Thursday, August 14, 2008

The problem with copyright and property law? It can stifle innovation

Posted by John Stoehr on Thu, Aug 14, 2008 at 10:12 AM

This is from James Surowiecki, who writes the "Financial Page" for The New Yorker. This week, he writes about something called "the gridlock economy" — when there's so much ownership of various parts of an industry that laws protecting innovation and investment actually end up stifling both. We're seeing this happening right now in the fields of technology, science, and culture.

This cropped up last week when a musician named DJ Girl Talk continued to challenge copyright law by stringing together a huge assortment of pop songs and then charging people for the CD. He's claiming protection under the "fair use" clause of copyright law, but some legal experts challenge that claim.

From The New Yorker: The point isn’t that private property is a bad thing, or that the state should be able to run roughshod over the rights of individual owners. 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.

Opportunities forgone aren’t always easy to see. 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.


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