[Reader-list] Ben Attar Lecture: Full Text

[Aarti]

This is a transcription of  Doron Ben Attar's public lecture at the Contested Commons/Trespassing Publics Confernce organised by Sarai-CSDS and Alternative Law Forum in Delhi, on 6, 7 and 8 January 2005. Audio files of the sessions and public lectures can be downloaded for free at: http://www.sarai.net/events/ip_conf/ip_conf.htm
We will keep making more material from the conference in the form of reports, audio files and full texts of papers and presentations, available on the sarai website (www.sarai.net) and on the lists, particularly the reader-list and commons-law lists).


"U.S Path to Wealth and Power: Intellectual Piracy and the Making of America"

We find that historians do not have the clarity of categories that other disciplines have. In fact the task of historians is to make things messy and unclear. However those of us who have been sitting through these talks and discussions, I don't think the American story offers these clear guidelines. China, and everyone today has to start with China because it has been the economic miracle of our time. less than two decades ago, that country defined poverty and underdevelopment. Today China is one of the
premier engines of world economic growth. Partly of course due to the
political repression that keeps the costs of labour so low. Mao's successors
have also realised that in order to join the ranks of the developed
nations, China must close the technology gap., and the surest and quickest
way to do this is to pilfer western know-how. The Chinese have been quite
active. There have been quite a few stories, let me tell you my favourite
one:

It centers on a woman by the name of Dr. Gao Jang. In February 2001, Dr.
Jang who received her PH.D in sociology from the University of Syracuse in
1997 was in China. She was conducting research for her academic work, and
was arrested and charged for spying for Taiwan. The whole affair, almost
immediately, gained international notoriety. It was covered by all the
major newspapers as another story of Chinese tyranny after Tinammen Square,
and so forth. In the United States, she was a green card holder not a
citizen, both houses of Congress passed a resolution giving her
citizenship. She was tried and convicted to spend a few years in prison,
but was released after six months in an apparent good-will gesture by the
Secretary of State Collin Powell.

Ah! you say. Another triumph of human rights against the evil power of
tyranny. Well, there's another chapter to this story. It begins two years
later. Two years later Gao Jang is again in court, this time in the United
States, in the State of Maryland where she plead guilty of being an
industrial spy for China. Using the assumed name of Gail Heights and using
forged documents that said she was associated with George Mason University,
which is a university in the suburbs of Washington DC, Gao Jang went into
American companies and delivered to her Chinese counterparts 1.5 million
dollars worth of high-tech components. These components included
micro-processors which had possible military use. Then she was caught.

The depth and extent of the Chinese piracy effort which has included
everything from computer software to music, has alarmed  members of the
United States Congress, from both political parties. In fact it is one of
the few issues on which there is bi-partisanship right now in America. The
republican Senator Richard Shelby from Alabama, who is chairman of the
Senate Select Committee on Intelligence, warned that China's next great
leap forward will be made possible through the illegal use of American
patented and copyrighted material. During recent Congressional hearings on
the piracy of intellectual property and its links to organised crime, and
Nitin Govil today spoke about the link between anti-piracy and
anti-terrorism in the minds of American policymakers, democratic Senator
from California Howard Berman estimated that China's transgression costs
the American economy 1.85 billion dollars a year.

With this kind of money at stake the conflict over intellectual property
has risen to the forefront of conflicts between developed and developing
nations. In this conference we have spent a great deal of time discussing
the perspective of the developing world. I think we belittle the developed
world interpretation at our own peril. I think we should acknowledge it.
The developed nations are concerned about piracy by consumers and by
producers. On the consumer front, companies and individuals, in developed
nations, complain that their creations whether design accessories or drug
patents are being copied and sold without authorisation or compensation.
Piracy by producers, in the developing world, causes even greater anxiety
in the West. The movement of manufacturing to the developing world where
raw material is available, and labour costs are low, has rendered
intellectual capital the most important asset of modern corporations. It is
not an exaggeration to say that intellectual property has become the most
important anchor of Western prosperity.

