The New York Times on Hypocrisy of US IP Policies

jwinterboy writes " The New York Times has an article (free blah di blah) criticizing the intellectual property framework that the U.S. places on developing countries, given that it was a large pirate of intellectual property during it's own industrialization. "

Comments

Developing nations

[panurge]

Indeed. British authors used to get very upset over the way their books were pirated in the US, and the practice didn't really stop until the US publishing industry was sufficiently large and international to want protection of their own. But then developing nations, like entrepreneurs, always need a bit of help up the ladder. Who was it said "I never ask a man how he made his first million dollars?"

Re:Developing nations

[Anonymous Coward]

Just to add a little bit to the "happened elsewhere theme":
AFAIK in the 2nd half of 19th century Germany was widely seen as the rip-off nation building machinery, chemical and pharmaceutical industries on violating patents, only switching to international patent system after they had something to lose.

For general amusement: among my fellow german countrymen it is widely unknown, that the mark "made in germany" (which they hold in a kind of national pride) was originally forced on german goods by the British to mark them as cheap crap (anybody to remember first japanese cars?).

Re:Developing nations

[FyRE666]

Yep, yet another example of the US policy of telling everyone else "don't do as we do, do as we say". It's not enough they seem to want to police the entire planet, whilst taking no notice of anyone elses laws, seek to destroy net-radio by allowing the RIAA to dictate terms, continue to protect a criminal organisation (MSFT) which pays half it's politicians. No, now the US is preaching the word of IP, patents and general stifling of inovation to 3rd World countries.

These are the same countries US (and EU to a lesser extent) corporations dump out-of-date food and medical supplies on to claim tax breaks - use for slave labour to make "designer" trainers and generally exploit however they can.

The sad thing is, the US govt can't see why the rest of the World (except our pathetic lapdog PM) takes offence at this...

Mod me down if you like, it needed saying...

Re:Developing nations

[sql*kitten]

continue to protect a criminal organisation (MSFT) which pays half it's politicians. No, now the US is preaching the word of IP, patents and general stifling of inovation to 3rd World countries.

It's telling that the Slashbots are so upset by RIAA and MS. These things are utterly trivial. The real problems are in steel tarriffs and agricultural subsidies, that a nation that touts free trade (and the EU is just as bad here) resorts to protectionism and barely-disguised mercantilism at the first sign of trouble. Trouble's when you need your principles the most, not the least.

The developing world doesn't give a stuff what word processor you prefer or how you think it's unfair that you should have to pay, what, $15 for a CD, so you steal it instead. Look at the big picture, people.

Re:Developing nations

[Oscar26]

THANK YOU! Someone else here has some understandings on how free trade works. Yes, the president stands up there, claims he is for "free trade" then the next day signs a $180B farm subsidy, or a few months later imposes a 30% tarrif on foreign steal. All in an effort to get votes come November. You can't beat buying votes with American tax dollars. The government takes your $$$, then gives it back to you and say "look what I did! Vote for me!"

The EU is just as bad as the US. So much for free trade. NAFTA the only true free trade agreement that coveres all goods and labor. Of course we undermine it with subsidies, but it is a step in the right direction.

Re:Developing nations

[Iguanaphobic]

The real problems are in steel tarriffs and agricultural subsidies, that a nation that touts free trade (and the EU is just as bad here) resorts to protectionism and barely-disguised mercantilism at the first sign of trouble. Trouble's when you need your principles the most, not the least.

Sigh...

This has been going on for too long in the USA and the reason is simple. Most voters in the US don't give a rats ass. Two recent situations come to mind.

The whole genetically modified foodstuff debacle. The problem is that the US has granted patents on GM strains of common foodstuffs. Then when GM strains pollute natural crops with patented genes, farmers get sued into oblivion. Then, when third world countries turn down "donations" of GM food , US aid officials criticize them. What everyone seemed to miss (unsurprisingly) is that if Zimbabwe accepted the GM maize and then their local crops "somehow" became polluted with patented GM strains, they would soon be in a position where they would have to pay IP lawyers and US corporations to enable their people to eat locally produced food.

The other issue is protectionism. I won't even touch the steel issue. It reeks too badly. Instead, let's consider the current softwood lumber dispute with Canada. (if you say "What dispute?" my point is made) The protectionism in this dispute is almost as rampant as the corruption. The bottom line being that a select group of southern lumber barons profit while average Americans pay $3000 more for new housing. Oh, don't forget the 50,000 Canadians who were put out of work. The fact that the WTO will eventually overturn this does not negate the impact it has on profits, costs and jobs in the short term. If this is how we treat our closest ally, it's no wonder our enemies hate us.

Look at the big picture, people.

Sorry, looking at the big picture is simply too difficult for most Americans. It requires critical thinking and the ability to look at our own behaviour objectively. Point being, as long as Joe Sixpack has a job and Monday Night Football, most Americans just don't care.

Re:Developing nations

[FyRE666]

Another way of putting that is that the US gives food and medicine to starving nations.

Are you actually objecting to that policy?

I was hoping someone would try this argument. Yes I do object when the pharmaceutical companies use war, famine and death as an excuse to push up their stock prices. The drugs and other garbage these companies "dump" are of absolutely no use to the people in the countries they're sending it to.

