Thursday, April 4, 2013

What's the Formula Stephan?

In this segment of the debate with Stephan Kinsella, I am trying to get him to say his use of the word "scarcity" is different from the common definition of the word. But he won't. He just holds to the position that my "Drudge formula" is not scarce, which makes him look pretty absurd, since he can't tell me what the formula is.

It is instructive that he refuses to point out that his definition of scarcity is different from common usage. Is it because he is not aware of this himself or is he afraid to say so publicly and clearly?


  1. Bob, stop doing this. This is embarrassing for you. How are you not understanding that you don't HAVE the formula?

    1. Why can't knowing be having?

      I'm getting a little annoyed with the anti-IPers on this website. The question is not what scarcity means, the question is why one definition of scarcity matters more than another for the non-aggression principle. Yet people are mindlessly commenting "no Wenzel! scarcity means this!"

      Likewise, your comment is a simple "No, Wenzel, you're wrong." Explain WHY he's wrong and give good reasoning.

      For full disclosure, I was originally anti-IP, but it seems not so clear to me anymore. I certainly have to go back and read Rothbard as well as Kinsella's and others' arguments in order to make a proper decision on this. But most of the comments, as well as the debate itself, have not zeroed in on the issue at hand: what is scarcity, why does a particular definition matter for the NAP, and what principles is your definition of scarcity derived from?


    2. Ideas are not tangible things. Ideas are not made up of matter. You can't place, move, manipulate or interfere with 'ideas'. Knowing is not having.

    3. Having implies ownership and exclusion rights. One cannot own an idea, just as one cannot "own" any action. One cannot exclude others from performing the same action; hence, the idea/concept behind an action (ie. the knowledge necessary to perform such an action) is not scarce. It is infinitely duplicable. It is the means that are scarce, and these are separable from the knowledge necessary to perform that action with the means. Both Menger and Mises describe ownership of means and knowledge of how to use those means as prerequisites for action; however, if knowledge is itself a mean, this would not have been separated out in their analyses; it would be included as a subset of "means".

      Not to mention, Kinsella has already put forth a positive theorem. Wenzel has yet to do the same except to say "you're wrong!" Therefore, the burden of proof is on Wenzel, not the anti-IP crowd.

    4. @theinterventionistparadox

      "The question is not what scarcity means, the question is why one definition of scarcity matters more than another for the non-aggression principle."

      You are absolutely right, but not only did Stephan Kinsella explain this in (I believe) his opening statement and several times throughout the debate, but it has been repeated many times by 'anti-IPers' on this site. Take for instance this quote from my comment on the debate:

      "Scarcity [in the sense Kinsella used it] is when one person's employment of the thing prevents another's employment of it. Property rights are the system by which this conflict is resolved and one person's incidental exclusion of another person, as a side effect of employing the thing, is deemed to be just."

      With this understanding of what property is it is clear that unless employment of a good causes this kind of exclusion then it cannot be property at all. The NAP is predicated on property so this clearly has an impact on the NAP.

    5. IP, like land rights, are "designed rights".

      Who says you can own land? Why do they say that?

      Same goes for IP.

      The issue is that some people think ideas, once made public, should belong to the public. They will say they think they shouldn't belong to anyone, but the result is identical.

    6. "The issue is that some people think ideas, once made public, should belong to the public. They will say they think they shouldn't belong to anyone, but the result is identical."

      That's not the issue at all. There is no *should* in an economic argument, which is being discussed in this thread. Neither does any anti-IP advocate say that "ideas, once made public, should belong to the public." This is a horrible mangling of the argument. Anti-IP advocates state that ideas, algorithms, melodies, rhythms, arrangements of colors or words, cannot be owned at all due to the nature of those goods, i.e. their economic non-scarcity.

      Furthermore, the only *should* being discussed by anti-IP advocates is the *should not* of the NAP as it pertains to tangible, scarce goods.

  2. How does someone that blogs about Austrian economics not understand the Austrian economics definition of the word "scarce"?

