1) Michel Chevalier on the cumulative nature of innovation
Michel Chevalier (1806-1879) was one of the most brilliant of the French Classical School of Political Economy, rightly called by Dr. Joseph Salerno the “Bastiat’s school”. As a minister during the second empire, he led the negociations that resulted in the Cobden–Chevalier Free-Trade Treaty of 1860. Michel Chevalier is, however, less well-known for his contribution to the intellectual-property debate.1 In contrast to Jean-Baptiste Say, Gustave de Molinari, Charles Coquelin, and most other French economists. Michel Chevalier fiercely opposed the patent system on economic grounds. Furthermore, having been an engineer, Michel Chevalier had a broad knowledge of new technologies. Thus, he cited numerous empirical examples of inventions and technical problems with patents. For those who want to understand Chevalier’s ideas in greater detail, you can check my article on “Michel Chevalier’s Forgotten Case Against the Patent System”. If you read French, Michel Chevalier’s book was republished by the Institut Coppet and available for free on their website.
By: Louis Rouanet
This article first appeared at Mises.org
[RELATED: A Libertarian Critique of Intellectual Property by Butler Shaffer]
Chevalier understood that innovation is above all a cumulative process. Initial innovations are never perfect, and must be complemented by further innovation in order to reach their full potential. Thus, giving privileges to the first innovator will destroy this process, leading to fewer inventions, not more. He wrote in his book Les Brevets d’Inventions (1878):
Every industrial discovery is the product of the general ferment of ideas. Each discovery is the result of internal work that was accomplished with the support of a large number of successive or simultaneous collaborators in society, over centuries. Industrial discovery is far from offering the same degree of individuality as compared to most other productions of the mind which require a relationship to the author. This is why it is hard to claim being the originator.
2) Michel Chevalier on patent trolls
Michel Chevalier was also a forerunner in understanding the terrible effect patent trolls have on innovation and economic progress:
The institution of patents has resulted in an interloper industry that renders no service, and that on the contrary is harmful to society because it lives from usurpations and abuses. The provisions of our legislation that allow and even require seizure and confiscation are in the hands of who wants them sometimes formidable weapons against the true inventors, sometimes against manufacturers or retailers. These smugglers are lurking like the hunter on the prowl. Once an interesting invention occurs, they vigorously strive to ensure its benefits and operation by a patent hastily put together, before the inventor is aware. If they have been outpaced and the patent has been granted, they do not consider themselves as beaten; by additions that the practice would be indicated to the least distinguished engineer, or by artfully drafted changes, they allow themselves to get a patent, to interpose as birds of prey between the patentee and the public, and to require tributes on both sides
Chevalier insisted on the importance of annihilating the patent system. In 1863, he wrote in a letter that, “all friends of industrial and social progress must work together to rescue the industry of obstacles, obsolete remains of the past,” adding that, “patents must disappear first.” After helping to end the protectionist system through the Cobden-Chevalier treaty of 1860, his major concern was to end the patent system. Chevalier’s compelling arguments against the patent system have been ignored, but deserve to be rediscovered.
3) Charles Coquelin on the inexistence of intellectual property
Charles Coquelin was another brilliant French classical liberal who is mostly known for his outstanding work on free-banking. Hayek was supposed to write the introduction to the English translation of his book on banking but this project was unfortunately not completed. Coquelin was also the editor of the first economics dictionary, theDictionnaire d’Economie Politique (1853). In it, he wrote the entry on patents were even though he defends the existence of patents, he refuses to call them property. Coquelin’s argument in favor of patents is consequentialist but he at least as the merit to see them for what they are: a privilege. As he puts it:
It is not true that the inventor is, in the ordinary meaning of the term, the owner of the industrial process he discovers; he is only the first explorer. The right to acquire it is not a property right, it is a priority right, nothing more; and this right has its natural limit in the corresponding right of all other industrial competitors, to walk in turn on the path he has committed the first.
4) Thomas Jefferson on ideas and scarcity
In a letter written by Thomas Jefferson to Isaac McPherson in 1813, the former express beautifully the idea that ideas are not scarce:
If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.
5) Stephan Kinsella on ideas and scarcity
One of the most accomplished modern libertarian work on intellectual property is certainly Against Intellectual Property by Stephan Kinsella.
