Friday, April 5, 2013

A Quiz for Anti-IPers

If I have the "Drudge formula" written on a piece of paper and sell that piece of paper to B for $10,000, if ideas aren't scarce, why would B pay $10,000 for a piece of paper with the paper worth  less than a cent  and with what Norman Stephan Kinsella would classify as "ink scribblings on a piece of paper"?

What is the economic good being purchased by B?

127 comments:

  1. The economic good is the act of sharing

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    1. lulz @ Wenzel.

      Can we say the last rights to Kinsella's anti-ip theories now and ignore the few remaining "hangers on"?(presumably including Kinsella)

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    2. ½

      Wenzel,

      The answer to your quiz question is this:

      B is not only buying a piece of paper from A. B is also buying a *promise* from A, namely, that A promises *not* to use their (A's) body or their (A's) material property in such a way that would send information signals to everyone not B, that might result in economic competition against B.

      For consider. Imagine that A told B, and B believed it, that A *is* going to use their (A's) body and their (A's) property in such a way that would the same information signals to others not B. Would B pay $10,000 for that piece of paper then? Certainly not. Well maybe he would, but assuming he isn't in the mood for charity...

      So B is actually buying a promise from A. It doesn't even have to be physically manifested on a piece of paper. It can be manifested in A's voice, or through miming, or the game charades. Whatever the physical manifestation of the idea is, B would be buying a promise from A not to divulge the information.

      Now, it is possible that this contract between A and B might also include a promise on B's part, namely, for B not to use their (B's) body or their (B's) property that would send information signals to others not A. It would depend on whether A still wants to economically compete using that information.

      The most important thing that all pro-IP people need to understand is that IP contracts are not actually contracts concerning "scarce ideas." They are contracts concerning scarce people, scarce material things.

      The best way to understand this last part, which requires some subtle thinking, is to imagine what would happen to IP contracting if human bodies were *not* scarce. What would that imply? It would imply that the entire universe consisted only of human bodies, or perhaps more meaningfully, one human body. Any idea that "anyone" originated in this world, would immediately become known by "everyone" in that universe, because "the human body" isn't scarce.

      Going back to our real world, the reason why secrets work is because human bodies *are* scarce. You can allow me to know and not know what's in your mind, by you controlling your body and material property in such a way that it does not send out the signals you don't want to send out.

      Do you own the photons that *leave* your body and/or material property? Do you own the sound waves that *leave* your vocal chords? Certainly not. Once those photons and/or sound vibrations leave your body and property, they become unowned by you. You are actually "disinvesting" yourself of the ownership of those photons and/or air vibrations.

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    3. 2/2

      You as a pro-IP advocate believe that you can own the information content in those photons and air molecules.

      Myself as an anti-IP advocate believe that you cannot own the information content in those photons and air molecules.

      Once those photons enter my eye, or once those air vibrations enter my ear, the information content that results is mine. Once it is mine, the question you have to consider is "Do I, Wenzel, have a contract with Pete, that consists of Pete promising not to use his body or material property in such a way that would send out the same set of signals that result from my "disinvestment" of photons and air vibrations?"

      If the answer is yes, then we're talking about regular private copyright contract. If the answer is no, then we're talking about a lack of a promise. If there is no contracted promise, then there is no copyright contract.

      See, what you and other pro-IP advocates are basing your position on (Ayn Rand is included on this one) is social contract theory. This theory consists of the notion that everyone is, by virtue of being alive, obligated to adhere to a certain self-imposed set of rules, such that if they break those rules, then force *from someone* is justified against them, because their behavior is to be interpreted as a violation of the social contract.

      Pro-IP is the social contract theory that says everyone is a priori obligated to abide by a certain set of rules, namely, to *refrain* from using their bodies and material property in such a way that would send out the information signals that just so happened to have been originated by another human being using their body and their property. This social contract is basically saying "Thou shalt not personally gain through using one's egoistic knowledge without paying others in the collective where such knowledge originated."

      Now, if you are thinking that people actually following this rule 100%, or people being forced to follow it 100%, would be absurd, impossible to practise, and so on, then you have put a gigantic stake through the heart of pro-IP theory, not just by that admission, but by the positive action of allowing some ideas to flow freely without recompense and to actually advocate for the protection of individuals against the force from those who have a higher tolerance of IP enforcement than you do.

      Kinsella is someone who thinks IP should be enforced for 0% of all ideas. You are someone who thinks IP should be enforced for say 10% of all ideas, or whatever. An insane person thinks IP should be enforced for 100% of all ideas.

      Who's more insane than the other?

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    4. Put it this way Wenzel:

      Suppose A and B signed a contract that consisted of a promise by both parties not to stick their middle fingers up in the air at the dinner table.

      This is a promise concerning scarce bodies, not any abstract hand and finger pattern, where both A and B promise not to use their fingers, hands (scarce body) in such a way that would send out information signals (e.g. "F^&k you") to the other.

      Suppose that this abstract finger and hand pattern, as far as the parents are concerned, is not known by little Bobby, also at the dinner table.

      Is the middle finger abstract pattern therefore a scarce good in the economic sense, by virtue of little Bobby not having any knowledge of said pattern?

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    5. "Sharing" is an excellent answer (by MDN above) to Mr Wenzel's question, but Mr Wenzel turns snide, as if he failed to get the point.

      The buyer is buying a service from the inventor. The question of Scarcity is irrelevant. An idea may be very well known, but if I don't know it, I may purchase from another the service of sharing that idea with me.

      It is impossible to prove how scarce or unscarce an idea is, since mind reading is impossible. It is also impossible to prove who thought of what first.

      What the pro-IP folks need to explain is what is LOST by Mr Inventor when Mr Imitator copies his idea. What is LOST by Mr Inventor that belongs to Mr Inventor?

      The answer is nothing. And I suspect we will wait a long while for the IP folks to directly answer that simple question.

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    6. Still waiting for an answer to the question: What is lost to the owner of Intellectual Property when it is "stolen"? What does the owner not have that he used to have?

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    7. "What the pro-IP folks need to explain is what is LOST by Mr Inventor when Mr Imitator copies his idea. What is LOST by Mr Inventor that belongs to Mr Inventor? "

      To restate/clarify your point per my understanding...What is lost by Mr. Inventor is: potential income. Does Mr. Inventor have a *right* to *potential* income? No.

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    8. @Franklin Tawle
      An income stream.

      @Scott
      Independent discovery is protected. Anything less (e.g. where B and C collude, or B is careless about adhering to the contract with A) is handling stolen property.

