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Source link: http://archive.mises.org/14320/understanding-ip-an-interview-with-stephan-kinsella/

Understanding IP: An Interview with Stephan Kinsella

October 21, 2010 by

“Finally, everything fell into place, primarily from Rothbard and Misesian theory. I found that this issue is difficult, but once you see it, it’s one of these issues that sets peoples’ minds on fire. It frees you to think about other things in different ways.” FULL INTERVIEW with Jeffrey Tucker

{ 41 comments }

Walt D. October 21, 2010 at 6:04 pm
Dave Narby October 22, 2010 at 8:32 am

Clearly, the problem is the failure of government to do it’s job properly, not the practice of using IP law to protect society’s innovators.

I suggest that if you want to further your crusade against IP, you need to clearly answer this question, first put forth by Silas Barta:

Innovations that don’t need patents will clearly exist whether or not we have patents. But the the reverse is not true. Where have you shown that patents *as such* prevent innovation?

Or to put it in one sentence: Please explain how repealing IP laws will provide innovators MORE incentive to innovate.

Many of us have been patiently waiting for some months now for you to address this. I sincerely hope for your sake that you can do so. You seem genuinely earnest, and I would hate to impute bad intent where it does not exist.

Peter Surda October 22, 2010 at 8:49 am

Silas’ point was addressed: those inventors whose costs are more affected by IP than their revenues will benefit from repeal of IP. The prototype of a business model that has no (or negligible) costs affected by IP is a patent troll. For those, you can definitely say that their business model benefits from IP and they will be hurt by the repeal thereof.

You ignored by replies to you and repeat the same fallacies.

Peter Surda October 22, 2010 at 8:51 am

by replies -> my replies

Silas Barta October 22, 2010 at 8:55 am

those inventors whose costs are more affected by IP than their revenues will benefit from repeal of IP.

In other words, if you assume that ideas invent themselves, and thus the cost of new ideas is zero, then inventors of new, um, costly ideas would no longer have to pay for other invetors’ costless … um … ?

The prototype of a business model that has no (or negligible) costs affected by IP is a patent troll.

Or an inventor that can’t personally put the idea into mass production.

Peter Surda October 22, 2010 at 9:17 am

if you assume that ideas invent themselves ..

… which I don’t, and had you actually made the effort of reading my arguments, you would know it. It directly contradicts my elaboration that IP redistributes property rather than creates new. You actually agreed with me on this, so why you repeat the nonsense is puzzling.

I have clearly explained my stance several times over, yet either it is incompehensible to you or you ignore it altogether. So, instead, I will point out directly to one of the self-contradictions in your argument. Your argument is that competition should be illegal, because noone would be willing to enter a market without being assured monopoly profits. Without monopoly rent, all second-comers can benefit from the work that the first entrant into the market has done without paying him a dime. The benefit can be, for example, the result of: market research, marketing, product research, or just the time he spent on trial and error. Competitors’ ability to enter existing markets and provide substitutes is causally related to the first entrant’s actions, they are offering products to customers because he did it before them and they copied some aspect of his business model. Therefore, mercantilism, protectionism and monopoly all the way is the way to go.

Now, this kind of claim is very rare among pro-market economists indeed, and I suspect you wouldn’t support it either if it was phrased this way. Yet, for some mysterious reason, for an arbitrary subset of causality and utility, it is supposed to be an exception. You have provided no explanation, or even a delimitation of that subset, but refer to the mystical concept of it being “evident”.

Dave Narby October 22, 2010 at 9:42 am

Mr. Surda:

You claim to have *clearly explained* your argument(s).We have summed up our argument in one sentence.

It is clear: Repealing IP laws will cause innovators to have less incentive to create and innovate.

I challenge you to make yours in three sentences or less. If you are clear, this should pose no problem.

Please, enlighten us.

Peter Surda October 22, 2010 at 10:22 am

Dear Dave,

the incentive will only be decreased for those inventors whose costs are affected less by IP than their revenues.

Dave Narby October 22, 2010 at 7:10 pm

@ Surda

“the incentive will only be decreased for those inventors whose costs are affected less by IP than their revenues.”

