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Source link: http://archive.mises.org/16873/copyright-and-the-end-of-internet-freedom/

Copyright and the End of Internet Freedom

May 10, 2011 by

It is obvious to advocates of liberty that modern communications and technology–cell phones, twitter, texting, video, youtube, email, and the Internet–are crucially important in the fight to delegitimze, expose, and fight against the state. Of course the state always works to hijack and corrupt various institutions and aspects of life in order to increase its control and power. As I discuss here, Professor Hans-Hermann Hoppe, in his classic paper Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order, explains how and why the state insidiously arrogates to itself the control of roads, communications, law and justice, healthcare, money, defense, police, finance and banking, and education.

So it is no surprise that they are coming for the Internet next, under the guise of tax law (it’s “unfair” if Amazon doesn’t pay the sales taxes that brick-and-mortar shops are forced to), prohibitions on gambling and child porn, and, of course, copyright and “piracy.” The latter is probably the biggest threat to Internet freedom, as can be seen in this chilling article: The Pirate Bay: “The Battle of Internets is About to Begin”.  The Internet must remain free and unregulated. If Internet freedom disappears, we will lose one of our most crucial weapons against the state. And it will have been because of copyright law, the fascist nature of which is becoming increasingly obvious to all libertarians except for the most stubborn pro-IP holdouts.

I used to think IP was bad, but way down on the list of priorities. But since 1995 or so (see my The Four Historical Phases of IP Abolitionism), IP’s abuses have increased and become more visible. IP does not include only patent and copyright and the other classical and modern forms of IP (trademark, trade secret, semiconductor maskwork, etc.). It also includes defamation law/reputation rights, which, like copyright, also censors speech, and one can even view other statist policies as variants of or close cousins to IP law–such as the state’s prohibition on counterfeiting its fiat currency (this is copyright like in that the state claims the right to make these copies but no one else), and even the drug war (the state can produce drugs or authorize people to do so, etc.). So at this point I’d have to put the state’s insidious and increasingly draconian and outrageous IP policies just behind the other obvious state evils: war, income tax, central banking/fiat money, drug war/police state, and government schools.

Update: Revised ‘Net censorship bill requires search engines to block sites, too

For current and impending copyright legislation and treaties, see The Mountain of IP Legislation.

{ 25 comments }

David C May 10, 2011 at 9:02 am

You can’t shoot information with a tank. I really think governments are going to have a hard time controlling information, now that the cat is out of the bag. (now with patent, physical control over how people use invention, that’s a different matter)

When a market commoditizes, the service value of that market becomes more profitable than the control value of that market. This has already happened with content, which is why the copyright cartel is really doomed. I’m sure they are going to lash out and can cause a lot of collateral damage like a person drowning in a pool kicking and grabbing onto everyone around them. But in the end, the government can’t end internet freedom.

The government is also desperately trying to control information about relative transaction costs, and value over time, as in … they are trying to control the monetary system. Notice, they are losing that information battle too.

Horst Muhlmann May 10, 2011 at 10:43 am

I don’t know about that. The government does control the mail ;)
http://www.youtube.com/watch?v=Rg_4z2adv6Q

Norm LeDonne May 10, 2011 at 3:53 pm

I’ve been thinking about patents and copyrights. It’s my understanding that the great composers (Bach, Beethoven, Mozart et al.) did not copyright their works. Is the world worse off for it? I don’t think so. In fact, I know that composers regularly stole each others ideas for their own pieces, which, to me, echoes “imitation is the sincerest form of flattery” and in my opinion only created more great works. The more I think about the US patent office, the more I believe it has to go, along with all of the other institutions which are stealing our freedoms.

Wildberry May 10, 2011 at 7:26 pm

Mr. Kinsella,

So at this point I’d have to put the state’s insidious and increasingly draconian and outrageous IP policies just behind the other obvious state evils: war, income tax, central banking/fiat money, drug war/police state, and government schools.

In each of the “state evils” you list, I can conjure up my own ideas of where the evil lies, and agree with you in general that each area has evils that should and must be addressed. To some extent, at least, I would agree that IP laws also cause some unnecessary harm.

Yet distinguishing between one thing and another is still important, especially so in the context of liberty. For example, not all wars are evil to the extent that they are waged to preserve individual freedom and survival. To conclude that something even as horendous as war is or is not justified in a given case requires some a priori concept of justice and liberty worth fighting for.

Also, I think you conflate the state and mercantilism in much of your rhetoric concerning the evils of the state. Those evils mostly derive from misappropriation of political means. Collusion between commercial and political interests for power and exclusive privilege does not prove that the underlying principles of self-government, or even the concept of taxes, are necessarily evil. It is when the institutions of society are hijacked for purposes contrary to their original purpose that something that is fundamentally good becomes a device of evil.

