(I created a Wikipedia article from this post.)
Check out this MSNBC profile on Intellectual Ventures, a company created by Microsoft alumni Nathan Myhrvold with a bold new business plan: create a marketplace for intellectual property. Rather than produce any material good, the company does nothing but buy up patents and lease them to the highest bidder.
This development is significant because I believe that intellectual property trading will become, in one form or another, the primary business of the 21st century, and ultimately the final stage of mankind’s technological evolution. While material goods will remain valuable as long as human beings depend on material values for their survival, the primary trend of technological development is the substitution of physical labor for mental labor.
The evolution of technology (which I define as “a material entity created by the application of mental and physical effort to nature in order to achieve some value”) in human history has followed three stages.
The pre-technological period, in which all other animal species remain today, was an pre-rational period of the prehistoric man.
The emergence of technology, which was made possible by the development of the rational faculty, paved the way for the first stage: the tool. A tool is material object such as a spear, arrow, or hammer that augments physical labor to more efficiently achieve his objective. Tools allow man to do things impossible to accomplish with his body alone, such as seeing minute details with a microscope, manipulating heavy objects with a pulley and cart, or carrying volumes of water in a bucket.
The second technological stage was the creation of the machine. A machine (a powered machine to be more precise) is a tool that substitutes the element of human physical effort, and requires the operator only to control its function. Machines became widespread with the industrial revolution, though windmills, a type of machine, are much older.
Examples of this include cars, trains, computers, and lights. Machines allow humans to tremendously exceed the limitations of their bodies. Putting a machine on the farm, a tractor, increased food productivity at least ten fold over the technology of the plow and the horse.
The third, and final stage of technological evolution is the automaton. The automaton is a machine that removes the element of human control with an automatic algorithm. Examples of machines that exhibit this characteristic are digital watches, automatic telephone switches, pacemakers, and computer programs.
Ultimately, this evolution follows two trends: the replacement of physical labor with more efficient mental labor, and the resulting greater degree of control over our natural environment, including our ability to transform raw materials into ever more complex and pliable products. This process culminates with man’s ability to achieve all of the material values technologically possible to him by mental effort. (It is unlikely however, that we will want to do this, since we enjoy some forms of physical labor – such as gardening, weaving, driving, or brushing our hair.)
The economic implications of the above theory is that intellectual labor – and thus intellectual property will become increasingly more important relative to material labor and physical goods. The creation of a market for intellectual property is an indication that our civilization is transforming into the final stages of technological evolution. For obvious reasons, it is not surprising that the leader in this field is a former manager from Microsoft, the leader in the creation of automaton-type technology.
(The tool-machine-automaton idea comes from Czech philosopher Radovan Richta’s 1967 publication “Man and Technology in the Revolution of Our Day”)