Surowiecki on Intellectual Piracy

James Surowiecki had an excellent article in the June 9 issue of the New Yorker about countries committing intellectual piracy. It includes a nice summary of how “stealing” patented ideas played a major role in the early economic development of the United States. In the process, it surveys some of the considerable historical evidence debunking the widespread myth that intellectual property is necessary for, or even makes a contribution to, economic growth.

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5 thoughts on “Surowiecki on Intellectual Piracy

  1. An interesting piece but I think to say that it debunks “…the widespread myth that intellectual property is necessary for, or even makes a contribution to, economic growth.” is a huge stretch. Do you really think that Eli Lilly will spend hundreds of millions of dollars to develop a new drug if Teva can immediately start manufacturing and selling it without paying the development costs?

    The article points out the benefits to the appropriator of intellectual property. Not too surprising; if I steal $50 from Brandon I’m $50 richer. If I use it wisely I might even generate more wealth. I find it surprising that libertarian circles are sometimes hostile to the notion of intellectual property.

    • Is think conflating cash with ideas constitutes a false equivalence.

      At any rate, have you ever thought about why R&D is so expensive? I think there is a good case to be made the IP laws actually drive costs higher than they otherwise would be.

      One other point that is important to note is that libertarians are pro-market, not pro-business. It might seem like a subtle difference to some, but if you think about there is a huge chasm between the two.

      • “At any rate, have you ever thought about why R&D is so expensive?”

        I know why r&d is so expensive in biotechnology & pharmaceuticals [the empirical venue for my research]. 3 letters: FDA

        “Is think conflating cash with ideas constitutes a false equivalence.”

        Really. Why is any fiat currency ever worth more than the material it’s made of?

        BTW, I’m leaving for Europe tomorrow. I’m not even going to bother playing on the internet during my conference in the Netherlands. After that my wife and I are house-sitting for friends in France for the rest of the summer and I’ll be back every now & then to check in on libertarianism.

  2. It’s not clear to me that, absent a patent Teva could “immediately start manufacturing and selling it without paying the development costs”. Teva can start manufacturing when the patent expires because the patent itself lays out how to manufacture the drug – or at least key aspects of it. That’s the deal. You get a monopoly for publicizing the information.

    On the other hand, trade secrets, like the infamous formula for Coke, also have a pretty extensive body of law behind them, including protections against “improperly” acquiring what is intended to be secret. With only trade secret protection, it might not take Teva 20 years (the patent duration) to come up with Eli Lilly’s drug, but they would have to invest in their own development and it would not happen overnight.

    They might even come up with an improvement. Under patent law, they would be prohibited from marketing their improvement, without a license from Lilly. Lilly naturally opts for the patent, but it’s not at all clear we enjoy better pharmacology for it.

Please keep it civil (unless it relates to Jacques)

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