Mises Canada: Intellectual Property: A Classical Liberal and a Libertarian Assessment

Many contemporary theorists and commentators frame the question of intellectual property as a question of ownership over ideas. In this framework, a new product is seen as an embodiment of a new idea. Producing multiple copies of a new product is then seen as a materialization of the same idea. Some conclude that ascribing ownership over a new idea to its original creator in the same way we ascribe ownership over material objects is inconsistent with either classical liberal or libertarian theory of rights. This inconsistency has led some to conclude that a creator of a new product has no right whatsoever in limiting the future replication of that object by others. This, however, is an erroneous conclusion.

The purpose of this article is two-fold. First I will elaborate why the concept of intellectual property is inconsistent with the classical liberal and libertarian theories of rights. In short, the root of this inconsistency is in the incoherent and ultimately subjective criteria for conflict resolution created by the concept of intellectual property. Second, I will argue that this inconsistency does not imply all replication of a new object is illegitimate. Classical liberalism and libertarianism contain clear principles for evaluating the legitimacy of copying in different situations. Both of these points bear heavily on the distinction between an idea and physical objects and on the nature of ownership under the classical liberal and libertarian theories of rights.

The Distinction between an Idea and Physical Objects

In its most general form, an idea has been defined throughout history as that which is not matter. For example, I may have an idea of a circle in my mind, but as far as we know, this circle does not exist anywhere as a physical object. It takes physical objects, say, pen and paper, to translate my idea into a material form. However, this translation is only provisional. I can imagine a circle that can never exist in reality. The equation x² + y² = r²defines an infinite number of dimensionless points in the x-y space, all at an equal distance, r, from one, central point. In other words, this is an equation of an ideal circular line in the Descartes’ two-dimensional coordinate system. This line, however, has no thickness or mass. No one can draw a line that has a thickness and a mass of zero.

This exercise has illustrated that, while ideas are not physical objects, they take shape through specific relationships of physical objects. In other words, an idea describes a relationship among physical objects. The idea of a circle describes a relationship of dots on a piece of paper or iron molecules in a steel rim, or polyvinyl molecules in my car radio knob or any other material particles in countless other circular objects.

We communicate our ideas to others by the use of physical objects. I am now using black shapes on a white surface to convey this idea. Some computer programs can translate these shapes into vibrations of oxygen, carbon dioxide and nitrogen molecules (i.e., audio waves) that you can hear. Maybe, someday, we will be able to communicate by the use of electromagnetic waves emitted directly from our brains. Even this form of communication of ideas requires material objects—electromagnetic waves. It takes a specific arrangement of physical objects to convey an idea. But it is important to maintain the distinction between the idea and the object. The idea is not the object. The idea is non-material. The object is material.

Since ideas are non-material phenomena, they have some attributes that physical objects don’t have. For example, the same idea can exist in two different places at the same time. The idea contained in the previous sentence now exists in your mind as well as in my mind. It did not disappear from my mind after I gave it to you. Therefore, we cannot speak of “theft” of ideas in the same way we speak of theft of physical objects. Your future use of my idea does not remove my ability to use the same idea. This is not the case with physical objects. If you take my car and decide to use it, that car will not be available to me anymore.

However, there are even more troublesome implications of the distinction between ideas and physical objects. To appreciate the importance of these implications for a proper assessment of the concept of intellectual property within the classical liberal and libertarian frameworks, we need to provide a brief summary of classical liberalism and libertarianism.

Classical Liberal and Libertarian Theories of Ownership

Classical liberalism rests on the concepts of self-ownership, homesteading, and non-aggression. According to this theory, each person has the right to be the master of his or her own body. This right stems from the belief that each person has free will as a gift from God.

The next step in the logic of the classical liberal theory of rights is mixing one’s labour with nature—homesteading. One acquires legitimate ownership over the products of his or her own labour when these products are created by using resources that were not previously owned by anyone. In other words, natural resources belong to the one who finds them first. In cases when a resource is already owned by someone, another person can legitimately acquire this resource only through a voluntary exchange. The key feature of a voluntary exchange is that the exchange is performed in the absence of physical aggression or a threat of physical aggression.

