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Source link: http://archive.mises.org/12995/kinsella-ideas-are-free-the-case-against-intellectual-property-or-how-libertarians-went-wrong/

Kinsella: Ideas are Free: The Case Against Intellectual Property: or, How Libertarians Went Wrong

June 17, 2010 by

Earlier this month, I spoke at the Fifth Annual Meeting of the Property and Freedom Society in Bodrum, Turkey (see my Bodrum Days and Nights: The Fifth Annual Meeting of the Property and Freedom Society: A Partial Report). My topic was “Ideas are Free: The Case Against Intellectual Property,” though a better title might be something like “Ideas Are Not Property: The Libertarian IP Mistake and the Structure of Human Action.” It is now available in audio and video. The other speeches (see the Program) are being uploaded and will be linked here.

PFS 2010 – Stephan Kinsella, Ideas are Free: The Case Against Intellectual Property Rights from Sean Gabb on Vimeo.

{ 140 comments }

Bala June 17, 2010 at 10:55 am

“Ideas are not property” – I like that. Sort of like saying that the best case against Intellectual Property is the point that the very term “Intellectual Property” is an oxymoron. If it is intellectual, it can’t be property and vice versa.

Amnesiac July 20, 2010 at 11:14 am

There is ultimately no way to defend an idea (read “intellectual property”) against being shared by others. If you monetize the idea itself, you lose. Money is made by doing, not thinking. Those who act upon ideas profit, while those who do not act, do not profit.
How would we solve a claim of simultaneous creation and verbalization of ideas? If two people claim to have written and performed a song simultaneously, society will reward the best implimentation, i.e. the best performance. The idea itself is unprotectable. The best way to keep someone else from profiting from your idea is to do it better than anyone else. If you choose to keep the idea to yourself (secrecy), you will never profit from it, and someone else may think of it anyway.
Otherwise, we profit as a society from the actions of each other, and as individuals through our own actions. Ultimately, noone can claim ownership of material goods except by universal agreement or through force. Noone may trace ownership back to origin of ownership without proving original theft from the whole of humanity, unless we universally agree that use is the only measure of property right, in which case we could all use any physical resource not currently being used by anyone else, and noone could defend ownership for the sake of ownership. All things made by man are constructed from things to which he had no claim of ownership, save that he took it and noone disagreed. (The only possible exception to this would be the religeous view that the earth was created by God from nothing, who granted the right of posession of a specific portion of it to the Israelites.)
This concept could be used to determine property rights in real estate, where unused land could not be hoarded away from the homeless, and where land could be used simultaneously by two unrelated parties for seperate causes, provided one use did not inhibit the other, in which case the greater number of uses would be given precident over the most restrictive single use, or the right of first use upheld, all other things being equal. This was once common in tribal communities, and worked well. The only reason it is not promoted today is that it does not allow for the centralization of power into the hands of elite groups.
Tangible and Intellectual property rights are therefore only enforcable through force or universal agreement or combinations of the two. Money is not really an issue, as it is only a tool created by man to keep track of universal agreements. The truth is, trading one thing for another, with or without the use of capitol, is fraud, unless all of humanity agrees to uphold the rights of ownership of the two parties involved, or the dissenters are held back from dissenting by the use of force. That being the case, what would happen if someone discovered the inpenetrable sheild and unstoppable weapon, and used them to abolish all concepts of ownership by men, save for the concept of universal ownership?

james b. longacre August 31, 2010 at 2:54 am

kinsella says ‘intellectual property law’ consists primarilly of patetent law copyright law and trademark lawss, and a few other things. i guess he means that he and/or some others consider patents, copyrights and tradmarks a property.

outside of scriptural doctrines property is some type of social ‘ought’????

maybe he is being deliberatly deceptive or misleading in using the term property coupled with intellectual endeavors…i dont know.

Andras June 17, 2010 at 1:26 pm

Kinsella is right about many things but…

“Ideas are Free” – this is a wrong sentence, and as Hayek (and many other classical liberal/libertarian ) teach us “language are very important”. “Free” is a very confusing word, and most people use it in a – as I use to say – “parrot talk”, just like a parrot they keep using the word keep talking without actually understand it’s meaning nor it’s context.

Ideas are products of the mind, and as such we can talk about the “production” of ideas and the use of ideas. Production of ideas are not free, the requirement is first of all an input of other ideas (use of other previously known ideas), now before we use an idea we need to acquire it (also not free), what is “free” is sharing ideas (nearly free) or most importantly copying ideas.

This is a timeline:

before the existence of idea “A” – idea “A” – after the existence of idea “A”

Now when you don’t have the idea it can’t be copied and shared, when you have the idea, sharing and copying are almost free. What isn’t free is the production/creation of an idea. it requires input of other ideas, time, capital (like computers, communication, paper, pencil, books, education, etc.)

If ideas were free we would drown in ideas. Now just as with everything else, ideas also has a subjective and marginal value, it may have value for someone at some place in a particular time or don’t. But the difference is that if an idea already exist, you don’t have to choose between an idea or something else. In other words it is not a rival resource. You can use an idea without taking it away from others to use.

So the right thing to say would be: “Ideas are non rival resources.” and additionally we can say “Ideas are free resources because they cost you nothing to use them.”

So ideas are non-economic resources and the opposite of non-economic is free. Now in this context, Kinsella is right. But we must separate the idea from the creation of an idea. The two are not the same. Creation of an idea is not free, therefore the creator rightfully expect a compensation and a profit.

The problem with the current “IP” law is that they force the market participants to pay for copying an idea, not for the creation of an idea. They force the business model suited for production of scarce and rival products and services as a model for “production” (copy) of non-scarce and non-rival ideas. No logic there for sure, and nothing but naive, non-critical thinking all over the board.

This would be a good starting point, but I am afraid we don’t have a correct theory of non rival resources, and this is bad because before it maybe wasn’t so important but now and especially in the post-industrial future it is. So we have to solve the problem, we must develop a correct theory of non-rival resources because they are essential for the modern economy and yet they are not economical resources (you can’t economize with non-rival resources, you don’t have to choose between A and B because they are non-rival).

I believe this is a very important point if we want to develop a valid and correct theory, and we libertarians must do it, the socialists, interventionists and proponents of mercantilism and control freak conservatives won’t do it, and even if they want they can’t because they ideology is wrong.

So the first question to answer is what to do with non-rival non-economical resources (ideas, etc.), essential for the economy, free to share and copy but not free to develop? Because to create/develop them we need economic resources.

I must admit I don’t have an answer, even though I try to answer this question for a long time, but I have some incomplete ideas.

“Ideas are not property”, Ayn Rand will disagree :) but the fact is that anything we call property must be rival (and more or less scarce), if it isn’t then any property rights over it is meaningless, then again it requires property to create it so how come something what requires property for its creation is not a property after its “birth”?

The funny thing with ideas is that until they doesn’t exist they doesn’t exist but once they exist they are not scarce, you can copy and share them with the whole world without losing the right to use it yourself. The question is: Why would I create an idea if I can’t make a profit by selling it. Well, I don’t think you should give it away for free, but I think you shouldn’t use the gun (neither your nor the governments) to block people from using your idea. Sell it to someone (direct profit) or use it to advance your competitive advantage (indirect profit) in either way you will be affected by the law of diminishing return.

What I believe, is that an idea without productive use is worthless anyway, so if you create an idea use it to your advantage or if you can’t then find someone who are willing to pay for it. But after it is “in the wild” the law of diminishing return kicks in, so the only way to secure your place is to create another idea. That is why you would create ideas, because if you are the one who creates them, you are the one who will use them first so you will be the one who will made the largest profit. This is when you are not just an idea creation business. When you are then you have the chance to sell it on a market, to someone who will use it first and therefore be able to gain a larger profit. All the others will start to use the same idea shortly after but they won’t be able to use it before you do, so your larger profit is secured for a short period of time.

The funny thing is that by my opinion in that world nobody would like to use your idea after you do in the original form, so everyone would work hard to develop new ideas (because only then would they have the advantage of first use) or to further develop existing ideas that would actually increase development not decrease as the proponents of “IP” wrongly believe.

Imagine that the only way you would be able to monetize ideas is to use them first or maybe second, all the others would use it to stay in business but wouldn’t profit from it. They only way to make higher profit would be to create new ideas (and be first to use it). And the overall quality would rise because everyone will use the good ideas. In the same time more ideas generate even more ideas so the velocity of our development would significantly rise.

In the same time we would be able to use all the ideas out there without wasting enormous rival (economic) resources to make sure that we don’t use somebodies idea or if we do, all the effort we put in our creation will be futile and we would end up in a long, expensive and painful adventure with the legal system.

Kinsella is right when he say that the whole “IP” related legal stuff is garbage, counterproductive and unjust (my words but that is what he actually think), but he must do a lot better job to convince libertarians not to mention the ones who creates the commands and privileges we wrongfully call laws.

Anyway I don’t think that the current generation will actually change anything about it, but perhaps new generations some 30 or 50 years from now will ridicule our current “IP” laws as primitive and hilarious, just as we already should (and some of us fortunately does), that would be the new “they believed the world is flat” story in 2050. :)

Joshua June 17, 2010 at 2:28 pm

“language are very important”

Yes, I agree, language am very important. jk

Andras June 17, 2010 at 3:15 pm

actually it should be: “language IS very important” (mea culpa) :)

mpolzkill July 15, 2010 at 10:08 am
Stephan Kinsella June 17, 2010 at 2:41 pm

Hoppe chose the title, and I think you can interpret it as ideas should be free–not controlled by the state. That you are free to use information since this does not trespass. A more accurate title would be patterns are not property. But there is nothing wrong with a bit of creative license, eh?

Stephan Kinsella June 17, 2010 at 2:50 pm

“we must separate the idea from the creation of an idea. The two are not the same. Creation of an idea is not free, therefore the creator rightfully expect a compensation and a profit”

What do you mean by this? Why does anyone have a “right” to “expect” compensation? Who is to guarantee this?

Andras June 17, 2010 at 3:14 pm

Human action… you act because you expect that you’ll be better off after the act than before, so I suppose when you do something you expect a profit (or say a compensation). Now… I wasn’t quite clear (mea culpa, my mother tongue is not English), so I should say that “the creator rightfully expect a MARKET RATE compensation and profit, which may be $0 as well.”

So my answer to you is: nobody should guarantee the compensation (and profit) other than the market, if your idea has value for someone I am sure he would pay for it, if not then your efforts required to create the idea was a bad investment (loss).

Peter Surda June 17, 2010 at 5:37 pm

Dear Andras,

there are still unanswered questions for you from our previous debates, plus I don’t have much time to write thorough posts. So just quickly. You accuse Stephan of using a vague word “free”, and counter with using another vague word, “product of the mind”. Then you say:

Creation of an idea is not free, therefore the creator rightfully expect a compensation and a profit.

Which is again deceptive. There is no “right to profit” and absence of IP does not prevent making creators from making profit.

What you are talking about is causality, but, as I previously elaborated, causality is an insufficient condition for property, unless you consider all externalities also property. My objection to ownership of abstract concepts is that they do not have natural boundaries, rather are an arbitrary curve on a graph with two axes, causality and similarity, therefore there can be no trespass. Nevertheless, you can still earn money off abstract concepts by using of contracts, exclusion of third parties it not a requirement for that. Absence of exclusion just increases the pressure from competitors (who have it easier to provide substitutes) and reshuffles the comparative profitability of different business models.

Andras June 17, 2010 at 6:30 pm

I am not accusing Stephan, I actually agree with him 99% of the time, so when I said what I said I said it to motivate him to keep up the good work.

I already explained the error in that sentence in my previous reply to Mr. Kinsella. I also agree with you that I could also do a better job than “product of the mind”, but it is not nearly as vague as “free”.

And for the record actually there is such thing as “right to profit” the only thing is that the profit can be negative, zero or positive (of course in a case of negative profit we call it loss). For example shares of a company is a right to profit (if there is a profit) and a right to vote (in a case of voting shares). Most people believes that a share is actually an ownership of capital. In fact the company (a legal person) is the owner of the capital, we trade our capital for the shares (a right to vote and right to a SHARE of a profit). Anyway that is a different story not related to this subject. Funny thing with “rights” is that “rights” are also an idea, we made that up, and has a meaning only in a context of society, now real “rights” are rock solid, nobody can take them away but not because they are “God given rights” but because they are a “product of human action”, not an execution of any human design. Nobody can take away the shareholders right to profit because it is a concept embedded in the core of our society, a product of centuries of human action. No man can erase them. I talk about this because there is an interesting concept when we talk about “IP”, the concept is that when you buy software you actually don’t, software companies sell you licenses, not software. So a license is a “right” to use the product but not an ownership certificate. This further complicate the issue, now we not just need to solve a single layer “IP” mess, but we have to solve a multilayer… software, license, etc. mess. :)

This subject is quite interesting and very complex. Add to that the fact that dominant model of the economy is not industry anymore but post-industry, or as some call it KNOWLEDGE ECONOMY. Today you can have tons of scarce and rival resources without being able to use it in an efficient and effective way. That makes your otherwise “expensive” property, worthless (for example GM). I don’t say one is more important than the other, I just say that today both are very important (that wasn’t the case in the past).

As markets becomes more and more complex and developed we find ourselves in a situation that what worked yesterday won’t work anymore. We need more and more abstract ideas, software and information than ever before just to be able to maintain our business, not to mention what we need to be able to grow (real grow not credit expansion “grow”). The property concept worked well until now, and it is more or less correct in a case of physical objects, but if we want to be able to continue our life in a relatively free capitalist society we must find better answers, not because of ourselves libertarians (we are OK with the current answers) but because of the forces which unfortunately isn’t libertarians, and they are stronger every day. If we find better answers, we may be able to save the free enterprise society we cherish so much.

Again I am very much against the concept of “IP”, but I believe most of us understand the problem but unfortunately we don’t have a satisfactory answer. First of all there are many problems with definition of property and property rights even in a case ob physical (scarce and rival) objects, some of us believe in Locke’s view, some of us not. Now if we try to apply the same principles to abstract concepts etc. we would further find our selves in error.

