Wednesday, August 8, 2012

Bob Dylan Royalty Stream to be Monetized

Some of Bob Dylan's royalties will be far from blowin' in the wind.

Sesac Inc., a performance-rights company, plans to sell $300 million of bonds linked to licensing agreements, copyrights and royalty payments for artists from Bob Dylan to Neil Diamond, reports Bloomberg.

The offering is being arranged by Goldman Sachs and will be rated BBB- by Standard & Poor’s. Sesac will use the proceeds to refinance debt and pay a dividend to Sesac owners.

Dylan, who signed a recording contract in 1961, accounts for 7 percent of Sesac’s royalty expenses, S&P said in a report for investors.

Sesac is unlikely to be a big fan of the view that property rights can not be attached to songs and other intellectual property.

The anti-property rights for intellectual work crowd believes that work created by your mind should not be protected by property right and that anyone should be allowed to use such intellectual work for free once it has been created.

It simply baffles me as to how this crowd can not recognize contracts when it comes to intellectual property. If I contract with Mr. X to create a song under the grounds that Mr. X does not show or distribute the song to anyone else, I do not see how I am not controlling the property rights relative to that song and that the person I contract with to produce the song is a criminal in breach of contract if he distributes the song beyond the terms of the contract.

More to come.


  1. While I side more with the Tucker/Kinsella crowd, I'm very interested to hear your opinions on this issue? I seem to remember you mentioning that you were planning to write a book on this. When can we look forward to a book [any book] by the great Wenzel?

  2. I have not heard anyone say private contracts in intellectual property are not valid. Just that one can not make a contract with the government for a granted monopoly on that "intellectual property".

  3. I guess I don't understand this issue. Maybe Mr. X is contractually bound, but what's stopping someone else from copying and distributing a recording?

    It always seemed like a waste of time to try to prosecute people sharing .mp3s.

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  5. The anti-IP crowd would not disagree with you in this regard. Stephan Kinsella has a part in his book on contractual IP. We just don't agree that a contract between A and B would bind third parties.

    1. LOL. You need to re-read Kinsella:

      "The law, then, should protect individual rights to one’s body, and to legitimately acquired scarce resources (property). There is not a natural right to ideal objects—to one’s intellectual innovations or creations—but only to scarce resources."

    2. That doesn't contradict what I said. You should read Kinsella's section in his book called IP as Contract.

    3. Dan is correct. Kinsella doesn't say contract rights are invalid when it comes to intellectual property, but rather they are useless, because they can not compel third parties who did not consent to them into following them.

    4. Read on boys.

      That is only one of his anti-IP arguments.

      Here's Jeffrey Tucker making Kinsella's view clear:

      "Real property is scarce. The subjects of IP are not scarce, as Stephan Kinsella explains. Images, ideas, sounds, arrangements of letters on a page: these can be reproduced infinitely. For that reason, they can't be considered to be owned."

    5. Anon, you keep quoting things from Kinsella that we are fully aware of. You might as well be telling me that Rothbard believed the State should be abolished. Kinsella has no problem with contracts. He just doesn't believe they will be effective at preventing people from copying your ideas because the contract wouldn't apply to third parties who never agreed to it.

      I've done more than just read Kinsella on this. I've also taken his course on IP at Mises Academy. You're completely wrong if you think he believes contracts aren't enforceable.

    6. For some reason, Bob struggles with this concept.

      Of course, he continues to misstate the argument, which means he hasn't read Hoppe, Tucker or Kinsella on the subject.

    7. "The anti-property rights for intellectual work crowd believes that work created by your mind should not be protected by property right and that anyone should be allowed to use such intellectual work for free once it has been created."

      Bob, this argument is a strawman. There cannot be property rights where there is not property. "Intellectual work" is not synonymous with property.

      No one is saying that anything should be free, but to apply the notion of property to what is clearly not property, creates an artificial condition. That is why IP only exists under a state. It doesn't exist in anarchy. There is no scarcity of "intellectual work".

      Please, please, please read Kinsella, Tucker, Hoppe and numerous other Austrians on this topic. Preferably before you give the Hazlitt lecture.

    8. Why do you guys assume a single contract between A and B? There could be a whole network of contracts between producers, distributors, internet providers, hardware manufacturers, and even courts. Individual C may not be bound by any of the contracts, but he may be severly limited in his capacity to obtain an unlicensed copy.

    9. Ed, we wouldn't disagree with you on that. The problem is that if one person obtains the information and had no contract that binds him, then he will be able to spread it to everyone else. So all the barriers you mention would break down as soon as one third party person posted the song, PDF, etc online for all to see.