A guy called Mark Thomas here in the UK presents a programme where he tries to uncover government corruption, corporate corruption etc each week (he also has a pretty wicked sense of humour, whire really makes the show). One of these shows dealt with this issue. Here are a few quotes that you might find interesting...

During the civil war in Bosnia so much unwanted drugs were dumped that the government were forced to pay $34 million to build an incinerator just to dispose of them. One charity we spoke to, Pharmaciens Sans Frontieres, said that they had to spend £100,000 in the town of Mostar alone disposing of these drugs in lime filled buckets.
[...]
Since then, the situation has not improved. We spoke to a woman who was involved in sorting out drugs in Albania in 1999. She told us of a hospital in Tirana which had received tonnes of drugs, shown below.

[picture of tonnes of drugs]

However in sorting them out she found some nitrous oxide canisters which had an expiry date of 1989 or 1990 - ten years before they reached Albania. She also discovered sadly that of all the tonnes of drugs donated, only a small proportion could actually be termed useful, shown below.

[picture of about 150 small bottles]

There were also other companies sending sex aids, diet pills and other completely useless crap to starving nations simply to make money while leaving the huge cleanup job to those with nothing. Nice, huh?

Hypocrisy?

[Isle]

As much as I dispise american (and western) IP laws and attitude. How can you hold people accountable for something someoneelse did 200 years ago, and how can it possibly be hypocrisy?

Re:Hypocrisy?

[Drahca]

What you mean to say here is times have changed? This is only true for our part of the world. We are considered developed countries, as apposed to the developing countries we are blaming. I for one can see the relevance in examining the way we got to being "developed" and how other countries, which may be some years behind, are trying to get developed now.

You could even say we are forcing a lot of countries to get developed, thanks to our globalisation efforts. It's not fair we are measuring them with standards that are based on our thinking now, apposed to our way of thinking 200 years ago. That is measuring with two different scales, and that is hypocrisy.

Re:Hypocrisy?

[ArcSecond]

Listen, when Americans can stop blathering on and on about the merits of their founding fathers, the revolution, the fight for the Union, etc. etc. then I will accept the "leave the past in the past" argument. So don't be a hypocrite and say that you accept the "good" parts of your past and reject the bad parts. History may not be objective, but it sure as hell shouldn't be forgotten.

Or maybe you would prefer to pretend that all the groups/societies in the world that are priveleged should be seen as being inherently "worthy" of that privelege, and that no historical analysis of how they got there is required? (ie: the "never ask a man how he made his first million" quote).

Re:Hypocrisy?

[back_pages]

Hi, You seem to not be aware that the United States is hardly monolithic. Our commander in chief was barely elected, in fact. Many of us disagree with the intentions of the Bush administration, and many of us would be just as critical of the IP regulation as the NYT. Some of us want the federal government to compensate Native Americans for the genocide that was comitted during the American expansion west.

Will we ever "quit blathering" about our founding fathers? Only when we've all conceded that we're going to Hell in a handbasket. Until then, we'll argue, disagree, and some of us will try to preserve the noble grounds on which the nation was founded. Just don't expect an immediate about face from one of the most ethnically, philosophically, religiously, and politically diverse nations on the planet. We tend to disagree like it's going out of style, a trait that seems to be missed by the rest of the world.

Thanks for your time.

Re:Hypocrisy?

[milo_Gwalthny]

Americans talk about our collosal historical screwups all the time. Maybe just not to the rest of the world. Try mentioning slavery, native americans, manifest destiny or a dozen other historical topics on any college campus in the country and you'll immediately be mobbed by young people demanding justice and chaining themselves to building. Unless the interpretation of our history you are referring to is that of the 1950s or before, you don't understand the US. Take a look at some more recent scholarship, including the work of Zinn, Foner and Forrest McDonald. The only people still pushing the saccharine sweet George Washington is Hollywood. We justly celebrate his strong points (but for his forbearance, the US would have become a monarchy) but are well aware of his weaknesses (slave owner.) You've got to stop watching TV/movies and read some books.

That said, if you understand how modern democratic governments work, you know that the US can't give lip service to ignoring IP protection. But, in fact, it doesn't do a heck of a lot to enforce it in the developing world. Look at Microsoft in China. Go to India and see how easy it is to buy pirated software. Look at the response of the American government to efforts by countries around the world (including Canada :) ) to reduce drug costs by buying generics (a policy approved by the Clinton administration for Africa.) Brazil threatened to ignore US IP and, I believe, will get substantial concessions not to ditch the whole IP framework.

You forget that, as sovereigns, countries choose which laws to enforce within their own boundaries. If Brazil were to turn a blind eye to domestic companies violating US IP to manufacture affordable AIDS medication, you would hardly hear a squawk from the US. It's only when Brazil makes a big deal about nullifying the IP laws that the US feels it has to respond -- it's just a negotiating tactic on Brazil's part anyway: why else would they draw attention to it?

In short, I believe that developing countries can do to the US exactly what the US did to the developed countries of 100 years ago: ignore their IP protection, and get the exact same response as the US did: annoyance.

Companies and IP

[a_borowski]

When IP law was first passed, the spirit was basically "Let the guy why invented something cool have a monopoly for a while. After a decade or so, give other people a chance." The problem is now copywrite is valid for such an insane length of time that there's little competition. End result: citizen loses (I hate the word 'consumer'). When did companies earn the priviledge to own copywrite?

