The “Austrian Economics Center,” which claims to advocate “the ideas of the Austrian School of Economics” and to promote “a free, responsible and prosperous society,” “has joined the Property Rights Alliance (PRA) in an open letter to WIPO Director Dr. Francis Gurry in support of strong protections for all types of IP”.
A letter from Barbara Kolm, the Center’s Director, announcing this, stated:
As we consider free markets and economic growth in Europe we must reflect on the importance of Intellectual Property (IP) rights. We strongly feel IP is key to fostering global innovation, creativity and competitiveness, particularly in today’s knowledge-based economy.
Risk is the lifeblood of creative and innovative economies. IP rights encourage entrepreneurs and creators to push for new advances and contemplate new creations in the face of adversity. Intellectual property is the engine of economic growth and competitiveness, and helps generate breakthrough solutions to global challenges.
In both the United States and European Union, IP-intensive industries support tens of millions of jobs and contribute trillions of dollars to annual GDP. For example, in the EU alone, IP-intensive jobs contribute to 26% of employment and 39% of GDP. Numerous studies have found that countries with strong IP protection programs have up to 13 times higher GDP than those that do not.
That is why we joined 85 think tanks and institutions globally in signing a letter to global leaders that articulates a framework and guidelines regarding intellectual property. As these issues are discussed in various forums around the world, these guidelines will be a helpful resource.
Advanced societies have long understood that by protecting the proprietary rights of artists, authors, entrepreneurs, innovators, and inventors, they are promoting greater public welfare. The continued protection of these fundamental rights is essential to global innovation, creativity and competitiveness.
The comment that “IP-intensive industries support tens of millions of jobs and contribute trillions of dollars to annual GDP” appears to be lifted from a ridiculous “study” by the Commerce Department that is transparently false and flawed—see USPTO/Commerce Dept. Distortions: “IP Contributes $5 Trillion and 40 Million Jobs to Economy”. As for her comment, “Numerous studies have found that countries with strong IP protection programs have up to 13 times higher GDP than those that do not.”—this makes the obvious error of confusing correlation with causation. (See Intellectual Property as a cause of American Prosperity?)
Also signing the letter are other supposed libertarian, free market, liberal, or Austrian groups, such as the F.A. v. Hayek Institute, Austria; Hayek Institute Romania; Ayn Rand Institute Europe (unsurprisingly); Libertarian Club Libek, Serbia; Liberty Forum of Greece; Italian Students for Individual Liberty; The Liberty Institute, India; Digital Liberty, USA; and many others.
To their credit, none of the Mises Institutes that are part of the Mises Global network, nor the Cato Institute, nor the Cobden Centre, signed this letter. Indeed, American groups seem under-represented on this list, perhaps because this letter concerns IP in Europe, and also perhaps because of the growing awareness over here among free market libertarians that IP is monstrous and utterly incompatible with liberal principles.
But it is especially distressing that the soi-disant Austrian groups (the Austrian Economics Center and the two aforementioned Hayek Institutes) are coming out explicitly in favor of IP, despite the fact that many prominent Austrians, such as Bohm-Bahwerk, Mises, Hayek, Rothbard, Kirzner, and Hoppe have expressed extreme skepticism or outright hostility to IP (or to the empirical/utilitarian approach implicitly being advanced here), plus a number of fellow travelers such as Plant, Machlup and Leonard Read. For example, see:
- Böhm-Bawerk on Patent and Copyright
- Fritz Machlup, U.S. Senate Subcommittee On Patents, Trademarks & Copyrights, An Economic Review of the Patent System, 85th Cong., 2nd Session, 1958, Study No. 15 (text excerpt) [“Report to the US congress from 1958, which also extensively narrates the history of the patent movement and of earlier economic research on this subject. Machlup, a renowned American economist of Austrian origin, is the first author of a large treatise on knowledge economics and other treatises which belong to the teaching repertoire of economics departments in universities. His report cites a wealth of historical and economic evidence to refute most of the reasoning used by lawyers to legitimate the patent system.”]; also Fritz Machlup & Edith Penrose, “The Patent Controversy in the Nineteenth Century,” Journal of Economic History 10 (1950), p. 1
- Ludwig von Mises, Human Action 3rd rev. ed. Chicago: Henry Regnery (1966), chap. 23, section 6, pp. 661–62; see also pp. 128, 364; also Kinsella, “Mises on Intellectual Property“
- Hayek: see Hayek’s Views on Intellectual Property; also Tucker, “Misesian vs. Marxian vs. IP Views of Innovation“; Tucker, “Hayek on Patents and Copyrights“; Salerno, Hayek Contra Copyright Laws
- Arnold Plant, “The Economic Theory Concerning Patents for Inventions,”Economica, New Series, 1, no. 1 (Feb., 1934)
- Murray N. Rothbard, Knowledge, True and False; Man, Economy, and State and Power and Market, Scholars Edition, pp. liv, 745-54, 1133-38, 1181-86
- Cordato and Kirzner on Intellectual Property
- Leonard Read, “On Plagiarism” (1972), reprinted in Kinsella, “Leonard Read on Copyright and the Role of Ideas“
- Hoppe on Intellectual Property; Hoppe Interview on Anarchy and Intellectual Property
Intellectual Property is completely contrary to private property rights, free markets, competition, and liberal principles. All Austrian and free market/libertarian groups should strongly oppose IP, not promote it. If these institutions choose to be wertfrei that is fine, but then they should take no policy positions. Once they enter the field of making policy pronouncements they open themselves up to criticism in this arena. (On a slight tangent: as I concluded in New Rationalist Directions in Libertarian Rights Theory:
Under the three theories outlined above—argumentation ethics, estoppel theory, and the self-contradictions of rights-skeptics—we can see that the relevant participant in discourse cannot deny the validity of individual rights. These rationalist-oriented theories offer, in my opinion, very good defenses of individual rights, defenses that are more powerful, in a sense, than many other approaches, because they show that the opponent of individual rights, whether criminal, skeptic, or socialist, presupposes that they are true. Critics must enter the cathedral of libertarianism even to deny that it exists. This makes criticism of libertarian beliefs hollow: for if someone asks why we believe in individual rights, we can tell them to look in the mirror, and find the answer there.