China is hardly the only developing nation that engages in intellectual
piracy, and Western companies are seeking aid from international agencies
to police the developing world. Indeed international agencies have adopted
Western standards and have created an agency, the World Intellectual
Property Organisation (WIPRO), which is, “ dedicated to helping ensure
that the rights of creators and owners of intellectual property are
protected world-wide, and that inventors and authors are thus recognised
and rewarded for their ingenuity.

Some companies are taking matters into their own hands. In a gathering of
chief executives of companies last November, the CEO of Metronics, said
that top-of-the line technologies would not be moved to the developing
world, because of the threat of piracy. This kind of statement, of course,
betrays the racial prejudice that still exists about the intellectual
capability of the peoples of the developing world in the minds of the
leaders of American corporations.

Now, unlike many in this conference, I do not consider piracy a social
virtue. Nor do I favour doing away all together with patents and
copyrights. I think empirical data suggests that sometimes, when checked
properly, they are a useful method of promoting social good. But before
Americans rush to condemn those pirate our know-how, they must not forget
how America became the richest and most powerful nation on earth.

At the end of the third quarter of the 18th century, the British colonies
of Northern America were mostly underdeveloped agricultural settlements.
The foundations for the new American empire were laid during the next
seventy or seventy-five years, as the United States was transformed from an
underdeveloped, decentralised entity on the periphery of the Atlantic
world, into the dominant center of industry, wealth, innovation and power.
Piracy of the intellectual property of others played a crucial role in this
process. transfer of protected European material was a prominent feature in
the political and diplomatic life on the north American Confederation from
its early moments as an independent nation.

With the signing of the 1783 peace accord with England which officially
ended the American revolution, the United States and Great Britain became
political and economic adversaries. The founders believed that American
political independence depended on economic self-sufficiency, which meant
that the young nation needed to reduce its vast consumption of imported
English manufactured goods. The new defiant American mood, heightened by
war time demands for military industrial goods and by the post-war desire
to prove the compatibility of republican government and a high standard of
living, viewed technology piracy as the premier tool for industrial
development. Perhaps I should do what historians do, and tell a story:

In the second week of November, 1787, Finneaus Bond who was the British
Consul in Philadelphia, received a visit from two English nationals. They
knocked on his door frantically. One was Thomas Edimsor, a cotton merchant
from Manchester, and the other was Henry Royal. Henry Royal was a calico
printer from Cheshire County. Both men were greatly agitated. They feared
they were going to be lynched by the American mob, lead by the leading
citizens of the city. They looked to the envoy of his Brittianic Majesty,
for shelter. And their story, went as follows:

In 1783, concomitant with the signing of the Anglo-American peace accord,
an English artisan by the name of Benjamin Phillips, decided he was going
to make money in America. He purchased, and sent to America, four machines
for the production of textile. One cotton machine, and three spinning
machines. There were of course restrictions, he was not officially allowed
to do so. But he sent them to America on a British ship called the
'Liberty', in the guise of them being Wedgewood china.

He had earlier sent his son to Philadelphia, and his son received the
packages. However, Phillips died during the journey, and the son when he
received the crates, had no idea what to do with the machines because he
was not a trained artisan. So he sold the machines to another transplanted
Englishman by the name of Joseph Hague. Hague managed to put the machines
together, but he still could not make them work.
And so having no capital, and despairing of making the machines work, Hague
sold the equipment to Royal, who in turn sold them to Edimsor. Edimsor, who
was an English patriot, so to speak, disassembled them and shipped them back
to England. According to his testimony he patriotically purchased and
repatriated the equipment in order to, “Check the advancement of cotton
manufacturing in America.”

In the meantime a group of Philadelphia merchants concerned with advancing
the cause of the United States economic independence, to compliment the
nations newly found political independence, formed the Pennsylvania society
for the Advancement of Manufacturing and Useful Arts. This group instigated
a search for Hague's machines and became furious when they learned that
Finneaus Bond was involved in their repatriation. They turned their wrath
on the British culprits who, “ in great dread of suffering from their
resentment,” went into hiding for a couple of weeks. Finally, they
approached Bond for protection.

