When someone invents or discovers something, should they be able to keep forever all the rights to that, or might a reasonable assumption be made that others would have eventually discovered or invented it too, and that therefore, at some point the rights to that invention or discovery should become part of the commons?

Henry George: Concentrations of Wealth Harm America (excerpt from Social Problems)  (1883)

a. direct cash outlays, such as cash to corporations for advertising overseas,

b. lucrative contracts, such as with weaponeers et al campaign contributors, and

c. tax breaks that burden would-be competitors, such as tariffs that protect GM and Ford but not autoworkers. Even if we were to abolish subsidies (a) and taxes, eliminating the advantage of tax breaks (c), and negotiate responsible contracts (b), that'd still leave in place

d. seven subtle privileges, mere pieces of paper that government grants its customers at nowhere near market value, positioning the privileged to claim all the surplus value of society.

1. The corporate charter's salient feature is to limit the liability of those choosing to profit by putting others at risk. ...

2. Pollution permits, performance waivers, land use exemptions -- whether granted by bureaucracies, legislatures, or courts - are worth much more than however much government charges and business pays. ...

3. Patents protect the basement inventor, right? Wrong. ...

4. Utility franchises create monopolies in exchange for some public service, such as providing electricity, phone communication, etc. ...

5. Communication licenses for TV, radio, cell phones, and the like are given away for free or for far less than market value, turning recipients into "instant billionaires" (the business press gleefully notes). ...

6. Resource leases for public oil, minerals, forests, and grazing land, are often let at "fire-sale" prices. ...

7. Land titles do protect the average homeowners but because they cost virtually nothing (a paltry filing fee often about $2.00), they also protect enormously wealthy absentee landlords. ... 

Land titles are the granddaddy of all privileges. Historically, titles preceded all others and created a class of elite owners with the power to win the six other indirect subsidies, along with the more direct ones – grants, contracts, and tax favors. To undo and reverse this history, it's necessary to collect and share the natural rents from all seven inconspicuous privileges.

For these pieces of paper, government should charge full market value. ... 

Getting a Citizens Dividend would not only eliminate poverty, it'd also erase any rationale for subsidies - direct or indirect - to the poor or to the privileged. Repealing the free ride of privileges would be like repealing capitalism. Without those subtle detours imposed upon public revenue, owners would have to work to amass a fortune, and work is one of the worst ways known to strike it rich.

What you can do: Dry up the milkmaid state. Dispense with the notion that the state must meddle in enterprise. Dispense the notion from others, too. Focus government on its lone raison d'etre - defend rights. Demand your right to a fair share of natural revenue. ...  Read the whole article

Peter Barnes: Capitalism 3.0 — Chapter 7: Universal Birthrights (pages 101-116)

Dividends from Common Assets

A cushion of reliable income is a wonderful thing. It can be saved for rainy days or used to pursue happiness on sunny days. It can encourage people to take risks, care for friends and relatives, or volunteer for community service. For low-income families, it can pay for basic necessities.

Conversely, the absence of reliable income is a terrible thing. It heightens anxiety and fear. It diminishes our ability to cope with crises and transitions. It traps many families on the knife’s edge of poverty, and makes it harder for the poor to rise.

So why don’t we, as Monopoly does, pay everyone some regular income — not through redistribution of income, but through predistribution of common property? One state — Alaska — already does this. As noted earlier, the Alaska Permanent Fund uses revenue from state oil leases to invest in stocks, bonds, and similar assets, and from those investments pays yearly dividends to every resident. Alaska’s model can be extended to any state or nation, whether or not they have oil. We could, for instance, have an American Permanent Fund that pays equal dividends to long-term residents of all 50 states. The reason is, we jointly own many valuable assets.

Recall our discussion about common property trusts. These trusts could crank down pollution and earn money from selling ever-scarcer pollution permits. The scarcer the permits get, the higher their prices would go. Less pollution would equal more revenue. Over time, trillions of dollars could flow into an American Permanent Fund.

What could we do with that common income? In Alaska the deal with oil revenue is 75 percent to government and 25 percent to citizens. For an American Permanent Fund, I’d favor a 50/50 split, because paying dividends to citizens is so important. Also, when scarce ecosystems are priced above zero, the cost of living will go up and people will need compensation; this wasn’t, and isn’t, the case in Alaska. I’d also favor earmarking the government’s dollars for specific public goods, rather than tossing them into the general treasury. This not only ensures identifiable public benefits; it also creates constituencies who’ll defend the revenue sharing system.

Waste absorption isn’t the only common resource an American Permanent Fund could tap. Consider also, the substantial contribution society makes to stock market values. As noted earlier, private corporations can inflate their value dramatically by selling shares on a regulated stock exchange. The extra value derives from the enlarged market of investors who can now buy the corporation’s shares. Given a total stock market valuation of about $15 trillion, this socially created liquidity premium is worth roughly $5 trillion.

