Tuesday, August 19, 2008

Ownership Congestion? Tragedy of Anticommons?

A former World Banker;
Well, I’ve been finding ownership puzzles in a host of disparate places, like waiting around in airports and wondering why we don’t build more runways. Just 25 new runways at our busiest airports would solve most air travel delays. Why don’t we build them? In Europe, for instance, I started thinking about why cell phones work so much better there than here. The answer, in part, is that over 90 percent of our prime spectrum is dead air. Talking to research scientists I asked why we have so many pharmaceutical patents today but so few new drugs that actually help people. My students clued me in to another puzzle: why has African-American farm ownership dropped 98 percent in the last century? And why are so many old television shows, like China Beach and WKRP in Cincinnati, still not available on DVD? Turns out, all of these problems are really the same problem. Private ownership usually creates wealth. But too much ownership has the opposite effect – it creates gridlock. Once people see this free market paradox, once we have a shared language for gridlock, we can begin to talk about it and then to fix it...

A drug company executive tells me he may have a better Alzheimer’s treatment. But to get FDA approval and bring it to market, he has to license dozens and dozens of patents relevant to testing for safety and side effects. So negotiations fail and the Alzheimer’s drug sits on a shelf, even though my informant is confident it could save countless lives and earn billions of dollars.

Very few people or organizations are speaking out against this – against the underuse of property rights. Whom do you lobby for drugs that don’t yet exist or for cures that people can’t yet see? Gridlock, that is, resource underuse, is invisible in comparison with overuse – everyone can see the dramatic results of fisheries being depleted or air being polluted. But with wasteful underuse, the effects are almost always hidden. So when drugs, wireless services, DVDs, and runways go missing, we don’t really have champions ready to set it right. The flip side of gridlock is that it’s one of the great entrepreneurial and political opportunities of our era....

The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives, Michael Heller

The legal framework for private sector development in a transitional economy : the case of Poland

The Liberal Commons

Can Patents Deter Innovation? The Anticommons in Biomedical Research

Eminent Domain and the New York Times

Symmetric Tragedies: Commons and Anticommons
James M. Buchanan and Yong J. Yoon

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