The same is true of IP; the principle that one should own what he makes is a valid and good principle of liberty in every context of peaceful human endeavor. The state, in principle, does not enforce IP for its own purposes. If there is evil there, it is derived from the collusion between those seeking rents by capturing political means, and those willing to trade politcal accommodations for political power. This is the evil principle behind the evils impliled in the examples you have identified.

The contrast between evil purpose, and ethical principle in a given social institution is a critical distinction. A failure to make those distinctions does not bode well for the struggle to preserve and expand individual liberty in a free society. Success in making those distinctions makes possible the distinction between a target and collateral damage. This is not an easy task, and takes more care, I fear, than you are willing to give.

Peter Surda May 11, 2011 at 9:45 am

Wildberry,

… the principle that one should own what he makes is a valid and good principle of liberty in every context of peaceful human endeavor.

And, since it is the copier, rather than the author, who made the copy, based on your own argument, it should belong to the copier, rather than the author. See? Vagueness works both ways. You can’t be both vague and able to refute your opponents’ claims.

Stephan Kinsella May 11, 2011 at 9:59 am

What a fantastic point.

Wildberry May 11, 2011 at 11:43 am

Mr. Kinsella,

Before you get all giddy about your star pupil, consider this:

The copier does not own the means of his production, since the origianl is required as an input to the copying process. No way to make a copy without an origianl, right?

If the original from which he copies was transfered under condition of copyrights, then how is he doing so with his own means?

If the original is presumed to be placed in his hands without copyright, then what do you assume as the total cost of copying what he has acquired? Are ideas still free?

Isn’t it a small problem if you assume access under copyright conditions, and then assume freedom to copy under some other hypothesis of rights?

I believe this leads one back to the issue of externalities. I know I’m beginning to sound like Peter now, but would you be interested in addressing that issue?

Stephan Kinsella May 11, 2011 at 11:59 am

The copier does not own the means of his production, since the origianl is required as an input to the copying process. No way to make a copy without an origianl, right?

first, IP does not prohibit only copying. It also prohibits use of information even if you are not copying it (in some cases).

Second: suppose I produce a sword. What does that mean? I own metal and use knowledge I have to guide my transforming actions. I own the sword because I already owned the factors. To call my knowledge of how to make a sword an input or factor is equivocating b/c it is treating it like the metal-factor/input. I need to own the metal to rearrange/shape it. I don’t need to own the knowledge to do so. Where I received the knowledge from is irrelevant to this–whether i learned it from a teacher, I observed a competitor doing it, or I figured it out on my own.

So if you call knowledge that guides action an “input”, then no, not all inputs are owned. They don’t need to be.

If the original from which he copies was transfered under condition of copyrights, then how is he doing so with his own means?

Well his means in the case of a copy would be his body, his computer, his paper, his ink, his printer. MIses explains that all means are scarce resources. Other things that play a role in successful action but that are not scarce resources are general conditions of action or free goods, and are not owned at all. It does not matter how the actor obtained information, because learning and emulating and thinking and figuring out recipes on his own does not commit aggression against anyone.

You say it’s copied under some condition that it not be–presumably you are envisioning a case where the copier has entered into some kind of contract with the creator. In this case it has nothing to do with the means invovled in the copying-action, but rather, there is a separate agreement set up to transfer money-title from the buyer to the seller IF the buyer performs certain specified actions (such as copying).

But you cannot assume such a contract as a general matter, whenever someone uses knowlege to guide their actions, evne if it’s learned from someone else. Learning and observing and emulating are not uses of the property of the person being observed or learned from, so it does not require their permission; thus the idea-creator being emulated or learned from has no right to deny permission, so no way to force people emulating him to enter into this silly contract.

It is similar to any aspect of action. If you do something publicly, then others may learn facts or information from this and you have no right to stop them from using or acting on this information.

If the original is presumed to be placed in his hands without copyright, then what do you assume as the total cost of copying what he has acquired? Are ideas still free?

this is a confused question.

Peter Surda May 11, 2011 at 12:26 pm

Wildberry,

The copier does not own the means of his production, since the origianl is required as an input to the copying process. No way to make a copy without an origianl, right?

The existence of the original is required for the creation of copy, i.e. there is a causal relationship. So what? Why should that be relevant? All kinds of things are causally related yet you do not advocate redistribution of property based on that. Competition requires the existence of an encumbent. Does that mean competition requires the permission of encumbents? You writing requires you know how to write. Does that mean your primary school teacher owns your writings? A reply requires a question, does that mean that one has a right to prevent other people from replying?

No way to make a copy without an origianl, right?