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  2. If I buy a car from you, no-one else can own that car whilst I own it.

    If I buy the formula from you, someone else can still come up with it and make use of it independently. Or they may be passing by and see the formula on the piece of paper and later replicate it. So clearly, I don't own it in the same sense as I would own the car.

    The point is that my buying it from you has not given me ownership of the pattern. It may have given me some benefit in going to market, or it may have made my operations more efficient - there are plenty of reasons why I might pay for it - but none of them involve ownership of the pattern itself.

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    2. You are mostly correct.

      Buy you buying the formula on the paper does give you ownership. That paper and formula is now your property, excluding the right of resale and replication for profit.

      I am still yet to see any anti-IP person refute this, and it's becoming ever more clear that intellectual property is an important part of the economy of a free society.

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    3. But, if you bought it, is it an economic good or something else?

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    4. why can't I sell it? going back to my example a couple days ago of a record of dark side of the moon and a digital copy just because they are in different formats.

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    5. x = a number between 1 and 10. I write x on a piece of paper. Since I'm the only one who knows what x is, I own x.

      This entitles me to do with x as I please. I can now write up a contract to transfer ownership of x. I can sell it with or without the paper.

      If I sell it under contract with the piece of paper, and the contract is violated in some way, ownership of x with the piece of paper is transferred back to me. All I have to do is tell the person(s) who violated the contract to forget about x (or simply cut out the part of the brain where knowledge of x is stored), take back the piece of paper, and put this episode behind me.

      All is well again.

      --------

      I think that Mr. Wenzel is forgetting about the time factor in all of this. x might be scarce while it is on the piece of paper or in his mind, but it can duplicated almost instantly. All one would have to do is show it someone. If you wanted to make a lot of copies of x, put it on Google's start screen (or anywhere where more than one person will see it at once), and voila, from zero to superabundant in the blink of an eye.

      The real question is, can an economic good be duplicated so quickly and effortlessly?

      From Rothbard's "Anatomy of the State":

      "Man is born naked into the world, and needing to use his mind to learn how to take the resources given him by nature, and to transform them (for example, by investment in "capital") into shapes and forms and places where the resources can be used for the satisfaction of his wants and the advancement of his standard of living. The only way by which man can do this is by the use of his mind and energy to transform resources ("production") and to exchange these products for products created by others. Man has found that, through the process of voluntary, mutual exchange, the productivity and hence the living standards of all participants in exchange may increase enormously. The only "natural" course for man to survive and to attain wealth, therefore, is by using his mind and energy to engage in the production-and-exchange process. He does this, first, by finding natural resources, and then by transforming them (by "mixing his labor" with them, as Locke puts it), to make them his individual property, and then by exchanging this property for the similarly obtained property of others. The social path dictated by the requirements of man's nature, therefore, is the path of "property rights" and the "free market" of gift or exchange of such rights. Through this path, men have learned how to avoid the "jungle" methods of fighting over scarce resources so that A can only acquire them at the expense of B and, instead, to multiply those resources enormously in peaceful and harmonious production and exchange."

      I thought that one of the ideas that set Austrians apart was that they factored time into their theory of capital. We need to do the same with IP.

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    6. ROBERT. Just because something is an economic good, doens't make it private property -- or even property.

      Yes, there are things that are goods and aren't property.

      You need to quit conflating, and come up with something new to add to this.

      TRacy

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    7. Wenzel:

      "But, if you bought it, is it an economic good or something else?"

      But he didn't buy "the formula". Ideas can't be owned. He bought a promise from the seller, a promise whereby the seller promises not to use his body and property in such a way that would send out information signals to others. He bought a promised behavior, not a formula.

      You need to dig deeper Wenzel. You keep getting stuck on the circular argument that ideas are scarce because ideas are scarce.

      You don't "have" abstract patterns. You "have" your body and your material things, which you may PERCEIVE as "containing" the pattern that you call an idea.

      You claimed before that you are against force being used against those who independently discover the idea. Can't you see that this is you realizing you can't own every instance of the same abstract pattern? You are only claiming ownership of the pattern constrained to a particular sequence of events, namely, the sequence of events that was originally set about by your movement of body and material property.

      If you happen to see the same pattern somewhere, and you can identify a causal sequence of events going back that originates with *someone else's* body and property, then to you this does not call for violence.

      Can't you see the contradiction here? You're not actually claiming ownership over the pattern itself. You are actually claiming part ownership in the nebulous "social contract" framework whereby there is some sort of pre-existing promise on the part of everyone to only use their bodies and property in ways that the originators of the corresponding mental patterns permit.

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  3. If ideas are scarce, then why do you still have the Drudge formula after you have sold it? How can you both have it in your possession at the same time if it is scarce?

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    1. The question is not whether I still have it, but is it an economic good or not.

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    2. Everything is an economic good. Just depends on what the price is.

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    3. When I taught econ I had a simple definition of economic goods for the kids - if you want more than you already have, then it's economically scarce, it's an economic good. That's why air is not one in most cases. The Drudge formula is not an economic good if it is not scarce, and it is not scarce if you can sell it and still use it yourself, unlike any object in the physical world. It seems to me that what is being purchased is only your service of writing down the formula, and that service is what is scarce.

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  4. Your are giving 10,000 to release a secret. How much can this secret holder get willingly when 10 million know it after his initial release of it? How about when 1 billion know it?

    The money amount is for the secret holder to use his body (property) in a manner to reveal the secret. By his hand on paper, or by mouth, it is a contract to get a property owner ( in his body) to use his body to release the secret.

    A contract between A and B to not release A's secret is a control over B's body.

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    1. Do you expect 10 million to own it? Is your view different before that occurs or do you just assume in your magical world that this happens with ALL information?

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    2. Nothing is "happening" to "the information" itself. What is "happening" are movements of scarce bodies and material property.

      If one person's body and property are moving in such a way that you see a pattern, while another person's body and property are moving in such a way that you see the same pattern, you're not actually seeing anything "happen" to "the pattern" at all. What you are experiencing is a, for lack of a better term, "deja vu" in *your own* mind. It's your mind that is experiencing the pattern. The pattern didn't "move" from one person to the other. It wasn't transferred. Scarce energy and matter interacted such that the left over result in the second person is a copy of the pattern that your mind perceives.

      When you sell your Drudge formula, you are actually selling a scarce piece of paper, self-contained, AND you are selling a promise not to use your body and property in such a way that would send the same signals out to others.

