEO of Intellectual Ventures, former CTO of Microsoft, is calling for the Supreme Court to hang firm on patent property rights in “Inventors Have Rights, Too!” in the Wall Street Journal.

Goliath is crying “Unfair! Take David’s sling away!” Without full rights there is no way for a small inventor to get a big infringer to the table to settle. Instead, they’ll stall and drown the little guy with legal fees. The courts would be put in the middle and have to decide all future licensing revenue. Is that the way we want to run an innovative economy?

If we prevented people who owned houses and cars from removing people who were infringing their rights there, it would be pretty clear that the rights would be worth a lot less.

But how should we grant these patents? Is it sufficient to stick a virtual flag in meme space like a 16th century explorer? Should there be a time window when many can make a filing after the initial filing and the patent right auctioned to the highest bidder with all of the filers getting a portion of the royalties?

—–Update 2006-03-30 09:21—–

The Economist weighs in too. They say save injunctions for “irreparable harm” which strikes me as a rotten standard. Either money is good enough and royalties can be decided in the courts or it isn’t and patent holders need a stick.

I’ve always doubted it. As many have predicted (and long before it was even implemented), it may be starting to die from its own internal contradictions.

Al Gore and David Blood write in the Wall Street Journal today:

Our current system for accounting was principally established in the 1930s by Lord Keynes and the creation of “national accounts” (the backbone of today’s gross domestic product). While this system was precise in its ability to account for capital goods, it was imprecise in its ability to account for natural and human resources because it assumed them to be limitless.

They go on to advocate environmental accounting which would favor Gore’s carbon tax from Earth in the Balance. This is good public policy, but rather than showing we are “operating the Earth like it’s a business in liquidation,” a sensible green accounting would show laws have curbed the dirtiest polluters, disease has subsided, pesticides and herbicides have fewer side effects, beautification campaigns have made our cities prettier and our parks more accessible, and our toxic sites have been cleaned up. In short, the Earth is now the best place to live it has ever been. Before the industrial revolution there was very dirty heating and lighting fuel, poor water sanitation, air filled with animal and human waste smells, poor food sanitation, poor isolation of pathogens, poor measurement and science of environmental hazards and few resources for transportation to or improvements of parks.

Taxing petroleum and especially coal when energy prices are on an uptick is politically tone deaf. A subsidy for carbon offsets might play OK. These would harvest additional greening without the heavy hand of central planning. But if they are written right, they might cheer the glad capitalists more than the sullen environmentalists.

I do think that it is wise for space enthusiasts to support green accounting–without it, it is unlikely that space solar or He-3 will ever be economically viable (which is not to say that they will be with it).

Politicians fight for jobs and their constituents love it. Governments write reports that laud politicians on their success at achieving jobs often double counting. Who gets the thousands of jobs that are created when a factory or government building opens? The same people on average who lose a job when a factory closes. Who gets the jobs that are created when those primary jobs created demand for additional services? The same people who lose the jobs in other parts of the country where people are leaving. The number of jobs gained nationwide is not positive sum unless people there is immigration or a fall in unemployment. Once you set monetary policy and tax policy and immigration policy, government subsidy for jobs is a zero sum game or a negative sum game.

Continue reading The Jobs Fallacy →

Housing derivatives.

I’m surprised it’s taken this long.

In Offshoring: The Next Industrial Revolution in the current issue of Foreign Affairs, Prof. Alan Blinder, former Federal Reserve Vice Chairman, shows us why the New Economy had good currency at the Fed while he was there. He posits that as manufacturing takes up fewer and fewer jobs, the economy is going to mostly be two types of services: personal services and impersonal services. The former will be what almost everyone does in rich countries while they import impersonal services from poor ones.

This strikes many of the same chords as Glenn Reynolds’s new book, Army of Davids (reviewed here and here).

Continue reading Shape of the Next Industrial Revolution →

(like the New York Times asks for) would have to lower wages further to compete with cheaper cars from Toyota North America. (Or would they just fail quicker because their employees would strike due to lower take home pay from higher taxes?)