From Mises Daily, 10/27/2009. This article was a chapter in Property, Freedom, and Society: Essays in Honor of Hans-Hermann Hoppe (Jörg Guido Hülsmann & Stephan Kinsella, eds., Mises Institute, 2009)
A Note on Intellectual Property and Externalities
I met Hans-Hermann Hoppe in 1991, I believe. Dissatisfied with inconsistencies in Hayek’s concept of individual freedom, I was looking for an assessment that (at least) tried to avoid these inconsistencies. Hoppe’s approach was and still is a representative of this rare species.
Hoppe was refreshing. He did not, and does not, take things for granted, for instance the classical liberal assumption that you cannot have individual freedom without government’s monopoly to protect it. If we believe in free markets, why should we easily assume that they do not work when it comes to the private production of protection? On a more philosophical level: if we look for a consistent political philosophy that allows for a peaceful solution of man’s most fundamental material problem, namely scarcity of resources under competing interests, why should not we look for a set of principles that do not contradict each other, no matter how difficult it appears to achieve these principles in practice?
The anarchocapitalism of Hans-Hermann Hoppe is a model developed along this guideline. Hoppe’s principles of original appropriation of free goods and of production and trade of private goods are perfectly compatible. As long as goods are identifiable, all questions regarding their proper ownership can be solved—in principle. Of course, goods which are difficult to identify pose a problem—a problem that exists apparently for each approach that tries to solve the above-mentioned, most fundamental, material problem of man.
Material goods are identifiable, at least in principle. The place where you park your car cannot be taken by another car, at least not at the same time, because matter has extension. On a more general level: matter, whatever form it has or extension it takes, fills a spot in time and space. One and the same point in the time-space-coordinate- system cannot be taken more than once. This exclusive relationship between matter, time, and space helps to identify, i.e., locate, material goods: material goods can exist side by side, but they cannot collide, e.g., take simultaneously the same spot in the time-space-coordinate-system. Hence a society in which only material goods exist can solve its material conflicts without any collisions or conflict as long as we apply coherent principles of legitimate acquisition of property.
Things become more difficult if we include property in immaterial goods. To say the least, the ontological status of immaterial goods is not the same as that of material goods. Whether immaterial goods fill spots in time and space, as material goods do, is much debated. It is also disputed whether or not it is possible to claim meaningfully that something exists if its alleged existence has no material form at all.
According to Popperian ontology, ideas have an immaterial status and began with language.[1] They are entities of World 3 and can be the subject of mental processes. These processes, in turn, belong to World 2. Of course, if we do not claim of ideas, problems, theories, arguments, etc. that they fill spots in time and space, what are they after all? Where do they go when nobody thinks of them? Where have they been in the meantime when someone “remembers” them? Do they disappear with mankind?
These questions address either deep philosophical problems or pseudo-problems. Whatever we think of the characteristics of these problems, it is clear that any meaningful concept of intellectual property presupposes that it is distinct from material property, hence immaterial. A further distinction between material goods and immaterial goods is that the former, in most cases, are tangible goods, whereas immaterial goods, for instance intellectual property, are intangible.[2] Ideas, melodies, and theories have no material extension per se as material goods do. Therefore, we cannot without further assumptions claim for them what we can claim for material goods, namely that they cannot collide with other material goods.
Intellectual property turns out to be a cumbersome element in an otherwise perfectly consistent political philosophy. Of course, Hoppe provides a solution to this problem. His solution rests on the introduction of a normative-functional explanation of private property into the debate and on the fact that immaterial goods are—unlike material goods—not scarce. As Hoppe has put it:
[O]nly because scarcity exists is there even a problem of formulating moral laws; insofar as goods are superabundant (“free” goods), no conflict over the use of goods is possible and no action-coordination is needed. Hence, it follows that any ethic, correctly conceived, must be formulated as a theory of property, i.e., a theory of the assignment of rights of exclusive control over scarce means. Because only then does it become possible to avoid otherwise inescapable and irresolvable conflict.[3]
In other words, assuming that scarcity is the reason for conflict over goods with competing interests[4] and that the very function of property rights is to solve these conflicts peacefully, there is no need to provide property rights for intellectual property, because intellectual goods are not scarce.
I shall return to this argument later. Until then we should keep in mind that intellectual property (if it exists at all) is, unlike material property, difficult to identify and, hence, its philosophical treatment asks for special care. Before we address the analysis of intellectual property, let us look at some aspects of the role of definitions.
Types of Statements: Analytical, Empirical, and Normative
It goes without saying that statements in the sciences can have different forms. Three are of importance here: some statements are purely analytical (for instance definitions, tautologies), while others are mainly empirical (theories, hypotheses) or normative (imperatives, rules, laws).
It also goes without further notice that it is sometimes quite complicated to tell whether a statement is meant to be (purely) analytical, empirical, or normative. Sometimes statements serve two or more masters. Take for instance your wife’s message: “Darling, the garbage can is full.” Not only do you suppose that she made an empirical statement (an assumption which is obvious because of the grammatical structure used in this sentence), you also clearly understand the implicit imperative: “Get the trash out of the kitchen and return with an empty bucket, please!”
Leaving the peculiarities of our language aside, it appears to be common sense among all scientists that language—despite all its imperfections—should be used as precisely as necessary for the theories in question and that analytical, descriptive, and prescriptive sentences should not be confused. It also appears to me that all three types of sentences have their distinct functions in all academic disciplines: definitions, being analytical statements, provide a field with abbreviations and meaning analyzes of the most central and frequently used concepts or terms,[5] while descriptive statements are mainly used for empirical assertions and prescriptive statements for normative recommendations.
Thus, when the existence or absence of some private property is either claimed or proposed, it is the definition of private property that tells us how private property, in either the empirical or normative context, is to be understood. Obviously, without knowing how private property is to be understood, we can definitely say neither what is empirically asserted nor what the norm recommends.
In order to set the stage for the discussion of the role of functionalism in intellectual property rights, to which we turn later, we should mention here that some definitions look rather functional while others do not. The reason is quite simple. It rests on the fact that some concepts are mainly—if not exclusively—used to describe a functional relation while others do not. For instance, we usually define a wife by the relation to her husband (and vice versa). The fact of bondage by marriage is constitutional for the definition of a wife—as it is for the definition of a husband. However, not for all terms are functional relations constitutional. Looking for a functional relation of the term that is to be defined might lead to the erroneous belief that this function, if found, is constitutional for the term.
