You admit that the product of your labour is not scarce, and only IP can make it scarce, and thus retroactively add value to your labour.
Bzzzt wrong. There are many PC games made now where most of the fun is had through online games. You cannot get onto the servers without a key, which are all unique. World of Warcraft is a good example. People could copy it all day long and still not be able to get onto the server. Perhaps the incentive to create actual video game systems would go down, maybe it wouldnt. I suspect companies would adjust and find a workable solution without IP.
Music is another area that seems like it would be fine without IP. Musicians make most of their money through concerts anyway, scarcly much at all off IP related sales. In a free society, record contracts would probably be more akin to advertising contracts.
I’m going to try to reply to everyone at once. This might get sloppy. Thanks in advance for the thoughtful analysis already offered.
LS, I agree that a consequentialist approach is probably going to be very misleading. However, I would counter that the many arguing against IP are not interested simply in justice, but acquiring currently protected IP without legal hassles. In other words, many anti-IP proponents view this debate purely as consequentialist, without actually thinking through the long-term implications. In any case, I do agree with many of Kinsella and other’s points about the justice aspect of IP. However, I think there are ways to reform IP law, rather than abolish it, that would better serve these just purposes without altering the desired consequences of our current system. I definitely believe that outright prohibition of market competition, free speech, and non-commercial flow of information is unjust while failing to produce positive consequences to the public as a whole, both in short-term and long-term time frames.
I tend to agree that justice is favorable to prosperity and that in the long-term for the most people the two are indistinguishable.
nirgrahamUK, this would indeed be an alternative business model. However, I’m not sure it can be profitable without being avoidable. What I mean by this is that consumers tolerate and even encourage advertisement to a certain extent, as it is either unnoticeable or enhances gameplay. But consider this. At equal market cost, would you choose the ad-free version of a program or the ad-full version? It’s worthy to note that it may be more difficult to find an ad-free version as opposed to the ad-full, and this IS a cost. Then again, ad-free versions may become popularly found in common locations, such as torrent finding sites, actually reversing the situation.
It seems to me that such a model is less profitable than exclusive distribution/licensing, otherwise it would already be done. In some cases it is done, but are these an exception or a rule? Firefox indeed derives significant revenues from Google to use their website as the default website. This actually enhances Firefox, however. Who would prefer a version with no webpage, when it costs more in one’s time to find this alternative? Such opportunities are not always available to software developers, however. Consider a program for a database, which can’t readily display ads to consumers, or if it did would diminish its consumer value.
Furthermore, what is to stop a distributor from replacing the ads that funded the fixed cost of development, and replace it with their own, becoming a more profitable venture than the original? Of course, that is a cost in itself, and it is unlikely to find greater consumer demand than the original producer.
So, the question then becomes do first-arriver benefits trump fixed research and development costs, which competitors can simply disregard? In some areas, like car engines, this would seem to be “yes”. For many forms of digital IP, especially software, I believe the answer is “no”.
It seems these arguments all resolve to the same thing, which is “yeah, people could do that, and yea, it would be cheaper for them to obtain the IP in that manner, or the IP would be more valuable, but then they wouldn’t be supporting the developers. if they want similar IP in the future, they need to voluntarily agree to support the developers financially in some manner.”
This creates a gift economy. Let’s look at the Austrian criticism of such on wikipedia:
Next, a misinterpretation of what I was saying:
I use Linux as an example of the prosumer model. Producers work for the end product, which is more quickly developed and developed with greater quality by allowing open collaboration. Indeed, allowing the free distribution of such works is beneficial to all involved. I don’t think anyone could argue however that Linux was created to rival MS Windows as a user-friendly OS to the mass majority of computer users. The point here is division of labor. Should a brick layer who only desires a computer for porn have to learn a crap-load of technical computer knowledge to do so? No, he is enhanced by commercial products aimed at him. In turn, he provides those who make these products his market service.
Development is not as big a gift economy as people assume. Developers rarely develop programs that they don’t really need or desire simply to satisfy the desires of others. Prosumption is different from gift production.
