There is a whole history of British patents which were applied for specifically to raise money rather than to do anything useful. This was in the 1690's i.e. 20 to 30 years before the South Sea Bubble and thus the bubble before the bubble. But it wasn't the first bubble, one of these days I'll get around to posting on that.
From Real Life Magazine, May 27:
Patently Harmful
How neoliberalized IP regimes incentivize innovation at the expense of the public good
"Public health goods are poorly served by markets, because there
is no
obvious way to capture the value of someone not getting sick"
....In general, patents function by granting to inventors the exclusive right to market their inventions for a limited period of time, establishing an artificial monopoly. As the argument goes, this incentivizes production by protecting inventors from reverse engineering and other forms of free-riding. This system took shape in the 1600s and 1700s, and is incorporated into Article I, Sec. 8 of the U.S. Constitution. Early on, the debates about it were largely oriented toward ensuring public benefit, and they were suffused with concern about the harmful effects of monopolies — including price gouging and the stifling of scientific research. For instance, Thomas Jefferson opposed the inclusion of an IP clause in the Constitution, writing that “the benefit even of limited monopolies is too doubtful to be opposed to that of their general suppression.” In England, John Stuart Mill supported a short duration for patent rights, and reasoned that the monopoly “is not making the commodity dear for [the inventor’s] benefit, but merely postponing a part of the increased cheapness which the public owe to the inventor, in order to compensate and reward him for the service.” Even the early neoliberal Friedrich Hayek wrote that “in the field of industrial patents in particular we shall have seriously to examine whether the award of a monopoly privilege is really the most appropriate and effective form of reward for the kind of risk-bearing which investment in scientific research involves.”But around the mid-20th century, a few things happened. First, Joseph Schumpeter, of “creative destruction” fame, successfully pushed the thesis that economic growth was driven by innovation. Second, neoliberal theorists decided that monopolies were often economically efficient. In 1969, economist Harold Demsetz applied this thesis to intellectual property, arguing that “in the linear model of two industries of equal output size, the more monopolistic will give the greatest encouragement to invention.” In other words, big firms protected by patent monopolies lead to more innovation than competitive markets, and stronger patents will lead to more invention. Demsetz also explicitly argued that the gains of future innovation (“dynamic efficiency”) are more important than whatever short-term distribution problems (“static inefficiencies”) they entail. You might sell more of a given drug today if you sold it at a lower, market price, but the higher, patented price — and loss of sales — today is worth it, because you’ll get more drug development down the line.....
....MUCH MORE
