WEBVTT NOTE Libertarian Perspectives on IP 1 00:00:00.000 --> 00:00:06.000 Against Intellectual Property by Stefan Kinsella 2 00:00:06.000 --> 00:00:10.000 Libertarian Perspectives on Intellectual Property 3 00:00:10.000 --> 00:00:12.000 The Spectrum 4 00:00:12.000 --> 00:00:18.000 Libertarian views on IP range from complete support of the fullest gamut of IP imaginable 5 00:00:18.000 --> 00:00:22.000 to outright opposition to IP rights. 6 00:00:22.000 --> 00:00:27.000 Most of the debate about IP concerns patent and copyright, 7 00:00:27.000 --> 00:00:32.360 As discussed below, trademark and trade secret are less problematic. 8 00:00:32.360 --> 00:00:39.640 Therefore, this article focuses primarily on the legitimacy of patent and copyright. 9 00:00:39.640 --> 00:00:46.520 Pro-IP arguments may be divided into natural rights and utilitarian arguments. 10 00:00:46.520 --> 00:00:52.120 Libertarian IP advocates tend to adopt the former justification. 11 00:00:52.120 --> 00:01:06.820 For example, natural rights, or at least not explicitly utilitarian, libertarian proponents of IP, include, from more to less extreme, Kalambos, Schulman and Rand. 12 00:01:06.820 --> 00:01:17.160 Among precursors to modern libertarians, Spooner and Spencer both advocated IP on moral or natural rights grounds. 13 00:01:17.160 --> 00:01:21.740 According to the natural rights view of IP held by some libertarians, 14 00:01:21.740 --> 00:01:26.880 creations of the mind are entitled to protection just as tangible property is. 15 00:01:26.880 --> 00:01:33.380 Both are the product of one's labour and one's mind, because one owns one's labour, one has 16 00:01:33.380 --> 00:01:36.780 a natural law right to the fruit of one's labour. 17 00:01:36.780 --> 00:01:40.940 Under this view, just as one has a right to the crops one plants, 18 00:01:40.940 --> 00:01:47.640 So one has a right to the ideas one generates and the art one produces. 19 00:01:47.640 --> 00:01:56.540 This theory depends on the notion that one owns one's body and labour, and therefore its fruits, including intellectual creations. 20 00:01:56.540 --> 00:02:02.640 An individual creates a sonnet, a song, a sculpture by employing his labour and body. 21 00:02:02.640 --> 00:02:10.740 He is thus entitled to own those creations because they result from other things he owns. 22 00:02:10.740 --> 00:02:33.740 There are also utilitarian pro-IP arguments. Federal Judge Richard Posner is one prominent utilitarian, although not libertarian, IP advocate. Among libertarians, anarchist David Friedman analyzes and appears to endorse IP on law and economic grounds, a utilitarian institutional framework. 23 00:02:33.740 --> 00:02:41.260 The utilitarian argument presupposes that we should choose laws and policies that maximize 24 00:02:41.260 --> 00:02:48.460 wealth or utility. With respect to copyright and patent, the idea is that more artistic 25 00:02:48.460 --> 00:02:55.580 and inventive innovation corresponds with or leads to more wealth. Public goods and free 26 00:02:55.580 --> 00:03:01.540 rider effects reduce the amount of such wealth below its optimal level, i.e. lower than the 27 00:03:01.540 --> 00:03:08.540 the level we would achieve if there were adequate IP laws on the books. Thus, wealth is optimized 28 00:03:09.540 --> 00:03:15.340 or at least increased by granting copyright and patent monopolies that encourage authors 29 00:03:15.340 --> 00:03:20.060 and inventors to innovate and create. 30 00:03:20.060 --> 00:03:25.900 On the other hand, there is a long tradition of opposition to patent and copyright. Modern 31 00:03:25.900 --> 00:03:34.820 Opponents include Rothbard, McElroy, Palmer, LePage, Bucquart and myself. Benjamin Tucker 32 00:03:34.820 --> 00:03:40.960 also vigorously opposed IP in a debate in the 19th century individualist anarchist periodical 33 00:03:40.960 --> 00:03:47.540 Liberty. These commentators point out the many problems 34 00:03:47.540 --> 00:03:54.240 with conventional utilitarian and natural rights arguments given to justify IP rights. 