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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Tuesday, June 13, 2006

How Patents Stifle Innovation, Continued

Via Bruce Hobbs, on LeftLibertarian. Michele Boldrin and David K. Levine. Against Intellectual Monopoly. Here's a great quote from the opening of Chapter One:

Once Watt’s patents were secured, a substantial portion of his energy was devoted to fending off rival inventors. In 1782, Watt secured an additional patent, made “necessary in consequence of ... having been so unfairly anticipated, by [Matthew] Wasborough in the crank motion.” More dramatically, in the 1790s, when the superior and independently designed Hornblower engine was put into production, Boulton and Watt went after him with the full force of the legal system. In contrast to Watt, who died a rich man, the inventor Jonathan Hornblower was not only forced to close shop, but found himself ruined and in jail.

...The fuel efficiency of steam engines is not thought to have changed at all during the period of Watt’s patent; while between 1810 and 1835 it is estimated to have increased by a factor of five. After the expiration of Watt’s patents in 1800, not only was there an explosion in the production of engines, but steam power finally came into its own as the driving force of the industrial revolution. In the next 30 years steam engines were modified and improved, and such crucial innovations as the steam train, the steamboat and the steam jenny all came into wide usage. The key innovation was the high-pressure steam engine – development of which had been blocked by Watt by strategically using his 1775 patent.

13 Comments:

Anonymous Wild Pegasus said...

Tweaking the efficiency of a system is an order of magnitude easier than designing the system. The question not being asked is, "Without patents, when would the steam engine have been invented?" Is the 15-20 years of slackened innovation worse than the serious prospect of not having the invention at all?

- Josh

June 14, 2006 8:48 AM  
Blogger iceberg said...

You can read the whole sorry story in the free PDF of "How We Got Here".

June 14, 2006 12:29 PM  
Anonymous quasibill said...

Josh,

How "serious" is the prospect?

Did people not "tweak" the design (in some cases, that is seriously underselling what was done) when they couldn't patent it? If not, why not?

If you believe that people don't seek to improve their products and services in response to ordinary market pressures, why would you think the market ever works better than socialist subsidization and planning?

Furthermore, isn't there a way that the inventor can parlay his knowledge of the new invention into a professional service to his purchasers?

Not to mention the costs imposed by locking out independent inventors who just happened to be a couple days (or years) late.

To me, the burden of proving the seriousness of the proposition that a free market is insufficient in a given way rests rests with the proposer. Noone has yet convinced me that all invention would stop in the absence of state enforced subsidies (patents).

June 14, 2006 1:03 PM  
Anonymous Wild Pegasus said...

First off, it is certainly not proven that patents are not a free market edifice. Since we've never had a complete free market or a complete working anarchy, we don't know what is or is not protectible.

The anti-IP people have certainly never made the case that IP is not "real" property. Since IP can be protected by parts of the bundle of sticks that comprise a property claim, anti-IP people are reduced either to utilitarianism - which is mostly crap - or to repeating the "You can't own ideas!" mantra. I don't find either particularly compelling.

But since this is a utilitarian discussion, here's the problem: tweaking is profoundly easier than inventing. Inventing often requires independent research, high expense, and great deal of trial and error before a final invention emerges. By contrast, tweaking is much easier, working off what someone has already done.

The complaint in the post is that the patent stopped people from tweaking for a few years. So it did. But the deeper question is: without the patent, would there have even been an invention to tweak? I don't know, and anyone who says they do is a fool.

- Josh

June 15, 2006 10:51 AM  
Anonymous quasibill said...

"The anti-IP people have certainly never made the case that IP is not "real" property."

I guess that's a matter of perspective. To me, it's clear that ideas are not "scarce" in the manner that physical property is. That's one of the justifications underlying the institutions of property - my use of physical property at a given time precludes your use of it at that time. Not so with ideas.

Furthermore, IP rights *clearly* interfere with my rights in physical property. If I independently make the discovery that you patented yesterday, you are clearly aggressing against my rights to use my physical property in a peaceful manner if you enforce your patent against me.

And I agree, anyone who says that they know that invention would grind to a halt in the absence of patents is a fool. Which leaves us at the same argument there is for social welfare programs - if you believe there is value in such a venture (subsidizing research), you should fund it through voluntary contributions. If you don't value it that much, that's not somebody else's fault that you should aggress against them or their property.

June 15, 2006 11:17 AM  
Anonymous Wild Pegasus said...

Ideas aren't scarce in the manner that physical property is. But we see information property protected by law in a number of instances. Data privacy is a form of information property. The right against unreasonable search and seizure has been correctly extended to information. Trade secret law protects companies from business espionage. All of these instances treat information as a form of property. And, more interestingly, they are products of the common law.

As for the IP v. physical battle, all rights interfere with your right to property. Your right to swing your fist is controlled by my right to bodily integrity over my face. Your right to practice your bazooka fire is controlled by my right to quiet and peaceable enjoyment of my real property.

You have to establish that IP is indefensible before you can say that it infringes. Otherwise, it's just another instance of balancing of rights, or where one right trumps another. Your right to swing your fist is trumped by my right of bodily integrity, because violence is indefensible (at least, aggressive violence is). Your right to practice your bazooka fire is trumped by my right to quiet and peaceable enjoyment, because disturbing the peace is indefensible. And so on.