Re:Companies and IP

[RobotRunAmok]

When did companies earn the priviledge to own copywrite?

At the point when the artist signs it over to them, in exchange for an advance and/or global distribution and promotion facilities. Or at the point when he signs a "work-for-hire" agreement, and gets a steady paycheck in exchange for a little less pressure.

When the fifes stop tweeting, the drums stop rum-tumming, and all the clenched fists make their collective way out of the air and back into blue-jeaned pockets, small children still need new shoes, and the writers, artists, and musicians who are their moms and dads have to buy them.

Not that I'm a big fan of US IP laws ....

[Titusdot Groan]

I'm not happy with where the US is going with their copyright and patent legislation, I'm even more unhappy about the fact that Canada seems to just follow the US in these matters.

but ...

My dad used to drive drunk occasionally when he was young. He's in AA now and thinks that drunk drivers should lose their licenses and go to jail.

Hypocrisy? Perhaps. But maybe he just wised up in his old age.

Same as what the US did to its forests and swamps

[shoppa]

Just like how the US clearcut vast forests for the lumber and turned millions of square miles of diverse swampland into flat farmland, but we're now trying to stop Brazil from doing the same for their individual economic gains.

On/Off

[jukal]

This is probably another very uneducated opinion, but IMHO the patent system is traditional On/Off system. When on, it should enforce equal rights and limitations to everyone - otherwise people will just find ways to exploit it. When off, it should be off for everyone.

Broader Theme of Colonialism

[vonWoland]

It is not just IP that the US is trying to clamp down on, the whole U. S. policy towards emerging countries is hypocritical: but there has always been a good historical president for it:

Just to take one example: the U. S. is pushing for all sorts of free trade agreements. Why? Well, for the first hundred years of our existence, the main form of revenue for our government had been tariffs (taxes on imports---taxes on exports are actually prohibited by the constitution.) At the time of the Revolutionary War, the main U.S. exports were cotton, tobacco, from the South and lumber from New England. You may notice that these are either raw materials or agricultural goods. But the money is in the value added, as readers of /. know so well: silicon is litteraly dirt cheep, ic chips made from silicon are perhaps the most expensive substance by weight.
It is no secret that the U.S. used protective tariffs to protect early manufacturer's (who otherwise could not compete with England). It is also no secret that the U. S. really did not like it when others tried to do the same. Now we are doing it with GATT. Throughout the last century we were not so sublte: Marines were sent throughout this hemesphere to make sure that bananas were grown and local governments were not too concerned about the welafare of the common man at the exoence of U. S. buisness interests.
The tragic thing is, just as with development of manufacture, this colonial IP policiy hurts both the developin countries and the people in developed nations. They can't form a manufacturing base, we can't get real, honest, labor unions. And of course, by keeping so many people in the unmechanized fields and unsecured mineshafts, we are really missing out on the increadible behefits that a well educated _global_ populace could bring.

Re:Broader Theme of Colonialism

[back_pages]

Good post. I think a very pressing issue in the future will be whether future administrations follow Bush's tendency to view the entire planet as the Holy American Empire or not. Being the last remaining superpower implies many things, but I don't believe it requires ruling over every other government. It does necessitate a certain amount of cooperation and benevolence, both of which seem to be completely absent from Bush's agenda.

While we can obliterate training camps and oust dictators, we're never going to subject every man who hates us to such abject poverty that he can't buy a box cutter and a plane ticket. Fighting the signs and symptoms of terrorism may even be more damaging than taking no action at all in the long run. Who will be left? The most hardened and determined? Do we really want to galvanize the will of our enemies and force them further into desperation?

It cannot be to America's future benefit to regard the nations of the world as its subjects. Sadly, I doubt Bush even has the wit to realize that he is doing so. I sincerely hope our future President will be some sort of diplomat rather than a caricature of a Texan cowboy.

Subtle clarification...

[fortinbras47]

jwinterboy writes " The New York Times has an article (free blah di blah) criticizing the intellectual property framework that the U.S. places on developing countries, given that it was a large pirate of intellectual property during it's own industrialization. "

The article is about a report which criticizes the intellectual property framework which the U.S. places on developing countries. The article itself is not criticizing the framework.

The NY Times can be a bit biased at times, but let's at least give them a little credit...

Typefaces and IP

[munro]

Typefaces/fonts are an interesting area. American companies apparently used typefaces (which tradionally all came from European type design houses) without paying any royalties or licences, but are now starting to try to get protection.

http://nwalsh.com/comp.fonts/FAQ/cf_14.htm

"The reluctance of Americans to press for typeface copyright may have been influenced by a feeling that typeface plagiarism was good for U.S. high-tech businesses who were inventing new technologies for printing, and plagiarizing types of foreign origin (Europe and England). If the situation becomes reversed, and foreign competition (from Japan, Taiwan, and Korea) threatens to overcome American technological superiority in the laser printer industry, then American firms may do an about-face and seek the protection of typeface copyright to help protect the domestic printer industry. Such a trend may already be seen in the licensing of typeface trademarks by Adobe, Hewlett-Packard, IBM, Imagen, and Xerox in the U.S. laser printer industry."