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  5. Is it not a matter of rights, rather than the economic value? B is paying for it, because they don't think they will otherwise have access to the information, and it is not within their right to take it by force.

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  6. It is entirely of an entrepreneurial nature, i.e., a risky and speculative endeavor.

    Advocates of intellectual property simply lack the necessary entrepreneurship to profit from their valuable innovations in a peaceful way.

    Just because you can't imagine the methods entrepreneurs will invent to monetize creative output -- in the absence of IP -- you're not justified to forcefully enjoin all of humanity in the shackles of prior restraint.

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    1. "What is the economic good being purchased by B?"

      A 50% share in the Wenzel Drudge Formula Trust, which is capitalized solely by "ink scribblings on a piece of paper" currently valued at $20,000.

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  7. You paying money to a person to use there body - their property - in a specific way: To reveal a secret. The secret if worth anything might command ten thousand to release...but the release reveals its infinite reproducibility as the no other person or group will pay $10,000 for this secrets release again. In fact the secret ceases to be one the moment it is revealed.

    IP is the contracting of other peoples body functions (their property) to act in a specific way; to reveal or to keep secret knowledge.

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  8. Bob, I agree with you 100% on this issue.

    However, the folks who disagree are dug in and won't concede the obvious at this point.

    This is the psychology of human nature and only time will let people come around to the truth. This is the same dynamic that is at work in exposing the global warming hysteria. Men regain their sanity one at a time.

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    1. Wow, now that is super duper freaky. I was just thinking the same thing about YOU. Weird.

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    2. Isn't libertarianism as much about truth-seeking as it is about the non-aggresion principle? If so, how can you agree with either party 100%? Especially when it's truth-seeking about the non-aggression principle.

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    3. Zero analysis

      100% rhetoric.

      Your opponents can say the same exact thing and claim victory.

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  9. If I independently come up my own Drudge formula, what have I stolen from you? The answer is nothing. Yet you somehow think it is fair to have the state steal from me or imprison me for that.

    All that B is paying for in the above scenario is not having to expend the time necessary to come up with the Drudge formula themselves.

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    1. No, Billy, you're wrong.

      If you coincidentally invent the same exact formula, then it's not a breach of intellectual property boundaries.

      It's only a violation of property rights if the original owner of the formula can prove you learned it from him.

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    2. As I have stated from the start, I am a Rthbardian on this point. I have no problem with independent discovery.

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    3. Bob, you claimed earlier that you believe in a state-ownership of all IP. Only an idiot would consider that view to be in line with Rothbard.

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    4. "I have no problem with independent discovery."

      Then there's absolutely no way to have Patents and many types of copyrights that currently exist today.

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    5. Wenzel,

      Since you "have no problems with independent discovery"...

      Suppose A prefers to keep a secret, accidentally, or without their intention, sends out information signals using their body or property, in such a way that B, who does not have any contracts with A, received those signals without realizing A is the originator, and then, using those signals, "independently discovers" the information content within those signals, and profits from directing his body and property with those ideas.

      Has B violated A?

      Suppose B continues to use his body and property directed by the same idea, without being stopped by force. Is an injustice taking place?

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  11. Robert, you said you sold a piece of paper, so there is no need for asking people what you sold. You already told us. Paper is scarce, especially paper with scribblings that someone likes and wants to pay $10,000 to have that kind of paper. If you want to know why that person paid $10,000, you have to ask him/her. We know that value is subjective and exists only in the mind of an individual.

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    1. What if that person said he bought the paper because of the formula written on it, would you then concede the formula is an economic good?

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    2. I would say that the existence of the formula on that piece of paper is an attribute of the good being exchanged, and the good being exchanged is the piece of paper.

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    3. If the person who buys the paper thinks he's buying the formula and not just the paper, then he is effectively buying the formula.

      If that argument is correct, then what's wrong with this one?

      If the person who buys the paper thinks it's worth 10000 dollars, then its value is effectively 10000 dollars.

      The point is that what the buyer thinks irrelevant. Psychology, perhaps, but not economics.

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    4. Well, we know the second argument cannot be correct because value exists solely in the mind of the observer and is ordinal, not cardinal.

      So if there's something wrong with the second argument, then there is something wrong with the first one -- Mr Wenzel's argument.

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    5. "I would say that the existence of the formula on that piece of paper is an attribute of the good being exchanged, and the good being exchanged is the piece of paper."

      So the product of man's sweat (paper) can be considered property, but the product of his brain (the formula) cannot.

      This leads to some interesting conclusions, Predrag.

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    7. alan.szepieniec, that was a question for Wenzel.

      bionic mosquito, paper is a product of human brain too, and we don't know how much physical effort it took Robert to come up with the formula.



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  12. What if you gave your formula to someone, who gave the formula to someone else, who gave the formula to someone, who sold the formula for $10,000 to some rube? What is the formula worth then? Is it free or worth something? Legitimate thought.

    Love this site Senor Wenzel, but all this IP, anti-IP stuff is getting redundant. We don't live in a libertarian fantasy world so what difference does it make? Seems like a lot of intellectual masturbation. Wouldn't the free-market work it out anyway? In a libertarian world that is. Isn't, whatever get's worked out, that it applies to NAP the whole point of this conversation.

    Plus I keep getting sucked into reading these libertarian hate arguments like a car accident that I can't pull my attention away from.

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  13. Wenzel's claim paraphrased: "only I know the Drudge formula, therefore it is scarce. Anything that is scarce is own-able and therefore I own the Drudge formula".

    Here is Kinsella paraphrased: "the Drudge formula is an idea, and ideas are infinetely reproducible (not scarce) therefore Wenzel can not own the Drudge formula".

    I call this the "Wenzel/Kinsella scarcity paradox".

    To solve the paradox, you have to recognize what is scarce and therefore ownable. Wenzel possess a unique skill of providing the Drudge formula. This is Wenzel's labor, which he owns. His labor is scarce, because he possesses a unique skill. However, if Wenzel lets the secret to his skill out, the supply of this skill can increase practically indefinitely. Skills cannot be owned, from burger flipping skills to Drudge formula providing skills.

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    1. So are you saying all information that is "let out" increases "practically indefinitely"?

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    2. Practically is the key word here. If the knowledge was useless, I can't see why it would be propagated. On the other hand, lets say you had knowledge that instantly made anyone with the knowledge happy forever. I presume this knowledge would spread quickly.

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    3. No, he's saying it has the potential to increase "practically indefinitely."

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    4. Hang on, if ideas can be owned, why can't skills be owned?

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  14. What does B get out of paying $10,000 for this piece of paper?

