Inequality And Patents

Dean Baker, in the March issue of the American Prospect (Yes, I am about 3 months behind in my magazine reading – I’ve been busy!) wrote something that surprised me:

In a recent paper, the Organization for Economic Co-operation and Development found that by far, the largest single factor contributing to the growth of wage inequality over the last three decades was the amount of patent rents earned in a country. Remarkably, few progressives pay any attention at all to patent and copyright policy, despite the enormous sums at stake and the huge impact that such policy has on inequality.

Really? “by far”??? Wow.

9 Responses to “Inequality And Patents”


  • The progressives I read talk about patent law all the time and how it harms the poor. This is what NAFTA was largely about. You look at the astounding growth S Korea experienced from the 60′s to today. They reverse engineered all kinds of things, ignored patent law. It played a huge role in bringing them from a place of complete poverty to where it is now.

    They did it also with state management. Blocking specific imports that didn’t serve technological advancement so they could have more ability to import those high tech machinery. State management and restructuring of companies that weren’t performing well.

    They were literally where Haiti is now. Maybe worse. Look at them now. There’s some lessons to be learned there.

  • I can see that point, but this is the part that surprised me most: by far, the largest single factor contributing to the growth of wage inequality over the last three decades.

    Do you agree with that? By far? Largest single factor?

  • Yeah, it is a bit surprising, but I can believe it. What progressives often talk about is the conditions that create such policies. International trade agreements. Corporate control of government and imposition of corporate preferred policies. These are the conditions that lead to these patent laws.

  • …and fairness. I invent something, I should be able to profit from it.

    Of course this all has to be balanced against development and growth for underdeveloped countries. But its a valid argument nonetheless.

  • I don’t necessary agree with that. Like supposing an early cave man thought to create a wheel. I shouldn’t be allowed to use it as well? Where would human civilization be in that condition? Or fire.

    Patent law is not because there’s some sort of moral principle that says people should be allowed to profit from inventions. It’s for the encouragement of developing new inventions. If patent law didn’t lead to an increase in the number and quality of inventions there would be no need for it. That’s my view anyway.

  • Reading Ha-Joon Chang’s “Bad Samaritans”. Just started the chapter on patents. Can’t recommend the book highly enough. How did poor nations actually pull themselves out of poverty? Was it via principles neoliberals would advocate? What is the effect on nations that have adopted neoliberalism over the last 30 years? It’s all about putting the theory to the test, and that’s what I’m all about, so it’s perfect for me.

  • Kind of an unrelated review of an argument by Gary Becker, just because I see you are reading his book.

    http://echidneofthesnakes.blogspot.com/2011_06_19_archive.html#1358254787069352742

  • I love Gary Becker! He has a blog too – highly recommended! Thanks for the link!

  • Oh and, I should say that I have absolutely no problem with redesigning patent laws. If they are inefficient and you make a persuasive argument, I’d easily switch. I dont see this as a particularly partisan issue.

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