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Source link: http://archive.mises.org/13302/without-rejecting-ip-progress-is-impossible/

Without Rejecting IP, Progress is Impossible

July 16, 2010 by

As Kinsella points out, a major feature of Jacob Huebert’s book Libertarianism Today is that he deals with the reality that issues of “intellectual property” constitute a major area of state expansion today and also present a serious challenge to libertarians. I can recall my own excitement when I heard that IP issues would be given an entire chapter in this book, literally being written into the libertarian apparatus as an essential part of what libertarianism implies.

The IP issue only emerged at the top of the list of theoretical priorities within the last few years, but the results have been spectacular, not only in helping libertarians make sense of the existing IP wars (in the news every day) but also in helping to clarify fundamental issues that everyone thought were largely settled (e.g. property rights).

So libertarians are really the only thinkers who can make sense of how issues of copyright, patent, and trademark have provided the state a major excuse to attack real property rights. Thanks to the work of Kinsella, we’ve come to realize how important the difference between scarce and non-scarce goods really is in making sense of the world around us. And this knowledge has assisted in clarifying even matters concerning the structure of society, the path of social development through the “free good” of information, and the absolute centrality of learning (in the Hayekian sense).

As just one example, I used to present the market framework as consisting of two broad forces: cooperation (division of labor and trade) and competition (rivalry between producers). I now see that a third force is just as important as these two, namely, the emulation of successful behaviors and the avoidance of unsuccessful ones. Without this emulative force through the free good of information, social development is truncated and stilted. Too much IP can actually destroy civilization and we are reduced to the status of animals, unable to improve over time. With emulation and the freedom to learn and apply that learning, we can have progress. The bogus idea of “intellectual property” is really nothing more than a mercantilist idea (a legal privilege that a single producer possess) that creates a stoppage in the learning/emulative process and thereby diverts the path of social development.

Mises, Hayek, and Rothbard variously spoke of these issues (some good observations and some missteps), but full clarity has arrived only in the last few years. The implications go far beyond just discerning the “libertarian political position” on matters of copyright or patent. This realization has changed the way we understand how markets themselves work. The implications are so profound as to amount to a gigantic leap in theory that will continue to be teased out for many years, as scholars read back into the history of thought and apply these insights into their work today.

There will be dramatic revisions taking place in the future in a large range of issues. I can think of one area now: the long-running claim in libertarian circles that there exists something like an “intellectual structure of production” as an analogy to the one that exists in the physical world of scarce resources. Well, why does a structure of production exist in the first place? Because of scarcity: there has to be a system for rationing and allocating time and resources via prices and interest rates. But what if there is no scarcity, no contest for resources, no rivalry, and goods (ideas) can be copied and copied infinitely without taking anything away from anyone? Clearly under these conditions, there is no traditional “structure of production” at all.

Ideas are an example of such a non-scarce good that needs no restricting, no rationing, no allocating, no pricing, no economizing. To impose something like a structure of production on them is to profoundly misunderstand their nature and the possibilities. The spreading of ideas is not in any way analogous to the way a computer is built or a factory turns out cars. It is more like a gigantic dust storm in which each particle can be multiplied without end and blow in any and all directions at all once. This is why the flow of ideas cannot be modeled much less controlled. All we can do is release the ideas and push them forward through any and every means, and then watch what happens.

This is only one of the realizations that comes about through a proper understanding of “intellectual property.” This is why I think Huebert is absolutely correct in adding an entire chapter on this topic. Until this issue is fully understood, and embraced, I seriously doubt that anyone can make much progress as a libertarian intellectual who seeks to understand the world as it is. In this way, this book is of historic significance.

{ 210 comments }

PK July 16, 2010 at 9:33 am

“Oh, New Zealand, you country full of crazy cats. When will your zany ways end? Looks like the government of the country which produced Peter Jackson, famed director of The Lord of the Rings Trilogy will finalize a move to make software unpatentable via a Bill which would make that the law of the land (software patents do not exist in Europe, either). The basic argument here is that patent trolls — and to some extent, patents in general — stifle innovation and make it nearly impossible for software developers in the NZ to get their groove on. New Zealand’s two largest software manufacturers, Jade and Orion, both support the banishment of such patents, so it’ll be interesting to see just how awesomely creative future software developments from the country become. Either way, we doubt Jaron Lanier will ever be moving there.”

http://www.engadget.com/2010/07/15/software-to-be-unpatentable-in-new-zealand-peter-jackson-said-t/

Gil July 16, 2010 at 9:49 am

Bwahahaahaha! Yeah right! I’m sure inventors would love to invent inventions just have others rip them off and churning out their inventions and the inventors gets nothing.

Jeffrey Tucker July 16, 2010 at 9:53 am

Gil, you know, I’ve been thinking. You get nothing for posting here. It only lets people steal your ideas. It really makes no sense! Perhaps you should just stop?

Gil July 16, 2010 at 10:17 am

Basic ideas, words and creations aren’t ‘ownable’, creative works are. C’mon. Libertarians after all argue that unowned resources should be homesteaded before they are owned thereby trying avoid someone being a “resources hog” and squeezing out others because they they can fence off an extremely large piece and have firepower to repel others.

Curt Howland July 16, 2010 at 10:24 am

“Basic ideas, words and creations aren’t ‘ownable’, creative works are.”

Define “creative”? Define “basic”?

Is it possible that they’re all “basic ideas, words and creations”?

Has there been a novel ever written that didn’t owe something to The Odyssey? But didn’t Homer simply restate the stories he’d heard?

I’m not saying artists do not deserve to be remunerated for their effort, in fact I think they deserve whatever it is they can get, tax free. But that’s just me.

newson July 16, 2010 at 11:09 pm

a commission could be instituted to determine “scientifically” at what cut-off point the transition from unownable words to ownable literary works occurs. gil for the job!

Silas Barta July 16, 2010 at 11:17 am

Hey, if you don’t mind the most creative intellectual works being blog comments …

Matthew Swaringen July 16, 2010 at 1:28 pm

If they’re your blog comments I’m scared.
.
Thankfully, I’ve got a better imagination on how the system would/could work without IP and plenty of real world current examples (open source software) to show people really can and will do great things without having to “own” something that is non-scarce.

Removing IP will only increase the ways people come up with to properly establish themselves.

Silas Barta July 16, 2010 at 7:35 pm

Sure, just like abolishing physical property rights will really open up the possibilities for non-market production methods, and people will do great things without having to “own” something they didn’t even produce.

Matthew Swaringen July 16, 2010 at 8:30 pm

Abolishing physical property even partially through production of common public areas extends problems like littering, environmental damage, etc because there is no one clearly responsible for the common areas. The government is a poor steward.

Abolishing “intellectual property” partially results in no such ridiculousness. It’s a form of property that has only ever existed with a state, and came into being in many cases for the sole purpose of limiting the spread of ideas to those the state deemed to be ok. Those who choose not to accept that they own their own intellectual property are still able to be creative, provide things that help others, etc. And when other people use what they have made, there is no loss to the owner. In fact, the owner benefits in so many cases.

A clear example of this is in the realm of ideas. LvMI distributes it’s work through this site in order to convince others. The more that are aware of this site the more successful they are, both ideologically and even financially as more books are purchased, etc.

“People will do great things without having to ‘own’ something they didn’t even produce.” People may indeed still do great things without owning the property, but the former owner of that physical property can do nothing with it now. Are you even trying to produce a convincing argument?

Hobbes July 16, 2010 at 11:37 pm

S.B.: Is too much to ask that you buy a gun, a dog, and a fence, and look after your own stuff? Who knows, maybe your neighbors will look after your property whilst you’re not home, and vice versa? Nah, that’s utopia! And think of the poor police families that will starve.

Peter Surda July 17, 2010 at 4:38 am

… without having to “own” something they didn’t even produce.

You fall prey to the metaphor, just like many other IP proponents. What does it mean “something they didn’t even produce”? Does it mean a causal relationship between the original and a copy? Then why aren’t all externalities illegal? Does it mean a copy can be used instead of the original? Then why aren’t all substitutes illegal?

Turns out this error is nothing new, it’s just rehashed marxianism. Marxians believe that people have a claim on the results of their labour beyond the scope of contracts they voluntarily enter, just like IP proponents believe authors have a claim on actions of people who have not signed a contract with them. They both miss that causality extends to infinity.

michael July 17, 2010 at 6:44 am

Matthew, a couple of thoughts:

1. “Abolishing physical property even partially through production of common public areas extends problems like littering, environmental damage, etc because there is no one clearly responsible for the common areas.”

How do you “produce” a public area? Once you set aside all privately owned property, what’s public is everything that’s left. It’s the commons. And it should be taken care of, for some very good reasons. Unless you feel that whatever is not owned has no value.

2. “The government is a poor steward.”

Obviously, the only alternative to public management is private management. And that can’t happen because it’s not private property. So our alternatives would then either be to have NO management or to get better at operating a government. And if we had NO management, mining outfits would dig everything up to see whether there might be free gold beneath it. And just leave their dirt piles lying around.

3. “Abolishing “intellectual property” partially results in no such ridiculousness. It’s a form of property that has only ever existed with a state, and came into being in many cases for the sole purpose of limiting the spread of ideas to those the state deemed to be ok.”

This, to me, sounds deeply weird. I’ve been wondering where this whole debate is going, and who’s behind it… because there is serious cognitive dissonance afoot. Here you guys are, all hyper about the idea of property, and being able to own things, yet you’re being conditioned to not want IP.

This removes a central motive for creating anything. If you go to the trouble of writing a book, it may take a year out of your life. And unless you were born rich and idle, you need to pay the bills for that year you’re writing. So you have to be able to sell that book. It does no good to have it published, and the day after it comes out it shows up on Kindle or something, with no payment to you. You’ve just been ripped off.

The same applies with movies. Just let a studio spend sixty million on making some blockbuster. And the day after it comes out, factories in Colombia or Taiwan are cranking out millions of copies. The studio doesn’t get paid.

It seems to me that if you and your fellows want to have a consistent philosophy you’d feel the same way about this sort of infringement you would if some entrepreneur were growing his marijuana on your personally owned back acres. At a minimum, you’d want to be cut in for a share in the profits. Right?

Explain all this to me. As I’ve said, I’m new here and haven’t swallowed the koolaid.

Silas Barta July 17, 2010 at 10:11 am

Matthew, I notice you didn’t answer my comment, you just repeated the standard anti-IP cliches. Again: if IP is bad *because* its abolishition will open up awesome new business models and show that people can do great things without rights in intellectual works, can’t you say the same thing, and make the same inferences, about physical property rights?

Peter Surda, those who claim physical property rights *also* want to assert rights over people who never signed a contract with them.

Hobbes: What is that replying to?

michael: Don’t waste your time, you won’t learn anything new here, just repetition of long-refuted anti-IP chesnuts.

Stephan Kinsella July 17, 2010 at 10:36 am

Surda:

“You fall prey to the metaphor, just like many other IP proponents. What does it mean “something they didn’t even produce”? Does it mean a causal relationship between the original and a copy? Then why aren’t all externalities illegal? Does it mean a copy can be used instead of the original? Then why aren’t all substitutes illegal?

Turns out this error is nothing new, it’s just rehashed marxianism. Marxians believe that people have a claim on the results of their labour beyond the scope of contracts they voluntarily enter, just like IP proponents believe authors have a claim on actions of people who have not signed a contract with them. They both miss that causality extends to infinity.

Another great point. This is exactly why I’ve noted many times Hoppe’s insight that property rights are to the physical integrity of one’s property not to its value; and that the assumption that there are property rights in value is always behind the IP idea, and is tied up with the “creationist” view of IP – see e.g. http://blog.mises.org/7614/objectivist-law-prof-mossoff-on-copyright-or-the-misuse-of-labor-value-and-creation-metaphors/ and the section “Libertarian Creationism” here http://mises.org/daily/3863. (see the post linked above, plus http://blog.mises.org/archives/006000.asp and http://blog.mises.org/archives/005098.asp).

Stephan Kinsella July 17, 2010 at 10:39 am

Silas, you jabber on about property rights in your gadfly way, you bring up Austrian points like the calculation problem like a hamfisted amateur to support your gadfly points — what is your theory as to basically why all of the senior Mises Institute faculty have the same view on IP? Why do none of them see the calculation problem you obsess over like a monomaniac? They are not unfamiliar with the calculation problem. Why do they all see how IP is nothing but an artificial right that undermines real property rights?

Silas Barta July 17, 2010 at 1:39 pm

Stephan_Kinsella: You ever heard of groupthink? Cognitive bias? Refusal to seriously engage the weak points in one’s beliefs because of the large investment in having argued for them?Incidentally, how does Hoppe answer the specific IP calculation argument I gave? Bob Murphy? Roderick Long? You?Have any of them *ever* tried to answer it, without just defining away the existence of a problem? I’m serious. Is Long even aware of the argument? How about Hoppe? Did you discuss it over with him?Or is this just not that important to you?In case you forgot its content, it’s point number 3 in this comment. Give it your best shot.

Peter Surda July 18, 2010 at 1:07 pm

Dear Silas,you have not answered a question. None of the IP proponents have.

Peter Surda, those who claim physical property rights *also* want to assert rights over people who never signed a contract with them.

In order for this argument to have merit, immaterial property would need to have boundaries. Which immaterial goods do not have, as I demonstrated, their boundaries stretch to infinity. Unless of course, you can answer my question an thereby prove me wrong.

If we ignore my proposal and accept another measure, such as the anger of the alleged owner of the property, as the demarcation line, we might just abolish all rights altogether, as people can get angry about anything.

just repetition of long-refuted anti-IP chesnuts.

On the contrary, what is repeated here is the long-refuted pro-IP errors. Noone tries to answer me, however. Not that I’m extraordinary genius, I just have the endurance to repeat my questions until I wear down the opponents.

Peter Surda July 18, 2010 at 1:20 pm

Stephan,

the article you linked is a really good one, I wish I had read it earlier, I might have been able to make conclusions faster. Indeed, the use of metaphors is a dangerous path.

Daniel Coleman July 18, 2010 at 5:00 pm

Silas,It’s good to hear that you are welcoming critiques of your own argument regarding IP.

I’ll start with point one from your link, which suffers from a flaw I have previously pointed out to you. In it, you write, “1) Non-scarcity of ideas cannot help establish the invalidity of IP. … The problem with this line of reasoning, is that creators … do not claim to own “the information”, except in a metaphorical sense. They are making specific claims about others’ moral right to instantiate it, which is different. While we may have reasons to find this claim unjustifiable, it cannot be on grounds of non-scarcity.”

This argument misfires because it ignores the libertarian position that arbitrary claims to physical property are illegitimate and rejected. Property rights are assigned using the homesteading principle with a prior/latecomer distinction. When a man uses IP in the way you describe to assert ownership of physical goods, his claim is rejected as arbitrary — since it clearly is not made on the basis of homesteading.

Kinsella refers to these more basic ideas about property rights in the beginning of his work and clearly relies on them throughout the rest of the article. His position on IP is thus not exclusive from the libertarian theory of property; in fact, it works by building on it. It is futile, therefore, to critique Kinsella on the presumption that his argument doesn’t make use of logically prior positions.

The ‘Silas objection,’ were it actually one promoted by IP advocates, would need to be met with a different argument than one stemming from a distinction about scarcity. So why does Kinsella mention scarcity at all? In reality, the vast majority of justifications concerning IP in fact are claims to own ideas. IP advocates by and large are not followers of Silas on the issue. Kinsella’s primary argument in Against Intellectual Property meets these — and not your — fundamental justifications concerning IP.

So you can pick your poison: stick with justifications that invoke idea-ownership, and get dismantled by the present arguments; or, you can continue to try your own distinction about instantiation (and so on), and be rejected on a far more basic libertarian basis.

Silas Barta July 19, 2010 at 10:15 am

@Daniel_Coleman: As I’ve said in refutation of that exact point numerous times, it is not responsive. Yes, you can come up with reasons why the (standard) libertarian homesteading principle justifies a particular assignment of property rights. Yes, you can base it on how the firstcomer has a superior claim to that use of a physical object.

But that would be a different argument than the one I’m criticizing! It would be, like most everyone on this topic, changing the argument. For, whatever argument you can make to the IP proponent, you would not be refuting the point that he most certainly is asserting (partial) ownership over scarce resources.

So you think that the firstcomer’s connection to the resource automatically invalidates any later claim whatsoever (except EM wave passage, but whatever). Lovely! But it’s *still not a freaking substantation* of the “IP isn’t scarce” argument!

The fact that you can refute his claim does not change the fact that the claim is on (undeniably) scarce resources.

And like I’ve said a trillion times, including in the comment you cite, it’s a complete category error to think otherwise. The very fact that we are debating this topic in the first place shows there is conflict and thus scarcity. How someone got the idea that you could ever *resolve* a conflict by saying there *is* not conflict … has always escaped me.

