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Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and “Rearranging”

This is from Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’Mises Economics Blog (Sep. 29, 2010), archived version with comments; reposted at StephanKinsella.com


I’ve noted before a central error of arguments for intellectual property (IP) is the idea that creation is an independent source of rights (see Libertarian Creationism; Rand on IP, Owning “Values”, and “Rearrangement Rights”; Locke, Smith, Marx and the Labor Theory of Value; this comment to “Trademark and Fraud”; Elaborations on Randian IP; Objectivists on IP). As I noted in “Intellectual Property and Libertarianism“:

… creation is an important means of increasing wealth. As Hoppe has observed,

One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers. There are no other ways.[26]

While production or creation may be a means of gaining “wealth,” it is not an independent source of ownership or rights. Production is not the creation of new matter; it is the transformation of things from one form to another — the transformation of things someone already owns, either the producer or someone else.

Using your labor and creativity to transform your property into more valuable finished products gives you greater wealth, but not additional property rights. (If you transform someone else’s property, he owns the resulting transformed thing, even if it is now more valuable.) So the idea that you own anything you create is a confused one that does not justify IP.

There are two ways to acquire rights to property: homesteading unowned property; or contractually acquiring title to property held by a previous owner. It is wealth and value that is created or produced, by rearrangingalready-owned scarce resources. But no new property emerges from an act of production, from labor, from creation: new wealth is created, by making existing property more valuable. By being careful here about the distinction between “creating value” and acquiring property rights, by avoiding overuse of the creation and labor metaphors, we can avoid the mistake of thinking that we have rights in whatever we find, whatever we buy, and whatever we create, as if this latter is an independent, third category. We have rights to the value we create only as a by-product of owning the resource that we have made more valuable by rearranging it. And once we see that this third category does not exist, we see that the creationist case for IP evaporates. Creation never was a source of ownership at all.

Or, as I wrote in Against Intellectual Property,

One reason for the undue stress placed on creation as the source of property rights may be the focus by some on laboras the means to homestead unowned resources. This is manifest in the argument that one homesteads unowned property with which one mixes one’s labor because one “owns” one’s labor. However, as Palmer correctly points out, “occupancy, not labor, is the act by which external things become property.” By focusing on first occupancy, rather than on labor, as the key to homesteading, there is no need to place creation as the fount of property rights, as Objectivists and others do. Instead, property rights must be recognized in first-comers (or their contractual transferees) in order to avoid the omnipresent problem of conflict over scarce resources. Creation itself is neither necessary nor sufficient to gain rights in unowned resources. Further, there is no need to maintain the strange view that one “owns” one’s labor in order to own things one first occupies. Labor is a type of action, and action is not ownable; rather, it is the way that some tangible things (e.g., bodies) act in the world.

Palmer (p. 838) cites Hegel’s Philosophy of Right for the contention that “occupancy, not labor, is the act by which external things become property”. In particular, in §§50-51, Hegel writes:

The principle that a thing belongs to the person who happens to be the first in time to take it into his possession is immediately self-explanatory and superfluous, because a second person cannot take into his possession what is already the property of another. … Since property is the embodiment of personality, my inward idea and will that something is to be mine is not enough to make it my property; to secure this end occupancy is requisite. … Occupancy makes the matter of the thing my property, since matter in itself does not belong to itself.

So: creation does not give rise to property rights or new property, but only enhances the value of already-owned scarce resources. And it is being first to appropriate or occupy an unowned resource, not some metaphorical and derivative “ownership of labor,” that is the basis for Lockean homesteading. The idea of creation and the labor metaphor Locke employed has been wildly distorted by modern advocates of intellectual property. They regularly argue that if you own your labor then you own “things” that you create with your labor. Yet even the American Founders who put the IP clause into the US Constitution in 1787 did not think of IP rights as natural rights, steeped as they were in Lockean ideas. “To the contrary, they evidently viewed copyright as a policy tool, one aimed at promoting the progress of science and useful arts. They begrudged copyright’s interference with natural and common law rights, like the government they formed, as a necessary evil.” Tom W. Bell, Intellectual Privilege: A Libertarian View of Copyright, ch. 3 (draft). The Founders didn’t think Locke’s natural rights views implied that IP was a natural right, and Locke apparently didn’t either. As Professor Bell writes, Locke’s

labor-desert justification of property gives an author clear title only to the particular tangible copy in which she fixes her expression–not to some intangible plat in the noumenal realm of ideas. Locke himself did not try to justify intangible property. He appears, in fact, to have viewed copyright as merely a policy tool for promoting the public good. Modern commentators who would venture so far beyond the boundaries of Locke’s thought and into the abstractions of intellectual property thus ought to leave his name behind.

