The Economist 2015-08-05 features two mostly excellent articles:
- Time to fix patents (subtitle: “Ideas fuel the economy. Today’s patent systems are a rotten way of rewarding them”)
- A question of utility (subtitle: “Patents are protected by governments because they are held to promote innovation. But there is plenty of evidence that they do not”)
I especially enjoy the second starting with the 19th century, in what is usually an ahistorical debate:
THE Great Exhibition, staged in London in 1851, was intended to show off the inventive genius of Victorian Britain. In doing so it sparked a hardfought debate on intellectual property. On one side were public figures horrified at the thought of inviting the whole world to see the nation’s best ideas, only to have most of it go straight home and copy them. They called for the patent system to be made cheaper and easier to navigate, and for the rights it conferred to be more forcefully upheld. These demands, though, were met with a backlash. Supported by economic liberals who had successfully fought for the repeal of the protectionist Corn Laws a few years earlier, this side of the debate argued that free trade and competition were good for the economy; that patents were a restraint on both; and that therefore patents should be not reformed, but done away with.
The Economist, founded by opponents of the Corn Laws, was an enthusiastic promoter of this abolitionist movement. A leader in our July 26th issue that year thundered that the granting of patents “excites fraud, stimulates men to run after schemes that may enable them to levy a tax on the public, begets disputes and quarrels betwixt inventors, provokes endless lawsuits [and] bestows rewards on the wrong persons.” In perhaps our first reference to what are now called “patent trolls”, we fretted that “Comprehensive patents are taken out by some parties, for the purpose of stopping inventions, or appropriating the fruits of the inventions of others.”
Arguing that patents “rarely give security to really good inventions” and fail at their job of encouraging innovation by rewarding inventors for their efforts, we backed the abolitionists in a debate over patent reforms then in Parliament. Our knockout argument: most of the wonders of the modern age, from mule-spinning to railways, steamships to gas lamps, seemed to have emerged without the help of patents. If the Industrial Revolution didn’t need them, why have them at all?
The debate raged on for years and through several changes of government. In 1883, though, Parliament decided that instead of killing patents, it would improve them.
Over the remainder of the century economists and others today called social scientists largely and tragically abandoned the field, leaving knowledge policy to lawyers and rentier industries.
Sadly today’s periodical agrees with the 1883 Parliament:
Today’s patent regime operates in the name of progress. Instead, it sets innovation back. Time to fix it.
Various fixes and a recommendation for more research are mentioned in the two articles. Of course abolition is not politically feasible at this time, or as one of the articles puts it, “would face an onslaught from the intellectual-property lobby.” But that’s no reason to grant freedom restricting regimes any legitimacy at all, as The Economist does with “abolition raises problems in terms of the ethics of property rights”.
The most significant flaw of the two articles is implicit acceptance of innovation as the top goal of knowledge policy. Yes, it is bad that patents have costs and have not been shown to increase innovation. But worse, they increase inequality and conflict. Property is the wrong institution for knowledge, period. The best reforms, commons-favoring ones, reorient the knowledge economy away from property, decrease the profits of and constituency for property, and further increase policy imagination for freedom.
Patents are not an institution that can be “fixed”; only mitigated and eventually abolished. Progress (freedom, equality, security, as well as innovation) requires fixing the knowledge economy, which produces and is produced by our institutions of knowledge regulation.