Two arguments in favor of IP

Economics Political Theory
1

I have two arguments in favor of intellectual property, one deontological the other is consequential.

  1. The deontological argument: I find Rothbard’s argument in favor of IP quite convincing. I quote Rothbard:

The usual counter argument against this is that third parties who are have not been part of the original contract between the producer of the copyrighted content and the buyer should not be subject to it. I think this line of reasoning is not very convincing. It assumes that contracts have to be made only in the physical presence of both parties. Yet that’s not how most contracts work. For example if I post a sign on my house requiring that all those who wish to enter must wear shoes I make a contract with all my potential guests without being physically present.

If a musician produces an album which begins with the following disclaimer: “Those who wish to listen to the album have to pay to Jones Johnson (details on www.JonesJohnson.com)”, then this would work in the same way as the sign about the shoes. Anyone who picks this album and decides to listen to it implicitly participates in the contract.

Now what if someone removed the initial disclaimer? I believe people should assume by default that all albums have such disclaimer, just as people assume by default that you can’t rape people in theaters or murder people in parks (unless its Block’s murder park of course). After all everyone knows that Britney Spears doesn’t give her albums for free, so when you copy such album from bitorrent or emule, you know that you are doing this in violation of the terms of Britney Spears. You can’t claim ignorance of that (at least in the vast majority of cases).

In general, we want to create a free society in which all associations between people are voluntary. However if a software company produces a product and conditions the use of the product on certain terms, then ignoring these terms would be aggression and not a voluntary association. Whether you decide to call it intellectual property or simply contract enforcement doesn’t really matter. Whether it is scarce or not also doesn’t matter. What matters is that if you decide to use something someone else created, you should abide by the terms or not use it at all.

  1. The consequential argument: Most likely that in the future, when nanotechnology will reach its peak, we will be able to create every physical material given a software program. I expect that industry as such will disappear and only software programs will continue to evolve to create better and better material goods out of any raw material. In this world physical property will be so cheap that even the poorest will have more of it that they need. After all you would be able to create a house for yourself from raw material just by using a very complex software program without much additional cost. So while physical goods will be very cheap, software programs, that is intellectual goods, will be expensive and their amount will determine who is rich and who is poor. Therefore I expect that virtually all people would be employed as programmers. Without enforcement of intellectual property in such world almost any work would have to be done voluntarily. The incentives to innovate will be quite low. The market signals will be very vague as well since when everything is free or nearly free, prices won’t be able to guide us as to which software program should be written next and how to improve existing programs. Without enforcement of intellectual property we might very well deterioriate to full fledged socialism.
Alternative to intellectual property
2
  1. The consequential argument: Most likely that in the future, when nanotechnology will reach its peak, we will be able to create every physical material given a software program. I expect that industry as such will disappear and only software programs will continue to evolve to create better and better material goods out of any raw material. In this world physical property will be so cheap that even the poorest will have more of it that they need. After all you would be able to create a house for yourself from raw material just by using a very complex software program without much additional cost. So while physical goods will be very cheap, software programs, that is intellectual goods, will be expensive and their amount will determine who is rich and who is poor. Therefore I expect that virtually all people would be employed as programmers. Without enforcement of intellectual property in such world almost any work would have to be done voluntarily. The incentives to innovate will be quite low. The market signals will be very vague as well since when everything is free or nearly free, prices won’t be able to guide us as to which software program should be written next and how to improve existing programs. Without enforcement of intellectual property we might very well deterioriate to full fledged socialism.

I see you’re up to speed with Ray Kurzweil and the singularity.

3

I won’t address (1) because I find deontology to be meaningless/worthless, but as for (2), there is a large body of literature covering the very question of whether IP enforcement would actually help or harm industries that produce IP. Why not actually address that?

I’m using Ubuntu (by your reasoning, a piece of socialist software) and I don’t find it any worse than Windows, often better and faster. When replicators come around, I may actually prefer open-source food!

