Nobel-caliber advice for John Edwards

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By David Rothman

I keep dreaming of slipping a summary of Darknet under John Edwards‘ door. Perhaps he’ll better understand the harm that Hollywood-bought laws have done to the U.S. economy and technological innovation and education in particular.

Now maybe we should add another item to Prof. Edwards’ reading list–an article by Joseph E. Stiglitz, a Nobel Prize-winning economist. In the ’90s the Columbia University professor chaired Bill Clinton’s Council of Economic Advisors. Today he recalls that “it was clear that there was more interest in pleasing the pharmaceutical and entertainment industries than in ensuring an intellectual-property regime that was good for science, let alone for developing countries.”

As a poverty-fighting professor at the University of North Carolina, John Edwards ideally will care about copyright gouges, too, not just the pharmaceutical variety. He just might find that some of the same concepts apply.

Meanwhile here’ s an excerpt from the Stiglitz piece in, of all places, the Daily Times in Pakistan:

The economic rationale for intellectual property is that faster innovation offsets the enormous costs of such inefficiencies. But it has become increasingly clear that excessively strong or badly formulated intellectual property rights may actually impede innovation–and not just by increasing the price of research.

Monopolists may have much less incentive to innovate than they would if they had to compete. Modern research has shown that the great economist Joseph Schumpeter was wrong in thinking that competition in innovation leads to a succession of firms. In fact, a monopolist, once established, may be hard to dislodge, as Microsoft has so amply demonstrated.

Indeed, once established, a monopoly can use its market power to squelch competitors, as Microsoft so amply demonstrated in the case of the Netscape Web browser. Such abuses of market power discourage innovation.

Moreover, so-called “patent thickets”–the fear that some advance will tread on pre-existing patents, of which the innovator may not even be aware–may also discourage innovation…

(Stiglitz item spotted via Boing Boing and Mike Cane.)

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