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Source link: http://archive.mises.org/9750/advanced-thinking-on-intellectual-property/

Advanced Thinking on Intellectual Property

April 7, 2009 by

One of the most important recent advances in libertarian theory has come in the field of intellectual property. Several writers, Stephan Kinsella most notably among them, have argued that patents and copyrights should not form part of a proper libertarian law code. These writers modify and extend the work of Murray Rothbard, who allowed copyrights but not patents. FULL ARTICLE


Eric April 7, 2009 at 1:00 pm

Software patents! I saw signs over in Europe demanding their dismantling.

Ah but the good old days of early software development. Nobody expected to be able to patent their algorithms, everyone simply understood this is the way it goes. We had user group meetings where code was shared. The reward was recognition. Few people even know that software patents are relatively new in government. In the 1950′s through 80′s (I forget the exact year software became patentable) you couldn’t patent software at all. And did the world stop spinning? Did software not truly have explosive developments in the beginning? What we get after software patents is vista! Nothing really new and exciting.

There’d be no Mac, Windows, or even X-windows (unix/linux) if there’d been patents back then. We’d all be strugging with smalltalk ideas, and likely forbidden from even implementing the ideas as the language itself would likely have been patented.

Can you imagine if the array, or linked lists, or even random access had been patented.

I myself, had written a pseudo device driver that made core memory simulate a tape drive. I got the idea from another programmer who simulated a buffered printer using a pseudo device driver. This might have been one of the first ram-disk (actually ram-tape) types of systems created. With suitably ugly patents, I might have strangled the computer industry for many years. And I was no expert – I just like to read other people’s code – but we all shared our results. It was truly beautiful before patents.

No wonder people are fighting back; with war chests full of spurious patents, people are fighting patents with patents. If the open source community can acquire as many patents as it can (and license them for free) it hopes to forestall the otherwise stagnating affect of software patents. This is the free market of ideas fighting back.

Barry Loberfeld April 7, 2009 at 3:51 pm

Copyrights, patents … what about trademarks? Can I just slap that (UL) on my product? (If this has been discussed before, please link — thank you.)

Barry Loberfeld April 7, 2009 at 4:20 pm

“They will say that libertarians dogmatically disregard consequences, insisting on principles at whatever cost.”

Indeed, do libertarians? Consider:

Published in the June 1999 issue of Liberty

Anarchy, State, and Morality

by Barry Loberfeld

I don’t want to argue the point. Okay, so libertarianism’s Mises-Hayek flank is waxing as its Rand-Rothbard flank is waning. Fine. I’m not even going to ask about the difference between a “general moral principle” and a “moral imperative.” What interests me is what this development of the consequentialist vs. natural law conflict means for another dispute that has divided our movement — minarchism vs. anarchism.

The former was responsible for the latter. Ayn Rand first stated the natural law position in terms that no one could mistake: No man has the right to initiate the use of physical force against another man — which, we were told, left us no ethical alternative to limited government.

Now this didn’t seem to cause too many people too many problems, at least not until some skinny kid named Roy Childs came along with an “Open Letter to Ayn Rand.” With the boldness of youth, he challenged her to resolve the “contradiction in Objectivism”: How could a (so-called) limited government maintain its existence, i.e., its “monopoly on the use of retaliatory force,” without initiating force against others, viz., competing private agencies of retaliatory force (e.g., free-market police corporations)?

Rand responded not by answering but by excommunicating. Childs’s subscription to The Objectivist was canceled, his name removed from the mailing list, and his money (“the unused portion”) refunded. This evasion was the “official Objectivist” line right up to Objectivism: The Philosophy of Ayn Rand (1991), in which Rand’s “intellectual heir” Leonard Peikoff, while purportedly confronting the question of “anarcho-capitalism,” failed even to recognize (let alone rebut) Childs’s point (pp. 371-3). So for many Rand-flank libertarians, the choice was clear: Join Childs in embracing anarchism or share a hole with an ostrich.

