The solution you proposed is the "Chicagoean" solution, as would be supported by someone like Friedman. I'm proposing an Austro-libertarian solution: homesteading is different than granting. For homesteading, they actually have to be making a real use of the spectrum (jamming it with junk-noise doesn't count).
It's the difference between the King giving a land-grant of an entire country to one person, and the the courts recognizing that a plot of farm a farmer has homesteaded (plowed, tilled, grew crops on, etc) is rightfully his property.
Obtaining physical control of property through fiat State-grants and through homesteading are entirely different things (and only one of them, homesteading, generates real property rights, in the sense of natural law).
Your reaction in support of consumers is understandable, but misplaced. It is, in fact, the FCC that harms consumers by regulating the spectrum; in fact, once big corporations realized how profitable such was for them, they fully supported such. I'd suggest reading what I wrote, and the quotes and articles I referenced. You might find them enlightening.
PS: Obviously, I work for the Greedy Capitalist Pigs (GCPs).
You are right, the spectrum is plentiful. However, that doesn't mean that there will be no interference if we simply allow unrestricted use of it. In fact, Wilson deliberately sabotaged the privatized spectrum by allowing any and all uses of it, without restriction (the result was a predictable tragedy of the commons). Furthermore, how well people can utilized the spectrumn depends on our technological state. Allowing homesteading of a specific frequency on the spectrum -- and disallowing interfering uses on spectrum that is relevantly close, via the "technological unit" -- is perfectly reasonable, just, and effective.
Although some of the comments here have been intelligent and made with understanding of economics, many of them have been socialist and interventionist nonsense. Hence, I'd like to offer a broad, but brief, response.
The argument by many here seems to run something like the following: The spectrum is scarce, relative to the demand for it; therefore, the government should regulate it. This is simply nonsense. It is precisely when things are scarce that we most need private property rights in them. How would these rights be acquired? By homesteading the relevant portion of the spectrum. Of course, what constitutes "homesteading" a certain frequency is a continuum problem -- clearly, simply spewing out junk on it doesn't constitute homesteading it. One has to actually be making a real use of it.
In a For a New Liberty, Murray N. Rothbard, argued that we don't need State-intervention in the spectrum. See Personal Liberty: Freedom of Radio and Television. Contrary to the commonly held but mistaken view, there was not chaos in the spectrum before the FCC was created to intervene in it. Instead, things were working quite efficiently as courts recognized private property rights in spectrum homesteaded by different individuals. As Rothbard states, the belief that there was chaos prior to State-regulation of the spectrum is
historical legend, not fact. The actual history is precisely the opposite. For when interference on the same channel began to occur, the injured party took the airwave aggressors into court, and the courts were beginning to bring order out of the chaos by very successfully applying the common law theory of property rights--in very many ways similar to the libertarian theory--to this new technological area. In short, the courts were beginning to assign property rights in the airwaves to their "homesteading" users. It was after the federal government saw the likelihood of this new extension of private property that it rushed in to nationalize the airwaves, using alleged chaos as the excuse.
As B.K. Marcus has noted, this account is supported by the memoirs of Herbert Hoover, who noted that One of our troubles in getting legislation [to nationalize the airwaves] was the very success of the voluntary system we had created. I would highly recommend reading the historical overview of the spectrum given by Marcus. Marcus argues that, in order to get support for legislation regulating the spectrum, Hoover purposefully created spectrum-socialism, granting licenses to all applications, free of price or restriction. This, of course, creates a tragedy of the commons.
What we need isn't regulation of the spectrum. Rather, we need deregulation and privatization (via homesteading) of the spectrum. Common law is perfectly capable of applying existing property-rights conventions to the spectrum, including accounting for interference (which would be analagous to building a mineshaft 2 feet under someone elses' house, hence causing it to collapse).
Neither do you. Outside of its State-granted priviledges of monopoly (copyrights and patents), which every software company enjoys, Microsoft is not a monopoly. The correct definition of "monopoly" is when competition is prohibited by coercive force. See Rothbard, Murray. Man, Economy, and State: Monopoly and Competition. The anti-thesis of capitalism is whenever the State intervenes in the free market, in voluntary (non-coercive) transactions between individuals.
Yes, there's no way to possibly compete. Because, as we all know, pouring more money at something always solves the problem and produces a superior product. Right? Which is exactly why many feel (subjective valuation) that FireFox is better than MS IE.
Typical attitude of the technical elites. The free market might not always decide that technical superiority is the criterion for "the better product". Maybe how many other people use it is, or maybe it's ease of installation (e.g., already being there) is a big factor; i.e., people consider the search costs of finding an alternative, and also the transaction costs (in terms of opportunity cost of the time it takes to search for, install, and configure an alternate browser that isn't on the desktop by default).
In short, value is subjective. Period. End of the discussion. What you "value" doesn't matter to anyone else. You can point to objective facts of difference between MSIE and FireFox. However, because value is subjective -- not objective, and certainly not something determined by you -- you can't say that any given browser is superior, except by the criteria you choose. Other people may not find those criteria so important.
You might argue that these factors might not be there if FireFox was installed on MS Windows by default. Maybe true. But neither you, nor anyone else, has the right to force Microsoft to alter the terms of their contracts with OEMs, nor does anyone have the right to force OEMs to place any particular browser on the PC's they sell (Note: MS does not "force" OEMs to install Internet Explorer; it presents them with the conditions under which it will contract -- no coercive force, no violation of property rights, involved).
PS: Btw, "supply-sider" does not mean supporter of the free market. The only group of economists who are almost unanimously in support of the free market is the Austrians. Outside of that school, all other schools of economists support various interventions in the free market, even the Chicagoeans.
Tell them to go fuck themselves. They can pyramid their fraudulent fractional reserve banking on someone else's money. Any bank or financial institution that can't be bothered to make their website serviceable for a variety of different web-browsers and OS' isn't worthy of your money.
There is no obligation by web-browsers to view the ads of those websites they visit. Even if the ads show up, they certainly have no obligation to pay any attention to them.
"Social contract" theory is bullshit. The only contract is one you actually agree to, either through obvious implicity or explicitly. Signing a contract, or clicking "I agree" on a license you read counts. Walking into Regal, you agree to obey the rules of the theatre, and not make a commotion. However, there is no such implication for viewing a website that says you have to download every image and piece of text on that website and look at it.
The only obligations you may incur would be to note deface the website or do something simlar.
Rather than everyone focusing on "what they want", what we should be focusing on is property rights and monopoly in the classical sense.