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  15. The economic good is the knowledge which, while it REMAINS secret, is scarce but not rivalrous.

    If in some way (violation of contract, independent discovery) the secret gets out, it is NO LONGER SCARCE and will not command a price.

    You are trying to equate 2 different situations. This is like asking someone why they won't pay top dollar for a 486 CPU today when someone 20 years ago paid thousands of dollars. Obviously back then that kind of CPU power was scarce and commanded a price. But now that the computational power of a 486 CPU comes a million times over in a modern chip, of course it has no value. The same with your secret - once the reality of the market changes - your secret is no longer scarce and will not command much of a price on its own.

    It seems that the pro-IP side thinks they can somehow restore scarcity by fiat. Whether scarcity of an idea or product has been destroyed by violation of contract, independent discovery, or a simple change in consumer preferences is irrelevant, it's gone and you can't bring it back.

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  16. The debate was interesting but neither of you got to the heart of the manner. Im still on the fence about this IP debate neither of you convinced me. the way you were approaching the drudge formula was as a contract between two individuals. Yes your knowledge of the drudge formula is scarce hence it has a price. Yes if you sell it to person B with a copyright and person B showed others or sold it for sure he would violate the contract and the market most def should protect contracts between individuals. Kinsella was 100% wrong in arguing with you about this. But let me ask you this.
    Lets say every time you used the drudge formula it displayed in the HTML link. So now your formula is not a secret and no longer scarce. No one is willing to pay for this since we all know it. But you have a patent on the formula. No one is allowed to use it. So now some one has to pay you in order to get permission from you. I have not entered into a contract with you but you expect me not to use this knowledge. How is this going to be enforced without the state and i have not made any aggression against you. There are many examples where i can replace "formula" with some other invention of object.

    I also have an issue with rothbards mouse trap example. Lets say i buy this mousetrap and its copyrighted by rothbard. Now i duplicate your idea to an exact but instead of using the spring loaded mechanism metal out of copper i use it made of brass. I discovered brass last longer and is better for a mouse trap. My point is where is the line drawn where im breaking the copyright. I can do simple things to alter the invention slightly and rebut back that mine is "improved" or is different. Most certainly my ideas are allowed to be derived from other things i see or learn. Robert can you please explain your position on this.

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  17. What does he get for purchasing the paper? Just the paper? Are there any other strings attached/legal protections? Were they acting within the law? Is there IP protection in this scenario or not? If so, was a trade secret, copyrighted work, invention details?

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  18. Because he is an idiot, unless the two of you made a contract to keep the formula secret

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  19. Robert, I want to say thank you for fighting so hard for this issue!

    It has helped me to clear up my understanding very much.

    I may not approve of your debating techniques, but ultimately you've persuaded me.

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  20. You're selling your own service which is the "good" in this case. The formula, algorithm, or pattern or whatever you want to call it is not the economic good for reasons already repeated at nauseum about the nature of scarcity and rivalry.

    In the case of the infamous "Drudge Algorithm", the service you're selling is along the lines of a "Syndication as a Service" model or a "SearchEngineOptimization (SEO) as a Service" which is similar to other service based business models. You're selling your service/expertise to help clients achieve an end which is to get on Drudge. The price is immaterial. It could cost $10000 or $.01 or even be free.

    It's well within your prerogative to protect and keep the knowledge "secret sauce" or conceal it from others or even contractually agree with others keep it on the down low. As far as contracts go, it is well within the already agreed upon law (trade secret law or NDAs) to set up agreements/contracts with others and stipulate any penalties if the agreement is broken. But, as we've discussed at length, all other people who are outside of the contracts who somehow observe, mimic, emulate, or harness the means for employing the same pattern and did NOT agree to any contract are under no obligation to pay any penalties which they did not sign or enter into.

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    1. If IP isn't property, then what is there to protect? The "secret sauce" argument begs the question, "If IP isn't property, why keep is secret?" I think this is the whole point of Wenzel's Drudge example.

      As I understand the differences between camps:

      1) Pro-IP define IP as property and anti-IP don't.
      2) It follows from 1) that pro-IP believes IP grants a monopoly but anti-IP don't like monopoly (even though they refuse to admit they enjoy a monopoly on all other forms of property including their body from the state).

      A less important objection from the anti-IP people is a belief that IP inhibits competition and innovation (but the same objection can be made for all types of property).

      But there appears to be no getting past step 1. We're at an impasse on the definition of property.

      I define IP as property because I think it meets the Lockean definition. Locke doesn't require property to be scarce. But even if scarcity is a quality, IP becomes property through induced scarcity (which the anti-IPers don't like).

      So now the issue, is there justification for inducing scarcity in IP? And I say there is for the same reasons Locke said we should recognize property at all - mixing one's labor with resources makes one the owner. This convention applies to all other property except IP in the minds of the anti-IPer.

      So the crux of the argument to me is "Do we as a society believe that IP producers should receive the same rewards for their labor and spent capital as all other producers?" I say they should.

      How best to handle IP is open to debate in my opinion but whether to have IP at all shouldn't be a debate.

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  21. The point of a contract disallowing disclosure of the formula is to sustain scarcity that otherwise is unlikely to exist for long. This necessity highlights the fundamental difference between abstractions and physical property. No contract is needed to create scarcity for the Hertz rental car. It is inherently so. The formula needs a special transitive contract that somehow binds third parties who never participated in the contract. The necessity of a special contract suggests that regarding knowledge as property is suspect. It is weak justification for use of force to prevent use of knowledge by nonparticipating third parties.

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  22. Bob has a service "the Daily Alert", that people pay I fee for. What would I pay for this service if it had no value?

    Does anyone here think that I should have the right to copy Bob's Daily Alert every day, and start my own "Marc's Daily Alert@ using Bob's information, whether or not I sell it or just give it away for free to everyone in my address book?

    This question is for both sides.

    Is there ever a legitimate claim to the ownership of information?

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    1. Sorry for the typos, commenting on EPJ from my phone can be perilous. I think everyone got the gist.

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    2. Both pro- and anti-IP people agree with contracts. I assume anyone who receives Mr Wenzel's Daily Alert is bound by a contract (or perhaps just a pledge of honor) not to relay its contents to third parties. Mr Wenzel has no way of controlling that you don't send it to a few select parties. But if too many people receive your forwards and he gets wind of this, he might put some watermarking in the alerts to find out who is breaking the contract.

      I think that's the way it would happen both in a pro-IP and anti-IP world.

