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Greenspan Examines the Economics of IP
lilgerry writes "Alan Greenspan is asking some tough questions about the correct balance between rewarding innovators and inhibiting follow-on innovators. There's not many answers here, but there's a hint that there could be some clear economic thinking coming to be added to the discussion. Several good questions raised, and in very precise terms that should get papers published on these topics for years to come."
You shouldn't be able to patent anything that has no mass. Think about it.
It's Christmas everyday with BitTorrent.
Damn, I had my heart set on patenting neutrinos...
"Stop failing the Turing test!" -- Dilbert
I think Greenspan is a smart guy. He has the moral understanding of Capitalism that he got from Ayn Rand and that lot, but unlike your average ideological Objectivist, he's also pragmatic. He understands that, say, the inefficiency of the federal reserve affecting interest rates is balanced against the short-term chaos and unpredictability of an unregulated money supply.
So what he's saying here is interesting and balances the ideology of "intellectual property" with pragmatic reality. The main point I notice is this:
To put it another way: free markets are beneficial, we all agree on that. We also most note that free markets are self-organizing. Which means that most people act in a way that supports the existence of a free market. This idea is echoed by Greenspan's statement above.
When 20 million people trade files on P2P networks, they may be commiting an act which is morally wrong according to our present views, but they are merely exploiting a property of information that has always been bubbling under the surface: it can easily be copied. Technology today is simply exposing the false assumption, made long ago, that information is difficult to copy.
A "free market" in information is therefore not self-regulating, and should not be called a free market at all. It's more like a kind of "non-laissez-faire capitalism"
We should ask ourselves, is the massive regulation required to prop up this system worth it? Or should we just fix this assumption and start anew?
Wait, so when you patent an algorithm, it's just a mathematical thing, therefore it has no mass, so it shouldn't patentable. What about drugs? Are you patenting the physical drug, or the method of making the drug, or what? The method of making the drug has no mass. All patents can be reduced to massless things. What exactly are you measuring for mass? It's not as simple as you make it, I don't think.
Greenspan is saying everything that has been said on Slashdot and other venues: the laws are unbalanced towards hyper-regulation, and there's an "untamed" frontier trampling IP rights totally unaffected by the hyper-regulation.
Although said in the usual Econo-speak, one of his themes is that trying to use the court system to tame this frontier is a waste of time, and ultimately useless. Other markets don't need constant lawsuits and court intervention because everyone understands and respects the rules and have no desire to cross them. The rules seem fair and the market prices things at an appropriate level so there's little desire to break the rules by most participants.
That's Greenspans way of saying the DMCA and the Lawyer Heavy tactics are going to stunt growth. He's really suggesting that IP rules be re-written so everyone can respect them and live by them, and implicitly, the IP vendors should try learning to live in a true free market where their prices come down due to competition.
That's one of his themes.
The bitter lessons of a veteran coder: http://bitterprogrammer.blogspot.com
From the Article Header:
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At the 2003 Financial Markets Conference of the Federal Reserve Bank of Atlanta, Sea Island, Georgia
I think Greenspan is plainning on having the rest of the Fed look at this stuff real critically, thus he leaves the questions open. This is, hopefully a very good thing, as it might raise some questions about congress's continued protection of Mickey. As it is, I would have to place Greenspan as one of the more influential people in the US economy today. I swear, this man farts and the DOW drops three points. I think that, if Greenspan was to state that he dislikes the current Copyright "balance", we might see some changes to it come down the pipe.
As for trying to get some good answers, you do realize that this is
Necessity is the mother of invention.
Laziness is the father.
I think a intellectual output calls for two protections which are to be VERY differently managed. All too often the two are wrongly lumped into one or at least muddled.
One is attribution: Your idea is yours, and anybody quoting or using it should attribute it to you whenever possible. I think this is an inalienable right and cannot be argued away. The GPL, for example, is very clear on this.
Second is compensation: Your idea MAY be yours to profit from it. Society MAY decide to let you use the idea for profit and help defend yourself from imposters. This is NOT an inalienable right, but merely a social bargain and will change over time to reflect market and societal environment.
I think Alan Greenspan in his speech correctly goes back to the underpinnings of the second protection and asks whether our current system of IP protections benefits or hurts the economy.
The whole idea behind patents is that you patent the PROCESS, not the material product. You can't patent a cheese burger or glass or steel, but you can patent the process of making the cheese burger, manufacturing and refinement of glass or steel.
You don't patent a car, you patent the DESIGN. Think about it, you can't patent matter. That's absurd. "You've got 10 molecules of naturally occruing versions of a material I've patented. You owe me XXX!"
Thinking like yours is why people people oppose anything with the word patent in it. You don't understand it at all.
Sigh. He lost me right there. I thought our objective was to maximize joy and minimize suffering. (I guess I'm either a utilitarian or a Buddhist.) Almost everyone seems to believe that the society with the fastest-growing economy is the best society for its members, but I've never seen a coherent argument to that effect. In fact, until I see something of the sort, I'm inclined not to believe it.
OK, if you're done being apoplectic about me challenging this particular sacred cow, how about explaining this belief to me slowly and calmly, in a manner suitable for a weak-mided fool like myself who somehow misses the point.
mt
I admire the simplicity of the capitalist ideal, but using it as a justification for making everything behave like property by enforcing scarcity where there is none, is an ugly perversion of capitalism, in fact, I would argue that it is the opposite of capitalism.
Capitalism is a means to manage scarcity, and it is very good at it, but artifically creating scarcity just so that capitalism may be applied is like shooting people to create a demand for hospitals:
"stop shooting people!"
"what, you don't like hospitals?"
If drug research were publically funded, who would determine which drugs are researched? How would we know which are the best drugs to research, and which not? The free market is a wonderful mechanism to determine this
Umm, this is ridiculously false. First off, the free market is only good for determining how much money something is worth, not for determining how much society will benefit from something. And to answer the firts point, the same way everything else in public policy is done, the people* decide what drugs are to be researched.
History bears me out on this. Any student of economics knows that free markets invariably produce better outcomes overall than do centralised economies
Not when it comes to things of public welfare. Why do you think the US has what is generally regarded to be one of the worst health care systems in the first world, and the most expensive drugs? Why do you think senior citizens have to smuggle drugs across the border because they cannot afford them themselves? Answer: because health care in most all EU nations and Canada and Australia are publicly funded, and have massive publically funded drug research programs, because they try to look after the people, whereas the US is just interested in making a quick buck.