State of Innovation

Patents and Innovation Economics

Libertarians vs Classical Liberals on Patents and Inventors

The libertarian crowd has been at the forefront of the anti-patent crusade.  It is important to understand that libertarians are not consistent with classical liberals, such as the founding fathers and Locke.  I have been looking for a way to illustrate this.  Then I ran across a Wall Street Journal article by Matt Ridley, a darling of the libertarian crowd, which illustrated the differences perfectly. The article ostensibly was about government funding of science. I am sympathetic to the thrust of the article, however, in the second paragraph he states:

“Suppose Thomas Edison had died of an electric shock before thinking up the light bulb. Would history have been radically different? Of course not. No fewer than 23 people deserve the credit for inventing some version of the incandescent bulb before Edison, according to a history of the invention written by Robert Friedel, Paul Israel and Bernard Finn.”

This struck me as a very odd paragraph in an article on government funding of science. Edison was not funded by the government. Mr. Ridley and the people he cites may have never worked in fundamental research or with inventors. This may result in a misunderstanding of the differences between various inventions that lay people group together, which is the case with the paper cited in the article.

mostpowerfulideaRidley’s sole argument about Edison rests on the idea that other people were working on the problem. Thousands of people have tried to solve Fermat’s last theorem since 1637. Does that mean Andrew Wiles proof in 1994 was inevitable? Alternatively, only Edwin Armstrong worked on and invented FM (frequency modulation). Does that mean FM was not inevitable?

The article does stop there however, it goes on to denigrate the work of almost every great inventor and scientist since the Enlightenment, concluding with the statement:

“Simultaneous discovery and invention mean that both patents and Nobel Prizes are fundamentally unfair things. And indeed, it is rare for a Nobel Prize not to leave in its wake a train of bitterly disappointed individuals with very good cause to be bitterly disappointed.”

Ridley is not just attacking government funding of science, he is contending that discoveries and inventions are equally likely, given a range of researchers. If you take the statement above literally, it means that everyone working in technology and science are robots.

However, Ridley provides no evidence for his position and ignores the large variations in the rate of science advancement and inventions in both time and geography. This is not surprising, as Mr. Ridley did the same thing in his book The Rational Optimist, where he claims that most inventions were never patented, however a simple fact check showed that every invention he mentions is the subject of numerous patents.

The excellent book, The Most Powerful Idea in the World by William Rosen, shows that the Industrial Revolution, which was really an explosion in new inventions, was the result of property rights for inventions, i.e., patents, as does my book Source of Economic Growth.

One of the differences between classical liberals and libertarians is that classical liberalism celebrates great people, particularly those who used reason in the areas of science and technology. The Enlightenment was about celebrating the power of reason and rejecting faith and determinism. Thomas Jefferson said the two of the greatest people in the history of the world were Isaac Newton and John Locke.

Perhaps Ridley’s position is not shared by most libertarians. Yet, a recent panel discussion on Reason TV, part of the libertarian magazine Reason, shows Ridley’s position is widely shared. One panelist compared patents to slavery and taxi medallions. Another panelist made Ridley’s point that most inventions were never patented. But, if you eliminated everything in your house that was subject to a patent or made by a process that was once patented, your house would not exist. Most people will quickly understand that all the electronics would be gone, but so would the refrigerator, the electrical power, and even the glass in your windows was subject to patents extending back to Venice.

It would be easy to brand such an anti-intellectual property as arising from jealousy or self-aggrandizement, however, I think that would be a mistake. These libertarians are pushing a version of F. A. Hayek’s cultural evolution. Hayek’s ideas on cultural evolution are based on the impotence of reason. Hayek argues, that the demand for rational, conscious (“political”) control of the concrete particulars of social life is based upon a misunderstanding of the process of cultural evolution and on a hubristic and dangerous overestimation of the capacity of the conscious reasoning intellect.”[1]

Ridley is just applying Hayek’s ideas on cultural evolution to science and technology. He is not the only one; the libertarian/Austrian economist Peter Lewin from University of Texas at Dallas, sadly my alma mater, makes a similar point. He emphasizes that most technical knowledge is tacit knowledge which is something we know but cannot prove or of which we are not conscious. In other places Lewin discusses “social knowledge” which appears to be tacit knowledge we hold collectively. Both Lewin and Hayek are fans of David Hume, who said causation does not exist (or cannot be proved) and induction is invalid or could not be proven valid. For many libertarians the anti-induction, anti-reason David Hume, is a hero.

Classical liberals know that causation exists, that Induction as a methodology, is not only valid, but the source of all knowledge. The most important value to a classical liberal is Reason. They understand that there is no such thing as social knowledge or knowledge of which we are not conscious. Classical liberals understand each person’s mind functions independently and therefore they celebrate great inventors and scientists. They know that without these great people, it is entirely possible that we would still be living in the Dark Ages. One only need look at North Korea, Cuba, or the Middle East to understand that technological progress is not inevitable and is not the result of some determinist spontaneous order.

What is interesting if you look closely at the arguments of Ridley, Hayek, and Lewin is that they are collectivist at an epistemological or cultural level. Their argument against a centralized government appears to be that it distorts this collectivist acquisition of knowledge.

