GregNews: "experimental economics and business patents"

[PILCH Hartmut <phm@a2e.de>]

Greg is again arguing for the abolition of the patent system as a whole.
Nothing particularly new, just citing another example to show that
business methods are the "technology" that corresponds to the "science"
of experimental economics and inferring from there that there can be
no meaningful restrictive definition of "technical invention" and rather
the term must encompass all creations of the human intellect.

A part of the debunking FAQ for this type of argumentation can be found at

        http://swpat.ffii.org/players/aharonian/

The EPO has btw invited EuroLinux to the symposium to give a talk on how
the free software community is coping with the realities created by the
EPO/CEC, as if the directive was already a decided matter.

<<
    On November 21 and 22, the European Patent Office is having a two day
symposium on computer-related and business model inventions.  More info
at the EPO Web site, or by emailing internationalacademy@epo.org.

    I have a few hopes for the meeting, none of which I expect to happen.
First, the Europeans have had two years (since the EPO Pension decision)
to explore ways of more clearly defining terms such as "technical effect".
I hope someone will be presenting more formally semantic definitions of
these terms used to deny patents to software and business methods.
Second, with regards to software patents (oh sorry, "computer-related
inventions"), I hope EPO will be inviting some of the European computer
scientists and mathematicians whose theoretical work and applications
are totally blurring any boundaries between hardware and software from
an economic and engineering point of view, and therefore from a patent
point of view (especially some of the cutting edge work done by the
Germans in hardware/software codesign).

    Finally, I hope some of the discussions focus on this year's Nobel
Prize in Economics to Vernon L. Smith for his work in experimental
economics.  Mind you, this is a prize from a group of Norwegians, who
as I last recall, live in Europe, who seem to be more familiar with the
the growing body of Europeans advancing the science of econophysics
(which provides a formal basis for experimental economics).

    The 24 October 2002 New York Times, page C2, has an article by Prof.
Hal Varian of UCal Berkeley titled "Observe, theorize, measure, test and
don't overlook what goes wrong" about Vernon Smith (and about Daniel
Kahneman who shares the economics prize for his work in the psychology
of economic decision making).  The article shares much in spirit with
Varian's earlier article on experimental economics (though I would be
more comfortable with Varian's articles if he tried reconciling his
views of the technology of economics with his opposition to patenting
such technology). Some excerpts from Varian's article:

    "Experimental economics has had a huge impact on economics, in
    both theory and practice.  Researchers have gone to examine a
    variety of social institutions using experimental methods, and
    today it is firmly established as a legitimate subject."

    "The discipline of economics, like other sciences, rests on
    observation, theory, measurement and experimentation.  Theory is,
    necessarily, a simplification of reality.  But how do you know
    you've chosen the right simplification?  Experimentation is an
    antidote to misspecification: one often finds that effects that
    the theory neglects turn out to be important in practice."

    "The wording of the instructions or minor variations in the
    rules of interaction can be critical to the outcome.  The wise
    economist will be on the lookout for this sort of anomaly, just
    as Mr. Smith was back in 1955, for those anomalies are often
    the source of a deeper understanding."

Lynne Kiesling, an economist at NorthWestern University, had a similar
article in the 10 October 2002 Wall Street Journal, page A14 titled
"Market Laboratory".  A few excerpts from her article:

    "Experimental economics also enables testing of the extent to
    which we behave in accordance with neoclassical economics
    assumptions.  "Do you see what I see, and do you interpret it
    and respond to it in the same way?"  These questions are
    difficult to answer in realtime in a non-laboratory setting,
    and be exploring them, experimental economists have generated
    important new knowledge about how we make choices when confronted
    with tradeoffs and incomplete information."

    "Humans, unlike particles, behave and make choices based on
     conscious thought, and are therefore something unpredictable.
     Humans also can behave strategically.  Yet Mr. Smith does not
     take this as an argument for why laboratory rigor is
     impossible in economics.  Quite the opposite; laboratory tests
     on humans, with profit incentives, can generate consistent,
     high-quality data gathered for the precise purpose of testing
     scientific hypotheses - superior to that gathered by other
     sources."

     "Experiments with real people facing real incentives create
     an environment in which the effects of tacit knowledge are not
     assumed away to solve the equations on the blackboard."

     "It is human nature to dislike change and risk, particularly
     in markets.  But a relatively young field, experimental
     economics, helps us to understand these concerns, allowing
     economists to test alternate models in a systematic manner.
     If we can demonstrate the possible outcomes of a change, and
     show that the change need not be disastrous, we can create
     value and economic opportunities for people and industries."

Substitute 'physics', 'chemistry', etc., for 'economics' in the above
passages, and the resulting meaning is just as true and meaningful.
Similarly for 'mathematics' and its technology, 'software'.  Though it
is information that is being transformed and manipulated by software
and business methods, this doesn't change anything - information is as
physical as anything else that can be physically transformed (which
is why astrophysicists have to take information into account when they
deal with the transformations and manipulations of those objects that
are the most physical of things - black holes), especially when the
information is in the form of physical packets of electronic charge
being manipulated and transformed by technological devices such as
computers.  And with regards to economic quantities, is there anyone
who denies the physicality of 100 tons of pork bellies?

>>

Evidently, when physicists talk about black holes, they can apply
mathematical models, including those from information theory.  And
evidently, innovations within the realm of information theory can be
materialised through the standard interface between information and matter
which is provided by the universal computer.

Evidently, Greg knows quite well how to distinguish information from
material entities, even if he tries to create the impression that monism
and pantheism (the teaching that the mind resides in all matter) are very
modern philosophy.  In fact I suspect that they are nothing but
eternally returning attempts at philosophical regression.

Yet this text of Greg is slightly better than most, also because it does
not shy away from citing Hal Varian and pointing out what Greg sees as
contradictions within Varian's thinking which are in reality
contradictions in Greg's thinking.  Usually GregNews avoids any citation
of sources or materials which would point to weak spots and enable
GregNews readers to form an independent view.

-- 
Hartmut Pilch, FFII & Eurolinux Alliance              tel. +49-89-12789608
Protecting Innovation against Patent Inflation       http://swpat.ffii.org/
125,000 signatures against software patents      http://www.noepatents.org/