Intellectual Property: As usual, Rothbard gets it rightSubmitted by Ed Ucation on Thu, 04/04/2013 - 14:11
Intellectual Property: As usual, Rothbard gets it right
On stealing BitCoins, selling brain patterns, and copying people
There has been a fierce debate going on recently about intellectual property (IP) between libertarians, led by Stephan Kinsella on the anti-IP side and Bob Wenzel on the pro-IP side. In recent years, the momentum has shifted toward the anti-IP side, with prominent thinkers such as Stephan Kinsella, Hans-Herman Hoppe, Jeffrey Tucker, and others, coming out against IP. In the pro-IP side corner sits Bob Wenzel, Paul Cwik, but also Murray Rothbard and Ludwig von Mises.
In this article, I will argue that, as usual, Murray Rothbard gets it right. Then I will address Kinsella’s arguments, based on his treatise “Against Intellectual Property,” Copyright 2008 Mises Institute . That’s right, Kinsella’s book is copyrighted.
So, what is Rothbard’s view?
In chapter 16 of the Ethics of Liberty, Rothbard writes:
Violation of (common law) copyright is an equivalent violation of contract and theft of property. For suppose that Brown builds a better mousetrap and sells it widely, but stamps each mousetrap “copyright Mr. Brown.” What he is then doing is selling not the entire property right in each mousetrap, but the right to do anything with the mousetrap except to sell it or an identical copy to someone else. The right to sell the Brown mousetrap is retained in perpetuity by Brown. Hence, for a mousetrap buyer, Green, to go ahead and sell identical mousetraps is a violation of his contract and of the property right of Brown, and therefore prosecutable as theft. Hence, our theory of property rights includes the inviolability of contractual copyright.
A common objection runs as follows: all right, it would be criminal for Green to produce and sell the Brown mousetrap; but suppose that someone else, Black, who had not made a contract with Brown, happens to see Green’s mousetrap and then goes ahead and produces and sells the replica? Why should he be prosecuted? The answer is that, as in the case of our critique of negotiable instruments, no one can acquire a greater property title in something than has already been given away or sold. Green did not own the total property right in his mousetrap, in accordance with his contract with Brown—but only all rights except to sell it or a replica. But, therefore Black’s title in the mousetrap, the ownership of the ideas in Black’s head, can be no greater than Green’s, and therefore he too would be a violator of Brown’s property even though he himself had not made the actual contract.
In chapter 10 of Man, Economy, and the State, Rothbard writes:
Turning now to patents and copyrights, we ask: Which of the two, if either, is consonant with the purely free market, and which is a grant of monopoly privilege by the State? In this part, we have been analyzing the economics of the purely free market, where the individual person and property are not subject to mo¬lestation. It is therefore important to decide whether patents or copyrights will obtain in the purely free, noninvasive society, or whether they are a function of government interference.
Almost all writers have bracketed patents and copyrights to¬gether. Most have considered both as grants of exclusive mo¬nopoly privilege by the State; a few have considered both as part and parcel of property right on the free market. But almost everyone has considered patents and copyrights as equivalent: the one as conferring an exclusive property right in the field of me¬chanical inventions, the other as conferring an exclusive right in the field of literary creations. Yet this bracketing of patents and copyrights is wholly fallacious; the two are completely different in relation to the free market.
It is true that a patent and a copyright are both exclusive property rights and it is also true that they are both property rights in innovations. But there is a crucial difference in their legal enforcement. If an author or a composer believes his copy¬right is being infringed, and he takes legal action, he must “prove that the defendant had ‘access’ to the work allegedly infringed. If the defendant produces something identical with the plaintiff’s work by mere chance, there is no infringement.” Copyrights, in other words, have their basis in prosecution of implicit theft. The plaintiff must prove that the defendant stole the former’s crea¬tion by reproducing it and selling it himself in violation of his or someone else’s contract with the original seller. But if the de¬fendant independently arrives at the same creation, the plaintiff has no copyright privilege that could prevent the defendant from using and selling his product.
