Patents and Intellectual Property Rights

Can humans afford to create artificial scarcity?

Life on Earth is hard. It is so, in part, because of scarcity. Goods and services are scarce because there is not enough for everyone to have as much as they want without giving up something else they also want. This is the meaning of the economic term "scarcity," which is not the same thing as rarity.

Economists say that goods and services are scarce for two reasons. First, because land, labor, and capital --- natural, human, machine resources --- are scarce. But the whole idea of scarcity is more subtle than simple rarity of resources. Second, the nature of time and space alone make scarcity unavoidable, rather like the law of gravity, regardless of what politicians and other government operatives say.

Two objects that have mass cannot occupy the same space at the same time, which makes particular spaces scarce, even though space is not rare in the least. For example, the same corner of real estate in downtown Manhattan, a particular space, cannot be be owned, occupied, and used as a gas station and a department store by two different businesses at the same time. And of course, humans cannot both ride a bike and swim in a lake at the same time, which makes time scarce for humans, putting aside the fact the human lives are finite.

The best we humans can do is mitigate scarcity. As it happens, humans have been spectacularly successful mitigating scarcity over the most recent 250 years of human existence on Earth. We have been so spectacularly successful by creating ever more advanced technologies that allow us to produce more goods and services with fewer scarce resources.

The previous 100,000 to 200,000 years of human existence on Earth were truly horrible for humans, with the vast majority of everyone existing hand to mouth in extreme deprivation and squalor, spending most waking hours trying to stave off starvation, ahead of some other malady like disease or trauma claiming their lives sooner.

In such a world of scarcity, it is unimaginable (at least for me) that humans would ever abide and accept creation of artificial scarcity by government operatives. And yet, patents and so-called intellectual property rights do exactly that. Make no mistake about it; patents and intellectual property rights are the creation of government operatives, and neither would exist without the force of government operatives.

So far as I know, no one has ever demonstrated with credible evidence that innovation is or ever has been curtailed or impeded or hindered by the absence of patents and intellectual property rights. So far as I know, no author failed to write and no artist failed to create art in the absence of copyright laws. No inventor avoided inventing and no software engineer refused to write code for lack of patents or intellectual property rights. As a matter of historical fact, just the opposite seems to be true. Writers write, artists create, inventors invent, and software engineers engineer anyway. They do so because it is what they want to do.

The notion that limiting wide and immediate dispersion of information is a good and necessary thing for human prosperity, because limiting is claimed to generate more innovation, is spurious, undemonstrated, and reprehensible, in my opinion. We appear to have evidence to the contrary, but those who want the benefits of artificial scarcity generated by patents and intellectual property rights have got their way from government operatives, nonetheless.

Some economists argued in the past that privately built lighthouses would not happen, due to what is called the "free-rider' problem. People who do not pay to produce a lighthouse, nor pay to receive the benefits of a lighthouse cannot be excluded from using a lighthouse. Lighthouses meet the necessary conditions of what economists call “public goods,” which are these: (1) non-rivalry: consumption of the good by one person does not reduce the amount available for others, and (2) non-excludability: it is not feasible to exclude individuals from benefiting from the good, even if they do not pay for it. True public goods are rare; the only other one that I can think of is national defense. See if you can think of another.

Government would have to build lighthouses, some economists and other theorists argued, which government should do, it has been said, to maximize “social benefit." Put aside that there is no meaningful definition of the term “social benefit,” since society is a nonexistent collective noun. Only individuals experience benefit.

And of course, governments would have to tax everyone to build lighthouses. But alas, private individuals did in fact build lighthouses, even though there was no way to make free-riders pay for their use. Why? It's really easy to understand, if you think about it. Ship owners did not want their own ships to founder on the rocks and shoals, and they simply did not care that there would be free riders. Private individuals built lighthouses for their own benefit. If others also benefitted, so be it.

Jonas Salk invented a vaccine for polio, never seeking or receiving a patent or remuneration for his innovation. He did so because it gave him personal value to create the vaccine. In colonial America, private subscribers in Philadelphia voluntarily gave money to pave city streets, even though there was no way to make free riders pay. They did so because they could, and they gained value by doing so, never mind free riders.

Pharmaceutical companies claim that patents are necessary, else new drugs will not be forthcoming. And yet, talented researchers will develop new drugs without patents. How do we know? Because they have. Research for new drugs is not conducted only by pharmaceutical companies seeking profit, which is a commendable act. Academic research also culminates in drug innovation, which research is conducted by scientists who will continue doing such research regardless of whether new drugs earn them or their universities one thin dime, just as Jonas Salk did.

Is it not unreasonable to accept the claims of would be patent holders who say patents and intellectual property rights are necessary to incentivize innovation? We have substantial evidence that innovators will innovate regardless of patents or intellectual property rights. Many innovators never seek patents, hoping instead to earn handsome income from their innovations, simply by being first to market, branding, and skillful marketing. Kleenex remains a top facial tissue product, despite the lack of a patent.

Putting aside the primary argument rehearsed just above, I also want to mention that patents and intellectual property rights deny the competing rights of millions of other people to use their owned land, labor, and capital however they choose. Millions are compelled by government operatives to abstain from duplicating particular arrangements of land, labor and capital by patent law and copyright law. Why do we allow ourselves to be so compelled, resulting in both articifical scarcity and immoral compulsion from government operatives?

To be effective, patents and intellectual property rights must be enforced with force and threats of force. Using force and threat of force to compel others is wrong for humans. I have written about that topic here. But this outcome is a minor side effect that is given short shrift by advocates of patents and intellectual property rights, perhaps because so many people think morality is relative, cultural, situational, and ignorable.