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Source link: http://archive.mises.org/13017/terence-kealey-science-is-a-private-good-%e2%80%93-or-why-government-science-is-wasteful/

Terence Kealey: “Science is a Private Good: Why Government Science is Wasteful”

June 20, 2010 by

Terence KealeyI recently attended 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). I delivered a speech entitled “Ideas are Free: The Case Against Intellectual Property.” The speech following mine was by one Terence Kealey, a biochemist at the University of Buckingham and author of Sex, Science and Profits and The Economic Laws of Scientific Research. Kealey is a fantastic speaker and his fascinating, riveting talk, “Science is a Private Good – Or: Why Government Science is Wasteful” (video; audio), perfectly complemented my anti-IP talk–in fact his book Sex, Science and Profits has a chapter calling for the abolition of patents. (The other PFS speeches (see the Program) are being uploaded and will be linked here.)


jon June 20, 2010 at 9:14 am

i can testify to this without even watching the video. but hey, at least i spend my ill-gotten gains at the mises store, and my free time screeching at my friends about austrian economics.

David June 21, 2010 at 10:04 am

oooooooohhhh, jon… you got us! The entire Libertarian movement just collapsed. Well done!

Jeffrey Tucker June 20, 2010 at 9:16 am

This is a wonderful lecture! I hope lots of people will take the time to listen.

Phoenix June 20, 2010 at 10:48 am

The old book by John Baker (which I think Mises referenced), Science and the Planned State, makes some similar points.

David C June 20, 2010 at 2:38 pm

Just a thought. It always seemed to me that there is this unnatural separation between the commercial sector and the university sector, and that it has a lot to do with patents and copyright.

Telpeurion June 21, 2010 at 1:55 am

Jeffrey, although he has the cool British accent, you yourself have made the same points about patents in your own speeches; in greater variety might I add. (Wright Brothers, James Watt, etc.) He has the form, you had the substance.

Still, I really hope the Institute and other organizations can acquire even more “smart” sounding people to espouse the Austrian perspective.

Daniel June 21, 2010 at 2:46 am

Nice talk, but it is still hard to believe that we’d be so scientific advanced without public funding. Up to 1940 of the twentieth century science was mainly privately funded, but it is after 1940 when science gave us an explosion of new discoveries. All major discoveries were publicly financed, even before 1940. Development of technology can be easily financed by private sector, but pure science doesn’t really bring profits (at least in the short term). Let’s take an example of physics. It is insanely expensive to run experiments that are designed to answer the hardest questions about the world, with no promise of making any profit out of it eg. Hubble space telescope, LIGO, WMAP, LHC, VLA, Cyclotrons and so on. Who’d pay for developing theory of quantum mechanics, which is essential for today’s electronic industry? Furthermore there are other unprofitable subjects such as Mathematics, Philosophy or History. Brian Cox gives a short speach on that at TED: http://www.youtube.com/watch?v=HdwOlk6HIVc

Seattle June 21, 2010 at 5:46 am

What you are dealing with here is the seen: You need to consider that which is not seen. For the sake of argument let’s assume these things really were brought about by public spending. The question remains to be asked: What would those funds have been used for if they had not been seized by the state? While it is impossible to know exactly what would have happened, we can say for certainty that it would be more useful to more people.

Furthermore, it’s rather onerous to say such things would not be pursued because they hold no “promise” of profit. Are you suggesting entrepreneurs are incapable of taking risks, therefore the state should take risks for them?

Finally, I hate the way people use the term “profit” to describe only monetary profits, it’s very misleading. When you have a net gain in utility from doing an activity, then you “profit” from that activity. Just because the profits are not in the form of money doesn’t mean they don’t exist. Furthermore, an activity has to appear profitable in the autistic sense (ex ante) otherwise that person wouldn’t do it in the first place.

Daniel June 21, 2010 at 11:39 am

I agree that the founds seized by the government could be used more efficiently by the private sector. All what I am saying is that our knowledge about the world would be so much poorer then.
Another thing is that scientists have to have freedom of research, because it is impossible to predict where the next breakthrough will come from. Small discovery in one field (e.g. Mathematics) can cause massive breakthrough in physics. Business doesn’t give as much freedom as public financing.
This is why I am not that optimistic about letting private sector to take over the research.

