Slashdot Mirror
Reason on IP Protection and Creativity
rnturn writes "A long but interesting article over at Reasononline discusses a paper written by a pair of economists and published by the Federal Reserve Bank of Minneapolis (!) and the reactions to it of several other economists. A snippet from the article: 'Moreover, U.S. court decisions in the 1980s that strengthened patent protection for software led to less innovation. "Far from unleashing a flurry of new innovative activity," Maskin and Bessen write, "these stronger property rights ushered in a period of stagnant, if not declining, R&D among those industries and firms that patented most."' Not exactly news to most readers but it appears that their paper is making waves in economic circles."
The basic idea of civil society, as articulated by the great enlightenment social contract philosophers, is this: You give up your "natural rights", that is, the right to take by force whatever you have the power to take, to the state, and in return, you are granted "civil rights", such as the right to your own property, the right to freely enter into contracts, freedom of speech, and so on.
Now, most copyright and patent infringement advocates don't have a problem with private ownership of material property, even though this is also an artificial construct which takes away their "right" to steal whatever they like and gives whoever acquires ownership of property through lawful market transactions a "monopoly" over its use. So why do they claim that intellectual property is any different? Usually the answer is a hodgepodge of weak analogies, claiming it is similar to such things as oxygen and water, unsubstantiated slogans like "information wants to be free", and of course the favorite retort of totalitarian zealots, "its inevitable".
But the most insidious of them all is the recent pronouncement that copyright, and intellectual property laws in general, create "monopolies", and so in fact are in opposition to the principles of free market economics. This is a gross perversion of the term monopoly, as it usually applies to monolithic, stifling state-supported enterprises. You might consider the case of the Coca-Cola corporation: They sell a popular soft drink which you may be familiar with. The secret to its popularity is great taste, and this is because of a time-tested, proprietary formula. In order to produce this beverage, naturally, operators of bottling plants have to enter into agreements with the Coca-Cola corporation, and pay royalties. If one is to follow the analogy favored by piracy advocates, Coca-Cola has "monopoly" on this drink, and it is unfair that only they are allowed to sell it, and it impedes the operation of free markets. But just ask their competitors: This idea is ridiculous. Just because they can't sell beverages made according to the exact Coca-Cola formula doesn't mean that they are prevented from selling soft drinks. It just means that in order to compete, you are forced to innovate yourself, and this results in the diversity that a market economy should provide: Pepsi, RC Cola, Jolt, and many other unique varieties of cola are available, and they are all able to profit because of their distinctive taste and branding. Why should they not be rewarded for their investment in research and development? And why should someone who rights software, books, or music not also be rewarded?
Of course an individual or corporation ought to have rights to the unique result of their own creative work, and they should also have the right to transfer these rights to anyone they please if it is in their own interest. Exclusive rights over something like the text of a particular, source code to a particular program, or a particular performance of a popular song, do not translate into a "monopoly" in the general case: It only forces competitors to produce their own original products, which produces diversity that we as consumers should value anyway. It isn't like Oxygen or water: Every O2 or H2O molecule is the same, but Microsoft Windows XP is the result of billions of dollars of research and development money invested over 20 years. And maybe it wants to be free, but perhaps so does your car: That doesn't mean that someone who tries to steal if from shouldn't be thrown in jail. We accept these abrogations of "natural law" because the result is more prosperity and more fairness for everybody.
Hmmm... well people on /. have been saying all sorts of stuff for years. The difference between wild speculation (i.e. what happens on /. most of the time) and rigorous accademic inquiry (like the papers produced by Boldrin and Levine) is that the later produces theories which can be tested against the facts, refined, put into use, etc.
Anyone can say "intellectual property is BS". Few can give a rigorous proof of why intellectual property is BS.
However, it seemed to have an air of, "well, gee I didn't think of that".
I think the surprising part for economists was the extent to which the predictions of earlier models depended on certain simplifying assumptions. Economic models always contain assumptions that are unrealistic, and usually this is fine as long as the predictions obtained from a model remain approximately accurate even when its assumptions are relaxed a bit. In this case economists had assumed that intellectual goods are entirely non-rival and that copying costs nothing at all. At first glance these look like pretty reasonable assumptions because they are actually pretty close to the truth - economists often use assumptions that are far more unrealistic. What is surprising here is that even very slight changes to these assumptions - a small degree of rivalry and a small copying cost - make a big difference to the predicted results. Some economists were surprised to see just how big that difference can be.
The difference between wild speculation (i.e. what happens on /. most of the time) and rigorous accademic inquiry (like the papers produced by Boldrin and Levine) is that the later produces theories which can be tested against the facts, refined, put into use, etc.
Not all slashdot posts are pointless speculative drivel, and many "rigorous academic inquiries" are pompous, pedantic, and obfuscated. The medium through which a thing is said does not inherently render it good or bad. Granted, you didn't say that, but I feel the need to point it out regardless.
Anyone can say "intellectual property is BS". Few can give a rigorous proof of why intellectual property is BS.
AFAICS, formally educated economists have done nothing but support conventional wisdom for the past few decades. If they have done anything great, I haven't heard of it, probably because I'm not an economist and "those in the know" do not feel obligated to explain to the public (in words we can understand) why their theories should govern us.
Anyone can support intellectual property by reiterating conventional wisdom. Frankly, I'm not comfortable with a system that isn't constantly being challenged. If the academics aren't gonna do it, I'm more than happy to have the slashdot trolls fill the void.
I believe the real reason why Boldrin and Levine are getting an audience is because economists don't care to listen to people who aren't of their ilk. Although I suppose I'll have to make a "rigorous academic inquiry" into that hypothesis before anybody listens.
What is surprising here is that even very slight changes to these assumptions [...] make a big difference to the predicted results.
And that's what is significant and eye-opening. When a system or relationship previously assumed to be linear is shown to be non-linear, that throws off everything -- all analyses and assumptions based on that have to be re-evaluated. It also raises the question: what other relationships have we assumed to be linear but aren't? (IOW, how much of what we thought we knew is wrong?)
-- Alastair