As classically (correctly) conceived, monopoly means that competition is prohibited via coercive force. The state, for example, is a monopoly: it is prohibited, by coercive force, to compete with the state in the production of law, justice, protection, etc.
So, regarding these companies, the question is, are they monopolies? Well, if competition is coercively prevented then yes they are. However, this should not mean that we should regulate the market, but rather that we shouldn't interfere with it (e.g., prevent competition). Of course, the existence of a State creates an incentive force corporations to lobby for anti-competitive measures. Fixed costs, such as licensing and inspection, benefit large companies by making it more difficult for small companies to stay in business.
If you want better broadband service, you should work to provide it, not try to force companies to do anything, or complain. However, this shouldn't be provided by the State; if anything, the State's only role should be in maintaining law (I'd argue even that isn't necessary, and that the state is a criminal organization which should be abolished).
What you're really saying when you say that the State -- either the local, state, or federal govenrment -- should do something is "I want this, but I don't want to pay for it, and want to externalize the costs of producing it onto everything else."
Thus, I come back to the issue of property right. No-one has the right to use someone else' property without their consent; to say that they do is to argue for socialism, which (even in its "anarchist" form) is immoral and impractical.
True, but that's the case in any system of experts: how does one decide whether one's an expert or not, without succumbing to the fallacy of popularity?
2. Accounts initially start off with a score of 0 on each topic.
3. Accounts earn points (or lose points, going negative) as their owners demonstrate knowledge/expertise/understanding of various topics.
4. Below a certain level, edits need to be submittted for approval. Below another level, individuals cannot post on a topic, due to their demonstrated ignornace of it.
5. Below a certain overall average level, individuals cannot post at all, because they've demonstrated they aren't being constructive.
6. Above a certain level, individuals are considered competent, supercompetent, or experts in various areas.
7. When there are arguments in a field (e.g., in economics, between mainstream economists and Austrian economists), to support objectivity, editors and contributors should not take positions, but rather explain the positions of particular sides. They should be judged on how accurately they explain these differences, and compare and contrast.
Superior means it serves the majority of the target audience (which doesn't need activeX) better. Crap like ActiveX and Flash is annoying and hindering to users. I'm particularly annoyed when financial websites (Fidelity, MBNA, Chase, etc) use unnecessarily fancy crap that slows me down; however, it renders fine on Firefox.
IE is the most worthless browser I've used. It has very poor security. It does allow popups (maybe you have some external popup blocker, because none comes by default with IE). It crashes frequently and is unstable. Its so crappy that you can't even adjust the font size to what you want on half of the webpages out there (e.g., ESPN). Even on websites where you can resize the fonts, you only have 4 options. In Firefox, you can make the font as large as you please. It renders HTML in non-standard fashion. Unlike Firefox, which is XHTML compliant, IE violates numerous standards, and invents ad-hoc standards of its own.
Anyone who's used Firefox knows it's better than IE. It has 10% market share already. More and more people are coming to use it. The things keeping people with MS IE are familiarity and search-costs.
However, people get sick of popups and virus'. You know, most people I know who've gotten food-poisening at a restaurant never go back to that restaurant again. It takes some 200 good experiences to negate just one bad experience with a company.
To clarify on the self-evident (a priori) truth of the action axiom, let me explain why it cannot be tested.
In statistics, we often use a null hypothesis (default, H{0}) and an alternative hypothesis (alternative, H{a}). The null hypothsis is assumed true (I won't get into CI, alpha, or p-values, since they are not needed for this point). So, the statician would write out something like:
H{0}: x >= 6 H{a}: x 7
However, the null and alternative hypothesis must be meaningful. This is something that textbooks don't even state, because it is so obvious. For example, you cannot state, or rather, you can state, but such would be meaningless:
H{0}: x = sqrt(-4) H{a}: x != sqrt(-4)
Saying sqrt(-4) is meaningless, because there is no such thing as a square root of -4, unless we get into imaginary numbers, such as 2i. You also can't say something like
x = my weight H{0}: x > 0 H{a}: x a priori truths.
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The only ignorant one here is you.
Pythagoras theorum isn't "proven" in the sense that you're referring to -- empirical observation. And anyone who went about trying to prove it by measuring the sides of every triangle he encountered would be considered an idiot who ahs missed the point.
I'm well aware of statistical methods. None of them can prove or show causation. They can only show correlation. Granger-causality is nothing more than a sophisticated fallacy. Every reputable statistics textbook specifically says that statisitcs cannot prove causation, but can only correlation. You state that we can determine if "all else is equal". Firstly, all else can never be equal in the absolute sense, since time and place are variables that can never be equal between two comparisons. You clearly do not understand what you are talking about. When statistics professionals account for variables in their regressions, they are not (and cannot) accounting for all variables. Rather, they're accounting for the ones they consider important. Someone else can always disagree with them, so -- contrary to your assertions -- none of their manipulations can be conclusive.
We can show a clear correlation between an increase in temperature and an increase in the number of ice-cream cones bought. This does not in any way prove causation, one way or another. Without a prior understanding (e.g., that people say that they eat ice-cream because it is hot; and the knowledge of physics to know that our eating ice-cream is not going to make it hot), we cannot determine whether the ice-cream eating causes temperature to rise or whether inreasing temperatures cause more ice-cream eating.
All that a correlation between to things shows is just that -- that there's a correlation. It also shows that there can be causation one way or another (not necessarily). We can also show a correlation between the number of people wearing thongs and the number of people eating ice-cream cones. We obviously know that neither causes the other, but that they are both "caused" by a third factor: increasing temperatures.
Your babblings about the IMF are irrelevant. No conclusions can be drawn from the interventions of the IMF alone. Rather, we have to interpret the history of the IMF. Someone who supports a command-control economy can come to very different conclusions from the IMF's actions than someone who supports the free market, and vica-versa.
You obviously do not understand the scientific method; this is not uncommon among mainstream economists. If an experiment has many variables and no controls, it is a poor and useless experiment. That would be an accurate description of any attempts at manipulation by the IMF. The history of the IMF hasn't really proven or disproven much of anything (except for statements that are solidly contradicted by fact; e.g., "the IMF does not exist").
