I believe the market is very much like evolution - the best producers of goods and services strengthen while their competitors challenge them or die out. One of the main arguments against capitalism is the issue of monopolies and their power over their competitors. If there is a lack of competition then prices and quality can become unfair and unchallenged. Although this is rarely the case because there is almost always competition, there is an issue with market ‘monopolies’ that can prevent the evolution in the market - patents. Say a technological company supplies the best products in their line of industry, they then obtain patent rights to privatize the next innovative designs and ideas in their line of industry. Their competitors are now restricted to out perform them. In this way a monopoly can be established with the power of the law preventing competitors to out-perform them.
I can understand the value of patents for inventors, but the misuse of them in terms of market evolution is very uneconomical.
I wanted to get some opinions on patents in an ideal market. How do you think they would work best (if at all) in an ideal market?
Patents would not exist in a free market. Think about what a patent (or any form of intellectual property) really is. It is a “right” to tell others what they may not do with their actual property. If someone violates this “right,” aggression can and will be used against the “offender.” Intellectual property is a monopoly, which in a more original meaning of the word, meant a government-granted privilege. This privilege (backed by force) was often all that was needed to make competitors unprofitable and driven out of the market. Thus, a patent is a monopoly, would not exist in a free society, and isn’t really helpful in any way to a society.
I can understand why. However, if someone had an inventive or innovative idea but did not have the resources to produce it, how could their ideas ever come into fruition? If they tried to pitch it or sell it to those who can produce it, how could it be protected from theft without some form of patent or copyright?
Exactly. People act as though every inventor would get screwed because his potential investors would run away with his idea. It’s very simple: inventors figure out that they ought to show no one their ideas without a contractual obligation to not use it. The repeal of patent law would mean in the medium-term, after people got wise, was that market-giants couldn’t sit on knowledge to the exclusion of competitors, knowledge which they may not necessarily have even created but bought from others.
Not sure I agree completely here. A patent allows someone to own an idea. It’s not an illegitimately enforced monopoly any more than you owning a house is an illegitimately enforced monopoly.
If patent laws go away entirely, the incentive to share new knowledge with the community in exchange for a limited grant of sole-use over that knowledge will go away and everyone will suffer.
Even in a free society, something like patent could still exist, because it is prima facie ownership, just ownership of something that’s very difficult to own, an idea.
So inventor A signs contract with B to not tell his idea to anyone.
B tells C and C makes a business using that idea.
Now A sues B for losses, including all the money C’s making, but A cannot then injunct C from making the product, even though A came up with the idea, thus homesteading it?
One cannot steal an idea if it is not divulged, this is true.
But, let’s say that an idea is like a tract of land that is unscarce but can only produce a certain amount of money despite its unscarcity, and the more people use it, despite its unscarcity, the more diluted its value becomes.
It is the use of that idea that gets diluted. The producer of an idea would normally have to keep that idea completely secret in order to profit from it.
I think we should look at patents much the way that we look at a property claim.
A property claim is claim to land that you’re not yet using but land that you plan to use, to mix your labor with, in the relatively short-term. There’s no reason why people should respect a property claim, except that they want others to respect their claim. There’s nothing in homesteading theory that supports the idea of respecting a claim, but it translates theory into reality. Because in practice there’s always a time delay between starting to till land and when the full farm is put in. And if you couldn’t have X number of acres farmed, because somoene else grabbed your claim before you could till it, you would never have begun tilling at all.
With an idea, like an invention, though ideas are not scarce we make this bargain with people: disclose your invention or idea such that anyone can use it, and in return we’ll give you an exclusive right to use that idea for a set term.
I think we’d lose something very valuable indeed if patents or something like them are indeed considered ultimately incompatible with a free society.
Ok, so people should own their inventions for their entire lives? In fact, they can also keep selling the rights to the idea, so the patent control can extend centuries. Correct? Like home ownership. Right?
Patents do not help invent things per se. It is all one big legal mess and people can get by without them at all. Something that can be infinitely reproduced has no intrinsic value, and no one has a property right over my brain or body.
What you would do in an Austrian society is offer prizes instead of patents to people that invent stuff. Think of the X-prize for instance.
“I hereby patent red. The very idea of a red object belongs to me. All royalties payable to Clayton Inc. 10239 Old World Rd. 00385”
The problem is that the human concept of ownership regards rights to exclusive use of specific objects, whereas patents and copyrights grant “property” rights to entire classes of objects. “You may purchase this clock and thereby own the right to hang it on your wall and look at it, but you may not under any circumstances disassemble it, reverse-engineer its mechanism and manufacture a clock operating on the same principle, whether of your own design or not.” That’s the effective meaning of patent. What an absurdity. You sell an object but its disassembly, reverse-engineering and copying is prohibited??
This makes no sense whatsoever in terms of the basic conception of what ownership means. It is a bastardization of the human concept of property and ownership. The owner of a patent or copyright is implicitly claiming a kind of property right in every burnable DVD (you can purchase this blank DVD but you may not burn this pattern upon it), every piece of steel (you can purchase this piece of steel, but you may not fabricate it into any of these patented shapes), and so on and so on. Such ownership rights are ridiculous.
anenome - breaking of contracts would obviously be a serious crime in a free society that doesnt have IP laws so i think you are kind of blowing off the seriousness of b telling c. Technically the contract can say if you tell anyone you goto jail for life/put to death. Inventors of ideas would also have access to entrepenuers with LONG records of remaining silent on deals that they did not agree to fund.
Plus if there is record (notorized or something) that an inventor of an idea came up with it before anyone else then out of no where C starts producing that very product legal action can be taken to stop the production of it because the courts need to decide if B just broke the contract or was C in on it too. So C has to be very careful on how they come about accepting and acting on information that B has given them.
Then there will also be a track record in the court system for Bs and Cs that effectively punishes them enough so this type of colluding doesnt occur often.
If it is discovered that B just told C without C knowing about A then credit for originating the idea would still goto A after the fact.
What do you think ownership conveys? I think it conveys three types of right: the right to use, the right to the fruit(s) of use, and the right to abandon. These kinds of right make sense when scarcity is involved - i.e. A’s use of something excludes B’s use of it and vice-versa. How does one’s use of an idea exclude anyone else’s use of it?
By that reasoning, there was no incentive to invent ideas like fire, agriculture, the wheel, metallurgy, the heavy plow, the equations of motion, and all the other things that were invented before the idea of “intellectual property” was invented.
How is it very difficult to own an idea? It doesn’t seem difficult to use an idea, nor to enjoy the fruit(s) of using it, nor to abandon it.