Thursday, April 4, 2013

Intellectual Property: As usual, Rothbard gets it right

By Ed Ucation

On stealing BitCoins, selling brain patterns, and copying people
There has been a fierce debate going on recently about intellectual property (IP) between libertarians, led by Stephan Kinsella on the anti-IP side and Bob Wenzel on the pro-IP side. In recent years, the momentum has shifted toward the anti-IP side, with prominent thinkers such as Stephan Kinsella, Hans-Herman Hoppe, Jeffrey Tucker, and others, coming out against IP. In the pro-IP side corner sits Bob Wenzel, Paul Cwik, but also Murray Rothbard and Ludwig von Mises.
In this article, I will argue that, as usual, Murray Rothbard gets it right. Then I will address Kinsella’s arguments, based on his treatise “Against Intellectual Property,” Copyright 2008 Mises Institute . That’s right, Kinsella’s book is copyrighted.
So, what is Rothbard’s view?
In chapter 16 of the Ethics of Liberty, Rothbard writes:
Violation of (common law) copyright is an equivalent violation of contract and theft of property. For suppose that Brown builds a better mousetrap and sells it widely, but stamps each mousetrap “copyright Mr. Brown.” What he is then doing is selling not the entire property right in each mousetrap, but the right to do anything with the mousetrap except to sell it or an identical copy to someone else. The right to sell the Brown mousetrap is retained in perpetuity by Brown. Hence, for a mousetrap buyer, Green, to go ahead and sell identical mousetraps is a violation of his contract and of the property right of Brown, and therefore prosecutable as theft. Hence, our theory of property rights includes the inviolability of contractual copyright.
A common objection runs as follows: all right, it would be criminal for Green to produce and sell the Brown mousetrap; but suppose that someone else, Black, who had not made a contract with Brown, happens to see Green’s mousetrap and then goes ahead and produces and sells the replica? Why should he be prosecuted? The answer is that, as in the case of our critique of negotiable instruments, no one can acquire a greater property title in something than has already been given away or sold. Green did not own the total property right in his mousetrap, in accordance with his contract with Brown—but only all rights except to sell it or a replica. But, therefore Black’s title in the mousetrap, the ownership of the ideas in Black’s head, can be no greater than Green’s, and therefore he too would be a violator of Brown’s property even though he himself had not made the actual contract.
In chapter 10 of Man, Economy, and the State, Rothbard writes:
Turning now to patents and copyrights, we ask: Which of the two, if either, is consonant with the purely free market, and which is a grant of monopoly privilege by the State? In this part, we have been analyzing the economics of the purely free market, where the individual person and property are not subject to mo¬lestation. It is therefore important to decide whether patents or copyrights will obtain in the purely free, noninvasive society, or whether they are a function of government interference.
Almost all writers have bracketed patents and copyrights to¬gether. Most have considered both as grants of exclusive mo¬nopoly privilege by the State; a few have considered both as part and parcel of property right on the free market. But almost everyone has considered patents and copyrights as equivalent: the one as conferring an exclusive property right in the field of me¬chanical inventions, the other as conferring an exclusive right in the field of literary creations.[93] Yet this bracketing of patents and copyrights is wholly fallacious; the two are completely different in relation to the free market.
It is true that a patent and a copyright are both exclusive property rights and it is also true that they are both property rights in innovations. But there is a crucial difference in their legal enforcement. If an author or a composer believes his copy¬right is being infringed, and he takes legal action, he must “prove that the defendant had ‘access’ to the work allegedly infringed. If the defendant produces something identical with the plaintiff’s work by mere chance, there is no infringement.”[94] Copyrights, in other words, have their basis in prosecution of implicit theft. The plaintiff must prove that the defendant stole the former’s crea¬tion by reproducing it and selling it himself in violation of his or someone else’s contract with the original seller. But if the de¬fendant independently arrives at the same creation, the plaintiff has no copyright privilege that could prevent the defendant from using and selling his product.
Patents, on the other hand, are completely different. Thus:
You have patented your invention and you read in the newspaper one clay that John Doe, who lives in a city 2,000 miles from your town, has invented an identical or similar device, that he has licensed the EZ company to manufacture it. . . . Neither Doe nor the EZ company . . . ever heard of your invention. All believe Doe to be the inventor of a new and original device. They may all be guilty of in¬fringing your patent . . . the fact that their infringement was in ig¬norance of the true facts and unintentional will not constitute a de¬fense.[95]
Patent, then, has nothing to do with implicit theft. It confers an exclusive privilege on the first inventor, and if anyone else should, quite independently, invent the same or similar machine or product, the latter would be debarred by violence from using it in production.
We have seen in chapter 2 that the acid test by which we judge whether or not a certain practice or law is or is not consonant with the free market is this: Is the outlawed practice implicit or explicit theft? If it is, then the free market would outlaw it; if not, then its outlawry is itself government interference in the free market. Let us consider copyright. A man writes a book or composes music. When he publishes the book or sheet of music, he imprints on the first page the word “copyright.” This indicates that any man who agrees to purchase this product also agrees as part of the exchange not to recopy or reproduce this work for sale. In other words, the author does not sell his property out¬right to the buyer; he sells it on condition that the buyer not reproduce it for sale. Since the buyer does not buy the property outright, but only on this condition, any infringement of the con-tract by him or a subsequent buyer is implicit theft and would be treated accordingly on the free market. The copyright is there¬fore a logical device of property right on the free market.
Rather than the nebulous term “idea,” I will use the terms “pattern,” as in “pattern of information.”
Thus, Rothbard believes that an expression of a pattern in a tangential format (e.g., a book), can be sold with a restrictive covenant on the title, preventing the buyer from copying the pattern of words. If the buyer then trades or gifts the book to a third party, that restrictive covenant remains, because the buyer cannot impart ownership rights onto the book that he did not initially have. The third party is thus bound by the restrictive covenant. It does not matter whether the third party is aware of the restrictive covenant, just like it does not matter if you buy a house to which someone else already has title. That’s why there is title insurance. Wenzel used the analogy of a rental car. If I rent a car and then sell the car to you, you do not own the car, because I did not have title to the car to sell in the first place.
Now, Rothbard does not address why patterns can be owned. However, we can deduce that, since Rothbard believes that ownership comes from mixing one’s own labor with a resource, ownership of a pattern comes from mixing one’s own labor with the previous patterns that were used to create the new pattern. But what gives you the right to use previous patterns? Well, not all patterns are scarce. You have the right to use a non-scarce pattern and mix it with your labor to create a scarce pattern. For example, I can use English words, which are not scarce patterns, to write a novel, which will be scarce. Furthermore, even with scarce patterns, you can have the right to use a pattern and derive new patterns from it, while still lacking the right to copy the pattern.
Now let’s get to Kinsella’s arguments. Stay with it, I saved the best for last.
1) Kinsella argues that distinction between which IP is protectable and which IP is not protectable is arbitrary. For example, why are novels protected by copyright, but not fashion designs or recipes? Since we can’t make a rigorous distinction between what is protectable and what is not, there is something wrong with the concept of IP.
Well, you can certainly copyright a book of recipes, or a book of fashion designs. So I would say that fashion designs and recipes can be copyrighted. Why is it that it seems reasonable to copyright a book of recipes, but not reasonable to copyright a single recipe? It appears to be a question of length and relates more to what the private law, as evolved through the market process, would set as a reasonable standard. For example, how much smoke pollution would you have to endure from your neighbor before you could sue him? The answer is somewhere between one molecule of smoke and total inundation of your property, and the legal system would sort that out through the market process. The same process would apply to IP.
2) Kinsella argues that IP gives you partial ownership of other people’s property, because an IP owner can prohibit them from performing certain actions with their own property. Therefore, IP violates other people’s property rights.
There are many examples of restrictions on property that are consistent with libertarian principles. Some examples of property restrictions include land easements, restrictive covenants, equitable servitude clauses, rental agreements, and leases and licenses. Furthermore, my property sets limits on what you can do with your property. You cannot drive your car over my lawn.
Here is an example straight from Rothbard ( Rothbard, Murray N. (1997). Applications and criticism from the Austrian school.):