Modern libertarianism has much in common with classical liberalism. Like classical liberalism, modern libertarianism is based on the concept of self-ownership, homesteading, and non-aggression. Unlike classical liberals, libertarians generally do not seek a religious justifications for the origin of rights. The existence of free will is understood as an axiom—a self-evident truth that cannot be proven or disproven. Aside from the potential disagreement on the origin of free will and self-ownership, classical liberals and libertarians derive similar conclusions when it comes to the legitimate ownership over resources.

Within the classical liberal and libertarian theories of rights, ownership is defined as one’s jurisdiction over physical objects within a defined space and time. For example, I own this computer, but I don’t own the room in which I am sitting and typing this text. The room is owned by the real estate company that rents apartments to tenants. This spatial delineation of ownership performs a specific function—it defines the terms for resolving conflicts among individuals.

If I wanted to sell this apartment to someone, my landlord would probably object to this transaction. The fact that the landlord owns the apartment provides a clear rule for resolving this conflict. I don’t have the right to sell something I don’t own. On the other hand, if I wanted to sell this computer, my landlord could not object because the physical matter that makes up my computer is not under his jurisdiction. Therefore, the classical liberal and libertarian theories of rights provide a clear prescription on how to resolve our conflict. This is the ultimate practical function that any moral rule has to satisfy—to provide unambiguous criteria for conflict resolution.

In that sense, a rule that creates contradictory or conflicting prescriptions for action does not qualify as a universal moral principle. If an action can be right and wrong under the same rule, then this rule does not contain a clear demarcation principle between right and wrong and thus cannot be used as a moral principle. Intellectual property is one such rule that creates ambiguous and conflicting recommendations for action.

Conflict Creation through Intellectual Property

Let us now extend the concept of ownership from physical objects to ideas and let us go back to my circle example. Suppose I was the first person to come up with an idea of a circle, and I use this as an argument that I own the idea of a circle. Since ideas are non-material phenomena that materialize through relationships among material objects, my claim that I own the idea of a circle implies a claim of owning a relationship among physical objects. I claim that I own a relationship in which physical objects are arranged in a circular shape. This, in turn, implies a claim of ownership over physical resources—I claim that only I have the right to arrange physical objects in a circle.

This creates a problem. If I claim I own the idea of a circle and, say, my neighbor claims he owns his pen and paper, there is a conflict. My claim that I own the idea of a circle interferes with his jurisdiction over that pen and paper. He now does not have complete jurisdiction over that pen and paper. According to me, only I have the authority to leave a circular trace on that paper with that pen. According to him, however, that pen and paper are his and he may use them to draw whatever he pleases, including a circle.

Now we need an additional rule to resolve this conflict. We need to determine whose ownership has priority and why. But, whichever way we decide to solve this conflict, the result is that, after introducing the concept of intellectual property, neither the traditional classical liberal theory of ownership nor the intellectual property theory alone were initially sufficient to resolve the conflict.

The second problem is the arbitrary nature of the intellectual property rule. All arrangements of matter differ from each other to some degree. One circular arrangement may be one millimetre wider than the other in some areas. But, why stop at one millimetre, or at one micrometre, or at one nanometre, or at any order of magnitude?

So, we have to decide how similar two objects have to be to be considered identical. Like any choice, this choice is ultimately subjective in nature. One individual may think that if any two circular shapes, when superimposed, do not deviate from each other by more than 1 millimetre, they are similar enough to be considered identical. Another person may think this is too big of a difference and he or she may ask for a stricter standard, maybe one tenth of a millimetre. Yet some other people may think that even this standard is way too loose, and they may ask for a one micrometre cut-off point. Whichever the cut-off point, it is always subjective. Now my neighbor’s freedom to use his pen and paper depends on the whims of whoever decides which shapes are similar enough to my circle and which are not.

Thus, by introducing the concept of intellectual property, we have added a degree of subjectivity into the criterion delineating the distinction between right and wrong. In contrast to physical invasion of property, where the limits of one’s property have objective attributes in space and time, the limits of intellectual property are subjective in nature and they exist only in the mind of the individual that judges which objects are similar enough to be considered identical.