The existence of the original is required. However, interaction with it is not necessary. Passive observation, as well as interaction with copies (instead of the original) is sufficient. These do not alter the original, so they are not a violation of its owner’s property rights. They alter the copy (or, in general, the data gathering instrument), so it is the owner of the copy who’s permission is relevant.

It’s the labour theory of value all over again. There is a causal relationship between worker’s labour and the products of the factory he’s employed in, so, the proponents of the theory say, they should belong to him, rather than the owner of the factory.

Wildberry May 11, 2011 at 1:38 pm

Grasshopper,

If one’s ability to construct non-sequitur was in demand, you would be richer than Bill Gates.

Peter Surda May 11, 2011 at 1:56 pm

On the contrary Wildberry. You are the one denying logic at every step. I attempt to formulate falsifiable arguments. Which part of my argument is non-sequitur? You don’t say. Because that would require you to engage in a genuine argumentation, and you want to avoid that at all costs.

Wildberry May 11, 2011 at 1:33 pm

@Stephan Kinsella May 11, 2011 at 11:59 am
Good morning.

first, IP does not prohibit only copying. It also prohibits use of information even if you are not copying it (in some cases).

I was responding to the fantastic point, which did not address derivative works.

Second: suppose I produce a sword. What does that mean? I own metal and use knowledge I have to guide my transforming actions. I own the sword because I already owned the factors. To call my knowledge of how to make a sword an input or factor is equivocating b/c it is treating it like the metal-factor/input. I need to own the metal to rearrange/shape it. I don’t need to own the knowledge to do so. Where I received the knowledge from is irrelevant to this–whether i learned it from a teacher, I observed a competitor doing it, or I figured it out on my own.

So if you call knowledge that guides action an “input”, then no, not all inputs are owned. They don’t need to be.

This is a valid point, but off target. It is not necessary that you own all things that are inputs, for example you don’t need to own the oxygen needed to heat your forge to own the sword you make with it. If an input not owned by anyone is used to make something that is owned, this does not mean the producer does not own what he’s made. We seem to agree on this.

For example, it is not necessary to own the alphabet, the ideas for writing a book, or even the knowledge of how to write a book, in order to write a book and own your work. But it is necessary to own an original copy of something before you can make a copy of it, by definition; i.e. copy of what?

The fact that something, books or swords, is made using both privately owned resources AND resources in the commons of the public domain, does not negate otherwise legitimate ownership rights.

But, unless you can show that you obtained the original copy legitimately and under mutually agreeable terms, then you cannot be said to own the means for making a copy of it. Obtaining it under one term (copyrights) and using it in violation of those terms is not a legitimate basis to establish ownership rights in the copy, because you did not have legitimate, private ownership of the means.

It does not matter how the actor obtained information, because learning and emulating and thinking and figuring out recipes on his own does not commit aggression against anyone.

Of course, but we are not talking about using information. The copier is not recording information obtained from a public-domain source; he is making a copy of an original work from an original copy. Under what theory do you suppose it was acquired? Isn’t this the fantastic point we are discussing?

You say it’s copied under some condition that it not be–presumably you are envisioning a case where the copier has entered into some kind of contract with the creator. In this case it has nothing to do with the means invovled in the copying-action, but rather, there is a separate agreement set up to transfer money-title from the buyer to the seller IF the buyer performs certain specified actions (such as copying).

I am not envisioning anything, but rather asking you to explain. Under what conditions to you presume the copier obtained the original copy? If he acquired it under terms that were not acceptable to the seller, then any subsequent use is a fraud on the seller. If you presume he acquired it under acceptable terms, what do you imagine those to be?

Whatever they are, they would have implications for the assumptions you make regarding the cost of acquisition, the cost of copying, and the motives (i.e. rational acts) for making the copy in the first place. What are those assumptions?

But you cannot assume such a contract as a general matter, whenever someone uses knowlege to guide their actions, evne if it’s learned from someone else. Learning and observing and emulating are not uses of the property of the person being observed or learned from, so it does not require their permission; thus the idea-creator being emulated or learned from has no right to deny permission, so no way to force people emulating him to enter into this silly contract.

I appreciate how you would like to change the fact pattern here, but I am only addressing one fantastic point. I am not assuming anything, you and your pupil are. I would like know what you have in mind.

We are not discussing knowledge or emulation, we are discussing copying. Grasshopper said that under my logic, the copier should own the copy. I am asking you how such a copier can be said to own the means of copying, since it is dependent on having an original? If he has it, under what conditions did he acquire it?

It is similar to any aspect of action. If you do something publicly, then others may learn facts or information from this and you have no right to stop them from using or acting on this information.

Assuming I know what you mean, I agree for the most part. But why is this relevant? I am not supposing that an author can stop someone from using the knowledge they gain from reading a book. I am saying that copying requires something to copy from. If you are going to own the copy, you have to own the original. How do you presume, fantastically, that this occurs?

