China, America, and the Newest Merchant’s Cry of “They Are Stealing”

When two great rulers meet in Washington while the rest of the world’s leaders gather in New York, one may be sure that something more than polite toasts is at stake. We are told that the American president and the Chinese leader are expected to discuss claims that China is surreptitiously copying American methods of mechanical calculation. The very word “surreptitiously” does half the work: it invites indignation before evidence, and punishment before inquiry. Yet before we applaud any project of retaliation, a cool spectator ought to ask a homely question: if the statesmen leave the room having agreed to defend their respective industries, who shall in the end pay for this chivalry?

In my own time, disputes about foreign plunder commonly concerned gold, silver, and colonial monopolies; now they concern algorithms and machines that imitate human thought. The object is novel, but the passions are ancient. In the Wealth of Nations I argued that when merchants cry out that foreigners are ruining them by unfair practices, they usually propose not open trial but secure protection, not competition but exclusion. They are seldom content that the magistrate should protect their property; they urge him to raise the price of that property by narrowing the field of rivals. When we hear of stolen methods of calculation, therefore, a prudent public should lend its ear, but keep its hand upon its purse.

The first effect of any punitive device—tariffs, embargoes, forced “decoupling” of technologies—will not fall upon the politicians who negotiate them, nor even upon the great companies that petition for them, but upon those who buy and those who might one day enter the trade. The benefit of protection is seen and concentrated; the cost is unseen and dispersed. Dearer software, slower diffusion of useful tools, fewer new firms who might challenge the present masters—these are not announced in the communiqués of summits, but they are written, line by line, in the accounts of ordinary consumers and in the wages of the labouring poor. To raise a wall around a clever art is often to raise a tax upon everyone who might have profited from it.

This is not to say that property has no claim in such matters. To take the fruit of another’s thought without consent, when the public rules have marked it as his, is to violate that rule of justice which consists in abstaining from what is another’s. A nation that allowed such depredations habitually would discourage invention as surely as one that confiscated land would discourage agriculture. The question is not whether justice matters, but whether the measures paraded under its name truly serve it. When the very firms who fear foreign imitators also resist domestic competition and court their own governments for special favour, the impartial spectator may suspect that zeal for virtue is being assisted by a very worldly concern for profit.

In the Theory of Moral Sentiments I proposed that we judge actions by asking what a well-informed, disinterested observer would feel. Such a spectator, attending to this meeting in Washington, would see not two philosophers inquiring into right and wrong, but two power-holders, each under the gaze of their own merchants, officers, and publics, seeking the honours of firmness and the gains of advantage. He would observe that both countries have powerful incentives to master these new arts of calculation; that each fears to fall behind; that each is tempted to describe its own imitation as learning and the other’s as theft. He would note too that the people whose lives may be most deeply altered by these contrivances—clerks, drivers, factory hands—sit far from the table where their ownership is being violently asserted.

In the old manufacture of pins, which I once used to illustrate the division of labour, every improvement that enlarged the market increased the skill, dexterity, and productivity of the workmen. The same must be true, in its own manner, of these more mysterious manufactures of the mind. Whatever enlarges the market for ideas—safe exchange, predictable rules, modest protection that does not harden into monopoly—will deepen specialisation and, in time, raise the annual produce of the land and labour of all nations concerned. Whatever fractures that market into hostile camps, each jealously repeating the other’s work behind a barrier of suspicion, will waste talent in duplication and keep the finest instruments in too few hands. Men boast of national strength, but hunger and idleness remain stubbornly local.

I do not pretend to foresee in detail how best to police the borders of intellectual property in such subtle arts; that task belongs to legislators who know the particular practices of their age. But I would urge them to distrust both the man of system, who imagines he can by a single grand design command the whole future of technology, and the merchant lobbyist, who wraps his own security in the language of patriotism. Rules must be gradual, intelligible, and framed so that self-interest, moving within the bounds of justice, guides each party naturally toward innovation and diffusion rather than hoarding and plunder. If, when the dust settles, the labouring poor of both countries find tools cheaper, opportunities wider, and their industry more productive, then—and only then—will we be entitled to say that wisdom, and not the vile maxim, has governed this contest over these artificial contrivances of thought.