Peter Surda July 19, 2010 at 10:29 am

Dear Silas,

since you seem to be so concentrated on the homesteading and firstcomer principle, let me ask you this way. If it was possible to homestead something which cannot be changed, what would be the scope of such homesteading? If it was possible to trespass something which cannot be changed, how would you distinguish trespass from non-trespass?

The issue here is of course the same: metaphors versus scientific rigor, imagination versus empirical facts.

Daniel Coleman July 19, 2010 at 11:30 am

Silas, no one is disputing the fact that copyright holders (et al.) are making claims on scarce property. (If they weren’t, Kinsella would never have had to write his treatise!)

That they are making claims on scarce property simply raises the question: why is your claim justified, especially if I am also making a claim on this property? Kinsella’s work deals with the justification for making claims on scarce property, not whether those claims are on scarce property or not.

Kinsella points out that the justification for IP-backed claims on scarce property is most often that they believe themselves to have created the idea, which allows them to claim at least some ownership over all of that idea’s instantiations. He did not make up idea-ownership; he is responding to it.

Therefore, it’s a silly critique of his work to say “but IP-backed claims on scarce property are claims on scarce property!” Yes, we are all agreed on this point; they are. The question is whether they are justified claims. Perhaps they are arbitrary (as your version of IP would have it) and can be rejected as such. But what cannot be disputed is that the justification for the vast majority of IP-backed claims on scarce property invokes some kind of ownership / creatorship of an idea.

Silas Barta July 19, 2010 at 11:59 am

@Peter_Surda: I’m sorry, your arguments all look confused an non-responsive. But I don’t want to look like I’m just copping out. If someone else wants to phrase them better (not just jump in with their own arguments, but actually show Peter_Surda’s to be relevant), and in a way that addresses the substance of my points, I will reply to that. But as it stands, I don’t think I’m alone in finding this pointless to try to reply to.

As for your comment on my blog from August: I don’t see how it’s responsive, or any different from the arguments about EM rights that I’ve addressed numerous times. For example, it completely ignores the (very, very basic and oft-repeated point) I’ve made: the very act of characterizing, as “exclusive use” or “consumption”, the use of EM spectrum to transmit *information* (rather than merely oscillations in the ether) assumes the validity of a particular preference set on the instantiation of a pattern, identical to the one (which is assumed *invalid*) used to justify IP. No difference established.

I’ll accept third-party opinion on that, too.

Silas Barta July 19, 2010 at 12:15 pm

@Daniel_Coleman: Hey, take it up with Stephan_Kinsella. He’s the one that thinks the non-scarcity of ideas (which he confusingly calls “IP”, which actually refers to the claimed *rights* in ideas) is relevant and crucial to the case against IP! If he actually appreciated the insight you just gave, we would see little mention of that fact in any of his IP writings; he stick to saying that homesteading a physical resource necessarily gives you full rights to how it is used (except for EM wave transmittance, for some reason), which is much harder to defend.

(Sorry, put this in the wrong place, but it’s too hard to move and duplicates aren’t allowed. Hope you see it and know what it refers to.)

Daniel Coleman July 19, 2010 at 12:40 pm

Silas, you write, “Hey, take it up with Stephan_Kinsella. He’s the one that thinks the non-scarcity of ideas (which he confusingly calls “IP”, which actually refers to the claimed *rights* in ideas) is relevant and crucial to the case against IP!”

It is relevant, as I have just shown in the previous comment.

Peter Surda July 19, 2010 at 12:42 pm

he stick to saying that homesteading a physical resource necessarily gives you full rights to how it is used (except for EM wave transmittance, for some reason), which is much harder to defend.

How do you kill that which has no life? I mean, how to do homestead or trespass that which cannot be changed?

Silas Barta July 19, 2010 at 12:59 pm

@Daniel_Coleman: No, you didn’t. The specific terms that IP proponents are irrelevant. All that matters is the substance of their arguments. And we know what the substance is, and your point (and Kinsella’s for that matter) is non-reponsive. Who cares what metaphors they use? They’re making a claim on scarce resources. Period.

@Peter_Surda: IP and EM rights restrict the usage of scarce resources, not their platonic existence. What’s “not changing”?

Peter Surda July 19, 2010 at 1:17 pm

Emitting EM waves changes the oscillation of your receiver. While it would be a long stretch to claim that this makes EM spectra property (maybe it even doesn’t), but at least it makes the concept of trespass via EM emissions an empirical phenomenon. On certain frequencies and with certain intensity, EM waves might cause burns and even worse property damage. The owner of the receiver or the damaged goods might therefore base on it his claim of a property rights violation. This is somewhat akin to an IP-less trademark, where even though the original author may not claim property of the trademark, a defrauded consumer has a recourse to the one who sold him something he didn’t want.

So, merely from observing one’s physical property, on his premises, one can establish unwanted changes EM emissions made.

Now that we got ride of the pesky EM spectrum, let’s go back to IP. With IP, this feat is impossible. The process is to a certain extent exactly reverse. You are not looking for a change occurring to your physical property, rather for a “sameness” of other people’s physical property. Two substantial conceptual differences: change vs. sameness, your physical property vs. other people’s physical property.

Daniel Coleman July 19, 2010 at 1:41 pm

Silas, the justification for making those claims to scarce property relies on idea-ownership. It is no mere metaphor; it is the linchpin of their justification.

This is all Kinsella is criticizing, and also why your critique misfires.

Peter Surda July 18, 2010 at 1:34 pm

… how does Hoppe answer the specific IP calculation argument I gave?

Although I don’t think I am as knowledgeable on the topic as Hoppe, I presented you a detailed refutation long time ago, I think it had five points, and you gracefully ignored it. Hopefully you are not committing the reverse appeal to authority fallacy and dismissing my rebuttal only because I haven’t published books on the topic?

Silas Barta July 18, 2010 at 2:05 pm

Please point me to the five-pointed refutation and where my deficiencies in responding to it were — I would love to hear the flaws in my argument. They have to be actual, GENUINE flaws, though, not “change the topic and argue a different deficiency of IP” flaws. (remember, “IP is unjust” is not a refutation of my calculation argument, even if it’s true)

You use that technique in your most recent reply:

Peter Surda, those who claim physical property rights *also* want to assert rights over people who never signed a contract with them.

In order for this argument to have merit, immaterial property would need to have boundaries.

Um, what do those have to do with each other? Let’s review:You: IP is unjust because it uses enforcement against those who didn’t sign a contract. Me: So do physical property rights. You: Oh! But physical property rights have *boundaries*!So what? How does that address the original point? How does that refute the fact that physical property also imposes on those who never signed a contract?

Beefcake the Mighty July 18, 2010 at 2:11 pm

I have also replied on this blog to his “shortest, safest” (whatever) argument in defense of IP (I honestly can’t remember when exactly, I think late last year in December). That too was ignored.

Silas Barta July 18, 2010 at 4:48 pm

Beefcake, if you’re the “paul” character, you didn’t say anything that others hadn’t already made an I already addressed.

Basically, you accept that there should be no property rights in the EM spectrum, and that is an implication of your beliefs. Do I really need to respond to that? Isn’t that more of a clue that you made a mistake somewhere?

Of course, some libertarians find a way to slip EM rights through a back door, without realizing IP fits through that door too.

Peter Surda July 19, 2010 at 7:34 am

Dear Silas,

Please point me to the five-pointed refutation.

I found it here:
http://blog.mises.org/11288/have-you-changed-your-mind-about-intellectual-property/#comment-642028
It was addressed at someone else, but applies to you just as well. Let me quote:

1. You have been shown that calculation is empirically possible.
2. Even if you don’t see that as sufficient, you need to show that bundling is an insufficient remedy. If you do this, however, a lot of material goods that cannot be unbundled (for practical or principal reasons) or assigned to outputs on a 1 on 1 basis will also be drawn into the problem, and therefore you would invalidate large parts of existing cost accounting and business processes.
3. Even if you manage that, you need to prove that the calculation argument is causally related to the ability to exclude, and not causally related to the ability to use and to trade.
4. Once you overcome this hurdle, since current laws do not implement ownership of immaterial goods (only restrict their expressions), you would need to propose an alternative implementation that fixes this.
5. Even if you overcome all those hurdles, you still face the problem that trading immaterial goods without the transfer happening on the material level is theoretically impossible, i.e. pure immaterial goods cannot be traded anyway.

Now, since I was able to progress my theory further, I can add a sixth point. You can make up a metaphor about any part of the causality scale, and claim that if you cannot have full control over it, it cannot have a price and therefore it wouldn’t be produced. Which is of course, again, demonstrably false.

Um, what do those have to do with each other?

Apparently, you have not been following my arguments and missed that they have been developed further. While you have been repeating your mantras, progress happened and new insights were discovered. If I put a restriction into a contract, that does not imply any ownership at all. If another person agrees with me to stand still for an hour, that does not imply the I own “movement” or “one hour”. These are imaginary concepts whose boundaries are defined by the contracts, therefore they cannot be applied to parties outside of contract. I cannot use this contract to claim that other persons are also required to stand still for one our.

This is essentially what IP proponents do. They make up a metaphor, e.g. “product of one’s labour” and claim that the restrictions they place within contracts are applicable to third parties too.

Why physical goods are different is that they have an existence outside of human imagination and can be modified (i.e. change of integrity or location). We call undesired changes trespass. The change is what determines boundaries. No such change exists with metaphors. Last couple of times, already before the latest development, I hammered to your head that “use” of immaterial goods is not an empirical phenomenon, rather something that happens in people’s imagination, but, of course, you were completely oblivious to that, not bothering with a reply. There is, for example, an open challenge from last August on your own blog: http://silasx.blogspot.com/2009/08/what-interference-with-radio-signals.html

To summarise, again, you fall prey to metaphors and mix them within an economic theory. I call this specific instance “The Theory of Claims on Causality”. My core arguments are only two (IP requires to create an artificial dichotomy between property and externalities on one hand and property and substitutes on the other). I believe if you confront them, instead of addressing something further down the line, that would be beneficial. Alternatively, you can make your own attempt on de-metaphorising “product of one’s labour” in a different way.

Silas Barta July 19, 2010 at 10:37 am

@Peter_Surda: First of all, since your five points weren’t addressed to me and I quite clearly was not participating in the thread at that time, can you *at the very least* understand why I hadn’t specifically addressed that comment, and why my not addressing it isn’t a case of ignoring you just because you haven’t published a book on the topic? I didn’t even know about it until now!

Could you at least, as a token of good faith, admit that there’s a good reason why I hadn’t addressed that specific comment before?

Even so, I believe I’ve argued against the points several times, but I’ll do so explicitly now anyway:

1) Wha? Have proponents of physical property rights not shown how calculation is empirically possible either?

2) I did show how bundling is an insufficient remedy: In particular, the fact that there are different goods, and demand for one does not at all imply demand for the other. From the fact that I would pay for a particular physical instantiation of the idea, it does not follow that I want that physical object — I could just want the idea. Therefore, demand — and thus price — is not reflecting the relative merit of that idea itself (and therefore the relative amount of resources that should have been devoted to its creation), and so an IP-free system would not provide a truthful signal for how to allocate resources — exactly what the calculation problem is!

(Note: this is already clearly explained in the very comment I cited that made the calculation argument, which makes me question if you are even trying to be responsive.)

3) Yes, I have shown the relationship, since trade is predicated on the ability to exclude. In fact, the act of trading *means* the (reciprocal) waiver of exclusion rights!

4-5) I don’t see the relevance. IP proponents are making a claim about how *physical* goods can be used. Whatever metaphors and whatnot they might be using, IP rights do implement this restriction, and they do it in a concrete way that allows trading of rights. The fact that you can phrase it as a metaphor and think of abstractions in this case is irrelevant.

As for the rest of your point, you’re trying to substantiate your claim that “physical property has boundaries” refutes the argument that “physical property binds people who didn’t agree to the claim of ownership of the physical property.” Your point still doesn’t work because I could accept it and it still wouldn’t change the fact that you are restricting someone from using physical property *even though they signed no contract*, and therefore there it is exactly like IP *in this respect*.

You could continue to find differences until eternity, but *this wouldn’t be one of them*.

Also, you’re not making an apples-to-apples comparison. Yes, restrictions on use of ideas are boundaries that exist only in our minds, but so are the restrictions on physical goods. Nature herself doesn’t say, after all, “oh, you guys can’t use this, only the firstcomer can.”

Seriously, we’ve been over these exact points numerous times, and you have yet to present anything new. Can you please wait until you have a genuinely applicable refutation before saying anything further? If you actually did notice that you don’t have a way to refute my IP arguments, would you even admit it, or just keep on arguing anyway?

Peter Surda July 19, 2010 at 11:40 am

Dear Silas,

First of all, since your five points weren’t addressed to me…

I posted the quintett of the refutations at least twice, not only the one that I linked. I couldn’t find the others, but I thought at least one of them was addressed to you. If that is not the case, I apologise.

… why my not addressing it isn’t a case of ignoring you …

The other link I posted shows an example of you not answering. Since it’s on your own blog, I assumed you read it.

1. Wha? Have proponents of physical property rights not shown how calculation is empirically possible either?

You misunderstand the argument, maybe because I didn’t quote the preceding thread. What I meant is that it is empirically demonstrable that price exists even in the absence of the exclusivity feature. Economic calculation argument requires the absence of price.

2. In particular, the fact that there are different goods, and demand for one does not at all imply demand for the other.

This distinction is purely situational, it is not a consequence of the the absence of exclusivity. You would face the same problem in all cases where one part of any good, even if covered by property rights, couldn’t be sold separately for a price that covers the costs. This would mean that a market price cannot arise, therefore, the good wouldn’t be produced. Which is of course, false.

2 (cont) … particular physical instantiation of the idea …

Metaphor. Science please.

2 (cont) … it does not follow that I want that physical object — I could just want the idea …

So, you arbitrarily pick a part of causality, use a metaphor to label it, and claim if you can’t have a property right in it, that part of causality would suffer from the economic calculation problem, because it does not follow that if you want that part, that you also want the preceding and successive parts of the causality. Pardon me, that’s just crap.

3. Yes, I have shown the relationship, since trade is predicated on the ability to exclude. In fact, the act of trading *means* the (reciprocal) waiver of exclusion rights!

Not only you have not shown that, it is also not true both on the theoretical level as well because of examples from reality. What the hell are you talking about? The ability to trade does not require the ability to control the whole causal change of events that result from your actions. That’s just another nonsense. It only requires the ability to make the other party better off than it was before the trade.

4-5 I don’t see the relevance.

Strictly speaking, this is not a refutation of the economic calculation argument, it just shows that even if it was true, introducing IP would not solve it. Thereby making the argument moot.

Whatever metaphors and whatnot they might be using, IP rights do implement this restriction, and they do it in a concrete way that allows trading of rights.

They do not allow the trading of rights, they allow the ability to regulate competition beyond the scope it would be possible without them.

As for the rest of your point, you’re trying to substantiate your claim that “physical property has boundaries” refutes the argument that “physical property binds people who didn’t agree to the claim of ownership of the physical property.

[sigh]. Not again Silas. Again you divert from the problem. Of course it does not refute the argument. However, it demonstrates that the difference between IP and actual property is the one between metaphors and empiricism, between imagination and measurement, between mysticism and science. If you don’t consider that relevant, fine, but they don’t pretend your arguments are based on logic.

Yes, restrictions on use of ideas are boundaries that exist only in our minds, but so are the restrictions on physical goods.

Boundaries of property, at least the physical one, are based on the ability to change your surroundings. Boundaries of IP are based on imagination only, on the false dichotomy between property and externalities, and between property and substitutes. Indeed, the only way IP can be consistent is if you stretch the property boundaries to infinity and redefine all externalities and substitutes as property rights violations. That approach I would accept. But of course, IP proponents don’t want it that way. They are going to insists that there is some way to make the distinction, although they have no clue how to make it.

Can you please wait until you have a genuinely applicable refutation before saying anything further?

I believe I just did. And can you maybe define property in a non metaphoric way, and address the false dichotomy you apply to causality and similarity?

Peter Surda July 19, 2010 at 12:35 pm

I’m sorry, your arguments all look confused an non-responsive.

In other words, addressing my points would make you suffer from cognitive dissonance, since it requires you to question your beliefs. So, you make it look like it’s my fault. Well, a third party reading this posts might be inclined to agree with you, but let me point out one simple fact: while I did attempt to provide a rigorous definition of property, IP proponents, including you, haven’t. That seems kind of important for a debate about property.

… assumes the validity of a particular preference set on the instantiation of a pattern, identical to the one (which is assumed *invalid*) used to justify IP. No difference established.

