## Monday, April 1, 2013

### Maybe Stephan Kinsella Can Give Travis Holte the Answer

Travis Holte emails:
The Drudge Formula, What is it? I'm dying to know.
I emailed back:
Your man Stephan says its not scarce. You should know it already.

1. What a ridiculously stupid argument.

Non-scarce concepts dooes not have to imply that everyone's brain has that same pattern.

The meaning of scarcity is not grounded on the numerical quantity of it. Goods aren't scarce because they are finite. They are scarce because they are goods that cannot have two separate actions associated with them by individual actors who make choices. Finiteness is one of the reasons this is so, but it isn't exhaustive.

The Sun is not a scarce object, because it isn't an object that currently has separate, rivalrous action associated with it. But the Sun is nevertheless finite in size. Now, according to Wenzel's asinine logic, because the Sun isn't a scarce good in the economic sense, because the Sun currently isn't having multiple plans associated with it by separate actors, it supposedly means that everyone can potentially have exclusive ownership of it. Clearly that's false.

Similarly, as regards ideas, it does not follow that because a particular pattern of the brain occurs only a finite number of times in the world (say only Wenzel and one follower has a formula of how to get on Drudge), that the pattern itself is therefore scarce. It is not scarce. It is not scarce because the pattern itself is not something that separate actors cannot both act upon. An infinite number of separate actions can be put upon the brain pattern. Separate actors can act upon the same pattern, potentially infinitely. Hence, ideas are NOT scarce, EVEN IF not everyone currently has the pattern in their brains.

Wenzel's position is full of crap. His "debate" was an embarrassment. He got the floor wiped with him.

2. Equivocation is just a pretty word for lying.

3. Wenzel, it's not scarce. not because no one else currently has it, but because you would still have your drudge idea even if someone else also had the exact same drudge idea.

a car is scarce because two people cant both have the same car at the same time, if I took your car you would no longer have it, if I also had your idea you would still have yours and be able to act with it freely.

1. so its not scarce because millions of people can all have have it without taking away the same equation from robert? i would say that its not the same equation anymore because if robert is the only one that can act on the equation, it has a much higher value and effectiveness than if millions simultaneously acted on the equation. when robert is the only one he can pretty much guarantee any article he wants on drudge will be on drudge. its perceived value is much higher and is much more sought after. when you have millions simultaneously doing this your diluting the quality of the formula. it is no longer the same.

2. This comment has been removed by the author.

3. Ok, so youre anti competition.

Bob still retains his formula and the liberty to act with it.

does bob have a property right over my body and the way i act with my knowledge? Does bob have a property right to profits? Or to some specific amount of profits? Does bob have a property right to the money that costumers would voluntarily trade to me for my knowledge at a lower cost than they would to him?

Does bob have a property right to a monetary value?!?!?!?

if i buy a chevy camaro for 40k, its now my property, if chevy makes a million more of them and other people acquire them as their property and i wish to resell mine, do i have a property right to tell other people that they cant sell their cars because it makes mine less valueable?????

If i invent a teapot, and other people make teapots, do i have a right on the free market to tell them that they cant make teapots because its driving down the price of mine?

4. Sean, if you're the only pizza shop in town you can make \$X, if 10 more pizza places open your profit may go down to \$Y. The value of your business has gone down, it's called competition, it forces you to innovate, there is nothing wrong with it and it most certainly does not violate anyone's rights.

1. He thinks profits or the amount of dollars an individual would voluntarily trade you for your property is his property right.

2. my point isnt anti competition. anybody can try and make the formula unless they buy it from robert. if he decides to sell it without and conditions of secrecy then go ahead and tell all your friends. just like if i discovered some new pizza oven design. i could sell the new pizza oven equipment using my secret schematic and compete with other oven companies. if theres a market to sell it along with conditions that you can't reverse engineer it and recreate it then id do that. if not, anybody can buy my new equipment and independently discover and recreate it for whatever purpose they want.

