Thursday , 24 April 2014

The Case Against IP: A Concise Guide

Courtesy: Mises.org

by: Stephan Kinsella

Like many libertarians, I initially assumed intellectual property (IP) was a legitimate type of property right. But I had misgivings from the start: there was just something too utilitarian and results oriented in Rand’s purportedly principled case for IP, and something too artificial about the state’s copyright and patent statutory classifications. I started practicing patent law around 1992, and the more I learned about IP, the more my doubts grew.

I finally realized that IP is incompatible with genuine property rights. (This echoed the sloughing off of my initial Randian minarchism in favor of Rothbardian anarchism, when I realized the state is aggression incarnate and cannot be justified. See my article, “What It Means To Be an Anarcho-Capitalist.”)

And so, in 1995 I started publishing articles pointing out problems with IP, finally culminating in my lengthy 2001 Journal of Libertarian Studies article“Against Intellectual Property,” which was republished as a monograph last year by the Mises Institute. A summary of the argument in this paper was set forth in my article “In Defense of Napster and Against the Second Homesteading Rule” (LewRockwell.com, 2000), and various of these pieces have been translated into other languages.

In recent years there has been a good deal of more useful writing on IP and, as my previous Napster article is somewhat dated now, the time is ripe to concisely restate the basic libertarian case against IP and provide links to some of the key anti-IP publications.

The Libertarian Framework

This section provides a brief sketch of the libertarian framework before applying these principles to IP.[1] As Rothbard explained, all rights are property rights. But a property right is simply theexclusive right to control a scarce resource. Property rights just specify who owns, who has theright to control, scarce resources.

No political system is agnostic on the question of who owns various resources. To the contrary: any given system of property rights assigns a particular owner to every scarce resource. None of the various forms of socialism, for example, deny property rights; each socialist system will specify an owner for every scarce resource.

If the state nationalizes an industry, it is asserting ownership of these means of production. If the state taxes you, it is implicitly asserting ownership of the funds taken. If my land is transferred to a private developer by eminent domain statutes, the developer is now the owner. Thus, protection of and respect for property rights is not unique to libertarianism.

What is distinctive about libertarianism is its particular property assignment rules — its view as towho is the owner of each contestable resource, and how to determine this. So the question is: what are the libertarian property assignment rules that distinguish our philosophy from others?

Property in Bodies

There are two types of scarce resourceshuman bodies, and external resources found in nature.

Human bodies are of course scarce resources. As Professor Hans-Hermann Hoppe observes, even in a paradise with a superabundance of goods,

every person’s physical body would still be a scarce resource and thus the need for the establishment of property rules, i.e., rules regarding people’s bodies, would exist. One is not used to thinking of one’s own body in terms of a scarce good, but in imagining the most ideal situation one could ever hope for, the Garden of Eden, it becomes possible to realize that one’s body is indeed the prototype of a scarce good for the use of which property rights, i.e., rights of exclusive ownership, somehow have to be established, in order to avoid clashes.

Now the distinct libertarian view is that each person completely owns his own body — at least initially, until something changes this (e.g., if a person commits some crime by which he forfeits or loses some of his rights). Implicit in the idea of self ownership is the belief that each person has abetter claim to the body that he or she directly controls and inhabits than do others. I have a better claim to the right to control my body than you do, because it is my body; I have a unique link and connection to my body that others do not, and that is prior to the claim of any other person.

Thus we can see that anyone other than the original occupant of a body is a latecomer with respect to the original occupant. Your claim to my body is inferior in part because I had it first. The person claiming your body can hardly object to the significance of what Hoppe calls the “prior-later” distinction, since he adopts this very rule with respect to his own body — he has to presuppose ownership of his own body in order to claim ownership of yours.

The self-ownership rule may seem obvious, but it is held only by libertarians. Nonlibertarians do notbelieve in complete self ownership. Sure, they usually grant that each person has some rights in his own body, but they believe each person is partially owned by some other person or entity — usually the state, or society. In other words, we libertarians are the only ones who really oppose slavery in a principled way. Nonlibertarians are in favor of at least partial slavery.

This slavery is implicit in state actions and laws such as taxation, conscription, and drug prohibitions. The libertarian says that each person is the full owner of his body: he has the right to control his body, to decide whether or not he ingests narcotics, works for less than minimum wage, pays taxes, joins an army, and so on.

But those who believe in such laws believe that the state is at least a partial owner of the body of those subject to such laws. They don’t like to say they believe in slavery, but they do. The liberal wants tax evaders put in jail — that is, enslaved. The conservative wants marijuana users enslaved.

