I recently learned of an interesting thesis by Professor Ross Emmett of James Madison College @ MSU about the nature of innovation. He’s working on book entitled “Innovation As an Act of Love: and Why it Matters for Fostering an Innovative Society.” You can find a quick overview of his argument in his TEDx Lansing talk (see below) and some of the pieces of the argument on his website. He tells me he’ll use some of my and others’ anti-IP arguments in his book. As noted here, “Emmett is also working on a fictionalized account of the historical relationship between John Law and Richard Cantillon during the European financial crisis of the early 1700s and an intellectual biography of Frank Knight.”
Those interested in Emmett’s talk may also find of interest Lewis Hyde’s The Gift: Creativity and the Artist in the Modern World (Hyde also wrote the recent Common as Air: Revolution, Art, and Ownership, which I’m reading now).
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As Matt Ridley says in his ‘Rational Optimist: How Prosperity Evolves”, Ideas have Sex!
This quote tells the whole story: “According to the anthropologist Joe Henrich, human beings learn skills from each other by copying prestigious individuals, and they innovate by making mistakes that are very occasionally improvements – that is how culture evolves.”
Unfortunately, the last time I checked they didn’t accept “Love” at the grocery store for payment.
Unless society protects compensation (incentive) for innovators (IP in particular), we will see far less innovation – and what innovation that remains will be controlled by the giant multinationals, as they have the resources to innovate in secret and bring a product to market faster than it can be counterfeited.
The Anti-IP movement seems to be moving quickly from desperation to the absurd.
So… you think we will have “far less” innovation absent IP law. How much less? I assume you mean net innovation because IP law certainly squelches some innovation too. And the net innovation you think the patent system encourages–how much is it worth? Is this greater than the cost of the IP system? If so, what are the numbers?
And it’s ironic that out of fear of “giant multinationals” you want to trust the biggest one of all–the US federal leviathan state–to issue monopoly privileges and enforce them with its army of goons and its fake court system.
First, this argument is only in support of patent IP laws.
“So… you think we will have “far less” innovation absent IP law. How much less? ”
That has absolutely no bearing on the argument. Although if innovation is good, then less innovation is less of a good thing.
“I assume you mean net innovation because IP law certainly squelches some innovation too.”
If it does squelch innovation, it is only for the duration of the patent it infringes on.
“And the net innovation you think the patent system encourages–how much is it worth? ”
That is determined by the market.
“Is this greater than the cost of the IP system? If so, what are the numbers?”
Since you brought up numbers, you are the one who needs to show them, otherwise you are clearly engaging in the “Burden of Proof” fallacy:
http://www.nizkor.org/features/fallacies/burden-of-proof.html
“And it’s ironic that out of fear of “giant multinationals” you want to trust the biggest one of all–the US federal leviathan state–to issue monopoly privileges and enforce them with its army of goons and its fake court system.”
You are conflating the enforcer of contracts (government) with multinationals. You are using the “Guilt By Association” fallacy:
http://www.nizkor.org/features/fallacies/guilt-by-association.html
Also, the failure of government to enforce the law (where it is Constitutional and enforceable) is not an argument for the removal of the law.
And since patents expire, if you were being honest, your last sentence would accurately state the facts as “Monopoly privileges for a limited period of time, after which it becomes public domain”.
That last part sir, is the largest problem I have with you. You simply refuse to debate the facts in an honest and forthright manner. Anyone who cannot see this needs to open their eyes, you in particular.
I find it somewhat amusing that you should refer to nizkor.org, since I have yet to see an IP proponent that provides an argument without including a fallacy. I have tried to explain for a very long time now what the logical fallacies in IP arguments are, but noone tries to address them.
First of all, you have failed to define “innovation”, and second of all, you have failed to provide an explanation why it should decrease in the absence of IP. You neglect to recognise that the only think IP does is shift the boundaries of property, therefore involves both relative costs and relative gains. Your implicit assumption might have been correct if IP introduced rights into an uncovered area. But there is no uncovered area in the absence of IP. Immaterial goods are aspects of material goods, they do not have a separate existence. Reinterpreting certain usage of ink and paper as “copying” does not increase the total scope of coverage, rather it shifts the boundaries from the person who owns the ink and paper towards the person who “owns” the text.
Now that I have explained that IP is redistributive, it is up to you to explain how to measure the net effect of the redistribution.
“I find it somewhat amusing that you should refer to nizkor.org, since I have yet to see an IP proponent that provides an argument without including a fallacy. I have tried to explain for a very long time now what the logical fallacies in IP arguments are, but noone tries to address them.”
By all means, provide them! Are they on the Internet somewhere? If not, why not?!
” If it does squelch innovation, it is only for the duration of the patent it infringes on.
First of all, you have failed to define “innovation”, ”
Fine.
Since we are communicating in English, and the subject is IP, I assumed we were using the second common definition of it: 2 A new idea, method, or device
http://www.merriam-webster.com/dictionary/innovation
“and second of all, you have failed to provide an explanation why it should decrease in the absence of IP.”
The argument is very simple: If innovators are given incentives, they will innovate more frequently. If incentives to innovation are removed, they will innovate less.
“You neglect to recognise that the only think IP does is shift the boundaries of property, therefore involves both relative costs and relative gains. Your implicit assumption might have been correct if IP introduced rights into an uncovered area. But there is no uncovered area in the absence of IP. Immaterial goods are aspects of material goods, they do not have a separate existence. Reinterpreting certain usage of ink and paper as “copying” does not increase the total scope of coverage, rather it shifts the boundaries from the person who owns the ink and paper towards the person who “owns” the text.”"