You are rushing the argument and skipping over the gaps. Before we can discuss whether a “preference set on the instantiation of a pattern” is valid or not, we need to determine what that metaphor means, how to determine the scope of a hypothetical homesteading and how to determine whether a trespass occurred. IP theorists, including you, fail miserably on the basics. They are like “have you stopped beating your wife?” while ignoring that the poor soul in question might have not beaten his wife at all, be married, or even a guy.

Shay July 16, 2010 at 7:21 pm

Jeffrey, you’re assuming anything he posts would be worth “stealing”. Every one of his posts is filled with cheap shots and appeal to emotion.

Brian Macker July 18, 2010 at 10:46 am

Jeff,

Then maybe you should stop giving to charity. Using your argument it lets people steal your money, and undermines private property.

Daniel Coleman July 16, 2010 at 10:10 am

The average-Joe inventor, author, and musician tend to do better, financially, without IP laws than with. Protective measures give rise to and sustain the large corporations that feed off of the author / inventor / musician’s success.

Have you ever seen a breakdown of how much money the typical band member makes per album sold? They can gross $11 million in sales with over $6 million in profit and pocket nothing.

Just a month (or so) ago a study was posted on the Mises blog comparing the publishing industries in England and on the continent at the advent of extensive copyright protections. Care to guess in which society the average author was better off, and which society boasted soaring numbers of publications and a flourishing market in the good?

So do me a favor: the next time you decide to comment sarcastically on an IP blogpost, make sure you get your names straight. Claiming that the inventors themselves will be hurt in the absence of IP laws is like claiming low-wage workers would be hurt in the absence of minimum-wage laws. The very people you think your preferred policy helps are the ones most hurt. So instead, I suggest making it clear that you are pro-executives, big corporations that take ownership of and sit on their employees’ ideas without doing anything with them, pro-protectionism, anti-innovation, anti–average-Joe writer, inventor, musician, and so on.

hobbes July 17, 2010 at 4:36 am

any link to that blog-post? thanks.

Daniel Coleman July 17, 2010 at 1:23 pm

I was mistaken: it didn’t appear on the LvMI blog, but on the Against Intellectual Monopoly blog. Here is the link: http://www.againstmonopoly.org/index.php?perm=593056000000003034

Sasha Radeta July 17, 2010 at 7:22 am

Daniel said: “Claiming that the inventors themselves will be hurt in the absence of IP laws is like claiming low-wage workers would be hurt in the absence of minimum-wage laws.” Your analogy is incorrect. Claiming that the inventors themselves will be hurt in the absence of IP laws is like claiming low-wage workers would be hurt in the absence of private property right laws. Yes, the rich and corporations have higher stakes in protecting these rights than poor people do… Many (BUT NOT ALL) of these investors got rich by using state privileges not granted to common people that have to negotiate with them for wages…. And yes, we hate that the state monopolized legislation and enforcement of these rights… but this does not mean that low-income workers would be better of from collectivization and communal ownership of property. At least not in the longer-run.

Daniel Coleman July 17, 2010 at 1:03 pm

Mr. Redata, you write, “Your analogy is incorrect. … And yes, we hate that the state monopolized legislation and enforcement of these rights… but this does not mean that low-income workers would be better of from collectivization and communal ownership of property. At least not in the longer-run.”

I agree that low-income workers wouldn’t be better off from collectivized property rights. I oppose all forced “communal ownership of property” arrangements. So it appears, at least on the surface, that we agree. However, you were pretty clearly writing this as though it were a rebuttal to something I had written. So unfortunately, whatever your disagreement was, it got lost in the transmission.

Sasha Radeta July 18, 2010 at 6:30 am

Daniel,

You’re missing the analogy then. Exclusive ownership rights of any kind (including copyright, which protects owner’s exclusive commercial rights) create a system which non-aggressively deals with existing scarcity, while providing material incentives to producers to reduce this scarcity. The fact that rich people profit the most from such protective system (because they have more to loose in absence of it) cannot be used as an argument against this system. Poor people would NOT benefit in the long-run if we were to issue a decree that all works of authorship now belong to them (so that they could replicate or commercially use them any way they want). This kind of expropriation always led to economic disasters, because it destroys economic incentives for producing such goods in future – remember, most of works of authorship are mass-produced in order to sell only their limited use (copyright protected). All these prolific authors who are not waiting in lines to waive their copyright protection (like dr. Kinsella and few others), would suddenly loose all economic incentives for mass production. This is what happens to any kind of collectivization.

Daniel Coleman July 18, 2010 at 4:52 pm

This paragraph is a confused mess that — among other things — begs the question by including copyright in the category of nonaggressive forms of rights protection. But this is clearly false, as copyright is often invoked against innocent third parties and must therefore be seen as aggression in at least some cases. (This is never the case with legitimate property rights.)

I see now why your original post had so little to do with what I was saying.

Sasha Radeta July 19, 2010 at 8:27 am

Daniel, you are clearly confused, but that’s not my fault. Copyright is never “invoked” on innocent third parties. A third party can never be innocent if it obtains the product of someone else’s trespass and if it also assumes full ownership over something that belongs to the author (he exclusively owns all services derived from his property).

Daniel Coleman July 19, 2010 at 9:53 am

Mr. Radeta, you write, “Copyright is never ‘invoked’ on innocent third parties. A third party can never be innocent if it obtains the product of someone else’s trespass and if it also assumes full ownership over something that belongs to the author.”

This is a good example of what I mean when I say that you have begged the question. There are many counterexamples to this view throughout libertarian literature (esp. Kinsella’s AIP and past comment threads on the LvMI blog.

So I am not “confused” on the matter: in my view it has been well demonstrated that innocent 3rd parties are often aggressed against under the guise of copyright protection. I am well aware of your own arguments (arguments I have seen for well over three years now) but have never been convinced by them.

And all of this is beside the point of my original comment, which (as is no longer clear, since it is but one of many comments in the thread) was a response to Gil’s sarcastic tirade. He suggested the average-Joe author, inventor, etc. benefits more under a system of IP than the non-IP system advocated by Kinsella et al. In fact, economic theory (here I am referring to the work done by Kinsella, Tucker, and many others affiliated with the LvMI) and history (see my comment above) bear out the truth that productive individuals are trampled by IP laws.

mpolzkill July 19, 2010 at 10:18 am

Daniel,

There is just no arguing with religion, and Statism *is* a bizarre false religion (but one with very real shy-of-omnipotent gods with very real thunderbolts). Each and every different pilgrim has their own ideas of what should be done by the State. And each and every different pilgrim forever has the mental image of the “public servant” who some how, some way in the future will be made to do only those things.

Sasha Radeta July 19, 2010 at 12:43 pm

Daniel,

- There is never a “innocent third party” issue involved with IP protection. It always comes down to unauthorized use of other person’s property. If you don’t have an explicit owner’s permission, you can’t republish other person’s work – that’s an easy concept to grasp.
- Dr. Kinsella is not an economist – and even if he was, he would never be able to prove that absence of exclusive property rights would ever benefit property owner. That’s why socialism of any kind always fails. A vast majority of authors don’t create open source works, because their way to prosper is to massively produce works for limited use only. If we take away that fundamental property right – you will no longer see these works (back to medieval ways, when few manuscripts circled around rich).

mpolzkill,

Just because I disagree with your Khmer Rouge ideology does not make me statist. Arguing against collectivization (theft) of works of authorship designated for limited personal use should be the duty of any free market supporter.

Daniel Coleman July 19, 2010 at 1:47 pm

Sasha, “everyone owes taxes to the state” and “Congress shall have warmaking powers” are also “easy concepts to grasp,” but neither statement is correct. So also is your claim about IP rights not true merely by assertion.

mpolzkill July 19, 2010 at 2:05 pm

Radeta, I could as easily call your rhetoric “Gestapo” for the way it tortures a comparison.

In your dream world will “IP” be enforced a: voluntarily, or b: through the State?

If “b”, you are a Statist. [State=State; ist=supporter] All of you Statists are the eternal victims of the State, it plays you and it gains immense power. This irritates me, so I moan and try to joke.

If “a”, dream away, I don’t mind.

Sasha Radeta July 19, 2010 at 3:33 pm

Daniel,
I’m glad you so openly deny the right of owners to restrict unwanted use of their property. You proved my point about ideological roots of anti-IP position.

mpolzkill,
I’m the proponent of private property rights in their purest essence. It is the fact that state (that violates many of our rights) is still in business of protecting some of our rights (inefficiently as a monopoly). It would be completely insane to argue against these few property rights left in this world – based on the fact that state monopolized their protection.

Daniel Coleman July 20, 2010 at 8:15 am

Dear Mr. Radeta, you write, “I’m glad you so openly deny the right of owners to restrict unwanted use of their property.”

I’m sorry you see it that way. Obviously, I do not. I suppose we are at an impasse.

mpolzkill July 20, 2010 at 8:45 am

Radeta,

I know you guys get some nastiness directed at you too, but I really think you’re behaving badly. Instead of the vitriol and all the Commie idiocy, couldn’t you just admit that we have a different opinion of what exactly property *is* than you do? Some other people that had and have different ideas of what property can consist of: Antebellum Georgia plantation owners; Detroit autoworkers. They believe they own their jobs, and that we owe them their pensions, if you don’t know what I’m getting at. And I really think you’re not far from that. So many “creative people” believe they are owed a living in a lot of traditional ways (albeit very new traditions). Not too creative.

And with the State, like with Vito Corleone, it’s an all-or-nothing kind of deal.

Aubrey Herbert July 16, 2010 at 10:16 am

Gil = The personification of Rothbard’s law (people tend to specialize in what they are worst at).

Ohhh Henry July 16, 2010 at 10:04 am

Thanks to the work of Kinsella, we’ve come to realize how important the difference between scarce and non-scarce goods really is in making sense of the world around us.

That’s it. The IP market is a market in non-scarce, (literally) imaginary goods. But it is essential to understand why the government is so bullish in this non-existent market. They pursue IP law in order to create something out of nothing which they can then trade (at gunpoint) for scarce goods.

The IP racket is the same as a protection racket, in that protection is a non-scarce good. Almost anyone could protect themselves, why do they need the overpriced services of thugs? Likewise, anyone can invent, trade, copy or share ideas and art. Do you need a bunch of heavies to muscle in on these activities? No. But the gangs need an excuse to muscle in, so that they can disguise their theft and murder as desirable “services”.

I think that if you examine what governments do, at their core many of these “services” turn out to be imaginary or unnecessary. Not owning what they consider to be an adequate amount of scarce goods themselves, and not willing to work or trade peacefully for scarce goods, those in the government come knocking on your door with imaginary, non-scarce goods in one hand and a pistol in the other. The imaginary goods they are selling have names like Education, Consumer Protection, Energy Independence, Zoning Bylaws, Trade Agreements, Legal Tender, Equal Opportunity, and so on. Read the government listings in the phone book or get the latest official Congressional record, and run your finger down the list.

So the challenge is to educate the majority of the public that IP is a non-scarce, imaginary good which should be freely traded without the self-interested intervention of armed thugs. And they must also be shown that the IP racket is just one of a whole galaxy of similar rackets perpetrated by the same gang. You cannot demolish only the IP straw man – the entire straw fortress must be overthrown in the minds of the majority.

David July 16, 2010 at 12:40 pm

Brilliant Point Bravo, Ohhh Henry.

So much of what government provides is actually non-existent on deeper examination.The criticism applies with special force to the keystone of the entire government structure: legal-tender money. Today, a legal-tender dollar represents a unique form of intellectual property–it is a monetary unit of account that Congress and certain privileged institutions enjoy a monopoly prerogative of conferring upon certain payment instruments.

It is an idea, nothing more.

So long as the people insist in retaining their superstitious faith in illusory yet foundational institutions like legal-tender money, the game is rigged to the advantage of the government. Once the people see that they can share ideas and trade goods without the state media of communication and media of exchange, the playing field will finally be level.

At that point, the power elite don’t stand a chance.

jerry July 18, 2010 at 5:19 am

“protection is a non-scarce good”

Can you explain what you mean by this please?

Sasha Radeta July 18, 2010 at 6:39 am

People here are clearly confused. We here this often: “The IP market is a market in non-scarce, (literally) imaginary goods”.

Unfortunately, these people not only didn’t bother to think about differences between purchasing full ownership (including publishing rights) and limited personal use (use of IP-protected physical goods owned by other person). They didn’t even bother to look-up the definitions of copyright, etc. IP protection only pertains to the allowed use of works of authorship in their physical form, by using their unique feature as a potential evidence of unauthorized use. There is nothing imaginary about that.

Curt Howland July 16, 2010 at 10:19 am

Jeffrey, I think there’s a singular/plural problem here:

“Ideas are an example of such a non-scarce good that need no restricting,”

Is it “ideas … need” or “a non-scarce good that needs”?

Or how about “Ideas are examples of non-scarce goods that need”?

Not that I’m trying to make a derivative product here… :^)

Jeffrey Tucker July 16, 2010 at 1:15 pm

thanks

Tim July 16, 2010 at 2:10 pm

I found this interesting article about the conflict between domestic farming and foreign agro-conglomerates in India. These large scale entities use patents to force local farmers to pay impossible royalties on the use of certain kinds of crops, thus driving them out of business. It has gotten so ludicrous that even a strain of basmati rice has been patented, which was grown there for millenia. The author of course, blames in part free trade and open market policies for creating this problem, but she does emphasize the pernicious role India’s patent agreements have played in it.

http://www.globalresearch.ca/index.php?context=va&aid=13820

The fact of the matter is, people are starving because of the patent system. It’s destroying communities in some parts of the world and it’s radicalizing the population. Those hurt by foreign enterprise in this way, will turn to violent ideologies. No wonder Maoism is on the rise in India’s rural regions.

Tim July 16, 2010 at 2:16 pm

Sorry to double post, I’ll quote an excerpt from the above article:

“the Indian government has undergone multiple IPR legislative changes, the first of which being the 1999 Patent(Amendment)Act[19].This was a serious legislative amendment, as exclusionary clauses of product patents in areas of food, drugs and medicine were removed[20].Moreover, in order to be fully recognized by the WTO, Indian officials altered IPR legislation to allow for the patenting of life forms, living organism derivatives, gene patents and components[21]. National IPR law had to also be changed to allow for patents to be valid for 20 years[22].”

Personally, I think Mises.org needs to run a front page article on this.

Matt Pritchard July 16, 2010 at 5:06 pm

Second.

michael July 17, 2010 at 6:55 am

Tim: It’s easy to construct a case against biopiracy through the use of patent law. But that doesn’t disprove the need for some sort of protection, such as copyright. It just means the laws are faulty in this area. Obviously, farmers who watch as their basmati is claimed and stolen by corporations from the other side of the globe have been wronged. And the abuse must be corrected.

But what about a pharmaceutical corp that puts $400 million into R&D to produce a new drug? Should they have any way to protect their intellectual product from copycats who would put out a cover within months? If not, there’s a big disincentive to ever develop novel products: you can’t make any money off them. Or even recover your costs.

Likewise with someone who has the ability to become a talented novelist. He has no incentive to quit his day job because his talent is in an area that’s time-intensive. And he can’t protect his intellectual product from theft. So he sticks with selling insurance.

So build a case that covers IP protections that are needed… not just those that are predatory.

Tim July 17, 2010 at 5:37 pm

Oh so in some cases patent and IP protection is fine and dandy, in other cases it’s obviously a bad thing. But who is to predict the consequences of every IP restricting law? I suppose a regulatory authority is in place to determine which is which? In that case I don’t understand what brings you to this website, which is all about studying un-intended consequences of every interventionist/restrictionist action. The reason why your idea won’t work is the same reason as for any coercive regulation – in the end it will only benefit the best connected and most powerful. Like the agro-businesses in India or the media tycoons in the US.

michael July 17, 2010 at 7:05 pm

You need to employ a little common sense, Jim. If we’re not ideologically inclined against the very idea of having laws, we can tell a good law from a bad law. Applications that hamper farmers from growing crops they developed in the first place, and have grown for thousands of years, are IMO badly written. Applications that hamper medical progress are also badly conceived. One such was the patenting of the gene for susceptibility to breast cancer. A company bid on and bought the rights to this gene, sending the cost of a simple test to soar from a couple of hundred to fourteen thousand dollars. Fortunately that excess has since been corrected.

We should have just as many laws as we really need, no more and no fewer. And if writers hesitated to write because they can’t guarantee a return from their published works, that would tell you we needed more law in that area.

“The reason why your idea won’t work is the same reason as for any coercive regulation – in the end it will only benefit the best connected and most powerful.”

This is ideological BS, presented without any form of supporting argument or evidence. If not, tell me how the rich and powerful win when a writer gets to own his own words. You could begin by explaining how “media tycoons” gain more advantages than ordinary mortals in the field of copyright protections for written material.