3. Sean, your argument sounds innocent enough, but it is inherently violent. You are just leaving out that part.

"if theres a market to sell it along with conditions that you can't reverse engineer it and recreate it then id do that. if not, anybody can buy my new equipment and independently discover and recreate it for whatever purpose they want. [sic]"

If I buy your oven, I now own it, correct? What if I build an exact copy of the oven with materials that I also own? Do you suddenly own this new oven? If not, why do you assert a supposed right over my ability to sell this new oven of mine?

Do you see how the pro-IP position is actually anti-property altogether? How is it that someone else's property becomes your property because it is was made with a design that perhaps did not exist until you created it? At what point did the metal and other materials used in the manufacture of this new oven, none of which you owned, become your oven over which you may now assert rights?

4. "At what point did the metal and other materials used in the manufacture of this new oven, none of which you owned, become your oven over which you may now assert rights?"

Ted, you bring up great points. I think it is important to consider the brief argument in the debate on "self discovery" in the context of what you are alluding towards...and even further the notion of extending some type of IP over uninvolved third parties is problematic.

The thing is, in a truly free market that still yet has respect for property rights...I believe Bob's contention is that contracts may be written in a way to deal with some of this.

If I understand properly, that might have been Rothbard's contention as well.

I think it's tough to say "Well, you don't have a solution for preventing theft in this area of property rights, so the theft is "ok"".

I think you still have to throw stones at Kinsella's argument to see if they hold water...even though he doesn't want people to do that and tries to insist they are "positivist".

Even he doesn't want people to be critical of his work, he probably shouldn't publish. As we all know though, it is the baptism of fire that helps separate good ideas from idea.

5. I am not sure that I would feel real good about an argument that hinges solely on the definition of whether a good is scarce and/or rivalrous in determining whether a good taken against an owners will is theft or not.

6. I know the Drudge formula, and I will share it now.

But first, I must point out that by sharing the Drudge formula, that Wenzel will be crushed and will have to admit the formula is no longer scarce, since I know it. Sharing this knowledge will crush Wenzel.

Now, on to the formula, but first, allow me to gloat in advance over the imminent crushing Wenzel is soon to face! Oh, how sweet it will be to crush Wenzel!

Prepare yourself, as you are about to witness a crushing, the likes of which you've never seen, the likes of which you will never see again, so thorough will be this crushing!

I shall crush Wenzel like a bug! Like a whining, sniveling bug, I will crush him. I shall crush him now!

Now, I crush him, but only after I mention one last time how total this crushing will be! And now, on to the crushing.

The formula is simple: you add "HOT" to a blog title full of otherwise generally known information, throw in a few ad hominum attacks to your libertarian-themed tabloid, and delete comments you find disagreeable.

BOOM! Thus ends the most complete crushing of a man in the short but glorious history of the internet. And thus ends the notion that ideas are scarce.

Jagger out.

2. Alex Jones clearly has the Drudge Formula, Wenzel has not revealed it. Wenzel is Alex Jones.

7. I'm just some guy on the internet, but unless you are using some sort of code-jargon, Scarce means "Insufficient for the demand". There seems to be sizable "I'm dying to know" demand for a Drudge Formula. Check that half off. If one actor has a single instance of the "Drudge Formula", possessing and protecting the only instance, well... that's insufficient "Drudge Formulas" available to meet the demand, hence it is scarce. By releasing the physically intangible and thus infinitely reproducible "Drudge Formula", the scarcity immediately vaporizes unless there is some control over its use, such as licensing, IP rights, protections for a period of time, etc. OK, this "guy from the internet" is going to crawl back into the routers and switches and disappear again for a while :)

1. That's not what scarce means in this context. If Wenzel were to publish the "Drudge Formula" everyone in the world could theoretically use it simultaneously without impacting anyone else's ability to use it. In the context Kinsella is using it, non-scarcity is an inherent property of an idea not a measure of how many people currently know it or have it.

2. So, if two, or 5 or 100 people know the idea, sworn to secrecy, it's non-scarce? Don't be silly. Scarce means scarce, "Insufficient for the demand". You cannot change the meaning of scarce to declare something "non-scarce". Global vs. singular knowledge are not binary states.

