| The Case Against Patents |
The Case Against Patents ======================== by Michele Boldrin and David K. Levine https://x.com/micheleboldrin Michele Boldrin and David K. Levine January 1, 2013 Original: https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.1.3 The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awardedâwhich, as evidence shows, has no correlation with measured productivity. This disconnect is at the root of what is called the âpatent puzzleâ: in spite of the enormous increase in the number of patents and in the strength of their legal protection, the US economy has seen neither a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development expenditure. Both theory and evidence suggest that while patents can have a partial equilibrium effect of improving incentives to invent, the general equilibrium effect on innovation can be negative. The historical and international evidence suggests that while weak patent systems may mildly increase innovation with limited side effects, strong patent systems retard innovation with many negative side effects. More generally, the initial eruption of innovations leading to the creation of a new industryâfrom chemicals to cars, from radio and television to personal computers and investment bankingâis seldom, if ever, born out of patent protection and is instead the fruit of a competitive environment. It is only after the initial stage of rampant growth ends that mature industries turn toward the legal protection of patents, usually because their internal growth potential diminishes and they become more concentrated. These observations, supported by a steadily increasing body of evidence, are consistent with theories of innovation emphasizing competition and first-mover advantage as the main drivers of innovation, and they directly contradict âSchumpeterianâ theories postulating that government-granted monopolies are crucial to provide incentives for innovation. A properly designed patent system might serve to increase innovation at a certain time and placeâand some patent systems, such as the late-nineteenth century German system allowing only process but not final product patents, have been associated with rapid innovation. Unfortunately, the political economy of government-operated patent systems indicates that such systems are susceptible to pressures that cause the ill effects of patents to grow over time. The political economy pressures tend to benefit those who own patents and are in a good position to lobby for stronger patent protection, but disadvantage current and future innovators as well as ultimate consumers. This explains why the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Our preferred policy solution is to abolish patents entirely and to find other legislative instruments, less open to lobbying and rent seeking, to foster innovation when there is clear evidence that laissez-faire undersupplies it. However, if that policy change seems too large to swallow, we discuss in the conclusion a set of partial reforms that could be implemented as part of an incremental strategy of reducing the harm done by the patent system. Do Patents Encourage Productivity Growth? ========================================= If there is to be any rationale for patent systems, with all their ancillary costs, it must be that they increase innovation and productivity. What is the evidence? Simply eyeballing the big trends shows that patenting has exploded over the last decades. In 1983 in the United States, 59,715 patents were issued; by 2003, 189,597 patents were issued; and in 2010, 244,341 new patents were approved. In less than 30 years, the flow of patents more than quadrupled. By contrast, neither innovation nor research and development expenditure nor factor productivity have exhibited any particular upward trend. According to the Bureau of Labor Statistics, annual growth in total factor productivity in the decade 1970â1979 was about 1.2 percent, while in the decades 1990â1999 and 2000â2009 it has been a bit below 1.2 percent. Meanwhile, US research and development expenditure has been oscillating for more than three decades in a narrow band around 2.5 percent of GDP. The recent explosion of patents, in other words, has not brought about any additional surge in useful innovation and aggregate productivity. In new industries such as biotechnology and softwareâwhere innovation was already thriving in their absenceâpatents have been introduced without any positive impact on the rate of innovation. The software industry is an important case in point. In a dramatic example of judge-made law, software patents became possible for the first time in the early 1990s. Bessen and Meurer, in a large body of empirical work culminating in Patent Failure (2008), have studied the consequences of this experiment and have concluded that it damaged social welfare. Academic studies have also typically failed to find much of a connection between patents and innovation. In Boldrin and Levine (2008b), we conducted a metastudy gathering the 24 studies (including three surveys of earlier empirical work) we could find in 2006 that examined whether the strengthening patent protection leads to greater innovation. The executive summary states: â[T]hese studies find weak or no evidence that strengthening patent regimes increases innovation; they find evidence that the patent regime increases patenting! They also find evidence that, in countries with initially weak IP [intellectual property] regimes, strengthening IP increases the flow of foreign investment in sectors where patents are frequently used.â Actually, the issue of promoting foreign direct investment, while a well-established empirical consequence of strengthening patent regimes, is entirely beside the point of this essay. There are a number of ways to encourage a countryâs institutions and infrastructure in a way that the foreign direct investmentâand, in any case, foreign direct investment is not equivalent to innovation. Our conclusion was in keeping with other studies that have addressed this question. Some studies have failed to find any connection even between changes in the strength of patent law and the amount of patenting, while others fail to find a connection between patents and some measure of innovation or productivity. For example, after failing to find a single study claiming that innovation increased as a consequence of the strengthening of US patent protection in the 1980s, Gallini (2002, p. 139) wrote in this journal: âAlthough it seems plausible that the strengthening of US patents may have contributed to the rise in patenting over the past decade and a half, the connection has proven difficult to verify.â Similarly, Jaffe (2000) also examines many studies and concludes: â[D]espite the significance of the policy changes and the wide availability of detailed data relating to patenting, robust conclusions regarding the empirical consequences for technological innovations of changes in patent policy are few. There is widespread unease that the costs of stronger patent protection may exceed the benefits. Both theoretical and, to a lesser extent, empirical research suggest this possibility.â^1 The Lerner (2002) study is especially notable because he examined all significant changes in patent law in all countries over the last 150 years. His conclusion: âConsider, for instance, policy changes that strengthen patent protection. Once overall trends in patenting are adjusted for, the changes in patents by residents of the country and the policy change are negative, both in Great Britain and in the country itself. Subject to the caveats noted in the conclusion this evidence suggests that these policy changes did not spur innovation.â This, in summary, is what is currently known as the âpatent puzzleââalthough as we will explain, it is substantially coherent with a theory of innovation that emphasizes the gains from competition and first-mover incentives, rather than benefits from the monopoly power of patents. Evidence at the sectoral level of the US economy shows the same disconnect between patenting and productivity. In Boldrin, Correa, Levine, and Ornaghi (2011), we carried out a sequence of statistical tests and econometric estimations on two datasets: an original microeconomic dataset obtained by combining firm-level information obtained through Compustat, the National Bureau of Economic Research, and the Bureau of Labor Statistics and an enriched version of the dataset used by Aghion, Bloom, Blundell, Griffith, and Howitt (2005) in their study of industry-level mark-ups. Conclusions must of course be drawn with care from this kind of data because, across industries, the strength of competition, patenting, and productivity are simultaneously determined and intertwined with technological change. With that reservation appropriately noted, at the industry level there is, in general, no statistically significant correlation between measures of productivity (whether measured by labor or total factor productivity) and of patenting activity (whether measured by number of patents or citations of patents). We then investigated the relationships between patents, competition, and productivity further. When we regressed measures of patents (or patent citations) on a measure of competition (as measured by the inverse of profitability) used by Aghion, Bloom, Blundell, Griffith, and Howitt (2005), we found a positive relationship that is remarkably robust to changes in industry classification, time period, and set of sampled industries. That is, patents were more common in competitive industries. We also studied the correlation between the same measure of competitive pressure and objective measures of labor productivity growth. In our preferred specification, we found that average annual growth of productivity in the sectors with the highest level of competition is up to 2 percent bigger than in the sectors with the lowest level of competition. These strikingly large differences when cumulated over various decades, as it is the case in our dataset. This finding of a positive correlation between competition and productivity at the sectoral level replicated a pioneering, and unfortunately forgotten, pattern reported in Stigler (1956). The accumulated findings of no positive correlation between patenting and productivity are not conclusive, and arguments have raged over the specific data used, whether to look for a structural break in the data, how the researcher to correct for endogeneity, and so on.^2 However, it is fair to say that the sector-level, national, and cross-national evidence fail to provide any clear empirical link from patents to innovation or to productivity. This lack of connection is consistent with the view that the use of patents either as a defensive or as a rent-seeking tool more widespread than one might have predicted. In addition, the empirical evidence is consistent with the proposition that greater competition, not patents, is the main factor leading to innovation and greater productivity. Theory and Practice of Patents and Innovation ============================================= There is little doubt that providing a monopoly as a reward for innovation increases the incentive to innovate. There is equally little doubt that granting a monopoly for any reason has the many ill consequences we associate with monopoly powerâthe most important and overlooked of which is the strong incentive of a government-granted monopolist to engage in further political rent seeking to preserve and expand its monopoly or, for those who do not yet have a monopoly, to try to obtain one. These effects are at least to some extent offsetting: while the positive impact of patents is the straightforward partial equilibrium effect of increasing the profits of the successful innovator to the monopolistic level, the negative one is the subtler general equilibrium effect of reducing everyone elseâs ability to compete while increasing for everyone the incentive to engage in socially wasteful lobbying efforts. Downstream Innovation, Defensive Patenting, and Patent Trolls ============================================================= In the long run, even the positive partial equilibrium effect of patents in providing an incentive for innovation may be more apparent than real: the existence of a large number of monopolies created by past patent grants reduces the incentives for current innovation because current innovators are subject to constant legal action and licensing demands from earlier patent holders. The downstream blocking effect of existing monopoly grants on incentives for future innovation has greatly increased in recent decades because modern products are made up of so many different components. The recentâand largely successfulâefforts of Microsoft to impose a licensing fee on the large and expanding Android phone market is but one case in point. With the exception of Motorola Mobility, all the handset manufacturers have agreed to the fee, and Motorola lost its first battle against the fee in spring 2012âfought not in court but in the more receptive domain of the US International Trade Commission (Investigation Number 337-TA-744, May 18, 2012). Microsoft is attempting to charge a licensing fee solely over a patent involving the scheduling of meetingsâa rarely used feature of modern smartphones. The meeting-schedule feature is but one of many thousands of patented âideasâ used in a modern smartphone, and each owner of each patent potentially can charge a licensing fee. Hence, the main dynamic general equilibrium effect of a patent system is to subject future inventions to a giant hold-up problem: with many licenses to be purchased and uncertainty about the ultimate value of the new innovation, each patent holder, in raising the price of his âcomponent,â imposes an externality on other patent holders and so charges a higher than efficient licensing fee. In Boldrin and Levine (2005) and Llanes and Trento (2009), we and others have explored the theory; and many case studies involving patents (and other fractionated ownership problems) can be found in Heller (2008). To understand more about the actual effect of patents in the real world, consider the recent purchase by Google of Motorola Mobility, primarily for its patent portfolioânot for the ideas and innovations in the portfolio. Few if any changes or improvements to Googleâs Android operating system will result from the ownership or study of these software patents. Googleâs purpose in obtaining this patent portfolio is purely defensive: it can be used to countersue Apple and Microsoft and blunt their legal attack on Google. These remarks apply to the vast bulk of patents: they do not represent useful innovation at all and are just weapons in an arms race. This is not news: the same message emerged decades ago from the Levin, Klevorick, Nelson, and Winter (1987) and Cohen, Nelson, and Walsh (2000) surveys of research and development managers. One could argue that the costs of building up a patent portfolio to engage in this sort of defensive patenting are not too large: after all, it costs as little as $15,000 to file a successful patent application, and filing applications on a larger scale might be cheaper. However, the acquisition of large patent portfolios by incumbents creates huge barriers to entry. In the smartphone market, for example, Apple is the market leader and Microsoft is unable to produce a product that appeals to consumers. Each are incumbent firms with a large patent portfolio. In this market, Google is the new entrant and innovator and, while wealthy, Google found itself lacking a large defensive patent portfolio. Hence we see both Apple and Microsoft attacking Google with patent litigation, generating hundreds of millions in wasteful legal costs and no social benefit whatsoever. Despite the fact that patents are mostly used for arms races and that these, in turn, are driven by patent trolls, there does not yet exist convincing formal models of the ways in which this interaction can inhibit innovation. In a pure arms race theory, if all firms get counterbalancing portfolios and all innovate, then they would all have innovation in the absence of patentsâhence, patents do not encourage innovation. This follows because with counterbalancing patent portfolios, no firm can sue any other firmâexactly as would be the case in the absence of patents. Hence in this setting patents simply add a cost to innovation: if you wish to innovate, you must acquire an expensive patent portfolio to avoid trolls. On the other hand if a patentholder does not produce a marketable product and hence cannot be countersuedâlike Microsoft in the phone market or other patent trolls in other marketsâthen patents become a mechanism for sharing the profits without doing the work. In this scenario, not only do patents discourage innovation, but they are also a pure waste from a social standpoint. Patents and Information Disclosure ================================== Another widely cited benefit of patent systemsâalthough not so much in the economics literatureâis the notion that patents are a substitute for socially costly trade secrecy and improve communication about ideas. From a theoretical point of view, the notion that patents are a substitute for trade secrecy fails in the simplest model. If a secret can be kept for N years and a patent lasts M years, then an innovator will patent when N < M. In other words, ideas will be patented when it seems likely that the secret would have emerged before the patent expired and not patent if the secret can be kept. In practice, it is uncertain when the secret will leak out, but it can be shown that the basic intuition remains intact in the face of uncertainty (Boldrin and Levine 2004; Ponce 2007).^3 It is also the case that the extent of practical âdisclosureâ in modern patents is as negligible as the skills of patent attorneys can make it. It is usually impossible to build a functioning device or software program from a modern patent application; this is made especially clear by the fact that some patented ideas do not and cannot work. For example, US Patent 6,025,810 was granted for moving information through the fifth dimension. While detailed studies of the usefulness of disclosure in patent applications are not available, companies typically instruct their engineers developing products to avoid studying existing patents so as to be spared subsequent claims of willful infringement, which raises the possibility of having to pay triple damages. According to sworn testimony by Googleâs chief of Android development during the legal battles between Oracle and Google (for example, Niccolai 2012), the engineers that developed Android were unaware of Apple (or other) patents, and so were unlikely to have been helped by them. The opinion of Brec (2008), a Microsoft developer, reflects that of many practitioners: > [Microsoft policy for developers is to] never search, view, or speculate about patents. I was confused by this guidance till I wrote and reviewed one of my own patents. The legal claims sectionâthe only section that countsâwas indecipherable by anyone but a patent attorney. Ignorance is bliss and strongly recommended when it comes to patents. The related idea that somehow improved communication about ideas, thereby creating some positive externalityâa notion key to the âpublic-privateâ partnership between government and private research organizations in which the government funds the research and then gives the private organization a monopoly over what is developed in the course of researchâis backed by neither theory nor evidence. It is impossible to study the history of innovation without recognizing that inventors and innovators exchange ideas as a matter of course, often secretly. It occurs, when it occurs, typically in the final stages of an innovation process when some ambitious inventors hope to corner the market for a functioning device by patenting it. A good case in point is that of the Wright brothers, who made a modest improvement in existing flight technology that they kept secret until they could lock it down on patents, then used their patents both to monopolize the US market and to prevent further innovation for nearly 20 years (Shulman, 2003). The role that Marconi and his patent played in the development of the radio is altogether similar (Hong 2001), as are innumerable other stories. At the opposite extreme we have, again among many, the example of the Cornish steam engine discussed in Nuvolari (2004, 2006). Here engineers exchanged nonpatent ideas for decades in a collaborative effort to improve efficiency. The contemporary FLOSS (Free/Libre and Open Source Software) community is another successful example of how collaboration and exchange of ideas can thrive without the monopoly power granted by patents. First-Mover Advantages and Incentives for Innovation ==================================================== In most industries, the first-mover advantage and the competitive rents it induces are substantial without patents. The smartphone industryâladen as it is with patent litigationâis a case in point. Apple derived enormous profits in this market before it faced any substantial competition. The first iPhone was released on June 29, 2007. The first serious competitor, the HTC Dream (using the Android operating system) was released on October 22, 2008. By that time, over 5 million iPhones had been sold, and sales soared to over 25 million units during the subsequent year, while the total sales of all Android-based phones were less than 7 million. In the tablet market, the iPad has had no serious competition since its release on April 10, 2010. While it is hard to prove the delayed imitation also would have occurred in the complete absence of patents, intuition suggestsâand our formal model in Boldrin and Levine (2004) predictsâthat there is little reason to assert patent rights while the first-mover is still active. Apple did not initially try to use patents to prevent the Android phones from coming into its market and the subsequent âpatentsâ fightâ has been taking place largely after 2010; these are consistent with a substantial first-mover advantage. However, for Apple was the delay in the Android phones entry? Largely because Apple kept its first-mover advantage in spite of a large imitative entry in this market, the value of Apple stockâduring a severe market downturnârose by a factor of approximately five. While there may have been some delay in entry from the competition due to Appleâs threatâsince executedâof patent litigation, the fact is that the similar but less-successful devices had been available for a number of years before Apple finally cracked the market. Less anecdotal than the story of the iPhone is the survey of research and development managers in Cohen, Nelson, and Walsh (2000). Here, over 50 percent of managers indicate lead time (first-mover advantage) is important to earning a return on innovation; outside the pharmaceutical and medical instrument industry, less than 35 percent of managers indicate that patents are important. To understand patents in practice, it is necessary to examine the lifecycle of industries (for example, Jovanovic and MacDonald 1994; Scherer 1990). Typically a new, hence innovative, industry begins with a competitive burst of entries through which very many innovators try hard to get their product to market. In these early stages, many firms bring different versions of the new product to the market (think of the American auto industry in the early twentieth century or the software industry in the 1980s and 1990s) while demand for the new product grows rapidly and the quality of products is rapidly improved. At this stage of the industry lifecycle, the price elasticity of demand is typically high; what is important is not to dominate the market, but rather to get your own products quickly to market and to reduce costs. From the perspective of competing firms, your cost-reducing innovation is good for me in the same way that my cost-reducing innovation is good for youâhence, let us all imitate each other and compete in the market. As the industry matures, demand stabilizes and becomes much less price elastic; the scope for cost-reducing innovations decreases; the benefits of monopoly power grow; and the potential for additional product innovation shrinks. Typically there is a shakeout in which many firms either leave the industry or are bought out. The automobile industry is a classical historical example, but many readers will have a more vivid memory of the bursting of the dot-com bubble, which makes this point even more forcefully. At this stage of the industry lifecycle, rent seeking becomes important and patents are widely used to inhibit innovation, prevent entry, and encourage exit. If we look at patent litigation in practiceâand as predicted by theories of first-mover competition (Boldrin and Levine 2004, among others)âit takes place when innovation is low. When an industry matures, innovation is no longer encouraged; instead, it is blocked by the ever-increasing appeal to patent protection on part of the insiders. While patent litigation has increased, few patents are actively used. Patent litigation often involves dying firms that have accumulated huge stockpile of patents but are no longer able to produce marketable products and that are now suing new and innovative firms. For example, Texas Instruments was one of the first producers of microchips, and many in our generation remember the capabilities of their first TI calculator. But Texas Instruments was unable to make the transition to the personal computer revolution and became, for a while, the symbol of a dying company trying to stay alive by suing the newcomers.^4 In more recent times, Microsoftâonce the giant bestriding the software industryâhas been unable to make the leap to portable devices such as telephones and tablet personal computers. Thus, Microsoft now uses patent litigation to try to claim a share of the profits Google generates in this market. Back in 1991, Bill Gates said: âIf people had understood how patents would be granted when most of todayâs ideas were invented and had taken out patents, the industry would be at a complete standstill today . . . A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose.â Today, Microsoft lobbies across Europe and Asia for the introduction of software patents, a prize it has already obtained in its home country. The cost of litigating patents is not insubstantial either. Bessen and Meurer (2008) used stock market event studies to estimate the cost of patent litigation: they estimate that during the 1990s such costs rose substantially until, at the end of the period, they constituted nearly 14 percent of total research and development costs. A related but more difficult-to-quantify phenomenon is the rise of uncertainty caused by the legal system. A case in point is the NTP Inc. patents that were used to threaten the Blackberry network with a shutdown. In 2006, Research in Motion (RIM), the producer of Blackberry, agreed to pay $612.5 million to license the patent in question from NTP (Svensson 2006). The patent was later invalidated by the courtâbut RIM did not get its money back (Salmon 2012). Here, the behavior of a single judge cost RIM more than half a billion dollars. In this setting, it is no surprise that patent trolls hope to get rich quickly. It is easier to list the main social welfare implications of the tradeoff between costs of legal monopoly and incentives to patent holders than it is to calculate their magnitudes. Still, the provisional evidence we have suggests that the net welfare effects of the current patent system could easily be negative. It is somewhat conventional to think of welfare losses from distortions as small, with the idea that welfare triangles due to monopoly power are small being the paradigmatic case in point. Unfortunately, monopolies have no incentive to avoid large social losses even when the private gains are small. Witness, for example, the fact that patented pharmaceutical products often sell for hundreds of times the marginal cost of production, as some astonishing pricing differences between the US and the European markets show. Most revealing is the empirical study of the Quinolones family of drugs (Chaudhuri, Goldberg, and Gia 2006). It measures the economic consequences of the introduction of pharmaceutical patents for the family of drugs and concludes the consequence of patent protection to India will be nearly $300 million in welfare lossesâwhile the gain to the pharmaceutical companies will be less than $20 million.^5 Pharmaceuticals =============== This brings us to the controversial issue of drug patents. The standard argument says: No patents, no drugs. The total cost of developing a new drug, including failures, is quickly approaching the $1 billion mark (DiMasi, Hansen, and Grabowski 2003). So how can anyone, faced with such a gigantic fixed cost and a microscopic marginal cost of reproduction, innovate without the protection of patents? But consider the following facts: Under current law, the chemical formula and the efficacy of the cure as established by clinical trials are made available to competitors essentially for free. About 80 percent of the initial fixed cost of drug development comes from Stage III clinical trials, a public good that legislation requires be privately produced. The downstream social cost of monopoly pricing of pharmaceutical product is highest for life-saving drugs, and the cost of monopoly pricing of other pharmaceutical products is also quite high. Given all this, various economists, such as Kremer and Williams (2009), have argued that if government intervention is indeed needed in this market, a system of prizes might be superior to the existing system of monopolies. There are four things that should be born in mind in thinking about the role of patents in the pharmaceutical industry. First, patents are just one piece of a set of complicated regulations that include requirements for clinical testing and disclosure, along with grants of market exclusivity that function alongside patents. Second, it is widely believed that in the absence of legal protection, generics would hit the market side by side with the originals. This assumption is presumably based on the observation that when patents expire, generics enter immediately. However, this overlooks the fact that the generic manufacturers have had more than a decade to reverse-engineer the product, study the market, and set up production lines. Lanjouwâs (1998) study of India prior to the recent introduction of pharmaceutical patents there indicates that it takes closer to 10 years to bring a product to market after the original is introducedâin other words, the first-mover advantage in pharmaceuticals is larger than is ordinarily imagined. Third, much development of pharmaceutical products is done outside the private sector; in Boldrin and Levine (2008b), we provide some details. Finally, the current system is not working well: as Grootendorst, Hollis, Levine, Pogge, and Edwards (2011) point out, the most notable current feature of pharmaceutical innovation is the huge âdroughtâ in the development of new products. With these four factors in mind, it is possible to make proposals for reforming the pharmaceutical industry along with the patent system. For example, we could either treat Stage II and III clinical trials as public goods (where the task would be financed by National Institutes of Health, who would accept bids from firms to carry out the work) or by allowing the commercialization of new drugsâat regulated prices equal to the economic costs of drugsâif they satisfy the Food and Drug Administration requirements for safety even if they do not yet satisfy the current (overly demanding) requirements for proving efficacy. In other words, pharmaceutical companies would be required to sell new drugs at âeconomic costâ until efficacy is proved, but they could start selling it at market prices after that. It is ensuring the efficiencyânot the safetyâof drugs that is most expensive, time-consuming, and difficult.) In this way, companies would face strong incentives to conduct or fund appropriate efficiency studies where they deem the potential market for such drugs to be large enough to bear the additional costs. The new policy could begin with drugs aimed at rare diseases, which, because of their small potential market, are not currently worth the costs of efficacy testing; without the new policy, they might never make it to market at all. If this new progressive approval approach works for rare diseases, it could be adopted across the board. Our broader point is that, rather than just ratcheting up patent protection, there are a number of moves we could make to reduce the risks and cost of developing new drugs. The Political Economy of Patents ================================ We do believe, along with many of our colleagues, that a patent system designed by impartial and disinterested economists and administered by wise and incorruptible civil servants could serve to encourage innovation. In such a system, very few patents would ever be awarded: only those for which convincing evidence existed that the fixed costs of innovation were truly very high, the costs of imitation were truly very low, and demand for the product was really highly inelastic. (The curious reader may check Boldrin and Levine, 2008a, for a more detailed explanation as to why these three conditions need to be satisfied to make a patent socially valuable). There is little dispute, among these same colleagues, that the patent system as it exists is very far from satisfying such requirements and it is, in fact, broken. To quote a proponent of patents, Shapiro (2007): âA growing chorus of scholars and practitioners are expressing concerns about the operation of the US patent system. While there is no doubt that the US economy remains highly innovative, and there is no doubt that the patent system taken as a whole plays an important role in spurring innovation, the general consensus is that the US patent system is out of balance and can be substantially improved.â Actually, we believe the evidence is clear that the patent system taken as a whole does not play an important role in spurring innovation. But if a well-designed and well-administered patent system could serve the intended purpose, why not reform it instead of abolishing it? To answer the question we need to investigate the political economy of patents: why has the political system resulted in the patent system we have? Our argument is that it cannot be otherwise: the âoptimalâ patent system that a benevolent economist-dictator would design and implement is not of this world. It is of course fine to recommend patent reform. But if political economy pressures make it impossible to accomplish that reform, or if they make it inevitable that the patent system will fail to meet its goals, then abolitionâpreferably by the constitutional means as was the case in Switzerland and the Netherlands prior to the late nineteenth centuryâis the proper response. This political economy logic brings us to advocate dismantlement of the patent system. The political economy of patent protection is shaped by many players, but âconsumersâ are not prominent among them. On one side, the side of the potential patentees, there are individual inventors, corporate inventors, and patent trolls. Other players include the patent office, the lawyers who file and litigate patents, and the courts where the litigation takes place. The rules of the game are established by some combination of legislation, judicial action, and custom. But because patenting is a technical subject about which few voters have anything with clarity, interests of voters are not well represented. In many spheres of government regulation, this lack of representation for voters has often led to âregulatory captureââas Stigler (1971) and other public choice theorists have arguedâwhere there is one âregulatorâ who is captured, it is the one in charge of regulating patents. To understand why, we need to understand the motivation and incentives of the relevant players. Let us start with the US Patent Office and the infamous âone-clickâ patent #5960411 issued to Amazon in September 1999. According to 35 U.S.C. 103, the statute under which the Patent Office operates, to obtain a patent âthe differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been not obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains . . .â Now consider the patent in question, which claims, among other things, a monopoly over: > 11. A method for ordering an item using a client system, the method comprising: displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and in response to only the indicated single action being performed, sending to a server system a request to order the identified item whereby the item is ordered independently of a shopping cart model and the order is fulfilled to complete a purchase of the item. The idea of taking a single action to accomplish a goal is hardly innovative, and applying the idea of taking a single action to making a purchase is obvious to anybody who has ever used a soft drink machine. Purchases were already being made over the Internet in 1999. It was thus clear that orders would be made by a credit card, and either the credit card information would be provided at the time of the transaction, or stored in advance by the retailer. Either way, the user must identify itself when the purchase is made. Those obvious steps are exactly what Amazon describes in its patent, albeit with a few flow charts thrown into the eleven-page patent application. But through the fog of those flow charts, it is relatively easy to see that the verbal description of the single-click procedure applies equally well to what happens on the Amazon site and to what happens in front of millions of vending machines every day. The Amazon patent was reexamined by the US Patent Office starting in May 2006. After a preliminary finding that, indeed, âobviousâ means âobviousâ even at the Patent Office, the office then reversed itself and in October 2007, reaffirmed the Amazon patent, albeit limiting its scope slightly. So we cannot dismiss such an absurd patent as an aberration. What lead the US Patent Office to interpret, essentially, the words ânot obviousâ as meaning âobviousâ? The Patent Office is constantly under pressure from applicants and their lawyers to be more generous in issuing patentsâthat is, to adopt lower standards of obviousness and steeper standards for what is considered âprior art.â The following statement by David Kappos (2010), director of the US Patent Office concerning the allowance rateâwhat fraction of patents are acceptedâis revealing: âOverall in FY 2010, the allowance rate increased to 45.6%, compared to an allowance rate of 41.3% in FY 2009 . . . So, while we still have a lot of work to do, I think we are on the right path.â Apparently, accepting a higher fraction of patents applications is defined as âthe right path.â Talk about âregulatory captureâ! Patent lawyers play a large role in the political economy of patents. According to Quinn (2011), who is a patent attorney, legal fees for filing a patent run upwards of $7,000 and roughly half are rejected. In 2010, according to the US Patent Office, 244,341 patents were issued, which would imply roughly $3 billion in legal fees per year. Obviously, patent attorneys as a group have a tremendous incentive to see more patents are issued. This insight helps us understand better the role of the courts and their fairly recent reform. In 1982âlobbied by patent lawyersâCongress passed the Federal Courts Improvement Act, which moved federal patent appeals out of the regular court system to a special court system for dealing with patents. Naturally, many of the judges for this new court were chosen from the ranks of patent attorneys. For example, when a court voted, in a 1994 decision, to expand the scope of patents to software (In re Kuriappan P. Alappat, Edward E. Averill and James G. Larsen 33 F.3d 1526 [July 29, 1994]), of the six judges who voted in favor, half had previously been patent attorneys, while of the two that voted against, neither had been. The referee of the patent game is biased both materially and ideologically. As Landes and Posner (2004, p. 26) write in their discussion of the political economy of patents: âThat has been the experience with the Federal Circuit; it has defined its mission as promoting technological progress by enlarging patent rights.â Notice, too, that many patent lawsuits have a public goods aspect. Consider a case in which the plaintiff is asserting that its patent has been infringed. If the plaintiff wins the lawsuit, by confirming its monopoly position it appropriates all the benefits of winning the lawsuit. A victory by the defendant, by contrast, benefits partly itself, but also other firms that might be sued by the plaintiff for patent infringing as well as consumers who would have a more competitive market. Thus, the defendant receives only a slice of the overall benefits from winning the lawsuit, and will be willing to spend less on such lawsuits than it would if it were to receive all the benefits. This dynamic is nothing but the patent court version of the (already noted) fundamental asymmetry in the distribution of economic incentives that define the foundations of the political economy of patent law. Finally, political economy can be influenced by how standard terminology frames a problem. Landes and Posner (2004) point out that there is an âideologicalâ argument in support of stronger patent rights: supporters of free markets tend to favor institutions of private property, and patents and copyright are intellectual âproperty.â Hence, strengthening them is ideologically and politically consistent with the general principle that âprivate property is good for growth.â But as we (Boldrin and Levine 2008B) and many others elsewhere have argued, patents are just a monopoly, not property. Given this set of players and their incentives, the patent game moves naturally towards its equilibrium, as we have observed over time. Two centuries or so ago, patents were restricted in their areas of applicability and limited in both depth and duration over time; they were somewhat âreasonable,â to the extent social gains and costs seemed balanced. But we have witnessed a steady process of enlargement and strengthening of patent laws. At each stage, the main driving force was the rent-seeking efforts of large, cash-rich companies unable to keep up with new and creative competitors. Patent lawyers, patent officials, and wannabe patent trolls usually acted as foot soldiers. While this political economy process is pretty straightforward in broad terms, we are still missing an empirical, quantitative analysis of the stakes involved and of the gains and losses accruing to both the active players and to the rest of society, from the general public to the innovators that never emerged due to preexisting patent barriers. Perhaps surprisingly, despite the key importance of political economy in understanding why we have the patent system we have, economists have had relatively little to say on the subject. The few prominent papers that we know of on this subject typically build from analyses very similar to what we have presented hereâbut then shy away from drawing the logical conclusions. For example, Landes and Posner (2004) recognize that patent laws are mostly designed by the groups keen to increase their monopoly rents, not aggregate welfare, and that this drove the enormous growth in patent legislation and judiciary activity during the last 30 years. The major work by Scherer (2009) on âThe Political Economy of Patent Policy Reform in the United Statesâ follows a similar approach. It focuses on the fact that âgovernment emphasis on patent systems increasedâ while academic research was starting to become more and more aware that patents are playing a minor positive role, if any at all, in creating incentives for high R&D and in fostering productivity growth. After providing a concise and very well-informed historical survey of all major changes in US patent policies over the last century or so, Scherer (p. 195) wonders why the political system would increase patent protection so much in light of the fact âthat the record of debates on the enabling bill contains no solid evidence that the change would stimulate R&D, and that there is no evidence of an acceleration in company-financed R&D between the 27 years before the bill was enacted and the 18 years thereafter.â He then extends the same argument to the international arena, paying particular attention to the case of pharmaceutical patents. While Schererâs language and arguments are strongly critical of current trends in patents, he does not seek to explain why the institution, such as the patent system that was supposedly sound, would degenerate into something so socially damaging over the same 30-year period that academic researchers were realizing the institutionâs limitations and potential dangerousness. In our view, even insightful writers such as Landes and Posner (2004) and Scherer (2009) seem unable to shake themselves free of the belief that patents are essential in fostering innovation and that any problems can be fixed with some tweaks to the patent system; they fail to seriously consider the possibility of intrinsic problems with the design of the institution itself. This belief in patents flies in the face of the structural realities: Marginal extensions of patents result in substantially higher per capita rents for the few holders of the right while marginally reducing the individual welfare of the much larger number of nonholders. The rent of the monopolist is a lot higher than an individual consumerâs deadweight loss, so the monopolist has an incentive to perpetuate the system while the individual consumer has no incentive to fight it. Those who possess a patent do hold a âproperty rightâ in the conventional sense of that term, but they do hold a socially granted âmonopolyâ right, and will tend to leverage whatever initial rents their monopoly provides in order to increase their monopoly power until all potential rents are extracted (and, in all likelihood, also large dissipated by the lobbying and transaction costs). This scenario helps explain how patents interact with the industry lifecycleâwhy patents are either ignored or scarcely used in new and competitive industries, while being highly valued and overused in mature and highly concentrated ones. Conclusion ========== In 1958, the distinguished economist Fritz Machlup in testimony before Congress famously said: âIf we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it.â A proposal to abolish patents may seem âpie in the sky.â Certainly, many interim measures could be taken to mitigate the damage caused by the current system: for example, properly enforcing the standard that patents should only be granted for nonobvious insights; requiring genuine disclosure of working methods in patents (the opposite of certain recent âprotectionistâ proposals to institute secret patents); and allowing an âindependent inventionâ defense against claims of patent infringement. But why use band-aids to staunch a major wound? Economists fought for decadesâultimately with considerable successâto reduce restrictions on international trade. A similar approach, albeit less slow, should be adopted to phase out patents. Because policy proposals are often better digested and metabolized in small bites, here is our list of small reforms that could be easily implemented. 1. Patents are time limited, which makes it relatively easy to phase them out by phasing in ever shorter patent durations. This conservative approach also has the advantage that if reducing patent terms indeed has a measurable effect on innovation, the process can be reversed. 2. Stop the rising tide that, since the early 1980s, has extended the set of what can be patented and has shifted the legal and judicial balance substantially in favor of patent holders. 3. Because competition fosters productivity growth, antitrust and competition policies should seek to limit patents when they are hindering innovation. This policy may be of particular relevance for high-tech sectors, from software to bioengineering, to medical products and pharmaceuticals. 4. Current international trade negotiations that affect patents often occur as part of either the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which was signed in 1995 as part of the World Trade Organization, or as part of the World Intellectual Property Organization, an agency of the United Nations. The nature of these agreements and organizations is well indicated by the use of the propaganda term âintellectual propertyâ in their titles. In both cases, these talks are often focused on how to prevent ideas from high-income countries from being used in low-income countriesâwhat we would characterize as essentially a neomercantilist approach toward free trade in goods and ideas. We should be highly cautious about this agenda. Within a couple of decades, the âbalance of trade in ideasâ between the US and European economies and emerging economies in Asia might easily equalize or reverse. Engaging in âmercantilism of ideasâ may seem favorable to certain large US firms now, but such rules may become costly to the US economy if they are applied to protect patents held in the future by producers in the now-developing Asian economies. 5. If the US economy is to have patents, we may want to start tailoring their length and breadth to different sectoral needs. Substantial empirical work needs to be done to implement this properly, although a vast legal literature is already pointing in this direction. 6. Patents should not be granted based only on the technological insights, but should also take economic evidence into account. For example, if an invention is easy to copy or has a high fixed cost, then patent protection to provide an incentive for the inventor may be more suitable. Ultimately, patents should be awarded only when strictly needed on economic grounds, as spelled out earlier. 7. We advocate returning to the rule prior to the Bayh-Dole Act of 1980 according to which the results of federally subsidized research cannot lead to patents, but should be available to all market participants. This reform would be particularly useful for encouraging the dissemination of innovation and heightening competition in the pharmaceutical industry. 