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Source link: http://archive.mises.org/6035/microsoft-and-tangibility-of-software/

Microsoft and Tangibility of Software

December 18, 2006 by

One argument against intellectual property is that property rights should be recognized only in scarce (rivalrous) resources. Some refer to this quality as “tangibility,” somewhat inaccurately in my mind, but it’s at least a similar concept. Anyway, the basic idea is that, say, “software” is not property because it is not tangible or scarce; therefore, copyright in software is illegitimate.

Of course advocates of copyright in software have to maintain that lack of tangibility is no barrier to software’s being protected by property rights. Like, say, a Microsoft. So it’s somewhat ironic to see Microsoft arguing that the intangibility of its software makes it different from normal, physical property for purposes of a US patent law provision that makes an exporter of technology liable for patent infringement if the thing exported is combined outside the US with a computer to result in a device covered by a US patent. In other words, Microsoft wants to have it both ways: software ought to be covered by copyright, even though software is not tangible. Yet, because it’s not tangible, it should not be counted like a tangible component would for purposes of the patent-export law.

{ 89 comments }

Sasha Radeta December 18, 2006 at 12:06 pm

Stephan said: Anyway, the basic idea is that, say, “software” is not property because it is not tangible or scarce; therefore, copyright in software is illegitimate.

The problem with this statement is obvious to anyone who knows what the economic scarcity means. The economic definition of scarcity is this: when the price of a good is zero, demand exceeds supply. Only if the supply of free goods exceeds or equals the demand for free goods do we say those goods are not scarce. Scarcity implies the condition of limited resources, where society does not have sufficient resources to produce enough to fulfill unlimited subjective wants.

Copyright did not artificially create scarcity by restricting any possible supply of software, just as restrictions of possible supply by any capitalist (private owner) do not create scarcity. Creation of private property rights and copyright (specific terms of use that explain that the owner sells only certain personal uses of his product) are only the logical response to pre-existing issue of scarcity. If copyright did not exist, the issue of scarcity would be far more visible in markets for software… Without any profit incentives from mass marketing, software developers would never make massive sales of their products. Software would become so rare and valuable that fewer firms or individuals could afford them and they would have no interest in giving it away for free (just as you would not give your diamonds or secret technology for free)…

To say that software is not scarce implies that in the absence of markets and private property rights (zero prices) we would have larger supply of current software products than its demand. This quasi-communist assumption presupposes that software creators would somehow be far more willing and able to create their products for free – than it is currently the case. I don’t even have to explain why this assumption is absurd based on law of supply and demand…

We can conclude that software is scarce – and that property rights and limited terms of use are the response to greater demand than available supply at zero-price point.

As far as patent protection go, Microsoft is correct in asserting that software contained in a patent-violating product is intangible and not the subject of some alleged violation.

Stephan Kinsella December 18, 2006 at 12:13 pm

No, poor Sasha, scarcity does not mean “when the price of a good is zero, demand exceeds supply.” It is used here specifically to refer to resources that are rivalrous. “To say that software is not scarce ..” It is microsoft itself that is in effect making this argument when it attaches importance to the fact that, and admits that, its software is not tangible–as noted, “tangibility” is a crude synonym for rivalrousness (scarcity).

Sasha Radeta December 18, 2006 at 12:49 pm

Poor Stephan,

You don’t even realize that you only confirmed definition of scarcity that I provided.

If you had any understanding of basic economics, you would know why scarcity is characterized by supply exceeding supply when price is zero. It basically means that if private property exchanges did not exist (zero prices) – there would be more wants and needs for software than willingness and ability to supply it.

This makes available software “rivalrous.” In order to assign property rights and to exchange software, designers write them on some tangible hardware. But that does not mean that Microsoft is responsible for patent violations by someone else’s hardware, just because these producers purchased Microsoft’s software originally written on some other hardware (CDs) and decided to incorporate it into their product.

David C December 18, 2006 at 12:49 pm

Sasha Radeta Said,

Copyright did not artificially create scarcity by restricting any possible supply of software, just as restrictions of possible supply by any capitalist (private owner) do not create scarcity.

This is wrong, so everything else that follows is wrong too. The natural supply and demand is not in the bits of information, but in the time and efforts that go into creating it. Copyright controls force the market to center around content controls at the expense of information services that it would gravitate toward naturally. This distortion leads to all sorts of strange side effects (like the RIAA suing millions of it’s best customers, like Microsoft trying to force terms on its customers all the time instead of the other way around)

Software would become so rare and valuable that fewer firms or individuals could afford them and they would have no interest in giving it away for free.

This is also wrong. For example, Linux has majority market share in the data center space (and growing) in spite of the fact that it’s GPL license specifically attempts to cancel out many of the restrictions of copyright. This didn’t happen because of hippie free love, but because of raw free market forces. What happened? Society entered the information age, information is becoming commoditized, and the service value is starting to exceed the content value of information. When the content and copying restrictions in Microsoft products started getting in the way of profits, people started using something else.

I know this first hand because I worked in a large retailers data center that had it’s Windows NT servers crash every day. The computers were hooked up to thousands of sites, and when down they were costing the company over a million dollars per hour. They flew in experts from all over the planet, hired coders to rewrite the TCP stack, but still they crashed every day. When they identified a bug in the OS, they demanded that Microsoft fix it but Microsoft told them to buzz off (probably cause they were working on XP).
If Linux was common at the time, I have no doubt that they would have hired coders to fix it in spite of the fact that all their competitors and everyone else in the universe could benefit from that fix free of cost. Thus, free market forces improve Linux and further drive it’s adoption, and further create industries that center around support and services that drive its adoption further.

The bottom line is that copyrights are more like a micro-regulation that controls how people use information at their disposal in the information age, rather than a free market property right. Informations non locality and non exclusive nature are pretty much going to force that truth, no matter how strongly people think it’s a property.

Sasha Radeta December 18, 2006 at 1:12 pm

David C,

You chose the wrong thread and completely wrong arguments.

There is “natural” or “artificial” market supply and demand. Inputs used to produce software are scarce (valuable, price bearing) – just because final good that people want and need is scarce. Read Aristotle.

The fact that Microsoft is aware of this scarcity and it is trying to control the supply of its own products – is not fundamentally different from any who does not want to produce everything he hypothetically could. By selling copyrighted items, Microsoft is refusing to sell commercial use of their products just to anyone. It is their private property right to do so – and it would hold in a perfectly free market.

—-

Your example with Linux is irrelevant. If service value is higher than value of the product itself (as it sometimes happens) – it is up to producers whether or not they will use copyright contracts. Microsoft calculated that they don’t have such interest – and it would be their private property right not to sell commercial use of their products.

You may claim that you “know better” than Microsoft – but they have a right not to listen to you and not to follow Linux. Also, think about book authorship and other products for which “service value” is non-existant and which completely rely on direct sales. Without copyrights and with prices of final goods approaching zero, you would have those effects that I described (massive reduction of supply).

David C December 18, 2006 at 1:24 pm

The fact that Microsoft is aware of this scarcity and it is trying to control the supply of its own products – is not fundamentally different from any who does not want to produce everything he hypothetically could.

Well, it’s all right if Microsoft wants to try and control the supply of their own products. But that’s not what they are doing, the taxpayers and government do that for them thru the copyright system. If Microsoft decided to monitor all their users, only work with hardware that would enforce their restrictions, and forced them to sign contracts at time of purchase, then that would be controlling their supply. But that’s not what they do, instead they try to get the government to control how people use information at their disposal, and more recently try and get the government to regulate chip makers to include DRM.

Your example with Linux is irrelevant….

Nonsense, you said that theory A implies B, I said Not B and proved it, thus theory A is crap.
It was logic 101.

nate December 18, 2006 at 1:27 pm

Software is very weird.

It’s the one thing that costs the same to make one copy as it costs to make a near infinate amount of copies.

