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Source link: http://archive.mises.org/9248/hayek-ip-and-knowledge/

Hayek, IP, and Knowledge

January 16, 2009 by

I am hesitant to compliment Tucker’s A Book that Changes Everything, given that he generously over-praises me in it, but I can’t help it–it’s really a great piece–just perfect. And he has a tantalizing suggestion in it: “As I’ve thought more about their book, it seems that it might suggest a revision in classical-liberal theory. We have traditionally thought that cooperation and competition were the two pillars of social order; a third could be added: emulation. In addition, there is surely work to do here that integrates Hayek’s theory of knowledge with the problem of IP”

Now, I’ve long been critical of aspects of the Hayekian focus on “knowledge problems” (see my post Knowledge vs. Calculation). But Tucker has a good point. Property rights are rights in scarce resources. All actions employ means, including scarce resources in our bodies, and in appropriated scarce resources (property). All action employs these means to attain certain ends. But all action is based on information or knowledge: beliefs by the actor about what causal laws are operative, what ends are possible, and so on. People acquire knowledge as they develop and grow; some by introspection and experience, but so much more is acquired dissemination from others, by those in one’s community, and by the inherited body of knowledge passed down, and added to, over the centuries. Emulation and the acquisition of knowledge play a key role–are essential to–society, and economy.

So Tucker has hit the nail on the head: one problem with IP is that by monopolizing information, knowledge–patterns–it restricts and locks up the flow of knowledge. It thus impedes the operations of the free market and productivity, by reducting the scope of human action, impairing its efficiency by hampering the means at one’s disposal.Update: See also my Against Intellectual Property, p. 53, noting that “All action, including action which employs owned scarce means (property), involves the use of technical knowledge. Some of this knowledge may be gained from things we see, including the property of others.”

Also, see my Knowledge, Calculation, Conflict, and Law, pp. 58-59, arguing that it should be realized that “knowledge” is merely a “technical problem that confronts any individual when choosing means to achieve certain ends, and when deciding which ends to pursue. … The need to acquire knowledge faces even Crusoe alone on his island, who has no need for private-property rules because there are no other people and thus no possibility of interpersonal conflict.”

And see Guido Hülsmann’s Knowledge, Judgment, and the Use of Property:

However, there is still a more fundamental condition of action. This is the fact that knowledge as such is never scarce. Knowledge problems thus do have a place in economics only insofar as knowledge has to be selected for application. Yet the selection of knowledge depends entirely on the property of the acting person.

At each moment we dispose of a myriad of information, and we often know of many ways to achieve any given end. For example, if my apartment is cold, I could keep my body warm through gymnastics or additional sweaters. I could also burn parts of my furniture or simply turn on the heating and pay higher bills. I could also sit down in my armchair and invent a new technology permitting one to heat my apartment at half of the present cost. To be sure, the latter alternative is the most elegant one. In any case, as conditions do not cease to change, we constantly have to acquire new knowledge if only to conserve our present standard of living. However, economic science does not have to deal with the factors conditioning the acquisition of knowledge.

… For the moment we are entirely unconcerned with the creation of knowledge, that is, of judgments that prove to be successful in action. We do not bother about the way we reduce our sheer ignorance. Rather we have to consider the principles that govern the selection of the judgments that we actually apply in our actions.

…In choosing the most important action we implicitly select some parts of our technological knowledge for application. In other terms, our choices imply a judgment upon the importance of our technological knowledge under the expected conditions of our action. This economic judgment is our only concern. Technological knowledge as such is immaterial for economics.

Notice how Hülsmann here distinguishes between action, and the means one employes, and the “technological knowledge” ones uses to guide one’s actions, to employ various causal means in the world to achieve certain ends–but that it is distinct from action and means.

{ 60 comments }

Bruce Koerber January 16, 2009 at 5:38 pm

The interlocking threads of the fabric of the market process appear as cooperation, competition, and emulation. It is from these, as the warp and weft, that the pattern emerges.

IP inhibits or prevents the tapestry of life from gracing the world.

J Cortez January 16, 2009 at 6:20 pm

Is this anti-IP day? :)

I’ve really enjoyed reading all of today’s posts on this subject.

Great stuff. Thanks.

Silas will say: January 16, 2009 at 8:28 pm

One problem with personal property is that by monopolizing goods, items–things–it restricts and locks up the flow of resources. It thus impedes the operations of the free market and productivity, etc.

Gil January 16, 2009 at 9:23 pm

Why not? It has been asserted that a totally privatised landowing system will make a non-landowner a potential trespasser whereever he goes. Yet others would argue privatised landowning will make more efficient use of the land.

Silas Barta January 16, 2009 at 11:17 pm

Actually, Silas will show how Stephan_Kinsella’s argument works directly against him. More generally, the entire economic calculation argument favors IP. No matter what scarcity you claim it doesn’t have (and Stephan_Kinsella is extremely loose with his terminology when he talks about scarcity — the concept can’t help him justify anything because the very existence of a debate proves that there is scarcity, but let’s leave that all aside for now), the fact is that scarce means are employed in the *production* of intellectual works. This comes at the (opportunity) cost of employing those scarce means for goods that are *not* intellectual works (or are different intellectual works).

Now, in the absence of intellectual property rights, you effectively put a price ceiling on intellectual works of zero, thus deleting all information provided by the rest of society to the entrepreneur about how “good of a choice” it was to employ his scarce means in the production of this intellectual work. Please, please do not respond by pointing out related scarce goods that you arbitrarily let the entrepreneur have property rights in, through which he can sorta-kinda capture the value of the intellectual work. These goods are not the same thing, and they are valued for different reasons. Purchasing them does not signal the value that the individual places on the *existence* of the intellectual work (which is what the innovator as such produces), but rather, the value he places on the production of a good, *given* the existence of the intellectual work.