8. In several industries, notably pharmaceuticals, it would be useful to rethink all of the government policies that bear on incentives for invention. The broad point is that there are a number of ways to reduce the risks and cost of developing new drugs, rather than just trying to ratchet up patent protection. In general, public policy should aim to decrease patent monopolies gradually but surely, and the ultimate goal should be the abolition of patents. After six decades of further study since Machlupâs testimony in 1958 has failed to find evidence that patents promote the common good, it is surely time to reassess his conclusion that it would be irresponsible to abolish the patent system. The patent system arose as a way to limit the power of royalty to award monopolies to favored individuals; but now its primary effect is to encourage large but stagnant incumbent firms to block innovation and inhibit competition. We are grateful to the editors, the referees, and to Richard Stallman for a careful reading and comments. â ^1: The study by Kanwar and Evenson (2001) illustrates some of the issues that arise in these kinds of studies. They have two five-year averages on 31 countries for the period 1981â1990. They find support for the idea that higher patent protection leads to higher research and development spending as a fraction of GDP. However, a different story seems equally plausible. Countries with a larger market can more easily pay the fixed costs of innovation. Indeed, one perspective is that their data essentially compares countries with relatively small economies, little intellectual property protection, and low R&D spending with countries with relatively larger economies, greater intellectual property protection, and higher R&D spending. For example, R&D spending as a fraction of GDP in their data ranges from a ten-year average of 0.2 percent in Jordan to 2.8 percent in Sweden. If we combine their data with GDP data from _The 1990 CIA World Fact Book_ to take account of the size of the economy, increasing the strength of intellectual property protection from 0 to 1 to 2 on their five-point scale does increase R&D expenditure. But as the intellectual property protection is increased further, the gains to R&D expenditure levels then falls. Even at the lower levels, we are probably observing primarily the effect of foreign direct investment: that is, among poor countries with near-zero intellectual property protection, increases in foreign direct investment and in doing so directly raise R&D spending. In higher-income countries with larger economies, foreign investment increases in intellectual property have little or no effect on innovation. ^2: For a sense of these controversies, Aghion, Bloom, Blundell, Griffith, and Howitt (2005) find an âinverted-Uâ relationship between the extent of competition, as measured by the inverse of mark-ups, and a measure of patenting activity, based on a dataset of US patents of UK firms. In other words, they find that the maximum innovative effect (as measured by patents) occurs at some âintermediateâ position between a high and low level of competition. However, Hashmi (2011) reexamines the inverted-U relationship using data from publicly traded US manufacturing firms and finds a robust positive relationship between the inverse of markups and citation-weighted patents. Correa (2012) reexamines the same dataset of UK firms and shows that the prediction of an inverted-U is overturned when allowing for the possibility that innovations follow a âmemory process,â where the current probability of introducing a new innovation increases when a firm successfully innovated in the previous period. He also finds a structural break in the data in 1981, when the Court of Appeals for the Federal Circuit was established to hear appeals of patent cases. Overall, Correa finds a positive innovation-competition relationship for the memory industries before the 1982 reform, but no relationship between innovation and competition for those industries that he classifies as memory-less. ^3: A more subtle point is that secrecy may bias the type of inventive activity away from innovation that are not easily kept secret to those that can be. In this symposium, Moser offers some of the historical evidence on this point. ^4: Texas Instruments is such an important source of litigation that empirical work on patent litigation usually uses a dummy variable for TI. Empirical studies of the importance of firms no longer doing business in an industry to litigation can be found in Bessen and Meurer (2005) and Hall and Ziedonis (2007). ^5: Although the focus of this paper is on patents rather than copyright, it is worth noting that most of the copyright wars revolve around measures to prevent piracy, empirically a relatively minor factor as far as profits of media corporations are concerned (see for example Sinha, Machado, and Sellman 2010; Danaher, Dhanasobhon, Smith, and Telang 2010; Sanchez 2012). * References ========== Here is the transcribed text from the image: --- **Aghion, Philippe, Nick Bloom, Richard Blundell, Rachel Griffith, and Peter Howitt. 2005.** âCompetition and Innovation: An Inverted-U Relationship.â *Quarterly Journal of Economics* 120(2): 701â728. **Boldrin, Michele, Juan Correa Allamand, David K. Levine, and Carmine Ornaghi. 2011.** âCompetition and Innovation.â In *Cato Papers on Public Policy,* Vol. 1, edited by J. A. Miron, 109â172. Cato Institute. **Boldrin, Michele, and David K. Levine. 2004.** âRent Seeking and Innovation.â *Journal of Monetary Economics* 51(1): 127â60. **Boldrin, Michele, and David K. Levine. 2005.** âThe Economics of Ideas and Intellectual Property.â *Proceedings of the National Academy of Sciences* 102(1): 1252â56. **Boldrin, Michele, and David K. Levine. 2008a.** âPerfectly Competitive Innovation.â *Journal of Monetary Economics* 55(3): 435â53. **Boldrin, Michele, and David K. Levine. 2008b.** *Against Intellectual Monopoly.* Cambridge University Press. **Bessen, James, and Michael J. Meurer. 2005.** âThe Patent Litigation Explosion.â BU School of Law Working Paper 05-18, Boston University. **Bessen, James, and Michael J. Meurer. 2008.** *Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk.* Princeton University Press. **Brec, Eric. 2008.** âNIHilism and Other Innovation Poison.â *MSDN Blogs,* November 1. http:// blogs.msdn.com/b/eric_brec/archive /2008/11/01/nihilism-and-other-innovation-poison.aspx. **Chaudhuri, Shubham, Pinelopi K. Goldberg, and Panie Gia. 2006.** âEstimating the Effects of Global Patent Protection in Pharmaceuticals: A Case Study of Quinolones in India.â *American Economic Review* 96(5): 1477â1514. **Cohen, Wesely M., Richard R. Nelson, and John P. Walsh. 2000.** âProtecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not).â NBER Working Paper 7552. **Correa, Juan A. 2012.** âInnovation and Competition: An Unstable Relationship.â *Journal of Applied Econometrics* 27(1): 160â66. **Danaher, Brett, Samita Dhanasobhon, Michael D. Smith, and Rahul Telang. 2010.** âConverting Pirates without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy." March 3. Available at SSRN: http://ssrn.com/abstract=1381827 or http://dx.doi.org/10.2139/ssrn.1381827. **DiMasi, Joseph A., Ronald W. Hansen, and Henry G. Grabowski.** 2003. "The Price of Innovation: New Estimates of Drug Development Costs." *Journal of Health Economics* 22(2): 151â85. **Gallini, Nancy T.** 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform." *Journal of Economic Perspectives* 16(2): 131â154. **Gates, Bill.** 1991. "Challenges and Strategy." Memo, Microsoft Corporation, May 16. http://www.std.com/obi/Bill_Gates/Challenges_and_Strategy/. **Grootendorst, Paul, Aidan Hollis, David K. Levine, Thomas Pogge, and Aled M. Edwards.** 2011. "New Approaches to Rewarding Pharmaceutical Innovation." *CMAJ: Canadian Medical Association Journal* 183(6): 681â85. **Hall, Bronwyn H., and Rosemarie Ham Ziedonis.** 2007. "An Empirical Analysis of Patent Litigation in the Semiconductor Industry." http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.69.5271. **Hashmi, Aamir Rafique.** 2011. "Competition and Innovation: The Inverted-U Relationship Revisited." Available at SSRN: http://ssrn.com/abstract=1762388 or http://dx.doi.org/10.2139/ssrn.1762388. **Heller, Michael.** 2008. *The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives.* Basic Books. **Hong, Sungook.** 2001. *Wireless: from Marconiâs Black-Box to the Audion.* MIT University Press. **Jaffe, Adam B.** 2000. "The U.S. Patent System in Transition: Policy Innovation and the Innovation Process." *Research Policy* 29(4â5): 531â57. **Jovanovic, Boyan, and Glenn M. MacDonald.** 1994. "The Life Cycle of a Competitive Industry." *Journal of Political Economy* 102(2): 322â47. **Karwar, Sunil, and Robert Evenson.** 2001. "Does Intellectual Property Protection Spur Technological Change?" Levineâs Working Paper Archive, no. 122247000000000455. **Kappos, David.** 2010. "Reflections on the USPTO Dashboard." *Directorâs Forum: on David Kapposâs Public Blog,* October 13. http://www.uspto.gov/blog/director/entry/reflections_on_the_uspto_dashboard. **Kremer, Michael, and Heidi Williams.** 2009. "Incentivizing Innovation: Adding to the Toolkit." In *Innovation Policy and the Economy,* vol. 10, edited by Josh Lerner and Scott Stern, 1â17. Chicago University Press. **Landes, William M., and Richard A. Posner.** 2004. *Political Economy of Intellectually Property Law.* Washington, DC: AEI-Brookings Joint Center for Regulatory Studies. **Lanjouw, Jean O.** 1998. "The Introduction of Pharmaceutical Product Patents in India: Heartless Exploitation of the Poor and Suffering?" NBER Working Paper 6366. **Lerner, Josh.** 2002. "Patent Protection and Innovation over 150 Years." http://www.epip.eu/papers/20030424/epip/papers/cd/papers_speakers/Lerner_Paper_EPIP_211403.pdf (quotes are from this version). Abridged version published in 2002 as "150 Years of Patent Protection," *American Economic Review* 92(2): 221â25. **Lerner, Josh.** 2009. "The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues." *American Economic Review* 99(2): 343â48. **Levin, Richard C., Alvin K. Klevorick, Richard R. Nelson, and Sidney G. Winter.** 1987. "Appropriating the Returns from Industrial Research and Development." *Brookings Papers on Economic Activity,* no. 3, Special Issue on Microeconomics, pp. 783â820. **Llanes, GastĂłn, and Stefano Trento.** 2009. "Patent Policy, Patent Pools, and the Accumulation of Claims in Sequential Innovation." *Economic Theory* 50(3): 703â25. **Machlup, Fritz.** 1958. "An Economic Review of the Patent System." Study commissioned by the Senate Judiciary Subcommittee on Patents, Trademarks, and Copyrights, 85th Congress, 2nd session. http://mises.org/document/1182/. **Niccolai, James.** 2012. "Android Developers Ignored Sun Patents, Google Exec Testifies." *Computerworld,* May 9. **Nuvolari, Alessandro.** 2004. "Collective Invention during the British Industrial Revolution: The Case of the Cornish Pumping Engine." *Journal of Economic History* 28(3): 347â63. **Nuvolari, Alessandro.** 2006. "The Making of Steam Power Technology: A Study of Technical Change during the British Industrial Revolution." *Journal of Economic History* 66(2): 472â76. Cambridge University Press. **Ponce, Carlos J.** 2007. "More Secrecy . . . More Knowledge Disclosure? On Disclosure Outside of Patents." Levineâs Working Paper Archive, no. 122247000000001600. **Quinn, Gene.** 2011. "The Cost of Obtaining a Patent in the US." *IPWatchdog.com,* January 28. http://www.ipwatchdog.com/2011/01/28/the-cost-of-obtaining-patent/id=14668/. **Salmon, Felix.** 2012. "Why Patent Trolls Donât Need Valid Patents." March 4. *Reuters.* http://blogs.reuters.com/felix-salmon/2012/03/04/why-patent-trolls-dont-need-valid-patents/. **Sanchez, Julian.** 2012. "How Copyright Industries Con Congress." Posted at *Cato@Liberty,* http://www.cato-at-liberty.org/how-copyright-industries-con-congress/. **Scherer, F. M. 1990.** *Industrial Market Structure and Economic Performance*. Houghton Mifflin. **Scherer, F. M. 2009.** "The Political Economy of Patent Policy Reform in the United States." *Journal on Telecommunications and High Technology Law* 7(2):167â216. **Shapiro, Carl. 2007.** "Patent Reform: Aligning Reward and Contribution." NBER Working Paper 13141. **Shulman, Seth. 2003.** *Unlocking the Sky: Glenn Hammond Curtiss and the Race to Invent the Airplane*. Harper Perennial. **Sinha, Rajiv K., Fernando S. Machado, and Collin Sellman. 2010.** "Donât Think Twice, Itâs All Right: Music Piracy and Pricing in a DRM-Free Environment." *Journal of Marketing* 74(2): 40â54. **Stigler, George J. 1956.** "Industrial Organization and Economic Progress." In *The State of the Social Sciences*, edited by Leonard D. White, 269â82. University of Chicago Press. **Stigler, George J. 1971.** "The Theory of Economic Regulation." *Bell Journal of Economics and Management Science* 2(1): 3â21. **Svensson, Peter. 2006.** "Long-Running Blackberry Patent Battle Ends with $612.5 Million Settlement." *The Daily Reporter (Associated Press)*, March 4. http://news.google.com/newspapers? nid=1907&dat=20060304&id=5bVGAAAAIBAJ& sjid=0MAAAAAIBAJ&pg=4340,273762. **US Central Intelligence Agency, n.a.** *The 1990 CIA World Fact Book*. Available from Project Gutenberg: http://ia700401.us.archive.org/32/items /the1990ciaworldf00014gut/world12.txt. Original: https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.1.3 ⧠/# ⧠|
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| Itâs Time to Stop Talking About Copyright |
Itâs Time to Stop Talking About Copyright ========================================= by Cory Doctorow https://x.com/doctorow Cory Doctorow November 2, 2011 Original: https://locusmag.com/2011/11/cory-doctorow-its-time-to-stop-talking-about-copyright/ I inaugurated this column in 2008 with an editorial called ââWhy I Copyfightââ, which talked about the tricky balance between creativity, culture, and the relationship between audiences and creators. These have always been hard subjects, and the Internet has made them harder still, because the thing that triggers copyright rules â copying â is an intrinsic part of the functioning of the Internet and computers. Thereâs really no such thing as ââloadingââ a web-page â you make a copy of it. Thereâs really no such thing as ââreadingââ a file off a hard-drive â you _copy_ it into memory. The story of modern Internet regulation and copyright goes back (at least) to 1995 and Al Goreâs National Information Infrastructure hearings, where Bruce Lehman, Bill Clintonâs copyright czar, pushed for expansive new copyright rules for the net. These proposals were pretty bonkers, so Gore sent him packing, and he scurried off to Geneva, to the UNâs World Intellectual Property Organization, where he instigated the WIPO Copyright Treaty, which became US law in 1998, as the Digital Millennium Copyright Act. Weâve been arguing about copyright and the Internet for at least 16 years now, and the arguments keep going back and forth over well-defined ground, wearing deep grooves in the discourse. But a funny thing happened on the way to the 21st century: copyright policy ceased to exist. Because every copyright policy that we make has a seismic effect on the Internet, and because you canât regulate copying without regulating the Internet. For example, take the matter of ââintermediary liability,ââ the kind of abstract subject that was once the exclusive purview of genuine copyright nerds. In law, intermediary liability is the liability borne by service providers and other entities that transmit or host material that infringes copyright. One of the major questions thatâs burned up the copyright debate for 16 years is whether ISPs, web-hosting companies and other ââintermediariesââ can be found liable for their usersâ infringements, and if so, under what circumstances. But this isnât a copyright policy. Intermediaries carry plenty of material that has nothing to do with the copyright wars â political videos during election season, first-hand accounts of war crimes, private videos of kids playing in the bath, emails between doctors and patients (or attorneys and clients), and much more besides. Viacom, in its billion-dollar copyright lawsuit against YouTube, asked the court to declare that intermediaries should be forced to disable privacy features on their services so that every hosted file could be examined by its copyright enforcement bots. If the Internet consisted of nothing but entertainment content, that might make sense, but entertainmentâs the Internetâs sideshow, while the main event is _everything else_ we do online. Various record industry legal theories have asked courts to hold that universities and colleges should be held liable for studentsâ illegal music downloads unless they install network spyware that snoops on all the networkâs communications to find the ââbad stuff.ââ If campus networks were nothing but glorified TV and radio delivery systems this might make sense, but for universities, the main thing that the Internet enables is free intellectual inquiry, and the entertainment stuff is just a diversion between scholarly pursuits. The disconnection laws that the entertainment industry has bought for itself in the UK, New Zealand and France provide for removing whole households from the Internet on the strength of their copyright accusations. If the net were just cable TV, this might make sense, but for families all over the world, the net is work, socialization, health, education, access to tools and ideas, freedom of speech, assembly and the press, as well as the conduit to political and civic engagement. There just isnât such a thing as ââcopyright policyââ anymore. Every modern copyright policy becomes _Internet policy_ â policy that touches on every aspect of how we use the net. And as we make the transition from a world where everything we do includes an online component to a world where everything we do _requires_ an online component, itâs becoming the case that thereâs no such thing as ââInternet policyââ â thereâs just _policy_. Iâm all for sorting out the rules that govern the entertainmentâs supply chain, but letâs keep some perspective here: when we ââsolveââ copyright problems at the expense of the Internet, we solve them at the expense of 21st-century society as a whole. When musician Don Henley writes in _USA Today_ in support of the proposed PROTECT-IP Act, which will establish a national Internet censorship regime in the USA, ostensibly to fight copyright infringement, he says that free speech doesnât enter into it, because ââpiracyââ isnât a form of free speech. This is why itâs time to stop talking about copyright and creativity and start talking about the Internet. Because someone can be as smart and talented as Don Henley and still think that you can establish nationwide networked surveillance and censorship and all youâre going to touch on is ââpiracy.ââ For so long as we go on focusing this debate on artists, creativity, and audiences â instead of free speech, privacy, and fairness â weâll keep making the future of society as a whole subservient to the present-day business woes of one industry. â Original: https://locusmag.com/2011/11/cory-doctorow-its-time-to-stop-talking-about-copyright/ ⧠/# ⧠|
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| Why Software Should Be Free |
Why Software Should Be Free =========================== by Richard Stallman https://www.stallman.org/ Richard Stallman July 1, 2011 Original: https://www.gnu.org/philosophy/shouldbefree.en.html The existence of software inevitably raises the question of how decisions about its use should be made. For example, suppose one individual who has a copy of a program meets another who would like a copy. It is possible for them to copy the program; who should decide whether this is done? The individuals involved? Or another party, called the âownerâ? Software developers typically consider these questions on the assumption that the criterion for the answer is to maximize developers' profits. The political power of business has led to the government adoption of both this criterion and the answer proposed by the developers: that the program has an owner, typically a corporation associated with its development. I would like to consider the same question using a different criterion: the prosperity and freedom of the public in general. This answer cannot be decided by current lawâthe law should conform to ethics, not the other way around. Nor does current practice decide this question, although it may suggest possible answers. The only way to judge is to see who is helped and who is hurt by recognizing owners of software, why, and how much. In other words, we should perform a cost-benefit analysis on behalf of society as a whole, taking account of individual freedom as well as production of material goods. In this essay, I will describe the effects of having owners, and show that the results are detrimental. My conclusion is that programmers have the duty to encourage others to share, redistribute, study, and improve the software we write: in other words, to write âfreeâ software.^1 https://www.gnu.org/philosophy/free-sw.html âfreeâ software How Owners Justify Their Power ============================== Those who benefit from the current system where programs are property offer two arguments in support of their claims to own programs: the emotional argument and the economic argument. The emotional argument goes like this: âI put my sweat, my heart, my soul into this program. It comes from _me_, it's _mine_!â This argument does not require serious refutation. The feeling of attachment is one that programmers can cultivate when it suits them; it is not inevitable. Consider, for example, how willingly the same programmers usually sign over all rights to a large corporation for a salary; the emotional attachment mysteriously vanishes. By contrast, consider the great artists and artisans of medieval times, who didn't even sign their names to their work. To them, the name of the artist was not important. What mattered was that the work was doneâand the purpose it would serve. This view prevailed for hundreds of years. The economic argument goes like this: âI want to get rich (usually described inaccurately as âmaking a livingâ), and if you don't allow me to get rich by programming, then I won't program. Everyone else is like me, so nobody will ever program. And then you'll be stuck with no programs at all!â This threat is usually veiled as friendly advice from the wise. I'll explain later why this threat is a bluff. First I want to address an implicit assumption that is more visible in another formulation of the argument. This formulation starts by comparing the social utility of a proprietary program with that of no program, and then concludes that proprietary software development is, on the whole, beneficial, and should be encouraged. The fallacy here is in comparing only two outcomesâproprietary software versus no softwareâand assuming there are no other possibilities. Given a system of software copyright, software development is usually linked with the existence of an owner who controls the software's use. As long as this linkage exists, we are often faced with the choice of proprietary software or none. However, this linkage is not inherent or inevitable; it is a consequence of the specific social/legal policy decision that we are questioning: the decision to have owners. To formulate the choice as between proprietary software versus no software is begging the question. The Argument against Having Owners ================================== The question at hand is, âShould development of software be linked with having owners to restrict the use of it?â In order to decide this, we have to judge the effect on society of each of those two activities _independently_: the effect of developing the software (regardless of its terms of distribution), and the effect of restricting its use (assuming the software has been developed). If one of these activities is helpful and the other is harmful, we would be better off dropping the linkage and doing only the helpful one. To put it another way, if restricting the distribution of a program already developed is harmful to society overall, then an ethical software developer will reject the option of doing so. To determine the effect of restricting sharing, we need to compare the value to society of a restricted (i.e., proprietary) program with that of the same program, available to everyone. This means comparing two possible worlds. This analysis also addresses the simple counterargument sometimes made that âthe benefit to the neighbor of giving him or her a copy of a program is cancelled by the harm done to the owner.â This counterargument assumes that the harm and the benefit are equal in magnitude. The analysis involves comparing these magnitudes, and shows that the benefit is much greater. To elucidate this argument, let's apply it in another area: road construction. It would be possible to fund the construction of all roads with tolls. This would entail having toll booths at all street corners. Such a system would provide a great incentive to improve roads. It would also have the virtue of causing the users of any given road to pay for that road. However, a toll booth is an artificial obstruction to smooth drivingâartificial, because it is not a consequence of how roads or cars work. Comparing free roads and toll roads by their usefulness, we find that (all else being equal) roads without toll booths are cheaper to construct, cheaper to run, safer, and more efficient to use.^2 In a poor country, tolls may make the roads unavailable to many citizens. The roads without toll booths thus offer more benefit to society at less cost; they are preferable for society. Therefore, society should choose to fund roads in another way, not by means of toll booths. Use of roads, once built, should be free. When the advocates of toll booths propose them as _merely_ a way of raising funds, they distort the choice that is available. Toll booths do raise funds, but they do something else as well: in effect, they degrade the road. The toll road is not as good as the free road; giving us more or technically superior roads may not be an improvement if this means substituting toll roads for free roads. Of course, the construction of a free road does cost money, which the public must somehow pay. However, this does not imply the inevitability of toll booths. We who must in either case pay will get more value for our money by buying a free road. I am not saying that a toll road is worse than no road at all. That would be true if the toll were so great that hardly anyone used the roadâbut this is an unlikely policy for a toll collector. However, as long as the toll booths cause significant waste and inconvenience, it is better to raise the funds in a less obstructive fashion. To apply the same argument to software development, I will now show that having âtoll boothsâ for useful software programs costs society dearly: it makes the programs more expensive to construct, more expensive to distribute, and less satisfying and efficient to use. It will follow that program construction should be encouraged in some other way. Then I will go on to explain other methods of encouraging and (to the extent actually necessary) funding software development. The Harm Done by Obstructing Software ===================================== Consider for a moment that a program has been developed, and any necessary payments for its development have been made; now society must choose either to make it proprietary or allow free sharing and use. Assume that the existence of the program and its availability is a desirable thing.^3 Restrictions on the distribution and modification of the program cannot facilitate its use. They can only interfere. So the effect can only be negative. But how much? And what kind? Three different levels of material harm come from such obstruction: - Fewer people use the program. - None of the users can adapt or fix the program. - Other developers cannot learn from the program, or base new work on it. Each level of material harm has a concomitant form of psychosocial harm. This refers to the effect that people's decisions have on their subsequent feelings, attitudes, and predispositions. These changes in people's ways of thinking will then have a further effect on their relationships with their fellow citizens, and can have material consequences. The three levels of material harm waste part of the value that the program could contribute, but they cannot reduce it to zero. If they waste nearly all the value of the program, then writing the program harms society by at most the effort that went into writing the program. Arguably a program that is profitable to sell must provide some net direct material benefit. However, taking account of the concomitant psychosocial harm, there is no limit to the harm that proprietary software development can do. Obstructing Use of Programs =========================== The first level of harm impedes the simple use of a program. A copy of a program has nearly zero marginal cost (and you can pay this cost by doing the work yourself), so in a free market, it would have nearly zero price. A license fee is a significant disincentive to use the program. If a widely useful program is proprietary, far fewer people will use it. It is easy to show that the total contribution of a program to society is reduced by assigning an owner to it. Each potential user of the program, faced with the need to pay to use it, may choose to pay, or may forego use of the program. When a user chooses to pay, this is a zero-sum transfer of wealth between two parties. But each time someone chooses to forego use of the program, this harms that person without benefiting anyone. The sum of negative numbers and zeros must be negative. But this does not reduce the amount of work it takes to _develop_ the program. As a result, the efficiency of the whole process, in delivered user satisfaction per hour of work, is reduced. This reflects a crucial difference between copies of programs and cars, chairs, or sandwiches. There is no copying machine for material objects outside of science fiction. But programs are easy to copy; anyone can produce as many copies as are wanted, with very little effort. This isn't true for material objects because matter is conserved: each new copy has to be built from raw materials in the same way that the first copy was built. With material objects, a disincentive to use them makes sense, because fewer objects bought means less raw material and work needed to make them. It's true that there is usually also a startup cost, a development cost, which is spread over the production run. But as long as the marginal cost of production is significant, adding a share of the development cost does not make a qualitative difference. And it does not require restrictions on the freedom of ordinary users. However, imposing a price on something that would otherwise be free is a qualitative change. A centrally imposed fee for software distribution becomes a powerful disincentive. What's more, central production as now practiced is inefficient even as a means of delivering copies of software. This system involves enclosing physical disks or tapes in superfluous packaging, shipping large numbers of them around the world, and storing them for sale. This cost is presented as an expense of doing business; in truth, it is part of the waste caused by having owners. Damaging Social Cohesion ======================== Suppose that both you and your neighbor would find it useful to run a certain program. In ethical concern for your neighbor, you should feel that proper handling of the situation will enable both of you to use it. A proposal to permit only one of you to use the program, while restraining the other, is divisive; neither you nor your neighbor should find it acceptable. Signing a typical software license agreement means betraying your neighbor: âI promise to deprive my neighbor of this program so that I can have a copy for myself.â People who make such choices feel internal psychological pressure to justify them, by downgrading the importance of helping one's neighborsâthus public spirit suffers. This is psychosocial harm associated with the material harm of discouraging use of the program. Many users unconsciously recognize the wrong of refusing to share, so they decide to ignore the licenses and laws, and share programs anyway. But they often feel guilty about doing so. They know that they must break the laws in order to be good neighbors, but they still consider the laws authoritative, and they conclude that being a good neighbor (which they are) is naughty or shameful. That is also a kind of psychosocial harm, but one can escape it by deciding that these licenses and laws have no moral force. Programmers also suffer psychosocial harm knowing that many users will not be allowed to use their work. This leads to an attitude of cynicism or denial. A programmer may describe enthusiastically the work that he finds technically exciting; then when asked, âWill I be permitted to use it?â his face falls, and he admits the answer is no. To avoid feeling discouraged, he either ignores this fact most of the time or adopts a cynical stance designed to minimize the importance of it. Since the age of Reagan, the greatest scarcity in the United States is not technical innovation, but rather the willingness to work together for the public good. It makes no sense to encourage the former at the expense of the latter. Obstructing Custom Adaptation of Programs ========================================= The second level of material harm is the inability to adapt programs. The ease of modification of software is one of its great advantages over older technology. But most commercially available software isn't available for modification, even after you buy it. It's available for you to take it or leave it, as a black boxâthat is all. A program that you can run consists of a series of numbers whose meaning is obscure. No one, not even a good programmer, can easily change the numbers to make the program do something different. Programmers normally work with the âsource codeâ for a program, which is written in a programming language such as Fortran or C. It uses names to designate the data being used and the parts of the program, and it represents operations with symbols such as `+` for addition and `-` for subtraction. It is designed to help programmers read and change programs. Here is an example; a program to calculate the distance between two points in a plane: ``` float distance (p0, p1) struct point p0, p1; { float xdist = p1.x - p0.x; float ydist = p1.y - p0.y; return sqrt (xdist * xdist + ydist * ydist); } ``` Precisely what that source code means is not the point; the point is that it looks like algebra, and a person who knows this programming language will find it meaningful and clear. By contrast, here is same program in executable form, on the computer I normally used when I wrote this: ``` 1314258944 -232267772 -231844864 1634862 1411907592 -231844736 2159150 1420296208 -234880989 -234879837 -234879966 -232295424 1644167167 -3214848 1090581031 1962942495 572518958 -803143692 1314803317 ``` Source code is useful (at least potentially) to every user of a program. But most users are not allowed to have copies of the source code. Usually the source code for a proprietary program is kept secret by the owner, lest anybody else learn something from it. Users receive only the files of incomprehensible numbers that the computer will execute. This means that only the program's owner can change the program. A friend once told me of working as a programmer in a bank for about six months, writing a program similar to something that was commercially available. She believed that if she could have gotten source code for that commercially available program, it could easily have been adapted to their needs. The bank was willing to pay for this, but was not permitted toâthe source code was a secret. So she had to do six months of make-work, work that counts in the GNP but was actually waste. The MIT Artificial Intelligence Lab (AI Lab) received a graphics printer as a gift from Xerox around 1977. It was run by free software to which we added many convenient features. For example, the software would notify a user immediately on completion of a print job. Whenever the printer had trouble, such as a paper jam or running out of paper, the software would immediately notify all users who had print jobs queued. These features facilitated smooth operation. Later Xerox gave the AI Lab a newer, faster printer, one of the first laser printers. It was driven by proprietary software that ran in a separate dedicated computer, so we couldn't add any of our favorite features. We could arrange to send a notification when a print job was sent to the dedicated computer, but not when the job was actually printed (and the delay was usually considerable). There was no way to find out when the job was actually printed; you could only guess. And no one was informed when there was a paper jam, so the printer often went for an hour without being fixed. The system programmers at the AI Lab were capable of fixing such problems, probably as capable as the original authors of the program. Xerox was uninterested in fixing them, and chose to prevent us, so we were forced to accept the problems. They were never fixed. Most good programmers have experienced this frustration. The bank could afford to solve the problem by writing a new program from scratch, but a typical user, no matter how skilled, can only give up. Giving up causes psychosocial harmâto the spirit of self-reliance. It is demoralizing to live in a house that you cannot rearrange to suit your needs. It leads to resignation and discouragement, which can spread to affect other aspects of one's life. People who feel this way are unhappy and do not do good work. Imagine what it would be like if recipes were hoarded in the same fashion as software. You might say, âHow do I change this recipe to take out the salt?â and the great chef would respond, âHow dare you insult my recipe, the child of my brain and my palate, by trying to tamper with it? You don't have the judgment to change my recipe and make it work right!â âBut my doctor says I'm not supposed to eat salt! What can I do? Will you take out the salt for me?â âI would be glad to do that; my fee is only $50,000.â Since the owner has a monopoly on changes, the fee tends to be large. âHowever, right now I don't have time. I am busy with a commission to design a new recipe for ship's biscuit for the Navy Department. I might get around to you in about two years.â Obstructing Software Development ================================ The third level of material harm affects software development. Software development used to be an evolutionary process, where a person would take an existing program and rewrite parts of it for one new feature, and then another person would rewrite parts to add another feature; in some cases, this continued over a period of twenty years. Meanwhile, parts of the program would be âcannibalizedâ to form the beginnings of other programs. The existence of owners prevents this kind of evolution, making it necessary to start from scratch when developing a program. It also prevents new practitioners from studying existing programs to learn useful techniques or even how large programs can be structured. Owners also obstruct education. I have met bright students in computer science who have never seen the source code of a large program. They may be good at writing small programs, but they can't begin to learn the different skills of writing large ones if they can't see how others have done it. In any intellectual field, one can reach greater heights by standing on the shoulders of others. But that is no longer generally allowed in the software fieldâyou can only stand on the shoulders of the other people in your own company. The associated psychosocial harm affects the spirit of scientific cooperation, which used to be so strong that scientists would cooperate even when their countries were at war. In this spirit, Japanese oceanographers abandoning their lab on an island in the Pacific carefully preserved their work for the invading U.S. Marines, and left a note asking them to take good care of it. Conflict for profit has destroyed what international conflict spared. Nowadays scientists in many fields don't publish enough in their papers to enable others to replicate the experiment. They publish only enough to let readers marvel at how much they were able to do. This is certainly true in computer science, where the source code for the programs reported on is usually secret. It Does Not Matter How Sharing Is Restricted ============================================ I have been discussing the effects of preventing people from copying, changing, and building on a program. I have not specified how this obstruction is carried out, because that doesn't affect the conclusion. Whether it is done by copy protection, or copyright, or licenses, or encryption, or ROM cards, or hardware serial numbers, if it succeeds in preventing use, it does harm. Users do consider some of these methods more obnoxious than others. I suggest that the methods most hated are those that accomplish their objective. Software Should be Free ======================= I have shown how ownership of a programâthe power to restrict changing or copying itâis obstructive. Its negative effects are widespread and important. It follows that society shouldn't have owners for programs. Another way to understand this is that what society needs is free software, and proprietary software is a poor substitute. Encouraging the substitute is not a rational way to get what we need. Vaclav Havel has advised us to âWork for something because it is good, not just because it stands a chance to succeed.â A business making proprietary software stands a chance of success in its own narrow terms, but it is not what is good for society. Why People Will Develop Software ================================ If we eliminate copyright as a means of encouraging people to develop software, at first less software will be developed, but that software will be more useful. It is not clear whether the overall delivered user satisfaction will be less; but if it is, or if we wish to increase it anyway, there are other ways to encourage development, just as there are ways besides toll booths to raise money for streets. Before I talk about how that can be done, first I want to question how much artificial encouragement is truly necessary. Programming is Fun ================== There are some lines of work that few will enter except for money; road construction, for example. There are other fields of study and art in which there is little chance to become rich, which people enter for their fascination or their perceived value to society. Examples include mathematical logic, classical music, and archaeology; and political organizing among working people. People compete, more sadly than bitterly, for the few funded positions available, none of which is funded very well. They may even pay for the chance to work in the field, if they can afford to. Such a field can transform itself overnight if it begins to offer the possibility of getting rich. When one worker gets rich, others demand the same opportunity. Soon all may demand large sums of money for doing what they used to do for pleasure. When another couple of years go by, everyone connected with the field will deride the idea that work would be done in the field without large financial returns. They will advise social planners to ensure that these returns are possible, prescribing special privileges, powers, and monopolies as necessary to do so. This change happened in the field of computer programming in the 1980s. In the 1970s, there were articles on âcomputer addictionâ: users were âonliningâ and had hundred-dollar-a-week habits. It was generally understood that people frequently loved programming enough to break up their marriages. Today, it is generally understood that no one would program except for a high rate of pay. People have forgotten what they knew back then. When it is true at a given time that most people will work in a certain field only for high pay, it need not remain true. The dynamic of change can run in reverse, if society provides an impetus. If we take away the possibility of great wealth, then after a while, when the people have readjusted their attitudes, they will once again be eager to work in the field for the joy of accomplishment. The question âHow can we pay programmers?â becomes an easier question when we realize that it's not a matter of paying them a fortune. A mere living is easier to raise. Funding Free Software ===================== Institutions that pay programmers do not have to be software houses. Many other institutions already exist that can do this. Hardware manufacturers find it essential to support software development even if they cannot control the use of the software. In 1970, much of their software was free because they did not consider restricting it. Today, their increasing willingness to join consortiums shows their realization that owning the software is not what is really important for them. Universities conduct many programming projects. Today they often sell the results, but in the 1970s they did not. Is there any doubt that universities would develop free software if they were not allowed to sell software? These projects could be supported by the same government contracts and grants that now support proprietary software development. It is common today for university researchers to get grants to develop a system, develop it nearly to the point of completion and call that âfinished,â and then start companies where they really finish the project and make it usable. Sometimes they declare the unfinished version âfreeâ; if they are thoroughly corrupt, they instead get an exclusive license from the university. This is not a secret; it is openly admitted by everyone concerned. Yet if the researchers were not exposed to the temptation to do these things, they would still do their research. Programmers writing free software can make their living by selling services related to the software. I have been hired to port the GNU C compiler to new hardware, and to make user-interface extensions to GNU Emacs. (I offer these improvements to the public once they are done.) I also teach classes for which I am paid. https://www.gnu.org/software/gcc/ GNU C compiler https://www.gnu.org/software/emacs/ GNU Emacs I am not alone in working this way; there is now a successful, growing corporation which does no other kind of work. Several other companies also provide commercial support for the free software of the GNU system. This is the beginning of the independent software support industryâan industry that could become quite large if free software becomes prevalent. It provides users with an option generally unavailable for proprietary software, except to the very wealthy. New institutions such as the Free Software Foundation can also fund programmers. Most of the Foundation's funds come from users buying tapes through the mail. The software on the tapes is free, which means that every user has the freedom to copy it and change it, but many nonetheless pay to get copies. (Recall that âfree softwareâ refers to freedom, not to price.) Some users who already have a copy order tapes as a way of making a contribution they feel we deserve. The Foundation also receives sizable donations from computer manufacturers. https://www.gnu.org/fsf/fsf.html Free Software Foundation The Free Software Foundation is a charity, and its income is spent on hiring as many programmers as possible. If it had been set up as a business, distributing the same free software to the public for the same fee, it would now provide a very good living for its founder. Because the Foundation is a charity, programmers often work for the Foundation for half of what they could make elsewhere. They do this because we are free of bureaucracy, and because they feel satisfaction in knowing that their work will not be obstructed from use. Most of all, they do it because programming is fun. In addition, volunteers have written many useful programs for us. (Even technical writers have begun to volunteer.) This confirms that programming is among the most fascinating of all fields, along with music and art. We don't have to fear that no one will want to program. What Do Users Owe to Developers? ================================ There is a good reason for users of software to feel a moral obligation to contribute to its support. Developers of free software are contributing to the users' activities, and it is both fair and in the long-term interest of the users to give them funds to continue. However, this does not apply to proprietary software developers, since obstructionism deserves a punishment rather than a reward. We thus have a paradox: the developer of useful software is entitled to the support of the users, but any attempt to turn this moral obligation into a requirement destroys the basis for the obligation. A developer can either deserve a reward or demand it, but not both. I believe that an ethical developer faced with this paradox must act so as to deserve the reward, but should also entreat the users for voluntary donations. Eventually the users will learn to support developers without coercion, just as they have learned to support public radio and television stations. What Is Software Productivity? ============================== If software were free, there would still be programmers, but perhaps fewer of them. Would this be bad for society? Not necessarily. Today the advanced nations have fewer farmers than in 1900, but we do not think this is bad for society, because the few deliver more food to the consumers than the many used to do. We call this improved productivity. Free software would require far fewer programmers to satisfy the demand, because of increased software productivity at all levels: - Wider use of each program that is developed. - The ability to adapt existing programs for customization instead of starting from scratch. - Better education of programmers. - The elimination of duplicate development effort. Those who object to cooperation claiming it would result in the employment of fewer programmers are actually objecting to increased productivity. Yet these people usually accept the widely held belief that the software industry needs increased productivity. How is this? âSoftware productivityâ can mean two different things: the overall productivity of all software development, or the productivity of individual projects. Overall productivity is what society would like to improve, and the most straightforward way to do this is to eliminate the artificial obstacles to cooperation which reduce it. But researchers who study the field of âsoftware productivityâ focus only on the second, limited, sense of the term, where improvement requires difficult technological advances. Is Competition Inevitable? ========================== Is it inevitable that people will try to compete, to surpass their rivals in society? Perhaps it is. But competition itself is not harmful; the harmful thing is combat. There are many ways to compete. Competition can consist of trying to achieve ever more, to outdo what others have done. For example, in the old days, there was competition among programming wizardsâcompetition for who could make the computer do the most amazing thing, or for who could make the shortest or fastest program for a given task. This kind of competition can benefit everyone, _as long as_ the spirit of good sportsmanship is maintained. Constructive competition is enough competition to motivate people to great efforts. A number of people are competing to be the first to have visited all the countries on Earth; some even spend fortunes trying to do this. But they do not bribe ship captains to strand their rivals on desert islands. They are content to let the best person win. Competition becomes combat when the competitors begin trying to impede each other instead of advancing themselvesâwhen âLet the best person winâ gives way to âLet me win, best or not.