Seattle June 21, 2010 at 11:51 pm

Please elaborate on what you mean by “Freedom of Research.” If you mean handing groups of scientists and engineers large sums of money and just letting them go to town with it (which is basically what non-targeted publicly-funded research is) then it’s obvious this can only lead to massive amounts of waste.

And if targeted research is your intention, then please explain why the State knows which targets are worth pursuing better than entrepreneurs who are risking their own wealth and capital.

Dave Albin June 21, 2010 at 11:57 pm

I work in R&D for a private company, and have freedom to try new things all the time – and not always related directly to a product I’m working on. My company has found that giving freedom to its R&D staff results in breakthroughs and happier employees.

Walt D. June 21, 2010 at 10:15 am

I liked the talk. His example of how patents stifled aircraft production in the US was striking. However, it is not clear how advances in aviation, particularly in the military, can be segregated into private and public, due to the huge subsidy from the US Government. Even in socialist countries, such as Germany under Hitler, there were tremendous developments, such as the jet engine. The Soviet Union also kept pace with the US after WWII. The UK and France developed the Concorde, this being one of the prime examples of throwing a ridiculous amount of money at a project. The key thing I think he missed was the cost benefit analysis. Could the private sector put a man on the moon? This is a silly question because why would a private company want to put a man on the moon in the first place?
Why has no private company made a battery that can power a car? Why has no private company developed nuclear fusion? Only a government has the resources to sink money into hugely expensive projects without having some guarantee of success.

Donald Rowe June 21, 2010 at 8:22 pm

I personally prefer this silly question, “Why would a private company want to spend their own money on developing space travel, high energy to weight batteries, nuclear fusion, faster than light transport, or anything similar when they are aware that there is always a government readily available to be duped into spending somebody else’s money on it, for the good of the economy and humanity, of course?”

Dave Albin June 22, 2010 at 12:02 am

Entrepreneurs and venture capitalists takes risks all the time.

Tibor R. Machan July 2, 2010 at 6:36 pm

Intellectual property Explored

Tibor R. Machan

There is a debate afoot now about whether one ever owns the likes of a novel, poem, computer game, song, arrangement or similar intellectual items. Some argue, to quote a skeptic, Professor Tom Bell of Chapman University’s School of Law, “Copyrights and patents function as a federal welfare program of sorts of creators,” while others, such as James V. DeLong of the Competitive Enterprise Institute, hold that “It is difficult to see why intellectual property should be regarded as fundamentally different from physical property.” I want to try to come to terms with this dispute and offer some suggestions as to its resolution.
A major issue that faces one who wishes to reach a sensible understanding of intellectual property is just what “intellectual” serves to distinguish among what surrounds us in the world and how that contrasts with other kinds and types of possible property. What quality does “intellectual” point to about something? In my list, above, I am assuming that whatever is an invention or creation of the human mind amounts to potential IP, while others would argue that nothing intellectual in fact can constitute property, let alone private property. But this is merely to start things off, in need of clarification and analysis.