So, according to your logic, without IP there is clearly a net DISINCENTIVE for innovators.Thank you!

Peter Surda October 23, 2010 at 3:10 am

No Dave,

that is not what I said. That would be a normative argument. From a point of view of property rights theory, the introduction of IP into a physical property system rearranges the boundaries rather than increases the total scope thereof. All rights that are gained by someone are lost by someone else. The net sum from a property rights theory point of view is zero.

We can approach this from a purely normative point of view, which is what you are doing. However, you have not explained what the unit of measurement is or how to conduct the measurement. You literally pulled your argument out of nowhere.

We can also approach this from a theory of efficiency (like Roy Cordato). That allows to conclude that IP makes property boundaries less clear due to absence of definitions and (under ceteris paribus conditions) decreases efficiency.

My argument is that IP is self-contradictory, overly arbitrary, based on metaphors, without clear definitions and not accompanied by a theory that explains it.

Benjamin October 23, 2010 at 9:58 am

Peter,

I’m not sure that I clearly understand your one-sentence response to Dave, but this here…

“…the introduction of IP into a physical property system rearranges the boundaries rather than increases the total scope thereof.”

…is demonstrably false. In terms of art (books, movies, music, etc) there’s more variety out there than one can shake a stick at. In terms of scientific and useful arts (a specific term denoting a technological and/or productive design), there’s been also been countless things brought to market.

In the current context, though, I have to side with Dave. Improper practices is the root of the problems of unjustified monopoly; increasingly, it’s the large corporations that are hoarding patents and copyrights. Though I can’t say for certain, it would seem there has been a slowdown in new ideas brought to market.

This itself, though, has a root problem: that of central banking. The boom/bust cycle favors the corporate monopoly. The malpractice of not enforcing timeline makes it all but certain that only those large corporations will retain indefinite control over the flow of new ideas.

Main point: The problem can’t simply be explained by IP itself, as in other eras there were plenty of new ideas on the market.

Peter Surda October 23, 2010 at 1:01 pm

Benjamin,

…is demonstrably false.

Apparently you still do not comprehend my argument. If you produce a good, that does not mean that the scope of goods covered by property rights increased. Similarly, introduction of laws that changes how property boundaries are determined does not mean that goods that were previously uncovered by property rights are now covered by property rights, it just means that the rights belong to different people. The sum of change is zero: that which is assigned to some is taken from others.

Benjamin October 23, 2010 at 2:25 pm

Peter,

Maybe I do, maybe I don’t understand your argument. You’re making two statements in one sentence…

a) IP rearranges boundries
b) does not increase the scope of property in the marketplace (ie, boundries)

I argue that it does indeed increase the amount of property. We’ve seen this, we still continue to see this (despite abuses of IP rules and easy credit).

But you still haven’t shown that IP a) is a statist redistribution, ie rearranges boundries. It’s still just an assumption, one I’ve seen reason to just accept. And as far as that goes, the only way it becomes a statist redistribution is through central bank money/credit expansion in the private sector and/or government to procure patent/copyright protection.

von Mises was well aware of what central banking does. It’s the root of all statist redistribution schemes and the single greatest distortion in the marketplace. Shouldn’t we start there first, then?

Peter Surda October 23, 2010 at 4:47 pm

Benjamin,

indeed it looks like you do not understand my argument. I am not talking about the amount of goods in economy, but whether those goods are covered by property rights or not. With or without IP, all goods are covered by property rights (100% coverage), just the boundaries are drawn differently, meaning that different people own different goods.

Since you refer to central banking, an analogy might help. Physical property rights are like 100% reserve banking and commodity money. The introduction of IP is like the introduction of fractional reserves and/or fiat money: there are more ways of obtaining property rights, but the in both cases all the goods in the economy are covered by 100%. Surely, inflating the money supply causes a different assortment of goods to be produced, and different people ending up owning them. Just like the introduction of IP causes a different assortment of goods to be produced and different people end up owning them. But neither of those means that the economy produced more goods or goods that are more useful. Just like the Austrians argue that FRB distorts prices and leads to malinvestment, an argument can be made that IP does the same. Those that inflate money are not necessarily those that contribute to economy, so why should those that inflate property rights be those that contribute to economy?

