Saturday, December 31, 2011

The Failed Promise of Patents

Some say that patents are a prohibition on competition against an inventor, but I believe that patents very much prohibit cooperation among innovators. With regard to disclosure of the invention, the general consensus among many who do read patents is that they incorporate language that is so broad and vague, it is often hard to determine just what invention is actually disclosed. That vague language prevents cooperation among innovators with fear, uncertainty and doubt.

To put it differently, a person practiced in the arts described by a patent would be hard pressed to recreate the invention disclosed by a patent. This is particularly true of software patents which are so general as to be a patent on an idea rather than a specific invention. The goal in writing patents, it seems, is not to disclose the design of an invention, but to get a private monopoly on an idea.

Patent apologists implore us with the notion that without patents, inventions would not be disclosed, keeping inventions secret. The technology available today allows for reverse engineering down to a very minute scale. Given enough incentive and eyeballs, an invention will eventually be reverse engineered, and 99% of the time, we have the resources now to do it. Note how every DRM system ever released has been broken. There is even recent news of a workaround for HDMI encryption.

Besides, an invention with a design that is unavoidably disclosed is ripe for sharing anyway. The best that any inventor can hope for is good execution for the first mover advantage, even with a patent. The first few years of sales with very good execution and manufacturing will provide plenty of revenue to cover the costs of development.

Until I see conclusive evidence that patents have been a net positive for society, I remain unconvinced. Patent defenders will often point to the innovation we have seen so far, but that is innovation in *spite* of the patent system. I think they would find it difficult to show even one patent that has not hindered follow-on innovation or one that provided society with more wealth than the patent owner has gained. In sum, patents are great for litigation, not so great for innovation.

Tuesday, November 15, 2011

Patent Transparency

The news about Linux and Android technology is rife with stories about attacks against free software by Microsoft. The latest trend is that Microsoft has been threatening all of the major Android cellphone  manufacturers with patent litigation. To prevent litigation, Microsoft coerces Android manufacturers into entering a very restrictive license agreement with the understanding that the terms of the agreement cost less and have less uncertainty than litigation.

There is one really big problem with all of these agreements: they're all confined to secrecy through non-disclosure agreements. Through these patent licensing agreements, Microsoft is imposing their tax (alleged to be as high as $15 per unit on cell phones) on a free, open source operating system they didn't even build. This is the cost of knowing what those patents are and the cost of being "covered" by a license to practice those patents, even if they're not being practiced by the victims.

The purpose of the high licensing fees is to impose a cost on an otherwise free work of software that is greater than or equal to the cost of a Windows phone license. In other words, the message is, "Android? Say, that's a very pretty operating system you've got there. I'd hate to see anything bad happen to it. I think you'd be a lot safer if you paid us for protection and built Windows phones, too." Does the image of Marlon Brando come to mind?

Microsoft's strategy is simple on it's face: Approach a competitor with threats of a patent lawsuit. Then offer a way to eliminate the threat, but discussions only begin with a non-disclosure agreement. This way, even if negotiations fail, the patents are never revealed. It's important to keep those patents secret to prevent competitors from working around the patents. As negotiations continue to success, the result is a royalty agreement in complete secrecy, ensuring that no one else knows which patents are included or their true value based on the agreement.

This practice can be used anti-competitively and Microsoft isn't the only one doing it. To put this in perspective, in a competitive market, competitors strive to offer a better product to consumers based on price, product quality and customer service. In a combative market, participants seek to hobble or even disable their competitors to assert a private monopoly on the market. Patents were never intended as legal weapons of combat in the marketplace. They were only intended to give inventors access to capital to practice their inventions, but that's not how they're being used in business today.

It's time for some patent transparency. Patents are government issued grants of intellectual property and each patent is a matter of public record so anyone can look them up at the USPTO website (Google has just introduced a new patent search engine, too). Each patent is a monopoly on an invention. Patents are also assets that tend to substitute for research and development and customer service. Unfortunately, many patent owners have set up a shell game of corporations to make it hard to trace the true owner of the patents.

So I have a solution: all patent licensing agreements may not be kept secret by any non-disclosure agreements and that there should be no exceptions. Investors, public or private, have a right to know the true value negotiated for a patent. Investors have the right to know the impact on their investment when the company they invest in is approached by a patent aggressor, like Microsoft, or IBM, the king of patent licensing.

This proposed law should cover a few basic points. All patent licensing agreements, including out of court settlements (95% of patent cases settle out of court), and court orders, are to be made public and shall be registered with the patent office. The patent office must be notified in advance that patent licensing negotiations are about to begin, with notice of time, place and scope to ensure they eventually get a copy of the agreement resulting from negotiations. All patent agreements shall be made public in reports made to the Securities and Exchange Commission by publicly traded corporations. Any person or company contacted by a patent aggressor for royalty negotiations that are subject to a non-disclosure agreement will have standing to sue for relief. Finally, provide for refunds of all patent costs to the licensee should the patent be ruled invalid prior to expiration of the patent.

The penalty for failure to comply is termination of the patent. That should create plenty of incentive for compliance on the part of patentees.

The public has a right to know how government issued monopolies are being used to stifle competition and remove choices from the market in favor of patent owners (sometimes affectionately referred to as "patent trolls"). Removing the veil of non-disclosure agreements from patent licensing agreements will create greater transparency in a very murky market.

Moreover, competitors have a right to see how patents are being enforced in a particular market segment. With access to these agreements, competitors can see how the agreements are structured, what rights are conferred and determine the costs of entry to the market affected by a patent. They can also find ways to work around the patents to secure entry to a market without having to risk litigation first. Transparency will allow competitors to be sure they aren't infringing on patents, which is the point of patent publication in the first place.