There is also two or more “competing” concept of libertarian views, the anarchist and a minarchist, also some of us like to talk about “natural laws” some of us choose to talk about “spontaneous order”… in all of that there are little (or sometimes large) differences in definitions and views. What I tried to say is, that we should try to give better answers than we do. The current “IP” “laws” are wrong, very wrong… but if we really want to change them we should find better answers. I don’t have the answers…

Stephan Kinsella June 17, 2010 at 8:13 pm

The better answer is simple: abolish unjust IP law. It’s clear. Then let entrepreneurs go to town.

Andras June 18, 2010 at 4:33 am

I agree, but unfortunately that doesn’t get us any results, I believe Congress would abolish the fiat currency and get as back to gold long before they abolish the “IP” “laws”. (Not that they would ever consider any of it).

Olegmatt September 3, 2011 at 9:40 pm

Stephan Kinsella wrote: “abolish unjust IP law”. However, before abolishing it someone have to suggest better reward system for the generators of ideas. It is not done yet. As soon more advanced reward system is invented the IP law would disapper automatically as if it was never seen before. Many critics of existing IP law do not understand that most real life cases demonstrating the IP law-evil occur because at present it is very easy to patent trivial, obvious ideas like, for example, Amazon’s one click patent.

Peter Surda June 18, 2010 at 1:35 am

Nobody can take away the shareholders right to profit because it is a concept embedded in the core of our society, a product of centuries of human action.

Bad analogy. Your “right to company profit” can be only exercised against the company (i.e. is based on a contract), you cannot demand it from a third party. It does not apply to the said company’s competitors or their customers.

My theoretical problem with IP is not that the current laws are bad, but that if you accept the notion that abstract concepts can be trespassed, any action whatsoever can be trespass, based on an arbitrary evalutation.

With regards to the rest, Stephan said it all. Let the market decide rather than attempt to socially engineer a solution.

Andras June 18, 2010 at 5:29 am

Then I guess we agree. I don’t accept the notion that abstract concepts can be trespassed (I never said something like that), I believe I told exactly the opposite, that abstract concepts cannot be property I just used a different reason why, I said they can’t be property because they are non-scarce and non-rival. The concept of property is meaningless in a case of non-rival resources. In the same time, I pointed differences between many of the definitions of property libertarians accept so it make our job more complicated, because if we can’t give a correct answer about property how can we give a correct answer what is and what isn’t property.

Peter Surda June 18, 2010 at 6:39 am

Indeed, defining what is and what isn’t property is a very tough nut to crack. If one clings to vague terms like “product of mind”, it is impossible to argue that, as that can mean literally anything.

Andras (the first) June 17, 2010 at 11:07 pm

Hi Peter,
This is another Andras, not the medicinal chemist you had polemics. I stay away from this discussion to avoid confusion!
Best Regards,
Andras (the first)

Peter Surda June 18, 2010 at 1:41 am

Thanks for the clarification, I was wondering why you were suddenly looking for a compromise :-).

Andras June 18, 2010 at 5:17 am

Well… I am the software developer Andras so… If I understand correctly, you think I am looking for a compromise? What compromise? I am completely and without any reservations against all “IP” “laws”, if you pay attention I refuse to call them “Intellectual Property” and even law (I learned from Hayek what is a law and what isn’t and most of the things we wrongly call law are nothing more than a decree (command for one, privilege for another), in other words not a law at all.

No I am not interested in a compromise (there is no third way as Mises points out correctly), I just want to find a better answer before I “attack” the problem, because I feel and believe with all my heart that we are right when we say that the “IP” “laws” are bad and should be abolished, but our answers are not complete, not quite correct, we base our opinion partly on valid arguments but partly on faith.

A don’t want to end up in a naive rationalist camp, I try to look on everything from a critical point of view, I just want to eliminate the “faith” part. I wish… we can have an answer by Misesian or Hayekian standards, correct and hard or unable to attack yet alone to invalidate. Even with that kind of answers it wouldn’t be easy to change the opinion of the majority (the only way to abolish the “IP” “law”), without that it is nearly impossible. I am looking for “killer” answers not for a compromise, I don’t believe to libertarians more than I believe to anyone else (that would be a Marxian “class” based view), I am always asking questions, using the critical approach… the truth is that the most satisfactory answers I ever heard for most economic, legal, social and philosophical questions comes from libertarian sources (so that would make me a libertarian I guess), but they are not always correct and many times people doesn’t really understand the questions yet alone the answers (I am one of them too, desperately trying to better my understanding).

I met many “libertarians” who think they are libertarians, but actually they are not, they hold some libertarian opinions without really understanding the problems and the answers, especially now when there is many new “libertarians” out there, talking like a parrot without understanding or ever reading any of the works of Mises, Hayek, Rothbard or any of the other great authors. I don’t think that helps us, we need quality much more than quantity, and that is what I am looking for. I am not satisfied with any of the existing answers we have on the question of “IP”, but I must say Mr. Kinsella’s efforts are very important and good.

That is the fact, and I think about that every day (because I believe it is increasingly important), but until now I can’t find a good answer, I read everything I can find about it, I talk with people (just like now), I even “talk” about it with those who are for pattents and copyright (like I did with objectivist George Reisman who simply told me I am wrong (and ends the discussion) :) anyway… we agreed that pattents, copyrights and trademarks are different animals and shouldn’t be put under one roof.

Anyway once again, I am not looking for a compromise, I am looking for a better answer and one of the reasons is exactly because I don’t want a compromise.

Peter Surda June 18, 2010 at 6:35 am

Thanks for the long reply. Coincidentally, I’m (mostly) a software engineer too. I have been interested in the question of IP for quite some time but only for the last year or two I was able to confront arguments with tough opponents. Similarly as you, I noticed that not only libertarians, but a lot of people in general who have deep beliefs in some ideology do not actually comprehend it themselves and are unable to think about it critically.

Throughout my debates on the site I gradually arrived at my current hypothesis about the nature of non-rival goods. So far, IP proponents have not been able to counter it. It is actually quite easy. Unlike rival goods, non-rival goods do not have natural boundaries. The boundaries of rival goods are evident: if an action causes a measurable change in the good, it is consumption thereof (either legitimate or trespass). But non-rival goods cannot be changed. Their boundaries are established metaphorically, by drawing an abitrary curve on a graph with two axes: causality and similarity. The causality axis goes from the original on one end, to externalites on the other. The similarity axis again goes from the original on one end and substitutes on the other. There is no obvious place to draw the line.

Another way of looking at this is that non-rival goods are abstractions. We use the same description for two situations. But that does not make the situations somehow metaphysically a part of a whole, it just changes our perception thereof. Which abstractions are relevant for the definition of property? IP proponents cannot answer that. Current IP laws cover arbitrary types of abstractions, but there is no reason why these should be picked in preference to other types of abstractions. The problem arises both horizontally (what sector of economy to cover) and vertically (what level of abstraction is relevant). What if there are overlaps? Patents for example are more abstract than copyright. If a good is covered by both copyright and patent (e.g. software can in US and Japan), the more abstract concept (in this case patent) takes precedence. But why stop there? Why can’t you own even more abstract concepts? Why can’t you own the concept of a computer that covers all computers? Why can’t you own the concept of a machine that covers all machines? Why can’t you own the concept of purposeful human action that covers all purposeful human action? Well, obviously, if the last was possible, the first human ancestor to discover it would have a claim on all human action that happened after the discovery, so that is kind of odd.

To summarise, my objection to IP is that they do not have natural, objective boundaries. They only have subjective boundaries, which can be addressed individually in contracts. Without boundaries that are applicable to parties outside of contracts, there cannot be trespass, without trespass there cannot be exclusion and without exclusion the concept of property makes no sense.

From practical point of view, legal exclusivity is not a requirement to earn money. Its absence just presses you to try different business models. There are plenty of examples how to do this, regrettably IP proponents often ignore them or deem them insufficient. The two most important ones are the first mover and leveraging reputation. They both allow you to distinguish yourself from your competitors and are able to achieve a certain level of exclusivity, even in the absence of a legal right to exclusivity.

james b. longacre August 31, 2010 at 2:56 am

“Ideas are Free” – this is a wrong sentence,

would ideas aren’t free. be wrong too??

james b. longacre August 31, 2010 at 2:57 am

are you referring to capitalization or something else?

james b. longacre August 31, 2010 at 3:33 am

If ideas were free we would drown in ideas.

if you consider eating and breathing the cost of brain function – ideas – then they arent exactly free.

but brains dont function without eating and breathing. no additional coast may be more appropriate.

scineram June 17, 2010 at 1:52 pm

Well, yes. But books, movies, software are not “ideas”.

Matthew Swaringen June 17, 2010 at 2:07 pm

Certainly, they are collections of ideas, but I’m not sure what that changes.

Idea = a formulated thought or opinion. Even facts are “formulated thought” when humans understand them through the mind. And aside from that, I somewhat doubt that you would want ownership of facts even though you are likely hinting that you want people to be able to own collections of ideas.

james b. longacre August 31, 2010 at 3:03 am

i guess they mean an idea for a movie isnt the movie itself. the film or projection, iow.

i suppose you can go around quoting books of shakespeare.

Andras June 17, 2010 at 2:28 pm

They are not, but they are also non-rival resources (you can copy them almost without effort).

As I said the problem to solve is: How to “secure” a market rate compensation for the author for the act of CREATION/PRODUCTION and not for the act of copying? How do you price an item with limited demand but unlimited supply (copied item)? The supply/demand is ∞/x (not calculable) so what is the market price? How does the market set a price on an item with virtually unlimited supply? Why do you sell all the music on iTunes for 99 cents, the good music and the crap as well? Why do you sell all the books for $10 the good ones and the crap as well? You see with paper books you didn’t have this problem to this extent, you still could easily print a new book but it wasn’t unlimited, you had to risk that the new book wouldn’t be sold at the price the old was or wouldn’t be sold at all, you had to store it in your storage using up rival resource (space), you had to put rival and scarce resources to print a book (paper, ink, etc.)… with digital copy that isn’t the case, you have unlimited supply, no risk at all, no storage or any other expenses… so every copy you sell is yours whatever the price is.

Imagine you are a farmer and you get “lucky” and you double your apple production in this year, so the supply is 2x the last years but the demand is the same (people don’t eat more apple then they usually do), now you must to sell your apples around half the usual price or otherwise you wouldn’t be able to sell them and they will go bad. Now with “digital” apple you can ask the same price disregard your “production”, because you can make not 2x but 1000x or more the supply without any additional effort. You are not compensated for production but for your ability (not your achievement) to copy as many items you need.

This isn’t a market phenomenon, this is guaranteed by the government. So actually to use the words of Frank Oppenheimer, if you are an author, you don’t get your income by economic means, you get your income by political means, you don’t use the market, you use the gun (not yours but eventually the governments) to force the consumer to pay you whatever you decide the right price (impossible with scarce and rival items).

Stephan Kinsella June 17, 2010 at 2:48 pm

A book, as an object, is protected by normal property law.

The IP laws protect the patterns of information–what we may call ideas, as a general matter–of a movie or book, however, and that is what is unjust. To own a pattern is to have partial ownership rights over everyone else’s physical property.

Darcy June 17, 2010 at 6:37 pm

Copyright being an agreed-upon limitation on access to normal property, it then also falls under “normal property law”.

Andras June 17, 2010 at 6:49 pm

Actually COPYRIGHT is an execution of a human design. Agreed-upon? By whom? It is forced on us as a “law” and in fact it is a privilege to the author, a non market inflicted expense on the consumer all that secured and executed by a command of the state.

This is not a good answer as well, but I found it much more satisfactory than the “official” answer.

Darcy June 17, 2010 at 7:41 pm

Agreed-upon? By whom?
Buyers and sellers of normal property such as books, network access, etc…

RWW June 17, 2010 at 8:34 pm

Odd: I don’t remember ever explicitly agreeing to a copyright.

J. Murray June 18, 2010 at 5:43 am

If you buy software, you do. All software upon installation has a EULA that must be agreed to before the software becomes functional. You, in essence, signed a contract stating you will not share the code with anyone. This same notion can be extended to movies, where the opening warning screen serves as your agreement to the terms of viewership, and books where the first page of the book serves as your agreement to not share the information beyond that point. Clicking the EULA, continuing to view the movie past the warning, or continuing to read the book beyond the initial pages constitutes you signing that contract and you are expected to abide by the terms.

I agree, however, that automatic copyright is a load of bunk. Unless the owner specifically creates the usage contract then its free and clear. However, the notion of copying information out of a book for all to use is a violation of a contract signed with the information’s creator and only that creator, with mutual agreement with yourself, can decide to terminate that contract prematurely.

Just because we get rid of government interference in the IP realm doesn’t open cart blanche downloading of movies, music, books, and software. We still have to contend with the contract we signed when we opened that book to get to the page in question to scan it.

Peter Surda June 18, 2010 at 6:49 am

First of all, not all software requires you to agree to an EULA. Second of all, if you do not obtain the software from an “authorised” dealer, there is no contract between you and the “owner” of the software, you need copyright laws for that. Third of all, with a bit of inventiveness, you can install the software without agreeing to the EULA. I saw a video on youtube where a guy let his cat click on the “I agree” button. Or person A can buy and install it and then back it up and give it to person B (person B is in no contractual relationship with the “owner” and has not agreed to anything). Or you can perform the installation manually and modify the software to not mention the EULA. Or if you are not that skilled, you can obtain a third party installer and/or crack.

Either way, without copyright these measures are practically irrelevant. If you obtain the software from an “authorised” distributor, you agree to the contract at the time of purchase rather than at the time of installation.

Oh, and, in most of the countries, downloading software/movies/music/whatever is not illegal. The IP lobbyists are trying to obscure the fact, but if you look at the official documents from the legal disputes, none of them mention downloading, people are only getting prosecuted for distribution (i.e. uploading, which is the converse of downloading). There is no such thing as “illegal downloads”.

RWW June 18, 2010 at 4:38 pm

All software upon installation has a EULA that must be agreed to before the software becomes functional. You, in essence, signed a contract stating you will not share the code with anyone.

This part of your argument has at least some merit. However…

…continuing to view the movie past the warning, or continuing to read the book beyond the initial pages constitutes you signing that contract and you are expected to abide by the terms.

This is nonsense. No contract is agreed to in this way.

Matthew Swaringen June 20, 2010 at 1:05 pm

I think this brings into question though what constitutes agreement to a contract. J. Murray brings up a good point, and insofar as you really are agreeing to the contract I do think it follows that the stipulation not to copy is just as important as any other contractual obligation.

