Home > Uncategorized > Intellectual property and China: No One is back

Intellectual property and China: No One is back

from Dean Baker

I sometimes go under the professional name of “No One” as in “no one saw the financial crisis coming.” I apparently need to use this identification again when it comes to trade war with China.

On Morning Edition today, Jeff Greene interviewed Jonah Goldberg, senior editor at National Review. Mr. Goldberg told Greene how conservatives are free traders so they generally are opposed to Trump’s tariffs. He then suggested that a way out for Trump would be to focus on China’s intellectual property “theft,” since everybody agrees this is a problem.

This is where I come in. I don’t particularly consider the fact that China doesn’t pay Microsoft, Pfizer, and Boeing what they think they are owed to be a problem for people who are not major stockholders in these companies. As a basic proposition, the more money China sends to these companies, the larger its trade surplus in other areas.

More generally, as a basic proposition it is more than a bit bizarre that so many economists can somehow believe both that without patent and copyright monopolies and related protections, there would be no incentive for innovation and that technology causes inequality. If we have a problem with inequality due to “technology,”  it is due to the way in which we assign property rights. Shorter and weaker patents and copyrights means less money to the people on top and more money for everyone else. 

That seems pretty simple, but recognizing an $8 trillion housing bubble ($12 trillion relative to today’s economy) also seemed pretty simple. There is a reason people say that economists are not very good at economics.

  1. patrick newman
    July 9, 2018 at 3:32 pm

    Perhaps these conservatives could be asked what they mean by “free trade” – what’s free about it!

  2. July 10, 2018 at 1:34 pm

    I do think the “technology sharing” behavior of China is bullying. Perhaps justified: Usually it’s the West that bullies other parts of the world to extract resources, compromise their rights, or pay exorbitant IP fees. I would prefer weak IP rights, though, instead of tit-for-tat bullying.

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