Tyler Cowen draws attention to this paper on his blog. The gist of it appears in this excerpt:
“Copyrights establish intellectual property in cultural goods such as music, literature, and science. Existing empirical analyses have found that copyrights can encourage creativity by increasing payments to authors. Yet copyrights also impose important welfare costs, by restricting access to existing content and by generating deadweight loss similar to monopolies for traditional goods. Moreover, copyrights raise the costs that future innovators face when they build on existing work. Through this mechanism, copyrights may discourage future innovation.”
To explore the hypothesis that copyrights may in fact inhibit scientific innovation, the authors examine the effects of a U.S. government program which in 1942 “allowed US publishers to reprint exact copies of enemy-owned science books,” negating their copyrights. This national theft of intellectual property correlates with an increase in American science innovation, the authors find.
One of the fascinating but irreverent inferences one might draw from the paper is that American scientists — just like the rest of us — tend to buy their knowledge on the cheap. But that aside, the inference that innovation per se is a type of social welfare also stands out.
I have long been dubious of intellectual property as a legitimate property type, but as a practical matter I’m at a loss to understand how an economy might function without it. It seems to me that public policy should encourage some level of open source development of human knowledge. Perhaps, too, copyrights and patents might usefully be made to expire sooner. But on the whole, I think we will have to wait until all of humanity is much wealthier to be able to declare an end to restrictive rights in intellectual property.