As I argued on my blog:

“All of the economic calculation arguments equally apply as critiques of lack of intellectual property. When Mises and Hayek formulated their economic calculation arguments, they made a powerful case regarding the practical implications of the lack of property rights. However, they cannot delimit by fiat the full extent of their arguments’ logical implications: only the logical examination of the arguments’ premises and steps can do that.

“What Mises and Hayek actually accomplished was to establish the need for the ability to perform economic calculations in any situation in which an actor has the choice between alternate uses of any scarce means toward ends, not merely those that they deem “economic goods”. And indeed one quite common choice actors face is that of expending scarce means (their time and labor) to produce non-scarce intellectual works, versus expending those means toward some other end.

“In such a situation, any claim about the implications of lack of price signals (due to lack of property rights) would likewise work against the lack of property rights in the potential intellectual work produced. The absence of IP effectively places a “price cap” on the intellectual work of $0, although other goods and services related to that intellectual work (transmission of it, future cooperation regarding it, etc.) may still have prices. An entrepreneur would therefore always “see” zero monetary demand for the production of the intellectual works he is capable of, even though we know at least some intellectual works have positive value (at least one person would pay some amount of money for that intellectual work to be available somehow).

“While the existence of these other, related goods with prices, may appear to give the accurate, relevant price signals, it does not: prices for them signal consumer desire for different behavior than prices for the intellectual work would. (To be specific, the “price of an intellectual work” is the “price of the right to legally instantiate that intellectual work”, just as the “price of an orange” is the “price of the right to legally use that orange”.) For example: desire for a machine that is capable of producing a pill according to a given formula, is not the same as desire that the knowledge exists of how to make a pill that cures cancer. In the fomer case, the actor values physical manipulation capability; in the latter, he values the status of a malady changing from incurable to curable at a cost.

“Therefore, any libertarian critical of the ability of property-free economies to rationally allocate resources, should also see a type of calculational chaos to the extent that actors choose for or against producing intellectual works.”

***

All Stephan_Kinsella has done here is show a vague resemblance between Hayek’s argument and his personal beliefs; more realistically, Hayek has shown — though he may have wished to deem this “not an implication” without giving a reason — that IP-free societies are in a state of calculational chaos with respect to ideas.

Sadly, I doubt anyone’s going to give my point any serious consideration, as it criticizes a sacred cow here.

RWW January 17, 2009 at 12:18 am

Silas,

You come tantalizingly close to the truth of the matter in mentioning “other, related goods.” The fact is that ideas (the ones you mislabel IP) are useful in their ability to bring forth new goods, or to produce the old goods in greater quantity or quality. These goods are not only related to the ideas in question, but hinge directly upon them. The abundant demand for such goods is a more than adequate signal to the “producers” of ideas.

If your point is not taken more seriously than this, it is not because of ideology, but rather the weakness of the argument itself. But, condescending as always, you dismiss a very convincing position (the principled opposition to “IP,” as advocated by some here) as a sacred cow.

kiba January 17, 2009 at 12:55 am

I have a hypothesis that whenever somebody inject the the idea of zero in economic reasoning, it will make 90% of otherwise smart economic thinkers’ brain to calculate to nonsense.

We are so used to dealing with scarce goods that some of us couldn’t deal with the fact that digital goods and similar goods in which scarcity for all practical purpose do not exists.

It is kinda like the concept of zero is considered heretical in time past. In the mind of ancient thinkers, it was a concept quite difficult to grasp.

Andras January 17, 2009 at 2:18 am

@kiba,
It is not surprising then that the early users of zero in twelve century Europe did not disclose their “invention”. They only sold their service instead of disclosing the knowledge to the masses for decades or as long as they could keep it secret. We had social planners instead of patent laws then, too.

Andras January 17, 2009 at 2:27 am

@RWW,
You showed in your reply that you are not an inventor. Here is the opportunity to show that you are not an entrepreneur either.
Again, back to Silas question translated for you: how do you expect an entrepreneur to rank and select an inventor from the inventor pool?

ktibuk January 17, 2009 at 5:48 am

Not all and every information is property in libertarian IP law. Only certain ones.

Some maybe given out for charity, some for fame and some because transaction costs would be too high in the event of copyright protection.

Yes, people freely give out information to others (and have been for thousands of years) just like they give out tangible property. This doesn’t negate or abolish property.

This argument is so weak that full socialists aren’t even using it. No socialist claims there can not be private property because people like Bill Gates have been giving out parts of his wealth for years to others.

Inquisitor January 17, 2009 at 6:57 am

Fascinating Silas, just fascinating. Now, when are you going to actually demonstrate ideas are scarce, i.e. economic goods? BTW, there’s no “right” to have property rights enforced… it’s up to the parties involved to secure them. So if they want to protect “their” IP (the same is true of their actual property), they can do so with their own money and time and stop wasting everyone else’s.

RWW January 17, 2009 at 8:05 am

Andras, cut the ad hominem. If you have an argument, please make it. As to your question, I assume it’s related to some point you wish to make, so let’s cut to the chase. What aspect of selecting an inventor would be impossible if “IP” laws were eliminated?

Michael Smith January 17, 2009 at 9:07 am

Kinsella wrote:

So Tucker has hit the nail on the head: one problem with IP is that by monopolizing information, knowledge–patterns–it restricts and locks up the flow of knowledge.

This argument makes no sense at all.

In the first place, there is no right to a “flow of knowledge”, just as there is no right to an education. There is only a right to seek knowledge by means of your own effort or trade for it with others who know what you wish to learn.

In the second place, you are free to pass any book you purchase on to whomever you wish — just as you are free to restate the knowledge, using your own, new wording and phrasing, and publish a billion copies of if you wish. Indeed, there are vast numbers of such books published every year that contain restatements of knowledge first published by someone else.

In the third place, in the case of patents, you are not permitted to restrict any knowledge about the invention. To the contrary, the patent must contain a full disclosure of the details of the invention’s design, a complete description of its features, a disclosure of what distinguishes it from any relevant prior art — there is even a requirement that the patent disclose the best method of manufacturing the invention. When the patent is granted, the patent document is released into the public domain and may be copied and disseminated without limits.

