Replies to Neil Schulman and Neil Smith re IP

by Stephan Kinsella on July 19, 2010

in Intellectual Property

As a supplement to the post The L. Neil Smith – FreeTalkLive Copyright Dispute:

My reply to Cathy, Neil Smith’s wife: http://forum.freekeene.com/index.php?topic=3502.msg39201#msg39201

Cathy, my only focus here is the claim that IP is justified. Neil’s latest articles is not a clear argument in favor, but it seems to rest on the idea that you own any pattern you create. But this is not a libertarian principle and in fact if people owned patterns they created then it would undermine all property in physical things. He implies we would have no innovation without IP–which is clearly untrue. We might have less, but not zero. So then the argument is we need IP to make sure we have more innovation. How do we know the value of that additional innovation is worth the cost of the IP system? How we do know even that higher level of innovation is enough? Some–even libertarians–think it’s not so they go even further and support tax subsidized innovation awards to spur even more innovation.

I am a patent lawyer, and a libertarian (and a huge fan of your husband’s novels). I used to be pro-patent, but when I searched for a more solid foundation for it, I finally realized I couldn’t, and that the reason was I was trying to justify the unjustifiable. Granting rights in ideas really means giving the idea-creator a veto-right over how other people use their own bodies and property. It’s simply unjustifiable. You do not own “whatever” you “create”–you own scarce resources for which you or an ancestor in title were the homesteader.

I’ve explained all this in detail in various works, such as “Intellectual Property and Libertarianism” and “The Case Against IP: A Concise Guide”, here http://www.stephankinsella.com/publications/#IP.

Jeff Tucker also has a brief reply to Neil up at http://blog.mises.org/13327/l-neith-smith-on-ip/.

I can assure you I’m no collectivist and I do not dismiss the value of mental creativity. But after looking at this issue in depth for a long time–from the inside as a patent lawyer, as well–it is very clear to me that granting property rights in things like ideas, patterns, inventions, etc. necessarily undermines and undercuts real property rights. It is based on a confusion that a lot of libertarians have, in part because of their reverence for the American Constitutional scheme, Ayn Rand, and also some somewhat imprecise wordings by Locke–about the ownership of “labor”. We have to keep in mind that the whole reason we need property rights is because tangible objects–which we need to use to survive and prosper–are scarce, or rivalrous: that is, only one person may use it. Because of this scarcity, unless there are property rules people will conflict and fight over these things instead of using them peacefully and productively. In a world of nonscarcity–which is hard to imagine–if you have a car and I can just blink my eyes and “copy” it magically have my own car, you still have your own car and I have not harmed you. There would be no need for theft prohibitions or property ownership in such a world. We ban theft in reality, because if I take your car you no longer have your own car.

Now it is true that ideas are crucial, but the role they play in action is not as scarce means (like appropriated scarce objects are–land, sticks, food, etc.), but as a guide to action. We use information at our disposal to decide what actions to take, with available (scarce) means. Unlike scarce resources, the information we rely on to guide our actions does not need to be economized or owned, since it is not scarce. You and I can each back our own cakes, as long as we each own our own equipment and ingredients. I can’t use the egg you are going to use; you need to own your egg and I mine, and then we can make our cakes. But we can each follow the same recipe. My having and using it does not prevent you from having and using it. Thus there is no need to have property rules in it; moreover, assigning property rules in the recipe is always enforced with physical force, against physical things in the real world (say, you would use your copyright in the recipe to take some of my money for damages, or to compel me not to use my body or property in certain ways). Because you have to enforce it in the physical world, with physical force, against physical property and/or bodies, assigning property rights in information or ideas always translates to some kind of property assigning in physical property–but it’s in property that is already owned. So that means my property ownership in my body or my equipment is now partially assigned to you (your “veto” rights over how I use it), which is theft, or a transfer of property rights from me to you.

We have to realize that it is a *good thing* that ideas are infinitely reproducible (nonscarce). This allows the gradual accumulation of knowledge and technology; learning is a good thing. The transmission and spread of ideas is a good thing. IP tries to force ideas  to be scarce resources, by imposing artificial scarcity. It tries to make ideas more like tangible objects, which are unfortunately scarce. We should be doing the opposite: be glad that ideas, at least, are nonscarce and reproducible (thus allowing learning and progress), and support the free market which makes scarce objects ever more abundant and cheaper (less scarce). We want to make scarce things (physical goods) more plentiful, and to keep ideas nonscarce. Learning is good. Imitation is good. The market thrives on emulation and the spread of information, ideas, knowledge.

