Bill Gates, Penicillin & Your Great-Grandchildren

[August1991]

If a person alive today discovers something that radically changes life - and the life of your descendants, does that person owe you anything? Or should you instead pay that person for their discovery?

For example, would you begrudge someone who invented a cure for cancer or AIDS, and became incredibly wealthy as a result? Would you change your opinion if their invention saved the life of your (future) grandchildren?

There is a general belief that wealthy people should contribute more to the collective because they are wealthy. How would our children, grandchildren and great-grandchildren view this belief?

The discoveries of Faraday and Edison affect my life, and make them better. Should contemporaries of Faraday and Edison have had the right to tax their success, and possibly discourage them in their discoveries?

[Riverwind]

The discoveries of Faraday and Edison affect my life, and make them better. Should contemporaries of Faraday and Edison have had the right to tax their success, and possibly discourage them in their discoveries?

All innovation today builds on what has gone before. Edison and Faraday did not operate in a vaccuum and they learned a lot of the other scientists/inventors of the day. Newton made this point himself when he said:

"If I have seen a little further it is by standing on the shoulders of Giants."

from http://en.wikipedia.org/wiki/On_the_shoulders_of_giants

There are many examples in history where the 'celebrity' scientist is not really the one who deserves the credit - they just happened to be the one with the best marketing ability. The case of Watson and Crick is a good example:

A more enduring controversy has been generated by Watson and Crick's use of Rosalind Franklin's crystallographic evidence of the structure of DNA, which was shown to them, without her knowledge, by her estranged colleague, Maurice Wilkins ... Franklin's superb experimental work thus proved crucial in Watson and Crick's discovery.

From http://en.wikipedia.org/wiki/James_D._Watson

Furthermore, a successful innovator learns a lot from the failures of others. I can't think of a good example at the moment but I beleive there is one related to the steam engine. The others may have been failures in terms of immediate economic success but they did contribute to the greater good of society.

As I said before there are of sets of mutual obligations between society and innovators that are not easy to untangle. Society owes a debt to the innovator, however, the innovator also owes a debt to society. And we must seek a balance between letting the innovator enjoy the rewards of his/her innovations and asking that that innovator contribute part of his/her wealth back to society.

[ClearWest]

If a person alive today discovers something that radically changes life - and the life of your descendants, does that person owe you anything? Or should you instead pay that person for their discovery?

They don't owe anybody anything. We shouldn't have to owe anything to the government, nor the public whom they claim to serve. If someone chooses to donate their invention to public domain, great! If they choose to make a buck off of it instead, it's none of anyone else's business. If the the government (or anyone) has power to take anything from someone else, then we have no freedom. We have no individuality. We become property of the state when the state has power over our property.

[Riverwind]

They don't owe anybody anything. We shouldn't have to owe anything to the government, nor the public whom they claim to serve.

If someone expects the gov't to protect their property rights then they have no right to complain if the gov't demands a contribution to the common good. BTW, I have not seen anyone on this forum argue that innovators don't deserve to make money on their inventions - the only question is whether they should be taxed on the money they make.

[geoffrey]

Actually, people have claimed that drug companies shouldn't profit for their inventions...

[margrace]

Listened to an interesting bit of advice from a Dr. Specialist to my son. Who is making money on drugs? He told my son to price around before getting a prescription. He told us which drug store ripped people off the most and how they did it. He was horrified that my son had been prescribed the most expensive drug that he really needed. Another drug came in at half the price.

He told him exactly how big dispensers, box stores etc, undercut drug stores apparently and how they made for that lose. I listened as my son went to one of these and heard the way they flog their drugs.

Now I hear that seniors are up in arms because the government is asking that some drugs not be used. Losec is one in point its counterpoint costs half.

[Michael Hardner]

If a person alive today discovers something that radically changes life - and the life of your descendants, does that person owe you anything? Or should you instead pay that person for their discovery?

For example, would you begrudge someone who invented a cure for cancer or AIDS, and became incredibly wealthy as a result? Would you change your opinion if their invention saved the life of your (future) grandchildren?

No one should be paid for their discoveries, but business needs to contribute to the general welfare.

There is a general belief that wealthy people should contribute more to the collective because they are wealthy. How would our children, grandchildren and great-grandchildren view this belief?

Nobody should be taxed because they are wealthy. They should be taxed based on the money they earn.

If somebody has 1B in assets and made no income on that, they should only pay consumption taxes on what they spent.

The discoveries of Faraday and Edison affect my life, and make them better. Should contemporaries of Faraday and Edison have had the right to tax their success, and possibly discourage them in their discoveries?

That's ridiculous. You can't tax a discovery, or an idea. You can only tax money flow.

