Re: [tlug] Yes! Another argument about the GPL!

[Raedwolf Summoner <rarooam@example.com>]

> Curt Sampson writes:
> > Any business that collects more in VAT than it spends effectively
> > pays no VAT on anything. So even if VAT is "entirely collected from
> > businesses," isn't it fair to say that only consumers pay it?

Stephen J. Turnbull replies:
> You're forgetting that anything that increases the price to consumers
> reduces quantity demanded.

When I was in university, my economics prof strongly stressed that cost does not affect price. I.e., for the most profitable price, if VAT is collected, the business would have to lower their price by the amount of the VAT to achieve maximum profit. Only the supply/demand curve determines price[1] (at least the price that delivers maximum profit to the business), so the business could be said to be sustaining 100% of the tax. What cost does affect, is the business profit, which in turn will affect such factors as whether it will stay in business, how much money it has for R&D and innovation, wages, bonuses, etc. Tangentially to this, we have been traditionally taught in school that "money is a medium of exchange", but F.A. Hayek has contributed the much more interesting observation that money is a medium of information.

I have found this conversation fascinating, and would like to thank all the contributors. We have become an extremely specialized society, making it difficult for any individual to know enough about any specific area to determine the best policies in almost any area. For example, many of the suppositions posited by the programmers concerning these licenses do lead to their conclusions, but I personally would have no idea of their validity. And I do wonder how much expertise the programmers have in economics, for example. Some, obviously, more than others.

[1] Supply and demand is a little like ideal gas laws for perfect gases. In the wild, there are more variables. Demand could be quite rigid for some items, and much less for others, or even have more elasticity at certain levels. But like gas laws, the concept is valid nonetheless.

--Ralph

Do not ask for whom the bell curves.

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