So not only is there no right to a “flow of information”, there is nothing about IP that restricts such a flow. Your argument makes no sense.

Michael Smith January 17, 2009 at 9:21 am

Inquisitor wrote:

Fascinating Silas, just fascinating. Now, when are you going to actually demonstrate ideas are scarce, i.e. economic goods?

I don’t understand this notion.

1) In the first place, what is more “scarce” than a new design I just conceived and put on paper? Prior to my effort, it did not exist at all; now that I’ve brought it into existence, it constitutes a single new innovation. Why is that not “scarce”.

2) More importantly, why do only “scarce” items qualify as property? What is your definition of “scarce”?

ktibuk January 17, 2009 at 9:58 am

Good job Silas.

Although I think property issue is an ethical issue, calculation argument is a good one that demolishes socialist claims.

I am sure the original socialists were as baffled as these IP socialists are. They had no answer back then, they have no answer right now.

Stephan Kinsella January 17, 2009 at 10:00 am

Smith: “”there is no right to a “flow of knowledge”, just as there is no right to an education. There is only a right to seek knowledge by means of your own effort or trade for it with others who know what you wish to learn.”

Sure. There is also no right to food or a home or a job. But if state policies restrict food, make homes more expensive, or cause unemployment, we point this out, object to it, and count it as yet another harm imposed on us by the state. The state no doubt impoverishes us–recognizing this doesn’t rely on a right to wealth per se.

To the extent state policies–both IP itself and the others that reduce wealth–impede innovation, this, too slows the development and progress of new ideas, recipes, technical information, scientific discoveries.

“In the third place, in the case of patents, you are not permitted to restrict any knowledge about the invention. To the contrary, the patent must contain a full disclosure of the details of the invention’s design, a complete description of its features, a disclosure of what distinguishes it from any relevant prior art — there is even a requirement that the patent disclose the best method of manufacturing the invention. When the patent is granted, the patent document is released into the public domain and may be copied and disseminated without limits.”

Sure, but many companies do not even attempt to innovate in some fields, because they are afraid they can’t sell the products they develop because of patent problems. So the engineers don’t have an incentive to read up on the literature, to innovate, etc.

Andras January 17, 2009 at 10:57 am

@RWW,
“What aspect of selecting an inventor would be impossible if “IP” laws were eliminated?”

If you eliminate IP as worthless you will eliminate all the reference related to IP (Patents). Currently, patents serve also as a measure to rank inventors, too. Without them, at a job appication, you have resumes without references.
Again, back to Silas question translated for you: how do you expect an entrepreneur to rank and select an inventor from the inventor pool?

gene berman January 17, 2009 at 11:03 am

For quite some time, I’ve been mildly interested in the “patent/anti-patent controversy adroitly maintained on the LRC/Mises site by Mr. Kinsella. I, myself, am relatively ignorant of the entire matter and, therefore, inclined toward the conservative (“if it ain’t broke, don’t fix it”) prejudice on the subject.

In that wise, I thought I’d “weigh in” on the topic at least just this once, since I’d noted an oft-made Kinsellian argument that I felt simply did not square with any clear-eyed perception of reality. The relative importance of the argument is larger than obvious at first glance because it is one of the foundations of the “anti-patent” argument, much of the balance of which has been very masterfully presented (over and over again, I might add) in Mr. Kinsella’s frequent posts.

So, with those thoughts in mind, I scrolled down to add my own thoughts to the preceding mix. And, lo and behold, the very final one (by Michael Smith) ably presents the very crux of the argument I should have made if he hadn’t beaten me to it. So, I shall restrict my further comments to some less-important (but variously germane). They are not organized into a “case” ; they’re just observations.

This is a “Misesian” site, i.e., one intended to provide a forum for questions and discussion particularly economic and particularly informed by our Austrian view, especially as propounded by Mises. But Mises himself is neutral on the subject. But, even in describing the matter as controversial, he insists (in considering “the external economies of intellectual creation”) that such controversy is not of catallactic significance. At this point (and in light of the foregoing), it thus seems to me to be somewhat of an “impropriety” to make the Mises site not only the place for frequent pieces devoted to the single, not-specifically-Misesian subject but, additionally, the seeming or apparent ‘sponsor” for one particular “side” or view of the matter. A visitor not particularly Misesian in view or knowledge might very well conclude that the anti-patent-and-IP view of Mr. Kinsella were specifically those of Mises and the Austrian School. In this wise, such articles render a distinctly negative (marginalizing) service to the site that it doesn’t need, no matter how well done are the pieces themselves. I would actually wonder why such pieces are carried on this site rather than on the LewRockwell.com site (as I note the usual, in all other regards, rather scrupulous separation on the basis of content).

Mr. Kinsella has (at many times and in many pieces) noted that the patent office seems inclined to superfluity in such awards; indeed, that very many are not only, on their face, impossible of practical realization but even eminently mockable. But here a point is missed (and it is an eminently Misesian point, at that). And that is that, at all times, there exist (whether the subject of patents or not is not at issue) a (“invisible mountain, reaching to the stratosphere,” the quoted expression being from somewhere I forget) plethora of as-yet-impracticable ideas available for the progress of civilization awaiting only some as-yet-unrealized event (as momentous as another enabling discovery or as prosaic as a change in price structure) for their practical (profitable) realization. With that understanding, it can be seen that many of the “far-fetched” patents are less unreasonably granted; they, too, add to the store of such ideas available to the future (and the very unlikelihood of their actually underpinning an exercised “monopoly” in the succeeding 20-year patent period ought to elicit some of Mr. Kinsella’s approval, rather than his scorn).