Daniel Coleman July 17, 2010 at 7:14 pm

Michael, you write, “And if writers hesitated to write because they can’t guarantee a return from their published works, that would tell you we needed more law in that area.”

The truth is that, no matter what laws are in place, there will always be writers who hesitate to write because they can’t guarantee a return from their published work. That’s called “the margin,” and it will always be there. The only question is how many or few writers should be on that margin — a determination that can only be correctly made through a price system established by voluntary exchange. Arbitrarily deciding that “too many” writers are hesitating to write will only introduce harmful distortions into the system.

jerry July 17, 2010 at 7:19 pm

Don’t bother Daniel. He’s been blurting out the same nonsense for weeks now, you’re wasting your time.

Carlos Castro July 18, 2010 at 8:10 am

Michael,

You say that we should have just as many laws as we really need, no more and no fewer. I’m afraid that it is impossible to determine the number of laws that we really need (is it 27; 509; 12,345; 3,082,372?) but, even if it were possible to determine that number, how would we know exactly what the contents of those laws should be? And, if we (and I won’t even try to define this very elusive word, “we”) did determine the exact number and the exact contents of the laws that we need, wouldn’t that imply that all laws should be identical everywhere in the world (even in regions of the world with different “we’s”)?

I’m a lawyer, so I’m deeply interested in this topic. In my opinion, all we lawyers do is help our clients navigate the maze of difficulties that legislators have put in their way, which help is, of course, extremely valuable to our clients (and one of the reasons why lawyers are able to have such high incomes, another reason being the artificial barriers to entry). But, if the maze did not exist, both our time and skills and those of our clients would be freed for other, likely more productive uses.

You also say that, with a little common sense, we can tell a good law from a bad law. Again, I don’t know who is “we”, but the legislators do not appear to be included, unless they can’t make the distinction because they don’t use common sense. No, it cannot be known beforehand which laws are good or bad with just common sense. What is necessary is to use intelligence (etymologically, the ability to read into things), and follow the rule of Bastiat and Hazlitt about foreseeing the unseen consequences of those laws for everyone. But I’m afraid that legislators don’t have the time or the inclination to do so, so they simply dump laws on their vassals, regardless of whether those laws are good or bad. The result is that most laws benefit a small minority of the people they affect (the easy-to-see consequences), and they prejudice everyone else.

Just to stress the point of how bad I think this is, the following is a non-comprehensive list of laws the elimination of which I think would benefit our society: most commercial laws (my specialty), certainly all IP laws (the topic of this thread), immigration laws (although the initial adjustment period, when the huge wave of immigration would hit the richer countries, would likely be uncomfortable for many people), welfare laws (e.g., social security and health care), labor laws, “vice” laws (i.e, anything that regulates what people put into their bodies or how they use their bodies), civil rights laws, tax laws, and environmental laws. Would chaos ensue? Probably during the adjustment period, but in the end people would use their intelligence and learn how to live more productively without all those impediments.

michael July 18, 2010 at 10:09 am

Daniel: You sound as though you know what you’re talking about. But I’ve never heard of any “writer’s margin”. And the idea doesn’t make any intuitive sense. Writers engage in contracts with publishers. And if those contracts aren’t well written, I’m sure they know what lawyers are for. Plus, Google reveals nothing about any “writers’ margin”.

Are you sure about that? Amplify on your comment, please.

jerry: “He’s been blurting out the same nonsense for weeks now..”

This is the first occasion in which I’ve offered any comments concerning IP. So it may be that I’ve been blurting out some other kind of nonsense… but your comment reveals you just don’t want to consider anything I have to say.

That’s the impulse of a closed mind.

Carlos: Asking for an estimate of the exact number of laws we need doesn’t help elucidate the issue. We need a body of well written law, one that represents the interests of all stakeholders in the area. How many words should that body of law consist of? Just as many as are required, no more and no less.

If artists can’t be assured they can profit from their works, they’ll stop presenting them to us. They’ll get into some other field where they can make a living with the confidence that they’ll be getting paid for their efforts. If you, as a lawyer, can imagine laws that are better written than the ones we have, write legislation. I’m sure you can get a hearing from your Congress person, and perhaps become part of the solution.

Carlos Castro July 18, 2010 at 12:35 pm

Michael,

You say that we need a body of well written law, one that represents the interests of all stakeholders in the area. I’m assuming that, when you say “well written”, you are not referring to grammar, syntax and the like, but rather to the substance of the law. Whenever a law is promulgated, its substance affects the interests of the different stakeholders in the specific area in different ways. Even assuming that all the initial stakeholders are treated in a way that truly represents their differing interests, most likely future stakeholders will be treated in a way that does not necessarily represent their interests. Think of social security laws, in which the initial recipients of the welfare checks were very happy, but their descendents today are carrying a very heavy burden.

You also say that “If artists can’t be assured they can profit from their works, they’ll stop presenting them to us. They’ll get into some other field where they can make a living with the confidence that they’ll be getting paid for their efforts.” I agree 100% with you, except that I would insert the word “bad” right after the word “If” at the beginning. What would happen is that the better artists would be able to sell their products, and the worse ones would not, and they would be weeded out (thereby raising the artistic level of art products). You object that good artists would not be able to live off of their products? You would be assuming that they live solely off of their reproducible art. But a musician can play at a wedding, and intellectual property laws are not necessary for that. And a painter does not have the issue of reproduction. A writer would sell the first batch of books at the highest price the market would bear, and then, when others copy that book and sell it for less, the writer’s prestige would increase so that the first batch of the next book would sell more copies. Or maybe something different would happen, but we don’t know because intellectual property laws don’t allow us to experiment in liberty.

Finally, you suggest that I might want to become part of the solution by writing better laws if I can imagine them. I’m not a social engineer (just a lawyer). I don’t want to control other people’s lives (I have enough work with my own). I believe each person should decide what they want to do with their own lives. That’s why I think the laws I mentioned in my previous posting should simply be abolished. That would be a real solution to the problem.

Daniel Coleman July 18, 2010 at 5:12 pm

Michael,

When I speak of “writers on the margin,” I am referring the the phenomenon of marginal utility. It is a foundational idea of Austrian economics. This article may be of use to you: http://mises.org/daily/2610.

newson July 18, 2010 at 10:17 pm

michael, why do you persist in these broad generalizations under the banner of “we”?

michael July 21, 2010 at 10:38 am

“You say that we need a body of well written law, one that represents the interests of all stakeholders in the area. I’m assuming that, when you say “well written”, you are not referring to grammar, syntax and the like, but rather to the substance of the law. Whenever a law is promulgated, its substance affects the interests of the different stakeholders in the specific area in different ways.:

Carlos: Here’s an example of a well written law, meaning succinct and unambiguous:

The authors of any artistic piece may insist on restricting its reproduction or showing before an audience without authorization. They have the right to receipt of a royalty in exchange for extending that authorization.

See? No more than 36 words. Conveys the entire spirit and letter of a workable copyright law.

Josh July 16, 2010 at 3:06 pm

Wasn’t it Bill Gates who said that the early advances in computer technology wouldn’t have been possible had software been eligible for patent protection?

Ohhh Henry July 16, 2010 at 8:38 pm

If he said this then possibly it was a roundabout way of admitting that Microsoft allegedly came up with the original DOS implementation by doing some kind of quick copy-and-paste job from the ideas and user interface, if not the source code, of some other, earlier microprocessor-oriented operating system – I think it might have been CP/M. If the allegation is true, then the true innovation of Microsoft was not the software engineering as such, but the businesslike and ultimately very profitable way in which they were able to deal with IBM and then with the world of PC users.

So why does the government focus on engineering-type ideas as being the most innovative and the most worthy of their special intervention and protection? Probably because engineering-type ideas are actually the least valuable cogs in the whole machinery of business, and therefore they represent a large slice of un-homesteaded, make-believe property ripe for exploitation by people who have the mindset and habits that are peculiar to government. Namely, arrogance, ignorance, mendacity, and a propensity to violence.

Peter July 16, 2010 at 9:48 pm

Microsoft didn’t come up with DOS at all — they bought it from Seattle Computer. I suspect you’re thinking of Gates’s BASIC implementation, which was copied.

michael July 18, 2010 at 10:14 am

Software’s a special case. Open source utilization is the most efficient way to de-bug and to disseminate software and to get everyone thinking on the same page. Because it works toward the development of a medium held in common between millions of people.

It’s like language. If, when humans first developed the medium of language, they decided that every time someone coined a word he’d be able to make everyone else pay every time they used ‘his’ word, we’d still be mute today. Because language is not personal property, it’s a commonly held asset. It benefits from creative employment by millions of users.

Donald Rowe July 18, 2010 at 2:50 pm

Thank you michael,
“Open source utilization is the most efficient way to de-bug and to disseminate software … “[and I would like to add create to de-bug and disseminate, but I won't be picky]
for another real, you can see it in action today, example of anarchy. I would include it in the treatise I am formulating for you, because it is a great example of anarchy, but I don’t want to risk running afoul of your copyright prerogatives, so I will leave it out. I hope I don’t incur your wrath by using it here, and I hope that I have done so with proper attribution. It is a great example because it demonstrates the main features of anarchy so clearly. I may botch the words, so if it is not so clear to you the fault will likely reside with me, not you. Please consider the following three things that put open source software firmly in the anarchy camp. First, no person is disallowed to contribute to open source software for any arbitrary cause. The potential to participate is open to all. All participants are limited only by their own internal constraints as to the type, quantity and quality of output they produce. All participation is voluntary. Second, all participant’s “pay” is determined by the acceptance of his work. Acceptance “is” his pay. More pay flows to the people who produce more. There is no way to redistribute the “pay” so that all participants are rewarded equally regardless of the value of their contributions. Third, while I would like to say that no person has any decision making control over any other, which is the default anarchy position, that is clearly not the case, and for a good reason. A self selected group has spontaneously formed for a specific purpose and in order to actually accomplish that purpose, choices must be made in selecting the path along which project development proceeds. Leadership emerges, perhaps good leadership or perhaps not. Good leaders tend to be the ones who best understand the entire scope of the project, are capable of rational thinking, and who are the most persuasive. Good leaders will retain a larger number of contributors, and perhaps better quality contributions. The bad leaders will lead fewer and fewer contributors, and they may not even realize it, if they are really bad leaders. As a result the project result, if there even is one, will likely take longer to finish and maintain.

The generic feature to note here is that all choice making power that accrues to the leadership is volitionally surrendered by the others. A very limited scope of power is transferred for a specific purpose and for a well circumscribed amount of time. This transfer of power is not even remotely counter to anarchy.

Anarchy has been utilized to create a little order out of chaos.

Cordially,
Don

michael July 21, 2010 at 10:46 am

Thanks, Don. As you’ve given me a proper attribution, you may use my words without the customary royalties being paid.

I like open source software. I like open source science, where every scientist can freely build on the discoveries of others. Doing it any other way would hold back progress painfully, and we all would lose thereby.

I like Wikipedia, an open-source resource that has become truly impressive, nay, miraculous in its extent and accuracy. The editing process works remarkably well in this age of ideological sabotage, resulting in balanced articles that steer clear of virtually all distortion.

But I do not like theft of artistic works. If Amazon ‘kindles’ a book they should pay the author what he or she is due. It’s only fair.

Nor do I buy black market DVDs, or download torrents of free music. I have no qualm about buying a movie, a book or a piece of music in a used book store. The fee has already been paid once, and I feel an insistence on a secondary fee would be quibbling.

Zach July 16, 2010 at 4:26 pm

Josh, I believe that was him. You can see software patents mucking with things now. Take a look at HTML 5 video, for example. Open source browsers cannot support h.264 video because of software patents, and all browsers that do must pay tribute to the patent lords. In fact, those patent lords have gotten so greedy that in a few years they’ll even demand tribute for merely streaming video in their format. This hinders operability and defeats the entire point of having an HTML 5 video standard.

Also in the realm of video formats, certain algorithms and methods for compression are patented. There are certain classes of algorithms that haven’t been thoroughly exploited because to do so, one would need to pay tribute. An example is fractal video compression, which has a few patents on its use.

Peter July 16, 2010 at 9:21 pm

This hinders operability and defeats the entire point of having an HTML 5 video standard. I don’t see how: Theora is a better codec for HTML5 video anyway. Apple’s pushing of H.264 is what’s hindering interoperability, etc.

Havvy July 17, 2010 at 12:54 pm

Actually, if you followed that entire debate, you’ll see that Firefox was pushing for Theora at first because it was the least likely to have patent conflicts. There is a company that owns the h.264 codec, but they haven’t charged anybody on the web for using it *yet*, but that is because they made open-ended agreements not to do so. This agreement though, has to be renewed by them every couple of years, and they could possibly rescind it causing lots of economic damage.

The good news is that a solution to this debate has been found. Awhile ago, Google bot the company On2 which had been developing a video codec similar to Theora called VP8. When Google released it, it was released with a container known as WebM. Browsers have agreed that that is the codec of choice.

You can find out more here: http://www.webmproject.org/about/faq/

Peter July 17, 2010 at 10:03 pm

WebM is great; but for the time being Theora is still the better option. (There’s also a patent issue with WebM: Google’s grant is limited to their code, not VP8 per se; i.e., nobody can write an alternate encoder or decoder without a separate patent deal. Not so with VP3/Theora)

Luongo July 16, 2010 at 4:51 pm

If not for IP protection, one wonders how many of the pharmaceuticals that we take for granted today would exist. The cost of making them is near zero per dosage, yet the R&D necessary to identify and verify their efficacy is considerable. If a pharmaceutical can be duplicated within days of being marketed, why bother making it?

Analogizing ideas to a “dust storm,” whether valid or not, is beside the point, for it is the tangible product of those ideas that people utilize, not the ideas per se.

Silas Barta July 16, 2010 at 7:38 pm

Don’t you get it, Luongo? People make blog comments for free. OBVIOUSLY, it follows that they’d make cutting-edge discoveries of new molecules without having ownership rights in their discoveries. I keep hearing it on this site, so it must be true.

Matthew Swaringen July 16, 2010 at 9:35 pm

Your imagination is apparently only limited to apparatus that the state can provide.

It’s quite possible the R&D would be paid for by collaboration between individuals interested in breakthroughs on a specific disease (this happens now), absent taxation and monopoly pricing on final drugs more funds would be available for this purpose. It doesn’t require altruism at all, it simply requires sufficient investment on the part of those who are interested in the final product.

Much open source software is developed by companies that are users of the software. The same might happen in drug markets, where those who desire to have the drugs are paying for their production through investment. This is hardly the only means, and maybe not even the best means but to assume the state provided means is the best simply because it’s what the state came up with, out of laziness and ease of management from their end, makes no sense.

michael July 17, 2010 at 7:02 am

Matt, could you expand on your comment? Take me through the process.

Company A spends years in R&D and several hundred million $$. They come up with a new drug. Company B spends weeks and maybe a million bucks analyzing the new drug and coming up with an identical one. And as there is no copyright protection they even mimic the original brand’s packaging, including the company name. They sell what appears to be the same thing, in the same way they also market their “Gucci” handbags and “Spalding” basketballs.

What’s to stop this from becoming the new norm?

Matthew Swaringen July 17, 2010 at 6:12 pm

“Company A spends years in R&D and several hundred million $$. They come up with a new drug. ”
First, lets establish that the “several hundred million $$” is very much the result of costs imposed upon industry. The need for FDA long term drug trials, etc. is not necessarily the best system, and it kills people. (Those who would have been saved by the drug had it not been forced through trial).

Now it may not kill as many people as would be killed by allowing drugs not to be tested, but in a free market system what we would get is a combination of both. For many (even most), there would be the expectation of significant testing on drugs to ensure little problems. Others might expect less testing, but still some. Independent 3rd party certifications could exist (like CE) to ensure the quality of this testing.

The cost of drugs and R&D would thus be variable, and the market price system would in the end distinguish best practices in accordance with consumer desires.

“Company B spends weeks and maybe a million bucks analyzing the new drug and coming up with an identical one. And as there is no copyright protection they even mimic the original brand’s packaging, including the company name. They sell what appears to be the same thing, in the same way they also market their “Gucci” handbags and “Spalding” basketballs.”

Consumers have every reason to want to support those who are actually making useful drugs and not those who are not. To sell something under a brand when the support is not conferred is something many consumers would reject, suing those who would lie to them by saying that they are what they are not. Any company that would do this would quickly lose trust and be drummed out of the market by lawsuits.

Now, it is likely true that many consumers would just buy the cheaper generic drugs. But what’s wrong with that? Many of those consumers would be the poorer ones, and they would go with the best option available to them at the cost they could afford. But this is certainly not something every consumer would do.