I’m a pretty sharp guy, but you’ll have to break that down for me as you’ve lost me. But when you do, please do so from the standpoint of *profiting* by IP.
They are scattered around this blog, I don’t have them centrally. The most important one is pointing out the vagueness in the arguments of IP proponents.
The core argument is that an author needs to be able to restrict copying (the justification for this differs either due to utilitarianism or natural rights). However, what is copying? IP proponents so far haven’t been able to provide one, so I provided one myself: copying is a mix of causality and similarity/utility, meaning that the copy would not exist without the original, and the copy and original are equally usable for some purpose. However, economics calls such goods externalities and substitutes. If the arguments were valid for “copies”, they must be also valid for all externalities and substitutes. Are they? If not, why and how does one distinguish among them? Causality extends to infinity, and utility is subjective. So what should the IP rights look like?
Some refer to “use of immaterial goods” instead of “copying”, but that is just a different interpretation of the same phenomena. If anything, it just eliminates the utility/similarity condition and only leaves the causality, only increasing the scope.
If taken to the logical conclusion, any competition should be illegal. Let’s make an example. I do market research and find out that there is a market segment that wants a good with features X, Y and Z. Once I start to sell it, other people come and also start selling goods with features X, Y and Z. However, they are freeriding on my market research. They do not need to spend money on it themselves, because they see it works. You have both the externality and a substitution effect. According to the IP theories, the firstcomer should have a monopoly right because others are benefitting from his labour. Your utilitarian argument would also apply: the competitors would have lower costs, and due to economies of scale, in the absence of a monopoly, small businesses would not perform market research and enter into new markets, rather would become slaves to multinational corporations.
The other issue one is that IP proponents misinterpret the extension of property rights into the immaterial as an extension of coverage of property rights per se. However, as I argue elsewhere, IP merely reinterprets the same scope in a different way (since all immaterial goods are aspects of material goods). So any IP right needs to come at a cost of a physical right. So any argument for IP would need to compare them against each other. IP proponents do not do that.
The quick summary is that all IP whatsoever expropriates physical property and assigns it to other people (“authors”). You need to explain why this redistribution is beneficial.
Re: innovation
You have not provided a scientific definition of “innovation”. That what you provide is very vague and can mean literally anything.
This would be only applicable if the effect of IP was only this. But IP redistributes property. That also affects innovators: some will get more, some will get less. The only way to achieve a net benefit for sure is if none of the inputs in the production process are covered by IP. The prototype of such a business model is a patent troll.
So the burden of proof is with those of us who don’t expect a coercive system of “rights” over what other people can do with their own property?
Wow…
What?
Answer this argument, please:
If patent protection is removed, then the only entities to benefit will be large, multi-national corporations with the ability to create and innovate in secret, and then bring those to market in volume and quickly enough so that they cannot be pirated/counterfeited.
Inventors/authors will be forced to become a cog in a larger machine, or face having their work appropriated via ‘intellectual eminent domain’.
Tens of millions of small and medium sized business would then simply cease to be as the fruits of their intellectual labor would be appropriated by the giants of manufacturing and marketing.
It does not logically follow, and empirical evidence to support your claim is also lacking. Why do you repeat that, other than due to irrational biases?
Hi Dave,
Haven’t seen your name in a little while. Welcome back!
I’m temporarily trying to be nice to everyone and engage in kinder discussions. Would you like to engage in a brief yet respectful point / counterpoint?
You’re a smart guy so I know you’re more than capable of a respectful discussion
You go first….
Frankly, I’m still waiting for Mr. Kinsella (or anybody for that matter) to answer the argument without resorting to various logical fallacies.
Here is the argument with regards to patent IP (there is a different argument for copyright and trademarks):
If patent protection is removed, then the only entities to benefit will be large, multi-national corporations with the ability to create and innovate in secret, and then bring those to market in volume and quickly enough so that they cannot be pirated/counterfeited.
Inventors/authors will be forced to become a cog in a larger machine, or face having their work appropriated via ‘intellectual eminent domain’.
Tens of millions of small and medium sized business would then simply cease to be as the fruits of their intellectual labor would be appropriated by the giants of manufacturing and marketing.
Thanks Dave. Well said.
I do disagree, however, based on two points:
1. I don’t believe any of my rights are justified on utilitarian grounds. That is, I do not claim my right to self ownership based on the fact that it is more “productive” or that if I was not entitled to self ownership the multinationals would end up owning my body instead.
If I were to concede that IP is legitimate because without it multinationals would be the only ones capable of innovation, then in order to be consistent I would be bound to concede any argument on this basis. I cannot subscribe to a system of ethics that is based on what would happen to the multinationals.
2. Are you making an empirical or logical argument above? I’ve seen no evidence to back up your assertion that multinationals would be the only innovators if there was no IP protection and I’ve heard no step by step rationalization (not that it fails both tests but I haven’t seen you demonstrate your argument passes an empirical or logical test). I innovated today. In fact, I was so proud if it that I told my client exactly what the innovation is and how they themselves, or my competitors, can replicate the innovation.
I view myself as a true professional and believe that my clients should come to me because I am more capable than my competitors. I understand innovation and do not hide it or keep it a secret. My clients respect this and ask me to critique the innovations others put forward (innovation for innovation sake is not good, it has to be helpful).
On a rational basis, I believe someone here argued that IP actually helps the multinationals and does not hurt them as you contend. I think it was actually the Kinsella lecture posted with the mises academy course on IP. The bits I recall is that IP protection is hard to get. As a small innovator it is not worth the money for me to patent every idea I have and I cannot afford to sue everyone who thinks of similar ideas to me.