The closest historical thing to a "natural experiment" was the split of East and West Germany. Yet, still, "all else was not equal". There is always something that someone can say was different that accounts for the failure of one, and the success of another, as opposed to the reason that we know to be true from correct economic theory. History must be interpretted. Alone, it tells us nothing. Without, for example, an a priori understanding of causality, we could not understand the relatedness of history, and would see it as a series of completely unrelated events. Your example of a "captured economy" still does not make your point. There are always variables that are different. For example, in the East/West Germany example, the socialists can always say, "well, it is something about the population and geography of West Germany; if it had been West Germany that was socialist, socialism would have worked".
You obvioulsy haven't bothered with what I've noted about self-evident a priori truths (axioms). These are not "self-evident" in the psychological sense. In the psycho
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You may have skimmed, but you obviously haven't comprehended, if you still don't understand why you cannot "test" economic theories, and why the positivst attempt to do so is misplaced. You are continuing to mistakenly confuse natural and social sciences.
I do not need to "test" the laws of mathematics. I don't need to "test" the pythagorus theorum. If I went about doing so -- making sure that a^2+b^2=c^2 for all triangles -- mathematicians would consider me an idiot and obtuse. The action axiom is not something that can be, or needs to be tested. If something is testable, it must be falsifiable and verifiable. The action axiom is neither. You cannot falsfiy it -- any attempt to falsify it would in fact verify it, because such an attempt would, in fact, be an action. An a priori truth is something that cannot be denied without self-contradiction in its denial.
The action axiom (man acts) qualifies as an a priori truth, as any attempt to deny its truth is in fact an action.
The postulates don't qualify as axiomatic truths -- nevertheless, to say that they are "tested" is a stretch of the imagination. We don't "test" that leisure is a consumer good. It is simply a law of nature. A variety of resources may, however, rise to axiomatic status. Without a variety of resources, man would never act, or perhaps could never even conceivably exist. So, any statement denying a variety of resources is self-contradictory: if there were no variety of resources, you and I could not exist, thus could not act. Thus, denying that there is a variety of resources is no different than denying the existence of man: self-contradictory. On this, see Economic Science and the Austrian Method. Hoppe, Hans-Hermann. Specifically,
What makes these axioms self-evident? Kant answers, it is not because they are evident in a psychological sense, in which case we would be immediately aware of them. On the contrary, Kant insists, it is usually much more painstaking to discover such axioms than it is to discover some empirical truth such as that the leaves of trees are green. They are self-evident because one cannot deny their truth without self-contradiction; that is, in attempting to deny them one would actually, implicitly, admit their truth....
It has been a common quarrel with Kantianism that this philosophy seemed to imply some sort of idealism. For if, as Kant sees it, true synthetic a priori propositions are propositions about how our mind works and must of necessity work, how can it be explained that such mental categories fit reality? How can it be explained, for instance, that reality conforms to the principle of causality if this principle has to be understood as one to which the operation of our mind must conform? Don't we have to make the absurd idealistic assumption that this is possible only because reality was actually created by the mind?... Mises provides the solution to this challenge. It is true, as Kant says, that true synthetic a priori propositions are grounded in self-evident axioms and that these axioms have to be understood by reflection upon ourselves rather than being in any meaningful sense "observable." Yet we have to go one step further. We must recognize that such necessary truths are not simply categories of our mind, but that our mind is one of acting persons. Our mental categories have to be understood as ultimately grounded in categories of action. And as soon as this is recognized, all idealistic suggestions immediately disappear. Instead, an epistemology claiming the existence of true synthetic a priori propositions becomes a realistic epistemology. Since it is understood as ultimately grounded in categories of action, the gulf between the mental and the real, outside, physical world is bridged. As categories of action, they must be mental things as much as they are characteristics of reality. For it is through actions that the mi
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I'd also note that another brilliant investor -- Phillip Fisher -- criticized the EMT, ever-popular among clueless academics. See Common Stocks and Uncommon Profits And Other Works.
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I'm sorry, but you're wrong. Science is not prediction. Just because some wank-off named Popper thinks that science is only that which can be tested and verified doesn't make it true. Certainly, all natural sciences are in that paradigm. However, social sciences cannot be in that paradigm.
While prediction is important and useful, it is not the only important factor in science. You have completely left out something far more important: understanding. The core of science is in seeking understanding. It is possible to make predictions without having understanding. Newtonian physics allows us to make very accurate predictions about falling bodies, without having any understanding of gravity. Long says, "As an empiricist, Friedman takes a theory to explain a phenomenon if it enables us to predict the phenomenon's occurrence; whereas for Austrians, to explain economic phenomena is, in Ludwig Lachmann's phrase, 'to make the world around us intelligible in terms of human action and the pursuit of plans.'":
The important question for us is: in what circumstances could one say that one had understood this sort of behaviour?... Weber often speaks as if the ultimate test were our ability to formulate statistical laws which would enable us to predict with fair accuracy what people would be likely to do in given circumstances....[But] we might well be able to make predictions of great accuracy in this way and still not be able to claim any real understanding of what those people were doing. The difference is precisely analogous to that between being able to formulate statistical laws about the likely occurrences of words in a language and being able to understand what was being said by someone who spoke the language....
We do not need to "test" economic theory. We deduce it from a logical chain of reasoning, starting from self-evident axiomatic truths and self-evidently true empirical postulates: (1) Man acts, and to deny such would be self-contradictory; (2) Variety of resources, human and natural; (3) Leisure is a consumer good; (3) optional: when analyzing economies of indirect exchange, we assume indirect exchanges are occuring; we aren't "testing" the theory here, but choosing the theory that applies to the reality we want to explain; (4) least important, a simplification for elaborating catallactics: firms aim at maximizing profits; praxeologists always remember that where this postulate does not apply, the theories deduced from it, while correct, do not apply. Furthermore, contrary to your mantra, we cannot test correct economic statements. We cannot "test" the statement that ceteris paribus, inflation causes price increases.
And, as noted, mainstream economists can't even do prediction very well. They're the one's talking about a "new economy" and how the price of gold would plummet after the dollar was severed from gold. So, by their own standards, they are worthless failures who can be completely rejected and ignored. While physicists make 99% accurate predictions, mainstream economists make incorrect predictions 99% of the time. Sounds like useless and worthless to me.
The Austrian system is better, because it does not make absurdly unrealistic assumptions, simply for the purpose of model-making. It does not confuse correlation with causation, or commit logical fallacies. It does not allow for absurd conclusions, simply because they can be mathematically derived. It does not assume the unrealistic assumptions of perfect competition and equilibrium. Finally, those who understand Austrian economics have the best track-record as a group when making entrepreneurial judgements on the business cycle.