4

With regards to a sign outside your house, each visitor enters into a discrete contract when they read it and tacitly accept its terms. Physical presence isn’t the point. The point is that contracts are only enforceable against parties to the contract. The point is that your visitors read the terms of contract on the sign/ticket/notice and tacitly accept the terms by proceeding to come onto your property, as their only personal right to be on your property is in terms of the contract. You have a real right in your property as owner - they need some sort of personal right to be there, which the owner has granted them exclusively in terms of contract.

There is no real property right in ‘intellectual property’ to begin with, so you’re comparing apples with oranges. If a musician, for example, contracts with a specific party such that this party assumes an obligation not to disclose, reproduce or distribute certain information to 3rd parties provided to him by the musician, this is perfectly legitimate… The musician may bring an action, in terms of contract, against the party he contracts with if this party violates these terms. But the musician never has a real right in the information to begin with. The contract here does not embody the granting of a personal right against a real right, as a contract allowing someone to make use of your property does. The contract is merely limiting the real right of the 2nd party in terms of his self-ownership to disclose, reproduce or distribute information known to him.

You have not provided a sound legal argument for why this contract should be enforceable against 3rd-parties. Your example of ticket-rule contracts does not involve 3rd-parties. Everyone who reads the sign and comes onto your property is a party to contract, and in fact it is you as owner who are granting your visitors personal rights against your real right of ownership which they would not have possessed prior to entering into the contract. If someone never read the sign and therefore never entered into the contract, they have no personal right to be on your property, and are trespassing.

In order for your analogy to be relevant, you will have to show that the musician (or whoever initially knows the information in question) has a real right of ownership in this information to begin with.

A compact disk used to store information is physical property in terms of which an owner has a real right of ownership. The information stored upon it, however, is just information - ‘intellectual property’ in terms of contemporary, incorrect statute law.

You realise that there is a distinction? That if you are applying your analogy above, the ticket contract only applies to the physical compact disc in question, and not to the information stored upon it. If the music were ripped off the CD into .mp3 format, copied onto another CD, or otherwise reproduced in any way, the analogy falls apart.

When actual physical property is stolen from X by Y and sold to Z, X may vindicate his claim of ownership over the property, which was never transferred, and claim it back from Z, even if Z received the property in good faith from Y, i.e. not realising that it was stolen.

If Z received the property in good faith, he now has a personal claim against Y in terms of the contract of sale he entered into with him. However, if he did not receive it in good faith, he doesn’t have a personal claim against Y.

However, as you can see, X needs to have an original real right (ownership) in the property in order for him to claim it back from Y. You have not demonstrated this to be the case with regards to intellectual property. What does it matter to 3rd parties that Brittney Spears doesn’t want people to listen to her music for free, if she has no real right to claim against them? Just wanting something doesn’t give you a legal right, I’m afraid.

http://www.logicalfallacies.info/relevance/appeals/appeal-to-consequences/

Intellectual property can’t stifle and encourage innovation at the same time, by the way. It’s either doing one or the other - or at least there is an overall net effect to consider.

5

Do you believe non disclosure agreements can be enforced? I believe they can be. So if person A says to person B: “I will tell you story about X only if you agree not to tell it to anyone else. If you do tell it you’ll have to compensate me with 1000 dollars”. If person B agrees to these terms he has to respect them, otherwise he will be liable in court. In the same way a musician tells me in his voice in the recording that if I am to listen to this recording I will have to pay for it at his website. Here a contract between the musician and anyone who listens to this recording takes place. The individual can then either accept or reject the contract, but he can’t ignore it just like he can’t ignore the sign on the house.

Britney Spears (or the recording company) is the creator of the album. I do believe she has rights to it. So in this sense she owns the content of the album. I don’t believe like you that property has to be scarce in order to be defined as property. If a person creates a distinct work of art or of engineering he can set whatever terms he wishes to on the use of this work. Therefore this work in my view would be considered his property.

6

Eugene,

suppose I steal some marble and create a statue out of it do I own the statue?