The large multinationals on the other hands have perfected the IP program building large portfolios at an efficient cost (compared to my inefficient approach). Once they build such a large portfolio they can breach patents of all other multinationals as they see fit because everyone is breaching everyone else’s patents. Except of course the small guys. The small guy who breaches a cell phone patent will be crushed but the multinational has a portfolio, all they need to do is counter sue with a patent that their competitor has violated and they are set.
I’ll find the link if you want but I’m interested to hear your counter explanation. Thanks for engaging in this one Dave!
Hi North, thanks for the measured response. I am a bit tired at the moment, and proofreading is difficult in these small response boxes, but I shall take a stab at responding:
“I do disagree, however, based on two points:
“1. I don’t believe any of my rights are justified on utilitarian grounds. That is, I do not claim my right to self ownership based on the fact that it is more “productive” or that if I was not entitled to self ownership the multinationals would end up owning my body instead.”
if I understand the “utilitarian argument” correctly, then that is the argument. Realize that all property rights are ultimately backed up by force, as that is how all laws/regulations are backed up.
When it gets right down to it, you only own what you can physically defend. Society, through government, decides (or doesn’t) to lend it’s support through the threat and/or application of force. Whether they are sucessful or not is an issue of good governance (or lack thereof).
Those who would argue “natural rights” may have the philosophical and moral high ground (and I would heartily agree!), but that does one little good when confronted by a mugger.
“If I were to concede that IP is legitimate because without it multinationals would be the only ones capable of innovation, then in order to be consistent I would be bound to concede any argument on this basis. I cannot subscribe to a system of ethics that is based on what would happen to the multinationals.”
The argument is not what happens to the multinationals, but rather what happens to the small and medium sized innovators. Take another look at that, it’s central to the argument.
“2. Are you making an empirical or logical argument above? I’ve seen no evidence to back up your assertion that multinationals would be the only innovators if there was no IP protection and I’ve heard no step by step rationalization (not that it fails both tests but I haven’t seen you demonstrate your argument passes an empirical or logical test). I innovated today. In fact, I was so proud if it that I told my client exactly what the innovation is and how they themselves, or my competitors, can replicate the innovation.”
I believe both logical and empirical. The logic should be obvious, and empirically for an example, we have the lack of enforcement of patent laws to substitute for the lack of patent laws.
Research the case of Philo Farnsworth vs. RCA. How many more inventions would Farnsworth have invented if the IP laws had been enforced equitably and fairly, and he had both the total fruits of his labor, and saved the time, energy and capital trying to get his property back? If there were no IP laws to begin with, would Farnsworth have bothered to invent television at all? Would he have had the resources from the fruits of previous IP he had profited by? I would say logically, no.
“I view myself as a true professional and believe that my clients should come to me because I am more capable than my competitors. I understand innovation and do not hide it or keep it a secret. My clients respect this and ask me to critique the innovations others put forward (innovation for innovation sake is not good, it has to be helpful).”
Unfortunately, in your case it sounds as if there is no enforceable IP. To protect your unique method of doing business, you would have to resort to non-disclosure agreements, etc. (which are frequently more trouble than they are worth), so unfortunately you personally are not a good example for this argument.
“On a rational basis, I believe someone here argued that IP actually helps the multinationals and does not hurt them as you contend. I think it was actually the Kinsella lecture posted with the mises academy course on IP. The bits I recall is that IP protection is hard to get. As a small innovator it is not worth the money for me to patent every idea I have and I cannot afford to sue everyone who thinks of similar ideas to me.”
Yes, Kinsella continually attempts to use failure of proper IP law enforcement as an argument against IP in general. It is one of the reasons I do not respect him, he simply is not honest in his arguments.
“The large multinationals on the other hands have perfected the IP program building large portfolios at an efficient cost (compared to my inefficient approach). Once they build such a large portfolio they can breach patents of all other multinationals as they see fit because everyone is breaching everyone else’s patents. Except of course the small guys. The small guy who breaches a cell phone patent will be crushed but the multinational has a portfolio, all they need to do is counter sue with a patent that their competitor has violated and they are set.”
This is a similar failing of government, similar to what happened with the mega-banks. Should we outlaw banking altogether, or simply clean up the government?
Personally, I think we should clean up government. Much of the innovation we enjoy today was because we had honest legislators and executives which protected our innovators. Now they favor the mega-corporations, to the detriment of us all.
But I would be careful not to throw the baby out with the bathwater!
“I’ll find the link if you want but I’m interested to hear your counter explanation. Thanks for engaging in this one Dave!”
My pleasure. You sir, are a scholar and a gentleman.
I believe I responded to this one months ago. First of all, it’s a utilitarian argument. Second of all, you presented no empirical evidence to support your claim, and there are is a lot of anecdotal evidence that the reverse is true (I think I already mentioned Boldrin & Levine’s book, Against Intellectual Monopoly). Furthermore, the theoretical argument neglects to see that IP changes both revenues and costs. Just like its absence makes it cheaper for the big ones to copy, it also makes it cheaper for the small ones. Last but not least, the vagueness of IP strikes back: patents are merely an example of internalising externalities. But externalities are present in all actions whatsoever. If your assumption was true, it would be valid for all human action whatsoever.
The repetitive vagueness of IP proponents (“fruits of their intellectual labour”) is tiresome. It is just an rhetorical trick to mask that you are talking about positive externalities, an omnipresent phenomenon. Labelling an arbitrary subset of them “patents” does not magically make a wealth redistribution into net gain.
“I believe I responded to this one months ago.”
Believe whatever you want.
” First of all, it’s a utilitarian argument. ”
I fail to see what bearing that has on the validity of the argument. If it is negative, then it applies equally to Kinsella’s and yours, as they are also utilitarian arguments.
