I think 'denounced' might be a useful change to this title since Hayek made this denouncement in 1944 and died in 1992. He hasn't changed his position.
That said, I appreciate the post and agree with Hayek in that patent law and corporate law should be very carefully governed so that advantage isn't given to the wealthy and the connected who can afford political and/or legal advantage (I may be injecting a lot into Hayek's rationale).
FWIW, Hayek was a "classical liberal." [1] It's more likely he wanted to get rid of the laws creating patents and corporations, than he wanted them to be highly governed.
If you read the road to serfdom, you would see he was a very reasonable thinker often making room for necessary intervention. He rarely makes a case for out-rightly abolishing anything. Rather he carefully chooses to say that we must be highly analytical and skeptical of all things the government does. Especially in terms of regulation, taxes, laws, and programs.
i was not (and am not) a fan of his economics (at least as seen in current cartoon-like views looking back), and cannot remember why i started reading the book, but it really is excellent (very well written bio with a fascinating subject).
and yes, he was a very smart guy who adapted his views as necessary.
Um, "the laws should be carefully governed" and "the institutions should be highly governed" aren't the same position; they're more or less orthogonal.
I like Kinsella's book on this subject which has much deeper critique of the harm caused by intellectual "property", which is broader than the damage done by software patents alone:
http://mises.org/books/against.pdf
I was just discussing the merits of IP with my dad, who happens to support it. His reasons for supporting IP was mainly to support the "little guy" who managed to come up with an invention.
I can't imagine living in a society where patents don't exist, and someone comes along and says "Hey guys! Let's grant legal monopolies on ideas!". It seems like it would take some serious propaganda to get people like my dad to support IP.
Ask your dad to cite some instances of little guys who benefited from the patent system working as designed.
I would then direct his attention to the case of Robert Kearns. (See http://www.me.utexas.edu/~me179/topics/patents/case3.html for basic background.) Even though he was legally in the right and won his cases, after legal fees, time, etc, he still lost. (He did win more than his cases cost, but I've heard that, thanks to inflation, he actually lost money. And even if he didn't, he still made considerably less than he would have if he hadn't devoted his life to the lawsuits.
Think instead Dyson and Ben and Jerry's. Both were propelled as businesses as a result of winning similar suits.
It is likely that Kearns found the case harder to win after waiting 12 years to bring suit. But wiki shows that the Chrysler judgement was 30M, so we have 2.2M profit from the Ford settlement and likely 22M from the Chrysler judgement. In my opinion this is much more than he would have gotten in licensing fees.
I don't think you're trying to imagine hard enough.
Imagine an inventor or small business who spends years perfecting a process to improve the production of, say, steel. After much work, he publishes it in a journal. What do you think all the steel corporations will do? Will they nicely hand over a bag with ten million dollars in it?
This isn't to say that patents in general or as they exist now are a good idea, but there are certainly ways that eliminating them could and would hurt the little guy.
Today if such an inventor published his idea in a public journal before patenting it, the same thing would happen because it would be prior art.
But in any case, patents are entirely unnecessary for a small inventor to sell his idea. Just create a contract with the company to sell the idea. Your side of the contract says that you promise that your process works according to the parameters of efficiency you say it does, and that you won't reveal it to anyone else. The company's side says he hands over 10 million dollars.
The little guy has only have one, or at most, a handful of patents, while the big guy has thousands, along with a large legal department that works 24/7 on patent lawsuits.
The only people that really benefit from patents are lawyers, and trolls (who are all lawyers).
That said, I appreciate the post and agree with Hayek in that patent law and corporate law should be very carefully governed so that advantage isn't given to the wealthy and the connected who can afford political and/or legal advantage (I may be injecting a lot into Hayek's rationale).