From my comment on Jeff Tucker's post, A Theory of Open:

Jeff: "Mainly, I think, this comes from an exaggerated reliance on IP and a belief that it is the key to success."

MIchael: "Do IP advocates understand that the system may very well make it a better bet to produce patents than products? Why go through the hassle of producing products for finicky customers when you can wait for someone to go through the trouble of making a successful product and threaten to sue them?"

I am not sure if non-practitioners realize exactly what goes on in patenting. Quite often medium to large sized companies hold "patent mining" sessions. They are usually not trying to come up with ideas that they might use in their business. What you do is you get 5-10 engineers to sit around a coffee table, and they are led by a "facilitor" (often a patent attorney). They talk about what they've been working on, and try to find little twists or aspects of a design that they can file a patent on. Or, they'll sift thru a bunch of patents in an area that competitors are practicing in, and just brainstorm, thinking of things they can file patents on. Not because they intend to use these ideas. But just to build up a thicket of patents that they can use against another company, either defensively (i.e., a countersuit if the competitor sues them); or to extract royalties or to squelch competition.

For example, the attorney shows a powerpoint with diagrams from a bunch of patents or product designs. The engineers throw ideas out there. Most of them are ridiculous. Someone is taking notes. One of them might say, "How about if we had two channels of information there, in parallel, instead of one? Do you think competitor B might some day do that? After all, dual-channels are becoming popular right now; they'll probably have to do this some day." The patent attorney says, "Say that sounds alright. What's your name? Bob? Okay, you're 'an inventor'. Anyone else contribute to this? Jim, didn't I hear you say something like, 'yeah, that might work?' Okay, you're the second inventor. Let's file a patent on this puppy. You each get a $3,000 bonus."

So, for about 3 minutes of brainstorming, a patent emerges. Maybe a dozen patent applications are filed from that meeting. These are not flashes of genius. They are not sweat of the brow. It's just a bunch of engineers torn away from their actual design work to brainstorm ways to hamper their competition. So maybe half the patents are abandoned half-way through "prosecution," a couple years later, after it's clear even to the bumbling patent office that they are sh*t. Of course about $20-30k was spent on each of the now-abandoned applications, or about $150k. No matter. PTO employees and patent lawyers have to put food on the table.

The other half might finally issue as patents. Most or all of them are probably sh*t too, but now they are issued, and have a "presumption of validity." Now we're up to $30-40k or so per issued patent. Got to recoup those expenses and justify the patent budget, eh? And say, it sure looks like company B's products are ... kinda close to the claims in 2 or 3 of the patents. Let's send them a friendly cease and desist letter.

Company B's patent attorney is then called into action. He's hired to draft 3 or 4 "non-infringement opinions" for, say, $30k each. Why? Just in case B is sued, and loses... so that they can at least plead that the infringement was not "wilful". They still have to pay damages (or stop selling the accused product), but it won't be trebled... if the judge believes the opinions were "sincere" and "relied on" by the defendant so that, although they were infringing, it was not "wilful" since they were after all following a lawyer's advice.. .the lawyer they paid $120k to tell them that ... they are not infringing ... even though it later turned out that they were. No matter, The $6 million B has to pay in damages is at least not trebled $18 million, so that the measly $120k spent on the patent opinions, plus the $1 million spent on patent litigators, was well worth the $12 million saved! B is better off (well, except for the $6 million verdict), its patent attorneys are better off. As for the patentee company, well, their few hundred grand in patent acquisition fees yielded them $6 million, and reduced competition! A win for everyone... right?

This abomination is what pro-patent libertarians thing is just? They think this is compatible with rights and liberty? They think this is productive, innovative behavior? Give me a break.

[SK]

A friend of mine is going to be a panelist at this event, World's Fair Use Day, which

is a free, all-day celebration of the doctrine of fair use: the legal right that allows innovators and creators to make particular uses of copyrighted materials. WFUD will take place at the Newseum in Washington D.C. on Tuesday January 12, 2010, and will be organized by Public Knowledge (PK), a Washington D.C.-based non-profit, consumer-advocacy group. PK works to ensure that communications and intellectual property policies encourage creativity, further free expression and discourse and provide universal access to knowledge. As part of its campaign to return balance to copyright law, PK hopes to use WFUD to educate the public about the importance of fair use in an information society.

Enhancing the fair use exception is all to the good, but it does not go far enough. Fair use is a vague, ad hoc, utilitarian legislative exception designed to blunt some of the edges of copyright law so as to help masque its manifest injustice. An analog would be a slavery law that permitted a judge to allow the slave a month of temporary freedom if he can demonstrate to the judge that his master has been mistreating him according to a balance test in which the judge weighs four "factors" to make this determination. Or an exception to tax law that says a judge can reduce your tax rate by 1% for one year, if you can persuade him of a "hardship" as proved by weighing four legislatively enshrined "factors." If the law is unjust and needs its edges blunted by ad hoc, unprincipled exceptions--the law itself is the problem and should be abolished.

This event is produced by the group Public Knowledge, which appears to be generally IP-skeptical ("Our first priority is promote innovation and the rights of consumers, while working to stop any bad legislation from passing that would slow technology innovation, shrink the public domain, or prevent fair use"; and they seem to be appropriately skeptical of the horrible DMCA), although their approach is somewhat ad hoc and unprincipled, and intermixed with the standard pro-democracy (and pro-Democrat), pro-"consumer," pro-network neutrality (see my A Libertarian Take on Net Neutrality) sentiments, and so on. Still, another ally in the fight against pattern privilege and intellectual monopoly.