I'd like to add that royal's statement that he was against piracy was just
as believable as the French inspector's statement in the movie Casablanca
that he is against gambling as he receives his winnings, because Royal
himself was a technology pirate who was in contact with Benjamin Franklin, a
few years earlier, and tried to get special benefits for coming to America
illegally.

Shocked by what Bond called, “the American seduction of British machines
and artisans,” and convinced of the real danger of violence his
compatriots faced from the leading men of Philadelphia in their quest to
acquire the industrial secrets of the old world, Bond paid a fare for Royal
and his family out of his own pocket to send them to England. When the
society learned of this, they publicly insulted the British representative.
Refusing to be intimidated, Bond researched a bit more and discovered that
the slippery character of Hague is an essential link in this story. He
learned that Hague had left Philadelphia and was back in England, attempting
to procure more equipment for illegal exportation to America. He notified
the British foreign Office that Hague could be found in Derbyshire, but by
the time the authorities reached, he was gone. 

He reappeared in Philadelphia the following spring, having successfully
smuggled over a new cotton carting machine. Adding insult to injury the
Philadelphia legislature awarded him a prize of one hundred dollars for
having succeeded in his piracy. The manufacturing society trumpeted this
achievement in the press, and showed little concern for intellectual
property. “It is with great pleasure we learn that the ingenious artisan
who counterfeited the carting and spinning machine, though not the original
inventor, being only the introducer is likely to receive a premium from the
manufacturing society, besides the generous prize for his machines. It is
highly probable, that our patriotic legislature will not let his merit pass
unrewarded by them. Such liberality must have the happy effect of bringing
into Pennsylvania other artisans, machines and manufacturing secrets, which
will abundantly repay the little advance of the present.”

The Bond affair is just one of many amongst such incidents which I
chronicle in my book 'Trade Secrets' and it is here that I would like to
pause for a second and say that there are three forms of technology
smuggling in the 18th and 19th century.

One is the knowledge itself, whichever way it comes. It could come as
something written or described, but this is quite problematic because
descriptions lacked standard measurements. For example in the 18th and 19th
century when people would register for patents in the English Patent
Office, they were required to give a description of the machine, but they
feared if they gave too detailed a description of the machine they feared
it would be copied, so their descriptions were always vague.

Another form were the machines themselves. But as we noticed in the above
story, the machines themselves were not of great use, you had to know what
to do with them.

Which brings me to the central agent, the people themselves who were
central to this process. those in the United Sates who whine about the
current process, conveniently forget that 200 years ago, the shoe was on
America's foot. American prosperity originated in the piracy of industrial
technologies from Europe, primarily from England, in the first half of the
19th century. The process took place in spite of a concerted effort on the
part of the British government to keep its trade secrets at home.

Prohibitions on the immigration of artisans and the exportation of
machinery from the British Empire had been in effect throughout the 18th
century. In the mid-1770s in the imperial conflict between the patriots and
the metropolis took shape, Parliament ruled that all people leaving for
North America from the British Isles and Ireland with the intent to settle
there were required to pay 50 pounds per head. After the United States won
its independence, growing anxiety in England over industrial piracy lead to
stronger legislation and stricter enforcement. Exporting industrial
equipment from textile, leather, paper, metals, glass, to clock making was
prohibited in the 1780s.

The legislations were particularly comprehensive with regards to all that
was concerned with the textile industry, covering existing as well as all
future developments. Robert Owen, recalling his earlier days in the English
textile industry, reported that in the 1780s, “cotton mills were closed
against all strangers. No one was admitted. They were kept with great
jealousy against all intruders, with their doors being always locked.”

My own favourite English tactic was that there were mils in which they
employed people who spoke only Welsh, and you will agree with me that
nobody speaks Welsh. These people were 'safe', they could not go anywhere
or divulge anything. 

The restrictions provided for a 200 pound fine and twelve months in prison
if you were caught smuggling any of the above machines, and if an artisan
who tried to smuggle himself out with machines relating to textile, the
fine went up to 500 pounds. These were severe fines in the context of how
much and English artisan made.