If you want an empirical argument, then we can use the lack of enforcement of patent laws to substitute for the lack of patent laws.
Enter the case of Philo Farnsworth vs. RCA. How many more inventions would Farnsworth have invented if the IP laws had been enforced equitably and fairly, and he had both the total fruits of his labor, and saved the time, energy and capital trying to get his property back? If there were no IP laws to begin with, would Farnsworth have bothered to invent television at all? Would he have had the resources from the fruits of previous IP he had profited by? I would say logically, no.
If you would like more empirical evidence, we also have the case of China vs. the rest of the world. In China, IP is not respected. Please note that the amount of innovation that has emerged from China vs. Europe or the US is paltry compared to the countries that protect and encourage innovation.
“Second of all, you presented no empirical evidence to support your claim, and there are is a lot of anecdotal evidence that the reverse is true (I think I already mentioned Boldrin & Levine’s book, Against Intellectual Monopoly). ”
You are the one making the argument that removing IP will not hurt innovation, so the burden of “empirical evidence” (proof) is on you. You are engaging in the “Burden of Proof” fallacy:
http://www.nizkor.org/features/fallacies/burden-of-proof.html
And by appealing to a book without quotations or citations, you are engaging in the “Appeal to Authority” fallacy:
http://www.nizkor.org/features/fallacies/appeal-to-authority.html
Please address the argument without polemics:
“Furthermore, the theoretical argument neglects to see that IP changes both revenues and costs. Just like its absence makes it cheaper for the big ones to copy, it also makes it cheaper for the small ones.”
Unfortunately, it is exactly the opposite of what you claim due to the economies of scale: ‘Economies of scale, in microeconomics, refers to the cost advantages that a business obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased.’ http://en.wikipedia.org/wiki/Economies_of_scale
“The repetitive vagueness of IP proponents (“fruits of their intellectual labour”) is tiresome.”
I am only forced to repeat it because you and Kinsella refuse to honestly answer it, and given that most people easily understand the argument, there is nothing vague about it; and you are now engaging in polemics and the “Appeal to Ridicule” fallacy http://www.nizkor.org/features/fallacies/appeal-to-ridicule.html
“It is just an rhetorical trick to mask that you are talking about positive externalities, an omnipresent phenomenon. Labelling an arbitrary subset of them “patents” does not magically make a wealth redistribution into net gain.”
Are you making the argument that IP rights are somehow redistribution of wealth?
You sir, cannot seem to answer the argument without being evasive, confusing the issue, and resorting to logical fallacies. I will restate the argument once more:
If patent protection is removed, then the only entities to benefit will be large, multi-national corporations with the ability to create and innovate in secret, and then bring those to market in volume and quickly enough so that they cannot be pirated/counterfeited.
Inventors/authors will be forced to become a cog in a larger machine, or face having their work appropriated via ‘intellectual eminent domain’.
Tens of millions of small and medium sized business would then simply cease to be as the fruits of their intellectual labor would be appropriated by the giants of manufacturing and marketing.
I cannot find the link now, but I’m fairly sure that I replied to you in the past.
The problem is multifold. First of all, the Austrians shy away from utilitarian arguments. The second is that you fail to provide evidence for it. The third is that your counter would only be appropriate if we were claiming that IP provides a net loss. It might, but that is not the point. What is relevant is you are making a claim without providing any sort of backing, either through logical reasoning or through referring to evidence. We are not making the claim it does the opposite, we are merely calling your bluff.
This is anecdotal evidence. I could bring up examples of patent trolls as a counter. My point is however that IP only results in redistribution of wealth. Giving more to Farnsworth can be only accomplished by taking away from someone else. It does not increase the scope of markets, it changes the relative strength of the players in a complex way. Now, you claim that this is beneficial. You have not provided a unit for measuring this, and you have not measured anything. You just have vague references to “innovation” and “what would guy X do”.
There could be multiple explanations for this. For example, you might have not gathered the evidence at all. Also, the “innovation” could be performed by multinationals in China and patented in the West. Or it could be that because the innovation occurs outside of the scope of IP, traditional measuring approaches do not provide correct results. Or it could be simply that the cost of labour gives China the comparative advantage in manufacturing. Of course, I could also refer to the researchers Wang, Feng, Lai, and Yu that developed a cryptoattack on MD5 and SHA1 a couple of years ago.
As I said above, that would be correct if we were basing our argument on the claim that IP decreases benefit. We are not. To us, it’s just an anecdote.
Since you have provided no logical support for your claims, nor empirical evidence, it is amusing that you should refer to this fallacy. I’m just calling your bluff.
This looks appropriate. IP proponents ridicule themselves by failing to provide proper definitions and depending on vagueness. I am merely pointing it out. Apart from “fruit of labour”, people also used: creation of mind, rearranging patterns, extending of sovereignty. They do not explain what it is. They are actually talking about externalities and substitutes. So, the whole argument is a fraud.
No sir, that is what you do.
You provide:
- no evidence
- no logical reason to make the conclusions you are making
- no theory to provide a framework for the proposed “solution”.
So, I will restate my argument:
IP theorists can be divided into two groups: the utilitarians, who provide no evidence of the alleged benefits, and the natural rightsers, who start with normative claims and end up with self-contradictions. They however share some same features: they do not define the terms they are operating with and depend on vagueness.
Let’s say, for example, I would say that you need to pay money to me and if you don’t, I’ll smack you. Just like IP, it’s just a redistributive policy based on shifting of boundaries of property rights. To argue for this from a utilitarian perspective would be, in my opinion, ridiculous. Why should any more merit be give to your arguments?