Unless, that is, a minarchist government is not initiating force when it stops a man from essentially taking the law into his own hands on the pretext that he himself constitutes a “free-market defense agency.” “Private force,” observes Harry Binswanger (an Objectivist who did confront Childs’ point), “is force not authorized by the government, not validated by its procedural safeguards, and not subjected to its supervision. The government has to regard such private force as a threat — i.e., as a potential violation of individual rights. In barring such private force, the government is retaliating against that threat.”

But let’s look past Childs’ line of reasoning to check its very premise: Can one ever coerce? Well, look at it this way: Can one ever lie? Yes, according to Peikoff himself: “The principle of honesty, in the Objectivist view, is not a divine commandment or a categorical imperative. It does not state that lying is wrong in itself and thus under all circumstances. . . . Lying is absolutely wrong — under certain conditions” (p. 275). But under other conditions, it is absolutely right. And the truth is that we all recognize this and are all aware of these conditions, from the trivial (“Honey, ya look great!”) to the vital (“Nein, Kommandant, keine Juden sind hier.“).

Now would one really care to claim that this approach undercuts the principle of honesty per se? Could it legitimately be mocked as saying, “Never lie! Unless, of course, you really need to lie . . .”? Are we to concede that if you can lie to the Gestapo, you can lie to anyone? To answer affirmatively would be no less absurd than assenting to the notion that one must let go of the flagpole he has grasped to break his fall if the owner comes out and demands that one do so (or whatever the scenario was). The point is, what holds for the principle of honesty holds for the principle of liberty. To my mind, the real “contradiction in Objectivism” was Rand’s welding of an intrinsicist valuation of noncoercion (though she did not recognize it as such) onto a contextual theory of value. Rand reasoned that because principles must be applied contextually, in some cases it may be moral to lie. But, she insisted, under no circumstances whatsoever can one “initiate force.”

And the upshot of all this? For one thing, it transforms Childs’ argument into (and thus buries it as) a reductio ad absurdum of Rand’s ideas about the noninitiation of force.* For another, it brings a measure of sense to the distinction between a “general [i.e., contextual] moral principle” and a “moral [i.e., categorical] imperative.” It also enables us to transcend the tired contraposition of John Stuart Mill (who championed the “one very simple principle … [t]hat the only purpose for which power can be rightfully exercised … is to prevent harm to others”) and James Fitzjames Stephen (who raised contextual questions of “time, place, and circumstance”).† But most of all, it means that we don’t have to throw the baby of principle (natural law) out with the bath water of intrinsicism — and then adopt pragmatism. It is nature that generates (or “legislates,” if you will) the contexts within which human action occurs — including both general conditions and “special situations”; it is the convention of intrinsicism that arbitrarily denies that distinction.

And pragmatism, as Peter Viereck used to say, just isn’t pragmatic. How can we “go with what works” when we don’t know what we’re supposed to be working for? Am I the only one who remembers Rand’s example of the college class who preferred a society in which all are equally salaried over a heterogeneous society whose “poorest” member earns more than a member of the other society (The New Left: The Anti-Industrial Revolution, p. 171)? How would a consequentialist, following Mises, respond? Could he say anything more than “Stick with socialism, if that’s your goal”?

It is wiser for us to define a context for the morality of noncoercion than to jettison morality altogether. I’m not willing to tie the market for liberty exclusively to the market for bigger bathtubs: Those who forget the history of laissez-faire advocacy are condemned to repeat it. Ah, but what if a contextually-applied noncoercion principle ruled out not only anarchism but minarchism as well? Then good: I don’t believe in putting the cart of politics before the horse of ethics.

All right, so I did argue the point.