For instance, it would be misleading to define private goods by their relation to public goods. Thus, it would be fallacious to conclude that unlike public goods, for which most authors claim nonexclusivity,[6] private goods are exclusive. Whether or not a good is exclusive is a coincidental character rather than a constitutional character of the good in question.
Of course, this coincidental character comes along with most of the private goods. However, it all depends on the way the good is treated by its owner and others. If an owner shares his good with others, it loses its exclusivity.[7] Take for instance a boat that you share with your friends for a trip along the coast. Though, strictly speaking, it is not exclusive for the time of the trip, it is still your boat throughout the trip.[8]
Consequently, an appropriate definition of private property presupposes identifying the subject who privatized the good. This is because the reason for a good to become private is not in the good itself, but rather in the relationship between the good in question and its “relator,” i.e., someone who owns it privately, namely the owner. If the owner is sovereign over it, then the good in question is a private good, his private good. In other words: it is sovereignty rather than exclusivity that defines private property.[9]
Having said this, it seems appropriate to add an observation on the exclusion and its costs. There are but two necessary preconditions for the existence of exclusion costs of a private good:
- The owner is interested in excluding others from his property; and
- Others covet his property.
Obviously, if the owner is uninterested in excluding others, then his property is likely to be taken away by someone who covets it. Nevertheless his exclusion costs are nil.[10] If the owner is interested in the exclusion of his property, whereas nobody covets it, he too faces no exclusion costs.
Though it may seem so at first, it is in fact not trivial to note that private property is appreciated by its owner mainly, if not exclusively, for the positive externalities that come with it. Also important is the insight that not all positive externalities that may come with a private good necessarily belong to the owner of that good. Think of a trumpet player in the street. His playing might cause positive externalities (as long as it pleases the passers-by). However, we most likely do not view him as the owner of these externalities, not to mention having an associated right to ask for compensation for the positive externalities initiated.
We may list five reasons to be reluctant to maintain that the musician has a right in these externalities. First, implicitly we assume that the busker, though the unopposed owner of his instrument, is not the owner of the public space or the air in which he performs and that, hence, he has no privilege to use that sphere exclusively or ask for compensation if others use it. He uses the public space and the free good “air,” and so do the passers-by.
Second, though the musician while playing initiates the sound waves, the listening of the passers-by is required in order to produce the full effect of listening to and enjoying music. In other words, though the musician is sufficient to produce the good “music,” he is not sufficient to produce the positive externality that may accompany it. Third, the passers-by could also—per impossibile— claim a property right to remuneration of positive side effects, because their forming an audience attracts others to join the event and, hence, enlarge the group of possible donators.
Fourth, the internalization of positive externalities is a problem of its initiator. To the extent that positive externalities are created without agreement (that would allow for compensation) and not internalized by its producer, these effects are nothing but free goods which can be internalized by anybody as he or she thinks fit.
Fifth, since there is no agreement between the busker and the passers-by that would allow for compensation, the positive externalities generated by the guitar player are at best an offer that one is free to accept or reject, and, if accepted, can be treated as a gift while the passers-by are free to respond to it by a return gift, i.e., throwing a few coins in the cap.
However one may view these considerations individually, they all seem to rest on the assumptions that property cannot generate new property for the owner if, in the process of this creation, property of others is included in one way or another; and that this holds true if the new “would-be property” is an externality. In other words, many positive externalities come into existence only by intermingling with property of others; and only if they don’t can the initiator claim a right in these without facing awkward queries.
These considerations are closely linked with the topic of intellectual property rights, although this might be not obvious at first sight. In order to become aware of this linkage, one should review the current debate on intellectual property rights.
Libertarians Views of Intellectual Property
Libertarians differ on the point of whether intellectual property rights can be explained and legitimized in the same way as property rights in material goods and services.[11] Some, like Ayn Rand, argue that the origin of property rights lies in the creative process that leads to private goods and thus conclude that intellectual goods, as results of a creative process, are also private and endowed with property rights. In other words, the legitimacy of patent rights, copyrights, etc. rests on the creative act of the author or inventor.[12]
Others argue that the creative act as such would not initiate new property.[13] They rest their criticism on the fact that ideas can be reproduced without any loss of quality and can be shared by many without creating any scarcity problems. As mentioned before, assuming that scarcity is the potential reason of conflict and that the very idea of property rights is to solve these conflicts peacefully, they see no need to provide property rights for intellectual property.[14]
However we might judge these competing views, it is quite interesting that both camps bring in functional explanations of private property, not functional definitions or any other sort of definition, as defined in the “Types of Statements” section above. From the proposed function of private property (be it “to give a man the right to the product of his mind” or “to assign rights of exclusive control over scarce means”) they either defend or deny intellectual property rights. However successful these approaches may be, they do not provide definitions of intellectual property in terms of an exclusively analytical statement. In the above-mentioned cases, the definitions of private property serve at the same time descriptive and normative functions, i.e., they also say how private property is and ought to be used in society.
Be this as it may, following the distinctions made herein, a definition of intellectual property has to take account of at least two implications. Assuming that talking of intellectual property is meaningful at all, the definition of intellectual property seems to imply that it shares with all other sorts of property the constitutional characteristic of property, namely being owned in a sovereign way by its owner. Another implication comes from the fact that intellectual goods are immaterial, hence not to be confused with material goods.
Intellectual Property, Material Property, and Externalities
Let us keep in mind that the most fundamental objection to intellectual property rights seems to be the following argument: as soon as we agree to the idea to establish intellectual property rights, we agree to the fact that they can collide principally with property rights in material goods.
The reason for this collision is obvious: a patent forbids everybody, with the exception of the patentee and his licensees, from using their material property in ways that are forestalled by the patent. Thus a patent to bake a plum cake—given to a baker—would prohibit all (nonlicensee) housewives from baking the cake in the patented way despite the fact that they would do it with their own ingredients. Hence, patents can collide principally with property rights in material goods (assuming that the patentee and the owner of the material goods in question are not identical).
