Vincent de Van, Why Intellectual Property Isn’t Necessary to Reward Innovation

“’Intellectual property’ is part of and depends on political power.”

Property is connected to politics only insofar as the need for rights to be protected. This applies equally to all property: note that the value of any property is based on an interaction between the conceptual and the material/physical. Even something as “physical” as land only has a value based on its conceptual use. Man’s conceptual faculty (his intellect) is the root of all property. There is literally no such thing as purely physical property.

Capitalism is what unfolds when this (protection of rights) is ensured because individuals operate and control every aspect of their property: only voluntary trading of intellectual and physical values is permitted.

“Intellectual Property functions to artificially transform abundant, non rivalrous resources into limited, rivalrous ones at the same time it incites massive conflict which would not otherwise arise.”

This is incorrect. Ideas are not abundant – they are the quintessential scarce resource! It is only when one can own one’s ideas that there are incentives to generate more ideas. The argument that an inventor’s ideas belong in “the commons” aligns with socialism – not capitalism.

To hear this from individuals who understand incentives and are otherwise pro-capitalism shows the dangers of a-philosophical thinking. This error comes from taking one half of the mind|body, values|action, intellectual|physical false choice, and derogating the other.

If you’ve ever agreed to a EULA, and I think the odds are almost 100% if you’ve bought and used software, then you’ve voluntarily consented to someone’s IP under their terms, also acknowledging their ownership.

No political authority needed- just contract enforcement, but private means if necessary.

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I’m glad that you agree that the inventor’s production of a new product is not force initiation. OTOH the state’s creation of new money IS force initiation. This is why the author’s Cantillon Effect analogy is an example of context-dropping.

The enforcement of the inventor’s right to IP is the use of retaliatory force against those who would use the inventor’s idea w/out his permission. We can argue separately about who should exercise the retaliatory force needed to protect the inventor’s rights to IP, and how such retaliatory force should be applied … but we are discussing something more fundamental here: whether such a right exists, similar to that for physical property.

Rothbard is on the premise that all government action is bad: since governments are typically involved in the administration of IP, there is something wrong with IP. Mises supports intellectual property (not in philosophical terms, but because it encourages the production of creative works and inventions).

The empirical evidence is against the Rothbardians. IP is the cornerstone of wealth creation under capitalism (see Soviet Russia, in which ideas belong to the state vs USA where inventors can own their ideas). In fact, while there are limits on the value associated with tangible property the only thing that limits IP is man’s use of Reason. In other words IP is infinite and it is this infinite potential that capitalism unlocks when ownership rights to all forms of property are protected.

In a society that protects the full exercise of Reason and ownership of ALL the products of Reason, we get more value from property – both physical and intellectual.

The protection involves using retaliatory force against anyone who thinks that they can steal an inventor’s idea just because he saw its physical implementation. In principle it is no different from someone occupying your unlocked house without your permission and refusing to leave, saying “but it was unlocked, therefore it belongs to everyone”.

No this is not what patents do. Patents prevent you from copying they don’t prevent you from improving a product.

Richard Cantillon identified clearly that those nearest to the state spigot benefit from their proximity unlike those who are downstream from it. This explains why the former are typically not opposed to money-creation. The latter are powerless and/or less informed, so it is an imposition of force by statists and their cronies on less connected people. In addition to explaining the economics of money creation, the Cantillon Effect outlines important ethical issues related to statist money creation.

” …no rights are being violated of later users of the innovation, since none of their physical ownership has been tampered with.”

Your statement falls into the category of “begging the question”, since it assumes that there is no right to Intellectual Property.

Note that Mises supports intellectual property (not in philosophical terms, but because it encourages the production of creative works and inventions). Rothbard does not support intellectual property. So, among the Austrian thought leaders there are at least two points of view about Intellectual Property.

I find the Rothbardian case against the right to IP as being rather weak. I think that his starting point is an a priori abstraction based on the involvement of the State in protecting Intellectual Property. He would be better off beginning with empirical evidence from the conditions in places with different postures towards the rights to IP (e.g. Soviet Russia vs US).

One can always find problems with certain examples of stagnation, and abuse of IP rights. Much is made of certain inventors who missed the coveted pioneer status by a few hours.

All inventors benefit from the very existence of a system that gives ONE individual ownership of IP for a predetermined time. Yes, they have to compete to be that ONE individual. It makes no sense to complain about the unfairness of the occasional “exact time” clash, when compared with the immense loss (to everyone) in a system in which NO independent inventors could protect their invention property. This is a case of applying an absurd standard of “fairness” to dismantle a system that would provide the same competitive opportunity to all.

In fact, it is reminiscent of this socialist argument: capitalist competition is unfair because there are “winners”; fairness demands that we re-distribute everything!

Rothbardians find themselves arguing that a competition that rewards a first-place winner is bad. What they are saying in effect is that ideas belong to everyone (the collective), and must be re-distributed.

Implicit in this position is also a restriction: an inventor may not sell his idea. Because the first use of an idea implies giving it away! No one would be interested in buying an idea under these conditions because as soon as they put a product on the market, they lose ownership of the idea.

Maybe. Doesn’t change the reality though.

Plus, there are arguments that Europeans were legitimately living in America if the area wasn’t where Indians lived or where they mixed in their labor.