Thomas Goetz at Wired is predicting that the US businesses grounded in intellectual property will go the way of the erstwhile US shipping industry, if they don't stop focussing on extreme protectionism as the way to deal with new technology.

In the case of the shipping companies, he says:

"The US fleet was a classic victim of the efforts to save it. Rather than adapt to new economics, the American
industry suffocated under overregulation and protectionism. Now the job gets done - goods move efficiently from place to place - but it's a rogue's business, rife with ne'er-do-wells and pirates."

Larry Lessig, in the same issue of Wired, takes politicians to task for exploiting the general public's ignorance of economics in relation to developing versus developed world price discrimination on drugs.

There is no easy way out of this one. The economists' dream world is one of perfect price discrimination where everybody pays what the market will bear. Drug companies use their patent monopolies to generate revenues for profits and recover their R&D costs. They can't sell at high prices and huge profit margins in the developing world because the market will not bear it - people just can't afford it. So they sell the drugs at a premium in the developed world. With today's so called global markets, though, people in one area can justifiably ask the question as to why they should pay more than those in another area of the world. Economists will answer - because you can afford to. And that is a completely unsatisfactory to most of of us. But but but, we ask, why should I pay a premium when someone else can get them cheaper. I can just fly to Africa, buy a large batch and take them home with me and still have it work out cheaper - what the economists call arbitrage.

So when the free market absolutionists cry leave it to the market, the question I guess is, which free market? The producer-loaded one with perfect price discrimination or the customer loaded one with perfectly informed global consumer discrimination? A similar question goes to the anti-capitalist perspective - how can drug companies supply the need for medicines fairly across the globe and still generate respectable (or even optimum) revenues.

Information economics and intellectual property's place in it is a complex business. I don't have an answer and though there are models which help work out optimising theories, we live in an imperfect world.