Increasingly, the path to development for these poorer countries seems to follow a pretty set path, complete with a corporate roadmap. Most developing countries seem to view the addition, for example, of a McDonalds as a step in the right economic developmental path. But is it? I would argue not so. Perhaps McDonalds isn’t the company to be worried about when it comes to taking advantage of the poor (or perhaps it is), but the point is this: Once these large companies come to play in the local economy, they bring their own set of legal tools with them, generally designed to pump as much wealth out of an economy as they can. These legal tools can be as simple as: buying up advertising on local television channels, so much so that the price goes up and up and local businesses can no longer afford to advertise, or: repealing domestic laws that protect the people but inhibit the company from pursuing profits (such as Philip Morris suing a small government in international courts for banning their cigarettes, using Investor State Dispute Settlement legislation). But the result is always negative for the developing nation.
At this point I should mention my initial frustration of moving to Asia and discovering how many IP laws, especially patents and trademarks, were being skirted or flat out broken, with little to no ramifications for the violators. I was frustrated, and sometimes still am, at the idea of an economy directly leaching the intellectual efforts of another country without contributing a cent to those efforts. But, as you may have realized, there is a contradiction here. How can I be both in favor of reformed (or possibly dissolved) IP laws, but also be opposed to infringing of those laws today? Well, the answer is not a terribly complex one, and it goes like this: The best proposed parts of IP law (such as cultivating innovation) only really work well when everyone is playing by the same rules, when you are following all the rules but you’re playing with someone who’s using loaded dice, it’s not the same game anymore. That’s the case in today’s current IP market. I realize it may be a bit subtle, but IP law does guarantee that if a company wants to create a better car, they and only they have the rights to do so in that particular way for a long period of time, and that these rights exist to stop another car company from just copying their car design and selling it cheaper and undercutting all of their rights; and that is essentially what often happens across international borders today. But, the difference between copying someone in today’s world, where companies are following the traditional model of trusting the state to protect them from IP theft and a post scarcity transhuman model is the need for that protection.
In a traditional market amount of a resource generally marks the value of this resource. So, things like potatoes are valued by how many potatoes are available to me, as a consumer. This goes for technology as well, the price of a computer, and now a smartphone, is generally kept down by the amount of competition, there are an abundant number of choices when buying a digital potato – I mean smartphone. But, the difference is that the total number of potatoes today is limited by how many potatoes can feasibly be grown in fields, without driving the price to 0. Whereas a smartphone is only limited by competition and availability to certain extent, as there is another market force at play, specifically patent law. Smartphone companies are notorious for protecting their patented IP’s ferociously, and do so because it is the major source of their income. They don’t make money for the physical products they make, rather they make money because to buy means buying one they made their way, using their patented technology. Essentially you are paying for the right to use their IP as much as you are to own their smartphone. But although I call it a different market force, it is essentially the same as scarcity, it’s just artificially created (meaning not created by market conditions alone) scarcity, done through legal instruments, rather than a lack of product. The law protects the company’s right to make a digital potato- smartphone, and doesn’t protect the right to grow an actual potato. It can easily be argued that the technology to grow a potato is considerably less intensive than that of developing a new smartphone, and that is true, for now. Silicon technology is interesting in that things like processors follow Moore’s law, which as a theoretically foreseeable conclusion that is rapidly approaching. This conclusion would mean that processors couldn’t be made any more efficient/smaller, at least not the way they are now. Instead, the S curve that Ray Kurzweil is always referring to will have plateaued, leaving tech developers with a digital potato, a product that is only limited by the resources required to create it. And given the increasing efficiencies of manufacturing, it would seem that those costs probably wouldn’t be very much by the end days of Moore’s law. The problem is of course that these companies will still get to hold the patents on their last generation Moore’s law processors, for a very long time (depending on country it can be over 100 years). Whereas potatoes will continue to grow in a field equally well in Russia or America.