I must admit having found Jeffrey Tucker’s November 19, 2009 lecture on the Evils of Intellectual Property to be a relief. Like so many others, I never was able to embrace the concept of so-called “intellectual property”. I think I never bothered to think it through, but something just didn’t feel right about it, particularly in a world in which the suppression of critical information is so commonplace.
In this context I feel particularly lucky to be alive in China, a country whose government has seldom made serious efforts to uphold this fiction. Still though, I have yet to hear anyone in China publicly challenge “IP”, despite the obvious fact that China is living proof of the economic vitality connected with its rejection. People who imagine that China’s product innovations are all mere copies of Western templates are seriously mistaken: in industry after industry the reality is that most innovation has long since moved to China. Why? Not because Chinese are any smarter than their counterparts abroad. The reason is far simpler – operating in an environment where patents play only a very limited role, they are simply infinitely freer. Freedom pays high dividends in terms of economic success.
Copyright and patents are not part of the natural competitive order. They are products of positive law and legislation, imposed at the behest of market winners as a means of excluding competition. They are products of positive law and legislation, imposed at the behest of market winners as a means of excluding competition. They are government grants of monopolies, and, as neoclassical economists with a promarket disposition, the authors are against monopoly because it raises prices, generates economic stagnation, inhibits innovation, robs consumers, and rewards special interests.
What they have done is apply this conventional model of monopoly to one of the most long-lasting, old-world forms of mercantilist/monopolistic institutional privilege, a surviving form of mercantilist privilege of the 16th century. IP is like a dam in the river of development, or perhaps very large boulders that impede the flow.
The Mises Institute’s choice to make a definitive and enduring break with the concept of intellectual property is striking. Not because they need fear any serious intellectual challenges to their positions; rather, because an open attack on “IP” is so rare. Almost unheard of.
Ideas are acts of creation which represent our primary contributions to posterity; perhaps one could even say that they are a quintessence of life. Life means growth and change, the opposite of prison and stagnation. In this light, if one considers the matter dispassionately, the concept that one can imprison an idea seems a bit preposterous. And so it is – nothing more than a fictitious construction which is destined for the trash heap of history.
Why People Cling to the Idea of IP
Of course no matter how preposterous, many people will no doubt cling to this idea for decades to come. Some may even recognize the ultimate futility of efforts to keep ideas in chains, yet still view this fact as unfortunate. This is, in my opinion, principally due to two factors:
1) unsubstantiated pro-IP utilitarian propaganda, and
2) a severe confusion of concepts.
Utilitarian Arguments – Fact vs Fiction
Though utilitarian arguments are perhaps less important in the overall scheme of things, thanks to the repetition effect they tend to be quite prominent in the minds of many. Moreover, in my experience if I don’t address this issue first, the conceptual arguments are often ignored.
The basic gist of this argument is that IP is necessary to stimulate creativity, or in other words, to “pay for inventions”. The image is of the solitary inventor whose makes millions from Invention X.
The reality is quite different. First of all, these days most patents are filed for defensive reasons – i.e. to prevent others from patenting something first. North America and Western Europe are drowning in them, with over 1 million patent applications filed each year. In today’s world, effective patent protection requires filing in multiple countries, something which takes substantial resources, resources which larger companies are much more likely to have. Second, even if a patent is obtained, small inventors seldom have the legal power to enforce patent protection.
Moreover, smaller companies and inventors are quite unlikely to have the resources to determine if that new Invention X might be violating some other company’s patent, thus drastically discouraging innovation instead of promoting it.
So who primarily profits from the system? The entrenched big boys, of course.
Is then this development perhaps merely a modern deformation of something which worked well in the “old days”? Far from it. On the contrary, the system has always worked that way, despite the notable failure of history books to reflect this. While this can be demonstrated using countless examples, in my experience a retelling of the much glorified Wright Brothers story tends to provide sufficient shock value. As Michele Boldrin and David Levine recount:
Despite their own rather modest contribution to the development of the airplane, in 1902 they [the Wright Brothers] managed to obtain a patent covering (in their view) virtually anything resembling an airplane. However, rather than take advantage of their legal monopoly by developing, promoting and selling the airplane, they kept it under wraps, refusing formany years even to show it to prospective purchasers. However,while refusing to devote any effort to selling their own airplane, they did invest an enormous amount of effort in legal actions to prevent others, such as Glenn Curtis, from selling airplanes. Fortunately for the history of aviation, the Wright brothers had little legal clout in France, where airplane development began in earnest in about 1907.
In the world of the written word a similar pattern holds. Publishers of heavily promoted blockbuster books tend to strongly IP protection; publishers of less well-known fare tend to be much more interested in getting the word out. In China certainly, when unauthorized copies of your book are being sold on street corners, you know you have arrived.
The Chinese fiction market provides a good example of the type of innovation which results when a market is freed from focusing on copyright protection. In the past 7+ years, countless talented new writers have found readers and become well-paid writers thanks to the new web-based fiction site industry. Here’s how it works: Aspiring writers sign up to sites such as Jinjiang where they post the initial chapters to one or more books. Higher rated authors can then get paid if readers wish to read the later chapters in their books. They can also earn income from printed paper versions. Apparently the list of new authors with substantial incomes from this arrangement is quite long.
Conceptual Arguments – Fact vs. Fiction
Once one realizes the hollow nature of the utilitarian arguments, it becomes easier to see that the same hollowness is echoed on a conceptual level. Real-life ideas are never one-time events; rather, they come interlinked with countless other variations and offshoots. They are always subject to development. They are built on millions of ideas of others preceding us, and form but one link between the past and the future. It is the PRODUCTION of ideas – their “life” as it were – which represents true value; not the “idea” itself. Sort of like the difference between life viewed through a light microscope and that viewed through an electron microscope. So keep producing them, and you will be valuable.
Second, two concepts – one real phenomenon and one fiction – have been confusingly mixed together.
The “real” phenomenon is that I can – and do – control the way in which my ideas are propagated to the rest of humanity. I can, for example, create a license server to limit copying of software which I have written. I can choose to write a blog, or write a book, or give an interview. Or I can choose to wait a year to do anything at all.
The “fiction” is that of government-enforced “copyrights” and “patents”. If such claims are to be believed, various governments around the world claim that their use of guns and lawyers will keep ideas in their appointed prison cells.
These two concepts have nothing to do with one another, but their co-existence often leads to understandable confusion. The truth is that the hopeless attempt to control ideas with guns has nothing to do with each individual’s decisions about how to propagate his or her thoughts. The Chinese economy is living proof of this.