Nathan Myhrvold: Bottom-Up Thinker?

Earlier this year, Princeton’s alumni magazine did a glowing profile (I’m guessing all of their profiles are glowing) of Nathan Myhrvold. I learned that he and I have several things in common. Like me, he was once a grad student at Princeton. Also like me, he “seems to have a strong libertarian streak.” Most surprising to me, he apparently considers himself an enthusiast for bottom-up processes:

Now look again at that Dunkleosteus: Those fangs aren’t really fangs. They’re not teeth. They’re sharpened jawbones. Teeth didn’t yet exist on the planet Earth when this creature roamed the seas.

“It’s convergent evolution,” Myhrvold says, and traces with his finger the sharp edges of the proto-teeth. “Notice the bevel is different on each side so they would self-sharpen.”

He adds, “After this, teeth were invented.”

But they were not actually invented, he quickly adds. They evolved. They emerged. There was no one drawing up blueprints for teeth. The market existed for sharp mouth accoutrements; nature innovated to fill that niche.

All of which raises a rather profound question: Were teeth inevitable? And what about the innovations in our own world — are they the result of carefully orchestrated projects, schemes, and hard work, or do they tend to bubble up from a million accidents and casual inspirations?

“Broadly, overall, the way society works is emergent, and it is built on progress — it generally runs downhill toward something better,” Myhrvold says.

6a00d8341c98a353ef00e54f614b188834-800wiI don’t doubt Myrhvold’s sincerity when he pronounces himself a believer in emergent, bottom-up processes. But these beliefs do seem to be in tension with his enthusiasm for drastically expanding the role of patents in the high-tech economy. Because there’s nothing bottom-up about the patent system.

Bottom-up systems are characterized by continuous, vigorous competition. This is obvious in the case of evolution: organisms mutate in many directions at once, and then the fittest animals are selected by the impersonal forces of natural selection. We can see the same dynamic at work in competitive markets. For example, consumers can now choose from dozens of different “social networking” websites. The process of market competition has produced some tentative winners—Facebook and Twitter—but there’s no guarantee their dominance will last. At any time, another firm could come along and knock them from their perches, just as Facebook did to MySpace, and as MySpace previously did to Friendster.

3064100312_13f90f31dbThings would work very differently in the patent-centric technology industry Myrhvold is working to build. The free-wheeling competition of today’s online marketplace exists only because of what Myhrvold calls the “culture of infringement”—that is, a tendency among Silicon Valley firms to ignore the patent system. Myhrvold would replace today’s free-wheeling online marketplace, in which anyone can enter any market at any time, with a much more centralized and bureaucratic process in which winners are chosen by the patent clerks and judges, not consumers. That would probably mean a social networking market controlled by Friendster, and Mark Zuckerberg being forced to go hat in hand to ask Facebook for permission to enter the marketplace.

Whatever else you might say about it, this certainly is not a bottom-up vision for the software industry. Indeed, patent-dominated industries tend to be controlled by one or a handful of large firms, at least until the relevant patents expire. The early sewing machine industry was dominated by a cartel that controlled entry to the sewing machine industry in the 1850s and 1860s. The early telephone industry was controlled by the Bell Company, after Alexander Graham Bell beat a leading competitor to the patent office by a few hours. Competition in the early motion picture industry was preserved only thanks to a “culture of infringement” among independent movie producers who openly defied the monopolistic Motion Picture Patents Company.

84383040_64352bffc0Now, this isn’t always a decisive argument against patent protection. Awarding patents to the first inventor of some technology does create incentives for invention. And if an industry is already highly concentrated, then concerns about the monopolistic tendencies of the patent system may not matter. The pharmaceutical industry fits this profile, and patents seem to work well there.

But whatever you might say about these arguments (and I personally find them convincing for some industries), they certainly are not bottom-up arguments. If you think technological innovation tends to “bubble up from a million accidents and casual inspirations,” you ought to be skeptical of policies that give a handful of large corporations the power to decide who may compete with them.

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2 Responses to Nathan Myhrvold: Bottom-Up Thinker?

  1. Pete says:

    I see what you’re geting at, but isn’t the idea that patents work in industries that are already highly concentrated a bit of a circular argument?

  2. No. An industry might be highly concentrated for reasons that have nothing to do with the patent system. Some categories of technology are highly capital-intensive to develop, or there might be other regulations that create high barriers to entry. Pharma is probably the best example.

    I’m not advocating that industry concentration be an explicit legal standard for patentability. But it’s something policymakers should look at when crafting the rules for patentability.

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