***

Another comment of mine:

I had a private email exchange with Cathy about some of this. I won’t post her comments, but below is an edited version of some of my comments to her:

Cathy:

I have not engaged in the name calling if you’ll notice. I respect Neil too much for that.

In response to a question about whether someone who makes audio versions of Neil’s novels would have damaged Neil’s ability to earn a living, and what recourse he would have:

I believe that the ability to copy ideas easily in a digital age–plus the fact that without a contract, this does not violate the property rights of the originator–may make it more difficult for the creator to make money than in the old days in a copyright-world. All entrepreneurs face various costs of exclusion, and have to be creative in finding ways to make a profit despite these costs, or to minimize the costs, etc.

I think in a free society with no IP there would have arisen other contractual regimes, customs, practices, arrangements, where there are ways for artists to make money. Suggesting getting rid of the IP system that has crowded out these private responses, and replacing it with a vacuum, is daunting, but that does not mean IP law is justified.

Also, even if someone’s abiltiy to earn a living is “damaged” does not prove that it is a violation of libertarian rights. After all if Walmart sets up show next to a mom and pop drug store it may be difficult for them to stay in business. Harming people is permissible as long as it’s not done by committing aggression against them or their property. So i’ts okay to “steal” someone’s girlfriend or customers.

To answer your actual question–do be honest I think if there are no audio recordings of Neil’s books and someone makes them and distributes them for free, it’s good for Neil–free advertising. But of course if he was already selling his own audio versions, that would indeed reduce the price he could charge. I don’t deny that copyright allows you to more easily sell things for a monopoly price. The problem is that it is a monopoly.

I honestly think Neil should think hard about this issue. It’s not easy. It’s like pulling a thread on a tapestry: if he starts assuming rights to XYZ there will be many other unlibertarian consequences. I tried. It can’t be done. IP cannot be justified. It is not libertarian. Once you see this, other things about property rights and libertarianism become clearer–like the role of information and knowledge in an economy and its distinction from scarce means. Neil Schulman, Ayn Rand, and Galambos all tried to justify IP and they have come up with systems so wacky that if they were really implemented seriously, it would choke off all human life by strangling and ensnaring all use of real property and even one’s own bodies, in webs and thickets of IP restrictions. IP is nothing more than state favoritism, protectionism, and grants of monopoly privilege. I urge Neil to think strongly and seriously about this, before adopting the arguments of Schulman or others. Schulman, Rand, and Galambos are the most consistent–they say their arguments are based on principle, not utilitarian considerations. This makes their conclusions even scarier. The utilitarians can take the easy way out and blunt the sharp, unjust, harsh edges of IP by just making unprincipled exceptions and compromise, much like the IRS tax rules have exceptions and loopholes to blunt its effect on those who squeal the loudest. Neil is not a utilitarian so his only choice would be to endorse some “principled” type of IP that if implemented in reality would have monumentally disastrous effects. Or then he would have to compromise or make ad hoc, unprincipled exceptions like Rand did when she said patent and copyright should have finite terms unlike normal property does.

***

Cathy, We see things very differently. … As a libertarian I am in favor of the non-aggression principle and respect for property rights. I have carefully explained why I believe that IP–protection in “works” as you say, that includes ideas or patterns of information–is incompatible with libertarian property rights. You are welcome to try to refute my argument or explain why I’m wrong, or even to come up with an alternative theory that justified property rights in patterns of information. Nothing you say below is an argument–you are simply presupposing the equivalence of “novels” with scarce things like hammers. This is just question-begging, since you are putting the premises for your conclusion into your assumptions. And Neil’s article also did not contain any serious argument either–it was mostly assertion (theft is theft) sprinkled with some irrelevant utilitarian considerations.

If you want to sell audiobooks yes, it may be harder to make a profit off of them than if you can rely on a state monopoly privilege grant. And if you are denied social security it will be harder to retire. And if the state does not protect you from foreign competition, it’s harder to make a profit in the face of more competition. How does the fact that you can benefit from a state grant of monopoly justify it?