In closing, I would expand somewhat on another point made by Mr. Smith. The library of patents issued is a technical resource in and of itself. Whether or not its maintenance is a proper function of government or whether the costs of its operation are justifiable is not my subject; merely that the existence of the resource is an organized technical aid addressable not only by those seeking to learn whether a particular idea is liable to be patentable but also as a source for the enlargement or improvement of existing ideas (and whether already embodied in products and processes or not). Thus, it makes eminent sense for many already in business to periodically review such data; not only is it possible, thereby, to discover novelties of some potential value with respects to one’s own products, it is even within reasonable conjecture to find sales opportunites for one’s own products within the material (or process) requirements of someone else’s.

I don’t think I’ll find much disagreement in naming Ben Franklin an outstanding inventor and a true philanthropist and humanitarian. Bifocals are still in use
as was, until relatively recently, the “grabber” thingamajig he cobbled together to get books down from high shelves (and was ubiquitous in grocery stores), and the ideas of lending libraries, adult evening schools, and volunteer fire departments are only a few credited to him. Franklin was anxious not to delay public benefit from his innovations and so did not bother with seeking patents for them. That was, indeed, generous of spirit of him. However, we also shouldn’t overlook that ol’ Ben was a great believer in the efficacy of a paper money system, even relishing the fact that he was “in the business” of doing the printing on contract with the government. Nobody sees everything clearly. In the case at hand, I suggest that Mr. Kinsella (and others against patents and IP) have not much more than imagination to reveal what would occur were those institutions to be dismantled.

Kiba January 17, 2009 at 11:53 am

gene berman: We have much more than just imagination. We also have seen much practical examples and business models to support our anti-IP views, copyright and patents. Many examples are already covered in the Intellectual Monopoly books and more.

This is not about some theoritical PDA, private courts and other agencies that only exist in an anarcho-capitalistic society. There are already real-world practical examples.

Economists like Mike Masnick have already covered this ad nasuem.

The pro-ip crowd choose to not see what can already be seen. It is a level of ignorance above “the seen and the unseen”.

gene berman January 17, 2009 at 11:53 am

Silas:

Though having sided more or less pro-IP and having commented in support of Michael Smith’s argument, I’ve read and agree with your own as well (and will certainly take a look at your site).

Actually, though, my major point is in my own 4th paragraph. It seems as though what appears to have been intended as and is represented as a Misesian site is constantly subject to attempts at “takeover” by those militating against IP and by those nearest the extreme libertarian end of the
authoritarian-freedom spectrum. Nor even have I paid enough attention to knwo whether there’s any relationship between those two groups or whether they’re just two separate sets of opinions each intent on grinding their own axes.

I don’t have any well-formed opposition to either of these groups other than the constant intrusion of what seem to me to be partisan matters where they (in my own opinion) don’t belong. I cannot see either of those positions as following with any logical necessity from economic knowledge. And, as expressed in my comment to Mr. Smith, I view such intrusion as quite liable to mark (to visitors, especially those actuall interested in economic matters) the site as dominate, if not owned, by proponents, not of Austrian School views but by poartisan supporters of these two essentially political planks.

gene berman January 17, 2009 at 11:59 am

Kiba:

I haven’t got a clue. Give me a reference or better, a link. I promise—I’m actually queer for new shit.
(The shortest and most comprehensive, if those are available together.)

Kiba January 17, 2009 at 12:04 pm

There are much literature on this so I’ll link you to one of the fundamental tenent of business models that take into consideration the non-scarcity of digital goods. This should get you started.

http://www.techdirt.com/articles/20070503/012939.shtml

Rye January 17, 2009 at 12:14 pm

Pardon me for butting into the flow of conversation here, but I would like to present an alternate tack for arguing against the governmental defense of IP. It seems to me that any use of someone else’s idea cannot be an aggressive use of force, so any force used against them for such a purpose would be aggressive. I’d also like to paraphrase Rothbard’s admonition: while it’s useful to argue about the ends of various actions, we cannot do so in lieu of arguing in favor of our ethical principles.

DixieFlatline January 17, 2009 at 12:30 pm

Gene, what is this about militating against IP?

It’s not by any reasonable definition a valid form of property. Pro-IP folks usually end up making utilitarian arguments, because they cannot explain how ideas can be scarce, unique or have specific ownership.

Quite honestly, I find people like you who take a pro-IP stance to be pro-state, anti-freedom, and anti-free market.

LvMI is merely taking the reasonable ideological stance on this issue.

Michael Smith January 17, 2009 at 3:07 pm

Stephen wrote:

Sure. There is also no right to food or a home or a job. But if state policies restrict food, make homes more expensive, or cause unemployment, we point this out, object to it, and count it as yet another harm imposed on us by the state.

All property rights are a “restriction” on the property in question and all of them constitute the acknowledgement and enforcement of a monopoly — specifically, the acknowledgement and enforcement of the owner’s monopoly on the exclusive right to the use and disposal of the property in question.

And yes, property rights make property more expensive — having to earn money and pay for property is more expensive than simply seizing it. Kroger certainly increases the cost of food by putting their profit margin on every item they sell.

So “restrictiveness” and “increased expense” cannot be grounds for excluding the recognition of IP — not unless you are going to exclude the recognition of all other property rights as well.

Silas Barta January 17, 2009 at 3:15 pm

@RWW: The fact is that ideas (the ones you mislabel IP) are useful in their ability to bring forth new goods, or to produce the old goods in greater quantity or quality. These goods are not only related to the ideas in question, but hinge directly upon them. The abundant demand for such goods is a more than adequate signal to the “producers” of ideas.

First of all, I never labeled any ideas as “IP”; I labeled them as intellectual *works*. Unlike Stephan_Kinsella, I’m rigorous enough to distinguish between intellectual *works* (which are not scarce) and intellectual *property*, which is the exclusive legal right to instantiate an intellectual work, and thus can be scarce.

The rest of your point is a non-sequitur. From the fact that there is demand for goods related to intellectual works, it does not follow that the demand reflects the value of the intellectual work. Among other ways to prove this, imagine downloading data. In the absence of IP, it costs just the same to download a song as to download a randomized stream of bits. But who would claim that people are indifferent between artists a) producing recognizable music, and b) producing random bitstreams?

