Many people take the notion of intellectual property for granted, without ever examining the contradictory basis upon which the entire idea rests. Intellectual property refers to a pseudo-category of property that includes intangible creations of the human mind. This flawed idea manifests itself in many forms – from people claiming ownership over ideas by virtue of having been the first to think of them, to states claiming ownership over the production of certain products by virtue of the product originating from a certain geographical area.

Since we live in a universe of scarce resources, we must deal with this unavoidable fact to survive, and the entire concept of property helps us in this regard. The idea of property is based on the fact that people can exclude other people from the ownership and use of scarce resources by the notion of having legitimately gained ownership over the resource.

For example, imagine an island upon which there is only one house, yet three people are claiming that the house belongs to them. The first person discovered the island and built the house out of wood that he collected by cutting down trees in the area. A few years later, the first person decided to leave the island for a week on a holiday, and this coincided with the second person reaching the island, subsequently noticing that the house was empty, and deciding to claim it as his own. A few days later, the second person decided that he no longer wanted to live there, and managed to sell the house to the third person, who lived on a nearby island.

The house is a scarce resource because only one person can use it in its entirety at the same time; imagine that the first person wants all of the walls of the house to be painted blue, while the second person wants all of the walls to be green, and the third person yellow. All three of these wishes conflict in nature, and a single one of these wishes coming true necessitates that the other two cannot happen. The idea of property is not a magic genie that can fulfill all three of these wishes at the same time, but it is an important mechanism that can at least justify one of these wishes on consistent grounds.

Clearly, the legitimate owner of the house is the first person, since they originally mixed their labor with an unowned resource, thus making it their own property. Meanwhile, the second person is a thief, since they illegitimately claimed ownership over the first person’s legitimate property; even if we give them the benefit of the doubt that they did not know that the house was not abandoned, their refusal to hand back the house to the legitimate owner once they realize their mistake only makes the crime worse since they are now occupying the house for a longer period of time. The third person did not necessarily do anything wrong, and is a victim of the second person’s fraudulent ownership claim over the house; perhaps they can only be blamed for not performing due diligence regarding the true ownership of the house.

The proponents of intellectual property want to take such scenarios and argue that they also apply to ideas, but this is logically impossible to do. Assume that instead of three people arguing over who owns a house, we instead have two distinct chefs of two distinct restaurants, who have both recently decided to add a certain item to their menu, which has led to a conflict between them as they disagree on who can sell the item.

In this case, the first chef is the one who put the recipe for the item together for the first time in recorded history. The second chef visited the first restaurant, ordered the item, and after being extremely impressed by its flavor, decided to experiment in his own kitchen until he finally managed to perfect the recipe that the first chef originally came up with. Subsequently, the second chef decided to also start selling the item at his restaurant, and once the first chef discovered this, he felt like he was the victim of a grand injustice and accused the second chef of stealing his idea, threatening him with a lawsuit.

Yet, it is not a logical impossibility for both chefs to sell the item at their respective restaurants at the same time; two people can order the item from each restaurant at the same time, and end up eating practically the same type of food, without either person even knowing that this happenstance took place. Therefore, where does the conflict arise?

The conflict arises as the first chef egoistically feels entitled to the recipe that he created, and wrongly derives that he should be the only person who decides on which restaurants can and cannot use the recipe to produce items that they will then sell to customers. For this example, let us assume that the recipe involves wrapping spinach around carrots which are stuffed with raisins, and cooking for 30 minutes. For brevity’s sake, we will call the item “spinach-wrapped raisin-stuffed carrots”, or “SWRSC” for short. By making the erroneous intellectual property claim over the recipe of SWRSC, the first chef is, perhaps unknowingly, claiming that if anybody decides to create SWRSC using their own ingredients (spinach, carrots, and raisins), then suddenly the specific spinach, carrots, and raisins being used by this third party immediately start belonging to the first chef! This is a ridiculous claim since he did not come to own these ingredients via voluntary exchange.

Furthermore, the first chef may claim that since he came up with SWRSC, if the second chef sells SWRSC, then he is stealing his potential future profits! The first chef’s erroneous argument can simply be shot down by pointing out the fact that nobody owns “potential future profits”. Potential future profits are currently sitting in the wallets of potential customers, and potential customers have the right to discriminate when buying an item from willing sellers; after all, to the restaurant owners, they might be potential future profits, but they are present customer savings in the meantime.

The entire notion of intellectual property rests on the contradiction that resources that are not scarce can still be legitimately owned. This leads to scenarios where somebody participating in the reproduction of an item is erroneously labeled as a thief. Taking the previous example into account, it would be wrong to accuse the second chef of stealing the first chef’s recipe because, in the most literal terms possible, the first chef still had full ownership over his recipe after the second chef decided to copy it. Therefore the second chef did not steal anything from the first chef, and it is impossible to steal a resource which is not scarce because the lack of scarcity implies that the resource can be infinitely reproduced.