Consequently, as soon as we include intellectual entities among the goods that can be private we end up with a political philosophy that has incoherent elements, while the very same political philosophy was coherent before this inclusion. In order to avoid this unpleasant problem, it seems to be necessary either to demonstrate that intellectual property and/or the right in it is nonexistent or to show that the aforementioned collision does not exist at all. Hoppe’s approach includes the former demonstration while the latter does not need to presuppose the nonexistence of intellectual property and/or intellectual property rights.
In fact, against the background of some arguments mentioned earlier and some to come it appears to me that the alleged collision does not exist at all and that we can talk meaningfully of intellectual property and intellectual property rights. In order to show this, it is helpful to look at the widespread distinction of the three kinds of usage of goods, namely usus, usus fructus, and abusus. Following this categorization, we distinguish the use of a good, its fruits, and its sale or transformation. I may use my apple tree by sitting under it (usus), eating its apples (usus fructus), or by selling it to a neighbor (abusus). Material usus, usus fructus, and abusus of the apple tree are possible without any further material good added to it.
Obviously, when it comes to immaterial goods, things become different. The material usus of any immaterial good is not possible without material added to it. Take a melody. It takes a voice, a guitar, or any other instrument to use it materially.[15] Mixing the melody with an instrument makes for a usus fructus. Neither an idea nor its fruits are per se material. Even if transformed into another idea, an idea stays immaterial. The material “extension” of an idea, so to speak, comes into existence subsequent to the mixture of the idea with matter.
That intellectual property alone cannot “breed” material property has far-reaching consequences. If it holds for intellectual property what holds for all private property,[16] namely that the sovereignty that comes with it does not go beyond the borders of that good, then no collision between intellectual property and material property is possible. Such a collision would require that the sovereignty that comes with an intellectual good would extend over material property.
Whatever intellectual property is (in ontological terms), the sovereignty over it does not extend to any material property. Thus an idea, whether patented or not, does not provide the owner of the idea with an extra sovereignty over any material property, be it his or the material property of somebody else.[17] That a patented idea (or any other intellectual good) cannot collide with material property means that the collision between the right of intellectual property and the homesteading principle simply does not exist. To put it differently, intellectual property rights and material property rights are in principle compatible.
Summary
The alleged collision between the two rights (material property rights and intellectual property rights) seems to rest on a misinterpretation of intellectual property. As some reflection on the different types of usage of goods shows, this misinterpretation rests on the confusion of intellectual property and its (material) externalities. These externalities are not, as shown, per se property of the owner of the idea. Only those externalities that derive from material goods he owned before or from free goods he appropriated belong to him. In particular, he is not the owner of the material goods owned by others. Hence the owner of the plum cake recipe remains the owner of “his” idea but cannot claim sovereignty over the ingredients owned by housewives. There is no collision with his intellectual property and their “using his” recipe of baking a plum cake.
To put it differently, we can talk meaningfully of intellectual property and intellectual property rights. However, intellectual property as such—being free of any material “extension”—is of no immediate importance to business life. What counts in the market are the externalities that can be derived from intellectual property. How to deal with these externalities is, of course, a different matter.
Notes
[1] Karl Popper, The Open Universe: An Argument for Indeterminism [The Postscript to The Logic of Scientific Discovery, vol. II] (Totowa, N.J., Rowman & Littlefield, 1982), 116.
[2] Though some speak exclusively of tangible and non tangible goods, I prefer to talk of material and immaterial goods. See, for instance, Stephan Kinsella, “Against Intellectual Property,” Journal of Libertarian Studies 15, no. 2 (Spring 2001): 2. The point about material goods is not that they are tangible, for some are not. For instance, atoms and many other small material units are not tangible; they are identifiable only indirectly, though this does not prevent us from calling them material.
[3] Hans-Hermann Hoppe, A Theory of Socialism and Capitalism (Boston: Kluwer Academic Publishers, 1989), 235, n. 9.
[4] Ibid., 10:
[B]ecause of the scarcity of body and time, even in the Garden of Eden property regulations would have to be established. Without them, and assuming now that more than one person exists, that their range of action overlaps, and that there is no preestablished harmony and synchronization of interests among these persons, conflicts over the use of one’s own body would be unavoidable. (emphases added)
[5] On the role of definitions, see Gerard Radnitzky, “Definition,” in Handlexikon zur Wissenschaftstheorie, Helmut Seiffert and Gerard Radnitzky, eds. (Munich: Ehrenwirth, 1989), 22–33.
[6] We cannot appropriately deal here with the related question of how to define public goods . It seems, however, obvious that non exclusion is an appropriate constitutional character of public goods. So while a likely concomitant of public goods, it is only coincidental. For instance: for the time a public library is used by just one person, it is, strictly speaking, not non exclusive.
[7] Bringing in the owner’s right to exclude others shifts the story onto another level for which different conditions hold. Foremost, talking of rights requires the inclusion of normative sentences in the debate, while the aforesaid operates with descriptive sentences exclusively.
[8] Analogously, it would be misleading to say that a private good is a good for which the owner has solved the exclusion problem, or paid the exclusion costs. Although this may hold for many private goods, it is accidental, but not constitutional. Some private goods do not have any exclusion costs, simply because there is nobody interested in being included. Think of bulky waste that nobody wishes to have. If placed on no man’s land it becomes a common good (or a bad, for that matter); if placed on a public good (street) it becomes a public good (or bad, for that matter); if thrown in the neighbor’s garden, it continues being private—and most likely becomes the subject of a fierce dispute among neighbors. However, it seems appropriate at least to indicate that an explication of the term “public good” would show that one of its main characteristics is non sovereignty.
[9] As Anthony de Jasay has put it: “Sovereignty may be delegated revocably, or transferred for good, but it cannot be shared, and that is why there is no true property that, after cancelling out agents, delegates and intermediaries, is not mine, yours, his or hers.” Anthony de Jasay, Choice, Contract, Consent: A Restatement of Liberalism (London: Institute of Economic Affairs, 1991), 75.
[10] Talking of the exclusion costs for goods, from which the owner does not want to exclude others, is pointless. In any case, talking of costs is meaningful only if there exists at least one possible cost-bearer. It is equally pointless to speak of the costs or the price of a good for which there is no demand. The seller might have some clear ideas on the amount of money he wishes to get in return for the good, but he cannot determine the price alone. The price is determined by supply and demand, and this determination finds its expression in the market transaction.