Classical liberals and libertarians both appear to support free markets or capitalism. Beyond this they diverge, especially for the modern beltway libertarians. Classical liberals base their support of capitalism in reason and natural rights, which are discovered by reason. Libertarians base their arguments for free markets based on collective acquisition of knowledge that is disrupted by government interference.

Libertarians often align themselves with Ayn Rand, and claim her as one of their own, however, their ideas are incompatible with Rand’s. Rand herself was highly critical of the creed of Libertarianism, calling them “hippies of the Right.” If Matt Ridley had written Atlas Shrugged, the economy would have hummed along based on spontaneous order and John Galt would not be a genius inventor.





[1], Hayek on the Role of Reason in Human Affairs, Linda C. Raeder, Palm Beach Atlantic University


December 1, 2015 - Posted by | -Philosophy, News, Patents | , , ,


  1. I have been on the fence on this issue because Im still reading all sides of this debate and I want to study this thoroughly. Having said that I do lean in the pro IP camp. However I have to say several things here. You write that “It is important to understand that libertarians are not consistent with classical liberals, such as the founding fathers and Locke” but then you go on at the end of the article to say that “Classical liberals and libertarians both appear to support free markets or capitalism” but they diverge elsewhere. So are libertarians consistent or not? Being consistent doesn’t mean they can’t disagree elsewhere. They certainly share areas of political theory. Einsteinian physics is consistent with Newtonian physics but they certainly “diverge” elsewhere. Perhaps what you meant was the two are not synonymous.

    Libertarianism qua libertarianism does not adhere to one epistemology or another so to accuse libertarianism of rejecting causation is unfounded. You make the claim that induction method is “the source of all knowledge”. I have a question for you? How did you come to that conclusion of fact? Can you rationally provide the basis for that? You totally misunderstood Hume. Hume was not being “anti induction” as you claim and his views deserve a more serious reading then that. He was making a very forceful argument about the of reason and the justification of induction. How do we know that induction provides knowledge? How do we know that the past will predict the future?

    So can you answer Hume’s Induction challenge and tell us by logical and rational argument how do you arrive at the conclusion that the inductive method gives us “the source of all knowledge”?

    I would inform you that Hume had a healthy influence on the founding fathers especially James Madison, “Father of the Constitution”. Professor Donald Lutz made a list of the top 40 most cited writers of this period and Hume comes in 5th just underLocke. Were the Founders “anti reason”?

    A fairer and serious reading of Hume on induction that challenges the view that he was being anti induction/reason is this paper here

    So yes Hayek is absolutely correct about the limits of reason and the collective nature of knowledge. It is a reflection of the limitations and fallibility of humans and reason. Reason must be guided by human experience. The foundling fathers of our country would agree wholeheartedly and reject the God of Pure Reason. They knew that it was not the source of all knowledge.

    You say that”They know that without these great people, it is entirely possible that we would still be living in the Dark Ages”. There never was a “Dark Ages”. Its pure myth and fabrication.

    Also its not true that “Libertarians often align themselves with Ayn Rand, and claim her as one of their own”. Ayn Rand hated libertarians and would have scoffed at such a claim. She called her philosophy Objectivism and did not see that as libertarianism.

    Other than that this was a good article.

    Comment by J.R. | December 1, 2015 | Reply

    • Hayek is absolutely wrong about reason. Induction is the source of all knowledge and Hume first denies causation, which means of course induction does not work without causation. Then people try to demonstrate why induction does not work by making an random connection between things – typically that you see 100 swans and they are all white, so you conclude that all swans are white. The next day you see a black swan – disproving induction. Only someone who ignores causation would draw this conclusion. Doves are white, moths are white, rice is white, so being white in no way defines a what a swan is.

      Yes it would be fairer to say Hume is skeptical. He never had enough guts to make an assertion, but that is just a rhetorical cop out.

      Comment by dbhalling | December 2, 2015 | Reply

      • The “100 white swans then a black one” is not used to critique induction, its used to what it is. That illustration is used to demonstrate the level of certainty that induction gives unlike deduction. No one says because there is a black swan one day, or some other irregularity, therefore induction isn’t true.

        A critique of it would take on the character of what Hume did. It asks what are the very foundations of this idea of induction. Can you justify inductive methods deductively? Of course not because then it would no longer be induction but deduction. Can you justify it inductively? Well then you would be assuming induction’s validity in the very attempt to justify it and so one would be arguing in a viciously tight circle. That is the essence of Hume’s powerful Riddle of Induction. Can you answer the riddle? Id still be interested to hear it.

        I for one do believe in causation but what Hume did was do philosophy a favor by challenging both empiricists and rationalists who cant account for induction on purely empirical or purely rationalist grounds or even a combination of the two. I do believe in causation but the point is to show that Hume rightly demonstrated the limits of reason. This is the same line of thinking that Hayek wrote about.

        History has proven Hayek absolutely right.

        Comment by J.R. | December 2, 2015

      • Nonsense. You do not know what inductive reasoning is and while you state you understand causation, it is clear that you do not. Hayek is wrong and dangerous.

        Comment by dbhalling | December 4, 2015

  2. I understand both things perfectly clear. You are the one who hasnt demonstrated anything except a very superficial understanding of history and philosophy. Anyone who believes Hayek is dangerous should not be taken seriously.

    Comment by J.R. | December 4, 2015 | Reply

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