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Source link: http://archive.mises.org/9244/a-book-that-changes-everything/

A Book that Changes Everything

January 16, 2009 by

With piracy and struggles over intellectual property in the news daily, it is time to wonder about this issue, its relationship to freedom, property rights, and efficiency. You have to think seriously about where you stand. Read Against Intellectual Monopoly (Cambridge University Press, 2008) by Michele Boldrin and David Levine, two daring professors of economics at Washington University in St. Louis. They have written a book that is likely to rock your world, as it has mine. FULL ARTICLE


scott t January 21, 2009 at 11:51 pm

is it then nearly unanimously agreed here that there is no such thing as ‘intellectual property’ but there are (or should be) types of contracts that can limit ones use of acquired ‘real’ items in such a way that some expression of an artist (print on a page, etchings on a cd, etc) , scientist, author etc. cannot be spread to others who didn’t agree to any initial limiting-use contract in the first place?

i have read that someone says that a software purchase is really only a license purchase – but there is a ‘disk’ that is owned or acquired.

every apartment or rental car i have had always went
back to someone after a specified period of time.

is a contract then legitimate if no ‘material’ change occurs to a (real) item but is used in a way that is counter to a contract.

is this the crux of the matter?

i guess this would refer to activities such as reprinting books or copying music or house plans or whatever.

personally…i only believe information is owned
until it is expressed. be that through a song, a disk or an ‘ancient chinese secret’.

it also seems there are questions here about how ‘artists’ and intellectualizers would receive income.

i would think that the market would easily be able to take care of that with various service and consultation fees, foundation support of the arts (through auditions) and venues for individual (paypal for artists) risk-investment of research and risk-patronage (up front patronage for future art, iow).

Maty January 22, 2009 at 12:16 am

RWW said:

“On the other hand, anyone who benefits from your violation (in this case, by obtaining the music for free) is under no agreement and therefore cannot be penalized in any way, nor withheld from redistributing.”

Let’s make clear that there are two questions here, a moral one, and a legal one.

Some tried to argue up until now that there is no MORAL problem for someone to use ripped content. I’m glad you scrapped that off.

As for the legal matter, while a person downloading a ripped copy of the album was not under contract, neither did he have the artist’s permission to use this content–which expressly DID NOT allow to be used without permission, and made it clear through Copyrighting. Why should you have any more right to use this content freely (which was initially obtained by fraud) than you would, say, a stolen vehicle–let alone redistribute it further??? That’s like saying you could not only hop a ride with the stolen car you have just found abandoned, but also resell it to the highest bidder…

And just to try and anticipate some responses–the argument that the the stolen car is not the same as the ripped album because the first deprives the owner of his physical item while the second can be replicated infinitely without depriving the ‘owner’ of the original album is absurd; the man who purchased the Album is the owner the physical disc, NOT the contents. The contents belong to the ARTIST or his company, who did not authorize their use without purchase. Anyone who tries to refute the idea of owning CONTENT is shooting himself in the leg… there must be something YOU want when you ache to burn an album… something you do not have–not even on a blank CD, which is identical to the PHYSICAL medium you claim can only be regarded as property…

Basically what you suggested (as pointed by bigmammal) means that if one was to obtain a good without signing a contract (for instance, by stealing it) he should not be subject to prosecution…

Also, you said that:

“This is the weakness in a proper “IP” regime (i.e. a contractual system, not a coercive one like we have at present).”

Could you please elaborate? Whom and how does the present system coerce?


Maty January 22, 2009 at 12:36 am

scott t said:

“i would think that the market would easily be able to take care of that with various service and consultation fees, foundation support of the arts (through auditions) and venues for individual (paypal for artists) risk-investment of research and risk-patronage (up front patronage for future art, iow).”

Sure–very handy, those ‘artists’ fellas, aren’t they… why not just tie one to a pole–or throw him at the backseat with the window cracked open, and add your dirty laundry too…!

