The disagreement arises from Kinsella’s claim that ideas – and here we are really talking about the expression of ideas as formulas, patterns, etc – are not scarce resources and therefore cannot be considered property. Wenzel’s counter is that these things indeed can indeed be scarce. In a follow up blog post, he quotes Ludwig von Mises from Human Action, where he states:
The available supply of every commodity is limited. If it were not scarce with regard to the demand of the public, the thing in question would not be considered an economic good, and no price would be paid for it.
This is a very important insight, and leads us to our next question…
Can Ideas Be Scarce?
The available supply of every commodity is limited. If it were not scarce with regard to the demand of the public, the thing in question would not be considered an economic good, and no price would be paid for it.If ideas are not scarce, why would anyone ever pay for them? The very fact that an idea can have any price at all seems to suggest that they can have value to individual actors, and therefore can be scarce.
Wenzel gives the example of his “Drudge Formula” – a formula he claims to have developed in order to get an article on the front page of The Drudge Report. Kinsella claims that this formula is an idea and is therefore not scarce, but of course when pressed cannot tell Bob the formula.
Does the “Drudge Formula” , if it works, have value? It would certainly have value to me if I knew a sure fire way to get one of our articles onto Drudge. I don’t know exactly what I would be willing to pay for this knowledge, but I certainly would pay some price. I don’t currently know how to get an article on the front page of Drudge, and I would find value in that knowledge.
Wenzel’s arguement is that the formula itself must be scarce, because if it isn’t, why would anyone pay for it in the first place?
This reminds me of one of my father’s best friends when I was growing up. He worked for Pepsi, and I remember my father telling me on several occasions that he was one of the few people at the company that had access to the formula for Pepsi. Clearly if only a “few” people have access to it, the formula for Pepsi must be scarce. I imagine that he also had stipulations in his contract with Pepsi that he could not share that formula with anyone that Pepsi does not authorize him to share it with, and doing so would put him in breach of contract.
This is precisely the concept behind how intellectual property not only can, but in many cases does work in a free market.
How would IP be enforced?
One of the most frustrating parts about listening to this debate was that whenever he didn’t want to answer a specific question, Kinsella would continually resort to the Strawman argument of “But…the State!” and then proceed to list all of the bad things the State does in the name of IP – CISPA, SOPA, etc. But this contradicts what he says in his opening statement that, since he and Wenzel are both of the Austrian economic school of thought and are anarchist libertarians, that this debate
should take place in the framework of a free market, private property society. And yet Kinsella keeps going back to the State!
Clearly Wenzel does not advocate State enforcement of intellectual property rights. Rather he pictures a private property society that would design their own IP rights through contract and enforcement would be at the discretion and at the expense of whatever party feels their copyright has been breached. They would have to take the case before a private court system and hash out the issues via arbitration or legal proceedings of some kind. I’ve described how this could work in my series on anarcho-capitalism, specifically my article on private law.
Was Kinsella “Crushed”?
Wenzel certainly pats himself on the back with the title of his YouTube video. While I can’t say that I have fully come around to Wenzel’s view on IP, I do believe he did “crush” Kinsella in one sense. Kinsella claims that the IP debate has been over for some time and that there is a general consensus among libertarians that intellectual property is an illegitimate concept, irregardless of whether it is run enforced by the State or the free market. If nothing else, the attention that Wenzel has brought to the issue of intellectual property and the dialogues that have since taken place among libertarians in the last few weeks does at least show that there is a debate to be had. That in itself is an important accomplishment, and certainly “crushes” Kinsella’s assertion that this is a dead and buried issue.Read Clair's full analysis here.