There is also the question of resale and what provisions mean to that, and ultimately I think that the EULA is valid only for the original purchaser. Provided that he violates the agreement, strips the EULA, etc. he is violating the contract but subsequent users are not.

In reality, even this limited form of contract-based copyright would require a huge state to enforce, given these kinds of infractions could be done in someone’s own home. Without the force of law, how is this hypothetical software company to get data from the infringer’s service provider? Some might provide it willingly, but many would absolutely be unwilling to do anything of that sort. I just can’t view even contract-based copyright’s enforcement as more important than freedom. Certainly the action taken by the initial “cracker”/re-distributer in this scheme is immoral and illegal, but subsequent persons initiated no force, committed no fraud, and made no agreement.

Now, provided specialized hardware (a game console) with features designed to make hacking difficult, there is less of a problem with a software company using some kind of DRM to protect itself along with the hardware DRM. This can still be cracked, eventually, but I have no issue whatsoever with this because it requires no potential government involvement to correct and doesn’t harm third parties who didn’t agree. I suspect in a true minarchist or anarchist society this is the decision that many software companies would make (they are already going that direction for many games today for this reason and others).

Stephan Kinsella June 17, 2010 at 8:15 pm

Copyright has nothing to do with agreement or contract. This is just confused. This is the problem with people who advocate IP law and do not even understand what they are advocating.

Darcy June 17, 2010 at 9:05 pm

Ultima Ratio Kinsella: we are all confused.

There is nothing to reply to that except that it is you who is confused.

Andras June 18, 2010 at 5:36 am

Well, not all of you but almost :)

Actually the word “confused” is not the best, the better word would be “naive”. The problem with the world today is that (Karl Popper’s definition) a large majority of the educated ones are naive rationalist (smart, intelligent but naive = products of the government/state controlled education system)… and the rest are ignorant.

Andras June 18, 2010 at 5:30 am

Agree 100%

james b. longacre August 31, 2010 at 3:12 am

people do lie too.

Anthony June 17, 2010 at 11:09 pm

… and if it is law it is just by definition, of course. Especially normal law.

Bala June 17, 2010 at 11:10 pm

I have explained this is past posts of Stephan’s. The essential argument is that ideas are not and can never be “property” and hence that the term “intellectual property” is utterly meaningless and self-contradictory.

The reason I say ideas can never be “property” lies in my understanding of the concept “property” itself. So, to agree with me, you will need to agree with my concept of “property”.

As I see it, “property” is a moral concept defining man’s relationship to objects in his environment (I do not start from or subscribe to the libertarian “axiom” of self-ownership because I find it meaningless). The relationship is essentially about the freedom to act to apply the said object in the service of one’s own life. For man to sustain his life, he has a fundamental need to apply things around him in the service of his life. To do so, he needs to act on them. To act thus, he needs the freedom to act.

In a social context, there are 2 broad types of objects
1. Scarce objects – These are objects on which only one person may have the freedom to act at any point in time. In order to have the freedom to act on any such object, a man needs to exclude others from simultaneously acting on the same object.
2. Non-Scarce objects – These are objects on which any number of persons may act simultaneously with none adversely affecting the freedom of action of any of the others. In such cases, there is no need to exclude others from acting simultaneously on the said object.

It is this right to exclude that is essential for man’s freedom of action that we call the “right to property”. Only such objects to act on which a man needs to be able to exclude others from simultaneous action need to be and can be legitimately called “property”. Applying this term to objects that do not require exclusion of others is utterly superfluous and can in fact be detrimental to more fundamental individual rights such as the Right to Life.

Physical objects fits the bill (since they are scarce by nature) and hence can be called “property”. Ideas ad patterns do not fit the bill and hence cannot be treated as “property”. Hence, the term “Intellectual Property” is self-contradictory; an oxymoron.

Peter Surda June 18, 2010 at 4:43 am

I have a problem with using scarcity as a delimiter. In my opinion, that is only a conclusion rather than the original assumption. I am quite sure it is technically true, but it is also imprecise.

Non-scarce (or, to be more accurate, non-rival) goods are not altered by consumption (i.e. by “acting on them”). So how do you know a specific activity is “acting upon” a specific non-rival good? You don’t. There is no way to objectively determine that. The maximum you can do is to establish the presence of a causal relationship. Anything else is personal opinion and subjective evaluation and not a fact. So, you have only two options: reject the concept of trespass on non-rival goods, or accept that all causal relationships are property. The latter leads to strange and absurd notions (even if you ignore the issues brought by attempts to implement a system based on that).

It is not the rivalry/scarcity per se which makes the notion of IP absurd. It is the subjectivity and arbitrariness of boundaries of non-rival goods that does. IP proponents use metaphors (e.g. “my”, “theft”, “product of the mind”) to mask that.

Andras June 18, 2010 at 6:31 am

Scarcity is not the delimiter, but it is a “deal-breaker”. Property is a social phenomenon (a “product” of human action or as Hayek called it COSMOS), a concept without meaning outside society, so if something is non-scarce, non-rival it is meaningless to call it property. “Intellectual Property” on the other hand is not a social phenomenon, it is a “product” of human design (or as Hayek called it TAXIS), it wasn’t here “before the beginning of time” like property was and we just had to articulate it and write it down as a law, it was designed by a few people and forced on the rest of us.The fact is that property exist even among animals, they can’t articulate (they can’t talk) they certainly can’t understand it, but try to take something away from a dog… he will defend it because it is his property. The same was true with us, before we become humans, our ancestors started to live in groups (the predecessor of society) and they couldn’t speak, they couldn’t articulate their “thoughts” but they already has a concept of property, because that was the only way to achieve a peaceful coexistence they all depended on it, if something was scarce and rival they used it as property, shared it with the “blessings” of the owner or exchange it for other property even when they didn’t understand any of the concepts behind their actions.If someone challenged the order, he would be punished, thrown out from the group if he couldn’t guarantee the peace, but if he could guarantee a peace he would be the new owner of the property… why? because property wasn’t the end it was a mean to achieve the end, and the end was survival which was possible only by peaceful coexistence. Now that was in a group, society is something else, in society nobody can challenge the order because nobody can guarantee peace. The only thing can somewhat guarantee peace is the spontaneous order, nobody likes it quite well, but everyone accepts it because it isn’t a human design, disrupting the spontaneous order is equal to disrupting the peace and that is why we consider theft or a murder a crime, not because the “ten commandments”, not because the “people who wrote the law”, but because it was a law long before we could articulate it yet alone write it down, and that is why we tolerate and most of us accept confiscation of unlawfully obtained property and even murder (“lawful executions”) because it doesn’t disrupt the peace it actually makes the peace more stable.This is why the majority doesn’t accept “Intellectual Property” (even those who say they do), this is why there are so many “thieves” out there downloading music, movies, books, software… most people does it because we all “know” it won’t disrupt the peace, we all “know” it isn’t a real law we all “know” it is something we can do without injuring another individual, and if we injure nobody then we are not disrupting the spontaneous order and consequently the we are not disrupting the peace. When a large majority of the population doesn’t care about some “law” and/or they care about it just because severe punishments, it is not a law at all it is just some bad and counterproductive command from the “authorities” forced on us in order to serve the interests of some groups at the expense of other groups.Real laws are respected by the large majority even without the threat of punishment from the government, only a small minority (the criminals) need to be forced to respect a real law, that is why we call it law, because the large majority “know” it emerged in order to save the peace, not designed in order to serve somebodies interest.

Bala June 18, 2010 at 6:32 am

I am sorry if i have been unclear, but that may be because I tried to keep it brief. So let me make it clear that I did not say that scarcity is the delimiter. I am sure you would recall all our past discussions in which I made it explicit that I am approaching this issue from Objectivist premises*. As I am (and have been in the past) putting it across, the clear delimiter is the absolute metaphysical necessity of exclusivity for man to have freedom of action on the objects of value that he has taken prior possession of. Where exclusivity is a metaphysical necessity, it makes sense to treat such objects as property. In other cases, it does not.

In this framework, scarcity of material objects is the reason one man will absolutely need to exclude other men from acting on objects he has already taken possession of. No such metaphysical need to exclude exists in the case of ideas and patterns. Any number of men may act on an idea or pattern without adversely affecting the freedom of action of any other man to do the same.

Hence, material objects constitute legitimate “property” while ideas and patterns do not. I hope no confusion remains. Please tell me if there is still something wrong with my explanation.

* In the Objectivist framework that I am using, Rights are
1. a recognition of a condition of existence essential for the survival of man qua man
2. a moral concept defining and sanctioning man’s freedom of action in a social context
and man is, by nature, a rational animal with a volitional consciousness.

Peter Surda June 19, 2010 at 3:24 am

Dear Bala,

I understand you, I’m just trying to point out that the definition of property is prone to confusion by usage of vague words. To me, “freedom of action” and “acting upon object” are such vague words.

I agree that there is no necessity to exclude from usage of non-rival goods in order to consume them. In the past, I also made arguments like this. However, I went deeper into the nature of non-rival goods. They aren’t non-rival because of some natural properties. They do not exist in nature at all, they only exist in our heads. We made them up. That is why it makes no sense to debate whether they are property. You can make anything up and claim that it is a property.

Brian Drake June 18, 2010 at 12:35 pm

Bala,

“I do not start from or subscribe to the libertarian “axiom” of self-ownership because I find it meaningless”

Do you find the concept of other-ownership meaningless too? If so, how would you describe slavery?

Bala June 18, 2010 at 6:26 pm

That’s a little bit of failing to read :)

“Ownership” can only be ownership of other objects. Slavery is the intentional and sustained violation of the Rights to Life, Liberty and the Pursuit of Happiness of another individual. (I believe slaves could possess property) That tells me why I ought not to engage in slavery.

Incidentally, I am unable to understand what according to you constitutes “other-ownership”. So, I made up my own definition.

Brian Drake June 18, 2010 at 8:55 pm

Bala,
So you wouldn’t consider that slave owners….owned their slaves? I think they (and societies that legally protect slavery) would say otherwise. Self-ownership is simply the anti-thesis to slavery. Slavery is when someone else (or group of people) owns you (has exclusive right to control your body), liberty is when you own yourself (you, and you alone, have exclusive right to control your body). I fail to see how this is meaningless.

james b. longacre August 31, 2010 at 3:07 am

I hope no confusion remains.

why call it intellectual property in the first place then??? why use the term if you didnt intend to confuse or deceive???

james b. longacre August 31, 2010 at 3:15 am

The essential argument is that ideas are not and can never be “property” and hence that the term “intellectual property” is utterly meaningless and self-contradictory.

or a poor choice of words. if ip is just used to refer to current copyright and patent and trademarks systems the it is two letters used to describe many similar things. i thought i had read somethign about some homesteading crap the kinsella had mentioned but i cant remember. if he alone uses the term ip maybe that was why.

james b. longacre August 31, 2010 at 3:05 am

i guess teh issues arrise when someone lets me read a book and while reading i use my camera to photogrpah every page as i turn the page.

Louis B. June 17, 2010 at 3:29 pm

Is having an Islamic creationist at the same gathering as Richard Lynn Prof. Hoppe’s idea of humour?

Matthew Swaringen June 17, 2010 at 7:15 pm

I don’t see how anyone can be a libertarian and support IP, because even if you believe it merits some kind of property it cannot be enforced without a large and substantial state. You could say to go the route of saying that ISPs shouldn’t be protected as safe havens because it’s clear they are colluding with the customers to violate IP.

Even if you go that direction what do you do once many people are using encrypted peer to peer technology? Do you advocate cracking encryption and hacking to get the information? Even if you do crack that particular app, encryption is not easily broken, and other apps won’t be hacked. The only way to tell others not to use encrypted p2p is force of law or getting the ISP to go along with it, but if the ISP is getting paid they probably won’t care about your IP.

Darcy June 17, 2010 at 7:39 pm

The cost of providing security must always be less than the value of this security, but just because there is a physical limit to how you can protect data does not mean that all data protection should be voided.

Minarchael June 18, 2010 at 12:09 am

Matthew, Libertarianism is a direction away from big government. Therefore you can be a libertarian who believes in small, but powerful, local governments, for example. Switzerland is a role-model for these people. Some libertarians even embrace anarchy- which they take to mean extreme direct democracy. Communes are the physical manifestation of this, with every adult having a vote, and owning a share in all the land of the commune. Anarcho-Capitalists believe in individual property ownership, and no democracy (except within private companies of equal partners). And some libertarians are minarchists, who want to reduce the scope of governments at all levels.
Perhaps you meant that ROTHBARDIAN libertarians can’t believe in IP, but the term ‘Libertarian’ has a broad meaning.
Why don’t Free-enterprize Anarchists just call themselves ‘Free Anarchists’, in opposition to communal anarchists? It’s shorter than Anarcho-capitalists.

Peter June 18, 2010 at 1:51 am

“Libertarian” with a capital “L” means those who support a particular political party. They’re distinct from “libertarians” with a small “l” (though the two groups may overlap). Small-l libertarianism is not “a direction away from big government”. Commie-anarchists are neither libertarian nor anarchist (there’s no such thing as a “non-free-anarchist”, by definition)

Minarchael June 18, 2010 at 2:30 am

Peter, Matthew used small ‘l’, thus not party-linked. A direction away from big government is exactly how I define the broad libertarian movement. And the word ‘anarchy’ is Greek for no-archy, or no single chief. ‘Kingless’ would be a direct translation. Traditionally, anarchists were communal and socialist, because the only alternative that primitive rebels could envisage to monarchy was democratic government. That’s why rothbard had to invent the term Anarcho-Capitalist, since anarchy already had lots of history, and connotations.

Brian Drake June 18, 2010 at 12:51 pm

Not all anarchists are libertarians. But all libertarians are anarchists (by logical implication, not by advocacy of anarchy for anarchy’s sake. You can be a “slave” if you want, you have no right to make me be one too).

If you advocate the violation of liberty through aggression, you are NOT a libertarian. Any form of state (fiat government) is a violation of liberty. Simple litmus test. I am not holding myself as some sort of arbiter or “decider”, but simply posing the question: do you support liberty or do you not? If you do not (truthfully), on what grounds are you a libertarian?