  1. It's pretty clear Kinsella's thinking is muddled, nice article. Bob could have been better at debating,(Kinsella was worse) ie, more calm, that doesn't take away from his clear thinking.

  2. It's a simple principle, really.

    Author: "The person who originated, created, or gave existence to something."
    Authority: "The moral right of a person to dispose of something (t.e., to decide its disposition), due to being its author, or the delegated right to so act on behalf of such a person."

    Intellectual Property, is just a convoluted way of claiming one's authority - by the "old school" definition I used, above.

  3. Rothbard is talking about his concept of "contractual copyright."

    "Hence, for a mousetrap buyer, Green, to go ahead and sell identical mousetraps is a violation of his contract and of the property right of Brown, and therefore prosecutable as theft."

    He is talking about a buyer who has agreed to a specific contract.

    As Kinsella said during the debate, Rothbard thought that contractual arrangements could replicate some of the features of the modern IP system, and he was wrong because he was trying to use contractual rights to build a case for rights good against the world.

  4. I don't understand how Black is bound by any sort of contract. He agreed to nothing.

    Contracts are valid only if all parties have voluntarily agreed.

    Rot hard is confused here. The fact that Green does not have distribution rights is not because he did not acquire them from Brown, it is because he surrendered them TO Brown.

    Black has always had the right to distribute any pattern of information he wishes, and because he never agreed to surrendering any of those rights, when he becomes aware of a new pattern, he has, as he always did, the right to distribute or sell it.

    1. Whoops my phone changed the spelling of Rothbard. No disrespect meant to the man he's one of my heroes. Wenzel if you can fix that please do.

    2. Would you agree that you are bound by someone's title to property? A property title binds everyone. If I own a house, you are bound not to trespass on it. A contract is a transfer of title from one person to another. You are bound by that transfer. If I let you use my car, but then I sell the car to someone else that doesn't let you use it anymore, you are bound by the contract, even though you were not party to it.

    3. The third party to the car sale is bound by the property rights, not by the contract. The contract simply exchanged property ownership rights between 2 people. The state of the 3rd party is exactly the same as it was before the contract - he still must respect property rights (he still doesn't own the car and must respect the wishes of the rightful owner with regard to its use).

