Friday, December 02, 2011

Smart policies

Life is good.  It took me about a minute to download Alex Tabarrok's Launching the Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast to my Kindle. The cost of the eBook is just $2.99.  It is short and easy to read.  And it is full of good ideas. 

Alex explains how and why we can and should reform our attitudes and policies regarding patents, prizes, education, global markets and cosmopolitanism. Just when we worry about the duration of the Great Stagnation and (even worse) listen to the many gasbags in high office who claim they know what to do about it, Alex's ideas are especially refreshing.

Alex introduced me to this thought some years ago:  "Many economists are theoretical empirics; they make empirical statements on the basis of theory." Sure. There are models that suggest that without monopoly protections, the incentives to innovate will not be adequate.  Patents law is necessary. Case closed. 

Trouble is that the evidence for this claim is remarkably thin.  Tabarrok points to the high costs of imitation; most patent protections are unnecessary. The high costs of monopoly privilege include plenty of rent seeking (many lawyers and lobbyists) and the whole thing is mostly unnecessary. 

There are many other worthy insights. Read the book, spread the word.