To put it in Lockean terms, “costly” is a secondary quality of a good, but not a primary one. Plainly speaking, secondary qualities of any object presuppose a possible relation between the object and a subject. According to Locke, the primary qualities of an object exist with the object, for instance gravity, while secondary qualities, like color, come into existence through the relation of the object and an observer.
[11] The best account on the different libertarian perspectives on this topic is given by Kinsella in “Against Intellectual Property.”
[12] Ayn Rand, “Patents and Copyrights,” Capitalism: The Unknown Ideal (New York: The New American Library, 1967), 130–34. “Patents and copyrights are the legal implementation of the base of all property rights: a man’s right to the product of his mind” (130).
[13] For instance, Boudewijn Bouckaert, Henri Lepage, Wendy McElroy, Benjamin Tucker and—partially—Murray Rothbard. See Kinsella, “Against Intellectual Property,” 11.
[14] See footnote 2.
[15] Of course, this changes the fact that you may use it immaterially, namely, mentally by thinking of it.
[16] In fact, this must hold for intellectual property if intellectual property is to be understood as a sort of private property.
[17] The only sovereignty over his material property comes with that very material property, and with nothing else.
Comments (30)
Anonymous
Maybe I’m missing something but if ‘Intellectual property’ has no impact on how I use my property, then what is the purpose of it at all? Just to establish the history of the ‘property’ in question?
Published: October 27, 2009 10:32 AM
Michael A. Clem
To put it differently, we can talk meaningfully of intellectual property and intellectual property rights. However, intellectual property as such—being free of any material “extension”—is of no immediate importance to business life. What counts in the market are the externalities that can be derived from intellectual property. How to deal with these externalities is, of course, a different matter.
While the article helps clarify things in some small degree, I felt rather cheated to be left hanging like this. What is the analytical form or definition of property, and how can “intellectual property” be called such? And how we deal with these externalities is the primary question we’re trying to answer, isn’t it? Isn’t this just background leading to those answers?
Published: October 27, 2009 11:18 AM
tz
Ownership is just as much an abstract idea as any invention or artistic work, as are rights.
Whether someone “owns” something or not tends to be subjective, even for real property – If I like the forest and lake as is – in it’s natural state, am I “using it” so would have a claim, or the fact that I don’t alter it means it is functionally abandoned? If ownership is merely the ability and willingness to use violence to defend something, then ideas and other things can be property. Usually the “evidence” of ownership is a deed or some other abstract proof of ownership granted by some human authority.
I would also note that most people who reject IP will accept any term in any contract. So what happens if I sell you a book or let you use an invention under the terms you must not disclose the contents? Having no copyright or patents does not mean the information will be free – some may not exist (the same way property whose rights are disputed is usually left undeveloped), and other bits may be encumbered with individual legal and/or technical measures which may be even worse than what exists now.
And “property rights” has nothing to do with any process involving a peaceful settlement of disputes. At some point one or more disputes will not be resolvable – both parties may have an equally good or bad claim or it would depend on some factor which cannot be independently verified. Either some authority (typically the state) comes in and says A is right and B is wrong and will do violence to B if he tries to pursue the claim or obtain the property. If there is no 3rd party enforcement of property rights (true 3rd party, not someone hired by either or both disputants), then the parties can go through whatever private ritual they want, but it will matter who has or can obtain the greatest stealth or most effective weapons – even such battles in an abstract place like an arbitration hearing will have to move to the real world which is where it will have some finality.
My fundamental problem with the anarchocapitalistic models is the subtle assumption that there will be providers of “protection” instead of providers of mere violence. That there might be Pinkertons (who often were thugs – are Blackwater contractors today better because they are “private”?), but NOT that the free market will produce entrepreneurial, creative thieves and assassin’s guilds – and they would be effective with the full force of the free market. And the Thieves merely need to make it uneconomical for the protection agencies to do more than occasionally pay off on the insurance and raise premiums. (“The Professional Thief, written in the 1930s shows how this did work and is probably a better example and is a real case of how things work outside the state, or by going outside it; more recently the series “It takes a thief” on Discovery showing how easy it was to ransack a house on a weekly basis). They will not catch every thief, so the probability of recovering an amount which would pay for the investigation, apprehension, finding the property, disputing ownership of “stolen property” has to be greater than just doing the paperwork and paying off the claim. If a company would only begin investigating claims above $2000, thieves are smart enough to steal only $1900.
There are stateless societies. Afghanistan before 9/11/01. Somalia. The tri-border region in South America and Now parts of Mexico. Returning to the US might be a problem, but these places without any state ought to be paradises. Yet I’ve never heard anyone say they actually want to move there and attempt to set up their anarchocolony in actual
Published: October 27, 2009 1:25 PM
ktibuk
There is one main, and false assumption underneath the opposition against IP.
The first wrong assumption can clearly be seen in the Hoppe quote and often repeated by IP opposition.
But to quote the author,
“In other words, assuming that scarcity is the reason for conflict over goods with competing interests[4] and that the very function of property rights is to solve these conflicts peacefully, there is no need to provide property rights for intellectual property, because intellectual goods are not scarce.”
This is a clearly positivist approach to law which is polar opposite of natural law. One can not claim to believe in natural law and repeat this assumption without contradicting himself.
According to natural law theory, laws are not made by people but they are discovered. Laws exist and humans realize, accept and act accordingly. Or not, of course. The implications of disregarding reality and its laws may have different consequences but they do have consequences.
Thus laws regarding property rights are not created by man to solve conflicts or better society or some other goal. Natural laws regarding property exist whether people realize and accept them or not.
Laws are not made to resolve conflicts, conflicts arise when some other person disregards the laws of reality.
This means Robinson Cruseo can own property before Friday comes to the island. Conflict may arise if and when Friday comes to the island and disregards natural law, that says Cruseo homesteaded property on the island.
On the other hand Hoppes assumption suggests, Cruseoe can not own property before anyone else comes to the island (he should starve I guess). The only way to establish laws regarding property is for Friday to come to the island and both of them make a law that might resolve potential conflicts.
Which is putting the cart in front of the horse, and wrong
Published: October 27, 2009 1:36 PM
Andras
The prevailing dogma in some libertarian circles is that IP is not property due to its lack of scarcity. However, whenever an idea first discovered or recognized it is scarce. It is so scarce it is unique (the reason it was an externality).
