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Source link: http://archive.mises.org/14729/ideas-are-free-the-case-against-intellectual-property/

Ideas Are Free: The Case Against Intellectual Property

November 23, 2010 by

What are the results of the patent system itself? The results are distorted research, protectionism, wealth transfers, and enrichment of the patent bar. Large companies, such as IBM, amass giant patent portfolios. FULL ARTICLE by Stephan Kinsella

{ 138 comments }

Barry Loberfeld November 23, 2010 at 9:19 am

And there’s an IP piece on today’s Reason.com.

Daniel Krek November 23, 2010 at 10:42 am

I think one could look to sports to see how patents kill competition. If a football coach was to patent, trademark, or copyrights all of his plays. The silliness of a football game knowing that if you try to run the ball up the middle or a simple pass was going to lead to a law suit is ridiculous. Soon it would seem everyone would just stop playing and then no football for anyone. I think the parallel is easy to see.

Stephan Kinsella November 23, 2010 at 11:34 am

Daniel–good point. During a typical game or season, you will often see one team “learning” from and adopting and copying plays, tactics, strategies made by competitors, just as competitors in the market copy each others’ successful actions. There is nothing wrong with emulation, competition, or learning.

Robby November 23, 2010 at 2:49 pm

Spot on, Daniel. A prime example is the “wildcat” formation that was popularized in college football a few years ago. Itself a close copy of the old single-wing formations from the ’20s through the ’60s (and even into the ’80s now and then for Tennessee fans like me), the idea was widely called a gimmick or a way to hide a lack of talent. Very quickly, though, it was installed by programs all over the country, and made its way into the NFL playbooks. How ridiculous would it be if a university athletic department held a patent on this?

darkcharro November 24, 2010 at 7:52 am

I have listened to a talk by Stephan Kinsella and read a bit, though not a lot, about the issue of IP. I am interested because I’m in the computer academic business.
I must say I remain unconvinced. I don’t see how there could be a software industry without copyright and patents. Yes, I know about the GNU, Free Software Foundation, etc, but most of the programmers who work on that kind of software, do it as a hobby. Most of them have a for-profit day job that pays the rent.
As for the football plays analogy. I don’t think it works, because as far as I know nobody is or has been interested in buying and selling plays. But I’m open to changing my mind. As I said, I’m looking at the arguments for and against IP and trying to understand the issues better.

The Kid Salami November 24, 2010 at 8:41 am

If we’re going to discuss examples, why not discuss ones that aren’t absurd. Patenting football moves isn’t even allowed now with the abomination that is current IP law, why on earth is it worthy of discussion.

I, personally, spent at least 18 months developing an algorithm to automate via software a process on a production line (not to mention the many man weeks of testing and fine tuning in factories by our field engineers). If it was entirely legal for a competitor to reverse engineer the final algorithm and reimplement it in, say, a month at most, I doubt this would have been done – and doubt that any of our competitors would do it either. That is, this particular production line process would necessarily be less efficient without copyrights in software.

I don’t think this justifies the current system by a long shot, nor that it justifies any patent or copyright laws at all. But it is at least the kind of example on which reasonable people could disagree and could have an illuminating discussion about – patenting moves on a football field is just ludicrous.

Peter Surda November 24, 2010 at 1:04 pm

To quote Michele Boldrin, this is an empirical question. Any business model, in order to be profitable, needs to make sure the revenues exceed the costs. It is not specific to IP. Some business models result in a profit over the product lifecycle, some don’t. A shift of property boundaries results in some endeavours to become more profitable, some more lossy. From praxeological point of view, this argument means absolutely nothing. Praxeology is value-free. It is impossible to compare different definitions of property based on the profitability of specific business models. You can’t say that copying is less valueable than originality, or vice versa. Those two terms are not praxeological. The whole argument becomes even more useless once you realise that all actions whatsoever contain aspects of both and the distinction is purely situational.

The Kid Salami November 25, 2010 at 5:36 am

“this is an empirical question. Any business model, in order to be profitable, needs to make sure the revenues exceed the costs. It is not specific to IP.”

Yes, I agree. But if someone were to argue that the interaction of the viable business models across the economy in a non-copyright world was in some sense more costly (produced less wealth) than those in an copyright world, this would at least be a reasonable thing to suggest. I don’t think it’s true – but if you know it is a stupid thing to say, then please tell me why.

And what is your objection to my example? Oil companies don’t drill test holes on the off-chance of being able to extract any oil they find, they are certain they can do so before they commit the resources to the prospecting. People now don’t (in general) write books on the off-chance they will be able to sell it to a publisher, they know they can do it already. If you can give your manuscript to a publisher to read (and make him sign a contract saying he’ll keep it secret) and he says he’ll pass but then the next day prints up the same book and puts it on bookshelves telling you “It was a coincidence – please define copy” or whatever, then some people will not write books.

I see this as a simple fact – there will be less books than there are now if the above situation can happen. If you disagree, please say. So, you can say the many other awful consequences of the copyright laws will outweight this and the new publishing and writing business models will actually be better/more efficient/whatever (and I would agree).

But I think your view is that utilitarian considerations aren’t important and it is the application of the non-aggression axiom that is most important – for example, here you say “It is impossible to compare different definitions of property based on the profitability of specific business models”. But this rests on the the non-aggression axiom being the King of the World, so your argument in this case is nothing more than “people who think anything other than the non-agression axiom needs to be considered are wrong and stupid”.

Peter Surda December 4, 2010 at 12:03 pm

Kid Salami,

I can only repeat what I already said:
- the same fundamental question exists with any endeavour whatsoever because all actions have some effects which are not covered by property rights
- the question will remain no matter how you define property rights, because causality extends to infinity
- given a specific definition of property rights, some business models are profitable and some are not. This indicates how well they are able to make the use of scarce goods to satisfy the needs of consumers.

The question of the definition of property rights is outside of the scope of economics. Please recall that Austrian economics is value free. An Austrian economist cannot judge a definition of property rights based on what products are produced by whom at what time and what products are not. That violates the principle of interpersonal comparisons being impermissible.

So, to interpret your example with copying, the algorithm from a value-free economic point of view: if the costs of you designing and writing it exceeded the gains that your employer was able to achieve, it means it was an inefficient use of a scarce resource (your time). Your argument proceeds backwards: from an inefficient business endeavour you draw conclusion that the product should not have been produced. But then you conclude that this would be bad thing. However, from a praxeological point of view, that would mean wastage was prevented.

Alpheus November 29, 2010 at 10:40 am
The Kid Salami November 29, 2010 at 7:43 pm

OK – but the point is only nutters think you should be able to do this and stuff like it. Even the pro-patent people arguing on this site aren’t such things, so it is just pointless to discuss it.

Alpheus November 29, 2010 at 10:43 am

Are you all that sure that your competitors either didn’t reverse-engineer your algorithm, or that they didn’t come up with the same algorithm on their own? And, if a competitor, completely unaware of your work, came up with the same algorithm, what gives you the right to demand royalties from their own work?

Alpheus November 29, 2010 at 10:46 am

And I forgot to mention: if you’re going to try to enforce your patent, is your company ready for the multi-million dollar lawsuit that would result? If not, did your patent really help out your company after all?

The Kid Salami November 29, 2010 at 7:41 pm

We didn’t patent it – we just stipulate that people can’t take the binaries off our machine.

The Kid Salami November 29, 2010 at 7:40 pm

“Are you all that sure that your competitors either didn’t reverse-engineer your algorithm”

No.

“or that they didn’t come up with the same algorithm on their own?”

They’ve got something like it for sure – not exactly it though, the benefits are at the margins of its use.

“And, if a competitor, completely unaware of your work, came up with the same algorithm, what gives you the right to demand royalties from their own work?”

Nothing – I didn’t say that. I said

“If it was entirely legal for a competitor to reverse engineer the final algorithm and reimplement it in, say, a month at most, I doubt this would have been done”

I don’t agree with patents at all, under any circumstances. But I do think that if a company wants to spend X man years on the development of a business solution that can be codified in some way (and I would say that this is actually quite rare) and then take pains only to release the software on their own machines to people who are by contract prohibited from copying the binaries or removing the originals from said machine, then: a competitor, who is proven to have seen a copy of these binaries, can be sure to have received this information only via a breach of contract by someone in the chain.

Tom Rapheal December 1, 2010 at 8:53 pm

Actually, Kinsella’s postion would defend your right to stipulate that you cannot lift the code up… Contract law and all.

Personally I am unsure on the issue…

The Kid Salami December 3, 2010 at 7:41 pm

Yes I’m aware of that. But the problem is that person X can buy a machine and then if the competitor stands to make significant profits/savings from the information, all he has to do is pay X enough money to make breaking the contract be in X’s interest.

So X admits to us “Sorry, I forgot about the contract – I copied the binaries and then left my memory stick on the bus. You’d better get your lawyer to tell me how much I owe you.” Meanwhile, the competitor now has “accidentally” stumbled upon this information and, having made no contract with us, is free to do as he pleases with it.

I have a problem with this. I think people have a natural sense that this is “not fair” and so think that in a free market some mechanism would evolve to prevent it.

Tim November 23, 2010 at 12:26 pm

In Mr. Kinsella’s world the kick to the nuts the Big Three gave to Robert Kearns was completely justified. I think the taking up of this subject by some libertarians is nothing more than an attempt to gain fame and satisfy their vanity.

Stephan Kinsella November 23, 2010 at 12:54 pm

“kick in the nuts” is not a rigorous concept nor is it what libertarianism is against. We are for protection of property rights and against aggression and trespass, not against “kicking in the nuts” in some metaphorical sense. I think the Kearns movie was some vague, sappy story based on the modern, statist conception of IP. It’s like Zuckerberg said of the Winkelvi: if they had invented facebook they would have invented facebook. I don’t have much sympathy for inventors like Lemelson and others running around using state granted privileges to shake down the competition. In a patent free world, Kearns would have to figure out how to make money off of his ideas. That’s the entrepreneur’s job.

Silas Barta November 23, 2010 at 12:40 pm

Anything here I haven’t refuted? Looks like we got the standard stuff about “Hey look at these stupid applications of IP the state allows”, and how that’s supposed to be an argument against IP per se, all while we act like the state’s application of physical property law is NOT a corresponding argument against physical property.

We’ve also got the standard assertion that “the case for IP is just utilitarian and so unproven” … which you could say, with equal validity about physical property law. After all, who’s *proven* the the benefits of physical property exceed the costs?

And we’ve got the typical implicit assumption that generation of ideas has no cost or no corresponding need to economize on the resources used to produce them, given consumer desires for the ideas and the alternate uses of the resources.

Standard fare here, nothing to see. It must be easy to be Stephan_Kinsella.

Sione November 23, 2010 at 12:55 pm

Barta

You have yet to refute anything here in any way whatsoever. Indeed, it is true that time and time again you evade the point, raise red herrings, substitute one topic for another, scuttle away from addressing questions honestly,…. On the other hand, it is clear that your case has been refuted repeatedly, on several occasions and by numerous contributors to the site. And now, having run out of steam, you resort to puffery and pretence. This is a demonstration of utter intellectual failure on your part.

You’ve been posting mumbo-jumbo here for a long while now. Rather than continuing to compound your stupidity with yet more of the same, how about you go away and either attend a pro-IP site where you can submerge yourself in the spit dribble you so clearly enjoy or as an intelligent alternative purchase the texts of Hoppe, download relevant papers from Kinsella, Boldren et al and go study the subject. It’d be best if you spent a few years on the latter option, but either option will suffice to get you to cease and desist from your consistent publication of lunacy and nonsense on this site.

Sione

Stephan Kinsella November 23, 2010 at 12:56 pm

Silas, libertarians don’t (necessarily) justify property rights in scarce things based on utilitarian wealth-maximization grounds. It is the advocates of state socialist IP privilege grants that use such reasoning, and so we point out that your case is flawed. When you use deontological arguments, those are full of holes too.

Patent originated in mercantalism, corruption, monopoly, privilege, protectionism, and the like. Copyright originated in censorship. They are now democratized and bureacreatized and modernized but are still basically the same. Shame on any libertarian for promoting this wicked nonsense.

Silas Barta November 23, 2010 at 1:05 pm

Silas, libertarians don’t (necessarily) justify property rights in scarce things based on utilitarian wealth-maximization grounds.

Whether this is their ultimate justification or not, they certainly *make* these arguments, and their position is no better than how you’ve characterized the case for IP rights.

It is the advocates of state socialist IP privilege grants that use such reasoning, and so we point out that your case is flawed.

It is the advocates of state socialist physical property privilege grants that claim such a policy will have good effects (i.e. people like you, apparently), and so we point out that your case is flawed.

When you use deontological arguments, those are full of holes too.

As is the deontological argument that IP monopolies are *teh evil* but pattern monopolies in EM waves occurring in others’ property are justified.

Patent originated in mercantalism, corruption, monopoly, privilege, protectionism, and the like.

In contrast to the pure-as-snow origin of physical property or the current land titles, you mean?

Peter Surda November 23, 2010 at 1:07 pm

Anything here I haven’t refuted?

You have not even defined the terms you operate with, so what are you talking about? Just a bunch of tautologies and non-sequiturs.

Andras November 23, 2010 at 12:44 pm

Stephan,
Why stop at IP? You can generalize easily and say the same of all title systems. Is the current Residential title system better? But is that a reason for abolishing residential property?

Silas Barta November 23, 2010 at 12:51 pm

Yeah, right on! I want *solid proof* that the residential titling system’s nebulous benefits exceed its costs!

Stephan Kinsella November 23, 2010 at 12:51 pm

Andras, I don’t understand your qustion. What is “residential” property?

If you are talking about state-recognized titles to land, well sure, get rid of the state system. But you don’t need the state or artificial law to recognize titles to normal property. IP requires a grant of state monopoly privilege.

Silas Barta November 23, 2010 at 12:59 pm

Good point — kinda like how you don’t need the state for people to recognize that, “hey, ripping off someone’s ideas is wrong”.

Stephan Kinsella November 23, 2010 at 1:27 pm

“ripping off” is a sloppy, informal term for “theft.” As such it is question-begging for you to refer to it as theft, which is disingenuous. Obviously copying is not theft, since the person whose idea is “taken” still has it.

When you point this out the IP advocate usually squirms and shifts his ground, saying well, you have had money taken from you–the money you would have earned. BUt the money is money owned by potential customers. You don’t have a property right in potential customers’ money. They do. If they choose not to give it to you, you have no claim.

Silas Barta November 23, 2010 at 1:48 pm

“ripping off” is a sloppy, informal term for “theft.” As such it is question-begging for you to refer to it as theft, which is disingenuous.