Since it’s all just digital data then you can trivially easily copy the most complex software.

Also once you wrote a peice of software to do a task it is not always nessicary to ever write another peice of software to duplicate it’s functionality, unless you have a better way of doing it. A more complex application can simply incorporate the command or the source code of the simplier program to increase functionality.

Also not only does it cost nothing per unit for software the cost of producing the software is significantly more inexpensive then producing other objects..

A small team of coders with 300 dollar computers from walmart can produce software which rivals software put out by people like IBM or Microsoft.

This is dirt cheap compared to openning up a car manufacturing plant or getting a supply chain developed for textile manufacturing.

This means that there is also no geographical boundries as the majority of people in the world can afford to do software development.

The only thing that gives software any commercial value at all in terms of traditional demand driven market is the licensing of the software (both copyright and patent licensing) and the skills of the programmers and support staff that a company or person will have to hire to maintain the software and adopt it to new purposes.

Especially interesting is the patent licensing terms. Due to the nature of software patents it is easy to patent trivial inventions even though it’s not suppose to technically work that way.

Since Microsoft potentially faces world-wide compitition for it’s products from any intellegent group of driven people then it is very vunerable in a market that it’s only way to restrict supply and is by using copyright licenses.

Effectively Microsoft can drive prices up using copyright restictions, but then this also increases the likelihood for profit for people that want to uncut them in terms of prices.

Since development costs are so low, and per unit cost is zero, then it can only truly compete on the software support side of things, which Microsoft has always lost money doing.

Now you have companies like Redhat were their income only comes from support and they are profitable at it. You can download their software for no-cost in source code form and you can get CentOS installation software that will duplicate Redhat’s software 100%.

However patent licensing is much more interesting to Microsoft.

Right now only the most wealthy corporations can do patent licensing stuff successfully.

Due to the nature of software patents and the complexity of software then any non-trivial peice of software will violate software patents.

So large companies, in order to avoid lawsuites, do a large amount of cross-patent licensing. IBM buys Microsoft patent licenses, and then sells back licenses to Microsoft.

It is not nessicary to determine the nature of violations or weither or not the violations actually exist.

Microsoft for instance I beleive has gotten 5 to 6 thousand software patents this year alone. I don’t know the exact figure, but I am guessing that a software patent is going to cost a company over a 100,000 dollars to get, with legal costs and lawyers and all that.

So in effect then what software patents do is raise the price of producing commercial software to the point were only the very richest corporations can do it and profit from it.

But it still requires copyright protections so that it’s possible for Microsoft to go after businesses that would simply download pirated versions of Microsoft software without paying them anything.

Also it prevents people from taking Microsoft’s source code, spending the money to cut out and replace the patented portions, then releasing it under a different product name. This would lower development costs for rival software companies to a point were Microsoft would again loose profitability.

I donno. The issues dealing with software are very weird when compared to something that is physical that depends on natural resources and supply chains and distribution channels and all that.

It’s also a issue starting to face the entertainment industry with digital data.

Anybody with a few dozen thousand dollars to burn and a internet connection can now do their own TV show or radio show. The big industries required in teh past to cover promotion, distribution, and production costs are seeing their reason for existance slowly flowing away.

So your going to start seeing these folks doing very wacky stuff to raise the cost of production in a effort to keep new players out of the market.

Things like royalties insanity, trying to sue and charge people for every logo or song fragment or image that makes it’s way into any sort of media. Look around your house with it’s labelling and trademark or walk down a busy street in a big city and you’ll see and hear why would it be so expensive for anybody to do anything in a environment like that.

Also DRM plays a big part of that. It claims that it will help prevent priracy, but in effect it’s a attempt to solidify and control distribution channels.

For example take Itunes and Ipods from Apple.

A person buys a Ipod and tries out Itunes. They buy a few songs and after a year or two of owning it they probably have a few hundred dollars worth of songs in their ipod and in their computer.

Now say that person’s Ipod gets broken. They have to buy another Ipod. Due to the DRM in songs purchased from Itunes they can’t use a Microsoft Zune or a Sandisk mp3 player to play those songs.

If they purchase a competing product then they loose access to itunes.

And since we now have the DMCA then it’s illegal for companies like Microsoft or Sandisk to break the encryption on the itunes songs and make their devices compatable.

On the flip side.. The average time for a song to appear on Itunes till it shows up on a P2P file sharing network is about 30 seconds.

So DRM in Itunes does zero to prevent piracy, but dramaticly puts Apple in a very clear advantage over it’s competitors. It’s the only one that has the agreements with RIAA and friends and it currently dominates the market, with millions and millions of dollars worth of songs floating around on people’s harddrives that are only compatable with it’s hardware.

Pretty bizzare stuff.

Sasha Radeta December 18, 2006 at 1:30 pm

Also, David C failed to realize why charging only services and providing completely free product (bundle sale) would not make any sense for Microsoft – but it would for Linux. In spite of that bug that he described, Microsoft software is far more common and there are more and more people who can offer their Microsoft related services without paying a dime to the company.
On the other hand, because Linux is not so common, the services in this OS are still profitable enough for the company, while they cannot possible compete with Microsoft – with any price (hence trying to reduce copyright).

But we are not here to give business advice to “poor” Microsoft, who should follow Linux according to David C :-) We are talking about economic principles here and why software is scarce (including related services that Linux sees as a bundled product with their software).

The copyrighted terms of use (limited supply of commercial uses of some product) are essentially the same as restrictions of any kind of supply by a capitalist producer. Socialists often have this issue with capitalists not producing everything they theoretically could, but this is the consequence of their lack of understanding of basic economics.

Legally and from a libertarian standpoint, Microsoft’s right to contractually restrict commercial use of their software products – is the function of private property rights that we hold sacred here.

Sasha Radeta December 18, 2006 at 1:37 pm

David C,

It is not Microsoft’s fault that the government established the monopoly over copyright and its enforcement. But the government did not invent “terms of use” types of contracts and Microsoft could protect the copyright of its software even in a perfectly free market.

As far as your Linux example goes, your “logic 101″ only shows that you don’t understand economics 101. The fact that Linux can profitably bundle their expensive services to a free product does not mean that Microsoft has the interest of doing the same thing. It certainly could not apply to book authors. Anyway, that has nothing to do with legal issues and the right of Microsoft to refuse to sell commercial use of their product to you anyone else.

Stephan Kinsella December 18, 2006 at 1:46 pm

“Mixing labor” is horribly misleading and a sloppy metaphor: if I turn a piece of land into a farm, did I *actually* mix my labor? I mean, is there like an amount of labor “in” the soil?

It’s really sloppy and imprecise.

I’ve always liked this observation of Huelsmann’s:

Only in a metaphorical sense could one say that prices reflect or contain information on present conditions. …

… It is asserted that prices communicate abridged relevant information. This, however, is only a metaphorical expression.

It is not prices that coordinate the actions of sellers and buyers of tin; prices are the outcome of (coordinated) action, not its coordinators. It is property, rather than knowledge, that coordinates the separate actions of different people. The terms coordination and communication rather obfuscate than adequately express this fact. This is another example of the dangers linked to the use of metaphors in scientific discourse.

p. 29 of this article

Sasha Radeta December 18, 2006 at 2:00 pm

Stephan,

what are we talking about here? Labor mixing acquisition of property (which states the fact that you can mix your body’s physical output with soil and make it yours)? Economic definition of scarcity? Software copyright and Microsoft’s position?

You are very confused.

First of all Huelsmann (is that how we spell it) is correct: “only in a metaphorical sense could one say that prices reflect or contain information on present conditions…”

An increase in current prices of inputs, for example, communicates the past increase in prices of final goods (the cause for increase of input prices).

Prices are the outcome of human actions – and their existence communicates that scarcity exists! If a good or service was not scarce – it would be completely free. That is not the case with software, regardless of possibility for theft (someone taking unauthorized use for free).