If the original is presumed to be placed in his hands without copyright, then what do you assume as the total cost of copying what he has acquired? Are ideas still free?

this is a confused question.

OK, I hope you understand now. The assumptions you make concerning the terms under which the copier acquired the original will have a consequence on those things that happen later with that original, including making copies. You cannot assume it is acquired under the terms of copyright, and then copied under “ideas are free” terms.

To quote Grasshopper, you can’t have it both ways.

Stephan Kinsella May 11, 2011 at 1:57 pm

I was responding to the fantastic point, which did not address derivative works.

I said IP not copyright. Patent does not require copying, say.

For example, it is not necessary to own the alphabet, the ideas for writing a book, or even the knowledge of how to write a book, in order to write a book and own your work. But it is necessary to own an original copy of something before you can make a copy of it, by definition; i.e. copy of what?

This is quite incorrect. to copy something you only need to be aware of its nature, or to observe it, which does not require owning or even possessing it. any number of examples will suffice. While getting my hair cut the barber discusses the novel Atlas Shrugged, which he read a year ago, with his co-worker. I listen. Now I know the plot. I copied nothing.

I hear the bartender singing a new pop song. I then record a cover of it.

My neighbor is blaring the latest AC/DC album. I am taping my son doing handstands in the front yard. The audio track of my recording now has AC/DC music on it.

And so on.

The fact that something, books or swords, is made using both privately owned resources AND resources in the commons of the public domain, does not negate otherwise legitimate ownership rights.

But, unless you can show that you obtained the original copy legitimately and under mutually agreeable terms, then you cannot be said to own the means for making a copy of it.

The means are the raw materials I transform, not the information that guides my action. I do not need to show I own the information.

You are equivocating above by including information (nonscarce resource) with other factors (metal etc.) by calling them both “resources.”

Obtaining it

What is “it”? If you mean the metal–it had nothing to do with it. If you mean information–I just gave examples of how you can acquire inforamtion without being bound by any terms or conditions or contract of someone else.

under one term (copyrights) and using it in violation of those terms is not a legitimate basis to establish ownership rights in the copy, because you did not have legitimate, private ownership of the means.

The means are the scarce things. I do own those. You are question begging by assuming information is a means, i.e. a scarce ownable thing.

It does not matter how the actor obtained information, because learning and emulating and thinking and figuring out recipes on his own does not commit aggression against anyone.

Of course, but we are not talking about using information. The copier is not recording information obtained from a public-domain source; he is making a copy of an original work from an original copy.

this is not always the case when copying occurs. In the cases where it is, you could in theory imagine a contract between seller and buyer. But now we are talking about contract, not IP.

Under what theory do you suppose it was acquired? Isn’t this the fantastic point we are discussing?

what is teh “it” that is “acquired”? Suppose my neighbor has a mural on his house in plain view. I one day practing my painting paint a copy of it. I never “acquired” his house or mural. He has no right to condition my “use” of it b/c I’m not using it.

You say it’s copied under some condition that it not be–presumably you are envisioning a case where the copier has entered into some kind of contract with the creator. In this case it has nothing to do with the means invovled in the copying-action, but rather, there is a separate agreement set up to transfer money-title from the buyer to the seller IF the buyer performs certain specified actions (such as copying).

I am not envisioning anything, but rather asking you to explain. Under what conditions to you presume the copier obtained the original copy?

you don’t need to “obtain a thing” to copy the pattern on it (not always anyway).

If he acquired it under terms that were not acceptable to the seller,

it’s not always a sale, and seller/originator can not always impose terms on people. see examples above.

We are not discussing knowledge or emulation, we are discussing copying. Grasshopper said that under my logic, the copier should own the copy. I am asking you how such a copier can be said to own the means of copying, since it is dependent on having an original? If he has it, under what conditions did he acquire it?

I have explained this umpteen times now.

Peter Surda May 11, 2011 at 5:58 pm

Wildberry,

The assumptions you make concerning the terms under which the copier acquired the original will have a consequence on those things that happen later with that original, including making copies.

You use a vague word “acquire” to muddle the whole argument. As I explained earlier, you use it when denoting causality, but then subsequently deny it (or at least it appears so).

To quote Grasshopper, you can’t have it both ways.

Exactly. “Acquiring” can refer to physical interaction, and then copying by passive interception or indirect methods (proxy) is fine. Or it can refer to causality, and then all hell breaks loose. You can’t have it both ways. You realise this, because when this contradiction is pointed out to you, you get emotional and turn to dadaism.