* Childs himself eventually came to acknowledge the absurdity of anarchism. In an unfinished essay in the posthumously published Liberty Against Power (1994), he conceded that he had “never written anything about how free market anarchism would work.” It was apparently the forever-fluid nature of this ideal that ultimately crystallized his “conviction that anarchism functions in the libertarian movement precisely as does Marxism in the international socialist movement: as an incoherent and therefore unreachable goal that inevitably corrupts any attempted strategy to achieve it” (p. 181).

† Definition should have also been a focus for Stephen: His “compulsion” does not appear to distinguish between initiated and retaliatory force.

David C April 7, 2009 at 6:51 pm

Another frontier I’d like to see more explored is spectrum. The current theory was that spectrum usage was becoming unworkable, so people started using the courts to create a defacto property system and then the government came in and imposed the FCC and state managed spectrum – screwing it up even more.

However, I argue that if there remained no spectrum rules at all, not even the court interference, that the market would have overcome the stress caused by spectrum sharing with new technology. The belief that two people can’t use the same frequency in the same space is a myth, not backed up by physics. In fact, when the FCC opened up some tiny slices of the spectrum to have no rules at all, people started putting chordless phones on it, and wi-fi802.11b on it. At first there was a lot of interferences and annoyances, but as time when on the technology overcame that so that large number of things could communicate in the same space in the same frequency group without stopping communication.

Notice how all the innovation is happening on the tiny slices of spectrum where there is no government regs and no property system at all, and we all use it successfully every day for our wireless internet and chordless phones. Isn’t the free market trying to tell us something here?

kmeisthax April 7, 2009 at 11:25 pm

Welp, the problem I see with the FCC and the copyrights and the patents, boils down to a category mistake. Specifically, the idea that non-rivalrous goods like knowledge can be turned into property and owned like rivalrous ones. This is absurd, really… The idea behind the free market is that it’s a method of allocating scarce goods given people’s preferences and tradeoffs. So when you have something that’s not scarce – something that people are willing to share, like information – the market eventually gives a price of near-zero and a quantity of ‘whoever wants it’.

Here’s a practical example: some piece of information or code X that people want to pay for. In the initial sales, prices are high since only a few people have X and are willing to share. Over time, however, as more sales are made more people are willing to share that information and the price quickly falls. Artists get their first fruits of the market by virtue of being the only seller for a short period. Once the price has fallen, everyone has it already and the artist has a greater incentive to produce more then to continue producing the same stuff.

Note that this is not taking into account shipping costs for shelf goods. In the case in which the information product, such as a CD or DVD, is being sold physically, the price can fall no further than the cost of making and pressing the disc. For example, most GNU/Linux distributors charge a few dollars; most of that just being the expense of pressing and shipping copies.

Even more practically is that copyright laws are being increasingly ignored on personal levels. That strange ‘Youtube Poop’ video you just saw of old cartoon footage being rearranged for comedic effect is most certainly not licensed by the original copyright holder. Neither is your giant music collection on your computer or your music player. And I think there are a few patent trolls that would like to have a word with you about your unlawful use of hyperlinks and software updates. In fact, if you had to count for copyright and patent law on every single action or transaction you ever did, you would find it very hard to remain in compliance.

Some anti-copyright activists see the costs of the current system but fail to see the reasons why there are costs. So they propose good things like copyright term reductions and limitations in scope, only to then go on to say that the government would have to increase funding for research or create new programs. The faulty reasoning lies from the idea that, since knowledge is a public good, that the government must produce it. Saying that governments are the only people capable of funding and producing public goods ignores their horrid track record of producing said goods.

Please correct me if I have erred in my reasoning.

ostralion April 8, 2009 at 1:45 am

Here is something else to think about- Brand name monopolies. An article in ‘the Australian’ warns us about using the adjective ‘Monster’ on anything! A Californian company, Monster Cable Products Inc.,is suing anyone else to stop them using the word in any advertising. It even sued Walt Disney over products tied to the film ‘Monsters Inc.’
Seems more like Monsterous to me!