35 00:03:54.240 --> 00:04:03.040 These and other shortcomings of standard pro-IP arguments are surveyed below. 36 00:04:03.040 --> 00:04:07.200 Utilitarian Defenses of IP 37 00:04:07.200 --> 00:04:13.840 Advocates of IP often justify it on utilitarian grounds. Utilitarians hold that the end of 38 00:04:13.840 --> 00:04:20.560 encouraging more innovation and creativity justifies the seemingly immoral means of restricting 39 00:04:20.560 --> 00:04:26.280 the freedom of individuals to use their physical property as they see fit. 40 00:04:26.280 --> 00:04:31.760 But there are three fundamental problems with justifying any right or law on strictly utilitarian 41 00:04:31.760 --> 00:04:33.560 grounds. 42 00:04:33.560 --> 00:04:40.640 First, let us suppose that wealth or utility could be maximized by adopting certain legal 43 00:04:40.640 --> 00:04:42.120 rules. 44 00:04:42.120 --> 00:04:45.400 The size of the pieside is increased. 45 00:04:45.400 --> 00:04:49.600 Even then, this does not show that these rules are justified. 46 00:04:49.600 --> 00:04:54.780 For example, one could argue that net utility is enhanced by redistributing half of the 47 00:04:54.780 --> 00:05:01.400 wealth of society's richest 1% to its poorest 10%. But even if stealing some of A's property 48 00:05:01.400 --> 00:05:07.500 and giving it to B increases B's welfare more than it diminishes A's, if such a comparison 49 00:05:07.500 --> 00:05:15.180 could somehow be made, this does not establish that the theft of A's property is justified. 50 00:05:15.180 --> 00:05:25.100 Wealth maximization is not the goal of law, rather the goal is justice, giving each man his due. 51 00:05:25.100 --> 00:05:30.460 Even if overall wealth is increased due to IP laws, it does not follow that this allegedly 52 00:05:30.460 --> 00:05:36.060 desirable result justifies the unethical violation of some individual's rights to use their own 53 00:05:36.060 --> 00:05:40.000 property as they see fit. 54 00:05:40.000 --> 00:05:46.620 In addition to ethical problems, utilitarianism is not coherent. It necessarily involves making 55 00:05:46.620 --> 00:05:53.240 illegitimate interpersonal utility comparisons, as when the costs of IP laws are subtracted 56 00:05:53.240 --> 00:05:59.760 from the benefits to determine whether such laws are a net benefit. 57 00:05:59.760 --> 00:06:05.800 But not all values have a market price. In fact, none of them do. Mises showed that even 58 00:06:05.800 --> 00:06:12.560 Even for goods that have a market price, the price does not serve as a measure of the goods' value. 59 00:06:12.560 --> 00:06:15.840 In a footnote, the author expands, 60 00:06:15.840 --> 00:06:17.740 Mises states, 61 00:06:17.740 --> 00:06:23.840 Although it is usual to speak of money as a measure of value and prices, the notion is entirely fallacious. 62 00:06:23.840 --> 00:06:30.640 So long as the subjective theory of value is accepted, this question of measurement cannot arise. 63 00:06:30.640 --> 00:06:35.080 On the measurement of value in The Theory of Money and Credit, 64 00:06:35.080 --> 00:06:45.960 by H. E. Batson, 1912, reprint Indianapolis, Liberty Fund, 1980, page 51. Also, money 65 00:06:45.960 --> 00:06:52.120 is neither a yardstick of value nor of prices. Money does not measure value, nor are prices 66 00:06:52.120 --> 00:06:58.680 measured in money. They are amounts of money. Ludwig von Mises, Socialism and Economic and 67 00:06:58.680 --> 00:07:06.740 and Sociological Analysis, 3rd Revised Edition, Translated by J. Kahana, Indianapolis, Independent 68 00:07:06.740 --> 00:07:18.480 Liberty Press, 1981, p. 99. And see also, Human Action, p. 96, 122, 204, 210, 217 and 69 00:07:18.480 --> 00:07:20.480 289. 70 00:07:20.480 --> 00:07:27.400 Finally, even if we set aside the problems of interpersonal utility comparisons and the 71 00:07:27.400 --> 00:07:34.400 It is not at all clear that IP laws lead to any change, either an increase or a decrease, in overall wealth. 