Patents, on the other hand, are completely different. Thus:
You have patented your invention and you read in the newspaper one clay that John Doe, who lives in a city 2,000 miles from your town, has invented an identical or similar device, that he has licensed the EZ company to manufacture it. . . . Neither Doe nor the EZ company . . . ever heard of your invention. All believe Doe to be the inventor of a new and original device. They may all be guilty of in¬fringing your patent . . . the fact that their infringement was in ig¬norance of the true facts and unintentional will not constitute a de¬fense.
Patent, then, has nothing to do with implicit theft. It confers an exclusive privilege on the first inventor, and if anyone else should, quite independently, invent the same or similar machine or product, the latter would be debarred by violence from using it in production.
We have seen in chapter 2 that the acid test by which we judge whether or not a certain practice or law is or is not consonant with the free market is this: Is the outlawed practice implicit or explicit theft? If it is, then the free market would outlaw it; if not, then its outlawry is itself government interference in the free market. Let us consider copyright. A man writes a book or composes music. When he publishes the book or sheet of music, he imprints on the first page the word “copyright.” This indicates that any man who agrees to purchase this product also agrees as part of the exchange not to recopy or reproduce this work for sale. In other words, the author does not sell his property out¬right to the buyer; he sells it on condition that the buyer not reproduce it for sale. Since the buyer does not buy the property outright, but only on this condition, any infringement of the con-tract by him or a subsequent buyer is implicit theft and would be treated accordingly on the free market. The copyright is there¬fore a logical device of property right on the free market.
Rather than the nebulous term “idea,” I will use the terms “pattern,” as in “pattern of information.”
Thus, Rothbard believes that an expression of a pattern in a tangential format (e.g., a book), can be sold with a restrictive covenant on the title, preventing the buyer from copying the pattern of words. If the buyer then trades or gifts the book to a third party, that restrictive covenant remains, because the buyer cannot impart ownership rights onto the book that he did not initially have. The third party is thus bound by the restrictive covenant. It does not matter whether the third party is aware of the restrictive covenant, just like it does not matter if you buy a house to which someone else already has title. That’s why there is title insurance. Wenzel used the analogy of a rental car. If I rent a car and then sell the car to you, you do not own the car, because I did not have title to the car to sell in the first place.
Now, Rothbard does not address why patterns can be owned. However, we can deduce that, since Rothbard believes that ownership comes from mixing one’s own labor with a resource, ownership of a pattern comes from mixing one’s own labor with the previous patterns that were used to create the new pattern. But what gives you the right to use previous patterns? Well, not all patterns are scarce. You have the right to use a non-scarce pattern and mix it with your labor to create a scarce pattern. For example, I can use English words, which are not scarce patterns, to write a novel, which will be scarce. Furthermore, even with scarce patterns, you can have the right to use a pattern and derive new patterns from it, while still lacking the right to copy the pattern.
Now let’s get to Kinsella’s arguments. Stay with it, I saved the best for last.
1) Kinsella argues that distinction between which IP is protectable and which IP is not protectable is arbitrary. For example, why are novels protected by copyright, but not fashion designs or recipes? Since we can’t make a rigorous distinction between what is protectable and what is not, there is something wrong with the concept of IP.
Well, you can certainly copyright a book of recipes, or a book of fashion designs. So I would say that fashion designs and recipes can be copyrighted. Why is it that it seems reasonable to copyright a book of recipes, but not reasonable to copyright a single recipe? It appears to be a question of length and relates more to what the private law, as evolved through the market process, would set as a reasonable standard. For example, how much smoke pollution would you have to endure from your neighbor before you could sue him? The answer is somewhere between one molecule of smoke and total inundation of your property, and the legal system would sort that out through the market process. The same process would apply to IP.
2) Kinsella argues that IP gives you partial ownership of other people’s property, because an IP owner can prohibit them from performing certain actions with their own property. Therefore, IP violates other people’s property rights.
There are many examples of restrictions on property that are consistent with libertarian principles. Some examples of property restrictions include land easements, restrictive covenants, equitable servitude clauses, rental agreements, and leases and licenses. Furthermore, my property sets limits on what you can do with your property. You cannot drive your car over my lawn.
