Whatever is the defining idea of the next decade, it ought to be free. Come to think of it, the idea that ideas ought to be free could well be the defining idea of the next decade.
In some ways this is an old notion, but it has new urgency in our increasingly idea-driven world. Lifesaving drugs, performance-enhancing software, and genetically modified seeds are overpriced and hence underused because of the monopoly power conferred by intellectual-property law. Innovation is stifled when artists, inventors, and entrepreneurs are forbidden to riff on others’ themes. Enforcement consumes vast resources. The FBI tracks illegal movie downloads. Shouldn’t they focus on tracking terrorists?
The problem is to make ideas free while still rewarding their inventors. So far, the best solution comes from the Harvard economics professor Michael Kremer, who wants the government to go right on granting patents (or copyrights), but then to purchase those patents at a fair price and place them in the public domain.
The sticking point is determining the fair price. Kremer’s idea is to put each patent up for auction. When the auction ends, a government agent shows up and flips a coin. If the coin lands heads, the auction bidder buys the patent; if it lands tails, the government buys the patent for the amount of the winning bid. That way, half of all patents end up in the public domain, and the government never pays more than some private bidder is willing to offer.
Or better yet, the government agent can flip a weighted coin that lands tails 90 percent of the time. You just have to let the private bidders win often enough so that it’s worth their while to show up and bid sensibly.
There are a thousand questions about how to prevent collusion and other sorts of price manipulation. Kremer has answers. Those details matter, but what matters most is this: The Kremer plan would cost us a bundle as taxpayers, but, by eliminating monopoly power, would save us a far bigger bundle as consumers. I know this because once an invention enters the public domain, it gets used more widely and generates more wealth.
That wealth has to go somewhere. It doesn’t go to inventors, who receive only a fair-market price for their patents. So it has to end up in the hands of consumers. When the pie gets bigger, someone has to get a bigger piece.
The Kremer plan would release a torrent of technological innovation sufficient to enrich everyone who uses patentable products, which is to say everyone. An idea this good can’t be ignored forever, and if it, or something like it, becomes the defining idea of the next decade, then the defining ideas of all future decades will have much richer soil in which to grow.