More pointedly, copyright contradicts Locke’s justification of property. He described legislation authorizing the Stationers’ Company monopoly on printing—the nearest thing to a Copyright Act in his day—as a “manifest . . . invasion of the trade, liberty, and property of the subject.” Even today, by invoking government power a copyright holder can impose prior restraint, fines, imprisonment, and confiscation on those engaged in peaceful expression and the quiet enjoyment of physical property. By thus gagging our voices, tying our hands, and demolishing our presses, copyright law violates the very rights that Locke defended.

… As our careful review of the historical record showed, however, the Founders almost certainly did not regard copyright as a natural right.

Bell cites here Ronan Deazley, who in Rethinking Copyright: History, Theory, Language [online at b-ok dot cc then /book/866732/b2d831 ] writes (p. 143-44, n.32):

One of the ironies of the orthodox conception of copyright within the UK is that John Locke himself did not consider that his theory of property extended to intellectual properties such as copyrights and patents. In response to this letter from Freke [discussing with Locke arguments about a Bill for the Better Regulating of Printing and Printing Presses to provide certain property rights in books], Locke suggested that Parliament might secure the “Author’s property in his copy” by either including some provision that would allow a right to reprint those works which bore the name of the author or publisher upon them, or by issuing a “receit” upon delivery of three copies of any printed work for the use of the King’s library and the two universities which would “vest a priviledg in the Author of the said book his executors administrators and assignes of solely reprinting and publishing the said book for ___ years from the first edition thereof” ….

Consider Locke’s words in Two Treatises on Civil Government (ch. V, § 28):

He that is nourished by the acorns he picked up under an oak, or the apples he gathered from the trees in the wood, has certainly appropriated them to himself. No body can deny but the nourishment is his. I ask then, when did they begin to be his? when he digested? or when he eat? or when he boiled? or when he brought them home? or when he picked them up? and it is plain, if the first gathering made them not his, nothing else could. That labour put a distinction between them and common: that added something to them more than nature, the common mother of all, had done; and so they became his private right. And will any one say, he had no right to those acorns or apples, he thus appropriated, because he had not the consent of all mankind to make them his? Was it a robbery thus to assume to himself what belonged to all in common? If such a consent as that was necessary, man had starved, notwithstanding the plenty God had given him. We see in commons, which remain so by compact, that it is the taking any part of what is common, and removing it out of the state nature leaves it in, which begins the property; without which the common is of no use. And the taking of this or that part, does not depend on the express consent of all the commoners. Thus the grass my horse has bit; the turfs my servant has cut; and the ore I have digged in any place, where I have a right to them in common with others, become my property, without the assignation or consent of any body. The labour that was mine, removing them out of that common state they were in, hath fixed my property in them.

Notice here Locke already assumes self-ownership, and then argues that an acorn ingested into one’s body becomes one’s property; to take the acorn back would violate his rights in his body. So what makes the acorn his? Locke says that it is labor that “put a distinction between” the ingested acorn and the unowned commons. Later he says the labor “was mine,” but this metaphorical comment is not necessary for his argument that by exerting labor on some unowned resource–by somehow transforming, enclosing or otherwise embordering it–one “puts a distinction” on it. That is the very purpose of borders of owned things: to distinguish them from things one does not own. Labor does this by establishing a connection or link between the homesteader and the thing embordered or transformed. (See my “What Libertarianism Is” and “How We Come To Own Ourselves.”) But labor does not need to be “owned” to serve this function. If labor were “owned” as some independent thing or substance (instead of merely being a metaphorical description of the fact that owning one’s body gives one the practical right to control one’s actions and labor as a sort of “byproduct”), and anything you “mixed” it with “therefore” became your property, then the argument would arise that you would own even useful, valuable ideas one “creates” by one’s labor. In fact this is how modern-day IP advocates argue.

But apparently Locke did not overextend his own labor metaphor as IP advocates do, for he did not view IP as a natural right, and neither did the Locke-influenced Founders who put the IP clause into the US Constitution in 1787. Bell is right that modern advocates of IP should not claim to be Lockeans. I’m not sure when the mistake arose of thinking of patent and copyright as “natural” rights. While the Founders and even Locke realized IP is not a “natural” right but only a temporary policy tool based on utilitarian notions, those coming later apparently did not see this distinction. They saw a large set of “rights” protected in the Constitution and lumped them all together as natural rights, even though only some of them were thought to be by the Founders and by Lockeans.

