
Is intellectual property law the new protectionism? Canada should be wary - walterbell
http://www.theglobeandmail.com/report-on-business/rob-commentary/is-intellectual-property-law-the-new-protectionism-canada-should-be-wary/article27372889/
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scottfits
Most the benefit of IP law goes to media and consumer products as opposed to
software anyway. Our industry is much less protected, and perhaps that's one
reason there's been so much more innovation in tech. Imagine the concept of
"open source" applied to other industries, it almost seems ridiculous.

~~~
hackuser
Fashion, a design-heavy field, is effectively open source. You like the Armani
jacket? You can make one just like it or copy elements you like (without the
branding, of course). The industry innovates pretty quickly too, as your
theory predicts.

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rayiner
Is there any innovation in the fashion industry? Or just . . . changing
fashion?

~~~
hackuser
I know very little about fashion msyelf, but let's be careful not dismiss
advances in a field simply because many people here have no interest in it.

~~~
rayiner
Let's also be careful not to overuse "innovate" until it has no meaning.
Fashion _changes a lot_ but that does not mean it's _advancing_.

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dnautics
Hardly "new". Smart people have been identifying it as protectionism since at
least Benjamin Tucker (Ca. 1880) and probably before, too.

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nickbauman
"Intellectual property is designed to encourage innovation and the
dissemination of knowledge by, somewhat paradoxically, restricting access to
knowledge."

For software this still makes no sense. As far as protectionism is concerned,
protectionism is precisely the way first-world economies became such. It's a
myth that trade liberalization moved any economy indigenously forward. (This
does not mean that all liberalization is bad)

~~~
bmelton
I'm having a hard time parsing this sentence:

> It's a myth that trade liberalization moved any economy indigenously
> forward.

What does "indigenously forward"? Are you implying that trade liberalization
does not move indigenous economies forward? Or is "indigenously forward" a
term with which I'm not familiar?

I'm having a hard time with the statement as a super-majority of economists
agree that liberal trade is a net boon, and hence, am wondering where the myth
part comes in, but without understanding the latter part of the statement, I'm
confused.

~~~
phillmv
>I'm having a hard time with the statement as a super-majority of economists
agree that liberal trade is a net boon

Not the OP but familiar with some of these arguments.

Free trade is held to be pareto optimal outcome - you and I get cheaper
tshirts, people in bangladesh get higher incomes because of tshirt
manufacturing, everyone is better off because of comparative advantage, etc.

However, if we distinguish between _development_ or _industrialization_ , then
free trade provides strong disincentives wrt investing in capital intensive
industries where one does not have a comparative advantage.

If I have capital to invest in Bangladesh, it does not make sense for me to
try to create a high-end equipment factory; German manufacturers are way more
efficient and effective, so it will be very hard for me to compete.

The competitive advantage of my region is cheap-labour, so all investment will
be biased towards that. Unfortunately, this means that it's very hard to
create high-value-added industries that can substantially raise average
incomes.

If we look into the historical record, we find that the industrial revolution
was a period of high tariffs and protectionism; the British empire had a great
advantage in acquiring raw materials but IIRC, the French textile industry was
more efficient at the time.

As a result, they were incentivized to export raw resources and import high
value added materials. This is a loser's game. Instead, with the application
of high tariffs British manufacturers were now able to compete and thus were
incentivized to develop their own industry.

Again, IIRC, you can basically take every well-industrialized nation and look
back to the period where they gained their industrial edge and you will find
high tariffs and protectionist policies aimed at protecting and developing
their own internal industries.

(This is a decent segue into talking about how pareto optimal outcomes,
without taking the initial distribution of resources into account, aren't
automatically moral or just
[http://www.interfluidity.com/v2/5537.html](http://www.interfluidity.com/v2/5537.html)
)

TLDR: free trade makes things cheaper, and spreads money around, but it does
not automatically make poorer countries _substantially_ richer.

~~~
tomp
I'm not sure your argument is valid. People in Bangladesh are competing by
offering their cheap labour becaus that's the most effective way for them to
compete, and the best investment of their time/money.

