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Against Monopoly

defending the right to innovate

Against IM

Monopoly corrupts. Absolute monopoly corrupts absolutely.





Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.


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Against Intellectual Monopoly in Washington D.C.

For the folks in the Washington DC area: next Monday, November 10th, the Cato Institute will be hosting a presentation of the book by David K. Levine and myself, Against Intellectual Monopoly.

I will be presenting the book, and Robert D. Atkinson, Ph.D., Founder and president, Information Technology and Innovation Foundation, will debate it. To be moderated by Jim Harper, Director of Information Policy Studies, Cato Institute.

The event takes place at 12:00 p.m. and it is followed by a luncheon. Please go here to register.

Fifteen minutes of fame

Actually more like an hour. You can find Michele and I talking with David Levine (yes, we David Levine's have taken over the world) on his radio show Hearsay Culture about our book here and here. It was a lot of fun, and I would have liked it even if our interviewer hadn't appropriated my name.

Russian Report

via Aleh Tsyvinski
Sergei Guriev and I (together) and Konstantin Sonin (also from the New Economic School) write a bi-weekly column in Russian business daily Vedomosti (jointly published by the Wall Street Journal and FT).

This week Konstantin wrote a very nice column about your book link here

He also has one of the most popular Russian blogs and there is more stuff here link here

Links for the book are Amazon Cambridge University Press and the free online version

This is the translation of Konstantin's article that Babelfish and I came up with:

There are economic questions, on which, it would seem, agreement between scientists is long established. Until recently these firm truths included the need for patents and copyrights. And here matters rested until the book by the economists of Washington University in Saint Louis Michele Boldrin and David Levine in which they reexamine patents and copyrights. They assert that intellectual property is not necessary: that the inventor or the author can profit even in its absence. Moreover the gain to society as a whole from eliminating it - including the users, who will pay less, and other producers - will be significant.

The standard argument of economists in favor of copyrights and patent rights is as follows. In order to provide incentives for invention, it is necessary to provide some reward afterwards. Patents give rise to a short-term monopoly. The problem is that monopoly is always inefficient. In order to force those, who value goods especially highly, to pay a little more, the monopolist restricts supply relative to the amount that would be sold if the market was competitive. Accordingly, the standard argument of economists is that the inefficiency from the temporary monopoly of patent protection is necessary to pay inventors and give them proper incentives.

Boldrin and Levine, relying on the theory they have developed, show based on numerous examples that the costs of intellectual monopoly are greater than necessary for the stimulus of development. Time after time it happens that the great inventors, whose names are known to us from school, after making their first discovery, switch their energy and not less remarkable resourcefulness to fighting for the right to exclusively obtain profit. The activity of James Watt, father of the first steam machine, for a long time slowed the development of more advanced technology and did not bring any special benefit. Watt earned more when his patents expired and he was forced to implement new developments and compete with his followers.

An even more striking example is drawn from recent history - the innovations that have changed the face of the world in the recent decades: especially the development of computer software. (The book also gives a great deal of attention to the pharmaceutical industry.) Until 1981 it was not possible to patent software (in practice is was not really possible until 1994). The success of software, developed freely without patent, shows that even without monopoly the developers have sufficient incentive to actively produce new innovations. Now almost all the large firms cross-license patents with each other and hurry to patent the smallest technological changes in order to be protected from potential rivals.

What would happen, ask Boldrin and Levine, if the latest book of J. K. Rowling was not copyrighted? Without Rowling's copyright it would not earn worldwide six hundred million dollars, but possibly only six million dollars. This would be due to sales during the first few days, during which time the other publishing houses would not yet have time to produce copies. But perhaps for a French teacher this would be more than enough incentive? Whether selling the "first copy" of an idea creates sufficient stimuli for the innovation, is one of the one of the most difficult issues in the book. But to each traditional argument in favor of patents and copyright the authors provide meaningful answers. They do not always disagree: for example, in discussion of the role of commercial secrets.