David C December 18, 2006 at 2:00 pm

Sasha Radeta said,

“Also, David C failed to realize why charging only services and providing completely free product (bundle sale) would not make any sense for Microsoft – but it would for Linux.”

I failed to realize nothing. Microsoft is an unnatural monopoly because copyrights are an unnatural monopoly. Of course it wouldn’t make sense for Microsoft.

“… while they cannot possible compete with Microsoft – with any price (hence trying to reduce copyright).”

What are you saying, that reducing copyright makes you more competitive? Well, of course it does because copyrights are are anti free market restriction on how people use information.

“The copyrighted terms of use (limited supply of commercial uses of some product) are essentially the same as restrictions of any kind of supply by a capitalist producer.”

But, that’s the whole point. It’s not. No one is trying to force the farmer to grow the maximum amount of wheat on his land, but rather the farmer is trying to say, we can’t grow the same wheat that he first discovered and growed on his land on our land.

“Legally and from a libertarian standpoint, Microsoft’s right to contractually restrict commercial use of their software products – is the function of private property rights that we hold sacred here.”

Well, then give them a contract they can sign. If I send you $100 in the mail with a note attached that says “by opening this you owe me $200″ – I know of no Libertarian that would recognize that as a valid contract. I also know of no contract that is beholden to third parties.

“if the government did not invent “terms of use” types of contracts and Microsoft could protect the copyright of its software even in a perfectly free market.”

Well, lets let the market decide that, shal we?

“As far as your Linux example goes, your “logic 101″ only shows that you don’t understand economics 101.”

Economics 101, the natural supply of information is infinity, the natural supply of information services is not infinity. Thus a free market will center around information services and not content controls.

“Anyway, that has nothing to do with legal issues and the right of Microsoft to refuse to sell commercial use of their product to you anyone else.”

You have a right to refuse to sell me your pink paint, but you don’t have a right to tell me I can’t paint my walls the exact same pink no matter how much effort you put into mixing your paint.

Sasha Radeta December 18, 2006 at 2:15 pm

David C,

you got lost in that “natural” – “not natural” nonsense.

Just as you cannot force a cattle producer to sell the maximum amount of output he can theoretically produce – you cannot force Microsoft to sell the commercial use of product to everyone.

Your assertion that supply of “information” in a free market is infinity is a nonsense. You cannot access all information you may want and need and some information must be purchased. The property right is established by writing your information on some piece of hardware – and than selling it with some terms of use (including copyright, if you choose to do so).

Like you said: I have a right to refuse to sell me your pink paint, but I don’t have a right to tell you that you can’t paint your walls the exact same pink. If you can figure-out how to create that pin color yourself – then no copyright would be necessary.

The same goes for Microsoft: they have a right not to sell you commercial use of their product (including reproduction rights)… You don’t have to buy it – but no one should prevent you from independently developing the software that would do the same thing.

nate December 18, 2006 at 3:40 pm

“”Like you said: I have a right to refuse to sell me your pink paint, but I don’t have a right to tell you that you can’t paint your walls the exact same pink.”"

Well actually in software, that is what patents do. They give you the right to tell people that they can’t make compatable software.

The cost of producing software (compared to other complex modern things) is quite small. Individuals with PCs is what you need. Also the cost of making one copy of software is the almost the same as making 30,000 copies of that same peice of software.

So a lot of the traditional market forces stuff does not apply here.

Right now Microsoft makes the majority of it’s money from selling Windows OS and selling MS Office…

Which is ironic since the majority of people who own Windows do not pay much for it. With big name computer resellers such as HP, Gateway, or Dell get a huge discount on software they provide bundled with their hardware. Say you go and buy a Dell computer the amount of money that you spend on Microsoft software in a basic home PC is going to be right around 30-40 dollars.

And that is going to get eaten fairly quickly the the costs of supporting that sort of thing. So essentially Microsoft is already giving away their software for nearly free for the vast majority of people that use it.

Of course they do this because the presence of their software on eveybody’s computer makes it easy to extract money from other sorts of markets (mostly business server and desktop related)

David C December 18, 2006 at 3:53 pm

Sasha Radeta: you got lost in that “natural” – “not natural” nonsense.

Natural as in natural law, it’s a common libertarian concept. BTW, natural law rights don’t have an expiration date.

Sasha Radeta:Just as you cannot force a cattle producer to sell the maximum amount of output he can theoretically produce – you cannot force Microsoft to sell the commercial use of product to everyone.

Yeah, but it’s my God given right to sell my copy of his cattle. … and the industry thrives rather than falls apart.

Sasha Radeta:Your assertion that supply of “information” in a free market is infinity is a nonsense….

OK, I should have said the costs of making a copy approach zero, but of creating information does not. Same diff. But, the assertion that information copied freely is harmfull for a market so we need the government to come in and demand personalized restrictions is what’s nonsense.

Sasha Radeta: The same goes for Microsoft: they have a right not to sell you commercial use of their product (including reproduction rights)… You don’t have to buy it – but no one should prevent you from independently developing the software that would do the same thing.

Or independently copying it. Microsoft has no right to tell me what I can do with information at my disposal. If they don’t like that no one forces them to make their software, or to put millions of copies out there, or to make it copyable.

nate December 18, 2006 at 4:01 pm

(I’d like to say that I am for very much strong copyright protections at the current time)

David C December 18, 2006 at 4:16 pm

nate,

It seems to me that the problem with copyrights is not cost, but control. For example, I work with virtual machines a lot. With Linux I can just make 10 coppies, and have 10 opperating systems running on the same computer without delay, apporval, or problem. It saves me a lot of money and time, but try doing that with a Microsoft product, it’s a major headache and they change the terms all the time. Their restrictions seriously inflict on my ability to go about my business more than the cost of licensing ever would. Sometimes I create opperating systems, sometimes I transfer them over to another system, sometimes I destroy them when I no longer need them. With Linux … easy, with Microsoft a major pain in the neck. The same is true with Music. Those concert halls are filled up with people paying $50-$300 per seat. The problem isn’t with the cost, but all the restrictions and control that must come with copyrights in order to secure them as a “property”. Those must also be restrictions on freedom, because it is simple to make content take any form, and because the human brain is the only “technology” smart enough to distinguish between free speech content and copyright content.

Sasha Radeta December 18, 2006 at 4:18 pm

Nate,

Just like Rothbard insisted on copyright protection – not on patents per se – I also say that INDEPENDENT DISCOVERIES cannot be prohibited. Piece of software that can easily be discovered on one’s own cannot be copyrighted, because you cannot prove that someone violated his contract with you and actually copied your item against terms of use.

What David C does not understand is that you do not have a “God-given right” to pay for only certain uses of someone’s product and than just go ahead and use it any way you want (against your contract, just like a passenger who wants to go to the first (business) class on the airplane, although he only paid for the “economy” class).

Microsoft has a private property right to tell you what you can do with their product at my disposal. If you accept the contract that states these terms of use, you legally bound yourself to these conditions. Commercial use, including reproduction, belongs to those publishers who pay for that kind of use and create different kind of contracts.

Stephan Kinsella December 18, 2006 at 4:26 pm

Sasha, “Just like Rothbard insisted on copyright protection – not on patents per se – I also say that INDEPENDENT DISCOVERIES cannot be prohibited. Piece of software that can easily be discovered on one’s own cannot be copyrighted, because you cannot prove that someone violated his contract with you and actually copied your item against terms of use.”

