Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism

pharmaceutical and 38% for other chemicals and 25% for petroleum). And there were six others where the answer was basically ‘none’ (0% for office equipment, motor vehicles, rubber products and textiles, 1% for primary metals and instruments). In the remaining three industries, the answer was ‘low’ (17% for machinery, 12% for fabricated metal products and 11% for electrical equipment). See E. Mansfield (1986), ‘Patents and Innovation: An Empirical Study’, Management Science, vol. 32, February. The result of this study is confirmed by a number of other studies conducted in the UK and Germany, cited in F. Scherer & D. Ross (1990), Industrial Market Structure and Economic Performance (Houghton Mifflin Company, Boston), p. 629, footnote 46.

8

A study based on a survey of 650 high-level R&D managers of listed companies in the US found that patents are considered much less important in preserving an innovator’s advantage than these ‘natural advantages’. See R. Levin, A., Klevorick, R., Nelson, S.& Winter (1987), ‘Appropriating the Returns form Industrial Research and Development’, Brookings Papers on Economic Activity, 1987, no. 3.

9

F.Machlup & E. Penrose (1950) ‘The Patent Controversy in the Nineteenth Century’, Journal of Economic History, vol. 10, no. 1, p. 18.

10

See J. Schumpeter (1987), Capitalism, Socialism and Democracy, 6th edition (Unwin Paperbacks, London). According to the authoritative British historian of economic thought, Mark Blaug, Schumpeter mentions patents only a few times in the thousands of the pages he wrote.

11

For further details on the anti-patent movement, see Machlup & Penrose (1950).

12

J. Gleeson (2000), The Moneymaker (Bantam, London). A more scholarly biography and a systematic discussion of Law’s economic theories is A. Murphy (1997), John Law – Economic Theorist and Policy-maker (Clarendon Press, Oxford).

13

According to the eminent economic historian, Charles Kindleberger, Law argued that ‘if the money supply were increased by bank notes issued for productive loans, employment and output would rise proportionately, and the value of money would remain stable’. See C. Kindleberger (1984), A Financial History of Western Europe (George Allen & Unwin, London). For further details, see Murphy (1997).

14

According to a contemporary account, around 900 British workers – watchmakers, weavers, metal-workers and others – were recruited by Law’s brother William and settled in Versailles (Gleeson, 2000, p. 121). The historian John Harris gives a samller estimate: ‘About 70 watchmakers were recruited and established in Versailles and Paris, at least 14 glass makers and over 30 metal workers emigrated. The last group included lock- and file-makers, hinge-makers, girders, and an important group of foundry workers who were established at Chaillot in Paris.Most of the other workers in metals and glass were in Normandy, at Harfleur and Honfleur. A substantial colony of woollen workers was set up at Charlaval and on Law’s recently acquired Norman estate, Tancarville. The main groups listed certainly do not include all the skilled workers involved … The total number of workers who emigrated through the Law scheme was probably over 150 …’ J.Harris (1991), ‘Movement of Technology between Britain and Europe in the Eighteenth Century’ in D. Jeremy (ed.), International Technology Transfer – Europe, Japan, and the USA, 1700–1914 (Edward Elgar, Aldershot).

15

For further details on the British ban on the emigration of skilled workers, see D. Jeremy (1977), ‘Damming the Flood: British Government Efforts to Check the Outflow of Technicians and Machinery, 1780–1843’, Business History Review, vol. LI, no. 1, and J.Harris (1998), Industrial Espionage and Technology Transfer – Britain and France in the Eighteenth Century (Ashgate, Aldershot), ch. 18.

16

For further details, see Jeremy (1977) and Harris (1998)

17

Technologies were relatively simple at the time so that a person with the right skills background could learn a lot about its technology from a tour of a factory.

18

For further details, see Harris (1998), D. Landes (1969), The Unbound Prometheus – Technological Change and Industrial Development in Western Europe from 1750 to the Present (Cambridge University Press, Cambridge) and K. Bruland (ed.) (1991), Technology Transfer and Scandinavian Industrialisation, (Berg, New York).

19

The British patent law came into being in 1623 with the Statute of Monopolies, although some argue that it did not really deserve the name of a ‘patent law’ until its reform in 1852, For example, see C. McLeod (1988), Inventing the Industrial Revolution: the English Patent System, 1660–1800 (Cambridge University Press, Cambridge).

20

Russia (1812), Prussia (1815), Belgium and the Netherlands (1817), Spain (1820), Bavaria (1825), Sardinia (1826), the Vatican state (1833), Sweden (1834), Wurttemberg (1836), Portugal (1837) and Saxony (1843). See E. Penrose (1951), The Economics of the International Patent System (The Johns Hopkins Press, Baltimore), p. 13.

21