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Source link: http://archive.mises.org/14330/rethinking-intellectual-property-history-theory-and-economics/

Rethinking Intellectual Property: History, Theory, and Economics

October 22, 2010 by

Everyone knows something is wrong here. Everyone. Except perhaps for patent lawyers, federal judges, and Orrin Hatch. I take that back. I think even most patent lawyers know something is wrong. FULL ARTICLE by Stephan Kinsella

{ 95 comments }

Silas Barta October 22, 2010 at 9:06 am

Ahem:

“We must start by taking a close look at the traditional libertarian assumption that absentee land ownership is, in fact, a legitimate type of property right. And it turns out that advocates of the free market have made a mistake all along. Land titles, to take the worst manifestation of absentee landlordism, is nothing but a state monopoly that violates natural rights. Land titles are antithetical to capitalism and the free market.

“And should this be any surprise? Land titles are rooted in feudalism. No wonder we still call them landlords. Property law finds its origins in divine right of kings under the feudalist structure, and even legalized plunder — property titles were used to establish a nobility through the middle ages — making it ironic for property law to be used against modern day “squatters” who are not real squatters at all.”

***

That was easy.

Stephan Kinsella October 22, 2010 at 9:23 am

I tremble at the thought of what Silas’s google alerts pages looks like.

Silas Barta October 22, 2010 at 9:28 am

Not very good, thanks to what you allow Beefcake_the_Mighty to call me the intellectual equivalent of.

Beefcake the Mighty October 22, 2010 at 9:55 am

Silas Barta is the intellectual equivalent of a dirty motorboat.

Dave Narby October 22, 2010 at 6:57 pm

Too bad you don’t have an an actual argument.

Peter Surda October 22, 2010 at 9:26 am

Why are you so obsessed with the normative issues and fail to address the holes your theory, nay the absence of any theory whatsoever?

Let’s supposed there was an anarchist society and it contained IP laws. What would they actually say? You’re not supposed to copy? Well, you just copied Stephan’s words. Pay up! Pay up also to ung ung the inventor of wheel, his brother gchgch, the inventor of fire, and their parents who invented human action. Of course, don’t dare to post anything on the web without paying to the guys who invented latin alphabet and english language. Also, competition of any kind is verboten, because that’s copying too. Also, you need to pay to Rothbard and Spooner, because you can’t live in an anarchic society without their permission.

Silas Barta October 22, 2010 at 9:33 am

Why are you so obsessed with the normative issues and fail to address the holes your theory, nay the absence of any theory whatsoever?

Let’s supposed there was an anarchist society and it contained physical property laws. What would they actually say? You’re not supposed to touch someone’s land? Well, you just flew over Stephan’s land. Pay up! Pay up also to ung ung the owner of the primitive ruins you homesteaded, his brother gchgch, the first farmer of the land you walked over to get there. Of course, don’t dare follow the cleared path to the lake without paying to the guys who cleared it. Also, competition of any kind is verboten, because that might interact with someone else’s land. Also, you need to pay to Neanderthals, because you can’t live in Europe without their permission.

Peter Surda October 22, 2010 at 10:19 am

My theory is clearly explained: the property rights are rights in the physical integrity of the object. The integrity per se does not require interpretation (unlike IP). I was also able to admit, based on Jay’s elaborations, that it needs to contain an arbitrary cut off point, otherwise no action would be possible whatsoever. My position, albeit not avoiding normative questions completely (to my own dismay), nevertheless provides neutral and universally applicable rules.

However, you have not presented anything. You fail to admit that your theory contains overlapping (= contradicting) rights. You claim that is is better due to normative reasons which you do not explain. You do not only admit to the arbitrary cutoff point, you do not even admit that you are obfuscating references to causality and utility. Obfuscation is indeed the only thing you do.

Well, you just flew over Stephan’s land.

This assumes that property rights are 2D. That is a historical relic. There is no reason to make this assumption nowadays. If property rights were 3D, it would indeed be clear if you are or are not in a specific part of the universe.

… owner of the primitive ruins you homesteaded …

Well, if I homesteaded them, then someone else cannot be the owner. That’s a logical impossibility.

If a physical property is owned by some guy 20000 years ago, we merely need to track his descendands. Difficult, but at least theoretically possible. Let’s then assume that you are indeed basing your arguments on causality, a condition you are too cowardly to admit. How do we track causality? And which of the infinite causalities takes precedence?

the first farmer of the land you walked over to get there

Ah yes. “There”. That is a specific location in a space time continuum, distinguishable from other locations, for example those that are 1km away. The location gives it an identity. But what gives the identity to a piece of causality? The anger of the author?

… that might interact with someone else’s land …

Yes, it might, and that’s why there is an arbitrary cutoff point. However, even if there wasn’t, the overwhelming majority of actions do not alter the integrity of other people’s land on a way that is measurable with the equipment available to us, so we wouldn’t be able to conclude an interaction anyway. Competition per se, however, is copying. You have not provided a method of distinguishing the permitted from the forbidden, or an explanation why your normative claims apply to the one but not the other, why one is abhorrent and the other one not.

Neanderthals

Any descendant of a Neanderthal can feel free to contact me with a documentation showing his ancestors were on a land where I reside and did not voluntarily abandon it. I have no problem with that.

Stephan Kinsella October 22, 2010 at 12:49 pm

damn. TKO.

Dave Narby October 22, 2010 at 6:59 pm

Hardly.

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.