Partial liberty is not liberty, it’s lenient slavery. Either you own yourself, or someone owns you. That they’re extremely permissive (as an idealized minarchist government would be) does not negate the fact that they have the final say on your life and are thus claiming ownership over you. That is slavery, not liberty.Those who advocate the enslavement of others have for some reason felt value in masquerading as “libertarians”. I suspect this is because “liberty” is a word with positive PR value (due, I think, to the endless propaganda to the effect of “Liberty = Good. America = Liberty. Therefore America = Good”) and therefore to outright say you oppose liberty has perceived negative social and ego consequences. But living at the expense of others (because your hyper-paranoia about the dangerous world leads you to suspect that if enough people weren’t forced by threat of death to pay for whatever protection scheme makes you feel safe, you wouldn’t be able to afford it on your own) requires real moral backbone (an apparently rare trait) to reject, so these people figure they can have their cake and eat it too. “I’m a libertarian” makes them feel good about themselves, but they still advocate enslaving others to satisfy their wants.

Bottom line: While pragmatically, libertarians (those who advocate liberty/oppose aggression) can celebrate any move from big government, ideologically, libertarians can not support any form of state and thus those who actually advocate minarchy are not libertarian.

Let the flaming begin. (though I’d prefer a logical refutation of my argument – “Ron Paul/Mises isn’t an anarchist” is not a logical refutation btw)

Peter June 18, 2010 at 7:33 pm

Minarchael: you used “Libertarian” twice in a way that doesn’t seem to be party-related, and “libertarian” three times; it wasn’t clear whether the latter was accidental (it’s easy to NOT press the shift key when you meant to; it’s not easy to press it when you didn’t, so the assumption is that you meant to capitalize the latter, not decapitalize the former). There are people who call themselves anarchists who are “communal and socialist”, but they’re not actually anarchists: anarchism, by definition, means nobody can command you to be part of their commune.

What Brian Drake said.

Jordan Bullock June 17, 2010 at 9:12 pm

It seems to me that the trap too many people fall into is getting too hung up on the idea of property that they forget the reason we care about property rights in the first place — they allow peaceful conflict-resolution over “rivalrous” things — i.e., physical property that isn’t super-abundant. Ideas/patterns don’t match this criterion, so what we’re left with IP is an enforcement of rights a person should not have under a true property-rights system: limited rights to the property of others, rights to profit, etc. In other words, Intellectual “property” rights conflict with actual property rights, which is why the former should be opposed if we are to truly support the latter.

The argument that people use their own bodies to “create ideas” is bad terminology–we don’t “create ideas”, we create property by leveraging ideas, but the ideas themselves are sort of a meta-means (other capital, such as your own body, being the means).

The worst effect of IP is that it causes people to shift focus away from leveraging the best ideas for economizing scare resources (i.e., property) and towards rent-seeking behavior, thus lowering everyone’s living standards in the long run.

james b. longacre August 31, 2010 at 3:11 am

It seems to me that the trap too many people fall into is getting too hung up on the idea of property that they forget the reason we care about property rights in the first place…..

what trap??

george t morgan June 17, 2010 at 10:41 pm

in a braod sense is physical property acknowldgemnt a type of contract?? or is it some type of social convention…a contract being…??? an agreement between two or more parties that somehow can be referred to for verification.

if you contract not to say tell the recipe of KFC chicken but someone finds it in you glove box and starts making Indiana Fried Chicken that tastes just the same has any contract for property been violated???

Bala June 17, 2010 at 10:54 pm

The way I see it, recognition of the concept “property” is the renunciation of the initiation of physical force in one’s own long-range self-interest. You renounce such initiation on principle with the aim of doing your bit towards building a social order that ultimately respects your “rights” over your own “property”. There is no “contract” and no need for one.

Andras June 18, 2010 at 6:46 am

BTW sorry for the monolith form of one of my posts, the “Quick Edit” messed it up… glued one paragraph to another…

Andras June 18, 2010 at 7:30 am

@Peter Surda June 18, 2010 at 6:35 am

I guess then the main difference between “your” definition of property and “my” definition of property is that you try to define property in technical terms (I may err here – so if I do then I am apologize – but that would be a little absolutist), while I try to do the same as a social phenomenon which is more of a relativist approach (I guess I am very much influenced by Mises’s idea of being able to experience the world only as a human being, incapable of looking on it from a neutral point of view, and also influenced with Hayek’s and J.M.Buchanan’s analysis of society).

Both ways (your technical and my social) are probably the part of the better answer but non of them are the better answer.

Peter Surda June 19, 2010 at 7:20 am

I try to define property in a way that is least prone to vagueness and can be evaluated independently of personal opinions. While this may differ from the social phenomena revolving around property, but it gives us a common frame or reference.

Michael McLees June 18, 2010 at 3:05 pm

There is a market that everyone seems to forget about here, in any debate I’ve had on this very subject.

This is a current debate I’m having on another forum…

http://www.reddit.com/r/politics/comments/cddlw/15_mindblowing_facts_about_wealth_and_inequality/c0rttmv

The scarce market everyone misses, and that is a very limited resource, is the market of consumers. While the idea might not be a limited resource, if the theft of the idea limits the creator’s potential sales, that is also theft of sales. There are not infinite people to purchase a product, nor are there infinite dollars with which to purchase them. The fact that the initial producer would have a competitive advantage until someone else copies his idea does not negate the fact that someone else is by force taking away the market he has yet to capture.

RWW June 18, 2010 at 4:35 pm

By that reasoning, any action that shifts buyers toward a given seller would be immoral. In other words, your reasoning is faulty.

I suspect you would respond to this by saying that the action is only wrong if it violates IP. But this is begging the question (that is, taking for granted that IP is moral in order to defend its morality).

Michael McLees June 18, 2010 at 8:37 pm

RWW – No. The particular action of copying a product invented by someone else, without his permission, in order to distribute it without his permission, is wrong because it reduces the possible market for that product that would otherwise exist. The market for Metallica CD’s was reduced by the effect Napster (people freely sharing Metallica music) had on the market. One does not usually purchase a product that one may rightfully get for free. This isn’t immoral in itself, but when it is done without Metallica’s permission, it is. Anyone who shared out Metallica’s music didn’t have the right to do so, and this is what makes it immoral, not because it violates IP law. It is true though that freely distributing Metallica’s music without license to do so only has the effect of force when IP law doesn’t exist. IP law is a protection against this force. The fact that IP law exists is besides the point and does not play into this argument, except insofar as IP law as such is response to the kind of force I would expect anyone on a Mises board to recognize.

Matthew Swaringen June 18, 2010 at 8:52 pm

You fail to explain the following in any satisfactory way
1) Why Metallica deserves a certain size market
2) Why permission is required to copy something
3) Why one has to obtain permission to gain the right to copy, when it is innate in all things like this. (Contrary to your claim, it would seem the world itself disagrees with your view because no force against another person is necessary to accomplish this).
4) Your claim that IP is a response to “force” is nonsensical, force would have to have no meaning to equate with what you are talking about here. You have to presuppose point # 1, to ever get this far, and as Andras has proven below you can’t presuppose the market is reduced in every case of copying.

In addition to just these basics you also haven’t met the challenge of explaining how your system should actually work, given that ideas are constantly copied, modified, etc. by humanity. No person writes a book or song without reality around them. They are only able to write what they do because of influence from others ideas, music, books, etc. It’s ludicrous to talk about copying only in the verbatim aspect as being wrong because it limits the market, when copying of any sort could potentially limit their market.

Lets say you have the first rock musician, but he’s not all that great. Then you have new rock musicians, who learned from the first, but made it better. Well the first guy, he could have had such a large market but now it’s diminished for him due to others who advanced the art.

Markets can expand or contract due to copying, there is no clear rule for this, and no establishment can be made that gives someone a right to a market even if you knew what the result of a given act of copying would be.

Michael McLees June 18, 2010 at 9:35 pm

1- The market is the human population. Metallica does not automatically deserve a certain amount of sales, but they do deserve to not have that market reduced by another party (a copier of their music) against their will.
2 and 3- Permission is required to copy something because copying something increases the amount of identical products in the market. Some fake Rolexes are near perfect copies of a real Rolex, but a market saturated with Rolexes decreases the relative value of all Rolexes. This reduces Rolex’s ability to make money by limiting the supply of their product, which Rolex has every right to do. Scarcity of Rolexes is part of what keeps them valuable, and this scarcity is what is under Rolex’s control. Why you believe a maker of fake Rolexes has a right to do this is something I fail to understand. If you can explain this, I’d love to see it. (Also, if you can explain Andre’s proof, I’d like that as well, because I cannot understand it.)
4- My conception of force is somewhat unique, but it is no less valid than yours. Indeed, yours is perfectly valid, which is why it gives rise to mine.

Correct me if I’m wrong, but your idea of force is the notion that one may not be compelled to do something by another. B may not force A to act out of his interest, which is an assault on reason, the most human of all endeavors. I embrace this. Do you?

I wonder, because while you presumably accept the above statement, you’re also asking me to believe that A may be forced, purely by his entry into the market, however voluntary that particular action may be, to allow B to copy his idea, despite the fact that it may be out of A’s interest. This is a contradiction.

DixieFlatline June 18, 2010 at 10:44 pm

1- The market is the human population. Metallica does not automatically deserve a certain amount of sales, but they do deserve to not have that market reduced by another party (a copier of their music) against their will.

So they don’t deserve a certain amount of sales, but they deserve a certain market size?

Permission is required to copy something because copying something increases the amount of identical products in the market.

This is untrue. Copying creates a unique product, not an identical one. You can’t argue for scarcity and then argue that everything is perfectly reproducible.The truth is, each product, even if they are made the same way, by the same company, with the same material composition, is a unique copy. No two rolexes are the same. No two CDs are the same. No two books are the same. They may be similar, but they are each unique and scarce.

you’re also asking me to believe that A may be forced, purely by his entry into the market, however voluntary that particular action may be, to allow B to copy his idea, despite the fact that it may be out of A’s interest.

You have to define what “allow B to copy” entails.

If it involves doing nothing, including assisting B with the copying, then yes. A has no right to stop B from copying something unless they have agreed to such an arrangement. Likewise, B has no right to force A to assist him in copying in any way, including the sharing of materials and patterns.

Your false premise is that each manifestation of an idea is not unique and differentiated. It is a common Objectivist contradiction that ideas are common (similar) and yet scarce at the same time.

Peter Surda June 19, 2010 at 5:19 am

… copying something increases the amount of identical products in the market …

This demonstrates the core problem with the concept of IP. Non-rival goods do not have existence so they cannot be “identical”. Non-rival goods are made up. The maximum we can objectively say about the copy is that it is an externality and a substitute. How, pray tell, do we distinguish between the “permitted” externalities and substitutes and the “forbidden” ones?

Matthew Swaringen June 19, 2010 at 3:30 pm

“but they (Metallica) do deserve to not have that market reduced by another party” –

Why do they deserve this? What is this based upon? It seems like an assumption but it’s not an assumption I hold. I don’t deserve anything except what I’m able to obtain through my own efforts. And if they can’t obtain it because others can copy, then they don’t deserve it.

Lets not forget that the only reason Metallica can have their market size is in fact due to the ability to copy! If Metallica could not have their music easily replicated they would have to make all of their money through concerts. If copying is their boon it is appropriate that it also be their limitation, lest non-scarce things that can be copied be valued more than things which cannot.

“reduces Rolex’s ability to make money by limiting the supply of their product”
The analogy is sound, I get your reasoning well enough from the Metallica case, but I think it’s inherently flawed because the premises is fundamentally unsound.

“B may not force A to act out of his interest…A may be forced…to allow B to copy his idea”
I agree, A cannot be forced to allow insofar as this means providing acknowledgement that it’s ok or assisting B in copying what A has done. However, B does not have to force A to allow anything if B does the copying without A’s knowledge and/or assistance. I know this isn’t what you mean by “forced to allow” but the meaning of “to allow” you are using is inherently flawed and not based in reality.

You are under the illusion that A should have absolute power over his own “IP” even though nature has assured us that he has no such power at all. I reject the illusion that A has any natural control over what is and isn’t copied, so your logical simply doesn’t follow.

Peter Surda June 19, 2010 at 4:51 am

You argument is based on the most common definition of IP by the proponents thereof. The definition is that certain types of goods that are both externalities and substitutes require permission and absent that, they are somehow violating the author’s rights. The problem with this argument is its arbitrariness. If some externalities and substitutes are property, why aren’t all externalities and substitutes property? Of course, that would lead to absurd conclusions.

Maybe unlike your predecessors you will be able to counter this.

Andras June 18, 2010 at 5:36 pm

Your logic is so ridiculously wrong that I can actually falsify it with itself without any effort:

Imagine that person A use an idea created by person B in that market so as you believe person A “by force takes away the market he has yet to capture” (I won’t even start to ask question about what “force” means here because it isn’t important for me to make a point). With other words you believe that person A limits the potential market (potential sales) for person B. Now try to go a step further, and imagine that person A by using the idea of person B get in a position to create a new idea, lets call it idea Ax which is derived from idea Bx and the new idea (Ax) is such that it significantly increase the market for idea Bx so much that the potential market for person B gets expanded (not limited) by let say 5 times.

An example for such scenario would be something like this:

Person A invent a DOOR, person B using that idea invents a LOCK, now a door without a lock is not so marketable as a door with a lock, so let say person A now offer only his door but person B offers a door with a lock. Now person C came in and he start to produce and sell only locks, so person A would sell more doors (because people would be able to mount a lock on his doors) or he would buy a lock from person C and sell the door with a lock or he would take the lock invention from C and start to produce a door with locks himself.

Now person A would sell a lot more doors because people can buy a lock which would increase the utility value of the door (the invention of person A) and even if person B also sell a lots of doors, person A has a bigger market than he would have without the invention of person B (the derived invention). SO in this case person A, B and C has a much larger market with using each others invention (or products) than any of them would have if B and C wouldn’t be permitted to use persons A invention.

How would your ridiculously wrong logic explain this contradiction? That using others idea (inventions) actually can increase the potential market for everyone instead of your “static” point of view. It can, because it is based on wrong premises, and wrong premises leads you to wrong conclusions.

Do you think our culture, our music, our movies, our literature or anything would be possible if all of those who create new thinks wouldn’t be able to use the ideas of those who lived and worked before them? Can you imagine that world? We are unable to build anything alone, everything we have are a result of thousands or millions of ideas created by people who lived before us or who lives here but come up with some ideas before us. We are very lucky if we have the creativity to add just a little on the top of that stack of ideas which makes possible everything we take for granted.

