I. Patents and Codified Knowledge

Dr. Shahindokht Kharazmi in her April 29, 2004 article entitled "Iran and Digital Revolution" writes:

"From the viewpoint of Technology, Jeffrey Sachs at the Harvard University has done a study and based on two criteria of invention patent rights for every 1 million people of the population and the share of advanced technology export of gross national product has divided the world into the following three regions:

Technology Innovators: The countries with 10 patents (registered inventions) or more, per million of population with the technology export comprising two percent of Gross national Product.

Technology Users: Countries that have a high capacity to attract advanced knowledge and technology and have created the necessary infrastructure for this task.

Eliminated: These countries in production, attraction, and use of advanced technology do not have an important share or their share is very minimal.

Iran is in the third group. Perhaps it may be said that since the model and numbers of this classification is not available, it is not possible to verify the credibility of this classification. But there is no doubt that the share of Iran of export of advanced technology and patents that are representative of production of new technologies, is very minimal. Iran in 2001, only had one patent. This is in circumstances that in 1997, this number for the United States has been 111906."

Let me repeat her last statement again, where she writes that Iran in 2001, had only one patent, whereas U.S. in 1997 had 111805 patents. Is the significance of this number like 100 years ago, only meaning that one society is more educated than the other? No.

The figure related to patents, in our times, is representative of the future wealth of the two societies, because the most important wealth of the world of future, is neither land property, nor industrial factory property, but it is the intellectual property, which is best represented in the number of registered inventions. Consequently the basis of production and distribution of wealth of Iran in the future, is intellectual property, and in better words, production and ownership of codified knowledge.

About codified knowledge, Daniel Bell in the 1999 Preface to his book The Coming of Post-Industrial, has extensively explained. What he calls codified knowledge, today is easily seen in the complex design of ASICs in the production of Semiconductors, and these designs, separate the real post-industrial economies from old service-oriented economies.

II. What is the Wealth of Societies?

Adam Smith's Wealth of Nations is the most important book in history, which has been written about the *wealth* of human societies. It is interesting that at the start of his work, he compares the hunter societies with the pasturing societies, that have domesticated animals, and writes that the latter can accumulate its product, and for the product, he gives the example of cattle. In fact, the difference of a wild deer and a domesticated cow is in the latter being controllable, and ultimately with the guarantee of law and state, can be owned as property.

The same way, intellectual property, such as inventions, or software, in countries where the rights are secured by the state, is different from free thought and science, and can be controlled and owned, and thus is representative of wealth of a society.

Adam Smith's book was published the year America's Declaration of Independence was written. At that time, the main form of wealth, even in Europe and America, was still landed property. But Smith correctly realized that factory ownership was the future wealth of the world. In cities, this wealth, either grew in relation to the agricultural regions around the city, or in case of cities on the shores of the seas, connections to the foreign trade, were the guarantee for the growth of wealth of the cities.

Today the first case, meaning the new economy benefiting from the needs of the adjacent industries of the past, has been the basis of growth of post-industrial economies in the West. In other countries like Japan, new economy essentially has grown in connection to the global economy. For example, in the recent two decades, economies of India and Singapore were the best examples of this kind of post-industrial development.

It is interesting to note that India's economy was able to seriously grow, when India's government took the securing of Intellectual Property rights very seriously, and companies like Wipro in India, have even done a better job than their Western counterparts, in securing these legal rights for their customers. Ten years ago, in a professional engineering management position at Adaptec, I had an engineering development office in Bangalore, where I used Wipro's services, and they would keep various operations of companies like Adaptec and Tandem, thoroughly shielded from each other, and used separate staffing and other resources, even when doing similar projects in the same building.

Let me return to the discussion, what is the wealth of Iranian society and what will it be into the future? It is true that until a serious alternative to oil is created, the main wealth of Iran is its oil reserves. But the essential issue for Iranian society is creating new wealth, and even the distribution of wealth, should be mainly in the framework of creating new wealth, and not redistributing the old wealth.

