I am the grandfather of two Torontonian girls. Do I like Alphabet’s Sidewalk Labs? I love it… as long as

Sir, as a father of two Torontonians, and grandfather of other two Torontonians, it is of course with much interest I read Leslie Hook’s “Toronto offers Alphabet downtown land to practice designs for cities of future” October 19.

I do love that "Quayside" project… subject to:

It shoots for the most intelligent artificial intelligence and the smartest robots, as I would hate my granddaughters to have to surround themselves with half-baked artificial intelligence and 2nd class robots.

It allows for some here-you-can-totally-lose-yourself free from artificial recognition space to my granddaughters, in order for them to be able to find themselves, and all is not Big-Brother-watches you space.

It provides some absolutely-nothing-spots that guarantee my granddaughters to be able to experience, quite often, that boredom so essential for creativity and thinking.

It does not leave in its wake a huge Torontonian debt to be serviced by the grandchildren of my granddaughters.

Alphabet splits, at least 50% 50%, with Toronto, all profits that could be generated by all patents resulting from inventions and experiences obtained during the Sidewalk Labs project.

PS. And of course as long as it duly considers the possibility or rising water levels.

@PerKurowski

Profits obtained under cover of patents should be taxed higher than those obtained when competing in the nude

Sir, Rana Foroohar writes about the clear ‘you can’t have the cookie and eat it too’ conflicts present in the area of protection of intellectual rights. “A better patent system will spur innovation” September 4.

In 2008, trying to build a bridge that could resolve some issues, I ended an Op-Ed with a proposal of introducing a special tax on all profits generated under the cover of any IPR, for instance a patent.

As I have since repeated many times, it is not logical the same tax rate applies to profits obtained when competing naked in the market, than when the profits are obtained under the cover of a protection.

Such tax should, as a minimum minimorum, at least cover all costs for society of awarding and enforcing IPR protections.

Nowadays I would also argue that tax should also be a source of funding for a Universal Basic Income. That because, most or even all of these protections, truth be told, are sort of unfairly awarded to whoever runs the last leg of a relay that has been run, with ingenuity, creativity and strenuous efforts, by generations of humans.

@PerKurowski

Why should profits made with IPR protection, patents, be taxed the same as profits made in the nude?

Sir, I refer to Andrew Ward’s “FT’s Big Read on Drug Prices: Tweaking the formula” April 26.

First of all I did not know of Nice and I must admit I am impressed that some formal rulings exist on whether to fund the use or not of some medicines. That certainly must help to put a lid on some bureaucrats’ “flexibility”.

That said, the article reminds me of a question I have posed many times before, including in Op-Eds in my country Venezuela, and in letters to you.

Why on earth should profits derived from operations under the protection of an Intellectual Property Right (IPR), patents, be taxed at the same rate than profits obtained fighting it out in the markets, naked, with no protection at all?

Surely the revenues of a special IPR/Patent profit tax could be ploughed back into some type of insurance scheme that could help cover some medicine costs the society can in general not afford to cover.

@PerKurowski ©

When paid by Volkswagen, the fines should go to patent free research of better diesel engines… and emission controls

Sir, Brooke Masters write “Drivers who bought VW’s “clean diesel” engines are now faced with technical fixes that could well reduce both fuel efficiency and power. Their communities have much dirtier than anticipated air” “Lawsuit on behalf of 1m $1 investors is something to fear. Somebody ought to sue” October 3.

Indeed but when suing make sure that if you win it can make a difference, not just make up for something secondary.

Many Volkswagen’s diesel engine buyers, who said they bought it out of environmental concern, many of them just green show-offs, now have a legitimate grievance being left out hanging like fools. But, if they are going to sue, they should at least request that, if successful, all fines paid by VW should go to finance the development of patent free better diesel motors.

Brooke Master’s also writes: “There are many frivolous [and not non frivolous] law suites were the attorneys on both sides walked away with millions of dollars in fees”. And with that she reminds me of that, at least in the case of banks being sued, all lawyers should be paid their fees in bank shares… I mean so that we do not hurt the lending capacity of banks and with that of ten thousands of innocent bystanders borrowers… the sort of civilian casualties.

