Book Review: Against Intellectual Monopoly

Anyone who has taken a seminar from me knows I attack “Intellectual Property Rights” (IPR) as a bad idea for small business. I draw on what I learned from the highly successful people I worked for long ago, and what has proven true being self-employed myself these last 25 years. As a practical matter far from harming my business, eschewing IPR gives me a competitive advantage when competing on design as opposed to monopoly or price.

I lay out this view in the morning session, and then follow up in the afternoon, while directly addressing contracting designers, with the views of a patent attorney by the name of Stephan Kinsella out of Houston. It was a delight years ago to read his critique from a patent attorney’s point of view, with which I concurred. He is more radical (and right) than another lawyer who is somewhat anti-IPR, Lawrence Lessig, the Stanford Law professor. I’ve developed my arguments over time to the point I was invited to spend an hour making my argument to 17 patent attorneys at a leading IP firm in Seattle last Fall. The IPR lawyers know change is coming, and are working to correct the abuses.

With business and law advancing arguments against IPR, that left academia to round out the condemnation. Washington University professors Michelle Boldrin and David Levine do just that in their book AGAINST INTELLECTUAL MONOPOLY. These are not some flakes being contrarian to get attention, they are regime intellectuals and their book is endorsed by three Nobel Laureates and Lawrence Lessig.

Business in USA is split between the Hamiltonian and Jeffersonian ethics, one loving fascism and the other loving freedom. Obviously with war and economic depression and shortages the Hamiltonians have had the upper hand, so it is very welcome to see a central tool of the bad guys in the USA economy, IPR, being taken apart both by law and academia.

Lawyers practice law and academics practice theory, neither of which seem to be very well informed about how business happens. In some ways their arguments are far more important, since they influence the thinking of so many people. Although it is unstated, AGAINST INTELLECTUAL MONOPOLY proceeds from the theoretical basis laid down by R H Coase as he has laid out in THE FIRM, THE MARKET AND THE LAW. At some point I will review that enormously influential book, but suffice it to say Coase is a Hamiltonian. Essentially, their guiding light is “does policy result in aggregate in a net increase in prosperity.?” By their analysis, the answer is no, IPR is a net deficit. For this conclusion, the book is most welcome, and should be read for the examples that contradict the “pro-IPR” arguments. Jeff Tucker at the Mises Institute has read the book and wrote a series of essays that might be a companion piece that you should read alongside the book.

AGAINST INTELLECTUAL MONOPOLY carefully takes apart the IPR regime as it is, but says nothing about what might be if we were to rid ourselves of it completely. You’ll be glad when you put the book down that you’ve been disabused of the notion that IPR is a good thing, especially the nonsense that we’d have no new medicines without patent monopoly to recover the up front costs. But what should we do? Coase was flexible on policies, because the acid test for his followers is the vague “net increase in wealth.” their solution is wishy washy.

That leaves the task of someone writing a book that rejects IPR from a free market point of view, laying out what we would have absent intellectual property rights, and give any startup competitor a road map for crushing those who want to compete by monopoly, doing good while doing well.

I’m working on it.

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