In defense of Dave Narby…
I think he raises a valid point, one not at all disimilar to my own. Students, when allowed to cheat on their exams, would in time see those doing the best work, guarding their work from those who offer them less than equal value for their invested efforts. Wouldn’t that be like a “rich, multi-national company” monoplozing their ideas?
If so, that’s… Fine. What’s wrong with that? All in the course of natural law.
But one has to admit that we would see a drop off in the number of shared ideas by the most competitive. Unless, that is, the best students were allowed to market their work on their own terms. At any time, though, the rest could decide to study and learn on their own. Which is fine too, but nothing can stop the diligent from monopolizing their studies. And any cheating made off of them while they market this knowledge would be, well, not very free market friendly, in my view!
So unless I’m missing something, Dave seems right enough to raise the point he did. The only thing different I would say is that there is destined to be monopoly either way. It would just be a matter of how abundant idea sharing would be with IP vs no IP. And without it, I contend it would be less, not more, because even those “students” who started working harder would share less too (unless, again, they could market their work under their own terms, which is what IP allows).
@Dave Narby
Should “Society” protect *All* innovation, or just those innovations which are going to be profitable? How should we decide which ideas are worthy innovations, requiring compensation protection, and which are flights of fancy? Maybe Society should think of a way for the people who think an idea has merit to invest in developing and protecting it, while the people who don’t are exempt from this tax burden. Is that an innovation worth protecting?One easy way to solve this problem would be to have a multitude of firms that specialise in identifying good ideas, and providing them with the funding and the resources they need to develop, market, and distribute their product to various markets faster than they can be counterfeited. We know that this is a good solution, because it is one of the many solutions to this problem that the market has already provided, they’re called Venture Capital companies.Venture Capital companies are large, admittedly, as they control the assets of a large number of private investors, but they are not “the giant multinationals”, they’re just firms, and firms that quickly cease to exist if they are inefficient. There are, of course, plenty of other options.
Innovation developed without the aim of profit in mind needs no defense, similar to the way popular speech needs no defense.
I believe this is why some release their IP specifically to the public domain, so that all can use it (‘copyleft’).
“How should we decide which ideas are worthy innovations, requiring compensation protection, and which are flights of fancy?”
I believe that answer can be found at http://www.USPTO.gov
Cheers
Love also formed the basis of the Pilgrim society that made its way to America long ago. Botherhood and communual ownership was their sworn practice, which nearly killed them. Realizing this, they then discovered and implemented private ownership, after which they began to florish. For a breif review of this history…
http://en.wikipedia.org/wiki/Plymouth_Colony#Economy
Why would communitizing ideas have a different result? It wouldn’t. When one owns their mind, as natural law has it, they won’t share it when it’s not considered theirs. The way to prove this is by witnessing the results of telling students that it’s okay to cheat on tests. How many would continue to study? Some would, because they honestly want to learn. The rest would just mooch off of them.
Some mutuality that is, and some brilliant society we would have as the result of it!
With respect, I fail to see how this has any bearing on IP laws.
See my response to your OP, Dave. imo, It’s a pretty good metaphor for what would happen and why.
My apologies. I’m clearly being too defensive, I resolve now to breathe deep and think three times before responding.
I did not know that bit of history about the early colonists. Talk about an indictment of Communism!
It’s alright. I understand what a sensitive issue this is can be
And indeed, the Pilgrims made it rougher on themselves than it needed to be. I was very surprised to learn that, myself. The things they don’t teach you in history class…!
If I re-classify production as an act of love, have I just proven that we should abolish property rights too?
Touche’.
I recall something from childhood about love to the effect of, “love is the kind of thing that you have more of the more you give away.” If you know of any physical/tangible good or substance that has that property, let me know.
Silas, production does not change property boundaries. Homesteading does. Stephan explained this sufficiently, I expanded a bit upon him somewhere on the blog.
Just BTW, producting changing property boundaries = labour theory of value.
Does mental work constitute labor?
Whatever “mental work” means, it must at least change the electric charges and chemical bindings in your brain. If you already own your brain, IP results in no change of ownership. In the later phase, you act by changing the physical objects around you. If the physical objects belong to you, again IP results in no change of ownership in this phase. If they belong to a third party, you are only allowed to change them if you have an agreement with them. This agreement can of course include various restrictions and remunerations. IP affects this to a certain extent, but it is more accurate to say that it changes the default restrictions and remunerations in the absence of an explicit agreement. The only place where IP really kicks in is when the change is performed by someone who does not have an agreement with the author and does not involve the alteration of physical goods owned by the author. But all acts involve the alteration of some physical good. So, logically, IP means that alterations of property owned by third parties now require the permission from the author (i.e. they expropriate property). From a theoretical point of view, this is a complete non-sequitur.
The stance of IP opponents (at least those here) can be maybe expressed as “You can control the results caused by your labour only to the extent covered by contracts”. The labour theory of value however states that an actor has a right to control the results of his labour until some arbitrary further point, even to infinity. Apart from not defining the actual extent, IP proponents also do not address the overlaps this causes.
Let’s break it down and keep it very simple, shall we?
Please explain how repealing IP laws will provide inventors MORE incentive to innovate.
Those whose inputs are more affected by IP than their outputs will benefit from repealing IP. It’s trivial economic reasoning, cost vs. income.
The most reasonable utilitarian explanation I heard is that IP promotes horizontal innovation, while absence of IP promotes vertical innovation. Not that utilitarian reasoning is important, but at least this argument makes sense. IP makes it more costly to improve on products that are covered by IP, so it might be cheaper for the innovators in the same field to find a workaround rather than pay for the patent, achieving the same outcome in a way that is not protected. Once they have it, why not patent it as well to recoup the increased costs? In the extreme, the progress can be hampered because the costs for developing any workarounds that are left is too high and the encumbents can raise the entry costs beyond the extent of profitability for potential competitors.
