Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Creative Thought and Ownership

The maker of the BlackBerry wireless e-mail service, Research in Motion (R.I.M), has more patent troubles, and it's fighting back. I don't want to go over the full case against patents, or intellectual property (IP) rights in general, but I do want to restate a powerful argument made by others, such as N. Stephan Kinsella. Some pro-IP folks think it is self-evident that if someone originates an idea he has a natural right to control the manufacture and sale of devices that instantiate that idea. After all, he thought it up. He exerted creative effort. Property rights are said to flow from that creative exertion.

It can't be. No ownership rights flow from thinking, regardless of how important thinking is to production. Ownership flows from other factors, and there are no gaps in the emergence of property rights that have to be filled in by creative thinking. Using Occam's Razor, we just don't need mental effort to justify property rights.

To see this, imagine that Howard Roark's evil twin enters your land without permission and uses your building materials and tools to create an acclaimed and original architectural marvel never seen before. Does this Roark have any rights whatsoever to the building? Of course not. Not even a scintilla of a claim. Why not? Because he didn't own the land or the materials. No degree of creative genius could transfer ownership to him. (And he could not gain ownership by mixing his labor with already owned things.) The real owner has every right to destroy the building without paying Roark a penny.

On the other hand, if Roark had legitimately owned the land and materials, the creation would clearly be his. His prior ownership of the elements of his creation would be sufficient to justify his ownership of the building. Thinking up the ideas embodied in the product adds nothing as far as his property rights are concerned. Prior ownership or original appropriation of unowned resources is not merely necessary to property rights in a product, it is sufficient.

The point is not that thinking is unimportant, only that it is irrelevant to the generation of property rights.

Cross-posted at Free Association.


Brilliant reasoning, Sheldon! :)
I'm sorry, but could you clarify something for me then? Are you implying that a person's right to something has to do with his ability to manufacture what he thought up? Using your example, let's say Roark's idea for the building reduces cost of the building by $400,000, and because of his brilliant architectural design it can be built solidly over a swamp (or any land that was previously useless and undevelopable). Since Roark doesn't own the materials to build his building, if say Carnegie comes by and decide to use Roark's idea to build the building in a swamp, Roark has no claim to any of the wealth generated to his idea? Carnegie saves $400,000 in development costs, turns an area that is worth nothing to a $600,000 apartment complex capable of generating $250,000 a year in rent/revenue, but Roark should not be entitled to any of it? Using a conservative estimate, a building like that would pull in around $3 million in revenue. Add that to the $400k in savings, Roark's idea is worth $3,400,000, generated from what otherwise would be considered worthless real estate. But he's not entitled to a penny of it, eh? I'm just making sure that's what you're saying. Huh. Roark better keeps his mouth shut then. Better that the swamp remains a swamp and the extra wealth never generated than to give that much away to Carnegie.
If I see you do or build something, by what right am I stopped from doing or building the same thing as long as I do it on and with my own property? When FedEx displayed its innovative service, anyone was free to try to copy it. That didn't stop Frederick Smith from innovating. Should FedEx have demanded a cut of the profits or gotten an injunction? Thus even if Evil Roark builds on his own land, I have a right to build a copy on my land. An idea isn't ownable. How could it be? I am not saying "that a person's right to something has to do with his ability to manufacture what he thought up." I am saying his right to it depends soley on his having acquired it (or its elements) through original appropriation, purchase, gift, charity, inheritance, or other voluntary process (if I've left any out). It doesn't matter what he thought or didn't think.
Sorry it took so long for me to respond, I had to think about what you said. I guess you didn't understand what I was saying. I am saying what about his rights to his thoughts? It seems to me that you are saying a man has no right to his thoughts once he has made it public, and he has no right to claim the product of his thoughts unless he himself "Appropriated, purchased, was given, or inherited" the physical product or the means of creating that product. I can agree with that, provided what he thought up is public domain anyway. It is unfair to compare a courier service to new architecture, because the former example a man is tapping a source of wealth that has been established as available, whereas the latter example is that of a man who creates a new source of wealth. Once an idea has been passed into public domain, the wealth that is generated from that thought is commonly recognized as available. That is not innovation. In the case of the courier service, I can agree with you it doesn't matter what Smith thought. He didn't need to think. He merely had to tweak an existing thought to his advantage. I cannot agree with you regarding architecture. Evil Roark started a completely new thought which creates wealth where there was none before. Personally, I've always thought of property as anything that generates wealth. Intellectual property is different from physical property in that unless it can convert an item without value into a commodity it cannot be considered as a source of wealth, since a thought that cannot spontaneously generate wealth is a thought everyone can have, which makes it a wealth. To me, Evil Roark's thought is valuable and needs to be protected. If we refuse to, there would be nothing for him to gain by bringing it to the world. That would just suck.
Um, I made a typo, that line toward the bottom should say, "which makes it a wash."
"What about his rights to his thoughts?" Beyond the trivial, I don't know what this can mean. Of course Roark has a right to his thoughts. Thinking is self-conversation. Roark has a right to converse with himself and a right to the "contents" of that conversation. This does not get you where you want to go, however. Because I too have have a right to my thoughts. If I see Roark's building, and it stimulates thoughts (self-conversation) in me, then those are my thoughts, and I have a right to use them as I see fit with my other property. I have not taken anything from Roark: he has the same thoughts he had before. But now I have a "copy" within the person I own. Stopping me from using my "copy" is to interfere with my rights. That can't be good. I don't know about the Evil Roark, but are you trying to tell me the original Roark would not create under these circumstances? I suggest you re-read The Fountainhead.