Wildberry May 11, 2011 at 6:07 pm

@Stephan Kinsella May 11, 2011 at 1:57 pm

It appears that a discussion of staying within the context is in order. Here is the fantastic quote, with some emphasis added:

And, since it is the copier, rather than the author, who made the copy, based on your own argument, it should belong to the copier, rather than the author.

I said IP not copyright. Patent does not require copying, say.

Yes, I know. But I think we are talking specifically about copying, so let’s stick with that.

For example, it is not necessary to own the alphabet, the ideas for writing a book, or even the knowledge of how to write a book, in order to write a book and own your work. But it is necessary to own an original copy of something before you can make a copy of it, by definition; i.e. copy of what?

This is quite incorrect. to copy something you only need to be aware of its nature, or to observe it, which does not require owning or even possessing it. any number of examples will suffice. While getting my hair cut the barber discusses the novel Atlas Shrugged, which he read a year ago, with his co-worker. I listen. Now I know the plot. I copied nothing.

Sorry, but I think you are trying to obscure the issue by driving towards the corners rather than staying in the center of the ring.

Grasshopper assumes a copy, a duplicate of the original. It would be a pleasant diversion to bat around the meaning of “copy” as a term of art in copyright law, but we can stick with the common usage of the word. At some point, one has to distinguish between a copy and something that is substantially similar, perhaps, but not a duplicate.

However, here we are discussing a standard case of copying a book; making a duplicate by way of having access to the original. So all the nuance examples you give at the corners of the issue do not address the simple case presented; since the copier makes the copy, he should own it. You think this is a fantastic point, so please defend that one and not others.

We are not discussing derivative works, substantial similarity, striking similarity; we are discussing direct copying.

The means are the raw materials I transform, not the information that guides my action. I do not need to show I own the information.
You are equivocating above by including information (nonscarce resource) with other factors (metal etc.) by calling them both “resources.”

I think you are wrong about this, and I think I have support from Mises. When humans act, they do so rationally. This implies some intangible actions which necessarily preceed physical acts of say, transformation of scarce resources. However not all of the means are scarce, as you point out. The process is not scarce. The ideas are not scarce. The language used to convey directives is not scarce. Yet they are all the means of production, for if any part is absent, production cannot occur.

Therefore, both the tangible, scarce goods, and the intangible rational thought process (which are not merely phantoms, in Mises’s words) are, in their totality, the means of production.

In the case of the sword example, the product is a finished sword, which finds its origin in both scarce and non-scarce resources. In the case of a book, equally originate from both scarce and non-scarce resources, but the product is by all accounts, a scarce resource), which is rightfully the property of the maker. Both the sword and book are completely analogous as justifiably being owned by their makers.

What is “it”?

Have you forgotten? It is a book made by the author. To copy it, the copier must have acquired an original copy of the first such book to copy from. I am trying to get you to explain to me how it is, do you presume, acquired by the copier such that any copies he makes are owned by him. I am asking you to state, from the universe of possibilities, how he acquired it in such a way that makes it his to copy freely? I am simply interested to see if you are accounting for the real cost of ownership, whatever you imagine that to be.

If you mean the metal–it had nothing to do with it. If you mean information–I just gave examples of how you can acquire inforamtion without being bound by any terms or conditions or contract of someone else.

Yes, but it is you who raised the example of the sword. I just feed it back to you as an analogy for book production. I am not asking you to explain how you became a sword-maker, nor am I asking you to explain how the author became a writer, or what either process is composed of.

You said earlier that you agree that an author owns his original manuscript, symbolically paper with words on it that the author composed. You agree that he has two choices in disclosing it: 1) figure out a way to keep it secret (meaning keeping it out of the public domain), or 2) place it in the public domain the moment he discloses it (and no whining about how others use it).

So in Grasshopper’s fantastic point about the copier owning the work because he made the copy, I’m asking you to explain how either 1) or 2) occurred, in this scenario, such that the copier is copying with his own means and therefore owns the copy.

The means are the scarce things. I do own those. You are question begging by assuming information is a means, i.e. a scarce ownable thing.

No, I am certainly not. The author owns the book, his manuscript. It is a tangible, scarce good. Next, the copier owns the copy that he made. How did you get from point A (manuscript) to point B (copier owns two copies)? I’m asking for your assumptions about how that might happen such that the copier owns the copy because he made it.

this is not always the case when copying occurs. In the cases where it is, you could in theory imagine a contract between seller and buyer. But now we are talking about contract, not IP.

OK, imagine a contract if you want. I realize this one example does not describe all possible other examples. In this fantastic example, a book is apparently being copied by a copier. If you imagine a contract, one that does not depend on copyrights if you wish, how do the buyer and seller set the price? Is it a voluntary trade? What terms are required to make it work? What are you saying is happening in Peter’s application of the principle that one generally owns what one makes with his own private means?

what is teh “it” that is “acquired”? Suppose my neighbor has a mural on his house in plain view. I one day practing my painting paint a copy of it. I never “acquired” his house or mural. He has no right to condition my “use” of it b/c I’m not using it.

