Category: Property Rights

All Land in China Owned by Communist Government

(p. B1) WENZHOU, China — Chen Furong and his wife bought their home 23 years ago for its proximity to the city center and for the tree-lined canal just outside. Their dream was to pass it on to their children and grandchildren, a piece of wealth giving their family a share of China’s economic miracle.
Then their neighbor tried to sell her place — and it was all thrown into doubt.
Like every other homeowner in China, Mr. Chen and his neighbor own their homes but not the land underneath them. All land in China is owned by the government, which parcels it out to developers and homeowners through 20- to 70-year leases.
When the neighbor — whose surname is Wang — tried to sell her apartment, local officials told her that her lease on the land had expired. To sell her apartment, they told her, she would have to pay them one-third of the sales value.
Ms. Wang protested in a move that drew national attention. Suddenly millions of Chinese who had socked away billions — and possibly trillions — of dollars were worried as well. If the local authorities in other parts of China did the same thing, they thought, a big chunk of their own wealth could end up with the government as well.
“What will happen after our land lease expires?” (p. B4) asked Mr. Chen, 69, who with his wife holds a 70-year lease. “I will be dead when the lease expires, but will I be able to give it to my son?”

For the full story, see:
STUART LEAVENWORTH and KIKI ZHAO. “Built on Shaky Ground.” The New York Times (Weds., June 1, 2016): B1 & B4.
(Note: the online version of the story has the date MAY 31, 2016, and has the title “In China, Homeowners Find Themselves in a Land of Doubt.”)

Government Land Use Regulations Increase Income Inequality

(p. A1) . . . a growing body of economic literature suggests that anti-growth sentiment, when multiplied across countless unheralded local development battles, is a major factor in creating a stagnant and less equal American economy.
It has even to some extent changed how Americans of different incomes view opportunity. Unlike past decades, when people of different socioeconomic backgrounds tended to move to similar areas, today, less-skilled workers often go where jobs are scarcer but housing is cheap, instead of heading to places with the most promising job opportunities, according to research by Daniel Shoag, a professor of public policy at Harvard, and Peter Ganong, (p. B2 [sic]) also of Harvard.
. . .
“To most people, zoning and land-use regulations might conjure up little more than images of late-night City Council meetings full of gadflies and minutiae. But these laws go a long way toward determining some fundamental aspects of life: what American neighborhoods look like, who gets to live where and what schools their children attend.
And when zoning laws get out of hand, economists say, the damage to the American economy and society can be profound. Studies have shown that laws aimed at things like “maintaining neighborhood character” or limiting how many unrelated people can live together in the same house contribute to racial segregation and deeper class disparities. They also exacerbate inequality by restricting the housing supply in places where demand is greatest.
The lost opportunities for development may theoretically reduce the output of the United States economy by as much as $1.5 trillion a year, according to estimates in a recent paper by the economists Chang-Tai Hsieh and Enrico Moretti. Regardless of the actual gains in dollars that could be achieved if zoning laws were significantly cut back, the research on land-use restrictions highlights some of the consequences of giving local communities too much control over who is allowed to live there.
“You don’t want rules made entirely for people that have something, at the expense of people who don’t,” said Jason Furman, chairman of the White House Council of Economic Advisers.

For the full story, see:
CONOR DOUGHERTY. “When Cities Spurn Growth, Equality Suffers.” The New York Times (Mon., July 4, 2016): A1 & B2 [sic].
(Note: the online version of the story has the date July 3, 2016, and has the title “How Anti-Growth Sentiment, Reflected in Zoning Laws, Thwarts Equality.”)

The paper mentioned above by Ganong and Shoag, is:
Ganong, Peter, and Daniel Shoag. “Why Has Regional Income Convergence in the U.S. Declined?” Working Paper, Jan. 2015.

The paper mentioned above by Hsieh and Moretti, is:
Hsieh, Chang-Tai, and Enrico Moretti. “Why Do Cities Matter? Local Growth and Aggregate Growth.” National Bureau of Economic Research (NBER) Working Paper # 21154, May 2015.

Were Paul McCartney and Michael Jackson Copyright Trolls?

