Against Intellectual Monopoly dares step out front, on a topic very dear to our hearts, to prove that "the great role of patents in giving us modern software is unadulterated fantasy." And they show this by reviewing the history of software innovation and its present workings. Neither Google nor YouTube nor any other driving force is using patents to retain competitive advantage, and those who do collect patents mostly do it in order to avoid patent trolls, e.g. those who would patent a technology already in use in order to possess and restrict its use.  Read more

Let's say you want your computer fixed or your software explained. You can shell out big bucks to the Geek Squad, or you can ask — but you can't hire — a typical teenager, or even a preteen. Their experience with computers and the online world is vastly superior to that of most people over the age of 30. From the point of view of online technology, it is the young who rule. And yet they are professionally powerless: they are forbidden by law from earning wages from their expertise.

Might these folks have something to offer the workplace? And might the young benefit from a bit of early work experience, too? Perhaps — but we'll never know, thanks to antiquated federal, state, and local laws that make it a crime to hire a kid.

Pop culture accepts these laws as a normal part of national life, a means to forestall a Dickensian nightmare of sweat shops and the capitalist exploitation of children. It's time we rid ourselves of images of children tied to rug looms in the developing world. The kids I'm talking about are one of the most courted of all consumer sectors. Society wants them to consume, but law forbids them to produce.  Read more

For an earlier generation of American dissidents from the prevailing ideology of left-liberalism, a rite of passage was reading Albert Jay Nock's Memoirs of a Superfluous Man, which appeared in 1943. William F. Buckley was hardly alone in seeing it as a seminal text crucial to his personal formation.

Here it is in one package, an illustration of the level of learning that had been lost with mass education, a picture of the way a true political dissident from our collectivist period thinks about the modern world, and a comprehensive argument for the very meaning of freedom and civility – all from a man who helped shape the Right's intellectual response to the triumph of FDR's welfare-warfare State. Read more

Pity the businessman who hires someone just out of school! Most graduating seniors have lived a lush life in college, after living a lazy life in high school, and a goof-off life before that.

Graduating seniors know all about credit cards, popular culture, web surfing, internet chat, and PC politics, but next to nothing about what used to be called the work ethic. In short, they are worse than useless to the world of commerce.

What follows is a primer in 500 words, easy rules for how new workers can go from worthless to super valuable with nothing other than a change of attitude.  Read more

All popular business histories are replete with lies. Or to be more charitable, they are filled with untruths based on a stupid version of cause and effect: inventions happen because people take out a patent on them. This assumption is hardly ever questioned in the mainline literature. Writers look through patent records and assume that they are a record of technological advance.

The truth is far messier. The patent records are a snap shot of those who filed a patent, and nothing more.

It is because of patent-based historiography that people believe that the Wright Brothers invented the airplane, when in fact they made only a tiny contribution of combining wing warping with a rudder. It was Sir George Cayley in Britain and Otto Lilienthal of Germany who did the bulk of the work of inventing the airplane. But it was the Wright Brothers who applied for the patent and quickly used it against Glenn Curtiss who improved wing warping with movable control surfaces.  Read more

Copyright law is a just another bogus modern institution we can and should do without, just like the income tax and central banking. International copyright only came to exist in 1891 – it was the result of lobbying not by authors but by publishers! – and has steadily tightened over the century to the point of maniacal absurdity today: thanks to the U.S. Congress, an article you write today is under copyright protection until 70 years after your death.

It is of absolute urgency, for the sake of saving the literary and artistic creations of our time and the future from oblivion, and for the sake of human liberty, that the whole rotten system be smashed. The argument to that effect is crystallized and made super compelling in the fifth chapter of Against Intellectual Monopoly by Michele Boldrine and David Levine. The chapter is pithy, thorough, dead on in its practical analysis, and deeply radical. It is the perfect illustration of why I think this is one of the most original and compelling books on economics in a generation. Read more

How essential are drugs patents as a piece of the machinery of the modern pharmaceutical industry? Incredibly so. Repealing them with no other changes would likely lead to a complete dismantling of a massive and lucrative industry that saves lives every day.

To elaborate, without patents, compensation for the hundreds of millions of dollars necessary for jumping through FDA hoops would not be forthcoming. Without patents, the huge manufacturers, who face mandatory disclosure requirements, would have their formulas taken by others and knock offs would immediately drive the price to marginal cost.  Read more

Someone handed me a book the other day – a cult classic among music geeks – and urged me to read it, and, when I had finished, sign my name in the front cover. That way I could be added to the already long list of readers in the front cover, each of whom add added his or her scrawl to the book after having read it.

How charming!

Except for one thing: this is complete violation of the spirit of intellectual property law. All these readers were sharing the same book instead of buying a new copy. Think of the revenue lost to the publisher and the royalties lost to the author! Why, if this gets out of hand, no one will ever write or publish again! These readers are all pirates and thieves, and they should probably be subject to prosecution.  Read more

In the hundreds of emails I've received over the issue of intellectual property, the number one most common objection to doing without goes like this. We can't subject the matters to free market competition. Some innovations are too easy to copy. Just one look or listen and the producer's idea is taken from. Then another company that had nothing to do with bearing the costs of innovation will be able to reap the rewards. We have to have a period of monopoly if only to inspire people to innovate and bring things to market.  Read more

Zeroing in on a topic like "intellectual property" offers a chance to clarify fundamental notions in economics generally. You think you understand something like property rights or the nature of competition – you have studied the ideas for years! – and then a challenge comes along that blows everything up. It's an opportunity. Time to think and think again.