So, it patents make it harder for new inventors to work around patents for inventions that only exist because of patents, thus proving that patents disincentivize invention?
Huh?
Silas,
I know how utilitarian reasoning sucks, I was merely providing an alternative explanation which makes more sense than the one provided by Dave. Whether it is actually correct or not is irrelevant.
Also, you make an error in your logical reasoning. You make the unfounded assumption that innovations exist because of patents. For some, of course, that might be true, but it does not logically follow, any more than any other protectionist measure causes innovation or other “benefits”. There is no economic reason to make competition illegal.
Yes, and innovations that don’t need patents will exist whether or not we have patents, while the reverse is not true. So, where have you shown patents *as such* to prevent innovation?
Again, you haven’t.
>Yes, and innovations that don’t need patents will exist whether or not we have patents, while the reverse is not true. So, where have you shown patents *as such* to prevent innovation?>
That argument only works if it’s agreed that the goal is to maximize the number of ‘innovations’ (however you can define that) rather than maximizing the freedom for people to utilize innovations. If you have a world with 1 more innovation but where millions of people are more restricted from utilizing the ideas of others, that’s not a clear gain. And arguably the ability to use others innovations has a knock-on effect that produces its own supply of innovation, but even leaving that aside, it’s not a clear gain.
Silas,
unlike you, I do not base my argument on utilitarian reasoning. It is immaterial whether patents increase or decrease innovation. How would you even measure that? Aggregate innovation? Addition of heterogeneous variables? Yuck. Not to mention that you, just like all the other IP proponents, fail to explain the difference between IP and externalities and substitutes, so all your arguments should apply to all externalities and substitutes, including all competition whatsoever.
However, I have made the argument that rather than extending the scope of coverage of property, IP redistributes property boundaries. Therefore, if it adds something, it also needs to subtract something. There is no way around this. You yourself admitted that it merely redistributes, but somehow are unable to make the next step in the reasoning. All new revenues are offset by new costs. Somehow, you seem to be under the impression that this magically redistributes into something better and more just. Without any explanation whatsoever regarding the method used for evaluating it, or any theoretical framework indeed.
@Dave_Narby: How much freedom do you have to use ideas that haven’t been discovered yet?
@Peter_Surda: IP can strictly increase the possible uses of your property by allowing more possible uses to be discovered — similar to when more land is discovered.
Silas, you do not address my question. Any increase in the use of one’s property needs to be compensated by a corresponding decrease in some other property. If it’s already yours, there’s no difference. If it is someone else’s, there is a difference and it is up to you to explain why it is beneficial, which of course absent a normative scale is impossible. Just like the fallacies of proponents of an inflationary monetary policy, where they claim it stimulates the economy, not recognising that because there is the same amount of scarce goods, the stimulus needs to come at a cost of something else and is merely a redistributive measure. Even if the redistribution leads to making more scarce goods available (e.g. land), the goods consumed in that process are unavailable for other uses. Merely because the decisions are made by different people it does not follow that the result is a net gain.
If you indeed do have a proper theory, why do you hide it?
I’m aware that you think so. The “innovation is an act of love” argument still sucks though.
Well said, Silas.
And while it does, imo, I defend one’s personal decision to value their work however they want. Does loving innovation suck? Only if it’s forced on me. But aside from that one exception, I say good luck to the entrepreneur that attempts to make it in the world, however they would!
Well if you think that production does change property boundaries, by all means please explain how exactly that should work. I’m especially interested how do you divide human action into “production” and “non-production”, and how do you determine the scope of the boundary change caused by production. Let me guess: you can’t.
How does being the first one to transmit information through EM wave oscillations at a specific frequency change the rights boundaries in the EM spectrum? I’m only making use of stuff that’s already been homesteaded … but didn’t I change a property boundary?
Think about it.
I repeatedly told you that sending EM radiation has physical effect on other people’s property and from this you can derive that that trespass occurs and the owner can ask the sender to cease. There is no need for ownership of patterns or spectra or anything like it. You repeatedly say that the boundaries created by current IP do not need to reflect the correct boundaries, so why should it be the case for EM?
Your attempts to ignore this and repetition of the same non-sequiturs are, just like all the other arguments you presented, fraudulent.
I haven’t made up my mind on the EM spectrum issue, but just playing devil’s advocate here.
Are you familiar with Rothbard’s pollution homesteading idea? I may have it wrong, but from what I remember he gave this example. Let’s say you live in your house, and next door they build an airport where the noise pollution from it is so bad, you can’t live there comfortably any more. You have a legitimate claim against them to do something about the noise because your property rights are not being respected.
However, if the airport were there first, then in effect they homesteaded the surrounding property in terms of the noise level. You can’t build a home next to them after that and force them to stop making noise.
I would think you could extend this idea to EM as well. They’re both vibrations through a medium. What do you think?
*sigh* … this is what i have to deal with…
Well maybe if you actually presented clear definitions, theoretical framework and a normative scale, you wouldn’t need to “deal with it”.
lol… Uh, folks? Whatever happened to simple explanation and common sense arguments?!
Is using one’s brain, work? Of course it is. It burns calories, and the human brain accounts for 20% or more of total expenditure. Regardless whether or not it is, though, what does that have to do with statist market valuations?
Valuation is the exchange. Not how/why the basis for exchange is figured. I can price my production according to how many alien invasions of earth have taken place in the last hour. The market can value it that way, and make the exchange. Or not. Whatever.
