Intellectual Communism - Butler Shaffer on Intellectual Property

Butler Shaffer has given "A Libertarian Critique of Intellectual Property".   Sadly, Shaffer's book is not libertarian, and has nothing to do with property. It ends up being another shallow propaganda rant for the Intellectual Communists.

After acknowledging, correctly, that a libertarian society is founded on respect for property rights, Shaffer sets out to prove that intellectual property (IP) is illegitimate, and nothing more than a tool of the coercive state. Seemingly wishing to analyze intangible goods on the same logical grounds as physical goods, Shaffer asks the pertinent question up front:

How do [property] interests come into existence? (p.17)

But Shaffer never actually addresses this question, certainly not from a libertarian perspective. He never mentions the concept of self-ownership, nor homesteading. He never discusses scarcity and rivalry, the very rationale for property.

Instead, he cites the U.S. Constitution, § 8.8, relating to the rights of authors and inventors, as if it gave birth IP in 1789. Having bypassed any discussion of the philosophy of property, Shaffer hurls hyperbole:

This constitutional authority [to govern copyright and patent] created, in a legal monopolist of violence, the power to create in others monopoly property interests that did not otherwise exist. (pp. 24-25)

This is just a naked assertion. Shaffer does not attempt, let alone succeed, at showing that property rights to intangible works cannot exist but for the state.  Instead, he simply assumes his desired conclusion, stating:

The incompatibility of such an interest with libertarian principles should be apparent. (p.25)

In a word Mr. Shaffer: No. No, the alleged incompatibility of IP with libertarian principles is most certainly not apparent. Whether or not IP is libertarian depends on our understanding of the rationale and ethics of property in general. If intangible goods can meet the critera, then IP is legitimate. If not, then not. 

Briefly, the rationale for property is avoiding conflict over scarce rivalrous goods. I have given my arguments for why and under what circumstances intangible goods must be considered scarce and rivalrous. But at no point does Shaffer even raise the issue. 

Briefly, the correct ethics of property are self-ownership and the homestead principle. I own my body, you own yours. The first person to discover un-owned things and transform them into usefulness is the rightful owner. Producer owns product. I have shown that intangible works are acts of homesteading. Shaffer does not even raise these issues, but instead offers: 

The common law system got it right: because the essence of ownership is found in the capacity to control some resource in furtherance of one’s purposes, such a claim is lost once a product has been released to the public. The situation is similar to that of a person owning oxygen that is contained in a tank, but loses a claim to any quantity that might be released—by a leaky valve—into the air. (pp. 25-26)

Shaffer's analogy to oxygen leaking from a tank into the atmosphere is ludicrous. Oxygen dissolves into the air almost immediately, and becomes indistinguishable from it. In stark contrast, an intellectual object like a song remains perpetually distinct from its surroundings in intellectual space. There are millions of copies of "Hey Jude" in existence, yet we still have no difficulty ascertaining its boundaries. We can tell where it begins, and where it ends. We understand what is "Hey Jude", and what is not "Hey Jude".

What philosophy holds that "the essence of ownership is found in the capacity to control some resource in furtherance of one's purposes" as Shaffer asserts? It certainly isn't libertarianism, and it certainly isn't the Common Law. Under Shaffer's theory, whoever is strong enough to take over a piece of land becomes the rightful owner.

The rightful owner is the homesteader, or those who have contracted with the homesteader in voluntary exchange. It's pretty basic libertarian stuff. Thus, it's downright astonishing that other Mises scholars let Shaffer get away with this shallow sophistry. David Gordon, who wrote the introduction, is one of the sharpest philosophical minds in libertarian circles, yet says nothing about Shaffer's unwillingness to adhere to even the slightest modicum of academic rigor. What is going on here? I digress.

Throughout his book, Shaffer repeatedly refers to IP as a "monopoly". This is the same thinly-veiled scare-tactic employed by Boldrin & Levine. Any property right is a "monopoly", if you want to abuse the term. Property, by definition, is the right to exclusive ("monopolistic") control. Shaffer badly wants to convince us that IP must be a state-granted "monopoly". But in the end, he doesn't even try. 

The notion that the anticipation of monopolistic rewards such as patents and copyrights is essential to the creative process, is negated by much of human history. I am unaware of any copyrights having been issued to writers such as Aeschylus, Homer, Shakespeare, Dante, or Milton; or composers such as Beethoven, Bach, Mozart, Wagner, or Tchaikovsky; or art- ists such as Van Gogh, Michelangelo, Da Vinci, Rembrandt, or Renoir. Were Leon- ardo’s or Gutenberg’s inventions, or the Egyptian pyramids, or the Roman aque- ducts, rewarded by state-issued patents? (p. 27)

Where is the evidence that ancient Egyptians had decent respect for property rights in land? And yet, they built the great pyramids, amazing physical structures that stand to this day. Clearly, great works can be completed prior to a general acceptance of property rights. Does it follow that property rights are therfore invalid? It's an obvious non-sequitur.

