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Dear Eduardo,

I know you’re getting a lot of grief right now from people upset that you’re leaving the country to avoid a huge tax penalty when you cash out on your Facebook stock. People have been calling you some horrible names.

On behalf of all of them, I apologize. I’ve heard some very crazy ideas lately about what it means to be an American. There’s talk about unpaid debts and “fair” share.

I can’t make much sense of any of it. Thomas Jefferson, Ben Franklin and our other founding fathers had some pretty strong ideas of their own about being burdened with imaginary and involuntary debt.

It was kind of a flashpoint for the creation of our entire country.

Yet others have forgotten this. Even though you’ve already paid far more in taxes than most of us will in our lifetimes – easily more than all your most vocal critics combined – they still feel that you owe more. This is nonsense.

You’ve followed the law. You’ve paid what you were legally obliged to. Now you’re free to go wherever you and your money will be more welcome.

You paid your taxes and even more important, you risked your own money to help create a little thing called Facebook which has changed the lives of billions. For this I thank you and salute you.

Whether your citizenship is Brazillian or Singaporean, you know more about the American ideal than any of the people trying to tear you down.


Tony Schalk's profile photoAndrew Mayne's profile photoAntonio Haley's profile photoKen Peleshok (PeleKen)'s profile photo
I wish I could agree. But I'm a former libertarian who's gone socialist.

Free market capitalism used to be great & brought us lots of great things. But it's been killed by game theory and collusion. Established players in a given industry are only interested in maintaining the status quo (or better yet collectively raising prices), not competing.

So Eduardo, pay your taxes for the sake of the have-nots. It's not perfect, but it's probably the best we've got at the moment.
+Ken Peleshok I'd love to know what game theory you're talking about.

Centrally planned economies killed more people in the 20th century than all the wars combined.

Free markets have brought about enormous prosperity.

In what areas are you suffering because of collusion among companies? As opposed to corrupt government and bad monetary policy?

Be honest with me, have you actually read Von Mises, Hayek or Friedman?
No no and no on the reading (honestly), but I'll look into it.

Understand I'm not talking about full on Marxism here. I'm talking about socializing a few key areas.

As an illustration to what I'm talking about, the Canadian loonie reached parity with the U.S. dollar back in 2008 and stayed there. Yet the U.S. pays a lot less on everything from bread to cars. Why? Simply because the industries have established a general price and it's in none of their best interests to undercut each other.

I have no desire to live in North Korea, but maybe a France or less sold out Canada would be nice.
+Andrew Mayne Is Road Serfdom a good place to start?

... I want you to be right. I think capitalism has worked well in the past. It worked so well because it played on human nature.

But then humans changed and decided to step back and objectively analyze they're strategy for collective gain. Ripping open the curtain and destroying the whole thing (maybe).
Serfdom is a great place to start. Friedman is the most contemporary and lucid of them.

Markets work by assuming we're all going to pursue our own interests. Governments that pretend this isn't the case end up becoming grossly inefficient and corrupt.

When the GSA wastes $1 million on a party (and who knows what else) one person gets fired and someone else takes their job. When a company wastes a million, sooner or later they go out of business. Bureaucracies on the other hand only get bigger and bigger.
There was some degree of business to business collusion between investment banks like Lehman Brothers and mortgage companies prior to the subprime mortgage bust. Pursuing their own interests, while perverted in this case by the Fed's low interest rate among other government policy, resulted in a net negative. Of course, the invisible hand pounded most of those companies out of existence.

The problem I have with Objectivism is that some interpret it to excuse away acts that while legal are unethical and shift the blame solely to intrusive government policy. Bad monetary policy did have a hand in the subprime mortgage crisis but that should in no way alleviate all blame from the salesmen who were selling mortgages in droves to people who couldn't afford them, or the processes in place that made those subprime mortgages desirable.

Of course I also blame the people who purchased a house that they couldn't afford, but they only made that mistake once.
Great. it's my next book after Hyperion (then I'll get on to Angel Killer).

For the most part, your preaching to the choir. I agree that socialism is problematic to say the least.

But what about my points about the current state of capitalism?

What about the example of NES vs Genesis? In a famous case study on game theory, Nintendo purposely delayed competing in the 16 bit market for as long as possible. The console market remained unchanged for 10 years.

Nintendo and Sega were the big winners.

But little Kenny & Andrew were the losers. We could have had an affordable multi-core system in the early 90's if they had only competed in those 10 years.

The effects are equal to collusion. It doesn't take long to see this going on in every industry.

I just think (mild) socialism with a angry, active and informed populous is the only way to keep the 99% from regressing into near slavery.
During that period you were free to create your own console. Many tried. Eventually Microsoft did and succeeded.

During that period PC gaming took off like crazy and created a whole new form of competition.

Now Nintendo is suffering. They can't compete with iOS gaming and could be extinct in a few years if they don't look beyond their own platform.

Free markets can't promise the best product will always be there at the earliest opportunity. But they can make it so if it appears it'll stand a better chance of becoming popular.

When the government picks winners and losers, we all lose. Hate your cable company? Blame the fact that local governments handed out monopolies in the 80's and 90's.