Jesse Forgione October 22, 2010 at 8:03 pm

Dave,

A lot of innovation is directly suppressed by IP laws. Invention that makes use of certain kinds of abstractions that someone else claims to “own” are violently prevented from coming into existence. Other times, would-be inventors avoid the risk ahead of time.

(Oh, and I agree with Stephan. Just call them Sonny Surda and Carlo Barta.)

Dave Narby October 22, 2010 at 8:17 pm

@ Jesse

If that is the case, I have yet to see an example.

And above and beyond that, I have yet to see a credible argument that there will be a net increase of innovation from removing IP laws.

One can point to the West, where IP protection and innovation is rampant, and to China, where IP is ignored as a matter of course, and innovation is nonexistent, to show the benefit of strong IP.

Jesse Forgione October 22, 2010 at 8:53 pm

Dave,

I’m not sure what kind of example you’re asking for. Are you asking me to name an invention that didn’t come into existence because of IP laws? That would be like asking Bastiat’s baker to see the suit he will not be able to have the tailor make.

I would say we can point to the west which still has some innovation despite oppressive IP laws, but nowhere near it’s potential, and we can point to China which has even more state control hampering innovation.

Peter Surda October 23, 2010 at 2:55 am

Please explain how repealing IP laws will provide innovators MORE incentive to innovate.

Those innovators whose costs are more affected by IP than their revenues will benefit from the repeal of IP.

Also, please explain how producers will be motivated to produce within competition without being guaranteed a monopoly. Well, you don’t need to explain that, just say whether you agree or not.

Many of us have been patiently waiting for some months now for you to address this.

Many of us have been patiently waiting for several years for the IP proponents to explain why the gains exceed the costs, with no reply forthcoming. Stephan brought this question forth several times (just look it up on the site) but it is never responded to. Because your argument specifically is utilitarian, you should have some sort of explanation for your position. So far you basically said that if you ignore the costs, there are some revenues, therefore the sum is positive.

You seem genuinely earnest, and I would hate to impute bad intent where it does not exist.

On the other hand, since you fail to respond to arguments that have been brought forth and repeat the same fallacies, I suspect you are acting under cognitive dissonance. It does not mean you are not sincere, but it brings doubt to whether you are able to fix your arguments.

Peter Surda October 23, 2010 at 3:16 am

One can point to the West, where IP protection and innovation is rampant, and to China, where IP is ignored as a matter of course, and innovation is nonexistent, to show the benefit of strong IP.

One can also link to a former rebuttal which you ignored.

Dave Narby October 23, 2010 at 6:57 am

The burden of proof is on you, Jesse.

I have yet to see an example of where IP laws have stifled innovation.

I have seen a few examples of where corrupt or inept GOVERNMENT has stifled innovation, but that’s hardly the same thing!

Dave Narby October 23, 2010 at 7:00 am

@ Surda

If anyone cares, I will provide a rebuttal of your argumentative and circular rebuttal.

Peter Surda October 23, 2010 at 1:18 pm

Dave,

If anyone cares, I will provide a rebuttal of your patently argumentative and circular rebuttal.

Feel free to provide a reply. However, since so far you have not provided anything whatsoever, no theory, no definitions, I doubt this will be any different.

North October 22, 2010 at 4:59 pm

Humans are not descendants of Neanderthals, separate blood lines

Dave Narby October 23, 2010 at 7:24 am

But they likely also traded genes occasionally (forbidden paleo love!), there’s a theory out there for that as well.

Peter Surda October 27, 2010 at 6:53 am

Thanks for the reminder. You also are forbidden to love without permission, as clearly other have done so before you. Surely, you don’t want to be love pirate?

André October 22, 2010 at 10:17 am

Who wrote that? Land titles are antithetical to capitalism and free market… ?! Quite a bizarre statement, at best. Could have been Mises himself who wrote that, but that’s just wrong. If I keep my beautiful sportive car in the garage – that does not allow the first pilot to steal it and drive it properly, just because I am an unworthy absentee driver. Property rights mean exactly that, that I do not have personally to stand all day next to my stuff with a shotgun in hands.

Ask those inconsistent capitalist who still own land and try to sell it or rent it… accidentally, they are the same subjects who typically sell land to construction enterprises, who then sell houses, offices, industries… If you do not own it, you cannot really sell it. Capitalism itself would quite collapse if we removed land property rights.

The comparison with IP is interesting, of course. Both land and ideas are not consumed with time and are infinitely usable. So, if it land titles are necessary to free markets, maybe it’s the same for IP titles?

One last note – I am probably to simple minded (or too smart, who knows) to understand Silas’ wit and irony, so maybe I just got it all wrong…

suur October 22, 2010 at 11:38 am

I don’t think I get how land and ideas are similar in the way you are musing. The important difference between ideas and physical property, the difference that makes some form of property rights valid in one case, but at odds with the other, is the fact that ideas can be used without messing with the idea itself, that it doesn’t take away from wherever the idea came from in the first place, or prevent others from using that idea. And it doesn’t seem like “not consumed with time” and “infintely usable” describe that.

Just because a plot of land is arguably “infinitely usable,” if you mean it can be built on and arranged in an infinite number of ways, and change that over time, doesn’t mean that I can make an apple orchard on it at the same time as you can build a house on it. You could probably argue that the atoms that make up any given piece of matter are not consumable and are infinitely usable; breaking a chair does not cause the matter in that chair to be consumed, it just puts it into another arrangement that is available for more use. That doesn’t make it not able to be someone’s chair, though, since one person arranging the matter making up the chair in some pattern would cause someone else to not be able to arrange it the way they want. This is in contrast with the pattern itself, which is important not in its infinite usability, but its non-rivalrous usability; making the chair into a table doesn’t keep someone else from using their own pieces of wood to make another instance of the same table.