No offense, but try to read some respected authors before you engage in discussion of such complex issues as abstract concepts and property rights, not to mention stuff like theft, force, etc. Again, no offense, but this is way to shallow and naive thinking.

Andras June 18, 2010 at 5:42 pm

This was a reply to Michael McLees June 18, 2010 at 3:05 pm

Michael McLees June 18, 2010 at 9:14 pm

Regarding my use of the word force, please see my above response to RWW.

Regarding your disrespect of my ideas, I’ll respond in two ways. First, I’ll recognize the fact that Mises would call you a mystic, in that you believe your ideas have some kind of validity, purely by virtue of the fact that they are his. Second, the fact that I know this should give you some kind of hint to the literature that I’ve read. Forgive me if I find more logic in Rand’s Atlas Shrugged over the few lines in Mises’ Human Action on this issue of intellectual property rights. By resorting to this sort of attack, you disgrace not only yourself, but the board in general. I don’t attack your English; don’t attack your perception of my library.

Regarding your falsification of my logic, you do in fact go to great effort to falsify it, but fail to achieve your desired ends.

Person A invents a DOOR, and person B invents a LOCK. Under my system, person A is selling only doors and person B is selling only locks UNTIL, they discover each other, mutually give value for value (A may sell doors with locks so long as B may sell locks with doors), and then benefit each other. In your system, A is unwilling to give anyone else license to sell doors, but B goes ahead and does it anyway. B did not give any value for this benefit. And suppose B does not desire to give anyone else license to sell locks. A sells locks anyway, without giving any value to B. If you can’t find the injustice in such a system, there’s little hope for you. And I can’t find the “contradiction” in your senario. I can’t follow those paragraphs very well. This is either the result of a language barrier between us, the fact that there is no contradiction, or the fact that your thoughts are poorly reasoned.

Your assumption is that people who invent things will not give license to anyone else to make and sell the inventor’s product. Not only does history bear out the opposite (Mises would not approve of this kind of justification), but so does logic.

Music, movies, and literature are possible because of the ideas provided to the creators of music, movies, and literature. That said, those ideas were either not protected by IP laws or they were protected and merely sold, for value, without force, to the people making new use of those ideas.

For example, let’s say that I write a screenplay for a film. In your idea world, I would not be able to show anyone this screenplay without the risk that they will take the ideas therein, make the film, and possibly profit off of my idea, without extending those profits to me. Of course, this wold probably not happen because few filmmakers would produce a film in a world where there exists the risk that the people who develop the film will simply create a thousand copies and sell them for their own profit, cutting out the filmmaker. This pattern can go on and on, but I think you’re starting to get the picture. In order to move an idea forward into the market, there needs to be some assurance that other people are not simply going to take the idea as their own and sell the product themselves. The creation of an idea takes time, money, and effort. After that time, money, and effort have been invested, the creator may simply give it away. IP law does not forbid this. What IP law forbids is your idea that if they desire to put the product into the market, they must also give away the design. The fact that the idea was prompted by some force outside the head of the inventor has no effect on this situation, unless the force was the inventor’s robbery of someone else’s idea.

So in short, no I don’t believe that our culture would exist if B could not use A’s ideas. Nor do I believe our culture would exist if A was offered no protection, save for the few days of sole ownership until B figures out the idea. What I believe is that A and B will mutually share their ideas and offer value for value for them, and this is what will create our society. In fact, that is what we have, and we also have our society. Coincidence, I think not.

DixieFlatline June 18, 2010 at 10:48 pm

I should know better, but I am still amazed when Objectivists invoke Rand, claiming reason as their highest value, and then proceed to construct arguments loaded with logical fallacies.

Michael, if you are sincere about reason, go back through what you wrote, pull out the assertions, strawmen and non sequiturs. In other words, “check your premises”. Then see what is left of your argument and work from there.

Bala June 18, 2010 at 11:09 pm

Actually, the problem most Objectivists face is that they find themselves unable to accept the possibility that Rand was wrong on something. In the case of IP, it is fundamentally a failure to reconcile two different fundamental principles and in particular, to develop a comprehensive theory of “property”.

I too came to these boards as an Objectivist with the firm conviction that IP is sound but subsequent thinking has forced me to come to the conclusion that treating ideas and patterns as “property” is contradictory to Objectivist premises. Basically, treating ideas and patterns as “property” is little more than claiming either a right to initiate force or a right to an object, neither of which is a valid right under an Objectivist framework.

DixieFlatline June 18, 2010 at 11:15 pm

Bala, you are of course right. But I was speaking more to how Objectivists romanticize logic, and see it within the emotional framework of Randian fiction, and not as explicit rules for thinking.

Reason to me, is the use of logic. Reason to many Objectivists is the act of thinking (correctly or incorrectly).

Perhaps it is the same thing after all. Many Objectivists believe in Rand, not in reasoning, and they see Rand (and even more strangely, her fictional characters) as being perfectly rational.

Bala June 19, 2010 at 1:20 am

” Reason to me, is the use of logic. ”

Objectivists (including me) would disagree. They would say “reason” goes beyond logic. Logic, to Objectivists, is the method and only the method of Reason. As Rand (and I think very rightly) put it, logic is the art of non-contradictory identification. That statement raises a very important point that highlights the difference between “reason” and “logic”. The point is “identification” of …… ? Non-contradictory with respect to …… ?

The answer is “reality” or “attributes” of reality. When Objectivists say that their epistemology is “reason”, they mean to say that their theory of knowledge has as its root the axiomatic concepts “existence”, “identity” and “consciousness”. All these are specific self-evident aspects of the larger concept “reality”. “Knowledge” is the understanding of reality obtained by applying logic to these axiomatic concepts. This method is what (as I understand it) Objectivists call “reason”.

In simple terms, reason is logic applied to reality. If you start with fanciful “axioms” that are either not rooted in reality or are not axiomatic in nature, that application of logic is not what Objectivists call reason.

I hope I have been clear.

Stephan Kinsella June 18, 2010 at 11:39 pm

And the same is true of Objectivists and anarchy.

Bala June 19, 2010 at 1:07 am

I agree :)

Anthony June 18, 2010 at 11:29 pm

As it so happens, Michael, my ancestor invented the idea of writing things down. If I have incontrovertible proof of this, should everyone who writes things down owe me money? Even if they are only writing a note to themselves?

If the concept that ideas can be owned is taken to its logical conclusion then nobody is free to use or do anything. Until you can give a principled method for drawing a distinction between ideas that can and can not be owned your whole philosophy is nonsense.

And by the way, your answer to RRW on the definition of force was woefully inadequate. No one on the Mises boards will recognize your definition of force because your definition is untenable. You might as well say that I am using force against a CRT monitor manufacturer by “forcing” them to compete with my LCD monitors. This makes just as much sense as your argument that A is “forced to allow B to copy his idea”.

Andras June 19, 2010 at 7:38 am

As Peter Surda said: “You argument is based on the most common definition of IP by the proponents thereof.”

So I don’t see where did I disrespected “your” ideas, I just simply can’t accept them as valid because there are so many holes that it is hard to know where one should start to refute them.

BTW your “explanation” is NOT an Objectivist explanation it is a interventionist explanation. You bring the market in this conversation (and you put an emphasis on it as “everyone seems to forget about here”) yet you seek for government intervention in order to “save” a POTENTIAL future sale of somebody. Doesn’t that bug you just a little?

I am not attacking you (I don’t like to use warfare terminology or tactics in something which isn’t a war nor it involve enemies), I just used the “you are all a bunch of socialist” kind of Misesian way to dismiss “your” ideas exactly because they are naive ones. (Again no offense, when i said “naive” I don’t use the word in a pejorative way, but as a way Karl Popper did).

Society is exchange, everything we do in order to limit exchange hurts society. The point is to try to think about our civilization and society not as a group of (independent) individuals, but as individuals in exchange (actually very dependent on each other)… I believe Mises told us many times about the importance of the division of labor (a form of exchange) and the importance of money (a medium of exchange) etc. Exchange is everything, without exchange there is no society there is no language there is no accumulation of capital goods, there is nothing.

My assumption is not that inventors won’t give licenses to others… not by a long-shot, my point is that they don’t have a right to stop anyone to use their invention so by that logic they don’t have a right to issue licenses as well. I explained this by the Hayekian idea that society is COSMOS and there is no place in it for rules and laws from TAXIS, that society and market is a product of human action and not an execution of any human design. “IP” “laws” are not a product of human action they are a product of human design, something the state invented and forced on society (market). If you are a proponent of free market, you shouldn’t support such subjective and direct regulation of the market (by the “authorities”).

Once again, I meant no disrespect and I told you I don’t attack anything. About my English… well I am a polyglot (I speak, write and read 4 languages, I hope you would excuse me but it is hard to use all of them in total perfection), English is not my mother tongue, but I don’t feel that I made so horrible language related errors that you or anyone else can’t have a meaningful conversation and discussion with me, which unfortunately I can’t tell is a case in your idea of the “free market”.

Regardless of that, I don’t try to disrespect you, I just would like to motivate you to take a critical approach not just against the views of others but also against your own views. I don’t think my ideas are valid, not by a long-shot… if I did I wouldn’t spend time here and with many books to try to better my understanding of the world, and certainly I wouldn’t say many times over on this board, that I am not satisfied with the current answers, not with my answers and not with any other answer for that matter.

I don’t know what would Mises call me, but I believe that Mises was right when he told us that a scientist is someone who today try to refute his yesterdays ideas… I too try to find better answers all the time I don’t believe there is such thing as a final and ultimate answer, but I am very sad when I see someone who hold and defend ideas which was many times over refuted by not one but many people. That is why I was maybe a little harsh, but not disrespectful… not at all.

Also how do you explain the next situation:

Let say you invent something (lets call it invention A) and you invest like a million dollars of capital, efforts etc. to get the job done (invent “invention A”). In the same time I did the same, I also invested significant capital and efforts and I also invented the same invention “invention A” completely independently. I was a day faster at the patent office and they granted the patent to me. Now you can’t use your invention A because I have the patent for it just because it was my invention too a day earlier. I may license it to you or may not (that is my decision). In a case I license it to you, I limit your profit because you have to pay the license fee for me even if you get to the same invention without using my services. You pay me for something you never used.

But that is the better situation for you because if I decide that I would like to keep the invention exclusively to me, you will have to accept that your efforts and capital investments was all for nothing, not because you made a wrong business decision, not because you didn’t do a good job in order to fulfill the needs of the consumers on the market, not because you was inefficient or ineffective, but because a government command gives you no choice. In the same time I get the privilege to take away a part of your income (by forcing you to pay me a license fee for something you invented independently) and a privilege to secure myself a “monopolistic” price because a legitimate competitor (you) was eliminated from the market by a government intervention, not by market forces.

“IP” “laws” are nothing but a device for NON MARKET distribution (redistribution) of wealth, it is a device which secure less competition, less exchange, and higher “monopolistic” prices (Mises write about this in Human Action in details, not specifically because of “IP”, but because there are many other similar “products of human design” devices out there). Income secured by “IP” is not an income one gets by economic means it is an income one gets by political means as Frank Oppenheimer would say. And political means on the market… is not compatible to the idea of free market.

Michael McLees June 19, 2010 at 11:17 am

I can see that I am getting nowhere with this, not because I am incorrect in anything, but because of a willingness to misunderstand what I’m saying and a general anti-Rand tone which I never would have expected to find on a Mises board. I will now take a different approach which I believe will be more productive.

Hypothetical – JK Rowling has written a book full of new characters, ideas, and plot. She calls this book Harry Potter and she hopes that it will sell a million copies. The manuscript of the book is on her computer, which was without her knowledge, hacked. The hacker, Hobie Gates, has purchased the http://www.harrypotter.com and has published the story on his website, so it is freely available to anyone who cares to visit this website. JK Rowling finds the site, sees the work and begins to cry. She has nightmares about Hobie Gates for the next 3 weeks.

Question – Does JK Rowling have good reason to be upset with Hobie Gates? If so, why? If not, why?

Scott Dysart June 19, 2010 at 12:02 pm

She was hacked. Anyone has a right to get upset about that. Hackers get into blogs all the time with the sole intention of spreading malware around. These actions represent assaults on property. Sure, JK Rowling would be upset, but so would the blog writer whose readers stop coming because his site infected their computers with trojans.

Andras June 19, 2010 at 12:15 pm

Your question is wrong! Because it is irrelevant if JK Rowling have a good reason to be upset with Hobie Gates or not. I can be upset with something because of my believes, it doesn’t automatically means that I am upset because of reasonable arguments.

But let me ask you another question? Do you think that the market “value” of the book of JK Rowling is more than a billion dollars? Because I don’t. And even if it is, do you really think the sole act of creating the story and writing the book is the reason why JK Rowling earned billions or maybe, just maybe the actual effort which secured that income is actually not the story (book) but the marketing machine behind it riding an unprecedented credit expansion machine exactly because the “IP” “laws” secured the high return so if high return is secured it is no problem to get hundreds of millions of credit. This is a extremely complex system we are talking about it, and I believe Mises told us countless times that nothing in economy can’t be observed without observing and understanding the whole picture.

I am not anti-Rand, I respect and actually I enjoy reading her and I even enjoy to watch Gary Cooper while delivering the amazing (thought not perfect) Howard Roark speech. It just happens that I refuse to believe in anything without critical reasoning.

One more thing… be ready to find critical tone just about anything on Mises.org boards, that is the best thing, here we almost never agree :) we represents countless variations of thoughts, we are not driven by Marxian “class” propaganda nor by any other collectivist dogma. We believe in freedom, freedom to agree and freedom to question and even disagree. Here we are a little bit of Objectivists, a little bit of Minarchists, a little bit of Anarchists, very much “Austrians” but with many different flavors, some of us likes Rothbard more than Hayek some of us likes Mises more than Rothbard, and some of us likes Spooner even more… some of us also likes J.M.Buchanan or Wilhelm Röpke… but most of us don’t believe every word of any of them. If not for other reasons, then because they also didn’t agreed on every issue… and that is good, that is one of the reasons classical liberal/libertarian ideas are so great, because most of those ideas was under heavy reviews, and most of them was corrected over time, made it better and more correct by freedom loving libertarians.