The English were so concerned, that in 1785 they even prohibited the export
of steam engines. Now, the whole point about steam engines is that you make
them and you export them. The only way you can make money from steam
engines is by selling them to somebody, but so concerned were they, that
they shot themselves in the foot. That ban, however, did not last long.

The American founders knew of those restrictions. But they also believed
that for the United States to survive politically and economically, it must
close the technology gap, and fast. Framers of the United Sates
Constitution unanimously approved article one, section 8 which instructed
the government to, “promote the progress of science and useful arts, by
securing for limited time for authors and inventors the exclusive right to
their respective writings and discoveries.”

The founding fathers decided upon a mechanism through which original
authors and inventors were rewarded for enriching American society with new
devices, or with new writings. Inventors and authors were the only, and I
repeat only, occupational group given special benefits in the United States
Constitution. It is the only section in the Constitution that specifies not
only the goals of the future government, but also the mechanism, the
strategy through which that goal could be attained. And at some level we
don't quite know why. There is no real discussion of this most radical step
by the founding fathers.

A bill to establish a patent system was introduced in the first session of
the United States Congress, but it did not reach the floor. Congress took
up the matter in its subsequent session. The initial proposal, by in large,
followed the English patent system. Here I must add that the English system
of intellectual property was founded on the promotion of piracy. In the
14th century England was not as it is now, a rainy island, it still is, but
then it was also incredibly underdeveloped in comparison to Europe. The
monarchy wanted to lure European artisans to England. But what can you
offer them in England? A rainy, dreary, poor island. Well, you can offer
them a production monopoly. Only in the 17th century do inventors get what
introducer's got in the 14th century and as late as the 1770s an English
court ruled in favour of an introducer against an English claim to an
invention.

What we need to understand, is that the English law of patents grants what
is known as 'patents of importation' to introducers. Introducers and
inventors are different categories and yet in the English system they are
not distinct. Both inventors and introducers can receive patents.

Likewise the initial patents bill gave all the privileges to introducers
that it would give to original inventors. President Washington however was
not happy with the pace at which the proceedings were going and in his
first State of the Union address he actually pleaded with Congress to enact
legislation to encourage, “skill and genius at home, and the introduction
of new inventions from abroad.” So a State of the Union address by an
American president calls for a law to encourage piracy.

Alexander Hamilton was the dominant person in the Washington
administration, as Secretary of the Treasury. Hamilton deplored the
American dependency on European imports. He described the difficulties of
American manufacturing through technological deficiency and wrote that the
gap between Europe and America manufacturing would diminish, “in
proportion with the use that can be made of machinery.”

He called on the Federal government to establish an auxiliary agency to
coordinate the piracy of European technology. He proposed to market
American industrialisation in Europe, in other words to spread the word, to
encourage people to come. These when you could not simply get a passport
and go, but when everyone was, by law, tied to locations. He proposed to
encourage industrial immigrants to come by offering them travell subsidies,
exemption from customs for their tools and implements of trade, household
goods and so forth. “The public purse must supply the deficiency of
private resources for as soon as foreign artisans be made sensible to the
state of things here affords a moral certainty of employment and
encouragement, competent numbers of European workmen will transplant
themselves effectively to ensure the success of their design.”

The industrialisation of the United States, Hamilton concluded, would for a
great measure depend on foreign stock. So Congress set out to write an
American patent bill that would conform to the wishes, and sentiments, of
the two most important politicians, President Washington, and Secretary of
Treasury Hamilton. The House of Representatives produced a vision granting
introducers of pirated technology the monopoly privileges that were granted
to original inventors. But the United States Senate, however, did not go
along. It amended the bill to grant patent monopolies only to inventors of
machine, and I quote, “ not before known or used.” And it deleted the
location qualifier of the House version which had added to that, “within
the United States.” The elimination of these four words was really
revolutionary.

