[Michael Perelman is a longtime student of that complex of questions which
goes under the heading of science policy, intellectual property rights, and
the social relations and processes of science and technology. Science is a
mass organised activity at the heart of large-scale production and is crucial
to capitalism's future. It has alwasy been a central concern for revolutionary
political theory and the Marxian analysis iof capitalist crisis. Michael
Perelman is completing a major work on the subject, and here are two draft
chapters from key concluding sections of the work.
Perelman believes "that the current regime of excessively strong intellectual
property rights undermines science, corrodes the university environment,
creates an explosion of litigation, and warps the economy, especially by
accentuating the maldistribution of income. All of these effects will cause
the rate of economic growth to deteriorate....In contrast, intellectual
property rights represents a promise rather than a problem in most
commentaries. Indeed, most people can appreciate the incredible array of new
technologies made available to the public almost daily. Given this continuing
flow of benefits from new technologies made available to those who can afford
them, many people naturally would flinch from any suggestion to interfere with
this system [but] I have attempted to show that the real threat to the pattern
of rapid technological progress comes from the intense application of
intellectual property rights rather than any challenge to intellectual
property."
Mark]
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How Corporate Power Affects Intellectual Property
The new regime of intellectual property set a dynamic process in motion. Over
and above exacerbating the maldistribution of income and wealth and
reinforcing the powers of corporations, it changes the entire political,
social, and legal environment in a way that makes this bad situation worse.
Think back to the earlier age in which Abraham Lincoln rhapsodized about the
importance of the individual inventor. Lincoln's sincerity in this regard
might be open to question. After all, as an attorney Lincoln represented the
railroads, which were notorious violators of the intellectual property of
independent inventors. Nonetheless, the patent law at the time embodied a
defense of the rights of the independent inventor vis-`-vis the corporations.
Once the courts bowed to the growing power and influence of the railroads and
the other major corporations, the courts granted corporations all the
constitutional rights of an individual person. Suddenly, as described
earlier, corporations began to amass an enormous array of intellectual
property rights, more often than not, for anticompetitive purposes.
Within this environment, the profits associated with intellectual property
soared, as did the income and wealth of those who controlled the corporations.
The standard used to gauge the appropriate reward for the owner of
intellectual property no longer was that of the modest income of a well-paid
professional, but rather an income hundreds of times more lucrative than what
an ordinary worker can earn.
Given the enormous stakes involved, the major players in this game began to
use their wealth and influence to subvert the political process in an effort
to the rules even more favorable to their own interests. In addition, they
also gained control of the major organs of science, including much of higher
education.
As a result, the hypothetical individual, who purportedly is the beneficiary
of the system of intellectual property, becomes irrelevant. Supposedly, the
individual has an interest in the system as a consumer, who is expected to
benefit from the flow of new science and technology. Unfortunately, as I have
shown, in the long run, the current system of intellectual property is
probably a hindrance rather than an incentive to the development of improved
technologies.
Intellectual property rights introduce still another perversion into modern
society. Supposedly, what justifies the enormous gap between the income of
the Silicon Valley executive and the janitor who cleans the offices for
minimum wage is the difference in their technical skills. To the extent that
the Silicon Valley executive pursuit of intellectual property rights raises
the price, the janitor's children will have less exposure to computers or
software. By stunting this aspect of their education, the gap between the
classes will become more extreme.
The government, the press, and even industry leaders bemoan the corrosive
influence of the digital divide between the rich and poor, but to the extent
that they applaud the strengthening of intellectual property rights, they
contribute to the ever-widening digital divide. In addition, to the extent
that the government musters resources for the protection of intellectual
property rights, budgets for pressing social needs will be neglected, further
diminishing the opportunities of the less privileged sectors of society.
The Law of Unintended Consequences
The idea that public intervention might improve the development of technology
runs counter to the widespread distrust of government intervention. Today,
trust in the efficacy of Adam Smith's invisible hand has become an article of
faith for many economists.
Smith proposed that individual people seeking their own advantage create
outcomes quite unlike what they had intended. Unfortunately, economists,
following in this tradition, unquestionably accept that in a competitive
market the result will be efficient without giving much consideration to the
special conditions that must hold for that theory to have any validity.
For example, Smith's theory assumes away behaviors that can affect other
people, except through the operation of the price system. Consequently, in a
Smithian world, firms do not emit pollution that affects people in any way.
Nor do scientists perform research that affects the value of what other
scientists are doing. In a Smithian world, either no long-lived capital goods
exist or, if they do, then investors have sufficient information about the
future to allow them to invest efficiently. Finally, public goods do not
exist in the context of Adam Smith's economic theory.
In recent years, as economics became more mathematically sophisticated, a few
economists could no longer reconcile the sterility of economic models that
required such extreme assumptions. One critical theory that gained wide
circulation concerned history of the layout of the simple typewriter keyboard
as told by Paul David, the exceptionally insightful economic historian from
Stanford University I had referred to in discussing the history of scientific
societies.
The first part of David's analysis is relatively uncontroversial. Early
typewriters tended to get stuck if the typists struck a sequence of keys
without a sufficient delay between each individual keystroke. As result,
manufacturers produced a typewriter keyboard intentionally designed to slow
down the typist. The controversy begins at the point where David insists
that, as typewriters became more efficient, the need to slow down the speed of
typing disappeared, but the layout of the keyboard remained unchanged. The
sheer inertia of this technology was sufficient to prevent the industry from
manufacturing keyboards that could have offered substantially more
productivity (David 1985).
Soon thereafter, Brian Arthur, a Stanford colleague of David's, published an
article that won him broad acclaim in the media. Arthur extended the keyboard
story to a number of different technologies. According to Arthur, industry
commonly gets locked into technologies that might seem to be the most
efficient at the time of their adoption, but which, in the long run, represent
an inferior technological choice (Arthur 1989).
Arthur's work echoed the iconoclastic economist, Thorstein Veblen, who, one
half century before, had attributed Britain's loss of economic leadership to
its earlier industrial success. Veblen argued that when Britain first
industrialized, it created a complex network of industrial structures. As a
result, replacing any single part of this structure became very expensive
since it required further changes in other parts of the network. This inertia
left Britain with factories and transportation systems that could not
accommodate more modern technologies (Veblen 1915).
Newly industrialized nations, such as the United States, faced no such
difficulty. They were able to adopt the most modern technologies without
having to incur such supplemental expenses. Thus, the British were "paying
the penalty for having been thrown into the lead and so having shown the way"
(Veblen 1915, p. 132).
While Veblen's work elicited only a few interested comments, the more modern
version of this theory provoked a firestorm of controversy among economists
(see, for example, Liebowitz and Margolis 1990; and 1997). In effect, rather
than accepting the possibility that the market might not always lead business
to move the economy in the most efficient direction, conservative ideologues
reverse the argument, invoking the principle of unintended consequences. They
insist that anything public actions taken in an effort to control the economy
is more likely to do harm than good.
The conservatives caution the public to abandon all efforts to control its
destiny and allow the wisdom of the marketplace alone to decide what is best
for society. In effect then, markets lead to good unintended consequences,
while government actions lead to bad unintended consequences. An editorial
page article in the Wall Street Journal singled out Brian's Arthur's theory
for laying the judicial groundwork for the government's antitrust suit against
Microsoft. The author took strong exception to Arthur's suggestion that
Microsoft's software might not be of the highest quality (Jenkins 1996).
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