As noted on Marginal Revolution, in Launching the Innovation Renaissance, erstwhile quasi-Austro-libertarian fellow traveler Alex Tabarrok has a new book out in the intriguing TED Books imprint, entitled Launching the Innovation Renaissance. The description of the book says:
Patents, innovation prizes, patent buyouts and advance market commitments all have their place. The key is to match problems to institutions.
Tabarrok is presented as some radical or maverick, bravely challenging the modern horror of statism and patent. But he is not really against patents. Or copyright. For example, in an article for FEE a few years back he wrote “The argument that copyright encourages innovation is simply a pretense for protectionism,” as if he’s making some bold, principled claim. But then he crawfishes in the very next sentence: “Some protection for intellectual property probably does encourage innovation, as the “Tabarrok Curve” illustrates.” Bullshit. On this ridiculous “curve” nonsense, see “Tabarrok: Patent Policy on the Back of a Napkin.”
In the book he says:
Patents, innovation prizes, patent buyouts and advance market all have their place. The key is to match problems to institutions.
So patents “have their place.” The patent system should be reformed, but it has its place! Of course patent reform is both unrealistic, and not a solution, any more than tax reform is needed. The only real tax reform is to lower the rates, not to shuffle things around and move from one type of tax to another. Likewise, the most meaningful IP reform, short of abolition, is to reduce the length of the term: patents, from 17, down to a shorter amount like 5 years; copyright, from over 100 years, to, say, 10 or 20. (See my post How to Improve Patent, Copyright, and Trademark Law.)
(Update: I note that although his “Tabarrok Curve” implies we have “gone too far” and that patent and copyright terms are too long, in a recent discussion, implies the patent term is too low because of FDA delays and thus favors legislation such as the 1984 Hatch-Waxman Act that provide for patent term extension of up to 5 years when there is delay caused by regulatory review, e.g. from the FDA. Tabarrok also seems to think the patent term is 15 years. However, the patent term is 20 years from date of filing, not 15; and since it usually takes 2-3 years before it issues, most issued patents have a term of about 17 to 18 years. Does this mean Tabarrok would say that the Patent Term Extension of Hatch-Waxman “goes too far” since, after all, the 17 year patent term is already 2 years longer than Tabarrok seems to think is already too long? One doubts it. Moreover, in the same discussion Tabarrok mentions positively how the US twisted the arm of Australia in 2005 when negotiating a “free trade” agreement to expand its IP protection for pharma patents and also extended its copyright term from life of the author plus 50 years to life plus 70, to match the insane US term. Free trade agreements have nothing to do with local property rights; that is the province of bilateral investment treaties, which are usually negotiated between a developed country and a developing country. So here we have so-called IP reformer who says IP protection is too strong but he gets the term of patents wrong, and things they should be extended, and favors US IP imperialism to force other countries to extend their own copyright terms.)
As for the “prizes,” in his new ebook he highlights private prizes like the X-Prize but downplays the fact that he thinks taxpayers should fund these prizes. But this is the idea. As I have noted previously, Tabarrok is in favor of a taxpayer-funded “medical innovation prize fund”–starting at “$80 billion per year, and increas[ing] with the growth in GDP“. Similar proposals include those by faux free marketeers Joseph Stiglitz and Forbes.com. (Update: I’ve read more of the book now; he doesn’t downplay the taxpayer-funded aspect of the prize system he (and socialist Bernie Sanders) advocates. He is explicit about it in the book.)
Of course, medical innovations are only a small slice of the space of technologies allegedly promoted by patent law (there are electronics, lasers, chemicals, data processing, pharmaceuticals, and so on; there are over 400 classes in the PTO’s classification system, and each class is divided into numerous subclasses). So if you extend this tax funded innovation prize idea, and replace all patents for all technology areas with tax funded prizes, you’d have to advocate $2 trillion to $20 trillion a year in taxes to stimulate the “right” amount of innovation. Or maybe more. Hurrah for “free market” “solutions” to our “problems.” What the hell, let’s be “bold” and make it $100 trillion of tax funded innovation prizes per year to create a utopia on earth by 2013! Or maybe a quadrillion dollars!
Sorry, did I say “replace”? As patents have their “place,” these prizes would not even replace the patent system, but supplement it. Injury upon injury! In this, I am reminded if calls for “replacing” the current income tax with a VAT or national sales tax. Of course, in practice this amounts to a call for adding a new sales tax on top of the current income tax, since the state will never give up the latter. Likewise, Tabarrok’s call for a taxpayer funded prize system would not result in this replacing the patent system, but being added on top of it, making things even worse. [continue reading…]
Last year, in Hillary Clinton’s Historic Speech on Global Internet Freedom, Adam Thierer praised Hillary Clinton for a speech drawing
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