Adam Smith and *Intellectual monopoly*

[NZheretic]

From The Relevance of Adam Smith by Robert L. Hetzel.
With added commentary by yours truly...

MONOPOLY AND GOVERNMENT SUBSIDIES: The principal theme set forth in The Wealth of Nations is that a country most effectively promotes its own wealth by providing a framework of laws that leaves individuals free to pursue the interest they have in their own economic betterment. This self-interest motivates individuals? propensity to truck, barter, and exchange one thing for another and thereby leads them to meet the needs of others through voluntary cooperation in the market place:

...man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. (p. 14)

Everyone realises and acknowledges that Microsoft is a business, there to make a profit to share with it's marjor stakeholders, from it's shareholders to it's employees. However ...

Smith also argues that the harmony between private goals and larger socially desirable goals promoted by voluntary cooperation between individuals in the market place is interfered with by monopoly and government subsidies. In contrast to competition, monopoly and government subsidies cause individuals to devote either too few or too many resources to particular markets:

....the private interests and passions of individuals naturally dispose them to turn their stock towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead to divide and distribute the stock of every society, among all the different employments carried on in it, as nearly as possible in the proportion which is most agreeable to the interest of the whole society.

All the different regulations of the mercantile system, necessarily derange more or less this natural and most advantageous distribution of stock. (pp. 594-5)
Every derangement of the natural distribution of stock is necessarily hurtful to the society in which it takes place; whether it be by repelling from a particular trade the stock which would otherwise go to it, or by attracting towards a particular trade that which would not otherwise come to it. (p. 597)

.... sometimes, because of the overiding profit motive, the end consumer can be put at a disadvantage, and the natural model can become unbalanced. This often happens in tha case of several types of monopoly...

Smith describes the actions of monopolists as follows:

The monopolists, by keeping the market constantly under-stocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate. (p. 61)

The natural price is the lowest which the sellers can commonly afford to take, and at the same time continue their business. (p. 61) Today we would use the word competitive for natural. The effectual demand is the demand of those who are willing to pay the natural price of the commodity. (p. 56) Monopoly, as well as a governmentally subsidized activity, contrasts with a competitive market where a commodity is...sold precisely for what it is worth, or for what it really costs the person who brings it to market. (p. 55)
The Wealth of Nations contains three general kinds of criticism of monopolies. The first is that the higher prices in a monopolized market reduce the welfare of consumers:

If...capital is divided between two different grocers, their competition will tend to make both of them sell cheaper, than if it were in the hands of one only; and if it were divided among twenty, their competition would be just so much the greater, and the chance of their combining together, in order to raise the price, just so much the less. Their competition might perhaps ruin some of themselves; but to take care of this is the business of the parties concerned, and it may safely be trusted to their discretion. It can never hurt either the consumer, or the producer; on the contrary, it must tend to make the retailers both sell cheaper and buy dearer, than if the whole trade was monopolized by one or two persons. (pp. 342-3)
In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest. The proposition is so very manifest, that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question, had not the interest sophistry of merchants and manufacturers confounded the common sense of mankind. Their interest is, in this respect, directly opposite to that of the great body of the people. As it is the interest of the freemen of a corporation to hinder the rest of the inhabitants from employing any workmen but themselves, so it is the interest of the merchants and manufacturers of every country to secure to themselves the monopoly of the home market. (p. 461)

.... like deals made between vendors to set prices, which RAND "reasonable" licensing systems effectively does.

The second criticism of monopoly is that it engenders inefficient management:

Monopoly...is a great enemy to good management, which can never be universally established but in consequence of that free and universal competition which forces everybody to have recourse to it for the sake of self-defence. (p. 147)

For example, Microsoft's Internet Explorer containscurrently 20 unpatched vulnerabilities, a disproportionately high number in comparison to all the other browers on the market today. Also, because of a general disregard for security in the past, many of those same vulnerabilities are exploitable though other Microsoft applications.

The third criticism of monopoly is that it is inequitable because it increases arbitrarily the inequality in individuals? incomes:

...The policy of Europe occasions a very important inequality in the whole of the advantages and disadvantages of the different employments of labour and stock, by restraining the competition in some employments to a smaller number than might otherwise be disposed to enter into them. (pp. 118-19)

And there is many a CIO discovering that the new Microsoft enterprise licensing agreement is far more expensive than before.

Monopoly has always been a contentious issue in debates on public policy in the United States. It is interesting to examine the way in which the ideas of Smith appear in current debates over monopoly. In general, proponents of government intervention in the market place argue that monopoly is endemic in capitalism and that its elimination requires significant intervention by the government in the market place. An opposing group argues that free markets effectively restrain monopoly power and that it is in fact government intervention in the market place that is chiefly responsible for monopoly. The first group assumes that large size, fewness of firms, and operation over an extensive geographic area automatically imply monopoly power and thus supports its position by citing the existence of industries dominated by a few large firms and the existence of multinational corporations. The opposing group supports its position by trying to show that where monopoly power exists it is made possible by particular governmental actions, e.g., in the United States by marketing orders that fix the price of milk above what it would be otherwise, or FCC regulations restricting the growth of cable TV, thereby preventing competition with the established networks.