Now I noted in Rand on IP, Owning “Values”, and “Rearrangement Rights” that Rand should have realized that creation is not an independent source of ownership (thus deflating her case for IP), given that she once wrote:

The power to rearrange the combinations of natural elements is the only creative power man possesses. It is an enormous and glorious power—and it is the only meaning of the concept “creative.” “Creation” does not (and metaphysically cannot) mean the power to bring something into existence out of nothing. “Creation” means the power to bring into existence an arrangement (or combination or integration) of natural elements that had not existed before.

She was not alone in this insight. In Man, Economy, and State, Rothbard wrote:

Men find themselves in a certain environment, or situation. It is this situation that the individual decides to change in some way in order to achieve his ends. But man can work only with the numerous elements that he finds in his environment, by rear­ranging them in order to bring about the satisfaction of his ends. With reference to any given act, the environment external to the individual may be divided into two parts: those elements which he believes he cannot control and must leave unchanged, and those which he can alter (or rather, thinks he can alter) to arrive at his ends. The former may be termed the general conditions of the action; the latter, the means used. Thus, the individual actor is faced with an environment that he would like to change in order to attain his ends. To act, he must have technological ideas about how to use some of the elements of the environment as means, as pathways, to arrive at his ends. Every act must therefore involve the employment of means by individual actors to attempt to ar­rive at certain desired ends. In the external environment, the gen­eral conditions cannot be the objects of any human action; only the means can be employed in action.

Lest Objectivists accuse Rothbard of “plagiarizing” from Rand, note the words of Mises in The Theory of Money and Credit (citing J.S. Mill’s Principles of Political Economy, sec. I.5.1-I.6.1):

It should never have been called in question that the transportation of persons, goods, and information is to be reckoned part of production, so far as it does not constitute an act of consumption, as do pleasure trips for example. All the same, two things have hindered recognition of this fact. The first is the widespread misconception of the nature of production. There is a naive view of production that regards it as the bringing into being of matter that did not previously exist, as creation in the true sense of the word. From this it is easy to derive a contrast between the creative work of production and the mere transportation of goods. This way of regarding the matter is entirely inadequate. In fact, the role played by man in production always consists solely in combining his personal forces with the forces of Nature in such a way that the cooperation leads to some particular desired arrangement of material. No human act of production amounts to more than altering the position of things in space and leaving the rest to Nature.

See also Mises:

“Action, if successful, attains the end sought. It produces the product.

Production is not an act of creation; it does not bring about something that did not exist before. It is a transformation of given elements through arrangement and combination. The producer is not a creator. Man is creative only in thinking and in the realm of imagination. In the world of external phenomena he is only a transformer. All that he can accomplish is to combine the means available in such a way that according to the laws of nature the result aimed at is bound to emerge.”

Human Action, ch. VII, sec. 4.

Mises goes on:

“The materialist metaphysics of the Marxians misconstrues these things entirely. The “productive forces” are not material. Production is a spiritual, intellectual, and ideological phenomenon. It is the method that man, directed by reason, employs for the best possible removal of uneasiness. What distinguishes our conditions from those of our ancestors who lived one thousand or twenty thousand years ago is not something material, but something spiritual. The material changes are the outcome of the spiritual changes.

Production is alteration of the given according to the designs of reason. These designs—the recipes, the formulas, the ideologies—are the primary thing; they transform the original factors—both human and nonhuman—into means. Man produces by dint of his reason; he chooses ends and employs means for their attainment. The popular saying according to which economics deals with the material conditions of human life is entirely mistaken. Human action is a manifestation of the mind. In this sense praxeology can be called a moral science (Geisteswissenschaft).

Of course, we do not know what mind is, just as we do not know what motion, life, electricity are. Mind is simply the word to signify the unknown factor that has enabled men to achieve all that they have accomplished: the theories and the poems, the cathedrals and the symphonies, the motorcars and the airplanes.”