Have people went nuts, or what?! So an artist should be able to make money through any means but his actual art…? And what was it besides ‘consulting’–foundation by auditions and patronage?!! So an artist cannot hope to make proceeds from his book, and left to scrap an income by being APPROVED by some elite?? the goes Individualism out the window…literally!!

And as for patronage, why would anyone want to invest in a book (or any work for that matter) that cannot bring in proceeds?! The only organization that does it is the government–and remember, the whole idea is to make them STOP doing that…!!!

bigmammal January 22, 2009 at 12:49 am

scott t: “every apartment or rental car i have had always went back to someone after a specified period of time.”
Actually, there is such a thing as perpetual lease of land subject to various conditions. Software purchase is a perpetual lease with a single payment.

Gil January 22, 2009 at 2:00 am

Or, by the same token, a person doesn’t have to sign a contract with everyone else to protect every piece of property. No one would argue a car thief can’t be charged because he never sign anything.

scott t January 22, 2009 at 2:50 am

maty says “So an artist should be able to make money through any means but his actual art…? ”

there is no reason an artist cant receive money from their art…i dont know why you seem to suggest that i said that they couldnt.

some artist claims they need $10k in for an upcoming project….well, they begin to solicit $10k from people through various means…in the same way other endeavors acquire start-up capital.

this could be done through a combination of live performance revenue and patronage streams.
that is just one example.

persona desiring art gives up money to personb doing art.

was that hard to understand from what i posted earlier?

maty says “And as for patronage, why would anyone want to invest in a book (or any work for that matter) that cannot bring in proceeds?! ”

hopefully for the pleasure the content and words bring them.

there wouldnt be anything precluding anyone from purchasing a hard copy ‘book’ bringing proceeds for a printer or paying fees for an electronic-media provider.

if the good stories dried up because of a lack of patronage or literature investment – well then i guess the market would be speaking that other items were more important.

maty says “left to scrap an income by being APPROVED by some elite??”

i specifically mentioned individual patronage schemes in my post, they can be elite or otherwise.

i mentioned consulting fees in a research funding context.
that may have not been clear.

in an earlier post i mentioned how pharm research could proceed without IP in the pharm research area.
much already takes place from donations and grants for drug research and a non-IP system of open research funding and investment would likely thrive from the above mentioned sources -and- from the likes of insurance companies and hospital corporations. such entities whose interest in better patient health would be first choice for those seeking health care because of close proximity to drug research and trial activities.
there are probably other ways as well which may already exist that i am not aware of but perhaps someone else can elaborate on.

maty says “add your dirty laundry too…!”
i dont understand your dirty laundry comments.

i said earlier that i dont see information (as revealed endeavors of the intellect) as ownable after they have been expressed.

certainly specific information can be attributed to a source. weired sketches to escher, tolkien-world to j.r.r., etc.

as popular sources of information become known it is likely that more information will be desired and this additional information can be facilitated through the methods i mentioned above, probably others too.

i just have doubts about the legitimacy of contracts that prevent the extending of un-ownable information.

i never brought government into my post at all.

RWW January 22, 2009 at 7:25 am

Amazing. Every response to my comment engages in begging the question (i.e. treating an idea as property in order to prove that ideas can be property). Is this really the best you can do?

John January 22, 2009 at 7:31 am

RWW — as if your belief that only physical things can be property is not, itself, an assumption that begs the question. Amazing. ;-)

John January 22, 2009 at 7:51 am

I had an idea for an analogy. Please examine and tell me its flaws.


Let’s say you are in a high-jump competition. If you win, you get $100,000,000. If you lose, $0. If you tie, $100.

So you train and train and train. Years and years. Hundreds or thousands of hours of blood, sweat, and toil put into becoming the best high jumper in the world. All because you know that if you win, you will reap generous rewards and fame!

The day finally comes and you JUMP!

Wow! The highest ever recorded. You have beaten all your competition.

But wait . . . there seems to be a problem . . . an identical mark is up on the board next to yours. Someone has tied you!