Similarly, I would love for their to be an “open engine” that could compete with the Unreal Engine or Source for hobbyists, or even professional developers to use to more quickly and in more quantity produce video games. I’d love a greater variety of hobbyist-created games. However, if the absence of IP law prevents professional developers from being rewarded for creating innovative games, there will actually be less, not more of them; and if this is my interest, it is NOT in my interest to get rid of IP law.
I am not anti-open source/free software. Yet these things exist inside copyright law. I think copy-center is the best licensing method. It enhances both commercial and non-commercial products. Mac, Windows, and Linux all use BSD networking code, as far as I know.
And I don’t think the view that most IP isn’t purposefully geared toward consumers is wrong. Films, books, software, video games, etc. are generally commercially produced to satisfy consumer demand. Even open-source projects like Firefox follow this model. They may not generate their income from licensing usage, but their model is based around selling something to consumers. For Firefox, it’s google ads. For Apache, it’s commercial licensing. The only notable exception to this I find is prosumption, which includes a lot of art.
wombatron, MS does not have a grip on the hardware market. If it does, it is the result of voluntary contract, not government coercion. It may engineer contracts that are overly exclusive and designed to harm their competitors, but it can’t force vendors to sign them. If there were an OS preferred by the market, MS would have NO grip on the hardware market. IP law can’t claim to be at fault here. Given that Wal-mart offered PC’s with Ubuntu pre-loaded is case in point. All OS producers are subject to the same IP laws. And as Torvalds has said, most patents on OS fundamentals were created in the 60’s and have expired. Any copyright violation is likely incorrect and could be quickly recoded for compliance. It is not simply IP law creating MS dominance, but consumer preference. As for demonstrably showing Linux is better, show it to a 10 year Windows user who knows next to nothing about computers. The time to learn a new OS is indeed a cost. I’d agree it’s better to me and you, but not the mass market.
As far as the alternative business model of support services, this isn’t necessarily available on all types of IP. How would you sell support services for a simple child’s video game that his/her parent would normally buy for them? A help hotline? Advertisements? These are most likely ineffective revenue generators. I agree that alternative business models are a good thing, and that IP law is currently too strict and too abused. However, these alternative business models and open licensing agreements are available inside a world with IP law. That they are not already prevalent throughout all IP industry suggests they are not always competitive or even viable.
As far as buying when you could avoid buying, this is a pure and simple gift economy. See the above criticism our school poses on this.
As far as tomatoes vs. IP, the differences are clearly obvious. The market prices for the resulting products have nothing to do with the labor required to create them, but the forces of supply and demand. Any free rider “problems”, such as a boost in sales for one producer from many other producers’ collaborating to encourage tomato consumption through general advertisement, do not effect the market fundamentals and can be dealt with without government force.
In IP, this is different. The marginal cost of reproducing the IP is virtually 0 compared to the fixed costs of development. Free riders would drive fixed costs down sharply. Thus, the only surviving IP products designed for consumers would be ones that could be produced cheaply or are already produced through prosumption. It essentially tells those who enjoy current consumer IP products that they need to support such industries through charity. We are back at the gift economy.
Please don’t interpret my mentioning of the free rider “problem” as an indication that I support public choice theory. I do not.
I would agree that such ideas shouldn’t be subject to IP law. I doubt, however, that anyone could write the same novel as me, beyond a few basic themes and characters and plot interactions. I doubt two different people can write a song with the same structure, melodies, harmonies, timbre, and rhythm at the same time. A melody here or a chord progression there is quite understandable. Same verse/chorus structure with the same melody/harmony/rhthym - infintesimely doubtful. IP law already takes this into account. Juries can easily tell if one work was copied beyond a reasonable doubt from another, rather than freely and independtly created.
…Finally, there are the collective consumer purchase agreements, which you can find if you google “code bounty”. These are proven inefficient mechanisms. They require consumer labor, risk, and expectations of reward, things traditionally handled by entrepreneurial middle men.
And I definitely don’t have a pseudo-LTV view. Value is surely subjective and imputed by the market. I’m not for prohibition of market restriction. I do feel that commercial providers of IP should be forced to give some of their revenue to the copyright holders, and that this portion should decrease over time until it hits 0%.
