David Brooks argues that the U.S. economy will be all about protectionism going forward. Specifically, he says that we aren't going to be making things in the future, we will support ourselves with the rents earned on patents, copyrights and other forms of intellectual property claims. (Really, I'm not making this up.) There are two fundamental problems with the Brooks story. The first, for us econ wonk types, he is describing an economy that is incredibly inefficient. It is almost certainly true that patents and copyrights are not the most efficient way to promote innovation and creative work, or at least not in most areas. (Here, here, and here are a few short pieces describing possible alternative mechanisms. One will look in vain for economic research that establishes the superiority of patents and copyrights, economists are too bust arguing against tariffs on tires.) The second problem is that he is describing an economy that almost certainly cannot work. While Brooks creative friends may have enough power to control the government in the United States and therefore use its policy power to break into dorm rooms and take the other steps necessary to impose his intellectual property claims, they don't have this power in China and other countries. Why on earth would China, India and the rest of the world pay Brooks' creative friends for their intellectual "property" when they can just have the knowledge for free. We don't have the economic or military power to force our protectionism on China and probably soon India, so I guess we'll have to rely on the moral force of Brooks' arguments.
--Dean Baker