All such related goods have the same problem: you needn’t be the one that produced the intellectual work, or have any contractual relationship therewith, in order to produce them. So the price of them *can’t* reflect demand for the knew knowledge, no matter how big such demand is.

@gene_berman: Thanks for the feedback, I hope you take the time to read the main post and the discussion in the link I gave.

Michael Smith January 17, 2009 at 3:17 pm

@DixieFlatline:

Pro-IP folks usually end up making utilitarian arguments, because they cannot explain how ideas can be scarce, unique or have specific ownership.

I’ll repeat two points and questions I asked of Inquisitor earlier:

1) In the first place, what is more “scarce” than a new design I just conceived and developed? Prior to my effort, it did not exist at all; now that I’ve brought it into existence, it constitutes a completely new innovation. Why is that not “scarce”?

2) More importantly, why do only “scarce” items qualify as property? What is your definition of “scarce”?

Silas Barta January 17, 2009 at 3:54 pm

I’d also like to thank ktibuk, Michael_Smith, Gil, Andras and gene_berman for their insights. This is a welcome change from the self-reassuring echo chamber Stephan_Kinsella usually gets when he posts about IP.

Some more replies:

@Inquisitor: Now, when are you going to actually demonstrate ideas are scarce, i.e. economic goods?

As I said above, I don’t designate ideas (once widely known) as scarce, or as economic goods. However,

a) The *rights* to *exclusive* use of an idea are certainly scarce.
b) It doesn’t matter if ideas are scarce or if they’re “economic goods”; as long as people spend scarce goods to produce them, the lack of property rights in ideas creates calculational chaos when entrepreneurs decide whether they will produce ideas or physical goods.

BTW, there’s no “right” to have property rights enforced… it’s up to the parties involved to secure them. So if they want to protect “their” IP (the same is true of their actual property), they can do so with their own money and time and stop wasting everyone else’s.

Yes, it’s certainly wrong to make third parties pay such costs. However. all that proves is that the costs should be shifted to the rights violators, not that the rights should simply not exist! It’s a red herring that IP opponents would spot in any other context.

Peter Cohen January 17, 2009 at 5:13 pm

My perspective is that which derives from the production of digital works of art. It would seem to me that the question of Intellectual Property however is a complex one and that a single paradigm for all IP is probably counter productive, if not futile. I can readily see how the world might well benefit from patents lasting maybe ten years instead of seventy five (or whatever). I can also however readily see how the world would be greatly harmed by inventors not having sufficient time to profit from the product of the work.

The utilitarian argument however is only one facet and frankly from a rights perspective, perhaps moot. I would argue strongly from the perspective of personal rights, of self ownership which extends naturally to ownership of that which I produce. The existence of the work I create is the product of my labor, talent and capital. It is not just the first copy of my digital art work that is my property. Simply because another may with a button click create a new copy, does not render my work no longer my property. My first copy owes it’s existence to my labor and capital. However it is not only the first copy of that work that owes it’s existence to my labor and capital.

Remove my labor and capital from the equation and not only does the first copy of my work cease to exist; ALL other subsequent copies also cease to exist!

It is by that definition that I insist that I own the product of my work, that I retain rights in all copies. When I sell someone the right to possess a copy of my work, I sell them some rights, I do not sell all rights. I sell to them the right to possess my work themselves, to avail themselves of it, even to display it to their friends and family. I even assert that they have the right to make copies of my work for different media, so long as the use of that work remain in their possession and not passed on to others. I do not however sell to them the right to profit from my work nor to give away copies of my work to other people.

Artisan January 17, 2009 at 5:40 pm

Nobody says one cannot use information he reads in a book for his trade without paying its author… society rules that one just has to mingle it with his own “work” (copy-paste doesn’t count as work). This principle is called homesteading. So again the Tucker argument is not relevant for copyright, only for patent.

jason4liberty January 17, 2009 at 7:36 pm

Silas,

By your definition, when does IP transition from IP to a work? In your posts I see that you refer to both, and distinguish between them. Can a transition happen? Does it happen by any other mechanism than state fiat?

How do you feel about use restrictions on IP? If the idea is sold, who then owns it, and can choose what to do with it?

Physical property theory has a “clear” system of determining ownership and transfer rights. Likewise, if I buy a pair of shoes, I get to determine where I walk in them. Do you posit that IP creates a new class of ownership rights, allowing rights and restrictions beyond those offered to physical property owners?

Physical property ownership, as proposed by Rothbard, is perpetual. Physical property does not transfer between classes or owners other than by the voluntary action of the owner. If an idea can be property, it doesn’t seem like it would ever be a work under that sort of property theory.

newson January 17, 2009 at 10:28 pm

to michael smith:
as regards “scarcity”, kiba has provided a useful link. once your idea has passed into the public domain, there is no limit to the number of people who can store and use that concept. by contrast, even abundant physical substances may be situationally scarce (ie sand at the north pole, water in the desert etc).

absent ip, you would have to resort to private accords in order to maintain the scarcity value of your idea. over time, it’s difficult to imagine you being able to monopolize this know-how privately, but short-term it may be doable.

newson January 17, 2009 at 10:36 pm

to peter cohen:
when i sell you a hammer, i hope you use it to hit nails, but i cannot compel you not to use it to hit your neighbour on the head. selling implies cessation of all ownership and associated rights. if i find you’ve been buying my hammers with violent acts in mind, the best i can do is to cease dealing with you.

Silas Barta January 17, 2009 at 10:38 pm

jason4liberty: By your definition, when does IP transition from IP to a work? In your posts I see that you refer to both, and distinguish between them. Can a transition happen? Does it happen by any other mechanism than state fiat?