The last couple of sentences are speculative, I haven’t fully developed the argument, so just see them as an alternative to an unsubstantiated assumption rather than hard disproof. However, it is undebatable that introducing new rights into a system with 100% coverage has an inflationary effect.

Benjamin October 24, 2010 at 6:24 am

Peter,

Yes, I had considered those points about money creation before you raised them. It would be true if the analogy is correct. It isn’t… Unless one first accepts that IP law is a statist redristubution, rather than a market one.

btw, It was a typo in my last post. It should’ve read “an assumption I’ve seen NO reason to accept”. That error was probably why you didn’t address that doubt. Sorry about that.

So let’s try and validate/refute that point. I argue that it doesn’t because…

a) In a free market with IP laws, you’re free to develop other things
b) You’re free to meet the patent/copright holder’s demands. Or not, and walk.

c) Provides incentive by better guarding against marginal returns. Speaking of which, there’s a very good reason why there’s a provision for limited IP in the United States Constitution: to protect capital in general thus the national security. If anything-goes
non-IP were allowed, there would be over-investment, marginal returns, and thus boom/bust cycles. To guard against that, the inventor is able to procure incidental protection, for a time. So it’s a two-way street, one which ultimately brings ideas to the marketplace, in a more regular fashion.

Peter Surda October 24, 2010 at 7:14 am

Benjamin,

you miss the core point of my argument, which is that IP causes costs in the same amount that it causes revenues. These, of course, affect innovators as well. In order to make some endeavours more profitable or possible at all, it needs to make others less profitable or impossible at all.

In order to make the conclusion that the overall effect is a net benefit, you need to provide a normative framework other than monetary one. Which neither you nor other IP proponents provided.

Let’s then address some of the other invalid assumptions you are making (which are not that important from a theoretical point of view, but they hint why you are making the error mentioned in the previous paragraphs).

In a free market with IP laws, you’re free to develop other things

Which is exactly the same as in a free market without IP laws.

You’re free to meet the patent/copright holder’s demands. Or not, and walk.

What you probably wanted to say is that without IP, you do not need to meet the patent/copyright holders’ demands. That’s untrue. IP does not create the ability to sell your intellectual creations, it merely increases the scope of people who have to pay you in order to benefit them by some arbitrary amount. But again, this affects in principle everybody, also other inventors. So, inventors are faced with higher revenues, but also higher costs (unless they do not have inputs affected by IP, e.g. patent trolls).

You do not provide a normative framework that explains why the net result on inventors is positive.

Provides incentive by better guarding against marginal returns.

Just like it affects revenue, it also affects the cost side of the business.

Benjamin October 24, 2010 at 9:08 am

Peter,

“you miss the core point of my argument, which is that IP causes costs in the same amount that it causes revenues.”

But IP law doesn’t cause equal returns vs capital costs. It only guaratees to the inventor/creator that they have the CHANCE, for a time, to make it so. Of all the abuses of IP taking place today, that’s one that isn’t being done. Not rampantly, anyway (General Motors comes to mind, but that’s a fairly recent protectionism, which probably does not relate to IP (after all, how many are copying them? lol).

“In order to make the conclusion that the overall effect is a net benefit, you need to provide a normative framework other than monetary one.”

Well, monetary has no choice but to come into the debate, as endless CB money affects who buys how much IP, and over what. However…

I did refer to the framework you require. In order to provide a society of law and order, and less malinvestment in new ideas (since no one knows how it will go; again, IP makes no guarantees other than exclusive right, for a time), markets need laws to make them more regular. That is also the point of hard money, of uniform taxation, and civilization at all. That’s free market philosophy, and its normative framework is (hopefuly!) well-known by now.

Free market ideology, literally on the other hand, has the framework and philosophical basis that the laws of man are “not natural”. In terms of IP, it’s the eternally radical idea that ideas have rights to not be claimed, which is tantamount to saying that animals have rights.

