Mackaay, “Economic Incentives in Markets for Information and Innovation”

by Stephan Kinsella on November 22, 2025

Ejan Mackaay, “Economic Incentives in Markets for Information and Innovation,” Harv. J. L. & Pub. Pol’y 13, no. 3 (Summer 1990): 867–910. This was part of the “Symposium: Intellectual Property” published in vol. 13, no. 3 (Summer 1990) of the Harvard Journal of Law & Public Policy, which also included:

Nance, Dale A. “Foreword: Owning Ideas.” In “Symposium: Intellectual Property.” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990): 757—74
Bouckaert, Boudewijn. “What is Property?” In “Symposium: Intellectual Property.” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990): 775–816
Tom G. Palmer, “Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects.” In “Symposium: Intellectual Property.” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990): 818–825
Mackaay, Ejan. “Economic Incentives in Markets for Information and Innovation.” In “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990): 867–909
Meiners, Roger E., and Robert J. Staaf. “Patents, Copyrights, and Trademarks: Property or Monopoly?” In “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990): 911–940

The pieces in this issue, which I regard as a classic, are excellent. Three of the pieces or authors—Nance, Bouckaert, Palmer—are critical of IP. Mackaay is not opposed to IP¹ but his piece does have some interesting insights (admissions?):

Scholars generally think of intellectual property rights, as incentives to produce and trade innovative ideas. Current wisdom, embodied for instance in the Encyclopaedia Britannica, ranks them among property rights in general, as indeed their title suggests. The idea of ranking intellectual rights as property goes back to the French Revolution. In replacing a system of privileges granted in the discretion of the authorities with non-discretionary rights to exploit inventions or literary creations, the proponents of the new legislation of the time insisted that:

of all forms of property, the least susceptible of being contested is without question that of the works of a man of talent or genius; something must astound us: it is that an Act has been necessary to recognize this property and to ensure its exercise.

The view of intellectual rights as property rights did not survive long even in France, since, as Roubier notes, in the Act of 5 July 1844 on patent and the Act of 14 July 1866 on copyright, the legislature systematically refrained from using the term property. This perhaps reflects the doubts that economists were voicing about the nature of the intellectual rights, some considering these rights as mere state-granted monopolies.² In the Twentieth Century, however, legislation concerning patent, copyright, trademark and industrial design has been expanded continually. International treaties have stretched the reach of these rights across national boundaries.³

Recent advances in reprography and computer technology have once more brought the issue of the theoretical status of intellectual rights into question. These advances greatly facilitate and reduce the cost of copying information from one medium to another. Information has become less dependent on the vehicle through which it is conveyed; it has become “purer.”⁴

The enforcement of intellectual rights has become correspondingly more difficult. The legal system has responded with new methods of enforcement. An example of these new enforcement methods is the judicially created Anton-Piller order, allowing a copyright holder, upon an ex parte hearing, to search the defendant’s premises for offending material and to seize it. The remedy has been granted regularly in the realm of software piracy, although only in exceptional circumstances and against “commercial” pirates. The remedy makes one realize that to enforce literally the prohibition of copying music onto cassettes, films onto video tapes, and computer programs onto diskettes, it may be necessary to intrude into people’s privacy in frightening ways. Inasmuch as they invite such aberration, intellectual rights would seem to be incompatible with property and other fundamental rights.