The New Yorker: James Surowiecki on the Permission Problem

credit: etech05

James Surowiecki makes the argument that the opportunity costs of intellectual property rows and strict licence regimes are hard to define yet have a huge impact on the productive capacity of an economy.

“The effects of overuse are generally unmistakable—you can’t miss the empty nets of fishing boats working overfished oceans, or the scrub that covers an overgrazed field. But the effects of underuse created by too much ownership are often invisible. They’re mainly things that don’t happen: inventions that don’t get made, useful drugs that never get to market.”

He argues that a balance has to be struck if we are to foster innovation. For a project to get off the ground, quite literally in the case of the 19th century US airline industry, then deals have to be done. Personally, I see this as a key role for the enabling state of the future. This requires a change of thinking at the heart of Western governments and institutions.

There are signs that these ideas are permeating a future generation of political leaders though. Barack Obama’s technology pledge specifically calls for a reform of copyright and patent systems to promote innovation, for example.

“Intellectual property is to the digital age what physical goods were to the industrial age. Barack Obama believes we need to update and reform our copyright and patent systems to promote civic discourse, innovation and investment while ensuring that intellectual property owners are fairly treated.”

As Mr Surowiecki says:

“Property rights (including patents) are essential to economic growth, providing incentives to innovate and invest. But property rights need to be limited to be effective. The more we divide common resources like science and culture into small, fenced-off lots, Heller shows, the more difficult we make it for people to do business and to build something new. Innovation, investment, and growth end up being stifled.”

I couldn’t agree with him more. Maybe we should email his article to the Chief Executives running Hasbro and Mattel.