Sure, you could make a high-tech plant in Bangladesh, but it would cost you
much more (in time and money) than making one in Germany. Instead, you first
invest into a low-cost low-skill plant, make the workers' lives a bit better,
they can afford better education, and so on, and very soon you'll have high-
tech companies there as well.

I think the main problem with free trade is completely different - that
countries don't just compete on cheap labour, but also (mainly?) on lack of
regulation - the West tries to pass laws protecting the workers, people's
health, the environment... but companies simply product their products
elsewhere where these protections don't apply, and then sell these products in
the West with comparatively low tarrifs - destroying the local competition
that actually abides by all the health/conservation/safety laws.

~~~
astazangasta
>Instead, you first invest into a low-cost low-skill plant, make the workers'
lives a bit better, they can afford better education, and so on, and very soon
you'll have high-tech companies there as well.

This is confusing - if the goal is to have high-tech companies there, and it
should be, why wait? If it's more expensive, spend the money - it's an
investment. Why spend years and years crawling along on low-margin sales of
labor? The workers lives will be "a bit" better, but this sort of accumulation
will be extremely anemic. It's hard to get ahead sewing T-shirts.

Meanwhile, compare Korea or Japan, which built actual industries instead of
pursuing their comparative advantage and became economic powerhouses.

~~~
bediger4000
I believe that Japan has historically had maybe not "high tariffs", but other
protectionist policies: [http://www.huffingtonpost.com/ian-fletcher/japan-the-
forgott...](http://www.huffingtonpost.com/ian-fletcher/japan-the-forgotten-
prote_b_850269.html)

I think that Japan is an example of a very protectionist economy that built up
internal, high tech factories and educated workforces. It's a counter-example
to the free trade argument.

~~~
astazangasta
Nearly all developed economies are counter-examples. Korea is the same way, as
is the US, England, etc. All of these nations used tariffs to protect their
native industry while they were developing. The same argument could be made
for China, that they liberalized slowly over a period of decades to protect
their native industry.

~~~
RodericDay
This sounds like some stuff I read from a Ha-Joon Chang book once. Who or
where can I read more along these lines?

I am Peruvian so the topic is extremely interesting to me.

------
SixSigma
There's nothing wrong with protectionism, check your assumptions.

~~~
vezzy-fnord
Not innately. However, protectionism strongly encourages modeling the economy
in adversarial and conservationist (status quo-preserving) terms. It's the
same logic that people use when talking about how immigrants are crowding them
out of the labor market. There's a kernel of truth, but taken too far it
becomes destructive to pursue.

The end result of protectionism taken to its conclusion is autarky, which has
some highly notable and horrible failures, _especially_ in more contemporary
times. The protectionist agent is, of course, the state. And contrary to many
social critics who shriek of "market failures," there are also corresponding
government failures that are often far more disastrous, as public choice
theorists have written on the subject, for instance. This along with the
problems of state power that we all know too well.

Autarkies necessarily have high levels of central planning that lead to such
issues as undersupply, allocative inefficiencies from distorted signaling,
more frequent rationing, shortages incurred by price controls and high amounts
of idle or unproductive labor with possible frantic/erratic production cycles
("employed unemployment").

~~~
SixSigma
Free trade traps agrarian societies into eternal peasantry enforced by the WTO
and clinging on to the Ricardian comparative advantage of nations.

~~~
AnimalMuppet
You're very efficiently generating pithy sound-bites, but I'm not sure that
you're either listening or thinking...

~~~
SixSigma
I leave the deep thought to the professionals

[http://www.freetradedoesntwork.com/](http://www.freetradedoesntwork.com/)

~~~
AnimalMuppet
Yeah... um... you might do better with a bit more range in the professionals
whom you allow to do your thinking for you...

~~~
SixSigma
Gosh, yes, thanks for the advice. I'm looking forward to reading my second
book. I'm hoping it's about why Spanish people are really good at making
shoes.