[Mises, SK]

There are various ways to explain what is wrong with IP. You can explain that IP requires a state, and legislation, which are both necessarily illegitimate. You can point out that there is no proof that IP increases innovation, much less adds "net value" to society. You can note that IP grants rights in non-scarce things, which rights are necessarily enforced by physical force, against physical, scarce things, thus supplanting already-existing rights in scarce resources. (See, e.g., my Against Intellectual Property, "The Case Against IP: A Concise Guide" and other material here.)

Another way, I think, to see the error in treating information, ideas, patterns as ownable property is to consider IP in the context of the structure of human action. Mises explains in his wonderful book Ultimate Foundations of Economic Science that "To act means: to strive after ends, that is, to choose a goal and to resort to means in order to attain the goal sought." Or, as Pat Tinsley and I noted in "Causation and Aggression," "Action is an individual's intentional intervention in the physical world, via certain selected means, with the purpose of attaining a state of affairs that is preferable to the conditions that would prevail in the absence of the action."

Obviously, the means selected must therefore be causally efficacious if the desired end is to be attained. Thus, as Mises observes, if there were no causality, men "could not contrive any means for the attainment of any ends". Knowledge and information play a key role in action as well: it guides action. The actor is guided by his knowledge, information, and values when he selects his ends and his means. Bad information--say, reliance on a flawed physics hypothesis--leads to the selection of unsuitable means that do not attain the end sought; it leads to unsuccessful action, to loss. Or, as Mises puts it,

Action is purposive conduct. It is not simply behavior, but behavior begot by judgments of value, aiming at a definite end and guided by ideas concerning the suitability or unsuitability of definite means.

So. All action employs means; and all action is guided by knowledge and information. (See also Guido Hülsmann's "Knowledge, Judgment, and the Use of Property," p. 44.)

Causally efficacious means are real things in the world that help to change what would have been, to achieve the ends sought. Means are scarce resources. As Mises writes in Human Action, "Means are necessarily always limited, i.e., scarce with regard to the services for which man wants to use them."

To have successful action, then, one must have knowledge about causal laws to know which means to employ, and one must have the ability to employ the means suitable for the goal sought. The scarce resources employed as means need to be owned by the actor, because by their nature as scarce resources only one person may use them. Notice, however, that this is not true of the ideas, knowledge and information that guides the choice of means. The actor need not "own" such information, since he can use this information even if thousands of other people also use this information to guide their own actions. As Professor Hoppe has observed, " in order to have a thought you must have property rights over your body. That doesn't imply that you own your thoughts. The thoughts can be used by anybody who is capable of understanding them."

In other words, if some other person is using a given means, I am unable to use that means to accomplish my desired goal. But if some other person is also informed by the same ideas that I have, I am not hindered in acting. This is the reason why it makes no sense for there to be property rights in information.

Material progress is made over time in human society because information is not scarce and can be infinitely multiplied, learned, taught, and built on. The more patterns, recipes, causal laws that are known add to the stock of knowledge available to actors, and acts as a greater and greater wealth multiplier by allowing actors to engage in ever more efficient and productive action. (It is a good thing that ideas are infinitely reproducible, not a bad thing; there is no need to impose artificial scarcity on these things to make them more like scarce resources; see IP and Artificial Scarcity.) As I wrote in "Intellectual Property and Libertarianism":

This is not to deny the importance of knowledge, or creation and innovation. Action, in addition to employing scarce owned means, may also be informed by technical knowledge of causal laws or other practical information. To be sure, creation is an important means of increasing wealth. 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." While production or creation may be 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 someone already owns, either the producer or someone else.

Granting property rights in scarce resources, but not in ideas, is precisely what is needed to permit successful action as well as societal progress and prosperity.

This analysis is a good example of the necessity of Austrian economics--in particular, praxeology--in legal and libertarian theorizing (as Tinsley and I also attempt to do in "Causation and Aggression"). To move forward, libertarian and legal theory must rest on a sound economic footing. We must supplant the confused "Law and Economics" movement with Law and Austrian Economics.

[Mises; SK]

It is clear to anyone who pays attention that IP is under assault--both institutionally, as digital copying, encryption, distributed information, the Internet, and the inherent impotence of IP policing make attempts to monopolize information patterns increasingly futile; and intellectually, as more and more people, especially libertarians--and especially younger libertarians--see the injustice of IP made manifest and obvious. There is a growing body of work that explodes the myths--moral and utilitarian, principled and empirical--of the IP proponents (see the works listed at the final section of "The Case Against IP: A Concise Guide"). There has been a noticeable and growing migration of libertarians toward the anti-IP position. I have lost count of the number of people who have personally told me they have seen the light on the IP cause in recent years. Among the radical and principled libertarians I know, there is a lot of debate about a lot of things--abortion, federalism, activism, "thickism," left- vs. right-, etc.--but on two issues there is a striking degree of agreement: these are anarchy, and intellectual property. That the state, and IP, are unjust, seem obvious to them after a little reflection. More and more libertarians are realizing that the case for IP being part of legitimate property rights is a hollow one that never needed to be accepted (see Have You Changed Your Mind About Intellectual Property?).

So it is no surprise that Objectivists would be distressed by this phenomenon. Not only are they among the most ardent modern advocates of intellectual property (in addition to Andrew J. Galambos [see Against Intellectual Property], and perhaps J. Neil Schulman), but Rand in a sense built her entire philosophical edifice on IP: to-wit, Rand incredibly said that "patents are the heart and core of property rights" and Objectivist law professor Adam Mossoff explicitly claims that "All Property is Intellectual Property" (see Objectivists: "All Property is Intellectual Property"). And so, realizing Rand's arguments for IP are deeply flawed, and that fewer and fewer people are buying it, they are starting to fight back.

