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Patents and Utilitarian Thinking

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As I've noted previously, utilitarian proponents of patent laws favor IP because it "promotes" innovation. But they have no principled reason to oppose setting up a tax funded government commission to "reward" innovators. Intellectual property and its discontents, by Tom Giovanetti, points out that certain

activists [... ] want to radically change how pharmaceutical innovation is accomplished. They propose that governments should nationalize intellectual property, levy new taxes to fund R&D, and then incentivize R&D through prizes administered by new government-sponsored enterprises or, even better, international nongovernmental organizations (NGOs) staffed by technocrats unaccountable to voters.

And now I come across this: "Rewards Versus Intellectual Property Rights," by Steven Shavell & Tanguy Van Ypersele, Journal of Law & Economics, which concludes that "the intellectual property rights system does not enjoy any fundamental advantage over the reward system"—i.e., a system in which "innovators are paid for innovations directly by the government (possibly on the basis of sales)...."

Just goes to show you, utilitarian thinking leads to statism.

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Update: Forbes.com is now advocating "reward[ing] drug inventors directly, with money raised from regular taxes, publicly imposed and publicly collected." Egads.

Stephan Kinsella is an attorney in Houston, director of the Center for the Study of Innovative Freedom, and editor of Libertarian Papers.

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