The standard theory behind support for creating a legal monopoly for certain ideas, processes, and inventions is that absent such promise of monopoly there would be far less innovation.
It has a surface level logic to it. People respond to incentives. Legal monopoly means more money for the one who has it. People tend to like the money incentive. Therefore, more people will innovate because they have the incentive to capture greater rewards by securing a monopoly on the production or sale of their invention.
The weird thing is it doesn’t play out like this in the real world. Something is missing.
Inventions typically spring from technicians and masters at a craft. These are the types who are driven by a passion for what they do. They want to solve problems, discover things, build things, and create things. So they do. If they seek a legal monopoly on their invention this happens after the fact. It is hard to imagine many innovators saying, “Oh wow! Think of possibility of solving this chemistry problem and discovering an entirely new way to do X! Wait…get a lawyer in the lab before I go any further. I refuse to make any discoveries without proof that I’ll be protected from competition once I do.”
And innovation doesn’t look like that. You can see this by observing areas without the ability to get legal monopolies on their inventions. Fashion, food, and football are a few of my favorites. You can copy, borrow, and imitate fashion designs, recipes, and defensive schemes with abandon. Many people do. Yet each of these fields is as dynamic as any industry, constantly evolving and introducing new things. Apparently the innovative offensive coordinator, cook, and designer don’t require the promise of monopoly to entice them to innovate.
People do respond to incentives. This is a fact of life and one that need not be overturned to overturn the belief that IP laws are required for innovation. Any good economist will tell you that incentives are many, and value is subjective. The innovators are certainly responsive to money incentives, but 1) legal monopoly is not the only or best way to earn money for inventions and, 2) money isn’t the only incentive driving invention.
As for number one, consider how many people are typically working on a similar innovation simultaneously. With the current IP regime, only one can get the monopoly. If we want to take incentives seriously, what kind of incentive does this create for all the others? Furthermore, the one most likely to get the monopoly is the one with all the lawyers and accountants and resources and willingness to take others to court, not the one with the greatest contribution to the discovery. This would seem to drive upstart innovators away from the task for fear of being sued by the big guys as much or more than it would drive them to innovate for the possible promise of securing a patent.
As for number two, while the promise of monopoly may be the dominant incentive for lawyers and R&D departments, it’s not the dominant incentive for inventors. They innovate first, driven by a passion for the task, the desire to solve a problem, create their dream, help a colleague, or improve their own daily life with some small innovation. Yes, they want and seek money for the invention once successful, but the absence of a promise of monopoly does not stop them from creating.
Understanding incentives is crucial to really understanding how the world works and how to change it. But an elementary look at incentives that examines only dollars and cents and only their intended, not actual, beneficiaries will not get you very far.
For more on the problems with intellectual property laws, check out “Against Intellectual Monopoly“. It’s excellent.
Originally published here.