The first United States Patent Act broke with the European tradition of
patents of importation. It restricted patents exclusively to original
inventors and established the principle that prior use anywhere in the
world were grounds for invalidating a patent. The criterion is
particularly puzzling because the young nation needed to import technology
to develop its industrial base. And moreover, the two most important
statesman of the era, Washington and Hamilton, supported granting patents
of importation.

Now, the 1790s Act itself was problematic. It established a patent board
consisting of Secretary of War, Attorney General and Secretary of State who
were to examine each and every patent and decide whether it should be
granted or not. Chairing the board was Secretary of State Thomas Jefferson.
Jefferson had a very high opinion of himself in all matters, and if you go
to his house in Monticello, you will see that he was a huge tinkerer.
Monticello is one of the funniest places to go to. Its a real comedy. He
started to create all sorts of things which he never finished. He tried to
create a way to make time through the wall, and he had to dig into the
basement, the stairs were too narrow so he couldn't bring furniture up.

He thought he was a tinkerer and a mechanic and he wanted to examine each
and every application. They just couldn't. The volume of applications was
so great that it was clearly impossible for anybody, any single person what
people were actually filing patents for. And so in 1793 Congress relieved
members of the board from wasting their time examining individual patents,
and deputed this to a clerk in the State Department.

The patent became a registration of a claim which anyone could make
provided that he paid the fee, and that no similar claim was submitted and
registered, and that he filed the forms. Acquiring a patent depended
exclusively on prompt completion of the necessary bureaucratic paperwork. The
revised system maintained the dual demand for novelty and originality,
requiring each patentee to take an oath that he or she was indeed the first
and original inventor. The disputes that were likely to arise from this
strictly bureaucratic registration were to be resolved by a board of
arbitrators, and if this failed it would go to the courts. A revision in
1800, required an oath by all applicants to th effect that, “their
invention, art or discovery, have not been known or used in this or any
foreign country.” 

Now, textual examination of the law might give the impression that the
young republic was rejecting technology piracy, and establishing a new
intellectual property moral code. But before Americans break into their,
all too familiar, self-congratulatory verse about the virtuous foreign
policy of the republic it is worthwhile to examine what actually
happened. How did the American patent system actually operate? 

First, we should remember that every founding father of the United States,
including those who we most esteem, from Franklin to Jefferson, understood
the inferiority of American technology, they viewed it as a problem, all
believed that American economic independence was necessary because
political independence without economic independence was meaningless, they
believed that the only way to catch up is through piracy and all of them
supported it. And every one of them, in one or the other, engaged in the
practice.

But this, if you wish, is maybe not that important. In theory, the United
States pioneered a new standard of Intellectual Property that set the
highest possible standards for patent protection, of worldwide originality
and novelty. By the intellectual property laws Congress enacted in the
first 50 years of its existence, were but a smoke-screen for a very
different reality. And this is where historians come in handy. The
statutory requirement of worldwide originality and novelty did not hinder
widespread and officially sanctioned technology piracy.

William Thornton, who administered the American Patent office for much of
its life, did not insist on the oath of worldwide novelty. Not that taking
an oath means you are telling the truth, but lets assume that you are. It
is indeed entirely possible that most of the patent application received
were for devices that were already in use, since acquiring a patent
required little more than successful completion of paperwork. The Patent Act
of 1793 allowed the patent office to receive patents that infringed the
intellectual property of others. Moreover the Act explicitly prohibited
foreigners from obtaining patents in the United States for inventions that
had been put to work elsewhere in the world. This meant that while the
United States citizens could petition for introducers patents in European
nations, European inventors could not protect their intellectual property
in America.

The American patents system, then, sanctioned technology piracy, as long as
imported technology was not restricted exclusively to any particular
individual introducer. Intellectual property in the early republic favoured
operators, developers and entrepreneurs at the expense of investors and
inventors. 