Initial drug research would start with investment by those parties who need the drugs themselves. Some of those people would be rich, because the rich aren’t mystically incapable of getting diseases. Others investors who deemed that the company doing the R&D and producing the drugs has a good brand and consumer trust would likewise invest generally towards that same R&D.

michael July 17, 2010 at 7:29 pm

The costs of putting a new drug through clinical trials are essential to insuring safety. You might remember thalidomide. Companies stand to make billions on a hot drug; therefore there is an incentive to rush a drug to market. If there is any excess built into the system, it’s that the manufacturers have captured the FDA to the degree that now it’s becoming common for drugs to be on the market for several years before their body count begins to be hard to ignore.

Unfortunately drugs are not required to show efficacy. So we have a lot f expensive drugs that don’t actually DO very much. But they sell in the billions because the mfrs spend so much money on product reps going to every doctor’s office in the country to tout them.

But for all that, in order to sell a drug we have some confidence in saying won’t actually kill you, the company shelling out that average $800 million in R&D should be afforded some degree of copyright protection. Enough time, at least, to earn back its outlay. I’m that much of a capitalist that I see that as basic fairness. So they need patent protection for a fixed period of years. Otherwise there’s no incentive to even try to develop a new drug.

In all honesty, your proposed model for funding drug development (“Initial drug research would start with investment by those parties who need the drugs themselves”) is a crackpot idea. That might be a good way to fund Viagra, but not drugs for the diseases of poor people, like diabetes or (globally) malaria.

The best model for promoting public health is publicly funded programs. NIH does a lot of basic research. But the profit motive applies mostly to serving those who can afford very expensive drugs. And our hemorrhage of public money in Medicare is largely due to having to pay inordinate profits to drug mfrs and others in the health industry. Without it, all but the very richest among us would die for the simple reason that we can’t afford to buy the drugs that save or prolong our lives. Not without help.

I would enact a cap on payments, bringing medical profit margins into line with other expenses. It’s the one product that we can’t just decide not to use if it’s too expensive. That’s why it’s too expensive– we have to have life and health.

Here’s something on R&D costs:

citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.128.4362.pdf

Michael September 29, 2010 at 12:35 pm

Several problems with this comment. Copying a drug usually takes four years (Against Intellectual Monopoly). Your argument is based on the same mistake people make when they say science is a public good (http://vimeo.com/4798314). The claim that you can “access” science by reading a journal is absurd. In order to understand scientific research, a scientist must be doing research in a very closely related field. Want to copy a drug? You’ll need to fund a scientist to do so, including funding that scientist’s own experiments so he can keep up with the field. Added up, the cost of copying such inventions approaches 100%. It costs almost as much to copy as it does to innovate, and let’s not underestimate first-mover advantage to motivate innovations.

Name brands are trademarks, not copyright. Even then, you don’t need trademark law to stop someone from claiming that a product was made by someone else. That’s fraud. If someone says a bag was made by Gucci, and the customer truly thinks he’s getting a handbag made by Gucci (not usually the case), and the handbag is a knockoff, that’s fraud.

For a modern example, see the fashion industry. They have no copyright protection, anyone can copy a design, yet designers come out with new fashions every year and still make money in spite of rapid copying by the rest of the industry.

Silas Barta July 17, 2010 at 10:13 am

Actually, *your* imagination is only limited to what the state can provide. Why can’t you think of a production method that doesn’t involve STATE ENFORCED physical property rights.

Oh, there could be physical property rights through non-state convention and enforcement? Well, the same could be said for intellectual property rights.

Now what?

Matthew Swaringen July 17, 2010 at 6:01 pm

Silas, why do I require state enforced physical property rights? I’ve never advocated that the state is necessary for physical property. Ownership of physical property is a biproduct of the scarcity of physical property. The one who initially uses the land by virtue of doing so has the strongest claim to ownership of it. He has a right to defend what he uses, and to maintain it exclusively (or not) because to allow others to use it against his will prevents him from using it as he desires.

“Intellectual property” has no such nature. It can be produced independently, it can be copied, and it can only be kept exclusively if it’s never released to anyone else. Because you have posted I could copy your post anywhere (in fact, it’s copied right now into RAM on my machine), and in no way does the site lose your post. If the site didn’t want my machine to have the ability to maintain a copy, the only way to prevent this entirely would be to not ever send the post to my machine.

Physical property doesn’t work anything like that. If I give you something and you don’t return it, I and no one else I could give it to can now use it.

michael July 17, 2010 at 7:37 pm

Your question of the hour: “why do I require state enforced physical property rights? I’ve never advocated that the state is necessary for physical property.”

All over the globe, large development companies in complicity with national governments are seizing land, or water rights, or mineral rights, and evicting farm families. It’s very large scale. And the reason is that poor villagers have no property rights unless someone is big enough to help them protect them. Hired goons run them off at gunpoint and burn their homes behind them.

So you do need something. If all you have is the family shotgun, you’re out of your league fighting these people. Historically, the US government has been complicit in this land seizure, but also has offered some degree of protection.

Ask yourself how you might be better protected without a government. Can you hire as many guns as a major mining corporation who wants your land? And if you form a self-protection association one million people strong (a decent size to get the job done) what distinguishes your organization from a government?

Silas Barta July 18, 2010 at 2:09 pm

Silas, why do I require state enforced physical property rights? I’ve never advocated that the state is necessary for physical property.

Great! I’ve never done the same for IP! Glad we could get that resolved!

Ownership of physical property is a biproduct of the scarcity of physical property.

No, it’s a byproduct of the conflict between people over how physical property should be used — just like IP is!

newson July 17, 2010 at 9:20 pm

silas barta says:
“Oh, there could be physical property rights through non-state convention and enforcement? Well, the same could be said for intellectual property rights.”

so does that mean you’re happy to allow for the state to give up on ip, and let private contractual arrangements take over?

Silas Barta July 18, 2010 at 2:07 pm

Exactly as much as I am for physical property rights.

Stephan Kinsella July 17, 2010 at 10:41 am

Silas, you seem to be resting your critique on an implicit but unstated view that we should choose laws based on the results we want to achieve. In particular you are saying that it is (obvious?) that we should have a certain amount of drug-production (how much? I suppose… whatever we have now?) and that we have to arrange our laws to ensure this result. Why do you think this approach is valid or libertarian?

Silas Barta July 17, 2010 at 1:41 pm

Everyone already cares about the results of the policies they advocate, and adjusts their beliefs accordingly. Even you. This is no different. This is why you bother to explain, again and again, why this or that libertarian policy would have a good *result*. Because you hold the very same view you just criticized in me; we only differ in how exactly we apply it.

How much tricycle production should there be? However much there is now?

Jeffrey Tucker July 16, 2010 at 9:42 pm

It’s not the tangible product over which ownership is being claimed.

As for pharm, they would have an easier time if government didn’t force disclosure years in advance of production and sale. But you seriously think that brand name and trust have nothing to do with the success of a pharm?

newson July 17, 2010 at 7:40 am

interesting how the leakage of industrial knowledge from one company to the next has helped to form industrial clusters in italy. biella – wool processing, brianza – furniture, castel goffredo – lighting, sassuolo – ceramic tiles, etc.
some of the clustering is due to geography and proximity to inputs, but much is due to the unstoppable flow of information between competing firms, as industry people bump into each other and talk, and job-hopping increases the cross-fertilization of ideas.

Silas Barta July 17, 2010 at 10:18 am

So why aren’t there Italian companies that blow billions of dollars making drugs and don’t assert rights in them so they can piggyback off of each other?

Oh, you mean this “innovation” is only limited to producing short-term fashions that become worthless with time rather than permanently useful knowledge about molecules (or other narrow targets in some long-term optimization-space)? Surprise surprise!

newson July 17, 2010 at 7:13 pm

of course drug developers are only able to spend billions today and reap a satisfactory return overall on their product offerings due to monopoly privilege. absent ip, why wouldn’t the investments be similar to those in the clustering industries – smaller (probably, though pooling would no doubt occur), incremental, with lower barriers-to-entry and faster speed of implementation? why is one big leap necessarily better than one hundred small steps?

Silas Barta July 18, 2010 at 2:11 pm

So, that’s what pharma might look like with IP? First, someone would sell water, then a pharma would make incremental improvements on it, maybe slap a few C’s onto the H-O-H structure, then someone else can mix in a few N’s and then gradually, over time, we might get a cholesterol-fighting drug? You know, even though almost none of the intermediate molecules are helpful and the final one requires extensive research to locate?

newson July 18, 2010 at 10:23 pm

research likely would end up being pooled.

Silas Barta July 19, 2010 at 12:23 pm

Communist production would likely end up being pooled too. Let’s abolish property rights and get this superior system.

jerry July 17, 2010 at 7:29 pm

“If not for IP protection, one wonders how many of the pharmaceuticals that we take for granted today would exist.”

Also, if we had a free market in education/training, food provision and medical care in general, one wonders how many drugs would exists. My guess is a fraction of what we have now, say 20%.

Dan July 16, 2010 at 6:50 pm

Thank you for your continued efforts to expose this protectionism-gone-property right as a recent phenomenon. Too many conservatives and libertarians lump us in with the far left, ignoring over 200 years of American history and centuries more. The Heritage Foundation has gone as far as to claim “the Founding Fathers supported intellectual property rights” when they push outlawing voluntary waivers such as FOSS and Creative Commons.

Stephan Kinsella July 17, 2010 at 10:42 am

The Founding Fathers did support IP, did they not?

Nina Paley July 18, 2010 at 11:02 am

The Founding Fathers argued about whether granting strictly limited monopolies to authors and inventors would contribute to the progress of science and the useful arts. They did not support “Intellectual Property” because the term, and concept, did not exist. They never thought of such limited monopolies as protecting “property”; they did not conceive of the works around which the monopolies were granted as “property.”The Founding Fathers ultimately supported limited monopolies, per the Copyright clause in the Constitution. That’s a far cry from “Intellectual Property.”

Ned Netterville July 16, 2010 at 9:29 pm

As a libertarian committed to nonviolence, I have long considered IP to be illegitimate because it requires using force without provocation against peaceful human beings.

Ned Netterville July 16, 2010 at 9:30 pm

OHHH HENRY, I wish I’d said that!

Kerem Tibuk July 17, 2010 at 1:27 am

I wonder why socialism and progress are equated this often?

newson July 17, 2010 at 3:42 am

i wonder why ip was recognized in the ussr’s constitution?

Sasha Radeta July 17, 2010 at 7:11 am

Even USSR was not insane enough to abolish all private property – because copyright rests on the most basic property right: the right to restrict unwanted use of one’s own property. Ideas in their abstract forms are not protected by copyright, but physical goods produced by authors and their publishers.The fact that unwanted use (replication) of unique works of authorship can be easily be proven explains how market for LIMITED USE of works of authorship came to existence: instead of selling one book manuscript that can be replicated into millions of copies without a penny to the original seller, the author can choose to retain ownership of manuscript and all of copies he decides to produce.In this system, authors or entrepreneurs do not sell their full ownership rights and instead allow customers a strictly limited use of their works in exchange for a small fee (“small” relative to the price of full ownership of such works).Copyright violators all agree in one: they all want to assume full ownership rights over a work of authorship they use. They want to act like publishers without ever reaching such agreement with the property owners. These ownership rights are very expensive — so they hate this market outcome… and like all socialists they advocate the abolishment of these basic private property rights.Some anti-copyright advocates are simply confused libertarians, mostly non-economists, who don’t realize that by taking away the rights of authors to sell only limited use of their goods these authors would loose willingness and ability to supply such works for general public.

newson July 17, 2010 at 7:28 am

so anti-ip proponents are more socialist than the soviets were? is that what ktibuk is implying?

Sasha Radeta July 17, 2010 at 9:59 am

Whatever he’s implying — IP opponents are more socialist than the Soviets were. IP opponents seek to abolish property rights for all works of authorship created up till now, by transfering the full control of these goods from their rightful owners (authors, publishers) to common users. Such collectivization in unprecedented. Well, maybe only Khmer Rouge could compare with anti-IP ideology.

Stephan Kinsella July 17, 2010 at 10:43 am

But Sasha you are question-begging: the issue is whether there IS property in “ideas” that one “produces”. You can’t solve this by saying it’s theft to “take” it. That is circular. Okay?

Sasha Radeta July 18, 2010 at 5:57 am

Property is not in ideas that one produces. Property of works of authorship belongs to those who mixed their labor with physical inputs to produce physical object — or to those who paid fair market price. Now, if this physical object belongs to author or publisher – he has an absolute right to sell/allow only limited use of his good, while excluding others from republishing or commercial use of any sort.

To clarify with an example – a proper free market copyright would seek to prevent someone who paid only $14 for a CD to assume much more expensive publishing right and to flood the market with millions of unauthorized copies. On the other hand, such protection would never go into the bizarre extent — such as preventing someone from trying to replicate a picture that was publicly displayed (example you once used) and so on…

Peter Surda July 18, 2010 at 12:55 pm

Now, if this physical object belongs to author or publisher – he has an absolute right to sell/allow only limited use of his good, while excluding others from republishing or commercial use of any sort.

This is true, however it is misleading. IP proponents (at least those that typically argue here) do not oppose restrictive contracts, so it is a completely irrelevant argument.

To use this as an argument for property is problematic for two reasons. First of all, putting restrictions into contracts does not imply ownership of the object of restriction. Second of all, it does not follow that a contractual restriction jumps to people who have not agreed to the contract.

This is actually one of the IP basics. It looks like you are not familiar with the actual objections to IP. I recommend reading more about it.

Peter Surda July 18, 2010 at 1:00 pm

Oh and one more thing. The reason why the concept of trespass (“restriction jumping”) from my previous post is inapplicable to immaterial goods is that they do not have boundaries (this is my minor contribution to the theory, although I am probably not the first one to realise this). If something does not have boundaries, it is impossible to determine whether a trespass occurs or not.

Sasha Radeta July 19, 2010 at 9:26 am

Peter,

I really don’t care about IP proponents here – i only care about proper and consistent defense of private property rights. You (wrongly) pointed out two alleged issues with IP:

- Allowing only personal, limited use of any property is a sovereign owner’s right. It does not need to additionally “imply ownership” or anything for that matter. Ownership over original works of authorship (in all its copies) is easiest to prove.

- Third parties (those without contract with owner/author) will never be in violation of IP, as long as they are not using works of authorship without owner’s (author’s) consent. This “use” can be defined as deriving all marketable services that lawfully belong to the owner, including distribution and replication of copies of his work.

I am very familiar with objections against IP usually stated here, but these objections deal with abstract and incorrect concepts, such as “idea ownership.” However, IP only deals with allowed use of someone’s physical property that is recognized as his work of authorship.

Peter Surda July 19, 2010 at 10:14 am

You (wrongly) pointed out two alleged issues with IP.

These issues are correct. You think they are wrong because you are using metaphors instead of proper definitions.

Allowing only personal, limited use of any property is a sovereign owner’s right.

This is, of course, correct. However, the reverse implication is isn’t. From the fact that you can agree to a certain restriction it does not follow that you are the sovereign of that restriction (meaning you can apply it to people who do not agree to that restriction).

Ownership over original works of authorship (in all its copies) is easiest to prove.

Actually, it isn’t. None of the IP proponents was so far able to explain what this means. They only invoke metaphors. Like “original work”, “authorship”, “copies”. These are all metaphors, which need to be de-metaphorised before you can use them in economic framework or a framework of rights. This might be easy from the colloquial point of view, but from a strict scientific point of view the proof wasn’t provided.

Third parties (those without contract with owner/author) will never be in violation of IP, as long as they are not using works of authorship without owner’s (author’s) consent.

Again, a metaphor. “Using works of ownership” is not an empirical phenomenon. You cannot measure it, you can only interpret it.

This “use” can be defined as deriving all marketable services that lawfully belong to the owner, including distribution and replication of copies of his work.

In other words, you are attempting to use a mix of causality and similarity as a definition of the scope of homesteading. However, they both extend to infinity. Your theory requires a false dichotomy between property and externalities, on the one hand, and between property and substitutes, on the other.

Sasha Radeta July 19, 2010 at 1:04 pm

Peter,

Thanks for demonstrating how deeply confused are typical IP-opponents. You say the following:

From the fact that you can agree to a certain restriction it does not follow that you are the sovereign of that restriction (meaning you can apply it to people who do not agree to that restriction).

WHAT!?

Example: You are implying that if I allow Joe to use my car for one day, someone who happens to borrow this use of my car from Joe could keep it for eternity!? Why not – he never agreed on any of my restrictions, hence, according to IP opponents (Mises.org Khmer Rouge as I like to call them) — he can assume any kind of ownership right.

This is of course a complete nonsense. Anyone even vaguely familiar with legal theory knows that you can’t obtain property rights from someone who is not the rightful owner. Going back to my example: If I didn’t stipulate that Joe should be the sole user of my car – he can lawfully only transfer this limited use to another person — and nothing more. For all other rights, this third party must ask for my permision.

