That's right folks, the world's richest man stages a guest appearance on the Washington Post's opinion pages, a.k.a. "the coward's corner" for the Post's refusal to print dissenting opinions. I mention the column to call attention to one bigtime fallacy that Mr. Gates promulgates in this piece and also to his assurances that highly educated workers can still enjoy government protection from international competition in his ideal world. (Okay, it's also fun to beat up on Bill Gates.) Mr. Gates's myth is that the strong intellectual property laws in the United States are a reason that the country enjoys a competitive edge in innovation over other countries. Apparently, the worldest richest man does not get his logic subjected to scrutiny by the Post's editors. Under TRIPS and other trade agreements, the vast majority of countries in the world are obligated to give exactly the same intellectual property rights to any innovation, regardless of where the research that led to the innovation actually took place. This means that an innovator in India or Bolivia would enjoy exactly the same patent and copyright protection in the United States, Europe, Japan and almost everywhere else, as an innovator based in Seattle. The strong protections in the U.S. give no reason whatsoever for a firm to locate their research here. A profit maximizing firm would locate their research in the country that has the lowest research costs, regardless of the strength of its intellectual property rules. (Presumably the folks who make these decisions at Microsoft are aware of TRIPS.) The other reason why I am so fond of Mr. Gates piece is that he argues for more H1B visas to admit highly educated workers, but then adds: "this program has strong wage protections for U.S. workers: Like other companies, Microsoft pays H-1B and U.S. employees the same high levels -- levels that exceed the government's prevailing wage." There you have it, Bill Gates is assuring the country's highly educated workers that they need not worry about being treated like the country's autoworkers or dishwashers -- the law will ensure that they will not have their wages depressed by foreign competition. Of course, the increased supply of foreign workers does depress wages, but is interesting that such a pillar of the IT era feels the need to assure U.S. professionals that they will not be subjected to international competition. Regular BTP readers know my view on this one -- we make our less educated workers compete with low-paid workers in the developing world. This has benefitted highly educated workers by driving down the cost of manufactured goods, restaurant meals and other goods and services produced by low-paid workers from the developing world. International competition for the highly educated workers would lower the price of the services they produce and thereby benefit less educated workers. But, the conservative nanny state has to protect the boys and girls with advanced degrees since they are not yet ready for the same sort of international competition faced by autoworkers and custodians.
--Dean Baker