Why Adam Smith, in his discussion of Wealth of Nations, starts with *division of labor* in the industrial society, and states that agricultural production could not easily be subject to division of labor, and why in contrast, he emphasizes, that factory production, in his time, which was a young production, had already divided into thousands of parts. I think he wants to understand and move with the future trend of wealth building, in other words the dividing of work and the plenitude of the parts, meant the ownership of greater number of parts, and thus was a representative of the expansion of industrial property. If the growth of industrial society was measurable with the growth of division of labor, in our times, the post-industrial development, is exactly measured by the degree of expansion of intellectual property, and the number of registered inventions is a good indicator for this expansion, and this is the subject to consider whether in relation to production of wealth or its distribution,

In my paper on Post-Anthropocentric Production, I noted that molecular production, which basically does not need human activity as a tool, will be the main way of production in the future. And a country like Iran will not be able to compete with post-anthropocentric production in the world, in the global economy, using old anthropocentric production. Therefore, post-industrial production for creating wealth in Iran is as important in Iran as in the U.S., and the competition will be on the best inventions and their growth, and the cornerstone of value of such production is none other than the intellectual property of the processes involved.

It is interesting that today, India and Singapore have started doing many *basic* projects which were previously possible only in the West. Thus it is apparent that such production endeavors for the developing countries are not only possible, but are the key to their future success, and in fact, these productions, will be the main source of wealth in Futurist Iran.

III. Social Justice

The capitalist and socialist approach to social justice will not work for future Iran, and neither will any middle road between the two, such as social-democracy. And obviously the return to the past has lost for a long time. One has to go forward beyond the capitalist and socialist solutions:

a. Those who think social justice in the post-industrial economy is not an issue of Iran, and think they can use capitalism as the solution for Iran, in effect are offering the capitalist solutions of the kind of privatizations of IRI, and will be quickly defeated in competition with the West, and will end up in protectionism, and ultimately will again cause the distancing of Iran from the global economy, this time in the framework of a private economy.

b. The dream of socialists who want distribution of wealth of industrial society, in the world of today, and are thus promoting a state economy, in practice will scare the foreign investors from investing in Iran, because of the state privileges. Moreover, internally, corruption and misuse, as it has been tested over and over again in socialist countries, will paralyze Iran's economy.

If in the developed countries, the achievements of socialist movements within capitalist systems, have created adjustments like welfare state and social rights, in Iran, even such systems do not exist, and moreover, the new development, will not be gradual like the Western democracies, and in practice, similar to the experience of countries like Zimbabwe, such plans can oscillate the country from one of these two scenarios to the other, and the result will be nothing but the destruction of society.

In other words the old capitalist and socialist solutions, or mixtures of the two in programs of social-democracy, are not a solution, rather are repetition of the same defeated vicious circles of the past, even though the issue of social justice, is an inseparable part of post-industrial development plan for Iran, and without an effective plan of social justice, no development plan can be successful in Iran.

In my opinion, with regards to social justice in Iran, the following points should be considered:

1. The state to spend its resources on supporting the educational institutions to create multitude of new inventions in the next 10 years.

This way Iran can reach an acceptable level relative to its size and population, in this regard, to be able to compete in the global economy.

2. A property-owning economy be accepted as the main form of economy in Iran with the necessary exponential taxes.

As I noted in Is Socialism More just? , the panacea of socialism has a lot of attraction among Iranian intellectuals:

"We are talking about a country that people have hardly paid any taxes and the state has always been the biggest owner and has owned the oil industry which is 90% of all the revenue -generating capital that the country owns and the state has been paying the citizens and not the taxpayers paying the state. So it is a pretty tough undertaking, to plan a property-owning democracy for Iran, and wanting to build-in justice into that system. Whereas in the eyes of the leftist intellectuals, there is a shortcut of socialism where one can just make the ownership of the means of production to be public, and social justice to follow. Easy and quick panacea to all the social ills in one easy shot.