  6. Robert, if individuals A and B make an agreement, individual C is not bound by the agreement and therefore is free to reproduce any material if he obtains it without coercion. Could you please elaborate since I'm struggling with the issue myself? Thanks.

  7. You guys are misunderstanding Kinsella. His A, B, C contract argument is only one of his arguments against IP.

    He writes, for example:

    "While production or creation is a means of gaining 'wealth', it is not an independent source of ownership or rights. Production is not the creation of new matter; it is the transformation of things from one form to another — the transformation of things one necessarily already owns. Using your labor and creativity to transform your property into more valuable finished products gives you greater wealth, but not additional property rights.

    So the idea that you own anything you create is a confused one that does not justify IP."

    This goes well beyond his ABC contract argument. He does not believe that intellectual creation can be owned at all, under any circumstances. His ABC contract argument is a side argument.

    1. Oh my God. We fully understand that Kinsella doesn't believe you can own an idea. Who doesn't understand this? You might as well be telling Rothbardians that Rothbard was anti-state. But a lot of pro-IP libertarians like to say that you could create an IP system with contracts. This is the argument that Wenzel is making above, but he was under the impression that people like Kinsella would say you can't do it legallly which isn't true. Kinsella believes you can set up whatever contract you want but it will fail to create a contract based IP system because you can't bind third parties who never agreed to any contract.

      If you still don't understand the discussion going on then I don't know what else to say, but please stop stating obvious things like Kinsella doesn't believe ideas can be owned.

    2. The issue is, for IP to work, you have to be able to contract third parties without their consent, hence STATE SUPPORTED IP.

      If I see you driving you invention down the street, you can't contract with me (without my consent) not to reproduce it or share what I have seen.

      Also, kudos to Bob for letting my posts through. I admire that he allows criticism in the comments, even though he and I have several differences of understanding.

  8. Is the assumption by some here that, since Wenzel does not agree with certain Austrian scholars, he obviously hasn't read them? Anyone else think that approaches religious fanaticism?

    1. Well, it also means that Wenzel is not a "fanatic".

    2. The reason Dixie said that Wenzel hasn't read Kinsella and other Austrians on this is because he made a statement that he thought anti-IP would disagree with on something that they don't actually disagree with him on. So if he has read the work of Kinsella on this then he must have missed the times where Kinsella discussed this very issue. I happen to agree with Wenzel on 99% of what he says but he is clearly wrong in thinking anti-IP people would say he couldn't do what he suggested above.

    3. Look are you going to admit that Kinsella is against all IP, or not?

      Here are Kinsella's exact words:

      "Another way, I believe, to seeing the error in treating information, ideas, and patterns as ownable property is to consider IP in the context of a structure of human action."

      The man is against ALL IP protection.

    4. Anon, I don't know why you are being so dense about this. Yes, of course, we all realize that Kinsella is against ALL IP. 2+2 also equals 4. That doesn't mean that Kinsella would say Wensel couldn't come up with a contract like he suggested above. So either your too dense to understand the distinctions being made or you're just playing around.

    5. Kinsella's work is in the public domain, and there is lots of it. I don't think Bob understands Kinsella's argument, which has lead him to take a hostile position against Jeffrey Tucker in particular.

      I'm the furthest thing from an Austrian fanatic, but if you're going to criticize an ideological position, then at least state the position correctly.

      Also, IP is state granted monopoly.

  9. RW, if you're not going to address the real issues then don't post about IP, you are simply throwing mud in the water. NO ONE is arguing that you can't have a contract around an idea, a song, or anything else. The argument is simply that the contract won't bind third parties.

    If someone hears Bob Dylan's song on the radio (no contract involved), can Bob Dylan use force to stop that person from recording it or recreating it? If not, then Bob Dylan cannot delegate that power to the government either, yet this is exactly what copyright law does. It says ideas are property and creates mechanisms whereby the registered owner may use force to stop anyone else from using it.

    So RW, if you and I are on a desert island and I build a coconut ukulele and start writing songs, and you copy my ukulele design and my songs, IP law says I can steal your ukulele since it's actually mine and stop you from playing my songs, by force. If you really think that is consistent with freedom, fine, but don't vilify those of us who are skeptical unless you are going to address the real issue--the use of force against third parties.

  10. Below is something I posted to Daily Paul a couple of years ago. It was in reply to someone posting the Copying is not theft video. While I think there are problems with a lot of IP law -- especially patent law -- I do not agree that IP cannot be protected. I am reposting it here because it covers most of what I want to say on the subject relative to the comment threads.

