Individualism, Intellectual Property, and the
Future of Capitalism

Simple coincidence cannot explain that the first known patent was issued not just in the birthplace of the Italian Renaissance, Florence, but also roughly at the moment of its birth (1421). What is most intriguing about the issuance of patent No. 1 to Filippo Brunelleschi, who had invented a loading crane for ships, is less that the Florentine authorities granted it, and more that Filippo had asked for it in the first place. The preamble to this first patent states: “he refuses to make such machine available to the public, in order that the fruit of his genius and skill may not be reaped by another without his will and consent; and that, if he enjoyed some prerogative concerning this, he would open up what he is hiding, and would disclose it to all.”¹ For 20 generations, medieval artisans had devised the means to build ever more complex cathedrals and public works and, yet, we know the names of only a handful of them. Why, then, against all tradition, did one man in 1421 stand up to demand both recognition of, and financial control over “his genius and skill”?

The answer encompasses both changes to economic life and to the way people viewed themselves in society. In part, Filippo wanted control over his invention because economic changes had suddenly made it valuable beyond historical precedent. In the early fifteenth century, Florence had not only secured access to the markets of Constantinople and Cairo, but also had developed rudimentary banking and insurance skills which spurred a dramatic increase in trade. Still, the middle ages had witnessed the invention of the stirrup, the windmill, and the flying buttress without ever making an inventor wealthy. Perhaps more significantly, this obsessively commercial Italian city-state had incubated a view of people as no longer simply anonymous souls in an organic, hierarchical society held together by bonds of piety and obligation. Though argued to be classically-inspired, this singlatore uomo emerged as a new person in history, an active, self-directed agent in an expressive, creative and possessive society, in short, an individual in the world as it is, not as it should be.

The very idea of a patent broke tradition with the norm of outright seizure. Florence’s rulers probably devised it as a trial-and-error response to an individual who had unexpectedly redefined what he could possess in and of himself at a time when the city was striving hard to improve its reputation vis à vis Venice as a safer and more profitable venue for the Eastern trade. Not to be outdone, Venice, itself, soon ran patent contests offering winners even more favourable terms.

If, for the city fathers of Florence and Venice (and shortly thereafter the German and Dutch trade cities), the granting of a patent was simply a calculation of costs and benefits, for Filippo, and the inventive individuals who followed him, it was a revolution in their economic and legal relationship to both the state and the broader business community. They held a property right, if only temporarily protected, to the relatively exclusive use and control of the physical and practical forms derived from their own unique insights into the possibilities of matter. What they owned the state could not seize, nor competitors steal. Thus, from its beginning, the patent embodied, in the words of Michael P. Ryan, “the philosophical tension between natural property rights and public welfare—enhancing incentives for risky investment.”²

One could, indeed, write the history of patent law as the shifting relative value of personal property rights versus a mere incentive for innovation and investment. Deputies of the National Assembly during the French Revolution asserted that an inventor’s property right in his or her discovery represented one of the “rights of man.” They desired in part to restrict the state and the aristocrats who controlled it from exploiting productive and innovative members of the bourgeoisie. In contrast, Thomas Jefferson, who worried less about aristocrats and more about the social value of proprietary knowledge, wrote Article I, section 8, of the Constitution to establish patents for strictly utilitarian purposes; in his words, “to promote the progress of Science and the useful Arts.”³ In the years since, fierce debates have broken out over whether intellectual innovations ought to be governed by property rights or by the utility of government’s either granting or removing monopoly privileges.

One could conclude that personal interests will forever determine the debate. On the one side, inventors and their lawyers insist that intellectual property rights are about preventing theft. On the other, politicians and economic planners assert that patent “law” concerns the balance between industrial incentives and the diffusion of useful knowledge. But just as the Renaissance created “new facts” as to the nature of capitalism and to the nature of mankind, thus altering profoundly the treatment of innovation, so, too, will the next 20 years re-shape our thinking of intellectual property protection, tipping the balance farther towards a property-rights based conception of intellectual property.

