What impressed me most about economics was probably Professor Xue’s use of easy-to-understand language to help me understand monopoly, rent-seeking, and the tragedy of public goods.
The topic when Professor Xue went to "Qi Pa Shuo" was: Qi Pa Planet has invented a chip implanted in the human brain in the future, which realizes the sharing of knowledge for all mankind. The pros and cons respectively agree and oppose the birth of this invention. Teacher Cai Kangyong stood on the front side, and Professor Xue stood on the opposite side.
First of all, let’s start with Teacher Cai’s speech. Teacher Cai cited the example of a pharmaceutical company developing cancer drugs to support his point of view. Indeed, “demonstrating specificity” can reduce the impact of monopoly on society. losses, but the greatest harm caused by monopoly is often not the deadweight loss brought about in the total social surplus, but the resource dissipation caused by the accompanying "rent-seeking" phenomenon. Professor Xue used an example to illustrate this truth vividly. He asked the audience: If there is a piece of gold 100 meters away and you run over and get it, it will be yours. Are you going to run or not? ?The audience nodded unanimously. Professor Xue went on to explain: If 100 people ran over for this piece of gold, obviously only one person would get it in the end. Among them, the other 99 people who worked hard to accompany us are a senseless loss. The 99 people that Professor Xue mentioned are the resource dissipation caused by social rent-seeking behavior.
There is a way to solve this social problem, which is to rely on companies or individuals to demonstrate their uniqueness. Teacher Xue followed the example of chasing gold and asked: If I told you that Bolt was also running with you, would you still run? ? The audience gradually retreated and shook their heads. This is actually a way to discourage other companies from competing with them from the beginning, because they know that they cannot compete with them at the same low cost or with sufficient strength. In order to obtain a monopoly position in the market, one of the most effective ways for many companies is to apply to the court for an injunction against other companies. As long as the company can prove its inherent advantages in monopolizing a certain industry, the court will often choose to issue an injunction as early as possible in order to reduce the unnecessary losses caused by rent-seeking by other companies. Because, from the perspective of a policy maker, he is not willing to see that the cost of rent-seeking in society is even greater than the loss of total surplus caused by monopoly. In that case, the total dissipation of social resources will only be greater.
He also gave an example. He said: A kind will will say that as long as there are apple trees, we can all pick them, it is equal and we can enjoy it. What are the consequences of picking apples like this? Red apples become green apples, green apples become small apples, and no apples. ?This is the tragedy of public goods. The patent pool exists to avoid the tragedy of public goods.