From AEI, another helpful corrective for the common claim that American incomes have stagnated, this…
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Image of the Day: Yes, Incomes Have Risen

From AEI, another helpful corrective for the common claim that American incomes have stagnated, this one incorporating the fact that the average size of households has declined over recent decades:

. [caption id="" align="alignleft" width="1309"] Median Incomes[/caption]

.  …[more]

September 19, 2019 • 10:03 am

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The Fuel to America's Fire of Innovation and Prosperity Print
By Timothy H. Lee
Tuesday, October 13 2015
[T]he simple fact is that one cannot identify an alternative IP system in the world today, or throughout human history, that has resulted in greater utility than our own.

In an excellent new piece entitled "The U.S. of Awesome:  Yep, America Still Leads the World in Innovation and Economic Dynamism," James Pethokoukis of the American Enterprise Institute (AEI) highlights how, despite our own regulatory and tax headwinds in the Era of Obama, America continues to outpace the more sclerotic socialist economies of places like Europe.  In addition to producing many more billionaire entrepreneurs and much greater turnover in corporate titans, he notes that "the US produces far more large tech start-ups than all of Europe combined." 

Although Pethokoukis doesn't delve deeply into causal factors, the fact is that much of the credit goes to our system of intellectual property (IP) protections. 

Specifically, the U.S. maintains the world's strongest legal protections for IP.  And what do we have to show for it?  Only the most innovative, prosperous, powerful and artistically prolific society in human history. 

That relationship isn't coincidental, but rather causal and intentional.  Our Founding Fathers, in devising a constitutional republic unprecedented in the human experience, specifically included protection for IP rights in the text of the Constitution they created.  Article I, Section 8 provides that, "Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." 

The Founders recognized that, as with every other type of property, protection of intellectual property in the form of patent, copyright and trademark recognized individuals' inherent right to the fruits of their own labor while also incentivizing productive activity.  As James Madison, the Father of the Constitution, emphasized, "The public good fully coincides in both cases with the claims of individuals." 

Several decades later, onetime patent attorney Abraham Lincoln observed that, "The patent system added the fuel of interest to the fire of genius in the discovery and production of new and useful things."  And as the Supreme Court confirmed a century after that, "encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors," while "sacrificial days devoted to such creative activities deserve rewards commensurate with the services rendered." 

Thus, America's strong historical protection of IP rights reflects both the importance of economic incentives - the utilitarian angle - as well as the recognition that free people possess a natural right to the fruits of their labor and investment. 

So why does all of this matter at the moment? 

Because our system of IP rights remains under deliberate assault both domestically and from abroad. 

Overseas, nations with weaker IP laws seek to wrangle concessions from the U.S. in negotiating free trade agreements.  Although free trade agreements offer a critical path toward even greater prosperity for America and our trading partners alike, we shouldn't allow other countries to exploit them to weaken our IP protections and jeopardize our position of global leadership in innovation and discovery. 

And here in the U.S., skeptics and special interests who seek to weaken IP rights claim that the Constitution's IP protections are utilitarian in nature, as opposed to natural rights.  The obvious flaw in that claim is that utilitarianism obtained more widespread popular currency in the 19th century, several decades after the Founding Fathers drafted the Declaration of Independence and Constitution.  They were steeped not in cold utilitarianism, but rather the natural rights theories of John Locke, who observed that, "a person rightly claims ownership in her works to the extent that her labor resulted in their existence." 

Even accepting for the sake of argument, however, that America's IP protections arose from solely utilitarian rather than natural rights ideals among the Founders, the simple fact is that one cannot identify an alternative IP system in the world today, or throughout human history, that has resulted in greater utility than our own. 

There are hundreds of nations across the world today, and countless other nations and societies throughout human history, that have maintained weaker IP protections than the U.S.  But not a single one even approaches the U.S. in terms of scientific, artistic, pharmaceutical and technological innovation.  Nor does any society today or throughout history rival the U.S. in terms of resulting prosperity and power. 

That straightforward correlation may not, standing alone, forever settle our ongoing IP debate.  At the very least, however, it shifts an extremely heavy burden of proof to anyone contending that our patent, copyright and trademark laws are too protective and should be relaxed. 

That heavy burden of proof is one that opponents of America's tradition of strong IP protections have yet to carry. 

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