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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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Interactive Graphic Pretends to Illustrate How U.S. Patent System Has Driven American Economy

Interactive timeline_ The history of patents in America - JSOnliInteractive Graphic Illustrates How U.S. Patent System Has Driven American Economy notes:
Last month, the Milwaukee Journal Sentinel published two articles documenting the current state of the U.S. patent system (see "The Milwaukee Journal Sentinel Gets It Right about Patents"). The authors of those pieces, John Schmid and Ben Poston, have now compiled an interactive graphic that shows how the U.S. patent system has shaped American history and innovation. The graphic contains a number of elements, including a timeline of key patents and significant events in American history, a comparison of domestic and foreign patents issued between 1790 and 2009, and charts showing the top countries and states in which U.S. patents originated, the number of pending applications between 1981 and 2009 and average application pendency between 1983 and 2008, fee diversion between 1992 and 2004, and rapid growth of the Chinese patent system between 1999 and 2008.
Some asked me if this proved patents do encourage innovation. But of course it does not. This proves absolutely nothing, in fact, except that there can still be growth despite state intervention such as intellectual monopoly grants. Correlation is not causation. I hope Obama doesn't see this--I'm sure he could whip up a similar chart correlating growth over the last two centuries with, say, increasing taxes, increasing federal spending, increasing federal size/employment, increasing military size, increasing efficiency at mass murder, and so on.

Further, note the flaw in using China to prove the patents-drive-growth hypothesis: China's economy has been growing for a good decade even though it has had and continues to have very mild and tepid IP laws. In fact, Chinese IP laws are gradually being reformed under pressure from the industrialized Western nations--no doubt to please large Western pharmaceutical, software, and other firms that stand to benefit from extending their Western-state-granted artificial monopolies to the growing Eastern economies (see my posts Russian Free Trade and Patents, IP Imperialism (Russia, Intellectual Property , and the WTO), Bush Wants More Jailed Citizens in Russia and China, and China, India like US Patent Reform). Do these intellectual monopolists really expect us to believe that China owes its recent growth to Disney and Big Pharma's lobbying efforts?! Thank God the Western White Man saves the poor benighted Yellow Eastern man. What would they do without us? Who needs capitalism and increasing institutionalized respect for property rights--if you are a third world economy and want to grow, just let America strong-arm you to adopt their type of IP laws--along with their FDA regulations, antitrust law, and IRS. Give me a break.

[Mises blog cross-post; StephanKinsell.com cross-post]


Comments

Couldn't you go the other way and suggest that this is excellent news, that it demonstrates the case for what you've been arguing for many years, that progress is promoted by the award of arbitrary monopolies?

What is perhaps needed for reform is a fairer system of allocating monopolies, perhaps in a lottery system?

You can thus completely eliminate the now poorly observed, rather spurious requirements for originality, novelty, and non-obviousness. People can now simply submit their ideas for monopolies. They get put into a pot, and then awarded to subscribers by lottery. Oh yes, there is of course a lottery subscription fee - to replace the archaic registration fee.

Given such huge growth in the volume of monopolies, and a much fairer system of allocation, progress would increase by leaps and bounds. After all, it's the monopoly that promotes progress, not who gets to exploit it eh?

I'll submit the idea of a monopoly in the reproduction of this comment, and then some lucky fellow awarded it by lottery will be able to exploit it. But, the important thing is, society's inability to make copies or derivatives of this comment will inspire it to produce superior alternatives. That's how you get progress after all, by preventing lazy copying or trivial improvement you force people to come up with something completely original.

Our holy mission to prevent lazy people sharing and building upon each others' ideas, in order to force them to be far more creative and innovative in their intellectual efforts, continues...

Stephan:

I take exception to one portion of your comments. China is hardly being "strong-armed" into their current militant "we shall overcome" attitude toward intellectual property that, if they continue on their present course, may give China the strongest IP laws and system in the entire world.

There has been a correlation between their growth and the strength of their IP laws, as a number of researchers have pointed out. It is possible that China, clearly quite intelligent when it comes to applying math, have observed that the stronger their IP laws become, the more foreign investment they receive. As long as they believe they are getting positive feedback from strengthening of IP, there is every reason to believe they will continue to do so.

