My thoughts on IP and anti-IP tunnel vision

[meambobbo]

I’ll be brief - I don’t want to start a theoretical discussion. I simply want to point out a few things.

Nobody has really responded to my saying that labor used to create IP is scarce, other than to try to reduce it to a labor theory of value, which is not even true since the resulting product can be shown to be demanded (that means I give up $xx.xx in exchange) by a market economy. I’m not saying IP has ___ value, should be paid involuntarily, or even that our current IP law perfectly represents a market economy. It should simply be obvious, however, that a great bulk of IP is produced simply to create profitable market products.

There seems to be a growing prevalence for people to assume that absent the financial gains IP laborers receive for their work, nothing would change. This is pure stupidity. It is obvious that patent and copyright are abused, being granted for ideas that are fairly simple and could reasonably be stumbled upon by hobbyists or developed just for the resulting IP. However, the majority of IP does not fit these abused categories.

Most IP is developed by professionals and intended for mass consumers. Let me give you some examples: video games and Mac and Windows operating systems.

It seems to me in the anti-IP utopian fantasy this site has become dedicated to creating, that IP laborers will work just as hard under different business models which cannot produce a reliable expectation of income, if any. Also, the fantasy assumes IP laborers would create the same consumer-targeted products.

Looking at my examples, we have alternative OS’s - specifically Linux. We even have at least one specific variant designed for mass consumer use - Ubuntu. These products are free to use. Every hardware vendor could save money installing it over Windows.

So why do Windows and Mac still rule the OS market? Because Mac and Windows are designed to be user friendly to the mass majority of computer users. Their software developers are hired specifically to do so. The developers are working for bread, not necessarily in the pursuit of what they consider a great product. They may even be using Linux workstations to do their work, ironically.

Compare this to Linux. One study says that Linux would have cost $1 billion to develop in a traditional proprietary environment. In other words, it has had lots and lots of man hours put into it? Why? The answer is obvious. Those who wanted Linux decided to communally work to make it. Thus, Linux is more an operating system for developers than it is mass consumers. Those who labor on Linux wish to have a better Linux, not more money. If they end up getting some money out of it, even better. However, the brunt of the direction of development is in the direction the developers want to consume. They don’t want to compete directly with Windows market, because they don’t want Windows.

Ok, so now someone please explain a few things to me. What business model would allow entrepreneurial investment to direct IP labor towards satisfying consumer demands, while guaranteeing as much or greater income than current business models that rely on IP law?

It seems anti-IP cannot answer this question. They can only point out abuses, or make far-fetched claims like that we’d simply stumble upon such information anyway or that the equivalent of the “new socialist man” would appear and work simply for others’ benefit. They cannot tell me why division of labor would still be performed efficiently, even while forcing formerly pure IP developers into quasi-entrepreneurs, beggers, or part-time manual laborers.

Here’s a simpler question to answer - why would I work year-round with 2 dozen people to produce a video game that will give me less than a week’s work of entertainment, if not for the monetary gains derived from satisfying consumer demand, which are obviously larger if our product is allowed to be artificially scarce? It seems anti-IP would turn all video games into hobbyist mods of existing games.

[liberty_student]

@meambobbo

Here’s a simpler question to answer - why would I work year-round with 2 dozen people to produce a video game that will give me less than a week’s work of entertainment, if not for the monetary gains derived from satisfying consumer demand, which are obviously larger if our product is allowed to be artificially scarce?

You wouldn’t.

@meambobbo

It seems anti-IP would turn all video games into hobbyist mods of existing games.

It seems you insist that a world without IP would have the same products and demands it has now.

Maybe people wouldn’t have video games. Maybe they would play badminton. Maybe they would drink more. Maybe they would read more.

Maybe there would be fewer games. Or more simpler games. Maybe the frameworks would be open source, and people would make their own games.

You’re not going to be able to fit an IP world into a non-IP world. IP has totally distorted the market for creation and creativity. Things would be radically different.

[nirgrahamUK]

a lot of video games could earn money from in-game advertisement. (car manufacturers in grand-theft auto etc.)

a lot of video games could make money from a subscriber model.

the basic economic force of trying to compete with your competitors for the markets of your material products will lead companies that arent taxed to hell to invest in R&D to reduce their costs relative to their competitors and increase their quality ahead of their competitors. This is an obvious motivating factor that would direct funds for intellectual pusuits in an economic fashion.

even if scrapping IP would reduce capital accumuklation and technical advancement (which i dont believe) surely the ethical/coercion of supporting bizarre claims to ‘concepts’ and ‘patterns’ is enough to damn it as a bad idea. Even if slaves could be more productive than freemen (which they arent) this wouldnt make slavery a defensible moral position.

