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Implications of rejecting "intellectual property"

In my recent article titled ""Intellectual Property" a Violation of Real Property" I've laid down the reasoning behind my rejection of the intellectual property idea, primarily in recognizing that it cannot exist without the medium and that in fact it is the medium itself - a specific property of the medium such are the dents arranged on the surface of a compact disc or energy patterns within the brain, and so on.

What follows from that fact is that any claim of ownership over these intellectual works comes down to a claim over a physical object, a medium. Claiming to own an arrangement of ones and zeros no matter what represents a "1" or a "0" and in which medium is claiming certain "ownership" derived exclusive rights over each and every medium that exhibits such arrangements as part of itself, thus bringing "intellectual property" into conflict with real property.

Unfortunately, quite a few people have a problem grasping this and the implications it has on such issues as is the compensation of people who spend effort creating music, writing books and software and so on. They hold some unquestioned assumptions that lead them to misunderstand the result of rejecting intellectual property.

I write this to clarify my ideas and illustrate more precisely what happens if we actually reject the idea of intellectual property.

What is "property"?

A lot of people seem inclined to define property ownership as whatever the government says it is. However what is most relevant here is the common thread to most definitions which is "exclusive control". Even when someone refers to such concepts as "shared property", "public property" etc. they're still referring to some kind of exclusive control or exclusive rights, only the idea is that a group of people have control that excludes other groups.

(Just for the record I don't agree such a thing is possible due to a contradiction of exclusivity with the fact that a "group" includes multiple people at the same time. I think only individual ownership is possible. However, that's beyond the scope of this article.)

I have recently written more about property in more detail here where I define ownership more precisely and establish the basis of it in objective reality. The core of the definition, however, is still exclusive control - that is, a stream of actions that constitute it.

What is "legitimacy"?

This is another concept whose defining most people just outsource to some sort of an authority or government without ever asking the question why does said authority even have any authority, that is, why do their decrees have any legitimacy to begin with. Honestly asking that question is enough to get to an answer which does not depend on any specific authority. I would venture to guess that most people would conclude that the answer lies in consent or agreement.

If you have any doubts about that just think about why is "democracy" so venerated if not because it supposedly gives "The People" a chance to provide consent to the government that governs them. Albeit I think democracy is a very flawed method of accomplishing that, this is typically the way it is justified. When your politicians do something that they were "not elected to do" you might often protest saying something like "I didn't agree to this".

That said, anyone who proposes that legitimacy fundamentally comes out of anything other than consent or agreement has a pretty tough case to build especially given the popular understanding of humans as equal and deserving of "equal rights". If certain humans get to force their will upon other humans how does that make them equal? It's going to be very tough indeed to say that consent doesn't matter in determining legitimate from illegitimate actions.

Thus I would establish that legitimacy fundamentally depends on agreement and consent more so than arbitrary opinions of the minority or majority imposed on the disagreeing ones.

Doesn't the value of intellectual works mean they can be "property"?

Some have pointed out that the difference in price between a blank DVD and a DVD with some content burned on it proves that intellectual works have inherent value and can thus be property. However one does not follow from the other.

A difference between a blank DVD and one with content is akin to a difference between a bland basic looking chair and a sophisticated stylish chair. A basic chair is definitely going to be less valuable to most people than the stylish chair. Does that mean that the style of the chair can be sold separately from the chair itself? Of course not. The style of the chair, its physical properties, ARE the chair. It's what makes it into what it is.

Claiming that you can treat the chair's specific properties as a property distinct from the chair itself which you can own even while not owning the chair makes no sense. Yet guided with that assumption you would assume yourself the right to take somebody else's chair and ruin it by taking from it the specific elements which constitute its style, just because you happened to have made a chair with the same style yourself previously.

The difference between a blank DVD and a DVD with content burned on it is still physical, even if microscopic (or nanoscopic). It is a different object, a different thing and therefore with a different value. Content burned on the DVD is one with the DVD. There is nothing distinct. There is no second object to own.

I have above defined ownership as involving exclusive control. If there is no distinct object you cannot control it. Without an object there is no possibility of ownership. Only distinct objects can be property.

What about the effort and time invested into creating intellectual works?

Another attempt to establish the idea of intellectual property on value is an appeal to the effort and time invested into creating intellectual works. To a large extent however this is answered above. What this investment of time and effort does is make a specific DVD, CD or a service of digital transfer more valuable and thus more expensive. This is exactly what should recoup any costs and compensate for the said effort.