In response to my “publicity” comment, you note that free publicity is worth what you pay for it. I disagree. If you go to Amazon.com and look at kindle http://www.amazon.com/s/qid=1279583555/ref=sr_st?page=1&rh=n%3A133140011%2Cn%3A%21133141011&sort=price , you’ll see many authors giving their books away for free. Why? One reason is publicity. As quasi-libertarian sci-fi author Cory Doctorow notes http://craphound.com/littlebrother/about/#freedownload (2), “for pretty much every writer—the big problem isn’t piracy, it’s obscurity.” For example I saw one thriller author give her one-year old book away for free on Amazon Kindle. Why? Its sales had petered out, and she had a new novel out. She figured if people read her free one they might buy her new one. The point is that publicity is of course good for people who have something to sell. Authors and creators like Cory Doctorow and Nina Paley (see ) are doing fine while working outside the standard copyright model. (see Interview: Nina Paley on Copyright http://www.stephankinsella.com/2010/02/27/interview-nina-paley-on-copyright/; Nina Paley’s “All Creative Work is Derivative” http://www.stephankinsella.com/2010/02/15/nina-paleys-all-creative-work-is-derivative/). When Neil says that without IP there would be no innovation–this is clearly wrong. There would be some. Maybe you would say there is not enough. I don’t know how you know this. When you express exasperation about how you would make a profit off of creative work in an IP-free society, the implication is that we must have IP because it’s one way you can make money off of creative work. But this doesn’t follow. It’s up to the entrepreneur to figure this out. Doctorow and Paley are examples of what is possible. See also The Creator-Endorsed Mark as an Alternative to Copyright http://blog.mises.org/13286/the-creator-endorsed-mark-as-an-alternative-to-copyright/.  That’s a creative approach. And see : Writers Can Prosper Without Intellectual Property http://mises.org/daily/4008

[Aside: Nina Paley wrote me: “There would be more innovation. More, not less. The argument isn’t, “OK, maybe there would be less but it’s worth taking that hit for the sake of liberty.” The argument is, “there would be more innovation without IP.” See most posts at techdirt.com, and also Karl’s piece on Ghost Works: http://questioncopyright.org/ghost_works

It’s interesting how few libertarians (or others) are able to distinguish between rivalrous and non-rivalrous. Maybe pictures would help, although I tried that with the bicycles in “Copying Is Not Theft” and they just reply that copying a bicycle is stealing from the bicycle manufacturer.”

As I replied: I agree there would be more.  For your reasons–and b/c we are more free without IP to produce and innovate–but also because in a free market society we would all be so much richer and would have more leisure or capacity to innovate and create.

I just don’t like to pin my argument on it. I think it’s a bonus or side argument–lagniappe. But even if there would be marginally less innovation, they have to show that the cost of the IP system is less than the value of this marginal innovation. They have not and cannot do this.]

These are just suggestions. I’m not saying they would all work or are the only way. I think it’s the job of the artistic entrepreneur to figure it out. There are various techniques and arrangements one could try. The one I oppose is lobbying the state to grant monopoly privileges to you.

In response to your suggestion that I have not proved that third parties are entitled to appropriate the work (be it a house, a hammer, a symphony, or a novel) of another human being and dispose of it as he sees fit…. –

Well, this is question-begging, since you are assuming it’s “appropriation” for me to use knowledge and information that someone else came up with. To say it’s theft implies that it’s property–which is the issue under contention, so you are just asserting your point over. That’s question-begging. But basically if you tell your ideas to others, release information to the world, it is unreasonable to expect others not to be able to act on the knowledge they now have.

Your think under my view, that your thoughts “belong” to others who can “seize upon” them. And that people will start keeping information private instead of sharing it, absent copyright.

Look–if you have a recipe, say, for making a cake, and you publicize it, and others use the recipe, you still have your recipe. You can still use it. So it has not been “taken” from you.

And of course sometimes people do keep things private: this is called confidential information or trade secret. And if you make it public, then it’s no longer private. As Benjamin Tucker noted: “You want your invention to yourself? Then keep it to yourself.” (see on this Wendy McElroy, Copyright and Patent in Liberty http://www.wendymcelroy.com/e107_plugins/content/content.php?content.70).