Some have proposed that the major element that distinguishes intellectual from other property is that it is supposed to be intangible. So, for example, a home or car or a land parcel is tangible, capable of being brought into contact with our senses. However, a musical score or arrangement or a romance novel is supposed to be intangible—such a thing cannot be touched, felt or otherwise brought into contact with our sensory organs. Yet an immediate problem this attempt to distinguish intellectual property is that there are tangible aspects to inventions, and there are intangible aspects to these other items that are supposedly all tangible. A home is not just some raw stuff but a building that is the result of a combination of ideas, some of them inventions. Even land isn’t owned exactly as it occurs in the wild but is configured by the more or less elaborate design work of landscapers. The same with whatever so called tangible items that function as property. A watch is not just some metal, mineral, glass and such assembled randomly but some assembly of such materials designed to show time and otherwise be appealing as well. In turn, a novel, song or computer game is also a combination of tangible and intangible stuff—the paper, typewriter or pen and the lead or ink with which the novel is written—only the author, and only for a little while, encounters the novel in intangible form after which the novel becomes an often very tangible manuscript.
The tangible-intangible distinction is not a good one for what can and cannot be owned and, thus, treated as distinctive enough to be related to owners. Indeed, the distinction seems to derive from a more fundamental one, in the realm of philosophy and its basic branch, metaphysics. In a dualist world reality would come in either a material or a spiritual rendition. Our bodies, for example, are material objects, whereas our minds or souls are spiritual or at least immaterial ones.
This goes back to Plato’s division of reality into the two realms, actual and ideal, although in Plato particular instances of poems or novels belong to the actual realm. A less sophisticated version of dualism, however, suggests the kind of division that’s hinted at through the tangible-intangible distinction. In nature we may have physical things as well as stuff that lacks any physical component, say our minds or ideas. Yet much that isn’t strictly and simply physical is intimately connected with what is, such as our minds (to our brains) and ideas (to the medium in which they are expressed).
So, the tangible versus intangible distinction does not seem to enable us to capture the distinguishing aspect of intellectual property. What other candidates might there be?
One candidate is that unless government or some other force-bearing agency bans the supply of some item of intellectual property, there is never any scarcity in that supply.
There is certainly something at least initially plausible about this view. What is tangible is more subject to delimitation and capable of being controlled by an owner than something that is intangible. A car or dresser is such a tangible item of property, whereas a novel or musical composition tends to be fuzzy or less than distinct. One cannot grab hold of a portion of a novel—e.g., one of its characters—as one can of a portion of a house such as a doorframe.
Yet intellectual property isn’t entirely intangible, either. Consider that a musical composition, on its face, fits the bill of being intangible, yet as it appears, mainly in a performance or on record, it takes on tangible form. Notes translate into sounds that are vibrations of material stuff. Consider, also, a design, say of a Swiss watch. It is manifest as the watch’s shape, color, and so on. Or, again, how about a poem or musical arrangement? Both usually make their appearance in tangible form, such as the marks in a book or the distinctive style of the sounds made by a band. These may be different from a rock, dresser, topsoil or building but they aren’t exactly ghosts or spirits, either.

