4 ms·

From a global perspective (rather than US- or China-specific), what exactly is the cost of IP theft? Obviously, the reduced incentives to do R&D (if you cannot

by _cs2017_ 8y ago

From a global perspective (rather than US- or China-specific), what exactly is the cost of IP theft? Obviously, the reduced incentives to do R&D (if you cannot monetize it as well, you'll invest less). That by itself could be pretty devastating. On the other hand, what are the advantages of IP theft? One that I can see is that it creates more competition. I don't know if it helps much in the long run though: if the competitors are just copying the leader, it's probably not adding any value. Any other pros and cons?

zanny 8y ago
The more general cost is if your country ignores IP while another doesn't you have an immense competitive advantage if the country you are "stealing" from can't in some way punish you economically for it. I'm personally an IP abolitionist but can recognize that China is abusing its position here. It doesn't hurt the US nearly as much as it does Southeast Asia, India, Japan, Korea etc that by and large obey US IP law. That was in part what the TPP was meant to enshrine in more formalized, consistent, and persistent terms - the Asian nations agree to obey US IP imperialism while the US gives them advantageous trade opportunities over China. A large degree of why it was so heinous was because of how biased it was in favor of the US because of how desperately the countries surrounding China wanted a competitive edge over their ability to ignore US IP. In many ways Trumps China tariffs are giving a lot of these nations what they wanted without getting anything in return from them.
- _cs2017_ 8y ago
  I agree that IP theft hurts countries that don't partake in it. However, I was asking about the effect on the world as a whole. Taking some wealth from one country and giving it to another isn't directly changing the amount of wealth in the world. But some second order effects may come into play that do change the global wealth.
  - pzone 8y ago
    The reduced incentive for innovation from US firms hurts global wealth just as much whether the IP copycats are in the US or if they're in China.
- erikpukinskis 8y ago
  Would you abolish copyrights too, or just patents? Trademarks? If I could only have one of the three I’d keep trademarks. But I think copyrights are pretty harmless, given the fair use provision and a sensible cutoff. Like 50 years seems like plenty of times to diversify those assets. I’m an anarchist generally, and I can definitely envision a world where all IP rights are abolished, but I think I’d want to go there slowly, one right at a time. Because the capitalist mechanism will by default harm people so we need syndicalist institutions in place before we open the floodgates to the abuse of the markets.
stjohnswarts 8y ago
It's mostly about catching up so that there's an equal playing field.
deleted 8y ago
[deleted]
Nasrudith 8y ago
Well copying in itself helps them gain some more skill and 'mutate' the designs with knock-offs if they are doing it with any level of understanding. I've heard accounts of Soviet copying being caught done as very verbatum to the point of leaving in designer signatures in a computer chip's unused circuit mask space, and an extra rivet hole in a wing (although to be fair given the sheer expense it is probably worth adding an unneeded hole than finding out that the hole was a fix for some obscure issue that could cause the plane to crash). One systemic advantage is an anti-oligarchic one in that it prevents abusing the IP incumbent from abusing their position too greatly - often seen with prescription drugs. If they charge so much that it would be cheaper to just reverse engineer it and start producing it locally (not a cheap or easy task) - well that is what they are going to do, thus encouraging more reasonableness. The third potential advantage is highly situational and an ironic opposite effect of the reduce R&D incentive. If the market is hot enough to sustain it a constantly changing market is a working strategy to encourage maximized innovation - if anybody can just copy the previous one in say a year but a superior product can be made by then it means that a constant cycle of innovation keeps them on top. As opposed to a protected situation which would allow for innovating only when someone else might catch up on their own or the protection expires. While the later would be better for them it would be worse for the world if say Moore's law behavior applied only every decade.
- _cs2017_ 8y ago
  Actually the last advantage is very convincing, especially in the technology industry. The equilibrium R&D investment level depends in a very complicated way on the relationship between your market share at any point and the entire history of your investment. I won't be surprised if that equilibrium level goes up as IP protection period shortens. Of course, there is no objective way to decide what the socially optimal level of R&D investment is in the first place. I guess we can just assume that the higher the better, as long as the economy still produces some food :)

zanny 8y ago

The more general cost is if your country ignores IP while another doesn't you have an immense competitive advantage if the country you are "stealing" from can't in some way punish you economically for it. I'm personally an IP abolitionist but can recognize that China is abusing its position here. It doesn't hurt the US nearly as much as it does Southeast Asia, India, Japan, Korea etc that by and large obey US IP law. That was in part what the TPP was meant to enshrine in more formalized, consistent, and persistent terms - the Asian nations agree to obey US IP imperialism while the US gives them advantageous trade opportunities over China. A large degree of why it was so heinous was because of how biased it was in favor of the US because of how desperately the countries surrounding China wanted a competitive edge over their ability to ignore US IP. In many ways Trumps China tariffs are giving a lot of these nations what they wanted without getting anything in return from them.

_cs2017_ 8y ago
I agree that IP theft hurts countries that don't partake in it. However, I was asking about the effect on the world as a whole. Taking some wealth from one country and giving it to another isn't directly changing the amount of wealth in the world. But some second order effects may come into play that do change the global wealth.
- pzone 8y ago
  The reduced incentive for innovation from US firms hurts global wealth just as much whether the IP copycats are in the US or if they're in China.
erikpukinskis 8y ago
Would you abolish copyrights too, or just patents? Trademarks? If I could only have one of the three I’d keep trademarks. But I think copyrights are pretty harmless, given the fair use provision and a sensible cutoff. Like 50 years seems like plenty of times to diversify those assets. I’m an anarchist generally, and I can definitely envision a world where all IP rights are abolished, but I think I’d want to go there slowly, one right at a time. Because the capitalist mechanism will by default harm people so we need syndicalist institutions in place before we open the floodgates to the abuse of the markets.

stjohnswarts 8y ago

It's mostly about catching up so that there's an equal playing field.

deleted 8y ago

[deleted]

Nasrudith 8y ago

Well copying in itself helps them gain some more skill and 'mutate' the designs with knock-offs if they are doing it with any level of understanding. I've heard accounts of Soviet copying being caught done as very verbatum to the point of leaving in designer signatures in a computer chip's unused circuit mask space, and an extra rivet hole in a wing (although to be fair given the sheer expense it is probably worth adding an unneeded hole than finding out that the hole was a fix for some obscure issue that could cause the plane to crash). One systemic advantage is an anti-oligarchic one in that it prevents abusing the IP incumbent from abusing their position too greatly - often seen with prescription drugs. If they charge so much that it would be cheaper to just reverse engineer it and start producing it locally (not a cheap or easy task) - well that is what they are going to do, thus encouraging more reasonableness. The third potential advantage is highly situational and an ironic opposite effect of the reduce R&D incentive. If the market is hot enough to sustain it a constantly changing market is a working strategy to encourage maximized innovation - if anybody can just copy the previous one in say a year but a superior product can be made by then it means that a constant cycle of innovation keeps them on top. As opposed to a protected situation which would allow for innovating only when someone else might catch up on their own or the protection expires. While the later would be better for them it would be worse for the world if say Moore's law behavior applied only every decade.

_cs2017_ 8y ago
Actually the last advantage is very convincing, especially in the technology industry. The equilibrium R&D investment level depends in a very complicated way on the relationship between your market share at any point and the entire history of your investment. I won't be surprised if that equilibrium level goes up as IP protection period shortens. Of course, there is no objective way to decide what the socially optimal level of R&D investment is in the first place. I guess we can just assume that the higher the better, as long as the economy still produces some food :)