Secondly I buy a statue made by Michaelangelo from a collector, do I own the statue?

It is clear that creation is neither a necessary nor sufficient criterion for ownership.

7

Perfectly reasonable to me. However if I break this contract and release this history to third parties then only me will be liable - third parties are not bound by this contract, therefore they can do whatever they wish with the story and they wont be hold accountable no matter how many times they reproduce the story.

I do not believe that property has to be scarce in order to be defined as property either. I believe that something must be rivalrous for property rights to emerge. It is true that you can set whatever terms you wish upon thing you sell. It is binding only to your client not to any third parties if your client chooses to break your contract (by contract I mean something that you actually have to sign and not something implicit or EULAs that you agree or not in order to use software).

8

I agree. Homesteading is also not necessary nor sufficient. You can receive property as gift, and you may homestead a field that was homesteaded before you. Acquiring property is not a process that can be easily summarized. There are many ways to acquire property, there can be conflicting claims, and so forth.

However in case you agree with me that some intellectual creations deserve to be controlled or owned by their respective creators (thus becoming their property), then you’d definitely agree with me that some form of copyrights is warranted.

Regarding third parties. As I wrote before, there are no third parties. When the writer of the book writes in his own words that anyone who wishes to read his book has to pay for it, no one can be considered a third party. To be a third party you have to be oblivious of that disclaimer, which is never the case.

9

Precisely, because they have no real right in the information to begin with. Non-disclosure agreements are purely concerned with who knows information. They are not evidence that information is property.

You have to be able to exercise control over an object before you can claim ownership. This is compatible with the ancient Roman law sources that the entire Western legal tradition is grounded upon, as well as modern homesteading theory. The extent to which you can, or indeed are, exercising control is not so important - merely that you are judged to be able to, to some extent.

You can’t exercise control over information once it is in the mind of another. That’s why information cannot ever be owned. If you want to keep it a secret, keep it a secret. Or, indeed, sign a non-disclosure agreement with the people you do disclose it to. But you can only go after the person you told, who violated this agreement with you. You can’t go after the people he tells*.*

“Homesteading” refers to the initial acquisition of property, eugene. Not the legitimate transfer of property. It is also possible to abandon an ownership claim in property, you know.

Of course there can be conflicting claims. That’s why, much as the world may hate us, you need lawyers. :slight_smile:

10

Homesteading is certainly sufficient to claim ownership. I mean, if you want to play semantics and say that someone could technically “establish a homestead” on a piece of property that someone already owns or something like that, but obviously that’s not an actual case of homesteading in an ownership sense. In this context of determining ownership when one uses the term “homesteading” they are referring to being the first to occupy the land.

11

The point is that homesteading is also a process of creation. You gain ownership over a resource if you manage to make something useful out of it. Intellectual work is another form of creation, and I believe property rights should encompass intellectual creation as well. An individual who spent his time and money to tame the wilderness and make a use out of it deserves to own that natural resource. A man who spent his time and money to create a work of engineering or art should also in my opinion gain ownership over his creation.

12

Eugene, please take some time to learn a little AE. You’ve got a lot of posts here now and you’re still making very basic economic errors. “Something useful” is subjective. What is useful to you may not be useful to others. Certainly, every human being has a unique value scale.

13

It wouldn’t be state socialism, but “true” socialism; absence of property rights and “from each according to his ability, to each according to his need”. And why is that a bad thing? In a way it would be the culmination of capitalism. I don’t think people will be employed as programmers in the future, because programs will be much too complicated for humans to understand and directly program. Writing software will be automated as well. Human work will be more like telling the computers what software to write. Designing cars or houses will be more like the work of an artist. People will gladly do that for free, so there will be no need for property rights, or prices or incentives. In a way shopping for houses will be like deciding upon the right open source operating system. In that sense, capitalism is the best way to get to socialism. The difference between capitalists and socialists is not that they want to achieve socialism and we don’t, but that they want to achieve it by implementing it and we do by letting it emerge.

14

Gotta disagree with a lot of that Nero.