Dave Narby October 22, 2010 at 7:07 pm

It is not about “use”, it is about fostering and supporting innovation.

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.

Innovations that don’t need patents will exist whether or not we have patents. However, the reverse is not true.

Beefcake the Mighty October 22, 2010 at 9:36 pm

“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.”

Sounds good to me.

james b. longacre October 23, 2010 at 1:50 am

or smaller firms that just use reserach consultants and dont even bother trying to innovate in secret mode. maybe just making their develoment and production as flexible as possible.

Dave Narby October 23, 2010 at 7:06 am

@ Beefcake

Wow.

Finally, we find out your true nature, sir.

You are a Corporatist.

That explains much.

Dave Narby October 23, 2010 at 7:09 am

@James

You fail to acknowledge the production side. In order to fend off counterfeiters, without IP a company is forced to bring a product to market quickly enough so that as little as possible is lost to counterfeits.

That still favors the large multinational corporations over small and medium sized businesses.

Beefcake the Mighty October 23, 2010 at 8:09 am

The Narbster writes:

“You are a Corporatist.”

No, I’m an anarcho-capitalist, actually. You are a tool, however.

Peter Surda October 23, 2010 at 1:08 pm

Dave,

You fail to acknowledge the production side. In order to fend off counterfeiters, without IP a company is forced to bring a product to market quickly enough so that as little as possible is lost to counterfeits.

Why doesn’t the same phenomenon apply to all competition then? Or does it and all competition should be illegal?

Peter Surda October 23, 2010 at 2:59 am

Dave,

you fail to address the cost of IP. Your argument is flawed.

Dave Narby October 23, 2010 at 7:04 am

@ Surda

Since you are arguing that IP increases costs (and thus discourages innovation), the burden of proof is on *you* sir.

Peter Surda October 23, 2010 at 1:17 pm

Dave,

Since you are arguing that IP increases costs…

my argument is not that due to IP increasing costs of innovation it should be rejected. Rather, I am challenging you to provide a proper argument.

Let’s summarise what you have brought forth so far:

IP results in additional revenue for innovators, thereby it increases motivation for innovation and therefore it is a desirable goal.

My objections are:
- IP is a redistributive measure and therefore from a property rights point of view a zero sum game
- you have not defined what IP or innovation mean or provided a normative framework how to measure either
- therefore, both of your “implications” are actually non-sequiturs, and the argument as a whole is bogus and unscientific

Your retort is that:

the burden of proof is on *you* sir.

That’s not a very convincing one.

Anarcho-libertarian October 23, 2010 at 1:49 am

Maybe my response is simple-minded, but I held the view that owning land was intrinsically connected with capitalism until I recently came across this debate:

http://mises.org/Community/forums/p/2017/27474.aspx#27474

My understanding now is that one doesn’t buy title to land, they buy title to the labor product of the land (the farm or house). If the labor product of the land ceases to be used then a claim on the land is no longer valid. The land can be re-homesteaded by anyone. To do otherwise is to create unnatural scarcity (and this scarcity can be seen by skeptics of capitalism and cause them to view it as “for the rich,” thus hurting the cause of capitalism).

And of course the government is not a legitimate owner of any land, for the people that constitute the government never homesteaded it. I always knew that property could be abandoned, but I thought of that as freely giving it away. But now I see that if you don’t use it, you lose it, whether you like it or not. You either make use of the land or transform it to make it yours, and to keep it yours, otherwise it reverts back to nature.

The debate started off about how that would work with nature preserves. I held the views of “kingmonkey” before but by the end my mind was changed.

Matthew Swaringen October 23, 2010 at 4:11 pm

Thanks for linking there. I haven’t read a lot about this subject yet, but I have kind of been thinking in this direction as it comes to the ownership of land itself. It seems to me that land speculation is not something that we should be looking to protect.

.357 Magnum October 22, 2010 at 9:27 am

I was going to come by and comment that I’d gotten in before those people who can’t differentiate between “rival goods” and “non-rival goods,” and therefore can’t understand how the nature of IP differs from physical property, but I see I haven’t… Silas showed up first and demonstrated this particular failing before I got here.

Oh well… I’ll try to be quicker on the draw next time.

Silas Barta October 22, 2010 at 9:29 am

Oh really? People never conflict over whether pages should instantiate the text of a Harry Potter book? Seems like a rivalry to me…

Peter Surda October 22, 2010 at 9:39 am

The subject of the rivalry in that case is the paper and ink, the particles of metal on a magentic plate, the bumps and holes on a DVD, the electric charge in transistors or the mouth that speaks. You are just reinterpreting a state of rival goods as a rivalry over an abstract concept. It does not, of course, automatically mean that your interpretation is incorrect, is just means it’s redundant, because the objects referred to are subject to property rights with or without IP.

Without the existence of paper, ink, metal particles, DVD, transistors and mouths, there is no way to conclude whether the text in question “exists” or if it’s being “instantiated”.

Silas Barta October 22, 2010 at 9:43 am

So, how, again, have you proven that there’s no conflict (“rivalry”) between someone who wants particular pages to instantiate Harry Potter text and someone who doesn’t want them to? We get that you favor the person who wants to instantiate the text, but the issue is whether there is rivalry.

