Against Intellectual Monopoly

competition
lowered prices and increased quality; the new ideas spread and were improved upon.
The mail-order catalogue, the moving assembly line, the decentralized corporation,
the frequent-flier mile, the category-killer store - none of these radical ideas were
patented." The ultimate monopolistic fate of the American publishing industry is
discussed in the excellent historical review by Hesse (2002).
    25. http://www.riaa.com/issues/piracy/default.asp (accessed, June 10, 2007).
    26. Should our passing reference to Catholic dogmas make the reader curious about
virginitas antepartum, in partu, and postpartum, http://www.answersingenesis.org
(accessed February 23, 2008) is a starting point for delving into the doctrine.
    27. That in the nineteenth century literacy was higher in England than anywhere else
in Europe, with the possible exception of the kingdom of Prussia, we learned from
Cipolla (1969).
    28. Almost all the facts reported here we have learned from Coover (1985), which
we discovered thanks to Mann (2000) and Johns (2002), who, apart from the
information contained in Coover, seems to have also checked a number of original
references.
    29. See Johns (2002), pp. 70-71.
    30. The stories of Hollywood and of the origin of sound recording are from Lessig
(2004).
    31. Lessig (2004), p. 54.
    32. Flint (2002), p. 1.
    33. Reporting of Penthouse's financial problems, and indications that they are due to the
advent of the Internet, are widespread in the press. See, for example, Carr (2002).
Our main source of information about the pornography industrywas Swartz (2004).

     

THREE
Innovation under Competition
    We have just seen numerous examples showing the frenetic pace of creation
in the absence of copyright. Of course, people love to create stories, music,
movies - and even news. So, perhaps you agree that copyright is not such a
big deal, and even that it is not such a good idea. However, although we may
hope to live lives free of boredom in the absence of intellectual monopoly,
what about invention, the driving force of economic growth and prosperity?
Would we benefit from all of the machines, drugs, and ideas that surround
us if not for the beneficent force of patent law? Can we risk the foundation
of our prosperity and growth by eliminating patents? In fact, the evidence
shows that the invention of marvelous machines, drugs, and ideas does not
require the spur of patents. If anything, the evidence shows, it is the other
way around: patent protection is not the source of innovation, but rather
the unwelcome consequence that, eventually, tames it.
    We have already looked at the computer software industry: at its inception
and during its most creative decades, the industry was essentially free of
patents and made almost no use of copyright protection to prevent entry by
competitors. As creativity slowed down, consolidation took place, and a few
large monopolists emerged (one in particular), the demand for copyright
first and patents later grew. Nowadays copyright and patents stand at the
core of the software industry, which has become both monopolized and
substantially less innovative than in the past.' Innovation and creativity
come from the competitive fringe, which has great difficulty hiding behind
"intellectual property" protection. Neither Google nor YouTube nor Skype
is the golden egg of the patents' chicken, and in fact they do not use patents
to retain their competitive advantage. By contrast, Microsoft would have
had a hard time imitating and then catching up with Netscape had the
latter managed to patent the idea of a browser, something it could do today. These are the facts: the great role of patents in giving us modern software is
unadulterated fantasy.

    We shall see now that the story of software is far from unique. Most
successful industries have followed the same pattern: "intellectual property"
plays little role at the pioneering stage when new innovations and better
and cheaper goods are pouring in. Then, when the creative reservoir runs
dry, there is the desperate scramble for the pork that "intellectual property"
provides. Because this is true for every well-established sector, from cars to
electricity, from chemicals and pharmaceuticals to textiles and computers,
and because this is widely documented in every decent history of such
industries, we will not bore readers by going through these most traditional,
if economically crucial, sectors.