Others usually dismiss libertarian ideas because they can’t refute them (that is hard and most of the time impossible) and because they hate freedom, freedom doesn’t like control . And most of them believes in dogmas (like the socialists/Marxists for example) and the funny thing is that they actually call they belief system scientific :)

Andras June 19, 2010 at 12:21 pm

that should be actually … “nothing in economy CAN be observed and understand without observing and understanding the whole picture.”

Michael McLees June 19, 2010 at 12:26 pm

Scott, you’ve totally missed the point.

Andras, I’m glad your tone towards me has changed for the better. On to the question, you’re falling short of the call of the question. Remember, the question was – Does JK Rowling have good reason to be upset with Hobie Gates? If so, why? If not, why?

Your answer seems to be so far, she has the right to be upset with Hobie Gates, but has no good reason to be. My question to you is, why does she not have good reason to be upset with Hobie Gates?

The actual success JK Rowling has had in reality is not at issue. Replace JK Rowling with “Andras” and “Harry Potter” with “The Trial of Zarbarf” and the answer should be the same if you wish to be consistent.

Andras June 19, 2010 at 1:01 pm

I didn’t say she have no reason to be upset (as Scott said if not for other reasons then because of the assault on her physical property), I said it is irrelevant for the question of “IP” if she is upset or not. Does the public have a good reason to be upset because she has a large house with a pool and a billion bucks? I don’t think either answer would change reality.

I believe a great guitar builder was asked once if he mind (or if he is upset) because there are many copies of his guitar (mostly from Asia), he answered a big NO and he explained that every “copy” of his guitar make his original more valuable… so I would be pleased to replace “Andras” with JK Rowling, not because of the fact that a hacker would made available my creation for free but because he would never do that without the marketing machine which made possible the extreme success of the work in question. And even if he did (for some stupid reason) he would made me (and the whole society) a favor, first there would be easier for me to sell my book because more people would know about it, second it would put in motion a larger exchange which would in a long term create more possibilities for me and for everybody.

I don’t want to write one book and live off it forever, I want to have more opportunities for my next creation tomorrow. And more opportunities comes from more exchange… from a more developed and more affluent society, not from a government mandated limitation on exchange. I respect the musician who goes every night to play live in some night club much more than a millionaire “musician” who live off the “IP” “laws”, because some marketing machine driven by unlimited credit was behind him and “he” sold 50 million copies of his albums. The first made his income by economic means and that income may be small or may be great (if the market (audience) likes him the club owner will pay him good), the second made his income by political means, by government commands which not only made possible for him to get monopoly prices, but also a marketing machine and a banking system with large credit behind him.

I never said one should give his ideas away for free, not because as said before creating an idea is not free. But I refuse to accept the idea that one should use the government as a mean to declare his idea a property.

Sell it, or use it. And move to the next idea… that is how the world works. A baker don’t copy his bread, he make a new one every time he sell a new one. Why should the government give privileges to some of us to sell something many times over without producing it many times over. “IP” “laws” eliminates or at least slows down the law of diminishing return, the best “economic” law in existence. The only law which drives us forward.

Michael McLees June 19, 2010 at 1:28 pm

I would like to speak very intently to anyone who believes that his property that he creates is MORE valuable with the increase of copies. All the guitar maker is saying is that he enjoys giving away his design. That is fine. I am not against that. Whether he gives away the design or sells it, wealth in created. But in the first scenario, the wealth in going to the people who did not put in the effort in the first place. This is charity. In the second scenario, the wealth is going to the purchasers of the guitar AND the design’s creator. As someone who daily sees an abundance of fake Rolex watches and Louis Vuiton handbags, I can tell you first hand where the wealth is going.

On to the example, you now seem to be saying that JK Rowling is upset about the free distribution of her manuscript by another, but really, she should be happy. Let’s add some facts to my hypothetical, namely, the reason she was keeping the copy of Harry Potter secret on her computer. She was gathering information about the relative efficiency of publishers who would sell her books for her vs. her publishing the book herself. In either event, she hoped to make a profit. By your answer though, one would think the greatest profit would come from her simply publishing it for free online herself, a task that the hacker performed for her against her will. The world became wealthier with the free distribution of the book, but JK Rowling didn’t. She must still sell the book to gain wealth, but now, thanks to the hacker, she must do so in a market already saturated with free copies of what she is trying to sell. It’s this unjust wealth distribution that I have a problem with.

Andras June 19, 2010 at 2:35 pm

Do you honestly believe that those who buy the fake Rolex watches or Louis Vuiton handbags are potential buyers of real Rolex watches and Louis Vuiton handbags? Because honestly… I don’t.

The hacker in question wouldn’t be able to saturate the market, he wouldn’t be able to even limit it because he also need the same advertising and marketing effort as JK Rowling does in order to sell or share the book regardless of the price. Simply making something available doesn’t will fill the market. BTW almost every book in Mises Store are available here for download for free and it is even “advertised” all over Mises.org and still people buy hard copied books from the Mises Store (I bought Human Action for example, even if I already read it a few times over from the free PDF available on Mises.org… I bought it because it represents a value for me a higher value than the money I paid for it). This is true with everything, if something represents a value for people they will pay for it, you don’t have to limit their choice. Many software are also available for free and yet people pay for it because they value it and they are looking forward for the next improved version. Even Steve Ballmer said, that if people find value in Microsoft’s products they will be willing to pay for it. This also leads us to the point where we have to understand that a vast majority of “pirated” software, music, books, movies are downloaded by those who would never purchase the “genuine” one, either because they find no value or less value in it then the cost or because they purchasing power is not enough to buy it (that is why they purchase the fake Rolex, they can’t buy the real one).

Now if you accept that software, music, movies or ideas are property then you would say that those people are stealing from the author, but the fact is that they don’t, the author still have his movie or software or idea he is still able to use it or to exchange it for something else (for example money)… and this would bring us to another economic question we simply can’t ignore when we discussing property or market or anything similar, and that is UTILITY VALUE and EXCHANGE VALUE. Why? Because in order to injure someone (economically) we must decrease the value of his property or/and devices. Now as we know value is subjective and marginal, but… do you decrease the utility value of an idea when you “take it away” from the author? I don’t think so, he is still able to use it (it is a non-scarce, non-rival thing), the same way as before. Do you decrease the exchange value of it? I don’t think so, he is still able to exchange it, just like he did before. So what value did you decrease, why should you be punished?

At the other hand, a car has no value if there are only a few cars, it has value when millions of cars running around. Or a computer… the only reason why we have computers on every desk today, is because Compaq (with a little help from Bill Gates’s wisdom to reserve his right to sell DOS to anyone not just IBM) was able to bypass IBM’s patents on the PC, and because they made possible the PC clones.

Then a new super prosperous industry started do emerge, and even IBM made 10x more money then they would if Compaq didn’t do that great thing. The utility value of every computer raised and if utility value rise, exchange value rise too, it is easier to sell a computer now then it was 20 or 30 years ago, that is why they sell 300 million computers a year instead of 300 computers.

The real world is full of similar stories, when the greatness was not in the act of limiting but exactly the opposite in the act of expanding exchange.

Andras June 19, 2010 at 2:47 pm

Actually imagine you made a new guitar design, let call it “McLees”, you bild a few every week you take a loan and build a little factory and you employ a few employees and you build like 50 “McLees” guitars a week… you sell them all for say $500 a piece. Now a guy from China likes your design and he start to copy it, and he sell it as a “McLees” copy (just like there are many Fender or Les Paul copies out there).

People will see your design, but many of them will know that the copy is not the original… so actually the guy who copies your guitar acts like an advertising agent for you, because now more people know about your guitars… and they start to look for it, not for the copy but for the original… you get more and more orders every week, your capacity to build the requested ones are limited so the demand is higher than the supply… your prices goes up, you make more money, you invest it to build more production capacity and hire more people, but no matter how fast you increase your supply, the demand increases even faster, now your guitar becomes famous, more people start to copy it… more people will hear about it, more people will see it, and more of them will want the original not the copy… and when the demand start to diminish, you design a new guitar and the whole thing starts over once again, only this time the market already value your original very high, much higher than they ever would if you where the sole little builder who builds a few unknown guitars a week and nobody ever copied you… that is how it works.

Peter Surda June 19, 2010 at 3:23 pm

“Being upset” is a completely inadequate criterion of violation of rights. You can be upset about anything.

Scott Dysart June 19, 2010 at 4:14 pm

Scott, you’ve totally missed the point.

No, I didn’t miss it. I’m pointing out a critical flaw in your argument. Manipulating someone else’s electronic equipment is trespass. You can’t just conveniently ride the coattails of that trespass to support your real argument. It’s perfectly legal to reduce Paul Krugman’s blog readership by criticizing him. It is not legal to do so by hacking his software. If you think that is a trivial distinction, you aren’t thinking very hard about this.

Bala June 20, 2010 at 11:35 am

How does it sound if I say that supporting the concept of IP and its protection contradicts basic Objectivist premises? In other words, to an sincere Objectivist, supporting IP is an immoral choice. I’ll explain if you are interested.

Michael McLees June 20, 2010 at 12:14 pm

I would very much like that explanation.

Bala June 20, 2010 at 2:21 pm

I had posted this earlier on the link below

http://blog.mises.org/11464/copying-is-not-theft-remixed-song-and-video/comment-page-1/#comment-652184

I am still reproducing it here (with minor modifications) for ease of reading.

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The fundamental point that I am trying to address is that it is IMMORAL to treat ideas and patterns as “property”.

Let’s start from Objectivist fundamentals.

1. Man is a rational animal with a volitional consciousness.
2. Life is a sequence of self-generated self-sustaining actions. The purpose of all action is life itself and its sustenance.
3. Values are that which you act to gain or keep.
4. Man’s values are not automatic unlike those of other living beings. He needs to choose his values and then act to gain or geek them.
5. Man’s epistemology is reason. He uses his powers of reason to form concepts of existence and of causality within existence. He uses these to modify his environment and thus derive the values that will advance his life.
6. Man, in order to sustain his life, needs to act. The purpose of all such action is to gain the value needed to sustain it and to keep that which he has gained.
7. Man needs to be free to act as per the judgement of his rational mind in order to choose his values as well as the means to gain/keep them. To do this, he needs that force may not be initiated against him by other men as force is that which neuters volition and renders it impossible for man to act.
8. Rights are a moral concept defining and sanctioning man’s freedom of action in a social context.
9. Rights are a recognition of a particular condition of existence essential for the survival of man qua man, i.e., as identified above.
10. The Right to Life is nothing more than a recognition of the reality that for man to be able to survive qua man, no other man may initiate force against him.
11. To sustain his life qua man, man needs to be free to apply the values he has gained in the service of his life. This is the beginning of the moral concept “property”.
12. For man to be free to act to apply the values he has acquired in the service of his life, it is necessary that others do not act in a manner that deprives him of the freedom to act thus. This is the next step in the evolution of the concepts “property” and “property rights”.

“Property” thus is the moral concept that applies to the objects of value that man acquires with the aim of applying them in the service of his life. The most important aspect of the concept “property” is that the owner should be free to act to apply the objects of value in the service of his life.

There are 2 categories of objects – material existents and concepts of and related to existence. Of the two, the former is “scarce” while the latter is not. The meaning of “scarce” here is that there is only 1 of a particular existent and therefore, if one man is in possession of a material object, another cannot. Therefore, if I have acquired a material object to apply it in the service of my life, your taking it deprives me of the freedom to act to apply it thus. The recognition of this condition of existence essential for the survival of man qua man is what we call the “right to exclude” that forms an integral part of the concept “right to property”. Without exclusion, it is impossible for man to have a concept of physical “property”. Hence, it is moral to treat physical objects as “property”.

Ideas and patterns, the 2nd category of existents, however, have the peculiar nature that they can be simultaneously used by any number of people without abridging the freedom of any of them to act to instantiate them. Therefore exclusivity is NOT NECESSARY for man to be free to act on them. Hence, there is no question of treating them as “property”. Any attempt to do so would be in violation of the basic Objectivist concept of Rights itself.

At the same time, ideas by THEIR very NATURE, are not amenable to exclusivity. Once an idea/pattern is instantiated and that object is sold, the idea screams out loud for anyone at all to grasp them. All it requires is a conscious human being acting as per his nature and forming concepts of existence and of causality within existence. This involves asking simple questions like “What is this?”, “How does this work?”, “How is this better than other known arrangements?”, etc.

To still insist that we should treat ideas and patterns as though exclusivity in them were possible, you would be guilty of evading the reality that they are not amenable to exclusion and acting to enforce exclusivity would be tantamount to worshipping your whim that they should be exclusive.

To say that the owner of the object that contains the instantiation should not do this is to demand that he lives a sub-human existence. If you further demand that he should not act to instantiate the idea that he has now obtained, you are once again demanding that he cease to live as a human being, i.e., act as per the judgement of his rational mind.

That would make you a supporter of the “right to enslave”, something no Objectivist would recognise as valid under any circumstances.

Thus, IP is contradictory to Objectivism.

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Michael McLees June 20, 2010 at 11:04 am

I understand that Mises’s books are available for free. This is fine charity. I would advise you to take a look at this link.

http://mises.org/store/Human-Action-Audiobook-MP3CD-P640.aspx?utm_source=Mises_Daily&utm_medium=Graphic&utm_campaign=Item_in_Daily

The audiobook version of Human Action is available for $15.00. Fine. Now look at the comments. “Don’t worry about buying this… just download it for free on iTunes.” I am curious about the sales figures of this book, especially since I have it, for free… from a torrent. As such, I have no desire to purchase this copy. I already have the content. Let’s take a look at the price of an audiobook version of Harry Potter. On iTunes, the price of a Harry Potter book falls between 32 and 50 dollars. The difference? Mises books are not under copyright and the Harry Potter books are heavily demanded. Take away the copyright from the Harry Potter series and release a free version right next to a paid version and you’ll decrease demand for the paid version. This would be fine from a moral standpoint if the copyright owner willed for that to happen, but in this case, she doesn’t. See, the purchaser of a Harry Potter book, unlike the purchaser of a Mises book, is ONLY purchasing the right to the book itself, not the right to copy it. This limits the supply of Harry Potter books, meaning they are scarce in the market. And I’m not likely to purchase anything I can with clean conscience get for free, so the Mises books are only likely to get me to purchase other books not available, except through legitimate purchase. In this way, Mises is helping other writers, but only those who are not giving away their books for free.

