[Chapter 8, live blog]
All popular business histories are replete with lies. Or to be more charitable, they are filled with untruths based on a stupid version of cause and effect: inventions happen because people take out a patent on them. This assumption is hardly ever questioned in the mainline literature. Writers look through patent records and assume that they are a record of technological advance.
The truth is far messier. The patent records are a snap shot of those who filed a patent, and nothing more.
It is because of patent-based historiography that people believe that the Wright Brothers invented the airplane, when in fact they made only a tiny contribution of combining wing warping with a rudder. It was Sir George Cayley in Britain and Otto Lilienthal of Germany who did the bulk of the work of inventing the airplane. But it was the Wright Brothers who applied for the patent and quickly used it against Glenn Curtiss who improved wing warping with movable control surfaces.
So it was with the radio, which is conventionally attributed to Guglielmo Marconi, the Nobel Prize winner in 1909. What about the contribution of Oliver Lodge in the UK or the forgotten genius Nikola Tesla or the Russian Aleksander Popov or the British Naval engineer Henry B. Jackson?
All Marconi did was ground the antenna, and also manage to win the patent wars thanks to the deep pockets of fellow aristocrat and partner Andrew Carnegie. Fifty years after the patent was granted, the Supreme Court conceded that it was unjustly given but by then, the other claimants were dead! (Marconi was consistent at least: he was a big supporter of fascism in Italy.)
Then there is the famous myth about Alexander Bell that displaced knowledge of the real inventor of the telephone, Antonio Meucci. But Meucci couldn’t afford the fee to file the patent. This oversight was fixed in a 2002 declaration by the U.S. Congress but just a bit too late.
There are an unlimited number of such cases that lead to fundamental questioning of the relationship between patents and innovation. It turns out that there are very few great leaps forward in history that are the result of a single Prometheus-style figure. Most advances are the cooperative work of many factors alive in society, with individuals improving things a bit at a time until all those improvements come together in a marketable form.
The patent has essentially nothing to do with it. And Boldin and Levine are hardly the first to point this out. You might be surprised to know that many academic economists have done empirical studies on the relationship between patents and economic advance. Of all those studies they reviewed, 23 in total, they found none that could establish a strong relationship and many that found negative relationships between patents and development: that is, that patents actually impede progress.
What they further find is that the main contribution of patents is to increase the production of patents. But that is not the same as increasing invention, for the main use of the patent is to put a stop to any similar innovation that builds upon and improves the patented thing. The patent holder rides high for a time but history is actually frozen in place. The process of imitation and sharing that led to the innovation becomes formalized, centralized, fixed, and stagnant.
They examine the case of databases, which are patented in Europe but not in the United States. The U.S. wins the competition easily. The American dominance of database production runs 2.5:1 compared with Europe. To me, this helps explain what many have noticed, namely that Europe is seriously behind in its digitalization and organization of information, with most Europeans possessing oddly antiquated intellectual capital concerning even the most basic databasing skills. Now we know: it’s not their fault; it’s the fault of their IP regimes.
Thus does chapter eight of Against Intellectual Monopoly discuss all the existing literature that makes the case–on purpose or inadvertently–against patents. It is packed with empirical detail, but in particular I’m intrigued at their review of the history of musical composition in England Europe in the 18th and 19th centuries.
They find that the countries with no copyright legislation (German territories in particular) had more composer per capita than countries like England. And in England in particular, the 1750 law had the effect of bringing the entire composition industry to a grinding halt. And later, when copyright was imposed on Italy and France, it led to a diminution of composer effort.
This demonstration is intriguing beyond most music historians can possibly imagine. It solves a long-running mystery as how it came to be that the most musically educated population in the world, one with a massive history of compositional genius, would suddenly fail to participate in the progress that defined the age of Mozart and Beethoven. These historians just haven’t known where to look for clues.
This chapter makes me sad for all the great innovators whose names are not in the history books, and even sadder for all of us who have been denied great innovations because some fool managed to make it to the patent office first only to use that privilege to kill his competition the next day. Far from encouraged innovation, patent and copyright have managed to kill off so many wonderful works of art and technologies that it boggles the mind. In order to understand this, you have to look beyond the patent records. You have to train yourself to look at the unseen costs of government regulation.