Let's survey a few. I've already mentioned neo-Objectivist (?) J. Neil Schulman's logorights; I have pointed out problems I see in his view in On J. Neil Schulman's Logorights and Reply to Schulman on the State, IP, and Carson. I think some of the mistakes Schulman makes are echoed in the tentative IP views of Machan; a problem with both is that they seem to think that any conceptually identifiable "thing" is ownable. For more on this, see Rand on IP, Owning "Values", and "Rearrangement Rights"; my comments in the thread of the post Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; this comment to "Trademark and Fraud"; Libertarian Creationism; also Elaborations on Randian IP and Objectivists on IP.

Another one was Objectivist IP attorney Murray Franck's defense of IP and his reply to my response in the IOS Journal, back in 1995 (I also discuss Franck's views in Inventors are Like Unto ...GODS... and Regret: The Glory of State Law). Here we can see glimmers of the idea that "all property is intellectual property"--or, at least, that IP is the most important type of right (just as Galambos held).

There is Greg Perkins's piece, Don't Steal This Article!", from 2006. I've noted deficiencies in his or similar arguments in various publications, such as Perkins on Pursuing Insufficiently Abundant Intangible "Values"; Against Intellectual Property; Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors; Elaborations on Randian IP; An Objectivist Recants on IP; "Intellectual Property and Libertarianism" (in particular see here and the section on Libertarian Creationism); Rand on IP, Owning "Values", and "Rearrangement Rights"; Libertarian Creationism; Inventors are Like Unto ...GODS...; Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; and Objectivists on IP; and in media, I discuss problems with Rand's view at length on the Peter Mac show and at the Mises University this year; also The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism.

Then there's Objectivist law professor Adam Mossoff who is writing a defense of IP, as mentioned in the Objectivist "Noodlefood" blog post An Objectivist Recants on IP??. Roderick Long informs us that "the Ayn Rand Society session at the APA is also devoted to intellectual property"--indeed it is, with the topic "The Normative Foundations of Intellectual Property: Two Perspectives," having as speakers Adam Mossoff and Eric R. Claeys, both of George Mason University Law School, and chaired by Allan Gotthelf (University of Pittsburgh), on Dec. 28, 2009 (sadly, I'll miss it, since I'm here skiing in Steamboat, Colorado. Wait, not so sadly). I'm eager to see Mossoff's paper (and curious to see what Claeys has to say), but suspect it will be built on the fallacies and errors noted in posts above such as this Objectivist blog post and Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors.

Also noted in Roderick Long's post is his upcoming Molinari Society IP symposium at the APA later this month (Dec. 29 , 2009), including Bob Schaefer's "Response to Kinsella: A Praxeological Look at Intellectual Property Rights." I've taken a look at Schaefer's piece, and it's not pretty. It's just a mess. Roderick Long ably dissects just a few of its glaring flaws here.

(Aside: Long's comments are really superb and insightful. A few comments. Discussing the IP comments of another author, Long writes, "a strong case can be made for thinking that Lockean principles must be substantially distorted in order to press them into service on behalf of IP". Long backs this up very ably. In the same article he makes an illuminating distinction between three conceptions of "capitalism" that helps to dispel the confusion among both right and left in addressing this issue.)

The Objectivist approach is mired in a number of problems. It anchors property rights to the idea of "creation"; it requires legislation, and the state; it believes in some intrinsic value and some property right in value; it advocates utterly arbitrary and/or unprincipled, utilitarian finite lengths for IP; it rests on an arbitrary distinction between discovery and innovation. In a world where we took the ideas of the IP advocates seriously patent and copyright would have to have infinite duration. And the gaps in coverage would be fixed, and the state's arbitrary exceptions fixed, such as the "fair use defense" to copyright. At present patent and copyright cover a statutory class of "inventions" and artistic works, respectively. Many logos, idea-patterns, "creations," values are not protected at present. These include: perfume smells, the fashion industry, food recipes, certain business methods, databases (unoriginal but useful collections of information), abstract ideas such as mathematical algorithms, proofs, and techniques and physical laws. Under the ideas of the IP fanatics, there is no reason not to grant state-monopolies to these patterns too. And the term should not expire in 20 or 100 years--does your property to your house expire after some time limit? And why the utilitarian fair use exception? No principled case for IP could tolerate it.

I would love to see libertarian IP advocates have to live in a world that truly implemented their IP views fully, consistently--it would be like a communist USSR stripped of its power to ape Western price structures, to ameliorate the effects of communism. They would either die out, as the material world was strangled by an impossible nettle of ghostly IP-rights tendrils, or they would cry uncle. Even today, one imagines the cognitive dissonance of Objectivists living in our digital age--cutting and pasting, linking, learning and reworking ideas of others--all the while maintaining that all the things they themselves cannot but help engage in are "immoral" or some such tedious nonsense. I think of modern do-gooder environmentalists--they must feel pangs of guilt while flying on a jumbo jet to a friend's wedding 2000 miles away, or to attend UN conference or job posting on another continent. They must wring their hangs in agonized guilt and indecision about whether to use styrofoam, paper, or a washable coffee cup. They must feel tremendous guilt whenever they discard a scrap of soiled napkin instead of recycling it. Environmentalist parents must feel terrible pangs of guilt at using disposable diapers (or they suffer by using cloth ones: either way, I am pleased by the thought of their discomfort). Likewise, when an Objectivist emails a vandalized picture of an apostate like Alan Greenspan to a friend they must be conflicted--wait, no, there's a fair use exception! Thank Rand for the State and its wise laws!

Addendum:

Book Essay: The strange world of Ayn Rand

Control freak

One striking feature of Objectivism is it outspoken support of intellectual property. A key scene in Atlas Shrugged is where metallurgist genius Hank Rearden is compelled by the government to hand over his intellectual rights to his innovative metal alloy, and Ayn Rand acted in kind. She passionately used the copyright on her works to bar people from forming "John Galt Societies", citing that the name John Galt is her creation and her intellectual property.