There is no way to escape property rights. We all must occupy space in the physical world. Not to mention opportunity costs, which help us to account for the scarcity of time.

15

The problem is that technological development will be significantly hindered if the smartest people wouldn’t have the highest incentives to work for the sake of the most valuable goods. Even today if it was legal to copy software programs, giants such as Microsoft, HP, SAP and others would crumble. Software engineers, who are usually very smart and capable people, would see their wages reduced by two and many of them would find employment in sectors that don’t require the same amount of intellgience and creativity. If you don’t let the most intelligent and productive people do the most productive things you will decrease your economic growth.

16

Oh, I agree. Sorry for not making myself clear. I meant we don’t need property rights of abundant resources, not that property or the market economy would be abolished in principle. We currently don’t have property rights of air or open software, in the same way I think many consumption goods could become abundant or virtually abundant. Then property of many resources will become unnecessary or rather it will be uneconomical to enforce it. I didn’t mean to suggest that we will ‘escape property rights’. There will always be a market economy with private ownership and prices, and opportunity costs. Just that more gods will become too cheap to meter and nobody cares who owns them any more.

17

I tried to argue for information as property in a previous thread. Hopefully it adds something to the discussion here.

I also think that consequential arguments matter, and existentially so. Rules/laws/customs primarily emerge as mere human means toward subjectively valued consequences (ends). As humanity devotes ever more resources toward creation of – and engages in division of labor and commerce in – information, the concept of property in same is likely to only strenghten.

18

Rothbard’s argument works only for both parties who signed the contract. Everybody else is not bound by it. Just seeing written words on a CD or book cover doesn’t constitute genuine contract no more than (see my signature) “social contract” when people just happen to be born in a “state’s territory” (which is not legitimate property of this abstraction called the “state”).

19

liberty student is right, Eugene. It would be much appreciated if you would actually utilize some of the wealth of resources made available to you on this website and actually read what others have written already. It will save you a lot of time trying to reinvent the wheel.

Kinsella and others have addressed this ad nauseam for years. Here is a random excerpt from an article 10 years ago about the Napster case that addresses it directly:

Some advocates of copyright and other forms of IP try to justify IP with natural law–type arguments. For example, some say that the author “creates” a work, and “thus” is entitled to own it. However, this argument begs the question by assuming that the authored work is property in the first place; once this is granted, it seems natural that the “creator” of this piece of property is the natural and proper owner of it.

But “creation” does not justify ownership in things. If I homestead a farm, there need be no “creativity” involved, in the copyright sense; I need only be the first possessor of the land. On the other hand, if I carve a statue into your block of marble, I do not thereby own the resulting statue. In fact, I may owe you damages for trespass or conversion. Thus, creation is neither necessary nor sufficient for ownership.

It is scarcity that is the hallmark of ownable property, and it is by first possession that one comes to own such ownable property. This can be seen by examining the purpose and nature of property rights. Were things in infinite abundance, there would be no need for property rights. But in the real world, there are scarce resources. These things can be used and controlled by only a single person.

For a good overall look at this subject I recommend Kinsella’s book Against Intellectual Property (which you can download here for free of course. And you can get it in audio form here as well as on iTunesU.)

20

Yes, we would essentially have socialism of intangible goods, e.g. programs, designs, plans, blueprints, music; anything intangible wouldn’t be ownable. And if you can’t own it you can’t sell it for money, because the buyer can just copy it for free. If there is no profit in selling intangible goods, then it does no make sense to pay people to create them. There would be no need to bid for the time of programmers, so the whole profession wouldn’t exist in the way it does today. All intangible goods would be excluded from capitalism. I don’t have an easy answer, but a few partial ones. A lot of intangible industries should be smaller than they are today, for example the movie and music industry. The resources these industries use up have more productive uses. Secondly, once society gets richer, it may not matter that there are fewer incentives to program stuff, because there’s going to be abundance of software anyways. And also producers of tangible goods will produce software that goes with it, such as the program in your microwave.