P.S.: I think Frederick Smith and others would take issue with your characterization of his ideas as in the public domain and not innovative.
I want to differ with your reasoning slightly, Sheldon, though I arrive at the same outcome in the cases you state. I think that the creation of new ideas and facts by people does create items of property that they own. In many respects, it functions the same as physical property. Assuming you don't release it to the public, you can buy or sell it. You can hoard it. You can use it in combination with other property to create things that benefit yourself and others. The difference is that this type of property is very volatile (in the chemistry sense) and becomes nearly uncapturable once you expose it (as when you expose a volatile chemical to open air and it gassifies).

This nests with the Lockean desert theory of property: Ideas are just as surely the mixing of labor with private and common property as apples are. The difference is that this form of property is very easy to abandon.

So, in the case of a cleverly designed building, the creator of the idea owns the design and can use that design to build a building or he can sell that design. This benefits him. The natural course of events if the building's clever design features are visible to others is that the idea for the building's design is then abandoned and made a part of the common property available to all.

Does it seem like Roark's intellectual property has been stolen when others see his design and make use of it? It may, but I don't think it has. Roark has captured the benefit of his clever design by building the building or selling the idea. The transfer of the idea to the public domain is a positive externality of his use of that intellectual property. Roark captured a benefit. It's just a small part of the total benefit: the rest is consumer surplus. Roark would only refuse building the building or selling the idea if his (irrational) goal was to deprive others of large gains by depriving himself of a small one.

It's important to recognize the idea as property because then you can form contracts around ideas. Assume Roark has a design idea and he wants to sell it to Rand, who will pay $10,000. If Roark doesn't have a property right, there can be no contract because promising to share something one doesn't have (or sharing nothing) eliminates the element of consideration. If Roark had no property right, Rand could take the idea and refuse to pay because Roark had nothing to give. Yes, you could make sharing of ideas personal services contracts - and privacy promises and trade secrets would be batches of personal services contracts, but that gets a bit silly.

Also, it's important to recognize ideas and facts as property so it's more clear that governments are taking something from people when they require disclosure of information. We exercise control over facts about ourselves all the time to protect privacy and structure our lives the way we want. When the government (or anyone using force, threat of force, or fraud) disrupts our ability to do that, that disrupts our exercise of self-dominion just as much as being handcuffed or jailed.

I think the recognition of (easily abandoned) property rights in information provides stronger and more supportable arguments for privacy than alternatives like the idea that invasion of collectively defined privacy sensibilities is an offense to personality.

Trying to tie the intellectual explanation for ideas to their insantiation in physical goods seems like a mistaken improvisation that Ayn Rand (maybe others) came up with. It doesn't really work in the digital age, as information has come to be more clearly treated as something distinct from physical goods.

Oops, forgot to release a fact or two about myself to the public domain.
"It's important to recognize the idea as property because then you can form contracts around ideas. Assume Roark has a design idea and he wants to sell it to Rand, who will pay $10,000. If Roark doesn't have a property right, there can be no contract because promising to share something one doesn't have (or sharing nothing) eliminates the element of consideration. If Roark had no property right, Rand could take the idea and refuse to pay because Roark had nothing to give. Yes, you could make sharing of ideas personal services contracts - and privacy promises and trade secrets would be batches of personal services contracts, but that gets a bit silly."

I think this is a mistake. Contracts for ideas are in fact contracts for services. That is not silly at all. Of course Roark can make a contract to disclose the contents of his self-conversation without having owernship of "ideas." He owns his body. Thus he can charge Rand in return for speaking or writing out those contents. When the government requires disclosure of information, it is compelling the surrender of physical property or compelling action. What's the problem with that? It is the better way to think about things, not only because it is accurate, but because the other way -- ideas as things subject to property principles -- leads to all sorts of conflicts of rights. The idea of volatile, easily abanonded property strikes me as highly problematic -- definitely more trouble than it's worth. We can have a solid property-rights theory without this strange notion. So who needs it?
Well, you and I need it. Having an explanation for what happens with information assists us in administering it. Treating information as property (highly volatile, which avoids conflicts of rights) allows us to work with it much better, control it, apportion it, etc. And, as I said, it puts individuals on much firmer footing when it comes to asserting control of personal information when we choose to.