This is yet another example of how ignorance of the field one is expounding on about can lead to error. Rothbard thought copyright would apply to inventions–his example was a mousetrap, I believe. Inventions are covered today by patent law, and original creative works of authorship by copyright. Copyright only covers copying; so independent creation is a defense–though it is rare. Patents do not work this way, for a reason: if you have an independent invention defense, it defeats the whole purpose of the patent system which is to encourage inventors to publish their inventions, and earlier. An earlier inventor who keeps quiet can actually be prevented by the patent obtaiend by a later inventor who does publish the invention by means of the patent application process. If you allow an independent inventor defense then all IP protection of inventions–whether you call it “copyight” or not–falls apart. Because once general scientific knowledge is “out there,” it makes it even more likely for someone else to “independently invent” the “copyrighted” mousetrap. Either that, or you don’t really have an independent inventor exception.

So Rothbard’s confusion in thinking copyright could apply to inventions is taken up here by Sasha, to breed more confusion.

And not only this: anyone halfway familiar with the way patent systems work–with the detailed rules and practices governining the difficulties of defining exactly waht the invention is, what is claimed–would realize that the mere idea of “stamping” a device “copyright” in no way could ever serve to capture what is the “invention” contained in that thing–or is it multiple inventions. Moreoever, there is no way to stamp “copyright” on a method or process, but only on a physical thing; yet many inventions are just processes or steps.

The whole idea of protecting inventions by use of some kind of contractual copyright stamp is utterly ridiculous.

Sasha Radeta December 18, 2006 at 4:50 pm

This is yet another example of Stephan’s ignorance of the field.

First he fails to see why demand for scarce goods must be greater than supply when price is zero (and what it implies)

Now he thinks that by allowing independent discoveries based on knowledge that is “out there” – we could not prevent copying of software or written literary works that are not “out there” and where you can prove that someone did not created their versions on their own – but through violations of their terms of use.

I could not reproduce “Democracy: The God That Failed” on my own… and neither could I do develop Windows XP OS on my own. Mises Institute and Microsoft could prevent me if I tried to reproduce these products and all my profits would belong to them.

David C December 18, 2006 at 5:27 pm

Sasha: First he fails to see why demand for scarce goods must be greater than supply when price is zero (and what it implies)

Well, I don’t. The uptake on (freely copyable) Linux in the marketplace is over 20% per year, and every data center in California is paying 6 digits for high end Linux software development skills. Oracle didn’t decide to make it’s own Linux distribution, and Microsoft didn’t decide to make a 200 million dollar deal with Novell Linux because uncompensated copying is loosing in the marketplace, but rather because free market forces are causing it to kick butt. We are not in fairy land, when a theory makes predictions that don’t match up with the real world, than that theory is wrong. Copyrights are not property and are anti free market crap.

Sasha: I could not reproduce “Democracy: The God That Failed” on my own… and neither could I do develop Windows XP OS on my own. …

Well, Shash, I’m sure you couldn’t and neither could they. Both are made up from thousands if not millions of pieces of knowledge and information out there taken freely and assembled in form. That they have a right to do this with out everyone elses permission, but we don’t have a right to do it with out theirs because they declare it a property, is nonsense. A restriction on freedom with the nonsensical label “property” is still a restriction in freedom. Property rights defined by incentives are feelings, not property.

nate December 18, 2006 at 5:53 pm

Well I am a bit confused about what you guys are saying.

It would be a nice way in a discussion like this to make very evident what portions of other person’s comments your commenting on.

I like to use double quotes, but html tags are nice.

But I’ll try my best to clear up the confusion between copyrights and patents. I am not lawyer though, so keep that in mind.

Now Copyright vs Patents. These things are very different items, different concepts and covered by completely different sorts of laws and such.

Generally speaking you have 3 sorts of law that get dumped together when your talking about ‘Intellectual Property’. Trademarks, Patents, and Copyrights.

Trademarks: They are designed to protect business’s good name and protect consumers against fradulant products.

These things are things you have to register with the government to go into effect.

If you choose not to protect your trademarks (actively go after people who infringe) then there is a good chance you can loose them.

There is no time limit on them. As long as you reregister and such then they can go on for a very long time.

Copyrights: In my mind they are based on the basic laws of ownership, that is you created it therefore it’s yours to control and own. Covers most creative acts.. programming, art, books, etc. etc. It only covers your work though. Other people can make their own thing that may look like yours, but as long as it’s truely independant then it’s ok.

Originally mostly intended for commercial endevors. This is to prevent one company from ‘stealing’ content from other company or individual for commercial gain. It never affected or was intended to affect normal people originally because the technology was so that only people that could copy were ones that were willing to put a substantial capital investment into printing presses.

Corporations going after individuals, I beleive, is a rather recent phenominom.

copyrights are automaticly given. Everything from a small doodle on a napkin in a bar, to the most expensive movie ever made.. they are covered the same law.

Copyrights expire. Generally 95 years, was originally 20 years or so.. not sure on the actual term, but since the 1950′s the length of the copyright has been extended dramaticly. People blame it on Dinsey because every time mickey mouse is about to enter the public domain they lobby congress to extend copyrights.

You can choose if and how and when you want to excersize your copyrights. You don’t loose them until the term expires.

Patents: Intended to place a temporary monopoly on concept or invention.

Unlike the concepts behind trademarks and copyrights, which go back thousands of years, patents are very recent idea. It’s something that was used by the U.S. government to entice the great minds and inventors of Europe to come to America were they could profit from their ideas. This was used to great effect in the first hundred or so years of our republic. Contrasted to Europe were inventors and researches generally worked for the state and their inventiosn became property of the state, more or less.

This is one of those classic tradeoffs of freedom for more freedom, which was discussed quite a bit back in the day.

So the reasoning goes like this:
Society agrees to sacrific the ability to use certain ideas and places a exclusive monopoly on this idea or invention for a individual or company, which they can then use or license out for profit.

The patent expires rather quickly, 7 years (I beleive), so there is financial incentive to take the profits you gain from the patent and make new inventions that are then patented.

In order to get a patent you have to publish the details of your invention for academics and other inventors to study and understand so they can use those ideas to create new patents of their own.

This discourages the use of trade secrets, and increases the financial incentive for creativeness.

since the patent is temporary then sociaty in general gets to reap the rewards of the research.

the state of the art moves forward rapidly and everybody profits with just a temporary sacrific made by the majority of the people.

So you see they are very very different things Copyright vs Patents, but can easily be confused.

One is long term, one is short term.

One covers only your own work. The other covers the work of other people.

One is based on ‘natural law’-type thinking, the other is based on sociaty trade off-style thinking.

Software is weird because it’s covered by both patents and copyrights.

Personally I think that patents form a very important function, but that they’ve been abused heavily. With software patents they retard innovation and punish software programmers instead of rewarding them.

Also it’s worth noting that currently the patent office is the only portion of the government that is _profitable_, which isn’t a good sign.

A good agruement against software patents are aviable here:
http://lpf.ai.mit.edu/Patents/patents.html

A nice quote from Bill Gates himself (then CEO of Microsoft).
http://www.bralyn.net/etext/literature/bill.gates/challenges-strategy.txt

“”If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today. I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique. If we assume this company has no need of any of our patents then the have a 17-year right to take as much of our profits as they want. “”

As for copyrights I think they are very nessicary.

For example: Linux.
Linux is licensed under the GPL. The GPL is termed as a ‘copyleft’ license to try to point out that it’s purpose is opisite of most ‘copyright’ licenses.

The GPL uses copyright law to ensure that people cannot take somebody else’s code, modify it, and then redistribute it without openning up the code for modification and redistribution themselves.

In effect then this is used to keep Linux as a commercially viable software product. If it wasn’t for the GPL and they just dumped the code into the public arena then other software makers would take the code, add their own restrictions, then release it putting the original programmers out of business.

How this works is how it similarly works for Microsoft or any other software maker.

hope that clears up some confusion.

Axel Riemer December 18, 2006 at 6:08 pm

Sasha: “The economic definition of scarcity is this: when the price of a good is zero, demand exceeds supply.”