      In your car example you have not shown how the 3rd party's obligations have changed in any way, just as in Rothbard's example, the state of the 3rd party was not changed by the contract. He always had a right to distribute arbitrary sequences of information, and there was no contract where he surrendered that right ( unlike Green who surrendered the right as part of the exchange )

  5. This is the way a case should be made, through dialectic and reasoned argument. Not through name calling. I commend Ed Ucation for an honest and well thought-out piece.

    I think he has proven that Rothbard was unequivocally and unambiguously in favor of IP. Contrary to what Kinsella claims.

    However, merely proving that Rothbard thought X was the case, does not prove that X is the case. Rothbard was not perfect and we should not surrender our own ability to reason to whatever he preached. If IP is really a legitimate form of law, then there is reason for it.

    That said, I think there are a couple of problems with Ed Ucation's article. He makes a good points in 1), 2) and 3). But from that point onwards, he misunderstands the anti-IP argument. Perhaps I am confusing the Kinsella argument with the anti-IP argument, though I do think they are the same thing.

    4) Kinsella argues that ownership is based on the first occupier, and is not based on mixing one’s own labor with the resource.

    By the first occupier principle, the person who first thinks up an idea is its first occupier and therefore the rightful owner. Therefore, the first occupier principle is consistent with the pro-IP position. It certainly cannot be the basis of the anti-IP position. I agree with the point that the first occupier principle is wrong, though.

    5) Kinsella argues that scarcity is defined by rivalry, and scarcity is the basis for ownership. Ideas are not rivalrous and therefore not scarce and thus cannot be owned. “The very possibility of conflict over a resource renders it scarce.”

    No, the argument is that scarcity is a necessary condition for rivalrousness, which in turn is a necessary condition for conflict. Only where conflict is possible, ought there to be a law. The entire discussion about the proper definition of scarcity is completely missing the point. The real question is whether Mr Wenzel's Drudge formula can be the object of a conflict. Since he's going to use violence against you if you use it without his permission even if you are under no contract, it obviously can be.

    The Bitcoin example is a good one. It is not physical, but in my opinion even the anti-IP people ought to concede it can be property -- precisely because it is rivalrous.

    What I'm really missing from the pro-IP side is an alternate theory of law. For Locke and Rothbard, anything you mix your labor with fits the criterion of property -- provided no one else mixed their labor with it earlier. But this is not fundamental enough. This theory offers no answer to questions such as "why ought there to be a law at all?"

    It is only the anti-IP side that attempts to answer that question: "to act without conflict". From this more fundamental principle, it is derived (perhaps incorrectly) that one ought not to be able to own ideas.

    The fundamental principle of the pro-IP side is "anything you mix your labor with is property -- provided someone else didn't mix theirs first". From this less fundamental principle, it is derived (probably correctly) that ideas can be owned.

    But why is the principle right?

  6. I've seen the letters I and P next to each other more in the last 4 days than the last 4 years.

  7. I don't get how pro-IP would be enforced. And how long does someone get to own (have rights to) an idea/pattern?

    1. It's nearly impossible to enforce to any significant extent, which is reflective of it's inherent illegitimacy.

  8. What Would Wenzel Say:

    I order a delicious dessert at a restaurant, make careful notes about taste, texture and appearance, and then recreate the dish at home, effectively nailing the recipe perfectly. Can the recipe "owner" sue me for theft?

    1. TTBOMK, that is actually the description of the first instance of IP, in ancient Greece.

      In Athens, the city made a law that the inventor of a novel food dish had the exclusive right to make that dish for a period of one year.

      Nowadays, IP doesn't cover that. But a city could pass that law locally, if society felt it was a good.

  9. What Would Wenzel Say:

    I order a delicious dessert at a restaurant, make careful notes about taste, texture and appearance, and then recreate the dish at home, effectively nailing the recipe perfectly. Can the recipe "owner" sue me for theft?

  10. What Would Wenzel Say:

    I order a delicious dessert at a restaurant, make careful notes about taste, texture and appearance, and then recreate the dish at home, effectively nailing the recipe perfectly. Can the recipe "owner" sue me for theft?

  11. What Would Wenzel Say:

    I order a delicious dessert at a restaurant, make careful notes about taste, texture and appearance, and then recreate the dish at home, effectively nailing the recipe perfectly. Can the recipe "owner" sue me for theft?

  12. What Would Wenzel Say:

    I order a delicious dessert at a restaurant, make careful notes about taste, texture and appearance, and then recreate the dish at home, effectively nailing the recipe perfectly. Can the recipe "owner" sue me for theft?

  13. Haha, Wenzel claimed before that he believes that independent discoveries shall not be prosecuted. Yet Rothbard here is claiming that independent discoveries shall be prosecuted.

    So does that mean that Wenzel is going to claim Rothbard is wrong, even though he went half berserk for Kinsella even hinting that he disagrees with Rothbard?

    1. No I think you are misreading. Rothbard is saying that they ARE prosecuted in the case of a patent, not that they should. A copyright being compatible with liberty allowing independent discovery, whereas the patent does not. If you read further in MES:
      "The patent is incompatible with the free market precisely to the extent that it goes beyond the copyright. The man who has not bought a machine and who arrives at the same invention in­dependently, will, on the free market, be perfectly able to use and sell his invention. Patents prevent a man from using his invention even though all the property is his and he has not stolen the invention, either explicitly or implicitly, from the first inventor. Patents, therefore, are grants of exclusive monopoly privilege by the State and are invasive of property rights on the market."