Here is an example straight from Rothbard ( Rothbard, Murray N. (1997). Applications and criticism from the Austrian school.):
Most of us think of homesteading unused resources in the old-fashioned sense of clearing a piece of unowned land and farming the soil. ... Suppose, for example, that an airport is established with a great deal of empty land around it. The airport exudes a noise level of, say, X decibels, with the sound waves traveling over the empty land. A housing development then buys land near the airport. Some time later, the homeowners sue the airport for excessive noise interfering with the use and quiet enjoyment of the houses.
Excessive noise can be considered a form of aggression but in this case the airport has already homesteaded X decibels worth of noise. By its prior claim, the airport now "owns the right" to emit X decibels of noise in the surrounding area. In legal terms, we can then say that the airport, through homesteading, has earned an easement right to creating X decibels of noise. This homesteaded easement is an example of the ancient legal concept of "prescription," in which a certain activity earns a prescriptive property right to the person engaging in the action.
Thus, there is nothing inherently wrong with restrictions on property.
3) Kinsella argues that you cannot own what is in someone else’s head.
Why not? Most libertarians will agree that you should be able to sell your organs. Thus, if I want to sell Joe a kidney, I can do so. But what if I want to rent him my kidney? Say Joe is waiting for an organ donor and is tired of being on dialysis. Joe knows it will take about a year for him to get a new kidney and we agree that, for a princely sum which he can afford, I will rent him my kidney for year. I, of course, put in all kinds of clauses in the contract about how he is to treat my kidney while it is in his body. Now my kidney is in Joe’s body and I have partial property rights to parts of his body. Note that this can extend to beyond my kidney. I can stipulate that Joe can’t drink alcohol while he has my kidney, which puts a restrictive covenant on his liver.
We can extend this little thought experiment to the brain. Just imagine that science has advanced to the point that we can transplant brain tissue. For example, I can rent Joe part of my awesome frontal cortex. Now, that may seem silly, but how about renting out a memory chip that interfaces with brain tissue and stores a certain skill set? Or, assume I develop the ability to rewire people’s brains to give them a particular engram. An engram is a term used for a set of neural connections that gives someone a particular skill. Let’s say we sign a contract that I give you an engram for fighting skills, but I stipulate that you can’t use your fighting skills to start a fight with an unwilling participant. This puts a restrictive covenant on your brain.
So, there is nothing inherently wrong with the possibility of owning what is in someone else’s head.
4) Kinsella argues that ownership is based on the first occupier, and is not based on mixing one’s own labor with the resource.
Kinsella argues against Rothbard’s, and Locke’s, criterion of homesteading. Rothbard quotes Locke (John Locke, "An Essay Concerning the true original, extent, and end of Civil Government"):
Though the earth and all inferior creatures be common to all men, yet every man has a "property" in his own "person." This nobody has any right to but himself. The "labour" of his body and the "work" of his hands, we may say, are properly his. Whatsoever, then, he removes out of the state that Nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property.
Kinsella disagrees with this basic homesteading principle espoused by Rothbard. Kinsella argues that whosoever is the first occupier of a resource is the rightful owner, and that labor has nothing to do with it. But, as Cwik points out, isn’t an act of occupation an act of labor? Furthermore, who has more claim on a piece of land? A first person who simply walks across it and leaves, or a second person that follows him and tills the land? Now, we can argue that the person that walked across the land and then left homesteaded the land and then abandoned the property, but that does not address the fact that the walking is an act of labor. Without labor, you cannot homestead.
How does this point apply to IP? Kinsella argues that creation of a thing, which is an act of labor, is not sufficient to demonstrate ownership of the thing. For example, if you create a statue out of a block of marble that you do not own, you do not own the statue. Rather, the owner of the marble owns the statue. In this, Kinsella is correct.
However, there are many examples of mixing one’s labor with a non-occupied, non-scarce resource to create a scarce resource. For example, I can make art out of garbage. This is the case with IP. I am mixing my labor with a non-scarce resource (that is, non-scarce patterns), to create a new scarce pattern.
5) Kinsella argues that scarcity is defined by rivalry, and scarcity is the basis for ownership. Ideas are not rivalrous and therefore not scarce and thus cannot be owned. “The very possibility of conflict over a resource renders it scarce.”