You jump again. A new record!

And yet, a few seconds later . . . there’s that tying mark again up on the leaderboard!

Then you realize: the scorers are seeing the replay of your jump, and counting it as an official jump!

You scream! You cry! You spent so long training and working and now, in an instant, it is all taken away from you because of an electronic copy of your achievement counts exactly the same as what you really did.


So, were you actually robbed of anything?

It was only a copy made easily reproducible by modern technology. And your original jump has not been affected by it.

You still have that memory and knowledge of your accomplishment; it’s still in the record books that you were the first person ever to jump so high. You did get $100 after all. And you still have the satisfaction of (actually) being the best (physical) high jumper in the world.

Shouldn’t that be enough?

And I’m sure you could figure out a way to simply “be a better high jumper/sprinter” to earn the money against any such illusory competition.

But somehow, you don’t get the rewards promised you because someone else produced a copy which others took to be the real thing.

Is this fair competition?

If you insist that the replay not count in the official scoring, is that protectionism because you want to be shielded from what is essentially just a little competition?

Also, would you put in the same effort next time, when the competition was the 100 meter dash and you know that you could also do that better than everyone else if you just spent years and years and trained as hard as you could?

John January 22, 2009 at 7:56 am

Sorry . . . I moved some stuff around in that last post and forgot to re-edit the remaining parts.

The paragraph after “Shouldn’t that be enough?” should read:

“And I’m sure you could figure out a way to simply “be a better high jumper” to earn the money against any such illusory competition.”

RWW January 22, 2009 at 8:33 am

RWW — as if your belief that only physical things can be property is not, itself, an assumption that begs the question. Amazing. ;-)

Please do show me where I have used an assumption to demonstrate itself. The fact is, following the proper approach, I have been refuting the pro-”IP” arguments rather than trying to prove a negative (the nonexistence of “IP”).

Now, to address your newest analogy. Your ability to analogize seems, as before, sorely lacking. In the real world, it is fairly simple to document that you were the source of whatever works you have produced, just as, in your unfitting analogy, it would be easy for the jumper to show that the second “record” is a mistake. Public acknowledgment of intellectual achievements is probably the least worrying of the possible objections to removing the “IP” regime.

John January 22, 2009 at 8:51 am

It is unfortunate that you cannot find a way to comment on my thoughts without being insulting.

Please do show me where I said that it was not a mistake that the second “record” counted as real as the first one.

I said that it was counted the same, not that such a counting is correct.

The practical effect, even though wrong, is that you are denied your prize through the introduction of a copy of your achievement.


On the other note, I apologize . . . I assumed from what seems to be your position (anti-IP) that you do not believe that intellectual property is truly property.

So, to clarify, do you believe that only physical things can be rightly considered property and that ideas and creations of the mind are not property and so not to be protected through property rights?

That presumed belief seemed to be the source of some of your comments. I apologize if I got it wrong and this is not the source of your skepticism of IP rights. Was I wrong? Is something missing from that statement?

RWW January 22, 2009 at 9:10 am

John, it’s hard to restrain myself from insults when you don’t take the time to read (in addition to your terrible analogies, of course).

John January 22, 2009 at 9:15 am

Nice, RWW. Very nice.

Care to answer my question and put your belief in writing?

Michael Smith January 22, 2009 at 9:27 am

Jeffrey Tucker wrote:

By the way, I see that this article dramatically drove up the sales of this book on Amazon. Great!

Except that according to the theory of IP, this is unjust that Amazon–a third party that contributed nothing to my article–should be able to benefit from my writing and I get nothing for it. It is pure intellectual robbery! These are my thoughts and yet some other capitalist out there is reaping the benefit!

According to IP theory, not only have I been robbed but I now feel so demoralize that I swear that I will never create another article again. Why should I, if the benefits are just taken from me by pirates?