  14. Wenzel claimed before that he does not think it justified to prosecute independent discoveries.

    Rothbard in these passages claims they can be.

    Is Wenzel disagreeing with Rothbard on something, and is he going to go half berserk at himself the way he went half berserk at Kinsella for disagreeing with Rothbard?

    1. Nope, I think you're reading Rothbard wrong. See comment above, or read the whole passage from MES.

  15. I think I just earned some kind of badge of honor. Kinsella called me a moron, a total idiot, and a pathetic loser.

    1. Ed

      You did good work here. Well written and well thought out.

      An honest critic would recognize your tone and respond in kind. Apparently Kinsella did not. The name calling is merely a act to keep the faithful herded - an attempt at distraction from the lack of substance.

      Thank you for this effort.

    2. Welcome to the club. It means you are on the right track.
      More importantly though, it shows how weak Kinsella's arguments truly are.

      I think the last thing left as another commenter posted in another write up here on EPJ is the addressing of the definition of property.

      That's is going to be pretty tough because they are no less than 10 heavy thinkers that have property theory in what wiki terms "modern" time(17th century forward)

      HOWEVER, one stood out to me with a definition of property that not only makes sense, but it VERY compatible with the pro-IP argument, BASTIAT:

      "Frédéric Bastiat's main treatise on property can be found in chapter 8 of his book Economic Harmonies (1850).[31] In a radical departure from traditional property theory, he defines property not as a physical object, but rather as a relationship between people with respect to an object. Thus, saying one owns a glass of water is merely verbal shorthand for I may justly gift or trade this water to another person. In essence, what one owns is not the object but the value of the object. By "value," Bastiat apparently means market value; he emphasizes that this is quite different from utility. "In our relations with one another, we are not owners of the utility of things, but of their value, and value is the appraisal made of reciprocal services."

      I think this property theory is exceptionally relevant to the discussion and VERY WELL SUITED to Austrian economics.

    3. Nick, this is very interesting.

      The concept of “owning” something, to me, is in the control, use, and disposition of the object (physical or intellectual).

      In my considering this issue of IP and property, I thought about the formula for Coca Cola. It is certainly true that if other companies have the formula, Coke is not deprived of also having the formula.

      However, I believe that what Coke owns is not the formula, but the sole proprietary right to the formula. Not any different than one does not own a cow, but the sole proprietary right to the cow. A sole proprietary right is not properly divisible (absent voluntary action by the owner).

      Is this idea consistent with your reading here of Bastiat?

    4. How is ownership of "value" well-suited to Austrian economics? So if a drug store opens up across the street from my drug store, since I have a property right in the "value" of my business, I have some claim against them for "damaging" by business?

    5. @ Bionic Mos:

      "Is this idea consistent with your reading here of Bastiat?"

      Absolutely, because the key criteria(which most of us implicitly know) is that property defined by Bastiat has a basis in " In essence, what one owns is not the object but the value of the object."

      We all know the formula for Coke is valuable.


  16. One issue that I take to passage from "The Ethics of Liberty" is that Rothbard equates a visual inspection with reverse engineering. Just looking at a device is not sufficient to copy it in detail let alone mass produce it. Tolerances, tooling, materials and precise measurements can't be eyeballed.

    If I described two mouse traps as having wooden bases, springs and catches would that make them the same design? There are still dozens of features that could differ between the two.

  17. So if someone buys something that says 'copyright so and so' on it somewhere, and their purchasing the product constitutes an implicit contract to do as the labeling says here's a hypothetical. Suppose I sell a product to millions of people that somewhere at the bottom of the packaging in small print says "All who purchase this product are legally obligated to commit suicide within 30 days of purchase." Is everyone who bought my product from me legally obligated to kill themselves as stated on the packaging, in the same way that one is legally obligated to not make a duplicate of a recording that says copyright on it in small print?

  18. Everyone knows that Rothbard thought it was illegitimate for someone to try and stop him from using his VCR to record some television or a movie and watch it later even though the media companies were claiming that was a violation of their copyright. He didn't say that if he had signed a contract then it would be legitimate. If I have a formula for convincing everyone that IP is illegitimate and I try and sell this formula but no one offers to buy it, is it still scarce?

  19. Isn't the english language "scarce"? Some people don't know english. Some of them would be willing to pay to learn that info. What if i teach them some words but i stipulate by contract that they are not to speak these words only to read them. is that a valid contract?
    What about a Slave? If a slave owner has bought through a contract a slave he has the sole right to dispose and make use of this slave how he sees fit. if the slave runs away he is taking property from the slave owner, If the property had stamped on it "Wenzel's Slave" then no one in the free world would be able to employ this slave because he could not purchase the fruits of the (ex)slaves labor because the original slave owner never gave up his property in the slave and his labor.

  20. Even executives within large media companies admit that piracy of media does not hurt DVD sales:

    The free market is demanding more, and big media is unwilling or unable to provide. I guess it's time to stop the subsidies.

    1. Weird, because he said exactly the opposite on an interview I saw a few days ago. There, he mused that if he just had $1/download from the 4Mil+ downloads that he'd have had the money to do a lot of the scenes in the manner he'd have liked to have filmed them.

