Spencer Heath Archive

Item 3150

Typed transcript and commentary by Spencer MacCallum from conversation with Heath regarding an advertisement favoring the patent system — remembering that Heath was a practicing patent attorney.

July 24, 1954

 

 

 

 

On the Patent System

 

 

“Here’s a full-page advertisement in TIME in favor of the patent system. It says, ‘Do you believe in this?’”

 

 

“THE PATENT

SYSTEM ADDED THE FUEL

OF INTEREST TO THE FIRE

OF GENIUS” — Lincoln

 

 

     As though genius were something that would not operate without stimulation, and as though the supposed incentive of preventing other people from using ideas because you have used them first was an incentive to progress. If it does encourage the patent monopolists, what shall we say of its added incentive to a thousand other men whom it prevents from making use of their own genius in the same line?  Like the dead hand of all political restraints on freedom, a patent monopoly encourages men of ability to take advantage of the poli­tically inhibited ability of many other men. It does not add anything to the freedom of the patent owner, for it gives him no powers he did not already possess. But it does diminish the freedom of any number of men to employ their natural powers.  The progress of civili­zation depends on the freedom of the human spirit and all its powers and nothing else.

 

     Moreover it deadens the incentive of the monopo­list by exempting him from the necessity of even keeping abreast, much less of excelling, others operating in the same line. Like all artificial contrivances in contravention of freedom a patent monopoly works in re­verse and retards the progress of mankind even where, owing to other causes of progress, it seems to advance it. Just as there is no substitute for victory, so there is no better thing than freedom.

 

“What about this example, where a little fellow in business develops a new process and finds that he cannot produce it long before the bigger corporations are under-pricing and over-producing him. They put him out of business. That must lessen his incentive.”

 

We must grant that the little fellow has the jump, and that if we want him to stop jumping just give him a monopoly. If he doesn’t have any patent, then by the time other persons have followed his fine example he will have jumped ahead to other inventions.

 

“Sure, but he has to some selling too — between inventions — in order to stay in business.”

 

I was in that situation. I invented things and went ahead and used them — capitalized them.

 

“You’re thinking of production machinery, not consumers’ goods.”

 

You get on the market before anyone else and collect on it; get your reward. Other people come along, copy cats, and lag in your shoes while you keep your inven­tive genius in practice by jumping ahead to new things, which is a fine incentive for them to do likewise.

“But if the bigger corporations, by under-pricing and over-producing their product, can drive the smaller organizations out of business ..?”

Well to argue against that situation is to say that the public has no right to avail themselves of the superior facilities of a large organization but must give the little man a premium for his incapacity.

“Then you admit his incapacity. This must hurt his incentive ..”

Yes, he has a superior capacity to invent something and an inferior capacity to give the public the benefit of it.

“So you would suggest that the small inventor take a position with the larger corporations?”

That would be a natural thing, for the inventor with small facilities to join a partnership with a producer with large facilities and let each benefit the other and let the public be better served.

Spencer, you can’t argue with people generally be­cause they have an emotional fixation, an unconscious desire to get an unfair advantage over others at the public loss and expense. This wild-animal psychology is not amenable to rational understanding.

“Now you’re just hurling brickbats.”

Yes.  You know, as between two animals, each serv­ing only himself and not serving any general public, such is the best available relationship, for they have no public to serve and no public to serve them in turn. The Golden-Rule technology of each serving many and being by many served in return is not a wild-animal institution nor is it included in the merely animal instincts of men. It is a higher attribute of the more distinctly human nature which transcends the animal.

“Popdaddy, why did you take out patents on your own machinery?”

Because as almost happened more than once, I nar­rowly escaped having somebody patent it ahead of me and so prevent me from using my own ideas. I never had any expectation of making any money out of the patents themselves. Henry Ford often said you make money when you don’t expect to, when you have a higher object in view.

I think that ought to be about enough for tonight, don’t you?

 

But you can make objections one after another just as you have done; every one of them falls to the ground, not one of them withstands rational examination.

“Well I think I won the point that it reduces in­centive for the small, independent inventor not to have a patent system.”

His incentive to take advantage of the public and deprive the public of the use of the larger facilities.

An enterprising manufacturer was once asked admiringly if his competitors did not follow him. His reply was, “Happily for me they do, for that is exactly what keeps them behind – where they belong!”[1]

You ought to have heard what Mr. Varley was telling me on the porch about an ingenious and resourceful young man who obtained a loan at his bank and by stepping out ahead of everybody else, instead of following behind them, built up a many-million-dollar business in a few years. Let’s suppose he had spent his energies and his resources in trying to prevent other people from walk­ing in his footsteps…

I don’t have the patience for it, Spencer, but a person of the plodding disposition of a writer could write a whole volume exploding in a thousand ways these fallacious presumptions as to monopolies benefiting society even temporarily. I haven’t that much patience. I would rather spend my time explaining how marvelously a freedom in society advances the ideals and aspira­tions of mankind — as I have done in my Citadel, Market & Altar. As Spinoza laid it down, “the wise man’s pre­occupation is with life, and not with death” — growth, and not stagnation.