Doesn’t matter for the point I was making, which is that — irrespective of the state — people see certain kinds of copying as sufficiently similar to theft in relevant respects.

Obviously copying is not theft, since the person whose idea is “taken” still has it.

Contract violations aren’t literally theft either — if I abrogate my (conditional) promise to pay you $X, people would characterize that as “theft of $X”. This is expressing an apprpriate, coherent, non-statist moral intuition, even if you can identify some differences between that and literal theft, or think they’re using the wrong term.

Stephan Kinsella November 23, 2010 at 2:08 pm

Silas,

“Doesn’t matter for the point I was making, which is that — irrespective of the state — people see certain kinds of copying as sufficiently similar to theft in relevant respects.”

It does matter. You have this implict view of IP which is naive and unhistorical. You are treating it as people have a common moral intuition against IP theft and therefore the state has implemented these laws, even if they are imperfect. This is not true. The state started patent and copyright out of corrupt privilege grants and censorship. Then later they justify it with propaganda that bamboozles the populace–just as they do and have with tax law, antitrust law, social security, and the like. Now that people have been so indoctrinated by the state they do mouth certain nonsense justifications over and over. They would no doubt say there is a “rihgt” to social security and a “right” to not have “big business” get an “unfair monopoly” too. But such incoherent mutterings of a brainwashed populace are not justified, and there is no reason to think such fallacious notions would be common in a society free of the state and its propaganda.

The idea that copyright and patent “could” arise in the courts of a free society if mistaken for several reasons. First, they did not arise this way in practice, any more than other statutes like the Sherman Antitrust act, the Income Tax Code, or hte PATRIOT act did. Where is your proof that such laws “could” arise in a decentralized manner? SEcond, it’s easy to see how a court might resolve a particular dispute about a given piece of scarce property: he awards title to it, to the owner; if it’s stolen, the owner gets it back; if a thief destroyed it, some award of restitution corresponding to the value of the property to the original owner. Easy to see how this would work. But common sense shows that copying something does not “take it” from the “owner” so what is there to restore? What are damages? What are the extent of rights? There is a resaon legislation is needed to specify in ad hoc fashion all these issues.

Third, you cannot abstract away from libertarian theory and ethics. A decentralized legal system is one embedded in a society that already has widespread libertarian sentiments. And in such a society it’s highly unlikely people would be motivated by IP reasoning since it is unjust.

“” Obviously copying is not theft, since the person whose idea is “taken” still has it.’
“Contract violations aren’t literally theft either — if I abrogate my (conditional) promise to pay you $X, people would characterize that as “theft of $X”.”

In a contract, title to something real is transferred. If the old owner of the thing refuses to turn it over to the new owner, yes, this is theft: it makes snese to call it this b/c we are talking about an existing, real, scarce thign: say, a car.

But if you just fail to repay a debt because you can’t, most people do not call this theft at all. And if they do, they are just confused: what is stolen? How can something that does not exist be stolen?

You should read up on the Rothbardian title transfer theory of contract.

Silas Barta November 23, 2010 at 2:28 pm

It does matter. You have this implict view of IP which is naive and unhistorical. You are treating it as people have a common moral intuition against IP theft and therefore the state has implemented these laws, even if they are imperfect. This is not true. The state started patent and copyright out of corrupt privilege grants and censorship. Then later they justify it with propaganda that bamboozles the populace–just as they do and have with tax law, antitrust law, social security, and the like. Now that people have been so indoctrinated by the state they do mouth certain nonsense justifications over and over. They would no doubt say there is a “rihgt” to social security and a “right” to not have “big business” get an “unfair monopoly” too. But such incoherent mutterings of a brainwashed populace are not justified, and there is no reason to think such fallacious notions would be common in a society free of the state and its propaganda.

… and, the same could be said of physical property law. Still wouldn’t affect my point that the state is no more or less necessary for societal acceptance of physical vs. intellectual property rights.

The idea that copyright and patent “could” arise in the courts of a free society if mistaken for several reasons. First, they did not arise this way in practice,

Nor did current property law or titles. (I wonder where the term “landlord” comes from…)

SEcond, it’s easy to see how a court might resolve a particular dispute about a given piece of scarce property:

Because you assume away all the difficulties in the case of physical property but not intellectual.

Third, you cannot abstract away from libertarian theory and ethics. A decentralized legal system is one embedded in a society that already has widespread libertarian sentiments.

Which is why you’d be assuming your conclusion if you supported this point by saying that widespread libertarian sentiments necessarily entail rejection of intellectual property.

In a contract, title to something real is transferred. If the old owner of the thing refuses to turn it over to the new owner, yes, this is theft: it makes snese to call it this b/c we are talking about an existing, real, scarce thign: say, a car.

In a contract, title to something real is transferred. If the old owner of the thing refuses to turn it over to the new owner, yes, this is theft: it makes snese to call it this b/c we are talking about an existing, real, scarce thign: say, a car.

You’re not listening. We say it’s theft because the relevant similarities to canonical theft hold, as you demonstrate here. You make my point for me when you dismiss, as irrelevant, the fact that in the case I described, the owner never possessed the stolen item. (“Dur, how can you steal something without taking it from someone’s possession? I’m so stupid I can’t abstract the concept of theft beyond the physical moving of an object, just like those other idiots who can’t abstract the concept of theft beyond car-like objects.”)

And of course it’s irrelevant — my point is that these standard intutions likewise see relevant similarities between theft and copyright infringement, no matter what definitional games or hair-splitting you can employ.

But if you just fail to repay a debt because you can’t, most people do not call this theft at all. And if they do, they are just confused: what is stolen? How can something that does not exist be stolen?

Probably the same way something can be stolen without physical possession transferring (like in the contract example I gave above)? Again, look at the relevant differences.

You should read up on the Rothbardian title transfer theory of contract.

Not really. I’m intimitely familiar with it, and have even helped you explain it to people in the past. The problem is not my poor understanding, but in the theory’s narrowness and arbitrary distinctions — the same problem with theories that can’t conceive of theft without movement of a physical object.

Beefcake the Mighty November 23, 2010 at 2:40 pm

Please tell us, Silas, WHY is copying a form of theft? What are the “relevant similarities?” Why should anyone care that “many people” see these similarities as “sufficient”? Clearly many people do not see them, so please elaborate.

No more bait-and-switch metaphors. Put up or shut the fuck up.

Peter Surda November 23, 2010 at 3:23 pm

Contract violations aren’t literally theft either…

According to Rothbard and subsequent expansions on his property rights theory, they actually are. Well, this is not completely accurate since the theory interprets contracts differently, but the point is you are blabbering nonsense again.

Walt D. November 24, 2010 at 12:44 am

By this token, I could argue that hacking into the Federal Reserve clearing house and crediting my account with $1 million is not theft, since I have not taken anything physical – the Federal Reserve is not missing anything.
“Not worth the digital paper it is not printed on”.

Silas Barta November 24, 2010 at 12:03 pm

@Walt_D.: You’re making my point for me. At some point, even IP opponents have to accept some kind of “informational rights”. I’ve used that exact argument against Stephan_Kinsella.

@Peter_Surda: The substance of your position should be label-independent.

Peter Surda November 24, 2010 at 12:38 pm

Silas, as usually, you miss the point of my arguments and counter them with a mix of tautologies and non-sequiturs.

Alpheus November 29, 2010 at 11:10 am

Here is a point that pro-intellectual-monopoly people never seem to address: Why should I be denied the products of my labor when I came up with an idea myself?

If I spend months, and even money, working on a new algorithm, or a new machine efficiency, and implement it, I could be sued for patent infringement, and be forced to pay royalties, and be forced to stop using my work, because someone else came up with the idea first, and slapped a patent on it.

Even worse, I may have had the idea first, even years before, but if I cannot afford the lawyers to defend my idea, I would be at the mercy of the patent holder.

Indeed, patent law itself recognizes this possibility: If I knowingly infringed on the patent, I have to pay about three times the penalty I would have paid if I had just come up with the idea on my own, and unknowingly infringed on the idea.

And don’t give me the canard of “this is just theoretical–no one ever comes up with the same idea”. All of these people illustrate to the absurdity of such a notion: Newton and Leibnitz (calculus); Gauss, Bolyai, and Lobachevski (hyperbolic geometry); Bell and Gray (telephone); Marconi and Tesla (radio). These are just the examples off the top of my head! This kind of thing happens far more often than we realize.

With regards to radio, when Marconi got a patent on the device, others in the same field complained that he got a huge patent–that covers the entire device–when the innovation he really did was to just ground the antenna. Why should Marconi have gotten this patent, when so many other people were pioneers in radio electronics as well? Indeed, here’s an example of how the patent system can really mess with inventors; it’s especially sad that the Supreme Court restored the patents to Tesla a few month after his death, to justify our use of radio in WWI without paying royalties to Marconi!

Alpheus November 29, 2010 at 11:15 am

@Walt D. I think this makes the case that any fractional reserve system is theft. Fractional Reserve is merely process of saying that you have something, when you don’t have it. In the case of gold-backed currency, you’re saying you have more gold than you actually do; in the case of fiat currency, you’re saying you have more pretend money than you really do.

Furthermore, you’re trying to claim that it’s theft when you do it, but not when the Fed does it–even though the result is the same: millions will have to do less with what they currently earn, or somehow earn “more”, because of the increase in inflation.

Andras November 23, 2010 at 1:28 pm

Have you heard about the conflict of MERS, run and milked by the TBTF banks vs. the current title system for residential real estate properties (or even commercial RE) run by the states?
That is (will be) behind the whole financial collapse. Fraud at all and every level!

Andras November 23, 2010 at 1:32 pm

I agree, you don’t need the state. Tell them!
My claim is that the drug patent title system would work without state registration and even state enforcement (in a free society).

Stephan Kinsella November 23, 2010 at 2:09 pm

Andras, why do you think this? What is your proof? What would the system look like? How in the world would it work, esp. compatible with libertarian principles?

Andras November 23, 2010 at 3:39 pm

I have more proof than you do for your anti-IP proposal!
To reach that level of inventions you have to be a Professional. You earn your title of Professional. Not by license but by knowledge and morals. People get excommunicated and ostracized in scientific circles even under this rotten, corrupted system for stealing ideas or claiming false inventorship. Unbelievable, isn’t it? However, moving out of the scientific/technological circle where the trouble starts with unprofessionals, financiers, producers, marketers.
You can have clear proof, it worked in the middle ages. You shouldn’t ignore it to fit your preconceptions. The Venetians kept the existance of zero (the decimal system) in secret for a century. Just imagine the implications, not only pro but contra, too.
Free market would create its own system. Of course, first the present system will be cannibalized for a generation or so which can give false ammunition to anti-IP then it will build according to the future current conditions. I would not go into fortune telling. It would be utterly unprofessional.

Stephan Kinsella November 23, 2010 at 5:18 pm

Sorry, but I can’t tell what you are talking about.

Alpheus November 29, 2010 at 11:21 am

“People get excommunicated and ostracized in scientific circles even under this rotten, corrupted system for stealing ideas or claiming false inventorship. Unbelievable, isn’t it?”

Yes, it’s unbelievable that private organizations, without the use of the heavy hand of law (either civil or criminal), can figure out ways to encourage others to correctly attribute ideas to the originators, when it is possible.

Of course–and I’m speaking mathematically, here–if I proved a theorem, and published that theorem in a paper, and was completely unaware that a colleague proved that same theorem in a paper of his, three years ago, I don’t have to worry about being subject to a patent lawsuit. I don’t even have to worry about being excommunicated or ostracized! because it’s well known that things like this happen all the time.

Indeed, some theorems are proved so often, by so many people, that it becomes impossible to attribute them to anyone! Such things sometimes become the stuff “you’re just expected to know”.

Jim November 23, 2010 at 2:36 pm

Being extremely new to the Austrian school of thought, I have what may seem like an extremely elementary question, but it’s one I hope the knowledgable people on this forum can help with.

The examples of silly patents and copyright infringement suits given in the speech all revolve around major multinationals. What happens to the incentive for the lone inventor, who, if he does not have the promise of IP protection, would simply not put forth the effort to invent? A man with a small workshop simply cannot bring the legal resources (without IP) to bear in order to force a large corporation who desired to use his design to compensate him. What, then, is the incentive for any small firm or individual to attempt to invent any kind of process improvement, when there is no promise of compensation (in a world without IP)?

I’m not defending IP mind you, I just haven’t seen the specific question I have addressed yet. I’m sure it is in the literature somewhere, but I haven’t run across it.

Silas Barta November 23, 2010 at 2:40 pm

Well, I’ll save you the time. The answer to your question is going to be,

“Oh, lone inventors will figure out something, moron. What, are you a statist or something?”

Ben November 23, 2010 at 3:22 pm

I can answer that. There is no guarantee or promise of compesation now! All a corporation has to do is file that patent paperwork before you do, or produce some “research” showing they were working on the idea before you patented it and poof, you are still not guaranteed any compensation. If IP and Copyright can be taken literally, then everyone driving a car now owes “Grok” the inventor of wheel and any of his descendants compensation, because after all if “Grok” had never invented the wheel, then we would not be driving cars. What about things like business cards? Can you pantent the idea of a 2×4 inch piece of paper with relevant contact information. I should think not, otherwise anyone who wishes to distribute information about themselves would be forced to pay whoever holds the piece of paper that says the invented the business card. How about the idea of buying stocks over the telephone? If Apple or Motorola or whoever can patent the idea of organizing all of your contacts into a quick and easy to access medium, then why can’t company X patent the idea of buying and selling stocks over the phone?Think of all the thousands of things you do on a daily basis. Almost every product you touch or use has a patent tied to it. Think of the billions of dollars that are spent every year defending and prosecuting these patents. Couldn’t this money instead be used to innovate beyond the current status quo?

Alpheus November 23, 2010 at 3:24 pm

I will provide my own reply: IP–both copyright and patent–are all too often used to hurt the lone inventor.

Cases in point: Walt Disney had to create Micky Mouse, because his former employer held the copyright of his original creation, a rabbit I can’t remember the name of.

Bobby Kearns practically destroyed his life, getting caught up in expensive patent lawsuits, trying to sue the Big Three.

Philo T. Farnsworth spent a lot of fortune fighting RCA in an attempt to produce TVs. If I remember correctly, he, the INVENTOR of the TV, was fighting just as much for a right to produce the things, as he was to attempt to put an injunction against RCA (which had its own patents related to TVs).

Microsoft looms over Linux users, such as myself, with the claim that all the lone code writers who produce the Linux system, have violated over two hundred of their patents…and that those who use the system are also violating those patents.

