Why Greg Mankiw's Textbook Is Not Sold In A Perfectly Competitive Market

This article makes an important point about Greg Mankiw's claim that his $170 textbook, which is the required text for his class at Harvard, is subject only to free market competition. Federal government copyright law is the only thing that prevents students from scanning the text and selling $5 copies of the text.

This brings me to another point that I will expand upon in the future. One of the major forms of competition between corporations is over intellectual property. Copyrights and patents provide important protections from market forces. The development of intellectual property, and the defense of intellectual property and trade secrets, is one of the most important activities of business. This will only become more important as the technical content of products increases, and they are sold across national boundaries. Intellectual property may be replacing capital equipment, or ownership of the means of production, as the backbone of capitalism. Firms and nations with intellectual property deficits will be seriously disadvantaged in the knowledge economy.