Free Trade Agreements That Guarantee Monopolies?

from the that's-not-free-trade dept

Free trade is a good thing. Your basic economics should have taught you that. Division of labor, comparative advantage, supply and demand -- they all combine to allow for better specialization, more productivity and greater output. In general, free markets are a good goal. While it's nice to see governments (especially the US) pushing for free trade agreements, the reality is that these agreements are very often not about free trade at all. There's so much lobbying that the "free trade" isn't just watered down, sometimes it's a complete farce. Witness the New Yorker's coverage of how the US is using free trade agreements around the world to force US-style intellectual property rules on the rest of the world -- often at tremendous harm to those countries. It's doubly ironic when you realize that intellectual property rules are the exact opposite of free markets. They're government-backed monopolies that benefit the monopolists, generally at the expense of everyone else. The New Yorker piece does a good job highlighting Josh Lerner's research that strengthening patent laws has no impact on increased innovation, and there's almost no connection whatsoever between copyright law and creative output. In other words, the exact reason for the laws (to put in place incentives for innovation and more creative content) aren't supported at all by history. Yet, now, we're forcing those same policies on countries where it seems clear to hurt them. The only issue I have with the New Yorker piece is author James Surowiecki's claim halfway through, that "Intellectual-property rules are clearly necessary to spur innovation." The rest of his own article shows how that's simply not true at all. In fact, even going beyond Lerner's research, there's plenty of other support for the idea that intellectual property laws don't actually help grow the markets they're supposed to grow, and in fact that they can do great harm. So, why isn't anyone else noting the irony that US "free trade" agreements include the exact opposite of free trade in a way that clearly harms the countries that agree to these policies?

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  1. icon
    Mike (profile), 10 May 2007 @ 3:28pm

    Re: Balance

    The article kept talking about finding a good balance, but when talking about IP laws it is quite clear that Mike has become completely unbalanced.

    Indeed. :) I've made it quite clear that the issue of "balance" is a lie when it comes to IP. There's no need for "balance." If you ignore IP and build a serious business model you can do much better without it. There's no need for IP in that situation and everyone wins. If that's "unbalanced" then call me unbalanced.

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