I take issue with this. It is certainly a correct representation of the concept of scarcity, as anyone who has seen a demand-supply curve can visually attest. Diminishing marginal utility and return force the demand and supply curves to be the way they are, (curving up to the down to the right, and curving up to the right respectively), so that at the y-axis (where price is zero) if the demand curve is below the supply curve, they will never meet. This implies that no producer can even give a consumer a good (this takes care of goods that exist for which there is no demand, like nuclear waste) for free.

However, copyright and patent monopolies force us to subsidize a good at a price set by an entity other than the market. Are we asked to subsidize goods that would not be scarce (these would be goods not demanded at price zero)? Of course not, because in order to subsidize them, we must buy them: obviously goods not demanded are not bought. So the only goods subsidized are goods that would be scarce.

How scarce?

I refuse to believe that the government, or a company with a government granted monopoly is competent to judge the correct price that would be set by consumers in the free competitive market.

Of course, this puts no obligation on companies with monopoly protection to produce or sell anything at any price but their own.

Being libertarian and pro-market, I deny that a monopoly has any benefit, or would be sustainable without the threat of government force.

Sasha Radeta December 18, 2006 at 6:19 pm

David C,

As I already explained, Linux has the economic interest to bundle their (in many cases free) software with their more expensive services. Microsoft does not have such interest and its software is more commonly used and those services can be commonly provided outside of Microsoft.

I could not independently reproduce Microsoft or Mises Institute’s property – which they already produced on their own. If I start reproducing their items – it is clearly in violation of my terms of use – which expressly prohibited commercial use and copying (I did not pay for that use).

When it comes to any kind of human-made product, its production is always based on some pieces of knowledge and inputs. If you are able to create a product that is uniquely designed – no one could force you to sell its commercial use.

Microsoft’s copyright is indeed a restriction of freedom of theft – just like any other implication of private property rights. Just as you cannot “upgrade” your airline seat for free and without their consent – you cannot freely “upgrade” your terms of use of Microsoft’s product and against their will.

Sasha Radeta December 18, 2006 at 6:23 pm

Nate,

I’m not advocating current government-run monopoly of copyright protection. I am only talking about original, contractual copyright, that would exist in a perfectly free market. I am also against government’s mandate on copyright establishment and expiration – which implies that government owns all products.

Sasha Radeta December 18, 2006 at 6:33 pm

Axel,

Copyright could exist as voluntary, free-market, contractual restriction of supply of some forms of uses of a product (just like any owner can restrict their production based on supply and demand conditions). If you own some product, you can contractually agree with some users on what will be their actual terms of use. You don’t have to allow the commercial use of your product to everyone, and to many producers (like book-authors) this would be the only way to survive in the market. And if customers accept these terms of use – they must respect them.

David C December 18, 2006 at 6:35 pm

Sasha, You assume on faith the premise that copyrights are a property. And then you go to show that you have no right to do this or no right to do that because they are a property. That’s called circular reasoning, it’s not rational. You must prove that they are a property first. (good luck)

Nate, If it wasn’t for copyrights, no one would be able to add their own restrictions so there would be no need for the GPL. Any incentive to control the binaries would be dead, thus so would incentives to control or hide the source. The industry would still evolve into the service model that GPL industry has now. Also, free software is improving all the time and people who create forks must constantly merge those improvements into their new code base. Thus there is strong incentives to minimize forks in a world free of copyright restrictions anyhow.

Sasha Radeta December 18, 2006 at 6:41 pm

David C,

You are basing your argument on a false premise. I do not think that “copyright is property” as you try to impute. I clearly stated that “copyright” in a perfectly free market could exist as a -contractual restriction of commercial uses- of someone’s item.

If you own something, you can restrict certain uses and allow (sell) others. That’s why all contracts, including restrictive terms of use, stem directly from property rights.

David C December 18, 2006 at 7:07 pm

Sasha, oops sorry about that. Your position is a lot different than where I thought you were coming from. But I think making a copyright system contractually is a lot more compliated than is being protrayed here. If Microsoft can make a perfect closed system thru contract and technology without regulating everybody else to death, or trying to control 3rd parties who signed no contract, then I wish great power to them. However, in practice I have serious doubts.

nate December 18, 2006 at 9:01 pm

“”I’m not advocating current government-run monopoly of copyright protection. I am only talking about original, contractual copyright, that would exist in a perfectly free market. I am also against government’s mandate on copyright establishment and expiration – which implies that government owns all products.”"

I don’t think I understand what your saying completely.

So your saying that it should work out that a company A gets a contract to use software from company B then if company B violates that then they can be sued (presumly in a government court)?

Then how is that different from now? Copyright licenses are just a form of contracts and copyright law is setting up the sort of limitations and scopes of those sort of contracts.

the only obvious difference I see is that it’s agreement you make when you buy or obtain the software versus having to write up a formal document and having it signed and witnessed and such.

It works out that copyrights is automaticly. You don’t have to go the government to register them or anything like that.

The government law works, as my understanding, works out to only realy establish ‘Fair use’, which is uses of copyrightable material that can’t be restricted, and for the length of time before copyrighted material enters into the public domain.

The only F-ed up part of it is the DMCA, which is very recent (thanks Bill Clinton + republican congress!) which sets up all sorts of extra controls and regulations that go far beyond the original intent of copyright.

That places all sorts of additional burdens and restrictions on everybody from people making compatable software to hardware makers to end user which is most unacceptable.

Sasha Radeta December 18, 2006 at 9:44 pm

David C,

The aim of my contractual copyright would not be to regulate someone’s life to their death – but to regulate the use of my product – as long as it exists. These terms of use simply state what is precisely exchanged in a market transaction – and what is still the right of the author. Such contract would not be more unusual than any other contract: from professional sports labor contract to conditional gambling contracts.

I saw to major objections to voluntary copyright:
- The “third party violation” issue – which is a simple tort issue, easily resolvable.
- The issue of independent discovery, which is also in many cases easy to resolve.

I would not be pessimistic about such contractual relations… I would be more concerned about the world in which contracts could be freely violated because that would be a dark world without private property rights.

Sasha Radeta December 18, 2006 at 9:54 pm

Nate,

In a perfectly free market there are no government’s courts… An yes, if you violate any free market contract (including violations of terms of use) you would get sued in that free market…

The difference between voluntary copyright and our current system is clear: all provisions of these contracts are established by the sides in contracts – and the government (third party outside of contract) does not determine how long will such contract be valid, as if they own everything there.

Linux example is actually great, becuase not everyone want or needs all of copyright controls. That eventually becomes a part of pricing mechanism and it is up to sellers and consumers to negotiate and determine their terms of exchange.

nate December 18, 2006 at 10:14 pm

How does this enforcement work in this totally free market?

If I run a company and choose not to be a good citizen then couldn’t I just tell somebody to F-off if they try to sue me?

Say I am company A and am in competition with company B. We both are in the same markets and both have similar budgets and resources…

So they develop software using their resources, then I take their software then use my resources to develop it further then use what tehnical measures at my disposal to lock them away from using it themselves.

So then third party companies, when deciding to choose which company to work with, can choose me with a technically superior product or my competitor with a inferior product, but better ethics.

Now the natural choice would be to go with the one with better ethics, but then that would put that third company in a disadvantage from their own competitors that may choose my software.

How do you see something like that ultimately resolving itself? (it’s a natural scenerio since it’s not rare for people to attempt to do that now)

Also shouldn’t there should be a limit to the scope of copyright? Having things aviable in the public domain is very valuable assit to a society as is fair use.

Would you have it that copyrights are non-transferable so that the purpose of the copyright dies with it’s author? (then there is a issue of copyrights owned by corporations)

rtr December 19, 2006 at 12:26 am

All of Sasha Radeta’s examples of contract are contradictory examples of coerced servitude. He is just too slow to realize that they are servitude. On the one hand he claims you cannot force a woman to have sex against her will, even if she previously contracted to provide such, and on the other hand he maintains one can be forced to turn over all of the products of one’s labor for life for as little as a pencil if they so specified to in a contract.