MichaelM April 8, 2009 at 9:39 am

@ Barry Loberfeld,

Splendid article, but for this:

Rand reasoned that because principles must be applied contextually, in some cases it may be moral to lie. But, she insisted, under no circumstances whatsoever can one “initiate force.”

To the contrary, Rand did allow for the initiation of force in the context of emergencies. An emergency initiation of force would be any act that initiates force to preserve one’s life when the failure to so act would imminently result in one’s death — a result that would directly contradict the purpose of defining and exercising the principle in the first place.

That is to say, non-initiation of force is a moral principle that serves the standard of life as one’s highest value. In any case in which upholding the principle would result in one’s death, one may not hold the principle to be a higher value than one’s life.

MichaelM April 8, 2009 at 11:17 am

Boldrin and Levine, though quite sympathetic to the free market, are neither Austrians nor libertarians, much less natural-rights libertarians of Rothbardian views. They are mainstream neoclassical economists and their ethical views seem, broadly speaking, to be utilitarian. Arguing strictly on consequentialist grounds, they oppose intellectual property.

The only valid context in which utilitarian/consequentialist grounds may obtain is in the choices of individuals of what is best for themselves over the long-run of their lives as human beings. The anti-IP crowd seek to usurp the autonomy of individuals over the product of their mind and actions. All of their arguments supplant the individual creator’s definition of “benefit” with their own. It is once and forever the morality of theft, the politics of statism.

The right to property is not a right to entities themselves. There is no ethical principle deriving from the nature of man that can establish a moral claim to control an entity in the absence of any application of ideas and actions to it. A property right is the right to control the use of unowned entities because they are the repository of the product of an autonomous application of ideas and actions to existence.

When someone creates an application of an idea to an entity that previously did not exist, only he has a moral claim to benefit from whatever potential position that application can generate in the value hierarchies of others, because that position is a direct result of his and only his actions.

By what moral standard does anyone else claim the right to decide that “some” of its potential benefit is sufficient and the rest must be transferred to the public domain? There is no such standard.

Consequently, all property rights are rights to intellectual property that exists in two different states: unembodied and embodied. Denial of one denies the other.

Wes Bertrand April 8, 2009 at 1:56 pm

Some premises need to be checked here. It is NEVER moral to initiate force. If it were moral, it would immediately beg the question of what happened to the rights of the recipient of the initiated force. Morality is objective, as Ayn Rand wisely noted, and universally applicable to all reasoning creatures. What MichaelM’s post is advocating, though probably not intended, is the law of the jungle–basically might makes right, and ~my~ individual good trumps ~your~ individual good–which is a direct violation of the law of non-contradiction (and of human rationality). Such a creed lies at the core of the ethical doctrine of sacrifice–in this case, sacrificing others for the sake of self.

Even life-boat situations don’t allow for the sacrifice of other individuals for the sake of oneself. Yet this perspective is no different in principle or in practical terms than the tenets of Marxism (following from Kant and Plato), in which some individuals must be sacrificed to the collective (i.e., other individuals), not just in lifeboat situations, but as a way of life.

Government, being a coercive monopoly of “legalized” force, consists of individuals who seek to implement the ethics of sacrifice on a daily basis. The mafia with a flag (let alone the mafia) cannot respect individual rights. The early Childs should have kept true to his suspicion of Rand’s contradictory premise of government.

As for so-called intellectual property (and the myriad “laws” enforcing IP), it’s another a manifestation of our age of pre-logic–clearly fostered by our mixed economy and pervasive governmental education system. IP is but a subset of the protectionist and extortion racket called government. Property entails the freedom to use something (whether tangible or intangible, embodied or unembodied) without conflict with others. Property is delimited via first possession (and use) and by negotiation and consensual transfer. Duplication of various property in the marketplace of ideas, goods, and services (or imitation, as Boldrin and Levine refer to it) creates no conflict when no fraud or force is involved. And as the authors noted, it creates more capital and increases productivity (minds are no longer hindered by other minds in creating more things).

