

Ask HN: Is Intelectual property a special case of the broken window fallacy? - throwaway64

Is intellectual property a net benefit to society, or is it similar to the idea of a broken window, which benefits one party, but is a net drain on the economy? Is IP is not generating anything useful, therefore is a net loss?
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mcherm
In its fundamental conception, I do not think that IP suffers from the broken
window fallacy.

The fallacy goes like this "Breaking a window must be good for the economy
because it employs glaziers". It is false because, although the glazier
(window repairman) gets work, the person whose window got broken loses (and
therefore does not spend elsewhere) at least as much money.

In the case of IP there is a benefit to the inventor/author/IP-owner (just
like for the glazier) and there is a broadly spread cost (just like the person
whose window it was and those she would otherwise be spending money with).
However, there is a key difference: in the case of the window, nothing new was
added. In the case of IP (patent and copyright, not counting trademark, trade
secret, right of publicity or others), the inventor/author/etc creates
something NEW, which benefits all of society, and which they might not create
if they were not motivated by the IP rights.

Notice how this argument shows us what could go WRONG with IP law so that it
was no longer a net benefit to society. If the rights granted to the
individual are significantly more than it takes to motivate them to create
(such as copyrights that last for many decades after the author's death) or if
the IP grant is given for something that does not benefit society (such as
patents on inventions that anyone could have thought of) then IP law is no
longer benefiting society as a whole.