For a person bent on propagating her ideas to the maximum extent possible, this would seem eerily counterproductive. Stealing an object from someone is obviously depriving the original owner of his property, but copying it isn't. It may or may not be harmful to potential income, but that income remains potential, in the realm of the unprovable. This is a debate that incites extreme passion.

While Objectivists, libertarians and conservatives strongly agree on the principle of physical property rights, the picture is much more divided when it comes to 'intellectual property', a catch-all phrase for several different items, including patents, copyright and trademarks. In a landmark essay by Stephan Kinsella, Against Intellectual Property, argues that 'Intellectual property' is not only meaningless and harmful, it is in direct violation of the general principle of private property, and primarily constitutes a state-sanctioned creation of artificial scarcity, leading ultimately to poverty, not job creation and wealth.

The wider libertarian movement accepted the argument, put it into action (see www.mises.org/books) and moved on. Objectivists, on the other hand, maintain that what Ayn Rand spoke and practiced on the subject remains the unalterable truth.

(See also on this Jeff Tucker, If You Believe in IP, How Do You Teach Others?.

[Mises; SK]

I previously posted "On J. Neil Schulman's Logorights"; Schulman and I recently had an interesting exchange in the comments section of the cross-post on my blog. The original post and the exchange are appended below.

On GMO patent infestation, Kent Hastings comments on my IP views and those of J. Neil Schulman. Schulman responded:

My article "Informational Property: Logorights" begins by specifically disclaiming any state grants of monopoly. The concept stands or falls on its natural-property-rights arguments. Neither Samuel Edward Konkin III or Stephan Kinsella or anyone else has ever successfully answered the challenge I raised in my article, that without the identity of a thing being real enough to make it claimable as property, there would be nothing identifiable existing to be copied in the first place.

This is not arcane. It's just being pointedly ignored -- and Kinsella's attempts to change the subject don't make me forget what I wrote.

My response is as follows:

Neil, I said your term "logorights" is somewhat arcane, not your theory, and there was no disrespect implied.

I think you are just wrong to assume that "having an identity" is a sufficient condition for being subject to property rights.

Consider: one has no property right the value of one's property, as Hoppe and Rothbard have argued (see Sheldon Richman on Intellectual Property versus Liberty); and likewise, one has no property right in the "identity" of one's property.

The reason is that owning value, patterns, identify gives you an ownership right in others' already-owned property. Saying you own the "identity" of a thing you own is another way of saying you own the pattern by which it is arranged-which is a disguised way of saying you have ownership rights in things everyone else owns. The standard Lockean account of property accepted by most libertarians says that the person who appropriates a previously unowned scarce resource becomes its owner. The IP advocate, of which you are one, says that if A thinks of a unique way to use his property or a unique pattern to impose on his own property, this act of intellectual innovation magically gives him partial ownership rights in property already owned by others. It lets you tell B how he can use his own property, even though B is the appropriator and by Lockean principles only B should be the owner. Granting A an IP right just means some of B's rights of control are transferred to A-it's a transfer of wealth or property, and it's incompatible with libertarian property rights.

The mistake Rand made was thinking "anything you create" is property, without first asking if the thing created is the type of thing that is subject to property in the first place. In fact, creation is neither necessary nor sufficient since if you create some new pattern using others' property you are not its owner; and if you impose a new pattern on property you own, then you own the transformed thing since you already owned the stuff of which it's made. A focus on creation as a source of ownership is the mistake made here. Creation is a source of wealth, sure, but not of ownership, since you can only create using things you already own.

Tibor Machan makes a similar mistake to your "identify" view when he assumes that many "ontological" types of things can be property-the mistake is in assuming that the way we conceptually and terminologically understand the world has some metaphysical basis that translates into property rights. By this view any concept we come up with to "identify" things that is successful, has magically created a new class of property. I find the concept "poem" useful-it is conceptually valid.. poems "have" "identity"-voila, they must be property!

I don't agree with this way of making rights depend on what concepts we have or how we identify and understand things in the world. Just because we can call something by a word, or call it a "thing," does not mean it is ownable. In fact, all ownership rights are enforced in physical terms against scarce resources; which means that granting rights in anything else has to undermine and dilute real rights in real things.

For a further explanation of what is wrong with Schulman's "logorights" theory and why it is contrary to libertarian property rights, see text at notes 48-49 et pass. to my Against Intellectual Property; see also the following posts, which point out various errors in the Randian "creationist" approach to IP (and apply more or less to Schulman's logorights idea too):

Articles:

• "Intellectual Property and Libertarianism" (in particular see here and the section on Libertarian Creationism);
• also "The Case Against IP: A Concise Guide";
• for an alternative to the Randian approach to rights and politics, see What Libertarianism Is.

Media:

• I discuss problems with Rand's view at length on the Peter Mac show
• and at the Mises University this year;
• also The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism.

Blog posts:

• An Objectivist Recants on IP
• Elaborations on Randian IP
• Rand on IP, Owning "Values", and "Rearrangement Rights";
• Libertarian Creationism;
• Objectivists: "All Property is Intellectual Property"
• Thoughts on Intellectual Property, Scarcity, Labor-ownership, Metaphors, and Lockean Homesteading;
• Renaming Intellectual Property;
• Perkins on Pursuing Insufficiently Abundant Intangible "Values"
• Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors;
• Inventors are Like Unto ...GODS....
• Also these blog posts: Intellectual Products and the Right to Private Property;
• New Working Paper: Machan on IP;
• Owning Thoughts and Labor;
• Objectivists on IP.

***

On GMO patent infestation, Kent Hastings comments on my IP views and those of J. Neil Schulman. Schulman responded:

My article "Informational Property: Logorights" begins by specifically disclaiming any state grants of monopoly. The concept stands or falls on its natural-property-rights arguments. Neither Samuel Edward Konkin III or Stephan Kinsella or anyone else has ever successfully answered the challenge I raised in my article, that without the identity of a thing being real enough to make it claimable as property, there would be nothing identifiable existing to be copied in the first place.