It might also appear that the theological division between the natural and supernatural mirrors the tangible-intangible division but that, too, is misleading since no one who embraces that division would classify a poem or novel as supernatural. Thus it seems that there isn’t much hope in the distinction some critics of intellectual property invoke. The tangible-intangible distinction seems to be independent of the usual types of ontological dualism and so the case against intellectual property, then, seems unfounded. If there is such a distinction, between ordinary and intellectual property, it would need to be made in terms of distinctions that occur in nature, without recourse to anything like the supernatural realm. Supposedly, then, in nature itself there are two fundamentally different types of beings, tangible and intangible ones. Is this right?
Again, it may seem at first inspection that it is. We have, say, a brick, on the one hand, and a poem, on the other. But we also have something very unlike a brick, for example, smoke or vapor or clouds. In either case it’s not a problem to identify and control the former, while the latter tend to be defuse and allusive. We also have liquids, which are not so easy to identify and control as bricks but more so than gases. Indeed, it seems that there is a continuum of kinds of beings, from the very dense ones to the more and more defuse ones, leading all the way to what appear to be pure ideas, such as poems or theater set designs.
So, when we consider the matter apart from some alleged basic distinction between tangible and intangible stuff, one that seems to rest on certain problematic philosophical theories, there does not appear to be any good reason to divide the world into tangible versus intangible things. Differentiation seems to be possible in numerous ways, on a continuum, not into two exclusive categories. Nor, again, does it seem to be the case that there is anything particularly intellectual about, say, cigarette smoke or pollutants, albeit they are very difficult to identify and control. They are, in other words, not intellectual beings, whatever those may be, yet neither are they straightforwardly tangible.
I would like to explore the possibility of a very different distinction, namely, one between what is untouched by human meaning and whatever is subject to it. For example, there would be no poems without intentions, decisions, deliberations and so forth. There would, however, be trees, rocks, fish or lakes. Is it the point of those who deny that intellectual property is possible that when people produce their intentional or deliberate objects, such as poems, novels, names, screenplays, designs, compositions, or arrangements, these things cannot be owned? But this is quite paradoxical.
The very idea of the right to private property is tied, in at least the classical liberal tradition—starting with William of Ockham, to John Locke and Ayn Rand—to human intention. It is the decision to mix one’s labor with nature that serves for Locke as the basis for just acquisition. In the case of such current champions of this basic individual right, such as James Sadowsky and Israel Kirzner, it is the first judgment made by someone to invest something with value that serves to make something an item of private property.
However all of this comes out in the end, one thing is certain: the status of something as property appears to hinge on it’s being in significant measure an intentional object. But then it would seem that so called intellectual stuff is a far better candidate for qualifying as private property than is, say, a tree or mountain. Both of the latter are only remotely related to human intentions, whereas a poem or novel cannot have their essential identity without having been intended (mentally created) by human beings.
Of course, in becoming owned, a tree and mountain does become subject to intentionality, as when someone decides to make use of such a thing for his or her purposes. And, conversely, even in the case of a poem, there are words that are as it were pre-existing and only their particular concatenation is a matter of intention.
I am not certain what the outcome should be from these are related reflections. They do suggest something that is part of both the ordinary and the so called “intellectual” property traditions, namely, that when human beings are agents of creation, when they make something on their own initiative—when they invest the world with their distinctive effort, they gain just possession of what they have produced. And if there is anything that they produce more completely than such items as poems or computer games, I do not know what it might be.
For me, then, the issue is this: When one designs and produces something novel that one has thought up, some gadget or machine or such, does one then own this design/product? And if someone else copies it, did they take something from the former against his or her will? If the answer is yes to the former, then I think the answer must be yes to the latter.
Whether the protection of one’s property occurs via this or that legal device—patent, contract, trademark, what have you—seems a secondary issue and detail. The first is ownership. Also, what one’s owning something one conceives and makes may mean for others who may be thinking up the same thing later is irrelevant, no less so than if one finds a piece of land and appropriates it and then later others, too, find it and would like to appropriate it but now may not.
Those, by the way, who complain that governments enforce patents and copyright laws should realize that governments also enforce property rights in societies with governments. Governments in such societies are akin to body or security guards. Certainly, taxing others for this enforcement is unjust but that isn’t the essential idea behind the enforcement, not if one understands that copyright and patents could be protected without government, as well, just as other private property can be protected without government. But until it is government that protects—not establishes but protects—rights, it will also protect the right to intellectual property, if there be such a distinct thing in the first place. Taxation for such protection is irrelevant since taxation for the protection of other types of property is also beside the point.
Finally, that patents run out may be compared to the fact that ownership can cease with death, too. Of course, patents or trade marks or copyright could all be reassigned from one to another owner, just as property rights to anything can be reassigned upon voluntary exchange or transfer. There is nothing necessarily odd about this, simply because the matter hasn’t developed very smoothly and consistently.