      Delete
  23. Look, knowledge is not scarce but it has transaction costs. So people buying your formula can rationally pay $10K for it if they estimate your knowledge can save them $10K in sourcing the information themselves. This does not make knowledge IP, this just means that there is a consulting market and that brain uploading is a trillion dollar opportunity as it eliminates the transaction costs involved in gaining and sharing knowledge.

    ReplyDelete
  24. I think where ManofBliss and the other pro-IP people are going wrong is that they think that:
    a) the formula is of value to the purchaser (if the purchaser thinks so, then yes);
    b) the parties can contract about who else they share the information with (correct);
    c) such contractual agreements are the same thing as owning the pattern itself (incorrect!!).

    If you stopped at b) you would be fine, but c) means you imposing the contract on non-parties, which is obviously fundamentally wrong. It's a red herring to say "I make an exception for independent discovery", that has nothing to do with it. It's irrelevant because there was only ever a contract between the parties, there was never ownership of the pattern itself.

    Also, i wonder if the pro-IP people are under the impression that anti-IP believe b) is incorrect. That would be bad, but I don't see how else this argument could still be going.

    ReplyDelete
    Replies
    1. The basis of the argument is that if you invent it, then you own it, and can add contractual restrictions on the use of the formula when someone purchases it from you.

      This is perfectly valid, consensual contract inside a free market society.

      You say:

      >> It's irrelevant because there was only ever a contract between the parties,
      >> there was never ownership of the pattern itself.

      Yes there was. He set precedent by inventing it first, as well as gained ownership by laboring to create it. That meets every standard definition of ownership.

      Intellectual property rights stand!

      Delete
  25. Bob, you are assuming that all economic goods are ownable. Goods are simply things that people subjectively value. I can subjectively value all kinds of things that are not ownable. Only physical things are ownable.

    ReplyDelete
  26. I feel for the whole debate Wenzel skirted the core of the issue. Say Bob invents a new kind of lawnmower. Certainly it is possible for Bob to sell that lawnmower to a customer with a contract that prohibits reproduction.

    But when the customer proceeds to mow his lawn with the new mower, his neighbor across the street may see the new design and conclude he would make a lot of money by producing and selling the same type of mower.

    Given that Bob does not have a contract with this neighbor, how does he stop him from producing and selling without violating that neighbors rights?

    If Bob goes and hires some police goons to raid the neighbor's house and shut down his production facility, doesn't that amount to nothing more than raw violence for the purpose of preserving a monopoly?

    There is no way Bob can justify this.

    ReplyDelete
  27. The 'formula' Wenzel keeps referring to is nothing more than fact about real world (if it is true).

    How is this any different than say, the theory of relativity?

    If Einstein kept the theory of relativity to himself does this mean the theory of relativity is scare? Of course not, because it amounts to nothing more than information about the world - information that can be discovered by anyone. The fact that (initially) only one person is aware of this fact about the world doesn't change this fact.

    ReplyDelete
  28. I feel for the whole debate Wenzel skirted the core of the issue. Say Bob invents a new kind of lawnmower. Certainly it is possible for Bob to sell that lawnmower to a customer with a contract that prohibits reproduction.

    But when the customer proceeds to mow his lawn with the new mower, his neighbor across the street may see the new design and conclude he would make a lot of money by producing and selling the same type of mower.

    Given that Bob does not have a contract with this neighbor, how does he stop him from producing and selling without violating that neighbors rights?

    If Bob goes and hires some police goons to raid the neighbor's house and shut down his production facility, doesn't that amount to nothing more than raw violence for the purpose of preserving a monopoly?

    There is no way Bob can justify this.

    ReplyDelete
    Replies
    1. If he gained knowledge of the design of the lawn mower by seeing Bob's lawn mower, then it was not an independent discovery, and he is violating intellectual property rights, and therefore deserves retribution.

      Clear cut case.

      Delete
    2. Why? The neighbor hasn't committed aggression. He hasn't taken anything from Bob.

      The economic effect of this is no different than if a starbucks opens across the street from an existing coffee shop. It's called competition. The pro-IP position is inherently anti-competitive. It's calling for the creation of millions of monopolies all around the world.

      Delete
    3. Chris P,
      Great question and the answer is (if the neighbor didn't make an independent discovery), the neighbor can be sued by Wenzel in any of the following existing torts:

      a) conspiracy
      b) interference with a commercial contract
      c) interference with prospective business advantage

      a) occurs when there is an agreement between two or more parties to deprive another of legal rights or deceive another to obtain an illegal objective.

      b) occurs when there is (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.

      c) occurs when (1) an economic relationship between the plaintiff and some third person containing the probability of future economic benefit to the plaintiff, (2) defendant's knowledge of the existence of the relationship, (3) defendant's intentional acts designed to disrupt the relationship, (4) actual disruption of the relationship, and (5) damages to the plaintiff proximately caused by the acts of the defendant.

      Delete
    4. Here's a tangential question...

      If I possess a special skill that you don't have (the ability to mow lawns) and you pay me $30 to mow your lawn, I am mixing my knowledge, skill, and labor, with your lawn. Am I now a partial owner of your freshly-cut lawn?

      Delete
  29. >If I have the "Drudge formula" written on a piece of paper ...

    If you gave your friend two sheets of paper with the formula written on each one of them, would you charge him double? Of course not. It makes no sense.

    You can't copy an idea. An idea is singular, and as far as I know permanent. You're providing a service of some sort in helping this person access the idea at a time when no one else appears to have access to it. Access to the idea is scarce, that's all. But is that the type of scarcity you can really control?

    The question is whether once *others* gain access to that idea, should you prevent them from applying it? Should we hire private security to stop someone from applying it? Should we ask the government to stop them from applying it?

    Consider the issue of patenting certain strands of DNA:
    http://www.genome.gov/19016590

    What are the implications of this?

    ReplyDelete
  30. Mr Wenzel, suppose I want to buy your Drudge formula from you, the same way someone might want to buy a car from you. You scribble the formula on a piece of paper and hand it to me in exchange for 10000 dollars. "Hang on!" I say. "If it were the car I was buying, I'd be purchasing the exclusive rights to it. Meaning that I could prevent you from using it in the future. But since you're not forgetting the formula, how can I prevent you from using the formula yourself?"

    ReplyDelete
    Replies
    1. Wrong. You are not buying exclusive rights to it.

      You are buying the right to use/consume it, but you are not allowed to replicate it for profit.

      This same principle applies to the formula.

      Delete
    2. Are you willing to concede that there is a fundamental difference between cars and ideas precisely because the exclusive rights to a car can be bought, but the exclusive rights to an idea can't?