    1. That's the point: I can't believe that a self-styled "Austrian economist" could ever say that "information is not scarce".
      It is as if he didn't know Mises' refutation of central planning by saying that no price information would be available to the Economic Czar, hadn't read Hayek about "The use of Information in Society" nor anything by Kirzner.

      To say that information is superabundant is to ignore the context of human action in which it is used, where it never is available instantly and through no effort at all on the part of the acting person; to deny that information has a cost is to deny that it can be an object of human action --denying Dr Hoppe's axiom that "men are capable of learning"; it its to deny that information has a value, which means that everyone is omniscient and infallible:
      the very neo-classical abstraction which the Austrians find to be too unthinkable for them to use it in their theoretical constructs.
      That is what Dr Wenzel tried to make Mr Kinsella understand when speaking of his "formula" and his "not linking to Mr Kinsella's writings", but apparently to no avail so far.

      From what I could hear among the name-calling, Mr Kinsella, however near to Dr Hoppe as he seems to be, also seems to believe that rivalry is necessary for things to be scarce, as is an isolated person, such as the celebrated Robinson Crusoe, couldn't face scarcity before encountering Man Friday.
      That, of course, is another categorical error: rivalry is not what makes things scarce, human action is; rivalry is what makes property rights necessary in a social context.

      The question Dr Wenzel should have asked Mr Kinsella relenlessly, apart from questions about his abuse and misquotes, is:
      "Do you think voluntary contracts should be respected?".
      Contract law, as Rothbard understood, are sufficient to create an "intellectual property" of sorts, particularly if it is part of mutual covenants among groups of sovereign proprietors like in Dr Hoppe's "Natural Society".

    2. Vincent,

      " deny that information has a cost is to deny that it can be an object of human action..."

      The parameter of intangible goods that commands a price, that is subject to supply and demand, is the medium through which it is transferred. The idea, though valuable, does not command a price itself.

      Also: "That, of course, is another categorical error: rivalry is not what makes things scarce, human action is; rivalry is what makes property rights necessary in a social context."

      Do you not realize that ideas, being non-rivalrous, by your own stated sufficient condition for the necessity of property rights are not eligible for property rights?

    3. Vincent. Kinsella is disagreeing with Rothbard by pointing out that Contracts can't bind non-signing third parties to the contracts.

      It is OK to disagree with Rothbard isn't it? He's not God.

  3. Wenzel: I have the formula.
    Kinsella: No one has it.
    Wenzel: What?
    Kinsella: No one has it.
    Wenzel: Right.

    Right? You contradicted yourself here. Which is it Wenzel: no one or you?

    Caught in your own Gotcha Game?

    1. So what? As long as not everyone has the formula, and any other imaginable information, Mr Kinsella's claim that "information is not scarce" is an absurd one.
      Which it obviously is.

    2. Scarcity, for the millionth time, does not derive from how many instances of the thing occur. It is wrong to argue that an idea is scarce because not everyone knows that idea.

      Scarcity derives from asking the question of whether or not the usage of the thing precludes another from using that same thing. For ideas, this is not so. You can use an idea, and nobody is precluded from using that same idea, even if they don't know it at the time. The key is that if they do know it, their usage of that idea does not prevent others from using it.

      Ideas, as Mises points out, are infinitely duplicable. They're not economic goods. They are not scarce, even if they are not known by everyone.

  4. Isn't the Austrian definition of inflation also different from the common usage?

    1. The "common usage" of inflation being a "constant increase in consumer prices" as defined by Milton Friedman is a recent, empiricist one.
      The proper definition has always been
      "a supply of money in excess of the demand".

      Hans-Hermann Hoppe has explained how and why empiricism is being used to prevent people from understanding the necessarily destructive nature of government intervention.

    2. @Vincent. Inflation is a supply of money in excess of the demand?

      I hope that was a typo. Because if not you'd have to say that there was zero inflation since 2008. After all, Hank Paulson, AIG et al demanded a giant supply of money printing, right?

