Tuesday 20 September 2011

The Gridlock Economy by Michael Heller

From The Week of September 12, 2011


In 1968, Garrett hardin, an ecologist, published an article in the Journal of Science in which he described what he called the Tragedy of The Commons. This occurs when a shared resource, E.G. The stock of salmon in a river, is irrationally depleted by the resource's users even though each user is fully aware that overusing the resource will kill it. The Tragedy of The Commons argues that none of the resource's users moderate their use to save the resource because they are all individually convinced that every other user will take more than their share of what remains. Therefore, they conclude that they might as well take what they can get now before the resource is completely exhausted. This human behavior has since been documented countless times and must be the single largest roadblock in the way of legislating against anthropogenic climate change. After all, if I am polluting, then why shouldn't you? But while we understand the concept of overuse, is the opposite true as well? Is it possible to underuse a resource?

We can look at plundered resources and see how we have abused them: rivers without salmon, jungles without tigers, atmosphere without an Ozone layer. But how do we see underuse? How do we see the drug not developed, the technology not invented, the industry not catalyzed? These potentials, unlike industrial smog, are invisible by dint of having never existed, ideas in our minds and on our chalkboards never actualized because of some law, some restriction, some impediment. This is what Mr. Heller calls the Tragedy of the Anticommons, a situation in which people with competing financial stakes, rather than spurring innovation, stifle progress that would benefit everyone. But why does this happen?

Mr. Heller, a professor of Contract Law at Columbia University, describes, in The Gridlock Economy a vital disconnect between our 21st century world and the 19th century ideas of patent law that govern it. Patents, which originated as a form of financial protection for inventors who wanted to profit off their years of experimentation and toil, were conceived in a world where one idea begot one invention. When James Watt invented the steam engine, he didn't file patents for each part of his engine. He filed a patent for the engine he sold to his buyers. But in our world of complex drugs and intricate smartphones, technology is composed of dozens, perhaps even hundreds of inventions, meaning, to make the IPhone, Apple must hold dozens if not hundreds of patents, or receive permission from the holders of those patents to use their invention. And in a world driven by the pursuit of profit, in a world that hinges on maintaining the slightest advantage over ones competition, such patents can be the difference between success and failure of a product and of a company.

After explaining patents and the purpose they serve, Mr. Heller does an excellent job of illustrating how they are preventing us from realizing the next generation of technologies:the fragmentation of over-the-air broadcasting which is keeping us from having revolutionary WI-FI, the gene patents on Golden Rice which nearly kept this genetically engineered crop from being fed to the starving for which it was made, the doctors who abandon research into developing curative drugs because of the impossibility of obtaining permission to use the necessary molecules and processes. The inventions and innovations being shackled by outdated patent law are widespread. But rather than throw out the idea of patents, Mr. Heller wants simply to update them to reflect a world in which ownership of a thing is often divided up amongst numerous self-interested parties.

Though Mr. Heller's reforms lack punch, his work here offers the reader a valuable look into an underexposed world. Patents were meant to encourage invention by creating a financial incentive for inventors. They were not meant to enchain innovation by forcing progressive companies to assemble a jigsaw of patents simply to create a product. For all his bland conclusions, Mr. Heller is utterly convincing that reform in this area is not only necessary, it may catalyzing the next wave of innovation. And given the financial state of the world as of this writing in 2011, we sorely need it. (4/5 Stars)

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