STOP WRITING WALL OF TEXTS PLEASE!
Copyright law is completely abritiary. How long should the term last? What count as fair use and what count as commercial use(HINT: It is very blurry)?
**
How many website have ads? Tons of them and yet they still exists. If that is the case, the free market will forced to adapt a new business models to fit consumer wants.
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Absolute nonsense. The high cost of innovation is inherient in every field. It takes time to write good software.
It is called “work for hire”.
(delete stuff about gift economy)
The linux world have lot of division of labors. Tons of text editors, video games, browsers, two rivial desktop environments, and different distro that serve different needs and users.
You completely ignored the commercial aspect of free software.
This is more of a business problem. I am working on that area and I already got my first programming contract.
What the hell are you smoking? The best software are the most free one(in both cost and freedom) and yet rivial proprietary applications.
(Delete craps)
Nonsense. Just because the proprietary business model is the dominant business model doesn’t mean it is the best. The enterprise linux world didn’t get built in a single day and RedHat doesn’t start out as a big fish.
BS. Did you read ANY of my techdirt links? It shows lot of examples.
We don’t need IP laws to separate liars from real authors. The market already does that just fine.
For example, techdirt get copied by people all the time, but techdirt’s aren’t dropping anyway. The bloggers there didn’t attempt to go out that sue everybody who did.
Also, copying is human nature. Are you suggesting we ban something that we can’t help do?
sicsempertyrannis,
your example is not entirely accurate, but it is indeed a good one. potentially, i can create my own host server with a less expensive key than the official Blizzard ones. i could possibly reverse engineer their server software, even if it was not made public. all that would be required is for someone to hack the game and change the networking code to work with any user-specified host. of course, in this example, blizzard would have a strong first-arriver advantage. and if their prices were fair, it may simply be unprofitable for a venture to spend the time and labor doing the reverse engineering and setting up their own host.
of course, this only applies to a small segment of IP. look at the amount of software that requires validation through the internet that has had such safeguards cracked. In a world without IP law, distributors could advertise and host these versions publicly…in any country.
in addition to performances, musicians make a good bit of money off of merchandising. without IP law, any merchant could offer their own merchandising. while that doesn’t eliminate the musicians’ own sales, it could be seen as cutting into them. so musicians would make even less money.
it seems to me that IP law is not the reason why most musicians are borderline broke. it’s simply that there are scores and scores of them. hell, i’m one, although i think it would be arrogant to offer my art as a commercial product. On the other end of the spectrum, there are few “middle class” musicians, who enjoy relative affluence but are not pushed hard by corporate advertisement/events, especially involving the media. Of course, this might be due more to our non-free market media and corporate tax/regulatory structure.
but the real question is this - what would happen to film score composers - those whose product is completely reproducible information, not tied to scarce goods and services that only they can authentically provide?
One can only hope.
Simple. Their fucking labor and writing ability.
But at the end of your statement you referred to video games. But computer games are not the only video games. And have you seen the supply of “good” computer games recently? It is next to nill.
Because copyrights and patents limit research, causing the cost of producing a game to go way up.
Not necessarily. First of all, there is still the cost of the disc and storage. If you are referring to downloads, computer game makers can protect their products like Blizzard and Valve do.
Except that development costs would drop dramatically, since companies would not have to create a whole new set of code for each game.
Kiba, would you prefer a dozen individual responses? In my mind it makes no difference. Plus you don’t need to quote my arguments at length if you want to keep posts small.
I agree that what i described for copyright is arbitrary. I don’t think this is a terrible flaw, so long as its juries and not regulatory agencies that get to be arbitrary. it seems clear that those who simply host direct copies of copyrighted works for commercial profit would owe some of their commercial profit to the copyright holder. trying to argue against an idea by exposing a portion of a copyrighted work seems like fair use to me. everything in between is gray. maybe juries could also determine what is owed without bounds, rather than enforcing the pointless range of fines that the government forcefully ascribes. as far as length, it seems 10 or 20 years is quite long, in regard to any form of IP. Limitless copyright lifespans attached to corporations are a terribly backward idea.
