Libertarians for Protectionism, Appendix B: contrarium sequitur edition

I haven’t yet had the chance to read Michele Boldrin and David Levine’s Against Intellectual Monopoly. Ideas may not be subject to economic scarcity, but my time to enjoy them — alas — is. But it looks really promising, and exciting, judging from some of the excerpts and commentary I’ve seen about it online. I look forward to digging in soon.

In the meantime, besides tantalizing discussions, the online commentary has also offered a perfect opportunity for students of economics to witness the ridiculous sight of self-proclaimed free marketeers dragging out all the crassest sorts of corporate protectionism to apologize for actually-existing forms of economic privilege. And for students of logic to enjoy a few choice specimens of the contra-sequitur in its natural habitat.

Thus, for example, consider the reader comments on Jesse Walker’s notice of the book at Hit and Run:

Fluffy | January 16, 2009, 5:11pm | #

Fine — but without the ability to file a patent and make money off it, would James Watt have even bothered to invent the condenser that everyone else’s steam engine used?

Wah wah wah we could introduce innovations faster without patents! Maybe, but who would bother? Owner/operators only.

We already experienced a time without intellectual property. It was called the Middle Ages. And while the Middle Ages were not a completely backward time as imagined by the public and were marked by the gradual introduction of many important technological innovations in agriculture, mining, metallurgy, transport and power generation, just about all innovation came from owner/operators or their equivalent, and the pace of innovation and adoption of new technologies was brutally slow, despite the really high marginal utility that even the smallest advance brought under those conditions.

Of course, whatever you may think of the Middle Ages, some other eras without anything remotely like modern copyright or patent law have been called classical Athens, Renaissance Italy, Shakespearean England, and the Scientific Revolution. But never you mind that. The important thing is this: if it weren’t for copyrights and patents, technological innovation might not be profitable for large corporations to pursue. Heaven forbid; some business might have to be carried on by somebody other than large for-profit corporations. Similarly:

Hazel Meade | January 16, 2009, 8:46pm | #

Episarch. I think the idea is more that with IP rights someone else couldn’t simply take your cold fusion device apart, figure out how it works, and start manufacturing knock-offs. Unless they altered the design in a way that improved it.

The problem is that development of new technologies often takes years of research. If others can copy your designs, it makes it unprofitable to bother.

Automobile factories take years of capital-intensive construction and immense amounts of labor. If other corporations can just push cars into the market willy-nilly, it makes it unprofitable to bother. Without a protective tariff, who in their right mind would invest in American automobiles? In a free market, who would be in charge of making all the shoes?

If there is one thing that government can and ought to do, it is to make sure that no large business ever has to fundamentally rethink their business model, ever. I mean, sure, consumers and investors may have a different idea of how much art or R&D is enough art or R&D for them; they may decide they want to pay for other things on the margin — for example, they may want to put more efforts into derivative, marginal improvements rather than fundamental redesigns; or they may just want to spend some of that money on little fripperies, like food, clothing, or shelter. But if government isn’t there to force the prices of everything upward, then that may mean that corporate investment in some highly visible, culturally prestigious set of goods and services (like literary works, or mechanical devices, or Kenny G. albums) might possibly falter or fail when people want to pay for other, different things. Good lord, if nobody can make a profit from selling the easily-reproducible products of their creativity and thought, then thinking and creating might even be left to academics. Or to a bunch of rank amateurs.

Before I continue to the next argument, I want to mention, in all earnestness, that there is a common problem with all of these arguments. The problem is that they attempt to support intellectual enclosure on explicitly protectionistic grounds: they begin from the premise that there is some level of innovation or artistic production which, somehow or another, they presume to know perfectly well to be the right amount. Then they offer a pseudo-economic argument intended to show that absolutely free exchanges in products that depend on intellectual discovery or creativity would fail to funnel enough money into the purses of discoverers or creators to produce the level of production that they’ve deemed the right level. Thus, they conclude, you ought to institute government restrictions on free exchanges just in order to make sure that enough money is pried from out of buyers’ hands to encourage the level of production that the protectionists have deemed the right one. The problem with all this is, first, that the Intellectual Protectionists are ignoring the invisible cost of this visible subsidy; whatever extra money buyers are forced at bayonet-point to spend on nifty inventions or works of art is extra money that would have gone to other productive purposes — like living our lives, or working on projects of our own, or gaining the leisure to put some of our own thought and creativity to work. Like all forms of protectionism, Intellectual Protectionism engages the force of the State in subsidizing some politically-favored goods (or, rather, politically-favored producers) at the expense of other goods or producers, which happen to be economically popular but looked down on by politicians. And this form of inequity and privilege — enforced through government coercion — is in fact utterly arbitrary — arbitrary because Intellectual Protectionists never offer any non-arbitrary basis whatever for their judgment of what the right levels of their favored goods would be. Non-protectionists have a perfectly good standard: we figure that the right level is the level that free people would freely choose to get for themselves, if left alone to make their own decisions. But Intellectual Protectionists cannot appeal to anything of the sort, since the whole idea is to override the normal processes of free exchange. They just know, by some kind of revelation, which they more or less never spell out in any detail, that the right level is something more than that, and thus the need for a command economy, controlled by the legally-privileged copyright- or patent-holders — usually, as a matter of fact, giant, bureaucratic corporations (Apple, GE, AOL Time Warner, Pfizer, and the like) that can sustain big-time R&D departments and, just as importantly, can pay for the small army of lawyers needed to effectively manage their politically-fabricated portfolio.