Property in External Things

In addition to human bodies, scarce resources also include external objects. Unlike human bodies, however, external things are initially unowned. The libertarian view with respect to such external resources is very simple: the owner of a given scarce resource is the person who first homesteaded it, or someone who can trace his title contractually back to the homesteader. This person has a better claim than anyone else who wants the property. Everyone else is a latecomer with respect to the first possessor.

This latecomer rule is actually implied in the very idea of owning property. If the earlier possessor of property did not have a better claim than some second person who wants to take the property from him, then why does the second person have a better claim than a third person who comes later still (or than the first owner who tries to take it back)? In other words, to deny the crucial significance of the prior-later distinction is to deny property rights altogether.

Every nonlibertarian view is thus incoherent. On the one hand, they presuppose the prior-later distinction when they assign ownership to a given person (in that it says that person has a better claim than latecoming claimants). On the other hand, they act contrary to this principle whenever they take property from the original homesteader and assign it to some latecomer.

But what is relevant for our purposes here is the libertarian position, not the incoherence of competing views. And, in sum, the libertarian position on property rights in external objects is that, in any dispute or contest over any particular scarce resource, the original homesteader — the person who appropriated the resource from its unowned status, by embordering or transforming it(or his contractual transferee) — has a better claim than latecomers, those who did not appropriate the scarce resource.

Libertarianism on IP

Given the libertarian understanding of property rights, as sketched above, it is clear that the institutions of patent and copyright are simply indefensible. Patents grant rights in “inventions” — useful machines, or processes. A patent is a grant by the state that permits the patentee to use the state’s court system to prohibit others from using their own property in certain ways — from reconfiguring their property according to a certain pattern or design described in the patent, or from using their property (including their own bodies) in a certain sequence of steps described in the patent.

Copyrights pertain to “original works,” such as books, articles, movies, and computer programs. A copyright is a grant by the state that permits the copyright holder to prevent others from using their own property — e.g., ink and paper — in certain ways.

In both cases, the state is assigning to A a right to control B’s property — A can tell B not to do certain things with B’s property. Since ownership is the right to control, IP grants to A co-ownership of B’s property. This clearly cannot be justified under libertarian principles. B already owns his property. With respect to him, A is a latecomer. B is the one who appropriated the property, not A. It is too late for A to homestead B’s property — B already did that. The resource is no longer unowned.

Granting A ownership rights in B’s property is quite obviously incompatible with basic libertarian principles. It is nothing more than redistribution of wealth. IP is thus unlibertarian and unjustified. (See Against Intellectual Property, pp. 43–45, 55–56.)

Why, then, is this a contested issue? Why do some libertarians still assert the legitimacy of IP rights?

Utilitarianism

One reason libertarians support IP is that they approach libertarianism as a whole from a utilitarian perspective instead of a principled perspective. They are in favor of laws that increase overall utility, or wealth. And they believe the state’s propaganda that state-granted IP rights actually do increase overall wealth.

Now, the utilitarian perspective itself is bad enough, because all sorts of terrible policies could be justified this way: why not take half of Bill Gates’s fortune and give it to the poor? Wouldn’t the sum total of the welfare gains to the thousands of recipients be greater than Gates’s reduced utility? After all, he’s still a billionaire afterwards. And if a man is extremely desperate for sex, couldn’t his gain be greater than the loss suffered by his rape victim, say, if she’s a prostitute?

But even if we ignore the ethical and other problems with the utilitarian, or wealth-maximization, approach, it is bizarre that utilitarian libertarians are in favor of IP when they have not demonstrated that IP does increase overall wealth. (For further discussion of various problems with utilitarianism, see Against Intellectual PropertyDownload PDF, pp. 19–23.) They merely assume it does and then base their policy views on this assumption. It is beyond dispute that the IP system imposes significant costs, in money terms alone — not to mention the cost to liberty.

However, the argument that the incentive provided by IP law stimulates additional innovation and creativity has not even been proven. It is entirely possible — even likely, in my view — that the IP system, in addition to imposing billions of dollars of cost on society, actually reduces or impedes innovation, adding damage to damage.

But even if we assume that the IP system does stimulate some additional, valuable innovation, no one has established yet that the value of the purported gains is greater than the costs of the system. If you ask an advocate of IP how it is that they know there is a net gain, you get silence in response (this is especially true of patent attorneys). They cannot even point to any study to support their utilitarian contention; they usually point to Article I, Section 8 of the Constitution, as if the back-room dealings of politicians two centuries ago is some sort of evidence.