This leads to situations where it is humanly impossible not to violate someone else’s intellectual property. If the decision on what is similar enough to be considered identical is indeed subjective, and it is, then someone could expand the limits of intellectual property depending on his or her preferences. I may think that a hexagon is similar enough to a circle to be considered a special case of a circle. After all, if we follow the geometrical logic of a circle, a circle is a polygon with an infinite number of sides. Why not then include all polygons?

We don’t have to stop there. We could include an ellipse as well. If an ellipse that deviates one micrometre from the shape of my circle is similar enough to it to be considered identical, why not an ellipse that deviates one milimetre or one centimetre or five centimetres. Using this logic, almost any shape can be produced from our original shape if we simply expand small deviations from the original shape. There is no objective criterion when these small deviations begin to be too large.

This means that our criterion for separating right from wrong is not only subjective but it can change at any instant depending on someone’s preferences.  This is a far cry from the classical liberal and libertarian theories that seek universal principles that apply equally over space and time to everyone (i.e., non-aggression) where our adherence to these principles can be verified using objective demarcation criteria (i.e., physical intrusion into a space owned by someone).

However, this incompatibility between the concept of intellectual property and physical property does not automatically mean that the creator of a new product cannot put any restrictions on its future use by others. The concept of voluntary exchange of property sets clear rules how this is to be done within the classical liberal and libertarian frameworks.

Applying Classical Liberalism and Libertarianism to a New Product

Let us go back to my circle example. Let us imagine that I designed a new product and let’s call this product the wheel. I used my own materials to produce a number of wheels and now I am considering selling or renting some of them to others.

First, I want to make sure no one sees my wheels before I sell or rent them. If someone sees them, he or she can use this information to produce their own wheel. Their acquisition of this knowledge would not violate any of the libertarian principles if, for example, they saw my wheels while visiting my neighbour for a cup of coffee. They did not intrude into my property whatsoever, and if they want to use their own resources to replicate what they saw in my yard, that would be a perfectly legitimate use of their own resources.

Second, I may want to make sure that the users of my wheels follow certain practices. This also implies that I would prefer renting the wheels over selling them. Renting would allow me to have some control over the renters’ use of the wheels. I can put different conditions in a contract, which the potential renter can either accept or reject. For example, I can ask that the renter does not produce any wheels in the future. I can specify how different any potential product produced by this person would have to be for me not to consider it a copy of my wheel.

I could even specify areas where the wheel can be used. Alternatively, I could simplify the contract and just require my renter to prevent any replication of my wheel. This would compel the renter to use the wheel only in spaces where the owner of the space can offer guarantees that no such replication would occur.

Critics may say that it would be nearly impossible for the renter to prevent any replication by third parties. This, however, may or may not be true. If it was true, I would take this into account and design a contract that I think would be acceptable to a potential renter. While I would like to prevent any replication of my wheel by third parties, if it is practically impossible to prevent legitimate replication (i.e., replication that occurs in the absence of violation of anyone’s property), then, let it be so.

The point here is not that the classical liberal and libertarian principles can ensure all my desires regarding the potential replication of my wheel are met. It simply means that these principles provide a mechanism by which a creator of a new product can have some control over its future use by others.

Conclusion

The concept of intellectual property is flawed. It is flawed because it does not have clear, objective limits, and it is in contradiction with the concept of ownership over physical objects. This is why this concept can only result in arbitrary standards that are based on the subjective judgement of whoever determines the limits of intellectual property. However, it is not true that if we abandon the idea of intellectual property, we also must accept all forms of copying and replication of new products. Classical liberalism and libertarianism contain clear principles for separating legitimate kinds of copying from the illegitimate ones.

Predrag Rajsic is a postdoctoral fellow in the Department of Food, Agricultural, and Resource Economics at the University of Guelph in Ontario, Canada. Friend him on Facebook.

Tags: classical liberal, copyright, intellectual property, law, libertarianism, Natural Law,Natural rights