Ramello, Giovanni B. --- "Intellectual Property, Social Justice and Economic Efficiency: Insights from Law and Economics" [2010] ELECD 652; in Flanagan, Anne; Montagnani, Lillà Maria (eds), "Intellectual Property Law" (Edward Elgar Publishing, 2010)

Book Title: Intellectual Property Law

Editor(s): Flanagan, Anne; Montagnani, Lillà Maria

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848446274

Section: Chapter 1

Section Title: Intellectual Property, Social Justice and Economic Efficiency: Insights from Law and Economics

Author(s): Ramello, Giovanni B.

Number of pages: 23

Extract:

1. Intellectual property, social justice
and economic efficiency: insights
from law and economics*
Giovanni B. Ramello

1. INTRODUCTION

Property rights have been a powerful device for promoting trade develop-
ment, market existence and efficiency throughout human history. What is
not owned cannot be traded. Hence, a well-defined set of property rights is
central to the existence of trade.
In addition, commonly held resources cannot be divided without a spe-
cific set of rules assigning the various parts to individuals. Thus, the market
as we define it today could not exist without property rights. On the other
hand, a system of allocating goods that does not rely on market exchange
­ such as war, theft or gift ­ seems unable in most cases to achieve the attain-
ment of maximum welfare through the allocation of a scarce resource to
the one who most values it. Therefore, as confirmed by a long tradition of
economic theory, a well-defined set of property rights can play a crucial role
in promoting the efficient allocation of scarce resources and social welfare.1
Further, in Western culture private property has been the cornerstone
of capitalist society, to the point of being considered to some extent the
necessary condition for the freedom of its citizens and the existence of the
market. It is hence an irrefutable component of individual liberty. These
premises are quite inarguable, and the beneficial role of property rights
should be duly acknowledged.



* An earlier version of this chapter was published in Gosserie A., ...