Yes, I can suppose this. But this is not an example of copying a book, right? This is an example of something else, like making something that is substantially similar to something else, as a result of having some kind of access to the original. This is a different scenario, as you know.

you don’t need to “obtain a thing” to copy the pattern on it (not always anyway).

Yes, I can agree. But in this case the copier must have had access to the original in order to make a copy of it. You support the notion that if a person owns what he makes, then a copier owns the copy, because he made it. I retorted that “make” implies private means in order to meet the conditions of the principle. If the original is a necessary means for making the copy, then the copier would have to own the original to make the copy he copied from. Otherwise, it would not be a copy, a duplicate.

It appears to me that you are assuming that the copier “has” it. I am asking you to state your assumptions about how that might have happened in the absence of an acknowledgement between the parties of property rights in the original, if you do in fact acknowledge that. If not, show me how it works. If the author has no property rights in the original, what assumptions are you making to place it in the hands of the copier? Am I speaking English here?

it’s not always a sale, and seller/originator cannot always impose terms on people. see examples above.

OK, assume any form of transaction you like. The author needs to put a copy of the book he owns into the hands of the copier with no strings attached. If he does that, the copier can make all the copies he wants. How do you suppose this could happen? I would like to understand your thinking on this.

I have explained this umpteen times now.

Yes I agree we are both repeating ourselves. Is it possible to ask you to just respond the central issue? What form of transaction occurs between an author and a buyer that entitles the buyer to make unlimited copies on the condition that he, the copier, makes them?

Under these conditions, whatever they are, I would agree that the copier would own what he makes, the copy. What are these conditions? I’m having trouble imagining a market operation that would result in that outcome. For example, how would an author set his acceptable price to a single buyer who is going to obtain unlimited copying rights? How would a seller, to whom the book has not yet been disclosed, be willing to pay a price the author would accept?

I think you have already said that they wouldn’t be able to reach a deal, because no buyer is going to be willing to accept either the price or liability that appears appropriate to make such a transaction work. Where does that leave you?

It appears that leaves an author with a work that cost real capital, but is worthless at any price approaching his investment, and no seller is going to want an expensive book that requires exposure to large liabilities. So, the author is left with the two choices you suggest; keep it to himself, or give it away, neither of which are economically attractive.

In the absence of willing buyers and willing sellers, at prices and terms mutually acceptable, products are not produced. I think you once called this merely a technical problem. I’m asking you to explain the way out of this dilemma, if you can.

Stephan Kinsella May 11, 2011 at 6:31 pm

This is quite incorrect. to copy something you only need to be aware of its nature, or to observe it, which does not require owning or even possessing it. any number of examples will suffice. While getting my hair cut the barber discusses the novel Atlas Shrugged, which he read a year ago, with his co-worker. I listen. Now I know the plot. I copied nothing.

Sorry, but I think you are trying to obscure the issue by driving towards the corners rather than staying in the center of the ring.

Grasshopper assumes a copy, a duplicate of the original. It would be a pleasant diversion to bat around the meaning of “copy” as a term of art in copyright law, but we can stick with the common usage of the word. At some point, one has to distinguish between a copy and something that is substantially similar, perhaps, but not a duplicate.

However, here we are discussing a standard case of copying a book; making a duplicate by way of having access to the original.

Not all copying requires ownership of an object. You can take a picture of your neighbor’s painting displayed on a billboard in his yard. Etc.

But in the narrow case of copying a book where you buy the book from a seller: there are a few possibilities. First, the book is sold free and clear. Copying is just one thing you can do with your property, as buyer.

Second, the book is not sold but only leased. The “buyer” is really just a lessee who only has some rights to use the loaned property. This is possible, but unlikely–why would I “lease” a $7 book when I could buy alternatives outright?

Third, the book is sold, but as a condition of sale, the seller insists the buyer sign an agreement saying he will not copy it (or learn from it or use it) and if he does, he owes potentially millions of dollars of damage to the seller. What moron would agree to such open-ended damages, and restrictions on his rights to use “his” property, … just to get a $10 book? hunh?

Peter Surda May 12, 2011 at 4:09 am

Wildberry,

At some point, one has to distinguish between a copy and something that is substantially similar, perhaps, but not a duplicate.

No, one does not have to do that. This is only something that you made up in order to make at least a bit of sense.

You previously used causality to define the rights such as IP (you called it “economic rights”). When it turns out that causality is insufficient, then you switch to “substantial similarity”. Kindly note that this condition is orthogonal to causality, so the step is a non-sequitur.

