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Source link: http://archive.mises.org/11042/rand-on-ip-owning-values-and-rearrangement-rights/

Rand on IP, Owning “Values”, and “Rearrangement Rights”

November 16, 2009 by

In Jeff Tucker’s superb article If You Believe in IP, How Do You Teach Others?, he notes Rand’s increasing focus on exalting the creator and elevating “intellectual rights” to such a height that they totally trump real rights. This is no exaggeration. As I noted in Against Intellectual Property, Rand actually, incredibly said that “patents are the heart and core of property rights.” See also my post Inventors are Like Unto …. GODS….., noting Objectivist IP attorney Murray Franck approvingly repeating this quote: “intellectual property is after all the only absolute possession in the world.”

So, yes, Objectivists focus on the creation of value, and thus in rights in value, and explicitly drop the connection between property rights and scarcity. As I note in footnote 76 of Against Intellectual Property, Objectivist David Kelley wrote:

Property rights are required because man needs to support his life by the use of his reason. The primary task in this regard is to create values that satisfy human needs, rather than relying on what we find in nature, as animals do. . . . [T]he essential basis of property rights lies in the phenomenon of creating value. . . . Scarcity becomes a relevant issue when we consider the use of things in nature, such as land, as inputs to the process of creating value. As a general rule, I would say that two conditions are required in order to appropriate things in nature and make them one’s property: (1) one must put them to some productive use, and (2) that productive use must require exclusive control over them, i.e., the right to exclude others. . . . Condition (2) holds only when the resource is scarce. But for things that one has created, such as a new product, one’s act of creation is the source of the right, regardless of scarcity. [emphasis added]

Letter on Intellectual Property Rights, IOS Journal 5, no. 2 (June 1995), pp. 12-13 (including: David Kelley, “Response to Kinsella,” IOS Journal 5, no. 2 (June 1995), p. 13; and Murray I. Franck, “Intellectual and Personality Property,” IOS Journal 5, no. 3 September 1995), p. 7.

Thus, Objectivists will talk about man creating values. For them “a value” is a thing that exists; it’s what you “create”. For the Austrian and Austro-libertarian, you don’t talk about “a value” as if it’s an existing thing that you create. I don’t make a value. For us, it’s more of a verb: we value things as ends or as means to ends. We can make something more valuable by transforming it, but we do not create new property when we do this. As discussed in Intellectual Property and Libertarianism, creation is an important means of increasing wealth. As Hoppe has observed,

One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers. There are no other ways. [Hans-Hermann Hoppe, "Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order,"Download PDF Review of Austrian Economics 4 (1990): pp. 55-87, p. 60. Emphasis added.]

While production or creation may be a means of gaining “wealth,” it is not an independent source of ownership or rights. Production is not the creation of new matter; it is the transformation of things from one form to another — the transformation of things someone already owns, either the producer or someone else.

By viewing “values” as things that we create, Objectivists then think there should be property rights in values. They are things, after all, right? But this is a fundamental mistake. As I noted in Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors, a common mistaken belief is that one has a property right in the value, as opposed to the physical integrity of, one’s property. For elaboration, see pp. 139-141 of Hoppe’s A Theory of Socialism and Capitalism; also see my comments re same to Patents and Utilitarian Thinking. This assumption sneaks into or lies at the basis of many fallacious notions of property rights, such as the idea that there is a right to a reputation because it can have value. It ties in with the (especially Randian) notion of “creation” as the source of rights, and the confusing admixture of the “labor” idea, when we talk about using our labor to “create” things of “value” (like reputations, inventions, works of art). As Hoppe notes in The Economics and Ethics of Private Property:

According to this understanding of private property, property ownership means the exclusive control of a particular person over specific physical objects and spaces. Conversely, property rights invasion means the uninvited physical damage or diminution of things and territories owned by other persons. In contrast, a widely held view holds that the damage or diminution of the value (or price) of someone’s property also constitutes a punishable offense.As far as the (in)compatibility of both positions is concerned, it is easy to recognize that nearly every action of an individual can alter the value (price) of someone else’s property. For example, when person A enters the labor or the marriage market, this may change the value of B in these markets. And when A changes his relative valuations of beer and bread, or if A himself decides to become a brewer or baker, this changes the value of the property of other brewers and bakers. According to the view that value damage constitutes a rights violation, A would be committing a punishable offense vis-à-vis brewers or bakers. If A is guilty, then B and the brewers and bakers must have the right to defend themselves against A’s actions, and their defensive actions can only consist of physical invasions of A and his property. B must be permitted to physically prohibit A from entering the labor or marriage market; the brewers and bakers must be permitted to physically prevent A from spending his money as he sees fit. However, in this case the physical damage or diminution of the property of others cannot be viewed as a punishable offense. Since physical invasion and diminution are defensive actions, they are legitimate. Conversely, if physical damage and diminution constitute a rights violation, then B or the brewers and bakers do not have the right to defend themselves against A’s actions, for his actions – his entering of the labor and marriage market, his altered evaluation of beer and bread, or his opening of a brewery or bakery – do not affect B’s bodily integrity or the physical integrity of the property of brewers or bakers. If they physically defend themselves nonetheless, then the right to defense would lie with A. In that case, however, it can not be regarded as a punishable offense if one alters the value of other people’s property. A third possibility does not exist.

Both ideas of property rights are not only incompatible, however. The alternative view – that one could be the owner of the value or price of scarce goods – is indefensible. While a person has control over whether or not his actions will change the physical properties of another’s property, he has no control over whether or not his actions affect the value (or price) of another’s property. This is determined by other individuals and their evaluations. Consequently, it would be impossible to know in advance whether or not one’s planned actions were legitimate. The entire population would have to be interrogated to assure that one’s actions would not damage the value of someone else’s property, and one could not begin to act until a universal consensus had been reached. Mankind would die out long before this assumption could ever be fulfilled.

Moreover, the assertion that one has a property right in the value of things involves a contradiction, for in order to claim this proposition to be valid – universally agreeable – it would have to be assumed that it is permissible to act before agreement is reached. Otherwise, it would be impossible to ever propose anything However, if one is permitted to assert a proposition – and no one could deny this without running into contradictions – then this is only possible because physical property borders exist, i.e., borders which everyone can recognize and ascertain independently and in complete ignorance of others’ subjective valuations.

Rand did have insights that militated against property rights in “values”; as she once wrote:

The power to rearrange the combinations of natural elements is the only creative power man possesses. It is an enormous and glorious power–and it is the only meaning of the concept “creative.” “Creation” does not (and metaphysically cannot) mean the power to bring something into existence out of nothing. “Creation” means the power to bring into existence an arrangement (or combination or integration) of natural elements that had not existed before.

She should have realized that this means there cannot be property rights in value since this would have to mean property rights in arrangements or patterns, which would then give the owner of the arrangement rights in other people’s already-owned property. If she had kept her focus on the fact that rearranging already-existing property can indeed make that property more valuable, she would have realized that creation (rearrangement) is not an independent source of property rights: if you rearrange your own property, even if this makes it more valuable, you already owned the property that you have rearranged (made more valuable). Yet this does not give you rights in other people’s property. You can re-word the Randian view as follows: if you make your property more valuable, it gives you additional property rights–the right to prevent other people from making their own property more valuable. And this makes it all the more obviously flawed.

This is where the Misesian approach to subjectivist value makes sense: things have value to a valuer; values do not exist independently as free-floating things that can themselves be owned. And again, Rand should have recognized this; e.g., she once wrote, “Material objects as such have neither value nor disvalue; they acquire value-significance only in regard to a living being–particularly, in regard to serving or hindering man’s goals.” (For more on the compatibility between Objectivism and Austrian economics, see Mises and Rand (and Rothbard); Randian Hoppe(?), Austrian Rand(?).) So she should have realized that if rearranging owned property makes the owner or potential buyers value the object more, it does not mean there is any additional thing created for which we need to find an owner.