  21. Gets what right? He just declares it to be property without actually saying why. He makes an arbitrary distinction between patents and copyrights (that because the state confers the patent it's illegitimate, but if you claim it yourself it somehow becomes legit).

    Look, this is a shock for most, but Rothbard wasn't right or complete on everything. Nor is this "rothbard said it" a way to claim a victory in a debate. These people were not gods.

    As for the post itself, it reads a lot like the first chapter of Kinsella's "Against IP" book. A lo and behold he's claiming that rothbard did lay out a framework against IP. The article is called Justice and Property Rights. It's a critique against Utilitarianism. He lays out the two conditions for property rights. It would seem you need a material claim to something physical for it to be considered property.

    1. I simply like Bastiat's theory of property much more than Kinsella's.

      This might come as a surprise to you, but I think Kinsella is wrong.

    2. @ Jt$

      "It would seem you need a material claim to something physical for it to be considered property."

      What about BitCoins? Domain names? IP addresses? MPLS labels? The Internet is ripe with instances of partitioning a particular information space into ownable subsets.

    3. That's great that you think he's wrong, but you haven't answered the primary objections to your argument. If you agree with the libertarian position that there should be property rights in scarce physical things, then to make the case for property in information, you need to explain how you can assign property rights in information, outside of contractual arrangements, without undercutting property rights in scarce physical things.

      The A, B, C example is the perfect way for you to present your argument. You claim that A has a property right in the information. B has a contract with A, so we have no dispute there. But C does not have a contract with A. So, how is C violating A's property rights by using the information to guide his action? And what can A do with regard to C that doesn't violate C's property rights?

    4. @ answered your just refuse to go back and read Rothbard's construction on it and I'm not going over the same stuff over and over again.

      Also, you did this once before: "If you agree with the libertarian position that there should be property rights in scarce physical things."

      The whole debate is over the word "physical" in the above quote.

      I offer up Bastiat's theory on property as being more sound than Kinsella's, which allows for treatment of ip as "property" on the basis of its value.

      It makes more sense logically and is better thought out. It conforms to Rothbard theories on copyright but more importantly is consistent with RESPECT FOR PROPERTY(even if the case of "C" with Rothbard's framework) within a free market.

    5. Nick,

      You did not answer my question. Don't point me to Rothbard or anyone else; just answer my questions.

      Me asking you to state your agreement that there should be property rights in scarce physical things is not what the debate is over. Wenzel stated his agreement with this during the debate. The question is, given that libertarians agree on this, can property rights also be assigned in patterns of information?

      So please, don't point me to someone else's argument. Just answer my questions in this thread as concisely as you can.

  22. Rothbard says what I've already held without reading what he wrote: Copyright is lawful, Patents are not. A process can be arrived at any number of ways independent of the first arrival. Copyright cannot. It is an exact duplicate with no new functions.

    Samsung violated copyright by outright copying the iphone with minor differences and should be punished. Samsung also violated patents, that as seen both logically and practically are unenforceable.

  23. Ed Ucation,

    I can't post at Daily Paul so I am responding to your critique of Kinsella here. I'm not going to address Rothbard's views because I don't think they are relevant to the debate about the legitimacy of ownership of patterns of information.

    1) Kinsella did not make this argument. Kinsella explained that rivalrousness is a necessary condition for the emergence of property and that we live in a world in which there are rivalrous resources. He explained that libertarians believe in property rights to assign an exclusive owner to each rivalrous resource. Kinsella then asked Wenzel what his alternate theory was. Wenzel said his theory is that ideas are scarce, but he did not provide a clear definition of what he meant by "scarce."

    Kinsella then explained the implications of assigning property rights in patterns of information, and pointed out that doing so would protect things that even the current IP system doesn't protect such as fashion designs, newspaper headlines, and pizza and bar-drink recipes.

    2) This is not Kinsella's argument. His argument is that granting property rights in patterns of information necessarily undercuts property rights in rivalrous resources. He is not against land easements, which are based on the homesteading principle. He is not against people making voluntary agreements that restrict the use of their property such as restrictive covenants.

    Kinsella agrees with Wenzel that there is nothing wrong with people entering into a contract that involves a pattern of information. This is simply a contractual arrangement and has nothing to do with "intellectual property." The idea of "intellectual property" has to do with assigning property rights in patterns of information and extends beyond contractual arrangements by binding third parties. If you have a property right in something, that means that you have the right to exclude others from using it. If A has a property right in a pattern of information, that means that he has the right to exclude others from using that pattern of information. This necessarily undercuts property rights in rivalrous resources because it prevents others from using rivalrous resources they have homesteaded or contracted for in any way they see fit, even when they have not entered into a contract.

    The reason the rivalrous distinction keeps coming up is because the fact that we live in a world in which there are rivalrous resources is the entire reason why property rights are necessary. Without property rights, there would be constant clashing over rivalrous resources. This is not the case with patterns of information: one person's use does not exclude, interfere with, or restrict use by any other person.

    3) Kinsella's argument is that you cannot own patterns of information. Your examples, while currently in the realm of science fiction, all involve rivalrous resources.

    4) Kinsella agrees with the basic homesteading principle, which is based on first use. His point is that "mixing your labor" with something is not a sufficient condition for ownership, which you admit by agreeing with his marble example.

