Perelman article in MR
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Thu Jan 9 08:30:55 MST 2003
Monthly Review, January 2003
The Political Economy
of Intellectual Property
by Michael Perelman
Michael Perelman teaches economics at California State University,
Chico. This article is based on his book Steal This Idea: Intellectual
Property and the Corporate Confiscation of Creativity (Palgrave, 2001).
His other books include The Pathology of the U.S. Economy Revisited: The
Intractable Contradictions of Economic Policy (Palgrave, 2002) and The
Invention of Capitalism: The Secret History of Primitive Accumulation
(Duke University Press, 2000).
The dramatic expansion of intellectual property rights represents a new
stage in commodification that threatens to make virtually everything bad
about capitalism even worse. Stronger intellectual property rights will
reinforce class differences, undermine science and technology, speed up
the corporatization of the university, inundate society in legal
disputes, and reduce personal freedoms.
We have no precise measure of the extent of intellectual property, but a
rough calculation by Marjorie Kelly suggests the magnitude of
intellectual property rights. At the end of 1995, the book value of the
Standard and Poor (S&P) index of 500 companies accounted for only 26
percent of market value. Intangible assets were worth three times the
value of tangible assets.1 Of course, not all intangible assets are
intellectual property rights, but a substantial proportion certainly is.
While the legal protection of intellectual property might seem
inseparable from contemporary global capitalism, until fairly recently
capitalists were equivocal about such things. During the first six
decades of the nineteenth century, corporations in the United States
were not inclined to respect such intellectual property rights. For
example, they often paid as little as possible, or nothing at all, to
inventors. In addition, the United States did not even recognize
The free-marketeers of the nineteenth century vigorously opposed
intellectual property rights as feudalistic monopolies. Their view of
intellectual property rights mostly dominated political economic opinion
in the United States until the massive depression of 1870s weakened
faith in market forces. In the context of the economic crisis, business
was desperate for anything that would return profits to what they
considered to be an acceptable level.
At first, business owners tried forming cartels and trusts to hobble
competitive forces. In response to vigorous protests, Congress passed
the Sherman Antitrust Act. However, corporations were able to use
patents, which were perfectly legal, as a convenient loophole to evade
the intent of that law. Through patent pools, they could divide up the
market and exclude new competitors. In this way, intellectual property
rights were important in establishing monopoly capitalism.
The strengthening of intellectual property rights accelerated once again
as the bloom wore off the post-Second World War “Golden Age” and the
United States’ export surplus disappeared. Behind closed doors,
corporate leaders successfully lobbied the government to strengthen
intellectual property rights that would give advantages to their
industries. Just as in the late nineteenth century, business saw
property rights as a means of increasing profits when economic
conditions began to sour. The public never had a clue about the extent
to which the government had given away important rights.
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