In a previous article, I explored the absurdity of intellectual property, the unfair and inefficient monopoly privilege it confers on those savvy enough to play the legal system well. By being nonscarce, nonrivalrous objects like ideas or sound waves strung together in a specific order, they can’t be property economically speaking. Nobody can “own” vibrations or reasonably punish me for using your grandmother’s recipe for meat stew. (This is also the reason cultural appropriation is such a nonsense concept.)

A lot of libertarians go wrong here, as legal scholar Stephan Kinsella has spent a career flushing out. The mistake is easily made. Once you realize the crucial role that (private) property plays in the economic system — allocating resource decisions and giving rise to market prices, and thus the profit-and-loss feedback — it seems an easy jump to extend the logic to intellectual property. It’s in the name, after all. If it’s good for society, the economy and social harmony to seclude off ownership of homes, T-shirts and coffee beverages to the individuals acquiring them, it ought to be similarly good for us to ascribe “rights” to the many intellectual products made (songs, poems, DNA assortments) to whom these creations therefore “belong.”

The unfortunate name aside, the analogy doesn’t hold. Property is scarce: It has competing, rivalrous uses, and you can exclude others from using it — if nothing else than by the physical usage of who’s currently wielding it. The T-shirt I’m wearing can’t simultaneously be worn by someone else; thus, in true argumentation ethics fashion, you must either take it from me violently or (implicitly) accept my property rights claim to it.

Property rights aspire toward social harmony in that they prescribe who gets to use which thing at what time for which purpose. Intellectual property doesn’t have that physical limitation, and social harmony is maximized by removing (unfair and immoral) protections to property over nonscarce and immaterial things.

Take Johan Norberg, the Swedish author and free trade evangelist who was once my gateway drug to libertarian ideas. Norberg is an excellent writer and debater with a reach far beyond our regular libertarian quarters: About his latest book “The Capitalist Manifesto,” Financial Times’ Martin Wolf even said that Norberg is “perhaps the world’s most effective defender of free-market capitalism.”

But we all need to slay our intellectual heroes, and part of growing up is to realize where those who came before us went astray. Norberg goes “dead wrong” on his stance on intellectual property, thinking it a prerequisite for capitalism to work — as if the patent system somehow made the modern world or upholds our standards of living. In “The Capitalist Manifesto,” he writes that “companies would not be interested in investing so much technology in other parts of the world if everything could be instantly copied by the factor on the other side of the road.”

Well, if the innovative production you’re running is so simple that it can be effortlessly copied and overtaken unless protected by a violent thug, then perhaps the business edge you’ve assembled is a lot smaller than you think. Per his own reasoning in later chapters about subsidies, the business therefore deserves to be outcompeted: open source everything, etc.

The infrastructure that lets artists and innovators hold fee-extraction rights over their creations are features of a legal system, not economic reality, and — at the stroke of a legislator’s pen — could be different. How do you, then, monetize intangible and nonrivalrous things? Musicians want to eat, as do writers or tinkering engineers.

Now, the words I string together in a certain order don’t have economic value; as the joke goes, the high school student pats her dictionary before an essay deadline and says reassuringly to herself, “All the words are in here. I just need to find the right combination.” Nobody owns the words listed in the dictionary pages, and once assembled, anyone can recreate them — speak them, sing them, recite them at a wedding, or publish them (online or in physical form).

The physicality of books and magazines themselves return us to the analog world of scarcity; one unit cannot be consumed and enjoyed while it’s being consumed by someone else. Thus, the magazine has a market price, as it takes up scarce resources. However, magazines only sell — or, by extension, keep their subscribers — if the content they deliver is worth more to the consumer than what he or she paid for it. So the content — the ordering of words — has to be good.

How does one get good word orders that consumers enjoy? Anyone — especially in the era of generative AI — can write bland, grammatically adequate text on some topic, so a magazine must get access to the flair or elegance, creativity, or unique information that certain writers possess — by waving a monetary carrot before them, either as employment contracts or freelance work. The service rendered isn’t the words themselves since they all exist in the ether available to anyone with a dictionary but the creativity of the assembly. And it’s given as donation or reward, not for payment of property transferred.

Take another illustration of open information, where the order itself is crucial and copyrighting impossible: the game of chess. You can’t patent or copyright a chess opening, even if the system or series of moves was invented (well, discovered!) by a specific player and popularized to the point that their name was attached to the moves. Don’t chess players deserve compensation for their hard, innovative work and for furthering the game by making a unique and specific series of impressive moves? No. The reason is that rent extraction isn’t feasible for things that are nonrivalrous. Magnus Carlsen, probably the best player of all time, doesn’t receive compensation when anyone else plays the Carlsen Variation of the Sicilian Defense. (Neither does the island of Sicily.)

Chess openings exist in the ether, in human minds, available for anyone to play. Nobody (bar authoritarians) can physically exclude you from moving pieces on a board in a certain order in a game in which you and your opponent subject yourselves to specific rules. If you’ve found an opening improvement that gives you a unique advantage, it was there in the open for anyone to find. You found it in information space, among the tens of duodecillion (1040) possible chess positions.

The Russian novelist Fyodor Dostoevsky found the words for his novels in language space, another information space composed of somewhere between 150,000 and 200,000 headwords; he used publicly available information in a specific order to assemble “Crime and Punishment,” which anyone in principle could have found. That’s why we socially add his name to the title of the book but don’t (and shouldn’t) reward him or his descendants financially for his find. If authors or musicians can monetize their nonrivalrous creation in other, roundabout, and economically fair ways, kudos to them!

Just like Spotify found a technical way to monetize music — letting users save, keep and easily manage playlists across devices — the service Chessable has in recent years showed how the intangible, open-information world of chess openings can be monetized. All manner of top-100 chess grandmasters release studies, complete with worksheets and lectures that Chessable users pay for. Neither the company nor the players (authors) “own” the move order, and yet the service keeps working since these masters must always stay on top of their (literal) game. If they don’t, they get outcompeted by someone who has deeper knowledge of the opening variations played.

Consumers are willing to pay not for the opening itself but the chess grandmaster walking them through it — complete with notation and videos and illustrations — and convenient software to practice with. Those things are as excludable as any other subscription or pay-per-use online service. Again, it doesn’t function according to copyright. Similarly, concertgoers are happy to pay for physical and time-limited access to an artist performing her songs — see Taylor Swift.

As Spotify showed in the early ‘00s, there was a way to monetize a free resource that didn’t primarily rest on copyright: In the early ‘00s, young people — cash-strapped, time-rich and tech-savvy — happily spent some effort to acquire music without spending money.

If you’re in the business of creating “intellectual property,” try monetizing your creations in honest ways instead of resorting to the crutches with which the legal system saddles economic reality.

Image Source: Adobe Stock

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

Home

The Absurdity of Intellectual Property Laws