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Misc. Economic Questions

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Savannah Liston posted on Mon, Nov 16 2009 6:44 PM

I am probably going to be attending an lecture later this week at a local college given by Keynesian economists, and I want to go prepared. 

This lecture will be on the labor market, poverty, and wealth distribution. I have very little idea of the Keynesian theory of all that, so if someone could give me more details, and then maybe some references to find more Austrian info on it, I would appreciate it. 

Also, some ideas on monopoly, perfect competition, and IP/copyrights would be helpful. I have a friend who keeps talking about the perfect competition model, and how one of the requirements of that is "no barrier of entry," and so he says that copyrights create a barrier to entry, which would seem to me to be more monopolistic, but he says it creates competition, and supports IP, and anti-trust laws. I can't understand the whole thing, his argument doesn't make sense, but oh well. Just some thoughts on that subject would be helpful. Thanks! 

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The argument in support of patents is that without them a businesses' product will be copied and produced for a cheaper price by another company, thereby providing a disincentive to invest.  But, this is false.  The incentive to invest is profit, and without investment and entrepreneurship there is no profit.  If you control physical factors of production (capital, labor, et cetera) then you have enough incentive to produce.  By providing patents you are giving businesses a monopoly of a certain good for a number of years, barring other companies from competing (which also is an incentive to invest).

Joseph Stiglitz actually makes this argument (against patents) in Making Globalization Work (he, at least, concedes that patents do not "always" provide incentive to invest).  But, he only supports the removal of patents on medication going to the Third World.  He later avoids the argument altogether and says that the First World should subsidize their medication industries to provide these medications to the Third World for cheaper prices.  But, it is nevertheless interesting to see a Neo-Keynesian basically conceding the point (even if he rescinds on this later in the same chapter).

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