The same goes for copyrighted material: full ownership rests solely with the owner – and ownership always includes all services that can be derived from owned good, including publishing rights that belong to the author – WHO NEVER TRANSFERED THESE RIGHTS to a third party. There is nothing abstract about that Mr. Surda. If we didn’t own these rights, you could never charge (enforce contracts) for your rent or labor (services derived from your property)…

Peter Surda July 19, 2010 at 1:40 pm

Dear Sasha,

Thanks for demonstrating how deeply confused are typical IP-opponents.

It is you who is confused, and can’t read. I correctly phrase my arguments, showing that the conclusions follow, or do not follow, from the premises.

You are implying that if I allow Joe to use my car for one day, someone who happens to borrow this use of my car from Joe could keep it for eternity!?

That is something completely different than what I claimed. You are using a circular argument. You assume already that there is a property right in immaterial goods, then proceed to explain that this means it applies to third party too. A pointless exercise.

This is of course a complete nonsense.

The nonsense is what you write. You drag along a sack full of assumptions, and when challenged, you react by talking about something completely different. You are completely oblivious to the fact that not only you are using a circular argument, but that you haven’t even defined the basic concepts of your theory, and hide behind metaphors.

… full ownership rests solely with the owner – and ownership always includes all services that can be derived from owned good …

“Full” extends to infinity. Same error as Marxians. When you say “full”, you actually want to say that you arbitrarily divide causality into property and externalities, and similarity to property and substitutes. Just like the other IP proponents, your theory is based on a false dichotomy.

Peter Surda July 19, 2010 at 1:42 pm

There is nothing abstract about that Mr. Surda. If we didn’t own these rights, you could never charge (enforce contracts) for your rent or labor (services derived from your property)

Sorry, forgot the obligatory “been a software engineer whole career but almost certainly never used IP to earn money”. But, I guess that is too much for you, you should research the basics first.

Sasha Radeta July 19, 2010 at 3:50 pm

Dear Peter,
Being software engineer is not synonimus with being successful, inovative author of anything meaningful – or anything that a publisher would purchase in order to mass-produce it for limited public use… I know that you know this well enough.

By the way, you only wrote so much nonsense about “circular arguments” and so much pseudo-philosophical babble, without realizing what kind of nonsense you wrote earlier. Once again, your statement:
“From the fact that you can agree to a certain restriction it does not follow that you are the sovereign of that restriction (meaning you can apply it to people who do not agree to that restriction).” – is a completely insane notion. You are implying that if you agreed to use someone’s property in a strictly limited fashion – a third party can obtain this good from you and use this author’s property in any way he wants – without owner’s consent!?!?!?!? I’m sorry you were incapable of recognizing the parallel with my car example (I intentionally didn’t use books, to make it easier for you) – but what you wrote demonstrated complete ignorance of any legal theory. You simply don’t have capacity to carry on a debate on this matter (and you sadly don’t even recognize this)

Peter Surda July 20, 2010 at 12:11 am

Dear Sasha,

“From the fact that you can agree to a certain restriction it does not follow that you are the sovereign of that restriction (meaning you can apply it to people who do not agree to that restriction).” – is a completely insane notion.

You demonstrate the lack of comprehension of elementary logic. I did not say that the two occurrences cannot coincide, rather I said their relationship is not that of an implication. Correlation does not imply causation.

You fail to address any of the problems that I describe, and retreat to metaphors and mysticism. So be it.

Sasha Radeta July 20, 2010 at 12:53 am

Peter,
Are you drunk? If you say that a third party can do whatever he wants with someone else’s property (be it a book, a CD, a car, whatever) – unless he agrees with owner’s restrictions – you are demonstrating such level of ignorance that no amount of pseudo-philosophical nonsense could disguise it. I’m done with you. Bye.

Peter Surda July 20, 2010 at 1:14 am

If you say that a third party can do whatever he wants with someone else’s property (be it a book, a CD, a car, whatever) – unless he agrees with owner’s restrictions…

Coincidentally, this is not what I said. I know religious beliefs can be a difficult obstacle to using logic, but can you at least try?

Sasha Radeta July 20, 2010 at 1:53 am

Mr. Surda,
Maybe you got possessed by the devil when you wrote that nonsense earlier. In other words, now you claim that you agree with me — the third party cannot use other person’s property in ways that were never authorized by the rightful owner. If a second party obtains only a limited use of one’s property, he can’t transfer anything more that this limited use onto a third party — which is the basic principle of any legal theory and property rights.
Great!

Peter Surda July 20, 2010 at 5:56 am

Yet again you demonstrate how you are unable to comprehend simple logic. Your interpretation of my words is incorrect, it reverses my implication and adds assumptions which were not there.

Jeffrey Tucker July 17, 2010 at 1:45 pm

It just occurs to me that we could construct an IP allegory using Robinson Crusoe. Crusoe arrives on the island and gathers berries. Friday appears. They sue each other over who had the idea first. Society is off to a great start?

Kerem Tibuk July 18, 2010 at 4:54 am

Better construct would be,

Crusoe gathers berries so much that he couldnt even consume most of them and they would rot.

Friday comes to the island and takes the excess berries that would eventually rot and doesnt even ask Crusoe since Crusoe can not even own them, since those berries are not scarce in any meaningful way and they are not naturally rivalrous between Crusoe and Friday. The only reason for Crusoe to exclude Friday from those berries would be pure whim of an owner/creator.

Society is off to a great and parasitic start.

Sasha Radeta July 18, 2010 at 6:06 am

Bad example Mr. Tucker… IP protection only applies to concrete, physical objects that some author produced — and IP laws regulate use of these physical goods – by assigning full ownership rights (including commercial ones) to the author. Just because the state decided to automatically assign and regulate these rights does not mean that we should abolish these fundamentals of private property. Let’s just abolish the state.

Nina Paley July 18, 2010 at 11:07 am

IP protection only applies to concrete, physical objects

Wrong. Completely, totally, 100% wrong.

Silas Barta July 18, 2010 at 4:54 pm

If it’s “100% wrong”, would you mind citing an instance of when IP rights were enforced against someone who *wasn’t* trying to instantiate the intellectual work in a concrete physical object?

Nina Paley July 18, 2010 at 8:13 pm

Sure. “Internet piracy.” File sharing. The Dept. of Homeland Security shutting down web sites and seizing URLs.

Zeroes and ones transmitted electronically are NOT concrete physical objects. URLs are not concrete physical objects. Computers are, but copyright enforcement isn’t over theft of computers, it’s over ethereal patterns of zeroes and ones.

Kerem Tibuk July 19, 2010 at 7:48 am

The point is IP is always, in every case embedded to a physical object. Nothing, not even ideas, are “floating” around in nothingness. Even the idea in your head is embedded in the physical brain cells and neurons.

Treating ideas, IP in general, as platonic ideals floating around, detached from the physical universe, somehow may help you forget the cause that they exist, but real libertarians do not.

Peter Surda July 19, 2010 at 7:53 am

So, you’re not a libertarian then? Yea, I almost forgot, you’re an IP coward.

Sasha Radeta July 19, 2010 at 9:11 am

Nina,
you confusing the fact that internet “file sharing” would be impossible without unauthorized use of author’s physical property (CD in this case, for which only personal, limited use is allowed). Since owner of that CD is exclusive owner (legally controls services derived from his property) he has every right to battle against those who trespass against his property.

Nina Paley July 19, 2010 at 10:01 am

In other words, what y’all are saying is that it’s “Libertarian” to control other peoples’ physical property. If my computer has “your” zeroes and ones on it, now we’re contending over physical property, which because of IP suddenly belongs to you, to dispose of as you wish.

This is why Kinsella emphasizes that IP degrades and disrespects physical property.

“Even the idea in your head is embedded in the physical brain cells and neurons.” So IP owners own my physical brain (a.k.a. my body) too. That doesn’t sound “Libertarian” to me. That sounds like slavery.

Silas Barta July 19, 2010 at 11:48 am

So, IP *does* apply to concrete physical objects, and you’re trying to deflect attention from your earlier error by making general critiques of IP?

Glad we could agree.

Sasha Radeta July 19, 2010 at 1:17 pm

Nina,

It is perfectly libertarian to protect people from trespass that occurs from unauthorized use of their physical property, even if this trespass involves remote use (it’s 21st century, after all). I think most libertarians are against the alleged “right” of hackers to delete files stores at their computers, often causing some serious economic injuries to innocent victims. But these issues are only peripheral. The core issue is that opposing IP per se goes directly against private property rights: the right of authors to retain some exclusive rights over their own goods.

Peter Surda July 19, 2010 at 1:46 pm

The core issue is that opposing IP per se goes directly against private property rights.

The core issue with IP is the absence of a definition of IP from the proponents thereof. If they actually tried that, they would quickly realise what nonsense they preach.

Sasha Radeta July 19, 2010 at 3:53 pm

Mr. Surda,
That’s not true. Use any official definition of IP — and you will see that it deals with allowed use of someone’s work of authorship (in any physical form, therefore, being real property).

Peter Surda July 20, 2010 at 12:13 am

Show me a scientific definition of IP, one that does not depend on metaphors.

Russ July 17, 2010 at 4:18 pm

Whether or not one favors IP, the basic premise of the article, encapsulated in its title, is ridiculous. If we don’t reject IP, no progress regarding freedom can be had? Surely this is not true. Taxes could be drastically lowered, for instance. This could be done without rejecting IP, and it would be progress. The premise “Without Rejecting IP, Progress is Impossible” is an example of an all-or-nothing mentality typical of libertarians (especially ancaps). It’s part of what makes libertarians seem like nutburgers to all the mundanes out there.

SK wrote:
“Silas, you seem to be resting your critique on an implicit but unstated view that we should choose laws based on the results we want to achieve.”

Stephan, you seem to be saying that our choice of laws should NOT take results into account at all. If one need not take results into account at all, why study economics? Wouldn’t studying ethics then suffice???

newson July 17, 2010 at 8:28 pm

silas is saying ip laws give the pharma industry its current shape (true), and that any different shape in their absence would be necessarily worse (unprovable).

Silas Barta July 19, 2010 at 11:46 am

I’m not saying that — where did you get that?

The current state-administered system of IP rights is sub-optimal. Therefore, I don’t believe that other forms would necessarily be worse, and in making these claims you are effectively saying that I think a state system is optimal, and is quite a disrespectful strawman argument for you to use.

State enforcement of rights =/= enforcement of legal rights =/= present system of enforcement of rights =/= existence of moral rights

Kerem Tibuk July 18, 2010 at 5:00 am

Kinsella is a not a consequantialist, didnt you hear?

:-)

Ned Netterville July 17, 2010 at 5:32 pm

The question I ask is this: Under what circumstances would one approve of someone initiating force and violence without any provocation whatsoever against entirely inoffensive people? That is precisely what the State does in order to fund itself by means of taxation. (Of course one cannot initiate violence with impunity. There is a always a cost that has to and will be paid, perhaps in the form of wars without end.) Now if one can have and hold private property, intellectual or otherwise, without resort to (the initiation of) force, then so be it. Although I can imagine–drool, drool–having and holding most private property safely and securely without the State resorting to force on my behalf, I cannot imagine how one could have and hold IP without the State and its laws securing same. Am I missing something, Silas, Gil, Sasha, anyone?

ABR July 18, 2010 at 2:04 am

To your last question: by agreement. That is, individuals agree to recognise some form of IP, and agree in advance to suffer some form of penalty for violating the agreement. Just as individuals might agree to recognise real property, or agree not to murder each other.

Sasha Radeta July 19, 2010 at 12:29 pm

Ned,

Free market supporters who are IP proponents (the same thing) do not advocate violence of any sort against inoffensive people. We only point out that property rights must be respected and that by purchasing or borrowing limited use of another person’s property, you don’t magically obtain full ownership or publishing rights. That’s all.

Peter Surda July 19, 2010 at 12:47 pm

We only point out that property rights must be respected…

So far true, but there is one thing which you don’t. You don’t define these property rights. Because, you know, that would make it look like fraud. And we can’t have that.

Sasha Radeta July 19, 2010 at 1:21 pm

Peter,

Are you speaking in tongues, or something. Property rights allow owner to control all services that could be derived from his good. He can allow certain kinds of uses, while retaining other — or selling these rights to publishers for more money. You don’t obtain these expensive rights by paying few bucks for limited personal use — what’s so confusing about it?

Peter Surda July 19, 2010 at 1:51 pm

Are you speaking in tongues, or something.

Cognitive dissonance starting to kick in, I see.

Property rights allow owner to control all services that could be derived from his good.

Although “derived” is in certain cases not a metaphor, you are using it in a metaphoric way. The proper scientific term is causality (or, in this case, causally related). But causality extends to infinity. So, IP requires to create a false dichotomy and separate causality to “forbidden” and “permitted”, or in economic terms, property and externalities. I wasn’t able to do so, and my challenges to IP proponents to prove the dichotomy right failed. Are you able to counter it or do you admit defeat?

Sasha Radeta July 19, 2010 at 4:01 pm

Defeat? You won by boring me to death. OK – I surrender. You still proved nothing: owners will always have some exclusive rights – as long as they are called owners. Third parties will never be able to lawfully obtain these rights without expressed owner’s consent. It’s the bottom line – there can be no “innocent” IP violator.

Peter Surda July 20, 2010 at 12:13 am

I see you are not interested in science but in religion. I am afraid I cannot help you there.

Tim July 17, 2010 at 6:38 pm

Unfortunately the pro-IP advocates all seem to be missing one important point. The enforcement of property rights results in far more property damage and restriction of intellectual progress than it does to protect property and ideas. They justify measures taken to combat or restrict illegal distribution of copyrighted works by equating all piraters with immoral thieves and irresponsible leechers.

The problem with that view is that all economic considerations are based on the scarcity of goods and resources. Price, as far as my limited understanding of it goes, is determined by the consumer’s valuation of the product compared to its relative availability. But in case of digital data, all scarcity has to be artificial, since there’s no cost involved in copying every product. Therefore, piracy is the inevitable result of an infinite supply compared with an unrestricted demand people have for free products.

The consumer wants to get everything at the lowest price while the supplier wants to sell at the highest possible. The whole idea that people who pirate are nothing better than common street crooks not just very well thought out. No actual damage to physical property is caused by the copying of digital data. The crook on the other hand, destroys the material value of the vendor’s sales. If we were to apply the same analogy to issues in the digital medium, we need to draw the source of value for the intellectual product. To do this, we have to inevitably accept the Marxian view of value of a product determined by the effort made into creating it. This isn’t necessarily wrong mind you. It just leads to the necessary creation of artificial scarcity where one doesn’t exist. The effects of which is something Mises wrote about all his life.

Even so, it’s remarkable that in many cases, piracy actually distributes publicity of the product better than any advertising could in its lifetime. Those who are introduced to a line of products are more inclined to purchase them than they would if they haven’t heard about it in the first place. The idea that people pirate instead of buying is also ill thought out for several reasons. The most important one of these is that because pretty much every digital work is freely available on the internet, it should follow that all incentive for purchase should cease. Yet people still go to theaters, purchase games, books, DVDs and songs. Why? If the logic of the pro-IP hardliners was true, then none of this would happen, as all human beings would be too irresponsible and selfish to pay for commercially available goods. In fact, the media industry would have completely collapsed already. Yet piracy has existed for decades, and I quite frankly didn’t see the production of movies and games letting up during that time.

Again, to address this view, we must treat humans as rational actors who are fully aware of the consequences of their actions. Which means that not everyone could be lumped into the category of “selfish downloaders” who must be restricted by force from the harm caused by their economizing choices. There’s no way of telling how many people are truly inclined to reward the creators by purchasing a product after trying it out for free. Or how many potential customers became aware of the product, only after it became available to them through peer to peer filesharing. Which leads to the final realization – the popularity of the social phenomenon we call “piracy” stems from its person-to person, individualistic and decentralized nature. It takes hundreds of millions of dollars for a company to advertise, service and distribute its sales brand. It costs 0 to do that through the largely word to mouth techniques used in internet communities. The amount of damage in sales actually lost by corporations through piracy needs to be weighed against the potential costs saved in distributing and advertising the product.

I myself for example believe the greatest anti-piracy measure in history was Steam, which allows me to conveniently download any game I want at a superb speed and without having to fumble with disks. I believe its ideas like Steam that kill piracy better than any DRM protection. Today, the cause of decline in sales of various media industries could be drawn from shifting consumer preferences and a declining economy than the proclaimed effect of individual file sharing.

Another thing to note is that something stored in an infinitely distributable digital form, is much more durable than in a physical, copy protected medium. This allows intellectual products that are too expensive, too rare and too obscure to be preserved and knowledge of them even revived. This is the case for many excellent abandonware games and old foreign films, which would have otherwise simply been lost to time.