â Proprietary software is harmful, not because it is a form of competition, but because it is a form of combat among the citizens of our society. Competition in business is not necessarily combat. For example, when two grocery stores compete, their entire effort is to improve their own operations, not to sabotage the rival. But this does not demonstrate a special commitment to business ethics; rather, there is little scope for combat in this line of business short of physical violence. Not all areas of business share this characteristic. Withholding information that could help everyone advance is a form of combat. Business ideology does not prepare people to resist the temptation to combat the competition. Some forms of combat have been banned with antitrust laws, truth in advertising laws, and so on, but rather than generalizing this to a principled rejection of combat in general, executives invent other forms of combat which are not specifically prohibited. Society's resources are squandered on the economic equivalent of factional civil war. âWhy Don't You Move to Russia?â =============================== In the United States, any advocate of other than the most extreme form of laissez-faire selfishness has often heard this accusation. For example, it is leveled against the supporters of a national health care system, such as is found in all the other industrialized nations of the free world. It is leveled against the advocates of public support for the arts, also universal in advanced nations. The idea that citizens have any obligation to the public good is identified in America with Communism. But how similar are these ideas? Communism as was practiced in the Soviet Union was a system of central control where all activity was regimented, supposedly for the common good, but actually for the sake of the members of the Communist party. And where copying equipment was closely guarded to prevent illegal copying. The American system of software copyright exercises central control over distribution of a program, and guards copying equipment with automatic copying-protection schemes to prevent illegal copying. By contrast, I am working to build a system where people are free to decide their own actions; in particular, free to help their neighbors, and free to alter and improve the tools which they use in their daily lives. A system based on voluntary cooperation and on decentralization. Thus, if we are to judge views by their resemblance to Russian Communism, it is the software owners who are the Communists. The Question of Premises ======================== I make the assumption in this paper that a user of software is no less important than an author, or even an author's employer. In other words, their interests and needs have equal weight, when we decide which course of action is best. This premise is not universally accepted. Many maintain that an author's employer is fundamentally more important than anyone else. They say, for example, that the purpose of having owners of software is to give the author's employer the advantage he deservesâregardless of how this may affect the public. It is no use trying to prove or disprove these premises. Proof requires shared premises. So most of what I have to say is addressed only to those who share the premises I use, or at least are interested in what their consequences are. For those who believe that the owners are more important than everyone else, this paper is simply irrelevant. But why would a large number of Americans accept a premise that elevates certain people in importance above everyone else? Partly because of the belief that this premise is part of the legal traditions of American society. Some people feel that doubting the premise means challenging the basis of society. It is important for these people to know that this premise is not part of our legal tradition. It never has been. Thus, the Constitution says that the purpose of copyright is to âpromote the Progress of Science and the useful Arts.â The Supreme Court has elaborated on this, stating in _Fox Film v. Doyal_ that âThe sole interest of the United States and the primary object in conferring the [copyright] monopoly lie in the general benefits derived by the public from the labors of authors.â We are not required to agree with the Constitution or the Supreme Court. (At one time, they both condoned slavery.) So their positions do not disprove the owner supremacy premise. But I hope that the awareness that this is a radical right-wing assumption rather than a traditionally recognized one will weaken its appeal. Conclusion ========== We like to think that our society encourages helping your neighbor; but each time we reward someone for obstructionism, or admire them for the wealth they have gained in this way, we are sending the opposite message. Software hoarding is one form of our general willingness to disregard the welfare of society for personal gain. We can trace this disregard from Ronald Reagan to Dick Cheney, from Exxon to Enron, from failing banks to failing schools. We can measure it with the size of the homeless population and the prison population. The antisocial spirit feeds on itself, because the more we see that other people will not help us, the more it seems futile to help them. Thus society decays into a jungle. If we don't want to live in a jungle, we must change our attitudes. We must start sending the message that a good citizen is one who cooperates when appropriate, not one who is successful at taking from others. I hope that the free software movement will contribute to this: at least in one area, we will replace the jungle with a more efficient system which encourages and runs on voluntary cooperation. â Footnotes ========= ^1: The word âfreeâ in âfree softwareâ refers to freedom, not to price; the price paid for a copy of a free program may be zero, or small, or (rarely) quite large. ^2: The issues of pollution and traffic congestion do not alter this conclusion. If we wish to make driving more expensive to discourage driving in general, it is disadvantageous to do this using toll booths, which contribute to both pollution and congestion. A tax on gasoline is much better. Likewise, a desire to enhance safety by limiting maximum speed is not relevant; a free-access road enhances the average speed by avoiding stops and delays, for any given speed limit. ^3: One might regard a particular computer program as a harmful thing that should not be available at all, like the Lotus Marketplace database of personal information, which was withdrawn from sale due to public disapproval. Most of what I say does not apply to this case, but it makes little sense to argue for having an owner on the grounds that the owner will make the program less available. The owner will not make it _completely_ unavailable, as one would wish in the case of a program whose use is considered destructive. Original: https://www.gnu.org/philosophy/shouldbefree.en.html ⧠/# ⧠|
Richard Stallman |
2011 |
6765 |
33.8 |
| Guerilla Open Access Manifesto |
Guerilla Open Access Manifesto ============================== by Aaron Swartz https://x.com/aaronsw Aaron Swartz July 1, 2011 Original: https://en.wikipedia.org/wiki/Guerilla_Open_Access_Manifesto Information is power. But like all power, there are those who want to keep it for themselves. The world's entire scientific and cultural heritage, published over centuries in books and journals, is increasingly being digitized and locked up by a handful of private corporations. Want to read the papers featuring the most famous results of the sciences? You'll need to send enormous amounts to publishers like Reed Elsevier. There are those struggling to change this. The Open Access Movement has fought valiantly to ensure that scientists do not sign their copyrights away but instead ensure their work is published on the Internet, under terms that allow anyone to access it. But even under the best scenarios, their work will only apply to things published in the future. Everything up until now will have been lost. That is too high a price to pay. Forcing academics to pay money to read the work of their colleagues? Scanning entire libraries but only allowing the folks at Google to read them? Providing scientific articles to those at elite universities in the First World, but not to children in the Global South? It's outrageous and unacceptable. "I agree," many say, "but what can we do? The companies hold the copyrights, they make enormous amounts of money by charging for access, and it's perfectly legal â there's nothing we can do to stop them." But there is something we can, something that's already being done: we can fight back. Those with access to these resources â students, librarians, scientists â you have been given a privilege. You get to feed at this banquet of knowledge while the rest of the world is locked out. But you need not â indeed, morally, you cannot â keep this privilege for yourselves. You have a duty to share it with the world. And you have: trading passwords with colleagues, filling download requests for friends. Meanwhile, those who have been locked out are not standing idly by. You have been sneaking through holes and climbing over fences, liberating the information locked up by the publishers and sharing them with your friends. But all of this action goes on in the dark, hidden underground. It's called stealing or piracy, as if sharing a wealth of knowledge were the moral equivalent of plundering a ship and murdering its crew. But sharing isn't immoral â it's a moral imperative. Only those blinded by greed would refuse to let a friend make a copy. Large corporations, of course, are blinded by greed. The laws under which they operate require it â their shareholders would revolt at anything less. And the politicians they have bought off back them, passing laws giving them the exclusive power to decide who can make copies. There is no justice in following unjust laws. It's time to come into the light and, in the grand tradition of civil disobedience, declare our opposition to this private theft of public culture. We need to take information, wherever it is stored, make our copies and share them with the world. We need to take stuff that's out of copyright and add it to the archive. We need to buy secret databases and put them on the Web. We need to download scientific journals and upload them to file sharing networks. We need to fight for Guerilla Open Access. With enough of us, around the world, we'll not just send a strong message opposing the privatization of knowledge â we'll make it a thing of the past. Will you join us? â Original: https://en.wikipedia.org/wiki/Guerilla_Open_Access_Manifesto ⧠/# ⧠|
Aaron Swartz |
2011 |
623 |
3.1 |
| Ideas, Free and Unfree: A Book Commentary |
Ideas, Free and Unfree: A Book Commentary ========================================= by Jeffrey A. Tucker https://x.com/jeffreyatucker Jeffrey A. Tucker March 18, 2011 Original: https://mises.org/mises-daily/ideas-free-and-unfree-book-commentary Introduction ============ The topic of intellectual property is hugely important in the world today, especially with the growing digitization of so many of the goods and services we use every day. For something to be digitized mean to take some portion of that good and transfer it from the realm of scarcity to the realm of infinite reproducibility. Under these conditions, the notion of âintellectual propertyâ â that only one government-privileged monopolist may use a certain idea for a certain period of time â becomes rather preposterous. It is unenforceable apart from despotic impositions on consumers and producers, and the attempt alone shuts down the learning process that is inherent in the development of the market-based social order. The topic rather snuck up on Austrians, however. It has always been in the background. Carl Menger wrote of the definition of goods and how their scarcity is a precondition for ownership and rationing. Böhm-Bawerk wrote a long reflection on whether things like justice, love, and other such values could ever be considered goods in the normal sense in which we think of that term, and he concluded that they cannot because there was no inherent need for economizing them. Hayek wrote extensively on the social benefit that comes from the free flow of knowing and information. Mises and Rothbard were more explicit on the matter of patents: both saw them as unneeded government monopolies. Machlup joined them in this view. Rothbard rejected copyright as it exists in law in favor of common-law standards of manuscript ownership. Thatâs pretty much where matters stood until 1996 when Stephan Kinsella shocked everyone with a journal article calling for the complete repeal of intellectual-property law. The article stunned me, and I instinctively rejected the idea. I figured that the idea could be ranked among the far-flung notions one bumps into within the world of libertarianism: true, perhaps, in some trivial, abstract sense but with no serious application for the here and now. Years went by but I kept thinking of the topic and its meaning, mainly because the headlines were constantly bringing the topic back up. Kids were being fined millions for illegal downloads. Corporations were being looted in patent suits. Drug prices were soaring due to patents. And so on. I had come to the point of actually embracing Kinsellaâs position but without fiery conviction. Then I read Against Intellectual Monopoly by Michele Boldrin and David Levine. It was a mind-blowing experience, and I ended up documenting the journey chapter by chapter on the Mises blog. I recall how I could hardly sleep at night as I thought about the thousands of examples they gave that demonstrated that this topic is not just intellectual play. The topic gets to the heart of the meaning of free competition itself. How could I have neglected it so long? The authors are not Austrian adherents, and certainly Kinsellaâs own treatment is more theoretically robust. But they know the field so well and their endless stream of real-life examples provide just what the consistent advocate of freedom needs to hear about this topic. It has been suggested that I put these âliveblogsâ of the book in a monograph form. I enjoyed reading the proofs because they really do chronicle an exciting intellectual journey. It was a long haul â six years from the time I first started thinking about the topic â but the payoff has been enormous for me. This book helped me see the world more clearly and understand so much that had previously remained cloudy. This is just about the best thing that can ever be said of a book. I hope this chronicle is of some help to you on the same journey. Jeffrey Tucker January 18, 2011 A Book That Changes Everything ============================== At a taped video interview in my office, before the crew would start the camera, a man had to remove my Picasso prints from the wall. The prints are probably under copyright, they said. But the guy who drew them died thirty years ago. Besides, they are mine. Doesnât matter. They have to go. What about the poor fellow who painted the wall behind the prints? Why doesnât he have a copyright? If I scrape off the paint, there is the drywall and its creator. Behind the drywall are the boards, which are surely proprietary too. To avoid the âintellectual-propertyâ thicket, maybe we have to sit in an open field; but there is the problem of the guy who last mowed the grass. Then there is the inventor of the grass to consider. Is there something wrong with this picture? The worldly-wise say no. This is just the way things are. It is for us not to question but to obey. So it is with all despotisms in human history. They become so woven into the fabric of daily life that absurdities are no longer questioned. Only a handful of daring people are capable of thinking along completely different lines. But when they do, the earth beneath our feet moves. Such is the case with Against Intellectual Monopoly by Michele Boldrin and David Levine, two daring professors of economics at Washington University in St. Louis. They have written a book that is likely to rock your world, as it has mine. (It is also posted on their site with the permission of the publisher.) http://www.micheleboldrin.com/research/aim.html posted on their site With piracy and struggles over intellectual property in the news daily, it is time to wonder about this issue and its relationship to freedom, property rights, and efficiency. You have to think seriously about where you stand. This is not one of those no-brainer issues for libertarians, like the minimum wage or price controls. The problem is complicated, and solving it requires careful thought. But it is essential that every person do the thinking, and there is no better tool for breaking the intellectual gridlock than this book. The issue is impossible to escape, from the grave warnings you get from the FBI at the beginning of âyourâ DVD, to the posters warning kids never to download a song, to the outrageous settlements transferring billions from firm to firm. It even affects the outrageous prices you pay for medicine at the drug store. The issue of âintellectual propertyâ is a ubiquitous part of modern life. Some of the police-state tactics used to enforce IP have to make anyone with a conscience squeamish. You have surely wondered about the right and wrong of all this, but, if you are like most people, you figure that copyrights and patents are consistent with the justice that comes from giving the innovator his due. In principle they seem fine, even if the law might be in need of reform. The first Iâd ever thought critically about issues of intellectual property was in reading about it in the abstract many years ago. The Austrian position has traditionally favored copyrights on the same grounds it has favored property rights in general, but it has tended to oppose patents on grounds that they are government grants of monopolistic privilege. Machlup, Mises, and Rothbard â as well as Stigler, Plant, and Penrose â have discussed the issue, but not at great length and with varying levels of cautious skepticism. That changed in 2001 with the publication of Stephan Kinsellaâs article (and now monograph) âAgainst Intellectual Property.â He made a strongly theoretical argument that ideas are not scarce, do not require rationing, are not diminished by their dissemination, and so cannot really be called property. All IP is unjust, he wrote. It is inconsistent with libertarian ethics and contrary to a free market. He favors the complete repeal of all intellectual-property laws. The argument initially struck me as crazy on its face. As I considered it further, my own view gradually changed: itâs not crazy, I thought, but it is still pie-in-the-sky theorizing that has nothing to do with reality. Kinsellaâs article appeared just before the explosive public interest in this subject. The patent regime has in the meantime gone completely wild, with nearly two hundred thousand patents issued every year in the United States, and half a million more in other countries â with 6.1 million patents in effect worldwide â and large firms collecting stockpiles of them. And the copyright issue has led to a massive struggle between generations: young people live by âpiratingâ music, movies, software, whereas the old consider this practice to presage the end of the capitalist system as we know it. The music industry has spent billions trying to contain the problem and only ended up engendering consumer embitterment and terrible public relations. Kinsellaâs article continued to haunt me personally. It took about six years or so, but I finally worked through all the theoretical problems and came to embrace his view, so you might say that I was predisposed to hear what these authors have to say. What I hadnât realized until encountering the Boldrin/Levine book was just how far-reaching and radical the implications of a detailed look at IP really is. It is not just a matter of deciding what you believe from a theoretical or political perspective. It is not just a matter of thinking that âpiratesâ are not really violating moral law. To fully absorb what these authors say changes the way you look at technology, at history, at the ebbs and flows of economic development, and even who the good guys and bad guys are in the history of civilization. Kinsella deals expertly with the theoretical aspects, while Against Intellectual Monopoly doesnât really go into the theory at great length. What this amazing book deals with is the real-world practice of intellectual-property regulation now and in history. I can make a personal guarantee that not a single objection you think you have to their thesis goes unaddressed in these pages. Their case is like the sun that melts all snow for many miles in all directions. The implications are utterly shattering, and every day I turned the pages in the Boldrin/Levine book I felt that sense of intellectual stimulation that comes along rarely in life â that sense that makes you want to grab anyone off the street and tell that person what this book says. It helps you understand many things that had previously been confusing. The emergent clarity that comes from having absorbed this work is akin to what it must feel like to hear or see for the first time. If they are right, the implications are astonishing. âI can make a personal guarantee that not a single objection you think you have to their thesis goes unaddressed in these pages.â Their main thesis is a seemingly simple one. Copyright and patents are not part of the natural competitive order. They are products of positive law and legislation, imposed at the behest of market winners as a means of excluding competition. They are government grants of monopolies, and, as neoclassical economists with a promarket disposition, the authors are against monopoly because it raises prices, generates economic stagnation, inhibits innovation, robs consumers, and rewards special interests. What they have done is apply this conventional model of monopoly to one of the most long-lasting, old-world forms of mercantilist/monopolistic institutional privilege, a surviving form of mercantilist privilege of the 16th century. IP is like a dam in the river of development, or perhaps very large boulders that impede the flow. They too favor its total repeal but their case goes far beyond the theoretical. They convince you that radical, far-reaching, uncompromising, revolutionary reform is essential to our social well-being now and in the future. The results are dazzling and utterly persuasive. I personally dare anyone who thinks that he believes in patent or copyright to read this book and deal with it. Iâm not sure what aspect of their case is the most powerful. Here are just a few examples: They show that people like James Watt, Eli Whitney, and the Wright Brothers are not heroes of innovation, as legend has it, but rent-seeking mercantilists who dramatically set back the cause of technological development. These people spent vast resources prohibiting third parties from improving âtheirâ product and making it available at a cheaper price. Instead of promoting innovation and profitability, they actually stopped it, even at the cost of their own business dreams. The authors show that every great period of innovation in human history has taken place in the absence of intellectual property, and that every thicket of IP has ended up stagnating the industries to which they apply. Think of the early years of the web, in which open-source technology inspired breakneck development, until patents and copyright were imposed with the resulting cartelization of operating systems. Even today, the greatest innovations in digital communications come from the highly profitable open-source movement. It is impossible to develop software without running into IP problems, and the largest players are living off IP and not innovation. Meanwhile, the most profitable and most innovative sector of the web, the porn sector, has no access to courts and IP enforcement because of the stigma associated with it. It is not an accident that absence of IP coincides with growth and innovation. The connection is causal. And look at the industries that do not have IP access, such as clothing design and architecture and perfume. They are huge and fast-moving and fabulous. First movers still make the big bucks, without coercing competition. Boldrin and Levine further speculate that IP is behind one of the great puzzles of the last millennium: stagnation in classical music. The sector is seriously burdened and tethered by IP. Other mysteries are answered. Why no musical composition of note in England after 1750? England had the worldâs most strict copyright laws. Why was English literature so popular in the United States in the 19th-century schoolrooms? It could be imported without copyright restriction â and therefore sold cheaply â whereas American authors used IP and limited their market. And consider the irony that Disney, which relies heavily on IP, got its start and makes it largest profits by retelling public-domain stories! Examples like this abound. One wonders whether the modern history of literature and art needs to be completely rewritten. Examples will occur to you that are not discussed in the book, such as fan fiction. It is technically illegal, so far as anyone can tell, to take a copyrighted character and tell a story about him even if the story is original. And yet Harry Potter fan-fiction sites enjoy tens of millions of hits per month. One hosts five thousand pieces of fan fiction, some as long as one thousand pages. Enforcement has been spotty and unpredictable. And yes, the book covers the poster child of the IP world: pharmaceuticals. They muster plenty of evidence that IP here does nothing to promote innovation and widespread availability and is largely responsible for the egregiously high prices of drugs that are driving the system toward socialization. The authors explore the very strange tendency of capitalists to misdiagnose the source of their profits in a world of IP, spending far more on beating up pirates than they would have earned in a free market. They further demonstrate that IP is a form of exploitation and expropriation that is gravely dangerous for civilization itself. In short, they have taken what might seem to be merely a geeky concern and moved it to the center of discussion over economic development itself. What about the far-flung conclusion that IP should be repealed? The authors take away your fears. The development of IP came about in the 16th century as a mechanism for governments to enforce political control and punish dissenters. The cause of this âproperty rightâ was then taken over by individuals in the 18th and 19th centuries as part of the liberal revolution for individual rights. In the 20th century it was transferred again, to corporations who become the effective owners through copyright. The creators no longer own anything, and let themselves be beaten and abused by their own publishers and production companies. Boldrin and Levineâs thesis really steps up this issue. It makes you wonder how long authors and creators will put up with the nonsense that some company has a state-enforced exclusive to use the work of others for longer than 100 years. Fortunately, the digital age is forcing the issue, and alternatives like Creative Commons (roughly akin to what would exist in a free market) are becoming increasingly popular. As the tyranny has grown more obvious, the free market is responding. No, the authors are not really Austrian, and Iâm not even sure that they can be called libertarians, but they understand the competitive process in ways that would make Hayek and Mises proud. As Iâve thought more about their book, it seems that it might suggest a revision in classical-liberal theory. We have traditionally thought that cooperation and competition were the two pillars of social order; a third could be added: emulation. In addition, there is surely work to do here that integrates Hayekâs theory of knowledge with the problem of IP. If the book lacks for anything, it is precisely what Kinsella provides: a robust theory behind the practical analytics. But since Kinsella has already provided this, the value added of real-world application is enormous. I have a minor nit to pick with them on their passing comment on trademarks, which strikes me as wrong. Otherwise, this book moves mountains. A book like this comes along very rarely. Against Intellectual Monopoly is a relatively small manifesto on economics that absolutely must be understood and absorbed by every thinking person without exception. Authors: Beware of Copyright ============================ When an author signs a publication contract, insofar as it contains strict and traditional copyright notices, he is pretty much signing his life away. It used to be that the publisher would maintain control only so long as the book was in print. Today, with digital printing, this means forever: your lifetime plus 70 years. During this time, you canât even quote significant portions of your own writing without permission from the publisher, and you could find yourself paying the publisher for the rights. You canât read your own book aloud and sell the results. You certainly canât give a journal a chapter. You could try to be sneaky and change the text a bit, right? Wrong. Theyâve thought of that. You will own and control new matter but the old matter is still the private possession of The Man. What if the publisher isnât marketing your book? You can yell and scream but they donât have to answer. In fact, most publishers have a system for dealings with authors. Itâs called voice mail. E-mails go unanswered. You are done for. You sold your soul and you canât get it back. Not within your lifetime. Your creation, which copyright is designed to protect, is now the possession of someone else. As Michele Boldrin and David Levine explain, this racket began in the 17th century when government instituted the idea of ownership of ideas, precisely so that the government could crush ideas it didnât like. Only approved authors got the stamp of approval. Same with art. But then the authors and creators rose up and demanded their rights in the 18th century, and the copyright idea was transferred from government to private parties, who were then in a position to crush competitors. In the 20th century, this changed again, when the right was transferred from individuals to corporations. In the digital age, which exists simultaneous to the most tyrannical copyright laws ever, this is creating an intolerable situation that amounts to a form of involuntary servitude. Creators write and paint and watch corporate interlopers doom their work to obscurity. The creator hoped to make a dent in the universe but only sees his material land in the recycle bin of history. Yes, it is done by contract â contract backed by the power of the state. So why do authors put up with it? Mostly because it is a convention, and they havenât known about alternatives. Also, they are bribed by the ego-exploiting promise of royalties that never arrive. The practical effects can be devastating. There is, for example, a book on Austrian business cycles that was published some years ago, and it is in print from an academic house, but âin printâ only in the most technical sense. It is essentially unaffordable for anyone but a state-funded library with an inelastic demand curve. The Mises Institute wants to bring it back in paperback and make it affordable. Nope, canât happen. The publisher says that it will do it for us, at a very high price with virtually no discount. They are within their legal rights to do this. Of course, it makes the whole project completely unviable. No deal. The authors are cornered. There is nothing they can do. There is nothing we can do. A great Austrian book, written over the course of ten years, is consigned to the dusty shelves of a handful of libraries, for at least another 70 years. This is only one case of a hundred that Iâve seen. It is even worse when the author is dead. The publisher may or may not have handed back the rights to the manuscript. Those rights may or may not have been transferred. They may or may not have been handed on in the will, or perhaps they are part of probate. Yes, a potential new publisher can hunt this down to find out who among six billion potential owners actually controls rights to this manuscript. A lawyer is always glad to spend vast amounts of your money doing research. He may or may not come up with an answer you can trust. Meanwhile, you have spent the equivalent of a first-print run. Most potential publishers will say: to heck with it. Again, you have failed to be immortalized by your work. This goes for artists and musical compositions and even recordings of your band or voice. Thanks to federal law since the 1980s, all this material is bound up in a thicket of law, and this thicket will not evaporate for more than 100 years. This is what the âintellectual propertyâ of copyright has wrought. So I say to all authors: Please look at your contracts. Donât sign your life away. Publish on the condition of Creative Commons. Claim your rights back as a creator and an author. How does this work? You have to copyright your work if only to prevent others from claiming copyright and thereby binding all other living persons, including you, from publishing it. Once you claim copyright, add that it is published under the Creative Common License 3.0. This rids your manuscript or song or painting of copyrightâs provision of doom: the requirement that only one institution can control it. In other words, it makes your creation part of the free market. It can be posted, recorded, shown, photograph, celebrated by one and all forever. Isnât this why you create in the first place? Isnât this what drove you to write, paint, photograph, sing, or whatever? You want to make a difference. You want credit for your work. This permits this. Old-fashioned copyright is nothing but a form of modern tyranny in the digital age. It has no future. Bail out of this wicked institution and make sure that your work has a future, too. What is Your Attitude Toward IP? ================================ As I think more about intellectual property in the form of patents and copyrights, it seems that the implications for social theory are profound. The behavior targeted and slaughtered by IP is one that provides a fuel for all social and economic development: imitation or emulation. In the German-speaking world of art in the 18th and 19th centuries, imitation by composers was considered to be the greatest tribute. When Bach would write an elaboration of Buxtehude, it was seen as a wonderful gift to Buxtehudeâs legacy and memory. When Mahler would turn a phrase by Brahms, or reorchestrate a Beethoven symphony, it was the tribute of one master to another. So it is in literature and economics. http://en.wikipedia.org/wiki/Dieterich_Buxtehude Buxtehude Imitation in economic affairs is essential for development, since nothing is ever perfect right out of the box, and society is constantly changing. You need that imitative dynamism in order for technology to keep up with changing market conditions. This is what IP shuts down in the name of rewarding creators. How can creators make a buck in a world of fluid imitation? The same way they always have: by having the best product at the right price to the market first. When others imitate them, they have to hustle again and innovate some more. This is how societies and economies grow. Think of the fashion world, where IP isnât in force. It is fast-moving, innovative, and remarkably profitable. Designers have their ideas imitated nearly as soon as they are seen on the runway. This imitative behavior is widely regarded as a ratification of a good idea. It is something that people are socialized to look for as an indication of marketability. It is the same with generic drugs, fonts, perfume, and other sectors in which there is no IP. Sadly, in sectors in which IP does apply, the opposite attitude applies. Authors, artists, and inventors sit and brood about the need to keep their wares to themselves and hunt down anyone who would dare âstealâ their ideas. In the successful cases, they can end up rewarding themselves but at the expense of social development. In the far more prevalent unsuccessful cases, the obsession with being ripped off leads to brooding, resentment, and disgruntlement that the world has failed to provide them a living. A sector consisting of nothing but people like this â with an attitude encouraged in law â is stagnant. By way of illustration, compare the imitation-oriented jazz and rock sectors with the IP-obsessed area of serious classical music! Other sectors like advertising fall somewhere in between. Several years ago, Apple ran a commercial for the iPod that looked incredibly similar to one produced by Lugz shoes. Now, one might laugh and appreciate this â surely it will benefit both companies â or one can regard it as theft. Instead of celebrating a success, Lugz regarded it as a rip-off, which Apple denied. Words flew between the companies, along with threats of litigation and cease-and-desist orders. This is really just pathetic and completely unnecessary. It really all comes down to the attitude one takes toward oneâs influence on others. The absence of IP creates a broad-mindedness that seeks to make a difference in the world and looks for imitators as a sign that it is working. The presence of IP subsidizes a kind of inwardness and bitterness that sees the whole world as being populated by potential thieves to keep at bay. You see the two ways of looking at the world in the way kids interact with each other. Iâm speaking of preteens and the way they deal with their emergent societies. Letâs say one kid has developed a certain phrase or gesture that is new to the social group. Another kid picks up on it and employs it. Now, there are two ways to respond to this imitation. The innovator child can see others doing and saying what he did and said and realize that he has made a difference in the world, put a dent in this little universe. He has become a force for changing the world as he knows it. He has made his mark, and the evidence is how others are doing the same thing. He feels a sense of pride and joy and works at coming up with other unique ways of dressing, speaking, or behaving that others similarly imitate. âCopyright is a subject replete with mythology. People imagine that copyright is important for protecting rights, even though the practical reality is that it is a killer of ideas and a rights violator on a massive scale.â Or the child can have another response. He can accuse his imitators of stealing his words, ripping off his gestures, pilfering his personality, and plundering his special way. He sees others who imitate as threats, forces that are reducing the value of his unique personality. He treats it as the equivalent of cheating on a test. It is taking what is his. It is the first stages of a very destructive, IP-style mentality. Parents: Be alert to signs of this among kids. Explain to children that it is a good thing when others are influenced by you. It means that you have made a difference in the world. It is not something to complain about at all. It is something to celebrate. It means that you are an entrepreneur on the cutting edge, someone who does things that succeed in society. That also comes with responsibilities to do good things and improve the look and feel of the world around them. Which attitude do you take toward emulation? Before you answer, consider that emulation is unavoidable. There is no such thing as absolute originality. Everything in a growing and health society is an elaboration on something else that already exists. This applies to technology, literature, music, art, language â everything. A world in which the ethics of IP applied would be backward and stagnant, headed nowhere but backward. Childrenâs movies cut both ways. The movie called Ratatouille strikes me as the ultimate IP-supporting propaganda. A rat with a gift for taste and smell is rescued from the gutter and put in a position to cook food at a fine restaurant. All his food is great. He has imitators all over the place but he alone remains the best. But then he begins to seethe with resentment that he alone is not given credit and accolades. Oddly, some people fear that customers will not like the idea that a rat is cooking all the food! The movie ends with his being discovered â he feels great pride, and we are supposed to be happy about this. The restaurant is destroyed, but the audience is supposed to figure that it is worth it. A much better case is Horton Hears a Who. Throughout the film, we see competitive pressure between the various animals to see which one will have the dominant influence over others. The Kangaroo tries to prevent Horton from influencing people, but he does anyway, and eventually everyone comes around. We see it too in the lovely operation of Whoville, a place where emulation is king, and it is a vibrant and lovely society in which everyone is happy. As web editor of Mises.org, hardly a week goes by when I donât see imitators of our successful web presence. It can be images, articles, design, feel, structure â everything. Some years back I had the view that this had to be stopped. Fortunately, no one here had time to bother with it. Thank goodness. The whole reason we exist is to influence the world. Evidence of that is glorious, and it keeps the fire under our staff to keep doing a better job and stay on the cutting edge. The Universals of IP Theorizing =============================== Against Intellectual Monopoly might have begun with a story about the failed attempts to stop illegal downloads or the wicked crackdowns on teens for file sharing. Instead, the authors take us back to the Industrial Revolution to explode the myth of the supposedly great innovator James Watt and his steam engine. Why? Because, as the introduction points out, this is a book of economics. If you have something to add to the science, it canât just apply to now, or last year, in this place, or just that place. Economics is a universal science. Its laws and lessons apply to all times and places. For this reason, a theoretical breakthrough is a massive event. It means work for generations of scholars: revising history, fine-tuning other aspects of theory, and applying it to different fields. This is one reason why this book is so important. And sensing that they are taking on more than just the problem of digital downloads, they put this ancient history up front. They take the first crack at revisionist history with regard to a famous patent. They show that most of Wattâs energies were spent lobbying for and defending a government patent on a technology that was quickly surpassed and could not come to market thanks to his rent-seeking behavior. Nor was this patent somehow necessary for his economically useful behavior. It wasnât until after the patent expired that steam-engine technology really took off, but by that time the Industrial Revolution had given up ten to 15 years of what might have otherwise been economic progress. There we have it: we are put on notice that this book is not merely about the digital age or life after the Internet, written by a couple of geeks. No, this is a revisionist treatment of the whole subject that applies not only now but to the whole modern history of intellectual property, which they insist on calling âintellectual monopoly.â Next they stake out their unique position, which is neither that patent and copyright law has gone too far nor that it hasnât gone far enough. They take a third position that only a few dare take: the stuff needs to be abolished altogether. Their grounds for saying so arenât nearly as complicated as one might at first think. First, grant that âeveryone wants a monopoly. No one wants to compete against his own customers, or against imitators. Currently patents and copyrights grant producers of certain ideas a monopoly.â Next, concede a point that everyone brings up first: âCertainly few people do something in exchange for nothing. Creators of new goods are not different from producers of old ones: they want to be compensated for their effort.â Now the core of the argument: > it is a long and dangerous jump from the assertion that innovators deserve compensation for their efforts to the conclusion that patents and copyrights, that is monopoly, are the best or the only way of providing that rewardâŠ. Creatorsâ property rights can be well protected in the absence of intellectual property, and that the latter does not increase either innovation or creation. They are an unnecessary evil. They continue to spell out precisely what they mean. They favor the property rights of producers. The property rights of innovators should be protected, and so should the property rights of those who have a copy of the idea of the creator. The first property right encourages innovation. The second property right encourages diffusion, adoption, and improvement of innovation. The question is whether creators should have a right to dictate how purchasers use a creation. To say they should amounts to a claim not of property rights but of intellectual property. It confers a privilege and restricts third parties in what they can do with property. It is a grant of monopoly privilege. Monopolies are not friends of innovation in any area of life. They donât go into detail here, but we know this by looking at the Postal Service or the public schools or the utility companies. All of the sectors controlled by monopolists are characterized by high prices, low innovation, and stagnation generally. How odd it is that we believe otherwise â this one kind of monopoly is something we canât live without! â with intellectual property! The authors point out that the supposed incentive to create is a double-edged sword. Someone pays the bill. Itâs not as if the creator benefits and nothing else happens. For example, they cite the case of a movie that cost $218 to make but that cost $400,000 in music rights. This is a serious social cost. It is largely an unseen cost, too. Think of the movies that are not made, the profits in publishing that are never seen, the inventions that are delayed or never come to market, the alternative use of the billions and billions that are spent by consumers on patented drugs. The introduction also deals with the US Constitutionâs endorsement of copyright and trademark. They say that it is outmoded but no more than that. For my own part, Iâm somewhat curious about this. Many parts of the Constitution are fundamentally antimonarchical (only republican governments permitted in the states, e.g.). The history of patent legislation in England prompts me to wonder if the purpose of this clause is to say that government will not own and dispense mercantilist privileges; rather individuals alone will possess such rights. It was supposed to be a point against kingly privilege; still misguided, to be sure, but one can make a bit more sense of it in this case. The first chapter is highly provocative and puts the reader on notice that a wild ride is coming. The authors donât disappoint. People sometimes ask me about ideas for research projects. What the authors have done with the Watt case could be done for a thousand other cases. There is so much work to do, and so much rethinking to do. Does Monopoly Create Wealth? ============================ How strange this intellectual-property issue is. In normal life, we tend to (or should) credit enterprise and markets for most innovations that surround us. Iâm typing on a system that includes products for several dozens of different creative companies, with hardware and software and applications of all sorts stitched together through some miracle we call the coordinating power of the market. No news in that, I suppose. Ho hum. But let the subject of IP come up, and most people will say that we only have this stuff thanks to IP. Think of the shift here. On the one hand, we credit markets. On the other hand, we credit monopoly. Both canât be true. Or if both are true, we have a serious theoretical tangle to unravel. So which is true? This is the topic addressed in the second chapter of Boldrin and Levineâs book. They begin by observing that âvirtually none of the innovationsâ in the digital industry of computers âtook place with the protection of intellectual monopoly.â Before 1981 it was not possible to patent or copyright software. The craze to patent every mouse click began only following a 1994 court ruling (In re Alappat). Meanwhile, the underlying guts of all that you see began long before. As with all genuine, economic revolutions, the foundation of end-user consumption was decades in its preparation. Compilers, assemblers, linked listed, databases, search algorithms, displays, languages, word processing: they all began long before the age of software patents or copyrights. Letâs see how this works. Property rights are protected. Trade is free. People made useful stuff. People bought stuff and used it. They imitated and emulated each other and improved things step by step through investment, profit, and reinvestment. Thatâs all. All development since this great age of innovation that preceded software IP has built on this foundation of open-source material. Said Bill Gates, âIf people had understood how patents would be granted when most of todayâs ideas were invented, and had taken out patents, the industry would be at a complete standstill today.â The authors comment on the post hoc ergo propter hoc fallacy: âIntellectual monopoly is not a cause of innovation, but rather an unwelcome consequence of it.