Some are sure to cry foul. "Patents are private property! You can't do that!" Are they really? Patents are issued by the government as a temporary monopoly to the patentee. Patents are the only kind of "property" that allow you, the patentee, to tell others what they can and cannot do with their own private property. Clearly marking the true owners, the limits of the patents and the agreements relating to their licensing has no bearing on the value of a patent and would actually increase the value of the patent to the owner and society.

Congressional intent is that patents should promote the progress of the arts and sciences. A non-disclosure agreement is a sure sign that a patent aggressor has little interest in advancing the arts and sciences and is overtly thwarting the intent of Congress. It's worth noting that there is is a lot empirical evidence to show that patents have never encouraged innovation, much less advanced the progress of the sciences or the arts.

A closer inspection of patents as "property" reveals broad, general language as to the scope of the patent, making it difficult to tell where the patent begins or ends. Try reading a patent, especially a software patent, to see how it is practiced, or even how to avoid infringement. You're going to need a lawyer to help you. Even for engineers, this can be a hopeless quest.

Real property on the other hand is easier to understand. There are clear boundaries to real property and those boundaries are very well established so that everyone knows the limits of a property claim. Car ownership is just as easy to prove. But the metes and bounds of patents are about as clear as pea soup.

The law as it currently stands is very one-sided in favor of patent holders. In order to help weed out bad patents, there needs to be some penalty for gaming the system. What happens if a patent covered under a licensing agreement is eventually invalidated before the patent expires? My proposal takes this into account by providing civil remedies for a refund of all royalties paid, legal fees and other expenses resulting from any negotiations, agreements or litigation arising from enforcement of the patent upon the plaintiff. Criminal remedies shall be available in situations where the former patent holder fails to refund costs.

Because ex post facto laws are prohibited by the Constitution (and I'm not advocating them here), there is nothing we can do about the patent agreements already in force. But the points above would go a long way towards cleaning up the fear, uncertainty and doubt in the marketplace. Perhaps we can create a voluntary patent licensing exchange so that anyone who wants to disclose previous agreements can do so, as an act of goodwill.

It is estimated that innovation has contributed 90% of GDP since 1870, with the vast majority of that innovation covered by patents issued by the government. We the People have a right to know how the patents are being used to control markets since they have a material impact on the well being of all of us.

Patents have no place in a free market. But as long as we have patents, transparency in patent royalty negotiations is essential to regulation of their use and maintaining choice in the market for consumers.

Sunday, November 06, 2011

A Letter to my Congress Critters: On Copyrights

Dear Representative, 

The E-PARASITE Act and the PROTECT-IP Act, collectively known as the Internet Destruction Acts, represent yet another attempt by Big Content to impose their aging business models onto the Internet. Big Content has seen fit to fashion legislation in their own image, for their own benefit, without regard to the public. In recent years, Big Content has made steady encroachments onto the Public Domain through legislation and through misappropriation. They seem to think that consumers have no rights with regard to content, such is the attitude expressed in these Internet Destruction Acts.

These acts set aside due process rights in favor of the rights of Big Content. They set aside First Amendment rights in favor of Big Content. And they seek to create a captured audience, unable to choose which media they wish to view and where they'd like to view it.  Though Big Content benefits from and even capitalizes on copyright laws, they seem to have forgotten who the copyright laws are intended to benefit:

"The sole interest of the United States and the primary object in conferring the [copyright] monopoly lie in the general benefits derived by the public from the labors of authors." --- Fox Film Corp. v. Doyal, 286 US 123, 1932

We the People, in the end, are the sole beneficiaries of the copyright laws. Not the multinational Big Content corporations who impose region codes on the DVDs they wish to sell, who issue DMCA takedown notices even in cases where their rights are not even proven, who have imposed DRM - a failed and broken technology that fails immediately when the authenticating servers are shut down, who have created secret agreements with Internet Service Providers to create a defacto 3-strikes law without the consent of the People and who have disregarded the will of the People at every opportunity to do so.

Big Content, and you, my representative, hear this: the only reason we still have copyright laws today is because it is the will of the People. As one of the People in this country, I urge you to vote no on these Internet Destruction Acts and others like it. They have no place in a free society. Remember, a free idea will create more jobs than an encumbered idea.

Scott Dunn

Friday, October 14, 2011

No PC Security in Vietnam

I've been on vacation in Vietnam for the last week or so. Before I got here, I recalled the state of the computers I've seen here during my last visit and came prepared this time. I brought with me Linux CDs and DVDs as well as a couple of USB drives to help the family with their computers. Today, I'm going to give a brief description of the state of the typical computer in Vietnam as I see them.

My findings are based on a pretty small sample of three computers. Despite the small sample, the uniformity of the install choices made, and the geographical disparity of all PCs suggest there is widespread agreement among the PC builders on how to best build a Windows PC. It seems that their highest priority is that the PC will function properly as a pirated copy of Windows. Every choice made by these PC builders leaves the user less secure, unable to recover Windows if the machine should fail, and more likely to fail due to the choices made. Unless otherwise stated, the conditions observed are seen in all three PCs.

First, not a single PC had a certificate of authenticity. You know that colorful little sticker you usually see on the side of your computer? That sticker is the license key for your copy of Windows. Having this key is absolutely necessary in order to install Windows and pass Windows activation. That sticker is your license for Windows unless you bought a boxed copy and left the sticker in the box. This condition leaves users unable to re-install Windows without having to take their computer to the shop so that a technician can do the work.

Automatic Updates were disabled. The obvious reason for this is to prevent Windows Genuine Advantage from being installed on the computer to check the validity of the license key on the computer. This leaves the user less secure against known security issues because Windows will not be kept up to date.