[AndrewKemendo]

@meambobbo

Ok, so now someone please explain a few things to me. What business model would allow entrepreneurial investment to direct IP labor towards satisfying consumer demands, while guaranteeing as much or greater income than current business models that rely on IP law?

It seems anti-IP cannot answer this question. They can only point out abuses, or make far-fetched claims like that we’d simply stumble upon such information anyway or that the equivalent of the “new socialist man” would appear and work simply for others’ benefit. They cannot tell me why division of labor would still be performed efficiently, even while forcing formerly pure IP developers into quasi-entrepreneurs, beggers, or part-time manual laborers.

Here’s a simpler question to answer - why would I work year-round with 2 dozen people to produce a video game that will give me less than a week’s work of entertainment, if not for the monetary gains derived from satisfying consumer demand, which are obviously larger if our product is allowed to be artificially scarce? It seems anti-IP would turn all video games into hobbyist mods of existing games.

It cannot answer it because it does not seek to guarantee anything. Remember, the entire point of what we talk about is to prevent monopolies and encourage liberty - not to provide system which will allocate goods and services; people can do that on their own.

You’re assumption is that people only work for capital reimbursement - yet you proved earlier that linux is obviously the proof of the opposite. Which one do you actually believe?

Why would video game development as a hobby be bad? Your assumption that MOST IP is developed for mass consumers is also incorrect and backward. In reality consumers find the products that are good and fit a specific need and gravitate toward that, not the other way around.

Again, the key here is liberty - IP opposes that.

[Thedesolateone]

@AndrewKemendo

the entire point of what we talk about is to prevent monopolies (and encourage liberty)

Just a quick off topic point, in general I’d say I’m only against enforced monopolies like that of government on force, or like those the government grants. Where the free market throws up a monopoly (very rare, but theoretically possible), I would be “for” this, so long as all exchanges were voluntary, and it did not initiate aggression against potential new entrants to the market. If everyone began to hate coke, and love pepsi, I’d have no problem with even 100% of the world’s cola consumption being of pepsi, so long as pepsi didn’t try and use force to preserve its position (etc).

[wombatron]

@meambobbo

So why do Windows and Mac still rule the OS market?

Windows, because MS has a chokehold on the computer hardware industry. Mac… well, Mac’s 8% market share isn’t that much better than Linux’s 2%, and both are demonstrably superior to Windows in almost every way. It has very little to do with actual market forces and a whole lot to do with the fact that Microsoft gets massive amounts of state privilege in the form of IP laws.

Also, your post doesn’t consider alternative business models. For example, Canonical, the company backing Ubunutu, provides the OS for free and sells technical support. They make a lot of money doing this. The backers of several other big distros also do this. Things like pay-to-play games and premium web services are similar.

On a side note, just because something is available for free doesn’t mean that there aren’t advantages to buying it. If I see a new CD from a band that I like, I will generally buy, because of both the generally higher quality and the fact that I want to see that band’s work rewarded.

[liberty_student]

Well, let’s not forget, that prior to strong IP enforcement on digital products, Windows got all of it’s initial momentum. If IP enforcement in the 80s was as it is today on digital goods, Windows might not have gotten off the ground.

[AndrewKemendo]

@Thedesolateone

Just a quick off topic point, in general I’d say I’m only against enforced monopolies like that of government on force, or like those the government grants. Where the free market throws up a monopoly (very rare, but theoretically possible), I would be “for” this, so long as all exchanges were voluntary, and it did not initiate aggression against potential new entrants to the market. If everyone began to hate coke, and love pepsi, I’d have no problem with even 100% of the world’s cola consumption being of pepsi, so long as pepsi didn’t try and use force to preserve its position (etc).

That’s not a monopoly. A monopoly is a producing entity which determines the terms on which individuals have access to their product by coercively disallowing competition - not just simply having a better product.

What you speak of is a really kick ass product.

[wombatron]

@liberty student

Well, let’s not forget, that prior to strong IP enforcement on digital products, Windows got all of it’s initial momentum. If IP enforcement in the 80s was as it is today on digital goods, Windows might not have gotten off the ground.

True.

[Spideynw]

@meambobbo

Nobody has really responded to my saying that labor used to create IP is scarce,

So what? IP laws distort rewards. People would still be rewarded for ideas without IP laws. No one has a monopoly on making tomatos. But they still do it, do they not? They just do not make as much producing tomatos as they would if they had a monopoly on it. IP proponents conveniently ignore the fact that people would still get rewarded for good ideas, they just would not get a distorted amount.

