Upgrade your account to a Community Supporter account and remove most of the site ads.

Reply to thread

Message: <blockquote data-quote="JohnNephew" data-source="post: 2722940" data-attributes="member: 2171">The fact is, we live in a world where intangible things actually do have value.  It is artificial value, but it has been constructed as a legal fiction because it serves a goal for all of society.  For example, a corporation is intangible; the difference between a collection of buildings, capital equipment, and a room stuffed with employees and a company is nothing more than the consensual fiction that there is an entity that is the company.  Our society has built was of formalizing that consensus -- articles of incorporation, for example.Someone fixated on the absolutely concrete could say that the bankruptcy of a company is inconsequential because the existence of a company is nonmaterial to begin with.  No persons winked out of existence; no equipment suddenly broke when a judge made dissolution of the corporation official.  But if you owned stock in Enron, or Worldcom, or any other failed company, you might look askance at someone who told you to stop complaining because your shares are now worthless -- after all, no one took those shares away from you!If I own a company, and it has 1000 shares of stock, and I sell you 400 shares, and tell you that you now own 40% of the company and its assets...and then I declare that we now have 9,000 more shares, and they belong to me, and I'm selling them to someone else to fund a new car I want to buy...would you accept it if I told you that you shouldn't complain because I didn't take your shares away, I just reproduced them -- I didn't steal your shares!  I didn't take any money away from you!However, obviously I devalued your shares.  You used to own 40% of the company.  Now you own 4%.(For another example: If I run the central bank and I print enough currency to double the amount in circulation, in order to buy yachts for my family and cronies, I could also say that I haven't taken any money out of your or anyone's pocket so it's not theft...but how far would that defense go in protecting me from an angry mob?)In most of the world today, intellectual properties actually are meaningful and valuable; conspicuously so in the countries that display the most innovation and creativity and economic health.  People pay significant money to own the legal fiction known as a "patent" or a "copyright," or to license the use of one of them.  Whatever disagreements we may have with the application of patent law or the absurdities of Disney-created eternal copyright extensions, the basic fact remains that this is a fundamental part of our economic structure.The value of an intellectual property, like any capital asset, is based on the future revenue it may generate.  If some part of its potential market simply need not buy it, because they can obtain it for free, that reduces its value.  If pirates persuade more and more people that downloading copyrighted material is at worst morally neutral, and perhaps even doing the creators a favor, this is a really big deal for anyone who makes a living determining the value of intellectual property and making investments based on that analysis (which, as a publisher, is one of the things that I do).When the patent on a drug expires, and chemically identical generics become cheaply available, the intellectual property of that patent goes from "worth something" (a government-protected monopoly on a revenue stream) to "worth almost nothing" (anyone can now make the drug, so the only residual value is consumer trust and goodwill, trademarks on the drug name, branding, etc.).  If your company had a patent and, say, it is overturned by a court, your company is suddenly worth substantially less.Just as intellectual property rights are legal fictions, so too are any property rights, really.  Suppose you could buy land in one of two countries.  In Country A there is a strong belief that people own land, and the government has a history over centuries of protecting rights of ownership.  In Country B, there have been periodic periods of nationalization, when some party sweeps into power and tries (and maybe succeeds) in redistributing land and wealth from people who are perceived to have more than they need, to those who need it; the people now in power assure you that they respect your rights as a potential land-owner, and they tell you that moreover periods of nationalization/redistribution have ultimately led to a generally higher quality of life, which should lead to higher property values as more people have been lifted out of poverty and so have money to bid up asset prices.  Leave aside the question of which approach is "right" (the political arguments).  All else being equal, would you invest in land in Country A or B?  Or, if you owned otherwise comparable plots of land in both countries, which would be worth more?Well, this is a similar situation to what game publishers face.  If the rent is really high in Country B, relative to the cost of buying the land, the chance of losing your property to the government or squatters or what have you may be worth the risk.  Similarly, if the returns on investment from an RPG in the short term are good enough (like the early-days sales of d20), publishers will accept the risk that the future revenue stream will be substantially impaired.  But if you can expect the same or better return in another area, without facing the hard to quantify risk of losing control of your property in the future, that's the business strategy to pursue.</blockquote>

Verification