[Update: Note that this latter passage of Mises also indicates that the role of information or knowledge is to guide action, while action itself employs scarce means; but knowledge is not a scarce resource or means, and property rights apply only to scarce resources, but not to knowledge itself. See Intellectual Property and the Structure of Human Action; Knowledge vs. Calculation; Intellectual Property and Economic Development. Also, the comment about “material changes” being “the outcome of the spiritual [i.e., mental] changes” supports the idea that the reason for mankind’s increasing and incredible prosperity in modern times is the result primarily of the accumulation of technical knowledge over the centuries, leading to what Hayek calls the “fund of experience”. On this, see Hayek’s Views on Intellectual Property; Tucker, “Knowledge Is as Valuable as Physical Capital”.]

Update: On a Facebook thread, Shawn Wilbur pointed me to Pierre-Joseph Proudhon’s “Les Majorats littéraires,” trans. Luis Sundkvist (1868), Primary Sources on Copyright (1450–1900), eds L. Bently & M. Kretschmer, in which, at pp. 11 et seq., Proudhon expresses sentiments similar to those of Rothbard, Mises, and Rand noted above:

The masters of science instruct us all—and the supporters of literary property are the first to argue this—that man does not have the capability of creating a single atom of matter; that all his activity consists of appropriating the forces of nature, of channeling these and modifying their effects, of composing or decomposing substances, of changing their forms, and, by this steering of the natural forces, by this transformation of substances, by this separation of elements, of making nature [la création] more useful, more fertile, more beneficial, more brilliant, more profitable. So that all human production consists (1º) of an expression of ideas; (2º) a displacement of matter.

Proudhon’s insight here is impressive not only because it preceded similar insights of Rand, Mises, and Rothbard, but because he realized that it implies that IP is problematic, whereas Rand, Mises and Rothbard did not make this connection.

Update re Proudhon: see mention here: Classical Liberals and Anarchists on Intellectual Property, Oct. 6, 2015.

Update: Hoppe from A Theory of Socialism and Capitalism:

What is the underlying rationale of this natural position regarding property? At the bottom of the natural property theory lies the idea of basing the assignment of an exclusive ownership right on the existence of an objective, intersubjectively ascertainable link between owner and the property owned and, mutatis mutandis, of calling all property claims that can only invoke purely subjective evidence in their favor aggressive. While I can cite in favor of my property claim regarding my body the objective fact that I was the body’s first occupant—its first user—anyone else who claims to have the right to control this body can cite nothing of the sort. No one could call my body a product of his will, as I could claim it to be the product of mine; such a claim to the right to determine the use of the scarce resource “my body” would be a claim of nonusers, of nonproducers, and would be based exclusively on subjective opinion, i.e., on a merely verbal declaration that things should be this or that way. Of course, such verbal claims could (and very likely always will) point to certain facts, too (“I am bigger, I am smarter, I am poorer or I am very special, etc.!”), and could thereby try to legitimize themselves. But facts such as these do not (and cannot) establish any objective link between a given scarce resource and any particular person(s). Everyone’s ownership of every particular resource can equally well be established or excluded on such grounds. It is such property claims, derived from thin air, with purely verbal links between owners and things owned, which, according to the natural theory of property, are called aggressive. As compared with this, my property claim regarding my body can point to a determinate natural link; and it can do so because my body has been produced, and everything produced (as contrasted with things “given”), logically, has a determinate connection with some definite individual producer(s); it has been produced by me. To avoid any misunderstanding, “to produce” is not to say “to create out of nothing” (after all, my body is also a naturally given thing); it means to change a naturally given thing according to a plan, to transform nature. It is also not to say “to transform each and every part of it” (after all, my body has lots of parts with respect to which I never did anything!); it means instead to transform a thing within (including/excluding) borders, or, even more precisely, to produce borderlines for things. And finally, “to produce” also is not to say that the process of production must go on indefinitely (after all, I am sleeping sometimes, and my body is certainly not a product of my actions right then]), it simply means that it was produced in the past and can be recognized as such. It is such property claims, then, which can be derived from past, embordering productive efforts and which can be tied to specific individuals as producers, which recalled “natural” or “nonaggressive.”

Update: See also Hume, in Hume on Intellectual Property and the Problematic “Labor” Metaphor : “1. There are several kinds of occupation, where we cannot be said to join our labour to the object we acquire: As when we possess a meadow by grazing our cattle upon it. 2. This accounts for the matter by means of accession; which is taking a needless circuit. 3. We cannot be said to join our labour to any thing but in a figurative sense. Properly speaking, we only make an alteration on it by our labour. This forms a relation betwixt us and the object; and thence arises the property, according to the preceding principles.”

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