For my friend George Reisman, I have hosted his Program of Self-Education in the Economic Theory and Political Philosophy of Capitalism lectures as well as his Pepperdine lectures on my site and youtube until he can get his old site Capitalism.net refurbished. He’s Objectivist so is in favor of IP (see Capitalism, excerpts below). Naturally, we disagree on this issue; see Trademark Ain’t So Hot Either…; Trademark and Fraud; Discussion with George Reisman; Trademark and Fraud; also The Problem with “Fraud”: Fraud, Threat, and Contract Breach as Types of Aggression). From Macro Lecture 14A Inflation I [mp3]:
He states:
the consequence of that is that Capital will move from the low profit lines into the high profit lines that expands production in those lines in order to find buyers for the additional goods what has to happen to prices play come down when costs fall unless it’s a patented process or a secret technology in fairly short order prices are going to come down to correspondwith the lower costs and so if we had a wage rates broadly falling that would reduce costs and prices would decline commensurately when you have improvements in the productivity of Labor prices also decline and perhaps the most dramatic example in our own experience is the prices of a megabyte or a gigabyte of a hard drive space or of ram what’s happened to these things over the last 20 years prices diminish tremendously …
Similar comments in Capitalism:
From ch. 2.1:
While patents on new inventions and copyrights on other new intellectual creations greatly contribute to the production of wealth by providing incentives to the development of new ideas underlying the production of wealth, neither the ideas themselves nor the patents and copyrights which protect and promote them are wealth. The ideas are preconditions to the production of wealth, but not wealth itself. And the patents and copyrights derive their market value from the fact that they make it possible for the intellectual creators of new and additional wealth to benefit from their contributions by temporarily limiting the increase in wealth that their intellectual contributions bring about. When patents and copyrights expire, the supply of wealth further increases at the same time that the market value of the patents and copyrights vanishes.”
… wealth must be distinguished from the wider concept of property possessing market value. Property possessing market value that is not itself wealth exists, as we have seen, in such forms as various legal rights to wealth, such as stocks and bonds, and in various legal rights, proper or improper, to restrict or limit the production of wealth, such as government licenses and patents and copyrights. Property that is not wealth—that, indeed, is the destroyer of wealth—but that nonetheless possesses market value is what exists in the case of slavery.
The meaning of wealth depends on the meaning of goods. More or less following Menger, the founder of the Austrian school of economics, we can define goods—economic goods—as things which are recognized as capable of satisfying human needs, requiring the expenditure of labor or effort in order to be produced or enjoyed, and over which one has sufficient command gainfully to direct them to the satisfaction of one’s needs.7 In other words, goods are things actually capable of benefiting us, that is, of doing us personal good, provided that we make the necessary effort to secure their benefit. Our wealth is the collection of material goods which we possess or against which we hold enforceable claims.
ch. 10.3, p. 388:
Patents on new inventions, copyrights on books, drawings, musical compositions, and the like, and trademarks and brandnames, do not constitute monopolies.
… None of these rights represent monopoly, however, because none of them is supported by the initiation of physical force. In all of these cases, the government stands ready to use physical force in defense of a preexisting property right established either by an act of personal creation or by the fact of distinct identity. A new invention, or book, drawing, or song, and so forth is the product of a definite individual or group of individuals and belongs to him or them on the same basis that a farmer’s crop or a corporation’s product belongs to him or it—namely, the right of having created it.
… Thus, contrary to monopoly, patents and copyrights, and trademarks and brandnames, operate to increase supplies and reduce prices, while their abolition would result in the opposite. Indeed, their existence must be considered a requirement of the freedom of competition, and their abolition as constituting the establishment of monopoly!
See also ch. 10.8, p. 417.
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