Based on your first question, you must have gotten the wrong idea of the distinction I was making. To clarify the distinction, let me give a clear example: consider a Harry Potter book. The informational content of that book is the the intellectual work. The right to make copies of it, or to prevent others from doing so, would be intellectual property. In the physical realm, it’s the distinction between an apple, and ownership of that apple.

As for the other questions: it’s kind of interesting how anti-IP libertarians shift their standards when the topic changes to something they don’t like. I don’t know if that describes you, or if you’re just asking a clarify question, but that’s been sadly common in discussions on IP here that I’ve joined.

Yes, the state can and has dictated intellectual property rights. It’s done the same for physical property rights. Just the same, physical property rights can arise without the state, through convention and recognitions within private legal systems. And so too, I claim, can intellectual property rights.

Stephan Kinsella January 17, 2009 at 11:21 pm

Silas Barta:

As for the other questions: it’s kind of interesting how anti-IP libertarians shift their standards when the topic changes to something they don’t like. I don’t know if that describes you, or if you’re just asking a clarify question, but that’s been sadly common in discussions on IP here that I’ve joined.

Yes, the state can and has dictated intellectual property rights. It’s done the same for physical property rights. Just the same, physical property rights can arise without the state, through convention and recognitions within private legal systems. And so too, I claim, can intellectual property rights.

The problem with this reasoning is that (real) property rights predate the state and are not dependent on it; we libertarians can easily describe what we are in favor of. But IP exists only because of the state. Patent and copyright are legislated, positive-law grants of monopoly privilege. You fair-weather IP advocates back off of every jagged edge we point out, till we reasonably start to wonder what in the world you guys really favor, if you will agree with all of our critiques’ of manifest absurdities and injustices. You can’t just kick the can down the road and say, “let the courts figure it out,” like Congress enacting an Americans with Disabilities Requirement with an amorphous “reasonable accommodation” requirement; or Congress adding “privileges or immunities”, or “the general welfare,” or “necessary and proper,” etc. etc., to the Constitution, expecting later generations to figure out what the hell these positive law assertions mean in practice.

As I explained here:

The IP socialists faux-libertarians pull the trick all the time. You point to an obviously unlibertarian aspect of IP law (which they appear to support, since they bash opponents of IP law), and they crawfish and say, “well, naww, we are not in favor of THAAAAT”. Every problem you find, they just deny it–leaving you to wonder what they DO favor. What is this ideal IP system like that they favor? They can never tell you. The ones that do, like Rand or Galambos, either support systems that are either unprincipled and pragmatic and arbitrary (Rand) or obviously absurdly unjust (Galambos). The rest just clam up; they don’t know what the heck they advocate or believe in. They don’t believe in the current IP system–so don’t blame them for ITS deficiencies. But if you ask them what they believe in, it’s deer-in-the-headlights, “Hey, man, I’m not a lawyer, don’t ask me.”

As for their system having some kind of exception for “independent discovery,” I assume this means that:

1. If A invents it first (but keeps it secret), then B invents it later and patents it, then B can’t stop A, right? This is called prior-user right (but we don’t have a general one here). Is B’s patent still valid, against C?

2. If A invents first and patents it, then B invents it later *independently*, I suppose this means A can’t stop or get damages from B, right?

3. Take case 2, B is about to independently invent it, but happens to see a bus advertisement showing A’s product, so that now he’s prevented from claiming to be its inventor–sort of like when your moronic friend spoils a movie by telling you its ending. In this case, A can stop B, unlike in case 2… right? So B, who in the absence of patent law, and in the absence of A’s invention, *would have* been able to use the idea he was working on, is now prevented, Right?

Let me guess–you are not sure of the details. I.e., you literally do not know what you are talking about.

Kiba January 17, 2009 at 11:24 pm

Who did change their stance or standard?

I still stand by my claim that IP is unethical.

It has nothing to do with my business and entrepneurship stance.

Peter Cohen January 18, 2009 at 8:26 am

Newson wrote: “Selling implies cessation of all ownership and associated rights.”

This is not always correct. There are several instances enshrined in law wherein the sales are made of ‘some’ rights, but not all. There is nothing that says that two people ‘must’ sell ‘all’ rights when they contract together.

Peter Cohen January 18, 2009 at 8:38 am

Kiba wrote: “I still stand by my claim that IP is unethical.”

I find that ironic in the extreme. There is a movement afoot here to legitimize your perspective, and the end effect of that is to enshrine in ‘libertarian’ principle, that you have the right to simply take, for free, the product of my labor and capital, simply because you have the technical means to do so. Libertarians who would champion property rights, as long as it is physical property that cannot be easily copied, would do the exact opposite for that which ‘can’ be easily copied. To assert that this stance is derived from one of ‘ethics’ is to me, utterly absurd.

Marcelo January 18, 2009 at 12:32 pm

[b]Peter Cohen[/b]

It is unethical to be on the side that favors the socialization of ideas because making a copy of an idea is not a crime. And to punish someone for making a copy is unethical.

ktibuk January 18, 2009 at 1:48 pm

“Newson wrote: “Selling implies cessation of all ownership and associated rights.”

This is not always correct. There are several instances enshrined in law wherein the sales are made of ‘some’ rights, but not all. There is nothing that says that two people ‘must’ sell ‘all’ rights when they contract together.”

Yes there is a concept called “renting” which I guess Newson is not familiar with. So this argument is only a matter of semantics.

Peter Cohen January 18, 2009 at 3:12 pm

Marcelo wrote: “It is unethical to be on the side that favors the socialization of ideas because making a copy of an idea is not a crime. And to punish someone for making a copy is unethical.”

The Lord of the Rings movie trilogy is not simply an ‘idea’. It is a billion dollars worth of capital and labor that the creators have every right to sell viewership to. You do not have the right to steal it simply because it is easy to do so.

Marcelo January 18, 2009 at 4:04 pm

Peter Cohen

Please come up with more strawman arguments. They are amusing. You should become a fan fiction writer.

Peter Cohen January 18, 2009 at 4:42 pm

Marcelo wrote: “Please come up with more strawman arguments.”

