Patents and Utilitarian Thinking Redux: Stiglitz on using Prizes to Stimulate Innovation

In Patents and Utilitarian Thinking I noted that the innovation-incentivizing rationale of utilitarian arguments for IP could also support the idea of using tax funded awards for “worthy” inventors--and that several actual proposals have been made. Now comes Nobel-prize winning economist Joseph Stiglitz, who argues, in Innovation: A better way than patents, for replacing the patent system with a system for “awarding prizes” for innovations and inventions. I assume the prizes would be taxpayer funded, but can’t see the entire article. Stiglitz notes that “This is not a new idea - in the UK, for instance, the Royal Society of Arts has long advocated the use of prizes. It is perhaps, an idea whose time has come.” The RSA’s various documents (2) on this seem mildly opposed to extending IP but I cannot tell their exact view on prizes (this one speaks of “innovation prize funds” but whether the funds are private or public is hard to tell). Their article “In defence of creativity“ is not a bad summary of some of the problems of various types of IP (patent, copyright, trademark) and the history of how these laws arose. Whether Stiglitz is supporting publicly funded prizes, some of his criticisms of IP law seem pretty good.