Two comments.

1. We are strong arming the Chinese - as in making them strengthen their patent laws as a condition for exporting goods to the United States.

2. The "history of patents" in the graph is laughable. It includes such gems as Morse's patent of the telegraph - he didn't invent it; Eastman's patent on film - that one that stifled the movie industry; and the Wright brothers patent on the airplane - that resulted in the airplane being developed in France rather than the United States. Really - they should have mentioned that key patent, the Amazon one-click patent, you know the one that created the internet revolution.

David:

(1) Based on my recent reading of the news, the Chinese seem to be running with patent protection all by themselves. I cannot speak to trademarks and copyrights.

(2) You have now listed three inventions accused of "stifling" or mis-attributed inventorship. Only 7,5997,999 patents to go.

However, why is the invention of the telegraph laughable? It took Morse a dozen years to figure out how to take the principles developed by others and make it do something useful.

I am unfamiliar with the Kodak story.

As for the airplane, there was a very detailed article regarding the airplane and the errors the Wright Brothers made in exploiting, or not exploiting, their invention in Invention and Technology Magazine. I suggest you might wish to read this article before publishing the next edition of your book. I must admit that I find some irony in the fact that Invention & Technology Magazine, affiliated with the USPTO and inventors, would have more details about the patent abuse by the Wright Brothers, than your book did.

Questions for moronopolists:

  1. Why does a law prohibiting unauthorised utilisation of another's publicly available technology assist mankind's technological progress rather than hinder it?
  2. Would more or less progress have occurred if the inventions of the industrial revolution could have been utilised freely?
  3. Would such 19th & 20th century inventions have remained in the deep recesses of insular hermits' minds were it not for the reward of a monopoly?
  4. Is the belief that monopoly is an accelerator of cultural and technological advancement a 21st century shibboleth that distinguishes intellectuals from Morlockian* moronopolists?

* Morlock: Cargo cultist with a devout belief that because technology has advanced in the presence of patents, it must be patents that have advanced it - ipso facto, laxer criteria+greater enforcement=more progress.

So, Crosbie, apparenlty you are, now, against IP. I can't keep your position straight.
Crosbie:

Answers from one of those wishing to advance society:

(1) Why does a law prohibiting unauthorised utilisation of another's publicly available technology assist mankind's technological progress rather than hinder it?

See also the answer to question 2. Invention is a rather unique thing, happening relatively rarely (as opposed to innovation, which can happen anywhere at any time). All inventors have a choice. They may reveal their invention to the world or they may keep their invention to themselves.

You might ask: What benefit does an inventor get from keeping an invention to his or herself? The inventor asks a different question: What benefit do I receive from revealing my invention to the world?

With the existence of patents, inventors, often not the most astute of businesspeople, have an opportunity to control their creation, whereas without patents the moment the invention is revealed there is no longer a need for the inventor (speaking primarily of mechanical inventions, though there can be some truth in that in the chemical, pharmaceutical and electronic world as well).

So, if inventors decided it was in their best interest to prevent showing anyone their invention, even to the extent of taking that invention to the grave, they would likely do so. In fact, some inventors have done so, leaving hints of inventions created and destroyed (e.g., Tesla's writings indicate numerous inventions either lost or deliberately destroyed by Tesla for personal reasons). Patents are small, relatively minor incentive to encourage inventors to share their knowledge rather than keeping it hidden or worse, destroying that knowledge.

(2) Would more or less progress have occurred if the inventions of the industrial revolution could have been utilised freely?

My belief is less, because I believe that fewer inventors would have revealed their inventions. In some limited areas, progress might have been greater, but on the whole, I believe it would have been less.

(3) Would such 19th & 20th century inventions have remained in the deep recesses of insular hermits' minds were it not for the reward of a monopoly?

Easy question with an easy answer. A number of inventors have spoken on their belief that they only way they would gain compensation and recognition for their invention was via a patent. There are numerous examples of inventors speaking exactly to this point; examples: Edison, Tesla, and Clessie Cummins. The number of well-known inventors who believed patents were necessary to gain a return on their invention is too great to list.