Can we put the horse in front of the cart and say that the definition of IP is the extent of its scarcity. Measuring this extent, however, is a problem. We only know that the two extremes, the unique and the infinite what borders it. The transition from one extreme to the other coincides with the process of internalization of a new idea. In the patent laws the recognition of novelty is awarded by an extended grace period (monopoly) to slow this transition. Although this award is arbitrary it is not unique. Internalization of a physical property goes the same way in the sense that the process (homesteading) is also arbitrary though not with time.
The advantage of having IP through patent laws that they enable for calculations even before the idea becomes fully internalized. Of all places, mises.org should be expected to comprehend this advantage.
Published: October 27, 2009 5:45 PM
Peter
Natural laws regarding property exist whether people realize and accept them or not.
What, independent of men? If all life in the universe was wiped out tomorrow, “natural laws regarding property” would still be in operation?
Somebody’s “disregarding reality”, but I don’t think it’s the anti-IP folk 🙂
Published: October 27, 2009 5:51 PM
D
Peter, you paint a picture where humanity has been wiped out totally….and then point fingers at others about ‘disregarding reality’.
Yikes.
Published: October 27, 2009 7:12 PM
Michael
tz says:
“I would also note that most people who reject IP will accept any term in any contract. So what happens if I sell you a book or let you use an invention under the terms you must not disclose the contents? Having no copyright or patents does not mean the information will be free – some may not exist (the same way property whose rights are disputed is usually left undeveloped), and other bits may be encumbered with individual legal and/or technical measures which may be even worse than what exists now.”
This doesn’t take into account the fact that contracts don’t apply to third parties. The second this idea is revealed to someone who wasn’t a part of the contract, all the original protection is gone.
And this doesn’t seem to be enforceable. How would you prove that a third party is violating a contract by printing a book or making an invention that takes advantage of an idea. You’d have to be able to trace it back to the person who signed the contract, and then that person would be at fault, not the third party.
Published: October 27, 2009 8:17 PM
Michael Vogt
ktibuk says:
On the other hand Hoppes assumption suggests, Cruseoe can not own property before anyone else comes to the island (he should starve I guess). The only way to establish laws regarding property is for Friday to come to the island and both of them make a law that might resolve potential conflicts.
This may be the strangest argument I’ve seen. How does what Hoppe state in any way imply that the island not a scarce resource in your example? Is it supposedly not scarce because only one person is there? I certainly can’t find a way to interpret his statement to arrive at that conclusion. And how is your Crusoe example any different than when someone homesteads any other property on Earth that nobody else has found yet?
Of course we don’t have to worry about conflict until a second person comes along, but that doesn’t mean ownership hasn’t been established.
Published: October 27, 2009 8:32 PM
averros
First of all, “intellectual property” is not property – simply because it is a TEMPORARY monopoly privilege granted by the government.
It does not exist without government, unlike real property.
The idea that “IP” somehow does not collide with real property rights is just absurd. The property rights in photocopier and paper permit me to do whatever I want with them. Including copying a book. The claim by the author of the book that I cannot do that are preventing me from exercising my material property rights – while it does NOT cause any material, demonstrable harm to the author. (Loss of income due to non-aggressive acts of other people is NOT harm – otherwise, we’d have to outlaw competition… wait, that’s exactly what IP laws do).
It is as simple as that.
Published: October 27, 2009 8:34 PM
huh?
ktibuk said that the following is a clearly positivist approach to law which is polar opposite of natural law : “In other words, assuming that scarcity is the reason for conflict over goods with competing interests[4] and that the very function of property rights is to solve these conflicts peacefully, there is no need to provide property rights for intellectual property, because intellectual goods are not scarce.”
Anyone care to explain in detail why this is positivist?
Published: October 27, 2009 8:53 PM
Michael Vogt
Andras said:
However, whenever an idea first discovered or recognized it is scarce.
I don’t understand how you can consider an idea to be a scarce resource. If I find an unowned diamond, that diamond is a scarce resource that I own, and nobody can take that same diamond from me without my permission without violating my rights. But even if someone doesn’t reveal an idea to others, someone else could very well come up with the same idea separately. Here someone has the same idea as someone else who had it before, but obviously without a violation of property rights.
And since when do we need to measure scarcity? With what? Utils? Seems to me that something’s either scarce or it isn’t.
And what does internalization has to do with property rights?
Published: October 27, 2009 8:59 PM
Russ
Michael Vogt wrote:
“Seems to me that something’s either scarce or it isn’t.”
I think you just hit the heart of the matter.
Obviously, information isn’t scarce. It mostly comes down to the fact that some people think that a person who comes up with an idea has a right to profit from it. If that is a moral position on the part of a pro-IP person, there’s not much arguing with it. (You can disagree with it, but it’s hard to argue a person out of a moral belief.) If it’s a utilitarian position, though, that’s different. Shakespeare didn’t have copyrights, and yet we aren’t denied Shakespeare’s art. He figured out a way to profit from his work without copyrights.
Published: October 27, 2009 9:36 PM
Del Lindley
To say that IP rights are non-existent (Hoppe) or to say that they exist but do not extend to material externalities (Bouillon) to me seems to be a distinction without a difference. Once a (public) idea is legally divorced from its material implementation it loses all market value, and any “good” without market value would not constitute property in any meaningful sense. Hoppe makes all ideas appear worthless because they are easily copied. Both approaches imply that idea discovery is an effortless process from which no market value can be derived.
This conclusion is refuted by the fact that many (if not most) useful commercial ideas are not patented but held as closely guarded trade secrets. Having no external market, the value of these ideas may be gauged by the cost of guarding them. The authors of these ideas, if no one else, appreciate the effort required to create them.
The material “collision” that supposes an IP owner can effectively own another’s property seems to be wildly overblown. How is the IP owner to know that his patent has been violated without the violator (directly or indirectly) advertizing the fact? The IP owner is concerned with competition in the marketplace, not how individuals or entities act with respect to their private consumption.
Published: October 27, 2009 9:44 PM
Michael Vogt
tz said:
And “property rights” has nothing to do with any process involving a peaceful settlement of disputes.
Are property rights not the basis of any natural rights process involving a peaceful settlement of disputes?