[Michael Hardner]

Clear:

They don't owe anybody anything. We shouldn't have to owe anything to the government, nor the public whom they claim to serve. If someone chooses to donate their invention to public domain, great! If they choose to make a buck off of it instead, it's none of anyone else's business. If the the government (or anyone) has power to take anything from someone else, then we have no freedom. We have no individuality. We become property of the state when the state has power over our property.

The idea of property is easy to grasp when you're talking about individuals with tangible goods.

It becomes a lot less murky when you start talking about multinational corporations, intellectual property, speculation and so forth.

If you do me some harm, I can bring a lawsuit and try to get reparations. But if you're a corporation, I won't have the resources to fight you and even if I win, you have limited liability so I might not get what is justly mine.

[ClearWest]

If you do me some harm, I can bring a lawsuit and try to get reparations. But if you're a corporation, I won't have the resources to fight you and even if I win, you have limited liability so I might not get what is justly mine.

You're right, limited liability is where we run into problems. I personally believe in the individual, so sole proprietorship would be ideal. If a business causes a problem, the owner is to blame. Corporations, however, complicate things because there is always more than one owner/shareholder. But, if you have been harmed, then there is usually a single individual behind the decisions. He would be the one responsible. And he would have to be accountable for his own actions in a court of law--no corporation taking some of the hit for him. If he was the one who ordered people to dump toxic chemicals on your lawn, then he should be personally accountable to you. Not the corporation. If there is more than one individual involved in the problem-causing, then they will be tried seperately.

It's like if a student is hurt at school. The law will investigate who was responsible for that child at that time, who the safety supervisor was at that time, who appointed the safety supervisor, and up and up the ladder until you get to the superintendent. And if a decision he made caused the injury of the child, then it is his responsibility. It shouldn't be the school district's fault collectively. People are individuals. They can be treated as such.

[Michael Hardner]

You're right, limited liability is where we run into problems. I personally believe in the individual, so sole proprietorship would be ideal. If a business causes a problem, the owner is to blame. Corporations, however, complicate things because there is always more than one owner/shareholder. But, if you have been harmed, then there is usually a single individual behind the decisions. He would be the one responsible. And he would have to be accountable for his own actions in a court of law--no corporation taking some of the hit for him. If he was the one who ordered people to dump toxic chemicals on your lawn, then he should be personally accountable to you. Not the corporation. If there is more than one individual involved in the problem-causing, then they will be tried seperately.

I have a big problem with that.

If you remove the responsibility from the corporations, there are a number of downsides:

- Working for a company now involves personal risk to you but not to the owner.

- If an individual is ordered to commit some kind of misdeed, then there's only so much that that individual can do to cover damages even if they're personally ruined.

- Such an arrangement would inevitably lead to irresponsible behavior on the part of large companies.

It's like if a student is hurt at school. The law will investigate who was responsible for that child at that time, who the safety supervisor was at that time, who appointed the safety supervisor, and up and up the ladder until you get to the superintendent. And if a decision he made caused the injury of the child, then it is his responsibility. It shouldn't be the school district's fault collectively. People are individuals. They can be treated as such.

You can fire them or decide that they didn't perform their duties, but the courts determined years ago that the ultimate responsibility is with the person who engages that individual in the activity.

You indicated that limited liability was a problem, and that sole proprietorship would be ideal but your response would eliminate even more responsibility from corporations.

This is one of the problems with Sarbanes-Oxley legislation. It puts individuals on the line for financial reporting but it doesn't protect them from being manipulated by their employer. If you were to refuse to sign off on financials, you could cost the company a large amount of money and your employment could be affected.

[geoffrey]

Michael,

No one should be paid for their discoveries, but business needs to contribute to the general welfare.

So businesses shouldn't be paid, but should give money.

I hope you meant something different here.

[Renegade]

If a person alive today discovers something that radically changes life - and the life of your descendants, does that person owe you anything? Or should you instead pay that person for their discovery?

That person owes me nothing. You may have both a moral and legal obligation to pay that person for the discovery, depending upon the discovery.

One other thought, suppose an inventor discovers something that causes society harm. Say some terrible virus, or Albert Einstien's theories which let to the nuclear bomb. In these cases does the inventor owe society something for the havoc he's caused?

For example, would you begrudge someone who invented a cure for cancer or AIDS, and became incredibly wealthy as a result? Would you change your opinion if their invention saved the life of your (future) grandchildren?

Society sets up "ground rules" to incent people to produce discoveries and inventions. These "ground rules" are in the form of Intelectual Property laws, and Patents. Under this incentives the inventor is allowed to gain financial advantage from the exclusive use of his invention. This arrangement benefits both parties. The inventor makes financial gain and society gains a valued product. It is both fair and necessary or no one would invent anything.

There is a general belief that wealthy people should contribute more to the collective because they are wealthy. How would our children, grandchildren and great-grandchildren view this belief?

