Never-ending questions about “how would creators make money in an IP-free world”?

by Stephan Kinsella on April 15, 2025

Re Examples of Ways Content Creators Can Profit Without Intellectual Property and Conversation with an author about copyright and publishing in a free society … God I tire of this. It’s a never-ending littany or series of questions. It never ends. No one can think in principled terms.

As I noted previously,¹

Just one follow up question: If you can, could you give an idea of how the “creative industries” might operate in a world without copyright and intellectual property? I.e. how would things like films and television, which require significant capital investment, be funded and ultimately constitute a profitable enterprise outside the current paradigm where copyright owners profit from selling copyrighted material/from royalties? Would the “creative industries”, as we know them today, even exist?

To me that seems to be the sticking point for many people — they might admit the principled objections to copyright and IP, but can’t get their head around how cultural content would be made without copyright. I’m not sure I fully grasp it myself.

Cheers,

***

Me:

It is a sticking point for a couple of reasons. People implicitly think of law as a way to arrange incentives to obvious problems. So people say that in a free market we’ll have an underproduction of creative goods–so IP law is a way to “adjust” incentives to fix this. There is no reason to think this is a problem, and there is no reason to think that IP law addresses this non-problem–but the real problem is that this is now how to think about the purpose of law. Law’s purpose is to do justice–to respect property rights so that conflict can be avoided and resources can be used peacefully, cooperatively, productively. That’s it. It’s not about incentivizing the right amount of innovation.

So I am hesitant to even answer such questions since they seem to presuppose the wrong normative assumptions. Answering them concedes too much. Further, we cannot know exactly how the market will or would address certain situations absent state intervention. I can’t predict what the market will do. If a commie under communism asks a free market advocate how many brands of toothpaste there would be if the state monopoly is eased, no one can answer this–does this mean that the state monopoly on making toothpaste should continue, just because liberals can’t predict exactly what a free market would result in? No.

That said–I and others have tried to explain and posit some answers to some of these questions–see some of the posts below. Others are sprinkled around at TechDirt. The problem is that if I answer one question–“how would novelists make money?”–then as soon as I answer it, the IP proponent just goes on to the next question in his unending bad of demands: “Okay, maybe novelists could make money taht way–but what about poets???” So the questions are never-ending. It’s like they want a state-granted assurance for any possible question they have. They seem to imagine that the state can provide some kind of panacea for their uncertainties and doubts. It’s all ridiculous.

Bottom line, to be honest: your failed business model is not my problem.

In another article,² I noted:

It is fairly straightforward to explain what is wrong with IP: patent and copyright are artificial state-granted monopoly privileges that undercut and invade property rights, as elaborated above. But the consequentialist and utilitarian mindset is so entrenched that even people who see the ethical problems with IP law sometimes demand that the IP opponent explain how innovation would be funded in an IP-free world. How would authors make money? How would blockbuster movies be funded? Why would anyone invent if they could not get a patent? How could companies afford to develop pharmaceuticals if they had to face competition?

When I see such demands and questions, I am reminded of John Hasnas’s comments in his classic article “The Myth of the Rule of Law.”³ After arguing against the state and for anarchy, Hasnas observes:

What would a free market in legal services be like?

I am always tempted to give the honest and accurate response to this challenge, which is that to ask the question is to miss the point. If human beings had the wisdom and knowledge-generating capacity to be able to describe how a free market would work, that would be the strongest possible argument for central planning. One advocates a free market not because of some moral imprimatur written across the heavens, but because it is impossible for human beings to amass the knowledge of local conditions and the predictive capacity necessary to effectively organize economic relationships among millions of individuals. It is possible to describe what a free market in shoes would be like because we have one. But such a description is merely an observation of the current state of a functioning market, not a projection of how human beings would organize themselves to supply a currently non-marketed good. To demand that an advocate of free market law (or Socrates of Monosizea, for that matter) describe in advance how markets would supply legal services (or shoes) is to issue an impossible challenge. Further, for an advocate of free market law (or Socrates) to even accept this challenge would be to engage in self-defeating activity since the more successfully he or she could describe how the law (or shoe) market would function, the more he or she would prove that it could be run by state planners. Free markets supply human wants better than state monopolies precisely because they allow an unlimited number of suppliers to attempt to do so. By patronizing those who most effectively meet their particular needs and causing those who do not to fail, consumers determine the optimal method of supply. If it were possible to specify in advance what the outcome of this process of selection would be, there would be no need for the process itself.

In other words: the answer such a challenge might be, as Leonard Read said, “I don’t know.”⁴

To return to the current subject: with the advent of state IP legislation, the state has interrupted and preempted whatever other customs, business arrangements, contractual regimes and practices, and so on, that would no doubt have arisen in its absence. So it is natural for those accustomed to IP to be a bit nervous about replacing the current flawed IP system with… a vacuum. It is natural for them to wonder, “Well, what would occur in its absence?” As noted above, the reason we are not sure what an IP-free world would look like is that the state has snuffed out alternative institutions and practices.

Consider the analogous situation in which the FCC preempted and monopolized the field of property rights in airwaves just as they were starting to develop in the common law. Nowadays people are used to the idea of the state regulating and parceling out airwave or spectrum rights and might imagine there would be chaos if the FCC were abolished. Still, we have some idea as to what property rights might emerge in airwaves absent central state involvement.⁵

In any case, because people are bound to ask the inevitable: we IP opponents try to come up with some predictions and solutions and answers. Thus, in the end we must agree with Hasnas:

Although I am tempted to give this response, I never do. This is because, although true, it never persuades. Instead, it is usually interpreted as an appeal for blind faith in the free market, and the failure to provide a specific explanation as to how such a market would provide legal services is interpreted as proof that it cannot. Therefore, despite the self-defeating nature of the attempt, I usually do try to suggest how a free market in law might work.

So, how would content creators be rewarded in an IP-free market?