The fact is contracts are legitimately cancelled all the time in a free market. This happens when someone quits their job, when someone is fired from their job, when someone is divorced. Sasha Radeta’s thinks involuntary coercion applies to all time forward if at any time temporarily agreed to in the past. This violates freedom of association, this violates a standard of continuing mutual voluntary agreement, and this violates ownership of tangible actually existing property. It’s wholly UN-libertarian.

The fact is if you can’t force a woman to have sex against her will, even if she previously agreed to in the past, you can’t force a soccer player to continue playing for any team. Freedom means voluntary freedom of association and that entails the liberty to change at whim whom and how one associates with others regardless of any prior contracts.

Trade is final where one real thing is transferred to another for another real thing. You can’t get ideas back or control them. You can’t circumscribe ideas. You can’t lease ideas and then claim exclusive ownership of ideas. For it is obvious multiple people can inhabit the same idea at the same time whereas in the real material physical world it is impossible for two people to inhabit the same place at the same time. Claiming copyright is as absurd as claiming ownership of the process of procreation or ownership of the air which is breathed by multiple people. They are coercive offensive acts of war, plain and simple.

If copyrights were real property someone could still own the method of creating fire, someone could still own the wheel, someone could still own the idea of wearing clothing, and bequeth ownership down to their progeny. That there are also arbitrary limits of time, that there are arbitary “fair use” exceptions, only further shows that the claims are without merit. Claimaints seek to enforce by violent means. And they seek to express themselves through a common language(s). They did not originate these claims in their sole created jibberish “language” which is understood by nobody else but themselves.

Voluntary agreement is inherent in trade, when one thing is exchanged in whole for another thing. Contract cannot violate a standard of voluntary agreement at a future time, and this is precisely what happens if someone changes their mind and ceases to wish continued association with another. Contract is not trade, and contract is thus at risk of future time and continued voluntary agreement into future time, as opposed to trade, which occurs in present time, and requires no enforcement whatsoever. This is privately voluntarily exhanged for that. And that voluntary agreement must also apply to contracts for every point in time going forward in time.

Sasha Radeta December 19, 2006 at 1:54 am

Nate,

for on more on privatized law enforcement and private courts read Hoppe ad Block. That is not our topic here. I explained and described copyright contractual mechanisms and I really don’t want to spend more time on that. If you use someone else’s product in ways that you did not pay for, you will trespass and commit theft by keeping the product from that unauthorized use (it belongs to author). That goes for any proven commercial use of someone’s product.

—–

rtr,

I know you are still upset because in last Stephan’s post I really lectured you on basic economics… But why do you go back to that?

And why are you telling lies about me? I never said that anyone can be forced into labor (for a pencil or for a million dollars), because that would constitute enslavement.

This is what I said about labor contracts on another thread:

—————————
“…not all market-exchange contracts are the same but they all have in common exchanges of property title exchanges. In Dan Coleman’s example, after you sell your labor services for a pencil, that pencil becomes your property – and you owe services to your buyer. If you decide not to provide your services you will have to pay damages to your buyer. If these damages were specified by contract – you will pay exactly those damages. If these damages were unspecified – you will pay the amount equivalent to current value of your non-provided service and any other cost that the other side might have incurred due to your cancellation (it may be 1 pencil or more).

There is no confusion there and no contradiction with the copyright contract. Your attempts to deny centuries of legal reality based on pure logic are futile and ridiculous.”
————————

In that same thread, you said that: “trade requires zero enforcement whatsoever.” That just illustrates what kind of economist you are! If you pay me $1,000,000 to perform my services for you in seven days, but I fail to show-up on that day and instead drive-out to Mexico, you think that enforcement is not necessary??? My god, you are a joker! You think that force would not be necessary at all to protect private property…. how funny, considering that scarcity and conflict motivated property creation at the first place (but conflict resolution principles do not determine property distribution as communist claim).

As far as contractual copyrights go, you are completely clueless about anything that involves law… I mean, look at this sentence:

Contract cannot violate a standard of voluntary agreement at a future time, and this is precisely what happens if someone changes their mind and ceases to wish continued association with another

Hold on!!!!! Are joking??????

You say that if you decide to steal from someone (at a future time) – by using their products in ways that only their publishers paid for – you are exercising “voluntary agreement”???!!! You say that if a lottery decides not to pay anything to winner, because they “change their mind,” that is a “voluntary agreement”. Of course that contractual copyright is calling for force against theft and idiocy. Any contract must be enFORCEable in order to protect private property rights and to make any sense.

Well, you cannot “upgrade” your terms of use and use someone else’s products in ways you did not pay for. I already explained this to you. Read it:

“You cannot just transfer property title on some good or service during a voluntary – and than “change your mind” and keep it. If that was the case, there would be no private property protection. You can change your mind and try to return copyrighted item to its owner (if he chooses to accept it back – he doesn’t have to if sale was final). But you certainly cannot “change your mind” and than use his item in ways that you didn’t pay for (more expensive, commercial use). You cannot “change your mind” in order to commit theft – in any kind of market transaction or a strict conditional contract (like labor, marriage, or even gambling contract according to Kinsella).”

I will not even comment that nonsense about copyrighted wheel and fire. You need to first learn what contracts are – then we can discuss history of private property and contracts.

I really cannot have any meaningful discussion with people who think that free market refers to freedom of theft and contract violations… people who don’t have any concept of contract law and basic economics. RTR, you eliminated yourself from any further discussion.

Axel Riemer December 19, 2006 at 2:53 am

Getting back to some of the main thread… The real problem here is a basic difference of opinion. Sasha’s positions are all realistic and follow very logically, provided that ideas are property. If ideas are property, then the owner has every right to negotiate contracts and deals. Those who make contracts with the owner/author must abide by their contracts or suffer penalties, as with contracts today. The difficulty arises for contracts that are violated by third persons, and how to deal with them. However, if ideas are property, it is still a breach of the contract, and there must be a penalty, either on the second person for allowing the breach, or on the third person for taking advantage of the breach. I tend to think that deciding between the two would depend on the circumstance and customs of the time. It used to be common practice to hang a man for horse theft in the west, but practices change. We may see some common law emerge with IP.

However, if you do not believe that IP is ownable private property, then any discussion of contracts and ownership or third parties is absolutely without any basis in reality. If ideas are a non-scarce, non-rivalrous resource, then all of this IP law is simply a way for the government to intervene and warp the creative process.

So until that question, of whether ideas are property and can be owned, is answered, I don’t think our two sides will be even able to see each others’ points.

ktibuk December 19, 2006 at 4:06 am

First about RTR’s comments. He is confusing labor contracts which are inailenable, and copyright contracts which is about something alienable.

Rothbard is very clear on these subjects. If you make a labor contract you can get out of it and you can not be forced to pay a penalty, because you cant seperate yourself from yourself and exchange it. If you would enforce labor contracts that would leed to servititude.

But copyright contracts are different. You are giving away intellectual property. And this IP is alienable. The hard part is this property can be copied infinitely thus there is no point of returning it after it is leaked.

And for third party argument.

This is just silly. Please someone tell me what the difference is in below examples. Regarding only and only third party enforcement.

A rents an apartment from B in conditions that he will leave as he found it after the term of the lease. C, a third party, comes in and trashes the apartment. C doesnt have a contract with B the owner.

A buys a copyrighted movie to show in its movie theatre. C comes in as a paying customer and secretly copies it and sells it on the street.

As for third party enforcements all is the same.

The only difference is one product can be copied the other can not.

Hence the problem is not third party enforcement. Third party enforcement is a convenience issue not an ethical once.

The main problem here is scarcity and Sasha explained it very well.

If two sides makes a copyright contract this implies there is scarcity. Otherwise no one would pay for the first contract. Forget the third parties.

andy December 19, 2006 at 6:12 am

Sasha,

It takes human resources to make a program, there would be no program without people using scarce resources – thus, software is scarce (I don’t agree, but I hope I got your message clearly and I’m not constructing a straw man).