In generally the wealthy are forced to contribute not because there is some underlying moral justification, but because as a practical matter it is more effective to collect money from those who have it than from those who don't. We fool ourselves into believing this coercion is morally justified.

The discoveries of Faraday and Edison affect my life, and make them better. Should contemporaries of Faraday and Edison have had the right to tax their success, and possibly discourage them in their discoveries?

We tax everyone's success (ie income tax). The more successful one is, the more they are taxed. The key is the right level of taxation which is not so onerous that it cause the majority of inventors to stop their efforts.

In once sense we have already put in barriers to success. In many industries, individual inventors are unheard of. This is not just because of the complexity of the invention, but in order to protect the invention, it is no longer feasable for the individual inventor to do.

[Renegade]

As I said before there are of sets of mutual obligations between society and innovators that are not easy to untangle. Society owes a debt to the innovator, however, the innovator also owes a debt to society. And we must seek a balance between letting the innovator enjoy the rewards of his/her innovations and asking that that innovator contribute part of his/her wealth back to society.

That balance already exist in the laws which protect intellectual property. Most of those laws only protect its exclusive use for a period of time, during which the inventor or patent holder may financially benefit, beyond that society may have free use of the invention.

There is no further obligation on either side.

[Michael Hardner]

So businesses shouldn't be paid, but should give money.

I hope you meant something different here. blink.gif

Whoops.

I meant no one should be taxed for a discovery.

[geoffrey]

So businesses shouldn't be paid, but should give money.

I hope you meant something different here. blink.gif

Whoops.

I meant no one should be taxed for a discovery.

Much better! I agree!

[ClearWest]

If you remove the responsibility from the corporations, there are a number of downsides:

- Working for a company now involves personal risk to you but not to the owner.

- If an individual is ordered to commit some kind of misdeed, then there's only so much that that individual can do to cover damages even if they're personally ruined.

- Such an arrangement would inevitably lead to irresponsible behavior on the part of large companies.

The risk is with whoever is doing wrong. And still, if someone thinks that something is dangerous or risky, they don't have to do it. We already have legislation for that, and Libertarians would support it because be believe that no one should be forced to something they don't feel comfortable with.

I would think that this arrangement would lead to more responsible behaviour from the individuals running the corporation. If they know that they have to face the consequences for their actions, then they will think twice before ordering someone to act illegally or unsafely.

You can fire them or decide that they didn't perform their duties, but the courts determined years ago that the ultimate responsibility is with the person who engages that individual in the activity.

Exactly, why can't it be this way with corporations?

You indicated that limited liability was a problem, and that sole proprietorship would be ideal but your response would eliminate even more responsibility from corporations.

Corporations aren't people, they don't have responsibilities. The only function of a corporation is to deliver a profit to its shareholders. A corporation is a vehichle for profit, it is amoral.

However, there are people who are in charge of corporations. They have responsibilities. They can be 'moral' or 'immoral', by doing things that others judge to be right or wrong. That's why it doesn't make sense to penalize a corporation for 'its' wrongdoings. A corporation can't do anything right or wrong. Individuals can. And they can learn to take responsibility for their own wrongdoings.

[Michael Hardner]

The risk is with whoever is doing wrong. And still, if someone thinks that something is dangerous or risky, they don't have to do it. We already have legislation for that, and Libertarians would support it because be believe that no one should be forced to something they don't feel comfortable with.

I sounds great in theory, but in practice it doesn't work.

Firms that know they're liable for mistakes are apt to be more careful. If you put the onus on individuals, you will see a decline in safety. If you've ever had to file a complaint with the labour department, you would know that it can take months or years to have your case heard, being unemployed the whole time.

I would think that this arrangement would lead to more responsible behaviour from the individuals running the corporation. If they know that they have to face the consequences for their actions, then they will think twice before ordering someone to act illegally or unsafely.

That's the thinking behind Sarbanes Oxley, I suppose.

Exactly, why can't it be this way with corporations?

Sorry, I guess it wasn't clear there. The corporation has engaged them to perform work, so the corporation is reponsible.

The corporation is like a person, in a sense. It is the one benefitting from the work, so it should be incurring all the risk and taking the steps to ensure that work is performed and manged properly.

Corporations aren't people, they don't have responsibilities. The only function of a corporation is to deliver a profit to its shareholders. A corporation is a vehichle for profit, it is amoral.

However, there are people who are in charge of corporations. They have responsibilities. They can be 'moral' or 'immoral', by doing things that others judge to be right or wrong. That's why it doesn't make sense to penalize a corporation for 'its' wrongdoings. A corporation can't do anything right or wrong. Individuals can. And they can learn to take responsibility for their own wrongdoings.

But individuals, even CEOs, have limited resources to make redress for the actions of a corporation.