The comment above illustrates confusion over intellectual property theory. Let’s review what I posted earlier:

IP theory states that when a man creates the content of a work of art — a book for example — or creates a design for a new invention — or creates a formula for a new material — the content, the design and the formula become his property — his property by right of the fact that he, and he alone, is causally responsible for bringing the content, the design or the formula into existence.

IP theory further states that since every subsequent copy of the book, or instance of the invention, or batch of the new material makes use of the creator’s property — namely, the content, the design or the formula — and since it is only the content, the design and the formula that gives value to each subsequent copy of the book, the invention or the new material — the creator is the only one rightfully entitled to collect those values. (See my comment of January 19, 2009, 7:31 A.M. for a fuller explanation of this theory.)

IP theory does not say the creator has the right to dictate what the value will be — the market of individuals willing to trade their money for the creation determines the value — IP theory only says that whatever the value is, it rightfully belongs to the creator.

Now, in the present case, if the creator (the authors of the book) chooses to allow Amazon to sell his IP, thereby giving Amazon a portion of the stream of values made possible by his IP, that is his privilege. And the terms and conditions of that relationship are strictly between the creator and Amazon. No injustice there.

The actions of another party — such as Jeffrey in this case — may change the market’s perception of the value of the creator’s property up or down; it may increase (or decrease) the number of individuals willing to purchase the creator’s property, thereby increasing or decreasing the stream of values going to the creator. This does not change the fact that what the market is purchasing with their dollars is what the creator brought into existence — the content of the book in this case. They are not purchasing anything that you, the third party, created. That’s why you, the third party in this example, are not entitled to any of that stream of profits, but Amazon, who has a deal with the creator, is entitled to the contractually stipulated share.

Essentially, you have voluntarily mounted a marketing campaign for this book. There were potentially two paths open to you to make money on this campaign. One would be for you to work out a prior arrangement with the authors to compensate you for your efforts by, for instance, giving you some cut of the increase in sales (if any) that your campaign creates. The authors may or may not have been willing to reach such an agreement; it would be a matter of negotiation between you and them. The other method is to put your campaign in book form and collect the sales revenue under IP laws.

The fact that you voluntarily chose to forgo both of these methods is not an injustice, because justice demands that your time belongs to you, and you alone have a right to decide how to use it. Nor is it “intellectual robbery”, because you voluntarily contributed the words of this campaign by putting them here instead of in a copyrighted book; your words have not been used against your will.

Has Amazon profited by virtue of your efforts? Yes. Has Amazon used your property without your permission — the way a copier uses a creator’s IP without his permission when he makes and sells unauthorized copies of a book, an invention or a new material? No.

So there is nothing in this situation that contradicts IP theory or practice. I again refer those interested to my comment of January 19, 2009, 7:31 A.M. for a fuller justification for IP.

RWW January 22, 2009 at 9:28 am

You’re serious? No, I do not believe in “intellectual property.” Hopefully this will help you to answer my request. As for yours,

Please do show me where I said that it was not a mistake that the second “record” counted as real as the first one.

I’m not sure what to make of it, as it has no connection to my previous comment. If your goal is to confuse me into silence, you’re actually close to accomplishing it.

James Schaeffer January 22, 2009 at 9:31 am

I must read this book. My father was a lawyer. He helped two inventors incorporate and begin manufacturing an industrial tire for hazardous environments. He filed for a patent. It was denied. He took it to the best patent attorney he could find and after about 5 years a patent was issued. By then their were 4 companies manufacturing the product. One of the inventors had sold his ownership in the company to my father and had gone on to help start one of the other 4 companies. Like the Watt & Pickard situation one of the other companies had obtained a patent on a feature that all four were using. Three companies survived through cross licensing agreements. My father told me that the whole idea of patents was a bad thing. He said all parties should have just devoted their energy and resources to making the best product and marketing it as best they could. Society would be better served and so would the innovators. If patents exist you are forced seek a patent for any thing that can be patented or you may find your efforts stopped or shaken down by some patent holder.

My field computer software fell under the copyright law. The original idea behind patents and copyrights was that a short period of monopoly would bring much useful things into public domain. Now the short period could be 100 years. No software will be useful for such a period.

