Of Apples and Ideas

This posting is a prelude to an exploration of how society provides recompense for the production of goods in comparison to how other work is afforded.

Modern economics (and society at large) treats goods, rights and ideas as if there were no difference between them. They are allocated according to the market, which is to say there is a bidding process mediated by the price mechanism.

There is of course a difference: goods are produced for consumption, rights are the means by which relationships are mediated (1) and ideas orientate our consciousness. The question is whether this difference should affect the way we treat them - do we need to allocate rights differently to the way in which we allocate apples. In order to address this it may help to point out that how we describe things may in itself help or hinder our understanding by clarifying or obfuscating the arrangement we think we have in place.

Goods: Apples / Cars / Houses?
Take the example of the difference between an apple and a car. While it may appear that both are goods, a car is more constrained by the rights life than an apples is (where one can park it, how fast one can drive it etc). Although the difference may not appear distinct, one should be able to see that in buying an apple one is not receiving a right so much as taking a good into ones possession for consumption; with a car, by contrast, one could argue that one is acquiring the exclusive right of use of the vehicle.

Now consider the difference between a car and a house: when one buys a car one doesn’t expect to be able to keep it on the forecourt of the showroom, nor to be able to live in it; when one buys a house the expectation is that one has bought not just the bricks and mortar but the right for it to remain on the land on which it stands. In reality one is buying the right of exclusive use but also taking on the obligation to maintain it and pay property taxes etc.

Rights of all kinds
Different kinds of rights are treated differently. For example, land rights can be passed on in perpetuity (as long as they can be asserted) where as copyright expires after a period of approximately a lifetime. It is not just because the object of one is tangible and the other is intangible: shares (which are rights connected with corporations) are also not usually subject to expiry. Other kinds of rights, such as the right to free speech or electoral voting rights, are non-transferable and non-saleable.

Ideas
When one moves to the realm of ideas it soon becomes clear that these by their nature are non-transferable, an idea can be shared but this is no guarantee that it will be understood. Ideas cannot be owned and there is no protection in law for them - it will always come down to a matter of design, or application or right of use. If they could then the idea of calculus would be someone’s property

How do the economics of ideas operate then? A mathematician has mathematical ideas, but somebody wanting to learn about mathematics would not simply be able to buy the ideas. They could try to learn themselves and once understood make use of them; in this context the mathematician could help them learn by bringing ‘insights’. People with expertise can provide their insight.

A physical good can be sold: its significance is mediated by possession and consumption.

A right, which is afforded by the community to individuals, can be treated as if it were a good but it has more the quality of a license. We differentiate between rights by treating some more like goods (land rights) and some more like social relationships (the right to trial before a jury).

An idea, when grasped, can be shared but not bought. The person providing insights can be paid, but the idea was not thereby bought. There is no ownership of ideas.