Even satellite had to fight long legal battles to be allowed to compete.

If we'd let the market decide, we'd probably have had a wider variety of technologies sooner.

Things like line-of-sight, cloud networks and other technologies would have stood a chance if regulation didn't prevent them from access to the market.

Back to the subject of video games; here's the results of an interesting experiment on state-controlled video gaming:
Exactly! those games look amazing!

I'm not arguing that the government should take over the video game industry.
But what if the government were to identify the lack of competition in the area and throw a little of Eduardo's cash at a startup or two? (It's up to that angry citizenry that I mentioned to keep the spending on the up and up.)
Create some competition, create some jobs and leave em alone.

The Nintendo example is only a small glimpse of the future. Also, it's an industry were the barrier to entry is not completely impossible yet.

And yes I hate Canada's Cable/Telcos because they went and privatized something that the taxpayer built. Creating a bunch of leaching oligarchs.

In Canada's vast wilderness, there is no incentive for these telco's to build the infrastructure necessary for the people up there to get internet. So the government builds fiber to their houses. Meanwhile the folks in Toronto pay ridiculous prices for DSL that penalizes use of Netflix.

And may I just say, this is the favorite argument I think I've ever had.
I don't quite see why or how a government would know better than Eduardo where his money should be financed. He's already proven quite capable of deciding that for himself and Singapore is probably that much better off that they've got him investing his time and capital there.
+Antonio Haley Of course my argument disregards where Eduardo wishes to spend the portion of his money which should be fairly taxed. He's got the rest of the money to do with whatever he wishes.
Alright already I give up. I'm taking my pinko video games and going home.
+Ken Peleshok When you and comrade Pak-Mann finish eating those bourgeois capitalist pig-dog ghosts, here's a thing to consider about the government using Eduardo's money to invest in start-ups:

The government is horrible at picking winners and losers (cough Solyndra).

The reason is quite logical and scientific. When you're betting with other people's money, we always make more irrational bets. We simply don't use the same amount or type of neurons as when it's our own capital at risk.

Why do casinos have you use chips and plastic cards? So you won't regard it as real money.

Our politicians have been gambling with our money for a long time.
Comrade +Andrew Mayne ;

I don't see how my games with their harmless message regarding the freedom of the working class is any different then the anti-drug, "support our occupation of South America" message that was forced into my scull before popping a quarter into Bad Dudes.

I'll admit my argument about using comrade Eduardo's money to fund startups was a little weak. There is a slight chance that the sovereign representatives of the working peoples might make a mistake (I know, I deserve the Gulag for that last statement).

But I do think that capitalism is poor at providing infrastructure. It's an expensive long term investment with little incentive.

Also, I believe that the capitalist glory days of the cola wars is dead. Corporations will find their niche, maintain that position and increase profits until they reach the capacity their consumers can spend.

I'm just trying to come up with a way around it.
I think there's a role for government in infrastructure, education and looking out for the little guy.

The danger is when we use state supported infrastructure projects as "stimulus", when they're really just corporate welfare. Should cities pay for stadiums so millionaires can play basketball? Look at how many monorail projects go bust. Public transportation budgets are probably the biggest source of graft there is.

As far as markets go, markets are nothing new. Our ancestors traded with one another while the neanderthals were chipping their own flints.

Even commercialization is ancient. Gladiators used to endorse wines and Rome was filled with advertisements.

Big conglomerations fall apart every day. Look at the juggernauts of 1990's: WorldCom, Enron, etc. They tried very hard to game the system in their favor as much as they could.

None of that could save them from their bad business models and shaky business practices.

I highly recommend the book The Rational Optimist by my friend Matt Ridley. I think you'd find it interesting.
Something that I took away from The Rational Optimist is the idea that markets are the progenitors of civilization, not government. Government is something that emerges after, either at the benefit of society or it's impediment. Our government may be for the people, but markets are of the people.

As much as Nintendo may have stifled innovation, to really muck things up for all requires some real corporatism and government over-stepping to minimize how much private citizens can contribute to society. This is why government should do what it is good at and nothing more, to leave as much capacity to act as it can for private citizens.
Ah yes I believe you mentioned that on weird things. My favorite podcast. (B.T.W you and JRY are total chickens for not taking that one way trip to Mars.)

I experienced the collapse of almighty GM first hand.

But, yes I should read it (no doubt I could use a little optimism).

“I realize that history doesn't seem to be on my side, but ...” (always a good way to start a debate). This game theory business is quite new.

One day I found myself listening to a case study on the dominant strategy equilibrium. The professor mapped out the scenarios regarding the business maneuvers of Airbus & Boeing. He then proceeded to calculate the outcome like a computer playing chess with itself. “Weird” I thought “it's like it totally overrides the human greed and frailty that our society is based on.” That thought stuck with me, slowly turning me into a maker and defender of Stalinist games, toys & collectables.
I've gotten mostly through the Rational Optimist. He would answer to my last post that equilibrium rarely happens and when it does it is short lived because it is broken by some new innovation.

Great read thanks. Important read.

One thing, I agree that the insistence on organic food is causing people to starve. But companies like Monsanto could do a lot of damage if left unchecked.
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