That argument (for patents) works just as well as an argument for many other policies that allows a  business to exclude competitors from a costly-to-enter market.<p>For example, in 1993 when it became apparent that the web was going to become important, it would have been beneficial for the government -- at least according to the argument you describe -- to auction off the right to develop and distribute web browsers since that would have motivated the winners of the auction to incur the costs to develop a really good web browser.<p>The development of a web browser is after all a significant expense: Mozilla, Google, Apple and Microsoft each sink 100s of millions of dollars a year into their web browsers.