So in itself, how/why matters not a lick. What matters is whether the state forces that valuation on seller and buyer alike. And there is nothing in IP law that says anything of the sort. Not even suggestively. All it says is that that the owner reserves the right to value their brainwork, and that the market must obey that demand if it wants lawful access. Which can’t stifle innovation. It has to encourage it (even if it lags/sags at times) because it forces people to give to the seller an equal or greater value.
I am afraid they got lost in vagueness, it is a rather difficult task to clear up the misconceptions.
You could put it like that.
On the contrary. It extends the number of people that are required to participate in negotiations. Without IP, it only affects your customers, with IP it also affects your existing and potential competitors.
Restricting your competitors can’t stifle innovation? That’s odd, I would have sworn it’s the other way around.
Mr. Surda,
I see you have your hands busy, I won’t be long here. Not sure how to use these HTML codes, so…
“On the contrary. It extends the number of people that are required to participate in negotiations. Without IP, it only affects your customers, with IP it also affects your existing and potential competitors.”
Hmm. Are you sure that the extenstion of negotiation is not a phenomenon of free market principles?
I concede you the point about affect. But that’s a good thing! See my posts on students and cheating. What’s important is that we have as many ideas brought to market. Otherwise, ideas in the market decrease in the atmosphere of scarce compensation.
Which would be all the more tragic, because some would argue “that’s the free market at work”. And they would be right. BUT… Just because they would be right doesn’t mean scarcity, or even abundance, for that matter, is what defines a free market. It’s laws and principles that do, because free market is forever the voluntary negotiations and exchnage between individuals and a collective of individuals.
This is a bit odd. First of all, a we don’t know what a situation without the state would look like. The IP we have now is a result of lobbying for legislation. Also, IP conflicts with physical property rights (that was my actual original issue mentioned above) and is too vague. So I think that IP, if it existed without the state, would be of much smaller scope than it is now, but alas, we will never know until it happens (or doesn’t).
That is a normative issue. I’m not really interested in those. Rather, I am trying to point out the issues in the theories presented to me. Of course, it could be that based on a specific normative standard, IP does provide a benefit over the absence of IP. But that does not mean that the explanation thereof can contain self-contradictions, non-sequiturs and other fallacies.
That is a contract issue. The students have a contract with the university, and the university can stipulate that they do not cheat. In return, the university can say that the leaving certificates accurately reflect the student’s knowledge.
From a customer point of view, it does not matter how the product is created. In general, I think that in most of jobs, including development of new products, do not require as much memorising but creativity and the ability to perceive, combine and reuse. The more you are exposed to the world around you, the more stimuli for your work you have. IP has a complex effect on these processes.
However, as I explained, the phenomenon you are referring to (externalities and substitutes) is omnipresent. IP is just a fraction of all the possible effects your actions have on others. Why should an arbitrary subset of them labelled “copyright” and “patent” and be a foundation for redistribution of wealth?
Peter Surda,
“Why should an arbitrary subset of them labelled “copyright” and “patent” and be a foundation for redistribution of wealth?”
The error you’re making is “guilt by association” re: redistribution of wealth = whateverism, forced by the state. But free markets will forever redistribute wealth too, based on the demands of buyers and sellers… not the state’s dictates.
That’s the difference, that’s the basis. It’s foundation as a factor in wealth redistribution (aka trade) is justified, for both creator and potential buyer, by the fact that it is just another capital cost, added voluntarily by the creator, according their ultimate goals with their production.
But another question: Without IP law, I would just charge more for anything I did put out. I would also invest less in putting them out. Print ten books, let the crowd/”competition” do the rest. But it’ll cost ya lots more than you can buy a book today. Do you mean to say I couldn’t raise my costs, even beyond what IP would, because I “force” you to value it higher?
Not Exactly Breaking News: More freedom, yes, but not for me. Someone else. It’s a “buyers” (theives) and “competitors” (theives) market that is a free market, then. Nevermind that the buyer/seller competitive one works, and generally and typically works better.
No, I’m not. You misinterpret my argument. Let me rephrase it. The difference between a property rights system based on physical property and IP is in the distribution of property boundaries rather than in the total scope of the area covered. Vis-a-vis each other, they are redistributive.
You are making the argument that your distribution is somehow more beneficial. I am not making the argument that my distribution is more beneficial, rather that your reasoning is based on logical errors: there is no definition of boundaries, there is no unit of measurement, there is no logical reason why your distribution should be “better” than any other distribution.
No, the difference lies in that you are using metaphors for explaining your position.
What does “put out” mean? Is it just another metaphor to obscure the fact that you are talking about causality? Why then should it only apply to a subset of causality we call IP? Why not all causality until infinity?
The rest of your post I don’t understand at all. Why not ban all competition? All competition requires that someone is first on the market and the newcomers do not need to spend the same amount of labour as the first one, they can just extract the information they need from observing the behaviour of the participants and features of goods that are already there.
Mr Surda,
It’s perfectly valid to use interchangably “redistribution” and “exchange”, which is what I was getting at. The former is, oft in error, negatively associated with statism, though it’s also a valid, voluntary exchange. Forced exchange, forced redistribution… same thing. Redistribution, exchange… same thing.
But you’re right; the common errors are not your fault, so it was an undue burden to place on your argument. My apologies, sir.
Anyway, you rephrased your statement to the same argument you’ve been making with Silas, so I won’t continue that here, for space/clutter considerations.
“What does “put out” mean? Is it just another metaphor to obscure the fact that you are talking about causality? ”
Uh, well, it means exactly what it means: What I decide to put on the market and why. There was no metaphors. It’s a fact, one that is seen everywhere and throughout history in the markets: when risk of less return is higher, price goes up to balance risk/reward ratio, and also for scarcity. An author would have to charge more, or not be an author. Or just live without receiving much. His choice, really, in a free market. And indeed, one has that option in an free/IP market.
btw, As for the students cheating, the point was to demonstrate the theory that scarcity of idea exchange (or worse, force) would be the outcome. Forgot to mention that before.
