Intellectual Property: The New Backlash

11 July 2006 at 12:42 pm 11 comments

| Peter Klein |

In the “new economy” or “knowledge economy” literature it is taken for granted that strong intellectual-property protection is not only efficient, but also just and fair. Without the temporary monopoly protection granted by copyrights and patents, who would have sufficient incentive to innovate? And don’t innovators deserve to reap the benefits of their creations?

There have always been doubters, and lately the critics have become more vocal. Stephan Kinsella makes a strong normative case, based on libertarian principles, against legal protection for intangibles. (See also his bibliography and blog.) For the utilitarian case against IP see Michele Boldrin and David Levine’s Against Intellectual Monopoly (and their blog). And for a summary of arguments against using patent counts to measure innovative activity see this article by Pierre Desrochers.

Entry filed under: - Klein -, Classical Liberalism, Institutions, Recommended Reading.

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11 Comments Add your own

  • 1. Stephan Kinsella  |  11 July 2006 at 2:56 pm

    See also There’s No Such Thing as a Free Patent,, Mar. 7, 2005 ( ), which points out that those who put forth a utilitarian or wealth-maximization defense of patents rarely make a serious attempt to actually determine the costs of the system, to weigh them against its supposed benefits.

  • 2. JC  |  11 July 2006 at 9:22 pm

    One of the intriguing aspects of patents is that they are the vestigial remains of the mercantilist policies that Adam Smith was so anxious to attack as inefficient.

    The history of their transportation to the US, and of the various political shenaginins involved, is interesting and revealing for those of us who argue that the declaration that ‘markets are efficient and a-political’ is itself a profoundly political and interest-oriented statement.

  • 3. JC  |  11 July 2006 at 9:23 pm

    PS the Desrochers link seems to be broken.

  • 4. Peter Klein  |  11 July 2006 at 10:57 pm

    Sorry about that, the link should work now.

  • 5. Laurent GUERBY  |  12 July 2006 at 3:01 am

    The funny thing about patents is that most libertarians and “small government” advocates are big fans of them , see for example Cafe Hayek

    Or the case for a small government

    For typical economists nonsense about IP, see econlog:

    My favourite Hayek quote:

    Just to illustrate how great out ignorance of the optimum forms of delimitation of various rights remains – despite our confidence in the indispensability of the general institution of several property – a few remarks about one particuilar form of property may be made. […]

    The difference between these and other kinds of property rights is this: while ownership of material goods guides the user of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopaedias, dictionaries, textbooks and other works of reference could not be produced if, once they existed, they could freely be reproduced.

    Similarly, recurrent re-examinations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period.

    The Fatal Conceit: The Errors of Socialism, 1988 (p. 35) Friedrich von Hayek

  • 6. JC  |  12 July 2006 at 5:49 am

    Yep. Just fine now. Thanks.

  • 7. Jüri Saar  |  12 July 2006 at 7:34 am

    Thanks for all the links.

  • 8. Paul D  |  12 July 2006 at 8:21 am

    Now that the Internet lets people share, produce, and modify culture so easily, there’s a bit of an awakening. Made-up property (copyrights, patents) only “works” if the big intellectual monopoly corporations control what the rest of us do with our real property.

  • 9. ajbadger  |  12 July 2006 at 4:14 pm

    Thank you for the information. I found it very useful.

  • 10. JC  |  12 July 2006 at 5:10 pm

    Hmm .. Laurent’s message popped into the middle of this thread.

    The issue here is non-rivalrousness – sometime known as ‘public goods’.

    Clearly the ecnomic notion of property collapses without some form of scarcity. For most goods, such as corn, their materiality supports their rivalrousness. Immaterial goods have a problem. There is no point in having any law about such goods unless they can be rendered rivalrous, and that is what patents and other IP legislation is designed to achieve. Clearly, as technology evolves, it sometimes renders the law ineffective, as we saw with Napster. But this cannot be grounds for denying the need.

    Whether it is, in fact, necessary for a society to implement such legislations seems to me an empirical matter rather than an economic one. After all the notions of property are grounded at law and in no other way.

    Likewise it seems remarkable to me that Hayek should make so free with the struggles writers and composers have with making a living, especially when they are so vulnerable to publishers ripping them off and property-izing their work by packaging it. Why on earth should the publishers’ investment be more worthy of protection than the author’s or the composer’s?

  • 11. Organizations and Markets » Patently Silly  |  20 July 2006 at 10:56 am

    […] It’s a bit unfair to interrupt our serious discussion of intellectual property by taking cheap shots at the US Patent Office, but I can’t resist plugging Patently Silly by Daniel Wright and Alex Eben Meyer. You’d be surprised what the USPTO considers unique, useful, and non-obvious. […]

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