US Innovation: Built On Copying And Permissionless Innovation

Innovation

from the a-history-lesson dept

We recently wrote about Rep. Marsha Blackburn’s nearly 100% fact free oped about how we need stronger copyright and patent enforcement to encourage innovation. I wanted to revisit that article to drill down on one point:

America has always been a society that rewards good ideas and protects property rights in a free-market capitalist system, not one premised on permission-less innovation where others can free-ride or take someone’s creation without even asking. It’s wrong to deny creators and innovators the fruits of their labor or to deprive them of their individual right to profit for the work they legitimately create.

That’s why the U.S. Constitution under Article I, Section 8 recognized these natural rights and empowered Congress to secure them in a way that advances honest and legitimate activity.

As we noted in response, that’s simply not true. And the history of American innovation is actually almost entirely about permissionless innovation and copying someone else’s ideas and making them better. Ben reminded us that a few months ago Bloomberg actually had a really detailed discussion of how early US industrialization, led by the same founding fathers of the US, was all about copying others and permissionless innovation. We wrote about this at the time, but it’s worth a reminder, just to see how incredibly wrong Rep. Blackburn is in her oped.

In its adolescent years, the U.S. was a hotbed of intellectual piracy and technology smuggling, particularly in the textile industry, acquiring both machines and skilled machinists in violation of British export and emigration laws. Only after it had become a mature industrial power did the country vigorously campaign for intellectual-property protection.

In fact, it was a widely supported view that Americans should flat-out copy the innovations of other countries, and this included direct statements from some of the key framers of the Constitution. Take, for example, Alexander Hamilton, considered one of the key people behind the Constitution. He cowrote the Federalist Papers, and his contributions are considered some of the most important in understanding and interpreting the intentions of the Constitution. So, how did he feel about Blackburn’s claim that Article I, Section 8 was recognizing the “natural rights” based on innovation and that it was wrong to “deny creators and innovators the fruits of their labor”? Turns out Hamilton says that Blackburn’s interpretation of the Constitution and history are both completely wrong:

The most candid mission statement in this regard was Alexander Hamilton’s “Report on Manufactures,” submitted to Congress in December 1791. “To procure all such machines as are known in any part of Europe can only require a proper provision and due pains,” Hamilton wrote. “The knowledge of several of the most important of them is already possessed. The preparation of them here is, in most cases, practicable on nearly equal terms.”

Notice that Hamilton wasn’t urging the development of indigenous inventions to compete with Europe but rather the direct procurement of European technologies through “proper provision and due pains” — meaning, breaking the laws of other countries. As the report acknowledged, most manufacturing nations “prohibit, under severe penalties, the exportation of implements and machines, which they have either invented or improved.” At least part of the “Report on Manufactures” can therefore be read as a manifesto calling for state-sponsored theft and smuggling.

The first U.S. Patent Act encouraged this policy. Although the law safeguarded domestic inventors, it didn’t extend the same courtesy to foreign ones — they couldn’t obtain a U.S. patent on an invention they had previously patented in Europe. In practice, this meant one could steal a foreign invention, smuggle it to the U.S., and develop it for domestic commercial applications without fear of legal reprisal.

Much of the rest of the article gives example after example of how US innovation and industrialization was based on this exact pattern. And, of course, this is not just an American pattern. We’ve seen how other countries, including Germany, Switzerland and the Netherlands used similar techniques to industrialize. Either way, even a basic knowledge of the history of industrialization shows that Blackburn’s claims about the Constitution are completely misinformed. And yet she wishes to base a massive policy shift based on these misunderstandings? Yikes.

Filed Under: alexander hamilton, copying, history, innovation, marsha blackburn