In what way am I using strawman arguments? Kiba for instance would assert that he has the right to copy the movie, Lord of the Rings. He would assert that it is ‘unethical’ (!!!) for Peter Jackson and company to try to stop him.

Marcelo January 18, 2009 at 6:17 pm

No, what you said was this.

You do not have the right to steal it simply because it is easy to do so.

Copying is not quoting. No one here is defending theft.

Marcelo January 18, 2009 at 6:17 pm

I meant stealing instead of quoting…

John Boyle January 18, 2009 at 10:25 pm

With zero intellectual property laws, it is still possible for, say, someone who writes a book to sell the book under the condition that the book a) be not copied and b) be not distributed to someone else except under this same condition. One can sell newly invented machines and drugs and everything like it under similar contractual conditions. The whole scheme that would make it harder for others to copy your work would be arrived at through perfectly voluntary contract between consenting individuals. I don’t think anyone here objects to voluntary contract-created “intellectual property”.

As far as I can tell, the domain of the debate over IP is, therefore: should copyright restrictions be imposed on people who have not voluntarily agreed to them? Should someone (call him Bob) who somehow gets an instance of contractually copy-protected work, who did NOT sign a contract agreeing not to copy such work, be forcibly prevented from copying it anyway?

To me, the answer is obvious: no. The only difficult situation is if the way Bob acquired the intellectual work involved some illegal means.

If Joe breaks into Coca-Cola and steals their secret formula, and then he writes it down on paper and gives that paper to Bob (assume Bob had no prior contact with Joe), is Bob allowed to use it as he wishes?

This is kind of a difficult question, and it’s related to questions about all stolen property. If B steals something from A and randomly passes it onto C (C had no prior contact with either B or A), can A demand it back from C? What if C has demolished it, taken it apart? Is C required to pay for damaging A’s property? What if C has traded it to D, who has traded it to E, and so on?

I’m thinking there are two possible solutions.
1. Once B steals something, it becomes his property. While A does have the right to demand some form of restitution from him for the act of stealing–and this restitution may include returning the stolen property if B still has it in good condition (by the way, I think punishment is a difficult and perhaps a necessarily ad hoc issue)–the stolen property is B’s from the moment he takes it. Therefore, if B sells it to C, or breaks it up and sells the parts to D through J, then A cannot demand his property back from the others.
2. When B steals something, it remains A’s property. Then, if B sells it to C, C does not really own the property; B is guilty of fraud in addition to theft, and A has the right to demand it back from C. And if C sold it to anyone else, he is guilty of unintentional fraud as well; and if he broke the property up and built other things out of it and sold them, then the situation is really messy, because all those pieces still belong to A, but now it’s nigh impossible to get them out…

I don’t like 2; 1 seems pretty elegant, and a lot more workable. Ok, I have now decided that, when you steal something, it becomes your property. (I repeat: the act of stealing it is a punishable crime, and if it’s in pretty unchanged condition, I would consider it a reasonable punishment for the previous owner to demand that you return it, plus possibly some other penalties. However, it remains the thief’s property until such punishment is exacted; you would be free to sell or break or otherwise mess with it in the meantime.)

I therefore conclude, in parallel: Suppose B does something illegal to obtain the information required to reproduce A’s intellectual work. Then, on the one hand, A does have a property-rights violation claim against B, and it might be a just punishment for B to be forcibly prevented from distributing copies of this information if he has not done so already. However, if B has already distributed copies of this information to C, D, and E, or if he does so in the future, then A cannot demand that C, D, and E refrain from using or redistributing more copies of this information. (A could say “Pretty please” and pay hush money to C, D, and E to hopefully persuade them to shut up, but A could not use force on them.)

To all of you who claim that zero intellectual property rights imply that the cost for copying someone’s intellectual work is zero… you’re wrong. For one thing, it is extremely easy to copy such things these days (e.g. patents) because those who have copyrights or patents on them post them freely on the internet, which they do because of currently existing IP laws. If those laws didn’t exist, the producers of such works would not post them on the internet, or at least they would require you to verify your identity and then sign a contract that said you would not copy it, before they let you load the page. (Perhaps you cannot imagine an efficient solution like that. Perhaps your imagination will be far outstripped by that of the free market.)

It’s like issues with free speech. There are certain kinds of speech that I find extremely unpleasant to listen to. So, are my rights being violated when others say extremely unpleasant things to me? Answer: Where are they saying these things? It has to be somewhere. If they’re magnifying their voices with big speakers and aiming them at my window, I might consider that a property-rights violation. If I’m at their house by their invitation, then my rights are certainly not being violated, unless they agreed to not say such things while I was there. If I’m at work with them, then it’s the responsibility of whoever owns the workplace to decide what behavior is allowed there and what isn’t.

People who don’t think about this, who don’t realize that offensive or hurtful speech has to occur someplace and that the rules can be whatever the owner of the place sets them to be, who think that laws about speech have to be the same everywhere, are forced to come up with a ridiculous ad hoc mishmash of an ethical system. (“Well, I support free speech in general, but surely kids shouldn’t have to put up with racial insults in school, and surely one shouldn’t have to hear loud profanity and insults on the street, although it’s certainly ok for people to use swearwords in normal conversation, and …, but …”)

Likewise, people who don’t think about where you would have to be in order to make a copy of an intellectual work (how do you, say, acquire a copy of a book without buying it or borrowing it from the library, both of whom could easily stipulate–some of which, today, stipulate–that you may not copy it? How do you copy the design of a machine without standing in a place owned by the person who owns the machine?) are forced to this ridiculous conclusion: if there isn’t an aggressively imposed law preventing people from copying certain things in certain situations, then there will be nothing preventing people from copying those things in those situations. This rests on the same line of reasoning as the idea that, if there isn’t an aggressively imposed law preventing people from saying certain things in certain situations, then there will be nothing preventing people from saying those things in those situations; it is just as fallacious.

