Rarely does a book come along that prompts a wholesale revision in the way we perceive laws and legislation, social progress, and the very foundations of development economics. This is one such book, and it is destined to be a classic in the economics literature. What's more, the authors' thesis suggests a much-needed revision in classical liberal theory and even the proper conception of the competitive process.
Michele Boldrin and David Levine are asking us to rethink everything we believe about copyright and patent. The authors argue that neither are part of the free market order. They are the product of positive law, a modern invention of the state, and one that is the enemy of technological progress. They amount to special grants of privilege to market winners to coerce others and prolong the period of winnings that derive from being the first to market.
The authors argue that intellectual property is the wrong phrase. They want to use the term monopoly, and examine the institution the same way all monopolies are examined in economic literature.
In fact, they say that copyright and patents need to be completely scrapped. That sounds shocking but the author's arguments are incredibly convincing. No matter what objection occurs to you immediately—this would ruin incentives for creation, be unjust, violate contracts, wreck profits, introduce chaos—they refute it with patience, logic, and massive amounts of evidence.
They don't only deal in theory. They examine the history and workings of these institutions, from the Industrial Revolution to the present. They show that anywhere copyright and patent have been applied, the result has been stagnation in that industry. This applies to the steam engine, the cotton gin, and the airplane. More recently, the problem of intellectual property stagnation has afflicted music, movies, books, and the internet at large.
They point to dynamic industries like fashion and architecture to show that IP is not necessary for creation or profitability or development. In fact, the belief in IP, they say, is rooted in confusion over the nature of the competitive process itself.
Competition and progress are everywhere based not only on rivalry but also on the ideas of emulation and imitation—institutions that are made illegal by patents and copyrights. There are no such things as lone creators who perfect a product the first time around in a market economy. Making technology come to life in a real market environment requires many rounds of experimentation with methods, manufacturing, and marketing. Shutting down that process—this is what patents and copyrights do—results in stagnation.
Their examples are immense. They show how IP in literature has been a disaster for writers of literature. The books that are unprotected have made the largest dent in the culture while copyright has been responsible for dooming certain authors to unjust obscurity. The same is true in music. They show that many of the great innovations in modern times are products of an open-source world: capitalists using public domain material to create great products and art, and then tragically resorting to the state to freeze history.
They further revise the history of IP to show that it is a modern invention of the state. Its present form is only decades old, and is the product of the largest market players shutting down the market process in order to reward themselves at others' expense.
The implications of this work are astonishing to consider. If they are right, the costs to civilization of intellectual monopoly are frightening to contemplate. It suggests a radical policy agenda for anyone who believes in freedom: the entire apparatus of copyright and patent needs to be thrown out completely. Not just reformed. Abolished.
There is so much to learn from this book. We can only recommend that you read it slowly and let their argument sink in. Ideas this dramatic and radical—and this thoroughly argued—don't come along very often. It takes time to deal with it intellectually.
Even if you think that patents and copyrights are wholly legitimate, you must read this book, if only to grapple with what the substantive opposition consists of. And if you think you don't care about this topic, beware: it is one of the most important areas of statecraft that young people do care about. Sooner or later, our society is going to have to deal head on with this area of law. It is incumbent on defenders of a free society to examine their position.
Another warning: this book shatters myths on nearly every page. Most of what we think on this subject is not true; much of what is actually true is not part of the street wisdom.
All credit goes to the authors here—Michele Boldrin and David Levine of the Washington University in St. Louis—who have undertaken this daring and challenging area of research. They are exemplars of intellectual pioneers. If they have an effect in changing the way people think on this subject, civilization will owe them a huge debt.
The table of contents is as follows:
- Chapter 1: Introduction
- Chapter 2: Creation Under Competition
- Chapter 3: Innovation Under Competition
- Chapter 4: The Evil of Intellectual Monopoly
- Chapter 5: The Devil in Disney
- Chapter 6: How Competition Works
- Chapter 7: Defenses of Intellectual Monopoly
- Chapter 8: Does Intellectual Monopoly Increase Innovation?
- Chapter 9: The Pharmaceutical Industry
- Chapter 10: The Bad, the Good, and the Ugly
Again, there is more at stake here than seen at first glance. Everyone who seeks to be conversant and knowledgeable in the workings of society, in whatever field in which you work, has a high stake in the outcome of this debate. This is the book that frames it all up and shows the way forward.
312 pages, Hardcover 2008, ISBN: 978-0521879286