… making a duplicate by way of having access to the original.

“Having access to the original” (without the original owners’ permission, assuming) does not imply violation of property rights. You equivocate the two, thus committing a logical fallacy. As I said earlier, passive data collection and indirect use (by proxy) are not a violation of property rights, they are only types of causality. So it’s not possible to make the conclusion you are making.

You’re a fraud Wildberry. Still no coherent argument, yet full of smoke and mirrors.

Peter Surda May 12, 2011 at 4:11 am

Wildberry,

another stupidity:

This implies some intangible actions which necessarily preceed physical acts of say, transformation of scarce resources.

No, it does not imply them. It’s metaphysical bullshit.

Wildberry May 12, 2011 at 12:52 pm

@Stephan Kinsella May 11, 2011 at 6:31 pm
I think I identified the new post from the old…?

But in the narrow case of copying a book where you buy the book from a seller: there are a few possibilities. First, the book is sold free and clear. Copying is just one thing you can do with your property, as buyer.

Agree. In this case, in the context of copyright laws, the book and copyrights are conveyed to the buyer, which is possible today under copyrights law, (although it has to be an explicit transfer in writing), and is similar to how an author sells copy rights to a publisher. As you probably know, this can be a complex contract, since many different uses are bundled into the copyright.

In the absence of copyrights, any rights that might otherwise exist are all bundled in the deal under this assumption.

One can imagine that under anything like a free market, an efficient price to be attractive to the author, would have to cover the entire capital investment by the author and the expectations for profit of the lifetime of the book, since this single transaction would extinguish any and all exclusive rights to the book in the author. In other words, if there is any market value left after the sale, it would be a “race to the basement” of marginal cost, so unless there is somehow time to compete with the buyer, this is a one-shot deal for the author.

This scenario would have some things in common with the often cited example of British authors releasing books in America first, even though copyrights didn’t exist at that time. However the typesetting technology at the time was sufficiently slow that first-mover advantage had some meaning. In the digital age, this potential strategy is greatly diminished.

In imagining a bargaining session between author and buyer, especially given that it must take place before disclosure, it appears most likely that a bi-lateral monopoly pricing strategy would be established, where seller’s and buyer’s offers are miles apart and there is no market mechanism to narrow the gap.

In this case, each would invest resources in trying to generate leverage for their own position, and it is likely to break down before a deal is reached. All of this would add up to substantial transaction costs, although enforcement costs would be near zero. The fact that is a 1-1 transaction would make transaction costs lower that a 1-many strategy.

Under these conditions, it seems likely that word would get around among authors that outright sales to consumers directly are unprofitable and prohibitively expensive, and most buyers would forego reading the books rather than pay the price required. A large part of any economic incentive to write books would vanish.

Let’s call this the “publisher” deal.

Second, the book is not sold but only leased. The “buyer” is really just a lessee who only has some rights to use the loaned property. This is possible, but unlikely–why would I “lease” a $7 book when I could buy alternatives outright?

Again, this would require a negotiated deal between buyer and seller, and enforcement costs would be greater than zero. I would imagine that the transaction costs for the seller of reaching a deal would also be high; higher than the publisher deal because it is a 1-many transaction.

Maybe this cost could be lowered by developing a “click-through” agreement that is a take-it-or-leave-it deal, like a Microsoft license. As each deal was made, the enforcement costs would go up. It is unlikely that the cost of enforcement would be self-funding, since I would expect that the damages would not be greater than the costs, and many that would be convicted would be judgment proof, because they couldn’t afford to pay a large fine.

As you pointed out, why would anyone in their right mind pay $7 for a book if it exposes you to a large potential liability? I think this is the more compelling argument than competition from alternative authors, because in a mature economic system built around this assumption, everyone would be in the same boat. Perhaps the field of literature would be occupied solely by hacks eager to give their work away, but it is unlikely that anyone would invest in the time and effort required to write a history or highly technical book, for example.

Let’s call this the “leasing” deal.

Third, the book is sold, but as a condition of sale, the seller insists the buyer sign an agreement saying he will not copy it (or learn from it or use it) and if he does, he owes potentially millions of dollars of damage to the seller. What moron would agree to such open-ended damages, and restrictions on his rights to use “his” property, … just to get a $10 book? hunh?

In this scenario, the transaction costs would be at least as high as the publisher deals, since all rights would have to be addressed within the corners of the contract, even if we assume the more liberal conditions of a Fair Use provision (to define what you call “learn” or “use”). Perhaps over time, or in a mature system, this again takes the form of some kind of standard “click-through” agreement that consumers understand at least as well as current copyright laws. Since infringement is in the control of the buyer, they could accurately assess their own intentions and understand their potential risks.