Sometimes all those who own patents as investments are derisively chastised as “patent trolls.” I have argued that some of those so-labelled are productively increasing the funding for invention. If Nathan Myhrvold is a patent troll then we should similarly view Paul McCartney and Michael Jackson as copyright trolls. Why do McCartney and Jackson get a pass, while Myhrvold is chastised?

(p. B3) It is one of the twice-told tales of the music business: Decades ago, Michael Jackson received some sound investment advice from Paul McCartney.

Back in the early 1980s, Mr. McCartney showed his friend a notebook full of songs he owned, by artists like Buddy Holly. The real money, Mr. McCartney suggested, was in music publishing, the side of the business that deals with the songwriting rights for big catalogs of songs. As Mr. McCartney himself has told it, Jackson perked up and said, “I’m gonna buy your songs.”
He did. And it was the smartest deal Jackson ever made.
In 1985, Jackson bought the ATV catalog, which included 251 Beatles songs, along with a few thousand others, for $47.5 million. It proved to be Jackson’s most valuable asset, helping to finance a lavish lifestyle even as Jackson’s own musical career reached a low point in the years before his death in 2009.

For the full story, see:
BEN SISARIO. “McCartney’s Tip Pays Off for Jackson’s Legacy.” The New York Times (Weds., MARCH 16, 2016): B3.
(Note: the online version of the story has the date MARCH 15, 2016, and has the title “Paul McCartney’s Tip to Michael Jackson Pays Off.”)

My paper on patents, is:
Diamond, Arthur M., Jr. “Seeking the Patent Truth: Patents Can Provide Justice and Funding for Inventors.” The Independent Review: A Journal of Political Economy 19, no. 3 (2015): 325-55.

Should We Have a Right to the Silence that “Contributes to Creativity and Innovation”?

(p. D5) The benefits of silence are off the books. They are not measured in the gross domestic product, yet the availability of silence surely contributes to creativity and innovation. They do not show up explicitly in social statistics such as level of educational achievement, yet one consumes a great deal of silence in the course of becoming educated.
. . .
Or do we? Silence is now offered as a luxury good. In the business-class lounge at Charles de Gaulle Airport, I heard only the occasional tinkling of a spoon against china. I saw no advertisements on the walls. This silence, more than any other feature, is what makes it feel genuinely luxurious. When you step inside and the automatic doors whoosh shut behind you, the difference is nearly tactile, like slipping out of haircloth into satin. Your brow unfurrows, your neck muscles relax; after 20 minutes you no longer feel exhausted.
Outside, in the peon section, is the usual airport cacophony. . . .
. . .
To engage in inventive thinking during those idle hours spent at an airport requires silence.
. . .
I think we need to sharpen the conceptually murky right to privacy by supplementing it with a right not to be addressed. This would apply not, of course, to those who address me face to face as individuals, but to those who never show their faces, and treat my mind as a resource to be harvested.

For the full commentary, see:
MATTHEW B. CRAWFORD. “OPINION; The Cost of Paying Attention.” The New York Times, SundayReview Section (Sun., MARCH 8, 2015): 5.
(Note: ellipses added.)
(Note: the online version of the commentary has the date MARCH 7, 2015.)

The commentary quoted above is related to the author’s book:
Crawford, Matthew B. The World Beyond Your Head: On Becoming an Individual in an Age of Distraction. New York: Farrar, Straus and Giroux, 2015.

Marie Curie Opposed Patents Because Women Could Not Own Property in France

(p. C6) Ms. Wirtén, a professor at Linköping University in Sweden, pays special attention to the decision not to patent and how it was treated in the founding texts of the Curie legend: Curie’s 1923 biography of her husband, “Pierre Curie,” and their daughter Eve’s 1937 biography of her mother, “Madame Curie.” The books each recount a conversation in which husband and wife agree that patenting their radium method would be contrary to the spirit of science.
It is not quite that simple. As Ms. Wirtén points out, the Curies derived a significant portion of their income from Pierre’s patents on instruments. Various factors besides beneficence could have affected their decision not to extend this approach to their radium process. Intriguingly, the author suggests that the ineligibility of women to own property under French law might have shaped Curie’s perspective. “Because the law excluded her from the status of person upon which these intellectual property rights depend,” Ms. Wirtén writes, “the ‘property’ road was closed to Marie Curie. The persona road was not.”