When Windows is installed for the first time, it creates a user account that is usually the administrator account for the machine. After the installation is complete, the computer will reboot and then walk you through setting up user accounts and Automatic Updates. The user accounts that are setup here are also administrator accounts. Administrator accounts have full control of every process and file on the computer.

Most Windows users are unaware of this condition, and they do not know that they should be running as users, not administrators. This is important because of the way malware installs on a computer: silently. If you are running as admin while browsing the web, and you encounter malware, or a "drive-by download", the malware will install on your computer without you even knowing what happened. After that happens, the only clue is that your PC is running a lot slower than before.

Next up is the file system. By default, Windows will format a hard drive using NTFS. NTFS assigns access controls to each folder and file. This security information assigns access permissions to each file and folder, allowing users to access their own files and prohibiting user access to files that are not theirs. This is important for security in that it prevents viruses from accessing system files and changing them - if you are not running as an administrator account.

Here in Vietnam, it is common practice to install Windows to a FAT32 file system. Some of you may find that the term "FAT32" is familiar. Some of you might even remember that FAT32 was a feature in Windows 95 and 98. Unlike NTFS, FAT32 provides no access controls to files and folders in the file system. This means that even if you are not using an administrator account, you still have access to every file on the system and can change or delete them at will (and at your own peril).

Taken together, all of these conditions add up to one very insecure computer, even with antivirus installed. The FAT32 file system allows non-administrators to access system files and change them. User accounts are admin accounts and Windows Update is disabled. This is a playground for botnets in Asia created for the very purpose of pirating Windows.

When people pirate Windows, they fail to realize the true cost of using pirated Windows. To prevent piracy, I recommend installing Linux (like Mint, or Fedora). Linux has a few qualities that you won't find in the way Windows is installed here. With Linux, you get file and folder security by default. You don't run as admin by default. And you get automatic updates by default without having to worry about Windows Genuine Advantage consuming your time and money.

Some people are starting to wake up and smell the choices, however. By one estimate, there are more than a thousand Linux users in Vietnam. I'm gonig to do a conversion today from XP to Xubuntu. Even the Vietnamese government has taken note of the opportunities afforded by Linux. Many small countries from around the world, including Vietnam, see Linux as a opportunity to create their own software industry. Linux is also a way out of dependence on Microsoft and other American software vendors. In fact, Microsoft depends on piracy to survive.

So get safe, get legal and get Linux, Vietnam.

Wednesday, August 10, 2011

The Linux Debates

There is a debate within the Linux community concerning which office suite is better?  OpenOffice or LibreOffice? There is another debate about desktops. Which one is better?  GNOME or KDE? How about XFCE? Who cares?

I'm really quite oblivious to the debate and have been for the four years I've been on Linux. What matters to me is the incredible variety and number of applications to choose from. And I'm not just talking about what you see on the desktop.

Let me give you an example. I got curious about the QR code, a barcode that most modern smartphones can read, and wanted to learn more.  With a little digging, I found a nifty little utility, QRencode for Linux in the package manager. In a few minutes I had it installed, with web pages on how to use it in front of me.  In a few more minutes, I had created my first QR code and tested it on my phone to be sure that it worked as promised. It did.

While I happen to prefer GNOME, the experience I shared above was possible irrespective of the desktop used. That experience didn't tell me whether or not one desktop is superior to another. But it does tell me that Linux is a hell of a lot more excitement for me than Windows or Mac. Discoveries like QRencode are priceless and they just don't happen on Windows or Mac as easy as they do on Linux.

Whether I use GNOME, Unity or KDE, or some Office suite we haven't heard of yet, those itty-bitty utilities are what make Linux so exciting to use. QRencode is just one example of the UNIX philosophy of programming which is to make small programs that do their job really well. These little programs are what makes Linux so much fun to use because they can be combined in very powerful ways. This is a feature missing from Windows and hidden to most users in Macs, yet it has been here all along since the beginning of UNIX.

Sunday, May 29, 2011

Republicans Vote To Authorize Endless War

A letter to Jason Chaffetz, who represents my district in Congress:

Mr. Chaffetz,

If you come home to tell us that the Democrats don't have a plan, I for one, will consider your conclusion as a ruse.  Republicans hold the purse strings for now, and we can be sure that if the Democrats had a plan, committees with Republican majorities will never let a Democrat plan out of committee.  We all know your plan to end Medicare as we know it, has been pitched as a plan to save it.  It is really a plan to shift the cost of care for our seniors from government to them.  Under your plan, the cost of healthcare will leave little room left for anything else for tomorrow's seniors.  Few have seen it as a plan to divide the vote and pit the young against the old, but that's what it is.

I see also that the ACLU has reported that the latest defense authorization bill will permit "endless war", ostensibly as a way to stimulate the economy.  We know from eight long years of Bush rule, that war doesn't create jobs.

Say what you like, but I will be telling my friends that the Republican plan is a plan to send income upwards.  It's a plan that will permit a further concentration of wealth into the hands of just a few men and women who think they know what's best for us.  You, sir, are going to help create a Banana Republic at the expense of the everyone else.

So I ask you, have you noticed that the United States became the most powerful economy on the planet when the top marginal tax rate was 90%?  Perhaps you could try raising taxes to close the deficit.  Think about that.


Scott Dunn

Saturday, May 07, 2011

CEO pay tops pre-recession levels

The Associated Press is reporting that in 2010, the CEO's of 334 of the corporations listed on the Standard & Poor 500 raked in 24% more than the previous year and more than in 2007, before the Great Recession began.  According to the article, the highest paid executive was Philippe Dauman of Viacom, with $84 million.  The average pay, including all forms of compensation was about $9 million.  Aren't we *still* in a recession?