So, as with all ideologies, we’re left only with the extremity of the jungle. Likewise, though, push regulated (free) markets a step further, you have the ideology of statism. Only states can claim and develop ideas, only states determine what is and what isn’t money, only states determine what is and isn’t excessive pollution, and so on.

And not to appeal to popularity, but I don’t know a single free-market commentator that says we have anything like free markets today. It’s generally recognized that we have statist-leaning/state-distorted markets, world-wide.

One makes a fatal error in not making the distictions between regulated/free, statist, and anarchist. If you think you’re better off outside the middle, I wish you luck (even though I know you won’t be, in the longer run).

Peter Surda October 24, 2010 at 1:21 pm

Benchamin,

But IP law doesn’t cause equal returns vs capital costs.

I find the division of costs into “capital” and “consumption” deceptive, but at this moment it doesn’t matter much, just like in the case of 100% reserves it doesn’t matter. Unless the inventor only has a one-stage production process before satisfying the customer, the costs need to be borne by other businesses. But more importantly, if you consider the opportunity costs, the distinction between capital and consumption costs vanishes and you face the same problem of a zero sum.

I did refer to the framework you require.

No, you didn’t.

In order to provide a society of law and order, and less malinvestment in new ideas (since no one knows how it will go; again, IP makes no guarantees other than exclusive right, for a time), markets need laws to make them more regular.

Since physical property rights already cover 100% of goods in a very regular manner, this does not explain why IP provides an advantage. Indeed, the IP proponents fail to explain what IP is. If you are not even able to define it, how does that make things more regular?

Furthermore, again you neglect the cost side. IP wreaks havoc on the cost side, making it more volatile and investments in areas that are covered by it more risky, especially for people who do not have a big portfolio already. On its own, that does not mean anything, but it provides an alternative to your literally pulled-out-of-nowhere claims.

In terms of IP, it’s the eternally radical idea that ideas have rights to not be claimed, which is tantamount to saying that animals have rights.

Let’s suppose we would indeed introduce animals as right holders. That would be equivalent to expropriation of the animal owners. Furthermore, it would require that you specify what animals are eligible. Flies and cockroaches too? And then you would have plant-rights lobbyists. And would animals then also be required to carry responsibility for their action, be sued, fined and jailed? I fail to see how this supports your argument and makes things more predictable or even practicable.

Likewise, though, push regulated (free) markets a step further, you have the ideology of statism.

But this shifts the boundaries between market and force. IP does not shift boundaries between market and force, it shifts them among existing market participants.

One makes a fatal error in not making the distictions between regulated/free, statist, and anarchist.

I fail to see how this supports your argument. On the contrary, it supports mine. Physical property rights cover 100% of the goods in a non-overlapping manner and is based on natural phenomena, therefore independent (at least theoretically) from interpretation. IP has none of this. If you want to introduce IP, you need to sacrifice some physical property rights. Furthermore, various IP laws create overlaps among each other because they work on a different abstraction level. Even if we ignore that current IP laws are messy, IP proponents fail to provide an explanation what the correct IP should be like. Indeed they provide no definitions and no theories.

I’m sorry, but you’re dragging the discussion further and further from the core and trying to avoid confrontation. I’m going to have to insist that you provide definitions and a properly formulated theory.

Benjamin October 24, 2010 at 4:50 pm

Peter,

“Since physical property rights already cover 100% of goods in a very regular manner, this does not explain why IP provides an advantage. Indeed, the IP proponents fail to explain what IP is. If you are not even able to define it, how does that make things more regular?”

IP is a) anything not public domain (expired protection; anything already in common use) or b) anything not discovered and/or brought to market yet. New ideas, processes, designs, etc.

And it most certainly does provide regularity. For the market, the individual, and the national secuirty. Are markets better off with the marginal returns and/or debt burden that would be had in a free-for-all? Is an economically weak country a better protected and more prosperous one? As for individuals, it’s been argued over and over what happens in the longer run when they know that their ideas are only protected in the absolute physical sense.