John January 22, 2009 at 9:53 am

You said:

it would be easy for the jumper to show that the second “record” is a mistake.

Then, in response to my asking where I said it was a mistake, you said:

it has no connection to my previous comment

Sure it does. If I did not say it was a mistake, then your comment that “it would be easy to show it was a mistake” is irrelevant.

This makes your subsequent claim that my request for “where did I say it?” has “no connection to your previous comment false as well.

Whether or not it is a mistake is not the issue. The fact that it counts as real as your jump and you are out yoru winnings, is.


You also said

No, I do not believe in “intellectual property.”

Would you mind offering a brief explanation as to why you do not believe in IP?

The reasons I was guessing you would give were the original source for my statement that you were begging the question.

Thus, I am highly interested in the reasoning behind your rejection of IP.

RWW January 22, 2009 at 1:49 pm

John, first you say

Please do show me where I said that it was not a mistake that the second “record” counted as real as the first one.

Then, you say

…in response to my asking where I said it was a mistake…


If I did not say it was a mistake…

I honestly cannot even follow you, so I’m going to stop trying. The short story is that your analogy is asinine. The electronic copy of the jump is no more real than the supposed “theft” involved in copying a music CD. To judge the copy of a jump to be real would be to make the same kind of error as someone who considers the copying of music a form of theft.

Would you mind offering a brief explanation as to why you do not believe in IP?

No one has convinced me of it. Would you mind offering a brief explanation as to why you do not believe that between the Earth and Mars there is a china teapot revolving about the sun in an elliptical orbit?

The reasons I was guessing you would give were the original source for my statement that you were begging the question.


John January 22, 2009 at 2:29 pm

Yes, you are.

Sorry to see that you cannot offer support for your own views other than to say that you don’t like other ideas. That’s too bad that you haven’t thought through your beliefs like that.

Have a good one. I’m done with you.

James Redford January 22, 2009 at 7:48 pm

To rephrase William S. Gilbert:

When I sally forth to seek my prey
I help myself in a royal way:
I download a few more files, it’s true,
Than a well-bred monarch ought to do;
But many a king on a first-class throne,
If he wants to call his crown his own,
Must manage somehow to get through
More dirty work than ever I do,
Though I am a Pirate King!

Maty January 22, 2009 at 11:20 pm

I think that on the level of principles the problem is that we all use the general word ‘ideas’ here to denote different things—the anti-IP people take it to mean concrete instances of knowledge and therefore rightfully reply that no one can ‘own’ what’s in their heads, while the pro-IP people take it for anything that is non-physical—and hence the confusion.

So why not simplify it?

As I mentioned in a previous post, no can own or copyright an idea per-se—nor can one do so with knowledge. Property is the result of work; either one’s own, or someone else’s. However, when one takes isolated ideas and groups them together in a certain way; in a particular order and fashion that is distinct and personal to him—he creates a new unit. All those ideas that have been previously isolated and continue to be so outside of his work, once formulated by the power of his mind, constitute a new whole. This does not mean that the individual ideas, concepts, information, or knowledge used therein are his property and cannot be used by others—what it means is that the new whole, the particular combination he has attained, is his property and cannot be replicated without consent.

Just because an author is using concepts—non-material units—for raw materials and not steel, concrete or any other physical commodity does it mean that he should not own the end result of his effort? And can you really claim that the end result of his work is only the PHYSICAL book and naught more? After all, what has he been toiling over all those years—binding and pressing papers, or contemplating concepts and grouping them into logical units, glued together by coherence and his unique style of expression?

Just as the mason, whose workplace is physical, would own the house his hands have built—should not a writer, whose workspace is conceptual, own the structure his mind erected?

So if you have worked hard to infer certain truths which the author happened to demonstrate in his book, or even if you have exerted your mental faculties to grasp the contents of his very book, it does not mean that the author now owns the ideas in your mind—you obviously own them because you have worked to put them there, and you are free to use them and express them in any way you wish. However, you are not free to appropriate the author’s expression—even if you memorized his entire text.