Here are a couple paragraphs concerning this from the chapter “Ending Modern-Day Letters Patent” within my book Complete Liberty:

“The notion of property of the intellect existing in the marketplace, however, is basically a contradiction in terms. As outlined, property is something that’s claimed, used, and possessed as an extension of self-ownership. Property rights ultimately mean the freedom of action to use and/or dispose of certain owned items and to do various things in relation to them. Property rights do not mean the freedom to prevent others from duplicating what you own, unless that duplication creates conflict of usage and possession of your property, as in identity theft, which involves fraud (which we’ll deal with in detail later).”


“At some point a few thousand years ago, the wheel was invented. If those in the Galambos’ school had their way back then, we’d all be paying royalties to the legally declared heirs, the descendants of the wheel inventor, every time we turned a wheel. Many of us would thus try to use our wheels surreptitiously, only rolling them in the darkness of night. Others might settle for less suitable polygons, such as decagons or even dodecagons in order to avoid royalty payments. Envision this scenario in a marketplace of billions of brains, each creating and declaring things to be their own intellectual property, and you can begin to fathom the deepest meaning of legal chaos, confusion over ownership, economic distortions, slowing of innovations, as well as rights-infringements.”


MichaelM April 8, 2009 at 3:45 pm

It is NEVER moral to initiate force. If it were moral, it would immediately beg the question of what happened to the rights of the recipient of the initiated force.

The moral principle that mandates individual autonomy in the service of life is the source of the political right that mandates abstaining from initiating force. They are not identical — one is a moral principle, the other, its political application. The latter is the extension of the former in the individual context into the context of a society of individuals. When that extension becomes itself a negation of one’s life, it ceases to be applicable. You are attempting to make the principle an end in itself.

And, in fact, it is the application of it independent of context that would violate the rights of the recipient of such force, because that recipient needs the right to use force in such situations for himself. It would therefore be irrational for either or both to support an objectification of rights that could not accommodate the rare emergency use of force to preserve one’s life.

By “accommodate” I mean, the user of force in an emergency would be morally and legally obliged to surrender to the system of justice asap and willingly accept its decree for full restitution for the recipient of the force and/or appropriate punishment, in order to restore the full force of his own rights.

Your attempt to make this principle extendable to the status of collectivism ignores the word “emergency” and the clearly stated requirement of the condition that but for the act the user of force would be dead. Its application is inherently in a specific, definable context that is temporary and rare in the extreme parallel to Rand’s ethics of emergencies in the context of risking one’s life to help others in danger of imminent death.

MichaelM April 8, 2009 at 5:54 pm

“Property is delimited via first possession (and use)”

The right to life is the right to autonomy over one’s thoughts and actions exercised to maximize one’s life. The concept, property, recognizes that such autonomy implicitly and logically extends to include their product. Thus while human beings do not own entities of physical existence that they did not create, they do own the value added to entities by the application of their ideas and physical actions.

This does not preclude first possession and use from establishing property as long as that which one first claims to possess is solely the improvement to the entity in which it is embodied. Absent any application of a creative act of improvement, first possession is nothing more than an arbitrary claim bereft of any ethical basis.

MichaelM April 8, 2009 at 6:20 pm

“At some point a few thousand years ago, the wheel was invented. If those in the Galambos’ school had their way back then, we’d all be paying royalties to the legally declared heirs, the descendants of the wheel inventor, every time we turned a wheel.”

This statement confuses intellectual property with physical property (embodied applications of intellectual property). The ownership of physical property may be passed on to descendants without limit, because each succeeding recipient must invest ideas and action to sustain its value. Thus they earn the right to retain it.

Intellectual property requires no effort to sustain its value, and therefore may only be held exclusively by its creator and heirs only long enough to assure value to the creator. Rand suggested IP be guaranteed until 50 years after the death of the creator to guarantee value to a prospective buyer in the event he would die shortly after closing the sale.

