ABSTRACT
A discussion of the link between power and intellectual property could easily turn into a discussion about the nature of the links between intellectual property rights, monopoly and market power. Intellectual property rights are sometimes said to be monopoly rights.1 To be described as a monopolist sometimes involves more than just description. It can also be a condemnation. The reasons for the pejorative use of monopoly probably have something to do with early Church teaching. The Church condemned monopolists because their opportunistic behaviour (the sin of avarice) did not fit the model of a good Christian and monopolies seemed to cause real damage to Christian communities by driving up prices over essential items like food. 2
Economic thinking about monopolies in the 20th century is more nuanced than outright condemnation. It may be that monopolies have a vital dynamic role to play in the evolutionary growth of capitalism.3 Likewise economies in a given phase of technological development and economic differentiation may find that some monopolies are 'natural'.4 Neo-classical economic theory describes and evaluates monopolistic behaviour on the basis of its impact on efficiency. Monopoly is not a moral evil, but there are economic grounds for not encouraging its development. The standard economic objection to it is that it causes a dead weight loss.5 In the case of the perfectly competitive market there is no unmet consumer demand. In the monopoly market the one producer sets price at a level which means there will be unmet consumer demand. The monopolist producer has some choice about setting price and so sets it at a level that maximizes the wealth transfer to him from the consumers. The wealth transfer is not an economic problem (although clearly there may be a problem in terms of some distributivist theory of justice). The economic problem with monopolies is that the unmet consumer
demand is not compensated for (in terms of a static analysis) by a gain to producers and so the total benefit of the monopoly market is less than the total benefit of the competitive market.