â How so? Young industries do amazing things and get a foothold in the market. Then even better folks come along with better ideas. The old guys panic, and turn to government for protection. The industry freezes in place. It is the oldest pattern. Thus did Microsoft make no effort to protect its IP in the early days; it begged for attention and encouraged widespread use and copying. When it saw a threat from newcomers, matters changed. There hasnât been that much innovation in operating systems since 1994. There has been innovation in web browsing, but where did the web browser come from? It was purchased from a creative company in 1993, before there were software patents. Imagine how a patent in web browsing would have set back the entire industry! The losses would have been incalculable. We can see here that the authors are holding up the computer industry as a model for how things work in a free market. And a superstrong case for their position is the open-source software movement, which is a main fuel behind the development we see today. Firms relinquish monopoly to assure longevity in the industry: others can pick up their designs and develop them. This helps build their market. In any case, we all depend on open-source software every day if we use Google: it runs Linux, an open-source operating system. There are many others. Indeed, open-source dominates the web completely. Some 70 percent of servers online today run Apache. But how can they make money? The authors tell the story of Red Hat. It is open source. It has plenty of competitors who offer the exact same product. But because of brand name, Red Hat is still marketable and has more staying power. As Boldrin and Levine say, âIf you had a problem with software you bought, and had to call the seller for advice â who would you prefer to call â the people who wrote the program, or the people who copied it?â Thus does Red Hat profit and their many competitors come and go, come again and go again. The authors effortlessly segue from software to books, and here is the part that especially interests me. They provide an alternative explanation for why British literature was so widely circulated in the United States in the 19th century. American publishers could publish without copyright â there were no international copyright agreements â and there was massive competition. It was so intense that American firms would pay authors directly for sending chapters even before they appeared in Britain. The amounts they would receive even exceed their British royalties over a period of years. As a result, there was huge dissemination of knowledge. And the prices were low: Dickensâs A Christmas Carol sold for six cents in the United States and $2.50 in England. Printing technology improved. Literacy improved. Ideas spread. Children and schools could have books, which in turn increased the demand for books, and spurred on new investment and technological improvements. It was a dynamic and wild world of publishing, comparable to what we see with the web today. But could it work in modern times? Look at government documents, which are always and everywhere in the public domain (unless they are secret). The 9/11 report of 2004 was a huge best seller, comparable to the first Harry Potter in sales volume. Norton even negotiated a deal with the government to release a paperback on the day of release, and it was also available for free download. Why would they do this? The same reason all entrepreneurs do what they do: to be the first to market. Meanwhile, anyone on the planet could publish it a day later. Still, Norton turned a massive profit. Another fascinating section concerns the newspaper industry. It began without patent protection. Benjamin Day started the New York Sun and his technology was open source: he collected advertising to pay the costs and recruited young boys to sell it. Anyone could do it. But the point is that he did it first and made lots of money. He was first and he was innovative. Thatâs the key to success. It was a massively costly undertaking! Why wasnât he driven out of business by piracy? The RIAA claims constantly that a free market canât work because pirates will go straight to the most profitable production ends and steal them. But the authors of Against Intellectual Monopoly ask us to think about this carefully. How do we know what is profitable? We have to let the market work. You canât know in advance. And once a line of production is profitable, it is too late: the player has market dominance, and all of the advantages that come with that. They ask us to try this yourself: try ruining a pop star by pirating songs only once you are certain they are big hits. Back up and consider the history of IP. It is a modern invention, whereas music and literature appeared at the dawn of civilization. Music and literature and art thrived for many centuries before IP. The authors donât go into it, but just imagine if the invention of the musical staff had been copyrighted and patented by the monk Guido dâArezzo who invented it. Progress would have been set back by a century! The first signs of IP appeared after the invention of the printing press. Governments used it to suppress political dissent (I suspect that the Wars of Religion had something to do with this). It was a royal mercantilist privilege conferred on printers â the same as it was conferred on tea, tin, cotton, banking, or any other good. In the day, it seemed reasonable. The ruler wanted to control goods and producers wanted guarantees. Everyone wins, right? Except that there was no competition, no market process, and hence there was stasis. Mercantilism was refuted by economists and the free market emerged and history was changed. What happened to IP in the age when mercantilism was being repealed? It was not abolished but transferred from kings to producers: the exclusive right to produce was granted to private owners who became responsible for enforcement under the cover of law. This was a huge mistake in the liberal revolution of the 18th century, an inconsistency that continues to haunt us. Boldrin and Levineâs section on IP history should be mandatory reading! Next in the second chapter: a short section on the history of sheet music. Did you know that the industry leader in sheet music â Francis, Day & Hunter â got its start through mass piracy? Fascinating. The war on cheap sheet music is comparable to the war on pirates today. It didnât work, thank goodness. The chapter concludes with a long and interesting section on the dynamic, hugely profitable industry of porn. You wince. Of course. So does the state. Copyright protection is nearly unavailable here for reasons that are obvious. It is a legitimate subject for investigation from an economic perspective. This open-source industry is massive and growing, orderly and profitable and technologically innovative. How tragic that IP has created a situation in which we have to look to the seedier side of life to see how truly free markets work. Does Innovation Require Property in Ideas? ========================================== Against Intellectual Monopoly dares step out front, on a topic very dear to our hearts, to prove that âthe great role of patents in giving us modern software is unadulterated fantasy.â And they show this by reviewing the history of software innovation and its present workings. Neither Google nor YouTube nor any other driving force is using patents to retain competitive advantage, and those who do collect patents mostly do it in order to avoid patent trolls, e.g., those who would patent a technology already in use in order to possess and restrict its use. The lesson, however, applies far more broadly. Wealth in the Western world has been rising for a thousand years, and innovation along with it, and patents have played virtually no role whatsoever. The authors, in chapter three, go more fully into the history of the patent to show that they originated out of kingly privilege associated with mercantilism and that the legislation of the 17th and 18th centuries were forms of liberalization, despite first appearances. It wasnât until the 19th century that the laws tightened again. Comprehensive intellectual-property laws as they exist today didnât make an appearance until the end of the 19th century and the beginning of the 20th century. Taking the long view, we can see even with a superficial look that economic growth throughout the world has been in process for one thousand years, while patents are new and were mostly very narrow until quite recently. Why did patents enter the picture? The rise of modern IP is due to the lobbying of incumbent firms threatened with competition. It is a complete myth that patents give rise to innovation; the reverse has been true: innovation gives rise to patents. The authors offer this incredible challenge: âCan anyone mention even one single case of a new industry emerging as a result of the protection of exiting patent laws? We cannotâŠ. Strange coincidence, is it not?â Examples. Services in the United States were not covered by patent until the 1990s. In Italy, pharmaceutical products and processes were not covered until 1978. In Switzerland, it was 1954. Agricultural seeds and plans were not effectively patented until 1977 â but the greatest progress here occurred over the previous 100 years. Basic sciences like math and physics cannot be patented. The tendency in the biological and life sciences toward patents is a very grave sign for the future of these sectors. Boldrin and Levine ================== The authors cite George Stigler in pointing out that patents did not assist âautomobiles, frozen foods, various electrical appliances and equipment, petroleum refining, incandescent lamps, radio, and uranium mining.â Stigler further cites the mail-order business, which revolutionized retail, as a case of patent-free development. Shall we go on? It helps to have the specifics that the authors provide: Ray Krocâs fast-food franchise (better known as McDonalds), the 24-hour convenience store, home delivery of precooked food, the suburban shopping mall, franchise-everything (from coffee to hairdressing), the various steps that make up the delivery business of UPS, Federal Express, and DHL, and, obviously, online commerce. That is, pretty much each and every innovation which, during the last half century, has had any lasting impact in the retail and distribution sector was not spurred or protected by patents. How did the inventor of the cotton gin â Eli Whitney â become rich? Not through the cotton gin! He and his business partner took out a patent and spent their energies crushing competition. They were trying to charge farmers two-fifths of their profits, paid in the form of cotton. Farmers hated it, and started to pirate the machine, and many competitive companies sprung up. Litigation followed and lasted from 1794 to 1807. Nothing came of it but an expenditure of time and energy, not to mention lawyer fees. The growth of cotton ginning in the South ended up owing more to the pirates than Whitney. So where did Whitney get his money? How did he die rich? In 1798, he invented a process to manufacture muskets by machine. This time he was smart: he sought no patent. He encouraged âpiracy,â that is, imitation. The industry took off, and he remained the leader through innovation. What a blessed life to be rid of the stupid waste of using legal means to crush the competition and instead devote yourself to doing good for others and making money at the same time! Here is the section in which the authors tell the story of agriculture. Before 1930, there was no patent protection â the very period in which the United States became so productive in agriculture that the entire population shifted in its main industrial focus. After 1930, law granted only patents for a narrow range of plants. It wasnât until 1970 that the Plant Variety Protection Act extended protection to sexually produced plants, and not until the 1980s when protection was extended to biotechnology. So we have a test case, and the authors measure innovation using total-factor productivity. They find no increase after patents, and even some disturbing data oscillations. In corn in particular, the astounding increase in yields occurred before patents and have nearly leveled off since patents. Two splashing examples of amazing innovation are now introduced in the book. The area of Almeria, Spain, was an unusable desert from the beginning of time until 1963, when an unpatented greenhouse was introduced into the area. The greenhouse was copied and copied and spread all over the region. The results can be seen from space with color photos reproduced in the book. The entire region was transformed from desolate to rich in the course of two decades. The same process took place in Treviso, Italy, where the âready-to-colorâ sweater was introduced by the Benetton family, and the process was imitated and spread to change an entire region in the absence of patent. Other examples: financial services (no patents), fashion (no patents), and advertising (no patents, and copyrights are ineffective). These are the leading examples of innovation in the modern age. This section is so compelling that so far as I am concerned, the book could end here. But if patents really are that irrelevant, why donât the captains of industry realize it? It turns out that they do. Two surveys in modern times asked R&D heads what techniques are most effective in realizing gains from innovation. It turns out that they regard the patent as the least effective means. The authors conclude this mind-blowing chapter with a long discussion of patent pools: these are cases in which companies relinquish patents in order to establish sharing agreements. It is a way of stepping sideways toward what the market would give us anyway. Companies live and breathe by innovation. Innovation and monopoly are not compatible. We are back to an old lesson that remains true: it is the market and all that comes with it â not laws granting exclusive privileges to produce â that gives rise to innovation. I end with a statement from Mises himself: > The great monopoly problem mankind has to face today is not an outgrowth of the operation of the market economy. It is a product of purposive action on the part of governments. It is not one of the evils inherent in capitalism as the demagogues trumpet. It is, on the contrary, the fruit of policies hostile to capitalism and intent upon sabotaging and destroying its operation. Sometimes those most hostile to capitalism are the capitalists themselves! Seen and Unseen Cost of Patents =============================== Drug patents took it on the chin a few years ago when major drug companies refused to sell cheap AIDS drugs in Africa. Presuming the drugs work, countless lives might have been saved. But the desire to protect the high price on the patented drug â despite the low marginal cost for producing additional units â trumped the humanitarian impulse to save lives. The large drug companies refused to budge, despite protests from all over the world. Defenders of the drug companies say: Well, sure, it is cheap to produce mass quantities of drugs after they have been developed. But the costs of getting there are sky high. If companies canât charge high prices, they wonât develop the drugs in the first place. Boldrin and Levine, in chapter four, offer an interesting response to this claim, but it requires a bit of thought. They point out that the drugs can still be sold profitably at vastly lower prices, in the same way that many other products can be sold profitably at low prices. Items of superhigh cost â think of passenger airlines or cruise ships â recoup those costs through volume sales over time. It is the same with drugs, or could be. So why wouldnât the pharmaceutical companies budge in the African case? It is due to the fear of reimportation, that is, that the drugs would make their way back to the United States and Canada and be sold at cheap prices, thereby undercutting the monopolistic price. Why not just price discriminate? Itâs not so easy to price discriminate in a global economy. Rather than take that risk, companies settled for not selling at all. This reflects a general principle articulated by Boldrin and Levine: âIntellectual monopolists often fail to price discriminate because doing so would generate competition from their own consumers.â Think about this principle. It helps explain why large software manufacturers routinely degrade their products available to individual consumers while reserving their better products for the more lucrative corporate market. This is why the versions of operating systems and end-user software are dumbed down on the consumer market. The companies donât want to permit cross-selling between markets, even though the costs of selling better products across markets are virtually identical. Only IP allows them to get away with this sort of behavior. So, yes, there are some benefits to patents in the same way there are benefits to all monopolists. The Post Office benefits from the prohibition against private delivery on letters. Public schools benefit from regulations on private education and mandatory funding. The electric company benefits from its statutory guarantee against competitive intrusion. But that is not the same as saying that all groups benefit. Boldrin and Levine examine data from total factor productivity in crossnational studies and show that the astounding increase in patents in the 1990s â rising more than three-fold from a stable rate in previous decades â has had no effect on increases in prosperity and innovation. Meanwhile, there are huge costs, even for those who acquire and own the patents. Oracle Corporation, for example, spends vast resources on what can be called âdefensive patents.â They must get them before someone else does, or else risk having to pay huge fees to someone else. Cross-licensing is the only way to develop software now, so the patent route has been forced on everyone. The word âthicketâ is the one everyone uses. What it really amounts to is a cold war between patent holders â a patent race that is very much like an arms race. This is why Nokia owns 12,000 patents and Microsoft is adding 1,000 patents a month to its arsenal. Intelâs CEO spoke for many when he said he would be glad to cut the number of Intelâs patents to a tenth of its current rate provided that others did the same. Conventional patent theory says they are necessary for generating revenue to fund research and development, and to inspire innovation. This is supposedly the economically valuable contribution of patents. Then there is the real world. A Carnegie Endowment survey of firms shows that businesses themselves report that this function of patents is mentioned as important only six percent of the time. The main reason businesses say that they want patents is enforce monopoly â preventing people from developing similar but better and cheaper products â and to prevent lawsuits. They authors describe the result of patents as not a competitive market for innovation but an oligopolistic market structure around patent-pool mechanisms. This affects every industry, as patent battles hinder economic development. A good example is the ongoing battle over who and what can lay claim to the title âbasmatiâ rice. A Texas company called RiceTec won a patent in 1997, infuriating Indian and Pakistani companies that have been making basmati for hundreds of years. These companies have been fighting back with their own attempts to register patents on the rice. What this has to do with the consumer and the dinner table and the need for cheap and delicious food being made widely available is the unanswered question. A peculiar form of patent abuse comes in the form of the submarine patent. This is a patent taken out early while the production of the product itself is delayed as long as possible. When someone else finally goes to market with a product, the patent emerges from the deep as a method of blackmailing the company that has gone to market. Boldrin and Levine explain that this tactic dates to George Seldonâs patent on the âroad engineâ in 1895. It commanded 1.25 percent on the sale of every car in the United States. He sold his patent for $10,000 and 20 percent of royalties to a syndicate in 1899. As the car actually started to make it to market, the Association of Licensed Automobile Manufacturers formed a cartel around the patent. The authors comment, âif you were wondering why the U.S. automobile industry developed so quickly into the oligopoly we know and hate, a fair share of the roots lie in bad âintellectual propertyâ legislation and the intellectual monopoly it created.â Personally, I find that revelation remarkable. More than a hundred years later, we are still paying the price for this car-cartel-creating patent. Something similar happened to airplanes, when the Wright Brothers managed to get a patent on anything resembling an airplane, despite their own contribution to the technology being so meager. They were so aggressive in blasting all competitors that all serious innovation in airline technology ended up taking place overseas in France. The authors make a statement that I wish could be made more prominent, since it comports with everything I know about businesspeople and patents. It is the most common thing in the world for a businessperson who uses every market-oriented skill to get a product to market: a good product at a good price that becomes the market leader. At this point, and for some odd reason, the businessperson gets confused. He thinks that it his IP that is the key to his success and ends up fighting for it with all his might, even at his own expense. Here is the statement by Boldrin and Levine: > âBeing a monopolistâ is, apparently, akin to going on drugs or joining some strange religious sect. It seems to lead to complete loss of any sense of what profitable opportunities are and of how free markets function. Monopolists, apparently, can conceive of only one way of making money, that is bullying consumers and competitors to put up or shut up. Furthermore, it also appears to mean that past mistakes have to be repeated at a larger, and ever more ridiculous, scale. A clear case in point concerns the Recording Industry Association of America, which managed to make itself appear as the devil incarnate in the eyes of an entire generation of music downloaders. Another example concerns Google Print. This work of genius would have brought all the worldâs libraries to one central location so that users could search the books and purchase them. Wonderful! But the Authors Guild sued, and the suit has gutted Google Print as a useful tool. The dream of all educated people from the ancient world to the present â a single accessible repository of all the worldâs wisdom â was stopped for no good reason. The authors conclude chapter four with a restatement of the theme: the benefits of patents are small and narrow, while the costs are large and broad. The biggest costs are the unseen ones that Bastiat speaks of. These are innovations we donât see, the products that donât come to market, the efficiencies that we never experience, the companies that donât come into existence, and the investment that would have taken place with the resources that are expended on patent acquisition and enforcement. Here are the real costs of patents, and they are incalculable. The Book and Music Killers ========================== One theory of copyright is that it promotes the production and distribution of literary works. Well, that myth is completely shattered in chapter five of Against Intellectual Monopoly. The chapter is pithy, thorough, dead-on in its practical analysis, and deeply radical. It is the perfect illustration of why I think this is one of the most original and compelling books on economics in a generation. Copyright is a subject replete with mythology. People toss around junk legalisms that they pick up on the street while knowing nothing about the facts or the law. They imagine that copyright is important for protecting rights, even though the practical reality is that it is a killer of ideas and a rights violator on a massive scale. Indeed, something must be done to crush this institution before it brings the creative and literary arts to a grinding halt. We must remember that the copyright law is a just another bogus modern institution we can do without, just like the income tax and central banking. International copyright only came to exist in 1891 â it was the result of lobbying not by authors but by publishers! â and has steadily increased over the century to the point of maniacal absurdity today: thanks to the US Congress, an article you write today is under copyright protection until 70 years after your death. As was mentioned earlier, copyright originated as a kingly permission to publish what was politically correct. The privilege passed to individual writers in the 19th century but didnât stay there long: the publishers inherited the right through contracts, and they now use that right to rob writers, musicians, artists, and consumers of what Jefferson considered to be inalienable. Did the internationalization and institutionalization of copyright actually achieve its stated aim of promoting literary work? There was no increase in copyright registrations as a percentage of the population between 1900 and 1950, despite the double lengthening of the copyright term. So much for the great outpouring of creativity in literature and music. In 1998, the Sonny Bono/Mickey Mouse Copyright Term Extension Act (âthe biggest land grab in historyâ) boosted copyright by 40 percent â but with what effect on incentives to produce? None, so far as anyone knows. But the publishers and moguls who pushed for this nonsense are surely happy that they donât have to work harder and can continue to live off the royalties of their long-dead predecessors. Boldrin and Levine find that the countries with no copyright legislation (German territories in particular) had more composers per capita than countries like England, where copyright had the effect of bringing the entire composition industry to a grinding halt. Actually, what that 1998 legislation did was provide a massive boost for authors to find ways out of the chains of copyright. The development of Creative Commons, and other tools, followed because it is ever more obvious that copyright is at war with the digital age. And thank goodness for that. But in the meantime, copyright in the 20th century has accomplished horrible evil. Large swaths of the literary output of the last 50 years, for example, now lies buried in the vaults of large publishers who neither print them nor permit them to be printed absent some huge fee. Nor will they return rights to the author. Nor will the publishers allow them to be posted. Getting them back in print is a very expensive and time-consuming operation. In my own work at the Mises Institute, Iâve encountered a dozen such cases myself, and while most individual cases offer some possibility of a fiduciary workaround, economic considerations on the margin effectively drive these works off the market. Meanwhile, the greatest thing that could ever happen to an author is for his or her works to enter the public domain, but that only happens if you wrote your book before 1963 and the copyright was mercifully not renewed. Here is a test case brilliantly conceived of by Boldrin and Levine. The works of Edgar Rice Burroughs are right on the fence of the copyright law. Some are out of copyright. Some are in. They compared the circulation between them. The books out of copyright in the Mars series are A Princess of Mars, The Gods of Mars, The Warlord of Mars, Thuvia, Maid of Mars, and The Chessmen of Mars. All of these are available on Amazon, in illustrated HTML versions, as electronic versions to buy and see for free, and in innumerable editions in stores. Meanwhile, other books in the Mars series are under copyright, including Master of Mars, A Fighting Man of Mars, Swords of Mars, Synthetic Men of Mars, and Llana of Gathol. Every single one of the books under copyright is out of print! This is not an accident. In this way, copyright serves as a tax on production, so of course it results in less, not more. The same is true of innumerable authors, including many classically liberal authors. The world is highly fortunate that they published with marginal firms that failed to renew their copyrights after they expired. Otherwise, their works would be unavailable. It is in fact tragic that Hayek himself had major publishers who renewed many copyrights, because that fact alone has caused them to be tethered to the point of limiting Hayekâs own influence. What the 1998 act did was put tens of thousands of titles under copyright that would otherwise have been open to the world. All this was done to protect the work of one company â Disney â which ironically made its fortune by making movies based on public-domain stories! The authors here further point out that large companies have no incentive to bring back into print the titles for which they own copyright, because they donât want them to compete with their new hardback titles. It really is a form of legal suppression of literary work going on here, made possible only by the stateâs law, and it is an outrage. A vast swath of the literary output of the West of the last 50 years has been kidnapped by private parties with the legal approval by the state. Again, the beneficiaries of the law are not authors and not musicians and artists. Musicians themselves typically earn far more from concerts than royalties. So the conventional theory is wrong: copyright doesnât inspire creativity. These musicians would work and create without it; in fact, no one has a greater incentive for abolishing the current system than creators. For 2,000 years, the core of musical creativity was the emulation and elaboration on existing musical forms, with composers both competing with each other and cooperating in a communal way toward advancement. They depend most heavily on sharing information. If this is stopped, culturally significant creativity is seriously impeded. Copyright shut the cooperative process down at the turn of the 19th century. Today, serious âclassicalâ composers have to keep returning to public-domain material like folk songs to make variations on themes. The music of the 20th century is largely off limits. Meanwhile, the search for originality has created bizarre forms of music within the conservatory culture, none of which has sticking power in the culture at large because it is illegal to imitate it. This whole scenario represents a radical attack on the very essence of cultural advancement. The repeal of copyright would result in a huge outpouring of great music that uses popular music in a variety of different forms. Composers would be unleashed to write, ensembles could perform and record, and musicians of all sorts would produce with glorious new creativity. As it is, they live in a caged world in which lawyers determine what they can write, play, and record. If you understand this, you can see why musical forms have taken such a huge tumble in the last 100 years, while creativity has taken place only in sectors that eschew copyright, such as jazz and independent rock. As for recording, the whole effort to prevent file sharing has been a disaster for artists. Again, this resulted from special-interest legislation. The tethers are so tight now that many bands are reduced to refusing any recording contracts at all, merely so that they can distribute their own music the way they want to. This has been proven again and again to be compatible with huge sales. The best-selling CDs of last year were also the ones available for free download. Whenever this subject comes up, people unthinkingly toss around crazy bromides. âYou mean you want to allow anyone to just steal anyoneâs work? Why would anyone bother to write a book or write a song?â These kinds of questions reflect what happens to our thinking in a time of statism; we canât imagine how freedom would work. We do not, for example, ask similar questions about other sectors. âIf you allow the private growing of vegetables, why would anyone bother to start commercial farms or open grocery stores? If you allow people to cook at home, why would anyone open a restaurant? If you allow people to just share recipes, why would anyone become a master chef? You would allow just anyone to steal the idea of a tomato or a sauce or a fancy dish that took years in culinary school to create?â These questions only sound stupid to us because we donât have existing laws covering these topics. Somehow everything works out. Because we have copyright, we canât even imagine how we could get along without it. And yet we see many examples around us. Public-domain works are hugely popular and firms profit from selling them, and they are more prevalent than copyrighted works. What I find striking is that copyright operates today by state-authorized theft of creativity by large firms. Writers and composers and bands permit themselves to be looted of their own right to distribute their own work. Composers work years on a piece and then give up the results to some business corporation in exchange for their right to publicly hum the tune they wrote. It is astounding, and wholly nonviable. Fortunately, the free market is finding a workaround to evil copyright laws in the form of Creative Commons and other institutions. In this way, at least there is a path to freedom for us, whereas the same canât be said of patent laws. One last note: Do not write me with some smarty-pants remark about how, if we are serious, the Mises Institute should allow anyone to publish our books. All our new works, insofar as it is possible, will be published with a Creative Commons license as a matter of signed contract with authors. As for this book, please âstealâ it. That goes for anything I write. If you can sell it and make a buck, good for you. If you become a millionaire, shame on me for not thinking of it first. Back to Basics on Property and Competition ========================================== Zeroing in on a topic like intellectual property offers a chance to clarify fundamental notions in economics generally. You think you understand something like property rights or the nature of competition â you have studied the ideas for years! â and then a challenge comes along that blows everything up. Itâs an opportunity. Time to think and think again. Is there really property in ideas, and if so, what rules should govern it? Is it really necessary that such property be protected in order that competition be kept fair and just and efficient? The authors of Against Intellectual Monopoly state at the outset of chapter six that property is a great and indispensable thing. It allows people to own, develop, be creative, profit, and build a prosperous society. Societies without private property stagnate and die. Property rights are necessary too when there is a limit on the number of things in question. But owning a thing doesnât prevent others from owning other things too. For example,- cars. They must be allocated through property rights because there is a potential for conflict if they are collectively owned. But my owning a car doesnât prevent you from owning a car. There is no coercion involved in the institution of ownership. The authors make a very important point with regard to ideas. If you have an idea, it is yours. You can do with it what you want. If you share it (sing, speak, broadcast, let others see the products of your ideas), others then have copies of it. They are entitled to do with their copies of the idea precisely what you can do with your idea. They can use it how they want provided they donât prevent others from doing with it what they want. This is a simple application of the nonaggression principle that governs a free society. Whether it is fashion, language, know-how, or whatever, people are free to copy. Ideas, then, are what Mises calls âfree goodsâ: copies are potentially limitless. They âdo not need to be economized.â Intellectual property is the completely wrongheaded idea that, in the words of the authors, someone has the right âto monopolize an idea by telling other people how they may, or more often may not, use the copies they own.â This strikes at the heart of progress, because it means not improving what exists but rather prohibiting others from using and improving it. In the same way that property is good, competition is also good. It inspires people to strive for excellence, and to measure their progress against what others are doing. It allows people to try and fail or try and succeed. It permits people to learn from each other, looking at what others do that is successful and emulating them. This is how society leaps forward from stage to stage: how we went from horses to engines, how plumbing came indoors, how industry took over from agriculture, how the digital came to be. Competition is predicated on the ability to learn and copy. If you think about it, this is the essence of daily life. We watch how people do things and learn from them. We get on the subway and hold the stabilizing strap a certain way. We follow fashion sense. We watch the Food Network. We listen to our professors and talk to other students. We read and absorb the ideas of articles on the Internet. The newly taught person becomes a competitor: the student becomes a professor, for example. The protĂ©gĂ© is always a threat to the monopoly previously held by the mentor. What can you copy? Anything and everything. This is not âtakingâ anything from anyone. The owner of the original idea still has his. Other people now have their copies, and are free to improve them. Commerce is part of this stream of life, and, in fact, learning through imitation and improvement is even more crucially important if we want to sustain a rising population with ever better health and well-being at their disposal. Letâs say I write a book and publish 1,000 copies. They are all mine. When I sell one, I now have 999 remaining, and the new owner of the one book, in a free society, is free to do with his copy what he wants: use it as a placemat, throw it away, deface it, photocopy, and even republish it. You can even rerepublish it under your own name, though that would amount to the socially repudiated vice of plagiarism (vice, not crime). The new copies, which always involve some cost, compete with old copies. What are the advantages of living under intellectual freedom as described above? The authors list three main ones: (1) The number of copies is more plentiful and their price is thereby lower, which helps consumers. I like this point because it underscores that IP is really what the old classical liberals denounced as a âproducersâ policy,â like protectionism or industrial subsidies. It beefs up the bottom line of specific firms at consumersâ expense. (2) The initial innovator still earns money, as in the perfume or fashion or recipe industry. (3) âThe market functions whether there is one innovator or many â and socially beneficial simultaneous innovation is possible.â The authors give the example of Mozart and Beethoven, who published without IP but did very well by being the first to market. This is the source of profits. Itâs the same today with products such as the iPhone. It was the first-time market, and Apple made a killing, enough of one to have inspired and ratified the initial innovation. Now they are attempting to prolong their period of monopoly profits by considering patent suits against imitators. Society is certainly not better off under these conditions. As the authors say, âthe goal of economic efficiency is not that of making monopolists as rich as possible, in fact: it is almost the opposite. The goal of economic efficiency is that of making us all as well off as possible.â Itâs interesting how people immediately object that no one would create things under free-market competition. Look around! A tiny fraction of what we use and experience every day is subjected to intellectual monopoly. And look at your own life. Do you trim the bushes in front of your house only because you then have copyright to your new design? Do you take a casserole to a potluck lunch only on the belief that no one is permitted to copy your dish? Do you wear a navy jacket with a yellow tie only on the condition that no coworker is permitted to do the same? There was no IP at all for many centuries during the greatest period of modern economic growth from the 15th century onward. Others generate all kinds of arguments to show that competition doesnât work. For example, we are told that very high costs are associated with some investments, and so monopoly is required in order for investors to make a profit and thereby have incentive to invest and innovate. The authors cite the cases of shoes and gasoline. Building a shoe factory or an oil-refinery plant is a very expensive undertaking, and competition is everywhere. But somehow no one suggests that these must thereby be produced under monopoly conditions. I suggest that that reason is that we experience competitive conditions in these industries; it is so difficult for people to even imagine freedom where it doesnât exist. I recall a story told to me by an economist who was serving as an adviser to a former Soviet satellite state. He advised free labor markets and privatization. Officials objected that this wouldnât work because people might build plants where there are no workers. He said that people would just move to the places where capital is most profitable for labor. The officials objected that they couldnât possibly allow the freedom for people to live wherever they wanted; this would amount to an intolerable kind of anarchy. They just couldnât imagine how such a system could work! There are advantages to being the first mover in markets, and here is the main source of the innovatorâs profits. But there is no reason to freeze the market process right there. In many ways IP represents the same fallacy that antitrust does: it takes a snapshot of the economy in one stage and evaluates it and manufacturers a policy response. Antitrust tries to break up what only temporarily appear to be monopolies; IP attempts to create and sustain monopolies over time. Competition, by contrast, lets the market work as an undirected and uncontrolled and rivalrous process of discovery, emulation, and creativity. Will some firms suffer under competition? Of course. âCompetition is not a gala dinner,â write Boldrin and Levine, âand getting rid of inefficient firms while allowing efficient ones to blossom is exactly what competition is supposed to accomplish.â The chapter ends with a hymn to imitation as a social force. These few paragraphs are so important, and what they imply is something that I believe has been overlooked by classical liberals. It is a foundation of social order. And that gives us three talked about this chapter: property (which gives rise to exchange), competition (a species of cooperation), and imitation (learning through emulation). Fallacy Run Amok ================ Fed up with the patent craze, The Economist magazine wrote the following in a main editorial: > The granting of patents âinflames cupidity,â excites fraud, stimulates men to run after schemes that may enable them to levy a tax on the public, begets disputes and quarrels betwixt inventors, provokes endless lawsuits. ⊠The principle of the law from which such consequences flow cannot be just. Itâs not in a current issue. That was published in 1851, but every word of it remains true today. It was once conventional wisdom among economists that state-granted monopolies were as bad as mercantilism. But in the meantime, sometime after the middle of the 20th century, the conventional wisdom became confused. The source of the problem was a mechanistic view of the market embodied in the idea of general equilibrium theory. It is a theoretical picture of what the macroeconomy looks like when all the dust is settled. Demand and supply perfectly match. The prices of all things have been competitively bid down to their cost, so there are no profits. All prices are a given and all markets are cleared. There is perfect information, perfect rationality, no uncertainty and no transaction costs or any other costs. Indeed, there is no activity at all. All the world is made of perfectly satisfied robots. Itâs a mathematical notion only, but once it is embedded in your head as a picture of a perfect economic world, it is not a small step toward using it as a benchmark for the whole of economic theorizing. It turns out that the case for patents and copyright is bound up with this theoretical notion, and Boldrin and Levineâs seventh chapter of Against Intellectual Monopoly has the authors grappling with this ideaâs problems. Joseph Schumpeter was an advocate of patents precisely because he couldnât shake the general equilibrium idea out of his head. He sought to account for how change happens under general equilibrium, and settled on a theory of entrepreneurship that imagines an innovation that shakes up the dust before it settles into a new pattern (Rothbard called this âbreaking out of the Walrasian boxâ). With his benchmark, imitation would be as a costless as any other activity, so it seemed necessary for the innovator to have an exclusive for a period, during which profits could be earned. Otherwise, the creative destruction necessary for social and economic advance canât take place. Well, the core problem here is that general equilibrium has nothing at all to do with the way an economy works, as the Austrians have pointed out for half a century. There are costs to every action, pervasive uncertainties in all aspects of life, entrepreneurship is inherent in all action, and the clearing of markets takes place over time and through a process of ceaseless trial, error, and change. It is a fascinating idea that the core reason why economists have only recently begun to look critically at the problem of IP is due to the triumph of the general equilibrium construct and the associated mathematization of the profession that excludes the possibility of modeling central features of real-world markets. We can chalk this up as yet another cost associated with the refusal of the profession to fully absorb the ideas of Menger, Mises, and Hayek. This is the core theoretical problem with those who believe that innovation cannot occur in the absence of IP law: they assume a world in which all the hard stuff of life is a snap. In fact, imitation is costly and takes time. It requires effort. Even if a process or product is perfectly imitated, getting the product to market is a far more serious hurdle than simply copying something. It took a hundred years for the process of silk making to be imitated successfully. Even to this day, most of the world cannot figure out how to make a decent cup of espresso. And even the possibility of quick and easy imitation doesnât strip away the profits associated with being first to market. Iâm pretty good at making ice cream, and I could probably replicate the Moosetracks recipe over the course of a weekend of experimenting. But it isnât the Moosetracks trademarks, copyrights, and patents that prevent me from doing it. It is because I have better things to do, and bringing anything to market has huge opportunity costs. Even if competitive but nearly identical products make it to market, that doesnât necessarily mean that the first mover cannot maintain a profit stream. The authors cite the case of TravelPro, the suitcase with the handle that has thousands of imitators. Yet even now, TravelPro does a booming business through ceaseless innovation, marketing, brand recognition, and competitive pricing. If you take the arguments of the IP advocates seriously, you would never be able to figure out how there could be a thriving market for pizzas. There are high start-up costs (buildings, employees, ovens, drivers, technique) and yet there is a very low marginal profit associated with selling each one, a product that can be imitated by anyone. Surely there must be a recipe copyright, a patent on the pizza, a monopoly of providers, in order to make sure that someone is willing to undertake this task. And yet look around: there are a dozen places you can call to bring a pizza to your desk in 20 minutes. Another argument concerns the idea of overgrazing. If you put ideas into the commons, they will be overused and degraded the same as regular property. This is true with real property. Public schools, public roads, public lands, and the like are all overutilized and fall into disrepair for lack of any economizing mechanism that allows rational allocation. What about intellectual property? The Walt Disney Company says that its IP in Mickey Mouse is designed to prevent overgrazing, that if he went into the public domain, he would be drawn as cat food or placed in unseemly settings. Its currency would be debased. Of course you can make the same argument about anything, such as pizzas or all food, but there is no question that, while an imaginary pizza and food monopolist would be worse off under competitive conditions, society is most certainly better off because anyone can make a pizza or make food. The authors make a further telling point in passing: when some good or service today is labeled as âMickey Mouse,â it is certainly not intended as a compliment. So despite the monopoly, the cartoon figure has certainly been degraded. Many pro-IP arguments boil down to beliefs that something is either going to be undersupplied or oversupplied on a competitive market. In other words, this is the same argument used for all forms of claims about âmarket failures.