Harry Potter books are valuable for the same reason Rolexes and gold bars are valuable. They are scarce. (You might dislike the artificial and government sanctioned nature of the scarcity, but this is beside the point.) If gold were as common as air, it would not be valuable. And if Rolexes were even more rare than they are, they would have an even higher exchange value than they do now, provided that people are willing to pay the higher price for the increased rarity of the product, which we know they are, as limited editions of products regularly sell for a premium over the unlimited versions of the same products.Your distinction between utility value and exchange value is especially relevant here because it proves my point. The utility of a scarce good is as least partially in its scarcity. Take away the scarcity and value in precious metals from a Rolex and one might assume its utility value is not as high as a digital Timex, because it will not keep time as well as the Timex. The moral point that I’m making is that in your world, you think it’s OK to take away this utility value (the utility of scarcity) from the owners (Rolex Corp. and all Rolex owners who purchased their watches based on scarcity) without their permission. And when you create a greater supply of a product, you decrease the exchange value of the product, as I’ve shown with the audiobook example above. The fact that people buying fake Rolexes are probably not in the market for a real Rolex is not relevant. Their purchase still devalues the real Rolexes against, and this is key, the will of the will of the true Rolex owners.

About your example with the McLees guitar, you may very well be right that giving away my design to the world would increase sales of my original McLees guitar. Not only is this not what you’re arguing, as what we’ve talked about all along is the fact that you’re arguing FOR a perfect copy of the McLees guitar, indistinguishable from the original, but also, this is a question of fact which involves huge speculation. I disagree with your speculation and I’m speculating the other direction (and so is everyone who creates an invention and patents it or writes something and copyrights it). This is, again, beside the point. When you sell your Andras guitar, you give away the design freely, speculating that it will increase your sales. When I sell my McLees guitar, I do not include in the sale the right for anyone to copy it. Both of us are pursuing our interests, but we are merely placing different bets on future events in hopes of maximizing profit.

The problem I have in your world is that I would not be able to sell the McLees guitar without also selling to the buyer the right to copy its design. Your world takes this away from me. I consider the ability to sell under any terms I choose fundamental to the very essence of property rights. Do you disagree? If not, your world takes away my rights. By contrast, my world does not take away yours.

Matthew Swaringen June 20, 2010 at 12:54 pm

Michael, I’m getting the same argument based on the presumption that someone deserves a certain size market and deserves scarcity “because I say so” without any intention to argue against the conclusions one must have at the end of the day if you believe this (that the world couldn’t actually function under the burdens of paying for all prior ideas that humans have come up with). I know you’d say that they can share, but the fact is given choice humans very well may choose not to for their own benefit or that of their family. Nature has made it such that they don’t get to do that, there is a benefit to copying, but also a detriment! That detriment being that they can’t control it.

You also still present a lot of non-sequitur in your arguments, like, “I would not be able to sell the McLees guitar without also selling to the buyer the right to copy its design.”

What is “the right” if you don’t believe in this mystical force that doesn’t exist in the real world? It’s nothing at all. You aren’t selling the buyer the right to copy it’s design because “the right” doesn’t exist. Now you could sell the guitar with the stipulation that the recipient not be allowed to take it apart through a contract, or the contract on purchasing the item might demand that they not make new designs, but there is no innate “right” absent contractual obligations (and your contractual obligations would only go as far as the initial buyer, if others learned of your pattern because he violated contract you’d have recourse only against him).

“Not only is this not what you’re arguing, as what we’ve talked about all along is the fact that you’re arguing FOR a perfect copy of the McLees guitar, indistinguishable from the original”
No, he didn’t argue for a “perfect” copy of McLees guitar. He argued perhaps for a “perfect physical” copy, but only if reverse engineering was sufficient (reproducing a complex item, that may have been partially handcrafted will not be perfect in any way as you describe here, not to mention your design might have scarcity “built-in” through use of precious materials that the replicator may not desire to use so he can make a cheaper clone – eg: the fake Rolex).

Even in such case that reverse engineering (the buyer has no right to force the seller to do the reverse engineering for him, he has to take it apart) allows for this, however, humans have independent valuations, and many humans would STILL value yours more despite the “perfect” copy, simply because they know you came up with it and they find some value inherent in that. You could appeal to this view by having certificates of authenticity with a special validation key going on each unit to signify that it came from you if you so desired, etc.

Michael McLees June 20, 2010 at 1:46 pm

But the contract is exactly what we’re talking about. When you purchase a CD, it says right on the package that you’re not purchasing the right to copy the CD, you’re merely purchasing the CD itself. By making the purchase, you’re agreeing to the contract. This is why Best Buy does not merely purchase one Garth Brooks CD from Garth Brooks and then make 100 copies with which to stock its store. That would be a violation of the contract Best Buy created with Garth Brooks when they purchased their inventory. If you find this contract valid, then you’re on my side of the debate.

And once more, you’re speculating as to why people will purchase my guitar when there are perfect copies more cheaply available on the market. Tell me, would you be willing to purchase the $15.00 audiobook on this website for use on your iPod when there is an identical copy available for free on iTunes? If so, you are still playing into my world where the Mises Institute has freely chosen to simultaneously give away and sell their products. If this works for them, fine. To me, this is merely evidence that they desire more to enact social change toward Libertarian views than profit from the sales of books. Again, fine. If I were an author, I would possibly desire more to profit from book sales than enact social change. The answers thus far against this have been – “Don’t you understand, you’ll profit more by letting me copy and then give away your product.” and “You should not be allowed to restrict my right to copy your work once I have it.” I find the first erroneous and the second morally reprehensible.

Peter Surda June 20, 2010 at 3:34 pm

But the contract is exactly what we’re talking about.

This is, again, one of the main errors of IP proponents. IP are not contracts, they are in fact disjunct sets. IP applies to third parties, i.e. those who did not agree to a contract before being exposed to the good. IP is the equivalent of trespass, rather than contract violation.

If you find this contract valid, then you’re on my side of the debate.

No, you don’t. A contract does not require IP of any kind. The objects of the contract do not need to be own-able, it is only necessary that the transaction can be performed. If you agree to a restriction, it does not mean that the other party owns the ability to restrict someone who did not agree to such a restriction.

If you would be so kind, can you address my objections, listed twice above? I.e. if causality and similarity are are the reason for property, how do you distinguish, on the causality scale, between property and externalities, and on the similarity scale, between property and substitutes? If you can’t distinguish, why aren’t all externalities and substitutes property?

Michael McLees June 21, 2010 at 9:06 am

Peter,

Your question assumes a knowledge which I probably don’t have. I have read A Note On Intellectual Property on this site, and it gave a somewhat thorough explanation of externalities.

http://mises.org/daily/3798

But let me first address your concerns regarding contracts. It is true that IP law is not in itself a contract. I never said that. Rather, IP law is the enforcing mechanism to contracts which exist between the idea’s creator and all other parties who voluntarily give up something in order to gain access to the idea. Your claim that the idea cannot have an owner is irrelevant for our purposes on this particular inquiry. I could easily imagine a world where patents don’t exist, but the effect of patent creation would based purely on the sanctity of contract. The fact that we have a Patent office is disagreeable to both of us. The fact that a contract may be created wherein artificial scarcity is the effect is disagreeable only to you.

Now, on externalities, the essay mentioned above gives an example of a street musician playing music in public space, his music causing the externalities enjoyed by the passers by. 5 arguments against the idea of calling his melody (which I’m assuming he created) his property are leveled against me. Unfortunately, this is a straw-man, for the reason that the street performer never entered into any contract, implied or otherwise, with the passers by. They are free to listen, not listen, distract, disrupt, ignore, pay, not pay, etc…

The example falls apart in the other typical music scenario, wherein I purchase a ticket to a concert in which I have been promised new and exciting music by the composer. On this promise, I enter a contract with the composer. I will pay the composer for the ticket and I will get to enjoy the concert. I must also follow the rules set by the composer and he must follow mine. My rule would be something like, “You must deliver on what you’ve promised. I expect music and I expect it to be new and exciting.” His rule might be something like, “You may not distract other patrons and you may not record or in any way repeat any music you hear here.” As I give him my money and he gives me my ticket, we enter into this agreement. The externalities in both cases are substantially the same. The difference is the existence of a contract and the artificial scarcity of the melody imposed on society by the professional composer.

It is precisely this that gives the music value for the musician. He is able to make a living on the scarce resource that is his music. The means of this scarcity are irrelevant. (In the old days when recording was not available, there was no need to impose scarcity by forbidding the use of recording devices. Scarcity was built into the system.) If I break the bargain, record the music and start selling it outside his concert hall, then I have effectively taken away this scarcity. Recording music and selling it is not wrong per se, but in this instance it is because it is a violation of the contract into which I freely entered. Had I not entered it, I would not have the means violate it, by producing the bootlegs which I’m now selling. So you’re right. The idea of a contract does not require IP of any kind, but this particular contract does. In the same way the idea of a contract does not require physical property of any kind, only the means of transaction to be performed (IE A contract stating: You scratch my back and I’ll scratch yours). The transaction only exists if I agree to follow the rules of the contract. It is the rules with the contract that extend the composer’s sovereignty to my recording device. I agreed to that. I agree to that when I go to a concert in which such rules are in place, watch an MLB baseball game, or purchase a CD. The MLB’s sovereignty extends to my VCR and the producer of the CD extends to my computer.

So in short, the distinction I draw is in how the externalities were granted. A public concert by a street performer is different than the private concert with rules by the professional composer. I hope this has answered your question.

Bala,

I have one simple response to you. Ideas can be exclusive through contract. In these cases, it is only through your violation of a contract that the idea becomes non-scarce. Please see the above response to Peter for further analysis.

Peter Surda June 21, 2010 at 10:09 am

Dear Michael McLees,

with all due respect, you have not addressed any of the issues that I brought up.

First of all, I have no problem with using non-rival goods in contracts. What I rather object to is calling being exposed to an non-rival good a contract. Non-rival goods do not have boundaries nor are they modified by being exposed to them (see my previous reasoning). So how do you determine whether a situation is exposure to an immaterial good? You can’t. It can’t be measured, it can only be interpreted, subjectively. That is why the scope needs to be agreed upon explicitly by all involved parties. You cannot extend the contract to someone merely because someone claims that if you interpret the situation in a specific way, you arrive at some result.

The musician example you bring up completely misses the point. You bring up externalities, but argue with lack of a clear contract. But that does not answer the question about how to distingiush between externalities and property. If some causal relationships are property, why not all?

Your claim that the idea cannot have an owner is irrelevant for our purposes on this particular inquiry.

This is a misrepresentation. That is the conclusion, rather than the assumption. You can’t trespass on something that does not have boundaries, and without trespass the concept of property is meaningless. On the other hand, trade does not require the concept of property. So from the existence of contracts upon immaterial goods one cannot conclude that they are own-able.

Maybe if I bring up an example, it will be more obvious. Let’s say I write a book. Physically, it is a bunch of paper with some ink. If you attempt to consume it, you must change it in some way (e.g. open it, relocate it, or at least shine some light onto it). This change is observable and gives the book definite boundaries.

The book is also an immaterial good (this is actually imprecise, but I’ll explain that later). But what is the scope of this immaterial good? Until where does it extend? Is it the text? What if I translate it or replace every word with a synonym? Is it the meaning? What if I prepend each sentence with “not”, thus negating the meaning? What if I make a reference to the book without actually mentioning any of the contents (e.g. hyperlink)? What if I make a summary, thus making it into a more abstract meaning? What if I iterate on the abstraction scale even further, to literary genre, type of art or even the art itself? What about purposeful human action? If some of these are property, why not all? Why can’t the first human ancestor that discovered purposeful human action not have a property rights claim on all purposeful human action that came after him?

Based on my previous experiences, these questions do not have answers. They do not have answers, because abstract concepts are made up, they do not have an existence.

Back to the book. A book is not “an” immaterial good, it is an infinite number of immaterial goods, depending on interpretation and usage. A copy of a book is also an infinite number of immaterial goods, some of them overlapping with the previous ones and some not. But all arbitrary subsets of material goods contain some overlapping criterion. Which ones are relevant and which are not? Why should be some of them externalities and some property? Why should some of them be substitutes and some property?

Bala June 21, 2010 at 11:20 am

” Ideas can be exclusive through contract. ”

That only means that you can “try” to exclude others. That does not mean that it is so by the nature of ideas and patterns. The issue you need to address is that applying your ideas in the service of your own life does not necessarily require exclusion of others from acting similarly. Hence, there is no morally sound “right” to exclude others from an idea. Hence, it is meaningless to consider ideas and patterns as “property” and apply the “right to property” to them. Saying that contracts are a means of attempting to exclude others does not address this issue.

Matthew Swaringen June 21, 2010 at 7:00 pm

“If you find this contract valid, then you’re on my side of the debate.”

Yes, on this we don’t disagree. I stated as much earlier in the thread on the concept of the EULA agreements. If you agree with the EULA you are bound to it. Insofar as the EULA is not present clearly before the purchase, however, you are not under it’s restrictions until you agree to it. So I partially agree with you on “point of purchase” but only insofar as what you are purchasing is well established beforehand.

Insofar as an agreement was accepted, I would agree that first infringers are violating a contract they made, and subject to contractual penalties agreed upon by both parties.

However, this only affects parties in the agreement. Subsequent parties not related to the original agreement aren’t under the obligation of the contract. Now if those parties were sold the product, they should have received it with the original contract and obligations. If this was not provided then the first buyer is at fault for any infringement that occurs by not making them aware of contractual obligations about what was purchased.

Take the example of any business that has debt obligations. Are those purchasing the business obligated to pay the debt? If they were advised about it on purchasing the business, absolutely. If not, however, they are not obligated to pay the debt. The original buyer is still obligated to fulfill that part of his obligation.

J. Neil Schulman August 16, 2010 at 3:30 pm

Michael,Well said.One’s artistic creations are an extension of one’s personal identity and brand. If anyone can put my name — established in the marketplace as a novelist — on their own amateurish novel, it can be argued that their use of my name is “non-rivalrous.” After all, nothing tangible has been taken away from me. It can also be argued that any devaluing of my literary reputation is nothing I have any right to control, since “reputation” is nothing tangible and exists only in the minds of others.It’s only the recognition of property rights being bounded and limited by ownership of identity and products branded with that identity that the survival of property rights into and beyond the Information Age begins to have a defensible foundation.