So, whats going on? Whats going on is that we have a new understanding of
the proper arena for technology piracy. A self-respecting government eager
to join the international community on an equal basis could not flaunt its
violation of the laws of other nations. Patents established under the
semi-anarchic conditions of the revolutionary and confederation periods
were inappropriate behaviour for a respectable member of the international
community. This all the more so in the case of the nascent Washington
administration. After all the most important task of the administration is
to achieve legitimacy. Its important to note that the United States was not
considered a nation by any other nation in the world at that time. No
nation sent representatives to America. In fact, in the 1780s, the
President of the American Congress, Nathanial Greene, wrote to the brother
of the king of the Habsburg Empire, asking him to come and become the king
of the United States because things were such a mess. And that royal
responded by saying that he would not come because Americans obviously do
not show sufficient respect for royalty. So America was that close to
becoming a monarchy. People also fail to note that there were fifteen
presidents before George Washington. Nobody needs to know that because
they were powerless and meaningless. I mean the only reason I know their
names is because I teach American History, but I still have to read them
form a list. I mean the United States was truly a meaningless entity. The
peace accord with England was extremely beneficial to the United States.
The British wanted to give the Americans a good deal because they were
concerned with other affairs in Europe. But there was not even a sufficient
quorum in the United States Congress to ratify the peace accord and England
could have revoked it. By the way, if England would have revoked it, the
Ohio valley would have been part of Canada. England gave America the Ohio
valley for no good reason - there were no American soldiers there. 

So the degree of ineffectiveness was so great, which is what brought
about the gathering in Philadelphia which formed a Constitution, and the
Washington administration had to establish international and domestic
legitimacy. A country seeking legitimacy could not begin by telling the
world it was going to steal the technology of others. To be sure,
clandestine appropriation of English technology not only persisted, but also
intensified. Every major European state engaged in technology piracy and
industrial espionage in the 18th century. The United States could not
afford to behave differently.

Yet, there was an etiquette to piracy. It was undertaken in secret, and
officials would deny any connection to such practices. The British efforts
to keep innovations from leaking across the Atlantic, proved futile.
Inventors and entrepreneurs easily found ways to circumvent laws that aimed
to keep know-how and production at home. Ten of thousands of artisans
crossed the Atlantic and brought with them their skills, methods and tools.
Piracy became the de-facto defining feature of American industrial policy
in the decades following independence. America emerged as the leading
industrial nation in the world, and Britian simply raised its hands and
revoked its restrictions, first in the 1820s and then the 1840s.

The young republic embraced a janus-faced approach. In theory it pioneered
a new standard of intellectual property with the highest possible
requirements- world-wide novelty and originality. In practice the country
encouraged widespread piracy and industrial espionage. Piracy took place
with the full knowledge, and sometimes even aggressive encouragement, of
government officials. Congress never protected the intellectual property of
European authors and inventors, and Americans did not pay for reprinting
of protected works and unlicensed use of patented inventions. Lax
enforcement of the intellectual property laws was the primary engine of the
American economic miracle. The early republic made no effort to embrace its
ground-breaking patent laws. The first decades of national independence saw
the most intense pursuit of English technology on the Federal and State
level.

Those efforts were particularly successful in the textile industry. A small
-scale capacity to build and operate the newest mule-spinning technologies
sprang up in a variety of spots in the North-Eastern urban centers. Indeed
piracy was crucial to this development of the republic. Its bookstores and
libraries were mostly composed of un-authorised reprintings of British
authors. A phenomenon, which I understand is similar, to rampant piracy of
music by consumers in todays developing world. 

On the producer front, the violations were even more blatant. A British
attorney reported in 1818 that European discoveries in arts and sciences
generally reached the United States within a few months after they first
saw the light in their own country and, “soon become amalgamated with
those made by Americans themselves.” When the patent law was reformed
again in 1836, it was no longer necessary for the nation to pretend that
it would protect the intellectual property of non-Americans. Indeed the 1836
Act removed the prohibition on patents of importation. And whereas the 1836
Act no longer restricted patents only to US citizens, it did set the
registration fee for foreigners at ten times the rate for Americans. I
would point out to you that sounds pretty extreme right? But, when I went
to visit some sites in Delhi, foreigners pay entry fees of Rs. 250 and
locals pay only Rs. 10. I am registering an official protest by the way,
and I wonder why I can't pass as an Indian.