The question is, how do we reward the actual intellectual input, as opposed to the material, into the creation of digital works, without draconian seizure of property, frivolous litigation that costs thousands, invasion of privacy and other gross breaches of civil liberties and freedom of information? This is a valid question and it needs to be addressed by every libertarian who opposes statist enforcement of property rights.

Also, I’d like to direct the editors and the readers attention to the patent induced agriculture crisis in India I’ve mentioned previously in this thread. I believe it’s a very important issue that shouldn’t be overlooked.

Tim July 17, 2010 at 6:53 pm

There are a couple of glaring grammar mistakes in that previous post that I unfortunately overlooked (I was in a rush while writing it). In the first paragraph, the phrase “enforcement of property rights” should read “enforcement of intellectual property rights”. I suppose this is something critics of my views would point out and latch on immediately. I’m not going to go through a lengthy defense of the concept of distinction between material and metaphysical value, which is something I admit, I’m rather poorly schooled at. It would suffice to say that I believe that intellectual property can’t be treated the same as private physical property, for reasons which I explained above, and which I’m sure people like Stephan Kinsella have elaborated upon in greater detail.

ABR July 18, 2010 at 2:14 am

“The crook on the other hand, destroys the material value of the vendor’s sales.” Only if the crook is a vandal. If he’s a thief, he hasn’t destroyed anything. He’s simply transfered ‘value’ from one person (the producer) to another (the thief).

“Yet people still go to theaters, purchase games, books, DVDs and songs.” — Fewer and fewer, I should think.

Sasha Radeta July 18, 2010 at 6:19 am

Tim,

Enforcement of all property rights could be considered as inefficient and wasteful, even parasitic — if you neglect the major role of exclusive ownership rights (Marxist view). Exclusive ownership rights of any kind create a system which non-aggressively deals with existing scarcity, while providing material incentives to producers to reduce this scarcity. Just simply think about what IP opponents are suggesting: If we were to declare that copyright no longer exist and that those who paid few bucks for personal use are now “full owners” of someone else’s product — those who paid fortune for full publishing rights would be considered fools. Imagine what such Khmer-Rouge-like act would do to the existing market for limited use (anything currently IP protected)… Without this market for mass-produced goods designated for LIMITED USE, we’d be heading back to medieval times, when only the rich could afford such works — and only economic incentive of authors would be in dealings with these few privileged individuals.

Brian Macker July 18, 2010 at 10:47 am

“Without Rejecting IP, Progress is Impossible”

Hmm…. I wonder were all this progress I see all around me comes from since it’s impossible under the current system.

Nina Paley July 18, 2010 at 11:10 am

Most of it comes from illegal activity.

Brian Macker July 18, 2010 at 3:22 pm

Nonsense

Donald Rowe July 18, 2010 at 12:44 pm

I like sudoku puzzles and I found a nice internet site that pops up puzzles at the press of a key on my keyboard. I assume the puzzles are generated by an algorithm running on a computer somewhere and not by an army of trolls using paper and pencil. Upon investigation, I found that the owner of that web site has struck a blow against the absurdity of IP, perhaps in an inadvertent way. A necessary component of any sudoku puzzle is, of course, a specific arrangement of numbers or letters in a grid pattern, Any such specific arrangement can be protected by a copyright, as they so assert on their web site. You can scroll to “terms of use” at their web site using the link below, but I have quoted the copyright notice here for your convenience. href="http://www.websudoku.com/faqs.php “You are welcome to play and print an unlimited number of puzzles for personal use. The puzzles provided by Web Sudoku are copyrighted and may not be reproduced in any form.”I think this is pretty cool. Say I publish and sell a book with sudoku puzzles in it. I must make an arrangement with the copyright holders of those puzzles or else I would violate their copyright if my puzzle book contains at least one puzzle their algorithm generated before I made mine for my book. My puzzles, of course, would also be protected by copyright so any puzzle in my book cannot subsequently be legally generated by their algorithm without some agreement to allow it having been made previously with me. Opinions vary ( href=”http://mathforum.org/library/drmath/view/68586.html” ) but apparently there are quite a few possible valid arrangements for a sudoku puzzle. Since I too will not allow my puzzle to be “reproduced in any form” it will be necessary for the other copyright holders to actually employ that army of trolls to compare each of my puzzles to all of the puzzles they have previously produced in order to prove that I infringed upon their rights, or at least until a match is found. Think of it in terms of the increased employment of trolls that would then occur. How can this possibly be anything but good for the economy, and we don’t even need any stimulus money!
Sometimes if it looks like a joke, it really is a joke.

Ralf July 18, 2010 at 1:57 pm

What if someone’s job is to deliver ideas, not something tengible, as is the case with architects or some engineers? I don’t see how their work can be protected without using some variation of intellectual property rights. If someone has an answer, please enlighten me.

Nina Paley July 18, 2010 at 8:15 pm

They are paid for their services.

Ralf July 19, 2010 at 3:05 am

Let us imagine the following situation. Someone breaks into the house of a person whose job is to create ideas, e.g. an author. The burgler copies the content of the computer’s hard disc where there is a newly written novel. He then sells this novel to a publishing house and the novel gets published. The original author gets nothing. If there is not any notion of intellectual property rights, nothing has been stolen and the original author does not have any right to any compensation. I don’t think it’s fair.

Peter July 19, 2010 at 5:56 am

Someone breaks into the house of a person
There’s your problem, right there!

Ralf July 19, 2010 at 6:42 am

What problem? If there are no IP rights the writer can be compensated only for the damaged window or door, perhaps the disturbance of his privacy, but not for the loss of income.

Peter Surda July 19, 2010 at 7:45 am

If burglary is illegal, they why shouldn’t the victim be compensated for the loss of income resulting from it? This is a circular argument.

Peter Surda July 19, 2010 at 7:02 am

I’m a software engineer and I don’t need IP to earn money.

Kerem Tibuk July 19, 2010 at 7:50 am

That is because you do not produce IP, you just sell your labor.

If you produced IP that could be copied and sold and used, then you would either need property rights in IP, or charity.

Peter Surda July 19, 2010 at 9:51 am

That is because you do not produce IP, you just sell your labor.

Wait a minute, wasn’t there a certain Kerem Tibuk who earlier claimed you can’t sell labour, and that teacher are not selling services but IP?

If you produced IP that could be copied and sold and used, then you would either need property rights in IP, or charity.

I see you are still lost in the sea of metaphors.

Kerem Tibuk July 20, 2010 at 6:12 am

Peter, you maybe confused about a lot of things but you can not be this stupid.

What you can not comprehend is “selling labor” is not the same thing as “promise to sell your future labor based on a contract”. One is a factor of production that even Marxist know about. The other is an invalid contract.

In one an exchange happens. Labor for money. You provide code, you get the money. If one party receives his share but doesn’t provide for it, it is aggression. Like if you provide the code but not get paid. Or if you get paid and do not provide the code.

In the other it doesn’t, it is just a promise to a future exchange. You promise to provide code in a future date, for a future payment. If no money or code has been provided there is no partial exchange and no aggression. The deal would be off with no consequences.

If this wasn’t the case, voluntary slavery would be possible with contracts. But since human labor is inalienable this would cause absurdities conflicting with the human nature.

I suggest you read Rothbard, instead of trolling around IP socialism. That would do you more good.

Peter Surda July 20, 2010 at 6:50 am

Dear Kerem,

What you can not comprehend is “selling labor” is not the same thing as “promise to sell your future labor based on a contract”.

So, it is impossible to make a contract for labour before the said labour is performed? Is that really what you claim?

In the other it doesn’t, it is just a promise to a future exchange.

But all exchanges happen in the future with regard to the decision to participate in it. The individual actions cannot be completely simultaneous. Also, all activities, even the act of performing the exchange, involve labour of some kind, without which they cannot happen. If you insist on this, you effectively deny that any transactions whatsoever can happen.

Just like with IP, you fall prey to metaphors, and use the words “future” and “labour” in a metaphoric way rather than the strict scientific one.

If this wasn’t the case, voluntary slavery would be possible with contracts. But since human labor is inalienable this would cause absurdities conflicting with the human nature.

I have no problem with voluntary slavery. There is no logical reason to treat it differently. The difference is in metaphors, just like it is the case in IP.

I suggest you read Rothbard,

I suggest you read Mises.

instead of trolling around IP socialism. That would do you more good.

Also, I suggest you respond to my questions, because that will make you realise what unfounded assumptions are present in your claims.

Kerem Tibuk July 20, 2010 at 7:33 am

“So, it is impossible to make a contract for labour before the said labour is performed? Is that really what you claim?”

“But all exchanges happen in the future with regard to the decision to participate in it. The individual actions cannot be completely simultaneous. Also, all activities, even the act of performing the exchange, involve labour of some kind, without which they cannot happen. If you insist on this, you effectively deny that any transactions whatsoever can happen.”

A contract is a promise on the conditions of exchange of property. It is a tool for conditional exchange. If exchange hasn’t happened yet, or if there is no exchange a contract is meaningless.

So it is not possible to enforce a contract before any exchange. But if the exchange has started, and it doesn’t have to be simultaneous, the contract is valid and has to be followed.

The simplest contract is the verbal or implied contract that is used to handle the delays in the exchange. Since almost always exchanges happen with a time gap, the simplest contract is,

“I am giving you this and in a few seconds I expect to receive that”.

People get into these contracts all the time.

If there are more and different conditions regarding the exchange of property, contracts can be complicated. But they always have to be related to a property exchange.

In the case of labor, it i a bit different because labor is not alienable. For the exchange to start you first have to perform the labor.

For other alienable property, lets say I own apples and you own oranges, and we can make contract to exchange them at a future date while keeping them in our possessions. Since they are alienable, us currently having the possession, me still possessing apples and you oranges, is not a problem. The exchange has already happened. It is our choice to have the option of keeping the already exchanged properties.

But this is not the case for labor for we can only keep labor in our possession and do nothing else. Only when we perform labor we can sort of alienate it from us, through the result of the labor.

The act of performing the exchange is not labor. Just like IP is not externality. Stop confusing these concepts already.

“I have no problem with voluntary slavery. There is no logical reason to treat it differently. The difference is in metaphors, just like it is the case in IP.”

You and I made an slavery contract, and you sold your self to me. I paid you a generous one thousand dollars. Who owns the proceeds from your sale? Who owns the one thousand dollars?

“I suggest you read Mises.”

I know Mises and Rothbard are the great thinkers of the Austrian tradition but only an ignorant person would bring up Mises in a discussion regarding contracts. Mises has barely said anything about property rights, let alone contracts. Rothbard on the other hand is not only an economist. Really, try to learn a little.

Peter Surda July 20, 2010 at 10:26 am

A contract is a promise on the conditions of exchange of property.

So if I promise to stay still for a hour, which does not involve an exchange, such a contract is not enforceable? Or, alternatively, does it mean that someone has a property claim on “movement” or “one hour”? I am sorry, this makes no sense at all. Exchange of property is not a necessary component of a contract. In fact, property is not a necessary component of a contract either.

So it is not possible to enforce a contract before any exchange.

Since an exchange is not a necessary component of a contract, this makes no sense to me.

But they always have to be related to a property exchange.

No, they are not, see above. Non-compete agreements, non-disclosure agreements, any sort of agreement where you commit to refraining from an activity. Or where a third party, rather than the party to the contract, is the beneficiary. The only thing required for a contract is that both parties are more happy when the contract is performed than if it didn’t take place. Evidently you miss that you can consider yourself better off even without gaining new property.

In the case of labor, it i a bit different because labor is not alienable. For the exchange to start you first have to perform the labor.

Do you notice you contradict yourself? If labour is not alienable, how come you can sell past labour? Or did you want to say that “future labour is not alienable”? Of course, I am aware that future labour and past labour are fundamentally different concepts, but I want to hear an explanation from you.

But this is not the case for labor for we can only keep labor in our possession and do nothing else. Only when we perform labor we can sort of alienate it from us, through the result of the labor.

But you just said it is not alienable, and now you explain how to alienate it. Prefixing “sort of” does not make the contradiction go away, it makes the argument into a metaphor. Notwithstanding this inconsistency, why is the relative position of these two time points relevant?

The act of performing the exchange is not labor.

Why?

Just like IP is not externality.

Ah, so after many months, you finally agree that my attempt to explain how IP proponents define property is correct. Which brings me back to the question: why is IP not externality? If A is not B, there must be a distinguishing factor. What is it?

Stop confusing these concepts already.

But Kerem, it is you who insists they are different, while failing to explain why. This is my whole point.

You and I made an slavery contract, and you sold your self to me. I paid you a generous one thousand dollars. Who owns the proceeds from your sale? Who owns the one thousand dollars?

You dilute the contents of a contract to confuse the underlying transactions. The money can be agreed to be paid to a third party, or to the slave after the condition (e.g. time period or a project completion) in the contract is fulfilled. I assume your confusion is caused by your unfounded assumption that all contracts involve an exchange of property.

Mises has barely said anything about property rights, let alone contracts.

Mises has however explained about sequence of actions, and that the same physical good at two different points in time is from a perspective of a consumer actually two separate goods.

Peter Surda July 20, 2010 at 11:22 pm

I forgot to mention, of course, that Mises explained that IP is a way of internalising externalities. To him I owe half of my anti-IP argument.

Ralf July 19, 2010 at 8:45 am

“If burglary is illegal, they why shouldn’t the victim be compensated for the loss of income resulting from it?”
To award any compensation you have to admit that some property was lost. What property was lost in this case if not intellectual property? If you claim that IP does not exist then there’s no reason for compensation or punishment. If you admit that it exists but claim that it should not be protected under any circumstances, then there is also no place for any legal remedies as that would mean protection of IP rights.

Peter Surda July 19, 2010 at 10:00 am

To award any compensation you have to admit that some property was lost.

No, you don’t. All you need to show was that a right violation occurred and that the violator, as a compensation, needs to put you in a state that you would have been had the violation not occurred. If you had a business plan that you now cannot realise in a way you originally intended, the profit loss may be translated into compensation. That does not require any property claim on the foregone profits, it only requires causality. If it demonstrated property, it would mean that you have property claim in any activity which is prevented by a rights violation. Which of course, is quite problematic, since causality extends to infinity. It is the inability of IP proponents to explain why causality should be divided into property and externalities which gives my argument the upper hand.

Ralf July 19, 2010 at 11:13 am

I don’t think the law violation criterion is any good in this discussion as it is all about what should be legal and what not. As far as causality is concerned then undoubtedly copying of your work can be a cause of your losses and can ruin your business plan. Based on this reasoning legal action is required, even if you don’t call it a property infringement . Names are not so important, or at least not the bone of contention, I believe.
To be clear, I’m not happy with the existing intellectual property laws, but I can’t agree with the argumentation that considers tengibility as the final criterion.

Peter Surda July 19, 2010 at 11:58 am

I don’t think the law violation criterion is any good in this discussion as it is all about what should be legal and what not.

This is confusing. My argument is that if a situation that is detrimental to you in some respect, you only have a claim to the one who caused it if a property rights violation was involved.

As far as causality is concerned then undoubtedly copying of your work can be a cause of your losses and can ruin your business plan. Based on this reasoning legal action is required, even if you don’t call it a property infringement.

You appear to have it backwards. From the fact that you do not like the a certain situation or that an action of another man prevented you from acting the way you wanted originally, you cannot derive a property rights violation. The implication does not work this way. As long as there are scarce resources, everyone will be always unhappy about something and some actions might not be available to him. That proves nothing, and does not explain how rights should be determined.

To be clear, I’m not happy with the existing intellectual property laws, but I can’t agree with the argumentation that considers tengibility as the final criterion.

I understand that, although this is a separate problem. Typically, IP proponents use a mix of causality and similarity to define property. On this site I have extensively criticised this approach as unscientific, because it requires a false dichotomy between property and externalities on the causality scale, and property and substitutes on the similarity scale. Sherlock Holmes, Karl Popper and Mr Spock all said that if you eliminate those theories which are false, among that which remains, regardless of emotional objections, must be the truth.

Sasha Radeta July 19, 2010 at 3:15 pm

Beyond the fact that IP deals with basic property right to allow only certain, limited uses of one’s physical, tangible work of authorship (IP does not protect ideas per se, but their physical forms, read US copyright law for example) — I would like to deal with one issue raised here, a common misconception shared by IP opponents…

Newson said: “…smaller (probably, though pooling would no doubt occur), incremental, with lower barriers-to-entry and faster speed of implementation? why is one big leap necessarily better than one hundred small steps?”

Extremely radical followers of libertarian-communism often argue that if all property was abolished, from all this “pooling” of resources, ideas and practices, many young or poor innovators would finally get a chance in life — and entire world would prosper, right? This viewpoint neglects the fact that even “small / incremental” steps would never take place in this communist utopia.