I could go on and on, but the reality is this: without copyright and patent law distorting these things, individuals would have a much easier time using even their own work!

Alpheus November 23, 2010 at 3:31 pm

I would further add that, by getting rid of patents, you require the individuals who innovate to actually have some descent business sense! What good is it to society, when someone comes up with an interesting idea, but makes a lot of stupid business decisions, and creates a company that limps along, providing a low-quality product and a ridiculously high price–all the while, suing people who do better?

Whereas, any person with a decent amount of business sense can keep a business afloat, even against amazing competition. Whereas Philo might not have been able to create a business that would have rivaled RCA in size and power, what’s to keep him from producing a small niche company that provided TVs that had a small cult following? Besides massive lawsuits over who owned what ideas, that is?

For that matter, even if I didn’t invent the TV, if I made my own TV, and decided I liked doing that, why should I be forbidden from creating my own small TV shop, and selling TVs?

Andras November 23, 2010 at 3:53 pm

Alpheus: “I would further add that, by getting rid of patents, you require the individuals who innovate to actually have some descent business sense!”

We have arrived: How? Somehow!
What about the advantage of co-operation? You know, the non-zero sum. What connects the co-operators in the (business) world of ideas? Or ,with a little extension, in all human affairs? May Rand have been right of something after all?

Beefcake the Mighty November 23, 2010 at 4:16 pm

“We have arrived: How? Somehow!”

Actually the answer to your question should be, “who cares?” Any successful businessman meets consumer demands in a way not previously imagined, ie, he is an innovator. If he wants to continue reaping the profits from beings such an innovator, it is HIS responsibility to stay one step ahead of competitors, who after all are imitators ultimately. Why do inventors merit special treatment in your viewpoint? Yes, inventors need to get some business sense if they expect to profit from their creations, *other* inventors who DO have this sense shouldn’t be handicapped because some nerd without business savvy thought of something first.

“May Rand have been right of something after all?”

I pretty seriously doubt it.

Alpheus November 23, 2010 at 4:27 pm

I’m not sure I get at what you are trying to say. Are you trying to say that patents foster co-operation between businesses?

Co-operation is the key to business, regardless of business. I offer a service or good in exchange for another service or good. For convenience, I usually offer services or goods for money, so that everyone can more easily trade with me; then, with that money, I typically go find other services or goods that I need. In the resulting co-operation, everyone benefits.

The reality is that patents aren’t necessary for me to make good business decisions–that is, for coming up with goods and services people need, and provide them. If there ever was a patent on the safety pin, for example, it has expired decades, perhaps even centuries, ago–yet people still make them.

On the other hand, there are plenty of “inventors” who manage to get something called a “patent” and then they expect that the world will come to them! If they make lousy business decisions, though, they can sometimes recognize that someone else came up with the same idea, and then sue that person for implementing it. Occasionally the person they sue may have been using that idea for years, but didn’t think it worthy of patenting. Sometimes the idea has been used before the idea could even be patentable.

When your business goes from providing useful goods and services, to suing those who provide goods and services, it’s not really a good way to get friends, or customers–and both are crucial in bringing in revenue!

What is it about patents that’s supposed to get all of us to co-operate? I don’t see it at all.

Andras November 23, 2010 at 4:47 pm

I give you some clue:
Why do their IP the most important asset of start-up biotech companies?
How does a financier select among innovators and their innovations? Further on,
How does a manager selects his labor for an innovative product?
What is the only marketable asset of a company up until having income from sales?
For them all you need to disclose your new idea (and get doomed without IP).

Alpheus November 23, 2010 at 6:13 pm

Maybe you’re right about companies being doomed without IP. Take Microsoft, for example. Oops! Never mind! They only had one patent for the first 20 years of existence, and it wasn’t even software related; also, their software became a success in part because everyone shared copies.

Or what about the RSA encryption algorithm. That would never have been developed without IP, right? Oh, wait. It occurred to only one of the people, three months after proving the effectiveness of the algorithm, that it could be patentable. But surely the RSA company couldn’t have existed without patents! I’m sorry, but I have my doubts.

I’m sure that everyone would just stop innovating if we just dropped IP. We only push the limits of knowledge because we have the hope of getting a patent, or a copyright, for our work. If only I knew that, I wouldn’t have become a mathematician–I can’t patent any of my results, and papers are photocopied like crazy so that students could use the new theorems for their own results. Oh, the humanity! One wonders how a mathematician could discover anything new, in such an environment!

Andras November 23, 2010 at 4:35 pm

@ Beefcake the Mighty,
I am greatful I have not received your canonized imprecation, yet.
Yes, you are right, who cares. You may ignore capital formation, investment, productivity, profit and loss, expenses, exchange, trade and other irrelevant economic buzz words as well. They are all connected with co-operation.

Beefcake the Mighty November 23, 2010 at 4:53 pm

Who says I’m ignoring these things? There manages to be quite an extensive development of all of these things in capitalist economies without anything like IP law pertaining to them. What is strange is that you think they support the case for IP law.

But are you going to answer my question? To repeat, what is so special about one kind of innovator (inventors) and not others (regular businessmen), such that the former is entitled to special protections (IP law) but not the latter?

Stephan Kinsella November 23, 2010 at 5:19 pm

Or Einstein, for that matter? his e=mc^2 is not patentble. Why not? Unfair!

Silas Barta November 23, 2010 at 5:32 pm

Yep, Einstein’s work in theoretical physics was just a case study in libertarian success, wasn’t it? He got five — perhaps six — percent of his funding from private sources!

Make sure when when you jump out of the frying pan, you don’t land in the fire.

Alpheus November 23, 2010 at 6:18 pm

What does government funding of research have to do with patenting ideas? How many people have since been able to use Einstein’s work, because it wasn’t patented–both who worked privately, or who worked publicly?

Furthermore, just because Einstein was publicly funded, doesn’t mean that there could have been ways to more efficiently fund him privately.

Steve R. November 23, 2010 at 8:27 pm

“What does government funding of research have to do with patenting ideas? ” Technically, nothing, all publicly funded research should be in the public domain. But to “foster” privatization we have the ridiculous Bayh–Dole Act. Also NASA Once Again Auctioning Off Patents Your Tax Dollars Paid For.

Somewhat unrelated, but points to the bastardization of the concept of patents, the “strong” IP crowd seems to believe that ideas and products of nature can be patented. So even if Einstein was privately funded, I would fail to understand how his theoretical work could be patented. Now if he designed an FTL drive, that would be patentable!

Silas Barta November 23, 2010 at 9:36 pm

What does government funding of research have to do with patenting ideas?

The fact that the purported example of an idea (E = m c^2) that came about without “government assistance” of IP, nevertheless had the government assistance of funding.

Furthermore, just because Einstein was publicly funded, doesn’t mean that there could have been ways to more efficiently fund him privately.

Right, and pigs *might* secretly be able to fly. Still not a useful argument here. Alternate mechanisms for funding innovation generally require either IP or dependence on charity. Like I said, out of the frying pan …

Stephan Kinsella November 23, 2010 at 10:59 pm

silas: “The fact that the purported example of an idea (E = m c^2) that came about without “government assistance” of IP, nevertheless had the government assistance of funding.”

All this does is show that IP is equivalent to state funding of research with tax dollars.

Silas Barta November 24, 2010 at 12:00 pm

And that your position’s absurdity has forced you into using the success of state-supported research as evidence *for* your position.

epic facepalm

Alpheus November 29, 2010 at 10:35 am

So, Silas, are you saying that Einstein developed the theory of relativity ON government assistance? If so, then why did he have to work at a patent office?

When you stated that Einstein only received five or six percent of his financing from private resources, I thought you were talking about his professorship, and the grants he received during that time. He didn’t become a professor, however, until he developed the theory of Relativity.

And while we currently have an education system that is highly subsidized by government–including research–that doesn’t mean it has to be that way! Indeed, certain companies have their own private research programs. IBM, for example, pays pure mathematicians to work on pure mathematics–with the hope in a few decades, that mathematics will prove to be useful after all.

Stephan Kinsella November 23, 2010 at 9:13 pm

Silas, are you saying Einstein should have had a patent on E=mc^2? If not, why are you criticizing me? If so, please justify this and tell us how long the term should be.

Silas Barta November 23, 2010 at 9:32 pm

Are you saying Einstein got to E = m c^2 without government assistance? Or are you just having trouble seeing the connection?

I thought you were a smart guy, is all.

Beefcake the Mighty November 23, 2010 at 9:53 pm

Hey Silas, answer my fucking question, bitch!

Anthony November 23, 2010 at 9:53 pm

So, Silas,
should Einstein have had a patent on E = mc2?

We are anxiously awaiting your response…

Andras November 23, 2010 at 6:03 pm

@Beefcake the Mighty,
“What is so special about one kind of innovator (inventors) and not others (regular businessmen), such that the former is entitled to special protections (IP law) but not the latter?”
It is not the innovator but the innovation what needs to be and, is protected. The proof of it that IP of an innovation is marketable and transferable. Transfering IP will not transfer the protection to the innovator.
Back to rationalization why it needs protection.
The subject of a real innovation is an externality, it is outside of the economy. Its internalization, its introduction to the economic processes what is the IP system is all about. However, this is not special at all. All internalizations of any externality, or homesteading, are similar in that they have their own rules or “protections”. I would not call them laws since they are totally arbitrary. Not in their concept but in their process. Yes, you can say the devil is in the details. Mostly they all are by “Right by Might”. But are they reason to eliminate property? In “real” properties, homesteading has negligible effects as all lands are taken already. However, although ideas are infinite good ideas are very scarce. So scarce, they are sometimes unique. Up until they got leaked to the public. Here come the compromises and the arbitrarinesses. Our current system has them, too, sure. But at least we have a system. And all the innovations can become part of the economy the moment its patent got filed or better granted.
Also, IP eliminates itself when it expires. In an ideal case its life time coincides with the time it takes to be internalized. Current IP laws are uniform. They use the same expiration time for absolutly unrelated concepts. This is a very weak and vulnerable point of the current IP laws. However, that does not mean that the concept itself is bad.
When you fight IP you risk the system of internalization, homesteading of ideas, for having them all “immediately” for a few years earlier. But you cannibalize the system for your short term gains.

Sione November 23, 2010 at 8:14 pm

“The subject of a real innovation is an externality, it is outside of the economy.”

BULLSHIT ALERT! BULLSHIT ALERT!

Two points:

1/. Economics is human action. It would be a good idea for you to undertake the basic readings BEFORE posting. Take a look what Von Mises (you know the guy this site is named after) writes about what economics actually is.

2/. Externality? Funny how socialists always fall back on some imaginary form of market “failure”. They pretend they hold a superior “knowledge” to the entire market (that is, all other people) and claim this “knowledge” is validation for the coercive and compulsory implementation of some self-serving mad rort. Funnier still is how they never seem to understand the significance of Mises demonstration of the impossibility of socialist calculation.

Sione

Andras November 23, 2010 at 8:27 pm

Dear Sione,
I am quoting von Mises from Human Action:
“It is beyond the scope of catallactics to enter into an examination of the arguments brought forward for and against the institution of copyrights and patents. It has merely to stress the point that this is a problem of delimitation of property rights and that with the abolition of patents and copyrights authors and inventors would for the most part be producers of external economies.”

The rest of your reply does not deserve a response.

Sione November 24, 2010 at 3:02 am

Andras

Ah, a selective quote. How slimey you are. I recommended you undertake the basic readings of what economics actually is, not merely one portion of it taken in isolation, not merely a single quote removed from its context.

As to the rest, you won’t respond because you can’t. It is clearly the case that you do appeal to a socialist argument and that you’re thick enough to believe it won’t be noticed. What a pillock.

Sione

Andras November 24, 2010 at 12:12 pm

Dear Sione,
If you read the quote this was all von Mises wanted to state. No more, no less.
Your attitude is interesting. Your creed of IP is “From all according to his ability to all according to his need” and you call me slimey socialist.
Please don’t write to me any more, this was my last response to you.

Peter Surda November 24, 2010 at 12:44 pm

you call me slimey socialist

Yea, you’re right, you’re not a socialist, you’re a mercantilist. Your argument is that it is necessary to externalise the costs associated with internalising the revenues of unprofitable business models.

Beefcake the Mighty November 23, 2010 at 10:06 pm

“It is not the innovator but the innovation what needs to be and, is protected. ”

Ah, so it is things (and not just tangible things, but abstract things) that merit protection, not human beings. Thanks for clearing that point up.

“The proof of it that IP of an innovation is marketable and transferable.”

What you mean of course is that a *particular* physical instantiation of an innovation is marketable and transferable. It certainly doesn’t follow that *all other* such instantiations are, which seems to be your claim.

“Transfering IP will not transfer the protection to the innovator.”

Since “transfering IP” can presumably only be granted by the innovator, this seems to be a distinction without a difference.

Frankly, the remainder of your post is rambling and incoherent, I see no need to respond.

Andras November 24, 2010 at 12:06 am

Beef,
Your response qualifies you not me.

Sione November 25, 2010 at 2:05 am

Andras writes, “If you read the quote this was all von Mises wanted to state. No more, no less.”

One wonders why he went to all the trouble of writing the entire book on economics. Perhaps, just perhaps, just possibly, maybe there might be a little more to the study of human action than a carefully isolated quote on but a single portion.

Sione

Sione November 25, 2010 at 2:07 am

Peter

A common mercantilist. That could be it.

Sione

Steve November 23, 2010 at 6:28 pm

I’m new to the IP debate, so if any pro-IP proponents can help me understand a point I would be appreciate it. Since ideas are never purely unique, but a continuation and compilation of ideas that has been building for generations, whose IP should be protected and for how long? The idea of a toaster, to a cavemen, would never have occurred, it took thousands of years of scientific application and copying others etc. to achieve even the idea of such a device. So if you use all or part of an idea that belonged to someone from 150 years ago are you then thieving from the progeny of this person? Do you owe his great-great grandchildren recompense, since it was initially his idea (even though his idea came from bits and pieces of others)? I guess I’m trying to figure out in what cases is IP protection valid, and in what cases is IP just part of the continuing evolution of human ingenuity? This is a serious request and thank you for any ideas you might have on the subject.

Steve R. November 23, 2010 at 7:20 pm

Coincidentally, the new issue of Forbes has an article on the high cost of patents. The cost being to both the firms defending themselves and society. Forbes Article: Going Toe To Toe With Medical Device Giants

Forbes Table Below
——————–
“Intellectual property is a precious asset–if you can afford to protect it.

