The present market mechanisms for physical goods cannot function when it comes to ideas and other non physical creations. The way society historically has coped with the problem has been to issue copyrights and patents. Patents and copyrights are in fact monopolies, but monopolies can never be dynamic solutions as they block and skew development. A patent holder can dictate any price!
The dynamics of the capitalistic - physical products - market is due to its ability to utilize the individuals self interest.
A completely new approach is needed!
The dynamic “App market” principles are in fact primitive forerunners of the generalized market mechanism described below.
Just as the functioning of E=mc2 cannot be understood without much explaining, the basic algorithm of the idea market IO→C→IC does not in it self yield much meaning either.
Whereas the basic structure of the market for physical goods can function as a transaction between two parties, the seller and the buyer, a dynamic market for ideas must necessarily consist of three parties, an idea-originator (seller), a registration and clearing function (institution) and an idea-consumer (buyer).
The dynamics of the physical goods market is obtained by the seller and buyer having equal rights and possibilities.
Equality between the two parties can be established as there exists a physical object to exchange, and the value of the goods is settled at the moment of exchange. In order to likewise balance the interests of the idea-originator and the idea-consumer, the idea-market must necessarily have a third party as there are no physical object to exchange, and a balanced exchange of a novel idea must reflect the possible future value of the idea.
Trade with physical objects consists of repeated seller → buyer transactions. When it comes to the exchange and further development of ideas the diagram of repeated three party transactions must be like this.
By opening up and globalizing the world economy, the western world “let the jinn out of the bottle” as the firms henceforth freely could establish subsidieries abroad. With them went not only jobs of all sorts high and low, but also the newest technology and the novel understanding and ideas.
Before the internationalization of the economy one could say “what´s good for the company is good for the country” that´s regrettably not always the case now. The company was the cow we should feed well and take good care of so that it thrived, it would then provide us with the necessities of life. Now we have removed the fences, the cow can freely wander off and in most cases it does! We are left without butter on our bread!
By and large the companies and investments live their own free international life and the old industrial nation states are left poor behind.
The basis for progress and prosperity has wandered off into the international realm.
If we are to get renewed prosperity we urgently have to transform our western economies to the idea-society structure.
The unpalatable alternative of continuing the present course will make us end up in a situation where we have to lower our living standards and societal level to that of our competitors in the Far East.
If you are interested in the reasoning and scientific argumentation you can go to the article below: "A market for ideas within firms or coreporations". That is the short version.
For the full version go to the other blog
named "Science History and the Future"