At some point one or more disputes will not be resolvable – both parties may have an equally good or bad claim or it would depend on some factor which cannot be independently verified.
If we’re still talking about property, how exactly would two parties have an equally good or bad claim? Why should a dispute not be resolvable? What sort of non-independently verifiable factor do you have in mind? This is so vague as to be difficult to understand what you’re saying.
Either some authority (typically the state) comes in and says A is right and B is wrong and will do violence to B if he tries to pursue the claim or obtain the property. If there is no 3rd party enforcement of property rights (true 3rd party, not someone hired by either or both disputants),
Why would someone hired by both disputants not be a “true” third party? If you want an example of a false third party, see every case where the government is both a party in the dispute and the decider in the dispute.
then the parties can go through whatever private ritual they want, but it will matter who has or can obtain the greatest stealth or most effective weapons – even such battles in an abstract place like an arbitration hearing will have to move to the real world which is where it will have some finality.
Why assume that stealth and weapons would immediately be used in disputes? Are people really just that eager to engage in a fight to the death or perhaps leave everything in the middle of the night?
My fundamental problem with the anarchocapitalistic models is the subtle assumption that there will be providers of “protection” instead of providers of mere violence.
There’s no subtle assumption about private protection agencies. This is explicitly advocated by anarchocapitalists, and if you feel that warlords would take over, that’s an argument you’ll need to back up with some reasoning. As it is today in the U.S., most organized violence happens in the black market, which wouldn’t exist in an anarchocapitalist society.
That there might be Pinkertons (who often were thugs – are Blackwater contractors today better because they are “private”?),
They certainly might be if they were on a free market, you had a choice about whether to hire them or not, and they were held responsible when they violated the rights of others.
but NOT that the free market will produce entrepreneurial, creative thieves and assassin’s guilds – and they would be effective with the full force of the free market.
Such criminals are hardly rendered ineffective by the presence of government. How would criminals operate any differently in an anarchocapitalist society than one ruled over by government? It’s not like criminals are currently hampered by bureaucratic red tape and regulation.
And the Thieves merely need to make it uneconomical for the protection agencies to do more than occasionally pay off on the insurance and raise premiums.
So we’re assuming the protection agencies would supply insurance and also make such bad decisions as to fail in the market place. Nevermind that insurance investigators have always been more effective at finding stolen property than state police forces.
(“The Professional Thief, written in the 1930s shows how this did work and is probably a better example and is a real case of how things work outside the state, or by going outside it; more recently the series “It takes a thief” on Discovery showing how easy it was to ransack a house on a weekly basis).
Wait, I haven’t read this, but I’m assuming this story takes place with the state in place. If that’s the case, why should the state’s inability to stop a thief be considered an evidence in the state’s favor?
They will not catch every thief, so the probability of recovering an amount which would pay for the investigation, apprehension, finding the property, disputing ownership of “stolen property” has to be greater than just doing the paperwork and paying off the claim.
It would be up to the protection or insurance agency to determine how to be profitable, and at least they would obviously have an incentive to find the thief. If you’ve ever had something stolen and spoken to the police, you’ll quickly find out how interested they are in recovering your goods.
If a company would only begin investigating claims above $2000, thieves are smart enough to steal only $1900.
That’s an incredibly arbitrary amount to choose, but like I said, the police practically never bother with looking for stolen goods. They’re only interested in catching criminals. And even when they do, they don’t care about your loss and really aren’t interested in recovering your goods for you.
There are stateless societies. Afghanistan before 9/11/01. Somalia. The tri-border region in South America and Now parts of Mexico. Returning to the US might be a problem, but these places without any state ought to be paradises. Yet I’ve never heard anyone say they actually want to move there and attempt to set up their anarchocolony in actual
Sorry you got cut off there.
First, no anarchocapitalist has ever claimed it would be a utopia, or that their ideas are solely concerned with the mere absence of a state. This is obviously strawman nonsense. There were also stateless societies in Ireland and Iceland, and though they obviously weren’t anarchocapitalist, they were also relatively successful without states. You have to overlook the whole of anarchocapitalist thought to believe that Somalia or just any stateless society somehow represents its ideas.
Published: October 27, 2009 9:55 PM
Michael
Del Lindley said:
The material “collision” that supposes an IP owner can effectively own another’s property seems to be wildly overblown.
Really? Aside from defensive patents, what’s the point of having a patent if you can’t control other’s property? How can you enforce a patent against a competitor and not stop others from using their property
How is the IP owner to know that his patent has been violated without the violator (directly or indirectly) advertizing the fact?
I would imagine they typically find out because often their competitors are in the same field they are. It’s worth the effort of looking around if you can take someone like RIM to court over a patent, and I don’t think Blackberry was “advertising” their use of such technology. Or even look at the guy who developed open source software for a train set. If you can knock out a competitor, you might be able to make more money.
The IP owner is concerned with competition in the marketplace, not how individuals or entities act with respect to their private consumption.
Check the train set story. There are IP owners who produce absolutely nothing. What exactly is their competition in the marketplace?
Published: October 27, 2009 10:07 PM
ktibuk
“This may be the strangest argument I’ve seen. How does what Hoppe state in any way imply that the island not a scarce resource in your example? Is it supposedly not scarce because only one person is there? I certainly can’t find a way to interpret his statement to arrive at that conclusion. And how is your Crusoe example any different than when someone homesteads any other property on Earth that nobody else has found yet?”
I am not talking about scarcity. The main point in Hoppes argument is “conflict resolution”, scarcity is just a potential reason for conflict.
Positivist claim, laws are made to reach an end, in this case a broad goal “resolving conflicts”.
Natural law theorists claim, laws are not made, they are discovered and conflicts arise only when some individual disregards natural law.
Clearly Hoppes approach to property rights are positivist and legal positivism has many distasteful consequences.
If potential conflict is the only reason there are laws regarding property, how can one claim
“Of course we don’t have to worry about conflict until a second person comes along, but that doesn’t mean ownership hasn’t been established.”
Published: October 28, 2009 4:36 AM
ktibuk
There are two main epistemological approaches in philosophy.
1. Reality and laws regarding reality exists independent of men. Men percieves, realizes and acts according to these realities in order to survive.