In fact, as far as I’ve been able to tell, virtually every study that attempts to tally the costs and benefits of copyright or patent law either concludes that these schemes cost more than they are worth, that they actually reduce innovation, or the study is inconclusive. There are no studiesshowing a net gain. There are only repetitions of state propaganda.

Anyone who accepts utilitarianism should, based on the available evidence, be opposed to IP.

Libertarian Creationism

Another reason many libertarians favor IP is confusion about the origin of property and property rights. They accept the careless observation that you can come to own things in three ways: through homesteading an unowned thing, by contractual exchange, and by creation.

The mistake is the notion that creation is an independent source of ownership — independent, that is, from homesteading and contracting. However, it is easy to see that it is not, that “creation” is neither necessary nor sufficient as a source of ownership.

If you carve a statue using your own hunk of marble, you own the resulting creation because youalready owned the marble. You owned it before, and you own it now. And if you homestead an unowned resource, like a field, by using it and thereby establishing publicly visible borders, you own it because this first use and embordering gives you a better claim than latecomers. So creation is not necessary.

And suppose you carve a statue in someone else’s marble — either without permission, or with permission, such as when an employee does this with his employer’s marble by contract — then you do not own the resulting statue, even though you “created” it. If you are using marble stolen from another, your vandalizing it does not take away the owner’s claims to it. And if you are working on your employer’s marble, he owns the resulting statue. So creation is not sufficient. (See alsoAgainst Intellectual PropertyDownload PDF, pp. 36–42.)

Or, as Sheldon Richman explains,

A key reason [many libertarians support IP] is the importance attached to the act of creation. If someone writes or composes an original work or invents something new, the argument goes, he or she should own it because it would not have existed without the creator. I submit, however, that as important as creativity is to human flourishing, it is not the source of ownership of produced goods. … So what is the source? Prior ownership of the inputs through purchase, gift, or original appropriation. This is sufficient to establish ownership of the output. Ideas contribute no necessary additional factor. If I build a model airplane out of wood and glue, I own it not because of any idea in my head, but because I owned the wood, the glue, and myself.

Of course, this is not to deny the importance of knowledge, or creation and innovation. All action, including action that employs owned scarce means, involves the use of technical knowledge — knowledge of causal laws, for example. To be sure, creation is an important means of increasingwealth. As Hoppe has observed,

One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers. There are no other ways. Download PDF

But while production or creation is a means of gaining “wealth,” it is not an independent source of ownership or rights. Production is not the creation of new matter; it is the transformation of things from one form to another — the transformation of things one necessarily already owns. Using your labor and creativity to transform your property into more valuable finished products gives yougreater wealth, but not additional property rights.

So the idea that you own anything you create is a confused one that does not justify IP.

The Contractual Approach

Some also argue that some form of copyright or possibly patent could be created by some kind of contractual tricks — for example, by a seller selling a patterned media (book, CD, etc.) or useful machine to a buyer on the condition that it not be copied. For example, Brown sells an innovative mousetrap to Green, on the condition that Green is not to reproduce it. (This is Rothbard’s example, from “Knowledge, True and False,” which is discussed at pp. 51–55 of Against Intellectual Property.)

However, in order for IP to work, it has to bind not only seller and buyer, but all third parties. The contract between buyer and seller cannot do this — it binds only the buyer and seller. In the example given above, even if Green agrees not to copy Brown’s mousetrap, Black has no agreement with Brown. Brown has no contractual right to prevent Black from using Black’s own property in accordance with whatever knowledge or information Black has. Thus, the contract approach fails as well. (See also Against Intellectual PropertyDownload PDF, pp. 45–55.)

IP and Statism

One final problem with IP can be mentioned. And that is that IP rights are statutory schemes, schemes that are constructed only by legislation. A patent or copyright code could no more arise in a decentralized, case-based legal system in a free society than the Americans with Disabilities Act could. In other words, IP requires both a legislature and a state. For libertarians who reject thelegitimacy of the state or legislated law,Download PDF this is yet another defect of IP.

Anti-IP Resources

Comments

comments

About Agorist Nick

Agorist Nick
Agorist is a co-founder of Speak Liberty NOW and a strong proponent of free markets and anti-authoritarian views. Growing up in Southern California has taught him to enjoy the outdoors and a vivid lifestyle. He enjoys a multitude of activities, and loves a good physical challenge. As a veteran and entrepreneur, Agorist has embarked on many different paths in life, but the one he has found most important and fulfilling is the role he plays as a father to his two children. The message of individual liberty has led him to believe living a traditional life with strong family values is ultimately the best, most prosperous and most charitable way to live. Through the reach of Speak Liberty NOW he looks to confront the intellectual war liberty faces against authoritarianism and its different forms.