This is not arcane. It's just being pointedly ignored -- and Kinsella's attempts to change the subject don't make me forget what I wrote.

My response is as follows:

Neil, I said your term "logorights" is somewhat arcane, not your theory, and there was no disrespect implied.

I think you are just wrong to assume that "having an identity" is a sufficient condition for being subject to property rights.

Consider: one has no property right the value of one's property, as Hoppe and Rothbard have argued (see Sheldon Richman on Intellectual Property versus Liberty); and likewise, one has no property right in the "identity" of one's property.

The reason is that owning value, patterns, identify gives you an ownership right in others' already-owned property. Saying you own the "identity" of a thing you own is another way of saying you own the pattern by which it is arranged-which is a disguised way of saying you have ownership rights in things everyone else owns. The standard Lockean account of property accepted by most libertarians says that the person who appropriates a previously unowned scarce resource becomes its owner. The IP advocate, of which you are one, says that if A thinks of a unique way to use his property or a unique pattern to impose on his own property, this act of intellectual innovation magically gives him partial ownership rights in property already owned by others. It lets you tell B how he can use his own property, even though B is the appropriator and by Lockean principles only B should be the owner. Granting A an IP right just means some of B's rights of control are transferred to A-it's a transfer of wealth or property, and it's incompatible with libertarian property rights.

The mistake Rand made was thinking "anything you create" is property, without first asking if the thing created is the type of thing that is subject to property in the first place. In fact, creation is neither necessary nor sufficient since if you create some new pattern using others' property you are not its owner; and if you impose a new pattern on property you own, then you own the transformed thing since you already owned the stuff of which it's made. A focus on creation as a source of ownership is the mistake made here. Creation is a source of wealth, sure, but not of ownership, since you can only create using things you already own.

Tibor Machan makes a similar mistake to your "identify" view when he assumes that many "ontological" types of things can be property-the mistake is in assuming that the way we conceptually and terminologically understand the world has some metaphysical basis that translates into property rights. By this view any concept we come up with to "identify" things that is successful, has magically created a new class of property. I find the concept "poem" useful-it is conceptually valid.. poems "have" "identity"-voila, they must be property!

I don't agree with this way of making rights depend on what concepts we have or how we identify and understand things in the world. Just because we can call something by a word, or call it a "thing," does not mean it is ownable. In fact, all ownership rights are enforced in physical terms against scarce resources; which means that granting rights in anything else has to undermine and dilute real rights in real things.

For a further explanation of what is wrong with Schulman's "logorights" theory and why it is contrary to libertarian property rights, see text at notes 48-49 et pass. to my Against Intellectual Property; see also the following posts, which point out various errors in the Randian "creationist" approach to IP (and apply more or less to Schulman's logorights idea too):

Articles:

• "Intellectual Property and Libertarianism" (in particular see here and the section on Libertarian Creationism);
• also "The Case Against IP: A Concise Guide";
• for an alternative to the Randian approach to rights and politics, see What Libertarianism Is.

Media:

• I discuss problems with Rand's view at length on the Peter Mac show
• and at the Mises University this year;
• also The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism.

Blog posts:

• An Objectivist Recants on IP
• Elaborations on Randian IP
• Rand on IP, Owning "Values", and "Rearrangement Rights";
• Libertarian Creationism;
• Objectivists: "All Property is Intellectual Property"
• Thoughts on Intellectual Property, Scarcity, Labor-ownership, Metaphors, and Lockean Homesteading;
• Renaming Intellectual Property;
• Perkins on Pursuing Insufficiently Abundant Intangible "Values"
• Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors;
• Inventors are Like Unto ...GODS....
• Also these blog posts: Intellectual Products and the Right to Private Property;
• New Working Paper: Machan on IP;
• Owning Thoughts and Labor;
• Objectivists on IP.

***

SCHULMAN'S REPLY:

Stephan,

Once again your reply to my Logorights argument is merely to assert that it's false without actually refuting any of the proofs I make. All you do is say "Well Locke said this" and "Tibor Machan said that." I don't care. I say outright that I'm offering a new theory of property rights -- and not once -- not ever -- have you ever dealt with it other than to say, "Well, that's not what [insert name here] wrote!"

1) You fail to answer my challenge that material identity IS property, and that without material identity the concept of property is meaningless.

Answer this challenge from my article:

" You go into a Waldenbooks and plunk down cash for a book that says on the cover "ATLAS SHRUGGED by Ayn Rand." You get it home ... and the first sentence is, "It was the best of times, it was the worst of times."

Now, what you bought is a book and this book has got everything that makes a book a book: a binding, hundreds of sheets of paper with printed ink impressions on it, and a cover. Let's even pretend that the book you took home has the same number of pages, the same dimensions and weight, the same binding and style of printing as the book with the composition called ATLAS SHRUGGED. Do you have any just cause of complaint if the composition of words inside the book turns out to be something other than what the cover says? If you answer no, then you got everything you paid for. But if you answer yes, then you are saying that the composition of words makes this book a different commodity from the book you thought you were buying, and therefore you are rightfully entitled to a copy of the composition of words labelled ATLAS SHRUGGED."

Does the difference in composition of words make an otherwise identical physical object a different thing -- yes or no?

Did the buyer who expected to get a copy of Atlas Shrugged and who got a copy of A Tale of Two Cities get what they paid for -- yes or no?

If the answer is yes to either of these questions, then you have conceded that the composition of words -- the logos -- is the sole differentia between two physical objects -- and therefore the logos is what makes it a different THING.