I took the time out to say all that, with my face as straight as I could make it, because most of this post has involved an argument wrapped up in a lot of ridicule and facile sarcasm. But sometimes people say things that make ridicule and sarcasm simply beyond the point. Like this:

TallDave | January 16, 2009, 11:31pm | #

IP should expire (we don’t need Michael Jackson owning the Beatles’ albums 30 years late), but we need some kind of IP rights or there will be nothing but monopolies exploiting their entry barriers and stealing ideas. Yes, it’s less efficient in some ways, but that’s true of most any private property (public transportation vs. owning your own car, etc.).

Want to know what a world without IP looks like? It’s Microsoft. Wordperfect, Lotus 1-2-3, Netscape… all reverse-engineered and shoved down the OS marketing channel.

Some things you can reply to. Some things you can ridicule. Other things you can only repeat.

See also:

8 replies to Libertarians for Protectionism, Appendix B: contrarium sequitur edition Use a feed to Follow replies to this article · TrackBack URI

  1. anonymouse

    In the tech industry at least, the purpose of patents is as a kind of mutual deterrence weapon. Each company gathers as many patents as it can, so that if someone sues them for patent infringement, they can use the threat of a counter-suit to negotiate a cross-licensing agreement. Employees are strongly discouraged from looking at patents, lest they inadvertently become aware that their work infringes on a competitor’s patent. The end result is more or less the same for the big companies as it would be without patents, except the lawyers get paid more. And the small companies who can’t afford armies of lawyers are shut out of the system.

    Another particularly nasty effect of the patent system is the existence of the so-called patent troll: a small company consisting entirely of lawyers, whose sole purpose is to collect patents from various sources and then sue anyone they possibly can for as much as they think they can get away with. These parasites contribute absolutely nothing to society in any possible sense. And that, by the way, is why people hate lawyers.

  2. Mike

    I can’t help but notice how often the pro-IP side appeals to the prohibitively high cost of R&D as if this were an argument for patent protection, rather than against. Much of the absurd cost of drug research, for example, is due to the army of lawyers (as anonymouse put it) needed to secure patents (not to mention the exorbitantly high cost of bribing FDA officials for the privilege of being allowed to sell a product to a willing customer). Eliminate these aspects of R&D and I suspect the price would drop quite a bit.

  3. Kevin Carson

    That last comment from H&R definitely earns the WTF? of the day.

  4. LIla Rajiva

    Are you limiting your aguments to patents…or copyrights too?

  5. Rad Geek

    Lila,

    I do object to copyright restrictions as much as I do patent restrictions, and for much the same reasons. And I think that pretty much all economistic arguments in favor of copyright restrictions follow the same sort of bogus protectionistic logic that is followed by these economistic arguments for patent monopolies.

    Typically, though, I think that economistic arguments tend to get made most often in favor of patent restrictions (to the effect that enough of the desired good won’t be produced without the government providing for a coercive monopoly), whereas copyrights tend to most often be defended by moralistic arguments (to the effect that the copier is somehow stealing from the author, artist, or other copyright holder). Both lines of argument in favor of Intellectual Protectionism are bogus, but the economistic arguments are the ones I focus on in the Libertarians for Protectionism posts.

    Does that make sense?

— 2013 —

  1. Discussed at c4sif.org

    Rad Geek (Charles Johnson)’s “Anticopyright” Declaration:

    […] Kill” (I) and “Patents Kill“ (II), and “Libertarians for Protectionism” (1, 2, 3). In this notice he explains that he used to try to use “copyleft” but he now declares […]

  2. Discussed at radgeek.com

    Rad Geek People's Daily 2013-02-13 – Patents kill, part III:

    […] GT 2009-01-21: Libertarians for Protectionism, Appendix B. […]

  3. Iconoclast

    “[Protectionists] begin from the premise that there is some level of innovation or artistic production which, somehow or another, they presume to know perfectly well to be the right amount. Then they offer a pseudo-economic argument intended to show that absolutely free exchanges in products that depend on intellectual discovery or creativity would fail to funnel enough money into the purses of discoverers or creators to produce the level of production that they’ve deemed the right level. Thus, they conclude, you ought to institute government restrictions on free exchanges just in order to make sure that enough money is pried from out of buyers’ hands to encourage the level of production that the protectionists have deemed the right one. The problem with all this is, first, that the Intellectual Protectionists are ignoring the invisible cost of this visible subsidy; whatever extra money buyers are forced at bayonet-point to spend on nifty inventions or works of art is extra money that would have gone to other productive purposes — like living our lives, or working on projects of our own, or gaining the leisure to put some of our own thought and creativity to work.”

    In short, Bastiat’s Broken Window Fallacy!

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