Patents: An unwanted State coercion

The most popular argument for patents among economists is the utilitarian one that a patent for a certain number of years is necessary to encourage a sufficient amount of research expen­diture for inventions and innovations in processes and products. This is a curious argument, because the question immediately arises: By what standard do you judge that research expenditures are “too much,” “too little,” or just about enough? This is a problem faced by every governmental intervention in the mar­ket’s production. Resources—the better lands, laborers, capital goods, time—in society are limited, and they may be used for countless alternative ends. By what standard does someone assert that certain uses are “excessive,” that certain uses are “insuffi­cient,” etc.?

Also:

Many advocates of patents believe that the ordinary competi­tive conditions of the market do not sufficiently encourage the adoption of new processes and that therefore innovations must be coercively promoted by the government. But the market de­cides on the rate of introduction of new processes just as it decides on the rate of industrialization of a new geographic area. In fact, this argument for patents is very similar to the infant-industry argument for tariffs—that market processes are not suf­ficient to permit the introduction of worthwhile new processes. And the answer to both these arguments is the same: that peo­ple must balance the superior productivity of the new processes against the cost of installing them, i.e., against the advantage pos­sessed by the old process in being already built and in existence. Coercively privileging innovation would needlessly scrap valuable plants already in existence and impose an excessive burden upon consumers. For consumers’ desires would not be satisfied in the most economic manner.

Both quotes from Rothbard in Man, Economy and State (chapter 10: Monopoly and Competition). The entire chapter is very interesting, especially for those of us who are raised up to believe such ideas that the State can "prevent monopolies" and "protect consumers" from "cartels" and other such monsters. "Anti-trust" laws are anti-market laws. That about sums it up.