If neoclassical, keynesian, and game-theorists really are so good at making predictions, why aren't they rich? There's one well-known example of a mainstream economist who was very successful on the stock-market: John Maynard Keynes. Yet, he did not obtain success using some econometric methods. He follo
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More nonsense. Austrians don't contend that people in the free market have perfect knowledge, nor that there are no crooks. These kinds of idiotic assumptions are the domain of neoclassicals and game theorists. Austrians don't make such ridiculous and unrealistic assumptions. People do fine in the free market without "perfect knowledge"; in fact, it is socialism that is hindered by the lack of knowledge. The free market also has ways of dealing with fraud, such as consumer agencies and protection agencies.
The reality is that the past 100 years would have been much better without any states at all: indeed, any 100 year period would be, but particularly this one. Firstly, there's the fact that States have killed more of their own people in the past 100 years than have been killed by wars. Then, there's wars, which have also killed millions.
The reality of capitalism is that individuals help themselves by providing services others desire. It's a win-win situation. The reality of socialism -- and mixed interventionist economies, like ours -- is that people help themselves by harming others: the war of all against all (e.g., special interest groups).
You continually appeal to physics, noting that they use approximations. While this may be true, it proves nothing. Physics is not economics. Simply throwing out analogies doesn't make your point. Particles don't make decisions. Human beings do. And if prediction is so all-important, mainstream economists (Keynesians, neoclassicals, game-theorists, etc) are all completely worthless and useless. They have a terrible track-record, and it isn't going to get any better. They're among the foremost individuals who start talking about a "new economy". In the 70s, when gold was severed from the dollar, mainstream economists predicted that the price of gold would fall to its non-monetary value (that of jewelery, around $6-$8 and ounce); the reality is that gold-prices skyrocketed. By their own creed -- "science is prediction" -- they are imbeciles.
Mainstream economists are wholy and completely deficient. They are confused about causality vs. correlation. Statistical methods cannot show causation. And causation is what you really need to be able to make real predictions. They're forever stuck in the ridiculous assumptions of perfect competition and equilibrium (an absurd thing, for in "equilibrium", the only place where their equations are applicable, there is no action; indeed, that's precisely why they're calculus is applicable). Economic phenomena are not subject to calculus because differentiation requires continuity, and economic phenomena are not continuous (or even close): (a) Many goods are discontinuous; (b) People do not consider things in infinitesimally small units.
You may be able to predict that a population will spend some portion of its income on food. So what? You hardly need econometrics for that? When econometricists try to go further, they fall on their face, precisely because there are no fixed constants. People can change their preferences for how much they spend on food, or the quality of food they buy. People can change their preferences for the type of foods they buy. What you're doing is trying to is blur out the real details by aggregation. In doing this, you're ignoring reality, and making simplifications just so that you can use your models.
You attempt to justify this by pointing to physics, noting that they don't account for all details, yet can make very accurate predictions. This is because, for one thing, their systems are not as complex. They aren't dealing with conscious, decision-making entities. The result is that they can make predictions with 99.9...% accuracy. The accuracy of econometricists predictions, however, is non-existant. This is because of all of the riduclous unrealistic assumptions, the confusion of causality and correlation, and the fact that if they ever could predict, they'd develop a reputation for doing so, and their predictions would become self-nullifying.
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You are -- quite understandably -- confusing some things which, while related, are separate. A list of concepts covered at Mises.org would include:
History Austrian Economics Libertarianism
Within libetarianism, there are three sub-categories:
Anarcho-Capitalist Minarchist Constitutionalis t
Murray Rothbard was an anarcho-capitalist; Mises. however, was minarchist. Sen. Ron Paul is Constitutionalist / minarchist.
Saying that you think anarcho-capitalism is unrealistic is not an argument against Austrian economics or the ATBC. Austrian economics merely describes the results of various scenarios. It is consequentialist. It is void of morality.
Libertarianism is a position on what should be law. It is a moral position on law and justice. It holds that it is justifiable to use coercive force against the initiation of aggression, but nothing else. Anarcho-capitalism holds that States necessarily violate that principle, thus are criminal organizations that are undesireable, and should be abolished.
The practicality of this position does not weigh on the judgement. Capitalism happens to be the most efficient system possible; however, even if it weren't, so what? If socialism were somehow more efficient, that wouldn't justify it. Rothbard acknowledged this point. Mises refused to even consider it. When presented with the question, "What if socialism was more efficient than capitalism?", he simply said, "But it isn't," and that was all that could be gotten.
Libertarianism is just as irrelevant to the conclusions of Austrian economics as is vica versa. Austrian economics is not a position on what forms of government should exist. It is a factual pursuit of knowledge. Your criticisms against anarcho-capitalism are thus nothing more than the result of poor aggregate thinking, and completely miss the target. There can be non-libertartian Austrian economists (see Greenspan). There can also be non-Austrian libertarians (see Bryan Caplan).
History is something to be interpretted through economics and politics. It can also inspire the study of both. However, it cannot tell us anything about the truth of either. It must be interpretted. Without our proper interpretation, history would be just a series of different things, without any causal connections.
Finally, regarding your criticisms on anarcho-capitalism. As someone who's read up on history, you should know that Ancient Ireland and Ancient Iceland were Stateless, the former for almost a 1000 years, the latter for almost 300. The "Wild West" was largely stateless, yet was very peaceful (despite dramatic renditions in the movies). Somalia is essentially anarcho-capitalistic, though experiencing difficulties. I suspect that given time, private solutions to law will arise. Anarcho-capitalists do not assert anything about the quality of human beings, only that for any given distribution of human character, anarcho-capitalism is the best system. Whether all men are evil and stupid or not, having a State doesn't fix the problem -- but only allow the worst to rise to the top.
Except, expensing stock option grants given by company A for company A's stock and accounting for a shareholder dilution is double-counting. Also, as I clearly explained, it doesn't make sense to expense these type of stock options, because the company's own stocks are not an asset it owns. It doesn't (and can't, and shouldn't) put them on the books as an asset. Thus, there can be no expense.
My point wasn't about the exact numbers. It was about the fact that you're assuming what you're trying to prove. Simply because the employees got $600 in salary does not mean that the company had an $600 expense. This can easily be demonstrated by the following fact: some external agent (outside of the company) could have paid them, as part of an agreement with the company.
Thus, to say that employees got $300 in stock options for their company does not necessarily mean the company incurred an expense. Rather, the shareholder ownership was diluted. The stock grant cannot be an expense, because the company cannot consider its own shares an economic asset. An expense is "the outflow of assets or the incurring of liabilities (or both) during a period". As stock options of the type we're talking about are neither an outflow of an asset or an incurring of a liability, they cannot be called an expense.
