David Warsh makes a great point in Knowledge and the Wealth of Nations:

"Managing the tension between... furthering the growth of knowledge while ensuring that its benefits are widely shared...is a responsibility of government every bit as important as monetary and fiscal policy."

A new wave of economic thought is focusing heavily on the concept of "rival" and "nonrival" goods.

Rival goods are those that are possible to be possessed completely and for which one can limit sharing. Examples include your house, the Google duo's private jet, my sandwich. Nonrival goods are those that can be shared almost limitlessly without added expense or resources. These types of goods include software programs, recipes, blueprints, the really annoying American Idol contestant's last hit song. In essence, most nonrival goods relate to ideas .

One of the biggest economic policy issues in today's world is how to create incentives to produce more and more new nonrival goods while maximizing the distribution of current nonrival goods. In other words, how can you incentivize Microsoft to keep coming up with new software while giving away current software to as many people for as little cost as possible?

Find a solution to that and you find a solution to many economic woes of our intellectual property age - patent law debates, DRM issues, international infringement cases, digital publishing restrictions, recipe stealing and a whole host of others. Hmm, if anyone is hunting for a dissertation topic, I sense that a few dollar signs might be associated with anyone who can call herself an expert in this field.

Posted by Michelle Smith on July 3, 2007 06:02 PM