Thursday, May 08, 2008

Intellectual Property: a further restriction on personal freedom

The Socialist Standard January 2006

Intellectual Property:

a further restriction

on personal freedom

Professor Noam Chomsky of the Massachusetts Institute of Technology’s contribution is based on a Q&A session held on 22 April last year at Washington State University. Tristan Miller provides a commentary from a socialist perspective on the following page..

(View Original)

Guaranteeing corporate profits

The relation of intellectual property to personal freedom and its place in public and academic settings is an interesting topic with an interesting history.

The Uruguay Round that set up the World Trade Organization imposed what is called a free trade agreement, but which is, in fact, a highly protectionist agreement (the US and business leaders being strongly opposed to free trade and market economies, except in highly specific ways beneficial to them). A crucial part of this agreement was the establishment of very strong “intellectual property rights”. What this actually means is rights that guarantee monopoly pricing power to private tyrannies.

For example, consider a drug corporation. Most of their serious research and development – the hard part of it – is funded by the public. In fact, much of the dynamism of the world’s economy comes out of public expenditures through the state system, which is the source of most innovation and development. There is some research and development in the corporate system, but it’s mostly at the marketing end. And this is true of the drug industry. Once the corporations gain the benefit of the public paying the costs and taking the risks, they want to monopolize the profit and the intellectual property rights. These rights are not for small inventors. In fact, the people doing the work in the corporations don’t get much out of them; at best, they would receive a small bonus if they invent something. It’s the corporate tyrannies that are making the profits and they want to guarantee them.

The World Trade Organization proposed new, enhanced intellectual property rights – patent rights – far beyond anything that existed in the past. In fact, they are not only designed to maximize monopoly pricing and profit, but also to prevent development. For instance, the World Trade Organization rules introduced the concept of product patents. It used to be you could patent a process, but not the product, so if some smart guy could figure out a better way of producing something, he could do it. The WTO wants to block this. It’s important to block development and progress in order to ensure monopoly rights, so they now have product patents.

Consider US history: suppose the colonies, after independence, had been forced to accept this patent regime. What would we Americans be doing now? First of all, there would be very few of us at all, but those of us who would be here would be pursuing our comparative advantage in exporting fish and fur. That’s what economists tell you is right – pursue your comparative advantage. That was our comparative advantage. We certainly wouldn’t have had a textile industry. The British textiles were far cheaper and better. Actually, British textiles were cheaper and better because Britain had crushed Irish and Indian superior textile manufacturers and stolen their techniques. They therefore became the pre-eminent textile manufacturer, by force of course. In actuality, the US does have a textile industry which grew up around Massachusetts. But the only way it could develop was by extremely high tariffs which protected unviable US industries. Our textile industry developed and later had spin-offs into other industries. And so it continues.

We would never have had a steel industry either, for the same reason: British steel was far superior. One of the reasons is because they were stealing Indian techniques. British engineers were going to India to learn about steel-making well into the 19th century. They ran the country by force so they could take what the Indians knew and develop a steel industry. In order to develop its own steel industry, the US used massive government involvement through extremely high tariffs and the military system, as usual.

This system continues right up to the present, and furthermore it’s true of every single developed society. It’s one of the best-known truths of economic history that the only countries that developed are the ones that pursued these techniques. There were countries that were forced to adopt free trade and “liberalization” – the colonies – and they got destroyed. The sharp divide between the first and the third worlds has really taken shape since the 18th century. And maintaining this divide is what intellectual property rights are for. In fact, there’s a name for it in economic history: Friedrich List, the famous German political economist in the 19th century, who borrowed his major protectionist doctrines from Andrew Hamilton, called it “kicking away the ladder”. First you use state power and violence to develop, then you kick away those procedures so that other people can’t do it.

Intellectual property rights have very little to do with individual initiative. Einstein didn’t have any intellectual property rights on relativity theory. Science and innovation is carried out by people who are interested in it; that’s the way science works. However, there’s been an effort in very recent years to commercialize it, much the same way everything else has been commercialized. So you don’t do science because it’s exciting and challenging, because you want to find out something new, and because you want the world to benefit from it; you do it because maybe you can make some money out of it. You can make your own judgment about the moral value. Personally, I think it’s extremely cheapening, but also destructive of initiative and development.

It’s important to note that the profits from patents commonly don’t go back to the individual inventors. This is a very well-studied topic. Take, for example, the well-studied case of computer-controlled machine tools, which are now a fundamental component of the economy. There’s a very good study of this by David Noble, a leading political economist. What he discovered is that these techniques were invented by some small guy working in his garage somewhere in, I think, Michigan. After the MIT mechanical engineering department learned about it, they picked up these techniques and developed them and extended them and so on, and the corporations came and picked them up from MIT, and finally it became a core part of US industry. Well, what happened to the guy who invented it? He’s still probably working in his garage in Michigan or wherever it is. And that’s very typical.

I just don’t think intellectual property has much to do with innovation or independence. It has to do with protecting major concentrations of power which mostly got their power as a public gift, and making sure that they can maintain and expand their power. And these highly protectionist devices really have to be rammed down the public’s throat. They don’t make any economic sense or any other sense.

Neither do I think that intellectual property should play any role in academic and public institutions. In 1980 the Bayh-Dole Act gave universities the right to patent inventions that came out of their own research. But nothing comes strictly out of a university’s own research; it comes out of public funding. That’s how the university can function; that’s how their research projects work. The whole system is set up to socialize cost and risk to the general public, and then within that context, things can be invented. But I don’t think universities should patent them. They should be working for the public good, and that means the fruits of their research should be available to the public.

Noam Chomsky

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