Wednesday, February 28, 2007

Free Trade and Intellectual Property

Economics blogger Dean Baker writes about copyright and patent protections in free trade.

I'm all for contrarian viewpoints, especially when they take a commonly-held perspective and throw a different light onto it. The combination of "free trade" and "patent protections" seems like rich territory for a contrarian view.

Most of us don't usually think of intellectual property rights as trade protectionism. Certainly, we figure, people in China shouldn't be able to crank out thousands of illegal copies of Microsoft Office, or people in India shouldn't be able to sell illegal copies of Hollywood movies for $0.50 each, right?

Dean Baker periodically makes the case, however, that intellectual property protection is simply another form of trade protectionism.

As interesting as Dean's perspective is, though, I say it's wrong.

Microsoft's product is software that allows you to write documents, or do complex calculations, or handle large amounts of data. Sure, the physical manifestation of its products is a CD in a box, but the real product, the value, is the intangible, intellectual design work that goes into the software.

Glaxo Smith Kline's product is a pill that cures an illness. Sure, the physical manifestation of GSK's products is a little white tablet, just some grains of stuff pressed together really tight. But the real product, the value, is the intangible, intellectual design work that took place in the laboratory, long before the pill was ever made.

To argue that intellectual property rights are simply another form of trade protectionism is to argue that we are all nothing other than line workers at a factory, that none of us produce anything of value other than our labor. And that is as insulting to a factory worker in China as it is to a scientist in Boston.


Anonymous said...

Protecting intellectual property rights has always been important fr countries who believe in the power of innovation.

In the 21st century, it is impossible to imagine survival without innovation. That brings trade protectionism, and yes, also many dollars with it, but that is really not the reason why we innovate.

Innovation is about market leadership. It is about getting there if you haven't already and staying there if you already are the market leader.

Fati Erdogan

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