OT:Greenspan Urges Intellect Property Safety
Friday February 27, 10:10 pm ET
WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan on Friday said the rising importance of ideas as the key force behind economic development is driving a debate on whether legal protections are adequate for the times.
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In prepared remarks to the Stanford Institute for Economic Policy Research in Stanford, California, Greenspan said times have changed since the major worry was guarding plants and manufacturing equipment.
"Because they have a material existence, physical assets are more capable of being defended by police, the militia or private mercenaries," he noted. "By contrast, intellectual property can be stolen by an act as simple as broadcasting an idea without the permission of the originator."
A text of Greenspan's remarks, which made no mention of the U.S. economic outlook or monetary policy, was issued in Washington. His comments were nearly identical to a speech he delivered by satellite in April 2003 to an economics conference in Sea Island, Georgia.
Greenspan said a rising proportion of total U.S. economic output now "is essentially conceptual rather than physical," a reflection of the shift toward an economy that does less manufacturing and offers more services.
As a result, means asset valuation has to measure intellectual property and the legal rights inherent in intellectual property rather than simply physical goods, and it raises questions for the courts and economists.
"If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights," Greenspan asked. "How appropriate is our current system -- developed for a world in which physical assets predominated -- for an economy in which value increasingly is embodied in ideas rather than tangible capital?"
Not only do Americans need to come to grips with ensuring an adequate regime for protecting intellectual property, but this "has emerged as a seminal issue in our trade negotiations" with other nations, Greenspan said.
The Fed chief had no recommendations for what constituted an appropriate legal regime to protect intellectual property rights but urged more analysis of the topic in recognition the economy was "increasingly dominated" by ideas.
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