Stephan Kinsella July 2, 2010 at 10:18 pm

Tibor, on Facebook, J Neil Schulman today wrote:”Arguing that existing copyright laws nullify an author’s right to license copying of a novel he’s written is like arguing existing eminent domain laws nullify a builder’s right to lease a house he’s made. It’s changing the subject to the crimes of statists who trample all property rights when supposed defenders of all …property rights carve out an exception denying rights of ownership for those whose product is Art.”An edited version of my reply is below:Neil, when we discuss this you say that others–me–don’t understand your argument. I believe I do understand it. I’ve seen variants of it many times. You have different details, but I think you and others have taken a wrong turn. You and others, like Tibor Machan in his latest post ( http://blog.mises.org/13017/terence-kealey-science-is-a-private-good-%E2%80%93-or-why-government-science-is-wasteful/#comment-698864 ) are sensing that the tide is turning. The younger libertarians are seeing not only that anarchy is right, that Austrian economics is sound, but that IP is nonsense and statist. Listen to the crowd cheering about anti-IP at 1:00 of the Molyneux porcfest speech I link to here; and also even the Motorhome diaries guys are getting it. http://www.libertarianstandard.com/2010/07/01/tls-podcast-picks-molyneux-language-state-motorhome-diaries/ As are the FreeTalkLive guys. As are Reason guys.Everyone is getting it. The recognition that IP is illegitimate is spreading like wildfire. I’m seeing it before my eyes. And yes, I think your logorights are just a variant of IP.I respect you and appreciate your reasons. But I think libertarianism took a wrong turn. It started with state grants of monopoly privilege, such as England’s Statute of Monopolies in 1623, an early patent granting scheme. Then the US applied egalitarianism, democracy, and primitive proto-utilitarian wealth-maximization pseudoscience to enshrine the idea of patents in the Constitution. But at least they didn’t have the gall to pretend it was a natural right. Jefferson admitted this. That’s why the right is limited in time; it was just a temporary state manipulation of the market to “stimulate” innovation. Of course the assumption is that the cost of this gov’t scheme is less than the value of the marginal innovation thereby stimulated; but you know, they couldn’t know it at the time. It was nothing but a wild assed guess. And you know what–no one in the last 200 yeas has shown that it is a net gain. So the utilitarian rationale is bankrupt.Then Rand comes over here, overglorifies this as the great capitalist utopia. After all it was 10,000 times better than Russia. Sure it was. So she assumed the constitution and our Founders must be right. They were principled and so much better than Marx and the commies. I have heard that she even originally assumed that eminent domain must be okay–after all it’s in the Constitution. She wised up on this but on on the rest. That’s why she fought anarchism tooth and nail, stubbornly, arrogantly, foolishly. And that’s why she clung to IP.Then a host of libertarians spring up–influenced by Rand, and others like Rothbard, Mises, Hazlitt, Bastiat, the Old Right… and here we have Rand glorifying IP, and the others mostly silent. So we have the libertarians newbs soaking up Rand’s wisdom, assuming she’s right… just as she did about the US Constitution. Which was an illegal centralizing power-grabbing coup, by white property and slave owners who used their position to grab power and wealth and enrich their friends…. not some idealistic high-minded libertopia. But leave that aside. Most libertarians wise up and leave the Rand personality cult and its quirks aside. Most of them grow up to have a sense of humor, tolerance, to just be decent human beings who believe in benevolence and charity without feeling the need to justify it with a Galtian deductive speech. Some of the smarter or more honest ones then become anarchists. But there is a remnant of IP left, because the idea of rights as deriving from “what you create” permeates Rand’s philosophy.Rand was wrong. The Constitution and framers were wrong. Utilitarians are wrong. The mercantalists in England who favored state grants of monopoly were all wrong. We libertarians do a should favor property rights in scarce resources. But not in value. There is no property right in value–but only in the integrity of the borders of physical things you own. Rothbard showed that all rights are property rights. There is no independent right to free speech or press; these are just consequences of the NAP and the right to property.Likewise, your property rights in your body and in things you homestead or contractually acquire are sufficient to let you flourish in a free market. Make whatever deals you want. But in the end, there is no way to have real IP rights–or logorights–without recognizing rights in “patterns” (logos, as you would say); and doing that is a convoluted, disguised way of granting the pattern-creator property rights in my already-owned property–since now you get to veto certain uses I would make with my own property, even though it’s my property, and even though my use does not invade the borders of your own property-but solely because my use of my property is guided by information that you claim some proprietorship over. This is wealth redistribution, Neil. It is theft.This is what all the young libertarians are seeing. There is a great IP awakening happening. I understand that it frustrates those clinging to the old, outmoded ideas. But it’s coming, because it’s right.


My further reply to Neil on Facebook is here:


“Much of the argumentation of the founding fathers — and by the way, referring to many of them who were abolitionists is typical leftist revisionist history, and not of the good Harry Elmer Barnes type — was utilitarian, originating with John Locke. ”

I see nothing wrong with recognizing the evil of slavery and that politicians are just politicians…. See More

As for utilitarianism–as you must know, it is bankrupt morally, methodoligically, and empirically. In the case of IP, they didn’t know what they were talking about. they were taking a wild assed guess that the cost would be trivial and the gains signfiicant. This has yet to be proven.

“My thinking about logorights did not originate with Ayn Rand, and while some of her views are compatible with mine, I made a natural-rights case for ownership in information objects neither she nor any of her disciples ever made.”

But in my view your argument shares common fallacies, namely granting rights in “things” that you create, whether those things are ownable things (scarce resources) or not. Your argument, with respect, seems to be based on non sequiturs: you make some non-rigorous philosophical observations about material identities and from this you end up concluding we can use information theory to determine the optimal time period of the monopoly over a pattern of information that can be used to justify force against others’ use of their own property.