Why yes, we are, if you're an employee.  Average employee pay increased by only 3%, and topped out at $40,500.  Employees are apparently being told that due the weak job market, they can expect lower pay.  So the board of directors at the largest corporations have no qualm about paying CEOs more money during a very deep recession while at the same time holding the line on wages for employees.  How...consistent.

Top management will be the first to insist that if we just lowered the tax rates, they could create more jobs.  But economists have documented in detail how tax rates are lower than they have ever been in 80 years.  Despite these low tax rates, particularly during the Bush years, we have seen fewer jobs created than when tax rates were much higher.  In fact, we're experiencing an essentially jobless recovery and have been for two years.  We have decades of empirical evidence to show that lower taxes do not lead to more jobs, simply because they are as low as they are ever going to go.

I have a theory about why the economy is growing so slowly.  Currently, the top 10% own more than 85% of all the wealth, you know, like in a Banana Republic. Most of that wealth is socked away in securities like government bonds, stocks and real estate.  The same top 10% have all the money they want and don't really need any more for survival - this is especially true for the top 1%.  At that point, their choices for entertainment become limited.  They may find that competition is too tough, so they sit on their money taking dividends and interest.  With enough money socked away into investments, it becomes a full time job just to manage the funds.  

Are they working?  Are they creating wealth?  Are they asking for tax cuts?  Maybe, probably not, and yes.  They're working if they're managing their funds, but are they helping other people or maximizing their profits?  They're creating wealth if they're actually creating something other people can use.  But given the current conditions, with so much wealth cornered in the top 10%, the name of the game is wealth extraction because there is simply too much competition for wealth creation.  That's because most of the wealth is locked up somewhere, and that's why when the Federal Reserve Bank tries to inject "liquidity" in the market, it does little good, remember, interest rates at the discount window are near historic lows.  When the Fed makes more money available to loosen up the economy, the top 10% is right there at the spigot, capturing as much as they can before it can even get to the middle class.

Members of the top 1% club hate inflation.  That works against their investments and their dividends. If inflation is what we get when there is too much money floating free in the economy, then the opposite is when the money is locked up in long-term investments where it won't create jobs.  Get my drift?  Creating jobs would fuel inflation by putting money into circulation, and that is adverse to the interests of those who would prefer to sit on their money - that top 1% again.

Now about those tax cuts.  We see Private Ryan asking for tax cuts in the House, with a request to lop 10% off the top marginal tax rate of 35%.  His justification is that cutting taxes will create jobs.  But, as mentioned before, cutting taxes for people who already have money is like offering a drink to a man who already owns a bar.  Giving tax cuts to the to the top 10% doesn't mean they will spend more money.  As Robert Reich is so fond of saying, "they've already spent all the money they want to spend." It is worth noting that American became the greatest economic power on Earth when the top marginal income tax rate was at 90%.  

I'm not exactly sure what the solution is, but I know for sure it isn't tax cuts as the Republicans propose.  Democrats and Republicans worked together to give us budget surpluses by 1992.  We can do it again without having to gut the government or send the middle class packing.  The extreme concentration of wealth has set all of us against each other.  With fairer taxation we could put more money into circulation to rebuild the economy, and help us all to cooperate together, again.

Friday, May 06, 2011

A letter to Orrin Hatch: Patent trolls

Mr. Hatch,

I read with some displeasure, this article about a patent lawsuit against users of Linux:  The article points to a lawsuit instigated by "Bedrock Computer Technologies" (BCT), wherein they prevailed against Google despite the prior art that should have invalidated the asserted patent.  The prior art in question was in the source code for Linux dating back to 1997.  Of course, BCT prevailed in a jury trial in the Eastern District of Texas, aka, "The Rocket Docket."  Apparently, the jury refused to even consider the prior art, probably because it didn't come from the USPTO.

Which brings me to my next point.  I see that Microsoft has just argued before the SCOTUS, in i4i v. Microsoft, their position that burden of proof in patent cases is lopsided, and that the burden of proof for defendants should be reduced to give them a fighting chance against trivial patents that should never have issued anyway.  There needs to be an effective check on the power of the USPTO and apparently there is none.

Since patents are essentially a social contract for innovation, patent owners should not be given so much power so as to chill other innovators.  Google is one of the most innovative companies in the world and should not have to worry about patent lawsuits where prior art is so obvious and evident as in the case linked to above.  Worse, the patent is on an algorithm which is nothing more than *math*, and the last I heard, you can't patent math!

I also think it's time for a "loser pays" patent court system to keep the trolls out of the business.  If their patents aren't worth the paper they're printed on, they should not be so bold as to sue on a patent covered in prior art just so they can get an easy settlement.  If they really want it, they should be made to work for it, and suffer the consequences if they lose.  This would take all fun out of litigation for patent trolls.

I think it is very likely that patent troll victims are signing settlements that waive their right for a refund if the patent is later found to be invalid.  The law should say that this right cannot be waived.  This will further chill out the trolls and encourage innovation *and* execution, for no matter how good a patent is, execution is where the money is made.

I'll leave you with one last thought: A patented idea will create fewer jobs than a free idea by virtue of the fact that more people can use it.  Reducing the number of silly patents that are issued by the USPTO would go a long way towards creating jobs in America.

Thank you for reading this far.

Scott Dunn

Tuesday, May 03, 2011

Medicare - The 55 and Older Plan

I see that Michelle Bachmann believes that everyone over 55 gets to keep their Medicare benefits but everyone else should be "weaned off".  She is of course, referring to The Ryan budget plan, which seems nice until we take a close look at what it means.  First, the Congressional Budget Office estimates that the "plan" would cost an additional $34 trillion in expenses to everyone who gets to take part in the "voucher" program.  As noted by Dean Baker, this is 3 times the estimated shortfall for Social Security.

