Surowiecki understates the case against IP

The ever-excellent James Surowiecki, writes in The New Yorker

The point isn’t that private property is a bad thing, or that the state should be able to run roughshod over the rights of individual owners. Property rights (including patents) are essential to economic growth, providing incentives to innovate and invest. But property rights need to be limited to be effective. The more we divide common resources like science and culture into small, fenced-off lots, Heller shows, the more difficult we make it for people to do business and to build something new. Innovation, investment, and growth end up being stifled.

But for the reason I have set out here in more detail, this critique of intellectual property rights concedes too much.

It is true that society needs economic incentives to invest in research and
innovation, and that one way to do that is to create artificial temporary
monopolies (such as those provided by so-called “intellectual property rights”). But
we should not be seduced by the language of “property rights” into
thinking that ideas protected by patent are like other kinds of “property”. There is an important econmic difference between the consumption of ideas and the consumption of other things: consumption of ideas is “non-rival” – that is, my use of an idea does not preclude you from using the same idea. So if we prevent someone from using someone else’s idea, we deprive them of a benefit that would have cost the rest of us nothing at all, and that is generally bad economics. (That is why some free-market economists are also sceptical of intellectual property.)

The state is “riding roughshed” over its citizen’s rights not, as Surowiecki has it, when it does not enforce patents, but rather when it creates them in the first place. That doesn’t mean there should not be any intellectual property rights – there is a defensible utilitarian argument for granting some temporary monopolies to create returns for innovators – but we should be clear that it is the establishment and enforcement of patents, not limiting them, that amounts to state interference in the freedoms of the individual.

Hat tip: Tom Watson

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