Regardless of how democratic liberal socialism to be, it will end up with small part of society to control the economy as had been seen by the elites in the socialist countries. Because they are the ones who will represent the productive assets and lack of ownership in the means of production means that such small elites *are* the owners. In contrast, the property-owning democracy avoids this, by ensuring the widespread ownership of productive assets and human capital, and this is why equal opportunity as well as political liberties are supported to make the system fair.

In fact, to maximize the minimum of the basic needs in society that John Rawls emphasizes in his book "Theory of Justice" in 1971, and his venture into enlightened self-interest are beyond the current Western societies. He always notes that for fairness, the 'greatest benefit of the least-advantaged members of society' is to be guaranteed. In other words supporting the first principle, meaning political liberties, and ensuring to maximize the social minimum, does not mean to stop the motivation for activity, which is killed in the socialist societies of even the Swedish type, because is is achieved here, thru the second principle of justice, i.e. equal opportunity, and not by charity."

In sum, the property-owning economy, more than a property-less economy, has the capacity to establish social justice, but the issue of income from national mutual fund alongside income from work, and a proper tax system, are the key issues for social justice that I note below:

3. To consider a Welfare System, as I have described in A Futurist Viewpoint in 1989, using Albus's model of a National Mutual Fund and not the government.

As noted in Post-Anthropocentric Production , "if the worldwide need for human labor drops, people in all countries, whose income is based on human labor as an intelligent tool in manufacturing or agriculture, will lose their source of income, and their lives will be directly impacted by such changes."

It is important to note that the welfare system that is being proposed, is a *non-governmental* pension fund, but it is for all people of all ages, and this way the minimum income of the society will be maximized, by owners of shares of this pension, and this income, will be independent of the citizen's income from work.

This plan, by creating an income, separate from work, for all people, will reduce the human damages of the economic change as the society moves towards a post-industrial production.

As we know, someone like the singer Britney Spears, or soccer player Ali Dai, or a successful software developer, may end up with millions of dollars of income from their work, whereas others in similar profession may have no income from their work, because the work of the former have been recognized as *best*. I have discussed this issue in details in Knowledge Economy & Social Justice.

Should the above differences be removed? I do not think that should be the goal, because that way the incentive for creating intellectual property will vanish, and the result will be like the slaves in the U.S., who basically had incentive for consuming more and working less. In fact, at the time of Abraham Lincoln in the U.S. of 1862, The Homestead Act was done to create the incentive for property, in opposition to the Southern states of slavery, and it was successful and was continued till 1976, and even halting it 100 years later, was because no more land was left for such plan. Therefore, if today, a similar plan, for granting the rights of individual inventions of educational and government entities, to the inventors themselves, is executed, for example within a time period like the 5 years of Homestead act, that was the time allowed for building a house and cultivating the land, such a plan can become a strong incentive for entrepreneurial activity.

In other words, my intention is not to prevent income from work, but it is to create appropriate laws for taxation, and also suitable laws for companies to give shares to their employees, companies that produce these kinds of intellectual property. And this way an increase of wealth and a fairer and more just distribution of wealth will be resulted. Perhaps it would be right to set aside a portion of the shares of these companies, at the time of them going public, to be allocated to the whole profession, to help the activity of the members of that profession who have less income. I have extensively discussed the formation of value in new economy in A Theory of Uniqueness Value and those same criteria should be used to determine the exponential taxing of this income.

IV. Conclusion

The issue of production and distribution of wealth in future Iran cannot be solved by the programs of capitalism or socialism, and the post-anthropocentric production of post-industrial societies, have as much significance for Iran's future economy, as for the U.S Economy. Working for molecular prodcution, development of intellectual property in the universities governmental private firms, and NGOs, and creating a welfare system based on national mutual funds, are the type of work needed for production and distribution of wealth in future Iran.

Hoping for a Futurist, Federal, Democratic, and Secular Republic in Iran,

Sam Ghandchi, Editor/Publisher
IRANSCOPE
Original Version
Written: May 23, 2004
Republished: July 14, 2007