Ludwig von Mises Quotes
If the government objects to monopoly prices for new inventions, it should stop granting patents.
This would seem a much easier solution to the problem of monopoly holders charging outrageous prices than trying to fix profits or lay a large tax on the profits. However, few governments ever do this. In many cases the patent holders control or heavily influence the government. There is in addition, in most Judeo-Christian societies an assumption that most people have a moral sense and will not take undue advantage of customers just because they have the power to do so. And in the most egregious cases of monopoly pricing there were many other patents where the inventors were not gouging the consumers. It is always been the minority of businesses that have taken gross advantage of patent monopolies. However at some periods, where there was an oligarchy, all the companies in an area abused their patent monopolies together. An example would be the pharmaceutical industry of the early 21st century.
Ludwig von Mises, 1881-1973, Austrian Economist & Political Philosopher, Human Action, 1949
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Many people believe that patents—especially in the high technology arena—actually inhibit innovation.
When Secretary of State, Jefferson ran the first American Patent Office. The Patent system was originally and educational program, not an intellectual property program. Inventors would keep all their technological secrets to themselves. The idea behind the original patent system was to give an inventor a limited monopoly on profiting from his invention in exchange for sharing his information and techniques with his countrymen—thus improving the technological competency of the entire society. The very first patents were available for public inspection for that reason. And even today, copies of patents are available easily for almost no cost. And few American ideas worked as well as our early patent system. Through its educational role and technology transfer, America came from technological nowhere to being the pre-eminent inventing nation of the world. The balance between public access to invention and innovation and preservation of some rights to the creator of intellectual property is key to modern development.
Whenever price controls have been tried, there always seems to develop a black market. However, some argue that price controls can work very well for a modest period of time in a national emergency and give WWII as an example. Although there was a black market, very few Americans participated in it, and the effect was positive as a result of the patriotism that was so keenly felt by most Americans at that time. Further, capital punishment has rarely worked to prevent any illegal activity. In London, pickpockets were publicly hung while other pickpockets fleeced the crowd watching the hanging ostensibly to dissuade people from pickpocketing.
Ludwig Heinrich Edler von Mises was an Austrian School economist, historian, logician and sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberalism. He is best known for his work on praxeology, a study of human choice and action.