[Thedesolateone]

@AndrewKemendo

@Thedesolateone

Just a quick off topic point, in general I’d say I’m only against enforced monopolies like that of government on force, or like those the government grants. Where the free market throws up a monopoly (very rare, but theoretically possible), I would be “for” this, so long as all exchanges were voluntary, and it did not initiate aggression against potential new entrants to the market. If everyone began to hate coke, and love pepsi, I’d have no problem with even 100% of the world’s cola consumption being of pepsi, so long as pepsi didn’t try and use force to preserve its position (etc).

That’s not a monopoly. A monopoly is a producing entity which determines the terms on which individuals have access to their product by coercively disallowing competition - not just simply having a better product.

What you speak of is a really kick ass product.

Then we fully agree [:)]

[JackSkylark]

@Spideynw

So what? IP laws distort rewards. People would still be rewarded for ideas without IP laws. No one has a monopoly on making tomatos. But they still do it, do they not? They just do not make as much producing tomatos as they would if they had a monopoly on it. IP proponents conveniently ignore the fact that people would still get rewarded for good ideas, they just would not get a distorted amount.

Tomatoes do not become infinite goods after they are first discovered. Ideas, or digital products (like games, etc.) cost next to nothing to copy and distribute, thus there is a disconnect in the time before the product and after. Before the product, the game does not exist. The game must be designed and that design must then be executed, this requires time, labor, etc. Once the execution is completed the product can be reproduced infinitely. In this way, without some form of IP (free-market contract or some legal standing), there is no reward for the development of a digital product (or any other infinite good).

I want to stress the point that I am simplifying this scenario and treating the infinite good as the primary product sold by the developer or company and not some form of advertising or gimmick used to sell some other non-infinite good.

It is because of this I would argue that the development of infinite goods would greatly diminish in the absence of all IP.

I am writing this post in an attempt to remain value free in this analysis, thus I am not appealing to morality or some “correct” libertarian position. So, in fact, I am presenting a prediction.

[Thedesolateone]

@JackSkylark

Tomatoes do not become infinite goods after they are first discovered. Ideas, or digital products (like games, etc.) cost next to nothing to copy and distribute, thus there is a disconnect in the time before the product and after.

You misunderstand.

The ability to produce tomatoes, and the efficient ways of doing so become instantly infinite as soon as they are discovered; it is analogous. And indeed, it is a forceful argument; imagine if the arabs and egyptians had enforced IP - there would have been no population explosion etc, as only a few would have been allowed to use the new farming techniques - the idea of doing so was their intellectual property.

[liberty_student]

@JackSkylark

Tomatoes do not become infinite goods after they are first discovered. Ideas, or digital products (like games, etc.) cost next to nothing to copy and distribute, thus there is a disconnect in the time before the product and after.

This is precisely why IP is not property.

@JackSkylark

The game must be designed and that design must then be executed, this requires time, labor, etc.

Sure. But there are all kinds of activities that consume time and labour that might not find a buyer in the market (and thus have a value of $0).

@JackSkylark

In this way, without some form of IP (free-market contract or some legal standing), there is no reward for the development of a digital product (or any other infinite good).

But surely the creation of numerous websites and digital products that are not “for commercial distribution” undermines this premise. Not to mention, you are defining profit very narrowly.

@JackSkylark

It is because of this I would argue that the development of infinite goods would greatly diminish in the absence of all IP.

We already have open source goods being produced. In fact, more and more all of the time. IP on the other hand, just like any regulation, can only stifle the marketplace. So how one can argue that stifling the market increases it, seems counter-intuitive to me.

[hayekianxyz]

@meambobbo

Nobody has really responded to my saying that labor used to create IP is scarce,

So what? ideas aren’t scarce. You can dodge the issue and point out that your labour is scarce, but that misses the point. I can think of an idea, at the same time as you. And that’s why you can’t own an idea.

By the way, if I choose to take a really deep breath, that uses labour, it doesn’t mean I own the air because of it.

[liberty_student]

meambobbo is making a pseudo-LTV argument. I think I wrote on the Mises blog somewhere, people who argue for IP, have not completely accepted the subjective theory of value.

[kiba]

It seems to me in the anti-IP utopian fantasy this site has become dedicated to creating, that IP laborers will work just as hard under different business models which cannot produce a reliable expectation of income, if any. Also, the fantasy assumes IP laborers would create the same consumer-targeted products.

Strawman position and you lack understanding of the economics involved. Read the grand theory of infinte goods.

So why do Windows and Mac still rule the OS market? Because Mac and Windows are designed to be user friendly to the mass majority of computer users. Their software developers are hired specifically to do so. The developers are working for bread, not necessarily in the pursuit of what they consider a great product. They may even be using Linux workstations to do their work, ironically.

This have something to do more with momentum now. A suitable Linux OS should be usable for grandmas.