      Delete
    3. @Alan.S,
      A car or an idea or a house can be sold subject to a clause restricting use.

      A car can be sold subject to paying installments of the purchase price to the seller. A house can be sold subject to a restrictive covenant not to have a bonfire.

      Delete
    4. I don't disagree fundamentally with restrictive clauses in voluntarily entered agreements. My point is that there is a fundamental difference between cars and ideas. Cars can be completely dis-owned without restrictive clauses in the contract. Ideas, however, cannot be un-learned, and therefore they require the restrictions in the contract to be properly dis-owned.

      Delete
  31. Great example. Imagine the teacher had said to you "I'll teach you this skill but you can't teach it to anyone else or it will be a breach of contract and I will sue you for x amount".

    Imagine you then call Bob and teach him this skill. Everyone would agree you are in breach of your contract and liable to the teacher. Not because you violated any 'property'. Only because you breached your contract.

    But neither you nor the teacher can go to Bob and tell him he can't use that skill. He never agreed to any contract with you or the teacher. What you agreed on with the teacher has no binding effect on Bob or any other third party.

    Then, Bob puts up the instructions on the internet and now 10,000 of your competitors learn the skill. You can't go and tell them not to user it either, because the skill itself was never your property or your teacher's. Yes, knowing it while hardly anyone else knew it was of value to you and worth paying for. That just does not mean you owned it.

    To prove this, imagine the teacher had refused to teach you the skill. But you examined his work closely enough to figure it out what he did, and you incorporated it into your work. How would you feel if he was able to sue you, saying he 'owned' the skill and you weren't allowed to use it?

    ReplyDelete
  32. I believe this disagreement can be resolved with a clear definition of what "scarcity" is.

    If something is scarce because a limited amount of people possess it, then ideas are scarce. I understand using the word "scarcity" for this meaning. However, I think there is an alternative definition which clears up the matter further.

    Instead of focusing on how many people currently possess a good, it helps to ask this question: how many people could possess this good, without any diminution in its integrity?

    If a good remains identical when additional people possess it, we could say it isn't "scarce".

    For example, we could say that air is not a scarce good, as I can inhale without "stealing" someone else's air. I think applying property rights to air would be a mistake. I am not a thief for breathing.

    Similarly, ideas are not scarce because an unlimited amount of people can possess them without any diminution in integrity. Your recipe is identical to itself, even when additional people know of it.

    All this means is that you can not "steal" something which can not be stolen. Non-scarce goods, if we choose to define them this way, can not be stolen by their definition. Therefore, we can't apply the notions of private property to them.

    I understand your use of the word "scarce", but I think there is an alternative definition which results in slightly clearer reasoning.

    ReplyDelete
    Replies
    1. I think scarcity has nothing to do with it. An item can be sold subject to a restriction on its use in the contract, and 3rd parties can be prevented from profiting if the buyer was fraudulent or negligent in adhering to the contract terms.

      Delete
  33. If I am teaching you principles of economics, which is widely available for free on the internet, and you pay me, are you paying me for 'my' knowledge or for my (scarce) labor to teach you the knowledge?

    ReplyDelete
  34. In answer to your question, I would say the economic good is the piece of paper. In the eyes of the buyer it is more valuable than other pieces of paper because the scribblings are especially meaningful to him.

    If you were not to write it down but orally convey the formula, the economic good bought would be your service. In the eyes of the buyer it would be more valuable than the service of other people because your words are especially meaningful to him.

    ReplyDelete
  35. As long as there is a copy and paste command present on every computer and the internet service providers are not quasi nationalized under the governments wing to search for "infringement" in every digital transmission, the whole debate is academic.

    The current state of IP for secret holders, authors, entertainment industry, musicians and software developers is decided already. Their digital data, once released in 1's and 0's, is infinitely, as well as perfectly, reproducible with no way to stop it or control it.

    The digital world changes the whole IP debate once and for all. IP is no match for the replicating power of the common household computer.

    The Pro IP people are really only left with the decision to support ATCA and internet control to stop the replication of digital data. How else will this "mass theft" be brought under control?

    ReplyDelete
    Replies
    1. Wenzel has repeatedly said his advocacy of IP relies on the law of contract and not on government. We cannot predict what mechanisms the market will invent to protect IP.

      Delete
  36. Really? This is getting ridiculous Bob. We're all already adressed this issue numerous times.

    Come up with something new to add to the debate, or bow out.

    ReplyDelete
  37. Banging my head against a brick wall. Just because somebody pays you to learn information from you doesn't make the information private property.

    ReplyDelete
  38. When somebody teaches they're selling their services as a teacher, they're not selling you the information.

    ReplyDelete
  39. Using Rothbard's example of the desert island:

    What would be the outcome be If Crusoe, who invented the fishing net, spent his whole time harassing and threatening Friday for trying to copy and use the design?

    ReplyDelete
    Replies
    1. By the same token, what would the outcome be if Friday had actually stolen the physical net and Crusoe spends his whole time harassing and threatening Friday and trying to get it back?

      Delete
    2. It would show the net is scarce.

      If Robinson constantly fought Friday to stop him from using the net idea, it would not show the idea is scarce, because they both have the idea. It would only show that Robinson is an aggressor and justifies his aggression over the false notion that the idea is scarce.

      Delete
  40. You have presented a situation where a human actor has decided to exchange $10,000 for a piece of paper.

    The only conclusion which can be derived from the presented information is that, in his ordinal ranking of the value of options at that moment, that paper was more highly valued than the money.

    Or has there been some sort of recent advance in economics where we can suddenly quantify, compare, and analyze the subjective values assigned by consumers?

    ReplyDelete
  41. Your scenario and IP are two different and unrelated issues.

    In your scenario, the formula that A had was valued sufficiently by B to be worth $10,000 to B. Basic free market exchange of goods.

    Now, if there was a non-disclosure agreement included as part of the transaction as such that B could not give out or resell the formula without A's express consent, that is a form of IP protection.

    IP is a set of laws designed to protect the Intellectual Property, the product of one's thoughts, from unapproved use by another.

    So the point of debate should not be over whether the sale of a thought, design, or any other form of idea is IP, but if, and by what form, there should be IP law.

    ReplyDelete
  42. Bob, if you sell me your Drudge Formula for $10,000 and yet you still possess the Drudge Formula after the sale, then haven't you committed fraud of some sort? How can you sell me something and yet still own it after the sale is complete? Does that not imply that you did not actually give me the item being sold? Did you not just steal my $10,000?

