Re: Intellectual property

Lee Daniel Crocker (
Tue, 25 Mar 1997 02:04:30 -0800 (PST)

Mr. Lorrey properly pointed out that I had ignored one of his earlier
arguments, and I misinterpreted his later reference to it. I will
attempt to remedy this. First, his point:

> For example: There have been approximately 5.5 million inventions
> patented in the US in it entire history (mostly during periods when
> patent rights are vigorously enforced, hint hint) while laborers have
> worked approximately 25 x 10^13 hours in US history. This means that
> in fair market value, the average invention is equal to 4.55 million
> man hours of physical labor in relative scarcity. If we value the
> average man hour at as little as $1.00 per hour (which was typical
> for the turn of the century, never mind that 2/3 of all workers have
> lived since that time) we see that the fair market value for an average
> invention is $4.55 million dollars.
> Any responses to this quoting communist rhetoric and I will puke.

Ignoring the parenthetical hint which is clearly circular (defining
inventions as patented things, then claiming most inventions happened
under patent laws), Mr. Lorrey then calculates that the "relative
scarcity" of an invention is 4.55 million man-hours of labor. By this
I believe he means to imply that this is an appropriate measure of the
value of an inventor's work, and further that he means to imply that
this income would not be obtained without patents.

That is at least three independent claims. The first (the value he
calculates) incorrectly assumes that patent=invention, thereby ignoring
the thousands of inventions that are never patented either because
their creators had no use for patents (high-tech and trendy things
often become obsolete so fast that waiting for and paying for a patent
is a waste of time and resources better spent on getting the thing to
market quickly), or because they couldn't find a sufficient market or
sufficient startup capital, or because they were invented by foreigners
for whom there was no US patent protection until the Paris convention
of 1884. As a guess, I'd put the number of "inventions", not including
all the little things people build for themselves with no intention of
marketing, at least an order of magnitude higher.

The second claim, that the relative scarcity of a commodity is in
direct corrolation to its value, just ignores the demand side of the
equation. It doesn't matter how rare your talents are if nobody has
any use for them. An inventor, then, must use judgment and take some
risk in deciding how to invest his time so that his creations will
have a better chance at being valuable. The best way to do that is
probably for him to do research under a capitalist patron, because
capitalists live on their ability to judge investments. An alternative
"strategy" (in a loose sense) is blind luck. To happen upon a
discovery by accident--like the vulcanization of rubber--eliminates
the risk, and is a time-honored tradition, primarily because some
things were just to farfetched to have been discovered otherwise.
However, many chance discoveries resulted from basic research aimed
at other goals, so there was still speculation involved. Because
that speculation takes capital, and its success is a major factor in
the success of the enterprise, it is the /speculation/, not the
invention, whose scarcity we most prize, and that should benefit the
most from the product. When the inventor himself does it, he does
indeed reap the benefits, but usually it's a capitalist, and quite
rightly so. He is, after all, paying the inventor's bills. So the
relative scarcity of inventions to labor is no measure of value.

Lastly, it is (presumably, but not explicitly) claimed that without
patents, the inventor would have insufficient incentive to create,
because he would be less likely to be rewarded commensurately with
his "value". That invention happened before patents is still there
to challenge that idea, but so too are all the other arguments I have
made before about other ways for an inventor (or patron) to profit
from his creations. Mr. Lorrey elsewhere claims that his experience
of individual contracts being imperfectly honored in courts hampers
most of those methods. But two wrongs don't make a right: if contract
law is broken, using the patent laws here in question to avoid that
problem rather than tackling the problem directly makes little sense.
And even if individual contracts are hard to enforce, most inventions
are made under the employ of large corporations who /do/ have the
resources to enforce their contracts with each other, which is
sufficient for several of the methods proposed. This is also moot
in the cases where an lone inventor, without contracts, can manage
to demonstrate an invention without giving away its secret, and
can then sell it to the highest bidder, and in the case where he
can choose never to release specs to the public at all, by making
money with the technology privately.

Because there are many patentless methods to profit from technology,
and because a patentless system cuts research and developments costs
drastically, I simply don't see that a patentless world automatically
resigns inventors to poverty. This is not a socialist argument that
inventors must sacrifice profits for the common good, or even a
left-libertarian argument that an inventor only "deserves" what he
can get without resort to force; it is a purely uncompromising
capitalist profit-driven argument that the inventor himself, his
investors, and everyone else benefits more from a system that does
not restrict the unfettered exchange of ideas to whomever can most
efficiently exploit them.

Lee Daniel Crocker <>  <>
"All inventions or works of authorship original to me, herein and past,
are placed irrevocably in the public domain, and may be used or modified
for any purpose, without permission, attribution, or notification."--LDC