The view of the world suggested in The Wealth of Nations is that monopoly power cannot persist without the assistance of government. The specific examples of monopoly that Adam Smith attacked required the police power of the state for their maintenance. These monopolies were of three kinds. One kind of monopoly depended upon the mercantilistic system of laws which England used to monopolize trade with its colonies: Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system. (p. 595) Another kind arose from the monopoly power granted guilds (referred to by Smith as corporations), which allowed them exclusive rights to produce a given commodity:

The exclusive privilege of an incorporated trade necessarily restrains the competition, in the town where it is established, to those who are free of the trade. To have served an apprenticeship in the town, under a master properly qualified, is commonly the necessary requisite for obtaining this freedom. The bye-laws of the corporation regulate sometimes the number of apprentices which any master is allowed to have, and almost always the number of years which each apprentice is obliged to serve. The intention of both regulations is to restrain the competition to a much smaller number than might otherwise be disposed to enter into the trade. The limitation of the number of apprentices restrains it directly. A long term of apprenticeship restrains it more indirectly, but as effectually, by increasing the expence of education. (p. 119)
The government of towns corporate was altogether in the hands of traders and artificers; and it was the manifest interest of every particular class of them, to prevent the market from being overstocked, as they commonly express it, with their own particular species of industry; which is in reality to keep it always understocked. (p. 124)

A final kind of monopoly depended upon tariffs and quotas that prevented foreign producers from competing with domestic producers:

The superiority which the industry of the towns has every-where in Europe over that of the country, is not altogether owing to corporations and corporation laws. It is supported by many other regulations. The high duties upon foreign manufactures and upon all goods imported by alien merchants, all tend to the same purpose. Corporation laws enable the inhabitants of towns to raise their prices, without fearing to be under-sold by the free competition of their own countrymen. Those other regulations secure them equally against that of foreigners. (p. 127)

Competitive markets restrain monopoly because the above-average profits associated with the exercise of monopoly power attract new producers who increase output and thereby lower prices:

When by an increase in the effectual demand, the market price of some particular commodity happens to rise a good deal above the natural price, those who employ their stocks in supplying that market are generally careful to conceal this change. If it was commonly known, their great profit would tempt so many new rivals to employ their stocks in the same way, that, the effectual demand being fully supplied, the market price would soon be reduced to the natural price.... Secrets of this kind, however, it must be acknowledged, can seldom be long kept; and the extraordinary profit can last very little longer than they are kept. (p. 60)

The next section is very IMPORTANT.

Monopolists can preserve their favorable position only if the government prevents potential competitors from entering the monopolized activity:

The exclusive privileges of corporations, statutes of apprenticeship, and all those laws which restrain, in particular employments, the competition to a smaller number than might otherwise go into them, have the same tendency...They...may frequently, for ages together, and in whole classes of employments, keep up the market price of particular commodities above the natural price, and maintain both the wages of the labour and the profits of the stock employed about them somewhat above their natural rate.

Such enhancements of the market price may last as long as the regulations of police which give occasion to them. (pp. 61-2)

In fact, the term "intellectual property" is a misnomer, a more correct term would be intellectual monopoly. Patents, Copyrights and even Trademarks are a government granted monopoly, they do not occur naturally. That does not mean that they are a bad thing per-say, but their use should be dictated by the benefit to socitety in general, with approprate limits so their use cannot be abused.
These statutes give the power that the ol' Mercantile laws gave to those monopolies. There is no true effective choice in the market. Compainies like Microsoft are sustaining it's dominate position in the markerplace by using a state-constructed and granted monopoly, which gives Microsoft the monopoly over it's protocols, effectively just as restrictive as the East India Trading Company trading zone monopoly of the Orient.

Free markets make the formation of monopoly difficult because monopoly requires the adherence of all actual and potential sellers in a market. Self-interest makes achievement of such adherence difficult because each seller has an incentive to undercut the monopoly price in order to increase his share of the market. Monopoly power is increased or made possible if enforced by the government. In the following passage Smith refers to the guilds, or corporations, of his day:

An incorporation...makes the act of the majority binding upon the whole. In a free trade an effectual combination cannot be established but by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind. The majority of a corporation can enact a bye-law with proper penalties, which will limit the competition more effectually and more durably than any voluntary combination whatever. (p. 129)

Smith?s ideas appear in current public debate over monopoly. Advocates of deregulating the transportation and communications industries by eliminating or reducing the power of Federal regulatory agencies argue that these agencies promote monopoly by limiting the entry of new firms and by fixing prices for all producers. Government regulations enforced upon all firms in an industry have the effect of allowing producers to eliminate competition and to raise prices. At the same time, lack of competition reduces incentives for efficient production.

My Solution

[Lonath]

Compulsory licensing of IP at a rate like this:

Take the lowest bulk licensing rate in the G8 (if they don't license, then the lowest rate per pill or copy of the software or whatever minus the expected costs of producing each copy).

Multiply this by the ratio of country Foo's MIN(mean, median) income over the G8's MAX(mean, median) income.

Then the industrialized nations have a reason to increase their income equality and they have a reason to make poorer nations less poor. And, poorer nations have the chance to make things without being overburdoned by the IP laws of the rich nations.

And for those of you keeping score at home, YES this is effectively giving away IP to poorer nations, but so what? The richer nations should be paying for their own IP within their own economies and they should look at any money gotten from poorer nations only as gravy.

Why does it take AIDS to let go?

