Unregulated capitalism has always tended to monopoly. But Big Tech represents a challenge antitrust tools can’t tame.
By Cédric Durand and Cecilia Rikap – Scientia potentia est—knowledge is power. The old adage has acquired a sinister connotation with the alarming dominance of Big Tech in the economy and society as a whole. Corporate Europe Observatory recently revealed that the sector is now by far the leading business lobbyist of European Union institutions.
But this is only the tip of the Iceberg of what the Italian economist Ugo Pagano calls ‘intellectual monopoly capitalism’. Knowledge, which should be a (non-rival, non-exclusive) public good, has been privately appropriated by top companies as capital: the share of intangible assets among S&P 500 corporations increased from 17 per cent in 1975 to 90 per cent in 2020.
For Pagano, the dramatic expansion of intellectual-property rights ‘involves the creation of a legal monopoly that can be potentially extended to the entire global economy’. His claim against a strict IP regime echoes the traditional position of economists treating knowledge as a gratuity.
Friedrich Hayek, for example, contended:
The growth of knowledge is of such special importance because, while the material resources will always remain scarce and will have to be reserved for limited purposes, the uses of new knowledge (where we do not make them artificially scarce by patents of monopoly) are unrestricted. Knowledge, once achieved, becomes gratuitously available for the benefit of all.
Recent calls for a patent waiver on Covid-19 vaccines graphically illustrate this broader principle: general progress requires that knowledge accrued through the experiments of some members of society be freely gifted. more>