- Josh

June 15, 2006 4:52 PM  
Anonymous quasibill said...

"And, more interestingly, they are products of the common law."

Not only that, they are extensions of physical property and contract rights. And of course, where do patent rights originate from? Common law, or statute?

"As for the IP v. physical battle, all rights interfere with your right to property"

Not to *peacefully* use my property. In other words the only restrictions on my use of my property are that it doesn't aggress against you or your property. Again, IP is unique in this regard because by its very nature, it aggresses against the peaceful physical property rights of others. You put the cart before the horse by immediately granting them the precedence of rights. They can only become rights if they can be practiced without aggressing against the peaceful, established property rights of others.

There's a reason patents are statutory grants of privilege - because they don't logically derive from any traditional property right. They are a form of social engineering, nothing more.

June 15, 2006 5:35 PM  
Blogger Kevin Carson said...

iceberg,

Thanks for the link. It definitely looks worth reading.

Josh,

As quasibill says, it's questionable (to say the least) that patents were necessary for the invention of the steam engine. Especially given that the general principle had been discovered in the Hellenistic period, and the prerequisites worked out in monasteries in the late middle ages. And the cost of building a working prototype, it seems to me, would be quite modest compared to the savings from increased efficiency. F.M. Scherer found in a study that something like 80% of product and process innovations would have been introduced without patents, for the sake of remaining competitive.

And I don't object to any IP rights that can be established through private contract. But the transaction costs of enforcing them would probably be a lot higher without any state grant of privilege, especially against third parties. And that's leaving out the enormous cost and difficulty of enforcing any contractually-based digital IP rights, without being backed by the power of the surveillance state.

Just as the drug war would be a moot point for the most part without search and seizure and due process violations, most IP would be unenforceable without the power to invade others' physical property.

June 15, 2006 10:00 PM  
Anonymous P.M.Lawrence said...

I googled on Jonathan Hornblower and found that he actually made a fortune in steam engines himself. This excerpt is misleading in contrasting Watt's end position with Hornblower's, as though the latter never made good.

Although my pages are currently down so you can't find this there, if you google for a guest post I once did for John Quiggin's blog, you will find a great deal of background about just where the steam age came from in Britain.

Worth a look?

Off topic: people might be interested in this mistaken interpretation of (accurate) historical evidence at Brad Delong's blog

June 16, 2006 4:28 AM  
Blogger Kevin Carson said...

PML,

If you mean the 2003 piece on canals and railroads, it's a fascinating narrative. I left a comment at DeLong's blog. This isn't the first time he's taken some society in which the state suddenly and catastrophically imploded as a case study in "anarchy." I suspect he knows better.

June 16, 2006 10:12 PM  
Anonymous P.M.Lawrence said...

Yes, that piece (which I've now googled for people).

Mind you, my criticism at DeLong's site only relates to what the evidence means. I'm very carefully not digressing away from that point to whether or not "anarchism" is viable, only on whether that evidence says anything on the point.

For what it's worth, I suspect that a large interconnected society would be like a lake large enough to generate its own tides, or a building large enough for its own weather (like an airship hangar). Cancerous tendencies would have an opportunity to start up.

As against that, beyond questions of morally neutral freedom per se, there are issues of underlying ethos.

If anarchism were a mere means to (say) a Christian end (suitably understood), we would have all sorts of internalising of values in place of external legalistic regulation.

There is a whole host of related points, focussing on how to prevent any internal or external perversion of the original system without in turn becoming what threatened it.

That is the sort of thing that needs to be researched, and with an open mind too, taking evidence whether or not it coincides with personal preferences.

June 16, 2006 10:46 PM  
Anonymous Wild Pegasus said...

Distinguishing between rights recognised by legislatures and rights recognised by judges is pointless. Both are entities of the state. An anarchic system will need judicial and legislative functions, too, and if one function right and the other wrong, who cares which it is?

As for *peaceful*, that brings us back to definitions once again. If IP is a just recognition of property, then the use of your property to infringe mine is not peaceful. In my bazooka example, you certainly weren't causing me bodily harm, or tearing up my yard, or blowing up my house, you were infringing on a right to quiet and peaceable enjoyment of property. You were infringing my rights, but you were also doing so without any sort of violence.

As for the aeolipile, I'm aware of it. It wasn't a fully realised steam engine, although it could have become a riverboat with little trouble. So, the question is, why didn't anyone begin producing it in mass quantites? Apply it to various endeavours? Build the ships that would have tamed the dangerous Mediterranean and made the Roman Empire even richer? Could it be because there was no protection for the idea?

June 17, 2006 11:45 AM  
Anonymous quasibill said...

Josh,

I think it's dangerous territory to just arbitrarily re-define peaceful. If the bazooka is actually interfering with your ability to use your property, then it's use is aggressive and not peaceful.

You'll need to posit some way that my use, on the other side of the world, of my independent invention, in some way interferes with the use of your property. You can't, unless you posit that you have a right to a certain amount of profit from your property, and at that point, the state socialist aspects of your argument should be becoming clear.

June 18, 2006 6:24 AM  

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