29 March 2013

You Don’t Say

"My take-away from this evidence is that – at least in some contexts – intellectual property can have substantial costs in terms of hindering subsequent innovation," said Williams. "The fact that these costs were – in this context – 'large enough to care about' motivates wanting to better understand whether alternative policy tools could be used to achieve a better outcome. It isn't clear that they can, although economists such as Michael Kremer have proposed some ideas on how they might. I think this is an exciting area for future work."

Well no shit.  The whole point of the limited monopoly power granted to inventors, innovators, and creators in the form of intellectual property rights, even as espoused by the constitution, has been to give said creators, inventors, and innovators the power to prevent people from using their intellectual creations.  By nature this power is suppressive, and therefore it should not be surprising that it hinders subsequent innovation.  That’s the whole point.

But, you may object, the justification for IP is to encourage innovation.  Of course, this straw man objection is nonsense (though this is the implicit justification for in Article One, Section 3 of the US constitution) because the very nature of the “right” granted by the government is suppressive.  And so, while it might encourage fundamental innovation (i.e. the creation of a new industry or product type), it will eventually prove to cripple the very industry it spawns because the first creators will inhibit their competitors in order to stay in business.  Their competitors will then either quit, or spend an inordinate amount of time inventing substitute goods, either of which they do instead of innovating an existing product or market segment.

So really, the failure of IP laws is that they do not account for that which is unseen.  It’s easy to see how IP will bring new products and market segments to bear, but it’s not as easy to see how the mechanism that supposedly brings about innovation ultimately cripples it as well.  Ultimately, getting rid of the negative effects of IP—in this case subsequent innovation—will mean getting rid of IP itself, for this is the natural consequence of the system.