72 00:07:42.680 --> 00:07:47.440 It is debatable whether copyrights and patents really are necessary to encourage the production 73 00:07:47.440 --> 00:07:52.520 of creative works and inventions, or that the incremental gains in innovation outweigh 74 00:08:22.520 --> 00:08:37.520 There are undoubtedly costs of the patent system. As noted, patents can be obtained only for practical applications of ideas, but not for more abstract or theoretical ideas. 75 00:08:37.520 --> 00:08:50.520 This skews resources away from theoretical research and development. In a footnote, the author quotes Plant, The Economic Theory Concerning Patents for Inventions, page 43, 76 00:08:50.520 --> 00:09:05.120 It is by no means self-evident that patents encourage an increased absolute quantity of 77 00:09:05.120 --> 00:09:11.000 research expenditures, but certainly patents distort the type of research expenditure being 78 00:09:11.000 --> 00:09:16.640 conducted. Research expenditures are therefore overstimulated in the early stages before 79 00:09:16.640 --> 00:09:23.640 It is not clear that society is better off with relatively more practical inventions than those of the modern society. 80 00:09:23.640 --> 00:09:28.640 In addition, some inventions are considered patentable, while others are not. 81 00:09:28.640 --> 00:09:35.640 The patent system then has the further effect of artificially stimulating research expenditures in the patentable areas, 82 00:09:35.640 --> 00:09:42.640 while artificially restricting research in the non-patentable areas. 83 00:09:42.640 --> 00:09:47.080 It is not clear that society is better off with relatively more practical invention and 84 00:09:47.080 --> 00:09:53.680 relatively less theoretical research and development. Additionally, many inventions are patented 85 00:09:53.680 --> 00:10:00.120 for defensive reasons, resulting in patent lawyers' salaries and patent office fees. 86 00:10:00.120 --> 00:10:05.720 This large overhead would be unnecessary if there were no patents. In the absence of patent 87 00:10:05.720 --> 00:10:10.600 laws, for example, companies would not spend money obtaining or defending against such 88 00:10:10.600 --> 00:10:17.600 and the use of force against others' property have to satisfy a burden of proof. 89 00:10:27.480 --> 00:10:33.760 We must remember that when we advocate certain rights and laws and inquire into their legitimacy, 90 00:10:33.760 --> 00:10:38.800 we are inquiring into the legitimacy and ethics of the use of force. 91 00:10:38.800 --> 00:10:44.400 To ask whether a law should be enacted or exist is to ask, is it proper to use force 92 00:10:44.400 --> 00:10:49.240 against certain people in certain circumstances? 93 00:10:49.240 --> 00:10:56.480 It is no wonder that this question is not really addressed by analysts of wealth maximization. 94 00:10:56.480 --> 00:11:01.160 Utilitarian analysis is thoroughly confused and bankrupt. Talk about increasing the size 95 00:11:01.160 --> 00:11:06.800 of the pie is methodologically flawed. There is no clear evidence that the pie increases 96 00:11:06.800 --> 00:11:12.960 Problems with IP Rights. Further, Pi growth does not justify the use of force against 97 00:11:12.960 --> 00:11:19.560 the otherwise legitimate property of others. For these reasons, utilitarian IP defenses 98 00:11:19.560 --> 00:11:24.880 are unpersuasive. 