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.