Regardless how another might argue it, the point of IP is to regulate the flow of capital into new ideas so as to protect the whole market from mania and the excessive losses that tend to result. That nesseciates a temporary monopoly for the individual (unless God or State is preferable?) which then allows a more ordely period of introducing new ideas in the market. It’s a “cool down” period, so that it can be ascertained how well an idea really performs in the market. You could even say that it’s a market-making force! And once settled in, the protection expires, whether or not the original owner was able to make anything or not.

And no IP? What does it offer? How does it make the market?

Oddly enough, as you claimed earlier, it’s to protect the rights of all innovaters…by refusing to acknowledge their natural rights to protect their works (more innovation, at the expense of protection). And somehow, that is supposed to make them come out in greater number, and market more freely than they were ever allowed to. But when that fails (as it inevitably would)? The anarchists are not particularly concerned about that outcome, as paradise awaits us. The freedom from “sin” is the only outcome of the “redeeming voyage”. I beg to differ.

As for dragging the issue away from the core… Yes, exactly!

If I hadn’t expanded the “map” of yin-yang, then I could only take the position of the opposite extreme in order to oppose the free-for-all of anarchy. But since I don’t find that position any more tenable than it’s opposite, I took the middle ground.

And not to put too fine a point on it, but for all that you tell me I’ve no right to such a “mythical” middle ground, I’ve not denied you the same choice of ground (not here, not in the last IP topic, where we met); I’ve not said people can’t choose the extreme for themselves, if they want to. Brave the jungle all you want. If you want statism, there’s other countries that can accomodate that desire. Go where you like.
All I’ve contended is that choosing the middle does not in any way a trample someone else’s rights. Proving that (or trying to) nesseciated having to show what the purpose of IP really is. I’ve done so, so I rest my case.

Jay Lakner October 25, 2010 at 12:02 am

Benjamin wrote:

All I’ve contended is that choosing the middle does not in any way a trample someone else’s rights.

You have entirely missed Peter’s point.

IP does trample someone’s else’s rights. It tramples their physical property rights.
When you start jailing people because they arranged their property into a configuration you’ve decided is forbidden, are you or are you not trampling their rights?

Peter’s point is that everything that exists is already covered by physical property rights. Ideas and patterns are merely possible arrangements that tangible materials can be formed into. The intangible does not exist unless it’s manifested in something tangible. Physical property rights covers everything.
The process of prohibiting arrangements of tangible materials must necessarily prohibit actions that people were previously allowed to perform. In other words, other people’s property rights must be violated by the presence of IP laws.

Peter Surda October 25, 2010 at 12:14 pm

Benjamin,

IP is a) anything not public domain (expired protection; anything already in common use) or b) anything not discovered and/or brought to market yet. New ideas, processes, designs, etc.

The “definition” you provided is not a definition, it is a tautology. IP is everything that is not not IP? It explains exactly nothing.

The rest of your post is a bunch of non-sequiturs and evasive manoeuvres. You seem to be under the impression that providing convoluted language and referring to some vague feelings about how things should be can fix the logical fallacies in your arguments. It doesn’t. I am starting to think you either have no idea what you are talking about, or you are deliberately attempting to perpetrate a fraud.

In conclusion, it is said that a picture is worth a thousand words. In the age of youtube we can do better. So, I provide you with an explanation of a redistributive measure.

Silas Barta October 22, 2010 at 9:53 am

How about this: First, you explain your bizarre theory about why you think no person X would ever enter a market unless X had a monopoly on “tools in X’s possession” and the resulting monopoly profits. Why do you think people shouldn’t be allowed to compete with X by using X’s tools? Hm? That’s just fair, free-market competition. If he can’t watch his workshop carefully enough, he needs to be prepared for people to make petter use of his tools than he was.

That’s the MARKET at work.

Peter Surda October 22, 2010 at 10:42 am

Silas,

First, you explain your bizarre theory about why you think no person X would ever enter a market unless X had a monopoly on “tools in X’s possession” and the resulting monopoly profits.

That is your theory. You claim that you should have a monopoly on the causal effects of your actions.

Why do you think people shouldn’t be allowed to compete with X by using X’s tools?