99 00:11:24.880 --> 00:11:28.680 Some Problems with Natural Rights 100 00:11:28.680 --> 00:11:33.200 Other libertarian proponents of intellectual property argue that certain ideas deserve 101 00:11:33.200 --> 00:11:40.000 protection as property rights because they are created. Rand supported patents and copyrights 102 00:11:40.000 --> 00:11:45.440 as the legal implementation of the base of all property rights, a man's right to the 103 00:11:45.440 --> 00:11:54.440 product of his mind. For Rand, IP rights are, in a sense, the reward for productive work. 104 00:11:54.520 --> 00:12:01.360 It is only fair that a creator reap the benefits of others using his creation. For this reason, 105 00:12:01.360 --> 00:12:07.600 In part, she opposes perpetual patent and copyright because future unborn heirs of the 106 00:12:07.600 --> 00:12:14.320 original creator are not themselves responsible for the creation of their ancestors' work. 107 00:12:14.320 --> 00:12:19.340 One problem with the creation-based approach is that it almost invariably protects only 108 00:12:19.340 --> 00:12:25.720 certain types of creations unless that is every single useful idea one comes up with 109 00:12:25.720 --> 00:12:30.660 is subject to ownership. More on this below. 110 00:12:30.660 --> 00:12:36.380 But the distinction between protectable and the unprotectable is necessarily arbitrary. 111 00:12:36.380 --> 00:12:41.840 For example, philosophical or mathematical or scientific truths cannot be protected under 112 00:12:41.840 --> 00:12:46.820 current law on the grounds that commerce and social intercourse would grind to a halt where 113 00:12:46.820 --> 00:12:52.220 every new phrase, philosophical truth and the like, considered the exclusive property 114 00:12:52.220 --> 00:12:55.540 of its creator. 115 00:12:55.540 --> 00:13:01.900 For this reason, patents can be obtained only for so-called practical applications of ideas, 116 00:13:01.900 --> 00:13:08.180 but not for more abstract or theoretical ideas. Rand agrees with this disparate treatment 117 00:13:08.180 --> 00:13:15.060 in attempting to distinguish between an unpatentable discovery and a patentable invention. She 118 00:13:15.060 --> 00:13:21.140 argues that a scientific or philosophical discovery which identifies a law of nature, 119 00:13:21.140 --> 00:13:24.920 A principle or a fact of reality not previously known 120 00:13:24.920 --> 00:13:29.340 is not created by the discoverer. 121 00:13:29.340 --> 00:13:32.620 But the distinction between creation and discovery 122 00:13:32.620 --> 00:13:35.840 is not clear-cut or rigorous. 123 00:13:35.840 --> 00:13:38.380 Here the author expands in a footnote, 124 00:13:38.380 --> 00:13:40.860 Plant is correct in stating that 125 00:13:40.860 --> 00:13:45.420 the task of distinguishing a scientific discovery from its practical application 126 00:13:45.420 --> 00:13:47.260 which may be patentable 127 00:13:47.260 --> 00:13:51.360 is often baffling to the most subtle lawyer. 128 00:13:51.360 --> 00:13:58.080 The Economic Theory Concerning Patents for Inventions, pages 49 to 50. 129 00:13:58.080 --> 00:14:02.020 On a related note, the US Supreme Court has noted that 130 00:14:02.020 --> 00:14:05.920 the specification and claims of a patent constitute one of the most difficult 131 00:14:05.920 --> 00:14:10.060 legal instruments to draw with accuracy. 132 00:14:10.060 --> 00:14:16.980 Topliff versus Topliff in an 1892 Supreme Court decision. 133 00:14:16.980 --> 00:14:22.900 Perhaps this is because patent law has no moorings to objective borders of actual tangible 134 00:14:22.900 --> 00:14:29.540 property and thus is inherently vague, amorphous, ambiguous and subjective. For the latter reason 135 00:14:29.540 --> 00:14:35.780 alone one would think that objectivists, ardent self-proclaimed defenders of objectivity and 136 00:14:35.780 --> 00:14:42.780 opponents of subjectivism, would oppose patent and copyright. 137 00:14:42.780 --> 00:14:50.580 Nor is it clear why such a distinction, even if clear, is ethically relevant in defining property rights. 138 00:14:50.580 --> 00:14:52.620 No one creates matter. 139 00:14:52.620 --> 00:14:56.780 They just manipulate and grapple with it according to physical laws. 140 00:14:56.780 --> 00:14:57.980 In this sense, 141 00:14:57.980 --> 00:15:00.680 no one really creates anything. 142 00:15:00.680 --> 00:15:05.280 They merely rearrange matter into new arrangements and patterns. 