Assurance contracts
From MR comes a link to a brief intro to assurance contracts, a supposedly general mechanism for routing around the free rider problem. A very large number of important social problems can be cast into this mold: it’s not just how to fund free software, which is where I first encountered it, but also national defense, fire and police, zoning, scientific research, environmental protection, good lawmaking, patents, etc. Notice that every one of these areas generally involves the coercive power of the state to tax and spend. Specific examples of people who’ve tried assurance contract type ideas include various free software types (dunno how successfully), Stephen King once tried to release a book that way, etc. So far I haven’t seen it working well, the state seemes to have pretty much captured the market on being a state, but innovative ideas are always helpful. Patents can be read as one example: if you define a new thing, and prove that it’s new, and show everyone how to do it, you can get a state-enforced monopoly on that new thing for some fixed period. There’s a lot of problems with patents — the paperwork is expensive for society, the period is fixed, irrespective of the problem domain, there’s no connection between the value to society of having the methodology discovered and published vs the cost to society of granting the monopoly, and so on. I wonder if there couldn’t be some kind of market mechanism, some bidding thing, which might make more sense. It’s a difficult problem, though.