I do not claim that. I am merely pointing out the self-contradiction of your claims. I am not claiming the the opposite position on the spectrum is true. You claim that the monopoly is necessary for IP, but not for physical assets. You base your claim on a metaphor: the word “my”. Merely by using it in conjunction with something does not create an identity. If I use the word “my” with a computer located on your premises, that does not mean it shares identity with the computer located on my premises and has economic relevance. Similarly, by calling a text that is on your monitor “my” does not mean that it shares an identity with a text displayed on the monitor on my premises and has economic relevance.

Just like if an overlord refers to people as “my” subjects, that does not mean they share an identity and from this identity economic rules can be derived.

Silas Barta October 22, 2010 at 10:54 am

But you do claim a monopoly is necessary for physical assets. You think that only Peter_Surda should be allowed to use Peter_Surda’s tools. That Silas_Barta can’t enter into fair, free market competition with the Peter_Surda monopoly by taking Peter_Surda’s tool’s and using them.

Why are you against this free market competition? Why do you advocate for these monopolies?

Are you just going to define everything you like as “not a monopoly” and therefore good? Are you going to tell me that I can just “get my own tools”, so it’s not really a monopoly, even though it *is*, somehow, a monopoly, when people can just “get their own original texts”?

I’m confused and need a better explanation from you.

Peter Surda October 22, 2010 at 11:18 am

But you do claim a monopoly is necessary for physical assets.

Wherever I may claim that, it is a normative question. It does not, per se, influence economic laws. What is most important (I’ll borrow from Roy Cordato) is that the total coverage of property rights is maximised. Introducing IP does not increase the coverage, it just reshuffles the boundaries. That’s the main reason why the IP theories fail. They assume that IP provides something at the cost of nothing. Which is evidently wrong.

Moreover, IP theorists often contradict themselves because they want to have IP in addition to physical property rights, although they necessarily eliminate them.

Why are you against this free market competition? Why do you advocate for these monopolies?

I’m not and I don’t, only when I have my normative hat on. But I don’t base economic claims on it.

I’m confused and need a better explanation from you.

The issue revolves around the cumulative scope of rights. IP does not increase that, it just reshuffles the inner boundaries. The arguments you are making require that IP provides something at the cost of nothing.

The Kid Salami October 22, 2010 at 10:07 am

I have a third question. Say i agree that you can’t own a pattern or idea, so you certainly cannot homestead it. And lets say i agree that you can homestead physical items which have an obvious physical boundary by a physical use of the whole object in some way.

What in your view is the story with a stream? You homestead a patch of land with water running through it. The guy next door who has the same stream running through his land sets up a dam in his bit – your water supply is cut off and you will die of thirst.

What vocabulary can we use to describe this scenario? Do you need to consult with other people when you can and can’t construct dams on your property? The water is never still, so there is no boundary that can be used to define what water you have homesteaded – how can anyone ever own a moving body of water in this way? Can they?

Peter Surda October 22, 2010 at 10:49 am

Kid,

this is a normative question. It cannot be answered by using deduction. From normative perspective, you can argue either way. Do you have rights in the molecules of water that are flowing towards your premises, before they reach your premises? In the extreme, if you e.g. homesteaded one cubic kilometre on the surface of the planet, can someone else take the rest of the planet away, leaving you without gravity and to suffocate?

The Kid Salami October 22, 2010 at 11:15 am

So we can’t answer, a priori, the very simple question of whether the second guy can build a dam or not on his property, is that what you are saying?

Peter Surda October 22, 2010 at 11:28 am

At least I cannot. However, I can make a practical point. Block deals with questions like this extensively. Because a situation like this is to some extend foreseeable, it is possible that the parties involved would prefer to come to some sort of an arrangement before the actual dam is built, even before one of them starts building anything on the land. This would make the vague issue of rights into a much clearer issue of contracts and the parties would give each other incentives to perform or abstain from performing certain actions. For example, the dam builder can offer to buy the land of the other guy. Or the land of the dam builder could only be bought form the previous owner only in conjunction with a promise to pay a huge amount of sum to the neighbour should he disrupt the water flow too much. This does not, per se, answer the question of property rights, but explains that there are a lot of ways how things could develop.

