The Salk dilemma

The Salk dilemma occurs in faulty markets that are optimized to allocate rival goods in win-win scenarios, resulting in win-lose or lose-win scenarios for non-rival goods.

Please note that value relativity does not imply subjectivity.

In free markets, transactions produce a win-win scenario, each of the parts gives something and receives something valued more by themselves. This works virtuously for rival goods, which cannot be shared, and are exchanged. Physical goods, as well as services or labor over them, are rival.

“Try not to become a man of success, but a man of value. Look around at how people want to get more out of life than they put in. A man of value will give more than he receives. Be creative, but make sure that what you create is not a curse for mankind.”

― Albert Einstein

Knowledge and the knowledge economy are increasingly relevant for the economy, and non-rival. They are treated as a degenerate case and fixed with laws as rival goods: patents, copyrights,… This results in a perverse economy where capturing value is rewarded and creating it is not, therefore producing the Salk dilemma.

The name of the Salk dilemma is inspired in the story of Jonas Salk, which is similar but more dramatic than Tim Berners-Lee and many others. Please share your favorite story in the comments, and remember: the plural of anecdote is not data.

“If I have seen further it is by standing on the shoulders of giants.”

― Isaac Newton

Jonas Salk discovered a vaccine for the polio, a critical disease at that time. He had to choose between:

  1. patenting the polio vaccine for hefty profits, acquiring a temporary monopoly, or
  2. giving it for free, possibly eradicating the disease.

He chose the latter. Motivations may include moral reasons and many others. Motivations make stories more interesting, but the story is not the point.

The point is that Salk should not have faced that dilemma. The relevance of this story is not in the quantitative or statistical aspects, e.g. expected profit, but in the qualitative of the possibility, i.e. it should not be possible in a well designed economy and markets. For a well-working society the incentives to contribute to the common good should be much greater than for selfish behavior. Instead, patents, lack of suitable business models for the knowledge economy, and a bias towards rivalrousness create the dilemma between win-lose and lose-win, In particular, among those two options, incentives are for bandit behavior, at a net opportunity loss that increases existential risks.

As knowledge becomes a larger aspect of our economies, markets (including international ones) should address the economy of non-rival goods and collaboration in better ways, even at the expense of less optimization for rival goods and competition. Current incentives shape the future. Yet once again, decision makers may have more incentives as bandits. In such a case, what are our options? The future is coming, and is up to us in the present to direct it towards utopia or towards dystopia.

Advertisements

3 thoughts on “The Salk dilemma

  1. It is important to note, as I commented elsewhere, that the economic value of a patented vaccine is much larger than the economic value of a vaccine that is not patented. The vaccine that is not patented does have a much larger value for the well being (even survival and survivability of our species), but that is harder to measure than money, and here we have another example of the McNamara fallacy. The patent provides a more lucrative business model, at the cost of the well-being of the people that lose access to it and contract the disease.

    Society and our economy reward the gatekeepers that limit access to knowledge that could improve the well-being of the people in the society, this should not be the case. It is a pathological allocation of resources, analogously to cancer. And, analogously to cancer, I don’t have a solution or cure for it, but I think we should be aware of the problem, because only so we can declare war on it and try to solve it. Any ideas are welcome.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s