I am in the software business. I make a lot of money using "scarce" ideas. How do I keep these ideas scarce? TRADE SECRET (and that is IP protection).

8. Robert,

Your argument is that ideas are scarce. All we need to do to disprove this is to show a counter example. Everyone on the planet knows to breathe in air. So there is atleast one idea that is not scarce. So, your argument that ideas are scarce is demonstrably false. Your argument is that some ideas, until a condition that no one else knows them, are scarce. But if everyone else knows them, they are not scarce anymore. So, you are saying that scarce ideas can become non-scarce and then they cannot be protected by IP anymore after others find out. Self contradictory.

1. Wenzel never said ALL ideas are scarce.

9. I still don't understand why withholding the formula wouldn't be covered by property law and transmission of the formula by contract law. NDA's provide an easy example and one would have to hack into a server to obtain the Drudge formula. If transmitting, storing and utilization of the formula requires no additional resources for an individual then the only scarce resource is the creativity to formulate it in the first place.

The pro-IP argument seems to be that both withholding AND transmission of an idea should be covered by property law. This still seems nonsensical.

10. If IP is valid, doesn't the formula actually belong to Drudge, making you a thief?

11. A trade secret is not the same as protectable IP - patent or copyright. If Bob doesn't disclose his secret, he gets monopoly use of the idea/process until someone else invents/discovers it. At no point here is there any concept of property, especially using the force of law and government to protect it against the use by others. No violence is necessary.

Furthermore, Bob can contractually bind those he shares it with (e.g., his web-programmer employees) to confidentiality with an NDA that prescribes damages/penalties for breach. Legal violence can be used to enforce the damages for the contract violation, but we still have no concept of IP. If others benefit from the leak or they independently come up with the idea, no violence is used.

Apples and oranges.

1. How would trade secrets differ from works covered by patents and copyright without monopoly privilege? It has been argued that EULA's are unnecessary because software can be covered by copyright. You could also argue the reverse: that EULA's make copyright redundant.

2. Without monopoly privilege every idea would require a contract to restrict individual action regarding it. The fact that tangible property is not involved would not invalidate a given contract.

12. How can someone who calls himself an austro-libertarian support a state grant of monopoly privilege?

13. "How can someone who calls himself an austro-libertarian support a state grant of monopoly privilege?"

Has Wenzel done that anywhere? Or are you inferring?

1. "Has Wenzel done that anywhere?"

Yes, he has: his pro-IP advocacy of course. State granted monopoly privilege.

2. Nah, you're assuming. I think he's taking a Rothbardian viewpoint via contracts.

It seems like all the anti-IP guys assume that pro IP guys are for state granted monopoly because they see no other way to protect intellectual property.

3. As Block has pointed out, it is possible to be believe in Austrian Economics and not be a libertarian....improbable but possible. Wenzel proves Blocks improbability statement.

4. "Nah, you're assuming. I think he's taking a Rothbardian viewpoint via contracts. "

It's not assuming, it's reasoning.

Rothbard's views are, as difficult as this pains you to hear, epistemologically irrelevant to whether IP is pro or anti-libertarian.

At any rate, Rothbard, as Kinsella has shown, was not Wenzelian, but more Kinsellian.

"It seems like all the anti-IP guys assume that pro IP guys are for state granted monopoly because they see no other way to protect intellectual property."

No, it just so happens to be the case now because that's where you pro-IP guys turn to in order to get a monopoly privilege. If we were in a private law society, and you hired some thugs to stop others from using their own bodies and real goods in ways they see fit, the violation would still be there. You'd still be in favor of violence backed monopoly privilege, this time granted by private security agencies.

Of course, in the absence of a central state, enforcing universal IP would be all but impossible, for the better.

5. "It's not assuming, it's reasoning."

I've got an idea that might help you. Ask first if someone is "for state granted monopoly" and then you won't have to admit your reasoning is incorrect.

"Rothbard's views are, as difficult as this pains you to hear, epistemologically irrelevant to whether IP is pro or anti-libertarian."