â I can recall that there was great controversy when the first books about medical information and pharmaceutical drugs came on the market. Shouldnât doctors and pharmacies hold the monopoly? Somehow, however, everything worked out. We buy books, look up medical information online, and still go to see the doctor. All providers are annoyed by competition. College professors are not entirely thrilled about Idiots and Dummies guides, but sometimes a colleague breaks ranks and writes one. This is just part of the rough and tumble of life in the absence of a general equilibrium. The Hoax of Invention History ============================= All popular business histories are replete with lies. Or, to be more charitable, they are filled with untruths based on a stupid version of cause and effect: inventions happen because people take out a patent on them. This assumption is hardly ever questioned in the mainline literature. Writers look through patent records and assume that they are a record of technological advance. The truth is far messier. The patent records are a snapshot of those who filed a patent, and nothing more. It is because of patent-based historiography that people believe that the Wright Brothers invented the airplane, when in fact they made only a tiny contribution of combining wing warping with a rudder. It was Sir George Cayley in Britain and Otto Lilienthal of Germany who did the bulk of the work of inventing the airplane. But it was the Wright Brothers who applied for the patent and quickly used it against Glenn Curtiss, who improved wing warping with movable control surfaces. So it was with the radio, which is conventionally attributed to Guglielmo Marconi, the Nobel Prize winner in 1909. What about the contribution of Oliver Lodge in the UK or the forgotten genius Nikola Tesla or the Russian Aleksander Popov or the British Naval engineer Henry B. Jackson? All Marconi did was ground the antenna, and also manage to win the patent wars thanks to the deep pockets of fellow aristocrat and partner Andrew Carnegie. Fifty years after the patent was granted, the Supreme Court conceded that it was unjustly given, but by then the other claimants were dead! (Marconi was consistent at least: he was a big supporter of fascism in Italy.) Then there is the famous myth about Alexander Bell that displaced knowledge of the real inventor of the telephone, Antonio Meucci. But Meucci couldnât afford the fee to file the patent. This oversight was fixed in a 2002 declaration by the US Congress but just a bit too late. There is an unlimited number of such cases that lead to fundamental questioning of the relationship between patents and innovation. It turns out that there are very few great leaps forward in history that are the result of a single, Prometheus-style figure. Most advances are the cooperative work of many factors alive in society, with individuals improving things a bit at a time until all those improvements come together in a marketable form. The patent has essentially nothing to do with it. And Boldrin and Levine are hardly the first to point this out. You might be surprised to know that many academic economists have done empirical studies on the relationship between patents and economic advance. Of all those studies they reviewed, 23 in total, they found none that could establish a strong relationship, and many that found negative relationships between patents and development: that is, that patents actually impede progress. What they found further is that the main contribution of patents is to increase the production of patents. But that is not the same as increasing invention, for the main use of the patent is to put a stop to any similar innovation that builds upon and improves the patented thing. The patent holder rides high for a time, but history is actually frozen in place. The process of imitation and sharing that led to the innovation becomes formalized, centralized, fixed, and stagnant. They examine the case of databases, which are patented in Europe but not in the United States. The United States wins the competition easily. The American dominance of database production runs 2.5:1 compared with Europe. To me, this helps explain what many have noticed, namely that Europe is seriously behind in its digitalization and organization of information, with most Europeans possessing oddly antiquated intellectual capital concerning even the most basic databasing skills. Now we know: itâs not their fault; itâs the fault of their IP regimes. Thus does chapter eight of Against Intellectual Monopoly discuss all the existing literature that makes the case â on purpose or inadvertently â against patents. It is packed with empirical detail, but in particular Iâm intrigued at their review of the history of musical composition in England and Europe during the 18th and 19th centuries. They find that the countries with no copyright legislation (German territories in particular) had more composers per capita than countries like England. And in England in particular, the 1750 copyright law, extended to music in 1777, had the effect of bringing the entire composition industry to a grinding halt. And later, when copyright was imposed on Italy and France, it led to a diminution of composer effort. This demonstration is intriguing beyond what most music historians can possibly imagine. It solves a long-running mystery concerning how it came to be that the most musically educated population in the world, one with a massive history of compositional genius, would suddenly fail to participate in the progress that defined the age of Mozart and Beethoven. These historians just havenât known where to look for clues. This chapter makes me sad for all the great innovators whose names are not in the history books, and even sadder for all of us who have been denied great innovations because some fool managed to make it to the patent office first only to use that privilege to kill his competition the next day. Far from encouraging innovation, patent and copyright have managed to kill off so many wonderful works of art and technologies that it boggles the mind. In order to understand this, you have to look beyond the patent records. You have to train yourself to look at the unseen costs of government regulation. Do Patents Save Our Lives? ========================== How essential are drug patents as a piece of the machinery of the modern pharmaceutical industry? Incredibly so. Repealing them with no other changes would likely lead to a dismantling of a massive and lucrative industry that saves lives every day. To elaborate, without patents, compensation for the hundreds of millions of dollars necessary for jumping through FDA hoops would not be forthcoming. Without patents, the huge manufacturers, who face mandatory disclosure requirements, would have their formulas taken by others, and knockoffs would immediately drive the price to marginal cost. The vast costs of redundant testing and retesting could not be absorbed by future revenue streams. And these streams are themselves uncertain due to the arbitrariness of the FDAâs process. And thanks to wicked antitrust laws, companies face a legal minefield in combining efforts, cooperating on research, maintaining prices, and sharing markets. But notice that all the reasons why patents in pharmaceuticals seem necessary are themselves due to some other form of government intervention: drug regulation, antitrust, government funding, and government mandates of all sorts. Regulation has begotten regulation, with each step seemingly dependent on every other regulation. The result is a massive ratâs nest of laws that is buried deep within a much larger hairball of the medical industry itself, which has been dominated by increasingly tight state controls for nearly a century. Then there is a further problem of liability confusion and court precedent that is woven through the system like a tapeworm in a deeply diseased body. How can anyone begin to discuss only one aspect of the marketplace without thoroughly discussing all the other aspects? How can the authors of Against Intellectual Monopoly possibly sort through this thicket to make a case for repealing patents on pharmaceuticals? Because of the above complications, I dreaded this chapter most. I was wrong to do so. What they have produced is a masterpiece of exposition. They have both the big picture and the small picture, with fascinating details in paragraph after paragraph. They take the reader through the logic and evidence at just the right pace, and manage the seemingly impossible: the reader is wholly convinced that drug patents are not necessary and in fact are doing great evil in the world today. It is the hardest case to make, and they knew this going in. Theirs is a virtuoso performance, worthy of separate publication. Some people love the pharms and other people hate them. The authors take a middle-ground position. They do great good for the world. But they are embedded deep within in a regulatory regime that is stultifying the industry, and drug patents play a big role in this. Can we imagine a world without drug patents? No need to dream. In the sweep of history, patents like we have today are essentially a postwar phenomenon, and prior to that, the industry developed faster in countries without patents than those with them. One way to show that is to examine 19th-century chemical production. They tell the story of the French patent on coloring dyes granted to the La Fuchsine company, a patent that pretty well destroyed all development in France, while the absence of patent in Germany, Switzerland, and Britain led to massive innovation and the beginnings of the modern industry. The United States was very behind here due to its strong patents, and even in the First World War the United States had to import dyes from Germany in violation of the British blockade. This was how DuPont got its start. In recent decades, there have been pockets of pharm-patent freedom. Before 1978, it was Italy where a thriving industry existed for a century in the absence of patents. The patent accounted for the discovery of ten percent of the new compounds between 1961 and 1980. Foreign companies poured into Italy to imitate and develop. But this shut down after 1978, when Italy introduced patents under pressure from foreign multinationals. India then took the position of the free-market country, and its industry became a huge player in the generic-drug production market, until India too was forced into the WTO agreement and shut down its dynamic market. The whole world of pharmaceuticals is now engulfed in an incredible patent thicket, and people praise all the innovation taking place but rarely ask how much prior innovation really owes to the patent or how much innovation we might experience or how low the prices would be in absence of the patent. Boldrin and Levine dare to ask the question about where the innovations of highest social value over the centuries have come from. They looked through medical journals and found several surveys. What were the medical milestones most significant in history? The list: penicillin, X-rays, tissue culture, anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the Pill, computers, oral rehydration therapy, DNS structure, monoclonal antibody technology, and the discovery of the health risks of smoking. Only two of those were patented or were due to some previous patent or brought about with a patent incentive. A separate list of the top ten public-health achievements of the 20th century was put together by the US Centers for Disease Control and Prevention. It is striking that not a single one involved patents at any level. Several people wrote in to complain that aspirin, Helicobacter pylori, and Medline were not on the list. None owes anything to patents. Even looking at a list of top pharmaceuticals does not produce a patent-favorable result. Boldrin and Levine find that patents had nothing to do with aspirin, AZT, cyclosporine, digoxin, ether, fluoride, insulin, isoniazid, medical marijuana, methadone, morphine, oxytocin, penicillin, phenobarbital, prontosil, quinine, ritalin (methylphenidate), salvarsan, vaccines, or vitamins. Of the remaining products that owe their existence to patents, most were either discovered accidentally, were discovered in university labs, or were simultaneous discoveries that led to expensive battles over who would get the patent. The authors turn to the problems of corruption in pharms and their relationship with doctors, and to the crazy requirements involved in redundant testing for patents and final FDA approval. More than half of newly patented drugs are nothing other than repackaging of existing drugs on the market. It is not uncommon for a drug going out of patent to be repatented as something new but that requires massive new clinical trials and high costs. The companies then have the incentive to market the patented over the out-of-patent product, and doctors have proven responsive to this tactic. It is not surprising that even some studies sponsored by the pharmaceutical industry have concluded that they would be better off without the patent, given the high costs of otherwise adhering to the mandates, marketing, and all the rest, and especially given that the length of patent is comparatively short given the time required for FDA approval. Despite all odds, the authors have made a very compelling case that a free market in pharmaceuticals would lead to the development of innovative drugs, save dramatically in all the associated costs of bringing drugs to market today, and save consumers a bundle. Even if you are completely unconvinced by this cursory summary, I urge you to read their entire case. It causes a mind shifting to take place, consistent with the overall theme of the book: competition, not monopoly, is the source of innovation and development. Life-saving drugs are too important to be left to government grants of monopoly. The Mercantilism of Our Time ============================ Someone handed me a book the other day â a cult classic among music geeks â and urged me to read it, and, when I had finished, sign my name in the front cover. That way I could be added to the already long list of readers in the front cover, each of whom add added his or her scrawl to the book after having read it. How charming! Except for one thing: this is in complete violation of the spirit of intellectual-property law. All these readers were sharing the same book instead of buying a new copy. Think of the revenue lost to the publisher and the royalties lost to the author! Why, if this gets out of hand, no one will ever write or publish again! These readers are all pirates and thieves, and they should probably be subject to prosecution. So goes the rationale behind intellectual-property law. Itâs what economists call a âproducersâ policy,â designed to create maximum revenue for one side of the economic exchange, consumers be damned. In that sense, it is exactly like trade protection, a short-sighted policy that stymies growth, robs consumers, and subsidizes inefficiency. Itâs Bastiatâs âpetition of the candlemakers against the sunâ all over again. Apply the IP principle consistently and itâs a wonder we tolerate public libraries, where people are encouraged to share the same copy of a book rather than buy a new copy. Isnât this also an institutionalized form of piracy? The defenders of IP would have to admit that it is. They are often driven to crazy extremes in sticking the claim that copying is a form of theft. I asked one emphatic correspondent about the ethics of the following case. I see a guy in a blue shirt and like it, so I respond by wearing one too. Is this immoral? No, he said, because the color blue occurs in nature. What if a person draws a yellow happy face on the blue shirt? Can I copy that? No, he said, this would be immoral. I must ask his permission and gain his consent. Actually, itâs even worse than this case suggests. If even one person had previously worn a blue shirt with a happy face, no one else on the planet would be able to do that without seeking consent. It should be obvious that if everyone were required to ask seek the permission for the use of every infinitely reproducible thing that âbelongsâ to someone else â every word, phrase, look, vocal inflection, chord progression, arrangement of letters, hair style, technique, or whatever â or if we were really to suppose that only person may possess the unique instant of any of these things, civilization would come to a grinding halt. Sadly, this is where our laws are tending. Right now, there are laws being considered that would step up IP enforcement to the point of clear absurdity. Just last week, YouTube removed the background music of countless videos for copyright reasons, even though such videos help popularize the music. Even home performances of songs written in the 1930s â young kids playing piano and singing â were taken down at the behest of producers. People are talking about extending patents to sports moves, extending copyright to story lines, imposing a central plan on computer design to comply with patents, forcing everyone on the planet to obey US-style IP laws by means of military force. Kids are going to jail, institutions are hiring internal police forces to watch for IP violations, and an entire generation is growing up with a deeply cynical attitude toward the entire business of law. We are at a Prohibition-style moment with regard to IP, just as with liquor in the 1920s. The war on the banned things isnât working. Those in power face the choice of stepping it up even further and thereby imposing a militarized state in place of anything resembling freedom, or they can admit that the current configuration of law has no future and bring some rationality to the question. Other societies have indeed crushed innovation with this very impulse. Do you know why we celebrate Columbus Day instead of Cheng Ho Day? Cheng Ho was a great Chinese explorer who, in the early 15th century, took his fleets to Africa and the Middle East, but he was forced to stop when the elites in the home country began to feel threatened by his discoveries. The Chinese government won the war on exploration, and became static and inward. You can win a war on progress but the gains over the long term are few. In addition to relaying the above story, the authors of Against Intellectual Monopoly, in the last chapter of their fantastic book, make a case for the complete dismantling of the law. âIntellectual property is a cancer,â they write. âThe goal must be not merely to make the cancer more benign but ultimately to get rid of it entirely.â The authors do not leave at that. They are intellectuals of the real world. They first make a case against any further expansions of bad laws, and lay out some reform proposals: shortening patent and copyright terms, changing burden of proof for originality, eliminating ridiculous redundancy trials for drugs, and the like. The authors even volunteer their time to help craft legislation. But the really hard work here is intellectual, since the pro-IP bias is so entrenched. The authors take the pure abolitionist position as a way of shocking us out of our stupor. Is change possible? Of course. It was thought in the Middle Ages that most all products required monopoly production. The salt producer would enter into an agreement with the ruler. The ruler would promise a monopoly in exchange for a share of the revenue. It was thought that this would guarantee access to a valuable commodity. How can anyone make a buck without a guarantee that his hard work would be compensated? Well, it took time, but eventually people realized that competition and markets actually do provide, as implausible as it may seem. As the centuries moved on, markets became ever freer, and we no longer believe that the king must confer a special status on any producer. They still do it, of course, but mostly for open reasons of political patronage. And yet in this one area of intellectual property, all the old mercantilist myths survive. People still believe that a state grant of monopoly privilege is necessary for the market to work. The myth has now been crushed with this book. So now the laws can be beaten back, and they are being beaten back in the age of digital media. Realize that for young people today, the initials RIAA and MPAA are the most hated on the planet â the equivalent of the IRS for a past generation. The heck of it is that these are private entities. Think what this means. Capitalists of the world, please pay attention: you have a serious problem when an entire generation is being raised to hate private, capitalistic institutions. Now, you and I know that these institutions are doing something illegitimate, namely enforcing âintellectual property,â which is really nothing but state coercion. Still, this besmirches the reputation of free markets. So too is a generation of socialists being raised to hate US foreign policy on the belief that its export of IP is a form of capitalist imperialism. For these reasons, no one has a stronger interest in abolishing intellectual property than supporters of capitalism. I said at the beginning of this book that it took me fully six years to think through these issues. The book by Boldrin and Levine broke through the reservations I had that remained. In the meantime, Iâve received hundreds of messages to the effect that other readers have made the jump too. Whatever is holding you back, I beg to you read this account. I personally consider it to be one of the most mind-blowing books Iâve ever encountered, and so now I join the armies of people who are demanding an end to a system that threatens our way of life in the most fundamental way. For this reason, this book is seminal, not only for our times but for the entire history of liberty. It has clarified a point that has been a source of confusion for many years, and put it front and center in the current debate. It might need correcting in places, and I have my own nits to pick over their neoclassical framework and talk of social costs and the like, but these are petty concerns as compared with the overall framework. What they have done is marvelous and extremely important. â Original: https://mises.org/mises-daily/ideas-free-and-unfree-book-commentary ⧠/# ⧠|
Jeffrey A. Tucker |
2011 |
19032 |
95.2 |
| The Fight against Intellectual Property |
The Fight against Intellectual Property ======================================= by Jacob H. Huebert https://x.com/jacobhuebert Jacob H. Huebert March 2, 2011 Original: https://mises.org/mises-daily/fight-against-intellectual-property When the Recording Industry Association of America (RIAA) wins a $1.92 million verdict against a 32-year-old Minnesota woman for sharing 24 songs online, is that good for liberty? When Disney and other big media companies got Congress to extend copyright protection for Mickey Mouse (and everything else) far into the future, should libertarians have cheered? When a patent-holding company threatened to shut down the Blackberry network unless Blackberryâs creator paid it hundreds of millions in licensing fees, was this a win for property rights, or was it just extortion?^1 For a long time, libertarians were conflicted about âintellectual propertyâ (IP). On the one hand, libertarians support property rights, so IP sounds like something they should favor. On the other hand, IP empowers some people to use government to limit other peopleâs speech and actions. Libertarian giants of the past such as Ayn Rand and Ludwig von Mises endorsed IP, either as a moral matter (for Rand), or to encourage the production of creative works and inventions (for Mises). But more recent libertarian thinking attacks the idea that so-called intellectual property is either justified or necessary. Older Libertarian Views ======================= To call the ideas protected by patents and copyrights âpropertyâ is misleading. Historically, âproperty rightsâ referred only to interests in real property (land, buildings) and personal property (tangible objects). This kind of property right existed before there even were governments, as people homesteaded land, produced goods, and traded. Government came into existence later, to protect these property rights; it didnât invent them. Intellectual property has origins that are far different and far more recent. As law professor Lawrence Lessig has put it, some peopleâs desire to treat IP rights just like we treat other property rights has â_no_ reasonable connection to our actual legal tradition.â^2 Rather, intellectual property rights are the product of government fiat â of statutes that grant inventors, writers, and artists a monopoly privilege to use certain ideas for certain lengths of time. The people who enacted IP laws in the first place knew this well â that they were not recognizing some preexisting natural property right, but just granting a temporary _privilege_. This is clear in the wording of Article I, section 8, clause 8 of the US Constitution, which gives Congress âthe power to promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.â The language shows that Congress would be granting a positive right to serve a specific purpose, not recognizing some preexisting natural right. We can contrast this, for example, with the First and Second Amendments, which state that certain rights âshall not be infringed,â implying that those rights already exist. Congress didnât need to _grant_ those rights because they derived from individualsâ rights to their lives and property and therefore preceded the formation of the government. If IP rights really were just like other property rights, they wouldnât present a controversial or difficult issue for libertarians. After all, libertarianism is founded on property rights. So, in that case, libertarians could simply agree with the late Motion Picture Association of America head Jack Valenti, who declared before Congress, âCreative property owners must be accorded the same rights and protection resident in all other property owners in the nation.â^3 And libertarians would also then have to agree with present-day representatives of the recording industry who claim that, when a person illegally downloads an album online, itâs no different than if the person went into to a store, took a copy of the CD off the shelf, and walked out with it. And maybe libertarians would find those huge verdicts against file sharers justified. But even in the days when a greater proportion of libertarians supported IP, it was never quite that simple. Ayn Rand considered the legal protection of a patent or copyright necessary to protect the rights of an ideaâs creator because of âmanâs right to the product of his mind.â But Rand recognized that ideas couldnât really be treated just like other property. Rights to ordinary property exist in perpetuity â you can pass the property on to your heirs, and they to their heirs, and so on forever. But Rand believed that IP rights could only be recognized for some limited period of time. She could see that if people retained permanent property rights in ideas, this would âparalyzeâ society as research and innovation would grind to a halt and people would be forced to pay royalties for virtually everything they use to the layabout heirs of long-dead inventors. So Rand recognized that some time limit would have to be established that balanced the inventorâs rights with the ability of others to pursue further research.^4 Rand maintained that her philosophy and her views on IP were a product of her moral views on manâs rights, so limiting the duration of IP rights to encourage innovation seems uncharacteristically utilitarian. But anyone who believes that IP rights are natural property rights will have to contend with this difficulty. Ludwig von Mises was not concerned with natural rights, so he didnât run into this problem. He simply considered IP necessary to motivate people to create useful books and technological innovations. He wrote in _Human Action_ that it is âunlikely that people would undertake the laborious task of writingâ such things as âtextbooks, manuals, handbooks, and other nonfiction works,â if âeveryone were free to reproduce them,â and that it is âvery probable that technological progress would be seriously retardedâ if inventors and those who finance their work could not have a patentâs help to recoup their expenses.^5 Murray Rothbard began to chip away at the IP idea but still clung to parts of it.^6 He attempted to justify copyrights and, in a limited sense, patents by rooting them in the traditional Lockean system of property rights, even though IP did not actually arise out of that tradition. For Rothbard, a believer in natural law and natural rights, copyright could not be justified on utilitarian grounds or legitimately established by government fiat. But Rothbard thought copyright could be justified if it were the product of contract. For example, if, when Smith sells Jones a book, Smith marks it âcopyright,â then Jones would only receive from Smith the right to possess and use that physical book, but not the right to copy it. In other words, by giving Jones notice of copyright, Smith does not include the right to make and sell copies of the book in the bundle of rights that he sells to Jones. Because a person cannot transfer any greater rights in something than he or she owns, any third parties who later got the book after Jones would be subject to the same restriction Jones faced. Under this line of thinking, anyone who copied a copyrighted book without permission would be stealing by exercising a right that still belonged to the bookâs original owner because he or she had never given it up. Rothbard justified patents of a sort on similar grounds. If Smith sells Jones a new kind of vacuum cleaner and marks it âpatentedâ (or, as Rothbard would have it, âcopyrightâ), that tells Jones that he is only receiving the right to the physical object, not the right to make copies of it. The patent/copyright creates a contractual limitation, just as in the copyright context. This type of âpatentâ would not, however, prevent another inventor who comes up with the same device _completely on his own_ from producing and distributing his device. As it stands, patent law grants exclusive rights to the first inventor of a good, and later inventors â even if they never saw or heard about the original invention â are bound by the patent. For Rothbard, this was unjust because the later inventor did not violate any property rights of the first inventor when he thought up and created the invention on his own. (This problem doesnât arise in the copyright context because itâs safe to assume that two people will not independently write the exact same novel, play, or piece of music, Shakespeare-typing monkeys notwithstanding.) Rejecting Intellectual Property =============================== IP remained a questionable issue among libertarians for decades, but in the first years of the 21st century, opinion seems to have shifted strongly against the legitimacy of IP for natural-rights libertarians and consequentialist libertarians alike. (Here, and throughout the chapter, when we refer to IP rights, we refer to patents and copyrights; trademarks, another concept typically grouped with IP rights, are relatively uncontroversial.) IP Violates Property Rights =========================== The current generationâs libertarian scholars in the natural-rights tradition have largely rejected the legitimacy of IP. The most influential figure in this intellectual revolution has been lawyer and legal scholar Stephan Kinsella, whose article, âAgainst Intellectual Property,â appeared in the _Journal of Libertarian Studies_ in 2001 and was published separately as a monograph in 2008.^7 According to Kinsella, the problem with IP is that it isnât grounded in property rights â as all libertarian rights must be â and in fact requires government to _violate_ property rights for its enforcement. Under the Lockean-libertarian theory of property rights, people create private property in land (assuming it is unowned when they find it) by occupying it and making it theirs. Then, they are entitled to do what they please with that land â live there, enjoy what they produce on it, sell it to someone else, give it away â as long as they donât aggress against anyone else or anyone elseâs property in the process. Land and tangible items are subject to becoming private property in this way because they are _scarce_. That is, they are limited in quantity, and one personâs use of a piece of property prevents someone else from using it. Two people cannot occupy the same space or eat the same orange. Without property rights, there would be irresolvable conflicts over who can use what land and objects, and how they may use them. With property rights, these conflicts are avoided. On the other hand, if certain things werenât scarce â if we could reproduce them infinitely at no cost, or if they were somehow abundant â there would be no conflicts over those things and no need for ethical rules, property rights, or laws to govern such conflicts. http://mises.org/daily/4630 scarce As it happens, _ideas_ fall into this latter category. If two people want to have the same idea in their minds, or put that same idea to use, there is no conflict between them â they both can do it. And they can pass on an idea to as many people as they want without diminishing their own possession of the idea. Kinsella uses the example of a book: > [I]f you copy a book I have written, I still have the original (tangible) book, and I also still âhaveâ the pattern of words that constitute the book. Thus, authored works are not scarce in the same sense that a piece of land or a car are scarce. If you take my car, I no longer have it. But if you âtakeâ a book-pattern and use it to make your own physical book, I still have my own copy.^8 Thomas Jefferson had essentially the same insight some two hundred years before: > If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.^9 So IP rights cannot be true âproperty rights.â And when government grants IP rights, itâs not really granting a property right in an idea, but is instead granting a _monopoly_ on the right to _use_ an idea for certain profitable purposes. If you own a copyright in a book, only you (or someone to whom you give permission) can produce and sell copies of that book. If you own a patent on an invention, only you (or someone to whom you give permission) can produce and sell the invention for a certain period of time. This means that IP rights are not property rights, but are in fact a power to _stop other people_ from exercising _their own_ property rights.^10 If I own a copyright in a book, I can use the force of government to stop someone from using their own paper and ink to produce their own copies of the book. If I own a patent in an invention, I can use the force of government to shut down someone elseâs factory that produces copies of my invention, even though the other person is using his or her own equipment, machinery, and components. I can even do this if the other person is _not_ using a âcopyâ of my invention, but independently invented it all on his or her own. For a libertarian, this is unjust because itâs using aggressive force against peaceful people. As law professor Tom W. Bell has put it, > By invoking state power, a copyright or patent owner can impose prior restraint, fines, imprisonment, and confiscation on those engaged in peaceful expression and the quiet enjoyment of tangible property. Because it thus gags our voices, ties our hands, and demolishes our presses, _the law of copyrights and patents violates the very rights Locke defended_.^11 So according to libertarian theory, IP rights are not âproperty rightsâ at all but are a government-issued _license to attack_ property rights â and therefore they should be abolished. Randâs attempt to justify IP fails under this framework because it presumes that ownership of ideas is possible and legitimate. So does Rothbardâs attempt to ground IP in contract. We can see why by comparing Rothbardâs contract-based copyright to a case in which Jones makes a contract with Smith to tell him a secret. A contract to keep a secret, standing alone, is legitimate â people can always make deals to do or not do things. If Smith tells everyone Jonesâs secret, Jones rightly can sue Smith because he broke their deal. Jones cannot, however, sue everyone else in the world who now knows the secret to stop them from repeating it; he didnât have contracts with those people and therefore canât claim any rightful ownership over them, the ideas in their heads, or their property. And so it is with copyright: a seller can make his buyers agree not to copy a book, but he may not stop others who happen to see it from doing so.^12 Likewise, an inventor may not stop someone who sees his or her invention (say, a machine) from using this knowledge to make a similar or better machine. All this analysis may sound academic, but it illustrates how libertarians approach issues by going back to their philosophical first principles in a way that most adherents to the more nebulous political philosophies of conservatism and liberalism do not. And it is important for libertarians, as champions of property rights, to explain why IP rights are not property rights because to call IP âpropertyâ is not only Orwellian, it also sullies the reputation of true property rights. This is why Bell suggests we instead refer to IP as a âprivilege,â not as âproperty,â^13 and why the two authors weâll focus on in the next section, Michele Boldrin and David K. Levine, suggest an even more blunt term for IP: âintellectual monopoly.â IP, Creation, and Innovation ============================ Of course, our argument about property rights might not matter to a utilitarian. Libertarian thinkers such as Mises or, today, Richard Epstein, would argue that even if IP rights arenât property rights in the usual sense, we should make an exception to the usual rule of liberty and property rights for IP because it presents a rare case where the benefits to society of a government intervention far outweigh the costs.^14 If such claims by IP supporters were true, they might present a compelling argument in favor of IP. But the facts show that this is not true, and that IP not only isnât necessary for creation and innovation to occur, it also actively harms these things. The leaders in debunking the myth of IPâs necessity have been Boldrin and Levine, whose 2008 book, _Against Intellectual Monopoly_, argues that patents and copyrights are not necessary for progress and creativity, and, in fact, have greatly harmed it. (Boldrin and Levine may not be strict libertarians across the board, but they are close, they have influenced libertarians, and they are pure libertarians on the subjects of patent and copyright, so thatâs good enough for our purposes.) Copyrights ========== Many IP advocates take it as self-evident, as the framers of the US Constitution did, that copyrights are necessary to motivate people to produce creative works. Supposedly, writers, musicians, and filmmakers wouldnât bother to produce books, music, and films if other people could come along and copy and take the benefits of their work â or at least, creative people wouldnât produce âenoughâ of these types of works, whatever that means. But it is not self-evident that this is the case, and the evidence shows that itâs just wrong. After all, for most of history, there were no copyrights, but people still created great literature, art, and music. Suppose Shakespeare had lived in a world where copyright existed. As one writer put it, âhis legal bills would have been staggering.â^15 Shakespeare made a unique contribution to Western civilization by putting words together in a way that no human being had before or since, but he was not a pure original. He took many stories, characters, and ideas from other works by other people â which he wouldnât have been able to do if the creators of those previous works had possessed and enforced copyrights. And what of copyright protection for Shakespeareâs own plays? He authored 38 plays without any incentive or protection from copyright law, and he managed to prosper besides. Itâs difficult to see how copyright would have prompted him to create more. One can imagine, though, that if copyright had existed in Shakespeareâs day, he might have spent his some of his time and effort suing people who sold transcriptions of his plays or performed them without permission, and devoted less of his time to writing, and we would all be immeasurably poorer for it. A rich public domain allowed Shakespeare to become what he was, and it has allowed the world to benefit in turn from Shakespeare. It seems likely that IP rights would only have resulted in less for him to draw upon and less for us to enjoy. Writers today could make money without copyright even if theyâre not modern-day Shakespeares. Of course, even with copyright protection, most authors whose names are not Stephen King or J.K. Rowling donât make much money from book royalties. Instead, publishing a book gives an author prestige and opportunities to do other things. Publishing in academic journals (for no pay) creates opportunities to get teaching jobs. Publishing books for a popular audience (usually for low pay) may raise oneâs profile as an expert and create opportunities to give speeches or do other things for money. Still, even without copyrights, many authors would make some money from book sales, and some authors would make a lot of money. One reason we can be confident of this is because books by foreign authors did not receive copyright protection in the United States for most of the 19th century, yet the authors made money here anyway. A publisher would pay an author to be the first to receive a copy of the authorâs manuscript, which would allow the publisher to be first publisher to reach the market with the book.^16 Even without copyright protection, there is great value in being the first publisher to sell a book. The first publisher will have the market to itself for a while because it will take competitors time to come out with their own editions. Plus, other publishers are unlikely to find it worthwhile to copy that book unless it proves to be a success for the first publisher. Once the first publisher has success, then it _might_ be worthwhile for others to copy and sell it, if they believe they can profitably sell enough additional copies. But in any event the first publisher is likely to reap the biggest profits, especially since books on average make 80 percent of their profits in their first three months.^17 So thatâs the 19th century. What about now? In this century, the government gave W.W. Norton the right to be the first to publish the _9-11 Commission Report_. As a government work, the 568-page report would immediately enter the public domain, and others would be free to copy and sell it. Despite this lack of copyright protection â and even though the report was also available online for free and downloaded millions of times â Nortonâs edition of the Report became a bestseller and earned Norton profits approaching $1 million.^18 Two weeks after Nortonâs edition came out, St. Martinâs released its own edition, with additional articles and analysis included, and it too became a bestseller. Based on this and similar cases, Boldrin and Levine estimate that J.K. Rowling could have received multimillion-dollar advances for later books in her Harry Potter series â not enough, perhaps, to make her one of Englandâs richest women, as copyright protection did, but surely enough to keep her writing. What about the music industry? Here we know what happens because artists have already effectively lost copyright protection for their recordings as millions of people trade them for free on the Internet instead of buying them. This has simply pushed artists into other ways of making money, especially performances. Even before the Internet age, most rock musicians, even successful ones, made comparatively little from their album sales. So, like books, recordings have been a way for their creators to attract attention and make money through other projects. In the realm of serious music, many of the great composersâ works were never protected by copyright. England began protecting musical compositions with copyright in 1777, yet relatively few composers lived or worked in England after that time, despite Englandâs relative prosperity overall. Beethoven, for one, lived in Germany, which offered no copyright protection, yet he made enough money to survive and felt sufficiently motivated to create some of the greatest musical works ever.^19 Like Shakespeare, pre-IP composers were able to draw on previous composersâ works and alter and adapt them freely. Today, that requires permission from copyright holders that may or may not be granted. Like the record labels, movie studios face rampant piracy, yet they remain in business. This is so in part because people are willing to pay for the experience of seeing a film in a theater; for many people, a DVD or downloaded version is no substitute. This wouldnât change in the absence of copyright. Studios could use contracts, technology, and security to make sure their films are only exhibited in theaters that pay for copies of them. Like book publishers, studios would also profit from being the first to market with a DVD. We could also note, as Boldrin and Levine do, that the pornographic film industry has always thrived and constantly innovated even though it essentially operates outside the protection of IP law because of its lack of social respectability.^20 Another point that applies to all media is that many people create just for the joy of doing it, without concern for further benefits; no government policy is necessary to âincentivizeâ them. For example, one of the most important American composers, Charles Ives, spent his days making money as an insurance executive and wrote serious music on the side, for which he received minimal recognition (let alone money) during his lifetime. Today, countless individuals produce countless written, audio, and visual works, at all levels of quality, for an Internet audience with no expectation of payment. Many even do so anonymously, with no expectation of personal recognition: Wikipedia provides one example. Increasingly, people are not just passive consumers of content from big media companies but producers of original work themselves, and compensation is not their motive. Copyrights in general are questionable; the kinds of copyright-term extensions we have seen in recent years are entirely indefensible. The Sonny Bono Copyright Term Extension Act of 1998 (CTEA) increased copyright terms by 40 percent. Copyrights were extended (retroactively) to cover the life of an author plus 70 years, or, in the case of a work for hire, the earlier of 95 years after the date of publication or 120 years after the date of creation. Did this extension create additional incentives for writers, musicians, and filmmakers to produce more? Of course not. What difference does it make to an artist if you extend his or her copyright protection for some number of years _long after theyâre dead_? In fact, economists have determined that the CTEA increases creatorsâ revenue by just 0.33 percent.^21 So copyright extension doesnât benefit artists; instead, it benefits big media companies that own really old properties and donât want to lose them to the public domain. In fact, the CTEA was pushed by one such entity in particular, Disney, which didnât want to lose its copyright on Mickey Mouse. While copyright extension offers no benefits to anyone but big media, the costs to the rest of society are tremendous. There is no âcultural commonsâ for creative people to draw from, as Shakespeare did â and as Disney did when it made movies out of stories in the public domain such as _Snow White and the Seven Dwarfs_, _Pinocchio_, and _Sleeping Beauty_.^22 Countless thousands of books, recordings, and software titles go out of print and remain out of print because the rights holders canât be found, refuse to take advantage of their rights, or refuse to release their rights. We are all poorer as a result.^23 Patents ======= It is also not obvious that patents are necessary to inspire innovation â and there is much reason to believe that they prevent innovation. If you own a patent on a mechanical rice picker, that means you can stop other people from building a better rice picker thatâs based on yours. For a number of years, your potential competitors canât legally innovate and improve your product â or at least, if they do, they _canât_ bring their innovation to market without your permission until the patent expires. At the same time, _you_ donât have much incentive to improve your product because you can just milk your old invention free from competition â enforcing your patents becomes a substitute for research and development.^24 This forces your competitors to waste effort trying to âinvent aroundâ your ideas to make competing products, perhaps inferior ones, without infringing on yours. And it also gives you, the patent holder, an incentive to take out a cluster of broadly worded patents for products similar to your own, to discourage others from even trying to enter your field and legally block them if necessary.^25 The potential to infringe on one of these patents and then get sued scares many would-be competitors out of the market. On the other hand, what if there were no patents? The first person to implement an idea would still receive exclusive benefits for some period of time, because even without patents, it would take a while for the competition to figure out how to imitate the invention and catch up. But competitors probably would figure it out before too long, so the original inventor couldnât rest on his or her laurels. Everyone would have to constantly improve to stay competitive. We see that idea at work in the many innovations businesses make where patent law doesnât protect them. The people who invented shopping malls, 24-hour convenience stores, supermarkets, fast-food franchising, and the extra-value meal didnât have any exclusive rights to their ideas. Neither do the people who invent perfumes, recipes, clothing designs, furniture, or car bodies.^26 But people do come up with these things because they want outpace their rivals. Without IP privileges, they have to be focused on what they can do to attract and please customers better â not what they can do with the legal system to crush other businesses. Historically, there have been many cases where patents allowed their holders to _stop_ innovating and to _stop others_ from innovating. Consider the supposedly heroic Wright brothers. They created their first airplane by slightly improving the unpatented ideas of others who came before them, such as British engineer Sir George Cayley and German Otto Lilienthal. Their 1902 patent was for the system of flight control resulting from âwing warpingâ and the use of a rudder. Glenn Curtiss improved on the Wright brothersâ design by replacing the wing-warping technique with movable control surfaces, the means by which airplanes to this day control their movements. For this, the Wright brothers â who did not sell many airplanes at the time â sued Curtiss to try to stop him from selling airplanes. The Wrightsâ litigiousness stunted the growth of the aviation industry in the United States as they focused more on suing Curtiss and other competitors than on making better planes. As a result, airplane development then took off in France, where the Wright brothers âhad little legal clout.â^27 http://en.wikipedia.org/wiki/Glen_Curtis Glenn Curtiss Another example Boldrin and Levine point out concerns James Wattâs steam engine. During the period in the late 18th century that Watt and his business partner, Matthew Boulton, held their steam-engine patent, innovation in steam engines practically ceased. When Jonathan Hornblower built a better engine in 1790, Watt and Boulton sued and stopped him from bringing it to market. Other competitors invented their own improvements, but kept them off the market while waiting out Wattâs patent term; they didnât want to be sued like Hornblower. http://en.wikipedia.org/wiki/James_Watt James Watt's Watt himself was distracted from improving his product both because he didnât need to do so â he had monopoly protection â and because he was preoccupied with using the legal system against his competitors. As a result, while his patent was in place, the UK added only about 750 horsepower of steam engines per year; in the 30 years after Wattâs patent expired, horsepower was added at a rate of more than 4,000 per year. Similarly, fuel efficiency improved little, if at all, during the years of Wattâs patent (1769-1800), but increased by approximately a factor of five between 1810 and 1835.