$10 million Cost to defend a high-stakes patent suit
$3.8 million Median damages awarded in patent infringement cases from 2001-07
482,871 Patent applications filed in 2009
191,927 Patents issued in 2009
2,700 Average number of patent-infringement lawsuits filed per year
$1,000 Hourly rate charged by top patent litigators
100 Average number of patent cases that go to trial each year
57% Percentage of trials won by patent holders
34.6 Average number of months to secure a patent”

Alpheus November 29, 2010 at 11:35 am

To think: a company that could have been spending its resources expanding its business, refining its products, and developing new products, had to lay off employees and suspend operations…and all this, over what? A dispute over who had what idea first!

And it’s sad that the fight itself could have destroyed the company–yet the fight was necessary to keep the company alive.

Nuke Gray November 23, 2010 at 9:18 pm

Steve, IP is usually of limited life, deliberately so; therefore your questions are answered about how far back we need to go.
As an innovator, and will-be inventor, I support Intellectual Property. I have come up with something that most people on the planet might find a use for (it will go on shirts and blouses- and most people seem to have some of those!). It seems to have been overlooked, and will make life easier- so why shouldn’t i get a reward for inventing it? I would not have bothered without some reward as an inducement!
And I remember pointing to the example of Viagra- would we have had Viagra without our current system of patents and IP? I never got an answer to this question, which I think is a point in its’ favour.

Anthony November 23, 2010 at 10:07 pm

Nuke Gray,

You have the reward of being the first one to manufacture and sell your invention… As the first to market you will be though of as the “original”, thus people who care about quality will buy your product over others.

That seems like reward enough to me…

Regarding Viagra, maybe we would and maybe we wouldn’t… but what about all the things that have not been created or produced because of the fear of infringing someone else’s patent? It seems to me that if patents get the credit for actual inventions they should also get the blame for all the innovation they prevent.

Wildberry November 24, 2010 at 7:37 pm

Anthony,
I suspect you have no data to support either of your assertions; whether people will buy from the first to market, or how many inventions did not happen because of fear of IP.

You may be right, but you might be wrong, right?

Can you think of ANY circumstance where protecting the dissemination of a product of a creator’s ideas might be protected for a time?

Anthony November 29, 2010 at 7:42 pm

Yes,

If the creator can think of technological or contractual means to protect the distribution of their ideas then they should be 100% free to use them for as long a time as they want.

As for evidence, just because I can’t count how many inventions are never made because of IP does not mean there aren’t any… similarly, you can’t prove that any invention was created because of IP, since you can’t prove that they would not have been created anyway. What we can use is logic: given that inventors have been sued for violating IP they were unaware of, it follows that IP creates a disincentive for inventing.

Whether the disincentives from IP outweigh the incentives is another matter, to prove this quantitatively would require a huge amount of research that neither of us is capable of undertaking.

Beefcake the Mighty November 23, 2010 at 10:25 pm

“I have come up with something that most people on the planet might find a use for (it will go on shirts and blouses- and most people seem to have some of those!). It seems to have been overlooked, and will make life easier- so why shouldn’t i get a reward for inventing it? ”

That’s the wrong question. The real question is, why do you acquire ownership rights in factors of production that could be used to duplicate this idea, based on the fact that you first conceived of this use (that is, NOT based on homesteading/exchange of those factors as most libertarian theories of ownership hold). This is the essence of IP.

I always ask Silas this question, I never receive an answer; perhaps you’d like to try?

Nuke Gray November 23, 2010 at 11:22 pm

I have mentioned this before, but you might have missed my comments in previous articles. I espouse something that I call Public Intellectual property- the public would have the right to licence and bar any and all products and advertising over PUBLIC properties and spaces, though not private properties (I am a Minarchist- not an anarchist. I think that whoever or whatever ends up owning the roads will be a local form of public utility, so anarchocapitalism would soon evolve into local minarchies.). As such, on your property, you would not be stopped from producing copies of any item you wanted, BUT you would not be allowed to advertise them if a patent or copyright was held by someone else. Public Intellectual Property would thus respect all property rights, but would affect licencing- and only the PIP-holder would be considered for any version by the public authorities.
Thus, ideally, i would not acquire ownership rights in other people’s property, but a licencing right on jointly-held public property.

Wildberry November 24, 2010 at 8:03 pm

Beefcake,

Isn’t it true that the protection of a negative right creates a positive right of retribution? Regardless of how that right is enforced or created, such enforcement implies some control over the means of others, right?

Jeff Tucker recently used the concept of a “magic bagel” to illustrate your point; that if one copies something such that the original possessor still has it, there is no “taking” because the original owner still has his. See http://mises.org/daily/4630

However the purpose for owning such a device, which obviously would be of great benefit to the hungry masses, includes applying its obvious value to the opportunities of trade. If that value is transferred entirely upon the first such trade, the residual value of the device is transferred for “free” to the other party, and the low costs of duplication and the reduction of scarcity does not figure into the economic calculation at all.

If, as some assert, a limited transfer could be accomplished by contract between trading partners, a breach of that contract would forever “let the cat out of the bag”, and any remedy would be limited to recovery from the breaching party; the original possessor would have no claims against those not a party to the contact.

If I owned such a bagel, I would immediately set about discovering how to destroy its self-replicating feature, so I could profit from my low-cost production, while significantly raising the cost of subsequent duplication to those of the standard bagel-making process, i.e. baking. Having control of the “low cost” replication would allow me to me to extract more value from the free market, while reserving the non-scarcity of bagels to myself.

My question to you is this: as a matter of public policy, meaning arriving at some solution that optimizes both remuneration and availability, what would you suggest?

Beefcake the Mighty November 24, 2010 at 10:20 pm

“Isn’t it true that the protection of a negative right creates a positive right of retribution? ”

OK, sure.

“Regardless of how that right is enforced or created, such enforcement implies some control over the means of others, right?”

No, not really. My property rights in a car have nothing to do with your property rights in a bat. My property rights in the car *means that* I can legitimately use force to repel your swinging of the bat onto the car, or extract payment for damages if you do smash my car. At no point do I have any ownership claim on or control over your bat. As Kinsella has repeatedly stressed in these discussions, actions are limited, rights are not.

“However the purpose for owning such a device, which obviously would be of great benefit to the hungry masses, includes applying its obvious value to the opportunities of trade. If that value is transferred entirely upon the first such trade, the residual value of the device is transferred for “free” to the other party, and the low costs of duplication and the reduction of scarcity does not figure into the economic calculation at all.”

I have no idea what you mean by “transferring value.” But, *any* exchange means that the person surrendering something gives up some (if not all) ability to continue to extract enjoyment, utility, whatever from that thing. That is as true of tangible (true) property as it is of things that you presumably consider IP to apply to. Why *should* a creator continue to derive benefit from his invention after an exchange? If he cannot secure contracts sufficient to enable him to do so, so what? I simply cannot understand why this sort of thing is taken to be a trump card. Again, the same issue arises with any transaction. If I want to continue enjoying the smell of the perfume I’ve developed, I’d better not sell to someone who’s going to walk very far away from me.

“My question to you is this: as a matter of public policy, meaning arriving at some solution that optimizes both remuneration and availability, what would you suggest?”

I reject the premise; I’m unconcerned with “optimizing” anything (assuming remuneration and availability can be represented in some kind of coherent way that would render optimization possible). I’m concerned with what constitutes legitimate property rights, and I don’t regard metaphors as acceptable substitutes for establishing what these are.

Wildberry November 25, 2010 at 11:02 am

Beefcake the Mighty said:

“No, not really. My property rights in a car have nothing to do with your property rights in a bat. My property rights in the car *means that* I can legitimately use force to repel your swinging of the bat onto the car, or extract payment for damages if you do smash my car. At no point do I have any ownership claim on or control over your bat. As Kinsella has repeatedly stressed in these discussions, actions are limited, rights are not.”

I am not asserting you have a property right in my bat. I am asserting you have a right to limit my actions in using it. If you have such a right and I am aware of it, I will not swing at your car because the result is predictable. Thereby the necessity to “extract payment for damages”, etc, are avoided.

Even without a law establishing this, if people who own cars consistently and without fail obtained retribution from bat-swingers, the cost/benefit calculation of the “swinger” would be affected. It would become part of the rationalization the preceded the act. Do you agree?

“I have no idea what you mean by “transferring value.”

I simply mean if you own something, like a car, you might be interested in trading it for something else of value. In such a trade, you would prefer a “higher” price to a “lower” one. On the other side of the trade, one’s calculation of a price that is “just right” is subjective, and is a function of an economic calculation. I am asking what factors will this trading partner take into account when calculating the price point that represents a willingness to trade.

The result would be at least partially a function of the rights you have to limit my and other’s actions to do certain things with their own property, like swinging bats against it, keying the paint, breaking windows, etc. Do you agree?

“But, *any* exchange means that the person surrendering something gives up some (if not all) ability to continue to extract enjoyment, utility, whatever from that thing.”

I agree, some. Any exchange means I give up what I’m willing to give up and I don’t give up any parts I am able to retain and still make a trade I want. In some trades, I can retain nothing. In others, I might. A trading partner may acquire what he wants, even though he did not acquire “everything”.

“Why *should* a creator continue to derive benefit from his invention after an exchange?”

A person continues to enjoy the benefits of ownership of something he still retains after a trade. The question is what, if anything, that is, and how is my right of ownership in it affected by the means (acts) of others.

“If he cannot secure contracts sufficient to enable him to do so, so what?”

The point is whether he has a right to do so. If he has a right, then he has a right to retribution against a violation of it. Contracts would be one mechanism that might be employed, but of course that raises problems with those not a party to that contract. This is a problem.

It can be solved by denying the right, or by modifying something about the means of obtaining retribution against non-parties.

“I simply cannot understand why this sort of thing is taken to be a trump card. Again, the same issue arises with any transaction. If I want to continue enjoying the smell of the perfume I’ve developed, I’d better not sell to someone who’s going to walk very far away from me.”

Not so. In your perfume example, you are selling precisely the fragrance. To the extent that fragrance is contained in the bottle you sell, the right to use it is transferred. Whether that transfer also includes the right to copy the smell by any means owned by the buyer is what we are talking about here.

“I reject the premise; I’m unconcerned with “optimizing” anything (assuming remuneration and availability can be represented in some kind of coherent way that would render optimization possible). I’m concerned with what constitutes legitimate property rights, and I don’t regard metaphors as acceptable substitutes for establishing what these are.”

Sorry that was not very clear on my part. I mean “optimizing” only in the limited sense of dealing with the conflicting issues in a way that arrives at a “useful” and “fair” compromise of the issues that arise when only a “pure” rendering of property rights is applied.

In my example of real property title, I was trying to illustrate that even in that case, the acquisition of original title is not “pure”. It was an initial settlement that was sufficiently accepted to become “law”. Original trespass litigation was not about excluding entry; it was about establishing property lines through arbitration.

Specifically in terms of IP, the conflict arises between a seller who owns something, and who is seeking to trade it in whole or part for something of value, and the buyer who would prefer to have it for “free” if he could get it that way. The tradeoff looks different depending upon which side of the trade you are on.

The seller would argue for greater retention, and the buyer would argue for less. That is a conflict of interests. In order for the economic calculation to proceed, both parties would be better off if they knew in advance what they were actually trading for, in the same way that sellers and buyers of real property are better off if they know in advance what they are actually trading. That is difficult if the boundaries of that property are not settled. We are discussing the boundaries of Intellectual Property rights.

I think you are arguing that there is no need to compromise on the “pure” rendering of property rights, and I am arguing there is rarely such a thing in reality, except in a logical construct, such as the Crusoe device.

Happy Thanksgiving

Beefcake the Mighty November 26, 2010 at 9:51 am

Wildberry,

“I am not asserting you have a property right in my bat. I am asserting you have a right to limit my actions in using it.”

OK, that’s good, it seems we’re in agreement. I was confused because you initially wrote:

“Regardless of how that right is enforced or created, such enforcement implies some control over the means of others, right?”

Which means something very, very different. Not trying to nit-pick, this is pretty central to the whole debate.

So if you hold that an inventor can prevent certain uses of someone’s property by that owner without claiming ownership rights himself, it can only be because you regard this prevention as defensive, yes? E.g., by copying his invention I am threatening him or committing aggression, yes? So what you (and other defenders of IP) need to do is provide a coherent defintion of terms like “threaten” or “aggression”. As far as I can tell, this has not been done, we only see metaphors
regarding these terms as they apply to *tangible property*. Silas does this in virtually every post. He begs the question by assuming these terms can be applied to IP, but they can only be so applied if a theory of property rights encompassing
IP is *first* put forth, such that we know exactly what is meant by “defending” IP or “threatening” IP.

Wildberry November 27, 2010 at 12:02 am

Beefcake the Mighty,
“OK, that’s good, it seems we’re in agreement.”

Yes, I think we are getting somewhere. I appreciate you hanging in there with me as I try to work this out.

“I was confused because you initially wrote:…”

Yes, this was not too clear, but based on what you say later, I think my intended meaning is correct and you actually agree with it, but we can come back to that.

“So if you hold that an inventor can prevent certain uses of someone’s property by that owner without claiming ownership rights himself, it can only be because you regard this prevention as defensive, yes?”

I think yes. To restate what I think you are saying here, I can only restrict your actions if such actions would be a violation of my rights. I have a negative right to protection from “infringement” and a positive right to retribution if you actually take action which infringes upon them. If I don’t have them in the first place, there is no right to prevention.

“E.g., by copying his invention I am threatening him or committing aggression, yes?”

Yes, let’s say that copying is an act for which I have a right to retribution only if such copying infringes upon a right that legitimately belongs to me first.

“So what you (and other defenders of IP) need to do is provide a coherent definition of terms like “threaten” or “aggression”. ”

I don’t think this is the issue. “Threaten” and “aggression” are well understood. They both involve either an implied or an actual act of violating another’s rights.

“…assuming these terms can be applied to IP, but they can only be so applied if a theory of property rights encompassing IP is *first* put forth, such that we know exactly what is meant by “defending” IP or “threatening” IP.”

Agreed. I think the central issue is why should such property rights in IP be established, and if we know why, then how?

This is the more difficult problem, and precisely where I’m hung. I have become familiar with Kinsella’s and other’s arguments regarding non-scarce resources, the theory of homesteading/first occupation/legal transfer, etc. In short, the argument comes down to the fact that the “right” to IP is first established by legislation, and then enforced using the machinery of the State and ultimately the courts to create a system full of absurdities, abuse, special interest, stifling of innovation, etc.

To answer these questions, one must get past the anarchist argument, otherwise the exclusionary system of internally consistent logic which dismisses legislation, courts, police, etc. are outside this internally consistent logical construct, and by definition disallowed. This is a barrier to further exploration.

