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Thursday, January 10, 2013

Did Patents Create A Step Change in Technological Progress? Could We Do Another one?

  A couple of days ago I posted on the Antikythera computer. I had an extra reason for doing so. That I could then use it to demonstrate a point, which I have previously discussed on patents and prizes further.


  The justification for patents, which are using state power to give somebody a short term monopoly on the use of an idea, is that rewarding the innovator encourages new ideas. Libertarians are split on this, essentially on whether intellectual "propoerty" is property in the same sense as machinery and labour. I think it is not only property in that sense but that it is the most important property there is since virtually all progress depends on technological progress, which depends on somebody making it. In which case it is proportionately as deserving of protection and reward by society as any other property. If you divide the land and the resouces it contains by the population of the time you find every caveman was a billionaire, if technological progress is discounted.

   England and Italy share the honours for the first patents.

In England grants in the form of letters patent were issued by the sovereign to inventors who petitioned and were approved: a grant of 1331 to John Kempe and his Company is the earliest authenticated instance of a royal grant made with the avowed purpose of instructing the English in a new industry. The first Italian patent was actually awarded by the Republic of Florence in 1421,

  There were also rudimentary patents recorded in 1 Ancient Greek city, but only for 1 year and one city and it clearly didn't last.

   Italy was then and England in due course became the most technologically advanced European and world nations, though it is worth noting that the English charter appears to be to encourage somebody to import a technology already known on the continent rather than true innovation. This doesn't change the principle.

     In the previous article I pointed to 3 major inventions for which patenting did not provide sufficient reward and consequently humanity lost serious value for considerable periods.

     I also previously reported an article from the von Mises institute which said of the early Roman era

characterized by a remarkable degree of institutional legal respect for private property (Roman law), and by the specialization and spread of exchanges in all sectors and factor markets (particularly the labor market, since, as Temin has demonstrated, the effect of slavery was much more modest that has been believed up to now). As a result, the Roman economy of the period reached a level of prosperity, economic development, urbanization, and culture that would not be seen again in the world until well into the 18th century.

   This is the era of the Antikythera computer. I would not go quite as far as the author. The Roman era was more technologically backward than the 18thC in a number of ways (the horse collar, paper, windmills) though that computer and a simple steam engine (used to open temple doors), plus a road system and aqueducts not duplicated in the intervening period did exist.

   The fact is that the Antikythera computer did disappear from human ken.

   Indeed it is only since patenting that there has been a major incentive for scientists to make their inventions public. Without them going public they are likely to disappear when their inventor, or his immediate successors, die. It is likely that many inventions were lost and reinvented several times before the Renaissance. Even during the Renaissance the way in which Leonardo da Vince manufactured the Turin Shroud was lost until very recently. In this he was following in the path of countless alchemist & other proto-scientists.

   The fact is also that ANY patenting system inherently requires that the technology be publicly recordeed in writing.

    Therefore had patenting existed in a significant way in the ancient Mediterranean era the Antikythera device would have been recoreded in detail and never lost to humanity. The same applies to the simple steam engine and who knows how many other things. By letting new inventions be known widely society also encourages others to innovate and makes it possible for others to build on the new invention.

   I am therefore suggesting that the lack of patent law in the pre-Christian period held back human progress, if not for 1,800 years, certainly for well over 1,000. And in turn that the success of the European age depends, to a very significant extent, on that bit of social engineering.

   Rewarding technological innovators directly caused technological innovation.


   In that article I also pointed out that patent holders only get about 1/4 of the value of the inventions they come up with. Moreover because of the technical limitations of government policing of ideas it was probably impossible to to develop a practical legal system that would do much better. The probl;em of getting the value is inherent in the intangibility of ideas. Thus I justified government funding of prizes up to 3 times the country's current 2% of GDP spent on research. That would be up to 6% which is more than we spend on the military but onlt 12% of total government spending and I suggest would be the most effective 12%.

   The effectiveness of prizes at up to 33-100 times that of conventional government grants is completely undisputed, even by our government which contiues to prefer grant giving. If there is a reason for that, other than that those in charge are using grant giving power as political patronage & quite often to ensure that everybody knows what results are acceptable (eg global warming "research").

    Anybody  of a libertarian mind who wishes government to be limited to using its powers impartially must prefer prizes to grants for ethical reasons. Anybody else who merely wants value for money should feel the same.

    However the point I want to leave you with is that if I am correct and that patenting can explain most of the enormous growth in technology that we have seen over the last 500 years, a step change beyond anything known previously which made western civilisation world leading then putting 6% of GDP into funding technology prizes, so long as the prizes selected were chosen mainly for their real value rather than for political posturing (eg windmillery) this would create another step change in human progress.

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I think the missing piece of the puzzle and a possible explanation for Tyler Cowen's Great Stagnation

is that the patent system has radically worsened from the point of view of the small inventor in the last hundred years or so, in many stages. (These two links outline many obstacles to innovation that confront the would be innovator today)

Combining your idea of X Prizes plus a patent recording system with Professor Bolonkin's seed idea (which I commented on at the link below), of making the government the free patent agent for the small inventor, and his royalty extractor, would enable even the poorest innovator with good ideas to make a living from innovation, rather than the present situation in which (in my phrase) the lawyer always gets paid, the corporation usually gets paid, the inventor hardly ever gets paid.
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