Perhaps if we start looking into the issue of where compensation payments and fees go to, and how it is paid, then perhaps we will start looking at tort reform from a much more productive angle.

@PerKurowski

Tax profits obtained under the umbrella of patents higher, and plough those revenues back lowering medicine prices.

Sir, I refer to Jonathan Ford’s “Pricing of life-saving drugs is put under the microscope” Monday 17.

It is for sure a very difficult and delicate topic that of harmonizing the incentives needed for research to be carried out, with the need of the results of that research ending up being accessible for the general market.

Since open ended (no profit limits) intellectual property rights is the source of much current income inequalities, I have for some time now been suggesting those profits generated under the umbrella of patents, should be taxed at a higher rate than profits obtained when competing completely naked in the markets. 

Perhaps the revenues obtained with such taxes could be ploughed back in exchange for lower prices and thereby help to bridge somewhat the divide between the two objectives.

http://perkurowski.blogspot.com/2014/08/my-current-list-of-prominent-inequality.html

http://perkurowski.blogspot.com/2006/05/human-genetics-made-inhuman.html

@PerKurowski

What if by lottery some patents are yearly declared null, in order to keep the pharma industry on its toes?

Sir, David Shaywitz writes: “If the pharmaceuticals industry is to remain in the vanguard of science it will have to embrace a far leaner approach, with less bloated bureaucracy”, “Addiction to deals reveals the depth of pharma’s ill” May 2.

Is that really possible in an industry accustomed to working in the protective environment provided by patents? Is it not high time we see to that all that extra money we are asked to pay in order to reward inventions and stimulate new inventions go to that, and not to some other purpose, like the further enrichment of a 0.01% plutocracy?

Perhaps a yearly lottery, by which 5 percent of their patents are declared null, no reasons given, could give these companies more incentives to be on their toes.

Call it a dividend to humanity if you want… in payment for how humanity helped the inventors run the last mile for a patent.

When referencing cash, remember it is usually not really cash... & do we need special taxes on profits from patents?

Sir, I refer to Sarah Gordon’s “Be wary of the tax incentives in pharma’s deal financing” May 1, in order to make the following two observations:

First I believe that we should take the opportunity of the inequality frenzy that Piketty’s Capital has brought on, to discuss the treatment given to intellectual property right profits… as there can be little discussion that patents and similar, are among the biggest de facto inequality drivers. I, for instance, have held for some years that profits obtained under the umbrella of patents, and or of extravagant market shares, should be taxed higher than profits obtained from competing naked in the markets.

Second, when Gordon writes about the “$1.64tn of cash” that Moody estimates US companies held at the end of 2013, she would do better referring to “$1.64tn of liquid assets”… since we have no reason to believe the CFO’s of those companies keep stacks of notes hidden in their mattresses. I say this because we should not forget that any alternative use of these assets, will require their disposal… which has other effects in the market.

When fighting inequality, before redistributing, eliminate some of its worst man-made causes.

Sir, on the front page you label Martin Wolf’s “A more equal society will not hinder growth” as “Robin Hood’s economy” April 23. Just in case, and since so many have recently been mixing up Robin Hood with the Sheriff of Nottingham, let us be clear in that Robin Hood indeed helped the poor, but he was not a tax collector for King John… much the contrary.

Many years ago in an op-ed, I wrote that since justice lies on a never ending continuum, which made it hard to know where you find yourself, the most effective way to fight for justice was by attacking the much easier identifiable injustices. In the same vein, since it is hard to define what equality we need, before the grave, it is better to combat the most egregious sources of inequality.

Right now many economic injustices firmly anchored in what is known as rent extraction or crony capitalism are important inequality drivers. Trying to make up for the bad results, by for instance a tax on wealth, without correcting those drivers will lead to even more inequality.

