Thursday, February 28, 2013

An Attack from the North on My IP Position

Ash Navabi at Mises Canada has joined the fray with regard to the debate on IP, with a piece titled, Cleaning Up After Robert Wenzel’s Drive-By Against IP.

I will not here discuss the majority of points Navabi makes, since I fully expect them to be part of my debate with Stephan Kinsella. I really am a very busy guy and can't respond to the same points over and over. For the short-term, the Wenzel-Kisnella debate is the forum I plan to use to point out the problems I see with the thinking of those who hold anti-IP views.

That said, Navabi does make one point that isn't likely to find it's way into the Wenzel-Kinsela debate, at least I hope Kinsella isn't carrying this flag also, so I will touch on it briefly here.

Navabi writes:
1. Wenzel begins by attacking Tucker’s claim that by understanding IP, we can “clarify fundamental notions in economics generally”, by quoting Ludwig von Mises as saying,
“It is beyond the scope of catallactics [i.e., economics] to enter into an examination of the arguments brought forward for and against the institution of copyrights and patents.”
At first this seems like a damning blow. But if we understand the full context that Mises was speaking in, we understand that he was indeed talking about judging the policy prescription of IP as being beyond catallactics. But don’t take my word for it; Robert Murphy, who wrote the Study Guide to Human Action, explains Mises’ position on this issue as,
“It is beyond the scope of catallactics to recommend where the property rights should be drawn in such matters, however.”
In other words, economics cannot say whether we ought or ought not have intellectual property, but it can describe a world under either circumstance.
This critique from Navabi still has my head spinning. He charges me with taking what Mises said out of context, but then quotes Bob Murphy instead of  Mises in "context". I challenge anyone to read Mises and show me where I have taken him out of context.

But further, I have no problem with Murphy's statement on IP. His view seems to be along the same lines as Mises and mine, specifically that "It is beyond the scope of catallactics [i.e., economics] to enter into an examination of the arguments brought forward for and against the institution of copyrights and patents." Or as Navabi would say, it is about policy prescription.

This, as a matter of fact, is exactly the situation. Navabi even tells us what this means:
In other words, economics cannot say whether we ought or ought not have intellectual property, but it can describe a world under either circumstance.
In other words, economics can build a model based on either IP position. It is not the case that IP theory builds economics! This is precisely my point.

But, Tucker is claiming that an understanding of his anti-IP view “clarif[ies] fundamental notions in economics generally.”

Mises wrote the damn book on economics and nowhere does he use IP as a method to clarify the foundations of economics. In the entire book, he treats IP as a side story to the fundamentals of economics. Perhaps we can look forward to Tucker tearing down Mises' text, Human Action and rebuilding with anti-IP as method to understand the fundamental notions in economics. But besides declaring it as fundamental, he hasn't done so yet. I really look forward to it though. I just can't wait to see how subjective value and methodological individualism are nudged to the side by Tucker so that anti-IP takes its place in clarifying "fundamentals in economics generally." Yes, how could we possibly have an understanding of business cycle theory, the regression theorem, capital theory and economics in general without anti-IP at a fundamental level.


  1. Two young women who lived in the same house and who both had an idea for a new hair style came to Wenzel for a judgement. One of the women claimed that the other, after realizing her idea was stupid, had exchanged the two ideas to make it appear that the better hairstyle idea was hers. The other woman denied this and so both women claimed to be the inventor of the better hairstyle idea.

    After some deliberation, King Wenzel called for a sword to be brought before him. He declared that there was only one fair solution: the better idea must be split in two, each woman receiving half of the idea. The liar, in her bitter jealousy, exclaimed, "It shall be neither mine nor yours—divide it!" However, upon hearing this terrible verdict, the idea's true inventor cried out, "Oh Lord, give the idea to her, just don't kill it!" The king gave the idea to the true inventor. King Wenzel's judgement heard throughout all of and thought to be wise.

    ...until King Kinsella explained to Wenzel that ideas are not scarce resources.

    1. That's pretty humorous. Perhaps King Kinsella can explain how good ideas are equally plentiful and of no value - same as bad ideas, eh?

    2. If ideas are not scarce resources, then why are Mises, Rothbard, Einstein, Fermi, Aristotle, Plato, Feynman, Tesla, Edison, etc. so revered for their ideas?

    3. @GuyNoir:
      You could say good ideas are equally plentiful: everyone can enjoy them without taking anything away from anyone else. For example, if I wear a cool new arrow-shaped goatee, you can use that idea too at the same time. In fact, plenty of us can use the idea at the same time and not one of us has to give up our use of it. That doesn't work with my Harley.

