Joel Poindexter, an economics student and contributor at the Ludwig Von Mises Institute website, posted an article titled, “Set Culture Free.” The article, overall, is well written and informative, but it makes the fatal assumption that intangible things cannot be owned. I will proceed by demonstrating why the standard Austraian view of property and tangibility are indefensible and create a serious contradiction.
Mr. Poindexter asserts,
“Over time, property rights emerged as a way of mitigating conflict over scarce goods. If there is a finite amount of something, say hammers, it’s possible that at some point conflict over the use of a tool may arise. Establishing property rights, and institutions to enforce those rights and arbitrate disputes, tends to reduce this conflict.”
He then buffers this view with the claim endorsed by Hans-Hermann Hoppe that in a resource-finite or scarce world, rules must be placed on the use of the resources. I have championed a similar view in my work on Logical Coordination, but the difference amid Hoppe and myself is that I do not exclude rules to only possible worlds that possess the attribute of scarcity. Why? Well, first, my theory of Logical Coordination holds that the necessary conditions of interaction hold in all possible worlds, and that conflicts would arise generally by the fact that there is no such thing as an actual infinite resource given that part of the value of a resource is contingent upon how I evaluate or perceive of the particular resource.
The second problem I have with this idea revolves around the assertion made by Poindexter, “If there are an infinite number of hammers, or a device exists to infinitely reproduce them, then the problem of scarcity disappears, along with the need for property rights…” This creates a problem for both the Austrain Economist, and any libertarian thinker that endorses a similar view. The problem rests in how Mr. Poindexter cements the notion of rights. He wants to hold that if scarcity were removed, then property rights would evaporate. However, a simple example should demonstrate why this is absurd:
Suppose that I have a hammer, and further suppose that there are an infinite number of hammers that are metaphysically similar to my hammer. I use my hammer often, but one day someone takes it from me. I become angry and demand that they return my hammer, but the thief proceeds to instruct me in the obvious fact that there are an infinite number of hammers, and so I should just get a new one.
Interestingly, the thief, too, should have obtained a hammer by the same recommendation. Nonetheless, was I harmed by the thief? Can I even call this “hammer-taker” a thief? No, not by the analysis given by Mr. Poindexter.
This problem grows worse. The reason that I was harmed and that my rights were violated by the ‘hammer-taker’ is derived from the fact that my hammer is a unique hammer. By Liebniz’s law it must be unique. It takes up a certain space that other hammers do not take up, and it has certain properties that are specific only to it. Not only is it unique, but it is a scarce and particular hammer given its uniqueness. There is only one hammer that I may use for any one activity, and from that, I alone determine how that hammer has value; basically, I attach values that extend beyond the material composition and economic value of the hammer.
If this example is just not “hitting-the-spot,” think of any one thing that you have (a luck coin, ball, a pair of old comfy shoes, or even a special tool) that has memories and meaning attached to it merely because you used it or possessed it in relation to some event. If I came up to you and were to smash your special thing, then would you not be angry? Would you not be harmed? You would because property rights are a natural extension of your interacting with reality, an not merely because things exist -property rights exist because you exist!
Robert Nozick provides some valuable insight into this very subject. Nozick says, “because each person possesses an inviolability that all others must respect… Individuals have rights,” he continues, “and there are things no person or group may do to them (without violating their rights).” Basically, rights are not contingent upon external things, they exist because people do. They attach to individuals. Moreover, rights define and explain fundamental principles of action and morality of free agents that interact; for example, John Rawls states that the role of the right of personal property “is to allow a sufficient material basis for a sense of personal independence and self-respect, both of which are essential for the development and exercise of the two moral powers.” So, in a resource-infinite world, I would not be able to, if the Mises followers are correct, possess any type of independence or self-respect given that I could not secure ownership of any particular property available to me; but this is lazy and shallow reasoning. I could only identify and enjoy a limited number of elements of any infinite set give that my capacity to interact with the infinite number of elements is limited by time. The time spent with those elements would logically allow the necessary attachment of memories, preferences, and conditions which would cause me to gain respect and independence; thus, by Rawls, property rights would have to obtain by necessity. Interestingly, the independence and respect gained must then, as per Hoppe, become protected by rules… Which brings us back to the fact that property rights are inherent to conscience creatures.
The next move made by Poindexter is interesting. He attempts to make the case that the removal of property rights would not, all else being equal, harm the incentives that firms have to develop and investigate new methods, systems, and objects that enable them to remain competitive. He uses, for obvious reasons, the music industry as an example. In light of the claim that low CD or album sales are attributed to an augment in piracy, he asserts:
Many critics of digital downloading point to single-song sales as a terrible thing for artists. But this is only a terrible thing if the artist possesses marginal talent. Most people have probably experienced a time when they heard a song they liked on the radio and bought the CD, only to discover that overall it wasn’t that good. Allowing consumers to buy one song at a time provides musicians an incentive to produce not one or two good songs for radio, but an entire record’s worth of quality music.