May I respectfully suggest that you simply give one or more of the following an honest, careful, open-minded read? Please keep in mind that I am pro-capitalist, pro-innovator and creator, and an Austrian and anarchist libertarian.  It is from these principles that I conclude that IP is nothing but a false right and can only result from the state. IP rights cannot exist in a free society any more than the Americans with Disabilities Act could. I’m also a patent attorney who would personally suffer financially if the patent system were abolished–I oppose IP despite this, because of my devotion to libertarian principle, justice, honesty, and integrity.

Sincerely, Stephan
The following are at http://www.stephankinsella.com/publications/#IP
* “Intellectual Property and Libertarianism,” Mises Daily (Nov. 17, 2009)
* “The Case Against IP: A Concise Guide,” Mises Daily (Sept. 4, 2009)
* Against Intellectual Property (Mises Institute, 2008)

***

In response to your comment that I was being condescending, and that lots of people are not persuaded by our antillectual property reasoning:

I don’t mean to condescend. I apologize if I came across that way. However, it is clear that the tide is turning. There is a massive anti-IP movement in libertarianism now. The young and radical libertarians almost all seem to get it.  The issue was neglected for a long time (Neil said he has never thought about it that much), maybe on the assumption that Rand and others were basically right, or that the Constitution was right, and that technical experts (like patent lawyers) are the only ones who really understand that arcane system so not much thought was given to it. It was always a problem, but it was not too massive because the economy was not digitized and networked. Now that it is, the problems of IP are exacerbated, magnified, and made more obvious as we see outrages on a daily basis (See http://blog.mises.org/11600/the-patent-copyright-trademark-and-trade-secret-horror-files/). Honestly, I don’t know how any principled, radical libertarian can look at this and think there is a chance IP is part of a libertarian order.

I don’t disagree that mental creativity is important and “worthy of respect”–but it’s not really a good libertarian argument that because you think something is “worthy of respect” that this implies there must be a property right in it.

The problem with positing that the IP rights you favor are not those enforced today by the state, is that IP rights could never exist without artificial legislation of the state. They originated in 1623 or so with the STATUTE OF MONOPOLIES in Britain. They didn’t deny what they were.

In a free society imagine Neil sues someone in a private court for baking a cake or making a mousetrap similar to one of Neil’s. Well he is just not stating a claim that he can get relief on–he hasn’t alleged any tort or trespass by me. I’m using my own hands and body and property to make a cake or mousetrap; I”m not invading neil’s property at all. An IP claim would be dismissed since it conflicts with the Lockean homesteading rule that would be the basis of a libertarian order. Neil would be claiming to partially own my own wood and cake ingredients–claiming the right to veto my use of it in my own house. But I already own this property–he doesn’t homestead part of my already-owned property merely by thinking of creative ways to arrange his own property.

