Monday, September 26, 2011

Should we knock off "Operation Knock Out Knock Offs"?

Mississippi, which is not exactly the place which comes to mind when one considers intellectual property theft, has just received a $200,000 grant to "continue the fight against counterfeit merchandise."

A number of observations here.

First of all, I loathe when USG agencies "combat" or "fight" something.  That is usually an immediate red flag indicating potential wastefulness.  Such ambitious language usually underlines a questionable mission disguised in the language of necessity.

Secondly, I see the grant is going to fund overtime.  If there is one thing I know about overtime, it's that workers love to publicly complain about it, but in reality almost all of them love the extra pay.  So much that they'll even fight over it.  I have to wonder if someone has carefully vetted this grant to make certain such OT is really merited.

Thirdly, I am not entirely comfortable with the concept of protecting "intellectual property," let alone having the federal government lead the effort.  Bear with me here, because at first glance copyrights, patents, and similar protections for innovations seem sensible.  I have to concede they are Constitutional, so my curiosity here is purely speculative- I do not doubt the USG lacks the authority to act in this area.

But might one argue that granting a monopoly to certain concerns is contrary to the principles of the free market?  If someone writes a song or invents a drug, did they really create that innovation, or just discover it?  And if they did only discover it, then shouldn't their windfall end with the benefit of uncovering it, not ensure them a long-term cornering of the market?

I understand the argument that absent government intervention, there would be no financial incentives for firms to engage in exploratory behavior.  But imagine the other side of the coin.  If were were to remove government sanctioned monopolies from the equation, the inflated prices we're presently paying for for many items would plunge.  Consider how much the price of music has gone down since clever teenagers started pirating MP3s.  Put the stuff in the public domain and the costs collapse.  Might that benefit outweigh the advantages of innovation borne from government protectionism?

I'm not sure it will, and suspect if I spent more time reading classical economics and less time enjoying lawfully downloaded MP3s, I might know why.

But what about this argument.  Couldn't the private sector enforce it's own anti-counterfieting efforts?  Why is the USG recruited into this effort, spending $200,000 in a state that has no Times Square, Hollywood Boulevard, or whatever that street is on South Beach that sells fake Gucci purses.

It seems to me that if an individual or company is benefiting financially from the labor or inventiveness of another firm or individual, the proper recourse is to pursue a cause of action in a civil court.  Crimes are offenses against a community, civil violations are between private persons or corporations.

The one exception to this area, which Mississippi's Operation Amusing Name takes note of, is items of public health.  Obviously if someone is passing off dog meat as Burger King Whoppers (just sayin'.....) there are public health concerns.  But again, this is traditionally a concern of the states, not the USG.

I suppose the root of my concern is the knowledge that the number of corporate lobbyists on Capital Hill far outnumber those advocating for consumers.  While it is possible the USG's anti-intellectual property theft initiated with some well meaning bureaucrats out to protect Johnny Flatscreen and Jane Zinfandel, I am reminded of the various recording associations, who seem to have hijacked a number of US Attorney's offices in recent years to chase down 15 year olds who dared to use Limewire to copy Arcade Fire MP3s.

I would hate to see a very critical role of government at all levels, anti-fraud protection, to be dominated by interests worried less about keeping the market free and open, than maintaining their own government subsidized dominance.