If you reduced the liability on the assumption that each consumer only does an marginal amount of damage, you would still have a high transaction cost from enforcement being higher than recovery, even if violators could be detected with high probability.

For simplicity, let’s assume that the liability is much lower than you assume, and is based on something more like actual damages. This would result in an enforcement situation much like we have today, where individual infringers are seldom detected, and if they are, are not prosecuted, but those engaging in high volume infringement are worth suing. The other transaction costs would still be quite high for both buyer and seller though, since both would have to negotiate a deal for each book purchased.

Even if you had a standard click-through agreement in place, you would have to ensure that sellers didn’t sneak in other terms from the standard. Maybe you could have a rule that says in big red letters, “THIS IS NOT A STANDARD AGREEMENT”, etc. but then you would have to have a way to enforce compliance to this rule.

We can call this the “contract” deal.

Of course, underlying all of these deals is the assumption that there is an economically efficient method of coercion to enforce violations of any of these deals, which is another component of transaction costs. Using the state to enforce these transactions, we have something similar to the current situation, which you oppose.

In an Ancap market, we have to hypothesize how this might be done. Even so, it is hard for me to imagine how a market would support the continued production of books for profit.

If you take the profit motive from production, we have to assume that either the market does not supply the goods, or some central planning agency intervenes in the market in some way to make them appear; maybe something like NPR for authors?

Peter Surda May 13, 2011 at 5:36 am

Wildberry,

This scenario would have some things in common with the often cited example of British authors releasing books in America first, even though copyrights didn’t exist at that time.

You are mistaken. Copyright did exist at that time. However, it was restricted in scope to countries of origin. British authors did have a copyright on their books, but only in UK. Similarly, American authors did have a copyright in US. The situation changed then in 1886 after the Berne Convention in which the signatories implemented international copyright.

However the typesetting technology at the time was sufficiently slow that first-mover advantage had some meaning.

In the book that I read recently (Piracy by Adrian Johns), the author quotes historical sources. There was a cut-throat competition in getting the book out. Let me quote:

Distributing a work to ten or more printing houses, an experienced American publisher could have an entire three-decker novel on the streets in two to three days.

In 1825 the firm printed Byron’s Don Juan at thirty presses in thirty six hours. And when Carey received Scott’s Quenin Durward, he had 1500 copies of the three volume novel printed, bound and distributed in twenty-eight hours.

That does not sound too different from what we have now.

Wildberry May 13, 2011 at 10:23 am

It is telling that this is the only response my last post generated.

Nonetheless, in the interest of fairness, you are correct. I should have said, copyrights didn’t exist as between Britain and America; i.e. there was no treaty to enforce copyrights between these two soveriegns.

As for the rest, I see no value in debating whose estimate is correct concerning how long it takes to typeset and print a book in the 1800s.

Peter Surda May 13, 2011 at 11:08 am

Wildberry,

It is telling that this is the only response my last post generated.

Since the rest of your posts is just a rehash of the same fallacies you repeated ad nauseum for months, I see no reason to address them anymore. I have addressed them many times already and you ignored my posts. It is obvious that you do not seek a debate, rather are true to the Goebbelsian maxim of repeating the same lie in the expectation that people will start believing it.

Nonetheless, in the interest of fairness, you are correct. I should have said, copyrights didn’t exist as between Britain and America; i.e. there was no treaty to enforce copyrights between these two soveriegns.

You neglect to mention, however, that this makes your whole premise dubious. The example demonstrates a situation where a market with IP and a market without IP existed in parallel, and the one without IP was more beneficial to the author. Yet for some magical reason, you stubbornly insist this is not the case. The empirical evidence (to whatever extent it is relevant) brought forth by yourself speaks against you.

As for the rest, I see no value in debating whose estimate is correct concerning how long it takes to typeset and print a book in the 1800s.

Since you provided your imagination, and I quoted a reputable historian, there really is no point in debating this. It just more vividly demonstrates the fraud you are perpetrating.

coturnix19 May 11, 2011 at 12:21 am

such as the state’s prohibition on counterfeiting its fiat currency (this is copyright like in that the state claims the right to make these copies but no one else)
———–

this is not copying, each bank note is unique as it has its own unique number.

George May 11, 2011 at 2:39 pm

Stephan, how do you propose content publishers deal with plagiarism, then? Just roll over and give up? What makes you so sure that a free market in law would unanimously reject all forms of copyright?

Stephan Kinsella May 11, 2011 at 2:46 pm

copyright has very little to do with plagiarism. A typical copyright action is aimed at someone who is not a plagiarist. If I copy Atlas Shrugged I will attach Rand’s name to it. That is not plagiarism.

Plagiarism itself is a non-problem and not a rights violation in any case.

Try to ask a clear question.

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