Is there really property in ideas and, if so, what rules should govern it? Is it really necessary that such property be protected in order that competition be kept fair and just and efficient? Read more

Against Intellectual Monopoly might have begun with a story about the failed attempts to stop illegal downloads or the wicked crackdowns on teens for file sharing. Instead the authors take us back to the Industrial Revolution to explode the myth of the supposedly great innovator James Watt and his steam engine.

Why? Because, as the introduction points out, this is a book of economics. If you have something to add to the science, it can't just apply to now, or last year, in this place, or just that place. Economics is a universal science. Its laws and lessons apply to all times and places. For this reason, a theoretical breakthrough is a massive event. It means work for generations of scholars: revising history, fine-tuning other aspects of theory, applying it to different fields. Read more

At a taped video interview in my office, before the crew would start the camera, a man had to remove my Picasso prints from the wall. The prints are probably under copyright, they said.

But the guy who drew them died 30 years ago. Besides, they are mine.

Doesn't matter. They have to go.

What about the poor fellow who painted the wall behind the prints? Why doesn't he have a copyright? If I scrape off the paint, there is the drywall and its creator. Behind the drywall are the boards, which are surely proprietary too. To avoid the "intellectual-property" thicket, maybe we have to sit in an open field; but there is the problem of the guy who last mowed the grass. Then there is the inventor of the grass to consider. Read more

When an author signs a publication contract, insofar as it contains strict and traditional copyright notices, he is pretty much signing his life away. It used to be that the publisher would maintain control only so long as the book is in print. Today, with digital printing, this means forever: your lifetime plus 70 years.

During this time, you can't even quote significant portions of your own writing without permission from the publisher, and you could find yourself paying the publisher for the rights. You can't read your own book aloud and sell the results. You certainly can't give a journal a chapter.

You could try to be sneaky and change the text a bit, right? Wrong. They've thought of that. You will own and control new matter but the old matter is still the private possession of The Man. Read more

As I think more about "intellectual property" in the form of patents and copyrights, it seems that the implications for social theory are profound. The behavior targeted and slaughtered by IP is one that provides a fuel for all social and economic development: imitation or emulation.

(Before I go on, I want to emphatically point to my personal debt to Michele Boldrin and David Levine's Against Intellectual Monopoly, from which everything in this article is derived.)

In the German-speaking world of art in the 18^th and 19^th century, imitation by composers was considered to be the greatest tribute. When Bach would write an elaboration of Buxtehude, it was seen as a wonderful gift to Buxtehude's legacy and memory. When Mahler would turn a phrase by Brahms, or re-orchestrate a Beethoven symphony, it was the tribute of one master to another. So it is in literature and economics. Read more

How strange this "intellectual property" issue is. In normal life, we tend to (or should) credit enterprise and markets for most innovations that surround us. I'm typing on a system here that includes products for several dozens different creative companies, with hardware and software and applications of all sorts stitched together through some miracle we call the coordinative power of the market. No news in that, I suppose. Ho hum.

But let the subject of IP come up, and most people will say that we only have this stuff thanks to IP. Think of the shift here. On the one hand, we credit markets. On the other hand, we credit monopoly. Both can't be true. Or if both are true, we have a serious theoretical tangle to unravel. So which is true? Read more

Fed up with the patent craze, The Economist Magazine wrote the following in a main editorial: "The granting of patents 'inflames cupidity', excites fraud, stimulates men to run after schemes that may enable them to levy a tax on the public, begets disputes and quarrels betwixt inventors, provokes endless lawsuits … The principle of the law from which such consequences flow cannot be just."

It's not in current issue. That was published in 1851, but every word of it remains true today. It was once conventional wisdom among economists that state-granted monopolies were as bad as mercantilism. But in the meantime, sometime after the middle of the 20^th century, the conventional wisdom became confused.  Read more

One of the fatalities of publishing at a rocket pace is that some amazing treasures get overlooked. So this column, perhaps the first of a series, covers some titles in the Mises Store that have not received much attention in the praiseworthy swirl of mania over Rothbard's Mystery of Banking and America's Great Depression, and Mises's Causes of the Economic Crisis, titles which speak directly to the moment.

I'll start with an unlikely title here, a book by an author you have never heard of. His name is Faustino Ballvé. He was from Mexico, a working economist whose intellectual life was changed completely when Mises visited the country and lectured. Mises and Ballvé carried on an extensive correspondence after. Ballvé continued to read and correspond for years.