Good argument with the adverts on websites. I agree, especially when site content is regularly updated. See more on this towards the end, after the “…”
I address the “work for hire” argument. Without entrepreneurs between laborers and consumers, the production process becomes inefficient. There are already dozens of “code bounty” sites and few of them produce any end result. This does not apply to a small group of consumers desiring specific software, which does operate pretty well. This is for mass-consumption products.
I do not ignore commercial aspects of free software. I say that they rely on advertising other tangible services. There are types of software that could not benefit from such.
I look forwards to hearing more about your project. Please don’t label me as an enemy.
Free software is most free when it is copy-center licensed. This allows it to be freely used in proprietary and non-proprietary software. Copy-center and copy-left are simple licensing techniques based upon copyright. Why are we confused here? I use both proprietary and free software. Oh, and you know what libertarians smoke; don’t pretend it makes me a moron.
If my example is incorrect, show me why. It is a very specific example - young children’s video games. Enterprise Linux is something different entirely. As I say, the business model works in some areas, but completely fails in others.
I have not yet read the techdirt examples, but I am going to. I’ll let you know what I think of them. I promise I’ll read them before responding to you again.
I agree about the market preferring the truthful to the liars, but the market also prefers the less expensive. There is likely a cutoff.
We could also argue violence is in human nature. Or receiving satisfaction at the least cost possible. And combined, these things mean crime is in human nature. Doesn’t make it right. I am not arguing that copying is inherently wrong. It seems that when you copy to purposefully attempt to undermine someone’s ability to earn income off his work, it is wrong.
…
Thinking about this - video game developers would not necessarily be out of a job without IP law. They could receive substantial revenue from web advertising, so long as they broke their distributions up into many discrete parts, with new levels, etc (possibly even developed “for free” by prosumer fans), that kept them returning for more and more. This would guarantee them the first arriver benefit and extend their revenue for a product over a long period.
I am willing to admit that I am completely wrong about all this (this usually happens when I argue with LS). Business models would definitely adapt. It just seems to me that part of it would be a gift economy, which is not necessarily bad. One of the prime arguments against a gift economy is that people could not remember beyond a certain number of people who was productive and who was a mooch. With the free flow of digital information, this may be easier to maintain. Mooches could not be entirely excluded, but they could be cut off from first access to relevant information, which alternative providers would not pay money to reproduce as their market would be made of mooches that generally do not contribute.
Finally, this argument might not even matter in the near future. It is becoming more and more difficult to enforce IP law. Without a totalitarian NWO, I think we’re safe to say that the only difference will be whether we have a white free market or a black one.
Kiba, techdirt is a helpful analysis of alternative IP business models, proving them more powerful than they may first appear. I like the site, and will continue to view it.
That being said, it’s main supported business model is “give away reproducible information for free to increase market share while offering scarce goods and services related to the information”.
This is not new news to me. In fact, I think it is the best business model one can make with many forms of info. However, it seems some forms of information would still prefer pay-per-user licenses as a revenue model.
I don’t see why both can’t exist, so long as IP law was reformed to prevent common abuses that border on the prohibition of free speech.
My assumption is with a good entering a market and instantly having an unlimited supply, thus we cannot bring into the discussion any form of individual (company created) copy protection (i.e. license keys and the like), as this is a look at entering a market with a good of unlimited supply. Secondly you violate the subjective value theory in trying to put a positive valuing to computer games.
But as to why I am posting, I assert that anyone who is in complete disregard of IP is just as detrimental to liberty as a communist. In fact I can not see why any of you would spend so much time on a site whose name you do not even agree with. The arguments put forth by the majority here have taken a complete reversal of the Austrian tradition and as such you do a disservice to those names you invoke.