Sorry, but you've assumed the thing you're trying to prove. In your
Expenses = 900
You've assumed that $600 of that is salaries. Of that $600 in salaries, you've assumed $300 is paid for in stock, which you call and expense.
Expenses:
Salary: $600 .Salary paid in cash: $300 .Salary paid in company stock: $300
Other: $300 ..Net: $900
You've thus assumed the very thing you're trying to prove. Simply using math doesn't allow you to commit fallacies.
Contrary to your statement, dilutions do dilute permanently. In effect, a dilution is an inflation of the number of stocks available. It's effects are lasting.
You, and anyone else who wants to mandate expensing options for the company the employee works for, are confused about assets, equity, and expenses. An expense has to be the expenditure of an asset. A company owns cash or other companies stocks -- those are its assets. If it uses them to pay employees, that is an expense. Yet, a company does not own its own stock. That is not an asset of the company. Quoting from Lloyd:
First, a company's own shares have no scarcity value to the company as it can create new ones effectively at will without significant cost.
Secondly, a company cannot own itself, as all internally held shares are actually owned by the external shareholders and whose existence is thus of no economic consequence to anyone.
However, in one case the shareholders suffer dilution in their proportional ownership of Intel, and in the other case they suffer a reduction in the value of the company itself as it has given up an economic asset. OTOH, a company cannot count its own shares among its economic assets....
Shareholders can be diluted in their ownership, OR they can experience a loss in the value of what it is that they own, but trying to pile one loss upon the other is simply absurd.
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The solution you proposed is the "Chicagoean" solution, as would be supported by someone like Friedman. I'm proposing an Austro-libertarian solution: homesteading is different than granting. For homesteading, they actually have to be making a real use of the spectrum (jamming it with junk-noise doesn't count).
It's the difference between the King giving a land-grant of an entire country to one person, and the the courts recognizing that a plot of farm a farmer has homesteaded (plowed, tilled, grew crops on, etc) is rightfully his property.
Obtaining physical control of property through fiat State-grants and through homesteading are entirely different things (and only one of them, homesteading, generates real property rights, in the sense of natural law).
Your reaction in support of consumers is understandable, but misplaced. It is, in fact, the FCC that harms consumers by regulating the spectrum; in fact, once big corporations realized how profitable such was for them, they fully supported such. I'd suggest reading what I wrote, and the quotes and articles I referenced. You might find them enlightening.
PS: Obviously, I work for the Greedy Capitalist Pigs (GCPs).
You are right, the spectrum is plentiful. However, that doesn't mean that there will be no interference if we simply allow unrestricted use of it. In fact, Wilson deliberately sabotaged the privatized spectrum by allowing any and all uses of it, without restriction (the result was a predictable tragedy of the commons). Furthermore, how well people can utilized the spectrumn depends on our technological state. Allowing homesteading of a specific frequency on the spectrum -- and disallowing interfering uses on spectrum that is relevantly close, via the "technological unit" -- is perfectly reasonable, just, and effective.
Although some of the comments here have been intelligent and made with understanding of economics, many of them have been socialist and interventionist nonsense. Hence, I'd like to offer a broad, but brief, response.
The argument by many here seems to run something like the following: The spectrum is scarce, relative to the demand for it; therefore, the government should regulate it. This is simply nonsense. It is precisely when things are scarce that we most need private property rights in them. How would these rights be acquired? By homesteading the relevant portion of the spectrum. Of course, what constitutes "homesteading" a certain frequency is a continuum problem -- clearly, simply spewing out junk on it doesn't constitute homesteading it. One has to actually be making a real use of it.
In a For a New Liberty , Murray N. Rothbard, argued that we don't need State-intervention in the spectrum. See Personal Liberty: Freedom of Radio and Television . Contrary to the commonly held but mistaken view, there was not chaos in the spectrum before the FCC was created to intervene in it. Instead, things were working quite efficiently as courts recognized private property rights in spectrum homesteaded by different individuals. As Rothbard states, the belief that there was chaos prior to State-regulation of the spectrum is
As B.K. Marcus has noted, this account is supported by the memoirs of Herbert Hoover, who noted that One of our troubles in getting legislation [to nationalize the airwaves] was the very success of the voluntary system we had created. I would highly recommend reading the historical overview of the spectrum given by Marcus. Marcus argues that, in order to get support for legislation regulating the spectrum, Hoover purposefully created spectrum-socialism, granting licenses to all applications, free of price or restriction. This, of course, creates a tragedy of the commons.
What we need isn't regulation of the spectrum. Rather, we need deregulation and privatization (via homesteading) of the spectrum. Common law is perfectly capable of applying existing property-rights conventions to the spectrum, including accounting for interference (which would be analagous to building a mineshaft 2 feet under someone elses' house, hence causing it to collapse).
Neither do you. Outside of its State-granted priviledges of monopoly (copyrights and patents), which every software company enjoys, Microsoft is not a monopoly. The correct definition of "monopoly" is when competition is prohibited by coercive force. See Rothbard, Murray. Man, Economy, and State: Monopoly and Competition . The anti-thesis of capitalism is whenever the State intervenes in the free market, in voluntary (non-coercive) transactions between individuals.
Yes, there's no way to possibly compete. Because, as we all know, pouring more money at something always solves the problem and produces a superior product. Right? Which is exactly why many feel (subjective valuation) that FireFox is better than MS IE.
Typical attitude of the technical elites. The free market might not always decide that technical superiority is the criterion for "the better product". Maybe how many other people use it is, or maybe it's ease of installation (e.g., already being there) is a big factor; i.e., people consider the search costs of finding an alternative, and also the transaction costs (in terms of opportunity cost of the time it takes to search for, install, and configure an alternate browser that isn't on the desktop by default).
In short, value is subjective. Period. End of the discussion. What you "value" doesn't matter to anyone else. You can point to objective facts of difference between MSIE and FireFox. However, because value is subjective -- not objective, and certainly not something determined by you -- you can't say that any given browser is superior, except by the criteria you choose. Other people may not find those criteria so important.
You might argue that these factors might not be there if FireFox was installed on MS Windows by default. Maybe true. But neither you, nor anyone else, has the right to force Microsoft to alter the terms of their contracts with OEMs, nor does anyone have the right to force OEMs to place any particular browser on the PC's they sell (Note: MS does not "force" OEMs to install Internet Explorer; it presents them with the conditions under which it will contract -- no coercive force, no violation of property rights, involved).
