November 05, 2018
The Washington Post used its lead editorial to demand that the Trump administration do more to protect US intellectual property from China. The highlight of the piece is the accusation that a Chinese state-owned company hired a number of employees from Micron, who brought over files containing Micron’s latest DRAM technology.
Assuming this is true, this sort of theft is indeed a problem. The company has now been indicted and it will be interesting to see the response of the Chinese government. However, it is important to note that this sort of taking of technology is not restricted to Chinese companies.
Some people may have heard of a company called “Uber.” It hired one of the top people from Waymo, the self-driving car unit of Alphabet. The new hire brought along stolen files containing much of Waymo’s latest technology.
While the Post’s response to this problem is a call for greater protectionism to put tighter locks on technology, the free market solution would be to work to have more technology in the public domain. This can be done through greater public support for research and shorter patents (see chapter 5 of Rigged [it’s free]). If there is less money to be made by stealing other companies’ technology, then it is less likely to be done.
While the protectionists at the Post may not understand this point, we all benefit if technology is freely available and can be transferred around the globe at the lowest possible costs. If Chinese producers are then able to produce goods and services at lower costs, then US consumers will benefit, even if the Post’s friends may see lower profits.
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