“Yet there is an exception to this general rule that monopoly prices benefit the seller and harm the buyer and infringe the supremacy of the consumers’ interests. If on a competitive market one of the complementary factors, namely F, needed for the production of the consumer’s good G, does not attain any price at all, although the production of F requires various expenditures and consumers are ready to pay for the consumers’ good G a price which makes its production profitable on a competitive market, the monopoly price for F becomes a necessary requirement for the production of g. It is this idea that advance in favor of patent and copyright legislation. If inventors and authors were not in a position to make money by inventing and writing, they would be prevented from devoting their time to these activities and from defraying the costs involved. The public would not derive any advantage from the absence of monopoly prices for F. It would on the contrary, miss the satisfaction it could derive from the acquisition of G.” - Ludwig von Mises, Human Action Pg. 383 (he reiterates these sentaments on pg. 676-677)
Also refer to pages 657-658, where Mises examines the “external economies of Intellectual Creation” (Mises presents the same argument I have thus far)
Or, let us look at Rothbard:
“It is true that a patent and a copyright are both exclusive property rights and it is also true that they are both property rights in innovations… Let us consider copyright. A man writes a book or composes music. When he publishes the book or sheet of music he imprints on the first page the word “copyright”. This indicates that any man who agrees to purchase this product also agrees as part of the exchange not to recopy or reproduce this work for sale. In other words, the author does not sell his property outright to the buyer; he sells on condition that the buyer not reproduce it for sale… any infringement of the contract by him or a subsequent buyer is implicit theft and would be treated accordingly on the free market. The copyright is therefore a logical device of property right on the free market.” - N. Rothbard, “Man, Economy, and State” Pg. 747
Also, refer to the many footnotes from pages 673, 746-748, in which he goes on to say that designs can, and should be, copyrighted on the free market.
How about Rand (who though not an Austrian, is commonly referenced here):
“What the patent and copyright laws acknowledge is the paramount role of mental effort in the production of material values; these laws protect the mind’s contribution in its purest form: the origination of an idea. The subject of patents and copyrights is intellectual property.
An idea as such cannot be protected until it has been given a material form. An invention has to be embodied in a physical model before it can be patented; a story has to be written or printed. But what the patent or copyright protects is not the physical object as such, but the idea which it embodies. By forbidding an unauthorized reproduction of the object, the law declares, in effect, that the physical labor of copying is not the source of the object’s value, that that value is created by the originator of the idea and may not be used without his consent; thus the law establishes the property right of a mind to that which it has brought into existence….
The government does not “grant” a patent or copyright, in the sense of a gift, privilege, or favor; the government merely secures it—i.e., the government certifies the origination of an idea and protects its owner’s exclusive right of use and disposal.”
-Ayn Rand, “Capitalism: The Unknown Ideal”
I could go on and on, from Hayek to Kirzner and back. Now, I am tired of writing… but if anyone needs anymore evidence I suggest you re-read some of these sources.
Our critics would respond that a monopoly price for F is not a necessary requirement for the profitable production of G. In other words, the created info or IP does not need a monopoly for its funder to make a profit off of the consumer goods that use/result from it.
I would respond that counter-examples do not make the rule, although they are indeed becoming more numerous. I stick by my argument - that the fundamental problem with IP law is not its premise but its abuses, which create moral problems, and that IP law still allows information to be licensed as though there were no IP law, through copy-left and copy-center licensing. Thus, we can both have our cake and eat it too, without telling IP creators they are immoral for attempting to monopolize the revenue of their products.
Maybe the largest problem is the inflating costs of legal troubles.
anti-ip libertarianism = SOCIALISM
Copy Left is not synonymous with CC 3.0 Attrib or Public Domain.
Copy Left is still IP, as is even CC 3.0.
Utilitarian arguments fail, not that they were particularly strong anyway. Moral/emotive arguments also fail, for obvious reasons.
What does not fail (IMHO) is a rational analysis of whether or not IP is property. And if it is, then certain forms of property rights apply. And if it is not, then they do not. Utilitarian and Emotive/Moral arguments notwithstanding.
How so?
I wish someone would make a real case for how IP conforms to any definition of property. As far as I am concerned, property has to be scarce or unique. IP is neither. It is merely the product of time and energy. Which if that was our only definition of property we would not be Austrians as we would subscribe to a time theory or labour theory of value instead of a subjective theory of value.
