<< What, if not supply and demand, will determine the prices that are settled upon? >>
The willingness of the two parties in question to agree on a transaction.
<< Yes, but this contradicts what you just said about supply and demand. >>
Where is the contradiction?
I am saying that the two parties can contract any price they want regardless of what all the other customers and suppliers do. If the customer backs away, the supplier can then offer a lower price (or free car floor mats, an extra year of product guarantee, a free cell phone, free call display, etc. etc.) to bring the customer back to the table. The customer can demand more too.
Granted, the willingness of a party to bargain up or down will be affected by how readily there are other customers and suppliers who are willing to spend more or less. The behaviors of the customer and the supplier are not bound to follow any curves on a hypothetical graph.
The dichotomy you present illustrates the truth of private property versus intellectual monopoly laws:
Actual property rights are a fact. They exist whether defended or not. If your government wants to use a tree for firewood, your neighbor wants to use it to build furniture, and you want to keep it alive and harvest the nuts it produces every year, SOME decision has to be made…and who makes it has the property rights.
As Jefferson noted, this can never apply to ideas. There is simply no such thing as “intellectual property” in the state of nature. It can never be anything more than government imposing censorship through a monopoly grant. A bard singing a song at a campfire can never impose his “ownership” of that song on the people hearing it, without government coercion.
The only real “intellectual property” is privacy, and that is naturally enforcable, like other property rights.
David Friedman discusses law in terms of supply and demand for different sets of laws. I don’t mean this as an appeal to authority, but to clarify because I am not sure if we’re disagreeing or just putting the same thing a different way.
So the price settled on by James and Frank will hardly be independent of what other people do. On the contrary, it will be largely determined by what other people do. (This is not controversial, at least to me… it happens in all industries. The amount I pay the hotdog vendor is largely determined by what other people do… we call it supply and demand.)
Is there a disagreement between us?
In your scenario, could we expect the amount that James and Frank (or their law brokers) settle on in RandLand (where 95% of the population are IP advocates, so support FrankComposer) to be different from the amount James and Frank settle on in KinsellaLand (where 95% of the population are anti-IP, so support JamesCopier). If so, why?
No, there is no disagreement. I just want to present an analysis independent of whether there is a lot of people involved or whether there are just a few. My intent was to present a scenario that could convey how anti-intellectual property law can be practiced beside a pro-intellectual property law.
Yes, I would expect the two settlements betwen RandLand and KinsellaLand to be different only because the suppliers could turn away customers and still financially survive.
Mainly, I left it out for simplicity because in my example, there were very few actors involved. I also wanted to convey the reality that the package of security or insurance coverage can be customized.
Not that it matters but I tend to be absolutist a lot – usually whenever it suits me. So, we can define a market any way we want. We can exclude any other elements of the economy. We can limit our analysis in space as well as in time. Thus, when analyzing a particular transaction, we can not be certain that anything else matters or is actually occuring.
In simple terms, we can limit our analysis to between time 13h00m00s and time 13h00m01s which negates any practical existence of the rest of the market. The presumption being that at the time of the transaction, nobody else had enough time to do anything different.
We can also limit our analysis to a very confined geographic area – say, your own house.
I point this out because all markets we analyze are limited. Very rarely do people consider what is excluded.
In regards to your first question, how easy would it be to prosper in this world if you were a known thief? Who would want to contract with you? Also, how dangerous is it to steal from someone else? Those are the two main reasons why most people don’t steal today and why they would not steal in a government free society.
As to copyrights, there would be no reason to not copy music. There is nothing inherently wrong with copying public content. No one owns public ideas. That is why there is so much media copying going on today. EXCEPT for government, there is no inhernet danger for copying without permission. Whereas when stealing the property of another, like a car, there is a lot of danger of that person coming after you, even in a government free society. I could however see a case made for the danger of hacking the computer account of someone.
Firstly, I think most libertarians define “free market” as excluding violent interactions, and use “market” on it’s own in a more neutral way. A “hampered market” or a “monopolised market” (aka a monopoly) would be the term for a market where there is some violent interactions - still a market. So the term market here would be neutrally defined as: a particular pattern of interpersonal exchanges. (The same definition as “society”, but with a narrower connotation.)
But now on to the more interesting point, that I have been thinking about a lot recently.
We define a free market as a pattern of interpersonal exchanges where ownership is determined by law codes based on libertarian principles (homesteading and voluntary exchange). This works very well for every kind of good/service/industry except one: the law code industry itself. To assume libertarian principles here - what we would normally call a free market - is to define the law code industry out of existence, by the unfortunate use of semantics.
If we use our usual definition of a free market in the law code industry, then “a free market in law codes” is plainly a contradiction in terms. So is “a monopoly of the law code industry”, since a monopoly is defined with reference to the libertarian principle of aggression. But these are our definitions of anarchy and the state, respectively! What is going on here?
Well, I think at this level of analysis - examining the law code industry - it actually doesn’t make any sense to talk of a state, or anarchy. There is just a market for law - with consumers and producers, supply and demand, etc. Our usual descriptors (“free”, “hampered”, “monopolised”) do not apply to this market. There is only a bunch of courts that have varying amounts of bargaining power. It just so happens that at present one court agency, which we call the State, has so much bargaining power that it is able to enforce the following remarkable law: “nobody else can supply law in territory X”.
So, to rescue our definitions… a “free market in law codes” (aka anarchy) we can define as a market where no one court agency is able to enforce a law preventing entry into the field of producing law codes (i.e. the establishment of a competing courts). A “monopoly of the law code industry” (aka a state) would be the contrasting situation where one agency is able to enforce this law, because it has acheived such great bargaining power, relative to other courts.
I am not sure thinking in terms of supply and demand will help because we are not dealing with a uniform service or product. There really is no supply or demand. There is just a few people (customers and service providers) who bargain amongst eachother to arrive at a price. They haggle over what the final product will be too.
An enforcer of justice only has so many bodies to be in so many places at once. If ten people come to him looking for justice each day, he can only take on one case. It will cost more to hire and train judges to rule in his stead, and the people who come looking for justice will have to pay more for it. There is your supply and demand.
As for the definition of a market, a market is any exchange of goods concluded between two parties. If a judge receives something in return for his rule, that is a market for justice.
I personally believe the non-aggression principle emerges naturally from human action and exchange. People who attack the physical property others will face the legal consequences of there actions. People who attack the physical property others because they believe their intellectual monopoly “rights” have been violated will still face the legal consequences. IP has nothing to do with naturally emerging property rights, it has it’s orgins in the state, where as physical property predated the state.
As for property rights as agressive force… I see nothing violent in acquiring ownership in land/resources previously unowned. When unowned land is acquired there is no victim, thus no crime. Also when labour/land/resources are traded there is again no victim, only those who benefit from the exchange. Thus enforcing property rights is not violent, but defensive. Usurping owned land and stealing owned resources however is pure aggression, thus inconsistent with natural rights.
There are some situations where use or threat of aggressive violence seems to increase one person or group’s “bargaining power” vis-a-vis other persons or groups. States, by definition, cannot continue to exist without continued use or threat of aggressive violence.