    ReplyDelete
    Replies
    1. A sells a large plot of land to B. B subdivides into 100 sub-plots, build houses and imposes a restrictive covenant that the buyer of each house shall not have a bonfire.

      Items are sold everyday subject to a restriction on their use.

      Delete
    2. In the scenario you cite of a restrictive covenant on sub-plots, all sub-plots have the same restrictive covenants applied to them. The original developer no longer has any control over those sub-plots. Only neighboring sub-plot owners can file suit against the neighbor who violates the restrictive covenant. So the original owner of the plot of land no longer owns the land after all sub-plots are sold. At best, he might own one or more sub-plots (which wouldn't give him any extra ownership rights over some neighbor who bought a single sub-plot).

      My question, OTOH, had to do with Bob selling his "scarce" idea. How is it that he is still in possession of it and how is it still "his" if he supposedly "sold" it to me?

      To ask the question another way...if I'm willing to accept the notion that an idea is an ownable thing *because* you are capable of selling it, but then the act of you selling it does not result in it transferring completely to my possession, then you haven't really "sold" it, and hence, the original assumption that it is ownable because it is sellable, does not actually apply. Now, if you could sell me some private piece of information and then wipe your brain of the knowledge of it, then maybe I'd be willing to accept the notion that this "thing" is a piece of property that can be bought and sold.

      Delete
  43. Mr. Wenzel,
    if you sell the formula to person B, then why do you still have the formula to sell to another person? The formula, idea, algorithm, etc is not property.

    You may clear up some confusion if you defined your terms first.

    ReplyDelete
    Replies
    1. Cindy,
      The contract between A and B might define whether A (the seller) still retains the right to sell the item to others.

      Ray Kroc having sold a franchise to a company in PA retains the right to sell a franchise to a company in NY.

      Delete
    2. The item isn't the idea. The items are the bodies and properties.

      What's being sold are promises not to use one's body and property in a particular way. But if those promises aren't contracted for, there is no obligation.

      Delete
  44. It is not and cannot ever be an economic good because it does not exist in any tangible state.

    For example, nobody can own 2+2=4. 2+2=4 is an idea that doesn't exist in any physical location. You can write it down, but that does not make it an economic good. Someone can even pay you 10 million dollars for that formula. That does still not make it an economic good.

    The so-called "drudge formula" does not exist in a physical location and is infinitely abundant, in the sense that any person at any time could discover the same formula with no knowledge of what you, Bob Wenzel, know.

    2+2=4 may have been known by very few people at some point in history, but because only a few people knew the formula does not make it scarce. Secrecy is not scarcity. I could makeup a jibberish formula and say that it is the secret to success in life and so it may have some perceived market value, but it is only an idea, and therefore not an economic good.

    This formula can be duplicated, rather taught, to an infinite number of people yet it will never be scarce. But if you wanted to give an infinite number of people a car, or an ear of corn, this is not possible because they are scarce economic goods.

    Ideas are discovery. You cannot own them. Even the greatest ideas in the history of civilization cannot be owned. Newton may have discovered gravity, but he cannot own the idea that gravity exists. The implication that Newton could own gravity would mean that everyone else who didn't pay for the "copyright" for this "IP" could not obey the laws of gravity. That notion is so absurb.

    I enjoy your blog Bob, but you are way off on this.

    ReplyDelete
    Replies
    1. Bitcoins do not exists in any tangible state, would you also contend they cannot be owned? Same goed for stock in company XYZ.

      Delete
    2. @dff,
      I do not see the relevance of discussions about scarcity or economic goods. Wenzel's definition of IP relies on a clause restricting use in a contract. He never said 2+2 or gravity is IP. If the Coca Cola company offered you and you alone the formula for Coke for $1 would you buy it?

      Delete
    3. Bitcoins are tangible in a sense. They are encrypted and limited. I can't own a Bitcoin by having it in my mind, I have to get it through different means, like trade. If I give someone a Bitcoin, I no longer have that Bitcoin. If I express an idea to someone, I still have that idea. If I fail to utilize that idea better than someone else, that is my fault.Everyone can hold the same idea in their head at the same time, while no two people can own the same Bitcoin at the same time. It's not that difficult. If IP is legit, then private property is not.

      Delete
    4. @ Oscar Milo

      You can store a BitCoin in your mind. It's called a brain wallet. Look it up.

      Delete
  45. The economic good "Drudge formula" purchased by B only has value in a world of lawful IP protection.

    Anti-IP is one of the positions where Libertarians fail. Anti-State is another. They are both closely related because the purpose of the legitimate State, as defined by the Classical Liberals, is to protect property, liberty, and peace. Mises, for example, defined it thusly. "This is the function that the liberal doctrine assigns to the state: the protection of property, liberty, and peace."

    Without the protection of IP laws, or the legitimate state, Robert is screwed. No one will pay him for his forumla and unless Robert is wealthy enough already to mass produce the product of his formula faster, and better, than his neighbor, then his wealthy neighbor, who did not labor to create anything, can mass produce the products of Robert's formula, without any investment in research, and keep Robert in poverty. Anti-IP laws stifle creativity.

    Essentially, the Libertarian argument is, individualism, "let the the strongest survive and thrive and to hell with everyone else." Anti-IP, and Anti-State, philosophy is a hard sell to people who truly desire the protection of property, liberty, and peace. Classical liberalism trumps Libertarianism.

    ReplyDelete
    Replies
    1. Brother J,
      I disagree.

      Classical liberals claim the State protects life and property but 200m citizens were killed by govt between 1900 and 2000, and most of the property you & I produce each year is stolen in taxes, so the claim is nonsense.

      The protection of IP rests on the law of contract. 3rd parties can be affected in law by the existence of a contract if there has been fraud or negligence. There is no law against independent discovery.

      The definition of the State is it is the only organization in society which claims a monopoly on the use of violence. The State is a manifestation of the strongest surviving if by strongest you mean those most willing to use brute force. In societies characterized by voluntary exchange there has always been much charity.

      Delete
    2. What Mises says is irrelevant. A state - by its nature - violates the right to liberty and property. IP law is a rhetorical game which calls a violation of liberty and property a protection of property. It is based on the notion that a person claiming to be the first to have an idea gains a right to attack others who may act on that idea.

      Delete
    3. "Essentially, the Libertarian argument is, individualism, "let the the strongest survive and thrive and to hell with everyone else.""

      That is false. Libertarianism says you may not survive by sacrificing the liberty or property of others.