I think a similar mistake is made by Tibor Machan. Rand slips into thinking of values as ownable things because she thinks of values as created things, rather than thinking of it as a verb: people value things (and demonstrate this preference or valuing in action). I’m sure Machan would disagree with my way or framing his argument, but his argument, to me, seems to say that if you can have a concept for some”thing”, or a name or word for “it,” then it’s an ontological “type of thing,” and after all, if you create this thing, why shouldn’t you be “its” owner? The problem with this is it does not first ask: what is an ownable type of thing? Surely you can’t just say that any type of thing you can conceptualize or come up with names for is therefore ownable. I don’t own my wife just because I say she is “mine”; language does not determine normative reality. It is just a useful tool. If I use the word “poem” to describe a pattern of words that I wrote, and if I refer to the poem as an “it” and say things like “I created it” to mean that I moved my pencil in such and such a way on paper resulting in a certain configuration of letters, just because we arrange our concepts and words in this manner does not mean the poem is a “thing” that can be owned. In my view, all talk about “ontology” is just a fancy way of dressing up the fact that we understand the world conceptually, and use words of a language to denote those concepts. It does not imply that any thing I can happen to come up with a word or concept for is ownable. I have a concept of running; who owns “running”? There is math; who owns math? It is “a truth” that WWII began in a certain year. Who owns that fact? The point is that saying that you own the poem because you create it presupposes we are asking who the poem’s owner is. If that’s the question, then sure, the creator is a natural answer. But you only get to this question if we need to find an owner for the poem; if it does or can have an owner; if poems are ownable types of things. In my view, only scarce resources are ownable things. Something does not qualify for this status just because of the words we use–and saying something is “an ontological type of thing” doesn’t change this. (For more on this, see New Working Paper: Machan on IP; Owning Thoughts and Labor; this comment to “Trademark and Fraud”; Libertarian Creationism; also Elaborations on Randian IP and Objectivists on IP.)

Update: Note: I pasted into the end of this post my side of a looong debate with Randians about IP. It’s very illuminating.

{ 65 comments }

Stephan Kinsella November 17, 2009 at 8:09 pm

Lord B: “For example, a sandwich? I think your theory is a pretty open-ended grant of privelege.”

See, Silas–I would never misspell privilege like that. Doesn’t that prove it? Heh.

Bala November 17, 2009 at 11:39 pm

Lysander,

” then the question is not one of more or less liberty, but of whose property rights should take priority. ”

You are engaging in the well-known approach called question-begging. I have tried my best to show you why ideas and patterns cannot and should not be considered “property” and here you come back saying “whose property rights should take priority?” as though your suggestion that ideas and patterns should be considered “property” has been accepted. How is this a valid response to my (rather long) post questioning the very validity of your stand that ideas and patterns can and should be considered property?

Since I seem to have been ineffective in conveying my point, let me try to present it differently.

My point is that your notion that ideas and patterns can and should be recognised as “property” is absurd. I am giving below my reasons starting by stating my basic definitions and axioms.

Definition : Rights are fundamentally a moral concept sanctioning man’s actions in a social context. The sanction required is not any external sanction (such as those of others) but one’s own long-term well-being and the nature of the reality that one faces (including the reality of one’s own nature).

Axiom : Life is a sequence of self-generated self-sustaining actions. The most fundamental Right of any human being is the Right to Life.

Argument :

The logical corollary of the Right to Life is the Right to Liberty. The latter is nothing more than the freedom to act to sustain one’s life in consonance with one’s nature.

The Right to Liberty is self-limiting – action that violates the Liberty of another person cannot come under the scope of “Liberty”. That’s because reality abhors contradictions and hence, you cannot claim for yourself a right that you deny to others. The means of violating a person’s Liberty is to initiate force against him and hence such action does not and cannot get moral sanction.

The Right to Property is little more than a manifestation of the Right to Liberty. Action to sustain life is fundamentally to gain or keep value. You can take value that I have gained away from me with or without my consent. The latter is possible only through the initiation of force. Since the latter does not have moral sanction, neither does the action of taking away the value I have gained without my consent. This, IMO, is the real meaning of the concept “property”.

By this understanding, only that can be considered property, which has been gained by one person and to take which away from him without his consent, you (or I) need to initiate force against him.

By this yardstick, physical goods can and should be designated “property”. Ideas and patterns can be taken from one person without the initiation of force. Hence, it is absurd to try to label ideas and patterns as “property”.

The notion that ideas and patterns be considered “property” is further damned by the obvious fact that while their taking does not constitute an initiation of force, preventing the “taker” from acting as per his rational mind necessarily constitutes an initiation of force. Thus, IP becomes no more than a means by which those who claim to have generated ideas get to enslave everyone else who “takes” them from the “producers” of ideas and tries to use them. Rather morbid, as I see it.

The rest of your “explanation” is meaningless unless you address this point of mine and show why you are not enaging in question begging but in logical argumentation.

Incidentally, my approach out here is to argue based on certain undeniable and self-evident axioms (what you call a priori) and the use of Logic to arrive at my conclusions. So, my approach is well within the boundaries that you tried to prescribe for the discussion. Your approach, however, does not meet your own standards. It definitely does not meet mine.

MichaelM November 17, 2009 at 11:49 pm

“For example, a sandwich?”

