Intellectual property – legal rights over the creations of the mind. This trend has great inertia and promises to accelerate at a feverish pace. I have objected to it since I first noticed its evolution and, though I have been convinced to soften my stance a bit, I’d still like to call to attention some potentially negative effects. All the laws on the books today are forged with the well being of certain people in mind. Often they injure others and in special cases, have adverse effects on those they were intended to serve. Milton Friedman expressed this point far more clearly than I can in the interview I’ve attached to his name.
That we can grant intellectual property means that the state has approved and promises to enforce a more or less temporary monopoly on an artistic or commercial idea. The intent I suppose is to allow the posessor of an idea a period in which he can recoup the expenses he endured in the design and execution of it.
In a conversation on the subject, a participant whom I respect introduced the example of the envelope with a window on it. The patent perhaps is to be considered the original guise of intellectual property as it related to tangible designs; the many other types of property we now recognize did not exist a century ago.
So you grant the person who invented the window on the envelope a patent and what happens? He enjoys financial success for a brilliant design and people that do a lot of mailing can do so more efficiently. The drawback is that you have eliminated the threat of competition and the inventor can produce a low quality product at a high price because even his inferior envelope is better than one without a window on it. In the end, you are only protecting one person, the inventor, and injuring all the other manufacturers of envelopes.
I say, the man who is enterprising enough to improve a product in so simple a way has the resources to stay ahead of his competition without the help of government intervention. Let his competitors begin improving on his idea immediately and what has anyone to lose? If the original inventor cannot stay a step ahead of the industry at least he is still in the industry. His competitors are not injured and the customer enjoys the benefit of an ever improving product at a competitive price.
Yes I know, it is quite a lofty stance I have and it gets real objectional when you begin to question the properties we are dealing with in this market. I am a musician and it’s a challenge for me to support the idea that I could write the song that everyone must have, sell one copy of my record and then find that it has been downloaded for free a billion times. Still, I’m sticking to my guns and I’ll tell you why.
First of all, back to my first principle. If I wrote the original song that changed the world, that would make me a contender for writing the one that followed as well would it not? And even if I never made a dime off a record or a T-shirt with my image on it, I’d have some credibility at least and when it came time for a concert, I’d be the one the people payed to see. I might not make millions in this way but I suspect I’d be compensated in proportion to my achievement. Though not the intent, perhaps the principle effect of property rights is that it helps blow things out of their natural proportion.
Secondly, I will draw upon the business model of Google at a crucial juncture in its development. To begin with, Google made their money selling a way to be noticed to people that needed to be noticed. At a certain point however, they realized their product was worth much more than the pittance they could charge for admission to their database and so they began to give it away for free. Why? To get some credibility. To build the most powerful search engine they could. The stock closed at $337.99 today. Not too shabby. I never payed YouTube a dime either but there where a lot of zeros on that price tag some years back.
My point? Here are some companies on the cutting edge of todays market that have succeeded in making their property valuable, not because they had assistance from legislation, but because they were ingenius, industrious and enterprising. This is what makes capitalism work. Intellectual property rights is an institution of charity and, in promising to uphold the legislation, our government has pledged its support.