One of the reasons it has been a slow week here at Stuffed and Starved is that I've been busy editing the final draft of the book. Inevitably, editing means cutting things. And one of the cuts concerns the reign of biopiracy in Africa. If you don't know what biopiracy or intellectual property rights mean for the poor, this post offers an introduction. I was sad to lose it from the book, because it showed how The Economist has done an about face on intellectual property - it now supports them, when once it didn't. Its original arguments were stronger.

But, since this was a little too dry for the book, out it came. And here it is for your reading pleasure (and you can read the entire thing, formatted and with footnotes, here).

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The idea behind intellectual property rights is based on this three step argument:

1. Progress depends upon inventions.
2. Inventions will be under-provided without sufficient incentives.
3. Intellectual rights offer the best mechanism for creating these incentives.

Although the economists in the nineteenth century limited themselves to taking issue with the last of these steps, those with faith in it might see it as progress that, today, all three of these assertions have their detractors.

The trade-off question is this: how do you balance the rights of the creator of an invention with the public’s right to “share in scientific advancement and its benefits”?

The least-worst solution, with which most of the world lives, is patenting. Patents provide a time-limited monopoly for the inventor so that the costs of invention, plus a reward for having done it, can be recouped.

At the same time, patents demand that the invention be put in the public domain, even if only the inventor can commercialise it so that everyone can start benefiting from the knowledge, if not the product, and that rivals can figure out how to make it so that, once the monopoly expires, they can jump right into the marketplace.

A first problem is that one never knows quite how long a monopoly ought to be allowed. One doesn’t want it too short, so that the costs of invention aren’t recouped, but one doesn’t want it too long, so that the monopoly endures way beyond the costs of invention and reasonable profit, at the public expense. If the costs of your invention, plus a handsome profit, can be recouped in a month, it’s hard to make a case that you should have a monopoly for twenty years, when the society that gave you the monopoly might then take it back, and start benefiting from month two.

The trouble is every invention, its costs, and its profits, are different. To measure every single one would, it is argued, raise the costs of the system to unacceptable heights. The solution to the problem, then, has been to award a set-duration monopoly.

It’s highly unusual for economists to condone monopolies. But John Stuart Mill’s view, which has since become canonical, explains it like this:

“The condemnation of monopolies ought not to extend to patents, by which the originator of an improved process is allowed to enjoy, for a limited period, the exclusive privilege of using his own improvement. This is not making the commodity dear for his benefit, but merely postponing a part of the increased cheapness which the public owe to the inventor, in order to compensate and reward him for the service. ... read more »

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Ch. 6. Pesticides, Genetic Engineering, Public Science, Cuba | Africa | Africa | biopiracy | innovation | intellectual property | inventions | rights | The Economist

Posted on 10 February, 2007 - 02:47

Microsoft has now launched its new operating system - Windows Vista. Within a year, 100 million computers will be running it. The code underneath the hood of the operating system is a tightly kept secret. There's no way to fix it if it's broken, other than to wait for Microsoft to come out with a patch. Indeed, most users won't have a choice about whether they want it - it'll come standard with new computers. Unlike free, open source software, Vista will depends for its adoption on market domination, heavy advertising, and unforgiving software license contracts that force businesses to upgrade to it.

It's a business model that keeps the cash flowing into Microsoft's headquarters in Redmond, and thence into the pockets of Bill Gates, whose net worth is now a shade over $50 billion. Which begs the question: how do you spend that kind of money?

To some extent, the decision was made for him. In the 1990s, when he faced a series of potentially serious lawsuits, Gates announced that he was going to give away large slabs of his money. As the jury deliberated, The Bill and Melinda Gates Foundation was launched. Today, it sits on an endowment of over $30 billion, a pile that includes some of Warren Buffet's loose change. Together, Buffet and the Gates' aim to fight hunger and poverty. Africa is in their sights. And they've promised to bring the same no-nonsense business approach to spending their money as they brought to earning it.

This is why their New Philanthropy is certain to do more harm than good.

... read more »

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Posted on 30 January, 2007 - 21:48