Yes. A recipe for a unique sandwich, or soft drink, or wonder drug, or fuel additive, or ….

“I think your theory is a pretty open-ended grant of privilege.”

Characterization is cheap. Showing that it actually applies will require a greater investment.

Lord Buzungulus, Bringer of the Purple Light November 18, 2009 at 6:55 am

MichaelM is trying to change the terms of the debate. His original claim was:

“When someone creates an application of an idea to an entity, and that application did not previously exist, only he has a moral claim to benefit from whatever potential position that application can generate in the value hierarchies of others, because that position is a direct result of his and only his thoughts and actions.”

Obviously, this would characterize a sandwich *as such*; prior to the genius who conceived of putting meat between pieces of bread, the application did not exist, and after his idea, changes to the value scales of others are generated as a result. Hence, by your thesis, the originator has a moral claim to the value thus generated.

Now, however, after confronted with the absurdity of all sandwich eaters owing a tribute of some kind to the originator, you tell us that only “unique” sandwichs are worthy of such consideration. This is another good example of how IP proponents rely on moral bluster in principle and ad hoc adjudication in practice.

TokyoTom November 19, 2009 at 8:06 am

I left the following comment on Jeffrey`s post:

While I`ve read Rand, I hadn`t actually followed how the idea of IP affected her own life.

My own view has come around to the idea that state-created IP is abusive and has been hijacked by rent-seeking. Firms and individuals that want to maintain information as property should do so without state grants, other than the use of courts in providing remedies for theft.

But that the idea of IP itself as “property” does not seem absurd to me in the least; the prevalence of the idea is an example of the way that communities adopt and internalize rules and apply them rather reflexively (and feel them morally) and is a testament to the capacity of humans to minimize tragedy of the commons situations (as Yandle and Ostrom have noted). The problem is simply that IP has slipped its moorings and become abusive to the point that we need to start working (via legislation, no?) to lessen the evident parasitism and abuse.

Absent the state, my notions of “property” are pragmatic (and consistent with Ostrom`s empirical studies of resources): property is what the owner possesses and can defend, which reflects both communities` acceptance of the legitimacy of such claims, and individual`s recognized stake in/claim on community property and institutions.

newson November 19, 2009 at 8:35 am

the lord bit i get, but the purple light?

Lord Buzungulus, Bringer of the Purple Light November 19, 2009 at 9:08 pm

newson,

The purple light is the medium by which I spread knowledge.

MichaelM November 20, 2009 at 12:05 am

“Obviously, this would characterize a sandwich *as such*; prior to the genius who conceived of putting meat between pieces of bread, the application did not exist, and after his idea, changes to the value scales of others are generated as a result. Hence, by your thesis, the originator has a moral claim to the value thus generated.”

IP rights cannot protect unspecified and undemonstrated future variations of a creation. A government cannot protect IP until and unless it is objectified — defined, specified, and demonstrated to be a viable improvement. To protect a sandwich *as such* the creator would have had to provide specifications for all possible variations and make models or exemplars as standards against which to measure all future claims of improvements.

The original sandwich was itself only an improvement on a previous creation (bread) that would have been at that time in the public domain. Per Rand (if the original sandwich could have been patented or its recipe copyrighted), the IP rights would have expired 50 years after the creators death. Thereafter the original sandwich would be in the public domain and only unique improvements (recipes for specific new combinations and measurements of ingredients) could be protected.

Rand made a clear distinction between property rights in material objects like land and IP. The former are unlimited, because their value can only be maintained by continued applications of reason and action. IP, however, can have value for a long or even infinite time without requiring further effort. Therefore she advocated a limit of 50 years beyond the creator’s death. That would insure value for the creator by guaranteeing any buyer of the rights time to profit from his investment in the event that the creator would die on the day of sale. It would also guarantee that others could not profit from it without contributing to its value.

TokyoTom November 20, 2009 at 1:39 am

I note that Stephan chose to respond at Jeffrey Tucker`s thread rather than here.

Stephan`s response is here; mine follow in the same thread:

http://blog.mises.org/archives/011035.asp#c627755

Lord Buzungulus, Bringer of the Purple Light November 20, 2009 at 8:00 am

MichaelM’s latest post confirms my observation that, stripped of moralistic bluster about creation, (non-utilitarian) defenses
of IP amount to some ad-hoc maneuvers to avoid absurdity. He tells us that a sandwich as such is not subject to IP rights
because one of the underlying factors of production (bread) was already in the “public domain,” whatever that is. Actually, we
know what it is: a period 50 years after the creator’s death. Why 50 years? He appeals to the authority of Rand for this
number, but it’s plainly proctologically inspired (i.e., pulled out of her ass). It’s completely arbitrary. No logic or
analysis supports it, it just seems reasonable to IP defenders.