PS: Btw, "supply-sider" does not mean supporter of the free market. The only group of economists who are almost unanimously in support of the free market is the Austrians. Outside of that school, all other schools of economists support various interventions in the free market, even the Chicagoeans.
Tell them to go fuck themselves. They can pyramid their fraudulent fractional reserve banking on someone else's money. Any bank or financial institution that can't be bothered to make their website serviceable for a variety of different web-browsers and OS' isn't worthy of your money.
There is no obligation by web-browsers to view the ads of those websites they visit. Even if the ads show up, they certainly have no obligation to pay any attention to them.
"Social contract" theory is bullshit. The only contract is one you actually agree to, either through obvious implicity or explicitly. Signing a contract, or clicking "I agree" on a license you read counts. Walking into Regal, you agree to obey the rules of the theatre, and not make a commotion. However, there is no such implication for viewing a website that says you have to download every image and piece of text on that website and look at it.
The only obligations you may incur would be to note deface the website or do something simlar.
Rather than everyone focusing on "what they want", what we should be focusing on is property rights and monopoly in the classical sense.
As classically (correctly) conceived, monopoly means that competition is prohibited via coercive force. The state, for example, is a monopoly: it is prohibited, by coercive force, to compete with the state in the production of law, justice, protection, etc.
So, regarding these companies, the question is, are they monopolies? Well, if competition is coercively prevented then yes they are. However, this should not mean that we should regulate the market, but rather that we shouldn't interfere with it (e.g., prevent competition). Of course, the existence of a State creates an incentive force corporations to lobby for anti-competitive measures. Fixed costs, such as licensing and inspection, benefit large companies by making it more difficult for small companies to stay in business.
If you want better broadband service, you should work to provide it, not try to force companies to do anything, or complain. However, this shouldn't be provided by the State; if anything, the State's only role should be in maintaining law (I'd argue even that isn't necessary, and that the state is a criminal organization which should be abolished).
What you're really saying when you say that the State -- either the local, state, or federal govenrment -- should do something is "I want this, but I don't want to pay for it, and want to externalize the costs of producing it onto everything else."
Thus, I come back to the issue of property right. No-one has the right to use someone else' property without their consent; to say that they do is to argue for socialism, which (even in its "anarchist" form) is immoral and impractical.
True, but that's the case in any system of experts: how does one decide whether one's an expert or not, without succumbing to the fallacy of popularity?
How about...
1. Only allow those with accounts to post.
2. Accounts initially start off with a score of 0 on each topic.
3. Accounts earn points (or lose points, going negative) as their owners demonstrate knowledge/expertise/understanding of various topics.
4. Below a certain level, edits need to be submittted for approval. Below another level, individuals cannot post on a topic, due to their demonstrated ignornace of it.
5. Below a certain overall average level, individuals cannot post at all, because they've demonstrated they aren't being constructive.
6. Above a certain level, individuals are considered competent, supercompetent, or experts in various areas.
7. When there are arguments in a field (e.g., in economics, between mainstream economists and Austrian economists), to support objectivity, editors and contributors should not take positions, but rather explain the positions of particular sides. They should be judged on how accurately they explain these differences, and compare and contrast.
Superior means it serves the majority of the target audience (which doesn't need activeX) better. Crap like ActiveX and Flash is annoying and hindering to users. I'm particularly annoyed when financial websites (Fidelity, MBNA, Chase, etc) use unnecessarily fancy crap that slows me down; however, it renders fine on Firefox.
IE is the most worthless browser I've used. It has very poor security. It does allow popups (maybe you have some external popup blocker, because none comes by default with IE). It crashes frequently and is unstable. Its so crappy that you can't even adjust the font size to what you want on half of the webpages out there (e.g., ESPN). Even on websites where you can resize the fonts, you only have 4 options. In Firefox, you can make the font as large as you please. It renders HTML in non-standard fashion. Unlike Firefox, which is XHTML compliant, IE violates numerous standards, and invents ad-hoc standards of its own.
It's a fact.
Anyone who's used Firefox knows it's better than IE. It has 10% market share already. More and more people are coming to use it. The things keeping people with MS IE are familiarity and search-costs.
However, people get sick of popups and virus'. You know, most people I know who've gotten food-poisening at a restaurant never go back to that restaurant again. It takes some 200 good experiences to negate just one bad experience with a company.
Actually, a worthy performance boost should be an order of magnitude (10x).
I don't upgrade until there's a computer 10x better than the one I have right now, and available at a good value.
To clarify on the self-evident (a priori) truth of the action axiom, let me explain why it cannot be tested.
In statistics, we often use a null hypothesis (default, H{0}) and an alternative hypothesis (alternative, H{a}). The null hypothsis is assumed true (I won't get into CI, alpha, or p-values, since they are not needed for this point). So, the statician would write out something like:
H{0}: x >= 6
H{a}: x 7
However, the null and alternative hypothesis must be meaningful. This is something that textbooks don't even state, because it is so obvious. For example, you cannot state, or rather, you can state, but such would be meaningless:
H{0}: x = sqrt(-4)
H{a}: x != sqrt(-4)
Saying sqrt(-4) is meaningless, because there is no such thing as a square root of -4, unless we get into imaginary numbers, such as 2i. You also can't say something like
x = my weight
H{0}: x > 0
H{a}: x a priori truths.
The only ignorant one here is you.
Pythagoras theorum isn't "proven" in the sense that you're referring to -- empirical observation. And anyone who went about trying to prove it by measuring the sides of every triangle he encountered would be considered an idiot who ahs missed the point.
I'm well aware of statistical methods. None of them can prove or show causation. They can only show correlation. Granger-causality is nothing more than a sophisticated fallacy. Every reputable statistics textbook specifically says that statisitcs cannot prove causation, but can only correlation. You state that we can determine if "all else is equal". Firstly, all else can never be equal in the absolute sense, since time and place are variables that can never be equal between two comparisons. You clearly do not understand what you are talking about. When statistics professionals account for variables in their regressions, they are not (and cannot) accounting for all variables. Rather, they're accounting for the ones they consider important. Someone else can always disagree with them, so -- contrary to your assertions -- none of their manipulations can be conclusive.