Right, but what about the disincentives that exist to not invest my time, energies, and money into making a new album or song given that said song/album may be downloaded and distributed to several hundred of thousands of people without them buying it? Would my expected earnings not fall? And if the problem were serious enough, would I not just say “screw it” I am not selling any more albums because the cost exceeds the benefits? It is possible, and even likely that certain people do not (I know of a few, actually) actualize their ideas in the marketplace given that the are afraid of not being able to have the rights to their product, and that others would merely take their idea and profit from it leaving the idea’s create cold and hungry. It is the case that individuals may prevent their ideas from being actualized into material products, and this would cause that the consumer looses both the opportunity to purchase a product and to benefit from the competition amid firms.
Finally, to hold the idea that only tangible things are claimable, demonstrates a failure to connect physical inventions (tangible property) to their idea representations (intangible property). Suppose I spend one million dollars in research and development to create a new oven. This new oven will cook bread, rolls, and pizza in a fraction of the usual time needed. I have struggled and toiled over thermodynamics, the components of certain refectories, and even the aesthetic elements of this oven to the point where I finally create a version that can be brought to market. Nonetheless, once I start to sell, I notice that a large company purchased one of my ovens and is now marketing an exact duplicate at a much lower price. The result is that I made a few dollars, but am not unable to profit (as I would have) from my idea. The fact that I can only lay claim to the physical instances of my oven and not the idea that is “my oven,” essentially requires that I do not have a right to my thoughts and the things developed in my mind. This is a violation of both the Kantian and Lockean tradition of rights and ownership. For Lock, I own the oven because I mix my labor with it, but I can logically extend this analysis to ideas. I own ideas because I mix my labor with them. Additionally, it behooves us to note that good ideas can be treated as commodity such that scarceness does apply.
Moreover, property rights can be said, as we found, to be natural extensions of my consciousness actions -of existence. This extending of rights is made possible only by action, and idea creation is an action; thus, ideas are extensions of my rights and can be placed under conventional and philosophical conceptions of property rights. This is akin to legal agreements and contracts (which we all know Austrians hold as sacrosanct), by the fact that they are rooted in action and delivered by ideas. Not to mention that any philosophy which favors such a cold empiricism, is usually committing a serious oversight to things not perceived by our senses -humm…so much for praxeology, eh?
John, I don’t know if you ever saw the debates between Mr. Johnston and myself on this topic on my FB Page. I even brought up Nozick to back up the idea, that limited government is necessary to preserve the potency of property rights, and the need for them to be administered by a neutral third party. This is a very good crtitique!
One thing, you may have not thought about: the argument about false scarcity is kind of dubious. For instance, even tangible property, absent common property laws administered by an independent judiciary, is not “scarce.” If any passer-by could rob you at knife point and take your car, if you could not take him to court and sue him in tort for conversion, the car fails to be scarce, Because there is no way to enforce your rights thereto. This is no different in the realm of intangibles, in fact the role of law is even more obvious, for the reason you posit regarding incentives.
Can I own a word?
Nick,
I actually thought of your conversation, but recalled that you no longer have a FB account. I would love to have you right a post on your blog an link it to me, and I can post your link. I think that the Libertarians are making a stupid move here, and that they a equivocating on what qualifies as property. The distinction that they draw relies on some dangerous assumptions that rights are not stringent, but rather absolutely conditional abstractions dependent upon production and distribution…
Kevin,
Yes, I can own a word, but not just any word. Suppose that I invent a tool, call it X for now. And suppose that X is so unique that nothing has ever been created like it before. Now, there is no word to denote X, so I invent a name for X. Suppose that I decide to call it a Woogleswank. Now, by Kripke, the term “Woggleswank” is a specific type of proper name, it is a ridged designator. That name will be mapped to all possible worlds and it only denotes my tool. Now, my ownership of a name is difficult because it becomes unenforceable outside the attachment it has to my tool, so it can’t be owned equivalently to private physical property. But no one else can create a tool and call it a Woggleswank, that violates my idea and my rights to how I describe my idea in the context of its creation.
However, Kevin, a word -in the general sense- is not the same as an idea the proceeds an invention. The idea that is an invention is particular and created as a result of my mental labor; the particular time, development, investment, and physical action that are used to secure, establish, and actualize the idea are no different that obtaining any form of physical property. In fact, my obtain physical property is often more simple that creating something out of thin air.
Also, to argue that I can’t hold rights to an idea, means that I can own a recipe, system or equation that are necessary in producing a good. It also entails -strictly- that I cannot own my thoughts, which is weird given that I own myself, but it is unjust to lay claim to the work of my mind.