Actually, I could truly care less. I care about what is "correct". I have no care for whether the owner of such reasoned truth is Rothbard, Hoppe, or Satan for that matter.

You seem to assume quite a bit.

"No, it just so happens to be the case now because that's where you pro-IP guys turn to in order to get a monopoly privilege."

Once again, you assume incorrectly. If you listened carefully to the debate, you should have noticed the topic
"self discovery" came up in discussion. The implication of which suggests that IP based on a contract between two parties doesn't necessarily have to roll over to forcibly include a 3rd party that happens to succeed in "self discovery".

I would posit that the issue of truly "unique" ideas is what we are talking about here. Not the "IP" of tying ones shoes, etc. et al.

"You'd still be in favor of violence backed monopoly privilege, this time granted by private security agencies."

Yet another assumption that I already pretty much addressed above, but going a little further:

If we would expect two parties signing a contract with one another in a true free market system would also agree to an arbiter in dispute, that COULD eventually lead to the use of private security agencies...this is IN NO WAY IN CONFLICT WITH RUN OF THE MILL LIBERTARIAN THOUGHT.

That being said, I would like you to sincerely consider this:

If two parties agree in contract that party A is going to use the intellectual property of party B for some type of compensation, and party A decides to renege on the contract- WHO COMMITTED THE VIOLENCE FIRST?

In my estimation, a truly nuanced view of IP should acknowledge that ideas can be property...and title of such leased, bought, owned, etc.....with the caveat that if an outside party via self discovery comes into the idea then all bets are off.

In this way, no "theft" has occurred...IP is still an ownable good/property...and contracts can on it can occur with benefit to all.

6. The content of the contract would still be important. That the contract could stipulate that party B is the owner of the idea does not make sense. However the contract could define what party A could do with the idea without penalty. It could also define that the contract itself is considered to be compensation of some sort.

The fact that use of an idea can be restricted by contract does not make it property.

7. Nick:

"I've got an idea that might help you. Ask first if someone is "for state granted monopoly" and then you won't have to admit your reasoning is incorrect."

That is irrelevant. One can manifest one's pro-IP stance by way of private security agency granted monopoly based on aggression.

"Once again, you assume incorrectly. If you listened carefully to the debate, you should have noticed the topic"

I did listen to the debate.

And the state is still where Wenzel goes.

""self discovery" came up in discussion. The implication of which suggests that IP based on a contract between two parties doesn't necessarily have to roll over to forcibly include a 3rd party that happens to succeed in "self discovery"."

Self-discovery is irrelevant.

"I would posit that the issue of truly "unique" ideas is what we are talking about here. Not the "IP" of tying ones shoes, etc. et al."

Arbitrary distinction.

"If we would expect two parties signing a contract with one another in a true free market system would also agree to an arbiter in dispute, that COULD eventually lead to the use of private security agencies...this is IN NO WAY IN CONFLICT WITH RUN OF THE MILL LIBERTARIAN THOUGHT."

IF THAT AGENCY ENFORCED THE CONTRACT NOT JUST ON A AND B, BUT ON OTHERS AS WELL, i.e. pro-IP, that is not run of the mill libertarian thought.

"If two parties agree in contract that party A is going to use the intellectual property of party B for some type of compensation, and party A decides to renege on the contract- WHO COMMITTED THE VIOLENCE FIRST?"

A.

"In my estimation, a truly nuanced view of IP should acknowledge that ideas can be property...and title of such leased, bought, owned, etc.....with the caveat that if an outside party via self discovery comes into the idea then all bets are off."

Non sequitur.

Saying that A can renege on a contract with B, concerning idea A, does not imply that IP is valid. It implies private copyright is valid.

"In this way, no "theft" has occurred...IP is still an ownable good/property...and contracts can on it can occur with benefit to all."

Ideas aren't scarce, so they can't be owned.

14. There is a difference between trade secrets which once revealed have very little to no protection under the law and patents and copyrights which require government coercion to maintain.

A drudge formula would be the definition of a trade secret.

15. Alex Jones clearly has the Drudge Formula, Wenzel has not shared the Drudge Formula. Wenzel is Alex Jones.