It's certainly true that great inventions and works of art occurred before patent and copyright. This is simply due to the fact that intellectual goods are a much more recent development than physical goods. The great increase in intellectual works in the late middle ages gave rise to the need for property rights in them, the same way that building houses and farms gave rise to the need for physical property rights long before that.

Steadfastly refusing to acknowledge even the possibility that IP could be based on actual property theory, Shaffer restates the the utilitarian argument, to then attempt to dismiss it:

But is the premise upon which IP has long been defended—i.e., its importance in making possible creations that benefit mankind—at all valid?  (p. 28)

[W]ho, amongst our earliest ancestors, were granted copyrights for [inventing the alphabet]?  (p.33)

Who, amongst our earliest ancestors, were granted land deed titles? None. Does this invalidate physical property? No. Recall that, in the beginning, Shaffer did suggest that he would apply a consistent standard in comparing physical to intellectual property. He obviously chose not to do so.

Throughout the book, given the lack of any mention of homesteading, or self-ownership, one gets the impression that Shaffer's bent is not particularly libertarian. Then he completely gives away the game, and his communistic mindset is revealed plainly: 

What anticipation of material rewards drove our prehistoric ancestors to make their handprints on the walls of ancient caves in Spain and France? Might they have had no other purpose than to reach their hands 40,000 years into the future to express to us that most fundamental spiritual need for transcendence: “I was here”? (p. 36)

I can think of no better expression of New Socialist Man than what Shaffer has written above. Forget your "anticipation of material rewards". Forget your property rights. It's all about your "fundamental need for transcendence". Wow. Just, wow. 

Having ignored his own question for the entire book, Shaffer restates it at the end:

As asked earlier, to the extent IP interests arise only by way of grants from the state, how can such claims be defended on the basis of libertarian principles grounded in individual liberty and respect for private property? (p.42)

Claims to property rights over intangible goods can indeed be defended on the basis of libertarian principles grounded in individual liberty and respect for private property. That is Intellectual Space.

Why Intangible Goods Are Scarce and Rivalrous

We have property rights to avoid conflict over scarce goods. Nearly all things are scarce, or more precisely, “rivalrous”. Rivalrous means that the use of the thing by one person interferes with the use by another. Super-abundant goods, like atmospheric air, are not rivalrous. My breathing does not interfere with anyone else’s breathing. So, there is simply no need to establish a property right.

It is argued that intangible goods (songs, stories, movies, computer games, software, etc.) are super-abundant, like a “magically reproducing lawnmower” (see Kinsella).  I will show that this assertion is based on a failure to distinguish between producer goods and consumer goods. Once the “use” of producer goods is understood, it becomes clear that intangible goods are rivalrous, justifying intellectual property (IP).

A Song is a Like a Bicycle . . . and a Bicycle Factory

Bicycles are mass-produced in a bicycle factory. A song is mass-produced by making digital copies on a computer.  A bicycle factory does not simply exist, nor does a master song file. Like any other producer good, both factories and master song files must first be created, only then can they be used for mass production.

Making a bike factory or a new song is an act of creation by an entrepreneur. The person who brings this productive capacity into existence is its rightful owner, according the to the homestead principle. The homesteader also owns whatever goods are produced in the factory.
Theoretically there is some finite limit on the quantity of goods that could possibly be produced in the factory over a given period of time. In operating the factory, the owner may attempt to reach that upper limit, or not.  Either way, ownership is not diluted. The homesteader owns 100% of the output from their factory, regardless of how much he or she chooses to utilize.

Bicycles in Physical Space

Suppose John is a bicycle maker. John discovers unowned land, and builds a bicycle factory there. By doing so, John has homesteaded in physical space, because he discovered and transformed unowned tangible raw material into something useful. The factory exists at a unique location in physical space, because other things are at a different longitude and latitude.  We can appreciate the boundary, because the building is distinguishable from its surroundings. By titling the factory and attaching his name, John has staked his claim.

For simplicity, imagine John’s factory as a building with an assembly line and a pile of raw aluminum tubing. With electricity to run the machine, and John’s labor, he can make 48 bicycles in an 8-hour day.

John owns all 48 bicycles produced each day. If he sells a bicycle to Betty, then Betty owns that one bicycle. Betty is now free to ride her new bicycle whenever she pleases. But in no way does Betty own any part of the productive capacity in John’s factory. When it comes to bicycles, the difference between the producer good (the factory) and the consumer good (the bicycle) is obvious, because they are physically distinct.

