Intellectual Property Rights, the Industrial Revolution, and the Beginnings of Modern Economic Growth

• Published in: The American economic review Vol. 99; no. 2; pp. 349 - 355
• Main Author: Mokyr, Joel
• Format: Journal Article
• Language: English
• Published: Nashville American Economic Association 01.05.2009
• Subjects: 18th century; British Industrial Revolution; Economic growth; Economic history; Economic theory; Europe; Historical analysis; Industrial Revolution; Innovations; Institutions; Intellectual property; Intellectual property law; Intellectual property rights; Intellectual Property Rights and Economic Growth in the Long Run; Inventions; Inventors; Monopoly; Motivation; Patent law; Society; Studies; Technological change; Technological innovation; United Kingdom > UK
• ISSN: 0002-8282; 1944-7981
• DOI: 10.1257/aer.99.2.349

The importance of the patent system in the British Industrial Revolution has to be scaled down. Inventors were not all motivated primarily by a desire to maximize income: the "two sharp spurs that quicken invention and animate application," as William Shipley, the founder of the society of Arts, put it in 1753, were "Profit and Honour." Much of the reward was indirect, through "honor," which was clearly a reflection of the importance of signaling and reputation in this world. Nor can one altogether rule out any role for altruism, as well as a direct utility from being able to solve hard problems--what could be term the "crossword puzzle" motive. None of this is to suggest that money was unimportant to most inventors. But the patent system, for the vast majority of them, offered a false hope, and the expected payoff of a patent was in all likelihood negative.