One line from last night’s speech that really left me cold was this: “No country has more successful companies, or grants more patents to inventors and entrepreneurs.”
For one thing, obviously you should use per capita measures here. But the bigger issue is that the quantity of patents the government hands out to inventors and entrepreneurs is measuring two different things simultaneously. One is how many new ideas do inventors and entrepreneurs send in patent applications for. The other is how loosey goosey does the patent office get about what it deems patentable. I think that if you compare today to the time when Edison and Tesla were working in the United States it’s much more plausible to say that US patent policy has gotten more indiscriminate than that the gross quantity of inventiveness has accelerated.
To offer an analogy that I actually think isn’t stretched at all, but 21st century standards Isaac Newton should have patented calculus (“A Method For Using Fluxions To Determine Instantaneous Rate of Change”) and then waited patiently until Leibniz published his superior method and then sued the pants off anyone who tried to take a derivative without coughing up a hefty license fee. But would that world have been a better place? The issue isn’t really so much the rents that Newton would have thereby extracted (I’m not going to begrudge one of human history’s greatest geniuses a fortune) but the barriers to entry that would have been created as a secondary consequence. A world in which smart people have access to the stock of existing human knowledge and are free to apply it in new ways is a world of competition and innovation. A world where you need to consult with an army of lawyers first isn’t. If you ask the people who care most about promoting entrepreneurship in America about this they kind of shrug, concede that the patent system is hopelessly broken, and then confess to despair that it can or will be fixed.
In a broader sense, a lot of our politics is about symbolism. And symbolically intellectual property represents itself in the contemporary United States as a kind of property—it’s right there in the name. But it’s better thought of as a kind of regulation. Patents and copyrights are modeled, economically, the same as you would model any state-created monopoly.