      @DavidT: Indeed, how could Mises, Rothbard etc. be revered by so many if ideas were scarce resources? In theory, we would have to borrow "the idea" one at a time and pass it around to other readers, removing the precious scarce idea completely from our head as we gave someone else a turn to be enlightened. How indeed would it be possible for thousands to revere these thinkers at the same time?

    4. Unskilled labor is just as common as ideas. Does this mean you have the right to take someone's labor from them? i.e. slavery? Also, many inventions/ideas involve much of someone's labor/capitol. If I spend a fortune and 12 hours a day for ten years perfecting cold fusion, does this mean you can just take the fruit of my labor? Is this not slavery? theft?

    5. "Unskilled labor is just as common as ideas."

      Frequency of occurrence of a thing isn't what makes that thing scarce.


    6. "Unskilled labor is just as common as ideas."
      You're comparing apples and oranges, or more accurately apples and Johnny-Appleseed-ideas. Labor is scarce, ideas are not scarce. For example, I can only plant one apple tree at a time with my labor. But a million people can use the Hydraulic-Auger-Genie invention I dreamed up to plant other apple trees -- all at the same time.

      "Inventions/ideas involve much of someone's labor...can someone just take the fruit of my labor? Is this not slavery? theft?"
      If someone takes your fruit without your consent that is theft. If someone takes your labor without your consent, that is slavery. An invention that you labor many years to come up with and then proudly show off to all and sundry is neither fruit nor labor. An invention is an idea. If you don't want anyone to use it, then keep it to yourself. If you can only make money by showing it to other people who might just copy it and pay you nothing, you may have a failed business model. Your failed business model is not my problem.

    7. @ Pete Petetpete That is the whole point. He made the case that ideas are "not scarce resources" which is not true. If it were, then why would anyone be paid as a consultant?

      @Martin You are arguing that ideas do not involve labor and capital investment like planting apple trees does and that is not true. And the point is not to not let anyone use your ideas just like the point is not to not let anyone use your apples, the point is to be compensated for your labor in the production of the apples or the intellectual product.

    8. @DavidT 3:11
      I think we agree on the fact that ideas can involve labor: I said "an invention that you labor many years to come up with". And sure, it makes sense that you want to get compensated. What we disagree about is the legitimacy of force to prevent people from using your ideas without paying you, which is what being granted an IP monopoly is all about. I believe you think it's perfectly all right for fines/jail to be imposed on people who use your idea without paying because it's your "property" they "stole" by using your idea and not paying. On the other hand, I think that an idea is not "property" at all, so therefore can not be "stolen". As I hinted at already, if you want to be compensated for your idea, you need to have a business model that promotes that eg. inventing a super gear-box that self-destructs when someone tries to open it to copy how it works...or keeping secret manufacturing techniques needed to construct your invention strictly secret etc. In performance art, there are plenty of business model ideas that can work. Like Cirque de Soleil, for example.

      Let's step back for a minute. The libertarian theory of property rights is the most naive, stupid, useless, counterproductive theory to prevent human conflict in the history of the world -- except for every other theory. If you are serious about a theory to minimize conflict, this is the theory for you. The premise of it is a world where resources are scarce. For example, if I'm using the cool bike in my yard, you can't use it at the same time. It's scarce. So we fight. How to solve this? Private property theory. If I built it, found it first or bought it, then it's my property and a libertarian court should side with me and tell you to stop trying to grab it. In contrast, with things that are not scarce (like ideas!), there is no need to bother with private property theory at all. We can both use it at the same time in perfect contentment. The phrase "intellectual property" makes a mockery of the word property which traditionally implies something scarce. And let's not forget the problem of defining what is really your own idea and thus your property. Did you use someone else's "property" (the invention of the pen) to sketch the plans? Did you invent the Roman alphabet yourself used in your patent application? If an idea is truly property (which I believe it is not), why does it only belong to you for the period of the patent granted? Does the property title to your house also expire like that? Why not?

    9. Who cares what you used (like a pen) to invent it. You don't think pens were used to make that bike?

      Now you are not arguing the if but the how. The time limit is about how intellectual property is protected, not if. And to say that you using my intellectual property at the same time as me does not hurt me is false. If Stephen King writes a book and six different publishers print it without paying him, how does this not hurt him? Furthermore, do you think he will continue to write books in the future if he does not get paid? Maybe for his own enjoyment, but not likely for anyone else to see. This not only hurts the originator of the intellectual property, but also anyone who would ever get use from that invention or idea.

      Our current IP laws definitely need changes, but I don't believe elimination of them coincides with the Libertarian view of property rights. The assumption that stealing IP does not hurt the owner is not true in the real world.

    10. "Who cares what you used (like a pen) to invent it. You don't think pens were used to make that bike?"
      Someone who believes that ideas are property should care because you are using someone else's property without their permission. Someone, like me, who believes that ideas are not property should not care.

