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Property Rights Aren’t Protected by Being Violated

Here’s a letter to new Cafe Hayek reader Ed Hall:

Mr. Hall:

Thanks for your e-mail.

Worried about what you call China’s “disrespect for Americans’ intellectual property rights,” you want “our government to be more proactive to limit Chinese acquisitions of ownership in US companies.”

Your argument is curious. You propose to strengthen Americans’ intellectual property rights by having Uncle Sam weaken those rights.

If the U.S. government restricts Americans’ ability to sell intellectual property to non-Americans, it does what you complain the Chinese government does and what many claim American intellectual-property owners must be protected from – namely, steal from American intellectual-property owners a significant portion of their property. After all, among the core of a property right is the right to sell or otherwise transfer that right to others.

Note also this reality: for our government to restrict us from selling our intellectual property to the Chinese is for our government to dampen our incentives to create more innovative ideas worthy of being protected as intellectual property – exactly the same negative effect that is believed to occur if, when, and to the extent that the Chinese steal Americans’ intellectual property.

Those who fear that Americans’ inventiveness is dampened by Chinese theft of American intellectual property should be among the most ardent opponents of attempts by Uncle Sam to prevent the sale or transfer of such property from Americans to the Chinese.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030