    5) A good is rivalrous if one person's use excludes, interferes with, or restricts use by any other person or for any other purpose. Your examples are all of rivalrous resources. Patterns of information can theoretically be used by every person, for any purpose, simultaneously. This is not the case with any of your examples.

    1. @Stephen:

      Sorry it took me so long to reply. There have been so many posts here on this topic recently that I find it hard to keep track of all the comments.

      1) Yes he did claim that the distinction, between which IP is protectable and which IP is not protectable, is arbitrary. See pages 15-19 of NSK's "Against IP."
      It is true that NSK claims that only rivalrous resources can be owned. But he keeps muddling this issue up by saying that scarcity depends on rivalrousness, which is wrong.

      Fashion designs and recipes are currently protectable. You can copyright a book of recipes and you can get a design patent on a fashion design. Did you know Google has a design patent for their homepage? Here it is:

      I think you are confusing use with copying. A bartender can use a recipe he didn't create, but he can't sell copies of it if it's copyrighted.

      2) "His argument is that granting property rights in patterns of information necessarily undercuts property rights in rivalrous resources."

      So what? If I leave my bike on your driveway, can you drive your car over it? Doesn't my property right in my bike undercut your property right in your driveway and in your car? You don't have unlimited rights on your property. You have unlimited rights in your property only insofar those right do not undercut someone else's property rights. Well, if we recognize IP, then your property right cannot undercut my IP rights. After all, no one is forcing you to obtain a copy of something I created. You choose to store a copy on your property. By obtaining a copy and storing in a physical medium you own, you are giving up some of your property rights in the physical medium, such as your right to use the physical medium to make a copy of my IP.

      I have also addressed the "contracts don't bind third parties" argument. If I let you use my pond to fish, and then I sell the pond to someone else that doesn't let you fish there, you are bound by the contract to respect the new owner, even though you did not sign the contract.

      3) I know NSK claims you cannot own patterns of information. The question is why not? NSK makes two claims: a) you can only own rivalrous resources and b) that the First Occupier Theory of Property is a better theory that the Labor Theory of Property. For a), all I have to do is give examples of clearcut ownership that does not include rivalrous resources. I gave the example of club goods (hot tub example, boat ride example), which no one has addressed so far. For b), consider my example of walking across the land vs. working the land and who has a better claim.

      4) NSK claims that mixing your labor with a resource is irrelevant, because you can't own your labor. He needs to take this position, because otherwise he has to admit that IP is valid. His homesteading principle is that the first occupier of an unclaimed resource is the rightful owner. But an act of occupation is necessarily an act of labor. So I don't see how you can take the labor out of the principle.

      5) While some examples I gave are rivalrous, such as bitcoins, others were not, such as your DNA pattern and your brain pattern (in addition to the club goods examples I gave earlier). Do you think someone should have the right to make a clone of you without your permission? Do you think someone should have the right to copy your consciousness into another body?

    2. Ed Ucation,

      1) Yes, the distinction is arbitrary. But Kinsella does not argue that IP is illegitimate BECAUSE of this. He is simply pointing out that people who advocate IP are advocating that the current IP system be extended even further than it already is to include things that it doesn't already protect.

      Kinsella does not say that scarcity depends on rivalrousness. He DEFINES the term "scarcity" to mean "rivalrous," which means that when something is used by any one person for any one purpose, its use necessarily excludes (or interferes with, or restricts) its use by any other person or for any other purpose. (This addresses your "club goods" argument. Club goods are not rivalrous by this definition.)

      If you don't like the way that Kinsella defines "scarce" as meaning "rivalrous," that's fine, but you need to clearly define your terms and present your argument. Nitpicking about his definition means nothing, because his definition is clear. You need to point out the flaws in his reasoning.

      2) You are not addressing my argument. You are simply analogizing patterns of information to physical things such as bikes. My argument is, we both recognize that there should be property rights in physical things. So, given this, how can you justify a new right that undercuts these things? Your example is of someone violating property rights in physical things. What you are not recognizing is that acceptance of property rights in patterns of information necessarily undercuts property rights in physical things that belong to people who have not committed a violation of property rights in physical things, nor broken any contract. Do you see how you are begging the question by giving an example of physical property rights being violated, which we both agree on, to attempt to prove your point that violating a property right in a pattern of information is the same?

      You have not addressed the "contracts that don't bind third parties argument." Again, you are simply begging the question by talking about ponds and fish, things that we already agree there should be property rights in.

      Property rights are "good against the world." You are attempting to extend contractual arrangements, which are only good between specific parties, to justify rights that are "good against the world." To do this, you need to answer two questions: 1) How is a third party who is not a party to a contract violating anyone's property rights by using a pattern of information to guide his action?, and 2) How can someone who claims a property right in a pattern of information prevent a third party from using that pattern of information in a way that doesn't violate that third party's property rights in physical things (which we both agree are legitimate)?

    3. Ed Ucation,

      3) I have pointed out already that your "club goods" examples are in fact "rivalrous" by the definition I have given (which Kinsella uses). If I want to put a museum to whatever use I want (say that I want to throw a party and fill the museum with all of my friends, have a band play, setup an open bar, etc.), that necessarily means that not every other person can put the museum to whatever use they want at the same time (they wouldn't be able to fill the museum with their friends, have a band play, setup an open bar, etc.).