The impetus, the “new facts,” lies beyond the obvious—an economy increasingly driven by technological advances and thus more heavily dependent on proprietary knowledge, be it in the new (computers and software), or the traditional (medicine and agriculture). This greater dependence on intellectual property is not changing the nature of modern capitalism, but rather allowing it to operate at a qualitatively higher level of efficiency. New communication tools have sped the diffusion of both market information and production, thus speeding up the articulation of consumer preferences and the ability of producers to respond. It is no longer necessary to have either a central market or a central factory. Technology has simplified and automated monitoring and process functions, thus reducing both transaction costs and personnel costs relative to a unit of economic output. Technology has allowed us to become more productive, while at the same time subjecting us to fewer hierarchical and personal controls. Just as the innovations of banking and insurance awoke Florence to the possibilities of early capitalism, the greater economic role of intellectual property has brought into clearer focus Friederich Hayek’s vision of “extended order” through the “rule of law.”⁴

As entrepreneurs flourish and more individuals work for themselves (roughly one in six North Americans), the concept of productive work in a capitalist economy has embraced new, decentralized configurations. Work can be self-directed. High levels of economic activity can be sustained by networks of self-contracting individuals and not just by economies-of-scale corporations. This emergent free-agent capitalism will, in turn, give greater weight to the insight of Austrian economics—that our “producer surplus” lies less in the hours of our labour and more in our creativity.⁵

In time, this understanding should further strengthen and extend to intellectual property John Locke’s familiar argument that individuals own their labours, at least initially.⁶ If the value of our labour lies in the product of our minds, we have no less a right to own it than the product of our physical labour, regardless of the social cost. If anything, the argument for the personal possession of intellectual creativity is stronger than for physical labour because the former is by definition unique. As such, it remains outside the purview of the state and society until we choose to share it. Though collective rules may define the limits of possession, they should still respect the origins of possession.

It would be insufficient to argue circularly that the current highly productive use of “owned” knowledge (patents) proves the case that property law, not policy wishes, guide decision-makers. Just as in the Renaissance, economic opportunity is alone an incomplete force to change attitudes. As in the fifteenth century, the legal recognition of intellectual property arose in response to both a new form of economic organization and to a new sense not just of self, but of its abstraction—the individual. If we are not surprised today that the nature of the economy is in flux, neither should we be if our ideas of the individual are shifting. At least, Western history shows individualism to possess an ontology or a story of change.⁷ This cannot help but alter the cultural boundaries into which we cast the nature and treatment of innovation and innovators. After all, it was a champion of the individual, not of economics, Lysander Spooner, the nineteenth century libertarian, who first coined the potent phrase, “intellectual property,” recasting unalterably the debate.⁸

Will our society, in the new millennium, recognize even greater individual autonomy, thus further shielding intellectual property from the short-term utilitarian machinations of a politicized state? It should, but wishes are poor predictions.

Still, if the hard-edged men of Renaissance Florence could figure out the advantage of patents in the first place, perhaps we can discern the potential value of conceiving of intellectual property as individual property before the law. In the real world, full of Filippo Brunschellis and Bill Gateses, the power of these individuals’ imaginations may illuminate a social self-interest expanding our current definitions of collective utility. The future of individualism, intellectual property, and capitalism should not be bound by today’s crude efforts to measure and analyze them.

Notes

1Bruce W. Bugbee, Genesis of American Patent and Copyright Law (Washington: Public Affairs Press, 1967), p. 17.

2Michael P. Ryan, Knowledge Diplomacy: Global Competition and the Politics of Intellectual Property (Washington: Brookings Inst. Press, 1998), p. 7.

3Tom Bethell, The Noblest Triumph: Property and Prosperity through the Ages (New York: St. Martin’s Press, 1998), p. 262.

4F.A. Hayek, Law, Legislation and Liberty, Vol. 2, The Mirage of Social Justice (Chicago: University of Chicago Press, 1976), p. 125 and following.

5Virginia Postrel, The Future and Its Enemies: The Growing Conflict over Creativity, Enterprise, and Progress (New York: The Free Press, 1998), p. 35.

6John Locke, Second Treatise of Government, Section V, C.B. Macpherson, ed. (London: Hackett, 1980) (1690)

7Charles Taylor, Sources of the Self: The Making of the Modern Identity (Cambridge, Mass.: Harvard University Press, 1989), pp. 8-14.

8Bethell, p. 259.

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Last Modified: Wednesday, October 20, 1999.