Here’s another howler:

“A government cannot protect IP until and unless it is objectified — defined, specified, and demonstrated to be a viable
improvement.” How do any of these three steps establish “objectification?” (Let’s leave asise the question of establishing
“viable improvement” from the perspective of [subjective] human ends, rather than in some narrower technological sense.) This
is an example of another pro-IP trick: use physicalist language and metaphors to obscure the distinction between IP and valid
property. It’s ironic: IP defenders reject the scope of property rights in things as being too narrow, yet they clearly feel
the need to craft their own defenses of IP in precisely same language as ordinary (ie, justifiable) property rights. (You
“objectify” an idea, “hence” you can own it. What crap.)

MichaelM November 20, 2009 at 11:39 am

“moralistic bluster – ad-hoc maneuvers – avoid absurdity – whatever that is – pulled out of her ass – another howler – another pro-IP trick – What crap …”

Gratuitous and purely decorative phrases like these undermine the credibility of the points you attempt to make, and are ultimately degrading to yourself, and the blog as well.

————————-

“He tells us that a sandwich as such is not subject to IP rights because one of the underlying factors of production (bread) was already in the “public domain,”

I did not. It illustrated the fact that IP is not necessarily a total object, but can and usually is an isolated modification or addition to a protected or unprotected item …

————————–

“the ‘public domain,’ whatever that is. Actually, we
know what it is: a period 50 years after the creator’s death. Why 50 years?”

Wrong again. The ‘public domain’ is the state of being not or no longer protected. For IP, it must begin well after the creator’s death. If it ended at his death, the creator could not profit from his creation, because no one would buy rights that could end if the creator were killed or died immediately after making the sale. The length of the period is neither inexorably fixed nor arbitrary. It is conditional upon the factors that determine how long it would take IP buyers to recoup and profit from their investment. Present parameters could easily be quite different from those that would obtain 500 years from now. These must be defined in law just as all other equally conditional issues of justice, like punishments of crimes and such, are established and enforced by the government as designed by the populace.

——————————

By the way, to use the term “appeal to authority” you must first learn how to distinguish learned knowledge from dogma and how to demonstrate that a statement is one or the other. Just asserting it doesn’t suffice.

——————————-

“…defined, specified, and demonstrated to be a viable improvement.” How do any of these three steps establish ‘objectification?’ ”

You make a sketch, you spec it and explain it, and then you make a prototype to show that it really does what you claim it does i.e. that the improvement claimed is viable. The degree of improvement is not a consideration and the effort required prevents frivolous claims. The Wright brothers objectified their claim and were due protection while all the other designs that did not fly were not. All claims to rights, to be enforceable, must be unambiguously concretized and demonstrated to be valid.

Pömmelhorse Pümmelfister November 20, 2009 at 8:43 pm

Mike,

You weren’t ask for a set of procedures, you were asked for the meaning of “objectification.” Metaphors are for the weak of mind.

MichaelM November 21, 2009 at 10:12 pm

@PP
Your first shot at the definition was directly appended to the word “objectified” in the original statement:

“— defined, specified, and demonstrated…”

—————

Your second chance to get it was in the closing sentence of my next reply:

“… unambiguously concretized and demonstrated”

—————-

Here’s your last chance:

objectification : concretization of an abstraction.

.

Octobox December 4, 2009 at 11:21 am

Is it okay if I re-print this and all other works on Mises as my own and sell them for commercial purposes?

*ahem – kicks pebble*

*leaves quietly*

scott t December 4, 2009 at 1:16 pm

“Is it okay if I re-print this and all other works on Mises as my own and sell them for commercial purposes?”

well…if you reprinted them and claimed yourself to be “pattern originator” the person responsible developing and researching the communicated concepts and you actually didnt do that…i would think that to be less than ok. a falsehood, iow.
if someone paid you for the material believing you were the concept originator ..well, if they benefited from the information then thats a good, but they were probobly wanting to support the actual concept developer. i suppose disdain would vary from person to person.
repeating or selling various forms information that you acquire without claiming authorship…well, i guess people have to buy things somewhere.

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