^28 What about pharmaceuticals? Some people argue that we need pharmaceutical patents because drugs require expensive R&D to develop, but then can be cheaply reverse engineered. So, the thinking goes, if we donât give drug makers patent protection, they wonât bother to produce drugs in the first place. Numerous facts undermine this argument. Boldrin and Levine have found that the pharmaceutical industry historically grew âfaster in those countries where patents were fewer and weaker.â^29 Italy, for one, provided no patent protection for pharmaceuticals before 1978, but had a thriving pharmaceutical industry. Between 1961 and 1980, it accounted for about nine percent of all new active chemical compounds for drugs. After patents arrived, Italy saw no significant increase in the number of new drugs discovered there â contrary, one supposes, to the IP advocatesâ predictions.^30 Another fact the conventional view overlooks is that patentable drugs are not the only medical innovations possible. Boldrin and Levine looked to a poll of the _British Medical Journalâs_ readers on the top medical milestones in history, and found that almost none had anything to do with patents. Penicillin, x-rays, tissue culture, anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the birth-control pill, computers, oral rehydration theory, DNA structure, monoclonal antibody technology, and the discovery of the health risks of smoking â of these top 15 entries, only two had anything to do with patents.^31 Similarly, _nothing_ on the US Centers for Disease Controlâs list of the top ten public-health achievements of the 20th century had any connection to patents. And even a review of the most important pharmaceuticals reveals that many came about without the motive and/or possibility of acquiring a patent, including, for example, aspirin, AZT, cyclosporine, digoxin, ether, fluoride, insulin, isoniazid, medical marijuana, methadone, morphine, oxytocin, penicillin, Phenobarbital, prontosil, quinine, Ritalin, salvarsan, vaccines, and vitamins.^32 Patent law does create one incentive for researchers: to pursue more of the kind of research that will lead to patentable drugs, and less of the kind of research that might lead to other types of breakthroughs that cannot be patented â even though, as weâve just seen, the latter kind may be some of the most important.^33 If patent law were abolished, we would probably see fewer artificial chemical drugs and more discoveries related to remedies from natural substances such as vitamins, minerals, and plants. Given the harmful side effects of many prescription drugs, it is not at all obvious that this would be a bad thing. Boldrin and Levine also show that patents are not essential to success in the pharmaceutical industry by pointing to the analogous paint and dye industries (which also depended on chemical formulas) in the 19th century. Germany offered no patent protection for paints and dyes at all until 1877, and even then only for the process involved in producing them, not for the products themselves. Nonetheless, German companiesâ market share rose from next to nothing in 1862 to 50 percent in 1873 and 80 percent in 1913. Britain and France, on the other hand, had patent protection for both products and processes all along and saw their market shares fall from about 50 percent and 40 percent, respectively, in 1862 to between 13 and 17 percent in 1873.^34 The Germans eventually benefited from patents, but itâs clear that patents were not essential to their rise to the top. Costs and Benefits ================== So weâve seen that copyrights and patents have costs that most people donât think about. How to balance this against their benefits? Austrian economists would say this is impossible. Costs and benefits are subjective; they exist inside peopleâs heads and cannot be measured or compared to each other to find out what is economically optimal. The only way to know what is optimal is to look at what people actually do in the marketplace through their voluntary choices using their own actual tangible property.^35 Because IP rights by their nature interfere with private property and voluntary exchange, they necessarily move us away from what is optimal. Putting aside that problem, any attempt by non-Austrian economists to measure the costs and benefits of IP will necessarily leave out countless important factors. One such factor is human liberty. Even if we could determine that IP makes us _materially_ better off in some respects â in terms of economic growth or the number of different products produced, for example â IP laws require a government empowered to interfere with individualsâ peaceful use of their own property. You donât have to believe in natural rights to value liberty and view its loss as a high cost. Still, even if you measure IPâs effects just in terms of economic growth â a rough measure of prosperity â economists are mostly undecided as to whether IP has even made this greater than it otherwise would be. Boston University law professors James Bessen and Michael J. Meurer have found that âintellectual property rights appear to have at best only a weak and indirect relationship to economic growth, the relationship appears to apply only to certain groups of countries or certain specifications, and the direction of causality is unclear.â^36 This last point is critical. To the small extent that patents may show a correlation with economic growth, we canât even say whether patents caused the growth, or if the growth caused people to pursue patent protection. The End of IP ============= Libertarians may not have to appeal to rights theory, economics, or history to win the war on IP. Libertarians are already winning as people around the globe incessantly violate the legal rights of copyright holders by sharing music through bit-torrent programs and by uploading (and remixing and mashing up) videos of copyrighted material to YouTube without the slightest feeling of guilt. People cheered the Swedish proprietors of the Pirate Bay website as they went on trial for helping people freely trade music, movies, and software. (The Pirate Bayâs anti-IP, proprivacy views are so popular that they have even inspired a Pirate Party that has won one of Swedenâs seats in the European Parliament.) As the RIAA and MPAA crack down on file sharers and website operators with ever bigger threats, these organizations only look more like villains to the young people who have always operated under the assumption that they should be allowed to do as they please with their own computers as long as they donât invade anyone elseâs. More thinkers outside of libertarianism are challenging IP, too. Lessig and others in the âfree-cultureâ movement have informed a large audience of how lengthy copyright terms and other especially oppressive aspects of IP impoverish us, and how an ever-growing âcultural commonsâ (public domain) would enrich us. Through the Creative Commons license invented by Lessig, people are deliberately giving up their exclusive rights under copyright law because they believe IP isnât in their interests as creators and they want their ideas to spread. http://en.wikipedia.org/wiki/Lawrence_Lessig Lessig Along similar lines, the âFree Softwareâ and âOpen Sourceâ movements have created software products that people are permitted to download, alter, and distribute freely. Contrary to IP advocatesâ predictions, people make improvements to these software projects even though they donât stand to profit personally. And many of these products, such as Linux-based operating system and the Firefox web browser, are competing successfully against such IP-dependent dinosaurs as Microsoft.Harvard law professor Yochai Benkler â not a libertarian himself, but a leading thinker in the âfree-cultureâ movement â has observed that because of the Internet, we âare at a moment in history at which the terms of freedom and justice are up for the grabs,â especially in the context of IP.^37 Because libertarians have the intellectual ammunition to show people that what they are feeling and doing online is right, and what the big media and government want to do to them through IP laws is wrong, this moment presents a unique opportunity for libertarians to provide those definitions and advance their cause. Further Reading =============== Michele Boldrin and David K. Levine, _Against Intellectual Monopoly_. New York: Cambridge University Press, 2008. This is the utilitarian case against IP. The authors make the case that intellectual property is not necessary to spur creativity and innovation. Their evidence and arguments go far beyond what is presented in this chapter. This book is available here. http://www.dklevine.com/general/intellectual/againstfinal.htm here N. Stephan Kinsella, _Against Intellectual Property_. Auburn, Ala.: The Ludwig von Mises Institute, 2008. This is the rights-based case against IP. Kinsella shows how intellectual property is antithetical to true private property rights. http://mises.org/resources/3582/Against-Intellectual-Property Against Intellectual Property Lawrence Lessig, _Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity_. New York: Penguin, 2004. Lessig is not a libertarian, and he supports IP in principle, but his book shows how ever-lengthening copyright terms enrich powerful interests at our great cultural expense. Notes ===== ^1: For these stories, see David Kravets, âFeds Support $1.92 Million RIAA File Sharing Verdict,â Threat Level, August 14, 2009 http://www.wired.com/threatlevel/2009/08/feds-support-192-million-file-sharing-verdict Feds Support $1.92 Million RIAA File Sharing Verdict Lawrence Lessig, Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity Download PDF http://www.free-culture.cc/freeculture.pdf Download PDF (New York: Penguin, 2004), pp. 213-45; Rob Kelley, âBlackBerry Maker, NTP Ink $612 Million Settlement,â CNNMoney.com, March 3, 2006. http://money.cnn.com/2006/03/03/technology/rimm_ntp/index.htm BlackBerry Maker, NTP Ink $612 Million Settlement ^2: Lessig, p. 118. ^3: Quoted in Ibid., p. 117. ^4: Ayn Rand, âPatents and Copyrights,â in Ayn Rand, Capitalism: The Unknown Ideal (New York: Signet, 1967) pp. 130â34. ^5: Ludwig von Mises, Human Action: A Treatise on Economics, 4th ed. (San Francisco: Fox & Wilkes, 1996), pp. 661-62. http://mises.org/resources/3250 Human Action: A Treatise on Economics ^6: Rothbardâs ideas on IP are presented in Murray N. Rothbard, Man, Economy, and State (Auburn, Ala.: Ludwig von Mises Institute, 1993 [1962]), pp. 652â660; Murray N. Rothbard, Power and Market: Government and the Economy 4th ed. (Auburn, Ala.: Ludwig von Mises Institute, 2006 [1970]) http://mises.org/resources/1082/Man-Economy-and-State-with-Power-and-Market Man, Economy, and State Download PDF http://mises.org/Books/powermarket.pdf Download PDF Murray N. Rothbard, The Ethics of Liberty (New York: New York University Press, 1998 [1982]), pp. 123â24. http://mises.org/resources/1179/The-Ethics-of-Liberty The Ethics of Liberty ^7: Kinsella has not been alone. See also, for example, Roderick T. Long, âThe Libertarian Case Against Intellectual Property Rights,â Formulations 3, no. 1 (Autumn 1995); Wendy McElroy, âContra Copyright,â The Voluntaryist (June 1985) pp. 1-3 http://libertariannation.org/a/f31l1.html The Libertarian Case Against Intellectual Property Rights Download PDF http://www.voluntaryist.com/backissues/016.pdf Download PDF Tom G. Palmer, âAre Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects,â Harvard Journal of Law and Public Policy 13 (1990) pp. 817-65 Download PDF http://tomgpalmer.com/wp-content/uploads/papers/morallyjustified.pdf Download PDF Timothy Sandefur, âA Critique of Ayn Randâs Theory of Intellectual Property Rights,â Journal of Ayn Rand Studies 9:1 (Fall 2007), pp. 139-61. http://ssrn.com/abstract=1117269 A Critique of Ayn Randâs Theory of Intellectual Property Rights ^8: N. Stephan Kinsella, Against Intellectual Property (Auburn, Ala.: Ludwig von Mises Institute, 2008),p. 32. http://mises.org/resources/3582/Against-Intellectual-Property Against Intellectual Property ^9: Thomas Jefferson to Isaac McPherson, Monticello, August 13, 1813 (emphasis added). http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12.html Thomas Jefferson to Isaac McPherson ^10: For an argument that rejects this analysis, see Adam Mossoff, âIs Copyright Property?â San Diego Law Review 42 (2005), p. 29. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=491466 Is Copyright Property ^11: Tom W. Bell, âIndelicate Imbalancing in Copyright and Patent Law,â in Adam Thierer and Clyde Wayne Crews, Jr., eds., Copy Fights: The Future of Intellectual Property in the Information Age (Washington, D.C.: Cato Institute, 2002), p. 4 (internal footnotes omitted, emphasis added). http://papers.ssrn.com/sol3/papers.cfm?abstract_id=984085 Indelicate Imbalancing in Copyright and Patent Law ^12: âTrade secretsâ â a relatively minor part of IP law â may present a special case. If a third party induces someone to give away a company secret, they may be considered liable in the same way that a co-conspirator to any wrongdoing is jointly liable. See Kinsella, pp. 56-57. Perhaps someone who induced a contractual-copyright breach could be held liable as well â but this still would not be enough to stop the information from getting out, so the attempted copyright protection wouldnât really be effective. ^13: Tom W. Bell, âCopyright as Intellectual Property Privilege,â Syracuse Law Review 58 (2008) p. 541. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1023735 Copyright as Intellectual Property Privilege ^14: Epstein argues that IP rights can be considered property rights, and has attempted to tie Lockeâs system to utilitarianism and IP. See Richard A. Epstein, âLiberty versus Property? Cracks in the Foundations of Copyright Law,â San Diego Law Review 42 (2005), p. 1. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=529943 Liberty versus Property? Cracks in the Foundations of Copyright Law ^15: Tom G. Palmer, âIntellectual Property: A Non-Posnerian Law and Economics Approach,â Hamline Law Review 12 (1989), p. 302. Download PDF http://tomgpalmer.com/wp-content/uploads/papers/hamlineip.pdf Download PDF ^16: Michele Boldrin and David K. Levine, Against Intellectual Monopoly (New York: Cambridge University Press, 2008), pp. 22-23. http://www.dklevine.com/general/intellectual/againstfinal.htm Against Intellectual Monopoly ^17: Ibid., p. 141. ^18: Ibid., p. 25. ^19: Ibid., pp. 187-89. ^20: Boldrin and Levine, pp. 36-38. ^21: Ibid., p. 101. ^22: Ibid., p. 31. ^23: On this, see Lessig and see Jeffrey A. Tucker, âThe Music and Book Killers.â LewRockwell.com, February 2, 2009. http://www.lewrockwell.com/tucker/tucker128.html The Music and Book Killers. ^24: Rothbard, Man, Economy, and State, p. 657. ^25: Julio H. Cole, âPatents and Copyrights: Do the Benefits Exceed the Costs?â Journal of Libertarian Studies 15:4 (2001), p. 92 Download PDF http://mises.org/journals/jls/15_4/15_4_3.pdf Download PDF Rothbard, Power and Market, p. 90. ^26: Bell, âIndelicate Imbalancing in Copyright and Patent Law,â p. 9. ^27: Boldrin and Levine, pp. 87-88, 206-07. ^28: Ibid., pp. 1-5. ^29: Ibid., p. 246. ^30: Ibid., pp. 222-23. ^31: Ibid., p. 229. ^32: Ibid., p. 230. ^33: Cole, p. 93; Rothbard, Man, Economy, and State, p. 658. ^34: Ibid., pp. 218-19. ^35: See Murray N. Rothbard, âToward a Reconstruction of Utility and Welfare Economicsâ in Mary Sennholz, ed., On Freedom and Free Enterprise: The Economics of Free Enterprise, (Princeton, N.J: D. Van Nostrand, 1956) Download PDF http://mises.org/rothbard/toward.pdf Download PDF Rothbard, Power and Market, pp. 89-92. ^36: James Bessen and Michael J. Meurer, âOf Patents and Property,â Regulation (Winter 2008-09), pp. 22. Download PDF http://www.cato.org/pubs/regulation/regv31n4/v31n4-4.pdf Download PDF ^37: Robert S. Boyton, âThe Tyranny of Copyright?,â The New York Times, January 25, 2004. http://www.nytimes.com/2004/01/25/magazine/25COPYRIGHT.html The Tyranny of Copyright? â Original: https://mises.org/mises-daily/fight-against-intellectual-property ⧠/# ⧠|
Jacob H. Huebert |
2011 |
7921 |
39.6 |
| Contra Copyright, Again |
Contra Copyright, Again ======================= by Wendy McElroy https://x.com/wendymcelroy1 Wendy McElroy January 1, 2011 Original: https://groups.csail.mit.edu/mac/classes/6.805/articles/int-prop/barlow-economy-of-ideas.html Retrospective ============= ERNEST HEMINGWAY ONCE WROTE, âIf you are lucky enough to have lived in Paris as a young man, then wherever you go for the rest of your life, it stays with you, for Paris is a moveable feast.â Los Angeles in the early â80s was like that for libertarians. It brimmed over with supper clubs, student groups, small magazines, debates and conferences. Given the concentration of high-quality scholars and activists in the area, the explosion of activity was inevitable. Although the new-born Libertarian Party was extremely active, the circles in which I ran were generally anti-political or apathetic about electoral politics. They included the cadre gathered around Robert LeFevre, a sprinkling of Objectivists (mostly admirers of Nathaniel Branden), a few Galambosians, and as many Rothbardians as I could meet. And, then, Carl Watner, George H. Smith and I established our own unique circle by creating _The Voluntaryist_ newsletter and re-introducing the term Voluntaryist back into the libertarian mainstream. A libertarian used book store named Lysanderâs Books that I co-owned became the center of Voluntaryism. One intellectual circle in particular exerted a profound influence on the development of my thinking on intellectual property: the anarcho-capitalists who banded around Samuel Konkin III (or, as he preferred, SEK3), many of whom lived in the same apartment complex as SEK3; the complex became known as the anarcho-village. (In truth, it was SEK3 and Victor Koman rather than the entire circle that exerted the influence.) My first exposure to the theories that constitute intellectual property came from reading Ayn Rand,^1 but I gave the matter little thought. It was not until reading Lysander Spooner that I began to analyze the issue critically. Spooner advocated a rather extreme form of ownership in ideas. He once wrote, âSo absolute is an authorâs right of dominion over his ideas that he may forbid their being communicated even by human voice if he so pleases.â^2 I had adopted many of Spoonerâs ideas wholesale but I balked at his view of intellectual property. Although I did not then question the claim that ideas could be property, I was disturbed by how closely so much of Spoonerâs advocacy came to the Galambosian view at which so many of my companions laughed derisively. Galambos famously had a nickle jar into which he would deposit a coin every time he used a word that had been âinventedâ by someone else and to whom (in his opinion) he owned money for its use. I thought then (and now) that such ownership claims went against the free flow of knowledge required by a thriving society ... or a thriving individual, for that matter. In short, Spoonerâs approach to intellectual property _felt_ wrong. At that same time, I was also engaged in indexing Benjamin Tuckerâs 19th century periodical _Liberty_ (1881â1908) and, eventually, I progressed into Tuckerâs discussion of intellectual property in which he fundamentally disagreed with the views of his mentor, Spooner. The pre-Stirnerite Tucker considered the issue to be his only deviation from Spooner. As I read the very active debate within _Liberty_, I began to reduce my commitment to intellectual property, to narrow it. For example, I abandoned altogether the belief that inventions could properly be patented. My belief in copyright, however, was more persistent despite the fact that Murray Rothbardâmy idol and my friendâwas anti-copyright. Frankly, Murray and I never discussed that subject. But SEK3 and I did. Many people found SEK3 to be a bit annoying in how he argued ideas. There was a persistence and casual assurance about him that irritated some but which I found charming. SEK3 was always available and âupâ for gab-sessions that lasted for hours. He had an uncanny ability to find the strand of thought in your argument which could be reduced to absurdity. Some people bitterly resented this ability because they thought he was making them look foolish but it fascinated me and I found it compelling. Indeed, it had been a similar technique of arguing that had made me relinquish my belief in God at the age of sixteen. SEK3 now used the technique on me and, so, chipped away at my acceptance of copyright.^3 The last blow was dealt by the science-fiction writer and SEK3 cadre Victor Koman who asked me a pointed question at an otherwise forgettable party. Vic asked, âDo you really think you own what is in my mind?â As an anarchist who was then reading both Tucker and 19th century abolitionist tracts, one answer alone was possible: âNo.â And, yet, if I claimed ownership over an arrangement of words he had read, then I was answering âyesâ because that arrangement now resided in Victorâs mind. If I could compel him (as Spooner suggested) not to speak the words aloud, then I was making an ownership claim over another personâs body. At that momentâand, granted, it took several months of consideration to reach that momentâI abandoned all belief in intellectual property. One of SEK3âs cadre who never made the same leap was/is the science-fiction writer J. Neil Schulman. Shortly after my conversion experience, I was asked to debate J. Neil on the topic of copyright at a Westwood supper club that scrapped the dinner part of the evening in order to accommodate a longer program of debate, rebuttal, Q&A. (SEK3 may well have been the more logical choice but, as I said, he irritated some people.) The event was a rousing success in several ways. First, the large room was filled beyond capacity, with people choosing to stand for hours rather than leave. Brad (now my husband of over 20 years) attended as the representative of the Society for Libertarian Life. SLL offered 2 buttons: one pro- and one anti-copyright; as I remember, they sold out. It was a long evening, mostly due to the fact that J. Neil went over his 20-minute time limit by about 30 minutes. Nevertheless, not a single person left and the Q&A was unusually lively. At first, I was disappointed because the questions were overwhelmingly directed toward J. Neil. But, then, I realized no one was arguing with me. Everyone was taking exception to his presentation on what he called âlogorights.â At that point, I relaxed until, finally, the moderator had to cut off questions because the gathering was going beyond the time for which the room had been rented. A group of us adjourned to a Great Earth restaurant and continued the discussion. J. Neil immediately began to write up his side of the debate and later published it.^4 I followed suit. Since I always write out my presentations, this merely required some polishing to produce âContra Copyrightâ which appeared in an early issue of _The Voluntaryist_ newsletter. A still more polished revision appears below. Contra Copyright ================ Copyrightâthe legal claim of ownership over a particular arrangement of symbolsâis a complicated issue because the property being claimed is intangible. It has no mass, no shape, no color. For the property claimed is not the specific instance of an idea, not a specific book or pamphlet, but the idea itself and all present or possible instances of its expression. The title of a recent book on intellectual property, _Who Owns What Is In Your Mind?_, concretizes a commonsense objection to all intellectual property: most people would loudly proclaim that NO ONE owns what is in their minds, that this realm is sacrosanct. And, yet, if the set of ideas in your mind begins âHoward Roark laughedâ do you have the right to transfer it onto paper and publish a book entitled _The Fountainhead_ under your own name? If not, why not? To say you own what is in your mind means you have the right to use and dispose of it as you see fit. If you cannot use and dispose of it, if Ayn Rand (assuming a still-living Rand) is the only one who can use and dispose of this specific arrangement of the alphabet, then she owns that sentence within your mind. And if she owns what is in your mind, you have violated her rights in writing or speaking it because you do not have permission to use her property. I advocate a form of copyrightâfree market copyright. I view copyright as a useful social convention to be maintained and enforced through contract and other market (voluntary) mechanisms. This is in contradistinction to those who believe copyright can be derived from natural rights; in other words, ideas or patterns are property and their exclusive ownership does not require a contract anymore than preventing a man from stealing your wallet requires a prior contract. Basically, the debate over copyrightâor, more generally, intellectual propertyâcomes down to two questions: What is property? What are the essential characteristics which make something ownable?: and, What is an idea? Before going on to a discussion of theory, however. I want to address two implications that often lurk beneath criticism of free market copyright. First: It is said that the marketplace cannot handle intellectual property issues. Those who contend that ten different people would publish Hamlet under their own names and, so, create cut-throated chaos, are using a form of the âmarket failureâ argument which has been applied to everything from medical care to defense. Similarly, it is claimed, the market cannot regulate the publishing industry. The opposite is true. When I co-owned a used book storeâa business which is virtually unregulatedâI was astonished at how effectively the free market spontaneously set standards. It was not uncommon for stores in L.A. to know the specifics of a stolen book or a forged autograph the day after it had been spotted in New York. Second, it is said that free market copyright would strip authors of valid protection or credit for their own work. When Benjamin Tuckerâa 19th century libertarian opponent of copyrightâwas accused of stripping authors of protection, he replied: âIt must not be inferred that I wish to deprive the authors of reasonable rewards for their labor. On the contrary, I wish to help them secure such, and I believe that there are Anarchistic methods of doing so.â^5 Equally, those who oppose state-enforced copyright are not seeking to victim authors but to use free market mechanisms to offer whatever protection is just. Returning to theory ... The issue of copyright hinges on the question: can ideas be property? Which leads to another question: what are the characteristics of property? Tucker addressed this issue in fundamental terms. He asked why the concept of property had originated in the first place. If ideas are viewed as problem-solving devices, as answers to questions, then what about the nature of reality and the nature of man gave rise to the idea of property? In a brilliant analysis, Tucker concluded that property arose as a means of solving conflicts caused by scarcity. Since all goods are scarce, there is competition for their use. Since the same chair cannot be used in the same manner at the same time by two individuals, it was necessary to determine who should use the chair. Property resolved this problem. The owner of the chair determined its use. âIf it were possible,â wrote Tucker, > and if it had always been possible, for an unlimited number of individuals to use to an unlimited extent and in an unlimited number of places the same concrete things at the same time, there would never have been any such thing as the institution of property.^6 Yet ideas defy scarcity. Since the same idea or pattern can be used by an unlimited number to an unlimited extent in unlimited locations, Tucker concluded that copyright ran counter to the very purpose of property itself, which was to ascertain the correct allocation of a scarce good. Copyright contradicts not merely the purpose of property but also the essential characteristics of property, one such characteristic being transferability. Property has to be alienable: you must be able to dispossess yourself of it. The individualist anarchist, James L. Walker (writing under the pen name Tak Kak), commented, âThe giver or seller parts with it [meaning property] in conveying it. This characteristic distinguishes property from skill and information.â^7 When you buy the skill and information of a doctor who gives you a check up, for example, you donât acquire a form of title, as you would acquire title to a car from a car dealer, because the doctor is unable to alienate the information from himself. He cannot transfer it to you: he can only share it. It was this point, transferability, that lead Thomas Jefferson to reject ideas as property. Jefferson drew an analogy between ideas and candles. Just as a man could light his taper from a candle without diminishing the original flame, so too could he acquire an idea without diminishing the original one. Jefferson wrote: > If nature has made any one thing less susceptible than all others of exclusive property, it is ... an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it.^8 When a poet reads or sells poetry without a contract, when he throws his ideas and patterns into the public realm, the listeners receive information, not property. For the publicized poems to be property they must be transferable, alienable. Yet, as the egoist J.B. Robinson said, âWhat is an idea? Is it made of wood, or iron, or stone? The idea is nothing objective, that is to say, the idea is not part of the product: it is part of the producer.â^9 In other words, if the poet claims ownership to the pattern of words in his listenerâs head, this reduces to a form of slavery since the ownership claim is over an aspect of the listenerâs body: namely, his mind, his knowledge. Such a claim is comparable to saying you own the blood in someone elseâs arm. Certainly, you could buy the bloodâperhaps for a transfusionâbut such a purchase would be contractual and not based on natural right. Everyone owns the ideas within their own minds. If there is only one instance of a specific idea or arrangement of ideasâe.g. a writer who locks his novel in a desk drawerâthen the idea is protected by natural right, by the authorâs to self-ownership. He has right to live in peace and silence and maintain a locked desk; no one can properly break into his desk and steal his property. When an author chooses to publicize his ideas without securing protection based on a listenerâs or readerâs consent, however, he loses the protection afforded by his self-ownership. He loses what Tucker called ââthe right of inviolability of person.â To restate this: I own my ideas because they are in my mind and you can get at them only through my consent or through using force. My ideas are like stacks of money locked inside a vault which you cannot acquire without breaking in and stealing. But, if I throw the vault open and scatter my money on the wind, the people who pick it up off the street are no more thieves than the people who pick up and use the words I throw into the public realm. And, yet, the poet might respond, no one is forced to absorb the poetry floating through the culture. They do so of their own free will. Therefore, says the poet, there is an implied contract or obligation on the part of the listener not to use it without permission. Victor Yarros, Tuckerâs main opponent on copyright in the 19th Century movement, argued along these lines. He claimed, âAll Mr. Tucker has the right to demand is that these things shall not be brought to his own private house and placed before his eyes.â^10 Tucker responded, > Some man comes along and parades in the streets and we are told that, in consequence of this act on his part, we must either give up our liberty to walk the streets or else our liberty to ideas ... Not so fast my dear sir! ... Were you compelled to parade on the streets? And why do you ask us to protect you from the consequences?^11 Moreover, the introduction of an implied contract between the poet and listener is a two-edged sword. To fall back on some sort of implied agreement implicitly admits that copyright is a matter of contract, not of natural law for one does not need to fall back on contract to protect natural rights. If a man steals your money, there is no need to appeal to an agreementâimplied or otherwiseâto justify a demand for restitution. Restitution occurs because it was _your_ money. Only when you are dealing with those things to which you have no natural right must you appeal to contract. Historically, copyright has been handled differently than patents. Many people accept copyrights while rejecting patents. The distinction is usually based on two points: (1) literature is considered pure, personal creation as opposed to inventions which rely on the discovery of relationships that already exist within within nature: and (2) independent creation of literature is considered to be impossible. Copyright is said to protect style or the pattern of expression rather than the ideas expressed. By contrast, most people agree that ideas themselves can be independently and even simultaneously createdâfor example, Walras, Jevons and Menger all separately originated the theory of marginal utilityâbut they do not agree that style can be independently or honestly duplicated. The issue of duplication of style raises interesting questions. For one thing, it is not unknown for poetry, especially short poems, to closely resemble each other. Do these chance similarities constitute duplication? Do they violate copyright laws? If they donât, what prevents me from taking _Atlas Shrugged_ and publishing it under my name after changing one word in each sentence? This would produce a similar pattern but not a duplicate one. If copyright would prevent me from doing this, then it is aimed not only at prohibiting exact duplications but at prohibiting similarities as well. And similarities are quite within the realm of honest possibility, especially when the guidelines of what constitute similarity are vague. Many advocates of copyright would argue that honest similarities in nature are impossible or highly improbable. But laws should be based on principle, not upon probability. Tucker wrote: To discuss the degrees of probability is to shoot wide of the mark. Such questions as this are not to be decided by rule of thumb or by the law of chances, but in accordance with some general principle ... among the things not logically impossible. I know of few nearer the limit of possibility than that I should ever desire to publish in the middle of the desert of Sahara: nevertheless, this would scarcely justify any great political power in giving someone a right to stake out a claim comprising that entire region and forbid me to set up a printing press.^12 In short, a question of right must be determined by a general theory of rights, not the likelihood of circumstances. In regard to the ownership of a form of expressionâof what is called âstyleââTucker believed that a particular combination of words belonged to no one; the method of expressing an idea was an idea in and itself and, therefore, ânot appropriable.â As long as you are not claiming ownership of a specific instance of a book, but of the abstracted style of every instance of this book, you are claiming ownership of an idea. Examples of styles or patterns surround us everywhere. In chairs, shoes, hairstyles, gardens, clothes, wallpaper, the arrangement of furniture ... patterns are everywhere. And if it is out of respect for style that arrangements of words cannot be duplicated, then for that same reason, a shoemaker cannot duplicate shoes. Women cannot duplicate hairstyles or clothes for, after all, these items express style as much as a sonnet does. Yet it is only with the sonnet, with literature that the originators clamor for special, legal protection. If copyright were not the norm, if all of us had not grown up with it, we might consider it as absurd as a house owner claiming special, legal protection of the pattern of colors with which he had painted his home or the arrangement of rocks in his garden. Indeed, to be consistent, the copyright advocate has to reduce his position to similar absurdity. For example, not merely writing but all of speech is a personal form of expression; speech is an arrangement of the alphabet in much the same manner as writing is. Therefore, by the advocateâs own standards, a man should be entitled to legal protection for every sentence he utters so that no one thereafter can utter it without his consent. Lysander Spooner, a defender of copyright much quoted by libertarians, seemed to consider this possibility when he wrote, âSo absolute is an authorâs right of dominion over his ideas that he may forbid their being communicated even by human voice if he so pleases.â^13 Think about that statement; it is frightening in its implications for the free flow of ideas and knowledge upon which human progress depends. I do not believe state-enforced copyright protects the just profits of an author. I agree with George Bernard Shaw who contended âcopyright is the cry of men who are not satisfied with being paid for their work once but insist upon being paid twice, thrice and a dozen times over.â^14 I believe free market copyright would temper the immense profits that can be made from writing, and that they should be tempered because such profits do not reflect just rewards so much as they do a state monopoly. Moreover, I do not believe that the absence of state enforcement would destroy literature Most of the worldâs great authorsâShakespeare for exampleâwrote without copyright. As for the possible destruction of the publishing industry, Tuckerâa publisherâexplained: > Why did two competing editions of the Kreutzer Sonata [a book he issued âWM] appear on the market before mine had had the field two months? Simply because money was pouring into my pockets with a rapidity that nearly took my breath away. And after my rivals took the field if poured in faster than ever.^15 As a writer I am eager to maximize my profits. I am not so eager, however, that I would claim ownership to what is in your mind. My attitude toward writers and lecturers who throw their products into the streets and, yet, claim legal protection as they do so is the same as that once uttered by Tucker: âYou want your invention to yourself? Then keep it to yourself.â^16 The energy being expended in debating intellectual property would be better used in exploring methods by which the free market could protect the just rewards of intellectual products. â ^1: See Ayn Rand, âPatents and Copyrights,â in Capitalism: The Unknown Ideal (1970). ^2: Lysander Spooner, _The Law of Intellectual Property; Or an Essay on the Right of Authors and Inventors to a Perpetual Property in their Ideas_ (1855), p. 125, http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=2243&Itemid=27 ^3: SEK3âs views on IP are expressed in Samuel Edward Konkin III, âCopywrongs,â The Voluntaryist (July 1986), http://www.lewrockwell.com/orig11/konkin1.1.1.html. ^4: See J. Neil Schulman, âInformational PropertyâLogorights,â Journal of Social and Biological Structures, 13 no. 2 (1990), pp. 93â117, http://jneilschulman.rationalreview.com/2009/12/classic-j-neil-informational-propertylogorights/. ^5: For further discussion of Tuckerâs views on property and IP, see my article âCopyright and Patent in Benjamin Tuckerâs Periodical,â Mises Daily (July 28, 2010), originally published in Wendy McElroy, ed., The Debates of Liberty: An Overview of Individualist Anarchism, 1881â1908 (Lexington, 2003). ^6: âMore on Copyright,â Liberty 7 (December 27, 1890): 5. ^7: âCopyright.--IV,â Liberty 8 (May 30, 1891): 3. ^8: Thomas Jefferson to Isaac McPherson (Aug. 13, 1813), http://presspubs.uchicago.edu/founders/documents/a1_8_8s12.html. ^9: âA New Argument Against Copyright,â Liberty 8 (May 16, 1891): 5. ^10: âThe Right to Authorship,â Liberty 7 (February 21, 1891): 4. ^11: Commentary on âThe Right to Authorship,â Liberty 7 (February 21, 1891): 5. ^12: Commentary on Yarros, âMore About Copyright,â Liberty7 (Dec 27, 1890): 4, at 5. ^13: Spooner, The Law of Intellectual Property, p. 125. ^14: Quoted in Clarence Lee Swartz, What is Mutualism? (1927), http://www.panarchy.org/swartz/mutualism.5.html. ^15: Commentary on âThe Reward of Authors,â Liberty 7 (January 10, 1891): 6. ^16: âThe Knot-Hole in the Fence,â Liberty 7 (April 18, 1891): 6. Original: https://groups.csail.mit.edu/mac/classes/6.805/articles/int-prop/barlow-economy-of-ideas.html ⧠/# ⧠|
Wendy McElroy |
2011 |
4254 |
21.3 |
| âIntellectual Propertyâ is Slavery |
âIntellectual Propertyâ is Slavery ================================== by Nina Paley https://x.com/ninapaley Nina Paley November 4, 2009 Original: https://blog.ninapaley.com/2009/11/04/intellectual-property-is-slavery/ > Every man has a property in his own person. This nobody has a right to, but himself. John Locke, Second Treatise on Civil Government http://en.wikipedia.org/wiki/Property John Locke, Second Treatise on Civil Government âMost thinkersâŠhold that you own your own life, and it follows that you must own the products of that life, and that those products can be traded in free exchange with others,â claims Wikipediaâs latest entry on property. âEvery man has a property in his own person,â says John Locke. Ayn Rand (who I generally canât stand, but who Iâm happy to quote as a passionate defender of the sanctity of property) wrote, âJust as man canât exist without his body, so no rights can exist without the right to translate oneâs rights into reality, to think, to work and keep the results, which means: the right of property.â http://en.wikipedia.org/wiki/Property property You also have a property in your own MIND. That which lives in your mind, is your property. And everyone deserves Randâs âright to translate oneâs rights into reality, to think, to work and keep the resultsâ â in other words to freely think, express, and own the contents of their own mind. That is what âintellectual propertyâ should (but doesnât) mean: everyoneâs right to their own mind. Instead, legally defined âIntellectual Propertyâ means exactly the opposite: it transfers ownership of the contents of your mind to others. It alienates the ideas in your mind, from you. Is there a song running through your mind right now? It doesnât belong to you, it belongs to Warner-Chappell. You are forbidden to express it; âperformanceâ requires permission. âTo think, to workâ â interpret â âand keep the resultsâ â record and sell copies of â the song in your mind, are illegal. Thus Intellectual Property gives alien, private owners title to our minds. We may think culture (songs, text, images) only in secret; any expressions of cultural thought belong not to the thinker, but to the IP owner. Your thoughts are âderivative worksâ; someone else has title to them. You may have âPorgy and Bessâ in your mind, but interpreting or singing it out loud is forbidden. That part of your mind belongs to Gershwinâs heirs and their lackeys. http://techdirt.com/articles/20091102/0401476761.shtml Gershwinâs heirs Wikipediaâs entry on Chattel Slavery states: âThe living human body is, in most modern societies, considered something which cannot be the property of anyone but the person whose body it is.â The living human mind should be the same. Legally defined âIntellectual Propertyâ is, quite simply, someone elseâs ownership of your mind. If they own the right to express what lives in your mind, the right âto think, to work and keep the results,â then they own your mind; they own you. What can we call that, except slavery? http://en.wikipedia.org/wiki/Ownership#Chattel_slavery Chattel Slavery â Original: https://blog.ninapaley.com/2009/11/04/intellectual-property-is-slavery/ ⧠/# ⧠|
Nina Paley |
2009 |
538 |
2.7 |
| There are No Good Arguments for Intellectual Property |
There are No Good Arguments for Intellectual Property ===================================================== by Stephan Kinsella https://x.com/NSKinsella Stephan Kinsella February 24, 2009 Original: https://c4sif.org/2009/02/there-are-no-good-arguments-for-intellectual-property/ There are some decent arguments out there that argue in favor of a state, welfare rights, war, democracy, drug laws, and so on. They are all flawed, since libertarianism is right, but there are coherent, honest arguments that we libertarians have to grapple with. But it is striking that there are no decent arguments for IPâas Manuel Lora remarked to me, âYou know, I havenât seen a good pro IP article ever.â This is true. One sees the same incoherent or insincere claims made over and over, such as: 1. Itâs in the constitution (argument from authority; legal positivism) 2. Intellectual property is called property! (argument by definition?) 3. No movies would be made and kids would die without medicine (artworks and medicine have been produced for ages without IP law; and whereâs the evidence?) 4. If you âcreateâ something you own it (despite all the exceptions, and despite the fact that creation is neither necessary nor sufficient for ownership; despite the fact that you either limit these rights in scope or time arbitrarily, or you extent them to infinity, choking off rights in real things and forcing life and commerce to a screeching halt) 5. It generates net wealthâmore value than its cost (no evidence, ever, for this contentionâjust assumptions; not to mention the problem of utilitarian summing of values) 6. IP infringement is âtheftâ (even though the owner still has his property and ideas, and even though IP infringement is just learning and emulating) 7. People âcouldâ create variants of IP via private contracts⊠therefore artifical patent granting bureaucracies legislated by a criminal state are ⊠justified?) There are other arguments, I suppose, but they are so incoherent as to defy description. They often involve crankish initial caps, like Property and Rights, the Internet equivalent of crayons. I have truly never seen a coherent, good argument for IP. The advocates are either utilitarian, with all the problems that accompany that (not to mention they never have any evidence for their claims); or the advocate a more âprincipledâ, rights-based type of IP that, if taken seriously, would completely undermine all real property rights and make life on earth impossible, so they retreat from this and impose arbitrary, senseless limits on it. What a kluge. In a recent discussion, Whatâs Wrong With Theft?, one of the IP advocates, when pushed into a corner, ended up arguing that rights to own property include the right to control all âaccess toâ and âinteractions withâ oneâs propertyâand that âinteractionsâ include observing or knowing about or learning facts about the things owned by someone, and that when you use this knowledge you are âinteracting withâ the property, and thus âstealingâ it (even though the owner still has it). So here we have it: IP means âinteraction rights.â Wow. This is how kooky all IP arguments ultimately are. https://web.archive.org/web/20090331204838/http://blog.mises.org/archives/009486.asp Whatâs Wrong With Theft? â Original: https://c4sif.org/2009/02/there-are-no-good-arguments-for-intellectual-property/ ⧠/# ⧠|
Stephan Kinsella |
2009 |
548 |
2.7 |
| Owning Ideas Means Owning People |
Owning Ideas Means Owning People ================================ by Roderick T. Long https://x.com/RoderickTLong Roderick T. Long November 19, 2008 Original: https://perma.cc/7LGU-XJLE Timothy Lee writes: âI canât agree with Baker that all copyright and patent monopolies are illegitimate.â Iâm actually not sure thatâs Bakerâs view (in his original response Baker remarks in passing, âthere may be areas in which patents are an effective policy for promoting innovationâ), but it is my view, so let me say briefly why I donât regard intellectual property as a legitimate form of property. The objects of ownership in the case of intellectual property are supposed to be abstract objects; but what does ownership over an abstract object amount to? Ownership is supposed to solve conflicts over use, but there cannot literally be conflicts over the use of abstract objects; I donât have to wait until youâre done thinking the Pythagorean theorem before I can start thinking it. Putative conflicts over the use of abstract objects are always really conflicts over the concrete items in which those abstract objects are embodied. An abstract object, such as a design for a new kind of mousetrap, gets its foothold in concrete reality only by being embodied in, say, a mind that is thinking of it, or a sheet of paper that describes it, or an actual mousetrap built in accordance with it. But if those concrete objects are already owned â the mind by the person whose mind it is, the paper and the mousetrap by whoever made or bought them â then the question of who has rights over those things is already settled, and there can be no further question of who owns the design itself. If the originator of the design were to claim exclusive rights over it, he or she would thereby be claiming, in practice, the right to control someone elseâs property â someone elseâs individual mind or individual sheet of paper or individual mousetrap. Intellectual property is thus essentially a claim of ownership over other people and the products of other peopleâs labor, and so is necessarily illegitimate; in forbidding the free circulation of ideas it constitutes a form of censorship as well. In defense of intellectual property, Lee notes that âCopyright and patent protections have existed since the beginning of the republic, and if properly calibrated they can (as the founders put it) promote the progress of science and the useful arts.â That they have existed since the beginning of the republic is true, but not a compelling argument for their legitimacy. (Slavery existed for the first century of the republic also.) As for their being needed to promote âscience and the useful arts,â even if this were true it wouldnât justify the violation of liberty involved â but it is doubtful that it is true, given that most scientific and artistic progress throughout history was accomplished without intellectual property protections, and in many cases was in fact possible only because there were no such protections (as inventions built on previous inventions, and artworks on previous artworks). The protectionist argument that intellectual innovators wonât have sufficient incentive to create unless theyâre protected from competition doesnât seem to hold up historically. I canât work up much enthusiasm for Bakerâs alternative proposal, however. Baker writes: > My ideal system would be a system in which the government allocates a pot of money (@$30 billion a year â approximately equal to private R&D in the pharmaceutical sector) that would be awarded in long-term contracts to a relatively small number of master contractors. For example, there can be 10 master contractors getting grants of roughly $30 billion each spread over 10 years. The model here should be government contracts for major projects, like building an airport. In light of the massive rent-seeking, favoritism, and costly boondoggles that plague government contracts, Bakerâs proposal seems worrisomely similar to the kind of destructive corporate welfare and monopoly privilege that I discussed in my first essay. Contrary to what both Lee and Baker imply, there are ways of promoting the âprogress of science and the useful artsâ without invoking state aggression against liberty or property â ways that would secure many of the benefits of copyright and patent protection without violating libertarian scruples. These ways include contractual stipulations, charitable patronage, and organized boycotts. Let me say a bit about the latter case, the organized boycott. During the late medieval period a system of commercial law arose in Europe called the Law Merchant, its creation prompted in part by the lack of uniform legal standards owing to the unwillingness of governmental courts in one country to enforce contracts made under the laws of another country. Bypassing the inefficient (because monopolistic) government courts, merchants from different countries joined together in developing their own rules and courts; being denied the enforcement powers of the state, mercantile courts could rely only on boycotts to secure compliance with their decisions. A similar situation arose in 17th-century Amsterdam: when government courts refused to enforce certain forms of financial contract, merchants continued to make such contracts anyway, relying on the power of boycott for enforcement. In both cases, the threat of boycott was sufficient to ensure that parties abided by their contracts.^1 There is little reason to suppose that payment for the labor of intellectual innovators could not be guaranteed in the same way, via an organized system of voluntary boycotts rather than by governmental force. Being voluntary, such a system would avoid the rights-based objections to copyrights and patents; moreover, the kinds of protections that would be sustainable under a voluntary regime would be unlikely to include the extreme, disproportionate excesses of current IP law. Notes ===== ^1: On the Law Merchant see Tom W. Bell, âPolycentric Law,â Humane Studies Review 7, no. 1 (Winter 1991/92; http://osf1.gmu.edu/~ihs/w91issues.html; on the Amsterdam case see Edward Stringham, âThe Extralegal Development of Securities Trading in Seventeenth-Century Amsterdam,â Quarterly Review of Economics and Finance 43 (2003), pp. 321â344; http://www.sjsu.edu/stringham/docs/Stringham.2003.QREF.Amsterdam.pdf. â Original: https://perma.cc/7LGU-XJLE ⧠/# ⧠|
