Really? It's obvious to me (and you) that sex.com is worth more than american-rivet-supply-corporation.net, but the question of how much more the first is worth is one that should have ramifications -- for example, if sex.com just goes to the first person to register it, it may end up as a popular, disappointing sexual education site -- if it goes to whoever pays the most, it's going to do whatever earns the most.
If someone else has a better use for octopart.cn, they'll buy it; if the Octoparts are the best possible users, they'll pay for it. If octopart.cn is worth more than X, where X is what they pay to get it, they're still ahead (just less so than they could be). If not, octopart.cn is overpriced from their perspective, and will end up going to whoever thinks it's cheap.
That's not a very effective defense of domain squatting. The idealistic sex educator should just as rationally say, "I'm not making $1.5m off this site, so I should accept that bid and sell it, and use the money to get my important message out some other more efficient way."
The domain squatter serves no beneficial function at all to society, so nothing is lost by banning that behavior except a sliver of economic freedom. If economic freedom is a very high priority for you, of course you're going to be against regulating the registration of domain names. You're entitled to your principles, but don't expect everyone else to share them.
"The domain squatter serves no beneficial function at all to society, so nothing is lost by banning that behavior except a sliver of economic freedom."
I like how you glide right past the argument I made. You note that you disagree, and then note that you disagree, but I see no refutation, so I'll illustrate it again: toilet-seat.com gets registered by a loving toilet-seat fanatic. He posts pictures of all the awesome toilet seats he's seen, and writes a fantastically detailed blog about the aesthetics of toilet seats. He is in the 99th percentile for Adsense users, earning upwards of $10 a month.
He realizes, however, that Global Toilet Seats, Inc, a massive conglomerate, could earn $500,000 a year more from their Internet operations, just by buying his URL. They offer him $5 million to give up his hobby site. He'd rather have $5 million than the URL. They'd rather have the URL than the $5 million.
You'd rather both sides walk away sad, because you can't see the value in reselling a domain to whoever can use it best, given that this sometimes benefits whoever thought of a good domain name first.
"You're entitled to your principles, but don't expect everyone else to share them."
I don't! That's why I argue them with examples, rather than. Um. Flatly stating that I'm right. I know of plenty of economic libertarians who do just say "Not allowing people to sell domain names they own violates freedom of contract," as if that settles it. But the people they're arguing with largely disbelieve in freedom of contract, so it's a wash.
I realize I'm howling in the wind by replying 13 days after the fact, but I just noticed this.
I would view the sale of "sex.com", at whatever price, to be a good and natural example of free markets tending to reallocate resources for near-optimum utility. I believe I read your parent post correctly as claiming that domain squatters serve a beneficial function by auctioning off domains to high bidders rather than letting fast-moving hobbyists set up disappointing web sites at those domains, and pointed out that the hobbyist could sell the domain just as well as a squatter could -- thus the squatter doesn't provide any added value for society as a whole.
So no, I would not "rather both sides walk away sad", and likewise I would not agree with most of your characterization of my comment. I'm sorry I was not more clear.
It can generate wealth in markets where accurate prices lead to more efficient allocation of the resources needed to produce the good in question.
That's great for physical commodities, but it doesn't take a genius to see that this doesn't do any good with domain names. It takes a committed libertarian to fail to see that, though.
A libertarian would think this kind of thing is repugnent as well. The difference is that a libertartian's first response would not be "we should pass a law forbidding this..."