Ideas DO NOT equal their expression, formulation, or presentation—even though many of us may hold the same truths in our minds, we all have our own way of explaining and expressing them. If we wish to repeat or paraphrase someone else’s expression—would cite or credit them. Why? Because we acknowledge their work and the fact that even though the idea is equally ours—the expression is theirs.

The thing that concerns me most about the anti-IP arguments presented herein is that they all seem to do away with the process of creation and its significance–regarding man-made creations once revealed to the world as equally metaphysical as the rocks and leaves…

Now, as a foot note, I do hope that this post is going to be answered intelligently and not ignored as my previous lengthily posts. Up to this point I have approached this debate as an exchange of ideas where everyone engaged is seeking to reach the truth, and gave most comments due time and consideration. Others arguing in favor of IP seem to have taken a similarly mature approach, taking the time to consider comments and trying to reason through them (even if not always successfully). However, those arguing against IP seem to have (mostly) confined themselves to being dismissive (bordering on elusive), while at times seemingly aiming at ridicule rather than intelligent discourse.

As for myself, I have been curious to hear the case for anti-IP and was open to challenging my own convictions. However, none of the arguments offered thus far withstood my deconstruction, nor were my counterarguments counteracted. Seeing as much confusion on both side has resulted from the use of analogies on the practical lever—I have sought in this post to bring the matter down to the level of principle, and to two fundamental questions:

1. Is a man entitled to the result of his work, and
2. Is he then entitled to set the terms under which he is willing to trade it?

These questions are at the root of the discussion, and I think that at this point, if we are not to talk in vain, we should strive to focus on the roots.

This would my last attempt to engage in this discourse intelligently, and if again it goes unanswered, I can only conclude that those arguing against IP simply have no answers and stop wasting my time. Those who care can keep on playing in the sand box…


jeffrey said:

“Would Rowling be poorer or richer? I don’t think there is any way to know. But the main thing is that the world be a better place.”

So much for the ‘individual’ as the standard of value…

Prakash January 23, 2009 at 2:19 am

I think there might be 2 issues which are getting confused here. One is the idea of IP and paying the creators of new patterns (because that is what a thing without its physical materials is, a pattern) a sufficient remuneration for their work. The second issue is the PRESENT SYSTEM OF IP PROTECTION, which involves copyrights and patents, both of which are based on intellectual monopoly.

I think this debate can be enriched by considering alternate ways of protecting IP, like the innovation clearing house “tree” structure described by Robert Klassen. In the tree structure, people can independently arrive at the same result and have no IP conflict because all they put in their IP filing is the prior art they used. It is possible for 2 teams to use the same prior art and come up with incredibly similar products and neither would be in conflict with the other, but both would be paying dues to the people who created their prior art.

Now, a person under this structure who would seek to modify or hack a present product would simply mention that product as prior art and move forth instead of trying to get to understand all the prior art behind that and mentioning that in his filing.

eg. A, B are prior art for product C. A person seeking to create a new version of product C would simply mention C as prior art instead of A,B because his royalty payment might end up as pretty much the same either way

E.B. July 14, 2009 at 9:43 pm


. . .And you want to know the REALLY funny part? Most of the government-created, government-protected business collectives to whom such IP rights have been granted HAVE NO such *actual* ‘rights’ under the supreme law of THIS land.

Everybody, let’s play “Find-the-Word-Corporation-In-The-U.S.-Constitution.”

That’s right, it ain’t in there–and such ‘persons’ wouldn’t exist at all had it not been for the SCOTUS usurpation of 1886. You know, the one where the Court *decided that it had been given the right to declare such business collectives ‘persons’ with all the rights and protections granted thereto? Capitalism/free enterprise have been going down the crapper ever since. In short my esteemed friend, how far down do you want to pull this curtain? It gets ugly from here. :-)


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