Intellectual Property II

As always, I am bloviating on a matter where I am not expert. I do sometimes wonder what the hell we should do with the strange human invention called intellectual property. It can be argued that it was a brilliant invention. For example the US Constitutional Convention wrote “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;” Article I section 8. It can also be argued that monopolies are inefficient and lead to less than optimal production (especially of Sars Cov2 vaccines). Both arguments make perfect sense.

I think that current laws which create intellectual property rights should be reformed. I certainly don’t support perfect freedom with elimination of patents etc. — economic incentives to invent are useful. I try to resist the temptation to make possibly very bad proposals (below) and fail

first (and demonstrably partly right) research and development can be nationalized by say the NSF, the NIH, and DARPA. This has been done and it has worked spectacularly (I shouldn’t need to even state this on the (CERN created) World Wide Web son of the internet which was daughter of the NSF net which was the son of the ARPA net. However, this has not gotten the complete job done — the venture capital industry exists largely to develope DARPA and NIH research. The public sector can be too uniform with a few extremely powerful people dominating (and not having that domination disrupted by new startups) and also often is too diffuse (NSF and NIH grants are much too small to develop something which is actually bought and sold).

A very appealing approach is the monetary prize. Currently firms which win a patent race win monopoly rents for a while. That is an incentive which comes with a dead weight loss. It seems much more sensible to just give them cash up front. For example someone won a huge prize for solving the Longitude problem. A problem with this is that prizes musst be awarded by a committee which is not the market. The guy who won the prize got it because of the personal intervention of King George III.

An even more obvious solution is for a government to buy the patent and then declare the technology public domain. I am very tempted to propose this, but I see a huge problem. This is and must involve huge amounts of money distributed with discretion. It is begging for corruption. I think the abuse of discretion is most likely to be of the form that anything invented in West Virginia will be assessed to be the best thing since sliced bread. It might be workable or it might be a huge boondoggle.