The start of what will no doubt be a continuing series:

Dear New York Times:

Laudably, articles in Sunday's NYT address the need for innovation. Not one mentions the single most important ingredient needed to encourage innovation - patent reform. Patents no longer serve to encourage innovation. Rather, rent-seekers see who have the best ideas and use patents to blackmail them. Software has been one of the great engines of growth. Yet Bill Gates said: "If people had … taken out patents, the industry would be at a complete standstill today." Industry is now at a standstill and there can be no new direction for American innovation without a radical patent reform. Let us roll back patent protection in software; enforce the existing standard of non-obviousness; and eliminate the kidnapping of ideas for ransom by providing an independent invention defense. This - without public money, and unlike the random assortment of stimulus spending currently being proposed in Congress - would build the foundation for sustained economic growth.

Sincerely:

Michele Boldrin, David K. Levine, and Stephen M. Silberstein

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Michele Boldrin is Joseph G. Hoyt Distinguished Professor, and Chairman, in the Department of Economics at Washington University in St. Louis. He is a Fellow of the Econometric Society and a CEPR Research Associate. He is co-author of Against Intellectual Monopoly from Cambridge University Press, August 2008.

David K. Levine is John H. Biggs Distinguished Professor in the Department of Economics at Washington University in St. Louis. He is the President of the Society for Economic Dynamics, a Fellow of the Econometric Society and an NBER Research Associate. He is co-author of Against Intellectual Monopoly from Cambridge University Press, August 2008.

Stephen M. Silberstein co-founded, and served as the first President of, Innovative Interfaces Inc., the world's leading supplier of computer software for the automation of libraries.

What is the next great wave of innovations? It is hard to know for sure, but over-the-air internet seems an obvious possibility. We observe the following facts

*Cell phone service is highly monopolistic and lousy.

*Over-the-air internet service has arrived - watch people with their iphones at the restaurant...

*Over-the-air internet service is lousy - watch how long it takes them to load a web page

This raises the question: what would really good over-the-air internet service do? Really high speed all the time everywhere over-the-air internet exists in laboratories all over the world. It is directional and frequency hopping and it cleverly gets around problems of interference, including that caused by other devices. The technology is there now. Why can't we have all the information in the world at our fingertips all the time? Think of all the great business opportunities - from revolutionizing markets for small businesses, to great new businesses, to the business of writing the software, building the small portable internet devices, to building the large radio networks needed to make the vision a reality. Expensive proprietary over-the-air networks revolutionized trucking and shipping. Why not revolutionize everything else? There is no question that there is huge opportunity here: for individual people to make their fortune, for the more average of us to make a living in a new and growing industry.

So what is keeping the vision from reality? Not enough support from the government? No - government is the problem. From dragging their feet on the allocation of "white space" spectrum, to delaying the introduction of HDTV, to the more fundamental problem of tying up massive amount of bandwidth with obsolete over the air television that provides minuscule benefits to practically nobody - government regulation is the culprit. We don't need "net neutrality" laws; we don't need government regulation of the airwaves - we need competition, hard and fierce and innovative.

And let us not forget patents and copyright. So much of the new technology is tied up with patents of course. But I'm especially reminded of a conversation I had with Gary Shapiro, President of the Consumer Electronic Association, who I met at a Cato conference several years ago. He represents mostly smaller electronics firms - exactly the ones who are eager to innovate and bring new products to market. What is their greatest fear? That competitors will steal their ideas if they don't tie them up with patents? Of course not. It is that they will be sued by copyright holders for somehow encouraging piracy. If you want to know what that is all about, go look up the case of Replay TV.

Finally - what does it take to succeed? The biggest success of the last decade is Google. Did they do this by trying to squelch the competition with legal means? No. They have a vision - all information at your fingertips all the time - and they've ruthlessly pursued that vision, necessarily bending and breaking copyright laws along the way. So...do we spend our time patenting elaborate business models? Or do we build better mousetraps?

I think it is time to start a campaign to free the airwaves. The time has come for inexpensive high quality access to everyone and everything all the time.

Chapter 9 live blog

Live blog 7

"Some talk about the problems of general equilibrium theory and the Austrian alternative. Some amazing material for dissertations."

Jeffrey Tucker's live blog has moved to Chapter 6.

I added a booklist (below the comments). It has Michele's and my book, and Stephan's. Other suggestions? I want to keep it reasonably short (five?) so books like the various books like Seth Shulman's that focus on particular cases are probably not what we want, rather more general purpose books about IP or monopoly.

I added a booklist (below the comments). It has Michele's and my book, and Stephan's. Other suggestions? I want to keep it reasonably short (five?) so books like the various books like Seth Shulman's that focus on particular cases are probably not what we want, rather more general purpose books about IP or monopoly.

link to the live blog here

I'm going to add a few comments of my own about copyright. There are basically four areas covered by copyright.

Entertainment: This is the tail that wags the dog. Not that entertainment isn't important; it is just that only a small subpart of the entertainment industry is covered by copyright. Let's call that the "professional entertainment" industry - popular fiction and non-fiction; movies; tv; professional music. The problem is that this industry is minuscule - smaller than just the IBM Corporation alone. Absent copyright, we'd lose some marginal contributions, and the very rich people at the top would be less rich. However, "professional entertainment" is tiny compared to "entertainment" which would include everything from home videos, to playing games, to talking on the phone with your friends. This industry is an order of magnitude bigger than "professional entertainment." And the main use of copyright in the "professional entertainment" industry is to limit competition from the "amateur entertainment" industry. Whatever we would lose from the professionals (not much, since copyright is de facto gone anyway) would be more than made up for by the amateurs.

Textbooks: Few people are educated by reading textbooks. If fewer text books are written without copyright (let's hope so since they are all the same) then the people who teach classes will have to do a better job; write more lecture notes; or create open source textbook - else we won't collect our pay as teachers. This industry is a sick joke: copyright is used so that teachers who are too lazy to develop their own material and don't pay for the texts themselves will assign bland overpriced texts to their captive students.

Scientific Research: Getting rid of copyright here would just accelerate the move towards open access scientific publications. If not for the fact that commercial publishers own the reputations of existing journals, they would be gone already. Scientific information is spread through the internet in preprints and working papers; publishing plays no role.

Software: This is an important industry. And one that can thrive without copyright as the example of open source/free software shows. Nor would the proprietary sector be driven out of existence - technical means of protection would still be available without copyright.

Jeffrey Tucker is back at it.

From Joe Schembrie to Jeffrey Tucker to me, a quote from the autobiography of Steve Wozniak, co-founder of Apple Computer and designer of the Apple I and II computers.

"It's funny, I think back on it now -- the Apple II would turn out to be one of the most successful products of all time. But we had no copyrights or patents at all back then. No secrets. We were just showing it to everybody." (p.195)

Do we want people to make products or engage in legal shenanigans? Although who knows...maybe the legal minds invested in patent law would be out running Ponzi games if they weren't so busy figuring out how to steal other people's inventions.