Intellectual Property Rights, Global Inequalities, and Secular Stagnation

Intellectual property rights have played an increasingly important role in the global economy since the 1994 TRIPS Agreement. The nature of this role has since come under the spotlights: do intellectual property rights foster innovation or rent seeking? Do they promote knowledge diffusion and development, or do they skew global competition in favor of Western economies? This article explores some of the most striking developments that recently occurred in the world economy, namely, the rise of inequalities and the emergence of the secular stagnation, in the light of the intellectual property rights debate. This article contends that income inequalities, both between and within countries, are partially driven by monopoly rents accumulated by a minority of large Western corporations (inequality between countries) and redistributed to a minority of employees (within countries). In both cases, the imbalance of profit and wage distribution may be contributing to global slow growth by depressing investments and consumption, ushering in an era of secular stagnation, thereby explaining some of the current trends in the global economy.