(4) Is the belief that monopoly is an accelerator of cultural and technological advancement a 21st century shibboleth that distinguishes intellectuals from Morlockian* moronopolists?

I think the belief that patents have no benefit to society is a 21st century shibboleth that distinguishes intellectuals from Morlockian anarchists.

However, regardless of whether Luddites are against patents, it is not "monopoly" that accelerate technological advancement, but inventions. Patents merely encourage inventors to share their knowledge with the world at large rather than keeping that knowledge to themselves or worse, destroying that knowledge.

Only against monopoly Stephan, not property, whether material or intellectual in nature. My position remains consistent. You can do what you like with yout IP (including the intellectual works I give you), but not my IP (the intellectual works in my possession). My IP is within my natural power to protect. The privilege of a monopoly to it requires the super-human power of a state.
So... you're against IP, by which we mean state laws such as patent and copyright. And you are for having the right to do whatever you want with your body and other scarce resources, which are normal forms of property. You seem to think there is someting left over, of in between IP and property. There is not. You are just confused on this issue.
I'm against the state granted monopolies of copyright and patent, not intellectual property, which remains quite natural in the absence of those unnatural privileges.

Let's not forget the difference between monopoly and property. The monopolies, being transferable privileges, may be termed legal properties relating to intellectual work, but that's a different sort of property compared to the ownership of the intellectual work itself.

Crosbie:

"I'm against the state granted monopolies of copyright and patent,"

Good. With you.

"not intellectual property, which remains quite natural in the absence of those unnatural privileges."

What in the world are you talking about? Absent IP law, then you just own your scarce resources, such as your body and things you homestead. What is "intellectual property" apart from your right to control your body and other scarce resources you own? Please explain this, as I think it will expose where your confusion lies, unless you dodge this. Maybe you can give a single, concise, clear example of something that you think is (a) "intellectual property," but not (b) a state grant of patent or copyright, and also (c) not already covered by one's natural rights in one's own body and other homesteaded or justly acquired scarce resources.

I think you must be like those liberals who think there is some floating "right to free speech." You can explain till you are blue in the face to them that there are no separate, free floating, independent rights to "free speech" and "freedom of the press"; that you don't have the right to speak on my property or use my property to print books or force me to listen to you or buy your books; and conversely, that if you have property rights, you can do what you want on/with it, including speak on it or print books--and they will still unthinkingly, like dullards, retreat to the "free speech rights" mantra. They just don't get it. I think you must be doing something similar here. You want to give the label "intellectual property" to one benefit you can derive from having property rights in your head, say--but you just can't see this is just derivative of property rights in scarce things.

Also, where did you get this theory--did you make it up yourself (which is my guess, it seems cobbled together and on the fly), or was there some source you got this from? If the latter, what is it, maybe he explains it more clearly.

I write a poem, that's my poem, my intellectual work, my intellectual property and you can't have it unless I consent to give it to you.

That's IP.

If I give you a copy of my poem, that's my intellectual work in your possession, your intellectual property. You may have offered me money in exchange - it's possible.

That's IP and the exchange of intellectual work for money.

Now some conniving lobbyist somewhere might claim that more than your money, I need a monopoly, that I need the privilege of being able to prosecute you if you make copies of my intellectual work (in your possession, your intellectual property).

That's monopoly.

A monopoly could well be lucrative for me, but it would be expensive upon society, and unethical in suspending people's natural liberty to make copies of their own property.

My intellectual work is a finite and limited resource. The fact that should I give it to you, you could make copies of it indefinitely does not make my work an 'infinite' or 'non-scarce' resource. If you want to make infinite copies of my IP, you're going to have to buy it from me first - then, and only then, are you free to make copies to your heart's content.

I have no need of a monopoly to constrain your liberty to make copies of the IP that I give or sell to you, but I do have need of the state to secure my natural ability and right to protect my intellectual property from theft.

I agree that the graph and concept are limited. Though patent law is certainly a driving force, it is only one among many factors that have helped shape our economy.

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