So, regardless of who you support there, why do you think “no conflict” exists? Because you think the two people are just putting on a show and secretly agree with each other? (Maybe it’s a play or something?)

Btw, instantiate = create an instance of

Beefcake the Mighty October 22, 2010 at 9:58 am

It’s already been explained to you that the rivalry in this case concerns the medium of instantiation, not the thing being instantiated. Who owns the paper and pen? Me, or the author of Harry Potter? Explain please how the author of Harry Potter can lay claim to this paper and pen without homesteading them.

Scott D October 22, 2010 at 10:31 am

Oh really? People never conflict over whether Silas Barta should instantiate his arguments against IP? Seems like a rivalry to me…

Peter Surda October 22, 2010 at 10:58 am

have you proven that there’s no conflict (“rivalry”) between someone who wants particular pages to instantiate Harry Potter text and someone who doesn’t want them to?

You are asking the wrong question. The economic rivalry does not refer to people who are in conflict, it refers to the targets of the conflict. The targets, in this case, just like in any other case, are physical, rival objects. Which are, of course, subjects of physical property rights. Merely because people have two opinions that contradict each other does not mean that there is some abstract concept that is the target of the conflict.

If you do not agree, then explain to me how there can be conflict without rival goods. Didn’t I ask you this before?

why do you think “no conflict” exists

I did not say that (maybe some long time in the past, and in that case it was inaccurate). Please, try to actually read what I write. I wrote that you are interpreting a phenomenon in a different way, but that does not invalidate the issue of physical conflict, because the total scope of the phenomenon is identical.

Btw, instantiate = create an instance of

I see you do not want to abandon vagueness, so I’ll ask you instead: can you do this without altering physical objects? What is the identity of the immaterial?

Dave Narby October 22, 2010 at 7:11 pm

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.

Beefcake the Mighty October 22, 2010 at 7:38 pm

” Repealing IP laws will cause innovators to have less incentive to create and innovate.”

A dubious claim, but even if true, so what?

Dave Narby October 22, 2010 at 8:18 pm

@ Beefcake

“So what”, indeed.

Peter Surda October 23, 2010 at 3:12 am

Dave,

I repeated my argument several times. IP causes both revenues and costs. Those innovators whose costs are more affected by IP than their revenues will benefit from the repeal of IP.

Your argument on the other hand is that if you ignore the costs, there are some revenues, therefore IP is a net gain. That’s not a theory, that’s just flawed logic.

Dave Narby October 23, 2010 at 7:02 am

@ Surda

So where have you shown example that patents *as such* increase costs and discourage innovation?

Again, you haven’t.

Peter Surda October 23, 2010 at 1:10 pm

So where have you shown example that patents *as such* increase costs and discourage innovation?

That is not my argument. My argument is that this is a normative issue and you fail to provide anything remotely related to a normative framework. I’m just calling your bluff and you don’t like it.

Jay Lakner October 23, 2010 at 9:23 pm

Dave Narby,

The argument is not that patents increase costs, the argument is that the benefits/costs are impossible to determine.
And then when you factor in that the implementation of patents results in definite negative effects (as opposed to the lack of definite negative effects involved in *not* implementing them), it becomes obvious that the utilitarian case for patents fails.

.357 Magnum October 22, 2010 at 10:17 am

And that’s exactly what the term “rival goods” does NOT mean. Thanks again for the further demonstration!

The term “rival goods” means that two people cannot impose their separate intentions on a physical object at the same time, therefore they agree to “property law” as a peaceful arrangement by which to determine whose intentions should prevail.

“Non-rival goods,” by contrast, permit different people to do different things with the same (say) computer file at the same time: one can read it, one can edit it to make it read a different way, one can XOR it with another file to create a one-time pad… and no one individual’s use deprives another of its use. Or as Thomas Jefferson (founder of the USPTO) once wrote, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.”

nate-m October 23, 2010 at 4:33 pm

It seems to me that it’s pretty damn obvious that IP laws have nothing to do with property at all because of arguments like this.

If I ‘steal’ a idea or concept from you it does not in any, way, shape, or form inhibit you from using your ideal.

If I ‘steal’ a loaf of bread from you then that means you can’t make any use of it at all anymore.

IP _laws_, patents in particular, themselves do not protect your idea or concept from ‘theft’ because the laws equally apply to people that copy your invention and people that happen to stumble on the same invention in a completely parallel and unrelated manner. It is not necessary to copy a invention violate patents.

In fact in software (I do not know about other industries, but I think the trend in them will be strong) I think that you find that the vast majority of litigation is done on independent inventions that just happen to be similar enough to fall under the scope of a patent completely by happenstance.

Therefore if anybody is arguing that ‘IP’ is actual property then they:
1. Are off on a tangent and are not talking about anything to do with the IP laws we currently have.
or
2. Don’t understand how the IP laws are actually enforced and how they apply to the real world.

Fraggle October 25, 2010 at 6:51 am

“The term “rival goods” means that two people cannot impose their separate intentions on a physical object at the same time, therefore they agree to “property law” as a peaceful arrangement by which to determine whose intentions should prevail.”

So it’s utilitarian, then?

Peter Surda October 25, 2010 at 11:59 am

It would be utilitarian if the alternative contained a non-empty set. However, the alternative does not exist. It’s like asking what the sound of one hand clap is. Likewise, without rival goods, there are no options to choose from, no human action and no economy.

gene October 22, 2010 at 10:41 am

I don’t know, but it seems like the discussion was originally centered on “absentee” property, not property and self ownership in general?