[Anonymous Coward]

Interesting use of the AIDS drug issue to highlight the possible negative effects of strong IP. The author got one thing on AIDS in Africa wrong when he said: an estimated 30 million people have H.I.V. in Africa. That is just plain wrong and is an indication of the ignorance of the problem. Zambia, Zimbabwe, Botswana, South Africa and Malawi together probably has that amount on their own! And on top of that people are starving right now, so AIDS-deaths are only really starting to impact right now. These people do not have the money to pay IP cost on top of the manufacturing cost of a drug - and usually IP is 95% of that. This huge tragedy prompted the scrapping of IP on those products.

Now we ask ourselves - WHY does it take something of this scale for people to let go of IP? and then only after lots of lobbying, pressure and pleading. I mean W.T.F.!!!

The first industrial spy?

[ProfessorPuke]

For a specific example of how America's development was spurred by IP violations, run a websearch on "Francis Cabot Lowell spy".

Tis said that in ~1810 he memorized the schematics to the automated weaving machine to get around the British prohibition on the export of technical schematics.

Whole cities (some bearing his name) in Massachusetts sprung up around this invention, and it lead to a spread of large scale agriculture in the south and west. Previously textile raw materials had to be exported to England for manufacture into garments, then imported back to the US for sale- and enormous impediment for efficiency and growth.

The development of American factories also changed the face of urban demographics- large quantities of the lower classes were pulled into dense cities that were previously enclaves of the wealthy (and their abundant domestic help). Since the best (most nimble & most managable) factory workers were girls, unmarried single women finally got the opportunity to support themselves financially while mantaining their virtue.

The violation of patents lead to progress like this, which had a much greater impact than breaking copyright and reading Dickins on the cheap.

Re:Developing nations (the Mauser)

[JThaddeus]

So the Germans stole from the Brits but the Yanks stole from the Germans. I recall that the Germans invented the Mauser bolt-action rifle mechanism, considered the finest in the world at the that time. After the First World War, the US Springfield arsenal was sued for failing to pay royalties on their wartime production of the 1903 Springfield rifle, the standard US Army rifle for WWI. Of course, this was heard in a US court that was not sympathetic to a German claim.

terrorism

[SubtleNuance]

on that topic, of hypocrisy wrt ones past, it brings up another point... more recent world events...

Funny, and they are also (because they were victors (those who control the present control the past)) describe their Revolution is a just and honourable war.

The US Revolution was really a terrorist effort. Disproportional warfare was fought by the Americans, the British, and other power powers of the time had strict rules of engagement. Certain things were "allowed" and "unallowed" during warfare. The Americans, outmatched by the British Forces employed distinctly divergent tactics (raids, ambushes etc) that were -- at the time -- considered barbaric, disgraceful and un-honourable.... Terrorism.

Today, the US, faced with a rebellion; fought against them by a weaker force -- required to employ techniques that change the rules of engagement -- the Americans are now condemning them as barbaric, disgraceful: terrorists.

Am i trying to justify recent acts of violence? No. I just find it INCREDIBLY amazing that a country, that has, to be exceeded by no other -- Chosen to live by the sword -- are so self-righteous and smug wrt the barbarians at the gate. My American neighbours: Witness the fruits of Neo-Imperialism. BTW, anyone who harms another is barbarian - you cannot except yourself from the label just because you tell yourselves so on CNN.

What else do you expect the US to do today wrt IP? We have not progressed beyond State-Politics to the point where international or non-national policies are employed. Presently, the Americans enjoy a great deal of influence in a world's dynamics that they have spent a great deal influencing. "They've made the rules", within the framework of national power (recent history)... America, the present world power is the only one (short of revolution and uprising or a challenge of that power, often bloody - but not absolutely mandatory. The Americans have the opportunity to ADJUST THE SYSTEM OF POWER. To say finally, the present system is broken (look at the war, famine, etc etc) and we will be a part of devising a NEW system.... they shun most all international effort that doesn't serve them explicitly. So, am i surprised that the NYT sees Yankee IP law as hypocrisy? not at all, its more of the same, and not at all unique.

Re:terrorism

[sql*kitten]

The US Revolution was really a terrorist effort. Disproportional warfare was fought by the Americans, the British, and other power powers of the time had strict rules of engagement. Certain things were "allowed" and "unallowed" during warfare. The Americans, outmatched by the British Forces employed distinctly divergent tactics (raids, ambushes etc) that were -- at the time -- considered barbaric, disgraceful and un-honourable.... Terrorism.

As far as I am aware, the American revolutionaries tended to attack military and government targets. Contrast them with modern-day terrorists such as the IRA who focus their attacks primarily on the civilian population. That's the real difference between freedom fighters and terrorists, not their tactics, not their strategy, but their choice of target.

Note that the Taliban/al-Queda were freedom fighters while they only attacked Soviet military forces, but exactly the same people using exactly the same techniques became terrorists when they turned their attention to noncombatants.

Get to full report here

[scottme]

At the Commission on Intellectual Copyright website.

You can download the whole thing in PDF format, or browse online.

(btw I submitted a story about this over a month ago)

Developing countries and IP laws

[jcam2]

I'm not sure if developing countries really benefit from not having IP laws in the long run. For example, I know people in Malaysia (a country where almost all software and movies are sold openly by pirates) who tried to produce a home-grown music videotape of songs by local singers.

