Bernhard Harms lecture: Aspects of patents and licenses as stimuli to innovation

Abstract

subject of my lecture this evening is "patents and licenses as stimuli to innovation/' At first glance, this is a subject rather remote from the field of international economics, the field for my work in which you have honored me to-day by conferring upon me the Bernhard Harms Prize. Yet it is, in fact, part of a subject which has become in an important sense central to the theory of international trade, and even more so to the theory of commercial policy, and of economic policy generally as it touches on international trade and economic relations. That subject is the economics of the advancement of economically useful knowledge, and of the techniques available and employed in a competitive economic system to reward and therefore to encourage economically beneficial innovation. I should emphasize in passing that this aspect of economics far transcends the economics of a capitalist economy or private enterprise system, for two quite distinct reasons. The first reason is that these are tangible through inprecise limits to the extent to which innovation itself, as distinct from social and economic organization and institutionalization of innovation-seeking processes, can be routinized and socialized. Even in the most socialist economy and society imaginable, innovation must at some stage depend on motivating individual imagination and mental creativity. The second reason is that the ultimate horizon to which the socialist political imagination can look at the present time is the national state. But the potential domain of economically useful innovation transcends the horizon of the national state, for reasons inherent in the eco-