143 00:15:05.280 --> 00:15:09.980 An engineer who invents a new mousetrap has rearranged existing parts to provide 144 00:15:09.980 --> 00:15:15.660 the function not previously performed. Others who learn of this new arrangement can now 145 00:15:15.660 --> 00:15:22.820 also make an improved mousetrap. Yet the mousetrap merely follows laws of nature. The inventor 146 00:15:22.820 --> 00:15:28.220 did not invent the matter out of which the mousetrap is made, nor the facts and laws 147 00:15:28.220 --> 00:15:35.660 exploited to make it work. Similarly, Einstein's discovery of the relation 148 00:15:35.660 --> 00:15:42.660 E equals MC squared, once known by others, allows them to manipulate matter in a more efficient way. 149 00:15:43.660 --> 00:15:52.660 Without Einstein's or the inventor's efforts, others would have been ignorant of certain causal laws of ways matter can be manipulated and utilized. 150 00:15:53.660 --> 00:16:04.660 Both the inventor and the theoretical scientist engage in creative mental effort to produce useful new ideas, yet one is rewarded and the other is not. 151 00:16:05.660 --> 00:16:21.660 In one recent case, the inventor of a new way to calculate a number representing the shortest path between two points, an extremely useful technique, was not given patent protection because this was merely a mathematical algorithm. 152 00:16:21.660 --> 00:16:41.660 But it is arbitrary and unfair to reward more practical inventors and entertainment providers, such as the engineer and songwriter, and to leave more theoretical science and math researchers and philosophers unrewarded. The distinction is inherently vague, arbitrary and unjust. 153 00:16:41.660 --> 00:16:49.100 Moreover, adopting a limited term for IP rights as opposed to a perpetual right also requires 154 00:16:49.100 --> 00:16:56.280 arbitrary rules. For example, patents last for 20 years from the filing date, while copyrights 155 00:16:56.280 --> 00:17:02.920 last, in the case of individual authors, for 70 years past the author's death. No one can 156 00:17:02.920 --> 00:17:09.880 seriously maintain that 19 years for a patent is too short and 21 years too long any more 157 00:17:09.880 --> 00:17:13.800 than the current price for a gallon of milk can be objectively classified as 158 00:17:13.800 --> 00:17:17.900 too low or too high. 159 00:17:17.900 --> 00:17:21.760 Thus, one problem with the natural rights approach to validating IP 160 00:17:21.760 --> 00:17:25.340 is that it necessarily involves arbitrary distinctions 161 00:17:25.340 --> 00:17:29.440 with respect to what classes of creations deserve protection 162 00:17:29.440 --> 00:17:34.320 and concerning the length of the term of the protection. 163 00:17:34.320 --> 00:17:38.620 Of course, one way to avoid this difficulty is to claim that everything is 164 00:17:38.620 --> 00:17:44.620 is protectable by IP with perpetual, infinite terms. 165 00:17:44.620 --> 00:17:50.220 Spooner, for example, advocated perpetual rights for patent and copyright. 166 00:17:50.220 --> 00:17:56.820 Schulman advocates a much broader concept of creations or ideas protectable by IP. 167 00:17:56.820 --> 00:18:03.620 He argues for property rights called logo rights in any logos that one creates. 168 00:18:03.620 --> 00:18:10.180 The Logos is the material identity or identity pattern of created things. 169 00:18:10.180 --> 00:18:16.460 The owner of a Logos would own the order or pattern of information imposed upon or observed 170 00:18:16.460 --> 00:18:20.380 in material substances. 171 00:18:20.380 --> 00:18:26.660 The most radical of all IP proponents is Andrew Joseph Chalambos, whose ideas, to the extent 172 00:18:26.660 --> 00:18:30.780 that I understand them, border on the absurd. 