IP is actually a form of fascism, in that it cannot exist outside of a state monoply of law.
Counter examples are so numerous that it cannot be anything else other than the rules. The problem of IP is only an entrepreneurial problem. Keep in mind that just because in certain sectors of an industry, free software do not dominate doesn’t mean that there isn’t a viable business models that exist. It might be due to other factors.
Such example is FOSS games, which is what I specialize my entrepreneurlship activity in. From my experience and discussion with gamers, I knew that gamers in these niche are probably willing customers who are willing to fund the development of games or is willing to buy ancillaries. The only problem is that there is no entrepenurial pool and the entrepneurs that exist are too unrealistic in their guess(Too big a target for funding, etc). Though I notes that one entrepneur was able to recevie money over a period of several month approaching his target. Unfortunately his effort was derailed by outside influences. I only been able to enter the arena through my first programming contract, which will reward me with a small amount of money. It was a culimination from months of writing games for free over the past two years.
However, these ulitiarian reasoning and practical application of economics are not the fundamental thesis for my opposition to IP. I relies on normative ethic for that. I refer to Kinsella’s excellent book Against Intellectual Property and Liberty Student’s statement .
Property really isn’t the important issue. I will freely admit that information cannot be property. I was thoroughly impressed by Kinsella’s arguments and look forward to reading Against Intellectual Monopoly.
The violation of freely formed contracts is the moral issue. Anti-IP law arguments fundamentally say that it is immoral to enforce contracts that both parties freely accept. I don’t consider this immoral. I consider refusal to honor contracts immoral.
I went back to Kinsella’s book to look at how he addressed this issue. He agrees. His theoretical argument is purely against copyright law. He merely mentions that contracts would most likely be consequentially ineffective.
This is a better question. It seems like any serial number, watermark, etc. linking an illegally shared piece of copyrighted material can be quite easily removed or muddled to conceal identities. Copyright holders serious about protecting their market under such a business model should be concentrating on non-cumbersome technologies that allow them to track down the serious criminals rather than small-time file sharers.
Thinking more about this…
It seems that those who end up with a copy of information that was only released under a contract not to reproduce could claim that they received it from a source who did not include this contract. But then they would be compelled to reveal their source, or face obstruction of justice charges. In this way, there would be an attempt to root out contract violators who are re-distributing for commerical purposes.
why not put the onus on the prosecution to prove their case. you know, innocent till proven guilty and whatn0t
Love how everyone ignores JackSkyLark’s references to the founders of austrian economics.. but that’s beside my point.
Current IP laws are a form of fascism, sure. IP, not so much.
Unique code is not scarce? The exact order of thousands of letters to form words and tell a story is not scarce? I’d say they are. Granted, IP is so overblown it’s laughable right now, but basic IP/copyright laws should exist. But by claiming that the sentences I write here, or the book I write in my spare time is not unique, and claiming that you’re able to reproduce it without my approval, means you are taking the labor of my mind. My mind and its creations are unique and scarce. You’re claiming ownership of anything that comes out of my mind and manifests itself physically, because you could have the same idea at some point independently. My argument would be that logically, I could build that car/toaster/other item you consider property on my own and independently, thus I have just claim to it. You’ll say this doesnt apply because I am comparing ‘non-property’ to ‘property’ in your view, and by rejecting my view you claim to invalidate it. Perhaps someday this will fly as a logical argument. But my contention is that no one will produce in this society. Don’t say the market will find a way. That’s a coward’s way of avoiding having to actually make an argument. Why would anyone go into software production or music/book publishing (the only industries I’m talking about) when they are assured no profit? They would not. Want to cripple the market, just tell people they cannot keep the profit produced by their creations. Sure, some people will do it for the public good. Marx would be oh so proud of them. Sorry, but this is socialism. Some sort of compromise would need to be enacted, else your society will exist in a static environment without any innovation. Summation: my mind is unique and scarce, just as your labor is. The market puts value on my mind. Thus the product of my mind has value, and should be considered property, just as the product of your labor is considered scarce, and is thus property.