If the logos makes these two otherwise identical objects different things then that which makes them different things is what gives them their value -- and the property rights case for the logos is made.

Answer that. Answer that!!!!!!!!!

NSK RESPONSE:

Neil:

Once again your reply to my Logorights argument is merely to assert that it's false without actually refuting any of the proofs I make. All you do is say "Well Locke said this" and "Tibor Machan said that." I don't care. I say outright that I'm offering a new theory of property rights -- and not once -- not ever -- have you ever dealt with it other than to say, "Well, that's not what [insert name here] wrote!"

I think all your theories are the same: if you "create" "value," you have a "right" to it. This is just confused and groundless.

1) You fail to answer my challenge that material identity IS property, and that without material identity the concept of property is meaningless.

I think you are playing tricks with the Randian concept of "identity." Saying that "the value" of a CD (say) is "in" its "logos" and therefore that it is the same as a copy of the CD proves nothing. It doesn't prove that your discovery of a way of using or impatterning your property gives you all of a sudden a magical right to control how others use their property.

"You go into a Waldenbooks and plunk down cash for a book that says on the cover "ATLAS SHRUGGED by Ayn Rand." You get it home ... and the first sentence is, "It was the best of times, it was the worst of times."

Now, what you bought is a book and this book has got everything that makes a book a book: a binding, hundreds of sheets of paper with printed ink impressions on it, and a cover. Let's even pretend that the book you took home has the same number of pages, the same dimensions and weight, the same binding and style of printing as the book with the composition called ATLAS SHRUGGED. Do you have any just cause of complaint if the composition of words inside the book turns out to be something other than what the cover says? If you answer no, then you got everything you paid for. But if you answer yes, then you are saying that the composition of words makes this book a different commodity from the book you thought you were buying, and therefore you are rightfully entitled to a copy of the composition of words labelled ATLAS SHRUGGED."

Sure it's "different." Being "different" does not give you property rights in the difference. And sure, you didn't get what you paid for: you transferred title to the money on condition you received a certain book. You didn't get what you bargained for. IP of course has nothing to do with contract. So this is all irrelevant.

Does the difference in composition of words make an otherwise identical physical object a different thing -- yes or no?

Neil, of course--even if you have two "identical" copies of Atlas they are still "different things."

Did the buyer who expected to get a copy of Atlas Shrugged and who got a copy of A Tale of Two Cities get what they paid for -- yes or no?

Of course not.

If the answer is yes to either of these questions, then you have conceded that the composition of words -- the logos -- is the sole differentia between two physical objects -- and therefore the logos is what makes it a different THING.

First, I think you got your examples confused--I think you meant if I answer yes to the first or no to the second. In any event, you wrong: the two objects are "different things" even if they have the same look, pattern etc.

If the logos makes these two otherwise identical objects different things then that which makes them different things is what gives them their value -- and the property rights case for the logos is made.

What "gives them their value"? They don't "have" value. Value is not objective, or intrinsic, or some substance. Rather, people demonstrate that they value things in their actions. I assume you agree with this.

You seem to think it is extracting some huge concession of me to get me to admit that the reason a typical consumer values a book (say) is because of what pattern it has. I readily agree to this. I value a box of paperclips more than a hunk of metal of the same weight because of the way the metal is shaped in the case of the paperclips. So what? I value a new condom more than a ripped one because of its "logos," its material configuration. So what?

Same with a set of paints and a blank canvas. If I use my talent to apply the paint to the canvas--rearranging the logos of the paint-canvas matter into a new one--to result in a beautiful painting, I have made it more valuable--in that I can sell it for a higher price. Sure. Why? Because the buyer would prefer it to the blank canvas. Who has ever denied that transforming--rearranging--the patterns of your work makes it more valuable--to you, or to others? But this does not mean you have property right in the logos, in the pattern. That doesn't follow.

Even Rand acknowledged most of this: as she once wrote:

The power to rearrange the combinations of natural elements is the only creative power man possesses. It is an enormous and glorious power--and it is the only meaning of the concept "creative." "Creation" does not (and metaphysically cannot) mean the power to bring something into existence out of nothing. "Creation" means the power to bring into existence an arrangement (or combination or integration) of natural elements that had not existed before.

Of course, there cannot be property rights in value since this would have to mean property rights in arrangements or patterns, which would then give the owner of the arrangement rights in other people’s already-owned property. If Rand had kept her focus on the fact that rearranging already-existing property can indeed make that property more valuable, she would have realized that creation (rearrangement) is not an independent source of property rights: if you rearrange your own property, even if this makes it more valuable, you already owned the property that you have rearranged (made more valuable). Yet this does not give you rights in other people’s property. You can re-word the Randian view as follows: if you make your property more valuable, it gives you additional property rights–the right to prevent other people from making their own property more valuable. And this makes it all the more obviously flawed.

This is where the Misesian approach to subjectivist value makes sense: things have value to a valuer; values do not exist independently as free-floating things that can themselves be owned. And again, Rand should have recognized this; e.g., she once wrote, “Material objects as such have neither value nor disvalue; they acquire value-significance only in regard to a living being--particularly, in regard to serving or hindering man's goals.” (For more on the compatibility between Objectivism and Austrian economics, see Mises and Rand (and Rothbard); Randian Hoppe(?), Austrian Rand(?).) So she should have realized that if rearranging owned property makes the owner or potential buyers value the object more, it does not mean there is any additional thing created for which we need to find an owner.

Answer that. Answer that!!!!!!!!!

I think I have. It gains you nothing. The fact remains that by giving people rights in "logos"--in patterns--you give them a right to control the already owned property of other people. It lets the re-homestead already-homesteaded property. This is transfer of wealth. It's theft.