Why diverge?

It’s a completely different argument, absentee property is not inherently “rival” property although it is certainly not non rival property.

certainly a “free” market could exist with the participants recognizing that absentee property is unclaimed and available or even the somewhat hybrid notion that absentee property is claimed but can be “borrowed” as long as returned within an agreed upon time in as good or better condition.

it may be harder to ascertain whether a free market can truly exist when that which by use is monopolized [land] is allowed to be monopolized without use.

whether absentee land is up for grabs is not a question of violation of fundamental property rights, but more a discussion of social “concept” of property extension. if we agree to agree that “labor mixed with land” is possession that doesn’t give a collective group the right to come to the conclusion that not mixing labor with land or mixing past labor [the value received from that enterprise} from other land gives one the right to “own” exclusively land property one doesn’t mix one’s labor with. At least, it doesn’t give them the right to force that concept on all.

Walt D. October 22, 2010 at 11:12 am
Stephan Kinsella October 22, 2010 at 12:51 pm

I’m sure Silas would say he doesn’t agree with *that* example (yet, he would still oppose abolition of the law that causes this. A mystery). What he *does* favor, no one knows.

Walt D. October 22, 2010 at 5:20 pm

This is pernicious. This is a total abuse of state power. It would be like giving KFC a patent that forbids any other restaurant from serving fried chicken. If you think this is extreme, there was a Michelin 3 star chef called Alain Senderens (Lucas Carton, Paris) who wanted to be able to patent his culinary creations.

Dave Narby October 22, 2010 at 7:02 pm

Exactly.

The problem is that Kinsella et. al. are arguing that because patent laws are abused, we should abandon all IP.

This is similar to arguing that because banking laws are abused, we should abandon banking. It is absurd.

Just as Congress has been co-opted by the multinational banks, so has the USPTO been co-opted by the multinational manufacturers.

The solution is honest governance. Unless of course, you want to destroy the last vestige of innovation from small and medium sized businesses.

Walt D. October 22, 2010 at 11:59 pm

“The solution is honest governance”
When the State is involved this is an oxy-moronic statement. The state is about power and power corrupts. What chafes my butt is that in the Colgate case, the use of State coercion is totally unnecessary – the Colgate brand name is enough to give them competitive advantage. There is no need for the State to be involved. The latest thing about “Volt Fraud’, where the State is going to give an $8,000 subsidy to a Government Motors car that has morphed into a Toyota Prius on steroids that also runs on coal, is further indication of the illegitimate influence of the State. Why can I not get an $8,000 subsidy on a Lexus Hybrid. Or if Lexus installs a plug-in battery charger, are the not using identical technology to the Chevy Volt? Why shouldn’t they get the same subsidy, particularly of they re-open the Toyota plant in Fremont, CA?

Dave Narby October 23, 2010 at 6:43 am

Your examples are completely off subject as they have nothing to do with IP supporting and encouraging innovation.

Peter Surda October 23, 2010 at 1:25 pm

Since you have not provided a definition of IP, why do you object?

Peter Surda October 23, 2010 at 2:55 am

IP proponents often disagree with the current IP laws, but do not explain where the specific errors are or how to fix it.

Dave Narby October 23, 2010 at 7:19 am

That is laughable, considering there has never been a forum for the REFORM of IP laws here, only the REPEAL of them.

I would relish the opportunity to clean up the IP law system.

Walt D. October 23, 2010 at 10:04 am

Peter:
Since many of the problems with current IP laws stem from corrupt government, it cannot be fixed without addressing the problem of corrupt government. The sad fact is that government is all about power and hanging on to power. We only ever see corruption increasing.

Peter Surda October 23, 2010 at 1:07 pm

That is laughable, considering there has never been a forum for the REFORM of IP laws here, only the REPEAL of them.

Surely if you object to current IP laws, you must know why. But that requires to formulate a proper definition. Without a proper definition, you cannot explain which set of facts is in accordance with or in contrary to a theory you subscribe to. But neither a definition nor a theory is forthcoming from IP proponents.

Stephan Kinsella October 23, 2010 at 3:57 pm

“The problem is that Kinsella et. al. are arguing that because patent laws are abused, we should abandon all IP.”

that’s not my argument at all. If you had read even a summary of my arguments you would realize this. Pointing to abuse is just a way to open the eyes of stubborn IP proponents.

Abhinandan Mallick October 22, 2010 at 5:13 pm

Hello Stephan, I have noticed a lot of daily articles on the IP issue, and though I do agree with your take, I do have a slightly pedantic, terminological quibble I’d like to share with you. I noticed in your previous article “Goods, Scarce and Nonscarce”, a deviation from Misesian terminology and was wondering if this was deliberate on yourself and Mr Tucker’s part, and if it is something you intend to keep, especially while teaching your course.

As far as I was aware, in Misesian terms, a good is necessarily a means, and therefore scarce. Hence the term “nonscarce good” makes about as much sense as “mammalian reptile.” Hence things which are not scarce are not means, since they are not subject to human action or decisions which decide how their sparse supply may be allocated to achieve the given ends, and are therefore “general conditions of human welfare.” I do of course realise that the term “general condition of human welfare” is probably quite hard to fit on a bumper sticker (perhaps GCHW would do;) ).

North October 22, 2010 at 6:02 pm

I hope Stephan gets a chance to reply to your question because I think it’s a really good question.