Peter April 8, 2009 at 10:11 pm

There’d be no Mac, Windows, or even X-windows (unix/linux) if there’d been patents back then.

And, FWIW, there’s no “X-windows” now. It’s just called “X” (or “X11″, or “the X Window System”, which is parsed as “Window System named X”, not as “System named X Window(s)”)

Mike April 9, 2009 at 7:52 am

The way I see it, the creator of a products owns that product until he sells it or gives it away, regardless of whether it’s a physical product like a chair or mp3 player, or a written product such as a novel or article.

Imagine the following scenario: A writer submits a novel to a publisher, then said publisher prints and sells a million copies and never pays the author. Clearly this is theft. The only objection can be if the author owns the novel until selling or contracting with the publisher.

What’s important to remember – what many seem to forget – is that the ownership only applies to the specific work, not the general. George Lucas can’t own the space fantasy in general, but he can own Stars Wars specifically. Apple can’t own the idea of the mp3 player, but they can own the iPod.

The argument that copyrights should be denied due to limiting advancement is absurd. “Society” does not have a “right” to “advancement”. It might benefit genetic diversity to allow anyone to breed with anyone, but that doesn’t eliminate personal freedom of choice. The foundations of society are individual freedom and property rights.

Per-Olof Samuelsson April 9, 2009 at 8:43 am

Barry Loberfeld: “Rand responded not by answering but by excommunicating. Childs’s subscription to The Objectivist was canceled, his name removed from the mailing list, and his money (“the unused portion”) refunded.”

I’ve heard this story, too, but is it true?

The reason I ask is that I once heard Miss Rand answer a question about it in a Q&A session, and she said 1) that she did not handle subscription matters personally, and 2) that people were allowed to question anything and object to anything, as long as they were not nasty about it.

Also, I read recently (unfortunately, I don’t remember the link) that Childs met with Ayn Rand some time after he published his “open letter”, but that he abstained from taking it up with her. Well, that’s a pity – Ayn Rand may have talked him out of this idea.

Per-Olof Samuelsson April 9, 2009 at 8:56 am

Michael IM: “To the contrary, Rand did allow for the initiation of force in the context of emergencies. An emergency initiation of force would be any act that initiates force to preserve one’s life when the failure to so act would imminently result in one’s death — a result that would directly contradict the purpose of defining and exercising the principle in the first place.”

I think her example was something like you are starving, and for some reason there is no other way out than stealing some food. But then you should be prepared to pay the owner back later. (Not a terribly realistic example, but it serves to illustrate the point.)

BWM April 9, 2009 at 12:41 pm

I know of many software patents, but that aside, software isn’t even a fair case to consider. For example, my Adobe Acrobat probably would do fine without a patent or copyright, because I WANT the Adobe version, due to it’s frequent updates and whatnot, over some knockoff. This is quite different from, say, a drug, where GlaxoKlineSmith might spend over a million dollars to create it over several years, and Pfizer would be more than happy to buy it the day it’s released, figure out how to make it, and have a competing product for a fraction of the price. Even worse would be situations in which, saw, John Smith invented a new machine and began selling it in Little Rock, Arkansas. Before he even managed to get it advertised in half the state, GE swoops in, buys one, and replicates it. GE, having factories, a marketing department, ready delivery services, and a worldwide brand name, could easily release a similar or even superior product for the same or a lower price. Austrians especially, since their definition of monopoly is less about the actual state of things and more about barriers to entry, should support limited and logical patents and copyrights for exactly these reasons.

And we shouldn’t even have to look at copyrights; if a man writes a book and submits it to HarperCollins, who refuses it and then turns around and starts printing a copy they made of the manuscript, come on! Or even if others buy a first edition from a small company, copy it, and release it nationwide, come on. The publishing company could be blamed somewhat, but the author is the one who gets screwed, especially with the internet making it easy to steal.

New York Properties for Sale January 8, 2011 at 8:32 am

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