Lilliputians encircle the Gulliver of IPR: Part III, Stiglitz in the New Scientist

There’s a fascinating article by Nobel laureate Joseph Stiglitz in the latest New Scientist. Yes, of course it’s hidden behind a paywall, what did you expect? Here’s the stub.

I quote from the article:

  • Locking up products with patents is an unfair and ineffective way to reward innovation.
  • There is a growing sentiment that something is wrong with the system governing intellectual property.
  • Recent years have seen a strengthening of IP rights…..The changes have been promoted especially by the pharmaceutical and entertainment industries, and by some in the software industry….
  • …[some] patents take what was previously in the public domain and “privatise” it — what IP lawyers called the new “enclosure movement”.

And finally:

  • In any system, someone has to pay for research. In the current system, those unfortunate enough to have the disease are forced to pay the price, whether they are rich or poor. And that means the very poor in the developing world are condemned to death.

I think we need something different. Whether it’s a new form of tax, a voluntary donation or a prize, or even all three, we have to stop this madness. It is unenforceable, wastes resources, gives IT a bad name because of all the unintended consequences of putting in poorly-thought-out DRM. And in some cases it is immoral.

13 thoughts on “Lilliputians encircle the Gulliver of IPR: Part III, Stiglitz in the New Scientist”

  1. If development were allowed to be a participative process, then democracy might do the trick. social networking sites and wikipedia prove that self policing is possible.

    what if there was a ‘myspace’ for new ideas that people could openly gather to make good ideas real. No patentability because of the published status, but none needed because participation meant documentation of origin.

    Most ideas never get patented, of those very few get made. many good ones fall by the wayside. if someone tried the patent route and got burned or never even noticed (more likely) they might be willing to offer it to the winds rather than never see it flourish.

    made available on a list, it could gain popularity and supporters in the public to the point of allowing it to be made for real. all participants are allowed to benefit from commercialization including a nice chunk to the idea originator just for having a good idea. of course, most originators will want to have some ‘control’ so they get to moderate the forum for their project. any dictators will quickly lose support, while open minded or well reasoned people can gain enough to realize their dream.

    I am in the process of trying to get fundng to build this and have a very unique interface that also allows the inventions to be directed at specific community expressed needs in the world.

    anyone wanna help?

  2. dunno – something in both your posts tells me that high-falutin’ ideals is getting in the way of the fact that capital needs price signals, and freedom to move, with that movement then regulated by democratic fiat if need be.

    Open an economy, legislate for clear and enforceable property rights at individual and corporate level, simplify the tax system remove red tape and regulate with clarity and authority , and capital wil lflow efficiently. Growth, development and health will follow. In the absence of these, then all these nice inventions, social networking and dreams will be as good as pi**ing in the wind for all the good that they will do.

    The failure of these things to happen is not a failure of capitalism, but a failure of the body politic to allow capitalism to happen.

  3. I don’t think it’s about highfalutin’ ideals, but about something that works. There’s an efficiency versus effectiveness question every time we look at the role of government vis-a-vis markets; today’s imperfections in information and competition and markets are often caused by poor regulation and intervention, and these imperfections then get exploited to a point where, as you say, capitalism is not allowed to happen.

    I still believe that social software will help us reduce those imperfections and thereby also reduce the body politic’s propensity for failure.

  4. ….social software will help us to reduce the imperfections of capitalism…

    yes, I think so. Indeed, as one of the core axioms of the perfect market of classical economics is perfect information perfectly distributed, then what better modern manifestation of that is a wiki, google, H2G2 or wikipedia itself? But actually this is an improvement on the capitalist condition, not a cure for capitalism – it is yet another step closer to allowing capital (social and economic) to move proportionately to signals.

    Social software makes capitalism, well, more capitalist. Everyone has a stake in the transmission and receipt of information. Marx would have loved it. Marxians would heartily approve. And Marxists would remain as confused as ever.

    However, social software is not a precondition to development, an altogether more fundamental issue. Nor, in the absence of price signals (the conversation of a market) and the freedom to follow them, will social software have anything fundamental to add to an economy and a people looking to develop.

    Back to Stiglitz. His point, in my prism, is that the patent is a brake on the transmission and distribution of information, and that the patent system is being abused to the benefit of the few. Well maybe, but then thats its point – to offer monopoly rewards, for a fixed time, to entice those into both R & D. I read his article and found it slightly incoherent. I studied under Stiglitz (ok ok I went to 3 of his lectures) and I think he’s great. So either it was badly edited, or what he was really going after was poorly thought out patenting and DRM, and the rather odd US legal system, which does a very poor jpb of enforcing societal property rights over that of the corporate entity.