It takes scarce resources to make an invention. There would be no invention without people using scarce resources. Including such inventions as a 1-click shopping on Amazon. Thus, ideas are scarce and I am not allowed to make a 1-click shop if I saw it on Amazon first (I am, however, if I didn’t see amazon first…).

Do you think that ideas/information are scarce?

IMO program is information. Once created and published, it is not scarce, because, once created, it perfectly fits your definition of non-scarce resource (everybody could have it with zero price). New, non-existent programs are scarce. Copyright protection protects only existing programs – it creates artificial scarcity.

That said, I think that the world without copyrights would be full of closed machines, much like the gaming consoles, mp3 players, mobile phones etc. The software being created would be different – there wouldn’t be necessarily less software.

As for GPL: I don’t think this is a correct example, because the GPL itself rests on copyright protection. The BSD license much better resembles the free-of-copyright world. Most companies obviously prefer GPL over BSD :-/

Sam December 19, 2006 at 7:25 am

Oops:

. . . Unlike the concepts behind trademarks and copyrights, which go back thousands of years, patents are very recent idea . . .

Sorry poor nate but history would agree with David C and rtr that ideas and concepts can’t be owned in any way. Actually copyright didn’t until 1709 when English Parliament granted it for authors. Patents did exist in Ancient Greece for recipes (12 months grant). But reality is societies have generally agreed that it is the final product you own, not the ideas that went into creating them.

rtr December 19, 2006 at 9:15 am

I’ve provided examples of legitimately cancelled contracts within a free market. What need is their for making arbitrary exception categories regarding “labor contracts”? A contract is a contract, and Sasha Radeta has agreed that “labor” contracts can be cancelled at whim at any time because you cannot force servitude. If “labor” contracts can be cancelled at whim, then any contract can be cancelled at whim. Contracts are conditional and extend into future time, as opposed to trade, which is final, and limited to present time.

That’s the difference between trade and contracts. Trade is mutual voluntary transferrance of real actual existing property which increases the wealth of all parties. Trade is final. Contracts are not final because valuation is not necessarily constant such that mutally beneficial exchange may cease to exist in the future.

Sasha Radeta: “I never said that anyone can be forced into labor (for a pencil or for a million dollars), because that would constitute enslavement.”

Yet you clearly contradicted yourself by saying: “If you decide not to provide your services you will have to pay damages to your buyer. If these damages were specified by contract – you will pay exactly those damages.” What exactly was unspecified in the contract that called for lifetime product of your labor in exchange for a pencil? You misunderstand that there is absolutely no difference in regards to economic value whether something is a good or something is a service. Whether you force someone to provide a good is no different then forcing someone to provide a service. Since you can’t force someone into servitude in the example of sex, you also cannot force someone into servitude with providing any other possible example of a good either.

Trade does indeed require no enforcement whatsoever because the nature of trade is that it is *voluntary* and *mutually beneficial*. You don’t need a gun or a lawyer to give some coins for a big mac. Theft is not trade. Theft is non-voluntary taking.

Ideas are not exclusively ownable products in a market! No matter how much you might wish exclusive ownership of a idea, once the cat is out of the bag you cannot put it back in the bag except by coercive force. Your only choice is to remain silent and not share your idea. You cannot force silence on others. Others must agree, and continue to agree to not copy. You can’t force them to. An idea is no longer exclusively ownable once it is shared, leased, or traded. That’s why you rest your case on continuing contract. However, you cross over from voluntary agreement into involuntary coercion once someone no longer wishes to freely associate according to the prior terms. You claim labor cannot be forced. Well, neither can labor be prohibited. Suppression of labor and forcing of labor are both offensive violent coercive acts.

You claim return of any property which may have been exchanged is dependent upon the seller accepting return in case of a cancelled contract. Again, you are once again back at coercion and confiscation of labor and goods above and beyond the actual exchanged goods which were not and are not voluntarily forthcoming from the buyer.

You are talking about simple leasing. If you lease a car and cancel the contract that does not entitle the seller to your house. The seller gets his car back and keeps any deposits or payments which were actually exchanged. The buyer’s house was not traded for the use of the seller’s car for one month. It’s obvious these copyright leaser sellers want to circumvent the clearly understood rules of voluntary exchange. If you wanted the buyer’s house the seller should have explicitly offered a trade of the buyer’s house for the car, which obviously, the buyer would have rejected as non beneficial to himself.

David C December 19, 2006 at 9:42 am

Sasha,

I have a huge problem with this tort thing, and matters of duplicate is not a trivial matter. Almost all major inventions are progressive, and duplication is very very common, maybe not in literature, but definitely in programming, math, and invention. The rubix cube, the phone, the airplane, the integrated circuit, RFID, the list of duplication is nearly as long as the list of invention.

So you can argue that you have a privacy right because it is really no one elses business what creative activities you do unless you want to make it someone elses. You can argue you have a contract right because it’s a basic fundamental right to make agreements with people. You can argue that you can have a property right with physical items because their non exclusive nature, and respect for human dignity.

But my perception is that you are claiming an additional right to control how everyone uses a piece of information once the cat gets out of the bag. Well, what about a press leak – do you claim a right to control that too? Can a politician? I hope you see the slippery slope and the clear lack of boundaries. I hope you can see that that “right” is not, and can never be local, which means massive growing levels of government at a global and galactic level to ensure universal enforcement as society becomes more information based. The non local nature of information is more telling about its nature as a property right than anything else.

The act of disseminating alone is skipping the contract option and giving up that privacy right and acknowledging the non exclusive nature of information. If someone you enter a contract with disseminates without your permission, then the liability rests with that person alone, because anything else would supersede the rights of other people to engage in free and private activities and hold people binding to contracts they didn’t make and can not know of. Society has rights in regards to contract and privacy too, not just the creator. In sum, copyright implies that the act of creation gives a magical right to bypass every one elses rights relating to contract and privacy.

ktibuk December 19, 2006 at 10:16 am

“I’ve provided examples of legitimately cancelled contracts within a free market. What need is their for making arbitrary exception categories regarding “labor contracts”? A contract is a contract, and Sasha Radeta has agreed that “labor” contracts can be cancelled at whim at any time because you cannot force servitude. If “labor” contracts can be cancelled at whim, then any contract can be cancelled at whim. Contracts are conditional and extend into future time, as opposed to trade, which is final, and limited to present time.”

Wrong.

Labor contracts which usually involve a future labor service are different than lease contracts which involve alienable things, whether tangible or untangible.

The reason labor contracts are not enforcable is because these contracts are promises for future labor services.

If the laborer promises to deliver a labor service in the future but changes his mind you can not enforce it.

But if for example labor service was given but money hasnt been paid for it, then the contract can be enforced. Because the other side of the contract, money is alienable.

Copyright contracts are these kinds contracts and they can be enforced and this is not called servtitude.

Every trade is actually a contract. Just because mostly tangible things exchange hands and there is a mutual unspoken agreement among almost anyone this doesnt change the fact.

When there is a trade of oranges and apples there is a contract involved. There is an agreement on the exchange of the property. If there wasnt a contract every exchange could have been nullified after with one party changing his mind.

RTR you need to read Rothbard again and again. Otherwise you wont get rid of your confusion.

Contracts are the basis of property rights with only one exception. Future promises of labor services.

This is the exception not the rule.

rtr December 19, 2006 at 10:53 am

There’s no economic difference between labor services and alienable goods. They’re both scarce and are valued by human actors. Any distinction is arbitrary from an economic perspective.

You could pay someone in advance to do a job and they could then not do the job. Someone could do a job in advance and then not be paid for their work. That’s why the market evolved toward weekly, bi-weekly, and monthly paychecks, rather than yearly or decade-long paychecks. There’s risk. There’s margin calls. There’s down payments. There’s deposits. There’s market punishment for failure to deliver in the form of credit ratings, blackballing, reputation, etc.