173 00:18:30.780 --> 00:18:37.220 Calambos believed that man has property rights in his own life, primordial property, and 174 00:18:37.220 --> 00:18:44.620 in all non-procreative derivatives from his life. Since the first derivatives of a man's 175 00:18:44.620 --> 00:18:51.320 life are his thoughts and ideas, thoughts and ideas are primary property. Since action 176 00:18:51.320 --> 00:18:57.860 is based on primary property, ideas, actions are owned as well. This is referred to as 177 00:18:57.860 --> 00:19:16.860 Secondary derivatives such as land, televisions and other tangible goods are produced by ideas and action. Thus, property rights in tangible items are relegated to lowly secondary status as compared with the primary status of property rights in ideas. 178 00:19:16.860 --> 00:19:24.860 Even Rand once elevated patents over mere property rights intangible goods in her bizarre notion that 179 00:19:24.860 --> 00:19:28.860 patents are the heart and core of property rights. 180 00:19:28.860 --> 00:19:37.860 Can we really believe that there were no property rights respected before the 1800s when patent rights became systematized? 181 00:19:37.860 --> 00:19:49.860 Halambos reportedly took his own ideas to ridiculous lengths, claiming a property right in his own ideas and requiring his students not to repeat them, 182 00:19:49.860 --> 00:20:00.860 dropping a nickel in a fund box every time he used the word liberty as a royalty to the descendants of Thomas Paine, the alleged inventor of the word liberty, 183 00:20:00.860 --> 00:20:13.860 and changing his original name from Joseph Andrew Chalambos, Jr. presumably, to Andrew Joseph Chalambos, to avoid infringing his identically named father's rights to the name. 184 00:20:14.860 --> 00:20:29.860 By widening the scope of intellectual property and by lengthening its duration to avoid making such arbitrary distinctions as Rand does, the absurdity and injustice caused by IP becomes even more pronounced, as Chalambos demonstrates. 185 00:20:30.860 --> 00:20:40.860 And by extending the term of patents and copyrights to infinity, subsequent generations would be choked by ever-growing restraints on their use of property. 186 00:20:40.860 --> 00:20:47.860 No one would be able to manufacture or even use a lightbulb without getting permission from Edison's heirs. 187 00:20:47.860 --> 00:20:56.860 No one would even be able to build a house without getting permission from the heirs of the first proto-human who left the caves and built a hut. 188 00:20:56.860 --> 00:21:06.860 No one could use a variety of life-saving techniques, chemicals or treatments without obtaining permissions of various lucky rich descendants. 189 00:21:06.860 --> 00:21:18.860 No one would be able to boil water to purify it or use pickling to preserve foods unless he is granted license by the originators or their distant heirs of such techniques. 190 00:21:18.860 --> 00:21:27.860 Such unbounded ideal rights would pose a serious threat to tangible property rights, and would threaten to overwhelm them. 191 00:21:27.860 --> 00:21:42.860 All use of tangible property would by now be impossible, as every conceivable use of property, every single action, would be bound to infringe upon one of the millions of past accreted IP rights, and the human race would die of starvation. 192 00:21:42.860 --> 00:21:50.860 But, as Rand noted, men are not ghosts. We have a spiritual aspect but also a physical one. 193 00:21:50.860 --> 00:21:57.860 Any system that elevates rights in ideas to such an extreme that it overrides rights in tangible things 194 00:21:57.860 --> 00:22:03.860 is clearly not a suitable ethical system for living, breathing, human beings. 195 00:22:03.860 --> 00:22:11.860 No one living can actually act in accordance with such an unrestricted view of IP. 196 00:22:11.860 --> 00:22:23.860 The remaining advocates of IP all qualify their endorsement by limiting the scope and or terms of IP rights, thus adopting the ethically arbitrary distinctions noted above. 197 00:22:24.860 --> 00:22:36.860 A deeper problem for the natural rights position lies in its undue emphasis on creation instead of scarcity as giving rise to property rights as discussed below.