The first premise in this construct is that “scarce property can only be owned by homesteading or subsequent “legal” (i.e. legitimate) transfer.” If the ownership of anything, including IP, cannot be established in this way, it cannot be owned. If it cannot be owned, there is no way to justify the defense of this ownership, and there is no right to prevent another from using their own property in ways which infringe on this “right”, or to retaliate if they do.

If IP cannot be shown to be owned by either of these owsnership tests in the first instance, then any subsequent defense of “infringement” is illegitimate, because the right does not exist in the first place, yes?

In Kinsella’s landmark paper, he argues that the creation of rights in IP are arbitrary, (i.e. not based on the principle above) and that they create scarcity where none existed before. Therefore, no IP laws are legitimate; they should be abolished and the world would be a better place.

He may well be right. I am not (yet) an IP proponent. Then again, I can’t be against it until I can work my way to that conclusion.

I think we could agree that IP rights are a special case of property rights, if there is a case at all. If we try to understand the distinction between alleged rights in IP and those in tangible property, then we have to first ask how property rights arise for tangible property. This may give us some insight to the more difficult issue of IP.

I gave you an example of title in real property, and asserted that you cannot conclusively prove your title in land is legitimate using this test of ownership. My point was this: If we assert that ownership of real property is only legitimate by way of the homesteading/transfer principle, then it follows that if was not first acquired by homesteading, no subsequent title can be legitimate through transfer. Therefore legitimate ownership today can only be established if it was at some time originally homesteaded.

If we agree that “legal” ownership in real property today is legitimate, then we must also conclude one of two things: Either all ownership in real property is ethically illegitimate, or legitimacy may be acquired in some other way or by some other means.

I tried to argue that the ownership in real property today was created by an arbitrary determination at some prior point in history. Even if it was acquired illegitimately from an ethical perspective, (i.e. through conquest), it has subsequently been legitimized in some other way. I would argue it is by convention; rights in property are created by the convention of “best title”. I think Kinsella says something similar when he claims that title is established when you have a claim to property which is “better” than anyone else’s. This is why homesteading trumps all other means, and transfer rights are derived from this initial act of homesteading. There is no “better” title than that of homesteading. But as I’ve pointed out, homesteading can rarely if ever be shown unequivocally. Right or wrong, ethical or not, most if not all real property traces its “original” title to conquest. Why? Because it is generally impossible to trace the ownership of a particular piece of property back to a time when it was originally homesteaded. It most often can be traced to an act of conquest. Also most often, the conqueror obtains “legal” title. Therefore any subsequent transfer of title is illegitimate only to the extent title can be traced to this conquest event and its subsequent legitimization.

Leaving the scarcity issue aside for the moment, if a person cannot trace the ownership of a specific parcel of real property to an act of homesteading, then how can anyone’s current ownership in land be legitimate? If it is not legitimate, then how can it be asserted that IP cannot have “ownable” interests it title on the basis that it is not or cannot be homesteaded? Homesteading in and of itself appears to be insufficient to establish ownership of property rights.

If homesteading alone is not sufficient, there must b e some other principle or means operating which legitimately creates ownership rights. What are these other means?

One could argue that the establishment of ownership in property by making and enforcing arbitrary distinctions is only possible if there is a state. I think Kinsella also said in this last post that “We have IP because we have the State”.

If we are going to allow that arbitrary distinctions disallow legitimate ownership rights in IP, we must also conclude that these same arbitrary distinctions render title in real property illegitimate. We can’t have it both ways.

It appears that one cannot resolve this problem of ownership simply by measuring “ownership” against the homesteading/transfer rule. This is the first issue that must be overcome before we can move to a discussion of whether or not IP rights can be established in any way that is comparable to those of real property rights.

Let me pause here and see what you might have to say. Again, thanks for hanging in there with me. I know this is a long post. If you want to move on, I can discuss the relationship between homesteading and scarcity.

Beefcake the Mighty November 28, 2010 at 10:39 pm

Wildberry, I’m not sure what you’re getting at here. You write in response:

““So what you (and other defenders of IP) need to do is provide a coherent definition of terms like “threaten” or “aggression”. ”

I don’t think this is the issue. “Threaten” and “aggression” are well understood. They both involve either an implied or an actual act of violating another’s rights.”

“Threaten” and “aggression” ARE well-understood, in the context of a theor of *tangible* property rights, these terms can’t be blindly applied to non-tangible property to derive the same conclusions about rights in those things. And you seem to agree, as your next response is:

““…assuming these terms can be applied to IP, but they can only be so applied if a theory of property rights encompassing IP is *first* put forth, such that we know exactly what is meant by “defending” IP or “threatening” IP.”

Agreed. I think the central issue is why should such property rights in IP be established, and if we know why, then how?”

Well, yes. What is your objection, exactly?

Wildberry November 28, 2010 at 11:51 pm

Beefcake,
Good to hear from you.

My specific objection is that homesteading/transfer theory is not sufficient to establish the presence of ownership rights in property, either real-property or IP. That concept alone is not sufficient to meet the objectives attributed to it by Kinsella; to avoid conflict concerning competing claims. That is the essence of my objection.

Furthermore, non-tangible property (if you mean by this pure ideas) is not the subject matter of IP law. It is the tangible “fixation” of a complex pattern, composed of ideas and other, scarce factors of production, that attributes the rights to these fixations.

Ideas are specifically excluded from IP protection, and therefore are in agreement with KIinsella’s and Tucker’s concept of ideas of “free-goods”. IP law refers to them being in the “public domain”. It is only when these ideas are combined in a unique, novel way, and manefest as a tangible good, that the issue of property rights arise.

Therefore, to argue that the “non-scarce” nature of pure ideas is sufficient to deny the ligitimacy of all property rights in IP law appears illogical.

Regards,

Beefcake the Mighty November 29, 2010 at 11:37 am

Hi Wildberry,

“My specific objection is that homesteading/transfer theory is not sufficient to establish the presence of ownership rights in property, either real-property or IP. That concept alone is not sufficient to meet the objectives attributed to it by Kinsella; to avoid conflict concerning competing claims. That is the essence of my objection.”

OK, fair enough. But why do you say this? Keep in mind that by “conflict” Kinsella et al. do not mean mere disagreement over use, but the fact that one person’s use *precludes* another’s. *This* fact is due entirely to scarcity. The point of property rights is precisely to identiy *which* use (actually, *whose* use) can be realized, or alternatively, which disputant has the superior claim.

Now, you can disagree that Kinsella or Hoppe or Rothbard have successfully established the legitimacy of a homesteady theory of property rights (many libertarians do disagree), but they certainly *have* put forth a theory that directly deals with conflict in the sense just laid out. There is no doubt that people can still be unhappy about or disagree with some assignment of property rights, but this is not the question the theory is meant to address. The real question is one of legitimacy of claims to property, and in particular why a homesteading ethic is the only justifiable system.

“Therefore, to argue that the “non-scarce” nature of pure ideas is sufficient to deny the ligitimacy of all property rights in IP law appears illogical.”

Fair enough, but as you note, IP law concerns implementation of scarce factors. *These* are the things over which conflict can arise, and in regards to exclusive use must be assigned. The question still remains: can such rights be justifiably assigned in some other way besides homesteading, production, and/or exchange? E.g., by the fact of being the first conceiver of some idea? I would say no, but I’m guessing you would say yes?

Wildberry November 30, 2010 at 2:03 am

Beefcake,
Good to hear from you.

“But why do you say this? Keep in mind that by “conflict” Kinsella et al. do not mean mere disagreement over use, but the fact that one person’s use *precludes* another’s. The point of property rights is precisely to identify *which* use (actually, *whose* use) can be realized, or alternatively, which disputant has the superior claim.”

Yes, right to preclusion is a fair test of ownership. I think there is broad agreement that disputes over the ownership to property are resolved when the prevailing party has “title” to it. The person who has good title is “entitled” to preclude its use by others.

In a dispute, (leaving aside who or how it is resolved) the person with superior title prevails. In property law, the concept of “better title” is used to test one’s claim, and the one who prevails has “good title” meaning it is beyond further dispute.
There is also generally no disagreement that a person who “homesteads” a subject property also has the best claim to it, or the “best title” since no other claim could be superior to it. However when homestead rights cannot be determined as a means to the best title, how is title conferred; if not by an act of homesteading, then by some other means?

I have attempted to describe those means as a “legal convention”, implying that after some act of resolution (leaving aside who and how it is made) good title is acquired and the current dispute and all future disputes are thereby resolved. From a clear position of “good title”, future conflicts can be generally avoided, and the use and rent values of property can be allocated to the proper owner. That is the purpose of conferring title to property; to make it clear who owns it, such that subsequent actions of use or conveyance can also be conducted on the basis or transfer of good title.

If you ask how good title has been acquired most often historically, it is by some form of “legal declaration” following an earlier act of conquest, and that is generally held as being “just”. It is just if it can be said to have been attributed to the person who has better better title than anyone else, even if that title is does not rise to the height of “best”.

“**why a homesteading ethic is the only justifiable system.**”

Now I have to ask you, why do you say that? Let’s agree that homesteading is the “best” way to establish a legitimate claim. I am wondering if it is the only way. And if there are other ways, are they legitimate?

“The question still remains: can such rights be justifiably assigned in some other way besides homesteading, production, and/or exchange? E.g., by the fact of being the first conceiver of some idea? I would say no, but I’m guessing you would say yes?”

The “first conceiver of some idea” is also insufficient, so again we agree. You are combining several terms. Let’s take them one at a time, but not in the order you gave them.

Homesteading is one way to establish your undisputed claim to property. We can agree on that. I have an argument about why “authorship” is a form of homesteading, but let’s leave that for the moment. I think you also agree that IF homesteading produces good title in property, THEN any subsequent transfer or exchange is also legitimate. But what if you cannot establish homesteading?

That leaves production. What is production? It is output, which equals income. Output of what? Of a good. How? Through a means of production. What are these means? They are the combination of planning, scarce resources, labor, and some ideas about how to put these things together. In short, it is the combination of the product of a rational human, acting on his capacities to manipulate the natural world, mixed with other scarce resources, all of which are clearly his “own” property. In order to “own” the output, you must also own the “means” of producing it. The absence of any one of these factors destroys the “means” to produce output.

It is not difficult to hypothesize ownership of everything but the ideas. So, what about ideas?

I think Kinsella and copyright law (for example) are both I agreement that ideas are in the public domain. One cannot own them, but being in the public domain, they could also be said to be owned by “anyone and everyone”. They are in the “commons” and initially non-scarce. They have a near-zero cost of replication. You must be alive to acquire an idea, but that’s almost about it. Let’s use the familiar term “free good” to describe their attribute of non-scarcity, much like the alphabet.

Ideas, which have little or no property value, are combined with the other factors of production to “produce” a good. That good is scarce. It may or may not be “unique”, meaning the first of its kind. The question of property rights only arises when that good is manifest. Before that, it is still a “non-fixed” idea. Only when it is fixed in some tangible form or media does it take on the attributes of property. This may be called the “authorship process”.

Calling this authorship process an “idea” is misleading. The authorship process may have started with a single idea, a “flash of inspiration”, but that flash has no property value, by copyright law of any other means. However, once this idea is developed into a complex and unique set of plans, is combined with the other scarce resources, and made tangible by the application of labor, the alchemy of “property” has occurred.

This is not the same as “creation”, in the same way that building a table is not a process of manipulating carbon-based molecules, or that the process of building a table really begins in a supernova. You buy the lumber, devise a plan, apply your labor to your tools, and “produce” a table from your own means of production. There is little controversy that you own the table, and you can transfer title to that particular manifestation.

The question for IP is this: Should I, as the owner of the table, be empowered to prevent others from duplicating the results of my authorship process in their own means of production? Copyright law requires a further attribute of “uniqueness”, but let’s leave that aside for now.

To answer this question, you have to look at the nature of the “good”. Land cannot be replicated at all, and regardless whether good title is established it needs no protection from replication.

Tables can be replicated, but it is not that easy, if you know anything about woodworking. Even if you could, attribution is a large factor in its “economic rental value; to mix metaphors, owning an original Van Gough has more value than owning a very good copy. Maybe for $50 I would like to own a very good copy, but no one is going to make a good one at that price.

Tucker recently said that the issue of scarcity is a function of replicability. If it is a free good, meaning it can be replicated or acquired for “free”, then it must be non-scarce. I disagree, but again, discussing scarcity is another step in the analysis.

All I’m saying at the moment is this: Homesteading is insufficient as an exclusive means to attribute ownership to property. Ideas are non-scarce and in the public domain, and are not “property”. However, ideas combined with other factors of production do produce a “good” and goods are property. All property is by definition “owned”. All goods are owned by those who produce them with their own means. The fact that some of those means are “free goods” of the “public domain commons” does not preclude these tangible good from being the subject of property rights.

However, a good that can be cheaply replicated does not relieve such replication from the consequences of theft; that is, the misappropriation of the value of property, whether it be the use-value, or the economic rent value, rightfully belonging to the owner with good title. A human actor who combines his own rational capacities, other tangible scarce goods, labor, and non-scarce ideas from the public domain has good title to the goods he produces. These factors in combination are sufficient to establish good title in those goods, without resort to homesteading theory, and despite the non-scarce nature of ideas.

The question this leads us to is this: How do we protect one’s good title in property if it is very easily replicated, and the value of the copy is roughly equivalent to the original? Ethically, it must be protected. I’m guessing you say no.

Beefcake the Mighty November 30, 2010 at 12:26 pm

Wildberry,

You raise a lot of points here, I’m not going to be able to respond to all of them. Let me note that certainly, convention, legal precedent, whatever you want to call, can play a role in adjudicating disputes. And no doubt, it can in practice be very difficult to determine who has the rightful claim, whether you adopt a homesteading ethic or not. I would just say these concerns do not really concern what IS a valid system of ethics (which actual legal decisions must try to implement) and what is not.

Here, I think, is a key point of debate:

“Let’s agree that homesteading is the “best” way to establish a legitimate claim. I am wondering if it is the only way. And if there are other ways, are they legitimate?”

It would be hard for me to answer this question here. I will simply say, I adhere to the rationalist-type ethics put forth by Hoppe and Kinsella, so I would say yes, homesteading is indeed the only way to establish a legitimate claim (along with its offshoots of production with such goods and voluntary exchange of such goods).

I do have to comment on some points you make:

“Ideas are non-scarce and in the public domain, and are not “property”. However, ideas combined with other factors of production do produce a “good” and goods are property. All property is by definition “owned”. All goods are owned by those who produce them with their own means. The fact that some of those means are “free goods” of the “public domain commons” does not preclude these tangible good from being the subject of property rights.”