Thus, property rights must have objective, discernible borders, and must be allocated in accordance with the first occupier homesteading rule. Moreover, property rights can apply only to scarce resources. The problem with IP rights is that the ideal objects protected by IP rights are not scarce; and, further, that such property rights are not, and cannot be, allocated in accordance with the first occupier homesteading rule.
6) Boldrin and Levine on intellectual monopoly as the new mercantilism
Boldrin and Levine’s book, Against Intellectual Monopoly (2012), is in my opinion the most compelling case against intellectual property. They reveal intellectual property for what it is: an unwarranted mercantilist and inefficient policy.
The contemporary variation of this economic pest [mercantilism]is one in which our collective interest is, allegedly, best served if we buy goods cheap and sell ideas dear. In the mind of those preaching this new version of the mercantilist credo, the World Trade Organization should enforce as much free trade as possible, so we can buy “their” products at a low price. It should also protect our “intellectual property” as much as possible, so we can sell “our” movies, software, and medicines at a high price. What this folly misses is that, now like three centuries ago, while it is good to buy “their” food cheap, if “they” buy movies and medicines at high prices, so do “we.” In fact, as the case of medicines and DVDs prove, the monopolist sells to “us” at even higher prices than to “them.” This has dramatic consequences on the incentives to progress: when someone can sell at high prices because of legal protection from imitators, they will not expend much effort looking for better and cheaper ways of doing things.
7) Kal Raustiala and Christopher Sprigman on the knockoff economy
Kal Raustiala and Christopher Sprigman’s book The Knockoff Economy is a brilliant empirical exposition of the innovative process as a cumulative one. It is hoarding ideas, not imitating which is harmful:
The monopoly theory is hostile to imitation because imitation, it is thought, inevitably undermines later rewards. […]But is this really the case? We have examined a wide array of innovative industries that, in one way or another, challenge this basic premise. Fashion, food, fonts, football, financial innovations—in all of these creative areas, and more, copying is free and often legal. Sometimes copying is simply permitted as a matter of practicality. But in all, innovations are open to imitation. By the lights of the monopoly theory, these industries should be only weakly creative. Yet the opposite is true: these industries are vibrantly creative.
8) Murray Rothbard against the value judgments of the pro-patent economist
Murray Rothbard in Power and Market criticize the pro-patent economists for adopting a normative judgment. To say that we need patent implies that the market forces are not sufficient to furnish the optimal amount of innovation. But how can we know what is the optimal level of innovation in the first place?
The market itself provides an easy and effective course for those who feel that there are not enough expenditures being made in certain directions. They can make these expenditures themselves. Those who would like to see more inventions made and exploited, therefore, are at liberty to join together and subsidize such effort in any way they think best. In that way, they would, as consumers, add resources to the research and invention business. And they would not then be forcing other consumers to lose utility by conferring monopoly grants and distorting the market’s allocations. Their voluntary expenditures would become part of the market and express ultimate consumer valuations. Furthermore, later inventors would not be restricted. The friends of invention could accomplish their aim without calling in the State and imposing losses on a large number of people.
9) Hayek and patents are a fatal conceit
Hayek made several anti-IP comments in his works. He was already septic toward IP in his book The Constitution of Liberty. Some pro-IP think tanks who praise Hayek as the god that did not fail could learn much from Hayek anti-IP stances.
In The Fatal Conceit, he writes:
The slow selection by trial and error of a system of rules delimiting individual ranges of control over different resources has created a curious position. Those very intellectuals who are generally inclined to question those forms of material property which are indispensable for the efficient organisation of the material means of production have become the most enthusiastic supporters of certain immaterial property rights invented only relatively recently, having to do, for example, with literary productions and technological inventions (i.e., copyrights and patents). […]
Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopedias, dictionaries, textbooks and other works of reference could not be produced if, once they existed, they could freely be reproduced.
Recently, Matt Ridley in his outstanding book The Evolution of Everything (2015) applied Hayek’s evolutionists arguments to innovation in order to criticize government funded research and the efficiency of the patent system, proof that more than 20 years after his death, Hayek’s legacy is still relevant and deserves to be expanded in other field of research, especially when it comes to intellectual property.
This article first appeared at Mises.org