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Sunday, September 29, 2013

Patent Rights - Are They The Ultimate Example Of Property Rights Being Human Rights Or Are They An Infrinigement Of Traditional Property?

   I promised to come back to this discussion on intellectual property. I is made up of comments from myself and others in response to an article on the von Mises libertarian site.

    He, like many other libertarians, believed that patents do not represent legitimate personal "intellectual property" but consider patents to be a government enforcement of monopoly. They limit property to the traditional economic definitions of land, labour and capital.

   I think that invention is not only a factor in production but the most important factor and the one to which the individual should have greatest rights.

   Beyond that there is the question of what are proper property rights - some countries include minerals under the ground as the landowner's property, some don't, some allow common ownership (ie common land) some limited common ownership to limited companies & partnerships. Heinelin once wrote of the equatorial countries having legal ownership of the Moon because it is always in their airspace (spacespace). And so on. I would say property rights are not inherent but derive from value produced and contracted for and that if, by defending property rights social wealth is increased (as ensuring inventors get the benefit of their invention does) then those are property rights that should be defended. This is anathema to those who say property rights are intrinsic and not differentiable from human rights.

Good ideas are indeed scarce - and valuable.

If they weren't any idiot could think what Einstein did (I mean think it first - any idiot can think E=MC^2 but few understand it).

Most of the rest of this article comes down to assertion that people have no right to their intellectual property because they have'n't.

In fact people are more responsible for their own invention than for land and equally responsible for their labour and capital. Of these 4 factors human brains are far and away the most important factor in production or cavemen would all have been billionaires.

Ethically wealth creators have the right to, at least, a fair share of the wealth they create, whether they create it by brains, brawn or machinery.

In practice if people don't benefit from their inputs to productivity they have no incentive to produce & indeed that the price they can charge should equally related to the wealth they create, irrespective of method - the entire private enterprise system is based on this.
What we are seeing is, as always, special pleading from one section of society that all the benefits should come to them. As is normal with lobbying of government, the section of society demanding special rights is the one that has long been in power. In the same way the aristos objected to the French Revolution's assertion that long established aristocratic rights shouldn't guarantee their right to the peasant's surplus - with disasterous results.

There is, at least as lawyering is currently run and probably inherently, a difficulty in defending the immaterial property rights of the inventor - land, labour and even capital are more easily defended. However this does not affect the principle that the workman is worthy of his hire even when working with his/her brain.
I have previously suggested X-Prizes as a way of accounting for that inherent difficulty but would be willing to consider any other method of doing so since it is a fairly jury rigged social balance.

Refusing to reward invention equally with other factors has been such a disincentive, as anybody knowing any economic theory should expect.

Certainly inability to defend a birthing tongs patent caused the deaths of over 100 million women over generations and I believe that the lack of patenting alone at the time of the antikythera computer , delayed human progress by about 1,500 years. X-Prizes would have improved progress even faster.
is really possible to economically benefit from an idea without other people finding out about it? I think that would be very difficult.
Besides that, if we go back to E=MC^2, it's not like if Einstein would've kept his mouth shut that it wouldn't exist today. He was a leading figure working in that field of science, but he was not the only one. Other people would've figured it out eventually.

So I concede that the existence of IP can have positive effects (it probably does incentivise people to invent things), but the non-existence of IP on the other hand, will make it possible for much more people to work with existing ideas (the 'two know more than one'-principle)

Anyway, like I said in my other post, Boldrin and Levine were not able to prove that IP is beneficial
for innovation and economic progress.
It may stimulate people to come up with new ideas, but it limit the emergence of new ideas because less people are allowed to work with existing ideas?

From Boldrin & Levine's 'Against Intellectual Monopoloy':
In late 1764, while repairing a small Newcomen steam engine, the idea of allowing steam to expand and condense in separate containers sprang into the mind of James Watt. He spent the next few months in unceasing labor building a model of the new engine. In 1768, after a series of improvements and substantial borrowing, he applied for a patent on the idea, requiring him to travel to London in August. He spent the next six months working hard to obtain his patent. It was finally awarded in January of the following year. Nothing much happened by way of production until 1775. Then, with a major effort supported by his business partner, the rich industrialist Matthew Boulton, Watt secured an Act of Parliament extending his patent until the year 1800.
Once Watt’s patents were secured and production started, a substantial portion of his energy was devoted to fending off rival inventors.
More dramatically, in the 1790s, when the superior Hornblower engine was put into production, Boulton and Watt went after him with the full force of the legal system.
After the expiration of Watt’s patents, not only was there an explosion in the production and efficiency of engines, but steam power came into its own as the driving force of the industrial revolution. Over a thirty year period steam engines were modified and improved as crucial innovations such as the steam train, the steamboat and the steam jenny came into wide usage. The key innovation was the high-pressure steam engine development of which had been blocked by Watt’s strategic use of his patent.
That's a good point. The restriction is a downside. On the other hand other factors of production are restricted to one user at a time. On the 3rd hand this is a positive argument for offering X-Prizes (in addition to patents).
If the work of a man is to reduce personal scarcity he should work in the optimally rewarding business which is less likely to be invention if the laws prevent him receiving as high a proportion of the increase in wealth he creates as in other lines. If the work of Man is to relieve scarcity and improve our condition, & I believe it is, then NOTHING contributes more to that, over time, than technological improvement (indeed one can argue that it is virtually 100% responsible). In which case a wise society will organise itself to encourage a wise man to maximise his contribution to Man.

    There are a number of other points on both sides. Mine here are in normal typeface, the other useful contributions on the other are in italics.

    As with all such debates no unequivocal conclusion is reached but I think the majority of those persuadable broadly agreed with my point.

   The entire comments are worth reading - go to the link above and click the comments section.

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