However, the institution of intellectual property has corrupted this dynamic. By pretending that these intellectual works are a property in and of themselves and enforcing the consequences of this idea (violation of real property) it has allowed creators of intellectual works to sell for too low a price as they count on recouping the costs via volume sales. The market has come to expect this which makes it difficult to count on recouping the costs with first few sales only. Yet even so, this isn't impossible, and the Free and Open Source Software movements have created a climate within which this could be successfully tried.

To help with that services like Fundable.org could be used. A demo version of the software program can be released to demonstrate its capacities and build a following. Only the software developer has the original full version. In order to release it he can set a release price that can be shared by multiple buyers. If he wants $1000 for a release he could set a price per person at $10 and seek 100 people to pledge $10 before he makes his release.

He can repeat this process for each new version of the program that he releases which could even come in handy as a convenient marketing plot since it makes every release into a sort of an event. Depending on the interest he can raise the price since more than 100 people may be willing to pay him $10. This is actually completely consistent with natural laws of supply and demand. Larger demand justifies a larger price and more money to him.

Of course, once the full version or the new version of the program is out and his money is in, everyone is absolutely free to share it as they wish. As for modifications, source code releases could be priced even higher.

A second point to make in addressing the concern of compensation is the fact that contracts could still be used as a legitimate business strategy as a replacement for copyright licenses without the unjust consequences of copyright enforcement. The dynamic however is slightly, but significantly different in that with contracts the only individuals liable and bound are the individuals in the contract. If one of them breaks the contract only that person is liable for damages even if as a result of a leak other people have a copy of the program (or a same arrangement of bits on their computers).

If a thief steals your car and sells it to Jack would you blame a thief or Jack for stealing your car? Who would you hold responsible for getting your car back, a thief or Jack? I think that coming down on Jack, even forcing him to give you the car, would be a terribly misguided application of "justice". Instead, you can convince Jack to voluntarily sell you your car back and prosecute the thief for the money. Bottom line is, only thief is liable for theft.

It should be noted that when you send someone a copy of your program you are providing a service rather than sending something akin to a physical object. The fact that you inevitably must use your own property to convey someone this arrangement of bits that is your program is precisely what allows you to charge for it. You're not charging for the arrangement of bits, but rather for the the service of using your computer or some other property to initiate copying and/or sending. Even if it's just providing a download, it is still your property which is being used.

Because of that you can require people agree to certain terms before your property is used to convey the program. When they seek a copy from you they're in reality seeking to use your property to get something out of it. Your terms can be anything you like. You can ask people to stand on their right foot for 10 minutes if you like, before you give them access to the server or before you initiate an email transfer, or burn and send a CD etc.

Of course, then, you can require them to agree to the terms like the following, which would be a contract between you and the downloaders.

By downloading this program:
1. You pledge that you have paid $100 to "so and so".
2. You pledge that you will never use any of your property to copy this program to any other person.
3. You agree and understand that if you violate the condition 2 you will be held liable for a damage of $1000 dollars.

The first condition is the price of the download. The second condition has the person agree that only he will use the program on his own property and not use his property to convey it to somebody else. The condition 3 is a penalty he must pay if he breaks the condition 2.

If he does break the condition 2 and copies the program to Bob and Bob puts it on a public torrent site Bob cannot be held liable because he did not agree to these terms. It is the person who downloaded the copy from YOU that is exclusively liable.

As we've established above it is agreement which is the basis of legitimacy. You can only legitimately prosecute people who have broken a prior and standing agreement with you, not the people who had no such relationship with you. This is the key thing that differentiates contracts from copyrights. Copyright allows prosecution of people who had nothing to do with you rather than people who've actually broken an agreement.

According to these terms, the person who downloaded a copy and leaked it will have to pay you $1000. Of course, since a contract can have any terms, you could have had the damages fee be multiplied by the number of copies which you can reasonably estimate have been made upon his leak. If you can prove that there are 100 copies around and the terms say that a damages fee per copy is $100 then you can charge the downloader $10 000.

These damages could then quickly become so high that they could not be afforded by the would be agreement breaker. The consequences of that would actually be pretty good.

Either it would lead to a lot less people breaking the agreements because the large fee is too scary to risk it or people would not accept such agreements very long thus having those who require such agreements sell far less. Draconian contracts would be weeded out by the market.

Bottom line is that abolishing intellectual property as an idea and an institution in no way means that the software developers and creators of intellectual works in general should work without compensation. All things considered that's a pretty ridiculous conclusion to make. Since intellectual works cannot exist without real property that means that creators still have pretty much absolute control over what they create. It is tied to their real property. The difference is that they do not control anything beyond unlike the idea of "intellectual property" would presume.

They control their computers, their media, their servers, but they don't and should not control your computers, your media and your servers. If they wish to profit from their work they can charge ONLY for the use of their own computers, media and servers, not for your use of your own. Once content creators realize this fact, the fact that they do not have the right nor a need to seek control over other people's property as means of earning their living their mentality will change and their methods of making content creation into a business will change as well.