So let's look at it from the perspective of taxation.  It is a well understood principle that those who pay taxes should be the ones who receive the benefits from the taxes paid.  For example, gasoline taxes are using to pay for the roads.  Taking the taxes collected and using it for something else is very bad public policy.

Most pundits are proclaiming the Ryan plan as the end of Medicare.  If the Republican Plan is to end Medicare and turn it into a voucher program, then we need to see if the plan will provide the same value as before.  As Baker and many other economists have shown before, it does not.  And if they really want to wean everybody else off the Medicare idea, then they need to stop collecting taxes for the Medicare program and let everybody else plan for the eventual demise of the program with their own money in their own retirement account.

Their theory is that if people have to shop for insurance in their old age and pay for it with their vouchers and any money they have left over, then the lack of money will provide economic incentive to reduce the price of coverage.  Experience with the auto industry has shown that even without a voucher program, rates will continue to go up due to inflation.  Experience with people who don't even have Medicare show that heatlth care insurance rates continue to rise faster than inflation even without government insurance or vouchers to help them.  What makes Republicans sincerely believe that the elimination of Medicare will reduce the cost of health care given past experience despite the mounting evidence before them?

Instead, the Republicans seem to be intent on eliminating the Medicare program to remove what is most likely the only brake on health care costs that we have.  They seem to recognize that Medicare is a "single payer plan", and that such plans are reviled among conservatives.  Getting rid of the plan would score serious points with the Tea Party now, wouldn't it?  Or would it?  We don't see them talking about ending the Veterans Administration health plan now, do we?  Why is privatization good for Medicare but not VA health care?

Now about that $34 trillion of increased costs that future seniors would have to pay for their insurance.  Future seniors would get a voucher to purchase private health insurance instead of health insurance through the government.  The assumption is that "competition" among insurers would actually bring costs down where the government could not. This is the privatization of Medicare that pundits have been talking about.  Republicans seem to be missing something very obvious in their quest to reduce healthcare costs.  The United States has one of the most highly privatized health care systems in the world, yet we pay more than 3 times the cost per person as other OECD countries.

The trend then, is that privatization has increased the costs of health care in this country, not the reverse.  Why?  Private insurers have to pay for marketing, advertising, overhead, litigation, campaign contributions and lobbying.  For what?  To ensure that their executives are among the highest paid in the world?  Medicare doesn't have to do all that.  Medicare uses empirical evidence to set rates and to determine the best possible treatment.  Private insurance seems to find what works and uses that information to deny coverage to those who need it the most.  The private insurance and Republican message seems to be, "get well soon, or die."  Just ask any cancer patient who has ever had to fight for treatment.

So before they send us off the cliff without a parachute, we need to consider some other alternatives for reducing costs.  There is a lot of talk about competition.  Well how about globalization of health care?  Globalization has worked well for cars, electronics, clothing and tech support.  Why not health care?

The noted economist, Dean Baker, has articulated the solution rather nicely.  By setting up international mutual agreements to trade medical professionals, we can expose our health care system to international competition. This will help to control the costs imposed by health care providers working here while providing ourselves with a broader base of professionals to choose from.  There is also the phenomenon of "medical tourism".  We could allow citizens here to use their "vouchers" to purchase health care in countries that have more efficient systems, further exposing our health care system to international competition.  Remember, all other OECD countries are spending 66% less than we do with better outcomes and longer life expectancies.

Another point, and I'll make this the final one, is that of patents and copyrights in health care.  Few are willing to discuss the chilling effect of patents and copyrights on medical research, devices and techniques.  Fewer still are willing to discuss all the government funded research that leads to patents that eventually impose significant costs to the health care system.  Patents on drugs and medical devices impose very significant costs on health care with drugs and devices that sell for several thousand percent more than the marginal cost to produce them due to patent royalties.

A partial solution to this problem is compulsory licensing of the patent at reasonable and non-discriminatory pricing for patented products that resulted from government funding.  Such a policy would have a ripple effect across the health care industry, forcing pricing down, and allowing greater access to the drugs and devices so desperately needed by our aging population.  The complete elimination of patents for drugs and medical devices would eliminate the rent-seeking behavior that we have all seen from patentees.  That behavior imposes additional costs in the form of litigation, threats of litigation and the inhibition of research and development.  A good recent example of this behavior can be seen as exhibited by the owners of the BRCA1 and BRCA2 breast cancer gene patents.

In summary, there is a lot we could be doing before we even consider the privatization of Medicare.

Sunday, May 01, 2011

Life with Linux

I've been using Linux since the summer of 2007, and so far, I've enjoy the trip.  I've managed to get through all the bumps, too.  Today, I'd like to share with you my experience upgrading from Ubuntu 10.10 Maverick Meerkat to 11.04 Natty Narwhal.  They are the same operating system based on Linux, but the desktop interface is very different from 10.10 to 11.04.

I started with an online upgrade through the Synaptics Package Manager.  Synaptics prompted me with an opportunity to upgrade my system as soon as it became available on April 27th.  I discovered that trying to upgrade on the first day was a bad idea, even on a fast connection.  So I waited until Friday and ran it late that night.  Then I saw download speeds often approaching 2.2 mbs, but averaging around 1.4 mbs.  That took about 30 minutes for the download to complete.

Then the packages were unpacked and installed.  Synaptics will provide a good progress indicator showing how much has been done, how far there is to go and prompting for any input required.  That took about an hour.  There were about 1800 packages to download and install.