Guess what happened - pirated immediately copied it, and the original producers ended up with thousands of unsellable tapes! So maybe the US is actually doing these countrys a favour by encouraging them to enforce IP laws.

Disney, I'm looking at YOU

[Thud457]

Disney has a long, glorious histroy of stripmining the public domain:

• Snow White and the Seven Dwarves - stolen
• Pinnochio - stolen
• Cinderella - stolen
• Mary Poppins -stolen
• 20,000 Leagues under the sea - stolen
• Beauty and the Beast - stolen
• Robinhood - stolen
• The Jungle Book - stolen
• Tarzan -I believe they actually pay royalties to the Burroughs estate -- and hate having to do it
• The Little Mermaid - stolen
• Mary Poppins - stolen
• Peter Pan - stolen

The list goes on and on. In fact, it appears that the whole success of the second phase of the Disney corp (The first wave of animated features) rides firmly on the back of the public domain. When they start producing their own stories in the 70's they fail miserably ("Escape from Witch Mountain", "The World's Greatest Athelete", ad nauseum).

It's not so much the re-using the public domain for source material that I have a problem with, it's the bald-faced refusal to let "their" "intellectual property" loose when it's legitimately part of the common public culture. For damn sure now, every westerner knows who Mickey Mouse is, that's why he's worth so much. But he wouldn't be worth so much if everyone didn't know him. That is exactly the same reason why Disney found value in the commons when it was establishing itself as a company. The same reason their first feature was "Snow White".

Re:Same as what the US did to its forests and swam

[TheOneEyedMan]

I this Shoppa is mistaken. Brazil clear-cuts most (approximately 95%) of the forests it cuts down for domestic wood consumption (mostly cooking wood and to farm the land in non-intensive modern farming. They use very little for paper exports.
Sure, we chopped down a huge amount of US forests for paper, furniture, cooking and ship building purposes. But then we got rich. Then this happened:

<i>Today, the volume of wood in U.S. forests is about 25 percent greater than it was 40 years ago. The United States has about the same amount of land covered by trees today as it did 80 years ago. In Vermont, for example, forest cover has more than doubled - from 37 percent in 1850 to 77 percent forest today. In New Hampshire, forest cover was 50 percent in 1850 compared to 87 percent today.
Each year, there are 1.5 billion tree seedlings planted in the United States - that's more than five new trees for each American, and nearly 2,000 for every bear. Forest planting in the United States currently averages about 2.4 million acres per year. </I>

http://www.timberhunt.com/country_report/country _r eport_america/resources.html

Re:Made in... [urban legend alert!]

[cduffy]

Which of course is the reason that the japanese put their electronics industry in the city "Usa", so they could put "Made in Usa" on everything.

Not true! See http://www.snopes.com/business/genius/usa.htm

Farm subsidies

[zenyu]

I used to be one of those people who thought those anti-globalization protesters were just treehugging tenderhearts looking for something to do. Mostly because I'm for free trade on principle. But then I realized how our farm subsidies caused starvation in poorer countries by destroying local food production industries. But our attack on those countries industrial sector with IP laws is part of the same picture.

The IMF orders those same third world countries we dump our subsidized food into on good years to stop helping local farmers buy chickens with something as simple as insurance that if the chick they buy doesn't become a 1 year old chicken it will be replaced. Then the free trade negotiators show up and tell them they can get rid of that 33% tariff on the president's widgets if he will just get rid of that tariff that protects his countries maize production and well prevents his family's competitors from coming out with better widgets by making those patent laws stronger, err in line with American standards.

What does it mean when we complain about a 55 year copyright in Taiwan, which hasn't even been around that long, much less democratic in that time? They are in line with international standards, and have trouble policing such an overlong copyright already, much less the kind of permanent monopoly the US wants them to establish on words.

PS As I understand it the farm subsidies are even worse in the EU, esp France, and this is causing problems with Eastern European countries who wouldn't get the subsidies if they joined the EU. This is from the economist which isn't an unbiased source; is it true?

Re:Farm subsidies

[sql*kitten]

I used to be one of those people who thought those anti-globalization protesters were just treehugging tenderhearts looking for something to do. Mostly because I'm for free trade on principle. But then I realized how our farm subsidies caused starvation in poorer countries by destroying local food production industries.

Ironically, by campaigning against agricultural subsidies and for "fair prices" for the developing world, the anti-globalization movement is agitating in favor of more globalization! That would homogenize prices across the market.

Actually, the whole movement is like that. They are anti-profit, but pro-tax. Anti-monopoly, but pro-government. Anti-capitalist, but pro-freedom.

Really, the corporate CEO and the tree-hugger want the same things, neither of which are in the interests of the government, which does its best to set them against each other.

As I understand it the farm subsidies are even worse in the EU, esp France, and this is causing problems with Eastern European countries who wouldn't get the subsidies if they joined the EU. This is from the economist which isn't an unbiased source; is it true?

Yup, google for "Common Agricultural Policy". You can get the raw figures from the EU website itself, then do the analysis yourself (compare, say, the CAP to the value of the agricultural sector in one of the aspiring members). I won't post a link, I want you to look for yourself so you know that I'm not biased the other way.

Re:Hypothically Speaking .....

[the eric conspiracy]

What would the world be like if there was no IP to speak of?