We can show a clear correlation between an increase in temperature and an increase in the number of ice-cream cones bought. This does not in any way prove causation, one way or another. Without a prior understanding (e.g., that people say that they eat ice-cream because it is hot; and the knowledge of physics to know that our eating ice-cream is not going to make it hot), we cannot determine whether the ice-cream eating causes temperature to rise or whether inreasing temperatures cause more ice-cream eating.
All that a correlation between to things shows is just that -- that there's a correlation. It also shows that there can be causation one way or another (not necessarily). We can also show a correlation between the number of people wearing thongs and the number of people eating ice-cream cones. We obviously know that neither causes the other, but that they are both "caused" by a third factor: increasing temperatures.
Your babblings about the IMF are irrelevant. No conclusions can be drawn from the interventions of the IMF alone. Rather, we have to interpret the history of the IMF. Someone who supports a command-control economy can come to very different conclusions from the IMF's actions than someone who supports the free market, and vica-versa.
You obviously do not understand the scientific method; this is not uncommon among mainstream economists. If an experiment has many variables and no controls, it is a poor and useless experiment. That would be an accurate description of any attempts at manipulation by the IMF. The history of the IMF hasn't really proven or disproven much of anything (except for statements that are solidly contradicted by fact; e.g., "the IMF does not exist").
The closest historical thing to a "natural experiment" was the split of East and West Germany. Yet, still, "all else was not equal". There is always something that someone can say was different that accounts for the failure of one, and the success of another, as opposed to the reason that we know to be true from correct economic theory. History must be interpretted. Alone, it tells us nothing. Without, for example, an a priori understanding of causality, we could not understand the relatedness of history, and would see it as a series of completely unrelated events. Your example of a "captured economy" still does not make your point. There are always variables that are different. For example, in the East/West Germany example, the socialists can always say, "well, it is something about the population and geography of West Germany; if it had been West Germany that was socialist, socialism would have worked".
You obvioulsy haven't bothered with what I've noted about self-evident a priori truths (axioms). These are not "self-evident" in the psychological sense. In the psycho
I do not need to "test" the laws of mathematics. I don't need to "test" the pythagorus theorum. If I went about doing so -- making sure that a^2+b^2=c^2 for all triangles -- mathematicians would consider me an idiot and obtuse. The action axiom is not something that can be, or needs to be tested. If something is testable, it must be falsifiable and verifiable. The action axiom is neither. You cannot falsfiy it -- any attempt to falsify it would in fact verify it, because such an attempt would, in fact, be an action. An a priori truth is something that cannot be denied without self-contradiction in its denial.
The action axiom (man acts) qualifies as an a priori truth, as any attempt to deny its truth is in fact an action.
The postulates don't qualify as axiomatic truths -- nevertheless, to say that they are "tested" is a stretch of the imagination. We don't "test" that leisure is a consumer good. It is simply a law of nature. A variety of resources may, however, rise to axiomatic status. Without a variety of resources, man would never act, or perhaps could never even conceivably exist. So, any statement denying a variety of resources is self-contradictory: if there were no variety of resources, you and I could not exist, thus could not act. Thus, denying that there is a variety of resources is no different than denying the existence of man: self-contradictory. On this, see Economic Science and the Austrian Method. Hoppe, Hans-Hermann. Specifically,
I'd also note that another brilliant investor -- Phillip Fisher -- criticized the EMT, ever-popular among clueless academics. See Common Stocks and Uncommon Profits And Other Works.
While prediction is important and useful, it is not the only important factor in science. You have completely left out something far more important: understanding. The core of science is in seeking understanding. It is possible to make predictions without having understanding. Newtonian physics allows us to make very accurate predictions about falling bodies, without having any understanding of gravity. Long says, "As an empiricist, Friedman takes a theory to explain a phenomenon if it enables us to predict the phenomenon's occurrence; whereas for Austrians, to explain economic phenomena is, in Ludwig Lachmann's phrase, 'to make the world around us intelligible in terms of human action and the pursuit of plans.'":
We do not need to "test" economic theory. We deduce it from a logical chain of reasoning, starting from self-evident axiomatic truths and self-evidently true empirical postulates: (1) Man acts, and to deny such would be self-contradictory; (2) Variety of resources, human and natural; (3) Leisure is a consumer good; (3) optional: when analyzing economies of indirect exchange, we assume indirect exchanges are occuring; we aren't "testing" the theory here, but choosing the theory that applies to the reality we want to explain; (4) least important, a simplification for elaborating catallactics: firms aim at maximizing profits; praxeologists always remember that where this postulate does not apply, the theories deduced from it, while correct, do not apply. Furthermore, contrary to your mantra, we cannot test correct economic statements. We cannot "test" the statement that ceteris paribus, inflation causes price increases.
And, as noted, mainstream economists can't even do prediction very well. They're the one's talking about a "new economy" and how the price of gold would plummet after the dollar was severed from gold. So, by their own standards, they are worthless failures who can be completely rejected and ignored. While physicists make 99% accurate predictions, mainstream economists make incorrect predictions 99% of the time. Sounds like useless and worthless to me.
The Austrian system is better, because it does not make absurdly unrealistic assumptions, simply for the purpose of model-making. It does not confuse correlation with causation, or commit logical fallacies. It does not allow for absurd conclusions, simply because they can be mathematically derived. It does not assume the unrealistic assumptions of perfect competition and equilibrium. Finally, those who understand Austrian economics have the best track-record as a group when making entrepreneurial judgements on the business cycle.
If neoclassical, keynesian, and game-theorists really are so good at making predictions, why aren't they rich? There's one well-known example of a mainstream economist who was very successful on the stock-market: John Maynard Keynes. Yet, he did not obtain success using some econometric methods. He follo
More nonsense. Austrians don't contend that people in the free market have perfect knowledge, nor that there are no crooks. These kinds of idiotic assumptions are the domain of neoclassicals and game theorists. Austrians don't make such ridiculous and unrealistic assumptions. People do fine in the free market without "perfect knowledge"; in fact, it is socialism that is hindered by the lack of knowledge. The free market also has ways of dealing with fraud, such as consumer agencies and protection agencies.
The reality is that the past 100 years would have been much better without any states at all: indeed, any 100 year period would be, but particularly this one. Firstly, there's the fact that States have killed more of their own people in the past 100 years than have been killed by wars. Then, there's wars, which have also killed millions.
The reality of capitalism is that individuals help themselves by providing services others desire. It's a win-win situation. The reality of socialism -- and mixed interventionist economies, like ours -- is that people help themselves by harming others: the war of all against all (e.g., special interest groups).