      Correct me if I'm wrong, but the Austrian definition of inflation is actually any increase in the supply of money, regardless of demand.

  5. This whole back and forth is really putting a bad taste in my mouth and making me dislike both sides. There is very little actual substance and honest debating of ideas, but a lot of personal attacks and piss and vinegar. I really wish you would all jut stop. Austrians have enough enemies without making more enemies among each other.

    1. On the contrary, this debate was very informative:
      Dr Wenzel seems to agree with Murray Rothbard on "intellectual property", and Mr Kinsella didn't seem to know what the latter had actually said there.
      And he made repeatedly the absurd claim that information is superabundant and has no value, which gives a sobering glimpse on his understanding of Austrian Economics.
      As Rothbard said:
      “It is no crime to be ignorant of economics, which is, after all, a specialized discipline... But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

    2. @Vincent: Kinsella repeatedly made the claim that information has no value?

      Please reference minute:second locations in the recording. Thanks.

    3. Exactly Martin. Whether something has value or not, is irrelevant to ownership.

      There are somethings that are valuable that aren't own-able (reputation, etc., and somethings that are that can (physical scarce resources) Kinesella never states that ideas aren't valuable.

      I'm still waiting for Bob to tell me HIS theory of IP. It seems like all he can do is pick and choose various passages from Rothbard and Mises and quote them with-out context to support some nebulous idea that IP is justified even thought he can't precisely state what IP even is.


  6. You seriously need to drop it, man. Look at the comments throughout your blog and on youtube. You lost the debate and are losing readership because of your antics. I'm a huge fan of your blog but they way you've acted in both your interviews and debates has really left a sour taste in my mouth. Are for me to enjoy your work the way I used to.

    And most importantly, you're making libertarians look nuts!

  7. This is becoming exhausting.

    The concept of scarcity can only be applied to the realm of tangible goods, i.e. goods that are not infinitely reproducable, and things which are rivalrous, meaning that if one individual makes use of a good, it cannot be used by another at the same time. The same is not true of intangible goods, such as ideas, algorithms, melodies, rhythms, arrangements of colors or words, etc., due to a different nature of the goods in question.

    Ideas, algorithms, melodies and the like can be thought, calculated, and whistled without another individual's doing so infringing on the ability of anyone else to do the same. Furthermore, ideas, algorithms, melodies, etc. can be nearly infinitely duplicated, so that anyone who wishes and knows them may know and make use of these intangible goods.

    One person knowing a formula, say, perhaps makes the formula numerically scarce, but it does not make the formula economically scarce. The anti-IP argument, as well as economics as a whole, hinges on the latter and not at all the former. The equivocation performed between the two definitions is tiresome. Wenzel is attempting to mow down a strawman. Kinsella's inability to explain the formula does not justify violence to subvert another individual's rights to real property. To argue in this manner is dishonest and fallacious.

  8. this is a side issue to the larger IP debate.

    If ideas are scarce or not is irrelevant to me.

    If kinsella did have the formula, would be within his own property rights to use it uninfringed with his own body and computer? Further, would Wenzel have the right to claim Kinsella's brain as his personal property to infringe on his right to use his brain, his body, and computer?

    It never got to that, and its absurd (regardless of how scarce the idea is) that Wenzel would claim ownership of Kinsella's brain to infringe on his right to use his own property.

    Wenzel's pretended gotcha moment is stupid.

  9. Its funny but in Power and Market, Rothbard actually steers a middle ground between the binary "pro-IP" and "anti-IP” groupings.

    He supports common law copyrighting. If I cut and paste a NY Times copyrighted article, and then sell that article to someone else, I am violating the Times’ property rights.

    According to Rothbard:

    “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 out­right to the buyer.”

    The way this sentence is constructed, reasonable people could differ on whether or not giving away a copy of a book or novel for free with the author credited for the work does or does not violate property rights.

    But concerning patents, Rothbard writes:

    "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."

    1. Exactly. This is why Stephan says Rothbard is muddled on the issue.

      Rothbard's views of various forms of IP actually change depending on what book by him you're reading.