    I would add to it based on the discussions above that third parties may not be subject to the contract I have that says I own my house, however I wouldn't advise coming in uninvited. ;) The idea that third parties can just take things because they are not party to the original contract is a socialist concept (used by my socialist friends from college, btw). There is no quantum property of matter that somehow gives it the attribute of being "property-right assignable."

    The post from Daily Paul follows:


    Trespassing is not theft, but we still recognize it as a violation of property rights.

    1) Property rights are an invention of humans, and we have generally found that human interactions work better when property rights are involved. The idea intimated by anti-IP proponents that people would still spend millions of dollars creating intellectual works like computer software or major motion pictures if the products were, for all practical purposes, free once they were presented to the public is ludicrous.

    2) Many of the arguments against IP seem to boil down to "it's easy to steal, so there is no inherent property right being violated." It is very easy to copy IP, however it's also easy to crawl over your neighbor's fence when he's not home so you can enjoy his back yard. It's also relatively easy for the government to break down your front door, take your belongings and throw you in jail. Does that mean we have no right to our person or property? Morality is not defined by how easy it is to violate a moral code.

    3) Unjust laws don't invalidate a concept. Just because patent law is screwed up, and there are some injustices in copyright law doesn't mean the concept of IP is invalid. If that were the case, screwed up zoning laws would invalidate the concept of owning a piece of land.

    4) What is privacy other than a form of IP? If there is no basis for ownership of intellectual property, how can you own something so ethereal as your privacy? If you can't own your privacy, how can anyone -- including the government -- violate it? Arguments against IP argue against all non-tangible forms of human rights.

    5) Another argument against IP is that a resource must be "scarce" in order to have a property right associated with it, and that IP is not "scarce." This argument ignores the scarcity of those individuals and their time in creating IP. Not everyone can write a ground-breaking novel, or produce a stellar movie, or write a complex piece of computer software, or take that perfectly aesthetic photograph. These resources are limited, and the people who are capable of these feats deserve to be compensated by what the free market will pay for their services. They can only be compensated by owning the fruits of their labor.

    Almost every argument I've seen against IP can be used against so-called "real property." I know this because I have some very intelligent socialist friends who have essentially used the anti-IP arguments for years, but regarding real property. They question the validity of claiming ownership of any property.

    The bottom line however, is that property rights are human inventions and are axiomatic -- we define them to help us interact with each other. Generally people respect each other more and resources -- including human time -- are used more efficiently when our interactions are based on property rights.

    1. The argument that no one would come up with ideas if there were no patents and copyrights is no different than saying people wouldn't take care of the poor or the environment so we need welfare and the EPA. It doesn't matter whether the program is achieving its goals or not it is still unjust and exceeding the proper role of government in protecting liberty and property.

      You still haven't addressed the fundamental question. If something is your property then you are justified in using force to defend it. But how can this be possible for ideas?
      Name one situation where you think protecting your ideas using force is just, and we'll see if trespass law doesn't already take care of it.

      You say that creators "deserve to be compensated for their services" but how does that justify forcing the while world into an involuntary contract? Should we be paying royalties to Beethoven's heirs, after all every music student is "stealing" from him. If we are going to have the government making up a contract for IP then we shouldn't be surprised when it ends up just as arbitrary and unjust as the "social contract."

      I do think there is a solution. Once we abolish the myth that one can protect his ideas by force then we can come up with more just ways to protect ideas. That ways is dissociation. Artists form an association and agree that they will all respect one another's works, inventions, whatever for whatever terms they agree on, and if anyone outside the guild copies the idea then theguild members all boycott the copier. They have protection without committing aggressions against third parties, and they can determine reasonable terms of that protection instead of Congress and lobbyists. That is a free market solution.

      I share your concern about the socialist idea that since there is no IP then all artists and inventors are the slaves of the masses, forced both to produce and share what they create. I don't think there are many in the free market crowd and i think my solution would take care to prevent what those socialists want (although it is currently illegal because of antitrust law in the united states)

    2. > You say that creators "deserve to be compensated for
      > their services"...

      And this is, of course, nothing more than re-phrasing of Marxist labor theory of value. To a Marxist, labor (of proletariat, of creators, or whomever) is what defines value, so it follows that the laborer has the right to be compensated.

      The whole idea of "intellectual property" is thoroughly Marxist.

    3. The whole idea of "intellectual property" is thoroughly Marxist.

      Funny. I have friends who are devout socialists/marxists. They use the exact arguments the anti-IP crowd uses, except against real property. They say agression is being used against them to deny them property that is rightfully owned by everyone. (of course they don't invite the homeless into their homes....)