Roderick T. Long |
2008 |
1033 |
5.2 |
| The Surprising History of Copyright and The Promise of a Post-Copyright World |
The Surprising History of Copyright and The Promise of a Post-Copyright World ============================================================================= by Karl Fogel https://x.com/kfogel Karl Fogel May 27, 2006 Original: https://www.questioncopyright.org/promise/ There is one group of people not shocked by the record industryâs policy of suing randomly chosen file sharers: historians of copyright. They already know what everyone else is slowly finding out: that copyright was never primarily about paying artists for their work, and that far from being designed to support creators, copyright was designed by and for distributors â that is, publishers, which today includes record companies. But now that the Internet has given us a world without distribution costs, it no longer makes any sense to restrict sharing in order to pay for centralized distribution. Abandoning copyright is now not only possible, but desirable. Both artists and audiences would benefit, financially and aesthetically. In place of corporate gatekeepers determining what can and canât be distributed, a much finer-grained filtering process would allow works to spread based on their merit alone. We would see a return to an older and richer cosmology of creativity, one in which copying and borrowing openly from othersâ works is simply a normal part of the creative process, a way of acknowledging oneâs sources and of improving on what has come before. And the old canard that artists need copyright to earn a living would be revealed as the pretense it has always been. None of this will happen, however, if the industry has its way. For three centuries, the publishing industry has been working very hard to obscure copyrightâs true origins, and to promote the myth that it was invented by writers and artists. Even today, they continue to campaign for ever stronger laws against sharing, for international treaties that compel all nations to conform to the copyright policies of the strictest, and most of all to make sure the public never asks exactly who this system is meant to help. The reward for these efforts can be seen in the publicâs reaction to the file-sharing lawsuits. While most people agree that this time the industry went too far, the error is mainly treated as one of degree â as if the record companies had a valid point, but had merely resorted to excessive force in making it. To read the true history of copyright is to understand just how completely this reaction plays into the industryâs hands. The record companies donât really care whether they win or lose these lawsuits. In the long run, they donât even expect to eliminate file sharing. What theyâre fighting for is much bigger. Theyâre fighting to maintain a state of mind, an attitude toward creative work that says someone ought to own products of the mind, and control who can copy them. And by positioning the issue as a contest between the Beleaguered Artist, who supposedly needs copyright to pay the rent, and The Unthinking Masses, who would rather copy a song or a story off the Internet than pay a fair price, the industry has been astonishingly successful. They have managed to substitute the loaded terms âpiracyâ and âtheftâ for the more accurate âcopyingâ â as if there were no difference between stealing your bicycle (now you have no bicycle) and copying your song (now we both have it). Most importantly, industry propaganda has made it a commonplace belief that copyright is how most creators earn a living â that without copyright, the engines of intellectual production would grind to a halt, and artists would have neither means nor motivation to produce new works. Yet a close look at history shows that copyright has never been a major factor in allowing creativity to flourish. Copyright is an outgrowth of the privatization of government censorship in sixteenth-century England. There was no uprising of authors suddenly demanding the right to prevent other people from copying their works; far from viewing copying as theft, authors generally regarded it as flattery. The bulk of creative work has always depended, then and now, on a diversity of funding sources: commissions, teaching jobs, grants or stipends, patronage, etc. The introduction of copyright did not change this situation. What it did was allow a particular business model â mass pressings with centralized distribution â to make a few lucky works available to a wider audience, at considerable profit to the distributors. The arrival of the Internet, with its instantaneous, costless sharing, has made that business model obsolete â not just obsolete, but an obstacle to the very benefits copyright was alleged to bring society in the first place. Prohibiting people from freely sharing information serves no oneâs interests but the publishersâ. Although the industry would like us to believe that prohibiting sharing is somehow related to enabling artists to make a living, their claim does not stand up to even mild scrutiny. For the vast majority of artists, copyright brings no economic benefits. True, there are a few stars â some quite talented â whose works are backed by the industry; these receive the lionâs share of distribution investment, and generate a correspondingly greater profit, which is shared with the artist on better than usual terms because the artistâs negotiating position is stronger. Not coincidentally, these stars are who the industry always holds up as examples of the benefits of copyright. But to treat this small group as representative would be to confuse marketing with reality. Most artistsâ lives look nothing like theirs, and never will, under the current spoils system. That is why the stereotype of the impoverished artist remains alive and well after three hundred years. The publishing industryâs campaign to preserve copyright is waged out of pure self-interest, but it forces on us a clear choice. We can watch as most of our cultural heritage is stuffed into a vending machine and sold back to us dollar by dollar â or we can reexamine the copyright myth and find an alternative. * The first copyright law was a censorship law. It was not about protecting the rights of authors, or encouraging them to produce new works. Authorsâ rights were in little danger in sixteenth-century England, and the recent arrival of the printing press (the worldâs first copying machine) was if anything energizing to writers. So energizing, in fact, that the English government grew concerned about too many works being produced, not too few. The new technology was making seditious reading material widely available for the first time, and the government urgently needed to control the flood of printed matter, censorship being as legitimate an administrative function then as building roads. The method the government chose was to establish a guild of private-sector censors, the London Company of Stationers, whose profits would depend on how well they performed their function. The Stationers were granted a royal monopoly over all printing in England, old works as well as new, in return for keeping a strict eye on what was printed. Their charter gave them not only exclusive right to print, but also the right to search out and confiscate unauthorized presses and books, and even to burn illegally printed books. No book could be printed until it was entered in the companyâs Register, and no work could be added to the Register until it had passed the crownâs censor, or had been self-censored by the Stationers. The Company of Stationers became, in effect, the governmentâs private, for-profit information police force ^1. The system was quite openly designed to serve booksellers and the government, not authors. New books were entered in the Companyâs Register under a Company memberâs name, not the authorâs name. By convention, the member who registered the entry held the âcopyrightâ, the exclusive right to publish that book, over other members of the Company, and the Companyâs Court of Assistants resolved infringement disputes ^2. This was not simply the latest manifestation of some pre-existing form of copyright. Itâs not as though authors had formerly had copyrights, which were now to be taken away and given to the Stationers. The Stationersâ right was a new right, though one based on a long tradition of granting monopolies to guilds as a means of control. Before this moment, copyright â that is, a privately held, generic right to prevent others from copying â did not exist. People routinely printed works they admired when they had the chance, an activity which is responsible for the survival of many of those works to the present day. One could, of course, be enjoined from distributing a specific document because of its potentially libelous effect, or because it was a private communication, or because the government considered it dangerous and seditious. But these reasons are about public safety or damage to reputation, not about property ownership. There had also been, in some cases, special privileges (then called âpatentsâ) allowing exclusive printing of certain types of books. But until the Company of Stationers, there had not been a blanket injunction against printing in general, nor a conception of copyright as a legal property that could be owned by a private party. For about a century and a third, this partnership worked well for the government and for the Stationers. The Stationers profited from their monopoly, and through the Stationers, the government exercised control over the spread of information. Around the end of the seventeenth century, however, owing to larger political changes, the government relaxed its censorship policies, and allowed the Stationersâ monopoly to expire. This meant that printing would return to its former anarchical state, and was of course a direct economic threat to the members of the Company of Stationers, accustomed as they were to having exclusive license to manufacture books. Dissolution of the monopoly might have been good news for long-suppressed authors and independent printers, but it spelled disaster for the Stationers, and they quickly crafted a strategy to retain their position in the newly liberal political climate. The Stationers based their strategy on a crucial realization, one that has stayed with publishing conglomerates ever since: authors do not have the means to distribute their own works. Writing a book requires only pen, paper, and time. But distributing a book requires printing presses, transportation networks, and an up-front investment in materials and typesetting. Thus, the Stationers reasoned, people who write would always need a publisherâs cooperation to make their work generally available. Their strategy used this fact to maximum advantage. They went before Parliament and offered the then-novel argument that authors had a natural and inherent right of ownership in what they wrote, and that furthermore, such ownership could be transferred to other parties by contract, like any other form of property. Their argument succeeded in persuading Parliament. The Stationers had managed to avoid the odium of censorship, as the new copyrights would originate with the author, but they knew that authors would have little choice but to sign those rights back over to a publisher for distribution. There was some judicial and political wrangling over the details, but in the end both halves of the Stationersâ argument survived essentially intact, and became part of English statutory law. The first recognizably modern copyright, the Statute of Anne, was passed in 1709 and took effect in 1710. The Statute of Anne is often held up by champions of copyright as the moment when authors were finally given the protection they had long deserved. Even today, it continues to be referenced both in legal arguments and in press releases from the publishing industry. But to interpret it as an authorsâ victory flies in the face of both common sense and historical fact ^3. Authors, having never had copyright, saw no reason now to suddenly demand the rather paradoxical power to prevent the spread of their own works, and did not do so. The only people threatened by the dissolution of the Stationersâ monopoly were the Stationers themselves, and the Statute of Anne was the direct result of their lobbying and campaigning. In the memorable words of the contemporary Lord Camden, the Stationers ââŠcame up to Parliament in the form of petitioners, with tears in their eyes, hopeless and forlorn; they brought with them their wives and children to excite compassion, and induce Parliament to grant them a statutory security.â ^4 To make their argument more palatable, they had proposed that copyright would originate with the author, as a form of property that could be sold to anyone â anticipating, correctly, that it would most often be sold to a printer. This proposal was a shrewd tactical move, because one of Parliamentâs concerns was to prevent the re-establishment of a centralized monopoly in the book trade, with its attendant potential for a renewal of censorship by the crown. Benjamin Kaplan, professor of law emeritus at Harvard University and a respected copyright scholar, describes the Stationers position succinctly: > The stationers made the case that they could not produce the fragile commodities called books, and thus encourage learned men to write them, without protection against piracy⊠There is an apparent tracing of rights to an ultimate source in the fact of authorship, but before attaching large importance to this we have to note that if printing as a trade was not to be put back into the hands of a few as subject of monopoly â if the statute was indeed to be a kind of âuniversal patentâ â a [legal] draftsman would naturally be led to express himself in terms of rights in books and hence to initial rights in authors. A draftsman would anyway be aware that rights would usually pass immediately to publishers by assignment, that is, by purchase of the manuscripts as in the past. ⊠I think it nearer the truth to say that publishers saw the tactical advantage of putting forward authorsâ interests together with their own, and this tactic produced some effect on the tone of the statute.^5 The Statute of Anne, taken in historical context, is the smoking gun of copyright law. In it we can see the entire apparatus of modern copyright, but in still-undisguised form. There is the notion of copyright as property, yet the property is really intended for publishers, not authors. There is the notion of benefitting society, by encouraging people to write books, but no evidence was offered to show that they would not write books without copyright. Rather, the Stationersâ argument was that publishers could not afford to print books without protection from competition, and furthermore that printers could not be depended to reproduce works faithfully if given unfettered freedom to print. The corollary, they implied, was that without the prospect of reliable distribution, authors would produce fewer new works. Their argument was not unreasonable, given the technology of the time. Making a perfect copy of a printed work required access to the original press and compositor, anyway; if reliable reproduction were to be encouraged, then a single-holder copyright system had a certain logic to it. And the publishers would now be effectively forced to pay authors in return for exclusive printing rights (although in fact the Stationers had sometimes payed authors even before, simply to guarantee the completion and delivery of a work). The authors who succeeded in selling this new right to printers had no particular motivation to complain â and naturally, we donât hear very much about the authors not so favored. The consolidation of authorâs copyright probably contributed to the decline of patronage as a source of income for writers ^6, and even allowed some authors, though always a small minority, to support themselves solely from the royalties their publishers shared with them. The fact that a given copyright could only be held by one party at a time also helped prevent the proliferation of divergent variations, a problem that had vexed authors perhaps even more than plagiarism, as there was no easy method by which they could endorse or disclaim particular variations. But the overall historical record is clear: copyright was designed by distributors, to subsidize distributors not creators. This is the secret that todayâs copyright lobby never dares say aloud, for once it is admitted, the true purpose of subsequent copyright legislation becomes embarrassingly clear. The Statute of Anne was just the beginning. Having granted the premise that copyrights should exist at all, the English government found themselves under pressure to extend copyright terms further and further. In the long legal saga that ensued, whatâs important is not the particular sequence of laws and verdicts, but the identity of the plaintiffs: they were just the sort of stable, settled business interests capable of sustaining litigation and lobbying over a period of decades â that is, they were publishers, not authors. They had proposed the authorâs copyright out of economic interest, and only after the crutch of a censorship-based monopoly had been taken away from them. When it became clear that the tactic worked, they lobbied to strengthen copyright. And this is still the pattern today. Whenever the U.S. Congress extends copyright terms or powers, it is the result of pressure from the publishing industry. The lobbyists will sometimes trot out a superstar author or musician as an exhibit, a human face for what is essentially an industry effort, but itâs always quite clear whatâs really going on. All you have to do is look at whoâs paying the lawyerâs and lobbyistsâ bills, and whose names appear in the court dockets â publishersâ. The industryâs centuries-long campaign for strong copyright law is not merely a reflexive land grab, however. Itâs a natural economic response to technological circumstances. The effect of the printing press, and later of analog sound recording technology, was to make creative works inseparable from their means of distribution. Authors needed publishers the way electricity needs wires. The only economically viable method of reaching readers (or listeners) was the bulk print run: to manufacture thousands of identical copies at once, then physically ship them to various points of distribution. Before agreeing to such an investment, any publisher would naturally prefer to buy or lease the copyright from the author, and just as naturally would lobby the government for the strongest possible copyright powers, the better to protect their investment. There is nothing inherently exploitative about this; itâs just straightforward economics. From a business point of view, a print run is a daunting and risky project. It involves the high up-front costs of a physical medium (be it dead tree pulp, magnetic tape, vinyl platters, or pitted optical discs), plus complicated, expensive machinery to imprint the content onto the medium. Thereâs also the unseen investment of vetting the master copy: because a flawed master can reduce the value of the entire run, publishers and authors go to considerable trouble to generate a polished, error-free version of the work before printing. There is little room for an incremental or evolutionary process here; the work must be brought to near-perfection before the public ever sees it. If any mistakes are overlooked, they will have to be tolerated in the finished product, at least until the process is started again for the next print run. The publisher must also negotiate prices and line up distribution paths, which is not only a matter of bookkeeping, but of physical expenses, of trucks and trains and shipping containers. Finally, as if all this werenât enough, the publisher is compelled to spend even more money on marketing and publicity, to have a better chance of at least recovering all these outlays. When one realizes that all this must happen before the work has generated a penny of revenue, it is little wonder that publishers argue hard for copyright. The publisherâs initial investment â that is, their risk â in any individual work is greater, in economic terms, than the authorâs. Authors by themselves might have no inherent desire to control copying, but publishers do. And in a world filled with publishersâ royalty-supported marketing departments, authors, of course, need publishers all the more. The concentration of distribution revenues results, inevitably, in the familiar logic of an arms race. * The arrival of the Internet fundamentally changed this equation. It has become clichĂ© to say that the Internet is as revolutionary a development as the printing press, and it is. But it is revolutionary in a different way. The printing press may have made it possible to turn one book into a thousand books, but those books still had to travel from the press into the hands of readers. Physical books were not only the medium in which the content was consumed, they were also the medium in which it was transported to the consumer. Thus, a publisherâs total expense was proportional to the number of copies distributed. In such a situation, it is reasonable to ask that each user bear a portion of the costs of distribution. Each user is, after all, more or less responsible for her particular quantum of expense. If the book (or record) is in her hands, it must have gotten there somehow, which in turn means someone spent money to get it there. Divide those expenses by the number of copies, add in some amount for profit, and you arrive, roughly speaking, at the bookâs price. But today, the medium over which content is distributed can be unrelated to the medium in which it is ultimately consumed. The data can be sent over a wire, at essentially no cost, and the user can print up a copy at her own expense, and at whatever quality she can afford, on the other end ^7. Furthermore, it is no longer important to possess the master; in fact, the concept of the master copy itself is obsolete. To make a perfect copy of a printed work is actually quite hard, although making a corrupt or abridged copy is very easy. Meanwhile, to make a perfect copy of a digital work is trivially easy â itâs making an imperfect copy that requires extra effort. Thus the practice of charging the same fee for each copy, regardless of how many copies there are or who made them, is now unjustifiable. The cost of producing and distributing the work is now essentially fixed, no longer proportional to the number of copies. From societyâs point of view, every dollar spent beyond the amount needed (if any) to bring the work into existence in the first place is a waste, an impediment to the workâs ability to spread on its own merits. The Internet did something the Company of Stationers never anticipated: it made their argument a testable hypothesis. Would creators still create, without centralized publishers to distribute their works? Even minimal exposure to the Internet is enough to provide the answer: of course they will. They already are. Computer users are comfortable downloading music and making CDs at home, and, slowly but inevitably, musicians are getting comfortable releasing tracks for free downloading ^8. Many short works of both fiction and non-fiction are already available online. Printing and binding entire books on demand is rarer, but only because the equipment to do it is still somewhat expensive. That equipment is getting steadily cheaper, however, and itâs only a matter of time before the copy shop down the street has it. There is no fundamental difference between music and text, from a distribution point of view. As printing and binding technology gets cheaper, authors will see more and more clearly that they have the same alternative musicians do, and the result will be the same: more and more material available without restriction, by the choice of the author. Some might argue that authors are different, that they are more dependent on copyright than musicians. After all, a musician expects to perform, and can therefore gain indirectly by releasing recordings for free â greater exposure leads to more performances. But authors donât perform; they reach their audience only through their works, not in person. If they now had to come up with ways to fund themselves without imposing an artificial scarcity on their works, could they do it? Imagine the simplest scenario: you walk into the neighborhood print shop and tell the clerk the Web address of the book you want. A couple of minutes later, the clerk comes back with a freshly printed, hardbound book, straight off the Internet. He rings up the sale. > âThatâll be eight dollars. Would you like to add the one dollar authorâs suggested donation?â Do you say yes? Perhaps you do, perhaps not â but note that when museums charge a voluntary admission fee, people often pay it. The same sort of dynamic is at work in the copy shop. Most people are happy to pay a tiny extra bit on top of some larger amount, if they have their wallet out already and think itâs for a good reason. When people fail to make small, voluntary donations to a cause they like, itâs more often due to the inconvenience (writing a check, putting it in the mail, etc) than the money. But even if only half, or fewer, of all readers were to make such donations, authors would still earn more than they do under traditional royalty schemes, and furthermore would have the pleasure of finally being the readersâ ally in distribution, instead of their enemy. This is not the only possible system, and it can easily coexist with others. Those not convinced by voluntary donations should consider another method: the Fund and Release system (also called the Threshold Pledge system ^9). This system is designed to solve the classic problem of distributed funding, which is that each contributor wants reassurance that others are also contributing, before putting in her own money. Under fund-and-release, the hopeful creator of a new work states up front how much money will be required to produce it â this is the âthresholdâ. An intermediary organization then collects pledges, in any amounts, from the general public. When the total amount pledged reaches the threshhold (or exceeds it by some standard percentage, to account for bookkeeping and assumption of risk), the intermediary signs a contract with the creator, and the pledges are called in. Only at this stage, when there is enough money to achieve the desired result, is anyone asked to actually pay up. The intermediary holds the money in escrow, paying the creator according to whatever schedule they negotiated. The last of the money is paid when the work is completed and made publically available, not just to the contributors, but to the entire world. If the creator doesnât produce, the intermediary returns the money to the donors. http://en.wikipedia.org/wiki/Fund_and_release Fund and Release http://en.wikipedia.org/wiki/Threshold_Pledge Threshold Pledge The fund-and-release system has some interesting properties not found in the monopolistic, copyright-based marketplace. The resultant work is available to everyone in the world, free of charge. Yet the author was also paid enough to produce the work; if she needed more, she would have asked for more and seen if the market would bear it. Those who did choose to pay paid only as much as they were comfortable with, no more. And finally, there was no risk for the contributors â if the threshold is never reached, then no one pays anything. Not all methods will be so pleasantly high-minded, of course. A couple of years ago, the established author Fay Weldon famously accepted money from Bulgari jewelry to write a novel that featured Bulgari products prominently. She did so, titling the book âThe Bulgari Connectionâ. The book was originally intended as a limited edition to be given away at a corporate function, but having written it, Weldon took it to a publisher for general release. Does this mean that in the future weâll have to scrutinize all creative works for signs of hidden corporate sponsorship? Perhaps, but this is nothing new â product placement was invented in the context of traditional copyright, and has flourished there, as it probably would anywhere. Copyright is neither the cause of corporate sponsorship nor its antidote. To look to the publishing industry as a force for decommercialization would be weirdly out of touch indeed. These are just a few examples of ways to support creative work without copyright. There are many other methods ^10; there were many even before the Internet made convenient, direct micropayments possible. Whether a given artist uses this or that particular scheme doesnât matter. The important thing is that with little or no friction to impede the payment of tiny amounts, authors will find ways to make such payments happen on the scale they need. Those economists who are enamoured of markets as a solution to everything should be in love with the possibilities here (but, predictably, many are not, because they hate to see anything become depropertized). * To see a glimpse of the future, it may be most helpful to look not at net-savvy musicians, but at software. The flourishing Free Software movement is probably the best example we have today of a post-copyright world. Free software (some also call it âOpen Sourceâ) is the brainchild of Richard Stallman, a programmer who had the idea of releasing software under a deliberately reversed copyright. Instead of prohibiting sharing, the softwareâs license explicitly permits and encourages it. A number of others soon caught on to his idea, and because they were able to share and modify each otherâs programs without limit, they quickly produced a large body of working code. Some predicted that this initial success would quickly level off as the software increased in size and complexity and required centralized, hierarchical organizations to maintain. But instead of foundering, the Free Software movement has grown so quickly that even its own participants are surprised, and it shows no signs of stopping. It now produces software whose functionality rivals that available in the proprietary market. Free software is widely used by banks, corporations, and governments, as well as individual computer users. More web sites run the free Apache web server than run all other web servers combined. Free operating systems are now the fastest-growing segment of the operating system market. Although some free software authors are paid for their work (after all, their services provide a benefit to those who use the software, and some of those users are willing to pay for it), others volunteer their time. Each software project has its own reasons for existing, and each programmer their own reasons for contributing. But the cumulative effect is a direct flaunting of copyrightâs entire justification: a thriving community of intellectual production now exists without enforcing copyrights, yet achieves substantially the same results as its mainstream counterpart. According to the traditional justification of copyright, this shouldnât be happening. The software is essentially in the public domain; its copyright serves mainly to identify the original authors, and in some cases to prevent anyone else from imposing a stricter license. The authors have given up every exclusive right except the right to be identified as the authors. They have voluntarily returned to a world before copyright law: they enforce no royalties, and have no control over the distribution and modification of their works. The softwareâs license gives everyone automatic permission both to use and to redistribute it. You can simply start handing out copies, thereâs no need to notify anyone or ask permission. If you want to modify it, youâre free to do that too. You can even sell it, though naturally itâs difficult to charge much, since youâd be competing with others handing out the same goods at no cost. A more common model is to encourage people to download the software for free, and instead sell services such as technical support, training, and customization. These models are not fantasies, they are the basis for profitable businesses that exist right now, paying real programmers competitive salaries to work on free software. But the point is not that people are paid to do it â some are, but many more are not, and yet write it anyway. The real point is that a tremendous amount of free software is produced and maintained every year, at a rate that grows quickly even by the standards of the software industry. If this phenomenon were isolated to software, it would be explainable as an aberration â software is different, programmers are overpaid, and so on. But itâs not just software; if you look carefully, there are signs of it happening everywhere. Musicians are starting to release their tracks online for free downloading, and the quantity of freely available writing on the Internet â starting with reference and non-fiction works, but now including fiction and poetry â long ago passed the point of measurability. Software is not fundamentally different from these other forms of information. Like poems, songs, books, and movies, it can be transmitted digitally. It can be copied in whole or in part; it can be excerpted for use in other works; it can be modified and edited; it can even be satirized. The abandonment of copyright is farthest along in software mainly because programmers were among the first groups to have Internet access, not because of anything special about the nature of software. Gradually, creators in other areas are realizing that they too can disseminate their works without publishers or centralized distribution chains, by simply allowing the freedom to copy. And increasingly, they are choosing to do so, because they have little to lose, and because itâs the easiest way for their work to find its way to an appreciative audience. Far from being especially dependent on copyright law, creators gain the most by abandoning the copyright monopoly. Even in their early stages, these trends raise an obvious question. If copyright is not really needed to stimulate original creation, then what purpose does it serve today? For it is quite clear that if copyright did not exist already, we wouldnât invent it now. We just finished building ourselves a gigantic copying machine (the Internet) that doubles as a communications device, and incidentally makes it convenient to transfer small amounts of money between people. Sharing is now the most natural thing in the world. The idea that artists are somehow harmed by it is demonstrated false every day, by the thousands of new works that appear online, credited and fully acknowledged by their authors, yet free for the taking. If someone were to argue that creativity would soon dry up unless we immediately institute a system of strict controls over who can copy what, we could reasonably look on them as insane. Yet, in slightly more diplomatic language, this is essentially the argument used by the copyright lobby to press for ever stronger laws. Creativity is not whatâs at stake here, and in its more honest moments the publishing industry even tacitly admits this. Although for public relations purposes industry leaders make token declarations about the need for poor artists to earn a living, their most detailed and compelling statements are usually about the business effects of copyright. Larry Kenswil of Universal Music Group, the worldâs largest record company, was quoted in the New York Times of Jan. 5th, 2003, in an article about digital copy protection schemes, saying âYouâre not buying music, youâre buying a key. Thatâs what digital rights management does: it enables business models.â Itâs hard to imagine a more succinct statement of the industry credo. He might as well have said âThatâs what copyright does: it enables business models.â Unfortunately, not all of the propaganda put out by the industry is as straightforward and honest as Kenswilâs. The Recording Industry Association of America, for example, explains copyright this way on their web site at http://www.riaa.org/: > You donât need to be a lawyer to be a musician, but you do need to know one legal term â copyright. To all creative artists â poets, painters, novelists, dancers, directors, actors, musicians, singers, and songwriters â the term matters dearly. To all artists, âcopyrightâ is more than a term of intellectual property law that prohibits the unauthorized duplication, performance or distribution of a creative work. To them, âcopyrightâ means the chance to hone their craft, experiment, create, and thrive. It is a vital right, and over the centuries artists have fought to preserve that right; artists such as John Milton, William Hogarth, Mark Twain, and Charles Dickens. Twain traveled to England to protect his rights, and Dickens came to America to do the same. Recognize that? Itâs a page straight out of the Stationersâ playbook â an undisguised retelling of the copyright myth, complete with references to individual authors, designed to arouse our support for struggling artists valiantly fighting for their artistic integrity. Apparently, all those artists throughout history who did just fine without copyright arenât included in âall creative artistsâ as far as the RIAA is concerned. Professor Pattersonâs comments, about the Stationersâ similar use of authors as a foil in front of the eighteenth century English parliament, are equally applicable today: âThey [the Stationers] did so by arguments intended to elicit sympathy for the author (conveniently ignoring their role in creating the poor plight of the author that they bemoaned) and avoided sound logic and reason.â ^11. The next paragraph in the RIAAâs introduction to copyright is even worse. Itâs a brief â very brief â introduction to the origins of copyright law, heavy with the cadence of historical inevitability, but rather loose with the facts: > Copyright law all started with the âThe Statute of Anne,â the worldâs first copyright law passed by the British Parliament in 1709. Yet the principle of protecting the rights of artists predates this. It may sound like dry history at first blush, but since there was precedent to establish and rights to protect, much time, effort, and money has been spent in legal battles over the centuries. This breathless summary is the copyright equivalent of âChristopher Columbus sailed to America to prove the Earth was round and make friends with the Indiansâ. Yes, much money has indeed been spent in legal battles, but the RIAA is careful not to say who spent it, nor are any further details given about the âprinciple of protecting the rights of artistsâ that is alleged to predate these developments. The rest of their page continues in a similar vein, with so many omissions, mischaracterizations, and outright lies that itâs hard to imagine how anyone doing even a modicum of research could have written it. It is, basically, low-grade supporting propaganda in their ongoing campaign to convince the public that copyright is as fundamental to civilization as the laws of thermodynamics. The RIAA also indulges in one of the favorite tactics of the modern copyright lobby: equating illegal copying with the unrelated, and much more serious, offense of plagiarism. For example, Hilary Rosen, the (now former) head of the RIAA, used to speak at schools and colleges, urging the students to adopt the industryâs views about information ownership. Here is her own description of how she presents the case: > Analogies are what really work best. I ask them, âWhat have you done last week?â They may say they wrote a paper on this or that. So I tell them, âOh, you wrote a paper, and you got an A? Would it bother you if somebody could just take that paper and get an A too? Would that bug you?â So this sense of personal investment does ring true with people. Since people who duplicate CDs do not usually replace the artistâs name with their own, letâs ask the question Hilary Rosen should have asked: âWould it bother you if somebody could just show a copy of your paper around, so other people could benefit from what you wrote, and see that you got an A?â Of course, the students would have answered âNo, we arenât bothered by that at all,â which isnât what Rosen wanted to hear. The RIAA is extreme only in the clumsiness of their propaganda. Their message is, in essence, the same one offered by the rest of the copyright industry, which maintains a constant drumbeat of warnings that online content swapping will deprive creators of their reputations and their ability to work, despite overwhelming evidence that copyright never provided them with much of a livelihood anyway, and that they would happily continue to create without it as long as they have a way to distribute their works. The campaign might sound harmless or silly when described as I have described it here, but because they are fighting for survival, with large budgets and skilled publicity departments, the publishers have succeeded in shaping public opinion to a surprising degree. Consider this poor woman, from the International Herald Tribune of Sep. 11th, 2003, in an article about the RIAA file-sharing lawsuits: > One woman who has received a subpoena from the recording industry association said she had struggled to explain to her 13-year-old son why file-sharing was wrong. âI said, âSuppose you wrote a song and a famous rock group sang it and you didnât get paid,'â said the mother, who declined to give her name because of her legal situation. âHe said: âI wouldnât care. That would be awesome.â Theyâre still just in that young age where money doesnât matter.â The mother said she had better results when she compared taking someoneâs song to plagiarizing a school paper. (One can only hope the sensible 13-year-old manages to keep his head, when so many around him are apparently losing theirs.) The combination of a still-sympathetic public and deep pockets has unfortunately allowed the copyright industry to exercise dangerous influence at the legislative level. The result is a disturbing trend: mutually reinforcing physical and legal barriers that, while ostensibly designed to combat illegal copying, have the inevitable effect of interfering with all copying. Digital copy-protection schemes are increasingly enforced by your computerâs hardware itself, rather than by malleable and replaceable programs. And the same companies that own content often also manufacture the hardware that makes distribution possible. Have you bought a computer from Sony? What about a CD from Sonyâs music division? Thatâs the same company, and its left hand knows what its right hand is doing. With government cooperation, this combination becomes even more powerful. In the United States we now have a law â the Digital Millennium Copyright Act â that makes it illegal to circumvent a digital protection scheme, or even to produce software that helps others circumvent a digital protection scheme. Unfortunately, since much hardware and software automatically imprints such schemes on any media it produces, the Act effectively stifles authorized copying and many other activities that would otherwise fall into the category of âfair useâ under current copyright law. It is vital to understand that these side effects are not accidents, not unexpected consequences of an otherwise well-intentioned effort to protect artists. Rather, they are an integral part of a strategy that, at bottom, has nothing to do with encouraging creativity. The purpose of this three-pronged industry effort â the publicity campaign, the legal campaign, and the hardware âprotectionsâ â is simply this: to prevent the Internet experiment from being carried out to completion. Any organization that is deeply invested in the concept of copy control cannot be pleased to see a system arise that makes copying as easy as clicking a mouse. To the extent possible, such organizations would like to see the same pay-per-copy model that weâve been using for centuries continue, even though the fundamental physics of information have changed to make pay-per-copy obsolete. Although the copyright lobby succeeds in getting new laws passed, and even in winning some court cases, these victories rest on a disintegrating foundation. How much longer will the public continue to believe in the copyright myth, the notion that copyright was invented to make creative work possible? The myth has been maintainable so far because it always had a tiny a grain of truth: although copyright was not inspired by authors, and was not enacted to protect them, it did enable the widespread distribution of many original works. Furthermore, there are still many publishers (generally the smaller or individually-owned ones) who behave with an admirable sense of cultural stewardship, subsidizing unprofitable but important works with money earned by stronger sellers, sometimes even losing money outright in order to print things they think worthwhile. But because they are all bound by the economics of large-scale printing, they are all ultimately dependent on copyright. * There wonât be a dramatic battle between the publishing industry and the copying public, with a climax, a denouement, and a clear winner striding out of the dust. Instead, what we will see â are already seeing â is the emergence of two parallel streams of creative work: the proprietary stream, and the free stream. Every day, more people join the free stream, of their own volition, for all sorts of reasons. Some enjoy the fact that there are no gatekeepers, no artificial barriers. A work can succeed by its merits and word of mouth alone: although thereâs nothing to stop traditional marketing techniques from being used in the free stream, thereâs less to subsidize them, so word of mouth and peer-review networks are taking on a greater importance there. Others enter the free stream as crossovers from the proprietary, releasing a portion of their work into the free domain as an advertisement or an experiment. Some simply realize that they have no chance of success in the proprietary world anyway, and figure they might as well release what they have to the public. As the stream of freely available material gets bigger, its stigma will slowly vanish. It used to be that the difference between a published author and an unpublished one was that you could obtain the formerâs books, but not the latterâs. Being published meant something. It had an aura of respectability; it implied that someone had judged your work and given it an institutional stamp of approval. But now the difference between published and unpublished is narrowing. Soon, being published will mean nothing more than that an editor somewhere found your work worthy of a large-scale print run, and possibly a marketing campaign. This may affect the popularity of the work, but it wonât fundamentally affect its availability; and there will be so many âunpublishedâ but worthwhile works, that the lack of a publishing pedigree will no longer be considered an automatic strike against an author. Although the free stream does not use traditional copyright, it does observe, and unofficially enforce, a âcredit rightâ. Works are frequently copied and excerpted with attribution â but attempts to steal credit are usually detected speedily, and decried publicly. The same mechanisms that make copying easy make plagiarism very difficult. Itâs hard to secretly use someone elseâs work when a Google search can quickly locate the original. For example, teachers now routinely do Google searches on representative phrases when they suspect plagiarism in student papers. The proprietary stream cannot survive forever, in the face of such competition. The abolition of copyright law is optional; the real force here is creators freely choosing to release their works for unrestricted copying, because itâs in their interests to do so. At some point, it will be obvious that all the interesting stuff is going on in the free stream, and people will simply cease dipping into the proprietary one. Copyright law may remain on the books formally, but it will fade away in practice, atrophied from disuse. Or, we can sit back and allow this process to be halted, by permitting manufacturers to build in hardware âprotectionsâ that interfere with our ability to copy legitimately; by allowing the copyright lobby to capture our legislatures, to the point where we are constantly looking over our shoulders for the copyright police; and by hesitating to use the free stream to its full potential, because weâve been taught a false story of what copyright is all about. We can, if we choose, have a world where concepts like âout of printâ or ârare bookâ are not only obsolete, but actually meaningless. We can live in a fertile and vibrant garden of constantly evolving works, created by people who wanted deeply to make them available, not mandated by a publisherâs market research. Schools would never be forced to stay with out-of-date textbooks because of the per-copy prices set by publishers, and your computer would always let you share songs with your friends. One way to get there is to question the copyright myth. Copying isnât theft, and it isnât piracy. Itâs what we did for millennia until the invention of copyright, and we can do it again, if we donât hobble ourselves with the antiquated remnants of a censorship system from the sixteenth century. This article is released under free copyright, and may be redistributed, excerpted, and modified without restriction. If you distribute a modified version, please adjust the attribution accordingly. â REFERENCES ========== ^1: These events can be read in any history of copyright. A good online resource regarding their legal implications is âCopyright And `The Exclusive Rightâ Of Authorsâ http://digitalcommons.law.uga.edu/cgi/viewcontent.cgi?article=1342&context=fac_artchop Journal of Intellectual Property, Vol. 1, No.1, Fall 1993, by Professor Lyman Ray Patterson, Pope Brock Professor of Law at the University of Georgia and a noted copyright scholar. His description of this earliest copyright is concise and revealing: The event in the history of Anglo-American copyright that led to the shaping events of the seventeenth and eighteenth centuries was the Charter of the Stationersâ Company granted in 1556 by Philip and Mary âŠ. The Charter gave the stationers the power to make âordinances, provisions, and statutesâ for the governance of âthe art or mistery of [s]tationery,â as well as the power to search out illegal presses and books and things with the power of âseizing, taking, or burning the foresaid books or things, or any of them printed or to be printed contrary to the form of any statute, act, or proclamation âŠ.â The power to burn offending books was a benefit to the sovereign (a weapon against unlawful publications), and a boon to the stationers (a weapon against competition). The book-burning power thus shows the real motivation for the Charter, to secure the allegiance of the stationers as policemen of the press for the sovereign in an uncertain world. (Note that the Company actually received its royal charter on May 4, 1557; thus one sometimes sees 1556 and other times 1557 as the date for the incorporation of the Company of Stationers.) ^2: âAn Unhurried View of Copyrightâ, Benjamin Kaplan Columbia University Press, 1967, pp. 4-5. ^3: Patterson, in ^1, goes so far as to say âThe characterization of the statutory copyright as an authorâs copyright, however, is one of the great canards of history.â ^4: Kaplan, p. 6. ^5: Kaplan, pp. 7-9. ^6: âFive Hundred Years of Printingâ pp. 218-230, S. H. Steinberg, Penguin Books, 1955, revised 1961 ^7: When I started this article, I assumed such developments were a few years away from commercial viability, but I was wrong: the print-on-demand service newspaperkiosk.com launched (note: it later apparently folded, but then came lulu.com, which is still going strong). ^8: See www.mp3.com, for one example. (Although many of the offerings on the site are nominally copyrighted, itâs more a legal reflex than anything else. The tracks are meant to be freely downloaded, listened to, and shared â and thatâs exactly what people do with them.) ^9: The original version of this article called this the âThreshold Pledgeâ system. However, Brandt Cannici of strayform.com, who independently invented the same system, came up with the much better name âFund and Releaseâ, and I now try to use that term instead. ^10: For a description of one funding technique, and a survey of others, see âThe Street Performer Protocol and Digital Copyrightsâ by John Kelsey and Bruce Schneier, at http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/673/583. ^11: Patterson; see ^1. Original: https://www.questioncopyright.org/promise/ ⧠/# ⧠|