It’s between the parties involved to settle their trades, return goods that can be returned, arbitrate disputes. But no matter what you wish, no matter what you claim, it’s absolutely impossible to return an idea so that the originator once again has exclusive ownership of the idea. All you can do is enforce servitude in the manner of confiscating goods or labor of the new idea co-owner, or enforce servitude by prohibiting labor of the new idea co-owner. Or you can just let the claims of fantasy of exclusive ownership of ideas go.

So is there a contract involved in holding hands? Don’t be ridiculous.

Sasha Radeta December 19, 2006 at 11:29 am

Axel and Andy,

I don’t have much time to read all of the responses, but I’ll try to clarify my position:

Ideas and information are scarce (there are less of them than we want and need for our production and/or leisure, and you can sell information and knowledge) – but in order for information to be ownable and exchangeable they must be written on something tangible. Then you can make a contract with someone that will determine his/her terms of use of that object and its contents. That’s where contractual copyright comes from.

——-

rtr,

Just the fact that you don’t understand that wheel and fire could never have been copyrighted (independent discovery issue) shows that any discussion with you is probably pointless… Not to mention your notion that force and contract enforcement is not present in voluntary market transactions.

But I will not ignore you this time…

I don’t understand what is so confusing to you about labor contract. Although you cannot force someone to work (work is unalienable) – you can certainly enforce a labor contract by making a violator pay for services that were not provided. You can even sue someone who promised their future labor services – if you specified cancellation damages in your contract, or if you incurred other damages as the result of that breach of contract.

I don’t know what to tell you. Watch Court TV, if you are boycotting legal literature. People get sued all the time when they violate labor contracts. Read about transfers of professional soccer players… artists’ contracts that cannot be broken without paying damages… or wedding planers who don’t show up at the arranged day and get sued… or people who get sued for violation of their pre-marital contracts, and who pay some consequences for their cheating. By the way, some sales specify that they are final and you cannot “change your mind”. I’m sorry.

But at any rate, you cannot EVER change your mind by “upgrading” your service without your seller’s consent and without paying anything. You cannot rent one flat in my building and than “change your mind” and than occupy also another one. The same goes for copyright: you simply cannot “change your mind” by using my product for purposes you did not pay for. You can change your mind and be dissatisfied with personal use of my product, which you could try to exchange (and I may refuse to accept this). But you cannot “change your mind” by “upgrading” your use against the word of your contract, because that is nothing but a theft. Period.

Your lack of understanding of basic legal concepts is just too great to be corrected on this blog. And there is no point of repeating same thing over and over… I just don’t understand how you get your motivation to write so much nonsense.

rtr December 19, 2006 at 2:45 pm

So wheels and fire can’t be copyrighted but automobile brakes and windshield wipers can be copyrighted? How about electricity? How about any pharmaceutical drugs that do anything? How about any of the 5,000 or so patents Microsoft applied for this year?

How is my notion of force and contract enforcement not present in voluntary market transactions? We’ve already agreed you can’t force someone to have sex against their will even if they previously agreed and signed a written contract. What’s the difference between forcing someone to work and forcefully taking the fruits of their labor?

The seller can have his property back if and when the lease is terminated. It’s only more fantasy to introduce an idea of “upgrading” use. If you disagree how your leased product is being used then you can have it back at any time, if it’s really a product that is being *leased*. In terms of OS software that would be your original cd and manuals. Somehow you still think that claims can go above and beyond the actual physical products which were or weren’t exchanged in the form of “damages” or claims against “unalienable goods”. Again, you are in violation of your own principles with the contract example whereby a pencil was traded in return for all the future products of your labor. That’s plainly and simply servitude to enforce by violent coercion the transferance of any and all future unalienable products of your labor. How do you expect to live when eating unalienable food puts you in violation of your contract?

Dan Coleman December 19, 2006 at 3:36 pm

rtr,

I had noticed that Sasha seemed to ignore the “pencil for slavery” example in the last thread of comments.

Under Sasha’s system, my “slave” would, after cancelling the contract, still owe me every product of his labor for the rest of his life! These are Sasha’s “damages” for an unfulfilled contract. It seems clear to me that this is involuntary servitude.

rtr December 19, 2006 at 4:05 pm

Indeed, Dan Coleman. I thought that had nicely settled the argument to whether contract could exist in violation of future mutual voluntary agreement. At any rate, it’s interesting to note how markets have evolved to deal with that problem; credit derivatives, margin, credit ratings, reputation, bi-weekly and monthly pay checks, deposits, pre-paid cancellation fees, etc. The list goes on and on.

Sam December 19, 2006 at 11:46 pm

But then D. Coleman, suppose someone said to me that if I mowed his lawn and clipped his hedges, he’d give me $20. Suppose then after I mowed the lawn and clipped his hedeges he decides he doesn’t want to pay me.

Are you saying that I have no right to ask for that $20? That it would endanger his right to feel obligated? Or he now decides that he will only pay $5? Or he decides now he pay the $20 in installments of $1 per decade for the next 200 years? Tough luck to me if he dies or misses payments. And finally suppose he didn’t pay and I have metal pipe with me with which I crack his head open, is that violent coercion or simply retaliation for a thief who stole my time and labour?

Sasha Radeta December 20, 2006 at 1:08 am

Dan Coleman,

How can you say that I ignored your “pencil for slavery” example – when I even repeated my response on this thread!? Everything I said about “rtr” applies to you, as well.

rtr,

go to some physics classes and you will learn why Nikola Tesla was “the man” and why it is to prove that no one else independently invented Tesla’s coil or alternating electric current. There is a huge difference between those inventions and the invention of fire throughout the globe (independently). Enough of that silliness!

As far as your forced sex example goes, I already told you what the difference is: labor is not alienable. You cannot force someone to work, but you can force them to pay damages specified or not-specified by labor contract. So there is no inconsistency: labor laws are still enforceable as evidenced in our every-day life (from soccer teams to Hollywood). I don’t know where you got that silly idea that you can just break the contract (and commit a theft in terms of use) by “changing your mind?”

If you know anything about contract law- you would know that after you transfer the property title on some products- that property no longer belongs to you. In a copyright agreement, you conditionally transfer any unauthorized copies to the author. In other words, these “fruits of your theft (labor)” are not yours. You conditionally sold them in exchange for personal use of that product. That’s not a bad contract… I want to believe that most people are not jerks and thieves who want to pay for personal use of some product – and than try to “upgrade” their terms of use for free and without the seller’s consent.

—–

Sam,

Good illustration, although a tad bit too violent :-)

Sasha Radeta December 20, 2006 at 1:39 am

I hope this will be my last posting on this thread (I will try to explain to rtr and Dan Coleman why their enslavement example is not any kind of proof that contracts could be vilolated at will, regardless of someone else’s violated property rights):

The fact that someone’s total and unalienable control over one’s body (the nature of our existance) theoretically excludes someone else’s sole control (ownership) over someone else’s body – makes slavery contracts even hypothetically invalid from a stict legal perspective. Subsequently, we cannot have slavery contracts in which someone can be forced to work. Instead, we have labot contracts, in which violators must pay some damages (other than labor).

If you hire me as a cook for you wedding and I refuse to show up, you cannot force me to show up and work adn cook for you. But you can sure as heck sue me for damages, because i did not provide service and products that belonged to you.

——–

Now back to copyright:

As I explained you in many different examples from labor to premarital contracts – they cannot be violated if they specify some property title transfer. Period! That’s the basic application of private property rights. That’s why Stephan Kinsella did not even try to invalidate legality or libertarianism of voluntary copyright contracts, but instead he tried (and failed) to demonstrate that they would dissolve on their own (and I provided logical evidence on why they would not). Give it up… EOD.

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