For the full review, see:
EVAN HEPLER-SMITH. “Scientific Saint; After scandals in France, Curie was embraced by American women as an intellectual icon.” The Wall Street Journal (Sat., March 21, 2015): C6.
(Note: the online version of the review has the date March 20, 2015.)

The book under review, is:
Wirtén, Eva Hemmungs. Making Marie Curie: Intellectual Property and Celebrity Culture in an Age of Information. Chicago: University of Chicago Press, 2015.

A Swift Defense of Property Rights

(p. B1) When Taylor Swift speaks, even the most powerful company in the world listens.
Less than 24 hours after Ms. Swift complained publicly that Apple was not planning to pay royalties during a three-month trial period of its new streaming music service, the company changed course, and confirmed that it will pay its full royalty rates for music during the free trial.
“When I woke up this morning and read Taylor’s note, it really solidified that we need to make a change,” Eddy Cue, Apple’s senior vice president of Internet software and services, said in an interview late Sunday.
. . .
Ms. Swift, who last year pulled her music from Spotify in another dispute over royalties, called Apple’s policy “shocking, disappointing and completely unlike this historically progressive company.”
“We don’t ask you for free iPhones,” she added. “Please don’t ask us to provide you with our music for no compensation.”
. . .
(p. B5) Ms. Swift has long been outspoken on economic issues for musicians. In a piece in The Wall Street Journal last year, she wrote: “Valuable things should be paid for. It’s my opinion that music should not be free.”

For the full story, see:
BEN SISARIO. “Taylor Swift Criticism Spurs Apple to Change Royalties Policy.” The New York Times (Sat., JUNE 22, 2015): B1 & B5.
(Note: ellipses added.)
(Note: the date of the online version of the story is JUNE 21, 2015, and has the title “Taylor Swift Criticism Spurs Apple to Change Royalties Policy.”)

“Nimble” Account of the Creative Destruction of the Music Industry

(p. C1) Stephen Witt’s nimble new book, “How Music Got Free,” is the richest explanation to date about how the arrival of the MP3 upended almost everything about how music is distributed, consumed and stored. It’s a story you may think you know, but Mr. Witt brings fresh reporting to bear, and complicates things in terrific ways.
He pushes past Napster (Sean Fanning, dorm room, lawsuits) and goes deep on the German audio engineers who, drawing on decades of research into how the ear works, spent years developing the MP3 only to almost see it nearly become the Betamax to another group’s VHS.
. . .
(p. C6) Even better, he has found the man — a manager at a CD factory in small-town North Carolina — who over eight years leaked nearly 2,000 albums before their release, including some of the best-known rap albums of all time. He smuggled most of them out behind an oversized belt buckle before ripping them and putting them online.
Mr. Witt refers to this winsome if somewhat hapless manager, Dell Glover, as “the most fearsome digital pirate of them all.”
. . .
Into these two narratives Mr. Witt inserts a third, the story of Doug Morris, who ran the Universal Music Group from 1995 to 2011. At some points you wonder if Mr. Morris has been introduced just so the author can have sick fun with him.
The German inventors and Mr. Glover operate as if they unwittingly have voodoo dolls of this man. Every time they make an advance, and prick the music industry, there’s a jump to Mr. Morris for a reaction shot, screaming in his corner office.
. . .
Mr. Witt covers a lot of terrain in “How Music Got Free” without ever becoming bogged down in one place for long. He is knowledgeable about intellectual property issues. In finding his reporting threads, he doesn’t miss the big picture: He gives us a loge seat to the entire digital music revolution.
He is especially good on the arrival of iTunes and the iPod.

For the full review, see:
DWIGHT GARNER. “Books of The Times; That Download Has a Back Story.” The New York Times (Tues., JUNE 16, 2015): C1 & C6.
(Note: ellipses added.)
(Note: the online version of the review has the date JUNE 15, 2015, and has the title “Books of The Times; Review: In ‘How Music Got Free,’ Stephen Witt Details an Industry Sea Change.”)

The book under review is:
Witt, Stephen. How Music Got Free: The End of an Industry, the Turn of the Century, and the Patient Zero of Piracy. New York: Viking, 2015.