In the book of Boldrin and Levine very little is said of Russia, beyond mentioning Alexander Popov's priority in the invention of radio. This is discussed in the chapter about how frequently the rewards from the efforts of a large number of people, who work independently of each other, wind up, because of the patent right, in the hands of one person. In our country the question of intellectual monopoly is discussed in the following context. The obvious benefit from the absence of copyright is greater accessibility. If in the 1990's software had been protected from the piracy, the advance of computer literacy would be much slower. In recent years our government has repeatedly moved in the direction of a stricter observance of patent rights and copyright. In other words, in the opinion the authors of the book Against Intellectual Monopoly, in the incorrect direction.

Perhaps nevertheless Boldrin and Levine - both of them among the most highly-paid academic economists in the world - are not right? The book, although based on long-term investigations, and no matter how convincing, has not changed the prevailing view in the economics profession. However, at a minimum there is something to their line of reasoning: I spent 20 dollars and purchased their book, although it - in complete agreement with the persuasions of the authors - can be downloaded free of charge load from their web site.

Against Intellectual Monopoly: The Book, Movie No Doubt To Follow Soon

Michele's and my book

is now out...sort of. You can order it on Amazon except it appears to be temporarily out of stock. I guess that is a good thing. They have links to a few copies from other sellers. Or the publisher Cambridge University Press although they say it isn't available to August. But we know it exists, we've seen, sold and even signed a few copies. The free online version is available here

Here is the official blurb:

"Intellectual property" - patents and copyrights - have become controversial. We witness teenagers being sued for "pirating" music - and we observe AIDS patients in Africa dying due to lack of ability to pay for drugs that are high priced to satisfy patent holders. Are patents and copyrights essential to thriving creation and innovation - do we need them so that we all may enjoy fine music and good health? Across time and space the resounding answer is: No. So-called intellectual property is in fact an "intellectual monopoly" that hinders rather than helps the competitive free market regime that has delivered wealth and innovation to our doorsteps. This book has broad coverage of both copyrights and patents and is designed for a general audience, focusing on simple examples. The authors conclude that the only sensible policy to follow is to eliminate the patents and copyright systems as they currently exist.

A Trademark Brouhaha

Citizens United, a Washington District of Crime outfit, sent a "cease-and-desist" letter to Citizens United Not Timid trying to intimidate it and to get it to stop using Citizens United in its name. Its letter contains a not-so-vailed threat of legal action.

Michael D. Becker, the lawyer for Citizens United Not Timid, responded with this cutting-edge analysis of their complaint. Mr. Becker would no doubt disavow this, but the letter speaks not only for itself, but for all victims of trade mark bullies.

These links can be found at its website.

David Rosen mentions the group in this article.

Thanks to Mark Brady for the scoop and the links.

Is a Patent a Monopoly?

Rereading N. Stephan Kinsella's paper "Against Intellectual Property", it occurs to me that strictly speaking a patent is not a monopoly, but instead is an exclusionary device that legally prohibits anyone, even an independent inventor, from copying a patented invention, method, or process. It gives the inventor, in cahoots with the State of course, the right to exclude others from inventing the patented object. A patent does not give an inventor the right to produce his own invention, although he can do so as a consequence of the natural right he has in his property, which includes his body (self-ownership) and his legally owned materials he would use to produce it. Of course, the effect is the same as a monopoly, because he is the only person who can legally produce the ideal object that is the subject of the patent.

Exclusionopoly?

For an example of the contradiction of this law, see Kinsella, pp. 4-5, n. 12. Then call your Congressman/MP, etc. and tell him/her that "I'm mad as hell and I'm not going to take it anymore."

Peter Finch, the only actor ever to win a posthumous Oscar award for Best Actor, would be proud.

The Anti-Defamation League's Thuggish Threat Against the the Anarchist Anti-Defamation League

Here is the 1998 exchange between the thuggish--there is no other word to describe it--Anti-Defamation League and the Anarchist Anti-Defamation League.