      If your only method of debate is to mis-represent your opponent's position, you have already lost the debate.

      Claiming that the state - which, by definition, is aggressive - is the proper tool for limiting aggression, is to parrot state propaganda.

      Delete
    4. Jonathan:

      "Without the protection of IP laws, or the legitimate state, Robert is screwed."

      With IP laws, Robert's competitors are screwed.

      "No one will pay him for his forumla and unless Robert is wealthy enough already to mass produce the product of his formula faster, and better, than his neighbor, then his wealthy neighbor, who did not labor to create anything, can mass produce the products of Robert's formula, without any investment in research, and keep Robert in poverty."

      Explain drug manufacturers of de-patented formulae, formulae anyone can use, being able to make a profit.

      Hint: It has to do with scarcity of bodies and material property, not ideas.

      "Anti-IP laws stifle creativity."

      False. Pro-IP laws stifle creativity by preventing people from creating new goods using old ideas and new ideas using old ideas.

      Delete
    5. Mises, Locke, and others correctly defined the legitimate state. The purpose of the state is to protect property, liberty, and peace. The fact of the matter is that the legitimate state was overthrown by lawless rulers 100 years ago. The state we endure today is the definition of the illegitimate State. A legitimate State does not kill, steal, or oppress ... only the illegitimate State claims those rights.

      John Locke,
      "The aim of such a legitimate government is to preserve, so far as possible, the rights to life, liberty, health and property of its citizens, and to prosecute and punish those of its citizens who violate the rights of others and to pursue the public good even where this may conflict with the rights of individuals. In doing this it provides something unavailable in the state of nature, an impartial judge to determine the severity of the crime, and to set a punishment proportionate to the crime. This is one of the main reasons why civil society is an improvement on the state of nature. An illegitimate government will fail to protect the rights to life, liberty, health and property of its subjects, and in the worst cases, such an illegitimate government will claim to be able to violate the rights of its subjects, that is it will claim to have despotic power over its subjects."

      And he is right as Mises explains,
      "National and governmental affairs are, it is true, more important than all other practical questions of human conduct, since the social order furnishes the foundation for everything else, and it is possible for each individual to prosper in the pursuit of his ends only in a society propitious for their attainment."

      The State is THE MOST IMPORTANT social order for human conduct. The absence of the legitimate State is what people in America have endured since December 23, 1913. Prior to the Federal Reserve Act of 1913 many people were free and prosperous with many more people being freed daily.

      Delete
    6. What I would like to know from Pete Petepete's perspective is why would anyone pay Robert anything for his research if IP laws did not protect his right to his duly earned property? Robert spent time, labor, and knowledge acquiring his property. Why should he not be compensated for transferring his valuable property to another?

      Delete
    7. Question for Franklin Tawke. What is the one thing that Obama, Biden, Bush, Cheney, and all the other rulers of the past century avoid? Let me suggest they avoid being restricted by Constitution. Every move the illegitimate State makes is to avoid being restricted by the rule of law. They do not want to be restricted by Constitution, and the Libertarians play right into their hands as cheerleaders for them.

      Delete
    8. Jonathan:

      "...why would anyone pay Robert anything for his research if IP laws did not protect his right to his duly earned property? Robert spent time, labor, and knowledge acquiring his property. Why should he not be compensated for transferring his valuable property to another?"

      That's not a valid argument justifying IP.

      Nobody has an a priori right to other people's money.

      Delete
    9. Pete Petepete:

      "Nobody has an a priori right to other people's money."

      True enough, yet I did not claim that Robert had a right to anyone's money. I simply make the claim that if IP is not protected, then what incentive does Robert have to research, expend resources, time, and labor to develop the "Drudge Formula?"

      Delete
  46. It's not the IDEA which is scarce. It's the revenue that can be made from applying this idea. It's true that if you were the only one to have it, you'd probably make $12,000, earning a $2,000 profit. Whereas if others took the idea, you'd be forced to "share" the revenues. And THIS is what the pro-IP people consider "theft:" winning off of somebody's idea. You got your things mixed up Mr. Wenzel.

    ReplyDelete
  47. If I pay you for absolutely nothing, what is the good you are selling?

    You're clearly missing the point of subjective value. How can you even have a blog about economics? Striking.

    ReplyDelete
  48. Mr. Wenzel, B is buying that specific way of accessing that formula. It's just as paying someone to teach you something. It is scarce in the sense that you can't ask a tree to teach you, but it not scarce in the sense that you own that knowledge, you may not share it with others, but you can't forbid other people to know that.

    ReplyDelete
  49. Ansar,
    I disagree that Bob is not prevented from revealing the secret in your example. There are times in existing law when C is affected by a breach of contract between A & B.

    For example when A sells a car to B and then B sells to C but B does not have a valid title, A can recover the car from C, and C suffers the loss. A typical situation of not having a valid title is when B only owns subject to the condition of paying B in installments. As soon as B stops paying the installments, B is in breach of contract with A and loses title. C can be completely innocent but suffers the loss hence the phrase caveat emptor. C can sue B for misrepresentation but in practice B usually has no money.

    ReplyDelete
  50. Why do you refer to him as "Norman Stephan Kinsella"? I get that's his full name, but everyone calls him Stephan Kinsella. Including the Norman makes it sound like you are mocking him.

    ReplyDelete
  51. Either B trusts that you have a great idea that he has not entered into his own mind yet, or he is worried that you will sue him for using the idea that you claimed ownership of through force. Either way, once you express that idea to others, it becomes entrenched in their minds, and yet does not take the idea away from you. Whoever can utilize the idea best will likely profit more. I think they call it competition. I don't blame you for hating that capitalist idea. Government granting people or corporations the right to operate in certain fields or to produce and sell certain things while denying others that right is completely Libertarian and pro private property.

    ReplyDelete
  52. Because by paying $10,000 for the idea scribbled on a piece of paper, someone can get access to the idea through voluntary exchange rather than having to torture you and violate your person to get it out of you, or by hypnotising you to get it out, or whatever. Also, by paying $10,000 for the idea on the piece of paper, you can avoid expending the energy and time to come up with the same idea on your own.

    The nuance you continue to ignore, Bob, is that the idea you sell for $10,000 scribbled on a piece of paper is non-rivalrous: the idea can reside both in your head, on a piece of paper, and after someone buys it, in their heads. The 'economic good' can therefore be duplicated without taking it away from you as the 'originator' of it. An idea also can't be homesteaded, you can't bind third parties to the agreement, etc. etc.

    ReplyDelete