***

on Facebook, J Neil Schulman today wrote:”Arguing that existing copyright laws nullify an author’s right to license copying of a novel he’s written is like arguing existing eminent domain laws nullify a builder’s right to lease a house he’s made. It’s changing the subject to the crimes of statists who trample all property rights when supposed defenders of all …property rights carve out an exception denying rights of ownership for those whose product is Art.”An edited version of my reply is below:Neil, when we discuss this you say that others–me–don’t understand your argument. I believe I do understand it. I’ve seen variants of it many times. You have different details, but I think you and others have taken a wrong turn. You and others, like Tibor Machan in his latest post ( http://blog.mises.org/13017/terence-kealey-science-is-a-private-good-%E2%80%93-or-why-government-science-is-wasteful/#comment-698864 ) are sensing that the tide is turning. The younger libertarians are seeing not only that anarchy is right, that Austrian economics is sound, but that IP is nonsense and statist. Listen to the crowd cheering about anti-IP at 1:00 of the Molyneux porcfest speech I link to here; and also even the Motorhome diaries guys are getting it. http://www.libertarianstandard.com/2010/07/01/tls-podcast-picks-molyneux-language-state-motorhome-diaries/ As are the FreeTalkLive guys. As are Reason guys.Everyone is getting it. The recognition that IP is illegitimate is spreading like wildfire. I’m seeing it before my eyes. And yes, I think your logorights are just a variant of IP.I respect you and appreciate your reasons. But I think libertarianism took a wrong turn. It started with state grants of monopoly privilege, such as England’s Statute of Monopolies in 1623, an early patent granting scheme. Then the US applied egalitarianism, democracy, and primitive proto-utilitarian wealth-maximization pseudoscience to enshrine the idea of patents in the Constitution. But at least they didn’t have the gall to pretend it was a natural right. Jefferson admitted this. That’s why the right is limited in time; it was just a temporary state manipulation of the market to “stimulate” innovation. Of course the assumption is that the cost of this gov’t scheme is less than the value of the marginal innovation thereby stimulated; but you know, they couldn’t know it at the time. It was nothing but a wild assed guess. And you know what–no one in the last 200 yeas has shown that it is a net gain. So the utilitarian rationale is bankrupt.Then Rand comes over here, overglorifies this as the great capitalist utopia. After all it was 10,000 times better than Russia. Sure it was. So she assumed the constitution and our Founders must be right. They were principled and so much better than Marx and the commies. I have heard that she even originally assumed that eminent domain must be okay–after all it’s in the Constitution. She wised up on this but on on the rest. That’s why she fought anarchism tooth and nail, stubbornly, arrogantly, foolishly. And that’s why she clung to IP.Then a host of libertarians spring up–influenced by Rand, and others like Rothbard, Mises, Hazlitt, Bastiat, the Old Right… and here we have Rand glorifying IP, and the others mostly silent. So we have the libertarians newbs soaking up Rand’s wisdom, assuming she’s right… just as she did about the US Constitution. Which was an illegal centralizing power-grabbing coup, by white property and slave owners who used their position to grab power and wealth and enrich their friends…. not some idealistic high-minded libertopia. But leave that aside. Most libertarians wise up and leave the Rand personality cult and its quirks aside. Most of them grow up to have a sense of humor, tolerance, to just be decent human beings who believe in benevolence and charity without feeling the need to justify it with a Galtian deductive speech. Some of the smarter or more honest ones then become anarchists. But there is a remnant of IP left, because the idea of rights as deriving from “what you create” permeates Rand’s philosophy.Rand was wrong. The Constitution and framers were wrong. Utilitarians are wrong. The mercantalists in England who favored state grants of monopoly were all wrong. We libertarians do a should favor property rights in scarce resources. But not in value. There is no property right in value–but only in the integrity of the borders of physical things you own. Rothbard showed that all rights are property rights. There is no independent right to free speech or press; these are just consequences of the NAP and the right to property.Likewise, your property rights in your body and in things you homestead or contractually acquire are sufficient to let you flourish in a free market. Make whatever deals you want. But in the end, there is no way to have real IP rights–or logorights–without recognizing rights in “patterns” (logos, as you would say); and doing that is a convoluted, disguised way of granting the pattern-creator property rights in my already-owned property–since now you get to veto certain uses I would make with my own property, even though it’s my property, and even though my use does not invade the borders of your own property-but solely because my use of my property is guided by information that you claim some proprietorship over. This is wealth redistribution, Neil. It is theft.This is what all the young libertarians are seeing. There is a great IP awakening happening. I understand that it frustrates those clinging to the old, outmoded ideas. But it’s coming, because it’s right.

***

My further reply to Neil on Facebook is here:

Neil:

“Much of the argumentation of the founding fathers — and by the way, referring to many of them who were abolitionists is typical leftist revisionist history, and not of the good Harry Elmer Barnes type — was utilitarian, originating with John Locke. ”

I see nothing wrong with recognizing the evil of slavery and that politicians are just politicians…. See More

As for utilitarianism–as you must know, it is bankrupt morally, methodoligically, and empirically. In the case of IP, they didn’t know what they were talking about. they were taking a wild assed guess that the cost would be trivial and the gains signfiicant. This has yet to be proven.

“My thinking about logorights did not originate with Ayn Rand, and while some of her views are compatible with mine, I made a natural-rights case for ownership in information objects neither she nor any of her disciples ever made.”

