Question: What are the implications for the American system of ownership
Michael Heller: I’m very pro-property. I’m a professor of property law. This is what I teach. I spent years working in the Soviet Union helping them create, move to become, when [the former Soviet Union] became Russia, I was with the World Bank, in there creating private property regime. I’ve worked all over the world creating private property systems. Private property is the basis for encouraging people to go out and create wealth and get rich and that’s what makes us a stronger, wealthier society. I think there’s a very strong link between democracy and property. But property isn’t self defining. What counts as a property right is always influx. This is one of the hardest points I always have convincing or trying to convey to law students, when they start law school, they think that property law is like reading the phone book. It’s a set of rules that’s in the book, it’s fixed and it’s done and you just have to learn those rules in, you know, property law or contract law or any other kind of law, and one of the eye-opening experience for law students who become lawyers is that that’s simply not true that law in general, and property law in particular, is a constantly evolving set of choices about how we’re going to control access to or control over scarce and valuable resources and we have lots of different values that are coming to play as we make those choices. Some of them are creating a personal space for autonomy, you against the state. Some of them are about encouraging people to conserve resources. But a lot of them are about having, creating a way for our society, overall, to be better off, to increase our total welfare, and sometimes that means giving people more rights and sometimes it means pulling them back a little bit. This is a very standard ebb and flow of property rights, and has been through throughout American history.
Question: Are monopolies more useful than we think?
Michael Heller: I tried to coin the term “pro-trust,” that in America we’re very used to the notion of anti-trust laws, the term that everyone’s… People may not know what anti-trust means, but they know that basically we have a posse trying to break up monopolies in this country, and the law in this country is called anti-trust law, and that’s good when you have people who are, when what you’re trying to do is have robust competitors over a single good. We want different widget makers to produce them at the lowest cost. But where the underlying market structure is not multiple competitors for a single good but multiple inputs to a single product, we need all these patents for a single drug, or all these licenses as spectrum for a single national network. In that case, monopoly actually is value producing. So, sometimes, the correct social policy is pro-trust. But our whole framework in this country is anti-trust. The overarching area of law here is called competition law. Europeans call this area competition law, and it includes both pro-trust and anti-trust. So, my sense is that America should do that too, that we should… Names matter, and calling this area of economic regulation anti-trust gets us off on the wrong foot. It makes it hard to see that for a significant part of the economy, the new economy, the innovation economy, often, pro-trust is the right policy.
Question: Are other countries putting this into practice?
Michael Heller: Yeah. No, so the United States is now out of the top 10, almost out of the top 20 on telecoms, so we can look to what the Japanese, Koreans, a bunch of other countries have done with licensing of spectrum policy in order to see, [got some] ideas for here. We can look at other countries on terms of patent policy. The US has the most aggressive, most expansive interpretation of patent law and copyright law in the world, and that favors certain owners, but it turns out to be crippling innovation for the American economy as a whole. So, again, we can also be looking overseas. On the land example I gave you, may countries have more fair and more efficient ways to assemble land for positive change than America has. America has really terrible options for how do you assemble big pieces of land. You either buy it voluntarily on the market, which is very hard to do when there’s lots of owners, or you have to [harm them] and condemn it. They use what’s called imminent domain, which people hate. But those are the only two solutions you have, and other countries have come up with tools for assembling land that give more of the value of the assembly to the people whose land is taken. It makes it both fairer and more efficient. So, yeah, we can absolutely look abroad for some of those land assembly tools as well.