Bill Gates: Wrong on Communism and IP

by Stephan Kinsella on November 18, 2024

I’ve long noted how the West, primarily the US, uses its leverage to pressure developing nations to adopt and strengthen intellectual property (IP) protections and adopt international IP treaties, primarily for benefit US corporate interests, namely pharmaceuticals (patent) and Hollywood and music (copyright). This is a form of what I call IP imperialism. It is often done by insisting on local IP protection even in agreements that have nothing to do with the local property law of developing nations, namely bilateral and multilateral free trade agreements.¹ The purpose of a free trade agreement is simply to lower tariffs and barriers to international trade, but the US and other western powers usually insist on developing nations strengthening local IP law even though this has nothing to do with trade but instead is a matter of local property rights.²

Developing nations grudgingly go along, but sometimes they complain, even if those complaining accept the legitimacy of IP but merely want more “balance” or “flexibility.” See, for example, Anselm Kamperman Sanders, “The Development Agenda for Intellectual Property: Rational Humane Policy or ‘Modern-day Communism’?,” in Intellectual Property and Free Trade Agreements, Christopher Heath and Anselm Kamperman Sanders, eds. (Oxford and Portland, OR: Institute of European Studies of Macau, 2007) (pdf), which notes:

More in particular, the mounting pressure from developing nations to view intellectual property not just as a means to guarantee the interests of rightholders, but also to bring about economic development and welfare for the whole of global society.

… In the fall of 2004 Argentina and Brazil submitted a formal proposal to the WIPO relating to the establishment of a new development agenda within WIPO.2 The proposal addresses the ‘knowledge gap’ and ‘digital divide’ that separates wealthy nations from developing nations and calls for a case-by-case assessment of the role of intellectual property and its impact on development.

Whereas in the previous years the prevailing trend has been to harmonise international legal norms through the World Trade Organisation’s (WTO) Agreement on Trade Related Aspects of Intellectual Property (TRIPS Agreement), there is now a clear call for increased flexibility.

… these provisions place the protection of intellectual property rights in the context of a balance of rights and obligations of producers and users of technical knowledge. …

these provisions recognise that WTO Members are entitled to a certain degree of flexibility when it comes to the protection of public health and nutrition, and the promotion of public interest in sectors of vital importance to their socio-economic and technological development. (pp. 3–4)

In other words, WTO is supposed to protect IP but balance the harms strict, Western style IP enforcement puts on developing countries, by giving them flexibility, such as the ability to issue compulsory licenses, access to technology transfers, etc.

However,

the Western world is undermining the Development Agenda by introducing so-called TRIPS-plus obligations through the WTO system and bilateral Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs).

…

The Development Agenda is about finding flexibility in the implementation of TRIPS obligations but also about balancing the monopoly of the intellectual property rightholder with the interests of third parties and of society as a whole. Flexibility is, however, something that sits uneasy with the current trend in intellectual property policy. This trend has been one of maximizing rights to stamp out piracy and one of harmonization to provide a one-size fits all level playing field of rights. (p. 4–5)

No surprise. Sanders then quotes Bill Gates, who “In a recent interview … even went so far as to say that restricting intellectual property rights is tantamount to communism.” As he said:

In recent years, there’s been a lot of people clamouring to reform and restrict intellectual-property rights. What’s driving this, and do you think intellectual-property laws need to be reformed?

No, I’d say that of the world’s economies, there’s more that believe in intellectual property today than ever. There are fewer communists in the world today than there were. There are some new modern-day sort of communists who want to get rid of the incentive for musicians and moviemakers and software makers under various guises. They don’t think that those incentives should exist.

And this debate will always be there. I’d be the first to say that the patent system can always be tuned — including the US patent system. There are some goals to cap some reform elements. But the idea that the United States has led in creating companies, creating jobs, because we’ve had the best intellectual-property system — there’s no doubt about that in my mind, and when people say they want to be the most competitive economy, they’ve got to have the incentive system. Intellectual property is the incentive system for the products of the future. (( Michael Kanellos, “Gates: Restricting IP rights is tantamount to communism,” CNET News.com (Jan. 06, 2005). ))

It’s a shame that Sanders and others can only dimly see the real problem: that IP law is unjust and should be abolished. Even those who sense something is wrong with the provisions foisted on developing countries by bilateral and multilateral trade agreements (see, e.g., www.bilaterals.org) criticize the wrong things about free trade and free trade agreements. But they all sense something is unfair.

In any case, Gates’ comments are ironic on many levels. First, he used to understand how patents impede innovation: “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.”³ But now Microsoft is just a huge rent-seeking IP bully.⁴

Second, the assumption is that patents are pro-west, part of capitalism, and that socialism is opposed to patents. This is not true either. Most countries, including socialist ones, have IP law, even if the “capitalist” West keeps pushing them to strengthen IP protections.⁵ This should not be a surprise since IP is inherently socialistic as it systematically violates property rights.⁶ IP rights are not part of capitalism; it is one of modern “capitalism”‘s socialistic aberrations.