Take “the law of gravity”. It doesn’t exist because men gathered and decided they didn’t want to fly off to nothingness. Gravity exists independent of men. People may realize this fact of reality and act accordingly or they may not. Both actions have consequences. In the case of the law of gravity consequneces of defying reality, jumping off of a cliff and flapping your arms for example, have direct and dire consequences so not many people dispute it.
Laws regarding property rights (or economics laws) are just the same. They are dictated by reality. But in this case defying reality has indirect consequences so people may defy reality, for a while at least.
2. Crudely, reality is dependent on the mens mind. Reality is what men wants and can be bent according to mens wishes. Or in the more sophisticated Kantian sense, even if there is some objective reality it can not be perceived by men, thus the main concern of men is the reality that is dependent of mens mind.
This is the basis of positivism. At least legal positivism, because as I mentioned positivism is physics or chemistry is quickly identified as schizophrenia.
Hoppes definition of property rights is tainted with legal positivism. The consequence is the oppostion of IP (IP socialism) in this case, but if one follows these assumptions to their logical ends you would reach nothing but full blown socialism
Published: October 28, 2009 4:59 AM
Peter Surda
@ktibuk:
> There are two main epistemological approaches in
> philosophy.
Yes. And your “property theory” is clearly positivist. IP cannot exist without a mind, but (classical) property can. If there is an apple and a horse eats it, or if an eruption on Sun causes disturbances in EM spectrum around the Earth, the consumption of these resources becomes impossible even in the absence of people. But no phenomenon could prevent a parrot from singing “I’m bad” or a monkey from writing Hamlet. Men have to come up with that and hit the poor animals with a stick.
I believe Hoppe’s argument wasn’t necessarily that conflict resolution is the justification of property. It could very well be a byproduct. Or that conflict resolution is a necessary condition, not a sufficient one, for rights.
I do not like the term “scarce” when used in the context of property, I prefere “rival”. Non-rival does not imply infinite supply or zero cost (as non-scarce seems to, which confuses people).
IP socialism would be if you were forced to disclose information or provide services against your will without an underlying contract. For example some of the people in the Free Software movement would like it to be compulsory for everyone to supply source code if they distribute binaries. Or make DRM illegal. In my opinion it would be more accurate to describe that approach as IP socialism.
If I was to accept Hoppe’s definition of IP (and its non-overlappingness with the material world), in that case my position might be described as IP socialism: If an immaterial good is not a subject to a contract you aggreed to, you can consume it unrestricted. But I don’t aggree with Hoppe’s definition, because that shifts the focus into externalities (i.e. utilitarian approach).
If you insist that your approach is natural, how do you naturally set boundaries of this immaterial property? What about the objections I wrote about in previous posts? E.g. translations, paraphrasing, change of form, usage by ownerless animals and machines? What if person A says “aguya beal afiruq” and person B says “oh, that gives me a great idea”, does that mean person B is using A’s property?
Cheers,
Peter
Published: October 28, 2009 6:07 AM
ktibuk
Peter Surda,
Firstly I claim Hoppes definition of property is “tainted” with positivism. It is clearly not totally positivist, or he would be a socialist.
Secondly, natural law doesn’t say men is totally irrelevant. Of course men is always in the middle. Reality may be independent of men but it certainly relates to men. We are all men after all and we are the ones thinking and arguing about these issues.
The product itself (not only IP but also tangible property) may be the creation of the mind but the law regarding IP is not a creation of men. At least not all. Patent laws for example are the result of a positivist approach to a natural law subject. That is why they are always at the center of attack. And this is not unique. There are millions of written legal code based on natural law but perverted by positivism.
But according to Hoppe not only property is mens making but laws regarding property, or property rights are mens making. They are means to an end. And that end is, as clearly stated, a conflict free world.
Again.
Laws are not made to resolve possible conflict, but conflict arises only when at least one party disregards natural law.
Published: October 28, 2009 6:51 AM
Peter
Positivist claim, laws are made to reach an end, in this case a broad goal “resolving conflicts”.
Natural law theorists claim, laws are not made, they are discovered and conflicts arise only when some individual disregards natural law.
These are not conflicting ideas as you claim; the natural law theorist (at least, the sensible ones) are not claiming there’s some sort of Platonic reality in which “laws” are floating around waiting to be discovered by physicists, which is what you’re implying here.
Published: October 28, 2009 7:01 AM
Peter Surda
@ktibuk
> Firstly I claim Hoppes definition of property is
> “tainted” with positivism.
I don’t agree. I think you are misinterpreting his arguments and have not thought about the article thoroughly. I have read some of his previous work. He clearly makes a distinction between the normative and the positive but his wording is often overly complicated and takes time to comprehend correctly.
> Secondly, natural law doesn’t say men is totally
> irrelevant.
In a way, they are. There is a distinction between being an originator of the law and being a passive observer of the law. A passive observer is not the cause of the law.
> The product itself (not only IP but also tangible
> property) may be the creation of the mind but the
> law regarding IP is not a creation of men.
After all this time you have failed to explain how it is anything but. As I said previously, IP is only the right to exclude, not the right to use and trade. So, how is the right to exclude using immaterial goods not a creation of men? How is it anything but a utilitarian experiment?
> But according to Hoppe not only property is mens
> making but laws regarding property, or property
> rights are mens making.
Again, misinterpretation. Hoppe knows the difference very well, probably better than either of us.
> Laws are not made to resolve possible conflict,
This is redundant. Natural law (should it exist) wouldn’t be created by men, and men’s law obviously has conflict resolution as one of the aims.
> but conflict arises only when at least one party
> disregards natural law.
No. Conflict arises whenever there is a disagreement over the use of scarce resources. It doesn’t matter what the rights are or should be. You are probably mistaking conflicts for injustice. That’s not the same thing.
Cheers,
Peter
Published: October 28, 2009 8:19 AM
Michael A. Clem
I’m not going to defend Hoppe, other than to say I think you’re misinterpreting what he’s said. It would be absurd indeed for an anarchocapitalist to rely upon positivistic law for the foundation of an anarchocapitalist society. Natural law is more about human nature and how people interact with each other based upon that nature rather than about any particular legal system that may be built upon that.