There are many man-made causes for inequality. Two of those that I have been proposing to end are:

First: It makes no sense if we want to make our capitalism vigorous that the usually ample profits obtained under the protection of a patent, or through the power of an extravagant market share, should be taxed at the same rate, that those more meager profits resulting from having to compete naked and unprotected in the market. As a result the capital accumulation of “the protected” will be higher than that of “the unprotected” with very dire long term implications to the dynamism of capitalism.

Second: It makes no sense whatsoever to allow banks to obtain higher risk-adjusted returns on equity when lending to “the infallible” than when lending to “the risky”. And that is the direct result of those so obnoxious risk-weighted capital requirements. Robin Hood would never agree with allowing banks to lend, in risk-adjusted terms, more favorably to the “infallible sovereign” or to the AAAristocracy than when lending to a “risky” Sherwood Forest entrepreneur.

Again, let us be sure that we fight inequality by reducing its causes, not by increasing the profits of the intermediaries in redistribution, the merchants of inequality reduction.

PS. Sir, just to let you know, I am not copying Martin Wolf with this, as he has asked me not to send him any more comments related to the capital requirements for banks, as he understands it all… at least so he thinks.

In the absence of QEs and TARP, would Piketty have written the same “Capital in the Twenty-First Century”?

Sir, I refer to Martin Wolf’s review of Thomas Piketty’s, “Capital in the Twenty-First Century” April 15.

First, I need to make two disclaimers. I have not read the book and, as suddenly references to it exploded on the web, I must confess I first thought of it as a too pushy publisher campaign, and I have not been able to free myself from that impression. From the little I have read of it, that in significance it is going to be up there with Hayek’s “The Road to Serfdom”?… no way Jose. 

Now if I could only make two questions on Piketty’s book these would be:

Would Piketty have written the same Capital in the Twenty-First Century in the absence of QEs and TARP which obviously helped to keep the wealth… or if profits derived from protected intellectual rights had been taxed at a higher rate that profits derived from competing naked in the market?

Where does Piketty think all inherited but dissipated wealth has gone? Is he unaware of the real difficulties of keeping the value of an inheritance?

By taxing more the profits derived from patents you might, on the margin, reduce conflicts between true inventors and trolls.

Sir, Richard Waters discusses that delicate issue about a too rigid or too lax patent allocation system and so rightly states “The trouble is, one person’s abusive troll is another’s deserving inventor”, “Tech industry opens a Pandora’s box of patent strife”, April 4.

One way to diminish the conflict might be to reduce, on the margin, the worth of patents and other intellectual protection.

Since some years I have for instance argued that it does not really fair that profits obtained by competing naked in the market, without any safety net, should be taxed at the same rate as profits derived from an activity that has the protection of a patent… especially when the government is expected to spend tax revenues in its protection.

Tax income from protected intellectual property rights at a higher rate than income from when competing naked in the market

Sir, Martin Wolf writes “Property rights are a social creation. The idea that a small minority should overwhelming benefit from new technologies should be reconsidered. It would be possible, for example, for the state to obtain an automatic share in the income from the intellectual property it protects”, “Enslave the robots and free the poor”, February 12.

And that as you know, is a theme close to my heart. On it I have written to you, to Martin Wolf and to other of your journalists many letter over the years. In fact only last week I wrote you a letter referring to Martin Wolf's article titled just like this one. I did not copy Wolf, and you might have not either.

Though it might very well have been thought of earlier by someone else I started to formally promote such a tax scheme in 2008, by means of an Op-Ed in El Universal, Caracas, titled “We need a tax intellectual property rights’ income”.

Wolf also writes “We must reconsider leisure… let people enjoy themselves busily”.

And that is another theme that I have often written about, as I feel it is of utmost importance for any society to know what to do well with its structural unemployed. As a example you can read “We need worthy and decent unemployments”

PS. Sir, I leave it in your hand to copy or not copy Martin Wolf with this letter, since I do not wish to receive a letter from him telling me again I write too much, or that he already knows what there is to be known, on issues such as the risk-weighted capital requirements for banks.