It's not that the creators would starve. They would simply make money in a different way, one that is more in tune with reality and the market, one that does not foster the kinds of incredible imbalances which we have today: Microsoft, BSA, RIAA, MPAA, or in other words, intellectual property corporatism.

Critics should think long and hard before they continue to defend "intellectual property". Not only is it based on pure fiction, something with no basis in reality, but their objections are silly and baseless showing more the lack of imagination and an unwillingness to think beyond their current paradigm. Furthermore their defense of IP only helps to prevent any meaningful change to the corporatist society we're living in, EVEN when they root for the Free or Open Source licensing.

Comments

Re: Implications of rejecting "intellectual property"

 

Thanks. Very stimulating article.

Re: Implications of rejecting "intellectual property"

 

The Ludwig von Mises Institute had an article on this subject today:

http://mises.org/daily/3864

"Some Harvard professors are taking very seriously their "intellectual property rights" and have claimed copyright to the ideas that they spread in their classrooms. What prompted this was a website in which students posted their notes to help other students."

and...

"The problem is a serious one that highlights the absurdity of the notion that an idea — infinitely reproducible and thereby not scarce, and also taught with the overt purpose of gaining adherents among students — can be somehow contained and restrained once it is unleashed. The only way to retain exclusive possession of an idea is never to share it with anyone. But of course that not only cuts against the grain of teaching; it is contrary to the human impulse for bouncing ideas off others and still claiming some credit for innovation."

 

The argument about agreements is a very formidable one. However, when a user is installing software, he is presented with an agreement from the developer. And so even if he got it for free, in order to install it he HAS to enter into an agreement with the developer, whose hand reaches to the users throat to squeeze out "yes, I agree to be taken to slavery and all my family killed if I give a copy of this software to my friend".
So basically the good argument drops here. Which is a pity, since it is a valid argument in all other cases.

I was aware of that possibility, but I'm not quite sure because agreements pertain only to the use of real property. If you get a copy of the program from someone other than an original developer than it is that other person whose property you're using to get the program and he gets to set the conditions which may or may not be subject to prior agreement with the original developer.

This makes current agreements including EULA's and even GPL at the very least awkward for this kind of use. Still, yes we can suppose that the other person giving you the copy without removing the EULA would mean that the original developer's EULA with him becomes his EULA with you.

In any case it would still illustrate the complete lack of necessity for the idea of intellectual property and related laws. All you need are agreements. With agreements at least you can establish far more clarity in terms of who agreed to what and thus prevent prosecution of innocent people.

The thing is, you can remove the EULA from the program and distribute it like that to your friends. Your friends then would not be liable, but you would be.

Bob Robertson wrote:

The Ludwig von Mises Institute had an article on this subject today:

http://mises.org/daily/3864

"Some Harvard professors are taking very seriously their "intellectual property rights" and have claimed copyright to the ideas that they spread in their classrooms. What prompted this was a website in which students posted their notes to help other students."

and...

"The problem is a serious one that highlights the absurdity of the notion that an idea — infinitely reproducible and thereby not scarce, and also taught with the overt purpose of gaining adherents among students — can be somehow contained and restrained once it is unleashed. The only way to retain exclusive possession of an idea is never to share it with anyone. But of course that not only cuts against the grain of teaching; it is contrary to the human impulse for bouncing ideas off others and still claiming some credit for innovation."

Thanks for the link. I agree and I'll check the full article out.

 

Bob: Interesting article! Very nice indeed.

I like your ideas and I might even agree with some of them. But first lets talk about "property" (that is ownership of physical objects". I didn't see you mention it in this post but somewhere you talked about ownership of property as being "granted" by "natural law". Did I get this right?

First off, laws are ideas in human heads which, as you're fond of saying, do not exist in reality. Gravity is a natural phenomenon we describe in our "law of gravity. To me that's a natural law.

Property is another idea which does not exist in reality. You say that it's related to "exclusive control" of an object. Let's talk about your bicycle. If you are riding it you mostly have control of it as long as you don't conflict with those natural laws like gravity, friction, etc.

But what about when it's parked in your garage at home and your out shopping. Do you have exclusive control over it then? Maybe your kid takes it out for a ride. Now, by your definition, you no longer own it, right?

I think the concept of property ownership is a social contract we have in our society that has evolved over thousands of years. (There are even some society that didn't have the concept.) People adhere to this contract because, for the most part, it makes their lives easier, more workable and more pleasant.

These are, I think, the "natural laws" you mention somewhere.