You continually appeal to physics, noting that they use approximations. While this may be true, it proves nothing. Physics is not economics. Simply throwing out analogies doesn't make your point. Particles don't make decisions. Human beings do. And if prediction is so all-important, mainstream economists (Keynesians, neoclassicals, game-theorists, etc) are all completely worthless and useless. They have a terrible track-record, and it isn't going to get any better. They're among the foremost individuals who start talking about a "new economy". In the 70s, when gold was severed from the dollar, mainstream economists predicted that the price of gold would fall to its non-monetary value (that of jewelery, around $6-$8 and ounce); the reality is that gold-prices skyrocketed. By their own creed -- "science is prediction" -- they are imbeciles.
Mainstream economists are wholy and completely deficient. They are confused about causality vs. correlation. Statistical methods cannot show causation. And causation is what you really need to be able to make real predictions. They're forever stuck in the ridiculous assumptions of perfect competition and equilibrium (an absurd thing, for in "equilibrium", the only place where their equations are applicable, there is no action; indeed, that's precisely why they're calculus is applicable). Economic phenomena are not subject to calculus because differentiation requires continuity, and economic phenomena are not continuous (or even close): (a) Many goods are discontinuous; (b) People do not consider things in infinitesimally small units.
You may be able to predict that a population will spend some portion of its income on food. So what? You hardly need econometrics for that? When econometricists try to go further, they fall on their face, precisely because there are no fixed constants. People can change their preferences for how much they spend on food, or the quality of food they buy. People can change their preferences for the type of foods they buy. What you're doing is trying to is blur out the real details by aggregation. In doing this, you're ignoring reality, and making simplifications just so that you can use your models.
You attempt to justify this by pointing to physics, noting that they don't account for all details, yet can make very accurate predictions. This is because, for one thing, their systems are not as complex. They aren't dealing with conscious, decision-making entities. The result is that they can make predictions with 99.9...% accuracy. The accuracy of econometricists predictions, however, is non-existant. This is because of all of the riduclous unrealistic assumptions, the confusion of causality and correlation, and the fact that if they ever could predict, they'd develop a reputation for doing so, and their predictions would become self-nullifying.
You are -- quite understandably -- confusing some things which, while related, are separate. A list of concepts covered at Mises.org would include:
s t
History
Austrian Economics
Libertarianism
Within libetarianism, there are three sub-categories:
Anarcho-Capitalist
Minarchist
Constitutionali
Murray Rothbard was an anarcho-capitalist; Mises. however, was minarchist. Sen. Ron Paul is Constitutionalist / minarchist.
Saying that you think anarcho-capitalism is unrealistic is not an argument against Austrian economics or the ATBC. Austrian economics merely describes the results of various scenarios. It is consequentialist. It is void of morality.
Libertarianism is a position on what should be law. It is a moral position on law and justice. It holds that it is justifiable to use coercive force against the initiation of aggression, but nothing else. Anarcho-capitalism holds that States necessarily violate that principle, thus are criminal organizations that are undesireable, and should be abolished.
The practicality of this position does not weigh on the judgement. Capitalism happens to be the most efficient system possible; however, even if it weren't, so what? If socialism were somehow more efficient, that wouldn't justify it. Rothbard acknowledged this point. Mises refused to even consider it. When presented with the question, "What if socialism was more efficient than capitalism?", he simply said, "But it isn't," and that was all that could be gotten.
Libertarianism is just as irrelevant to the conclusions of Austrian economics as is vica versa. Austrian economics is not a position on what forms of government should exist. It is a factual pursuit of knowledge. Your criticisms against anarcho-capitalism are thus nothing more than the result of poor aggregate thinking, and completely miss the target. There can be non-libertartian Austrian economists (see Greenspan). There can also be non-Austrian libertarians (see Bryan Caplan).
History is something to be interpretted through economics and politics. It can also inspire the study of both. However, it cannot tell us anything about the truth of either. It must be interpretted. Without our proper interpretation, history would be just a series of different things, without any causal connections.
Finally, regarding your criticisms on anarcho-capitalism. As someone who's read up on history, you should know that Ancient Ireland and Ancient Iceland were Stateless, the former for almost a 1000 years, the latter for almost 300. The "Wild West" was largely stateless, yet was very peaceful (despite dramatic renditions in the movies). Somalia is essentially anarcho-capitalistic, though experiencing difficulties. I suspect that given time, private solutions to law will arise. Anarcho-capitalists do not assert anything about the quality of human beings, only that for any given distribution of human character, anarcho-capitalism is the best system. Whether all men are evil and stupid or not, having a State doesn't fix the problem -- but only allow the worst to rise to the top.
Except, expensing stock option grants given by company A for company A's stock and accounting for a shareholder dilution is double-counting. Also, as I clearly explained, it doesn't make sense to expense these type of stock options, because the company's own stocks are not an asset it owns. It doesn't (and can't, and shouldn't) put them on the books as an asset. Thus, there can be no expense.
My point wasn't about the exact numbers. It was about the fact that you're assuming what you're trying to prove. Simply because the employees got $600 in salary does not mean that the company had an $600 expense. This can easily be demonstrated by the following fact: some external agent (outside of the company) could have paid them, as part of an agreement with the company.
Thus, to say that employees got $300 in stock options for their company does not necessarily mean the company incurred an expense. Rather, the shareholder ownership was diluted. The stock grant cannot be an expense, because the company cannot consider its own shares an economic asset. An expense is "the outflow of assets or the incurring of liabilities (or both) during a period". As stock options of the type we're talking about are neither an outflow of an asset or an incurring of a liability, they cannot be called an expense.
Sorry, but you've assumed the thing you're trying to prove. In your
Expenses = 900
You've assumed that $600 of that is salaries. Of that $600 in salaries, you've assumed $300 is paid for in stock, which you call and expense.
Expenses:
.Salary paid in cash: $300
.Salary paid in company stock: $300
..Net: $900
Salary: $600
Other: $300
You've thus assumed the very thing you're trying to prove. Simply using math doesn't allow you to commit fallacies.
Contrary to your statement, dilutions do dilute permanently. In effect, a dilution is an inflation of the number of stocks available. It's effects are lasting.
You, and anyone else who wants to mandate expensing options for the company the employee works for, are confused about assets, equity, and expenses. An expense has to be the expenditure of an asset. A company owns cash or other companies stocks -- those are its assets. If it uses them to pay employees, that is an expense. Yet, a company does not own its own stock. That is not an asset of the company. Quoting from Lloyd: