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Or, instead of having the government grant monopolies on production left and right, and then using the legal system to create a market in these monopolies, we c

Or, instead of having the government grant monopolies on production left and right, and then using the legal system to create a market in these monopolies, we could..... skip this whole process, and let the free market operate properly from the start.

jeremyjh 14y ago
Why would you believe that a "free" market is necessarily "proper" ? Markets are good at setting prices. I'm not sure they are good at providing incentives for expensive, high-tech research that can be undercut within six months due to the costs of reverse engineering (or espionage) being much less than costs of research.
rayiner 14y ago
Externalities (http://en.wikipedia.org/wiki/Externality http://en.wikipedia.org/wiki/Externality) undermine the operation of the "free market" and much of the legal system exists to deal externalities. Tort law exists to manage risk externalities, environmental law exists to manage pollution externalities, etc. The theoretical justification behind IP isn't just "hey the government decided to come along and create some monopolies." You can model intellectual developments as positive externalities which are subject to free-rider effects that reduce or eliminate the incentive to create.
- hdevalence 14y ago
  Yes, I am aware of the theoretical justification for IP. I'm just not convinced that it's as strong a justification as is claimed. I think that the current system, in general, provides monopoly protection beyond what is necessary to compensate for these externalities, and is hence detrimental to the economy. See, for example, chapters 4 and 8 of Boldrin and Levine's Against Intellectual Monopoly (Google to find the PDF), which presents empirical evidence that patent protections go beyond what is necessary. "To sum up, careful statistical analyses of the nineteenth century's available data, carried out by distinguished economic historians, uniformly shows two things. Patents neither increase the rate of innovation nor are the best instrument to maximize inventors' revenue. Patents create a market in patents and the legal and technical services required to trade and enforce them." My point is that a market in patents is not our goal, and absent evidence that such a market increases innovation (our real goal), there's no reason to have one. I don't think the evidence available supports the extent of the current patent system -- it might support a more limited one, but I'm not making a claim there.
anigbrowl 14y ago
OK, I'll set that up while you amend the constitution.

jeremyjh 14y ago

Why would you believe that a "free" market is necessarily "proper" ? Markets are good at setting prices. I'm not sure they are good at providing incentives for expensive, high-tech research that can be undercut within six months due to the costs of reverse engineering (or espionage) being much less than costs of research.

rayiner 14y ago

Externalities (http://en.wikipedia.org/wiki/Externality http://en.wikipedia.org/wiki/Externality) undermine the operation of the "free market" and much of the legal system exists to deal externalities. Tort law exists to manage risk externalities, environmental law exists to manage pollution externalities, etc. The theoretical justification behind IP isn't just "hey the government decided to come along and create some monopolies." You can model intellectual developments as positive externalities which are subject to free-rider effects that reduce or eliminate the incentive to create.

hdevalence 14y ago
Yes, I am aware of the theoretical justification for IP. I'm just not convinced that it's as strong a justification as is claimed. I think that the current system, in general, provides monopoly protection beyond what is necessary to compensate for these externalities, and is hence detrimental to the economy. See, for example, chapters 4 and 8 of Boldrin and Levine's Against Intellectual Monopoly (Google to find the PDF), which presents empirical evidence that patent protections go beyond what is necessary. "To sum up, careful statistical analyses of the nineteenth century's available data, carried out by distinguished economic historians, uniformly shows two things. Patents neither increase the rate of innovation nor are the best instrument to maximize inventors' revenue. Patents create a market in patents and the legal and technical services required to trade and enforce them." My point is that a market in patents is not our goal, and absent evidence that such a market increases innovation (our real goal), there's no reason to have one. I don't think the evidence available supports the extent of the current patent system -- it might support a more limited one, but I'm not making a claim there.

anigbrowl 14y ago

OK, I'll set that up while you amend the constitution.