I am afraid we still don’t understand each other. The exchange of goods and the distribution of property rights are two separate questions. The latter merely explains which of the former are legitimate and which are not, or even better said, it explains who gets to decide which exchange of goods is legitimate. On its own, it does not follow that either of the distributions is “better” than the other.
I can make a counterargument for “my” distribution of property rights from utilitarian point of view. Not that it would be true, it just shows that utilitarianism is a two edged sword. It is arguably easier to determine which actions are legitimate if people have 100% control of their physical goods, rather than having to determine which restrictions are imposed on the control by the various IP laws.Therefore, they can make more accurate plans regarding usage of their physical property in the process of production. Physical assets belonging to other people do not randomly pop up in the middle of your premises. IP, on the other hand, does randomly popup in the middle of people’s premises, and because it restricts the way you can use your physical assets, it can cause unpredictable changes to your production processes, increasing the costs thereof.
That is still too vague. What does that actually mean? Allow me to provide my interpretation: you want others to pay you because they are influenced by something you did. In other words, you are talking about causality. The metaphor is in the implicit assumption that a copy is somehow “the same” as the original, for which there is no scientific foundation, or even a proper definition provided by the IP proponents. A copy is not “the same”, it’s a substitute. So why should your claims not apply to all substitutes and externalities, banning all competition whatsoever?
Peter,Funny thing, my post didn’t go through. I think it’s because I closed my browser before the time limit was up. Anyway, I was ending this particular thread in the topic, as it’s strayed outside the common sense I was refering to. But in fairness to your questions, since it didn’t post…
I’ve seen distribution and exchange used interchangably before, even among von Miseans such as Gary North (I think; don’t quote me on that), who from time to time defends free markets in such a way by saying to the effect “free markets are best at distributing resources, not states”. That’s how I understand it, so I didn’t consider it a far stretch to assume redistribution to mean basically the same thing. Hope that clears that up.
I said: “What I decide to put on the market and why.”
Okay, it’s like this… Yes, I do want others to pay me what I ask, if I ask anything. Nothing wrong, there. They can pay that or go make their own, from their own brain work, or buy someone else’s work whose demands they do agree with. That’s not the same as forcing you to meet to my demands, whatever those are. You’re free to do otherwise.
As for copies being less than the original, and therefore “not property”…
All I can do is again refer to students who must study for a grade or market their abilities among other students . But from a different angle than scarcity vs abundance…
This is a metaphorical. What it says is that unless you give me something of equal or greater value, be that answers I don’t have, money, toads, or anything. I don’t have to give you anything, though, if you don’t meet what I demand. I have therefore successfully monopolized my efforts. And I will tell on you if you cheat off me without meeting those demands. If you cheat off someone that did meet my demands, I will tell on you. But you’re still free to cheat off someone else who didn’t cheat off me, or, better, study on your own. My monopoly is harmless.
The same applies in anything else IP. Do your own work for your own rewards.
The trouble is that your side doesn’t accept that people _already_ can and do monopolize their ideas as a matter of natural law. It’s a similar error that Dave Narby made. He’s worried about big companies having a monopoly, but the fact is… they would be there anyway because that is the nature of things.
But the patent/copyright office comes in purely as a matter of making the claim legit as well to give the person a means to seek recourse when their claim is violated. It’s the only way to keep track, so it is first come, first served. Why? Because. Yes, it’s that easy. And since it doesn’t stop anyone from having other ideas that can be just as if not more valauble……
there’s no good reason to raise all this fuss!
I’ll be fair, and will hear any closing statement you might want to make. But afterwords, I’m out of this conversation.
… and I suspect that leads to to a misinterpretation of what I am saying. You miss that I am referring to two different subjects of the distribution/exchange. The one describes the process where ownership of goods change throughout time by human action. The subject of the exchange is the good themselves, while the property right definition is constant. The one describes the change of ownership as a result of change of definition of property, while exchange of goods as a result of human action is not taking place. The subject of the change are the laws rather than goods.
The example of the former is when I give you an apple and you give me money. The example of the latter one is when a government nationalises your land. The former one is an exchange of goods. The latter one is a shift of boundaries of property. They both result in a change of who owns what, but neither increases the sum of property.
My point is that no matter how you define property and phrase the laws, the total scope of all goods covered by it does not change by the introduction of IP into a system where physical goods are owned. The boundaries shift, but the sum remains the same. The shift is not an net enlargement, it is a shift from one person to another (simply said, from the pirate to the author). So, if you want to say that one legal definition of property is “better” than another one because of the gains it contains, you need to weigh the gains against the costs.
I hope it is clear now.
Well, yes, there is. If person A sells an apple to person B, why should person C be entitled for receiving money too? You have failed to explain this connection.
That is precisely not the point. You are using a metaphor here. From the fact that you can use one phrase to refer to both the original and the copy, you somehow deduct that they represent the same identity and this is relevant from legal point of view (“it can be owned”). It’s a complete non-sequitur. Just like there is no “virtual apple” that can be owned, and there is no reason why a vendor selling apples should have a claim over apples sold by other vendors, there is no “virtual Harry Potter book”, there is no reason why one vendor selling Harry Potter books should have a claim over Harry Potter books sold by other vendors.
The reason why you are making these unsubstantiated claims are in the condition that I referred to earlier: a copy is causally related to the original. However, causality extends to infinity, is an omnipresent element of all human action. How do you decide when it is relevant from legal point of view and when not?
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