Peter Cohen January 18, 2009 at 10:51 pm

You present two possibilities:

“I’m thinking there are two possible solutions.
1. Once B steals something, it becomes his property…
2. When B steals something, it remains A’s property…”

You then conclude that it is possibility number 1 that you find more workable and elegant and base the rest of your though upon that conclusion.

However actual law reaches conclusion number 2. If B steals something from A, and sells the stolen thing to C, The thing remains the property of A. If everyone is found out, A may demand the thing back from C and C’s only recourse is to sue B for restitution.

John Boyle January 19, 2009 at 5:15 am

You seem to have just restated solution 2, without giving any reasoning to support this solution, other than that it is the status quo. I don’t think that’s a good reason; if it were, then I wouldn’t be able to argue against the status quo on intellectual property rights either.

Can you justify solution 2 and tell me how it should apply in cases where, e.g., B steals something from A and then, generations later, a descendant of A demands that thing from a descendant of B? Or where B melts it down and combines it with some of his own property to make a product? Also consider the native Americans; do the descendants of those who were forcibly kicked out from their land have a claim to all the land we live on today? If not, why not?

Actually, after thinking about it for a while, I thought that perhaps it’s not the act of stealing something, but rather the act of destroying its original form, that makes the result into the thief’s property. That ethical system is functionally very similar to the system I stated as solution 1, where stealing something turns it into your property.

(Of course, the point where the original form can be said to be destroyed is kind of arbitrary–if all you do is paint it green, is it still the original owner’s property? What if you break it in half? What if you break it in half again? What if you glue one small piece of it onto something else? And what if you sell it to someone else? Etc. I think it’s cleaner if you simply say that the stolen property becomes the thief’s, and then the owner, in deciding on a punishment, can decide for himself whether he wants his stuff back or some other form of compensation. That would be kind of messy in some cases, though… as I mentioned, I suspect that proper punishments cannot be figured out a priori.)

Consider the situation where B sold the stolen property to C, who sold it to D, who sold it to E. E has made an agreement with D, paid money, and gotten something from D’s possession and put it into E’s own possession. Does E nevertheless not own this thing? I would hate to say no, although I could understand the response that E should have made sure that what he bought was not a stolen good (and ditto for C and D). There is cultural precedent for A having to buy it back from E, but… Meh, it’s hard to figure out, and the decision between these two ethical systems is not relevant here.

Regardless of whether B owns the property he just stole, he certainly owns the paper on which he writes down a copy of the information needed to produce an “intellectual work” like what he has just stolen. (You must either admit that or assert that, by stealing an intellectual work, B partially loses ownership of all of his property that could be used to copy what he just stole. I think that is kind of ridiculous, though I’m not absolutely eliminating the possibility.) If B owns whatever property he uses to make a copy of this information (including his brain and vocal cords), then he is perfectly within his rights to pass the information on to C through J, and each of them is perfectly free to pass it on to anyone else; the figurative cat is out of the bag.

Something else suddenly occurs to me. Just what do IP laws forbid you to do? You are allowed to memorize the contents of a book, presumably, but you are not allowed to make copies and sell them. Are you allowed to make a copy and not sell it? How about a partial copy? (See “fair use.”) It’s pretty arbitrary. I consider arbitrariness in the fundamentals of an ethical system–numbers or concepts that do not come from anyone or anything in the given situation–to be a damning flaw. So let’s see if the arbitrariness really is fundamental to the system of IP rights.

Is it arbitrary because the maker of the intellectual work has the right to prevent you from doing any kind of copying, but they voluntarily choose to waive most of that right? Could an author, in theory, decide that, for her next book, she is not going to waive her right to prevent you from mentioning any aspect of the plot to your friends? (Without that being stipulated as a condition of buying the book. Remember, once again, the IP rights that we’re arguing about is those that are not created by contract; I think everyone agrees that contractually created copy-protection is fine.) Could I decide, even though I have chosen to put this post where anyone with an internet connection can read it, to not waive my right to prevent you, the reader, from quoting any part of this post anywhere? Did Watt have the right to never allow anyone to duplicate his steam engine?

No. That’s absurd. Therefore, I think the theory of IP rights must rest on either some ridiculous empirical, ad hoc ethical system (“It is morally wrong to reverse-engineer and duplicate a machine you own, unless the design is 17 years old”), which I have already rejected out of hand, or on… utilitarianism. Hey, someone said that earlier. (“Utilitarianism” being the system where you assume that everyone’s happiness is a scalar quantity, and then you decide that anything that increases the sum of everyone’s happiness is morally allowed.) I reject utilitarianism, too. So I can’t see how one can ethically argue for IP.

Let me condense that into a question, then, to IP supporters: Suppose you say that IP is a natural form of property right, one that gives the creator of an intellectual work the absolute right to control the use of the information required to produce this intellectual work (even if the creator carelessly allows the information to spread around the world). How do you avoid the conclusion that anyone who gets a patent (or whatever form of IP-law protection), such as James Watt, would have the right to keep the IP rights for as long as he wants, and to pass them onto his children and basically have a perpetual, hereditary monopoly on this particular invention? How can you possibly justify giving them the monopoly, but only for X amount of time, with a natural-property-rights argument?

(It occurs to me that most of the second half of this post may have already been said in this thread. Which might be why this second half suddenly occurred to me. Oh well.)

ktibuk January 19, 2009 at 8:05 am

“I don’t think anyone here objects to voluntary contract-created “intellectual property”.”

You would be wrong John.

IP Socialists would claim otherwise because all they argue for is that they are entitled to other people’s fruit of labor.

RWW January 19, 2009 at 11:08 am

ktibuk, you’re being incredibly dishonest. I have only ever witnessed one commenter on the LvMI blog argue that a non-disclosure agreement, agreement not to redistribute, or any other contractual form of “intellectual property” is illegitimate. I vehemently opposed that view at the time and still do, and I’m sure Stephen Kinsella and others would agree.

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