SCHULMAN:

The real-world difference between two otherwise identical books -- one with the composed text of Atlas Shrugged and one with the composed text of A Tale of Two Cities -- is the composition of words. These are objective differentia that can be discovered by either human readers or even machine intelligence. The compositions, as information, have different mathematical values that can be calculated.

You jump around between objective and subjective -- between cognitive and normative -- in an attempt to hide the difference.

It is a true statement that there are minute differences in every single object that exists. But the word "duplicate" is a meaningful term in that the essential utility of a book is to be read (yes, I know books can be used by interior decorators and also be used to hold up a broken table leg or as a paper weight) but the essential quality of a book -- why human beings go to the trouble of manufacturing them -- is that they are convenient means of recording and transporting the printed words, symbols, and art work on the pages.

Atlas Shrugged is identified as a distinct commodity by its words, whether they exist printed in a hardcover book, or a paperback book, or read aloud as a recording, or as bits of data stored or transmitted digitally. The entity that is Atlas Shrugged is an information object -- a real-world thing -- separate, distinguishable by man or machine, and valued apart from the multiplicity of physical forms on which it may be recorded or performed.

The usefulness -- utility -- which human beings have for this objectively and observably distinct information object -- this thing -- is based on the presence, intactness, completeness, and availability -- of that objectively and observably distinctinformation object.

The subjective value which any human being will or will not assign to this objectively and observably distinct information object will be based on the objectively and observably distinct identity.

A human being will take action with respect to acquiring, using, keeping, or discarding that objectively and observably distinct information object because no matter how many different objects, forms, or transformations it goes through IT'S IDENTITY IS THE SAME AND THEREFORE IT IS THE SAME THING.

That which makes it a distinct thing -- that which gives it distinct utility -- that which makes it distinctly an object of desire by a human being's subjective perceptions and choice -- is its material identity.

That which makes it a thing makes it ownable.

He who creates it is its first owner.

Those who respect property rights must respect that if a thing can be identified as unique and different --and can be recognized as a thing created by someone -- that its creator owns it.

The rest of my logorights argument uses commonly accepted theories of ownership and history of property rights transactions in the real world -- to show how ownership rights in material identity can be claimed, recognized, traded, and protected -- just like all other naturally occurring property rights -- without the existence of the State.

At this point, Stephan Kinsella, I am writing only to your readers. I do not consider that you have any actual interest in understanding what I am writing and I think you are being what the Catholics refer to as invincibly ignorant on this topic.

Neil

NSK:

Neil,

The real-world difference between two otherwise identical books -- one with the composed text of Atlas Shrugged and one with the composed text of A Tale of Two Cities -- is the composition of words. These are objective differentia that can be discovered by either human readers or even machine intelligence. The compositions, as information, have different mathematical values that can be calculated.

They are not otherwise "identical"--they are two distinct books. A and B. Just as two "otherwise identical" gold coins are not the same coin. But sure, they have a similar configuration. I fail to see how this is relevant for property rights. If I see your log cabin and build an "identical one" I have stolen nothing from you. We each own our own log cabins--no matter how identical they appear or are shaped.

It is a true statement that there are minute differences in every single object that exists. But the word "duplicate" is a meaningful term in that the essential utility of a book is to be read

? I know this. I never denied this. You seem to think this is wresting some huge admission from me, as if it automatically leads to IP. It does not. So what if two objects can be described as similar or duplicates? They are still distinct things. And anyway, if having-a-duplicate somehow violated the rights of the owner-of-the-original, then .... this would cover only copyright, not patent, and it would cover only literal copying, not the bundle of copyright such as derivative works. And it would be hyper-copyright--it would never expire; and original creation would not be a defense (as it is in copyright law). And how would it cover patents? Take a method patent. There are now no similar objects. Just similar actions, say actions of one's body. If A moves his body in such-and-such-way, now he "owns" this pattern-of-moving, and can use force to stop B from moving his own body in that way (and remember, patents are not about copying at all--A can stop B even if B comes up with this sequence of steps indendently).

Yes yes, I know you'll say you don't support modern patent and copyright law. You only support logorights, which is even more extreme. And though you won't endorse patent and copyright law, you'll condemn those who want to abolish it.

the essential quality of a book -- why human beings go to the trouble of manufacturing them -- is that they are convenient means of recording and transporting the printed words, symbols, and art work on the pages.

Of course.

Atlas Shrugged is identified as a distinct commodity by its words, whether they exist printed in a hardcover book, or a paperback book, or read aloud as a recording, or as bits of data stored or transmitted digitally. The entity that is Atlas Shrugged is an information object -- a real-world thing -- separate, distinguishable by man or machine, and valued apart from the multiplicity of physical forms on which it may be recorded or performed.

Sure, you can conceptually identify the pattern of words that is Atlas Shrugged. (Not sure you can objectively identify works that violate the copyright sub-right to make "derivative works", or objectively justify and define "fair use" exceptions, those sorts of things.) So what? I can identify also the method of using fire to cook food, using animal hide to make clothes, using logs to make a log cabin, using a chiseled rock as a knife, and so on. So? Just because we can conceptually identify patterns does not give you ownership of these patterns.

The usefulness -- utility -- which human beings have for this objectively and observably distinct information object -- this thing -- is based on the presence, intactness, completeness, and availability -- of that objectively and observably distinctinformation object.

The subjective value which any human being will or will not assign to this objectively and observably distinct information object will be based on the objectively and observably distinct identity.

A human being will take action with respect to acquiring, using, keeping, or discarding that objectively and observably distinct information object because no matter how many different objects, forms, or transformations it goes through IT'S IDENTITY IS THE SAME AND THEREFORE IT IS THE SAME THING.