      "Now you are not arguing the if but the how. The time limit is about how intellectual property is protected, not if.".
      On the contrary. If 17 years have elapsed, your invention idea property is confiscated from you. If 17 years have elapsed, the property title to your house is not confiscated. If. Why?

      "And to say that you using my intellectual property at the same time as me does not hurt me is false."
      Like "fruit" (above), I prefer to use "hurt" in a literal sense. If Stephen King does not receive an additional million dollars by means of copyright laws enforced by men with clubs, he is not hurt. On the other hand, if police club a man resisting arrest for unauthorized photocopying of "Pet Cemetery", the man is indeed hurt.

      "Furthermore, do you think he (Stephen King) will continue to write books in the future if he does not get paid?"
      Maybe or maybe not. And maybe there will be an explosion of other reading and entertainment options for you. After all, there was no such thing as copyright in the days of William Shakespeare and the Globe Theater. It's also important to remember that many inventors are afraid of being sued for infringing existing patents and so don't bother to come out with new designs that we are therefore deprived of.

    11. David T, any use of IP involves the government using violence to violate property rights. IP has NOTHING, and I mean, NOTHING, to do with inventing something. For example, there are hundreds of patents for quantum computers yet there isn't a single quantum computer. Also, how can you steal something from someone without depriving something from someone. If I steal a million dollars, I have deprived someone of a million dollars. If I "steal" an idea, does that person have once less idea?

    12. Guy Noir, the best test for property is to see if it can be stolen. If I steal one million dollars, someone has one million fewer dollars than they had before. If I use someone's idea, does that person have one fewer idea? If my use of it doesn't deprive another person of it, it isn't property.

    13. @Martin

      Did you buy or steal the pen?

      If you use hurt literally, then theft of anything by your definition is ok. Does it hurt me physically if you steal my car?

      @EO No, but you have stolen profits from the person. That person has a million (or whatever the number may be) less dollars because you stole their intellectual property. Stealing the cash or the IP can have the same effect.

    14. @Martin

      Also by your definition, you must condone Fed money printing. Afterall, they are not taking any money away from anyone. By your definition, the Fed can print all they want and not "hurt" anyone.

    15. "Someone who believes that ideas are property should care because you are using someone else's property without their permission. Someone, like me, who believes that ideas are not property should not care."

      Considering we currently have IP protection, and it is not illegal to buy a pen (or a car, or a book) and use it, you are again arguing the how and not the if. You are basically saying you think there should be more stringent regulations.

    16. @David. I think we're at a standstill over the concept of an idea being property. But will you concede that it is an unusual type of property that you can steal without the owner having any less of it per se? This certainly doesn't apply to someone stealing your car or debasing the money in your wallet. I think there should be more regulations narrowly confined to upholding the non-aggression principle and all other regulations should be dispensed with including threatening innocent people with violence for the crime of idea inspiration and sharing.

    17. David T, if I "steal" someone's ideas, how do I steal their profits? Their profits come from them selling something to someone at price that exceeds the costs of the producing that thing. Profits don't come from owning the idea, it comes from using that idea. Your make an argument, and fail to actual try to make it sound logical. If I stole profits from someone, wouldn't I have some amount of money that came from someone else without their permission?

    18. @Martin I think it is very much like the debasing of the money in your wallet. It can be taken from you "without the owner having less of it per se" but is then at a diminished value. Having Zero IP laws would be like having zero money-printing laws. Just like the currency would be worthless, because everyone would be making/selling their own, so would intellectual property be. Eventually, nobody would have any reason to create either.

    19. @David "I think it (copying ideas) is very much like debasing of the money"

      So if we libertarians get our way and abolish the Fed, you would be in favor of outlawing gold mining? Then you would be consistent: neither debasing of ideas nor money allowed.

      Also, it is important to note that the "debasing" or copying of ideas can sometimes help the original creator. Walter Block says he is a bad marketing guy and would be quite pleased if a skilled promoter were to publish his works at zero royalty because he thinks this would increase his speech invitations. There is no possible gain for the victim of debased money...unless you posit that the robber-debaser will spend some of the stolen loot in the victim's store, which I am sure you will recognize as the "broken window fallacy".

    20. Never said I would be in favor of outlawing gold mining. I against stealing in whatever form it takes. Mining gold, silver, oil, etc. is the fruit of someone's own capital, intellectual, and labor investment and is not taking it from someone else. That's the difference. As a side point, the whole point of using gold is it doesn't matter if it is mined. The price of gold will determine if it is worth while to pay for the mining. Guess what happens if its price goes to low? The miners lose money every second they continue.