Once all the packages are installed, a clean up operation runs to detect software that is no longer needed or supported, and then the user is provided with an option to remove them or keep them.  I removed them.  When the cleanup completed, I was prompted to reboot my computer.  This is always the most exciting part because I've been waiting for the reveal of the new experience.

On reboot, I was presented with this: grub>.  This is a problem that I had not encountered in any previous upgrades.  After doing some research I found the documentation I needed.  that I could use a live CD to reinstall GRUB so that the bootloader could find the operating system and the kernel needed to start up properly.  Then entire operation (sans downloading the live CD) took about 15 minutes and some cautious typing to do.

First, I booted my computer to the GNOME desktop with the latest live CD for Ubuntu.  Then I started a terminal.  Setting that aside, I opened the hard drive to locate the UUID number.  The UUID is assigned to a partition when formated and makes different hard drives easier to distinguish.  Once I had the UUID displayed, I could enter the following command inserting the UUID where "XXX" appears:

sudo grub-setup -d /media/XXXX/boot/grub /dev/sda

This command reinstalled GRUB with the proper settings to the correct folder.  I used sudo to assume root privileges when I run the command that follows. "grub-setup -d runs the setup and the path that follows tells where to do the install.  "/dev/sda" names the drive.  In Windows, drive C is the boot drive and if you look at the drive through the BIOS of your computer, it will usually be SATA 0.  In Linux, drives are numbered a, b, c, and the drive letter isn't as important as the UUID.  Linux will map the UUID to the drive letter as need, but when GRUB looks for the files needed to boot, it goes by the UUID.

Then I rebooted my computer.  As the computer booted, I watched as the BIOS loaded and instead of getting "grub>", I got a blank splash screen, which I think I'm going to change later on, and then the login prompt for my desktop.  What a relief.  Documentation is king.  The lesson in this story?  Make sure you have a live CD ready to go before you do an upgrade.  You just might need this.

Some of you might also be familiar with GNOME.  GNOME looks a lot like Windows and has some similarities to the Mac interface as well. There is something like a start menu, icons on your desktop, and when you open folders, you get square windows with icons therein.  While Unity offers that, one big difference is the Launcher.  The Launcher usually stays hidden until you need it.  But when you need it, just move your mouse over to where it will appear.  Mine is on the left side so when I move my mouse over there, the Launcher slides into view from the left and allows me to pick the application I want with my mouse.

I can customize the applications that appear there by right-clicking on one at a time and clearing the check next to "Show in Launcher."  If I want to add items to the Launcher, I click on the Ubuntu button at the top-left corner of my screen, search for the application I want, then drag the icon for that application to the Launcher to the position I want it to appear.

So far, I'm enjoying the new experience of using the Launcher and I'm planning on test driving it for a couple of weeks. If, in the end, I find that I don't like it, I can still go back to GNOME and use that as my default.

If you don't have Linux installed, but want to try it out, you can download the Live CD and boot from it to test it out.  You can get it here.  Remember, when you run the live CD, you can test it out without making any changes to Windows on your hard drive.  When you're done, just reboot the computer by clicking on the power button in the upper-right hand corner of your screen and selecting "restart".  During restart, the CD will eject and you will be prompted to press Enter.

If you want to install Ubuntu over Windows or Linux, be sure you have backed up all your data.  Ubuntu will import your users and their data into new folders during the install, but you must follow the prompts closely to do that.  If you want to try an install, it is best to do it on a spare computer first.  That's how I got started.

I hope you find this information useful and look forward to your comments.

Tuesday, April 19, 2011

Tax Cut Addiction

Since the Christmas recess in Congress ended, the debate over the automatic expiration of the Bush era tax cuts has resumed with vitriol and fervor. We see that Paul Ryan has proposed what appears to be a rather extreme prescription for debt reduction with zero discussion of cuts to defense spending and additional tax cuts.

We have heard from Warren Buffet, one of the most successful investors of our time, suggesting that we should let the tax cuts for the wealthiest expire. We also see a new club of philanthropists forming, pledging to give half their money away. Perhaps this is their token offering of appeasement to the middle class for what they did to them to get where they are now. Or they may be waking up from the buzz of an addiction as I'll explain later. In any case, we know that change is coming, we just don't know the form or the time of it for sure.

I bring all of this up because last year, I read this very interesting article which discusses the question of whether or not income inequality creates unhappiness in America. Here is the relevant part of an article by Timothy Noah of Slate Magazine where comments on a point made by Arthur C. Brooks, president of the American Enterprise Institute. Brooks has said that income inequality doesn't create unhappiness, and Noah responds:
"Living conditions improve over time. But people do not experience life as an interesting moment in the evolution of human societies. They experience it in the present and weigh their own experience against that of the living. Brooks cites (even though it contradicts his argument) a famous 1998 study by economists Sara Solnick (then at the University of Miami, now at the University of Vermont) and David Hemenway of the Harvard School of Public Health. Subjects were asked which they'd prefer: to earn $50,000 while knowing everyone else earned $25,000, or to earn $100,000 while knowing everyone else earned $200,000. Objectively speaking, $100,000 is twice as much as $50,000. Even so, 56 percent chose $50,000 if it meant that would put them on top rather than at the bottom. We are social creatures and establish our expectations relative to others."
So the majority of people in the study would prefer to know that they make more money than others rather than to know that what they have is a lot and more than enough to cover their expenses, even if others are making far more. That can probably be extrapolated to the general population without much controversy. That extrapolation would make sense since the need for social hierarchy is hardwired into human brains. What this suggests is that what makes the top of the line Mercedes so appealing to a higher ranking human is that other people can't have it, not just that he can have one with everyone else, right?