J. Neil Schulman August 16, 2010 at 3:53 pm

I don’t know why my response was put in reply to something else, but this was the comment I was replying to. I wrote:

Michael,Well said.One’s artistic creations are an extension of one’s personal identity and brand. If anyone can put my name — established in the marketplace as a novelist — on their own amateurish novel, it can be argued that their use of my name is “non-rivalrous.” After all, nothing tangible has been taken away from me. It can also be argued that any devaluing of my literary reputation is nothing I have any right to control, since “reputation” is nothing tangible and exists only in the minds of others.It’s only the recognition of property rights being bounded and limited by ownership of identity and products branded with that identity that the survival of property rights into and beyond the Information Age begins to have a defensible foundation.

Michael McLees June 21, 2010 at 10:43 am

Peter,

But the exposure to the non-rival good may in fact be a contract, if the exposure was predicated on some prior agreement between the party doing the exposing and the party being exposed. This is why some externalities are property and others aren’t. The boundaries of the ideas are defined by the contract itself, the same way a treasure inside a treasure chest may or may not be your property when I sell you the chest. If I own both, I should be able to sell you one, but not the other. It depends on the contract. In the same way, I should be able to sell you the externalities of my book without also imparting upon you the right to record, copy, and sell the words within.

When you speak of the scope of the immaterial good, it is illuminating to note that every single one of the examples you bring up are not intangible thoughts or ideas, but rather human action. Translating, replacing words with synonyms, referring to it, making abstractions, etc… Your right to translate and my right to keep from translation are non-existent until we’ve come to some agreement. For example, let us say that you’ve written a book, but do not want it translated. I would like to read the book, but would like to translate it. Either you get what you want or I get what I want. If we reach an agreement that you do not get the book, you’ve got nothing to translate. If we reach an agreement that you get the book, but will not translate it, then your translation is not necessarily a trespass of the ideas within, but rather the agreement we made, however unjust, pithy, or otherwise undesirable. Like I’ve been saying, the boundaries are not in the ideas, but rather the agreed upon limits of our acts.

And let’s say you make the translation, you have then violated our contract. Even if you don’t see a problem with the violation of this contract, do you still not see that it is a violation?
The very essence of property relates to this idea that your “right” to engage with something, whether physical or not, ends at some point. My bed is my property. Take away my right to keep you out of it and the entirety of the idea and ideals of property has been exploded. It is precisely my right to keep you out of it that means it is my property, and vise versa. The ideas are interchangeable and synonymous. You may not keep me out of my bed because it is not your property, nor may I not keep you from enjoying yours because it is not my property. And all this without an explicit contract, to boot.

The same thing holds for ideas. The agreement we make when I give you a book, provided you promise to not translate it, gives each of us rights. I have the right to sleep well at night, knowing my book isn’t being translated by some oaf, and you have the right to read when I’ve written. I now do not have the right to take away from you what I’ve written and you do not have the right to translate it. The rights of property arise out of this contract.

Peter Surda June 21, 2010 at 11:01 am

Dear Michael McLees,

perhaps I did not accentuate the issue strongly enough.

I have no problem contracts limiting the second party with what they can do. If you write a book, sing a song, develop a new software, there is no problem with requiring the other party to agree to some sort of restrictions before you expose them to the good. I don’t think any of the opponents of IP here object to the validity or the enforceability of the contract. However, this has nothing to do with IP. IP only kicks in if you are exposed to a good without a prior arrangement with the “author”. It is the equivalent of trespass, rather than of contract violation.

All the situations you mention are examples of contracts or contract violations, and therefore are completely irrelevant to the problem at hand: applicability to third parties.

Michael McLees June 21, 2010 at 11:30 am

Then we are in agreement and only disagree with how the third party was exposed to the good. If he was exposed by the original producer, he is really just another second party. If the third party was exposed to the good by the second party who promised not to expose anyone to the good, then it is the second party who is liable of both trespass (as I define it above) and contract violation.

It seems to me that the general thoughts on this board are somewhat different than yours, namely the despite a contract to the contrary, a person ought to be allowed to copy a CD and give it away to all his friends. Whether or not all the friends or only the party who violated the contract should be sued is a different debate and not what we’ve been discussing thus far.

Bala June 21, 2010 at 11:35 am

” It seems to me that the general thoughts on this board are somewhat different than yours, namely the despite a contract to the contrary, a person ought to be allowed to copy a CD and give it away to all his friends. ”

The “punishable” action is the violation of the contract and not the act of copying. That is the main point of most people on this board including myself and Peter Surda.

Peter Surda June 21, 2010 at 12:22 pm

Then we are in agreement and only disagree with how the third party was exposed to the good. If he was exposed by the original producer, he is really just another second party. If the third party was exposed to the good by the second party who promised not to expose anyone to the good, then it is the second party who is liable of both trespass (as I define it above) and contract violation.

Actually, if you eliminate the word “trespass”, then we agree even on this. There should be no objections to the contents of such contract and violations thereof. But, in the latter situation, IP is necessary to have a recourse against the third party. However, because there is no contract and no boundaries, there cannot be trespass.

It seems to me that the general thoughts on this board are somewhat different than yours, namely the despite a contract to the contrary, a person ought to be allowed to copy a CD and give it away to all his friends.

I cannot recall people claiming this on this site. Rather people claim that such restrictions are often counterproductive and a stupid business plan.

Michael McLees June 21, 2010 at 12:32 pm

Then it seems that despite our disagreements about enforcement and 3rd parties, can we at least agree that ideas may be property and that it is out of principles of contract that the rights of property may be inferred?

Peter Surda June 21, 2010 at 1:11 pm

No, we cannot agree on that. Contracts do not require the concept of property, you can’t use this as a “proof” that that immaterial goods can be owned. You can put any sort of conditions into a contract, but that does not mean that anybody owns anything. Person A can require person B not to use person C’s bed, but that does not mean A owns C’s bed. It does not require any relation between A and C. Why should then be inferred from trading of immaterial goods that A owns anything? A can require B not to move for an hour. That does not require that A owns “movement” or “an hour” or any other abstract concept.

I imagine a typical fallacious argument chain of IP proponents is like this:
- you can trade immaterial goods
- hence, they can be property
- hence, there can be trespass and IP

The first implication is untrue and the second one is vague. What meaning does property have if it doesn’t include trespass? None.

Michael McLees June 21, 2010 at 1:42 pm

I understand that contracts do not require property. They only require action. The action though is what limits one’s rights to a good, and is that limit not what the very essence of property?

Bala June 21, 2010 at 2:02 pm

” The action though is what limits one’s rights to a good, and is that limit not what the very essence of property? ”

No on both counts.

Michael McLees June 21, 2010 at 3:04 pm

Then please define “Property.”

Peter Surda June 21, 2010 at 3:52 pm

That’s in my opinion one of the toughest questions. Often used definition is “if you mix something unowned with your labour it becomes your property”. If you can modify it or fence it, it’s obvious. But if you cannot modify it or fence it, what does it mean? The definition then makes no sense.

Bala June 21, 2010 at 5:00 pm

The following definition is entirely mine based on my understanding of what Rand said on this topic.

The “property” is a moral concept. There is no such thing as “property” in this world. It is a product of our rational mind. The concept “property” denotes the relationship between a man and objects in his environment. It refers to the person, the object and the entire sequence of actions to be performed in the process of acquiring, retaining, applying and disposing of the object.

The concept “property” essentially refers to the right of an individual to exclude others from taking possession of, consuming and/or applying in the service of their own lives the object which is said to be the property of the individual. Exclusion of others from an object necessarily involves the use of force. However, such force is deemed to be justified and retaliatory in nature when it is exerted to exclude others from what is one’s “property”.

The origin of the moral concept “property” is man’s Right to Life. The Right to Life is essentially the moral principle that sanctions man’s freedom to act to sustain his life in consonance with his nature, i.e., as a rational animal with a volitional consciousness. Life is a sequence of self-generated self-sustaining actions. Action involves changing the state of oneself and of the external environment. Life requires man to exchange materials with the environment, i.e., to consume them or to apply them to produce other materials that he may then consume. To do so, man has to first take possession of the objects involved in the exchange. He then needs to apply them in the service of his own life.

When such action needs to be undertaken in a social context, it gives rise to the moral concept “property”. It basically denotes the moral principle that no man may initiate force against another. Specifically, it denotes the principle that the said object “ought” to be in the possession of one person and not in that of another. The moral “ought” flows out of the actions involved in gaining possession of the object.
In simple terms, one can say that if an individual
1. acquires an object directly from existence or
2. in the case of objects previously in the possession of another person, he acquires it with the voluntary consent of the previous possessor
one can say that the object “ought” to be in the individual’s possession rather than in the possession of any other man. An individual violating this “ought” is considered to be initiating force against the “owner” of the object because taking possession of an object in the possession of an individual without his consent necessarily involves the initiation of force.

The moral concept “property” also flows from a recognition of the condition of existence that man needs act to acquire the objects that he needs to apply in the service of his life. If others may initiate force against him to take the objects away, it becomes impossible for a man to act to sustain his life as per the judgement of his rational mind. In this sense, the concept “property” denotes the principle that other men may not initiate force to deprive a man of the freedom to act on the objects of value that he has acquired.

The “owner” of the object then has absolute freedom to do as he pleases with the object provided he does not violate the rights to Life, Liberty and Property of others. After all, he acquired the object to apply it in the service of his life and he, the rational animal that he is, is the best judge of how to apply it in the service of his life. Anyone other than the “owner” needs the consent of the “owner” in order to use the owned object because that it the only morally sound way of doing so. Anything else would be tantamount to an initiation of force.

I hope my attempt is comprehensible.

james b. longacre August 31, 2010 at 3:24 am

its what god says you shouldnt steal.

james b. longacre August 31, 2010 at 3:26 am

I understand that contracts do not require property. They only require action.

do they require physical things too??

farting is action. does a contract require more?

Michael McLees June 21, 2010 at 6:39 pm

I’m beginning to think that defining property may be a more interesting and productive debate than whether or not IP laws are a moral, expedient, or based in any sort of reality. This will be my last post on this topic. I enjoyed talking to you fine folks and I now have some hefty ideas to digest.

james e fraser June 22, 2010 at 3:20 am

scripturally..there is a commandment to not steal.

i guess there is a concept of property going back to that era anyway and perhaps before.

to the extent that one can show labor applied to an unowned real-good, via a fence (a product of man) a read able sign ( a product of man) then i guess a initial title to property can then be seen. here first, was here, will be back, etc.

especially if one doesnt make them selves present at the property.

modern times i guess rf chips, serial number and engraving etc can show a property-exchange-title-chain.

james e fraser June 22, 2010 at 3:25 am

initiating force against the “owner”

one initiates force whenever they do anything.

force isnt initiated against an owner but on an object that is owned.

you could be relaxing with lemonade and someone steal your mail while your relaxation would be uninterrupted

Amnesiac July 19, 2010 at 7:01 pm

There is ultimately no way to defend an idea (read “intellectual property”) against being shared by others. If you monetize the idea itself, you lose. Money is made by doing, not thinking. Those who act upon ideas profit, while those who do not act, do not profit. How would we solve a claim of simultaneous creation and verbalization of ideas? If two people claim to have written and performed a song simultaneously, society will reward the best implimentation, i.e. the best performance. The idea itself is unprotectable. The best way to keep someone else from profiting from your idea is to do it better than anyone else. If you choose to keep the idea to yourself (secrecy), you will never profit from it, and someone else may think of it anyway.

Cathy Smith August 9, 2010 at 10:15 am

Amnesiac:
>The best way to keep someone else from profiting from your idea is to do it better than anyone else.

Please explain to me how it is possible to “do it better than anyone else” when anyone and everyone else has the absolute right to take “the expression of your idea” (expression being the operative concept — an issue that seems to elude (or be deliberately ignored by) most everyone here), copy it in every detail, leave your name (or mark) on it, and offer it as a substitute for your own at a lesser price, or for free. How can you “do it better” when you’re competing with yourself? You have created a paradigm here that cannot function and the only rational thing left is to think, do, and say nothing.

> Money is made by doing, not thinking.

Do you seriously mean to imply that the act of writing a novel (or a poem or a song) is not “doing”. Or that anything can be done without thinking?

I would also like to point out, once again, that in almost every case of what you might call IPR abuse it is another creature of the state — that artificial person who has rights, but only limited responsibilities and liabilities, and held in such high esteem here — that is the instigator. It seems completely wrong-headed, and more than a little dishonest, to insist that individual creators must be punished because artificial persons cannot behave.

Stephan Kinsella August 9, 2010 at 10:32 am

Cathy, maybe you don’t realize that if state patent and copyright law is abolished, there is no way a private system can have similar laws that provide monopolies to inventors and artists for their inventions and original works. So if you are calling for the abolition of patent and copyright, then you are basically calling for the evisceration of IP law–and the IP proponents will oppose your just as they oppose me. You are basically on our side already, but don’t seem to realize it.

Cathy Smith August 9, 2010 at 2:52 pm

I’m not on your side.

And you have not even attempted to address my question. So I’ll try it again, in case you overlooked it:

Please explain to me how it is possible to “do it better than anyone else” when anyone and everyone else has the absolute right to take “the expression of your idea” (expression being the operative concept — an issue that seems to elude (or be deliberately ignored by) most everyone here), copy it in every detail, leave your name (or mark) on it, and offer it as a substitute for your own at a lesser price, or for free. How can you “do it better” when you’re competing with yourself? You have created a paradigm here that cannot function and the only rational thing left is to think, do, and say nothing.

james b. longacre August 31, 2010 at 3:19 am

i dont think you have found any side.

james b. longacre August 31, 2010 at 3:20 am

there is no way a private system can have similar laws…..

does a private system have laws?

james b. longacre August 31, 2010 at 3:43 am

if contracts i suppose are used to access info that state to not repeat or reproduce sounds of a certain duration or pitch or what have you that allow for a punative renumneration of some sort via dispute resolution that could possibly be similar.

operationally effective?? i am not sure.

cable boxes used to go back to cable companies i suppose computers couild have done the same thing.

Andras June 18, 2010 at 6:42 am

@J. Murray June 18, 2010 at 5:43 am

Don’t confuse EULA (license agreement) with Copyright.

james b. longacre August 31, 2010 at 3:17 am

do both affect an end user??

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