Finally the professor sat down and wrote a primer on economics. The result was Essentials of Economics, first in Spanish and then translated to English. Nowhere does this book specifically say that it is free-market oriented or Austrian or Misesian. To Ballvé, this is just good economics, and he presents it as such. Read more

At a violin camp for kids in my neck of the woods, the students divided into four groups: bad boys, bad girls, good boys, good girls. No one had to divide them. They sorted quickly based on human volition. The groups ate together, walked to and from class together, and sat together. As the week went on, the sex separation reduced, so that by the end, there were only two groups: good kids and bad kids.

The good kids paid attention in class. They spoke respectfully to teachers. They practiced at the appointed hours. They had nice table manners. They didn't use vulgar language. They were in bed somewhat early and they woke early. They were neatly dressed. The girls were modest and the boys didn't wear hats indoors. They excelled in sports.  Read more

Let's pull this sentence out of the civic pieties of our time and see what's wrong with it: "We should all volunteer our time in charitable causes and give back to the community in a labor of love."

We can't argue with the instruction here, or the sentiment behind it. There is nothing wrong with giving and sacrifice. My argument is with the choice of language. It contains a word and three phrases the common usage of which can be highly misleading.

Voluntary

This word "volunteer" is used to describe a person who does things in service of others, and we all know the intent of the term. We speak of volunteering all the time. The United States has what is called the voluntary sector, which is supposed to refer mostly to nonprofit organizations that elicit nonremunerative employment. Read more

Drugs patents took it on the chin a few years ago, when major drug companies refused to sell cheap AIDS drugs in Africa. Presuming the drugs work, countless lives might have been saved. But the desire to protect the high price on the patented drug – despite the low marginal cost for producing additional units – trumped the humanitarian impulse to save lives. The large drug companies refused to budge, despite protests from all over the world.

Defenders of the drug companies say: well, sure it is cheap to produce mass quantities of drugs after they have been developed. But the costs of getting there are sky high. If companies can't charge high prices, they won't develop the drugs in the first place.  Read more

How awful we were to substitute teachers when I was in grade school! These "substitutes" – the very term implied dread mixed with malicious opportunity – didn't know our names, our lesson plans, the class culture, and had no pre-existing expectations for our behavior. We took full advantage, switching seats, hurling paper wads, goofing off, or otherwise just having a grand and very cruel time of it, knowing that if we all behaved badly as a class, in the aggregate, the punishment would be minimal. It was never worse than the day in band when we all switched instruments, and generated an hour worth of cacophony. To what end? It was just something we did because we could.

Justice dictates that everyone who participated in these evil acts should be a substitute teacher for day. And so I was, but not in the same setting I had growing up. Instead I enjoy what turned out to be a glorious morning for Dad and his well-trained and homeschooled children. There were no spitwads or wisecracks or seat switching (that I know of!); rather I was privileged to be of part of one of the most beautiful scenes I've witnessed in my adult life.  Read more

See if you can spot anything wrong with the following claim, a version of which seems to appear in a book, magazine, or newspaper every few weeks for as long as I've been reading public commentary on economic matters:

The dominant idea guiding economic policy in the United States and much of the globe has been that the market is unfailingly wise…. But lately, a striking unease with market forces has entered the conversation. The world confronts problems of staggering complexity and consequence, from a shortage of credit following the mortgage meltdown, to the threat of global warming. Regulation … is suddenly being demanded from unexpected places.

Now, a paragraph like this one printed in the New York Times opinion section on December 30, 2007 — an article called "The Free Market: A False Idol After All?" — makes anyone versed in economic history crazy with frustration. Just about every word is misleading in several ways, and yet some version of this scenario appears as the basis of vast amounts of punditry.  Read more

If you think about it, it is inherently implausible that the state could be an effective administrator of justice, for which there is a supply and demand like any other good. Shortages, inefficiencies, arbitrariness, and underlying chaos all around are going to be inherent in the attempt.

Because we are dealing here with the meting out of coercion, we can add that inhumane treatment and outright cruelty are also likely to be an inherent part of the system.  Read more

Leonard E. Read, the founder of the Foundation for Economic Education in 1946, is often heralded for his role in kick-starting the libertarian movement after World War II. The sons of FEE went on to do great good for the world, and FEE is often called the father of all libertarian think tanks – institutions that work outside official academia to advance radical ideas.

He did more than merely sponsor lectures and publish. As a matter of fact, others were doing the same. So far as I know, no one has yet noticed that he used a secret weapon in his struggle, something that made him truly different and unusually effective. He eschewed the use of exclusive copyright. Read more

The cashier overlooked the milk in my shopping cart, so there had to be a separate transaction to process it. I paid for it with American Express, and it suddenly occurred to me to apologize.

"I'm so sorry for that. Your fees on that card will probably exceed your profit."

She looked at me as if I were speaking an unintelligible language.

"My fees?" she asked.

"Yes, American Express is the most expensive card on the market. You guys have to pay per charge and also a percentage of the transaction. This was only a couple of bucks spent here, so these fees can really eat into your profit margin."

"I don't pay any fees," she said.

It was at this point that I realized that we were on two different planets. She works for the company as a worker. The store makes a contract with her to show up and do certain things. She does them. She gets paid for this. That's the beginning and end of her economic role in the matrix of exchange. She is unaware that she is a consumer too, of the employment services offered by the store; these services must be paid for out of revenue generated by sales. Read more