There’s a good chance they are using the term as Menger would (sorry, I have more reading to do before I can comment about Mises’ use of these terms). Menger described “economic” goods as scarce goods (there’s more to it than that but that’s the short version).

Ocean water would not be an economic good to me as there is more of there than I could ever use. Clean potable water in a desert on the other hand is scarce and would qualify as an economic good. Both are still goods, and means to ends, but both do not qualify as economic goods.

I hope Stephan gets a chance to reply too, base on what I’ve read on this site his explanation would be much better than mine :-)

Stephan Kinsella October 22, 2010 at 6:58 pm

I’ll try to comment later in detail but in my article w/ Tucker we had plenty of links/references to Austrian uses of this idea of “goods.”

Abhinandan Mallick October 23, 2010 at 11:23 am

Actually, in my laziness I did not read the full article when it was first published, but I now see you have adopted Menger’s definition of the term good over Mises’(and to some extent Rothbard’s).

I tend to have an eye for pedantically noting these things. For instance, in MES, Rothbard says in the passage you quote from (cf. p.11, MES Scholars edition):”There is another unique type of factor of production that is indispensable in every stage of every production process. This is the ‘technological idea’.”But this seems to contradict what he says earlier (cf, p.8):”The means to satisfy man’s wants are called goods. These goods are all the objects of economizing action.[10]Such goods may all be classified in either of two categories: (a) they are immediately and directly serviceable in the satisfaction of the actor’s wants, or (b) they may be transformable into directly serviceable goods only at some point in the future—i.e., are indirectly serviceable means. The former are called consumption goods or consumers’ goods or goods of the first order. The latter are called producers’ goods or factors of production or goods of higher order.”

Hence factors of production are indirect means, and thereby necessarily scarce. This is unless I have misunderstood his definition, and rather indirect means are factors of production but factors of production are not necessarily indirect means. I suspect the latter may be the case.

Additionally, I think it would be worth pointing out that scarcity is a sufficient but not necessary condition for an object to be considered a good, not only for the reasons you cited in that it is not desired by anybody (e.g. mudpies). A GCHW is not subject to human action, though it may well be desirable, and yet scarce. An obvious example would be the sun, whose light is essential for life yet is itself quantitatively limited(the time of its remaining lifespan would be besides the point). It is however not possible(yet) to be an object of human action, and thereby a means and must hence be treated as a given.

Jesse Forgione October 22, 2010 at 6:53 pm

Great point. I think a lot of the confusion over IP comes from thinking of abstractions as “things” that have some kind of Platonic existence of their own.

If they’re “things” it sounds like something that can be homesteaded. But abstractions represent aspects of physical reality.

Owning a certain pattern or method would be like owning a color, tone, or size.

Dave Narby October 22, 2010 at 7:04 pm

That is absurd.

Colors, tones and size are clearly public domain.

Novel and original arrangements of such are not.

This concerted attack on IP is interesting.

Peter Surda October 23, 2010 at 2:44 am

Colors, tones and size are clearly public domain.

If colours and tones are “clearly public domain”, how come visual and audio media are subject to copyright? Another complete non-sequitur in the “arguments” of IP proponents.

Dave Narby October 23, 2010 at 6:54 am

Errr… Because visual and audio media are not colors and tones, those are what we call VIDEO and AUDIO RECORDINGS..!

…Just like how copper wire and NdIB magnets are public domain, but an original, novel arrangement of them that produces an improvement over existing designs is called and an INVENTION?!

It seems we can always count on you to for reductio ab surdium!

Peter Surda October 23, 2010 at 1:25 pm

Because visual and audio media are not colors and tones, those are what we call VIDEO and AUDIO RECORDINGS..!

If you are referring to the media, those are physical goods and covered by physical property rights regardless of IP. Why should the addition of a public domain good into privately owned good result in something which is owned by someone else, the mythical “author”?

… but an original, novel arrangement of them …

Any combination of physical elements is unique in some way and resembling something that existed before in other ways. Or to use Silas’ terminology, all actions result in an instantiation of an infinite number of patterns, some new and some old.

Which of those are relevant for the concept of “invention”?

TokyoTom October 26, 2010 at 12:47 am

AM:

FYI, here is a summary of Mises’s discussions of IP:

http://mises.org/Community/blogs/tokyotom/archive/2010/10/06/mises-on-copyrights-by-bettina-bien-greaves-his-student-translator-editor-and-bibliographer.aspx

It seems Mises was sympathetic to utilitarian arguments FOR IP; perhaps now, given the growing abuses, he’d be sympathetic to the principled and utilitarian arguments AGAINST IP that Stephan is now marshalling.

TT

Josh Fulton October 22, 2010 at 7:46 pm

Copyright (alright, IP/patents) is not rooted in censorship. If you even go to the wiki page on patents, it points out that Greeks, or at least some Greeks, gave out 3 year or so monopolies to people who created useful inventions. Then a patent was given to Brunelleschi for his development of hoisting gear while working on the Santa Maria del Fiore.

Yes, IP law can be misused as was the case with the Stationers’ Company, but it wasn’t/isn’t always used that way.

Dave Narby October 22, 2010 at 8:21 pm

That is a fascinating fact about the Greeks. I did not know that, thank you.

Stephan Kinsella October 23, 2010 at 12:51 pm

Copyright is rooted in censorship and thought/idea control. Patent is rooted in economic favoratism/mercantalism.

gene October 23, 2010 at 1:42 pm

a creator always has monopolistic control of intellectual property.

