The Commanding Heights

Imagine for a moment that the U. S. had no copyright or patent laws and that there were no restrictions on providing health care of any sort, from licensing to restrictions on telemedicine to buying pharmaceuticals across national borders. I know there would be all sorts of abuses but that’s fruit for another post. What would happen is that compensation for copyright holders, whether authors, publishing companies, software developers working for large companies, television studios, motion picture distributors, and health care providers would fall because they were open to competition.

Now onward to David Brooks’s New York Times column:

Progress is real, but of course it doesn’t happen in a straight line. Often it happens in what Ruth DeFries calls the ratchet, hatchet, pivot, ratchet manner.

First there’s some innovative breakthrough that benefits society over all. But the innovation disrupts some lives. Down comes the hatchet as people want change. That leads to a pivot as society looks for new innovations to address newly created problems. Thanks to human ingenuity the innovation comes and progress ratchets up another notch.

This clearly happens with technological progress but also, less linearly, with cultural progress. Every era develops the culture it needs to solve its problems.

During the mid-20th century the West developed a group-oriented culture to deal with the Great Depression and the World Wars. Its motto could have been “We’re in this together.” That became too conformist and stultifying. A new individualistic culture emerged (pivot) whose motto could have been “I’m free to be myself.” That was great for a time, but excessive individualism has left society too fragmented, isolated and divided (hatchet). Something new is needed.

Politics during the hatchet phase gets nasty. It tends to devolve into a fight between upswingers and downswingers. (I’m adapting the words from a deceased Iranian-American futurist who called himself FM-2030.) Upswingers believe in progress and feel that society is still fitfully moving upward. Downswingers have lost faith in progress and feel everything is broken.

Mr. Brooks is confused. Technological development has nothing to do with “upswingers and downswingers” while policy has everything to do with them.

Let’s engage in a second thought experiment. Imagine that steel, automobiles, and clothing were all as restricted as providing health care, selling pharmaceuticals, banking, or practicing law are. What would happen is that all of those manufactured goods would rise in price and wages would rise for those who produce them, again due to competition, in this case less of it. U. S. auto unions would have much more bargaining power because the more restrictive laws would free them from the fear of U. S. “manufacturers” just buying what they build in Japan and South Korea and slapping “Made in the U. S. A.” labels on them.

My point is not that we should abandon copyrights and patents or professional licensing or that we return to the system of restrictive tariffs that dominated most of our history. It’s that what is happening now is not just some airy Whig history notion of progress but the direct consequences of policy, the picking of winners and losers.

The winners should not merely show magnanimity, the thrust of Mr. Brooks’s column. They should recognize the source of their victory and just how tenuous it is.

1 comment… add one
  • steve Link

    “health care providers would fall because they were open to competition.”

    Actually, I would predict that compensation would become bimodal. The legit players would probably see even higher compensation, and set up licensing groups to keep it that way. The quacks and fly by nighters would earn less. If we had true universal health care, I would expect total health care spending to go up as we clean up the messes for the fakes. Absent universal care, it could decrease costs. OTOH, lawyers would make a ton more money. (This is for the licensing side. On the patent side, not sure what happens.)

    Steve

Leave a Comment