The Chicago Intellectual Property Rights Tradition and the Reconciliation of Coase and Hayek

The paper traces a fairly continuous line of argument about the institutional mechanisms by which intellectual property is produced and maintained in an advanced, commercial society. What the author calls the Chicago intellectual property rights tradition offers a rich and suggestive interpretation of market institutions as alternatives to direct government tax and subsidy schemes. According to Hayek, the pricing system quickly utilizes information that is already in existence. But the speedy diffusion of all commercially valuable information would discourage its production. In my view, a Coasean world dominated by firms that have been established to economize on certain costs associated with the use of the price system can also be a world able to account for investments in the production and maintenance of intellectual property. In this way he offers a reconciliation of Hayek and Coase.