At the moment, this $5 trillion gift flows mostly to the 5 percent of the population that own more than half the private wealth. But if we wanted to, we could spread it around. We could do that by charging corporations for using the public trading system, just as investment bankers do. (For those of you who haven’t been involved in a public stock offering, investment bankers are like fancy doormen to a free palace. While the public charges almost nothing to use the capital markets, investment bankers exact hefty fees.)

The public’s fee could be in cash or stock. Let’s say we required publicly traded companies to deposit 1 percent of their shares each year in the American Permanent Fund for ten years — reaching a total of 10 percent of their shares. This would be our price not just for using a regulated stock exchange, but also for all the other privileges (limited liability, perpetual life, copyrights and patents, and so on) that we currently bestow on private corporations for free.

In due time, the American Permanent Fund would have a diversified portfolio worth several trillion dollars. Like its Alaskan counterpart, it would pay equal yearly dividends to everyone. As the stock market rose and fell, so would everyone’s dividend checks. A rising tide would lift all boats. America would truly be an “ownership society.” ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 8: Sharing Culture (pages 117-134)

So far I’ve focused on the commons of nature and community. In this chapter I explore the third fork of the commons river, culture. By this I mean the gifts of language, art, and science we inherit, plus the contributions we make as we live.

Culture is a joint undertaking — a co-production — of individuals and society. The symphonies of Mozart, like the songs of Lennon and McCartney, are works of genius. But they also arise from the culture in which that genius lives. The instrumentation, the notation system, and the prevalent musical forms are the dough from which composers bake their cakes. So too with ideas. All thinkers and writers draw on stories and discoveries that have been developed by countless men and women before them. To paraphrase Isaac Newton, each generation sees a little farther because it stands on the shoulders of its predecessors. In this way, all new work draws from the commons and then enriches it. To keep art and science flourishing, we have to make sure the cultural commons is cared for.

In addition, unlike most natural commons, the cultural commons is inexhaustible. Shakespeare’s plays can be “used” again and again without diminishing them. The same is true of Newton’s theories, Beethoven’s string quartets, and the information on the World Wide Web. Indeed, the more we use these assets, the more value they bestow. And thanks to technology — from Gutenberg’s press to Marconi’s radio to the globe-spanning Internet — sharing this wealth has become increasingly easy.

Today, unfortunately, this cultural commons, like the commons of nature and community, is being enclosed by private corporations. The danger is that corporations will deplete the soil in which culture grows. The remedy is to reinvigorate the cultural commons. ...

Patently Unscientific

Enclosure of the commons has also been occurring in the world of science. Here, too, the Founders’ intentions were clear. Ben Franklin, no slouch when it came to the dollar, never sought a patent on his most famous invention, the Franklin stove. “As we enjoy great advantages from the inventions of others,” he wrote, “we should be glad to serve others by any invention of ours.” Thomas Jefferson, who served as first head of the U.S. Patent Office, believed the purpose of the office was to promulgate inventions, not protect them. He rejected nearly half the applications submitted during his term. (Eli Whitney’s cotton gin made it through.)

As with copyrights, this stringent approach to patents worked well for a long time. America didn’t lack inventiveness in the nineteenth and early twentieth centuries (and let it be remembered that we stole much of our early technology from the British). But from midcentury to the present, patenting has become a national pastime. The Bayh-Dole Act of 1980, which let universities get patents on taxpayer-funded research and license those patents to corporations, opened the floodgates. Corporate money rushed into academic labs, and with it came a corporate mindset. Where scientists once shared their discoveries openly, many now fear to discuss them, lest someone beat them to the patent office. Today, some say, the secrecy is so intense and the thicket of property rights so dense that the advancement of research has noticeably slowed.

The U.S. Patent Office has gone along with this, issuing patents for everything from one-click shopping on the Internet to genes that are 99 percent nature-made. Often, companies get patents not with the intention of developing them, but rather with the intention of suing someone else who might (a practice known as patent trolling). Figure 8.1 shows the dramatic rise in number of patents issued over the past few decades.

Consumers and taxpayers are burdened as well. Thanks to patents, pharmaceutical companies can charge monopoly prices for up to twenty years after introducing a new drug. This is said to benefit society by providing incentives for research, but according to the Center for Economic Policy Research, the benefit is greatly exceeded by the cost. Pharmaceutical companies spend about $25 billion a year on research, of which about 70 percent is for copycat drugs that mimic competitors’ brands and add no significant health benefits.

The federal government could fund 100 percent of noncopycat research — and place the resulting drugs in the public domain — entirely from cost savings to Medicare and Medicaid. On top of that, the savings to consumers from lower drug costs would amount to hundreds of billions of dollars each year.

To release science from corporate control, we need to take a twofold approach: apply more stringent standards for issuing patents, and provide more public funds for research (with the proviso that publicly funded discoveries stay in the public domain). The track record for publicly funded research has, in fact, been phenomenal. The entire computer industry was spawned by the U.S. Army Ordnance Corps, which produced the first digital computer in 1945. Similarly, the Internet emerged from the Defense Advanced Research Projects Agency and the National Science Foundation in the 1980s. It’s hard to imagine the modern world without either of these breakthroughs, or with the Internet being owned, say, by Verizon or TimeWarner. ... read the whole chapter