depends on patent protectionsÊ. 3 The monopoly effect due to IP rights also helps to create and support high paying jobs by protecting firmsÊ profits. This allows them to incentivize their workers to be productive and efficient through well-paid jobs and bonus schemes. Moreover, as a consequence of innovation, heavy research and development spending, and high paying jobs, the monopolistic effect of IP rights also helps to drive growth in the economy. For instance, Âintellectual property-intensive industries account for over 38% of total U.S. GDPÊ 3 and these industries also have Â72.5% higher output per worker than the national averageÊ. 3 Thus, economically, IP rights can be argued to foster progress by granting people and firms monopoly power in their given market, allowing our economy to expand, albeit under the inefficiencies and demerits of monopoly power. On the other hand, free market supporters of Hayek would argue that IP rights hinder economic progress. Through the free movement of information between people and companies, they believe a more dynamic economy, with a far higher rate of innovation, can be created. Competition is the way to do this, as it forces individuals to constantly improve and innovate to find ways to be more efficient than their competitors - stimulating rapid progress. Furthermore, IP rights, such as patents, merely provide monopoly power to those granted them. This creates productive and allocative inefficiencies due to the lack of competition. For example, firms may operate over their minimum costs and charge higher prices than the market equilibrium, reducing the consumer surplus in the given market and hindering economic progress. Monopolies created by IP rights also provide a distinct disadvantage to small businesses, as they cause barriers to entry into a given industry. This allows larger firms with a dominant market share to engage in anti-competitive practices. On a 3 ÂGlobal Intellectual Property Center.Ê Global Intellectual Property Center . N.p., 28 Dec. 2009. Web. 25 July 2013.
more fundamental level, the economic case for ordinary property rights depends on scarcity. But, technically speaking, information is not a scarce resource. As a result, many critics reject the term intellectual property all together - Âwhilst tangible goods are generally rivalrous; ideas are non-rivalrous and therefore should not be labelled as ÂpropertyÊÊ. 4 Hence, the Keynesian-Hayek divide over IP rights is very evident when considering the economic case in the debate, outlining the stark contrast between interventionist and free- market policies. Nevertheless, having examined the role of IP rights from an economic perspective, we must also consider the ethical and philosophical impact on our society. According to Article 27 of the Universal Declaration of Human Rights, Âeveryone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he or she is the authorÊ. 2 There are three key philosophical arguments that support intellectual property rights and their role in fostering social progress. The first argument stems from John LockeÊs idea of Ânatural rightsÊ. 2 Locke argued that every person has a natural right over the labour and products they produce because Âownership of our bodies extends to what we createÊ. 2 Indeed, it is possible to apply this argument to IP rights, in which it would be unjust for people to misuse another's ideas. Hence, advocates of Locke would argue that if we want our natural rights protected, then our society needs IP rights. Secondly, utilitarians would argue that IP rights provide the greatest amount of benefit to society as a whole. This is because they provide innovators with a profitable return on their Âinvestment of time, labour, and other resourcesÊ 2 , meaning we are constantly encouraging the development of new ideas. This benefits public welfare because a 4 Long, Roderick T. ÂThe Libertarian Case Against Intellectual Property Rights.Ê The Libertarian Case Against Intellectual Property Rights . N.p., Autumn 1995. Web. 28 July. 2013.
118
Made with FlippingBook - Online Brochure Maker