It was up to us to enforce these rules ourselves. If someone tried to take something you thought was yours then you objected verbally and/or physically. If you had to track the taker down then you'd bring your friends to help. If the taker had more friends than you, he likely got to keep it. We still often say, "possession is nine-tenths of the law."

As our society became more complex, people became more plentiful and crowded together, we wrote the laws down and hired people to enforce them for us. We got people to arbitrate disputes, etc.

But I think I've established that "property", that is the ownership of physical objects, is just something we invented. It's an abstract idea. (Who owns the air we breath?)

Because things have gotten much more complex we have tried to extend this "property" idea to ideas themselves. We call it "intellectual property ownership". Flawed as it is, I postulate that intellectual property exists in the same way "physical property ownership" exists; because we say it exists! It is a new idea extending the idea of physical property.

Does it conflict with the ownership of physical property? Yes. So what? Lots of things conflict with other things, especially in the realm of ideas. And, as I have established above, everything we are talking about are ideas.

So why do you think the concept of "intellectual property ownership" came to exist. Here's my simple take on this: people who create ideas sometimes want to profit from them just like the people who make physical objects profit from them.

I think that's a reasonable goal and we, as a society, will benefit also if we can find a suable way, a fair way, for this to happen. These are new concepts that have only started to exist since the early seventeen hundreds. It may take several hundred more years for agreement to be reached.

I do agree that the patent and copyright system is not functioning very well. I also think that the "ownership mentality" is running rampant through our culture.
---

You said, "If there is no distinct object you cannot control it. Without an object there is no possibility of ownership. Only distinct objects can be property."

If you can get enough people to agree with you perhaps it can become the norm. But I haven't found your arguments very persuasive. So far the argument is, "because I said so", which is a perfectly good argument if, as I said, enough people agree with you.
---

You said, "What this investment of time and effort does is make a specific DVD, CD or a service of digital transfer more valuable and thus more expensive. This is exactly what should recoup any costs and compensate for the said effort."

Yes, the first one is the expensive one. All the others only cost about a dollar. So if I write a program that I think has a market of a hundred million copies and it cost me twenty-five million dollars to make the first one, and I want a gross income from this of a hundred million dollars then I should sell one copy for a hundred million dollars to one person and then I'm done.

You really think this business model will work? I don't.

Let's see if this works for physical goods.

You take six months to design a killer chair. With assistants, drawings, prototypes, market research, etc. it costs you $100,000. You want to want to recover this design cost so you're going to add something to the sales price to amortize it over the perhaps the first three years of sales.

Now your chair hits the market and is selling well. You win awards for innovation. People rave about how this chair is so conformable it's like sitting on a cloud.

Two months later an exact copy of your chair hits the market ... but cheaper ... cheaper by exactly the amount you added to cover your design costs. The sales of your chairs drop and the knock-off sales shoot through the roof and you end up loosing money over the life of the chair sales.

The consequence of this is that on the next design cycle you cut back and put out a mediocre design. No awards. No accolade. Innovation is stifled.

So, unless you can demonstrate how your new ideas will stimulate innovation, you have not created a complete argument.
---

You said, "In order to release it he can set a release price that can be shared by multiple buyers. If he wants $1000 for a release he could set a price per person at $10 and seek 100 people to pledge $10 before he makes his release."

This has been tried so often it has it's own name, vaporware. It's not clear to me if you meant that the potential buyers send the money first or only promise to buy when the software is ready. If the former then they are investors and should expect a profit for the time-value of the pre-order and is subject to SEC regulation in the USA.
---

You said, 'If a thief steals your car and sells it to Jack would you blame a thief or Jack for stealing your car?"

If a stranger walks into your garage, takes your bicycle and walks across the street to your neighbor, who saw him take it from your garage, and your neighbor gives the stranger $5 to "buy" the bicycle, who would you blame?

Theft is not profitable without buyers.

If you were going to buy Adobe Photoshop because you are a professional graphic artist, but instead you download a "free" copy and use it on your computer, how could you possibly think what you did was moral, much less legal?

I think music downloads are a bit different because there is quite a bit of free music available. But I think many people download music they know isn't free ... it's just too tempting. I think the music labels have exacerbated the problem by not adapting to the new paradigm and making downloadable music easy to buy at a reasonable price. Even CDs have been too expensive for too long. Now the recording industry is paying a heavy price while the music industry as a whole is thriving. Movies are going through the same process now.
---

CONCLUSION
I agree that the copyright and patent system are screwed up and need to be reformed somehow. However I have not found your premise or arguments persuasive. But I admire you for thinking a bit outside the box. Keep trying.

Peace,

Rob:-]

Re: Implications of rejecting "intellectual property"

 

Thanks.

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