Schmookler Essay

Economic incentives run ahead of invention is the idea Shmookler established in a book written by him where he set out to tear down the transcendental method. His study of certain industries and relative patent numbers gave a solid grounding to establish there was indeed a high correlation between the two. The level of activity in terms of invention is represented by the amount of Patents surrounding it. His argument that invention comes about through supply and demand, just like any other economic activity is credible and I will explain and alalyse this opinion now.
Basically what Shmookler meant by the high correlation between patent numbers and level of activity in terms of invention is that a patent to the inventor is viewed as a negotiable tool. It is protection of the idea so imitators cannot benefit from your work. One could then infer that a high number of patents surrounding a particular product represent a high level of inventive activity. The story of the windscreen wiper is an example of this. Even though it was seen as a small part of the complete package which was the motor vehicle, it had over 200 patents against its name. Shmookler would argue that the inventor could see the value of the car increasing as it was at the beginnings of what was to be a large market, therefore worthwhile to take out the patents in order to wreak the benefits. Furthermore inventors are driven by the possibility of prosperity from their invention. The value of the invention when it hits the market is the main driver of inventive activity. By the time the motor vehicle hit the market they all had windscreen wipers on them and the inventor received a nice settlement.
To implement this theory even further the story of the horseshoe invention is referred to. Invented as a means to allow horses to go faster and longer while pulling a carriage or other form of labour. At first patent numbers were high and therefore so was inventive activity as everyone used horse and carriage as a means of transport at the time. This also meant there was a high demand for them inferring an established market. Due to the rise of the motor vehicle, as mentioned above, the patent numbers surrounding the horseshoe began to decline which indicated a drop in inventive activity even though the technology was far from established. To view these facts it is clear that the inventor will only invest time into something that is seen to be worthwhile and infers that invention is demand induced and not so much reliance on the cost side of things. By this I mean that demand induces the inventions that satisfy, economic prospects slow down when demand slows down not because of an increase in cost of production.
Arguments towards Shmooklers theory are that patents do not segregate innovation from invention. From knowledge gained one would know that invention and innovation are to be distinguished but not separated. Invention is defined as “the subset of innovations that are patentable”. From this we can infer that they are indeed related and from the above analysis it is clear that all inventions are done with commercial incentives in mind anyway.
Another argument was posed using the pharmaceutical industry as an example to discredit Shmooklers theory. Patent numbers had been soaring for the last 50 years but the number of new drugs entering the market is dropping substantially. In 1970 the ratio was 53:1 in terms of patent numbers to drugs but now you can patent almost anything to do with drug production which resulted in a much higher ratio. The reason being is an enormous widening of what was patentable from the beginning of time series until the end.
The weighting of individual patents is argued as it is theoretically possible to have everything covered under one patent, but in reality it is not so simple. Some patents are only tiny improvements and therefore should not be regarded as inventive activity. This is quashed due to the simple fact that in the modern day companies are the largest shareholders of patents and proves invention is economic activity.
This consolidates the idea that economic prospects run in front of invention