This is the laugh line from the ADL's general counsel:

In fact, it appears to us that you may have selected a name so similar to our name in an effort to draw upon the good will and national success that people associate with the ANTI-DEFAMATION LEAGUE.

Anyone who knows anything about anarchism (which obviously the writer of the quoted words doesn't) knows that anarchists stand opposed to the statism of the ADL, including the Progress Clause of the U.S. Constitution, and all enabling legislation, both state and federal, as well as court decisions, such as those cited in the ADL's e-mail, that allow this sort of thuggery to stand.

As for the alleged good will and national success of the ADL, that is irrelevant to the AADL's using the designation "Anti-Defamation" in its name, which it has a natural right to do.

Is Intellectual Property the Key to Success?

"Is Intellectual Property the Key to Success?" by Jeffrey Tucker is posted at the Ludwig von Mises Institute website. A sample:

Merchants are free to attempt to create artificial scarcity, and that is what happens when a company keeps it codes private or photographers put watermarks on their images online. Proprietary and "open-source" products can live and prosper side-by-side, as we learn from any drug store that offers both branded and generic goods inches apart on the shelves.

But what you are not permitted to do in a free market is use violence in the attempt to create an artificial scarcity, which is all that IP legislation really does. Benjamin Tucker said in the 19th century that if you want your invention to yourself, the only way is to keep it off the market. That remains true today.

So consider a world without trademark, copyright, or patents. It would still be a world with innovation perhaps far more of it. And yes, there would still be profits due to those who are entrepreneurial. Perhaps there would be a bit less profit for litigators and IP lawyers but is this a bad thing?

Quick Hitters

I'm leaving for Europe shortly, so don't have time for a long post, but there is a lot of news, so I'm going to put up a few links - check Slashdot, they are following these stories

Peer Patent Review: Looks like the voluntary patent peer review is underway for real. You may recall I've had some skepticism of this, but now we will see.

Secondary Copyright: I think this is a good thing: a court has given publishers that buy material from freelancers more control over the content, allowing them to use the material electronically without separate royalty payments. But I just looked at it briefly.

Maybe some of our readers can fill us in on what is going on with some of these developments.

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Most Recent Comments

The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace

The right to rub smooth using a hardened steel tool with ridges I'm a bit confused by this--even if "hired to invent" went away, that would just change the default

Do we need a law? @ Alexander Baker: So basically, if I copy parts of 'Titus Andronicus' to a webpage without

Do we need a law? The issue is whether the crime is punished not who punishes it. If somebody robs our house we do

Do we need a law? 1. Plagiarism most certainly is illegal, it is called "copyright infringement". One very famous

Yet another proof of the inutility of copyright. The 9/11 Commission report cost $15,000,000 to produce, not counting the salaries of the authors.

WKRP In Cincinnati - Requiem For A Masterpiece P.S. The link to Amazon's WKRP product page:

WKRP In Cincinnati - Requiem For A Masterpiece Hopefully some very good news. Shout! Factory is releasing the entire series of WKRP in Cincinnati,

What's copywritable? Go fish in court. @ Anonymous: You misunderstood my intent. I was actually trying to point out a huge but basic

Rights Violations Aren't the Only Bads I hear that nonsense from pro-IP people all the

Intellectual Property Fosters Corporate Concentration Yeah, I see the discouragement of working on a patented device all the time. Great examples

Music without copyright Hundreds of businessmen are looking for premium quality article distribution services that can be

Les patent trolls ne sont pas toujours des officines

Les patent trolls ne sont pas toujours des officines

Patent Lawyers Who Don't Toe the Line Should Be Punished! Moreover "the single most destructive force to innovation is patents". We'd like to unite with you

Bonfire of the Missalettes!

Does the decline in total factor productivity explain the drop in innovation? So, if our patent system was "broken," TFP of durable goods should have dropped. Conversely, since

Does the decline in total factor productivity explain the drop in innovation? I wondered about TFP, because I had heard that TFP was increasing. Apparently, it depends on who

Music without copyright I do agree with all the ideas you have presented in your post. They are very convincing and will