We can take an example from England early in the industrial revolution, where machinery was sealed in iron boxes, or even further back in time when Kings would intentional cripple their blacksmiths so their sword making technology couldn't escape.

Everything would be kept as trade secrets, under non-disclosure agreements.

Anyone remember the wheel, the steam engine, + others.

The steam engine was patented, as was pretty much all technology developed after 1700.

http://inventors.about.com/library/inventors/bls te amengine.htm
http://www.gsn.uk.com/watt.html

The fact is that the patent system has been around since the early industrial revolution, and a lot of historians cite the development of the patent system as the root cause of the rapid development of technology in the industrial world over the past 300 years. Anyone proposing that patents be abandonded really needs to consider the early history of the patent system, and what went on before patents were introduced.

J.R.R. Tolkien...

[Storm Damage]

...was rather bothered by American bootleggers, too. But unlike Charles Dickens, he didn't go on a big U.S. tour to lobby for stronger international copyright protection. He and his publisher issued a higher-quality print of his novels, sold them for a reasonable price (a bit higher than the bootlegs, but not much), and made an appeal to his fanbase to boycott the unauthorized version.

The result was, he made a lot of money, and the unauthorized version didn't sell very well.

Neat, huh?

Be even more cynical

[0x0d0a]

Well, that last post seemed to go over unexpectedly well, so lets see how Slashdotters react to an expose of *Slashdot* propoganda. :-)

::MUSIC PROPOGANDA::

The Slashdot line: We want to protect starving artists who are being exploited by the RIAA.

Reality: Almost everyone on Slashdot pushing this has vague notions of "unlimited free music" available, without them having to put any resources into production of future music. As for people that claim (and frequently have rationalized their behavior to the point of believing it) that their goals really *are* to defend the artist rather than get free music...I ask, how many of you were crusading against the recording industry's exploitation of the artist *before Napster was around*?

::WINDOWS SECURITY::

The Slashdot line: Windows is highly insecure. Anyone using it is asking to get broken in to. Linux/Unix is much better.

Reality: Windows and other Microsoft products have had security holes, the same as Unix/Linux has. For every egregious MS bug (active content), there's an equally egregious Unix/Linux bug (massive numbers of buffer overflows in ssh, which is frequently deployed at secure sites and is relied upon to be solid). For every MS program with a miserable security history that runs with administrative permissions (IIS), there's a Unix program that does the same (sendmail).

::H1B WORK VISAS::

Slashdot line: H1Bs exploit foreign workers by bringing them to come to the United States and then work at lower wages than other US workers. H1Bs produce workers that produce code of abysmal quality. H1Bs should be eliminated to protect the workers that are being exploited. The US economy would be better (by employing more US workers) if we got rid of the H1Bs.

Reality: H1Bs let people get into the country. Workers coming to the US are quite happy to work at lower wages for a period of time if it means they get their foot in the door and can get permanent residency. People aren't being forced to take H1Bs -- they want them! They work at lower wages than US workers because US tech wages are astronomical compared to the amount of effort required to gain the skillset necessary to do the job. Many H1B workers are *very* skilled, more so than their US counterparts. If a company is going to go all the way over to another country *and* sponsor a worker, it is damn well going to do an even more stringent examination of the worker's competence than it would a domestic worker. Eliminating H1Bs wouldn't make any H1B-users happy at all -- they *choose* to come to the United States and work at 90% the normal US wage because it beats the snot out of working at 10% the normal US wage in a foreign country. As for the US economy being better by helping domestic workers...that's simply not true. What US workers want is guaranteed jobs (or at least jobs with a heavy edge given them in hiring). Costs of paying US workers more is then passed down to the consumer. So people in favor of labor protectionism are asking the entire United States to subsidize their highly-paid lifestyle when there's a more efficient alternative. Plus, it's easy to move software development to another country -- everyone speaks C++, work is fairly independent, and collaboration (and tools for collaboration) are pretty good and easy. If the US does labor protection, in the long term, companies will either move to other countries or go out of business, beaten by companies in countries with cheaper workers. That's *bad* for the economy.

::SWEATSHOPS::

Slashdot line: Sweatshops are evil. They exploit the foreign worker. They should be eliminated.

Reality: This is mostly AFL/CIO-initiated propoganda. Sweatshops are hiring foreign workers at low prices because that's the only way they can be competitive. If you want to pay $50 more for your hard drive, go for it...but competition on price is what has driven down wages. Eliminating sweatshops, as some have proposed, wouldn't do anything to help the foreign worker -- they're willing to work at inhumanly low rates because that's the only way they can get enough for food. Wipe the sweatshops out, and they simply starve. The only people to benefit are US unskilled labor, which gets a short term boost in hiring. This is much the same as the H1B item mentioned above.

::DRUG LEGALIZATION::

Slashdot line: Drug legalization is good because I'm concerned about the human rights of the nonviolent offenders that are put in jail. The Constitution doesn't give the federal government the right to ban drugs.

Reality: Most people taking this view are interested in smoking up, not primarily concerned about potential constitutional violations. Why? I don't see complaints of constitutional violations (libertarian types aside), despite the fact that most of the Bill of Rights is pretty much ignored by the federal government (I remember doing a breakdown at one point of how many are actually strictly followed...something like two of the amendments.)