In Easing the Transition to an Alternative Economy, posted at the Citizen's Briefing Book at Change.gov by "Mutualist" Kevin Carson (mentioned here at Center for a Stateless Society, and here on Carson's blog), Carson has a good critique of the damaging and distorting effects of IP. Now, he does mix it in with ideas I find questionable (see 1, 2, 3), such as the leftist hostility to "bigness" and the corporate form of business, the penchant for "localism," the notion that "road subsidies" somehow favor large companies (which basically, as many "vandarchists" seem to believe, makes them fair game for vandalism and worker appropriation since they do not "really" own their property), and the idea that we should "liminat[e] differential tax exemptions that favor firms engaged in centralized, large-scale, capital-intensive production" (this would just amount to raising taxes--now he does advocate making up for this by lowering overall taxes, but only enough to be "revenue neutral," which, by my math, does not prevent net taxes from being raised on some companies; a good libertarian opposes all tax increases)--so I bold the parts below that I reall like:

If we want to replace the present centralized economy of waste production and planned obsolescence, it's an inescapable fact that a great deal of excess manufacturing capacity cannot be saved. In my opinion it's a mistake to try to prop it up through expedients like the Detroit bailout.

Corporate capitalism has been plagued from its late-19th century beginnings with chronic crises of overaccumulation and overproduction, which would probably have destroyed it in the Great Depression (despite the New Deal) had WWII not postponed the crisis for a generation by helpfully blowing up most of the plant and equipment in the world outside the U.S. and creating a permanent war economy for absorbing surplus output. But Europe and Japan rebuilt their industrial capital by 1970, and since then the chronic crises have been back with a vengeance. Before the current downturn, America's overbuilt industry couldn't dispose of its full output running at capacity, even with everybody tapping into home equity and maxing out their credit cards to replace everything they owned every five years. And we'll never see those levels again. So there's no escaping the fact that much of our plant and equipment, in a few years, will be rust.

The goal should be a shift from the present system of overaccumulated, centralized, oligopoly industry, and its business model of planned obsolescence and "push" distribution, to a decentralized economy of small-scale manufacturing for local markets. This means, among other things, a switch from capital-intensive production methods based on product-specific machinery, to production with small-scale, general purpose machinery. It means, in place of the old Sloanist production model, something like the present-day economy of Italy's Emilia-Romagna region: networked small manufacturers producing for the local market, with a high degree of cooperative ownership. Such an economy, based on a "pull" distribution model with production geared to demand on a just-in-time basis, will be insulated from the boom-bust cycles of the old national "push" economies. And we need a new model of user-friendly, modular product design aimed at cheap and easy repairability and recycling.

Your main focus, in my opinion, should be to ease the transition by eliminating present policies (market-distorting subsidies, privileges, and cartelizing regulations) that impede it and protect the old economy from the new one.

This means, for one thing, eliminating differential tax exemptions that favor firms engaged in centralized, large-scale, capital-intensive production: e.g., the depreciation allowance, the R&D credit, the deductability of interest on corporate debt, and the exemption of stock transactions involved in mergers and acquisitions from capital gains tax). Then lower the corporate income tax enough to be revenue-neutral.

It means, especially, eliminating the biggest subsidy to economic centralization, and to artificially large market area and firm size: i.e., subsidies to long-distance transportation. The Interstate should be funded entirely by weight-based user fees on trucking, which causes virtually all of the roadbed damage. All subsidies to new airports or to expanding old ones should be eliminated, including all federal guarantees of local bond issues.

Perhaps most important of all, it requires radically scaling back the present strong "intellectual property" regime. IP (through patent pooling and exchange, monopolies on current production technologies, etc.) is probably the single most powerful cartelizing force, which enables each industry to be concentrated in the hands of a few players. It impedes the transfer of skills and new technology from the old manufacturing dinosaurs to the kinds of small, local producers we need. It also serves as a powerful bulwark to planned obsolescence, imposing legal restrictions on the manufacture of cheap generic replacement parts.

Scaling back IP law (a good start would be repealing the DMCA, the WIPO Copyright Treaty, and the Uruguay Round's TRIPS accord) would eliminate the barriers to the diffusion of skill and technology that currently prop up the old corporate dinosaurs of the software and entertainment industries, and facilitate their replacement by networked production on an open source model. Please cut loose the MPAA, RIAA, and Bill Gates, and do so yesterday!

Finally, we need to eliminate all subsidies to large-scale agribusiness. The result will be a flourishing sector of community-supported agriculture, replacing the old agribusiness dinosaurs as fast as new ground can be cultivated.

'...this would just amount to raising taxes--now he does advocate making up for this by lowering overall taxes, but only enough to be "revenue neutral," which, by my math, does not prevent net taxes from being raised on some companies...'

Actually, this issue came up in another area that I have researched, the Kim Swales plan for a Pigovian virtual subsidy to undo labour market imperfections by allowing tax breaks per worker on GST/VAT (which we already have here in Australia), raising the rates to compensate. That too would cause some firms' payments to rise even while oether firms' payments fell. I worked out ways to eliminate that, one of which would work in this situation (although it's not the best way for the Swales plan, in my view).

This involves giving existing firms a grandfathered or possibly sunsetted additional adjustment. Say each firm F paid T(F, t0) = G(F, t0) - E(F, t0) at time t0 just before the change, where G(F, t0) was its gross payment and E(F, t0) was its exemption. Then just change the formula for later times t to G(F, t) - E(F, t0), i.e. freezing the exemption rather than eliminating it, or to G(F, t) - P(t)*E(F, t0) where P(t) is a sunsetting taper proportion. Even the former frozen exemption would be eroded by inflation; either way there would be no marginal advantage for further centralising etc., and changes in the particular firms in the market would gradually eliminate this transitional arrangement. This involves treating past centralisation as (in the short term) a fait accompli and a sunk cost.

For me this is all rather academic as I personally favour undoing the specific advantages of the corporate form over others, so that over time the others should outcompete and displace them and their centralisation etc. anyway (if not, that would be experimental confirmation that they were justified after all - which I suspect would be true in certain special cases). It is particularly immaterial in Australia, since eliminating such exemptions completely would have no effect whatsoever on the natural persons ultimately owning the firms, in most cases; they would automatically get more matching deductions on their personal income tax. The only effect would be on corporate decision making, as desired (there would still be motives for that, as that profit does matter to the managers and directors both as a signal and as a pool feeding their own remuneration).