Betty Makes Bicycle Copies

Suppose Betty noticed that John was only operating his factory 8 hours per day. Late one night, Betty sneaks into the factory. Using her own raw materials and her own labor, Betty runs the assembly line and produces some new bicycles, which she carts away before John returns the next morning.
Has Betty stolen anything from John? Has Betty done anything wrong? Betty may argue that she did nothing wrong. After all, John was using his factory only during the daytime, so Betty’s use did not interfere with John’s use. John is still free to use his factory just as before.

I hope that the flaw in Betty’s argument is apparent.  Betty may not have stolen anything from John, but she trespassed. The reason trespassing is wrong is that the owner of property is entitled to exclude others from using it, even when not using it himself. The owner is entitled to 100% of the use. Betty may assert that she did not interfere with John’s use, but properly understood, she most certainly did interfere. Before Betty’s trespass, John enjoyed 100% of his factory’s productive capacity. Afterwards, it was something less than 100%.

Note that expressing the factory’s total productive capacity as a percentage is crucial. If we were to express the capacity as a quantity, say “48 bicycles per day”, we would arrive at the mistaken conclusion that Betty is allowed to use John’s factory at night.

Songs in Intellectual Space

Now suppose John is a recording artist. John writes and records a new song called “Think This Through”. In doing so, John has homesteaded in intellectual space. He discovered and transformed unowned intangible raw material into a useful new object. The song exists at a unique location in intellectual space because it has a beginning, an end, and unique contents within. We can appreciate the boundary because it is distinguishable from other songs. By titling and attaching his name, John has staked his claim.

“Think This Through” exists as a digital file on John’s computer. The master song file, the computer, and a stack of blank CDs are like a factory assembly line. With electricity to run the machine, and John’s labor, he can make 48 copies in an 8-hour day.

John owns all 48 CDs produced each day. If he sells a CD to Betty, then Betty owns that one CD. Betty is now free to play her CD whenever she pleases. But in no way does Betty own any part of the productive capacity in John’s factory. When it comes to music, the difference between the producer good (the original song) and the consumer good (a copy of the song) is not obvious, because the copy can also be used as an original.  But the difference is real, and crucially important:

No matter how many bicycles come rolling off the assembly line, there is still only one factory.

No matter how many copies of the song are made, there is still only one song.

Betty Makes Song Copies
 
Suppose Betty noticed that John was using only his own computer to make copies of “Think This Through”. Betty buys 1 CD and extracts the digital file from it.  Using her own computer, her own raw materials and her own labor, Betty burns new CDs.  Has Betty stolen anything from John? Has Betty done anything wrong?

Betty may argue that she did nothing wrong. After all, John was making CDs with his own computer, so Betty’s use did not interfere with John’s use. John is still free to use his computer just as before.
I hope that the flaw in Betty’s argument is apparent.  Betty may not have stolen anything from John, but she trespassed in intellectual space.  She could not have made the copies of “Think This Through” without first venturing on to John’s intellectual property without permission.

The reason trespassing is wrong is that the owner of a property is entitled to exclude others from using it, even when not using it himself. The owner is entitled to 100% of the use. Betty may assert that by making copies she did not interfere with John’s use. But properly understood, she most certainly did interfere. She interfered with the producer use, not the consumer use.

Before Betty’s trespass, John enjoyed 100% of his song’s productive capacity. Afterwards, it was something less than 100%.

Conclusion

Copyright infringement is trespass, not theft. Recognizing the distinction between producer use and consumer use of intellectual objects is crucial to correct analysis. The music industry should continue making the strong utilitarian argument, pointing out that creators will not be compensated without copyright. However, the music industry should also address the philosophical debate over intellectual property by implementing the paradigm of Intellectual Space.

Title-Transfer Theory of Contracts (and other notes to Steve)

A reader named Steve has stated what he believes are central claims of my thesis. He then asserts that he has shown them to be false. These occurred in the the comments section of my post titled "3 Questions . . ."

Following are his statements, with my responses.

1) Because people value so-called "IP," property rights are necessary in so-called "IP."

Intangible goods are scarce and rivalrous

 

People value intangible goods, just as they value physical goods. Just as with physical goods, property rights to intangible goods are necessary because they are scarce and rivalrous.

Briefly, an intellectual work, like a song, is like a factory. At first the song does not exist. Once homesteaded into existence, the producer of the song owns its productive capacity, just as one can build and own a factory. Making copies of a song is like making copies of a widget on the assembly line. The song owner is entitled to 100% of the productive capacity of the song, just as the factory owner is entitled to 100% of the productive capacity of the assembly line.