Sure, people value certain works of authorship because of the patterns. But your notion that objects A and B "are the same thing" is utterly bizarre. Putting it this way is really just a complicated way of begging the question. Consider: I invent the transistor. A month later you independently invent it. Soon you and I are both manufacturing and selling these cool transistors. They are both transistors. Sure. They both use the same idea that transistors are based on. The reason people value these things is because ... they are transistors. But your truck of transistors and my truck of transistors, even though they are all transistors--even if they have identical looks and characteristics--are not "the same". There's that truckload, and this truckload, just like you have a gold eagle and I have a gold eagle. And sure, you can say the transistors are all "the same" in some relevant sense--fine. So what? It doesn't give me the right to stop you from making your transistors.

That which makes it a distinct thing -- that which gives it distinct utility -- that which makes it distinctly an object of desire by a human being's subjective perceptions and choice -- is its material identity.

That which makes it a thing makes it ownable.

He who creates it is its first owner.

This is some wild metaphysical legerdemain here. So... I can use force against you to stop you from selling transistors... that you invented ... because ... "That which makes it a thing makes it ownable." and "He who creates it is its first owner." You can't be serious. What kind of reasoning is this?

In the transistor example above, you own your own body and various material. It already has an owner. As its owner, you have the right to use it. I don't gain some veto-right over your use of your own property merely by thinking of a way to use my own property.

You seem to think that if we can conceptually identify a "thing," then "it" can have an "owner". Only ownable things can have an owner. Ownership specifies who can use a given thing. The only purpose of such a rule is if the thing can only be used by one person at a time--if use by one person excludes use by another--if the thing is a scarce resource. The libertarian rule is that for such things, to avoid conflict the right to own is assigned to the homesteader--the first user, the one who appropriates it out of the state of nature. Your rule would underming the Lockean homesteading rule by allowing "ownership" of any "thing" that you can conceptually give "identity" to... but of course, though you grant all these conceptual entities existential status, though you say they are just as real, just as ownable as material things, you of course want to enforce rights in these ephemeral ontological ownable things in the real, physical world. If I "steal" your "ideal object" or "informational object" by ... using my own property in certain ways, then you want to use physical, real force (not merely "informational force") against my real, tangible body or my real, tangible property (say, my money) to stop me or penalize me. When the rubber hits the road, IP advocates always turn to the real world of scarce things and real force to enforce their rights to the "informational objects" floating around up there in the Platonic realms.

Those who respect property rights must respect that if a thing can be identified as unique and different -and can be recognized as a thing created by someone -- that its creator owns it.

Your mistake is in assuming that any "thing" can be owned. There are an infinite number of "things" out there--the human mind can conceptually understand the world in any number of ways. My love for my poodle "exists". The fact-that-the-earth-rotated-today exists. My ability-to-jog exists. Poems exist. Crime exists. There "are" facts. I "have" memories. Perfume scents "exist." Physics equations and mathematical algorithms "exist." The method of long division is a "thing". It is obviously ludicrous to assert that just because I can define or name or conceptualize a "thing" that it does, or even can, have an owner. We do not even get to the question of "who owns that thing?" unless the thing is an ownable thing. Not all things are ownable things. What is ownable? Only scarce resources. Information is not a scarce resource. You and I can both use the transistor-idea at the same time.

SCHULMAN:

I have already asked and answered every point you raise once again. You fail to address my challenges and attack straw men.

I leave it to your readers to read my article "Informational Property: Logorights" -- and all you can muster against it -- then decide for themselves.

I'm done exhausting myself re-answering the same refuted points endlessly.

[Mises cross-post]

I was recently reminded of "The Reluctant Anarchist," a wonderful piece by the great columnist Joseph Sobran about his intellectual journey from conservatism to strict constitutionalism to anarchist--thanks to Rothbard and Hoppe. Highly recommended.

Note: I post this on this blog because the proprietor assured me once that this blog is not only about IP but all forms of monopoly. And it is the state that is the biggest and most dangerous monopolist of all--in fact, the only true monopoly. It is the source of the monopoly known as intellectual property; without the state, IP could not exist. Those who oppose IP but favor the state remind me of members of skeptics groups--those who scoff at ESP, astrology, and divining rods--but who are still religious. Those who oppose IP but favor the state should engage in some reflection.

[Mises; SK]

[Please reply to this at the original Mises Blog post]

It's my impression that in the last 5-10 years, there has been a striking movement towards the anti-IP camp among libertarians and Austrians. This is a result of the mounting everyday evidence of injustice resulting from the digital age magnifying the baleful effects of IP that have always existed; and the mounting scholarship, from a pro-property rights, pro-free market perspective, against both the moral and principled case and the utilitarian case for IP (resources listed in the final section of my "The Case Against IP: A Concise Guide").

I'm personally aware of dozens of people who have changed their minds or seen the light on this issue--including, say, myself, Jeff Tucker, and many others. For some things I'm writing and just for general curiosity it would be interesting to get a better idea of this trend. Please feel free to add a brief comment to this post specifying whether you have moved toward the anti-IP position in recent years.

Update: Some here may also find of interest the Patent Rights Web Poll I did a while back, pasted below. Feel free to take it if you haven't:

***

On a patent practitioner email list I posted the following:

It seems to me that many small/medium companies live in fear of a big patent lawsuit. Even if they had their own IP, I suspect many companies would gladly give up forever their right to sue for patent infringement, in exchange for some kind of immunity from patent liability--at least, if they could eliminate the threat of an injunction, so that the worst penalty they might face is some kind of mandatory royalty. Surely IBM et al. would not take this deal, but I bet a lot of other companies would. What do you think?

Second, in view of this, does this mean there is some kind of market for a service that would let a bunch of companies get together and "pool" their IP and have some kind of agreement (a) never to sue each other; (b) to have access to this pool of patents to countersue any company that sues any of the members.

This post drew some interest so I am doing a simple webpoll. I think the results might be interesting. (DIGG it here.)