Creating the Invisible Hand: the construction of property rights and the promotion of economic growth between state and interest groups in the first German patent law of 1877

Abstract

"The introduction and the revisions of patent laws which many nation states undertook in the second half of the 19th century strongly confirmed the 'marriage of science and business' which is the central element in the sustainable dynamic of the 'second economic revolution'. The, German case is of particular interest in this respect, as the 'Kaiserreich' after debates that lasted for decades introduced a highly innovative patent law which differed markedly from those in other countries. Particularly the differentiated regulations to protect inventions in the area of chemistry were identified by economists and historians as instrumental to the immense success of the German chemical industry on the world market. The core of the patent law consisted of a limited protection which gave innovators room to make advancements on the basis of existing inventions. Taking institutional economics the theory of collective action as a point of departure and tracing the historic events from an actors' perspective, the article aims at explaining the behaviour of leading representatives of the chemical industry who lobbied for a legislation that seemingly contradicted their 'rational' business interests." (author's abstract)