      The reason that property rights do not need to be assigned in patterns of information is because they are not rivalrous. Only rivalrous things need to have property rights assigned in them, to prevent otherwise unavoidable clashing.

      4) Kinsella does not claim that it is irrelevant. He claims that it is not SUFFICIENT. You have already accepted this by agreeing with his marble example.

      You can take "labor" out of the principle because it is an imprecise concept. You do not have a property right in your "labor." "Labor" is simply a result of body ownership. First use is more precise, and as I explained, mixing your labor with something in no way means that you own it.

      5) I have already debunked your "club goods" thing. How can someone copy a DNA pattern without permission? Or clone someone? Or copy their consciousness? You are in the realm of science fiction again, which is fine, but these examples seem to be impossible without permission. If they were possible, in a future world, without permission (meaning that they could be copied without violating my property right in my physical body) and the use of these patterns of information in no way excluded, restricted, or interfered with my use of these patterns of information, then I do not see how I could claim any sort of property right in those patterns of information.

    4. @ Stephen

      If NSK defines scarcity to mean rivalrousness, he is putting himself into all kinds of contradictions. Is time scarce? Yes. Is time rivalrous? No. Do you see how this definition is a huge problem? There are many economic goods that are scarce and not rivalrous.

      In one part of your reply you say club goods are not rivalrous and in another part you say that they are. Which is it? I will assume, based on your example, that you mean they ARE rivalrous. The museum example you give is an example of congestion. Club goods are not rivalrous up to congestion, but become rivalrous as congestion approaches. For example, as a bus fills up, bus rides on the bus become rivalrous. If the bus is empty, the bus rides are not rivalrous.

      The rest of your arguments seem to say that I assume that ideas can be owned and am putting myself into a circular argument. I could say the same about you, that you assume ideas cannot be owned and then end up in the same circular argument, such as saying that they violate physical property rights. Well, that is only a problem if you refuse to accept that you can own ideas. If you do accept IP, it just becomes another kind of property. So who is right? I don't know whether we can say one person is right and the other is wrong, but we could try to figure which theory of property is better suited for humankind. NSK says First Occupier Theory of Property, I, Rothbard, and Locke say the Labor Theory of Property. There are other theories, such as Bastiat's Value Theory of Property. We should discuss the merits of each theory, then.

      Also, you misunderstand NSK's claim about labor. It's not that he believes that labor is not SUFFICIENT, it's that he believes that labor is not NECESSARY. He thinks first occupation (or first use, as you call it), is sufficient. How do you define that? Also, you still haven't answered my question about who has a better claim to a piece of land. A first person that walks across the land or a second person that tills the soil on the land.

    5. Ed Ucation,

      Defining "scarcity" to mean "rivalrousness" is perfectly legitimate. Time may be "scarce" according to your definition, but not "rivalrous." So what? Kinsella doesn't argue that "scarce" (in some other sense than "rivalrous") things can be owned; he argues that only rivalrous things can be owned.

      It was a typo when I said that "club good are not rivalrous by this definition." I meant to say that they are rivalrous, as I explained later.

      A rivalrous good is a good whose use by any one person for any one purpose necessarily excludes (or interferes with, or restricts) its use by any other person or for any other purpose. The level of congestion, as you say, has nothing to do with whether a good is rivalrous by nature. If I want to use a bus to go on tour with my band, you can't use the bus to drive yourself around. If I want to turn a museum into a skate park, you can't maintain it as a museum.

      The point is, when one person makes a claim and another person makes a conflicting claim, who justly gets to exercise exclusive control? Notice that in the case of patterns of information, this problem can never arise because two people's claims can't come into conflict. The conflict is always over rivalrous things.

      Can you please state your agreement that there should be property rights in physical things?

      If you agree that there should be property rights in physical things, then my argument stands. You need to make the positive case for how property rights can be assigned in patterns of information without undercutting property rights in physical things. This is the clearest example I can give to pose the two questions to you that you need to be able to answer:

      A and B agree to a contract: A agrees to share information with B on condition that B not reveal it. The contract specifies monetary damages if B shares the information. The information could be anything.
      Now, let’s assume that B breaks the contract and reveals the information to C. B is liable for the monetary damages specified in the contract. But C is not a party to the contract. Now A, B, and C know the information.
      If C uses the information to guide his action, is he violating anyone’s property rights? How can A prevent C from using the information without violating C’s property rights?
      You need to be able to answer these questions because you are trying to justify rights "good against the world" in patterns of information. You are going beyond contract.

      Kinsella doesn't like using the word "labor" because it is imprecise, but he believes in the libertarian homesteading principle. Libertarians believe that the person with the best claim or link to a rivalrous resource should be the rightful owner, and establishing the best claim or link of course requires that some action be performed with a physical body ("labor").

      The best claim or link to a rivalrous resource has to be based on an objective link between the owner and the resource; a link that is intersubjectively ascertainable. Transforming or embordering a rivalrous resource fulfills this criterion; walking across something does not. If you claim a property right in something, you want to make it clear to others that you have staked a claim. You want to do something to the rivalrous resource you are claiming ownership over so that other people can avoid violating your property rights if they want to. Remember, the entire reason that property rights are necessary is to make it possible to peacefully resolve conflicts.

      Rothbard's discussion of the "relevant technological unit" is applicable here.