But in my view your argument shares common fallacies, namely granting rights in “things” that you create, whether those things are ownable things (scarce resources) or not. Your argument, with respect, seems to be based on non sequiturs: you make some non-rigorous philosophical observations about material identities and from this you end up concluding we can use information theory to determine the optimal time period of the monopoly over a pattern of information that can be used to justify force against others’ use of their own property.

“The problem with you and in general with what you’re calling the next generation of libertarians is that you’re exactly the total materialists Karl Marx wanted you to be.”

You deride this as materialism but take note: whenever you want to enforce your IP rights, it’s alwasy with PHYSICAL force and against PHYSICAL THINGS. You want to use physical force to stop ME from using MY physical material property as i see fit, and/or to take my physical money from me as damages. If you are so above material things, why don’t you enforce your lofty IP rights in the IP realm? Why stoop down to our lowly realm of things, possessions, and bodies?

“You’re an intelligent man but you’re too wedded to your ideology to see an obvious truth. There are things that exist — real things — that have no atoms or molecules as part of their natural existence. Matter can store them and reflect them, but not define them.”

I searched for years for a way to justify IP. I practice it for a living. I saw that Rand was full of it. Then I tried others, like yours. None of them make any sense.

You think it is so significant if you can point to something, like Donald Sutherland at the end of Invasion of the Body Snatchers, and call it “a THING that EXISTS.” Say a poem exists. I don’t care. Say it all you want. Saying some “thing” “exists” doesn’t prove there can be property rights in it. Just because we use concepts in certain ways to organize the perceptual data to understand the world doesn’t mean this imbues the referent of these concepts with ownability.

“”If a thing can be copied, then it’s a thing.”

“In two decades you have never defeated this challenge.”

I don’t care if it’s a “thing”. It’s got to be an ownable thing.

“In America we saw for one of the few times in human history that it was not uncommon for artists to be able to support themselves by selling their art to the public — the best examples being in popular music. But we have reverted to the pre-American model where a few artists become the court favorites of the rich and powerful, and the rest are buried under massive amounts of competing capital to advertise and promote only the Chosen Ones. ”

Here you are resorting to a type of consequentialist argument. Which is it? Principled or results-oriented?

“None of these media are constituted of atoms and molecules. But they are real, definable things that didn’t exist before I made them and do exist after I made them.”

Just becasue you can “define” something doesn’t mean you own it. Just b/c you feel it’s “real”, whatever this means, doens’t prove you “own” it.

“I have explained how this comes to be: to rearrange matter into newly designed patterns which are then displayed by and stored in material form.”

I agree that in rearranging things we form new patterns–whcih of course always borrow to some degree on older patterns others originated. So what? That doesn’t prove you own the pattern. You seem to think this is obvious, not needing any further argument. It’s not obvious. It verges on incoherent.

“I make real things. They are works of Art.”

You know, just because patterns are not ownable doesn’t mean your work and creativity is not respected–and even if it meant this, your being insulted does not prove information patterns are property.

” People want them and by the principles of Austrian economics these things are valued as items of commerce.”

Sure. I might want someone to perform a service for me that I value. I might be willing to buy a book that is valuable to me because it’s arranged just so, according to a given logos. But we do not have property rights in values. Only in the physical integrity of scarce resoures. This is one reason there are no reputation rights, as Rothbard showed. Austrians Hoppe and Block explain this. http://www.walterblock.com/wp-content/uploads/publications/property_exploitation.pdf

” I brand them and claim them before I release them to be licensed for reproduction. It is by licensing the reproduction that I gain my compensation. It is my property rights in my natural original creation that entitles me to do so.”

No. It is your property rights in your body and other pysical things. Just as it is my property rights in my printing press that gives me freedom of press. Just as it is my property rights in my body that lets me withold my singing services unless someone pays me for singing. It borders on crankish to say I own my singing; and in any event it’s not necessary for me to “own” my singing for me to “sell” it: it’s only necesary for me to own my body and to refuse to use it to sing!

“And I willl then have only the hope that some future generation of libertarians is smarter than the one that will have handed Marx that victory.”

The Internet age is helping to kill IP. The genie is out of the bottle, dude. It’s only gonna get worse from here, though the spasms of the dying IP statist whale will be painful to watch, and experience, for some time.

Tagged as: L. Neil Smith, Schulman