eBay guilty Of Patent Infringement, Ordered To Pay

theodp writes "Remember that patent infringement lawsuit brought against eBay? A U.S. District Court jury just ordered the online auction house to pay $35 million for infringing on patents for programs and procedures to operate an Internet-based auction."

Comments

Re:This is great because,

[Hard_Code]

Perhaps this needs to be taken somewhere else, but your signature intrigued me. I have several critiques though. The essay makes the two following assertions:

"The first states that information conveyed by market prices is necessary to determine how best to use scarce resources in production."

"The second states that a centralized planner can never acquire all of the information that is in the hands of decentralized economic actors, and that prices allow that information to be harnessed by individual decision-makers."

1) I would argue that information conveyed by market prices is necessary to determine how to best use scare resources in production, *for producers* - not for society in general. For example, Whizzy Advertising Agency manages to convince 100% of the population that they should buy 5 times more Widgets than they currently do. Has any efficiency been gained? Of course! Widget Co. can take advantage of economies of scale in their production of Widgets! Hurrah! But, universally, is it efficient to artificially raise demand for Widgets? Of course not. The essay further goes on to say in a centralized economy "there will be no market prices to serve as an "invisible hand," guiding production to the best interests of society". That may be true. But in absence of absolutely rigorous and universal public awareness (a rock solid free press), this "invisible hand" will not guide production to the best interests of society, it will guide production to the best interests of *producers*. You need only look to recent Wall Street scandals to see where this can obviously go astray. So I think the mere presence of price information doesn't inherently and necessarily guide the economy to highest efficiency (this is obviously true if you disregard human rights, labor laws, free press, etc.). Furthermore, I'm not even certain that a free market *will* produce these efficiencies. Example: 5 companies are started, and produce cakes. After a while it is found that consumers only like the type of cake one company makes...the rest all crash and burn in bankruptcy. Is this efficient? Is it more efficient than some other process, for example, a scientific inquiry into consumer predilictions? Don't laugh, you get my point, and I think it is an open question. That pure and brazenly socialist and/or communist regimes have failed miserably at this doesn't bode well for them, then again, have there been any such governments which included the prerequisites of human rights, labor laws, and free press?

2) This may very well be true, but the assertion is that because in the absence of a free market you have absence of economic information, therefore a free market is the best. There are other ways of course to convey economic information. For instance, under a dictatorship, perhaps owners of companies that produce products that the regime doesn't like, are murdered. That surely provides *some* economic information right? But you wouldn't argue that we should keep such a system merely because in absence of it we would have *less* economic information (anything is better, i.e. provides more economic information, than anarchy, right?). So again, although it may be true that free markets supply freely available economic information (regardless of the value of that information), I don't think that is *sufficient* justification of such a system.

My conclusion I guess is that a free market is not automatically magically and universally better. A free market corrupted by accounting malpractice, advertising propaganda, and anything but absolutely rigorous press oversight, and public disclosure, is not inherently better than any other system (although you could have a separate arguement over which types of systems are more or less prone to said corruption).

To realize the benefits of the free market, it is absolutely fundamental that the consumer is informed, and that the government works with the larger society to root out corruption in financial systems, and break up monopolies (which are the natural tendency of an unregulated free market) which threaten the touted efficiency-gaining competition.