IP laws are simply state efforts to extend that monopoly to the state’s benefactors beyond the point in which a creator voluntarily gives up monopoly control whether for value or freely.

If IP were truly property, which it isn’t in any physical sense, this would be akin to a land owner retaining the use of land and the products from it on land he has already either given away or sold in its ENTIRETY {you cannot partially release IP monopoly, an idea is either expressed or not}.

how this concept would ever fit into a truly free market is beyond comprehension.

the argument that abolishing IP laws would only benefit giant corporations is absurd being that many giant corporations owe their very existence to IP laws.

your above quote steve is dead on, both patent and copyright are rooted in privlege and force, not consensual exchange.

Josh Fulton October 23, 2010 at 1:44 pm

Yes, I guess it is favoritism to reward someone who creates an invention.

Beefcake the Mighty October 23, 2010 at 1:49 pm

The issue is not whether inventors should be rewarded, it’s whether they can acquire ownership rights in non-homesteaded goods by the fact of first conceiving some idea/invention.

Trolls' troll October 23, 2010 at 7:03 pm

Well, erm, they won’t be rewarded if their IP isn’t protected, will they sport? By the way, I think the world benefits when it is made harder, not easier, to adduce whether something invented coincidentally was in fact coincidence, as I think this is the actual extent of IP law enforcement beyond trespass. The reductio ad absurdum just doesn’t work. Because when you’re talking about letters, colors, shapes, being IP because like so many things the distinction *will* be arbitrary. But, um, so what? This is telling when IP Communists never use concrete examples that spell out exactly how such repeal would work irl unless it’s some idiotic lighthouse example as if the world is made up of only lighthouses and idiotic examples and the people who make them. So, if actor A writes a novel, a truly great novel, and actor B “copies” it and then slaps a dainty little cover on it then sells it and sells many, many than the author *he* gets rewarded for being a better producer of other people’s inventions while the author, aside from the pure artful joy of doing it again possibly, has ZERO economic incentive to to do so. (Sound like any socio-economic systems you know?) But then again many more people will be great at reproducing such inventions and stealing them from their producers than will be people producing them, naturally. So, I guess if we must shove all of our ideas into the childish verbal categories of the anti-IP crowd, the question becomes can an entrepreneurial thief acquire ownership rights in already homesteaded goods? Sounds like a crappy ass lazy argument because, oh, wait, it IS! But, you first. Gotcha.

Beefcake the Mighty October 25, 2010 at 9:37 am

yawn

gene October 25, 2010 at 12:44 pm

so, how did actor b get the “original” in the first place?

did he buy it?

creators in a free market have all the freedom in the world to do what they want with their books, etc. supply and prices will reflect what they decide. chances are an author’s “first sale” of a really good book will bring a really good price. sytems naturally adapt to freedom. restriction always limits freedom and the ability to adapt. but we don’t know, do we, that’s why it is called a “free” market.

as libertarians, we claim to oppose agressive force. which situation uses agressive force, that of free exchange of ideas or state enforced IP restriction? where has agressive force been used when someone copies that which they have already purchased in full consent of buyer and seller?

on the other hand, hey, don’t copy your friend’s cd, you may end up in the gulag.

can’t speak for others, but I am a musician myself and I am not interested in being partially free. not interested in protecting some folks [even if those folks include me] right to privlege and eliminating others. we all give up privlege and there will be more than enough left to go around for anyone who is wiling to do something of value.

i don’t want a state that protects me from someone copying one of my cds that i have already sold on the market. why would i not want some other musician playing a song i wrote? getting paid to play it? how can that hurt me? should we “confiscate” apples for some farmer who bought an apple at the store, planted the seeds and harvested the fruit?

IP freedom isn’t “communal” at all, its market oriented. what is socialistic is IP restriction.

Matthew Swaringen October 23, 2010 at 4:25 pm

Reform the IP system here.

Seriously, I want to know exactly what Dave Narby/Silas Barta/etc. propose. You’ve both given why you don’t want repeal but why you think the current system doesn’t work. What neither of you has really done is provide the scope. Silas has lately given some kind of argument for term limits (as has Omar) but I’ve not seen sufficient detail.

So take this opportunity to place exactly what you’d like to see. Here’ s what I’m looking for, but feel free to extend your position as much as you like.

1) Does your IP have term limits? If so, how long are they? Does the term go up/down? If you don’t know how long they are provide a methodology by which you would determine a term limit. Could the term limit be different for different things? If so, how would one establish variable term limits and when would they apply? (variable term limits exist for patents/copyright/etc. now, but I’m saying they might be variable even to a specific “property”)

2) What is the scope of IP in areas like literature, music, pictures, etc.? By this I mean does IP count as a word -> sentence -> paragraph -> page -> chapter -> book? Does IP apply to paraphrase? Does IP apply to plot concept? Does IP apply to character names, object names, titles/etc?

Does IP apply to modified versions of a picture (at some percentage of modification?) ?

Does IP apply to a series of notes? (How long of a series?) The entire lyrics, a portion of the lyrics? The title of the song? How long does a song have to be to be IP?

3) For patents, how do you determine which inventions can have a patent? What level of complexity is necessary? Can software have a patent? How do you determine “independent discovery”? (assuming you believe it’s allowable)

4) Who is going to enforce the rules? (Government or the market?)