To put this rat-race in perspective, this article describes what it's like to have everything you could ever want and still be unhappy. According to the author, he has attained his goals and acquired what he wanted: a house, a wife, a few cars, and plenty of money in the bank with good prospects for retirement. Yet, he's unhappy and says he was happier when he had less. How could that be?

To summarize up to this point is this: humans have a natural tendency to establish social order, and those that attain the highest levels of social order expect differentiation and exclusivity. It can also be shown that for many, getting everything they want means they're going to have to have their own initiative if they want to be entertained, even if they can pay for entertainment.

There is one more point to make about upper income status before we move onto taxes. Consider the predicament of someone who has everything he has ever wanted, faces no real challenges from others in order to satisfy his needs (assuming he can identify and articulate them), and has time on his hands. What to do? What to do when making more than $75,000 a year doesn't necessarily buy happiness

If what we've witnessed in the last 10 years is any indication, the most popular choice of late is to take extraordinary risks regardless of what will happen to other people, using their money. This risk-taking behavior may include acts that, if not illegal, are at least immoral. That would point most likely to investment firms like hedge funds, banks, and corporations. All of them use other people's money as a platform for risk taking, and lately, they've been paid handsomely for doing it. They have been paid their bonuses and salaries, and they have even received money from the government to cover their losses.

This is why the Bush tax cuts for the very wealthy need to expire. My point about higher taxes for the extremely wealthy is that the act of making money for the top 1% has become something more like an addiction rather than a necessity. It's like they have developed a tolerance for money, and the rush they used to get from making money doesn't come anymore, so they need greater and greater rewards to get the same rush. 

To get that same rush, they are willing to endure greater and greater risks, regardless of who else they might hurt. Here, we see that the very wealthy seem to think that insider trading is the norm and that they need to engage in it to get an advantage over everyone else. Competition at any cost appears to be their philosophy. In case you haven't heard already, insider trading is securities trading activity based on "inside" information on stocks that most people aren't privy to. But if you're wealthy, you can entice the right people to give that information to you.

Taxes are imposed on things we don't want, want to discourage, or that require regulation. We don't want the biggest financial institutions taking extraordinary risks with other people's money, especially without adult supervision. These same institutions could take the rest of us with them in their failure. Does anyone remember Enron? Who was playing with fire there? Some were members of the top 1% club, and they were probably psychopaths. Given those conditions, I'm not sure I want "trickle down" economics even if it did work, but it doesn't. Tax cuts don't create jobs, they create tax havens.

Consider that the top marginal rates for income taxes are lower now than they have been in 80 years, which puts the last low point back in 1929 (seems familiar, doesn't it?). Such low taxes have encouraged very wealthy people to take very great risks. And since 2008, we've seen the damage done by the addiction to the euphoria associated with making gigantic sums of money while taking great risk with other people's money. We may not be able to stop all of it, but we can certainly discourage it.

So, from a sociological and psychological perspective, letting the Bush tax cuts expire for at least the top 1% makes perfect sense. It's not like they have the greatest track record for allocating resources in this country despite any notion that they are leaders. These same leaders took great risk, lost their bets and then asked the government for help and got it (that's what I mean by "other people's money"). That's leadership? They proved themselves wrong in 1929 and in 2008. Why should we reward them again with a tax cut extension?

Update 1: One other aspect of the tax cut addiction that I forgot to mention is the property and employment tax enticements offered to large corporations by various states to welcome large employers. This works well when times are good. But when times are bad and austerity measures are introduced, the workers tend to pay for it as seen here in Ireland. The only people who ever seem to benefit from those deals are the executives who run the companies that enter into them. The employees never see the millions of dollars in tax savings, but the employers do. So when the money runs dry as it did in Ireland, the executives are well insulated from the fallout while the employees have to deal with the results with limited resources. Is this what we want?

Sunday, January 16, 2011

A King's Dream

Yesterday was Martin Luther King's Birthday.  It was the holiday I usually forget because I work for a company that doesn't observe it, but today, as in recent years, I'm taking note of it.  In recent years, I began to notice YouTube and it was on YouTube that I found that I could watch the entire "I Have A Dream" speech.  The first time I watched it, I was mesmerized by a fantastic orator, capable of putting lucid metaphors into context with American history, and eliciting the excitement of the realization of freedom.

King was clearly a man who understood the responsibility of freedom from all who enjoy it or seek to. There was one comment he made in the speech that had particular meaning for me today.  It is as follows:

The marvelous new militancy which has engulfed the Negro community must not lead us to distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny and their freedom is inextricably bound to our freedom. We cannot walk alone.

The notion that my destiny and my freedom is bound to others is something I have long realized, particularly upon learning about the concept of ownership.  That which I own, owns me, too. That which I control, controls me, as well.  And so it is that I have sought to avoid the temptation to control others having suffered the great anxiety and agony of having tried to do just that.  That experience has tempered my responses to the behavior of others, be they insults or love, as I have learned to simply experience the incidence of either rather than try to control it.  Once experienced, I can then make a more informed and perhaps enlightened decision about how to respond.

So you might be asking, "What does that have to do with technology?"  Our freedom is bound to our respect for technology.  If we respect technology, it will serve us well, but if we take it for granted, many woes may befall us.  I have seen many people express frustration at their computers because of some kind of perceived insubordination on the part of the computer.  I have helped many of those same people, and in so doing, I've come to think of myself as a computer therapist.  You see, I help people work through their unresolved conflicts with computers.

When I work with computers, I approach them with respect and a certain amount of caution.  I have, throughout the years, learned to temper my response to the computer in the event that I get an unexpected or unwanted result.  Of course, backup is king.

