Tepper & Hearn, The Myth of Capitalism: Monopolies and the Death of Competition: Missing the Point

by Stephan Kinsella on December 20, 2025

These geniuses seem to attack capitalism and lack of competition, and identify some extensions or uses patent and copyright (intellectual property), but they do not condemn IP per se. No one can ever clearly see the problem or strike at the root. https://t.co/jPzMozEwFn…

— Stephan Kinsella (@NSKinsella) December 21, 2025

Jonathan Tepper and Denise Hearn, The Myth of Capitalism: Monopolies and the Death of Competition (2019)

These geniuses seem to attack capitalism and lack of competition, and identify some extensions or uses patent and copyright (intellectual property), but they do not condemn IP per se. No one can ever clearly see the problem or strike at the root.

See Grok: They do not oppose patent or copyright law. They criticize “extensions, abuses, and expansions of these laws as contributors to monopoly power (e.g., endless lobbying for longer terms, “patent trolls” in software, and regulatory barriers delaying generics after expiration), they explicitly support the core idea of granting limited-time protections to reward innovation and creativity. Their policy recommendations focus on reforms like enforcing strict time limits without extensions, encouraging competition post-expiration, and removing protections only in abuse-prone areas such as software and business methods.” Grok.

Some radicals. Just like the craven pro-IP statists in Congress–all of them, literally all of them–who whine about high pharma prices but do not suggest an obvious fix: abolish patents on drugs. Bernie Sanders never suggests this. Here is what they say on p. 246:

Patents and Copyright

To promote competition, patents and copyrights must only be granted for a limited time without extension.

Uh, they are granted for a limited time and cannot be extended. Stupid suggestion.

Innovation and creativity must be rewarded, but only for a limited time.

Why just the law grant IP rights, again? I see no coherent reason or argument.

Extending the life of patents, even through bureaucracy and regulation, is the granting of a private monopoly and the death of competition.

It’s the grant of patents that grants monopoly privilege and hampers competition, not their extension, genius.

Competition must be encouraged once patents expire.

If there is no patent, once it expires, you don’t need to “encourage” it, since the patent is no longer in force to block it! The question is why you would want there to be a patent in the first place.

Regulation, bureaucracy, and legal prohibitions have made it difficult if not impossible for many patients in the United States to get access to cheap, competitive generic drugs even after patents expire.

What about during the term of the patent? Why should the prices be so high then?

Faster approval of generics, and the importation of generics from Canada and Europe must be allowed to promote competition.

Duh.

Congress should remove patent protection for areas that are rife with abuse.

Abuse is not the problem. Patent Trolls, Bad Patents, and Incompetent Examiners are Not the Problem. The problem is use not abuse. As Burke said, “The thing! the thing itself is the abuse!”

Almost half of all patents are for things like software and business methods that have been abused by “patent trolls” who drive up costs for producers and consumers.

Okay. So if you want to end business method and software patents, why not other ones?

This is a shame since elsewhere they identify some actual problems with IP, e.g. p. 174:

We can thank Walt Disney in part for the dire state of US patent laws. Even though Mickey Mouse is now almost 90 years old and should have long ago entered the public domain, every time Mickey’s copyright is about to expire, Disney spends millions lobbying Congress for extensions. Over the years, the lifetime of a copyright has become longer and longer. The latest judgment occurred in 1998, when Congress passed the Copyright Term Extension Act, which increased ownership from 75 to 95 years. The Act became known as the Mickey Mouse Protection Act.

The supreme irony is that while Disney gets perpetual extensions in copyright legislation, more than 50 of its own films come from tales and stories in the public domain: Alice in Wonderland, Aladdin, Frozen, and The Lion King. If only Hans Christian Andersen could have lobbied Congress, he could also endlessly extend his copyright.27

Endless extensions of patents and copyrights impose a burden on society. In the words of Brink Lindsey and Steven M. Teles, who have written extensively on the effects of copyright law, “The current state of intellectual property law may be bad for economic growth overall, but it is highly effective at showering riches on a favored few.” They note that “in the entertainment, software, and pharmaceutical industries, the monopoly power created by copyright and patent protections encourages industry concentration and inflates corporate profits. As a result, income and wealth are even more highly concentrated at the top than would otherwise be the case.”

The cost to society from patents and copyrights abuse is impossible to understate.

The United States spends over $3 trillion annually on health care, and 10% is spent on drugs. The average American spends more than $1,000 a year on prescription medications, 40% more than the next highest country, Canada, and double what Germany spends.28

The broadest study done on the reasons for the increase in costs appeared in the Journal of the American Medical Association. “The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents.”29 Generic drugs are the main reason why drug prices have fallen, but access to them is generally delayed by numerous business and legal strategies.

See also: p. 188:

Lobbying creates a perverse feedback loop. The more distorted the economy becomes, the greater the incentive companies have to reinvest those profits in lobbying. As Brink Lindsey and Steven Teles describe in their book, The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality, “Stunted competition is especially problematic, as wealth derived from distorted markets is recycled into influence over government. Incumbents can choose to invest in protecting themselves from competition rather than inventing new products and production methods or improving existing ones.”79

The authors rely on fellow IP critics Lindsey and Teles, who are also too confused and timid to oppose IP outright although recognizing its deep flaws and problems with common justifications for IP. See Brink Lindsey and Steven M. Teles, The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality (Oxford University Press, 2017); see also Brink Lindsey and Steven M. Teles, “Intellectual Property Laws: Wolves in Sheep’s Clothing,” ProMarket (Sep. 15, 2017).

Lindsey and Teles are no better:

In other words, copyright and patent laws are regulatory responses to what economists call “market failure.” … It’s a plausible argument with only one problem: the facts on the ground don’t provide much support for it. The market failure theory suggests that vulnerability to copying and imitation creates serious disincentives for would-be artists and inventors, such that only exclusive rights over reproduction and use can create the proper incentives for cultural production and technological innovation. Yet we regularly see robust, ebullient creativity and innovation even where intellectual property protections are absent or increasingly porous. The empirical evidence that intellectual property rights stimulate creative expression and innovation is remarkably weak.

… The evidentiary record on patents is thus mixed. Some findings describe positive effects, yes, but there is no convincing confirmation that patent systems as a whole work as intended. Overall, we find ourselves agreeing with the assessment offered nearly 60 years ago by the economist Fritz Machlup, a pioneer in the study of the emerging information economy. “If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one,” Machlup wrote. “But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it.”

… The current state of intellectual property law may be bad for economic growth overall, but it is highly effective at showering riches on a favored few. In the entertainment, software, and pharmaceutical industries, the monopoly power created by copyright and patent protections encourages industry concentration, inflates corporate profits, and exaggerates the tendency toward winner-take-all “superstar markets.”26 As a result, income and wealth are even more highly concentrated at the top than would otherwise be the case.