Here is the introduction to my Buenos Aires talk:

OPEN STANDARDS AND OPEN SOURCE

My thoughts today are based on two quite recent experiences.

The first occurred two weeks ago in Washington, when I had the privilege of meeting the renowned Peruvian economist, Hernando de Soto. As I am sure you know, he is the author of The Mystery of Capital, and a leading proponent of the thesis that a lack of property rights is a major deficiency in the less developed nations.

As soon as DeSoto learned that I was involved in intellectual property, he pulled out his notepad (an old envelope) and began examining me about how intellectual property might fit in with his work – in what ways is IP like physical property, and in what ways is it not? Does his thesis apply to IP – is a lack of property rights a problem in the less-developed world? (The answer is “yes,” by the way.

In the course of our talk, DeSoto made a striking point. He said that discussions of “property rights” anywhere south of the equator carry a heavy burden of 500 years of history in which the phrase “property rights” has been a code meaning “let’s protect the rich.”

This is unfortunate, because it is inaccurate. Throughout history, and everywhere in the world, the rich are the people least in need of laws and settled customs that accept and protect the use and enjoyment of property as a basic human right. The rich have other means of protecting their property, such as by buying arms and men to use them, and by buying governments. Of course, this means that they “protect” not only their own property but everyone else’s as well, which soon belongs to them.

In fact, property rights as a legal and social concept are more important to everyone other than the rich. They are the means by which people become and remain middle class, and it is the poor and the middle classes that need them the most.

Nonetheless, de Soto noted, a different language is needed, because history makes it difficult for people to hear this point about the importance of property rights as the creator and defender of the middle class. Their turn off their attention without listening to the real points.

Unfortunately, our meeting ended before he could provide me with a set of alternative terms.

But the fundamental point remains. That property rights are the great engine of the striving middle class, and of those who want to get to it.

My second recent experience started a few days after my meeting with de Soto. I went to Japan to talk about intellectual property rights, and about the connection of IP to innovation in the information technology industries.

There, too, I ran into a language problem. Beyond the obvious one of not being able to speak Japanese.

As everyone knows, Japanese culture places high value on cooperation. To them, the terms “property rights” and intellectual property are associated with intense competition, with conflict, with (shudder) lawyers, not with harmonious working together. In consequence, the tone of the conversations was about how to limit or ignore property rights in the name of cooperation. They simply assumed that while intellectual property rights might be a useful way of providing incentives for creation and production of new ideas – of new property – that they were not a good mechanism for combining these ideas in the real world of industrial production in the world of information technology.

I can see how this impression came to be. People in the United States do talk a great deal about the glories of competition. And indeed competition is a good and necessary thing – monopolies do quickly descend into sloth and insolence.

But competition is only part of the story. Cooperation is equally crucial for any economy, and particularly for the economies based on highly technical products and services of the information age.

To those of us who extol property rights, their great merit is that they enable cooperation. Sitting in meetings with the Japanese, I realized that they have it backwards – as they worry about cooperation, their goal should NOT be to figure out how to limit property rights in the name of cooperation, but how to best use them to that end.

These two lessons – about property rights as the tool of the middle class and property rights as the mechanism of cooperation – frame my views of the subject of this panel.

posted by James DeLong @ 7:07 AM | Digital Americas

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