Well, it’s the *produced good* that is owned, the means used to do so are irrelevant, *unless* those means were themselves unjustly acquired. So although you reject that ideas can be owned, you seem to be smuggling in a metaphor of an idea *as* a tangible means (which can be justly or unjustly acquired). In other words, you seem to be saying that someone can unjustly use an “public” idea in the course of production. But this claim is based on metaphor.

“However, a good that can be cheaply replicated does not relieve such replication from the consequences of theft; that is, the misappropriation of the value of property, whether it be the use-value, or the economic rent value, rightfully belonging to the owner with good title. ”

I’m sorry but I completely disagree with this. Value is not owned, cannot be owned. Would you say that a businessman whose profits shrink because of competition has been wronged or robbed? I don’t think you would. I believe you make this same error when you try to distinguish authorship from creation.

Wildberry November 30, 2010 at 11:45 pm

Beefcake,
This exchange is really interesting because we are in fact reducing the debate down to a few issues.

“…you seem to be saying that someone can unjustly use an “public” idea in the course of production.”

I am saying the opposite. If the ideas I use are in the public domain, how can it be unjust that I use them? At the same time, I am saying that a mere “idea” is not sufficient in itself to describe the attributes of either the means of production, or the goods thereby produce. They are merely a component of the means of production, although a necessary component. However, if no one owns it, I own it as much as anyone else, so my use is not unjust.

It order to “produce” something which I own, I must own the means employed to produce it. If I own everything but the idea, including the idea in the means does not change my position.

“Value is not owned, cannot be owned.”

According to Nock, property has value in two domains: use-value and economic rent value. (Our Enemy, etc. p. 104-105) Goods produced are property, and I own them if I own the means of production. So far it would be hard to deny the ownership of such goods. If you own the goods, you also own the value of those goods, which you are free to employ in a process of trade. If these goods had no value, they would not be useful for trade. So obviously, you own the value of goods which you own.

“Would you say that a businessman whose profits shrink because of competition has been wronged or robbed? I don’t think you would.”

You are right, under the implied general assumptions, I would not. But profits would shrink because the price for goods with less scarcity is lower than those more scarce. Competition implies less scarcity. Provided the businessman and the competitors all own the means of their production, not a problem. Competing bakers don’t argue over the IP nature of a loaf of bread.

So, the central issue in the debate comes down to whether it is ever legitimate to acknowledge something like property rights in a unique means of production, and if so, how might those rights be attributed to the author?

Using Nock’s terminology, I would argue that to not attribute property rights deprives the author of the economic rent value of his production. That value is attributable to the producer, or “author”. That value is created by taking something that didn’t exist (totally scarce) and producing one instance of a good which has economic rent value, because there is a perceived (and real) desire by more than one person to possess it. It is precisely the low cost of replication, (replication would reduce scarcity) that creates the ethical breach; i.e. the economic rent value of a scarce good is attributed to someone other than its owner.

The only way to preserve the scarcity of that good is to do one of a limited number of things: Withhold it from trade and maintain the scarcity, make a unilateral transfer to all comers, or develop a legal convention that attributes the economic rent value to the original owner of ultra-scare goods such that these goods can be dispersed into the market by the process of economic trade. This third option makes for equitable public policy, i.e. it avoids the unjust enrichment of misappropriators.

I think it is also possible to arrive at this same conclusion taking the path of homesteading of ultra-scarce resources, but I’m not sure it is necessary.

Beefcake the Mighty December 1, 2010 at 12:42 pm

Hi Wildberry,

“If the ideas I use are in the public domain, how can it be unjust that I use them? At the same time, I am saying that a mere “idea” is not sufficient in itself to describe the attributes of either the means of production, or the goods thereby produce. They are merely a component of the means of production, although a necessary component. However, if no one owns it, I own it as much as anyone else, so my use is not unjust.

It order to “produce” something which I own, I must own the means employed to produce it. If I own everything but the idea, including the idea in the means does not change my position.”

Sorry I misunderstood you initially; I’m pretty much in complete agreement with this; it makes me wonder, what exactly are we disputing re. IP? Perhaps it relates to this:

“According to Nock, property has value in two domains: use-value and economic rent value. ”

“Using Nock’s terminology, I would argue that to not attribute property rights deprives the author of the economic rent value of his production. ”

Not sure exactly what Nock had in mind, but to me, terms like “economic rent value” can only mean the *market price* the owner can get in exchange for his property. And I would say, not attributing property rights deprives the author of the right to TRY to exchange his property for other goods. THIS is the only right he has: to try to exchange his justly acquired goods. He has no right to a particular price. So, eg, opening up shop next to yours doesn’t violate your rights, assuming that I do not prevent you from continuing to (try to) make sales.

If this is the context for some hypothetical support of IP, then I still disagree. Let me stress that there are definitely ways in which an author’s work can be unjustly copied, eg, breaking and entering, violating an agreement to not copy, etc. But copying as such (or whatever specific facet of IP is under consideration), or more appropriately, duplication as such, does not violate any rights. It certainly does not preclude the author from continuing to TRY to fetch money for his work, a right he had before the copying and a right he continues to have after copying.

Wildberry December 1, 2010 at 3:38 pm

Beefcake,
“Not sure exactly what Nock had in mind, but to me, terms like “economic rent value” can only mean the *market price* the owner can get in exchange for his property.”

He explains it pretty clearly on page 104-105 of Our Enemy. I don’t have it with me, but it is the value that is created when two or more people want to own the same property. In the context in which he was speaking, it related to land speculation.

So in this regard, yes, it is the value a good has in the market, which can be measured in a single transaction as “price”, but it is really a reflection of the fact that there are others in the market that would like to own it, too. This creates the trading opportunity for the original owner. This straightforward situation becomes complicated when the cost of replication (i.e. copying) is very low. That creates an impact on scarcity, and subsequently drives price deflation. But the deflation is not the central issue.

Regardless of the price, who has the right to a monopoly on the enjoyment of these property rights? Who has better title? If you know the answer to that by some form of establishing good title, then the next question is, how do you enforce that right?

I think that is the point that the concept of IP rights arises. It is a legal convention for providing protection to one’s property rights, when the goods in question are easily copied. The fact that it is an “arbitrary” construct is not sufficient to defeat its legitimacy.

Wildberry November 24, 2010 at 9:08 pm

Beefcake,
You said: “The real question is, why do you acquire ownership rights in factors of production that could be used to duplicate this idea, based on the fact that you first conceived of this use (that is, NOT based on homesteading/exchange of those factors as most libertarian theories of ownership hold).”
Let me answer you this way:

Do you own any real estate?
How can you prove you have title according to the definition of ownership based exclusively on one or the other methods of ownership approved by “libertarians”?

I think I can prove that you do not.

First, would I be correct to assume that you did not homestead this property? If not, then it must be through exchange. Probably this means you paid a prior owner who already had legal title, who simultaneously transferred title to you.

If this prior owner did not actually have title through the means you require, then your own ownership title would be flawed. The warranty of this is essential to your willingness to pay and thus the function of title insurance.

Each successive owner has his title by virtue of a prior owner having “legal” title.
Depending upon where you live in the US, your particular parcel of land has a history that stretches back into the far reaches of history. The farther back you go, the more uncertainty grows concerning the legitimacy of the prior owner.

In California, most title to land finds a link to Spanish land grants. These grants were issued by the King of Spain, based on a theory of conquest establishing possessory rights.

Conquest is neither homesteading nor transfer of legal title.

Or maybe in your neighborhood, you could find an example where European settlers “purchased” their land from the indigenous people who “homesteaded” it prior to such immigration. The question then arises, how did they possess it, and do you have clear evidence that their original possession was not the result of conquest as well?

If you live in North America, perhaps you can trace the history of your particular parcel to the time when humans crossed the land bridge from Siberia into North America. However, since our records are a little sketchy from that time, it cannot be determined with certainty that they did not conquer some prior inhabitant.

If you owned property in say, Poland, the history of conquest would make this problem even more problematical, perhaps involving the prior conquest of Cro-Magnon hominids.

So, you may not be able to prove your title based on either homesteading or clear transfer of title. Yet, no one would hesitate today to accept a transfer of title from you. Why is that?

Because at some specific time in history, arbitrary laws drew a line in the sand and essentially declared that “from this date certain forward, the titles of Lord Fauntleroy (or whomever) will be recognized as valid”.

This act, in a literal sense, settled the issue of ownership and facilitated all future transfers of title to real property. Such an act was what we might call a “public policy” which combined practical, ethical, and utilitarian objectives.

Now my question to you is this: What makes IP laws any different than this?

Your anticipated answer: Scarcity.

My reply: We weren’t talking about scarcity. Stick to the issue.

Beefcake the Mighty November 24, 2010 at 10:24 pm

All due respect, but I have absolutely no idea what you’re trying to prove with this example. That all current claims to land are illegitimate because they can be traced back to conquest/theft at some point in history? Perhaps this is true, but so what? What does this have to do with what *are* legitimate property rights, to say nothing of whether IP qualifies as such legitimate rights?

Sione November 24, 2010 at 3:06 am

Nuke

What is “public property”?

What do you mean by that term?

Sione

Beefcake the Mighty November 24, 2010 at 10:06 am

Yes, I’d like to know the same thing. Is IP private, or public property? I don’t understand Nuke’s response.

Nuke Gray November 24, 2010 at 6:32 pm

What are roads, streets, and highways? What are town halls, Parliament buildings, and Executive offices, like your own White House, and our own Lodge? These, and all other non-private lands, and the space above them, like airways and flight paths, are public properties.
And how come no-one has come up with a counter-example to Viagra? Can anti-IP advocates prove that any company would have even tried to make Viagra, without the promise of IP protection for all that hard work?

Sione November 25, 2010 at 2:38 am

Nuke

Roads, streets, highways, town halls, parliament buildings and the like are unowned. They are not property in the sense that private individuals own them. For example, if you reckon you as an individual member of the “public” own a share of any of this stuff, then try selling it, disposing of it, destroying it or borrowing against it.

So when you talk about setting up some IP rules to operate in “public property” what you are really describing is the erection of a system for the allocation of special priviledges for the favoured enforced according to the arbitrary whims of the elite that operates the tools of power. Sound familiar? It should, because that’s kinda what is in force presently.

Fancy that!

Sione

Nuke Gray November 25, 2010 at 6:37 pm

The flaw in your reasoning is that I do currently have a share in all public properties, but only as one shareholder amongst many. Public property is democratically controlled, the same as any other share-holder company is, and individual share-holders can’t just grab any particular piece to do what they like with it- unless the share-holders collectively give them this power and right.
Also, unlike you, I believe in evolution, not revolution. i think we should refine what we have, and see if that works, instead of throwing everything out, and building ad hoc.
Here’s a history poser for you. Patents and copyrights were part of the U.S. Constitution from the beginning, deliberately so- and other countries had to do the same, because people with brains and ideas emigrated to America! Britain had a much slower system, and had to drastically change it, in order to compete with the U.S. Patent system. If patents are so bad, how come they have worked so well for America?

Sione November 28, 2010 at 12:44 pm

Nuke

You’re deluding yourself. You do not own a share of that which you identify as “public property”. You have no control over it whatseoever. None. Nada. Nothing. It appears that at some level you do realise this.

Quoting, “individual share-holders can’t just grab any particular piece to do what they like with it- unless the share-holders collectively give them this power and right.”

So, according to you, an individual shareholder can’t do anything with his “share” unless a collective grants permission first. In other words, the individual is not an owner and has no ownership rights. He must seek permission (which may be arbitrarily granted or with-held as the case may be).

One laughs loudly at the utter imbecility of the pretense that owning shares in a company is the same as an illusory ownership of “public property.” You need to shake yourself loose from that nonsense. Nuke, I own shares in a company. I can sell them. I can borrow money against them. I can swap them for other property. I can trade them. The reason I can do these things, the reason I can arrange for the disposal of these shares is because I own them. They are my property so I control them. I decide their disposition.

You do not possess ownership of “public property”- your claim of “currently have a share in all public properties” is based on a deceptive myth. Can you sell it this magical “share”? Can you borrow against it? Can you use your “share in all public properties” as collateral for a loan? Can you swap, trade or otherwise dispose of it? The answer is, no, never. It is forbidden. That is because what you are dealing with here is not your property. You have no ownership rights whatsoever. None. Nada. Nothing.

Now, I already identified this issue to you in the previous post. You evaded addressing it. While dealing with the issue raised might be uncomfortable for you, that isn’t a valid reason not to seriously consider it. Think on it.

You write, “Also, unlike you, I believe in evolution, not revolution etc.”

What you believe in is irrelevant to reality. Your faith is not germaine to the enquiry. Learn to deal with fact.

Your view of the history of patents is flawed. The notion that it was the US patent system which attracted people with brains and ideas to the USA is silliness. Did you make that nonsense up all on your own? If you cared to study the historical record you might find there were significant other reasons for the population in-flows to the USA. Patents were not a primary cause. (Hint: capital, economics, costs of living, style and standard of living, liberty, taxation, class and social structure, opportunity, wars, famine, slavery, trade, etc. etc. etc.).

This was a howler, “If patents are so bad, how come they have worked so well for America?”

They haven’t. They have not worked well. If you bother to read up on the subject you’ll find they have been a terrible hindrance to innovation and a hindrance to the economic development of the USA. Take another read of the article written by Kinsella (see above). Do you really hold to the faith that patents “work”? It’s a mess.