A person will use their property in a way that brings value. Valuation is subjective. Thus, "use" is subjective.  The producer's use of a song is to exploit it commercially, thus unauthorized copying interferes with the producer's use. Only by presuming that valuation is objective can one decide that copying does not interfere.

Much of Intellectual Space is devoted to an explanation of this concept. In particular, see "Grammy Essay", and "The Alleged Case Against Intellectual Property".

2) Contracts involving so-called "IP" are impossible without assigning property rights in so-called "IP."

No property, no contract 

 

That is exactly correct, contracts involving IP are impossible without assigning property rights in IP.  Please see Rothbard (and indeed Kinsella) on the title-transfer theory of contract. One may only contract with that which is one's own property. If there is no property right in a pattern of ideas, then one cannot buy, sell or license that pattern of ideas.

3) People would only be ostracized if they violated someone's property right.

No property, no wrong

 

We do not ostracize randomly. We ostracize those who have done something wrong.  If there is no property right violation in, say plagiarism, then it is not wrong. Thus, without IP, there is no basis to ostracize.


All legal rights are property rights. Period. All legal wrongs are property violations. Period.

4) People necessarily have property rights in the products of their labor.

Service contracts are title-transfers

 

A person rightly owns the product of his labor, assuming he did not violate the property rights of others in the process. Keeping this in mind helps clarify why a service contract is a contract for the exchange of property titles, just as with any contract.

Suppose you hire me to paint your house. I am renting my physical body to you for some period of time, which I may do because I own my body. You agree to allow me in while I work, which you may do because you own the house. I agree to let you keep the layer of paint on your wall, which is the product of my labor.

3 Questions for Stephan Kinsella, Jeffrey Tucker, or Stefan Molyneux

Super Abundant IP? 

Stephan Kinsella and the other Intellectual Communists claim that Intellectual Property (IP) is unnecessary because it is super-abundant, like a "magically reproducing lawnmower" in Kinsella's words.

It is agreed that there is no justification for property rights in super-abundant goods. The best (maybe only) example of a super-abundant good is atmospheric air. Here on the surface of the earth, we find ourselves with more than enough air for every person to breathe. Notice that people never attempt to buy and sell air to breathe. Every person already has all the air they need, delivered right to their faces.

Under water air is scarce. Notice that people do buy and sell air for breathing underwater, in the form of scuba tanks.

Question 1: 

If IP is super abundant, why do people act as though it is scarce? In particular, why do people contract for the delivery of IP (movies, songs, software, video games)?

Contract Requires Property Rights

Kinsella contends that IP are creations of the coercive state, and would not exist in a libertarian world. It is agreed that property rights and voluntary contract are the basis for prosperous free society.  It is a well-accepted principle of contract that one may only contract with that which is one's own property.  I can offer to sell you my car, but I can't offer to sell you my neighbor's car, because I don't own it.

Question 2:

In a world without IP, how could we possibly contract for the intangible goods people want? 

By contracting for the physical containers? That's absurd. Yes, I understand that intangible goods require physical containers to be useful, just as many physical goods require physical containers to be useful. But people do not contract for the delivery of containers. We don't care about containers. We care about content. If the pattern of ideas on a DVD is not rightful property, then there is simply no basis to contemplate buying, selling or licensing such a pattern.

Boycotting Plagiarists

Jeffrey Tucker and Stefan Molyneux have suggested boycott and ostracism as a response to plagiarism in a world without copyright. They believe that consumers will recognize that plagiarism is fraud, and refuse to deal with such a bad guy. They are correct that plagiarism is fraud, but only because a property right is at stake.

By definition, fraud is harming another person by inducing a reliance on a deception. I deceive you, you rely on the deception, and are harmed as a result.

Suppose you write a book, and I plagiarize it, offering it up as my own work. I have deceived you, because we had an understanding that I would not copy your work. You relied on my deception, because you trusted me. Under copyright law, I have harmed you because I interfered with your intellectual property.

But if there is no property right in the authorship, then who have I harmed? The true author? No, because I did not take or interfere with the author's property. Did I harm readers of the book? No, the content of the book is the same regardless. Are the readers harmed because they don't enjoy the benefit of the reputation of the true author? No, reputation is another form of intellectual property, and a rather tenuous one at that.

Absent copyright, plagiarism is not fraud.

Question 3:

Why would you ostracize a plagiarist, when the plagiarist has not violated anyone's property right?

Is the plagiarist wrong simply because plagiarism is dishonest? No. Lying is only wrong when done to deprive another person of property. Deceiving a robber about the location of your valuables is virtuous.

Tucker and Molyneux are quite correct that the free market would punish plagiarists. This is simply an admission that people recognize the property rights violation that plagiarism is.


Stephan Kinsella, Jeffrey Tucker, Stefan Molyneux, or any other Intellectual Communists are invited to answer.