A scarce good is not necessarily rivalrous. A good is rivalrous if consumption by one consumer prevents consumption by another consumer. For example, you and I both can’t eat the same apple, can’t use the same bicycle, can’t get a massage from the same person at the same time, etc. But there is a class of goods known as club goods, wherein consumption by one person does not preclude consumption by another person. Examples of club goods include museums, movie theaters, cable television, or a boat ride. Imagine 10 people on a boat, enjoying a sunny day. Another boat comes by, and the captain offers the 10 people a ride on his boat for $100 each. They tell him to beat it. But if their boat hits a rock and starts to sink, and the captain comes back and offers them the boat ride again, they will happily pay for the boat ride. Furthermore, all 10 people are able to consume the boat ride. Yet the boat ride is clearly scarce.
Furthermore, imagine Robinson Crusoe. He has no rivals on his island. Yet he still has to make decision about scarce resources. Furthermore, what does he do with his time? As Cwik points out, time is also scarce.
Thus, scarcity is not defined by rivalry. Rather, scarcity is determined by supply and demand. Something is scarce if there is insufficient supply to meet all demand. This is why air is not scarce. It's in great demand, but there is sufficient supply. How do we know something is scarce? Someone is willing to trade for it (i.e., It has a price. In the example of Crusoe, he is willing to trade his time for it). But doesn't a price imply a bidding contest and thus rivalry? No, because there can be just one prospective buyer. But isn't there rivalry between the buyer and the seller? In other words, isn’t it necessarily the case that there is a conflict, resolved by the trade, as to who will consume the good, the buyer or the seller? No, because there are goods that can be consumed by both the buyer and the seller. For example, I can let you join me in my hot tub for a beer. Now we are both consuming the hot tub.
So, can a pattern be scarce? I submit that if there is insufficient supply of copies of a pattern to meet the demand, that pattern is scarce.
Having addresses some of Kinsella’s arguments, let’s get to the heart of the matter. Can you own patterns?
My view, which I believe is consistent with Rothbard, is that one homesteads something by mixing one’s own labor with a previously unowned resource. The resource can be scarce, as in land, or not scarce, as in air. For example, I can fix nitrogen from the air to create fertilizer. In the case of IP, I am mixing my labor with non-scarce patterns.
Let’s take a look at some revealing examples.
1) What is a BitCoin? My understanding is that a BitCoin is essentially a private key, and he who knows the private key can control the BitCoin. Thus, a BitCoin is a pattern. Are BitCoins scarce? Can they be owned? What about a brain wallet? A brain wallet is a sufficiently large pattern, such as a very unlikely, long sentence, which can be memorized and stored in someone’s brain, and which represents a BitCoin. Can you own a brain wallet? Can you own a brain wallet stored in someone else’s brain?
2) What about your DNA pattern? Do you own your DNA pattern? Can someone else copy it? If you store it on a disk and someone steals that disk and gives it to a third person, can that third person copy your DNA pattern and use it to clone you?
3) Who are you? Questions of the soul aside, most people would say that you are your body. But what does that mean? Are you a collection of cells? Cells die and new cells are born. Most of the cells in your body were not there 10 years ago. Now, you can argue that neural cells do not get replaced and that you are your nervous system. But neurons replace molecules all the time. DNA repairs itself with new molecules all the time. If parts of you are continuously being replaced, why are you still you?
What about your memories, your consciousness, your self-awareness? Where does that come from? Again, questions of the soul aside, most people would say that your consciousness comes from the pattern of neural interconnections in your brain. Notice that I said pattern. It is not the neurons themselves, but how they are interconnected. You could replace the neurons one by one with new neurons, or artificial functional equivalents, and you would still be you. The essence of what is you is not the neurons themselves, but how they are interconnected. You are, at the heart of the matter, a pattern.
While I doubt this is possible, suppose we develop the technology of being able to upload our consciousness into a computer and download it into a new, cloned body. Now, there are all kinds of philosophy of mind identity questions that this brings up, but I don’t want to focus on those kinds of issues right now. Rather, I want to posit, if your consciousness is stored in a computer, and someone gives a copy to a third party, should the third party be allowed to make copies?
You are not just your body. You are a pattern expressed through your body. You are pattern that is continuously evolving, by mixing your current labor with the previous version of yourself. Do you own yourself? I hope you say yes. To deny intellectual property is to deny self-ownership.