Exit Now: IP: The Property That Isn’t

Intellectual “property” is considered by many—even, sadly, those within the libertarian movement—to be good, or at least a necessary evil to sponsor creativity and innovation. Yet, when one considers the nature of property and the alternatives to IP from the libertarian tradition, the very idea of IP as a legitimate system collapses. When properly understood, property is not some social construction, nor is it good by virtue of being legal. Rather, it is the one and only true solution to the problem of scarcity, rooted in ethical concepts such as self-ownership, homesteading, and trade. When examined under this framework, one can see that intellectual “property” does not fit this definition. By claiming ownership of ideas—that is, resources that are not subject to scarcity and thus cannot be owned—intellectual “property” spits in the face of the very purpose of property norms. Worse still, it does so by empowering the state to override genuine property rights, restrict peaceful action, and cartelize markets under the guise of protecting creators. This essay will argue that intellectual property is not property at all, that its enforcement necessarily entails coercion and abuse, and that a free society, far from collapsing without IP, would be more innovative, more just, and more consistent with libertarian principles once it is abolished.

First, what even is property? Well to understand the nature of property, first one needs to understand scarcity. Scarcity is when there is a finite amount of goods. For example, there are only about 220,000 tonnes of gold, at least that is the amount mined. Now, that means that gold is a scarce resource.

Now, take the example of Robinson Crusoe and Friday stranded on an island. Crusoe is strolling along the island, and discovers a stick. Crusoe figures this stick to be perfect to spearfish, and gain him food so that he does not starve. However, as Crusoe begins to try and sharpen his stick into a suitable spear, Friday comes across Crusoe, and figures that that stick would actually be better for Friday to stoke his fire, and continue to provide light and warmth. There is now what is called a conflict over the use of this stick. Conflict is when there are contradictory actions. Crusoe cannot spearfish at the same time that Friday stokes his fire, and vice versa.

 So, how does man overcome the deadlock that comes about when there is conflict? There are 3 possible options. 1. Everybody owns a given item: In this theory of conflict resolution, both Crusoe and Friday own the stick, yet this solves nothing. Crusoe still wants to spearfish, and Friday still wants to stoke his fire. Thus, to say that they both own something, while having a conflicting view over what is to be done with it, then whose claim is superior? Claiming that they both own something while being in deadlock over what is to be done with it does not solve scarcity. Under this view, nothing can be truly owned if anyone can arbitrarily claim it, making the whole point of conflict resolution to be moot. 2. Nobody owns a given item: In this theory of conflict resolution, neither Crusoe nor Friday own the stick. Yet, this still faces the same challenges. If no one owns it, then who gets to use it? The existence of conflict over use implies that there has to be someone who eventually gets the stick, otherwise conflict would not be avoided. Again, making it a contradiction, and thus false. Then comes 3. Only one person owns a given item: In this theory Crusoe gets the stick, he found it first, and by virtue of that, he took an unowned stick, and made it his, or in others terms, homesteaded the stick. Friday can protest as much as he likes, but in the end, it is Crusoe’s legitimate property, running into none of the contradictions that falsified the previous two theories. Thus, from this we can understand the nature of property. One individual has an exclusive right of use for a given item.

Now, how does this theory of property apply to intellectual property, or as it should be called, intellectual monopoly? Well, if we understand property as the means to solve conflict over the use of scarce goods, we can see that property is created to solve the issue of scarcity, and why intellectual monopoly cannot be property, is the simple fact that it is not scarce. Property is defined by exclusive use of an item, yet, ideas are not scarce. Let’s return to the example of Crusoe and Friday on an island. Friday might be excluded from use of the stick by virtue of Crusoe homesteading it, yet, Friday is not excluded from the idea of spearfishing. Friday can find another stick just as easily, and spearfish with that separate stick. If Crusoe attempts to stop Friday, claiming that the idea of spearfishing was his, and thus Friday cannot do the same as him, then Crusoe would be initiating conflict over the use of the stick that Friday had rightfully homesteaded.

Now, one might claim that yes, it may not be right for Crusoe to attempt to physically stop Friday from spearfishing, but without Intellectual Property protection, then innovation would be discouraged. Yet, the utilitarian defense of IP is still not justified. Why? One might ask. It is a relatively known fact that with the assurances granted by IP, inventors are incentivized to get their ideas out into the market, as they have the insurance that their ideas will not be stolen by others, and as a result, they would gain all of the profits, rather than only a fraction. As a result, if there is more and more innovation because of IP grants, then the market would surely flourish as well because of the amount of products being created and distributed. Yet, the premise of this is flawed.

For example, let’s look at James Watt, the man, at least partially credited with the spark of the Industrial Revolution, but, if one examines his career, and the patent given to him that is championed as an example of innovation, with any amount of scrutiny, it becomes clear that this is actually a prime example of intellectual monopoly being a destructive force, rather than a force for good. First, Watt did not even invent the steam engine. Rather, it was constructed in 1712 by Thomas Newcomen, not James Watt. Regardless, he was granted a patent in 1769 for his improvements on the engine. In that time from 1769 to 1800, rather than leading to innovation, it actually resulted in the hampering of innovation, and Watt using his patent as a monopoly grant. Richard Trevithick and Oliver Evans pioneered a higher power steam engine, one that was even better than Watt’s engine. How did the innovation loving Watt respond? By suing everyone who made an engine on the same level, or even better than his engine. Eventually, the innovation loving monopolist lost his patent in 1800, and what was the result? Well, innovation, and advancement of the steam engine exploded. The engine was massively improved, without a patent, and it saw an increase in uses. So, if patents and IP serve to advance innovation and result in a better outcome, then why was it that the steam engine was advanced and developed without a patent. Why did the inventor use their patent as a monopoly grant, to stop all competition rather than an inventor simply trying to invent and make money off of their invention? The answer is that IP is not even good under utilitarian grounds, even if one is to accept utilitarianism as a valid form of argument.