Sione

Wildberry November 24, 2010 at 5:22 pm

It can be hard to get a word in edgewise during the ongoing food fight between Stephan Kinsella, et. al., and Silas Barta, but let me try.I have been trying to follow Kinsella’s arguments and those of his critics, and as nothing more than the offerings of a nobody, let me say this:When everything else is peeled away, we end with this from Kinsella: “We have IP law because we have the state.” Although not spelled “State”, we may presume he means that entity which possesses the “monopoly on the initiation of force”.The expression of this aggression which is most interesting to Kinsella is the arbitrary creation by the State of scarcity where none otherwise exists.“Material progress is made over time in human society because information is not scarce.” And later, “There is no need to impose artificial scarcity on these things to make them more like scarce resources…”Finally, he concludes that “…an essential defect of IP is that it seeks to impede learning and the spread of ideas and knowledge.”He generally seems to dismiss any notion that utilitarian or deontological justifications are sufficient to overcome this essential defect.To illustrate the self-evidence of this position, he extracts the most egregious illustrations of where IP law has gone wrong. I gleefully concede the validity of many of his illustrations. Even some that has an initial “good” purpose can be put to “bad” purposes by those who are intent on gaming the system.My question is, can there ever, under ANY circumstances, exist a justification for ANY IP legislation what so ever? Is it possible in an analysis of this question to allow that the answer may be some combination of natural rights, ethical, and utilitarian compromises?Assertions that the cost of IP exceeds the benefits is an empirical question, but a lack of data cannot be offered as proof either way.Whether IP encourages or discourages innovation is not as susceptible to resolution empirically. Like much in the common law history of justice, the application of the basic principles are dependent up on their application to a very specific fact pattern.While there may be many examples that illustrate its stifling effects, I can think of at least one example from my own experiences in the semiconductor industry where the IP laws fostered an accelerated innovation and its introduction to the market.Some of you may recall the Rambus story; allegedly they copied “free ideas” from the JEDEC conventions developing standards for next-generation DRAMs, and obtained patents without the knowledge of the design engineers, and then proceeded to blackmail the semiconductor industry with these patents. So far this sounds like another Kinsella illustration. The response, in part to this situation was to accelerate the introduction of the next generation in order to escape, among other things the royalties and patent litigation costs from which Rambus was the primary beneficiary. The enforcement of Rambus IP rights created the opportunity for them to “exclusively” license to Intel, who allegedly had designs on a re-domination of the DRAM markets they once commanded. The rest of the industry accelerated their development of SDRAM, which is now the DRAM standard, I believe. Had this scenario not been possible because IP laws didn’t exist, the current bus architecture might still be dominated by “Rambus” archetectures.The point is there appears to be anecdotal evidence on both sides of the argument as to whether IP does or does not stiffle innovation.Kinsella’s opposition to IP, IMHO, seems to derive primarily from the compatibility of his position with Ancap ideology. If this was not the case, his arguments, using the same illustrations, might be couched in the notion that IP laws need to return to something more closely resembling its original public policy purpose, namely, to balance the conflicting goals of 1) creating an incentive to create and 2) the promotion of competition by providing for the freest public access to the new products. Because these goals represent potentially conflicting interests, public policy seeks to reach a compromise of optimal balance. That is an imperfect science and subject to special-interest abuse. So, what else is new?In case you may not have noticed, hours and years of debate between anarchists and minarchists has not resolved the issue. Placing IP law on this footing will only result in the same sort of impasse. Unless opponents and proponents can agree on a different footing for this debate, it will go nowhere.

Wildberry November 24, 2010 at 5:27 pm

Sorry, I was trying to correct a spelling error and lost all my formatting. Shucks!

Wildberry November 24, 2010 at 5:30 pm

REPOST

It can be hard to get a word in edgewise during the ongoing food fight between Stephan Kinsella, et. al., and Silas Barta, but let me try.

I have been trying to follow Kinsella’s arguments and those of his critics, and as nothing more than the offerings of a nobody, let me say this:

When everything else is peeled away, we end with this from Kinsella:
“We have IP law because we have the state.” Although not spelled “State”, we may presume he means that entity which possesses the “monopoly on the initiation of force”.

The expression of this aggression which is most interesting to Kinsella is the arbitrary creation by the State of scarcity where none otherwise exists.
“Material progress is made over time in human society because information is not scarce.” And later, “There is no need to impose artificial scarcity on these things to make them more like scarce resources…”
Finally, he concludes that “…an essential defect of IP is that it seeks to impede learning and the spread of ideas and knowledge.”

He generally seems to dismiss any notion that utilitarian or deontological justifications are sufficient to overcome this essential defect.

To illustrate the self-evidence of this position, he extracts the most egregious illustrations of where IP law has gone wrong. I gleefully concede the validity of many of his illustrations. Even some that has an initial “good” purpose can be put to “bad” purposes by those who are intent on gaming the system.

My question is, can there ever, under ANY circumstances a justification for ANY IP legislation what so ever? Is it possible, in an analysis of this question to allow that the answer may be some combination of natural rights, ethical, and utilitarian compromises?

Assertions that the cost of IP exceeds the benefits is an empirical question, but a lack of data cannot be offered as proof either way.

Whether IP encourages or discourages innovation is not as susceptible to resolution empirically. Like much in the common law history of justice, the application of the basic principles are dependent up on their application to a very specific fact pattern.

While there may be many examples that illustrate its stifling effects, I can think of at least one example from my own experiences in the semiconductor industry where the IP laws fostered an accelerated innovation and its introduction to the market. Some of you may recall the Rambus story; allegedly they copied “free ideas” from the JEDEC conventions developing standards for next-generation DRAMs, and obtained patents without the knowledge of the design engineers, and then proceeded to blackmail the semiconductor industry with these patents. So far this sounds like another Kinsella illustration. The response, in part to this situation, was to accelerate the introduction of the next generation in order to escape the royalty payments and patent litigation costs from which Rambus was the primary beneficiary. The enforcement of Rambus IP rights created the opportunity for them to exclusively license to Intel, who allegedly had designs on a re-domination of the DRAM markets they once commanded. The rest of the industry accelerated their development of SDRAM, which is now the DRAM standard, I believe. Had this scenario not been possible because IP laws didn’t exist, the current bus architecture might still be dominated by “Rambus” architectures.

The point is there appears to be anecdotal evidence on both sides of the innovation argument.

Kinsella’s opposition to IP, IMHO, seems to derive primarily from the compatibility of his position with Ancap ideology. If this was not the case, his arguments, using the same illustrations, might be couched in the notion that IP laws need to return to something more closely resembling its original public policy purpose, namely, to balance the conflicting goals of 1) creating an incentive to create and 2) the promotion of competition by providing for the freest public access to the new products. Because these goals represent potentially conflicting interests, public policy seeks to reach a compromise of optimal balance. That is an imperfect science and subject to special-interest abuse. So, what else is new?

In case you may not have noticed, hours and years of debate between anarchists and minarchists has not resolved the issue. Placing IP law on this footing will only result in the same sort of impasse.

Unless opponents and proponents can agree on a different footing for this debate, it will go nowhere.

Stephan Kinsella November 30, 2010 at 3:54 pm

“Kinsella’s opposition to IP, IMHO, seems to derive primarily from the compatibility of his position with Ancap ideology.”

Not true. You need not be a consistent libertarian (anarchist) to see why IP is nonsense. just consistent enough.

Wildberry December 1, 2010 at 8:05 pm

“You need not be a consistent libertarian (anarchist) to see why IP is nonsense.”

Well, maybe. But it appears you have to be a “consistent libertarian” to reach the conclusion that ALL forms of IP are ABSOLUTELY nonsense.

The conclusion is strained in both cases, (IP and Ancap ideology) and is not necessary to establish your main assertion concerning IP, which is that there is quite a bit of nonsense all around. That seems sufficient, doesn’t it?

Not if you are an anarchist. To be consistent, you must eat everything on the menu.

Not that there is anything wrong with that, I’m just saying.

Sione November 25, 2010 at 2:23 am

Wildberry

Well, I guess that would make Dr Kinsella consistent in the application of principle. There does not seem to be much wrong in that I’d submit.

Quoting, “…IP laws need to return to something more closely resembling its original public policy purpose, namely, to balance the conflicting goals of 1) creating an incentive to create and 2) the promotion of competition by providing for the freest public access to the new products.”

Some questions pertaining to that:

According to whom does IP law need to do anything, even exist?

Who determines the “public policy”?

Who determines the conflicting goals and who determines how (let alone whether) they are “balanced”?

Why are other goals (outside the two quotes) not considered? According to who are other goals excluded (or included if that be the case)?

By what right do those who determine the above possess the authority to decide?

By what right do they force or coerce all other individuals to obey their decision?

Your approach contains certain premise. Could be a good idea to specify what some of them might be and see where that leads you.

Sione

Wildberry November 25, 2010 at 11:32 am

Sione,

It is very difficult to be completely consistent in the application of a principle unless you are strictly talking about “natural laws” like physics, or pure logic. Even theories in physics are subject to verification in the real world.

In human interactions, principles are useful, like “homicide” or the “non-aggression principle”. Their application in the real world subjects them to exceptions and modifications, depending upon the facts. The problem arises when someone violates the principle.

“According to whom does IP law need to do anything, even exist?”
Let’s start with you and me. We can generalize from there.

“Who determines the “public policy”?
Let’s pretend we are founding fathers and see if we can agree on something.

“Who determines the conflicting goals and who determines how (let alone whether) they are “balanced”?”
I am hoping we might discuss that and reach some common understanding. See my response to Beefcake above.

“Why are other goals (outside the two quotes) not considered? According to who are other goals excluded (or included if that be the case)?”

Do you think others should be? I am simply stating the commonly held public policy issues addressed by current IP law. I thought it might be a good place to start.

“By what right do those who determine the above possess the authority to decide?”
Conflicts between humans must eventually be settled. Even the Hatfields and McCoys settled theirs eventually. Some form or arbitration is the most common form of non-violent conflict resolution in the realm of rights and alleged violation thereof.

“By what right do they force or coerce all other individuals to obey their decision?”

This is an age-old problem. Much of human history that is not on the “dark side” was written around this problem. If you have something called “laws” then you must have a means of enforcement. Enforcement by its nature is coercive. Is there room in our ideology for a concept of enforcement? I suspect there is. What is enforced is a question of rights. The assignment of these rights may follow certain principles, and the points of departure from “purity” is also part of any analysis. Discussing how a given situation does or does not follow a set of asserted principles is the enterprise of philosophy.

Philosophy is interesting because it may establish certain principles which eventually become a foundation for our ideologies, which are necessary to engage in human interaction, including trading and economic calculation. A useful philosophy is one which helps clarify our understanding of the world we live in. That world contains a concept of IP.

“Your approach contains certain premise. Could be a good idea to specify what some of them might be and see where that leads you.”

I am attempting to do that very thing.

Happy Thanksgiving.

Sione November 29, 2010 at 7:16 pm

Wildberry

“It is very difficult to be completely consistent in the application of a principle unless you are strictly talking about “natural laws” like physics, or pure logic. Even theories in physics are subject to verification in the real world.”

Can you expand on this some?

I asked, ““According to whom does IP law need to do anything, even exist?” You answered, “Let’s start with you and me. We can generalize from there.”

Well, I don’t believe that there is such a thing as “intellectual property” or that any law is necessary. So from the start, there is nothing to generalise about.

My question was, “Who determines the “public policy”?
Your answer was, “Let’s pretend we are founding fathers and see if we can agree on something.”

Well, we are not the founding fathers and we do not agree on anything so far. The question stands unanswered.

My Q/. “Who determines the conflicting goals and who determines how (let alone whether) they are “balanced”?”
Yr A/. “I am hoping we might discuss that and reach some common understanding. See my response to Beefcake above.”

The way to deal with this IP issue is to start from first principles. What is necessary is to prove that what is commonly referred to as IP is real and that it can (and should be) properly treated as private property. That means, it must be proved that the attributes of IP are those of private property. Of course, this all relies upon an accurate definition of what IP is, assuming such a test can be devised and employed consistently.

My Q/. “Why are other goals (outside the two quotes) not considered? According to who are other goals excluded (or included if that be the case)?”

Yr A/. “Do you think others should be? I am simply stating the commonly held public policy issues addressed by current IP law. I thought it might be a good place to start.”

The current law was written by certain individuals for specific interests. That does not mean it is correct or immutable or moral. Hence it can be regarded as arbitrary. That’s not a good place to start. The danger is ending up with a tower of floating rationalisations and abstractions based on hollow rhetoric.

The place to start is to prove from first principles that IP is property.

My Q/. “By what right do those who determine the above possess the authority to decide?”
Yr A/. “Conflicts between humans must eventually be settled. Even the Hatfields and McCoys settled theirs eventually. Some form or arbitration is the most common form of non-violent conflict resolution in the realm of rights and alleged violation thereof.”

Fair enough that conflicts should be settled. The question is directed at discovering who possess an authority to apply a “solution” to others and by what right they possess this authority.

My Q/. “By what right do they force or coerce all other individuals to obey their decision?”
Yr A/. “This is an age-old problem. Much of human history that is not on the “dark side” was written around this problem. If you have something called “laws” then you must have a means of enforcement. Enforcement by its nature is coercive. Is there room in our ideology for a concept of enforcement? I suspect there is. What is enforced is a question of rights. The assignment of these rights may follow certain principles, and the points of departure from “purity” is also part of any analysis. Discussing how a given situation does or does not follow a set of asserted principles is the enterprise of philosophy.”

Now that is interesting, as is the next comment.

“Philosophy is interesting because it may establish certain principles which eventually become a foundation for our ideologies, which are necessary to engage in human interaction, including trading and economic calculation. A useful philosophy is one which helps clarify our understanding of the world we live in. That world contains a concept of IP.”

Philosophy is the set of ideas one uses to deal with reality. In this case we are investigating the nature of ideas and whether certain of these (or according to the Objectivists, the substantiation of the ideas- they discuss “bringing values into existence”) are properly regarded as property. That needs an exhaustive analysis as previously indicated.

My Q/. “Your approach contains certain premise. Could be a good idea to specify what some of them might be and see where that leads you.”
Yr A/. “I am attempting to do that very thing.”

Good stuff. With respect, I think one of your assumptions is that IP is properly regarded as property. That contention is debatable (and controversial!). It is a good place to begin.

You lucky, luck man, getting a day off! Happy Thanksgiving. Have a good holiday.

Sione

Wildberry November 30, 2010 at 2:31 am

Sione,

“Can you expand on this some?”

I used the physics of electrons in my post to Beefcake to explain this. As another illustration, have you heard the tale of how Einstein had to wait for astronomers to photograph an eclipse to verify a prediction of his new relativity theory? That’s when be really became “credible”. Before that there was no theory to explain why mercury’s orbit did not conform to Newtonian predictions.

“So from the start, there is nothing to generalise about.”

OK, this will be a short conversation.

“Well, we are not the founding fathers and we do not agree on anything so far. The question stands unanswered.”

Not much for pretending, eh?

“…this all relies upon an accurate definition of what IP is, assuming such a test can be devised and employed consistently.”

Really, it depends upon what you mean by “property”, not so much what “things” you assign that attribute to. Property is “owned” and ownership implies “rights”. If you own property you have rights relative to its use. So the question is, is IP worthy of the attributions of property?

“The current law was written by certain individuals for specific interests. That does not mean it is correct or immutable or moral. Hence it can be regarded as arbitrary. That’s not a good place to start. The danger is ending up with a tower of floating rationalisations and abstractions based on hollow rhetoric.”

I have no idea what this means, but it sounds really smart.

“…who possess an authority to apply a “solution” to others and by what right they possess this authority.”

That is a very good question. Unfortunately I don’t know who “who”, “others” and “they” are, so I don’t have a very good answer.