Compare this to Linux. One study says that Linux would have cost $1 billion to develop in a traditional proprietary environment. In other words, it has had lots and lots of man hours put into it? Why? The answer is obvious. Those who wanted Linux decided to communally work to make it. Thus, Linux is more an operating system for developers than it is mass consumers. Those who labor on Linux wish to have a better Linux, not more money. If they end up getting some money out of it, even better. However, the brunt of the direction of development is in the direction the developers want to consume. They don’t want to compete directly with Windows market, because they don’t want Windows.

Nonsense. There are lot of developers working on it because they get paid to do it. The linux kernel project is quite possibly one of the largest commercial free software project on the planet.

Ok, so now someone please explain a few things to me. What business model would allow entrepreneurial investment to direct IP labor towards satisfying consumer demands, while guaranteeing as much or greater income than current business models that rely on IP law?

It seems anti-IP cannot answer this question. They can only point out abuses, or make far-fetched claims like that we’d simply stumble upon such information anyway or that the equivalent of the “new socialist man” would appear and work simply for others’ benefit. They cannot tell me why division of

labor would still be performed efficiently, even while forcing formerly pure IP developers into quasi-entrepreneurs, beggers, or part-time manual laborers.

You sucks at thinking up business models. Look at techdirt and search through their archives for business models.

Here’s a simpler question to answer - why would I work year-round with 2 dozen people to produce a video game that will give me less than a week’s work of entertainment, if not for the monetary gains derived from satisfying consumer demand, which are obviously larger if our product is allowed to be artificially scarce? It seems anti-IP would turn all video games into hobbyist mods of existing games.

I already got 50 bucks for my first programming contract on video games. Without such copyright restriction on the game, I wouldn’t be able to work on it.

All your concerns have been addressed by real world examples and emperical evidences. There are thousand of business models that could work but was not tried yet and there are probably thousand of examples.

[Spideynw]

@JackSkylark

Tomatoes do not become infinite goods after they are first discovered. Ideas, or digital products (like games, etc.) cost next to nothing to copy and distribute, thus there is a disconnect in the time before the product and after. Before the product, the game does not exist. The game must be designed and that design must then be executed, this requires time, labor, etc. Once the execution is completed the product can be reproduced infinitely. In this way, without some form of IP (free-market contract or some legal standing), there is no reward for the development of a digital product (or any other infinite good).

Of course there is, you are just denying reality. Console games cannot be downloaded. Granted, other companies would probably reproduce a good game that they did not invent, but they would probably add or change the content of the game to try and make it better. So you would have hundreds if not thousands of companies churning out better and better games. Companies would keep trying to make games better, rather than just trying to invent new games.

[JackSkylark]

I find it hard to believe that having a legal backing to “I made this, make your own” stifles the market. Sure, go ahead and imitate, but direct copying I predict will drive down the time and labor spent in research and development, leading to a slowdown in innovation in anything that would now be an infinite good. I believe we would see a shift away from the technology sector into the material goods sector of the economy.

[JackSkylark]

@Spideynw

Of course there is, you are just denying reality. Console games cannot be downloaded. Granted, other companies would probably reproduce a good game that they did not invent, but they would probably add or change the content of the game to try and make it better. So you would have hundreds if not thousands of companies churning out better and better games. Companies would keep trying to make games better, rather than just trying to invent new games.

You moved away from the limits of the constructed arguments in your first two sentences. You say “console games can not be downloaded”, and I say “I am only talking about goods that would become infinite in supply without IP.” This is a very important assumption, which acts to overlook any company based copy protection.

Do you know why you go into a electronic store and buy a game for 50$? Because that is what a single company needs to sell their game in order to get a return on the investment they put into development of the product, also the are competing with various other games, etc… Anyways, putting out your game (without any form of IP, meaning your digital good enters into unlimited supply once it hits the market) would now, after a few purchases at 50$, be reduced to a market price of 0$ (once again assuming this is the primary good sold, so as to deflect the business model argument) – Obviously, the investment put into the development of the product would not be repaid, and as such the company will most likely see no use in continuing any sort of development within a market which creates infinite goods.

Based on this, I don’t see (in the absence of IP) much investment of either time or resources (outside of hobbyests, and people getting 50$ for messing with a game engine, i.e. people who really enjoy working in these areas) in the development of a good with an infinite supply. Perhaps this is a good thing, I’m not arguing that. I am only arguing what would happen to that area of the market.

another option, and probably a good counter example, would be company based copy protection (license keys, online registration, etc.). But I am excluding these examples for the sake of argument and will only be introduced if need be.

Once again, I am not saying this is good or bad, but rather what I believe would happen to the market for infinite goods, in the absence of any form of IP.