Now, one might still claim, yes Intellectual property might not be scarce, and it might sometimes lead to abuse, but how would a system without IP function? After all, couldn’t large companies steal the ideas of smaller ones, and as a result, block their profits? And how exactly would you maintain canon in a story if anyone can add onto it? And without IP, then how would one profit from any creation if they can’t profit off of royalties for, say, a book?

Take these one at a time. 1. Without IP, wouldn’t people have their ideas stolen? Well, not really. First, “stolen” implies the unconsenting taking of property. As is, hopefully, clear by now, IP is not property, and cannot be stolen, to claim that IP can be stolen is a contradiction in terms. Regardless, it is still true that there is a chance that a bigger entity can copy the ideas of a small creator, and potentially gain more from it than “the little guy”. However, this fear is misplaced. For example, in 2019, Sony released a promotional video for the PS4. However, the video was filled with blatantly copied animation, but it was not necessarily in violation of copyright law. Yet, it was still taken down. Why? It was not the copyright holders, they couldn’t really do anything. Rather, it was fans and the general public that were outraged by it, pressuring Sony to take the video down. So, in a situation where IP did not apply, while a bigger entity copied the work of smaller creators, they took it down, not because an Intellectual tyrant strongarmed them, but because people dislike copycats, regardless of whether IP is law or not.

2. How does canon work in a world without IP? It’s a fair question after all. If there’s 12 different Star Wars Episode 2s, then which is the real Star Wars Episode 2? Well, there are several different answers. 1. Most likely, the most successful one. If George Lucas makes his Star Wars Episode 2, but, lets just say that there is a mega Star Wars fan called Henry. He isn’t sure if he likes the way Lucas is taking the franchise. So, he decides to make his own Star Wars Episode 2. Fans end up liking Henry’s version more, and purchasing it at a higher rate than the “official” release. People who want to build off of Star Wars will likely build off of Henry’s version, while George Lucas has to adapt, and try to give fans what they want, or his legitimacy as the originator of Star Wars dissipates. 2. The second response is the SCP project. The project is listed as Creative Commons, and as such, there is no IP protection. So, does it devolve into endless contradicting stories that confuse rather than entertain viewers? No, in fact, it is remarkably consistent. Despite the project not being maintained by a single voice, it retains logical and structural consistency, and the story told is engaging to fans. So, if the SCP project is to be taken as an example, we can see that even when there is no formal protection for intellectual monopoly, canon is maintained.

3. Why would a creator create, if there is no monetary incentive? To understand this, one has to understand that there isn’t just 1 type of income/profit. Physical/regular profit, what one thinks of, gaining literal currency, but there is also psychic income. For example, Todd writes a book. He writes not because he seeks physical profit, but because he enjoys writing, and spreading his story he thinks is worth telling. Additionally, Todd can still profit without royalties, in many ways. Instead of gaining profit from royalties, Todd can create a kickstarter, or kickstarter like alternative, and gain funds for production. Todd can also simply just sell physical copies. But, even with things like kickstarters, the vast majority of aspiring authors don’t have the funds or resources to self-publish, at some point they need a publisher to get it out there. This might be true, but creatives can still make profit without royalties. In the early, and parts of the mid 19th century, the United Kingdom did not extend intellectual monopoly grants to other countries. As a result, American publishers began to freely publish English authors, and their original authors did not gain any royalties. So, one would imagine that this left them destitute, or at least they did not earn anything from these American sales right? Wrong. In fact, American publishers ended up gaining contractual agreements with the English authors, and they ended up profiting from the American audience, without royalties. It can be assumed that, if authors can enter agreements to profit from distribution without any arbitrary monopoly grant, then it can function similarly in an IP-free society.

To finish, imagine a world without IP. Contrary to the utilitarian defenses of IP, the world would actually see flourishing. In contrast to the suspected economic crash from the claimed lack of innovation, innovation would actually explode without Intellectual monopoly grants. Canon would remain consistent for the most part, with only minor exceptions, and even those can be resolved via competition. Artists don’t need royalties to profit, and can’t abuse the market in the same way. Overall, a world without IP wouldn’t be the exploitative system IP advocates claim it would be, but instead, it would be a world of freedom, innovation, and consistent, and moral ethics.

Sources:

Kinsella, N. S. (2008). Against Intellectual Property. Ludwig von Mises Institute.

Hoppe, H. H. (2006). A Theory of Socialism and Capitalism. Kluwer Academic Publishers.

Boldrin, M., & Levine, D. K. (2008). Against Intellectual Monopoly. Cambridge University Press.

Nuvolari, A. (2004). “Collective Invention during the British Industrial Revolution: The Case of the Cornish Pumping Engine.” Cambridge Journal of Economics.

Plant, A. (1934). “The Economic Aspects of Copyright in Books.” Economica.

Webster, A. (2019). “Sony pulls PS4 trailer after being accused of plagiarizing various animations.” The Verge.

• SCP Foundation. (n.d.). “Licensing Guide.” Retrieved from scp-wiki.wikidot.com/licensing-guide. (Note: The site operates under the Creative Commons Attribution-ShareAlike 3.0 proving my point that it is Creative Commons)

Additional thanks to Liquidzulu’s (@LiquidZulu) video on intellectual monopoly (LiquidZulu. (2024, January 22). Why artists shouldn’t own their art [Video]. YouTube.), it greatly inspired this essay.

IP: The Property That Isn’t by Max C. Sterling is marked CCO 1.0 «O