Thursday, February 02, 2006

Noam Chomsky on Intellectual Property

No one should read the news about the patents, IP, inventors, or "market innovation", without first reading this essay (from

The relation of intellectual property
to personal freedom and its place in
public and academic settings is an
interesting topic with an interesting

The Uruguay Round that set up the
World Trade Organization imposed what is
called a free trade agreement, but which is,
in fact, a highly protectionist agreement
(the US and business leaders being
strongly opposed to free trade and market
economies, except in highly specific ways
beneficial to them). A crucial part of this
agreement was the establishment of very
strong "intellectual property rights". What
this actually means is rights that guarantee
monopoly pricing power to private

For example, consider a drug
corporation. Most of their serious research
and development - the hard part of it - is
funded by the public. In fact, much of the
dynamism of the world's economy comes
out of public expenditures through the state
system, which is the source of most
innovation and development. There is
some research and development in the
corporate system, but it's mostly at the
marketing end. And this is true of the drug
industry. Once the corporations gain the
benefit of the public paying the costs and
taking the risks, they want to monopolize
the profit and the intellectual property
rights. These rights are not for small
inventors. In fact, the people doing the
work in the corporations don't get much
out of them; at best, they would receive a
small bonus if they invent something. It's
the corporate tyrannies that are making the
profits and they want to guarantee them.

The World Trade Organization
proposed new, enhanced intellectual
property rights - patent rights - far beyond
anything that existed in the past. In fact,
they are not only designed to maximize
monopoly pricing and profit, but also to
prevent development. For instance, the
World Trade Organization rules introduced
the concept of product patents. It used to
be you could patent a process, but not the
product, so if some smart guy could figure
out a better way of producing something,
he could do it. The WTO wants to block
this. It's important to block development
and progress in order to ensure monopoly
rights, so they now have product patents.

Consider US history: suppose the
colonies, after independence, had been
forced to accept this patent regime. What
would we Americans be doing now? First
of all, there would be very few of us at all,
but those of us who would be here would
be pursuing our comparative advantage in
exporting fish and fur. That's what
economists tell you is right - pursue your
comparative advantage. That was our
comparative advantage. We certainly
wouldn't have had a textile industry. The
British textiles were far cheaper and better.
Actually, British textiles were cheaper and
better because Britain had crushed Irish
and Indian superior textile manufacturers
and stolen their techniques. They therefore
became the pre-eminent textile
manufacturer, by force of course. In
actuality, the US does have a textile
industry which grew up around
Massachusetts. But the only way it could
develop was by extremely high tariffs
which protected unviable US industries.
Our textile industry developed and later
had spin-offs into other industries. And so
it continues.

We would never have had a steel
industry either, for the same reason: British
steel was far superior. One of the reasons is
because they were stealing Indian
techniques. British engineers were going to
India to learn about steel-making well into
the 19th century. They ran the country by
force so they could take what the Indians
knew and develop a steel industry. In order
to develop its own steel industry, the US
used massive government involvement
through extremely high tariffs and the
military system, as usual.

This system continues right up to the
present, and furthermore it's true of every
single developed society. It's one of the
best-known truths of economic history that
the only countries that developed are the
ones that pursued these techniques. There
were countries that were forced to adopt
free trade and "liberalization" - the
colonies - and they got destroyed. The
sharp divide between the first and the third
worlds has really taken shape since the
18th century. And maintaining this divide
is what intellectual property rights are for.
In fact, there's a name for it in economic
history: Friedrich List, the famous German
political economist in the 19th century,
who borrowed his major protectionist
doctrines from Andrew Hamilton, called it
"kicking away the ladder". First you use
state power and violence to develop, then
you kick away those procedures so that
other people can't do it.

Intellectual property rights have very
little to do with individual initiative.
Einstein didn't have any intellectual
property rights on relativity theory. Science
and innovation is carried out by people
who are interested in it; that's the way
science works. However, there's been an
effort in very recent years to
commercialize it, much the same way
everything else has been commercialized.

So you don't do science because it's
exciting and challenging, because you want
to find out something new, and because
you want the world to benefit from it; you
do it because maybe you can make some
money out of it. You can make your own
judgment about the moral value.
Personally, I think it's extremely
cheapening, but also destructive of
initiative and development.

It's important to note that the profits
from patents commonly don't go back to
the individual inventors. This is a very
well-studied topic. Take, for example, the
well-studied case of computer-controlled
machine tools, which are now a
fundamental component of the economy.

There's a very good study of this by David
Noble, a leading political economist. What
he discovered is that these techniques were
invented by some small guy working in his
garage somewhere in, I think, Michigan.
After the MIT mechanical engineering
department learned about it, they picked up
these techniques and developed them and
extended them and so on, and the
corporations came and picked them up
from MIT, and finally it became a core part
of US industry. Well, what happened to the
guy who invented it? He's still probably
working in his garage in Michigan or
wherever it is. And that's very typical.
I just don't think intellectual property
has much to do with innovation or
independence. It has to do with protecting
major concentrations of power which
mostly got their power as a public gift, and
making sure that they can maintain and
expand their power. And these highly
protectionist devices really have to be
rammed down the public's throat. They
don't make any economic sense or any
other sense.

Neither do I think that intellectual
property should play any role in academic
and public institutions. In 1980 the Bayh-
Dole Act gave universities the right to
patent inventions that came out of their
own research. But nothing comes strictly
out of a university's own research; it comes
out of public funding. That's how the
university can function; that's how their
research projects work. The whole system
is set up to socialize cost and risk to the
general public, and then within that
context, things can be invented. But I don't
think universities should patent them. They
should be working for the public good, and
that means the fruits of their research
should be available to the public.

- Noam Chomsky


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