But to get back to the topic of IP, if it requires posivitism to have IP, then it is clearly unnatural and could not exist without an authoritarian government. However, the assumption that a creator cannot profit without IP is just that, an unwarranted assumption. There are, and may be, many different ways to profit. If an idea is worth something to someone, the market will value it and treat it accordingly. People will profit from their ideas. The mistake is in thinking that these ideas must be considered “property” and/or that some positivistic law must exist in order for people to profit from their ideas.
An unskilled laborer is valued for the labor he does–showing up for work and punching in on the timeclock is merely a prerequisite for the labor he does. Likewise, having an idea, however unique it may be, is still just a prerequisite for implementing the idea and making a profit from it–the profit comes from how the idea is used, not merely for having the idea.
Published: October 28, 2009 10:39 AM
Michael
@ktibuk
I can’t make any sense out of your argument. Hoppe’s recognition of conflict as a necessary (but not sufficient) condition for property rights. Natural rights come out of the nature of things. The nature of our existence includes multiple persons who can come into conflict with one another. I don’t see how this is problematic.
Perhaps you can answer this question: How are property rights going to matter if there’s only one person on earth? How exactly would you conceive of natural rights in this situation in a way that would actually matter?
I also have never seen your definition of positivism used in philosophy or in the legal profession. Where are you getting this stuff?
Published: October 28, 2009 6:16 PM
Greg
Either there is a property right to matter or a property right to patterns. Both cannot exist at the same time.
“Intellectual property” rights would be rights to patterns. They would be superior to rights to matter, because rights to patterns would include rights to matter.
Rights to patterns are therefore not compatible with libertarianism.
Published: October 28, 2009 7:19 PM
ktibuk
I am not misinterpreting anything since the assumption, the axiom, at the root of this “property theory” is quite simple and already quoted and repeated endlessly by IP oppononents.
“”In other words, assuming that scarcity is the reason for conflict over goods with competing interests[4] and that the very function of property rights is to solve these conflicts peacefully”
Thus the conclusion,
“there is no need to provide property rights for intellectual property, because intellectual goods are not scarce.”
I am challenging the assumption. I am saying it begs the question and I am also saying this is a typical positivist approach to law.
And actually Michael asked the relevant question which I have brought up many times..
“Perhaps you can answer this question: How are property rights going to matter if there’s only one person on earth? How exactly would you conceive of natural rights in this situation in a way that would actually matter?”
If the reason for property is the possibility of conflict amongst individuals, how can Robinson Cruseo homestead anything and make anything his property?
Property is property whether there is one person or many. It is dictated by nature, by reality. If humans doesnt homestead and use natural resources they can not stay alive.
The core property, self ownership, is also dicated by reality not the whims of men. Even a slave is ultimate decision maker. He can rebel at anytime because he is in total control of his actions, he k-just choses not to rebel because of the possible consequences.
This is not so because, people got together and decided each would have total and ultimate control over themselves because there may be conflicts otherwise. This is so because it is. And conflicts arise when someone else tries to enslave another because this action is against the laws of reality, nature.
Coming back to IP.
There is positivism in IP law, and I never denied it. All laws are tainted with it but the most perverse is patent laws. Patent law is natural law, perverted by positivism Also there are problems with copyright laws like time limit on ownership.
But the core IP, the basic right to be left alone, is a natural right as any other.
You can not arbitrarily dismiss it because you think you can make the law and decide what is a natural right or not.
Published: October 29, 2009 2:57 AM
Peter Surda
@ktibuk:
Even if we assume that everything you write (about property making sense even if there are no people) is correct, you still haven’t explained how IP follows from nature. I can maybe see how you can “kind-of-homestead” an immaterial good (in a very narrow sense), but how can you naturally deduce its boundaries? There is no natural connection between an original and a copy, translation, paraphrasing, format change etc. That connection only exists in people’s minds and that contradicts your original assumption that it is independent of them.
How do you prove that the immaterial “property” they use is identical? The only thing you can do is to compare some physical manifestations and try to interpret them.
Without men (or aliens, whatever), there is no interpretation. Without interpretation, there are no boundaries. Without boundaries, there is no exclusion. Without exclusion, there is no IP. Therefore, without men there is no IP.
Cheers,
Peter
Published: October 29, 2009 4:37 AM
Shay
ktibuk wrote, “If the reason for property is the possibility of conflict amongst individuals, how can Robinson Cruseo homestead anything and make anything his property?”
I think that it is meaningless until someone else arrives on the island. At that point, Crusoe has effectively already homesteaded the island.
“Property is property whether there is one person or many. It is dictated by nature, by reality. If humans doesnt homestead and use natural resources they can not stay alive.”
I tend to think of property ownership as simply meaning whoever has the ultimate decision about its use, and whatever it is cannot be used for more than one thing simultaneously. So a lone person inhabiting a place is effectively the owner of it all, unless perhaps there’s a fierce lion that won’t let him near a certain place. If there is a state that can take “your” property if you don’t pay taxes, for example, then the state effectively owns it and is simply allowing you some input on its use.
“This is not so because, people got together and decided each would have total and ultimate control over themselves because there may be conflicts otherwise. This is so because it is. And conflicts arise when someone else tries to enslave another because this action is against the laws of reality, nature.”
But the aspect of conflict is an explanation of how such laws come into existence. There wouldn’t be any if there weren’t the aspect of conflict. If there were no issue of deciding who decides what is done with something, then what would property mean? It’s all about the potential conflict when more than one person wants to decide what is done with something.
Published: October 29, 2009 5:11 AM
Peter
“In other words, assuming that scarcity is the reason for conflict over goods with competing interests[4] and that the very function of property rights is to solve these conflicts peacefully”
Thus the conclusion,
“there is no need to provide property rights for intellectual property, because intellectual goods are not scarce.”
I am challenging the assumption.
Which assumption? That scarcity is the reason for conflict over goods with competing interests or that the function of property rights is to solve conflicts peacefully? Both seem self-evident…what is your argument?
Published: October 29, 2009 7:26 AM
Peter
This is not so because, people got together and decided each would have total and ultimate control over themselves because there may be conflicts otherwise.
Oh, is that what you’re arguing with? Well, sure; you’re right…but nobody ever made the claim you’re disputing! “The function of property rights is to resolve conflict” is not the same as “some people decided to make up property rights to resolve conflict” (after all, any process could do that!)
Published: October 29, 2009 7:29 AM