For me, computers have taught me patience.  "Garbage in, garbage out" was what I learned early on.  A computer can only do what you tell it to do, either directly or indirectly.  If you open a DOS prompt or a bash shell and type a command, you're being very specific in telling the computer to do something.  If you install a program and run it on your computer, you're giving it a very complicated and specific series of commands.  But no matter what happens, you're telling it what to do.

Now, most of us aren't programmers and when we run a program, we're running millions of lines of code written by humans that has been converted to binary code, also known as machine code.  We have, at that point, no way of knowing what will happen when we run that code beyond what we're told it will do and what our past experience will tell us.

(Check out this segue.)   Such was the case of the white man in the early days of the previous century.  As the white man sought to impose his will on the black man and still coexist with them, they had to endure the uncertainty of the exercise of power.  Anytime power is exercised, there is uncertainty to contend with.  The oppressor will never know for sure what to expect from the oppressed. An educated guess is about all anyone can expect, just like with computers.

In the technology world, I see how one faction will attempt to exert their will upon another faction.  They may try to use deceit, coercion, threats of force or even acts of violence - all through the use of technology.  My current interest is in patents, particularly with software patents.  Patents used to be used to protect new, smaller companies from predatory practices of bigger companies, but that seems to have changed.  Nowadays, only very deep pockets can file, prosecute and defend patents.  And those large companies are using patents to stifle innovation from new competitors.

A great example of this is with Microsoft.  Bill Gates was aware of the dangers of patents in software before they became all the rage.  He knew that if software was patentable at the beginning, the industry would be completely stopped by the incumbents.

I have a particular interest in software patents because I prefer to use free software.  I use Ubuntu Linux at home and I do so because I find that I learn more from Linux about how computers work than I do from Windows.  Unfortunately, there are incumbent players in the computer industry, such as Microsoft, that are filing as many patents as they can in the hopes that they can prevent others from establishing a foothold in the market.  This looks like oppression to me.

There are even patent trolls, small businesses that buy up patents and then sue people who they believe are infringing.  The patent trolls don't make any products themselves, they just sue if they don't collect.  As such, they have no incentive to negotiate in good faith - all they need to do is threaten a lawsuit a lawsuit with a licensing offer that costs less than litigation.

There is one really big problem with patents with respect to Linux.  Linux is free software, owned by no single entity and there is no deep pocket to sue, other than the users.  But in recent years, and in unexpected corners, people are beginning to recognize software patents as a form of slavery.  In remarks about patent encumbered document standards made in 2008 at the 3rd Idlelo African Conference on FOSS and the Digital Commons, FOSSFA, by the Minister of Public Service and Administration, South Africa, Ms. Geraldine Fraser-Moleketi. She had this to say about patents in standards:

The adoption of open standards by governments is a critical factor in building interoperable information systems which are open, accessible, fair and which reinforce democratic culture and good governance practices. In South Africa we have a guiding document produced by my department called the Minimum Interoperability Standards for Information Systems in Government (MIOS). The MIOS prescribes the use of open standards for all areas of information interoperability, including, notably, the use of the Open Document Format (ODF) for exchange of office documents. ODF is an open standard developed by a technical committee within the OASIS consortium. The committee represents multiple vendors and Free Software community groups. OASIS submitted the standard to the International Standards Organisation in 2005 and it was adopted as an ISO standard in 2006. South Africa is amongst a growing number of National Governments who have adopted ODF over the past year.

It is unfortunate that the leading vendor of office software, which enjoys considerable dominance in the market, chose not to participate and support ODF in its products, but rather to develop its own competing document standard which is now also awaiting judgement in the ISO process. If it is successful, it is difficult to see how consumers will benefit from these two overlapping ISO standards. I would like to appeal to vendors to listen to the demands of consumers as well as Free Software developers. Please work together to produce interoperable document standards. The proliferation of multiple standards in this space is confusing and costly....

An issue which poses a significant threat to the growth of an African software development sector (both Free Software and proprietary) is the recent pressure by certain multinational companies to file software patents in our national and regional patent offices. Whereas open standards and Free Software are intended to be inclusive and encourage fair competition, patents are exclusive and anti-competitive in their nature. Whereas there are some industries in which the temporary monopoly granted by a patent may be justified on the grounds of encouraging innovation, there is no reason to believe that society benefits from such monopolies being granted for computer program “inventions”. The continued growth in the quantity and quality of Free Software illustrates that such protection is not required to drive innovation in software. Indeed all of the current so-called developed countries built up their considerable software industries in the absence of patent protection for software. For those same countries to insist on patent protection for software now is simply to place protectionist barriers in front of new comers. As the economist, Ha-Joon Chang, observed: having reached the top of the pile themselves they now wish to kick away the ladder....

One cannot be in Dakar without being painfully aware of the tragic history of the slave trade. For three hundred years, the Maison des Esclaves (Slave House) on Gorée Island, was a hub in the system of forceful transportation of Africans as slaves to the plantations of the West Indies and the southern states of America. Over the same period people were being brought as slaves from the Malay Archipelago and elsewhere to South Africa. The institution of slavery played such a fundamental role in the early development of our current global economy, that by the end of the 18th century, the slave trade was a dominant factor in the globalised system of trade of the day.

As we find ourselves today in this new era of the globalised Knowledge Economy there are lessons we can and must draw from that earlier era. That a crime against humanity of such monstrous proportions was justified by the need to uphold the property rights of slave owners and traders should certainly make us more than a little cautious about what should and should not be considered suitable for protection as property.

The oppression of the incumbents is what I see in the proponents of software patents.  In the 21st century, slavery is still present, if only in a more subtle form.  It is my hope that this form of oppression gets more notice.