  5. Your comments are naive and uninformed. Without intelectual property protection, ideas would be held in secret effectively killing the value. As a result the economies would stagnate.

    Secondly ideas have consequences. Not all is positive and worthwhile when ideas are controversial. If Dean Kamen couldn’t protect the Segway scooter innovations, there would be no motivation to continue to develop it. I would be certain that he understands the value of his ideas and can persevere until the rest of the world sees the value of his ideas.

    Thirdly not all ideas are of value. Albert Einstien’s ideas are more significant then most. If an individual has some good ideas, what motivation would exist for the inventor to bother with them.

    Fourthly I would be gravely concerned with anyone that files for a patent. To think that the process is “too easy” and the ability to protect your invention from all comers is a poly anna perception. I would suggest that the “owner” of the patent would soon realize that really a software patent may be useless when contrasted to its value and the cost of maintaining it. Stickin a target on your back does not seem to be a valuable strategy if the idea is of marginal value. However, if you invent a valuable product you’ll need as much protection as you can muster.

  6. Thank you for clarifying that, Paul. You may have noticed that the bulk of the post was excerpted from Joseph Stiglitz’s article. I guess you wouldn’t call him naive and uniformed, given his PhD from MIT, his tenured professorship at Columbia, his long stint at the World Bank, and not forgetting his Nobel Prize.

    Which means the comments that are naive and uninformed must be all mine, in the last paragraph. The issue of needing alternative forms of IPR is not going to go away. The problems with the current process are not going to go away either. There is a growing body of evidence that bad IPR actually hampers innovation and economic growth rather than anything else.

    But all that is beside the point. The point is that you have a right to disagree, to challenge, to confront. Without that we will not have discussion or learning.

    I think you need to consider one point carefully. There are a lot of people like me who believe it is time to overhaul the current IPR regime; none of us believes that inventors shouldn’t be rewarded.

  7. JP – doesn’t a consideration of the IPR regime also need a consideration of the legal regime within which it operates? After all it is via that legal regime that IPR’s are protected and rewarded. And the IPR regim e will have grown iteratively with the legal regime. And doesn’t such a consideration also need to take into account the whole issue of property rights and hpw a society wishes to weight the individual vs the corporate vs the public?

    I think it is right to question how it is used and abused, but one should be aware of the scale of the issue one is taking on when seeking something different.


  8. JP, your comments through out your blog have reflected you have a strong opinion regarding this topic. I have the same strong opinions regarding the manner that the DMCA and Patent legislation in North America provide. Secondly as we proceed down this globalized economy, I believe that the only “thing” of any value will be intelectual property. Physical assets will be supportive of the IP to the extent that it is required.

    I would not debate the merits of the Nobel Prize as being supportive of you argument. Here is an individual that has lived and prospered based on his intelectual property. I doubt that he would be a proponent of your perception regarding the development of ideas.

    Finally I would like you to address the 4 points that I noted above. And most particularly how the consequences of ideas (and particularly significant ideas) can develop. The ostracization (sp) of Fredrick von Hyak and Gallileo are offered as examples of the consequences.

  9. Paul, let me try and rebut your four points as best I can. I guess I read them as opinions of yours rather than statements requiring rebuttal, all part of a good contended conversation stream.

    Your first point seems to be that ideas will be held in secret if not for intellectual property protection. Ideas have been around for a long time, intellectual property protection is a much more recent “invention”. People have shared ideas ever since they’ve been able to communicate. And learnt from each other. Research as carried out in universities never had any such protection in the past, it is only recently that this evil has come up. All the evidence I see today is that IPR prevents ideas from being exposed; you need to be inventive and creative in your patent and not your invention. You make a subpoint about economic stagnation, again this has little basis in fact. There are many developing countries where the corruption of today’s IPR regime has not mushroomed, and quite adequate economic growth.

    I’m not sure what you’re trying to say in point 2. OF course ideas have consequences. But that has nothing to do with IPR. Maybe I need to see different words, I can’t figure out your question.

    Your third point is one I will cover in a post quite soon. About the gap between ideas and inventions and what happens in between.

    I couldn’t possibly agree with your fourth point, about valuable inventions needing all the protection you can muster. Why? I don’t understand this protection bit. The monopoly rent was meant to be an incentive to share while recouping investment, not an annuity for life. Why not let market conditions operate as with everything else?

  10. I’ll await your posting regarding item number 3. From my point of view as an individual, which to me is the important variable in the global economy, intelectual property rights give me a fighting chance to protect my ideas and a shot at doing something material in the world. You seem to want to throw that all away on some altruistic “belief” that ideas belong to society at large. Is the government the one that should be the benefactor of all the ideas?

    I am at a loss to understand your argument.

Let me know what you think

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