“That needs an exhaustive analysis as previously indicated.”

OK. I’m waiting and listening.

“I think one of your assumptions is that IP is properly regarded as property.”

I think of it more as a premise than an assumption. I am not advocating it, just exploring how the theories about it being posted on this site coincide with my own sense of how the world works. If I become an opponent or advocate of IP in general, or an agent for change of it, it will be because I have worked myself to that conclusion, using the best reasoning I can muster.

“You lucky, luck man, getting a day off! Happy Thanksgiving. Have a good holiday.”

I am guessing you are not working in America, or you work in a gas station and have no seniority. My condolences on both counts, but thank you. (p.s. I hope you are good natured.)

Sione November 30, 2010 at 12:22 pm

Chosen

OK. I’ll take another look at the post you wrote for Wildberry.

Quoting, “Really, it depends upon what you mean by “property”, not so much what “things” you assign that attribute to. Property is “owned” and ownership implies “rights”. If you own property you have rights relative to its use. So the question is, is IP worthy of the attributions of property?”

What I’m saying is that the first step is to identify and define property. That means determining what attributes that which is property MUST posess. The next step is to demonstrate that IP posesses those attributes and is therefore properly considered as property.

For example, Dr Kinsella identifies the attribute of scarcity as important. He cites Hans Herman Hoppe’s work as important in understanding what property is.

I’m resident in the US, so no Thanksgiving holiday over here. Anyway, when you work for yourself you don’t get official days off. Same goes for racing cars and racing boats- if you want to do it well enough to gain satisfaction, there are no official days off! The other guys are always practicing or testing or working up something clever or busy in some smart way.

I understandthat many Americans celebrate Thanksgiving with family and closest friends. My experience from visiting the US was that many families have members spread all over the country. People have moved to where their careers have taken them. It appears the Thanksgiving holiday is the traditional time to get back together. That’s good reason to celebrate I reckon.

Anyway, I hope you had a good Thanksgiving.

Sione

Sione

El Bobbo November 25, 2010 at 9:43 am

Ugh….I couldn’t go though all of that. What I would ask of Mr. Kinsella is that why he would scrap the entire IP process altogether?It seems to me that you point out many terrible flaws in the system, then red herring the arguments for it by pointing out that the idea was born of mercantilism, supported by some guy with a bad quote, and the like.Wouldn’t repairing the system be better than scrapping it all? It seems like a very strange argument to say, “well, there’s something wrong with this, so lets ditch it for something worse (obviously not that straightforward)? How can the idea of physical property and intellectual property be truly separated? Instead of inventing with some fear that someone has patented the idea and might act, why invent at all when anyone with better means to produce it will take it for themselves?

Sione November 29, 2010 at 7:45 pm

El Bobbo

You write, “Ugh….I couldn’t go though all of that.”

OK. Here is a shortcut. Take it one step at a time. Begin with this: Demonstrate that IP is real property, that it posesses the attributes of property. If you get that accomplished properly, then the idea of repairing the system, instead of discarding it altogether, is a valid one.

You ask, “Wouldn’t repairing the system be better than scrapping it all?”

No. Not if the premise of the entire system is false.

An example of false premise in action. In the Islands there are those who are descended from slaves who used to be farmed as food. They are sensitive about their ancestry, even all these generations on. In the olden times the most suitable members of those slave villages were taken away to another island, had their Achillies tendons cut (so they couldn’t escape) and then generously fed up big time- fattened. They were kept in great luxury and had plenty of sex (to breed more “food”). In some cases they received facial tattoos. Then when it was time to feast, they were killed, butchered, cooked and eaten. The heads were shrunken and sold to European and British sailors as keep-sakes.

When my forebears first came across this practice, they asked how such terrible cruelty could be countenanced. How could such a thing ever be done to other people, to fellow human beings? The cannibals responded that these were not people. These individuals were different from people. They were “food on legs.” The sailors from Europe and the British Isles in effect said the same thing. They purchased the shrunken heads, gruesome keepsakes from savages- not people. The premise in both cases was that the slaves murdered for eating and making the keepsakes were not the same as regular people. They were sub-human. Less than human. Therefore, fair game.

Great premise and utterly, totally, dreadfully and completely false. So should the system of farming people for eating have been eliminated totally (as it was) or should it have been modified, repaired and improved (let’s work with what we have)?

“How can the idea of physical property and intellectual property be truly separated?”

How can they be mixed? Seriously.

What is required is to show what property actually is- what its fundamental attributes are. Then it is necessary to prove that IP is property- that it posesses the necessary attributes to qualify as property.

That would be very difficult. So hard it has not been achieved.

“….why invent at all when anyone with better means to produce it will take it for themselves?”

First mover advantage. Get to the market before competitors. Establish yourself and stay ahead. No need for patents and the like.

Sione

PuntPal November 25, 2010 at 9:32 pm

Great read Stephen, but this was the part of the argument tha I dont like:

“Like the magically-reproducible lawnmower, ideas are not scarce. If I invent a technique for harvesting cotton, your harvesting cotton in this way would not take away the technique from me. I still have my technique (as well as my cotton). Your use does not exclude my use; we could both
use my technique to harvest cotton.”

But the value of the inventing something and showing innovation is the competitive advantage you have over others in the industry. I dont like you example of harvesting cotton (as I know nothing about that industry) but lets instead look at beverage industry (you use Coke as an example). If I developed the recipe and brand design of Coca Cola and did not have any right to protect that trade secret under IP law, then the value of this invention for me will be greatly dimished, as another company could come along and use my recipe and marketing.

So although it may not seem as obvious as your lawnmower example, the uncompensated theft of someone’s ideas still causes a financial loss to inventors and rewards copy cats.

Can someone explain this to me, because it seems very obvious flaw int he argument.

Stephen Kinsella simply asserts that X reproducing Y’s invention without paying any royalty has no affect on Y because he is still able to use his invention. But the value of inventing something stems from, as I have said above, the ability to differentiate yourself from competition.

I thought this was the essence of progress…a compeititve market for ideas and innovation.

But besides this (and I am willing to have it exaplained by someone) thanks for the insights!

p.s. This AustrALian loves the Austrian way of thinking!!

Alpheus November 29, 2010 at 11:52 am

Unless you publish your recipe, I don’t see how you can copy the recipe; and, as for marketing, that is something Coca-Cola alone has, unless I clearly become a “Coca-Cola Copycat”. If I take the copy-catting too far, I could be sued for fraud–trying to deceive people, in making them think I’m Coca-Cola.

Marketing is more important to success than the strength of ideas, though. One person pointed out that Slug Cola, although everyone who tried it seemed to think that it tasted better, largely disappeared because of the name–what do you think of when you think “slug”? That person then pointed out that a lot of computer languages–Lisp, Smalltalk, Erlang–have similar problems. Lisp in particular has a small yet dedicated community, known to be annoyed that every idea more “modern” languages adopt are often taken from Lisp.

Sione November 29, 2010 at 7:50 pm

PuntPal

Quoting, “But the value of the inventing something and showing innovation is the competitive advantage you have over others in the industry.”

First mover advantage. Exploit it. Then keep updating and moving ahead. That is the real advantage you will posess. You do not need a patent to do that. Prosecuting a patent slows you down by diverting resources away from your business activity while disclosing what you are up to for others to see.

Sione

Nuke Gray November 30, 2010 at 7:32 pm

Now you allow a reply!
Nuke Gray here.
You are wrong, sione, I do have some control over governments, limited though it is. And I exercise this right regularly. It is not as much as I would like, but it is real.
You are also wrong about history. I have studied it extensively, and Britain did change its’ cumbersome patent system so it could compete with the US on equal terms. If you read the book ‘Hot Property’, you will see how America has benefitted from its’ patent system. If you look at the history of the USSR, which did not have Intellectual Property, you will see that just having things named after you is not as good as a patent system.

Sione December 1, 2010 at 2:22 pm

Nuke

You write, “I do have some control over governments, limited though it is.”

I’d contend that you have none- nothing real. What you control think you have is illusory. Anyway, that is irrelevant to what we were discussing. The topic to hand is “public property” and whether you have an owership right over it. It remains correct that it isn’t your property. You don’t own it. You are not even able to arrange for the disposal of your “share” of it or even borrow against it.

Whether some government or other altered its arbitrary processes and random rules for the granting of special priviledge is not of fundamental importance. The point remains that the patent system of the US was not the primary causal agent in the population in-flows that occurred (which included the bright, the clever, the intelligent and the abitious). I previously listed a few that you might like to consider (capital, economics, costs of living, style and standard of living, liberty, taxation, class and social structure, opportunity, wars, famine, slavery, trade, etc. etc. etc.). Surely these more than eclipsed the alleged attractions of the US patent system.

As far as the USSR is concerned, them Russians, they may just have had a few other problems with their political and economic structures that more than dwarfed any issues with their patent system. Just a few…

Cheers

Sione

Nuke Gray December 1, 2010 at 6:29 pm

Still unconvinced, Sione.
I remain a minarchist, BUt, don’t worry! I will use any gains I squeeze out of current IP laws to promote libertarianism in general, even if it isn’t the Rothbardian alternative!
And you, of course, will always have the option of saying, “I refuse to buy this labour-saving device since I argued with the inventor! I’ll go on sewing on buttons the proven old-fashioned, way!” I’ll salute your integrity as I drive past in my new Rolls!

Sione December 2, 2010 at 12:52 pm

Nuke

I’m favourably inclined to anarchism. It would appear that there is no justification for monoply government, as there is no justficiation for granting some individuals the divine right to impose force over others.

As far as buying labour-saving devices is concerned, I’ll buy whatever I like and can afford. Of course, once I have done that I’m quite free to take the devices apart, learn their workings and manufacture copies (or have my colleagues in Vietnam or China do it on my behalf). My property is mine and I can do as I want with it.

A Rolls Royce? Which model do you like? Right now some of the older ones are cheap. A slightly rough one takes a little work to put right, but it is worth it (and a fun project). Get an old one with the 6.7 litre (417cid) V-8 and you’ll find it responds very well to turbo-charging. Rolls Royce of Crewe found this and in various forms that engine has continued in production to the present.

Sione

Wildberry December 2, 2010 at 1:09 pm

Sione,
“It would appear that there is no justification for monoply government, as there is no justficiation for granting some individuals the divine right to impose force over others.”

OK, but you do believe in individual monopoly, right? I mean, it’s not monopoly you object to, right?

“I’m quite free to take the devices apart, learn their workings and manufacture copies…”
Are you sure about this? If you were copying someone else’s property, theoretically, then that is ethically and morally OK with you?

“My property is mine and I can do as I want with it.”

Yes, but my property is mine and you can’t do what you want with it. In fact, you can’t even do what you want with your own property, right? What about that pesky non-aggression principle?

Peter Surda December 5, 2010 at 2:41 pm

Wildberry,

OK, but you do believe in individual monopoly, right? I mean, it’s not monopoly you object to, right?

There is no such thing. What you are describing is scarcity, not a monopoly.

Gil December 5, 2010 at 11:35 pm

Is too. It’s private monopoly versus government monopoly.

Peter Surda December 6, 2010 at 4:13 am

Gil,

there is no such thing as a private monopoly in the Austrian framework because it defines monopoly to depend on the initiation of force. It does not define monopoly through scarcity. Scarcity means that there are mutually exclusive options. Exercising more than one of them simultaneously is impossible. Exercising more than one option when you have a monopoly is possible, it is merely undesired by the monopoly holder and he’ll employ force to prevent them.

It is impossible, for example, to simultaneously steal an apple and for the victim to have the apple. Laws do not change that. But it is possible for someone to copy a book and the original book to remain with the owner, it is merely (sometimes) undesired by the copyright holder.

Wildberry December 6, 2010 at 9:38 am

“The second connotaion of monopoly differs from the first in tht it descibes a state of affairs compatible with the conditions of a market economy. A monopolist in this sense is an individual or a group of individuals, fully combining for joint action, who has the exclusive control of the supply of a definite commodity”.

Mises, Human Action Scholars Ed. p. 277

Wildberry December 5, 2010 at 11:22 pm

No, it is monopoly, as in a property owner’s right to exclude all others. It could be said that an owner of property has a monopoly on the possession and use of that property. This right belongs to him to the exclusion of all others.

Also, a person has a monopoly on his own body. It is also scarce. But all others are excluded from the possession or use of one’s body. Isn’t that a monopoly, of the personal kind?

I think it may be true that property must be scarce to be owned. Ownership of non-scarce goods makes no sense.

Peter Surda December 6, 2010 at 4:16 am

No, it is monopoly, as in a property owner’s right to exclude all others.

That’s not how Austrians define monopoly.

I think it may be true that property must be scarce to be owned. Ownership of non-scarce goods makes no sense.

Great, we have progress. Without scarcity, there are no mutually exclusive options, there are no decisions, there are no means and no ends and there is no human action.

Wildberry December 6, 2010 at 9:44 am

“However, the mere phenomenon of monopoly is without any significance and relevance for the operation of the market and the determination of prices. It does not give the monopolist any advantage in selling his products. Under copyright law every rhymester enjoys a monopoly in the sale of his poetry. But this does not influence the market. It may happen tht no price whatever can be realized for his stuff and that his books can only be sold at their waste paper value.”

“It would be a serious blunder to deduce from the antithesis between monopoly prices and competitive price that the monopoly price is the outgrowth of the absence of competition.

Mises, HA, p. 277-278

El Tonno December 16, 2010 at 1:54 pm

http://www.theregister.co.uk/2010/12/16/patents_do_not_protect_small_firms_says_smeia/

“Patents do not give protection to inventive small businesses because they are impossible to enforce, an organisation claiming to represent small technology companies has said. In an open letter (http://www.smeia.org/smeia-org/_img/sme/SMEIA_HMG_Growth_policies.pdf) to Government ministers, the group said that small and medium-sized enterprises (SMEs) are not able to take advantage of the protection offered by patents. ”

But you know what comes next…

“For high-tech SMEs … a patent is almost impossible to enforce,” it said. “It does not require another review of IP [intellectual property] to establish this particular unfair fact yet again; it requires immediate change.” SMEIA chair John Mitchell told the Daily Telegraph that smaller companies could not afford to defend themselves in court and that a “patent defence fund” should be made available to them so that they could afford to take part in major patent suits with large corporations.

danimal June 2, 2011 at 2:52 pm

so what happens if i had on paper a recipe i’d used in a restaurant to make me a lot of money…then somebody steals it. in libertarian world, i would get back and how would the guy get punished? by me stealing a piece of his paper or being reimbursed for the cost of a piece of paper or slightly more, even tho the guy can copy my recipe somewhere and profit later? it doesn’t seem that fair

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