Donald Trump may be President-elect of the United States, but when he ran on the slogan “Make America Great Again” it was also based on the assumption that America had once been great and then become something less than great. I’m not certain that all Americans would agree with this broad assessment.
Nevertheless, consultant Joseph Allen posited in a recent piece on IPWatchDog that it might be American innovation that was lagging and could use an infusion of greatness in an article entitled “Make American Innovation Great Again.”
Like many others, I expected to go to bed last Tuesday night to jubilant proclamations by the media that their anointed candidate was the newly elected President of the United States of America. But something unexpected happened on the way to the coronation: blue collar men and women from the heartland arose and overthrew the political class. Government by transnational elites was said to be the inevitable wave of the future but it shattered against a wall of voters in the United Kingdom and the United States where commoners standing up to those presuming to determine their futures for them has a long tradition. They said “No thanks” (actually their sentiments would more accurately be captured in a two word phrase inappropriate for printing here).
One of the collateral casualties of last week’s revolution is the effort to bring our life science industry under UN control and to overturn the Bayh-Dole Act, putting bureaucrats in charge of setting “reasonable prices” for products arising from government funded R&D. You can also write off the associated idea of “delinking” research from markets by having the government take over drug development. Like chickens with their heads cut off, those advocating these positions will flail around for a while but their time is past– for now. However, they will not go away. Rather they will bide their time hoping that the public will accept management of the economy by global elites if the new Administration and Congress fail to deliver on their promises.
The Trump Administration (how odd it feels to write that) and the Republican led Congress have a mandate to get this economy moving again and if they want to maintain power they better produce results fast. To jumpstart the economy we need more than infrastructure projects (seems like we heard about those elusive “shovel ready jobs” somewhere before) — we need to reignite the fire of American innovation. One of the brakes on our prosperity has been the deliberate undermining of the patent system. This was not imposed by some malevolent foreign power but by internal forces which didn’t want to be bothered by pesky patent owners objecting to having their property being taken by their betters. While American innovation manages to lead the world despite a malfunctioning patent system, imagine what we would do if the intellectual property rights of our inventors were protected as the Founding Fathers intended.
It’s a fundamental principal of economics that the secure ownership of personal property is essential for prosperity. Walk through any public park and see how seldomly people bother to pick up trash thrown so thoughtlessly about by a few. But if someone throws trash on your lawn, it will quickly be made clear that this nonsense better stop, including calling the police if necessary. But what happens when the police won’t protect the rights of homeowners? Neighborhoods deteriorate, crime flourishes and investors move their money to other markets. That’s what’s happening to patent owners as “effective infringement” becomes an accepted business practice. However, we’ve been down this road before and have a good roadmap of the way out.
When President Reagan was unexpectedly swept to power, he faced a similar situation. The Bayh-Dole Act had just been passed and some bureaucrats were quietly working to smother the law in the crib because it threatened their power. The essence of Bayh-Dole is decentralizing the management of inventions made with federal R&D out of Washington and into the hands of those doing the research. That idea ran squarely against the competing idea of the time– that we should adopt a version of Japan, Inc. where government planners working with dominant companies plotted the economic future. We heard how much more sophisticated that was than relying on markets and competition. One attractive feature of this model to those on the inside track is that it allows the wielders of political power to reward companies that support them with contracts and other lucrative favors. They also get to punish their enemies.
For the rest of the story, check out Great America