      Regardless, whether Rothbard likes IP or not is irrelevant to whether it's a valid theory of ownership or not. Argumentation from authority is a logical fallacy.


  10. Say that Y has a hammer. Y gives Z the hammer. Z now has the hammer, but Y doesn't. Only one party can have the hammer at a time. Z having the hammer precludes Y from having the hammer. So, the hammer is scarce.

    Now say that Y 'has' the Drudge formula. (More accurately, he KNOWS the Drudge formula rather than HAS the Drudge formula, but for the sake of argument we'll just keep it simple) Y 'gives' (tells) Z the Druge formula. Z now 'has' the Drudge formula, BUT SO DOES Y. Z 'having' the Drudge formula DOES NOT preclude Y from also 'having' the Drudge formula. Therefore, the Drudge formula is NOT SCARCE.

    Whether or not one person knows a certain piece of information or not is irrelevant given what the economic definition of scarcity is. There is no limited supply to an idea over which a situation of rivalry (again, rivalry in the economic sense) could ever occur. Y still 'has' the Drudge formula whether zero individuals know what the formula is, or whether every single person on the globe knows what the formula is.

    Robert isn't a stupid guy. I think he understands this perfectly well by this point. Unfortunately, he is so dug-in and proud that there is no chance whatsoever that he will admit that he erred (and continues to err) in his logic.

    1. "Unfortunately, he is so dug-in and proud that there is no chance whatsoever that he will admit that he erred".

      Yes CP. In Shakespeare class I was taught that this is an example of a character's tragic flaw and is the basis of a tragedy play. Unfolding before our eyes.

  11. Kinsella's definition of scarcity IS the standard economic definition of scarcity.

    Something is scarce if it can be taken from you -- i.e., if you don't have it anymore when he uses it.

    If he uses your formula, you still have your formula.

    The formula still exists even if it's copied 10 gagillion times.

    The fact that only 1 copy exists is irrelevant to the fact that it is copyable, and not rivalrous in the economic definition of the term.


  12. It's hard to know how an idea could be called scare.

    Certainly *access* to an idea could be scarce – or even non-existent.

    But think about it, if there were some formula for getting mentioned by the Drudge Report, then that method exists whether anyone knows about it or not.

    For example, all the angles in a triangle add up to 180 degrees. This was true before anyone realized it. There might be a method of getting on the Drudge report. That method doesn't exist because it's in someone's head or on a piece of paper. It exists, because, factually speaking, it's *true* that it works.

    If only one person in all the world knew that all angles in a triangle add up to 180 degrees, then only one person has access to the idea. But the idea having nothing to do with that person exists even if no person has access to it. It's a single entity that can't be duplicated. All we can control is *access*.

    Now if an idea is true, then should we seek to limit access to that idea? Should we seek to monopolize the truth or some aspect of it?

    X = "my formula for getting on the drudge report"

    If X really works, it is a truth about the world. As such, this truth exists independent of whether anyone knows it – moreover, this truth is singular, not plural. If someone learns of the existence of X, should they keep it a secret or share it?

    Can we cordon off aspects of the truth and sell it to highest bidder? Is that okay?

    FInally, I'll note that even a false idea is undoubtedly singular not plural. It strikes me as strange to suggest otherwise.

  13. I have discovered the formula.

    During the "debate" Wenzel said his formula was used to drive traffic to his site. In other words, the formula is the means, site views are the ends.

    As long as he continues publishing these disjointed posts on the topic, without actually addressing any of the arguments made by Kinsella or readers opposed to so-called IP, he continues to generate traffic for his site.

    The formula thus becomes irrelevant, since his ends are achieved by other means.

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  15. Wenzel:

    I am thinking of a number between 1 and 1001.

    What's the number Wenzel!?! WHAT'S THE NUMBER!!?!?!

    You don't know it? That means the unmber 476 is scarce, and thus I have a right, according to you, to prosecute anyone else who uses it. They must pay me. Pay me what? Who cares, it's all bogus anyway!