Sam’s position is something I posted last year:
He has been doing a very nice job of arguing it. It really is that simple, if we begin with a society lacking a central government.
Scarce things that have goods-character are valuable.
If I offer to sell a new object with contract saying I do not sell the idea just its product for price A, but I also offer to sell the idea at a different price B; and a person does not independently obtain this idea, but obtains it from looking at my object or recipe while I am showing it to him to sell, then he violates my personal property.
I offered to sell it; he refused to buy but took it. Yet he only “copied it” when I showed it to him to sell to him. I lost something valuable that I offered to sell and someone obtained from me. Of course, if he did not obtain from me, and never met me or saw my offer, then there cannot be a property violation, neither through negligence nor intent. If he invented it also, entirely himself, he can also sell it. Or he can disclose it, in which case it is common and valueless from then on in.
Case 1:
A seller, e.g., Mises Institute, Inkscape, Paint.net, and so on, decided nicely to disclose literature or software or technological proportions, selling only physical copies. Thus, no one else can ever now prevent by contract other people from copying these things. Only one seller has to decide to do this, and its done.
Case 2:
What if someone breaks contract and copies the idea between the seller of idea and the buyer of idea despite no-copy clause? What if no seller has ever yet disclosed the ideas. Is the fraud of the second party preventing a contract from carrying over to third party?
It depends. However, only insofar as who is liable to seller.
The second party (buyer) had no right to break your agreement in the first place. He cannot transfer this non-right to any other person. Any third party copying from the second party violates the law. If the second party was unwilling, then the third party violates the law. If the second party was willing, then the second party violated the law. The contract is a claim that carries along with the object, if the object was sold with a contract.
As Bruno Leoni said, a claim is a choice. There can be choice without claims, but all claims of all people that have been established commercially cannot be violated else an anti-property rights precedent is established. (See Leoni’s 1962 essay Obligation and Claim). The idea is that law is spontaneous. If this is so, all contracts must be respected by everyone. If broken, someone is liable for damages. An idea does not become free through theft; someone is liable, as specified above.
Case 3:
Machlup responds, “But the assertion that the recognition of anybody’s exclusive rights in an invention, in its commercial use, ‘takes nothing the public’ is a fallacy which can be rebutted, and has been for centuries… In particular, those who independently develop the technological ideas already patented by someone else are barred from using the fruits of their own labor” (Machlup 1958:53).
Correct; which is why IP spontaneous law will allow anyone who also invents the idea can sell it. But he must have discovered it entirely in isolation, uninfluenced by the other sellers of the idea; else he was a third party violating a no copy contract. Indeed, many sellers of one idea, if they individually discovered it and sell it under no copy clause can at the same time sell their right. There will be a market price then.
(If one seller wants to make it free, however, then the idea becomes free regardless of all other sellers. It is however unlikely that this happens. But it could. In that case, the idea is free.)
Case 4:
Common knowledge is not valuable. No one ever has to choose between a scarce object and a known formula, said Mises. A formula that is not common knowledge, however, is valuable.
Suppose A owns land, on which A own factory B. Suppose private provision of security. A has a formula that is not common knowledge. Assume C physically trespasses into B.
Now, assume there was a formula in A’s factory B, that is not common knowledge. C trespasses into B, then leaves, and reveals the formula.
A has lost something valuable.
In other words, if we privately or publicly don’t treat knowledge as property, then corporate spying is punished just as trespassing, when it, in fact, is clearly something more. What if the trespassing was intentional to get the scarce knowledge? Can a private property order tolerate the violent extraction of information form unwilling people? Suppose that trespassing is not punished with a large fine, but a certain production process, if sold before it is disclosed is worth a greater amount.
If I am threatened with a knife to reveal my business knowledge, does the knife-wielder go unpunished if he doesn’t, pardon the language, stick me?
After all, remember what Gossen, and then Bohm-Bawerk wrote, all people do control orderings of physical forces when they are producing goods. Is not knowledge of how to produce a good?
As Gossen said, more or less, when he was presenting the ecfonomic calculation: If people already knew what to produce and who to produce it and when to make the excahnges, then they would just do it, and no calculation problem would arise. But no person or central authority can know this.
People produce what has highest price. But they get profit simply ecause of better knowledge. It is knowledge of who, what, when, how that makes a producer rich.
And what is a technology. It is not a physical thing. Merely an array of proportion coefficients [A,B,C,D,…,Z].