The concept of property exists in the first place for the administration of social order. I walked by some bricks on my way to work today. I did not pick one up and bring it to the office to use as a paperweight because I am party to a personal services contract (a social contract, if you will, entirely implied) under which I agreed to not carry off other people’s stuff and others agree not to carry off mine. Figuring out what is other people’s stuff and how it is divvied up is made easier and more efficient by the concept of property.

This is just as true with information. More and more, information is a discrete object of collection, use, purchase, and sale. Why avoid an opportunity to administer these processes better?

To illustrate why having an explanation for information is better than not having one, take the Kyllo case (not Kelo). Government agents aimed an Agema Thermovision 210 thermal imager at a home and noted that a garage roof and wall were hotter than other exterior surfaces. Based on this information, they got a warrant, searched the house, and found the suspected marijuana growing operation.

The Supreme Court found that use of a device such as this to observe what was going on inside the home violated the “degree of privacy against government that existed when the Fourth Amendment was adopted.” It’s a good decision, but it shows that privacy is about as flimsily protected as possible. Under the Katz formulation, privacy rests on collective judgments about expectations. Privacy is protected unless “the individual manifested a subjective expectation of privacy in the object of the challenged search,” and “society [is] willing to recognize that expectation as reasonable.”

It’s well known that this reasoning is a tautology. If the Court finds privacy expectations reasonable, they’re reasonable. If it doesn’t, they’re not. This is true of tangible property as well, of course, and the social contract is nothing more than assertion. But bricks are put to better use and we’re all better off thanks to the widely accepted property formulation. If you treat information as property, rather than . . . nothing, it’s more like a brick. Individuals are in a better position to assert control over it. That’s a good thing.

This strange notion? “Self-conversation” is a strange notion . . . .

Thank you, Mr. Harper. You put into words much more elegantly that I did how I feel about Richman's article. I completely agree with you. Ideas should be recognized as property. I'd like to add, as I mentioned above, that ideas that generate new sources of wealth must be protected for the sake of innovation. Going back to your question to me, Mr. Richman, you're probably right; Howard Roark would not stop creating simply because people could steal his ideas. But John Galt would. And does. Read up on your "Atlas Shrugged". ;-)
We have skidded into privacy, the Fourth Amendment, and the right to be free of government intrusion. This is not about so-called intellectual property at all. Moreover, to use the need for property in physical things (bricks) as a support for property rights in ideas begs the question. Ideas are not physical things. Unlike physical things, they can be reproduced endlessly without depriving anyone else of them. After I give a lecture to 1,000 people, there are 1,000 new "copies" of the ideas I spoke. No conflict arises from an additional person having the idea because his possession of it deprives no one else of it. (We're not talking about market value; no one has a right to the market value of things because that depends on other people's evaluations and choices.) On the other hand, if I show off my new chair, no one else can possess that chair without my no longer having it. That's why we need property rules: to avoid conflict over finite things. Where a "thing" isn't finite, property rules do not apply. One may think self-conversation is a strange idea, but only until one thinks about it a bit. Once we see that ideas do not exist in the same way that chairs and bricks do, it is easily seen that the usual property rules/rights don't apply.
So you're saying that thoughts should not be considered property because they do not adhere to the traditional definition of property. But how then, should we govern it? You claim there is no need to govern it, but Harper's given an example of why it is vital that we do govern it. His point is not about the fourth amendment. Rather, it is to show that if we do not consider privacy as a form of property/commodity, what we are left with is whimsy. And whimsy is arbitrary. The fact is, ideas exist. They do not exist as a book or a man exists, but that doesn't mean we should pretend it is irrelevent in every day dealings with other people. Imagine if we decided to do that with mathematics! Fine, there are flaws with our current treatment of intellectual property, but just because a system has problems does not mean we throw it out completely, especially when you offer nothing to replace it with. Here, read this article regarding software patents, and please, keep an open mind. http://www.paulgraham.com/softwarepatents.html
Why do you insist on conflating privacy with intellectual property? When one protects one's privacy, one is not protecting an idea. One is protecting oneself, one's home, and one's papers from intrusion. What do patents and copyrights have to do with that?
Thanks, MurnShaw, but I'll caution that you and I may part company where you say "ideas that generate new sources of wealth must be protected for the sake of innovation." To me, that's an open question. I found the book Against Intellectual Monopoly a fascinating argument against any extra protection for ideas - for precisely the same reason: innovation. If you haven't already, give it a read.
Murnshaw wrote: "Howard Roark would not stop creating simply because people could steal his ideas. But John Galt would. And does. Read up on your 'Atlas Shrugged'. ;-)"

Oh, come on. John Galt was oppressed by a fascist state. His problem was not that so-called intellectual-property laws were unenforced. He, like Roark, would create without patents and copyrights.
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