      What is also funny is I said "These resources are limited, and the people who are capable of these feats deserve to be compensated by what the free market will pay for their services," not the quoted "deserve to be compensated for their services." That's typical for the anti-IP crowd. Redefining what was said is key for making them appear to have the high moral ground.

      The argument that no one would come up with ideas if there were no patents and copyrights is no different than saying people wouldn't take care of the poor or the environment so we need welfare and the EPA.

      Another disingenuous statement always made by the anti-IP crowd.

      You cannot patent or copyright an idea today! That "IP law" doesn't exist. Copyrights and patents are very specific collections of ideas expressed in a specific manner.

      There's a difference between I have an idea to write a song about masturbation, and actually writing a song about masturbation. The first cannot be copyrighted, but the second can.

      And to the force issue, ALL property rights are protected by force, and they disallow third parties who had no involvement in the contract from accessing the property. Socialists get angry about that as well as the anti-IP crowd.

    4. Yes, you can't copyright a patent or an idea, patents must be novel and useful, copyrights must be original expressions of an idea. But without the state, who will decide what qualifies and what doesn't in a free society? It wouldn't work.

      Again, name a situation where you come up with a creative work (copyright) or a useful invention (patent) in a stateless society, someone else is using the same work or invention, and you would feel justified in using force to stop him. That is what will define the bounds of the property right, if there is one. I can't come up with anything that doesn't amount to a physical trespass (hacking, spying, stealing documents).

    5. If I spent 10 years working on a song or a novel, and some fucker came along and put his name on it and started selling or distributing it (or did so even without putting his name on it), I would absolutely feel justified in using force against him. I would also feel justified in using force against him if I came into my house and found him sitting in my chair.

      Some would say without the state you wouldn't be able to own a home. Certainly without the function of enforcement of property rights, there would be nothing except your own ability to fight to prevent someone from taking your home. Property rights are man-made constructs. They require the use of force to enforce them.

      If the anti-IP crowd got their way, information would be driven underground. We would see a reemergence of guilds that carefully guarded their information. Guild members violating their "trust" would be ejected from the guild -- or more likely suffer a much worse fate.

  11. Speaking as a songwriter and musician that's had a modicum of success, I have a different take than what I read from theorists. I also have a different take from the suits and a few others in my biz, subjective and unstudied as it is.

    When I write a song, it's mine. Since it's mine, it's up to me to make money on it if I wish. I don't make money on all my music, but the stuff I have made money on gets pirated. Heck, the stuff I don't make money on gets pirated. I LIKE my music being pirated. It's the new radio. My music gets around and me and my music get known. Sometimes it even generates a sale.

    Since the song is mine, it's also mine to share. Rather than get mad at people for copying my music, my default position is that I'd rather share it rather than turn to what appears to be the default IP-camp model of "We gotta sue someone!".

    Because of current technology, copying and sharing is a reality that needs to be accepted and turned to advantage rather than attempt to legislate or moralize it away. I love finding out that someone in Russia or France downloaded my humble tunes. Being an artist, I'd rather my art lived on, money or no money. I love finding out that someone covered my song, money or no money.

    Unless one is dinosaur songwriter/musician that was used to the old monopoly model of the music biz, this is a great time to be a self-employed songwriter/musician.

  12. Rather than arguing with unnamed people I suggest that you have Stephan Kinsella on your show and discuss the issue in depth. Your point isn't even worthy of being called a strawman. That issue regarding copyrights as a solution for IP has been thoroughly addressed. The problem is 3rd parties. You have to not only make behavior on the claims of 3rd parties, but to even find out about the vast majority of copyright infringement you need to be able to demand information from other 3rd parties who would have every reason to provide you with nothing without the present legal system.

    If you really support the idea of intellectual property and you're an anarchist, if we ever reach anything even close to a minimal state or anarchy, IP isn't capable of surviving for the reasons I already mentioned. It absolutely requires the use of force against 3rd parties to achieve anywhere near the necessary level of prohibition on most parties.

    You may be able to find a substantial number of people who won't buy bootleg products, but you're not going to find many who will support ostracism against those who infringe on copyright. Even most of those I know who claim to believe in the principles behind IP violate it. There have been a small few who actually followed it, and unlike regular theft you can't stop it with a building or a fence.

  13. The key problem with IP, is that it violates my property rights when someone says I can't copy something with my hard drive, on my computer, with the electricity I pay for.

    "IP" is nothing more than a grant of temporary monopoly privilege by the government. It allows the IP holder to discriminate against my ideas, and to control how I use my own property.

    It's so far from being libertarian, it's not funny. It's maybe libertarian in a Libertarian Party sort of way. Like how Rand Paul is a libertarian...