No Future? Fritz Machlup and the Invention of the Economics of Patents

The economist Fritz Machlup can be considered a pioneer of patent economics and, more generally, of the study of the knowledge economy. As early as the 1940s, he began work on industrial property and, after the Second World War, published articles and books that are still considered landmarks today. His 1950 article on patent controversies, published with Edith Penrose, is still one of the milestones in the historical economics of patents, while his Economic Review of the Patent System (1956) stands out for its agnosticism on the usefulness of patents, which were at the heart of intense political debate on their future.The aim of this chapter is to understand the reasons for Fritz Machlup's agnosticism on this subject, and how they explain his caution regarding the future of intellectual property. By exploiting his personal archives deposited at the Hoover Institution, it is possible to retrace Machlup's intellectual itinerary on this issue, showing how this agnosticism was nonetheless productive, as it paved the way for the development of the economics of knowledge. The paper highlights how Machlup was involved in different theoretical but also political debates about the US patent system. It shows how he had to face strong "vested interests".