Found over on the Politech list is this fascinating speech by Federal Reserve Board Chairman Alan Greenspan about intellectual property rights. Greenspan who probably chooses every word he utters much more carefully than anyone else, clearly understands many of the issues that are constantly discussed on sites like this one - but which it seems many policy makers have ignored. He talks about the importance of protecting property and the rapid rise in importance of intangible rather than tangible goods in our economy. However, he worries that the intellectual property protections written into law during a time when tangible goods were more important aren't designed effectively to handle a world where intangible goods are the basis of much of our economy. "If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights? Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on innovation? Are such protections so vague that they produce uncertainties that raise risk premiums and the cost of capital? How appropriate is our current system--developed for a world in which physical assets predominated--for an economy in which value increasingly is embodied in ideas rather than tangible capital?" Following this, he points out that not nearly enough is being done to look objectively at how to deal with this situation. So far, it's mostly appeared to be a fight between those with extreme beliefs, but with little empirical evidence to back up claims: "Understanding the interplay of ideas and economic growth should be an area of active economic analysis, which for so many generations has focused mainly on physical things. This work will not be easy. Even as straightforward an issue as isolating the effect of the length of patents on overall economic growth, a prominent issue recently before our Supreme Court, poses obvious formidable challenges. Still, we must begin the important work of developing a framework capable of analyzing the growth of an economy increasingly dominated by conceptual products." Hopefully, this will jumpstart more activity in exactly this area. Lots of people have been pointing to problems with our intellectual property system, but having strong evidence pointing to a better solution would go a long way in convincing policy makers of the changes that must be made.
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