In 1861 the Act was reformed again to give foreigners almost equal footing.
US copyright protection, was restricted to United States citizens even
longer. And when those were removed, other regulations such as requiring
the use of American typesets delayed American entrants to the Berne  Copyright
Convention till 1989, more than a hundred years after Great
Britain joined.
So, to a very large extent the industrialisation of the United States in
the first half of the 19th century relied upon pirated know-how. In textile
some followed Robert Lowell, who went into English factories and wrote down
what he saw and then delivered it at home. By far the most important agents
were the European artisans. As late as the 1850s, migrants from the British
Isles comprised more than three-fourth of the weavers and skilled workers
in the textile industries of German Town, Pennsylvania. Managers in cotton
mills in the first half of the 19th century, were for the most part,
English immigrants because native experienced managers were rare. American
glass manufacturers recruited European workers aggressively in the first two
decades of the 19th century, and by the 1820s the United sates was the
world leader in glass manufacturing. Paper mills in New England relied on a
constant stream of European immigrants before local industry took off in the
1830s and 40s.

In all these cases European know-how was instrumental in getting industry
started and turning America into the leading industrial nation. A dual
intellectual property regime fuelled the 19th century economic miracle. In
theory the nation was committed to protecting the intellectual property of
author and inventors, but authorities did little to enforce the laws. By
granting unenforceable patents to patentees, The United States acquired
a reputation of being friendly to innovation, while at the same time, by
declining to crack down on technology pirates, it allowed for rapid
dissemination of information that made American products better and cheaper.

>From the American Revolution to the crystal palace exhibition of 1851,
where American technology was exhibited and recognised as the leading in
the world, United States technology caught up with and surpassed its
European rivals. The industrialisation that took place along the
North-Eastern seaboard in the first half of the 19th century, facillitated a
dramatic two-third growth in per capita income. The United States economy
grew faster, and was faster, than any other European nation. Contemporary
historians have come up with a wide range of social, cultural and political
explanations of this dramatic development. Some celebrate it as the
ultimate manifestation of the American spirit of enterprise. Others argue
that the blood and sweat of slaves provided the economic capital for the
remarkable growth in the first half of the 19th century. What is often overlooked is
the manner by which smuggled technology made for more efficient and
profitable industrialisation. Tens of thousands of artisans crossed the
Atlantic and brought with them their skills, methods and tools. American
industrialists, scientists and intellectuals kept abreast with mechanical
developments through trips to Europe, and the growing scientific exchange.
Federal and State authorities were officially committed to respecting the
intellectual property of others, yet in fact sanctioned smuggling of
protected technology on a huge scale. American investors and inventors
modified imported technology to local circumstances. The infantile state of
American know-how and the absence of established classes,
committed to earning their livelihood from known and tried techniques,
freed innovators from whole scale adoption of imported technologies in
favour of innovations Europeans often deemed too costly and impractical.

Technology transfer then, accounts not only for the rapid economic growth
of the republic, but also for the experimental and innovative reputation of
what came to be known as the, “American system of manufactures.”
Crystal Palace turned out to be the coming out party for American
technology. In the span of seventy years, an agricultural republic, with
some household manufactures, that had more in common with the middle-ages
than the industrial world, transformed itself into the world leader of
cutting-edge industrial technology. American machines, and the American
system of manufactures, became the model for worldwide imitation.

Similar to modern developing nations, early in its history, the United
States violated the intellectual property of rivals in order to catch up
technologically. Integration into the international community required
that the government of the United States, distance itself from such rogue
operations. In this process, the United States had come full circle. The
fledgling republic, once committed to technology piracy, had become the
primary technology exporter in the world. The years of piracy upon which
the current stature was founded, however, were erased from the American
national memory. The intellectual debt owed to imported technology, did not
turn the United States into a champion of the free exchange of know-how. As
the diffusion of technology began to flow eastward of the Atlantic, the
United States emerged as the world's foremost advocate of extending
intellectual property to the international sphere.