Having Your Intellectual Property Stolen, Modifies Your Views on Piracy

(p. C18) Dear Dan,
My nephew has been downloading music and movies illegally from the Internet. Without sounding self-righteous, how can I get him to respect intellectual-property rights?
–Patricia
My own view on illegal downloads was deeply modified the day that my book on dishonesty was published–when I learned that it had been illegally downloaded more than 20,000 times from one overseas website. (The irony did not escape me.) My advice? Get your nephew to create something and then, without his knowing, put it online and download it many, many times. I suspect that will make it much harder for him to keep up his blithe attitude toward piracy.

For the full advice column by Dan Ariely, professor of behavioral economics at Duke , see:
DAN ARIELY. “ASK ARIELY; It’s Risky to Rely on Retirement Questionnaires.” The Wall Street Journal (Sat., May 23, 2015): C18.
(Note: italics in original.)
(Note: the online version of the advice column has the date May 22, 2015.)

Fongoli Chimps, Where Prey Is Scarce, Show “Respect of Ownership”

(p. A10) The Fongoli chimpanzees live in a mix of savanna and woodlands where prey is not as abundant as in rain forests. There are no red colobus monkeys, and although the chimps do hunt young vervet monkeys and baboons, the much smaller bush babies are their main prey.
Dr. Pruetz argues that less food may have prompted both technological and social innovation, resulting in new ways to hunt and new social interactions as well. Humans evolved in a similar environment, and, as she and her colleagues write in Royal Society Open Science, “tool-assisted hunting could have similarly been important for early hominins.”
. . .
By and large, said Dr. Pruetz, the adult males, which could take away a kill, show a “respect of ownership.” Theft rates are only about 5 percent. The chimps she studies also have more mixed-sex social groups than chimp bands in East Africa.
Travis Pickering, an anthropologist at the University of Wisconsin, said that with less food available it seems that the Fongoli chimps, “have to be more inventive” and that “these hunting weapons even the playing field for non-adults and females.”
Early hominins may have been in a similar situation, he said.

For the full story, see:
JAMES GORMAN. “Hunter Chimps Offer New View on Evolution.” The New York Times (Fri., APRIL 15, 2015): A10.
(Note: ellipsis added.)
(Note: the online version of the story has the date APRIL 14, 2015, and has the title “Chimps That Hunt Offer a New View on Evolution.”)

The academic article discussed above is:
Pruetz, Jill D., Paco Bertolani, K. Boyer Ontl, S. Lindshield, M. Shelley, and E. G. Wessling. “New Evidence on the Tool-Assisted Hunting Exhibited by Chimpanzees (Pan Troglodytes Verus) in a Savannah Habitat at Fongoli, Sénégal.” Royal Society Open Science 2, no. 4 (Weds., April 15, 2015), URL: http://rsos.royalsocietypublishing.org/content/2/4/140507.abstract .

Hamilton Fostered the Preconditions for Capitalism

(p. 345) In a nation of self-made people, Hamilton became an emblematic figure because he believed that government ought to promote self-fulfillment, self-improvement, and self-reliance. His own life offered an extraordinary object lesson in social mobility, and his unstinting energy illustrated his devout belief in the salutary power of work to develop people’s minds and bodies. As treasury secretary, he wanted to make room for entrepreneurs, whom he regarded as the motive force of the economy. Like Franklin, he intuited America’s special genius for business: “As to whatever may depend on enterprise, we need not fear to be outdone by any people on earth. It may almost be said that enterprise is our element.”
Hamilton did not create America’s market economy so much as foster the cultural and legal setting in which it flourished. A capitalist society requires certain preconditions. Among other things, it must establish a rule of law through enforceable contracts; respect private property; create a trustworthy bureaucracy to arbitrate legal disputes; and offer patents and other protections to promote invention. The abysmal failure of the Articles of Confederation to provide such an atmosphere was one of Hamilton’s principal motives for promoting the Constitution. “It is known,” he wrote, “that the relaxed conduct of the state governments in regard to property and credit was one of the most serious diseases under which the body politic laboured prior to the adoption of our present constitution and was a material cause of that state of public opinion which led to its adoption.” He converted the new Constitution into a flexible instrument for creating the legal framework necessary for economic growth. He did this by activating three still amorphous clauses–the necessary-and-proper clause, the general-welfare clause, and the commerce clause–making them the basis for government activism in economics.

Source:
Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.