How Intellectual Property Reinforces Inequality, By JOSEPH E. STIGLITZ - NYTimes.com
inequality is not just morally repugnant but also has material costs. When the legal regime governing intellectual property rights is designed poorly, it facilitates rent-seeking — and ours is poorly designed, though this and other recent Supreme Court decisions have led to one that is better than it otherwise would have been. And the result is that there is actually less innovation and more inequality.
Indeed, one of the important insights of Robert W. Fogel, a Nobel Prize-winning economic historian who died last month, was that a synergy between improved health and technology accounts for a good part of the explosive economic growth since the 19th century. So it stands to reason that intellectual property regimes that create monopoly rents that impede access to health both create inequality and hamper growth more generally.
There are alternatives. Advocates of intellectual property rights have overemphasized their role in promoting innovation. Most of the key innovations — from the basic ideas underlying the computer, to transistors, to lasers, to the discovery of DNA — were not motivated by pecuniary gain. They were motivated by the quest for knowledge. Of course, resources have to be made available. But the patent system is only one way, and often not the best way, of providing these resources. Government-financed research, foundations, and the prize system (which offers a prize to whoever makes a discovery, and then makes the knowledge widely available, using the power of the market to reap the benefits) are alternatives, with major advantages, and without the inequality-increasing disadvantages of the current intellectual property rights system.