“The problem with you and in general with what you’re calling the next generation of libertarians is that you’re exactly the total materialists Karl Marx wanted you to be.”

You deride this as materialism but take note: whenever you want to enforce your IP rights, it’s alwasy with PHYSICAL force and against PHYSICAL THINGS. You want to use physical force to stop ME from using MY physical material property as i see fit, and/or to take my physical money from me as damages. If you are so above material things, why don’t you enforce your lofty IP rights in the IP realm? Why stoop down to our lowly realm of things, possessions, and bodies?

“You’re an intelligent man but you’re too wedded to your ideology to see an obvious truth. There are things that exist — real things — that have no atoms or molecules as part of their natural existence. Matter can store them and reflect them, but not define them.”

I searched for years for a way to justify IP. I practice it for a living. I saw that Rand was full of it. Then I tried others, like yours. None of them make any sense.

You think it is so significant if you can point to something, like Donald Sutherland at the end of Invasion of the Body Snatchers, and call it “a THING that EXISTS.” Say a poem exists. I don’t care. Say it all you want. Saying some “thing” “exists” doesn’t prove there can be property rights in it. Just because we use concepts in certain ways to organize the perceptual data to understand the world doesn’t mean this imbues the referent of these concepts with ownability.

“”If a thing can be copied, then it’s a thing.”

“In two decades you have never defeated this challenge.”

I don’t care if it’s a “thing”. It’s got to be an ownable thing.

“In America we saw for one of the few times in human history that it was not uncommon for artists to be able to support themselves by selling their art to the public — the best examples being in popular music. But we have reverted to the pre-American model where a few artists become the court favorites of the rich and powerful, and the rest are buried under massive amounts of competing capital to advertise and promote only the Chosen Ones. ”

Here you are resorting to a type of consequentialist argument. Which is it? Principled or results-oriented?

“None of these media are constituted of atoms and molecules. But they are real, definable things that didn’t exist before I made them and do exist after I made them.”

Just becasue you can “define” something doesn’t mean you own it. Just b/c you feel it’s “real”, whatever this means, doens’t prove you “own” it.

“I have explained how this comes to be: to rearrange matter into newly designed patterns which are then displayed by and stored in material form.”

I agree that in rearranging things we form new patterns–whcih of course always borrow to some degree on older patterns others originated. So what? That doesn’t prove you own the pattern. You seem to think this is obvious, not needing any further argument. It’s not obvious. It verges on incoherent.

“I make real things. They are works of Art.”

You know, just because patterns are not ownable doesn’t mean your work and creativity is not respected–and even if it meant this, your being insulted does not prove information patterns are property.

” People want them and by the principles of Austrian economics these things are valued as items of commerce.”

Sure. I might want someone to perform a service for me that I value. I might be willing to buy a book that is valuable to me because it’s arranged just so, according to a given logos. But we do not have property rights in values. Only in the physical integrity of scarce resoures. This is one reason there are no reputation rights, as Rothbard showed. Austrians Hoppe and Block explain this. http://www.walterblock.com/wp-content/uploads/publications/property_exploitation.pdf

” I brand them and claim them before I release them to be licensed for reproduction. It is by licensing the reproduction that I gain my compensation. It is my property rights in my natural original creation that entitles me to do so.”

No. It is your property rights in your body and other pysical things. Just as it is my property rights in my printing press that gives me freedom of press. Just as it is my property rights in my body that lets me withold my singing services unless someone pays me for singing. It borders on crankish to say I own my singing; and in any event it’s not necessary for me to “own” my singing for me to “sell” it: it’s only necesary for me to own my body and to refuse to use it to sing!

“And I willl then have only the hope that some future generation of libertarians is smarter than the one that will have handed Marx that victory.”

The Internet age is helping to kill IP. The genie is out of the bottle, dude. It’s only gonna get worse from here, though the spasms of the dying IP statist whale will be painful to watch, and experience, for some time.

Michael Vogt August 15, 2010 at 7:29 pm

I saw Terence Kealey on Youtube in a Q & A session about the myth of science as a public good, and was disappointed that this was the only video I could find with him speaking. Glad to read that there will be more.

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