The Kid Salami October 25, 2010 at 9:51 am

“This does not, per se, answer the question of property rights, but explains that there are a lot of ways how things could develop.”

I’ve read some Block on this topic – I agree what he says usually makes a great deal ofsense. I have some reservations but these are not relevant here – this is just a clearer example of what I was trying to say last week.

That is, A owns some land and uses it only for, say, parking his car. B homesteads the lot next door and wants to use it to grow food. This would reduce the, say, magnesium content of A’s soil because it is drawn to B’s plot from the surrounding land when used in the farming process.

According to you, because A “owns” his land, he can prevent B from growing food on land (that they don’t dispute B legitimately homesteaded in the same way A did with his land) because he wants – for reasons he need not even articulate – to retain this magnesium in the soil he “owns”. B might want to make some arrangement with A but A could turn him away. He “owns” the …something… the “right to a certain magnesium content in his soil”? IF you don’t like that terminology, what terminology can we use? You think that A can turn down Bs request?

Or can B claim to be performing a legitimate act of homesteading on this previously unutilised and unhomesteaded magnesium?

Which of these is true in your framework?

Peter Surda October 30, 2010 at 3:02 pm

Sorry for the delay Kid,

I have a “mises backlog” and am trying to process it now slowly.

The reason why the situation with the water is unclear is that it is unclear how you can homestead something dynamic. The situation is somewhat similar in your other example with magnesium “sucking”. I think agriculture specialists and geologists might be able to answer better how the underlying objects behave when undisturbed by humans and that should be the starting point for the decision.

My framework does not per se explain where the boundaries are to be drawn if there is an overlap of activities. I lean towards the conclusion that due to the overlap, both participants need to agree on usage, otherwise neither of them can use the resource. If they are unable to come to an agreement, one of them can try to pay off the other for the scope of overlap. It might sound a bit of “coasean”, but I’m not claiming the outcome of a voluntary agreement is equivalent to the penalty for trespass. Rather my point is that it has to be clear to everyone what the legally enforceable boundaries are, so that they can make plans for the usage of goods (Roy Cordato calls this “catallactic efficiency”). If the boundary is muddled or unclear in advance, using affected objects in production processes bears a legal risk and makes economic calculation more difficult.

Benjamin October 25, 2010 at 2:03 pm

Jay Lakner,

Yes, laws, if need be, are enforced by jailing if the violator so wishes it on themselves.

Peter,

Very well. Let’s talk boundries, at long last.

Supposing I conduct some scientiic/technological research, and post it online, which is accessible by paying my ask price. You pay this price, for an initial copy, but then turn around and post it on your site, at cost or for free. And let’s say you’ve been a busy, angelic little hero, clearly ignoring what us “iron-fisted, jailing, demons” have been inflicting on you and the rest of the world. So you’ve several different works, all posted without prior permission or contract.

Your property? And what makes it yours, to the point that you can create and diseminate as many copies of it as you please, knowing full well that it’s going to hurt the person(s) who sunk their time, effort, and capital into conducting the research that is now “yours and the rest of the world’s now”, even though neither you nor the world has contributed nadda to the ongoing effort?

IP needs no complex defenses, as it’s rather apparent why they’re needed and why the person has that right…

a) Because the idea would not in exist without someone putting forth that resource in order to provide what is “yours to do with as you please”.

b) Would exist in boom/bust cycles, resulting in artificial scarcity and artificially high prices of new ideas on the market.

And if you don’t understand by now, there’s nothing more I can say on it.

And not to put TOO fine a point your accusation of MY being a little clueless miscreant/mindful one with a sledge hammer in hand, BUT…

You and your ilk are ones trying to tear something down, not me. I’m merely defending the legitimacy of the right (for all that I don’t even HAVE any patents or copyrights, and never have).

Now, if you’ll excuse me…

Peter Surda October 25, 2010 at 2:28 pm

Benjamin,

it looks like I was right. You have no idea what you are talking about, and think that your feelings make you immune to logical fallacies. Talking to you was a waste of time. Have a nice day.