    6. @ Stephen:

      "A and B agree to a contract: A agrees to share information with B on condition that B not reveal it. The contract specifies monetary damages if B shares the information. The information could be anything.
      Now, let’s assume that B breaks the contract and reveals the information to C. B is liable for the monetary damages specified in the contract. But C is not a party to the contract. Now A, B, and C know the information.
      If C uses the information to guide his action, is he violating anyone’s property rights?"

      Yes, C is violating A's property rights in the information! Do you see how you assume that information can't be owned and then derive your argument that C is not violating anyone's rights based on this assumption? You are stuck in the same kind of circular reasoning with which you accuse the pro-IP people.

      Each side takes one side of the premise of whether information can be owned and then derives their conclusions about property violations based on this premise. The majority of the arguments on both sides have been of this type. I think both sides are logically consistent based on their premise/axiom. But how do we argue about an axiom?

    7. Ed Ucation,

      I am not assuming that information can't be owned.

      1) My starting point is that every person owns their physical body. I do not see how it can be argumentatively justified that this is not the case.

      2) The human condition is such that resources of all kinds are rivalrous, meaning that use by any one person for any one purpose necessarily excludes (or interferes with, or restricts) use by any other person or for any other purpose.

      3) Because people are actors who subjectively value different things and use means to achieve ends, it is possible that people will come into conflict over the use of rivalrous resources.

      4) This is where the concept of property emerges. Property is a normative concept the purpose of which is to answer the question "who should have the right to exclusively control this rivalrous resource?"

      5) The libertarian rule for assigning property rights, because conflicts can arise over rivalrous resources, is the homesteading principle. Once a rivalrous resource has been homesteaded, title to it can then be transferred via contract. Homesteading and contract are the only two ways to justly acquire property under libertarianism (unless you aggress against someone's property and become liable for a tort).

      The entire purpose of property rights is to allow conflicts over rivalrous resources to be peacefully resolved. The entire reason why property rights are necessary is because rivalrous resources exist and people can come into conflict over them.

      Property rights impose obligations on other people, but only negative ones: don't aggress against other people's property. Creating new property rights necessarily creates obligations on other people. A "right" to health care or whatever imposes positive obligations on some people to provide those things to others.

      By attempting to recognize property rights in patterns of information, you are necessarily obligating other people who are not party to any contract to not use the rivalrous resources that they already own -- which all libertarians agree there should be property rights in -- in certain ways. You are trying to control other people's actions and other people's property. This is a violation of the non-aggression principle, and is incompatible with libertarian property rights.

      Do you see how I am arriving at my conclusion rather than simply assuming that patterns of information are not property?

      Now, can you please explain your theory to me? How do you justify property rights in information?

  24. The latest Rothbard commentary on IP outdating all of the above. Note the intellectual honesty. Note the admission of seeking further commentary. Note the request for more information. Note the shattering of your position that Rothbard saw copyright in perpetuity.

    "...Finally, there is the almost incredible harassment of VCR owners. If I buy a VCR and a blank tape, I should be able to tape a movie or other program off my own TV set. If the TV or movie people don't like it, they should jolly well have to lump it. It is grotesque that movie producers might get the Supreme Court to agree to outlaw use of the VCR. Worse yet is that the movie producers are harassing poor SONY, who only manufactures and doesn't use VCRs. Obviously, SONY has the deep pockets to enjoin and sue, which most home owners do not. Obviously, too, the government would have a great deal of difficulty mobilizing an enormous Gestapo, armed to the teeth, to break in on and confiscate or destroy the VCRs in many million American homes. Defend your VCRs to the death, fellow Americans! In practice, then, the movie people are not going to outlaw VCRs. They will just force SONY and the other manufacturers to pay a tax to the movie people, a tax which will be passed on to every VCR buyer. But the unfortunate principle—and the higher cost—might well be enshrined in the books.

    The problem in all these cases is not whether "property rights" should or should not be upheld. The problem in each of these cases is: Who should have the property right? The computer hacker to do what he wants with his own computer and his access to the telephone lines, or the other computer owner? The signal sender or the signal receiver in the latter's own equipment? The VCR owner or movie producers? In all of these cases I believe that the concept of copyright has been illegitimately extended to become invasive, and that the fact that the common law cannot combat these "crimes" is already an indication that they are not crimes at all.

    But I am in an odd position here. Of all the people in the libertarian movement, I probably know the least about computer technology. There are few movement people lower tech than myself. And yet among all the computer mavens in the movement, I have seen no discussion of these thorny issues. But it is important to apply libertarian property rights theory, i.e. judgments in various areas on who is a criminal and who is a victim, to advancing technology. So on these matters I still have a relatively open mind. Before the Iron Door closes, I cheerfully invite libertarian theorists and high-tech mavens to submit papers, on any or all sides of this problem, for possible publication in the Libertarian Forum. Is there computer crime? Are VCR and satellite dish owners criminals? Please send in your discussions, and help advance libertarian theory."

    — Murray N. Rothbard, High Tech 'Crime': A Call for Papers, The Libertarian Forum, Vol. 17, No. 7-8, July-August, 1983.

    1. Yeah but the real question is - does Rothbard know Wenzel's Drudge Formula?

    2. Rothbard is now to scarce for us to ever find out


    3. thetrue sleuth: "Rothbard is now to scarce for us to ever find out"