5) What privileges do rule enforcers have in terms of finding out about infractions? Do they have the right to crack encryption, entice people to download illegal copies from them, hack computers, etc? Do they have the right to demand (by threat of government or private force) a service provider give up information concerning users (that the service provider would not willingly give) ?

Mushindo October 25, 2010 at 6:05 am

Latest reductio absurdum: English Heritage has now claimed copyright on any and all images of stonehenge.

http://www.thinq.co.uk/2010/10/21/english-heritage-seeks-copyright-stonehenge/

this is even more absurd than the recent SA initiatives to patent wild-growing medicinal herbs on behalf of San descendants.

Peter Surda October 25, 2010 at 6:26 am

But, the IP proponents do not want that! What they do want they don’t tell though. It’s a secret!

Mushindo October 25, 2010 at 9:27 am

Artistic aspects aside, what galls me about patents is simply this, viewed from a universal evolutionary perspective: Once any organism , human not excluded, has acquired knowledge that will advance his prospects for survival, it is unreasonable to expect him to unlearn it. Nor is it reasonable to prohibit him from using it to advance his prospects for survival and procreation.

gene October 25, 2010 at 5:01 pm

very well said.

as long as it is not stolen, there is no harm done to anyone by using an idea someone else has already released and marketed.

loss of profits from the loss of an IP monopoly isn’t harm, it is the difference between a free market and a state market.

TokyoTom October 26, 2010 at 1:38 am

What you and others in this discussion miss, Mushindo, is that humans live and work in often-competing groups. Groups have always tried to preserve competitive advantage by limiting the access by outsiders to valuable “inside” information. A focus on individuals misses a large aspect of the dynamics at play here.

http://mises.org/Community/blogs/tokyotom/archive/2009/12/20/what-is-quot-property-quot-a-few-weird-thoughts-on-evolution-society-quot-property-rights-quot-and-quot-intellectual-property-quot-and-the-principles-we-structure-to-justify-them.aspx

TT

Sione October 25, 2010 at 11:56 pm

What I have encountered is this. If you are an individual inventor/innovator of modest means, then patents are a terrible hindrance to you. There are several reasons:

Cost of patenting in time, money and resources are high. Better to invest in your business, get to market and improve it. Rather that than playing the IP game.

Existing patents & patent applications, many of which you will be unaware of (at least initially) represent significant barriers. They can hinder or even keep you from the market. They can even be employed to destroy your business activity outright simply by the method of out-spending your resources. They wreck your business, diluting your market activities and forcing you to direct resorces to defending yourself against vexatious litigations instead of developing your business.

Even were to to successfully patent some innovation, you still need to defend your patent against anyone who may decide to employ it. That costs much time, money and resource. You may well be outspent… In the meantime you’ve not been developing your business. Instead you’ve been wasting time on the IP game. All your patent filing did is put your business all over a publically searchable database.

Basically, IP protection schemes favour the large and well resourced over the man of modest means. A modest man is better to bring his innovation to market first, harvest what he can and then move on to the next innovation as soon as possible. The one advantage he has is the first mover advantage. IP protection causes expensive delays and that favours large, slow moving institutions who enjoy exploiting the status quo. Why choose to compete on a battlefield that favours the other guy?

Sione

TokyoTom October 26, 2010 at 1:47 am

“Basically, IP protection schemes favour the large and well resourced over the man of modest means.”

Well said, Sione, and welcome back.

Large industrial firms now use patent IP as a way to erect barriers to entry; while media enterprises use copyright to loot. Meanwhile, the state is happy for help in controlling informal markets.

TT

Sione October 26, 2010 at 5:00 pm

TokyoTom,

Yes indeed. Now extend your line of enquiry some.

Basically, global-warming schemes favour the large and well resourced over the man of modest means. Large well-connected firms now use environmental regulations as a way to erect barriers to entry; while academia uses the politics of “scientific consensus” to loot. Meanwhile, the state is happy for the helpful justifications in controlling all.

Not a great difference from the IP situation really.

Did you realise?

You’re a little late. I returned from the Islands April last and moved to NZ not so long after. It is interesting what altered and what is remaining as it was. Might be time to go over to Asia for a while.

Sione

TokyoTom November 7, 2010 at 1:55 am

Sione, thanks for your comments; sorry to be so late in responding.

Did I realize?

- that “Large well-connected firms now use environmental regulations as a way to erect barriers to entry”? Sure, it’s been one of my continuing refrains. If we removed environmental barriers to entry+permits, public utility monopolies, limited liability of corporate shareholders, and the role of governments as owners of resources, no doubt we’d see dramatic changes in fossil fuel consumption+technology.

- that “the state is happy for the helpful justifications in controlling all”? Sure, it’s a concern that I have always shared

- that “academia uses the politics of “scientific consensus” to loot”? Academia doesn’t loot so much as it takes advantage of opportunities. Moreover, most researchers believe sincerely that we face a real serious problem; this belief is widely shared in the insurance industries and even in the oil+gas cos. No doubt they and others like Bill Gates would step in to provide funding were governments to stop doing so. http://mises.org/Community/blogs/tokyotom/archive/2010/02/04/geoengineering-say-it-ain-t-so-bill-world-s-richest-man-revealed-as-sugar-daddy-to-vicious-crackpot-envirofascist-cult-quot-scientists-quot.aspx

TT

By the way, did you realize that there are principled, libertarian approaches that would address climate change risks and concerns?
http://mises.org/Community/blogs/tokyotom/archive/2010/02/10/towards-a-productive-libertarian-approach-on-climate-energy-and-environmental-issues.aspx

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