Example:

A corporation saves 10M a year by contracting out work in an unsafe fashion. Inevitably, an accident occurs one year later. Individuals are injured and require $100K in payment, but the individuals performing the work only make $20K a year so they declare backruptcy.

Meanwhile, the corporation made 10M by cutting safety.

Of course, you can argue the person who made the decision is responsible, but you can't always assertain in court that they were aware of the situation, etc. etc.

[GostHacked]

In the United States, coproations in the eye of the law are considered a person.

Some benefits to having your business incorporated:

http://www.legalzoom.com/universal/press_04002002.html

Protection from liability by the owner

Less chance of an IRS audit.

Hell I would be auditing corporations alot more with the recent corporate scandals involving some of the biggest companies in existense.

http://www.forbes.com/2002/07/25/accountingtracker.html Look at those scandals.

Arthur Anderson, Haliburton, World Com. AOL Time Warner, Enron, Zerox.

-=-=-=-=-

Now onto the topic at hand.

Do I owe Edison for his discovery? I think I do. My computer would not work otherwise.

Do I owe Gates for his creation of Windows? I think I do, makes my PC easier to use.

Do I own Banting for his discovery? Yes indeed.

But what do I owe? That is relative. Gates I owe money and thanks for a good OS (yeah yeah laugh)

I owe Banting and Edison many thanks for their discoveries.

[ClearWest]

Firms that know they're liable for mistakes are apt to be more careful. If you put the onus on individuals, you will see a decline in safety. If you've ever had to file a complaint with the labour department, you would know that it can take months or years to have your case heard, being unemployed the whole time.

Individuals that know they're liable for mistakes are also apt to be more careful. Firms are run by individuals, afterall. It's not like after you start a corporation it begins running on its own, lol. Anyways, I just don't understand your logic on this one. If an individual is put in charge of the safety of other people, things will suddenly become less safe??

But I see what you're saying about how the corporation as a whole should be responsible. Afterall, a corporation is collectively the property of its shareholders. And if the shareholders are pressuring the managers to cut safety in an effort to increase profit, then they should be responsible. That could be done, as you mentioned, by taking the corporation as a whole to trial--but I wish I could find a better way.

[Riverwind]

If an individual is put in charge of the safety of other people, things will suddenly become less safe??

When a mob kills someone it is often extremely difficult for the police to get a conviction because no single individual can be proven to be at fault beyond all reasonable doubt. Making individuals responsible for corporate misbehavoir would create a similar problem -> people would walk free because there was not enough evidence of culpability or innocent people get used as scapegoats.

[August1991]

In the United States, coproations in the eye of the law are considered a person.

This thread has many fascinating comments, but let me stop here.

Corporations cannot go to jail. Corporations cannot be deprived of freedom. Corporations are not human.

Maybe that really, really stupid movie started the idea that corporations are psychopaths. I dunno.

A corporation is a "nexus of contracts". The best, easily understood comparison is marriage. To say a corporation is a psychopath makes about much sense as to say a marriage is a psychopath.

[GostHacked]

In the United States, coproations in the eye of the law are considered a person.

This thread has many fascinating comments, but let me stop here.

Corporations cannot go to jail. Corporations cannot be deprived of freedom. Corporations are not human.

Maybe that really, really stupid movie started the idea that corporations are psychopaths. I dunno.

A corporation is a "nexus of contracts". The best, easily understood comparison is marriage. To say a corporation is a psychopath makes about much sense as to say a marriage is a psychopath.

http://www.law.cornell.edu/wex/index.php/Corporations

http://www.irs.gov/businesses/small/intern...d=96395,00.html

Government treats it as a person regardless of that Wal Mart video.

[Michael Hardner]

Individuals that know they're liable for mistakes are also apt to be more careful. Firms are run by individuals, afterall. It's not like after you start a corporation it begins running on its own, lol. Anyways, I just don't understand your logic on this one. If an individual is put in charge of the safety of other people, things will suddenly become less safe??

Well, let's see ...

A corporation has a single goal - to return profits to its owners. Because the corporation is responsible for errors, safety has to be planned for. Mistakes are very costly.

If the onus fell on individuals, then you have a situation where the corporation has no liability for unsafe situations and safety would fall in priority.

Now, if you think that the entire chain of command should be personally liable then that's something else entirely. That would make the president of the company take more of an interest in safety, it's true, but it would also be unworkable. Many lawsuits are filed against Wal Mart every day.

But I see what you're saying about how the corporation as a whole should be responsible. Afterall, a corporation is collectively the property of its shareholders. And if the shareholders are pressuring the managers to cut safety in an effort to increase profit, then they should be responsible. That could be done, as you mentioned, by taking the corporation as a whole to trial--but I wish I could find a better way.

I agree.

I think the corporation was a great invention in terms of contributing to economic growth. Many people don't like them, but without corporations we wouldn't have created the affluent society IMO.