Steve R. October 24, 2010 at 6:03 pm

In one sentence Tucker stated: “… one of the major reasons for China’s growth right now is the almost complete absence of all intellectual property.”

I will also offer another one sentence hypothesis that repealing IP laws will provide innovators MORE incentive to innovate. It will allow multiple people to implement an idea and allow others to further build on an idea without the fear of lawsuits.

Finally, what is the source of so-called intellectual property as a right anyway? More than one person can come-up with the same concept, so by what right can another person deprive that person of his right to implement their idea. Furthermore, the concept of patent law and copyright law have been so bastardized today, that they have lost “contact’ with their original intent, which was for innovation that would benefit society. Now, patents/copyright are nothing more than toll-booths to extract revenue, not for innovation.

Guy October 23, 2010 at 11:16 am

I’m an ISV. Since the software I produce is a digital commodity whats to stop it from being distributed without retribution to me? Most of my income is from enterprise customers (where IP is mostly respected).

nate-m October 24, 2010 at 6:46 pm

With software specifically it’s pretty easy answer. Not because anything natural or far ranging, but simply because this is the nature of the beast.

Your business model will have to change slightly so that instead of resting on copyrights and the governmental enforcement of your profits you have to depend on being a programmer by trade and work under contracts. You services and perform tasks like support contracts, customization, and other services that large businesses need to have for their software.

That is you become a tradesman (or own a corporation that offers these types of services) if you do not want to work directly for a particular corporation. Just like any accountant, plumbers, welders, drivers, doctors, lawyers, and pretty much everybody else on the planet that works for a living or owns a business.

The vast majority of programming in business happens specifically because of specific business requirements. Business needs tend to be unique and I see no lack of potential future contracts.

S. J. Bentsen October 24, 2010 at 6:06 am

I don’t get the limited ownership of physical property comparison: an idea has no physical extension at all. Take an inventor with an idea for a new type of motor, he goes to an engine maker, who takes his idea and makes and sells the engine without paying the inventor anything – I can’t see the inventor’s ownership then as ever existing.

Of course the situation today, where some French clothes manufacturer can extract a gigantic sum from Ebay because some kid sold a cap with an illegally copied design through them is lamentable. And truthfully, musicians, for example, have performances to sell in addition to records, but there are a number of idea makers out there who sell nothing but immediately reproducible products. A writer may also receive the message that the publishers liked his book but they’ve stopped honouring copyright.

Maybe the Mises Institute could do well without the Mises store, as they would have to if all their books were downloadable into a cheap book producing machine, but imaginably they could not. (Some living writers in their catalogue obviously demand a sizeable royalty btw.)

nate-m October 24, 2010 at 7:03 pm

Most musicians make more money from t-shirt sales at live performances then they ever will from record sales.

The whole recording industry is a rip off of massive proportions. If you want to support your favorite bands go see them live and buy a t-shirt. They will make much more money from that then they will ever see from a 100 or 200 record sales. The whole system is rigged not only against the consumers, but against the bands themselves.

Steve R. October 24, 2010 at 6:29 pm

The Kinsella/Tucker interview touched on ACTA and China. However, they seemed to have missed the obvious “Be Careful of What You Ask For”. Kinsella notes that“The Western countries are twisting the arms of emerging economies like China to adopt a draconian Western-style intellectual property.. Economic power is fickle, countries move-up and move-down in power. China is in ascendancy and it seems that they are funding our deficit spending. So if we huff and puff about “strong” IP, we may find ourselves at the losing end when China begins to claim intellectual property rights for all the stuff we are buying from them. In fact they have started to invest in US companies, such as Chesapeake Energy with our IOUs. Given current trends, demanding “strong” IP will be suicidal.

As an aside, I would also mention that when the concern of any corporation or country is “protection” that they are more worried about protecting their turf than they are about competition, innovation, and developing new products.

Willis Hamolik September 15, 2011 at 4:00 am

this kind of Understanding IP: An Interview with Stephan Kinsella is nearly much like my favorite blog I assume this subject is indeed , starting to be very common

TRINIDAD October 30, 2011 at 12:17 pm

Progamador online que saque da API do twitter.

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