Why? It’s rather simple: the price of inputs (like book manuscripts or drawn ideas) are determined by the price of final goods – it’s basic law economics stipulated even by Aristotle in ancient times. If you have final goods that are virtually free (through shareware) – the price of inputs (author’s original work) would go down close to zero.

Imagine if you wrote a brilliant literary work: what publisher would be stupid enough to pay you a deserved fortune – if the entire market could be flooded with unauthorized copies from which the publisher does not get a dime? The logical consequences are following:

- Since publishers would loose economic incentives to invest in works of authorship, author would in turn loose economic incentives to create such works for mass production
- Author could obtain larger sums for their works only for devoted rich fans, which would create a negative selection based on ideology, social status, social views, etc.

These are simple applications of laws of demand and supply and no communist could ever deny these simple economic axioms.

PS

Some IP opponents say: “well, many people scan their books and publish them online – and they are perfectly able to sell paper copies… This is the evidence that IP is absurd.” This only demonstrate confusion with basic economics: the market for online books is completely different than market for paper books. People who like to read paper books often have issue with sitting by the computer monitor, getting their eyes exhausted not being able to hold the book in their hands. By the way, even Dr. Kinsella owes his market success to the fact that his paper books are copyrighted (by default, but that does not change this fact). So online access can serve as an excellent marketing tool — especially if you’re not selling mystery novels

If this economic mode was perfect recipe for success, all authors would subscribe to it. You would have all productive novelists and inventors in the frontline of battle against IP – instead of less productive and less significant bunch. This reasoning is denied by everyday facts of life.

It’s a shame that Mises.org dedicates so much of its online resources to this dangerous, collectivist, anti-economics ideology, which advocates confiscation and collectivization of works of authorship which were produced for limited public use only (robbing publishers who paid fair market price to obtain more expensive rights). By placing so much emphasis on libertarian-communist pseudo-arguments against the merits of exclusive ownership rights, Mises Institute discredits itself in serious economic circles, while diverting attention from valuable contributions of Ludwig von Mises in economic and political theory.

Peter Surda July 19, 2010 at 3:43 pm

… IP deals with basic property right to allow only certain, limited uses of one’s physical, tangible work of authorship…

It is the opposite way. IP does not permit use of one’s physical property, it restricts it. For permission, IP is not necessary.

Extremely radical followers of libertarian-communism often argue that if all property was abolished, from all this “pooling” of resources, ideas and practices, many young or poor innovators would finally get a chance in life — and entire world would prosper, right?

Strictly speaking, I agree with you on this. This is a utilitarian argument. A proper Austrian should stay away from those. However, that goes both ways, it cannot prove either side right.

even Dr. Kinsella owes his market success to the fact that his paper books are copyrighted (by default, but that does not change this fact)

You know that correlation does not imply causation, right? That conclusion is far fetched. I have been a software engineer my whole career, yet I cannot recollect a situation where my income was causally related to IP laws. Since I haven’t been interested in IP since the beginning, I can’t be sure about that completely, but at least for the last few years I am pretty adamant on the claim. As for Stephan’s profession, the laws and the arguments lawyers make in the court are a place of public record and available for reading to anyone, yet, in what must appear paradoxical to IP proponents, lawyers don’t seem to be poor.

It’s a shame that Mises.org dedicates so much of its online resources to this dangerous, collectivist, anti-economics ideology…

And it is a shame that none of the IP proponents I met are able to provide a rigorous definition of IP, without which, obviously, their arguments are pointless. I would be actually happy if I was able to have a proper scientific discourse on the topic, regardless of the outcome. Because, unlike many others, I’m not interested in proclaiming dogmas or strengthening my beliefs. As a follower of Popper’s falsificationism, I know that the quest for truth is unending and we’ll never be able to finish it. But at least we can abandon that which is false. The ineptitude of IP theorists slows down that process.

Sasha Radeta July 19, 2010 at 4:13 pm

Still nothing from Surda. “IP does not permit – it restricts… blah, blah”…
As always, you’re clueless. The Section 106 of the 1976 Copyright Act states what the owner of copyright (author) has the exclusive right to do and to authorize others to do. So in fact, it just restates basic property rights, implying that people are generally stupid to recognize these basic ownership rights on their own. When I was younger, I thought that this demonstrated paternalistic arrogance on state’s part… After reading postings on Mises.org I can see Mr. Surda and others justifying such approach. Sad but true.

Peter Surda July 20, 2010 at 12:17 am

As always, you’re clueless.

As always, you demonstrate the lack of grasp of elementary logic.

The Section 106 of the 1976 Copyright Act states what the owner of copyright (author) has the exclusive right to do and to authorize others to do.

This phrase (“exclusive right”) is an ongoing source of confusion. If it was interpreted the way you allege, it would mean that absent copyright, the authors would lack the right to use or sell the immaterial goods they produce, which is demonstrably false.

newson July 19, 2010 at 11:11 pm

sasha radeta says:

“- Author could obtain larger sums for their works only for devoted rich fans, which would create a negative selection based on ideology, social status, social views, etc.”

those who decry communism should be leery of egalitarianism, i would have thought.

Jay Lakner July 20, 2010 at 12:16 am

Dear Sasha Radeta,

You have made a common mistake of trying to apply the economic calculation argument to the intangible. As I hope you will see, such an argument only applies to the tangible.

Each and every tangible good is a unique entity which must be produced. A certain amount of time, cost and effort is need to produce each tangible entity. The price of the inputs are determined by the price of the final good.

An intangible entity, such as a pattern, only needs to be produced once. That is, once someone has gone through the time, costs and effort of producing it then nobody else ever again needs to go through that time, costs and effort to produce it again.
Once produced, the costs of producing more of the pattern is zero. Hence the price of the inputs are fixed at zero.
So the monopoly price given to a pattern can not in any way determine the price of the inputs.

Furthermore, the monopoly price of pattern A gives us no indication as to monopoly price of undiscovered pattern B. We can’t use the sales of “Human Action” as a guide as to how much time, money and effort we should put into writing “Giraffe Action”.

Hence, these monopoly prices do not communicate any useful economic information. All they do is redistribute wealth.

Sasha Radeta July 20, 2010 at 12:47 am

Surda,
Still nothing from you… Copyright outlines owner’s rights in use of PHYSICAL goods they produce — not intangible ones (nonsense) as you falsely allege.

Jay,
There is no such thing as monopoly price in a real market. Read Rothbard on this – we’re all monopolists (single sellers) when it comes to our exclusive piece of property. By the way, IP deals with exclusive ownership of tangible goods sold for limited use only. Your analysis about “pattern production” hence makes no sense.

Peter Surda July 20, 2010 at 1:07 am

Dear Sasha,

Copyright outlines owner’s rights in use of PHYSICAL goods they produce …

I cannot see how what you say refutes what I said. As I said before, the term “exclusive rights” is confusing. Absent copyright, the non-exclusive forms of all the rights section 106 and 106a mentions are still present, as they directly follow from the non-IP property laws (the ability to use and trade physical goods you own). Copyright only introduces the feature of exclusivity, which is the equivalent of the denial of the said non-exclusive rights to people other than the copyright holder.

I lament the poor quality of my opponents. These are trivial things that should have been left long behind us. Despite the wealth of literature available on the subject, the religious beliefs of IP proponents are firmly entrenched.

Sasha Radeta July 20, 2010 at 5:39 am

Ha ha ha. Funny self-comforting “laments” of a demolished troll… Surda tries to challenge the exclusivity of ownership rights, hence professing his communist religion.

Peter Surda July 20, 2010 at 6:33 am

Your lack of logic, rather than the presence of my beliefs (whatever they are), are the reason for your miserable failure as a debater.

Jay Lakner July 20, 2010 at 2:08 am

Dear Sasha Radenta,

You are the one not making any sense here. You clearly did not understand my argument and now you are trying to confuse the issue.

Firstly, all intangible constructions are simply patterns. That is, they are an arrangement that tangible materials can form into. Stories, ideas, movies, inventions, computer games, etc are all patterns. Each of them is simply a possible arrangement that tangible materials can be configured into. That is why I specifically chose the word “pattern”.

Now, you wish to assign property rights to patterns. That is, you wish to grant people monopolies over the patterns they first produce. This equates to preventing others from arranging their own tangible goods into certain patterns. You are trying to create a monopoly where none naturally exists.

I merely demonstrated that the calculation argument can not be used to justify this. Once a pattern has been brought into existence, the costs of duplication are fixed at (approximately) zero. Therefore, the price of any monopolised pattern does not impute the price of the production of that pattern.
Furthermore, the price of pattern A does not in any way impute the price of the factors of production for unknown pattern B. The production costs of pattern B cannot possibly be known until after the first instance of it has materialised. And then further duplication has a cost of zero.

Compare this with the production of a tangible entity, such as a computer. The costs of producing one computer are the same as the costs of producing each additional computer of the same type. Therefore, the price of a computer acts as a market signal determining the production of extra computers of the same type.

Whichever way you look at it, the prices for patterns do not act as market signals for the production of new patterns or patterns of the same type. Therefore there is no calculation problem inherent to the production of patterns.

Sasha Radeta July 20, 2010 at 5:38 am

Dear Jay, you are just confused. IP does not deal with intangible entities — only with allowed use of invented and produced goods (physical property). If you own series of patented computers or copyrighted CDs, you fix your output based on projected revenue from limited use of consumers (you produce to provide market service – not to sell away your ownership rights). Now some a-hole decides to purchase only a limited use of your good — and then to use it in ways you never allowed, by flooding the market with unuthorized copies — that’s what brings the price close to zero, creating economic injury to the author. That’s why in such dark world of legalized trespass (communism) you would see a dramatic drop in mass-production of original inventions and works of authorship (these are massed produced only with the intention of providing the consumers with strictly limited use). That is all.

Zorg July 21, 2010 at 12:07 am

“IP does not deal with intangible entities — only with allowed use of invented and produced goods (physical property)”

What the hell is “allowed use” if not an intangible???

Imagine the first caveman inventor of the wheel going around
with a club beating the hell out of anyone who copied “his” idea
claiming that they are not complying with his “allowed use”.
It’s absurd.

mpolzkill July 21, 2010 at 6:11 am

“Imagine the first caveman inventor of the wheel going around
with a club beating the hell out of anyone who copied ‘his’ idea.”

Not too hard to do after reading as much as I could stand from this latest swarm of government rent seekers.

Kerem Tibuk July 20, 2010 at 3:55 am

This analysis is pure rubbish.

It uses the same fallacy Statist use to intervene in the market claiming they are battling monopolies. And it is no surprise that it comes from an IP socialist.

“Human Action” is a unique product. But it is part of a genre. Signals of Human Action may not relay any economics information about “Human Action” but it does about many similar products including, books on economics, books on Austrian economics, even books by Mises, and many different subjective signals to many other people.

You know what is very sad?

There maybe arguments and disagreements regarding property rights among libertarians, and even in this Mises Instute.

But many economists associated with this institute and preach Austrian Economics, do not even touch the fundamental economic problems of this IP Socialism parroted by Kinsella and Tucker.

What is it? Do you economists do not care about this IP socialism? Is this the plaything of Kinsella and Tucker and not relevant to the important things?

Or do you not want to break the hearts of your comrades?

Don’t you see that this IP socialism crusade even prohibits people like Jay from learning economics, or learning it the completely wrong way?

newson July 20, 2010 at 4:22 am

“comrades”? a lapsus, perhaps.

Peter Surda July 20, 2010 at 6:19 am

“Human Action” is a unique product.

Not only that, every copy of Human Action is also a unique product. They can only be considered “the same” if you introduce the subjective factor of utility: are they both equally suitable for a specific purpose? The theory of “objective copies” fails on this. “Copy” is a metaphor for a utilitarian perspective on abstract concepts.

Jay Lakner July 20, 2010 at 11:34 pm

Kerem Tibuk,

I stopped bothering to read your posts a long time ago.

Sasha Radeta July 20, 2010 at 1:43 am

Ha ha ha. Funny self-comforting “laments” of a demolished troll… Surda tries to challenge the exclusivity of ownership rights, hence professing his communist religion.

Peter Surda July 20, 2010 at 5:53 am

So, your inability to grasp elementary logic and my demonstration that your arguments contain contradictions, vagueness and unfounded assumptions and you cannot counter them is my “communist religion”.

Joe B July 20, 2010 at 9:36 am

While I generally agree with Tucker/Kinsella, one point in this post struck me as a gross oversimplification:

“To impose something like a structure of production on them is to profoundly misunderstand their nature and the possibilities. The spreading of ideas is not in any way analogous to the way a computer is built or a factory turns out cars.”

Ideas, creations, whatever you want to call them have a definite structure of production. They take time to develop, and can consume physical resources as well. An author spends months at a typewriter, Pfizer spends years collecting data on Bob Dole’s boner – This is no different than the production process of any physical good.

The difference is that this production process only occurs once. After this, a different process, which uses the “idea” as a capital good, is able to produce copies indefinitely (it is not really even correct to call this a capital good, since it cannot be consumed). It is now a free capital good.

The entire pro-IP argument is based on utilitarian incentivisation of the capital good production process (“Development”). If we don’t have socialized protection of IP, we will live in a world of de-facto socialism, because everyone will be able to use ideas whose creators are unwilling to pay for their own protection. So bring on the guys with guns.

Among the inputs to the development process, particularly for “patentable” inventions, are prior works. If inventors have to pay royalties to access these inputs, the cost of their development goes up. Many new patents are workarounds to avoid infringing old patents. This is not progress.

Productive capital reduces the real costs of producing new capital. The more intellectual capital that is available, the cheaper it is to produce new ideas. Does this mean that eliminating patents will instantly produce more innovation? Or less? Who knows. That’s the problem with utilitarian arguments.

Maybe there is some sort of “Laffer Curve” where too little IP protection reduces incentivisation, and too much stifles progress. However, just like the real Laffer Curve, this point cannot be known or measured in any meaningful sense.

A market process, which allows creators to protect their IP at their own personal cost, is the only way to dynamically price IP protection for heterogeneous new ideas. This does not require the state.

The incentivisation problem can be solved by new business models that are more closely suited to compensating a creator for the actual value of the produced idea. This probably means contracting someone to develop a new idea without expecting to profit from the quantity of copies produced.

This is done all the time in custom software, web design, architecture… Generally in these cases, the creator retains the idea and is able to apply it to similar projects in the future at little or no additional cost. He is now the expert. For this reason, he may even discount the price of the initial commission. This is a win-win-win – the first client gets their new idea – possibly at a discount to the actual costs required to create it, the creator has valuable capital and expertise, and his future clients get the benefit of the idea, probably at a discounted price as well since it does not require redevelopment.

If one of these parties wants to protect this idea, they can enter into a contract with the other. The first client may wish to restrict his competitors from accessing it, and include an NDA or non-compete in their terms of the contract. The same scenario could also be initiated by the creator with each of his clients. This is how non patent-trolling companies do business now, and no patents, copyrights, or state is required.

However, a creator who is restricted by an NDA will charge full price for his services since he will gain no useful capital from his work. This, and the unseen lost future clients, is the cost of IP protection.

The argument between pro-IP and anti-IP here is who should bear this cost. Pro-IP says everyone should (through socialized enforcement and arbitrary statutes). Anti-IP says whoever values this protection is free to pay for it – which forms the basis for market calculation of IP protection.

Tim July 21, 2010 at 5:41 pm

Bravo, the most sensible post I’ve ever heard on this issue.

True, a considerable amount of effort and sometimes physical resources goes to create an intellectual work. However it costs nothing to infinitely replicate it over and over again so as to create a situation where the good is in infinite supply. This is why material property can’t be dealt the same as physical property. The crux of my anti-IP position lies in the fact that the government and the hardline IP proponents in the industry want to create a draconian system of copyright enforcement which maintains the status quo while inconveniencing the customers and stifling progress. To the aged executives running the media companies, it would be better to shut down the internet altogether, or at the very least hose it down to a medium for commercial propaganda like public TV has become. None of them seem to be interested in diverting time and money to seek new entrepreneurial solutions. Such a thing would require an abandonment of modern misconceptions on IP and a move towards practices which implement the peer to peer nature of file sharing in place of the traditional “enterprise to customer” relationship. I have examined some of the ways individual filesharing can actually benefit, or at the very least, diminish the costs associated with product distribution. I’m sure that a free market in intellectual property would offer many opportunities for profit to be made from new ways to distribute digital content.

Saying that humanity will go back to the dark age unless something is restricted or outlawed is awfully familiar. Indeed, every argument against the free market is based on this notion. It been touted so much in our face by “public choice” intellectuals, drilled in our heads at our schools, and propagandized every day in the airwaves, that we have come to recognize it as an irreplaceable part of the interventionist mentality.

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