      That is up to Walter Block to decide whether he wants someone to print his works with zero royalties. That is a business decision which is up to him to make for his own business and not for anyone else's.

      You are promoting intellectual communism. It never worked for production of anything else, what makes you think it would work for intellectual productivity?

    21. Also, maybe I should go to one of Walter Block's speeches, film it in HD, and then charge $10 to anyone that wants a copy, while at the same time making a digital copy of all of his books and selling them for pennies on Amazon. Wonder if that would make him reconsider his position.

    22. We both believe in private property rights. You believe that ideas are the property, I do not. I tried to explain, from my very first post, that an idea is not a scarce resource. When you chop it in half with a sword, it is not diminished. When many people use the same idea, it is not diminished. You responded that, when many people use the same idea that the value of the idea is debased from the point of view of the creator denied monopoly protection. But how does his right of monopoly protection arise? What gives him the right to instruct the state to dispatch men with clubs to control other men's bodies and real property they may wish to rearrange in such a way to reflect their admiration and imitation of the idea?

      And whether "it works" (ending fake intellectual property rights) or not doesn't matter to me. It might also "work" to slaughter 10 redheads on national TV every Sunday to boost advertising revenues and worker morale. The correct path is the moral path. And threatening violence against people for copying ideas is as immoral as communism.

    23. I think I already went over the fact that people stealing others intellectual property does diminish it in reality. You can argue this until blue in the face, just like Bernanke can argue that printing money doesn't diminish its value but the reality is, it does.

      What gives you the right to instruct the state to dispatch men with clubs to protect your tangible property?

      I just looked on Amazon for books by Walter Block. First two were by Block, and the third was by him and Lew Rockwell. Correct me if I am wrong but both of them believe IP laws to be immoral. Yet every book I looked at was copyrighted. If it is "immoral" than it would be immoral for them to copyright such things. Could it be they are separating their fantasies from reality?

    24. I mentioned previously that ideas are a very unusual type of property that can be stolen without the victim having any less of it per se. You responded that, in this way, ideas are like the property of fiat money. Is there any other property that ideas are similar to other than fiat money in your opinion? In my opinion fiat money, like intellectual property, is an artificial construct of the government. If the Fed were abolished and let's say we all used gold and silver coins instead, would there be anything left as a strange property that can be stolen without being diminished -- other than your concept of "idea property"?

      Why have you not responded to my question about why, if indeed ideas are true property, they are confiscated after an arbitrary period of years? It is frightening if you are in favor of property arbitrarily being confiscated for the greater good. Sounds like communism.

      FYI, the government currently imposes an automatic copyright for anything you write or record on some physical medium regardless of your opinion about the legitimacy of intellectual property. It is impossible for Walter Block or anyone else to renounce their copyright.

  2. This is a question for Bob,

    Ive been interested about IP lately and, i guess coincidentally have been dabbling into 3d printing for fun. As yet, I have not been able to form any opinion on IP as there are good arguments on both sides. I dont know the future extent of 3d printing technology but it is quite possible that a significant number of household goods could be made this way as progress develops in the field. This would only require a 3d printer and some digital file to create a tangible good. These data files would be (assuming there was no authority there to prevent it) replicable without any form of scarcity--the only scarcity would be the materials needs to make them. These data files can be made with the use of scanners that replicate existing goods or simply transferred from one individual to another. I cannot imagine in a potential future as this how IP law would be able to be enforced. Unless of course you lived in a megastate. Which would suck.

  3. Seems like Wenzel's time has all of a sudden gotten scarcer with this IP debate. I've never seen this excuse being made before. There was always time for the smackdown on other topics.

    I don't think this is just a coincidence.

    1. Duh!

      Maybe he is saving his smackdown for the debate.

  4. I disagree with your position on IP and think you're way off here. Tucker's point, if I understand it correctly, is that by examining IP we can better understand property rights, contracts, scarcity, and political economy -- all of which are included within the broader topic of economics. IP has nothing to do with the regression theorem or business cylce theory, or any of the red herrings you mentioned above.

  5. I'm thinking that the point of this post is to say that economics doesn't say what *should* happen, but rather what is likely to happen if you do this or that. In this case, you could analyze what would happen in this formulation of IP theory or that formulation of IP theory.

    Libertarian or other sorts of political theory is better suited for determining whether IP is or is not the way to go. (I look forward to the debate, btw.)

    IIRC, something else Mises said was that economics cannot explain what ends people should pursue, only the effects of different actions taken to pursue them. This, of course, is a largely different discussion that the means used to pursue them with respect to other people. That is, the decision to pursue kayaking or dancing is different than the decision to do so by interfering with the person and property of others or not.

    From there we depart into a disquisition on religion, which is better suited for a beer than this board :-)