This article was a joy to read. I have visited the Von Mises website almost daily for 3 1/2 years. The one subject matter for which the articles there have always perplexed me is that of Intellectual Property. I’ve contributed pro-IP-rights comments in response to articles there many times. I have to say that the responses I’ve gotten from anti-IP people has always been extremely civil and in a constructive spirit. These people aren’t just blatantly stupid. But I still have to say that it seems to me that when you think about these issues very hard at all, the anti-IP arguments seem so riddled with holes and irrelevancies, as well as instances of ‘moving the goalposts’ for IP-rights relative to physicial-property-rights, that I don’t even know where to begin in my arguments with the anti-IP people. You did an excellent job in this article of identifying one false premise — the notion (just assumed on the anti-IP side) that physical property rights emmanate from the numerical facts regarding how many copies there are of things.
I agree completely. I have also frequented the Von Mises site. I enjoy their articles, but find the standard Austrian position on IP laws to be somewhat contradictory. Nonetheless, I think that there is a strong need for some philosophical work to be done in this specific instance -both for economists and lawyers/politicians.
I think it fair to argue that there is a connection amid private property in the physical sense and private property in the non-physical sense given that ideas are necessary conditions to produce a instance of physical property, but then again, I do not see the Austrians bending to this connection as per it hurts some basic tenants of their philosophy.
Thanks for the comment, Frank.
I am not an IP lawyer, but I understand the law within the greater framework of tax and finance law. We often look at intangibles with regard to the value they add to the company and how the cost of creating them may be recovered. There is often a presumption that IP is a valid form of adding value. But, I understand the argument Austrian’s make, I just think it lacks credibility. How can you claim that the ability to hedge and control prices of your inventory does not add value to your company? If you own the rights to the financial model which the hedge is based on, you can lease that right to other companies, even more value. It is insane.
John,
You, nor anyone else on this blog, seem to understand what the Austrians’ argument entails. The main point, which you missed is that IP is coercive and creates monopolies; basically, you are allowing a company to be a monopoly of an idea, system, meathod, or anything else that comes from a simple thought.
I don’t know why you, being a libertarian, would resist the Austrian philosophy in such a misguided manner.
Ownership creates a monopoly, so long as you can enforce that right in a court of law. I don’t see how IP is any different. The right to exclude others from createsa micro-level monopoly on its value, as it then becomes part of the selling price upon its alienation. So if it is OK for that role in common law to be granted to tangible property, why is that different regarding intangible property? Intangible property is capable of replicating that same value that is protected by common law, so why should it not be afforded this same protection? Monopolies are not bad at the micro level, they are necessisty of capitalism.
What I mean as a necessity of capitalism, is that, ownership must exist in order to improve goods for resale, otherwise goods are merely being recycled with old ideas and old goods. Being able to own the idea of an improvement or method, drives the value which is added to an existing good. Even if you wanted to take the position that the same system could be governed by private contracts, you are still necessitating a court to interpret that contract for or against you. Then, once you recieve a judgment you need an authority which can extract said judgment from said defendant. At this point you would just be quarelling over whether the entity exacting the judgment is a branch of the government or a private enforcement company. But if your principle objection is based on the force and coercion involved, then the entity employing force and coercion should be irrelevant, no?
Nick, I don’t see how ownership of an idea can be well defined. We can well define physical property because it is an instance or a particular thing, but we cannot well define an idea, meathod or the like in a way that a claim can be levied. The IP system tries and squish an idea into a physical description that is regulated by corrupt government.
I also think that IP laws are just a way for cornyism to protect its own survival. Capitalism would be more productive if the best production of any good took the stage; consumers would benefit form this competition… So, if ideas were not protected competition would bloom and growth would ensew, right?
No, there is no reason that it is not well defined. A hedging transaction can be very well defined, even more so by the metrics being used in the equation by the drafter. It is just as tangible as the blueprint for your house, which actually creates its value (same with your car). So in essence what you are advocating is that your car manufacturer should recieve all the profit from the sale of your car, not the creators of the input as it is now. Because, as an Austrian you do not think IP exists. This system makes cronyism and concetntrations of wealth even worse, not better. Think of how many ideas, methods, patents go into making homes, cars, furniture. Each of those is owned by their creator (or has since its creation been sold to the manufacturer, but believe me, the creator cahsed out big time upon its sale). So, no it does not promote growth, it promotes concentration of wealth in large manufacturers selling end products.
Also, this idea totally destroys the incentive to create scalable value. Scalability allows more economic progfress, because scalable products and services are thosw which take a fixed amount of labor, but can be infinitely replicated. Because time is finite, if you can create property which can be replicated and continually be alienated for value, you can then free up time for other pursuits, likely creating more ideas that will allow for similar treatment. The ability to create such value is a positive thing, most laymen refer to this a value-added services (although they can alos be products).