Karl Fogel |
2006 |
8809 |
44 |
| Copyright And Patent Policy In a Post-Scarcity Society |
Copyright And Patent Policy In a Post-Scarcity Society ====================================================== by Paul Fernhout https://x.com/pdfernhout Paul Fernhout January 1, 2001 Original: https://pdfernhout.net/open-letter-to-grantmakers-and-donors-on-copyright-policy.html _An Open Letter to All Grantmakers and Donors On Copyright And Patent Policy In a Post-Scarcity Society_ executive summary ================= Foundations, other grantmaking agencies handling public tax-exempt dollars, and charitable donors need to consider the implications for their grantmaking or donation policies if they use a now obsolete charitable model of subsidizing proprietary publishing and proprietary research. In order to improve the effectiveness and collaborativeness of the non-profit sector overall, it is suggested these grantmaking organizations and donors move to requiring grantees to make any resulting copyrighted digital materials freely available on the internet, including free licenses granting the right for others to make and redistribute new derivative works without further permission. It is also suggested patents resulting from charitably subsidized research research also be made freely available for general use. The alternative of allowing charitable dollars to result in proprietary copyrights and proprietary patents is corrupting the non-profit sector as it results in a conflict of interest between a non-profit's primary mission of helping humanity through freely sharing knowledge (made possible at little cost by the internet) and a desire to maximize short term revenues through charging licensing fees for access to patents and copyrights. In essence, with the change of publishing and communication economics made possible by the wide spread use of the internet, tax-exempt non-profits have become, perhaps unwittingly, caught up in a new form of "self-dealing", and it is up to donors and grantmakers (and eventually lawmakers) to prevent this by requiring free licensing of results as a condition of their grants and donations. introduction to the problem =========================== Consider this license fragment from a foundation supported (PRI) project from 1993: "You will not modify, publish, distribute, transmit, participate in the transfer or sale, create derivative works, or in any way exploit, any of the content, in whole or in part, found on the Service." The non-profit collaborative communications ecosystem is polluted with endless anti-collaborative restrictive terms of use for charitably funded materials (both content and software) produced by a wide range of public organizations. These restrictions are in effect acting like "no trespassing -- toxic waste -- keep out -- this means you" signs by prohibiting making new derived works directly from pre-existing digital public works. The justification is usually that tight control of copyright and restricting communications of those materials will produce income for the non-profit, and while this is sometimes true, the cost to society in the internet age in terms of limiting cooperation is high, and in fact, I would argue, too high. Unfortunately, the situation is even worse than that, because even without a copyright notice or license, the default under the law is now that all works are copyrighted upon creation. So basically everything on the internet put up by non-profits without an explicit license granting permission to use, communicate, and/or make derivative works also has an invisible implicit "no trespassing" sign on it as well. http://www.loc.gov/copyright/circs/circ03.html the law Perhaps allowing content producing 501(c)3 non-profits to tightly control their copyrights made sense in the past. Driven by cuts in much non-profit funding in the 1980s and early 1990s, many non-profits moved to funding models requiring more entrepreneurship. For many non-profits, that has meant selling copyrighted materials, and they effectively became no different than commercial publishers -- except for receiving a charitable subsidy that perhaps allows break-even cost production for smaller audiences otherwise underserved by the the mainstream for-profit press. Acting as subsidized presses has been an important mission for non-profits, and both my wife and I have helped with it. We assisted NOFA-NJ in producing two versions of the New Jersey Organic Market Directory -- which was subsidized by among others the Geraldine R. Dodge Foundation. But, I would argue, it no longer makes sense to enable non-profits to function mainly as subsidized publishers operating in an otherwise conventional for-profit way through selling copyrighted material. Assuming subsidized publishing made sense at some point, what has changed recently? Widespread internet use is one obvious thing. In general, the bigger picture is that a more cooperative "post-scarcity" economy is emerging. http://www.google.com/search?q=post-scarcity post-scarcity This post-scarcity economy is made possible by such things as: - the exponential growth of technological capacity (including the internet), - increasingly widespread knowledge, and - new ways of collaborating pioneered by free software and open source developers. post-scarcity information economics and non-profits =================================================== Even in a "post-scarcity" or "gift" economy, some things remain scarce, like human attention or trust. This new economy is driven in part by peer status, which does have indirect physical, economic, and other benefits. http://www.well.com/user/mgoldh/natecnet.html does have indirect physical, economic, and other benefits James P. Hogan wrote a novel "Voyage from Yesteryear" around 1982 on a similar premise describing a gift economy governed by status. http://www.jamesphogan.com/books/voyage/baen99/titlepage.shtml Voyage from Yesteryear Nowhere is a post-scarcity economy more visible today than with content on the internet. However, does the funding plan for most digital public works made by non-profits incorporate a post-scarcity perspective? There are a lot of non-profit projects being funded out there (especially educational and digital library ones) which have a component of attempting to charge for access to the results of charitably funded work as part of their business plan. Some completely restrict access (and redistribution) to a local paying community. In fact, most government funding agencies and foundations encourage such restrictions, on the (often flawed) assumption that such restrictions will make the project self-sustaining financially. Rather than single out another example, let me point as a contrast to a foundation and an organization it funds that are both doing a great job at enlarging the public domain as opposed to shrinking it. http://www.centerforthepublicdomain.org/ foundation http://www.ibiblio.org/ organization it funds An outdated scarcity perspective in the non-profit community is still manifesting itself, however. There remains a continued emphasis on charitable projects which include plans for restricting access to the resulting publicly funded digital works now, in the hopes of creating revenue streams later. The funded organization usually proposes continuing to improve the work itself under its solitary control using money derived from selling licenses to the work. Contrast this with, for example, the post-scarcity development of the GNU/Linux operating system, made by thousands of volunteers contributing improvements to an initial base contributed by Linus Torvalds and the Free Software Foundation (FSF) GNU project. The old scarcity criterion towards selecting what makes a viable project (based on a recurring royalty stream for static content) is completely at odds with the new post-scarcity model (based more on streams of attention, status, service, and customization). The new collaborative development process made possible by the internet (resulting in a work made by sharing licenses to copyrights made by a distributed network of authors funded indirectly by other means) is fundamentally different than the old process (resulting in a work made by centralized copyright ownership with a development process funded by selling licenses to the result). how copyright ownership corrupts the non-profit mission ======================================================= One problem with the current approach is that non-profits who are paid to create proprietary content and then sell access to it are unfairly competing with for-profit companies who do the same thing. While there may always be an issue with how contributions to the public domain affect other peoples proprietary profit-making plans, conflicts between for-profit and non-profit work might be greatly lessened if all non-profit content development work was put in the public domain or under some sort of free license (copylefted or not), so everyone, for-profit and non-profit alike, could build on it in some way. This would mean there would be no situation where a non-profit, having developed some copyrighted or patented system, could use it to gain unfair advantage over a for-profit entity, because the for-profit company could always build on and extend the non-profit's work. Such policies might help foster a related worldwide culture of benevolence, cooperation, and sharing in non-profits might also improve things among an increasingly competitive non-profit culture shift, because free access to each others copyrights and patents might in turn do more to promote an attitude of friendly competition in non-profit staff instead of combat over what might seem at first to be finite resources. http://www.fsf.org/copyleft/copyleft.html copylefted This is more than anything a plea to think about how the tightly controlled ownership of copyrights can be corrupting people and organizations in the non-profit world -- because we have seen that first hand to our dismay. Please think deeply about the difference between "free" content and "subsidized" content. There is a world of difference in terms of making derived works, since free content can be given away with permission to make derived works, whereas subsidized content can't. Similarly, the common notion of "matching funds" breaks down when applied to whether a product is free (as in the French "libre" sense [think free speech], not necessarily "gratuit" sense [think free beer]). http://www.gnu.org/philosophy/categories.html think free speech Since half the match needs to come from selling licenses to the work, this means derived works can't be easily allowed. Problems also arise when a developer matches free funds with a free license to a proprietary underlying platform, because the combination can then never be free in the sense of allowing derived works. In both cases, the "free" funds from charity are contaminated by the "proprietary" contribution and the result is essentially proprietary (even when the price of the result is $0). It might be much better to have half as many truly free projects as opposed to twice as many proprietary ones, because everyone could potentially benefit from building on the free projects, so their value each might be (arbitrarily) ten to one hundred times that of proprietary ones. is it "self-dealing" to exchange public property for salary? ============================================================ Consider this way of looking at the situation. A 501(c)3 non-profit creates a digital work which is potentially of great value to the public and of great value to others who would build on that product. They could put it on the internet at basically zero cost and let everyone have it effectively for free. Or instead, they could restrict access to that work to create an artificial scarcity by requiring people to pay for licenses before accessing the content or making derived works. If they do the latter and require money for access, the non-profit can perhaps create revenue to pay the employees of the non-profit. But since the staff probably participate in the decision making about such licensing (granted, under a board who may be all volunteer), isn't that latter choice still in a way really a form of "self-dealing" -- taking public property (the content) and using it for private gain? From that point of view, perhaps restricting access is not even legal? Self-dealing might be clearer if the non-profit just got a grant, made the product, and then directly sold the work for a million dollars to Microsoft and put the money directly in the staff's pockets (who are also sometimes board members). Certainly if it was a piece of land being sold such a transaction might put people in jail. But because the content or software sales are small and generally to their mission's audience they are somehow deemed OK. To be clear, I am not concerned that the developers get paid well for their work and based on technical accomplishments. What I am concerned about is the way that the proprietary process happens such that the public (including me) never gets full access to the results of the publicly funded work (other than perhaps a few publications without substantial source). I've restricted this to talking about copyrights, but patents only make this situation worse. Right now, a patent on MP3 technology held by a non-profit (the Fraunhofer-Gesellschaft, commissioned and funded by the Federal and Lïżœnder governments): - http://www.iis.fhg.de/amm/legal/index.html - http://www.fhg.de/english/company/index.html is causing distress to free software developers, and their response is to invent a new audio encoding system. http://www.vorbis.com/ (My response to similar distress could be seen as this effort to reinvent the non-profit sector entirely. :-) This example is from Germany, but one could find similar examples in the United States. Likewise, Germany has many outstanding developers of free and open software, "Germany Leads In Open-Source Development" so this situation reflects internal conflicts in German society as well. http://content.techweb.com/wire/story/TWB20001101S0016 Germany Leads In Open-Source Development I admit this self-dealing analogy may sound at first far fetched, but perhaps that is another sign of how bad the situation has become as old economic models of paper-based content distribution break down in the internet age. Note: this is not to argue non-profits should not be able to assert "moral rights" or "privacy rights" over various types of content they produce as the situation applies. For example an artist collective might not want their digital paintings modified (even if they can be freely redistributed), or clients at a clinic might not want their digital records made publicly available. Both are digital works, but in one case "moral rights" may apply, and in the other "privacy rights" may apply. There will undoubtedly be gray areas as works fall between categories (e.g. a work of art telling how to do something). how new alternatives can work ============================= Assuming people need to make a living, how can people who deal in public domain works get paid? One may object that such a "new" scheme of sharing non-proprietary knowledge created by charitable means can never work economically. However, there are perfectly capitalistic examples where it has worked already. The "new" model of making money with public domain content is actually an old one related to guilds. Doctors and lawyers both make excellent livings working with a large body of public domain knowledge, interpreting it, customizing it, and applying it to client's specific situations. Both doctors and lawyers create new knowledge that is effectively put into the public domain in the form of medical journal articles or court proceedings. While the average person can be their own doctor or lawyer to an extent, there is so much to know including certain ways of reasoning that in practice one is usually better off getting some assistance from a professional (as well as getting some self-education to work well with that professional) than trying to go it alone. Many times grants help researchers create more information for the medical or legal public domain. But those grants don't corrupt the process, because the results are essentially available to all practitioners on an equal basis. There are some medical grants that produce drug or plant patents that probably are corrupting, but that is another issue. Patents are an example when science (which thrives on reference chains of journal articles) crosses over into technology (which thrives on incrementally improved artifacts -- and artifacts can be copyrighted or patented to prevent others from using them for a time). To help a lawyer to understand free or open source software for example, just ask her or him to think about it in terms of the law itself -- from court proceedings to legislative records. While lawyers may pay for a service like Westlaw for convenience or practical necessity, they are not paying to use the law itself, say when they make an argument in court. http://www.westlaw.com/about/ Westlaw Surely nobody would suggest the world was better off in the days of 18th-century England when a medical student had to crawl on top of a roof and look in from a skylight to find out the proprietary technique used by one group of secretive obstetricians to have a lower rate of infant and maternal mortality than their competitors: - http://web.archive.org/web/20030405130500/http://www.ogilvy.com/memorial/html/onads.htm Yet, in some ways, are drug patents or other medical technology patents really that much different than simply hiding the information to those with no choice about needing the drug and can't afford it (such as in developing nations with AIDS epidemics)? And if the answer is that they are different things, still, should charitable or tax dollars be subsidizing proprietary techniques, even for limited times? And as a deeper issue, as copyrights are effectively extended indefinitely, and as technology moves increasingly faster and faster, rendering even twenty years and eternity of many generations of technical development, any sense of a public bargain that copyrights and patents someday become public domain in a *useful* way, is starting to break down. Granted, that is an issue that goes beyond the one of purely charitably funded works, but it still is an issue charitable donors should consider. This guild-like process has already started with public software such as GNU/Linux. Competent GNU/Linux system configuration experts are now in high demand and can get good wages for dealing in purely free software. One of the things that helps prove competence in this "guild" is having contributed to the GNU/Linux kernel. [Note that historically guilds often kept their methods secret from outsiders; I'm not advocating that here.] why "new" alternatives need to work =================================== How different is the basic issue in the secretive obstetricians example above from when publicly funded non-profits put "no trespassing" signs around their copyrighted works, preventing anyone else from improving on them, or benefiting from them without paying a toll to the non-profit itself? Toll collecting imposes other external costs. Once I heard a collision happen between a few cars two lanes over while driving at the Whitestone bridge's toll plaza -- another hidden cost of tolls. People could have died, say if an airbag killed a child improperly secured in a front seat. Likewise, I had my license plate scanned and checked as I paid a toll leaving an airport parking field (according to the automated display), resulting in an extra "privacy" toll not recorded on the receipt. The tolls imposed by non-profits for licensing their copyrights can have similar negative external costs. Such tolls can contribute to causing people in developing nations to die because of lack of access to how-to information on agriculture. Such tolls can also contribute to creating a closed bureaucratic Orwellian society without privacy where every viewing of information is monitored so it can be billed (consider Acrobat Reader 5 which includes technology to scan your computer and communicate the results across the internet -- pick "Edit | DocBox | Preferences" to see the InterTrust warning and license). As mentioned earlier, such restrictions can also (through temptation) create criminals where none might have existed. Frankly, if the non-profit world of copyright creation cannot provide a model by slowly moving to a post-scarcity economic structure, when such creation is already funded in large part by charity, how can the for-profit world survive the transition without complete and painful chaos? Naturally, many non-profits like soup kitchens or Habitat for Humanity are already working on a service basis, and if they collect fees for services rendered, I'm not against that. I'm talking specifically about copyright and patent work here. examples of fine-grained cooperation in action ============================================== How could post-scarcity economics be reflected in new ways of doing things by the non-profit sector? The current growth level of the internet makes possible fine-grained voluntary collaboration on an unprecedented scale to cooperatively develop enormous creative works, exemplified by these three collaboratively developed sites: - http://www.everything2.org/ - http://dmoz.org/ - http://www.slashdot.org/ In a sense, these sites are promoting a concept which in biology is called "stigmergy". An example is how African termites build large mounds -- by getting excited at the partial structures other termites have made and adding to them, which gets even more termites excited in new ways. Essentially, these web sites are "artifact coordinated cooperation". Without some form of a free license, this form of advanced cooperation can not take place among peer, because there is neither free access to the artifact or legal permission to change it in any way to make a new derived work. Post-scarcity collaboration has also long been shown by many of the internet newsgroups, which include discussions and information on most topics of human interest, somewhat archived and indexed here: deja http://groups.google.com/googlegroups/deja_announcement.html deja At this point, I rely on these newsgroups to do a good job as a software developer when starting a new project with new technology. My technical questions are almost always asked and answered already. In short, non-profits could work together to create in total a continually improving distributed library of free digital public works covering all human needs. This would be a very different side of the internet than the one full of tolls and restrictions that many for-profit interests are working towards. For a hint of what this might someday become, read Theodore Sturgeon's short story written in the 1950s entitled "The Skills of Xanadu". That story helped inspire our (hibernating) OSCOMAK project and a related "moral license" concept. http://www.kurtz-fernhout.com/oscomak/index.htm OSCOMAK project http://www.kurtz-fernhout.com/oscomak/license.htm moral license how things go wrong with current practice ========================================= However, most non-profit organizations dealing with "know-what", "know-how", or "know-why" content (i.e. science, technology, and art/philosophy) still follow the common practice of supporting their continued existence as they transition to the internet age by attempting to make money directly selling digital public works funded by grants, the same way they used to sell text books, blueprints, or art prints. This model of fund raising has some serious negative consequences. The main one revolves around preventing collaboration by preventing easily making derived works. There are more subtle moral and ethical implications as well, which Richard Stallman points out, as the age old civic duty of sharing with a neighbor is made immoral and illegal (and repositioned linguistically as "piracy"). http://www.fsf.org/philosophy/philosophy.html Naturally, promoting sharing still needs to balance both "moral rights" of authors getting credit for their works or controlling some aspects of the presentation or alteration of aesthetic or opinion works (as opposed to functional ones), and "privacy rights" related to personal information. For more on these distinctions, see for example stallman or: http://www.fsf.org/events/rms-nyu-2001-transcript.txt http://www.ipmatters.net/webcaught/interview_stallman.html stallman Given the ease of free content distribution on the internet, to make money from content, organizations must create an artificial scarcity of their content (including text and software). This entails using copyright to impose restrictions preventing anyone from making copies of their content, so people will pay for licenses to use their content. Since derived works are also copies in a way, organizations must also prevent others from making derived works. This derived-works restriction in turns prevents cooperation through others easily building on the works. In theory, money changing hands will let things continue to happen, and sublicensing of content for derived works does happen to an extent in the commercial world. However, even if a non-profit organization is willing to license their works to others for a fee for making derived works, this entails royalty payments, carefully evaluating complex binding legal contracts, and other arrangements whose initial cost to set up and operate generally exceed any expected revenue of most subsequent charitable projects, and, further, force all derived works to be handled as commercial, not gift, transactions. Essentially, instead of having permanent lasting benefits, the initial charitable investment made by some foundation or government agency into supporting a non-profit organization's content creation process just devalues over time as the content becomes obsolete or is forgotten by the very organization that created it -- since no one else with an interest in the work can maintain it. The ironic thing is that most non-profits will probably fail to make enough money from selling their content to even justify the expenses of doing so, so the loss to humanity is for nothing more than a funding fantasy. the tragedy of the New Alchemy Institute ======================================== Yet, there are millions of individuals on the internet who might continue to improve content developed initially by non-profits, if these individuals only had the right to do so (rights that can only be granted by the copyright holder). For example, I have a large selection of publications created by the New Alchemy Institute on things like compost pile management, indoor fish farming, and geodesic dome greenhouse construction. I paid for those copies both for the information and to help support the institute. The New Alchemy Institute is now defunct. I have no right under copyright law to put these materials on a web site or to improve them , as much as I would like to do so (until about 100 years from now). Quite possibly obtaining such rights might cost more in time and money than creating such materials from scratch or completely rewriting them. Even if I got permission from someone previously affiliated with the New Alchemy Institute or its successors to do something with the materials, how could I be sure their information was accurate and their permission meaningful and legally binding? Sadly, decades of innovative and alternative non-profit R&D work done by dedicated and hardworking people at NAI is effectively lost as far as the internet audience is concerned. And that means, that R&D work is effectively lost to everyone in the world as the internet continues to supplant other forms of content distribution and use (like using inter-library loan). In the past, when most information was sold on paper and was difficult to modify, perhaps it made sense for non-profits to raise funds by selling documents (as when I purchased the New Alchemy Institute materials). But now, this old habit based on an out-dated paradigm is preventing cooperation and collaboration to create the informational underpinnings of a post-scarcity society demonstrating knowledge democratization. For me, the deepest tragedy of the New Alchemy Institute is somewhat personal. I visited NAI around 1989 and later gave an invited talk there to some interns, while a graduate student at Princeton. I wanted to make a library on sustainable technology and related simulations, and NAI had an extensive library on such topics and an interested member base and even some Macintosh computers. But we never connected -- in part because I was too shy and couldn't think of something coherent and fair to propose as a way out of my boxes of being a PhD graduate student and thinking in terms of a for-profit company selling proprietary software requiring a substantial investment, and out of their boxes of being mainly an agricultural technology R&D facility, selling products and papers via their catalogue, and giving interns room and board for doing manual labor. I was very saddened by the newsletter announcing their demise around 1991, because I felt that working together on a digital library of alternative technology we might have prevented that. [And ironically Richard Stallman with his Free Software vision in Cambridge was only about seventy-five miles away from NAI.] For reference, all the NAI publications themselves are supposedly available through inter-library loan at the American Archives of Agriculture (AAA), located at Iowa State University. The library itself became part of a "Green Center" at the same location, but I am not sure if that is still in operation, and in any case NAI would have no way to grant permissions for putting any works but its own on-line. Such works would ultimately have to be rewritten from multiple sources to be put on-line, a project probably worth doing, but something that would take far more effort than putting on-line what exists. proprietary vs. free content producer example ============================================= How can we prevent such tragedies from happening again and again, even for internet-connected non-profits? One possibility is simply for non-profits from the start to put their creative works under licenses allowing redistribution and the making of derived works. As a corollary, they must then obtain their funding from ways other than selling licenses to use copyrighted works. They can still sell permission to access an archive, as long as the works including the entire archive are freely redistributable once accessed. Contrast, for example, this proprietary work of hundreds of appropriate technology publications sold as micro-fiche or CD-ROM which is still pretty much as it was ten years ago: "The Appropriate Technology Library" with this blossoming free library to aid developing nations which is available directly over the web: "The Humanity Libraries Project" http://www.villageearth.org/ATLibrary/cdrom.htm "The Appropriate Technology Library" http://www.humaninfo.org/ The Humanity Libraries Project Which one has more of a future given the internet? Which one could continue be improved if the supporting organization were to suddenly become defunct? Which organization and development process is then really the lower risk "investment" for a foundation grant? The Humanity Libraries Project is the exception to the rule. The difficulties they face and the solutions they see to them (for example, starting a petition just to get the UN to freely license its content so people who need it can get it) just show how bad the situation has gotten and how ingrained the old habits are. Their petition idea helped inspire this essay on enlarging the issue to being about the copyrights of all non-profits, no just the UN and directly related NGOs. Copyright for most government funded work goes to the for-profit contractor, who usually just sits on the work because it is more expensive and risky to market a copyright than to get another government contract. Copyright for most foundation supported work goes to the non-profit, who also usually just sits on the work or makes only token efforts at marketing because it is more expensive and risky to market a copyright than to get another foundation grant. Perhaps an occasional exception is museums who show in-house created digital works until they become obsolete in a restricted setting (generally entered only after the patron pays a general admission fee). In some ways, the state of non-profit copyright ownership and licensing is so bad we don't even notice the issue anymore. digital public works are not physical public works ================================================== The fundamentally flawed concept is that digital public works are like physical public works. When one creates a physical public work like a bridge, it may make sense to charge a toll to pay for its construction or upkeep -- although even that is questionable, see for example: http://www.gnu.org/philosophy/shouldbefree.html This physical public works paradigm is unfortunately then applied to thinking about most digital public works, and there is a major flaw in the analogy. A bridge does not require much marketing. It's highly visible by the nature of what it is and how it is built. Things are different in the content and software realm. Marketing costs for any commercially successful software product are typically ten times that of creation costs. Many well funded marketing efforts fail. So, almost all projects funded by foundations with an intent to be marketed later using other funds will fail because the funds won't materialize. Likewise, because the costs of production are small relative to marketing, there is usually little value in other's licensing the works (at typically inflated fees) as opposed to just making new ones since the marketing costs are the dominating factor. Word-of-mouth marketing strategies can lower marketing costs, but it may increase support costs, and it also often takes years. This is far beyond the funding horizon of most non-profits with paid staff. Freely distributed collaborative efforts like GNU/Linux may survive long enough for word-of-mouth to help them -- but that requires a different approach to licensing. patents, blueprints, and journal articles are "leftovers" today=== ================================================================== Plenty of public money is being spent -- it just is not connecting to the community as digital public works. This failure to connect is also in part because of another notion -- that patents and scientific journal articles as funding "leftovers" are sufficient detail to support a free technological civilization. For an example of why this doesn't work, researchers at NASA just discovered NASA doesn't have the rights to the 3D CAD models of the International Space Station or the Space Shuttle. They had wanted to make a virtual reality model of those for further research and development of ergonomic design. Such plans are now on hold until new arrangements can be worked out with the contractors. Funding organizations need to break out of the mindset that the organization doing the work to create something (in this case a NASA contractor) should necessarily be the one to shepherd that work in the future, and that in order to shepherd the work, their exclusive ownership of most of the aspects of the work is justified. Both these premises are flawed in the internet age. One group can create something under a free license and another group can extend it if they have the interest. A group who initially creates something under a free license can shepherd a process involving members of the public contributing under similar free licenses. There is a real question here of how our society will proceed -- mainly closed or mainly open. It is reflected in everything the non-profit world does -- including the myths it lives by. The choice of myth can be made in part by the funding policies set by foundations and government agencies. The myth that funders may be living by is the scarcity economics myth. How does that myth effect the digital public works funding cycle? the cycle of failure ==================== Essentially, most digital public works funded by the government or foundations follow this process: - public money is paid to some organization to develop some seemingly useful digital work either as a "prototype" or as a "product", - the contractor argues it is important to create an artificial scarcity for the work through copyright to ensure future support of new versions of the work by the contractor without the need for future grants, - without marketing, which is almost always more expensive than expected (everyone hopes word-of-mouth will be enough for an overnight success), the work fails to attract enough interest to justify continued distribution and minimal support costs, - the work is quickly outdated given limited original investment in it and rapidly changing platforms and needs, plus the PI wants to move onto other things, and so, - the cycle repeats, since an organization that has learned how to get one grant probably knows better than anything else how to get another. Very rarely, the project is a "success" in the sense of being able to become self sustaining economically after generally a large number of funding cycles. At that point, the idea is "commercialized" often by the private sector and often someone makes a lot of money. Essentially, a lottery ticket has paid off -- for one group out of hundreds or thousands. To an extent, the logic behind all this is similar to when the US Forest service puts in $100 of logging roads for $1 in logging fees, because supposedly cheap access to timber will promote the US economy and welfare of US citizens (even if the timber gets sold to Japan). In the forest example, it is the public wilderness and those who would enjoy it spiritually or physically who suffer. In the non-profit example, it is the public domain of copyright that suffers, and likely also public privacy and public safety. However, the same logic could be applied to the results of creating a directory of organic food suppliers or a book about how to achieve world peace. Restricting access to all of them is a result of the same scarcity mythology, and the exponential growth of technology requires a new funding mythos. encouraging successful collaboration ==================================== To break that cycle, what needs to be done? The mythology of funding needs to shift to fostering the creation of free works of public value. There needs to be a faith that such works if they are of value will eventually attract further support (from public or private sources). How can that new mythology be implemented on a practical basis? Here are some ideas: 1. Support free content creation processes more than specific products. 2. Support people and organizations participating in those processes, either those making free content or those shepherding free processes. 3. Don't encourage organizations to become self supporting by selling licenses for copyrights or patents. Suggest instead they sell services, customization, or memberships if they want to become self-supporting -- but such things are hard to do so don't insist on them. 4. Reward with more grants people and organizations who actually make important free content (however that is judged). It is very hard to make effective grants, no matter how knowledgeable, hardworking, and dedicated the foundation staff and board is. Michael Phillips talks about this in the book "The Seven Laws of Money" based on his experience on the board of the Point Foundation. So obviously, this is all easier said than done. Actually, Michael Phillips argues in practice it is impossible to give successful external grants, but perhaps this new funding mythology of supporting free content may change the granting landscape enough that some external grants will produce good things, since at some point grant applicants could be judged on a portfolio of previously developed free content in addition to perceived public value for proposed new efforts. what about special case like drug research? =========================================== One can make a point on the issue of exclusive rights as far as attracting additional investment to get something so it is generally acceptable for widespread use. In the case of new drugs, it may take hundreds of millions of dollars in investment in clinical studies beyond a drugs initial invention. Still, would it really ever be the case that if all drug research was done in the public domain our society could never under any circumstance find a way to put into production new drugs, even if it meant making some changes to how drugs are tested or produced? The private sector should IMHO provide value added to the public domain, and if it can't, the situation needs to be rethought. Clearly with trillions of dollars a year spent on health care, there is a huge incentive for insurance companies and the government (Medicare/Medicaid) to fund the creation of effective drugs to reduce other long term care costs, even at half a billion a drug. >From what little I understand of the drug industry, most drug research by drug companies is actually to make "me too" clones of existing drugs (with the original novel drugs typically derived from government funded research and studies and signed over cheaply to drug companies), so drug companies are one of the worst examples of dysfunctional public/private sector investment patterns. Additionally, drug companies generally don't invest in research on drugs of great value to large numbers of people (e.g. river blindness or malaria) if they don't see as much profit in it as the next version of something already popular (and not really needed as much if at all). One approach is to disconnect drug manufacturing and sales from drug research and drug testing. Why should the two go together? Certainly after a drug patent expires, I can still buy Aspirin or other generic drugs, and drug vendors can compete on price, availability, packaging, and quality. So if research and studies were done purely using public funds then there wouldn't be this issue. Granted, if FDA approval is excessively costly for novel drugs, ways should be considered to streamline it without compromising safety excessively. In general, the future prospect is for "designer drugs" targeted to individuals' biochemistries in the future (perhaps based on genetic and other individual based testing), so this whole expensive drug approval process is going to have to be rethought anyway. please keep charitable content free; ask peers to do likewise ============================================================= In conclusion, please, please look seriously at the copyright policies of individuals and organizations you do fund. Please insist all the creative work you fund is communicated to the public under free or open licenses or returned to the public domain. - http://www.fsf.org/philosophy/license-list.html - http://www.opensource.org/ And please encourage other peers in foundations and government agencies to do likewise. That way, at least others can build on top of the efforts of people you do fund. That would at least be a big improvement over the current situation. â Original: https://pdfernhout.net/open-letter-to-grantmakers-and-donors-on-copyright-policy.html ⧠/# ⧠|
Paul Fernhout |
2001 |
6987 |
34.9 |
| The Economy of Ideas |
The Economy of Ideas ==================== by John Perry Barlow https://x.com/jpbarlow John Perry Barlow March 1, 1994 Original: https://groups.csail.mit.edu/mac/classes/6.805/articles/int-prop/barlow-economy-of-ideas.html A framework for rethinking patents and copyrights in the Digital Age ==================================================================== (Everything you know about intellectual property is wrong) ========================================================== > "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property." - Thomas Jefferson Throughout the time I've been groping around cyberspace, an immense, unsolved conundrum has remained at the root of nearly every legal, ethical, governmental, and social vexation to be found in the Virtual World. I refer to the problem of digitized property. The enigma is this: If our property can be infinitely reproduced and instantaneously distributed all over the planet without cost, without our knowledge, without its even leaving our possession, how can we protect it? How are we going to get paid for the work we do with our minds? And, if we can't get paid, what will assure the continued creation and distribution of such work? Since we don't have a solution to what is a profoundly new kind of challenge, and are apparently unable to delay the galloping digitization of everything not obstinately physical, we are sailing into the future on a sinking ship. This vessel, the accumulated canon of copyright and patent law, was developed to convey forms and methods of expression entirely different from the vaporous cargo it is now being asked to carry. It is leaking as much from within as from without. Legal efforts to keep the old boat floating are taking three forms: a frenzy of deck chair rearrangement, stern warnings to the passengers that if she goes down, they will face harsh criminal penalties, and serene, glassy-eyed denial. Intellectual property law cannot be patched, retrofitted, or expanded to contain digitized expression any more than real estate law might be revised to cover the allocation of broadcasting spectrum (which, in fact, rather resembles what is being attempted here). We will need to develop an entirely new set of methods as befits this entirely new set of circumstances. Most of the people who actually create soft property - the programmers, hackers, and Net surfers - already know this. Unfortunately, neither the companies they work for nor the lawyers these companies hire have enough direct experience with nonmaterial goods to understand why they are so problematic. They are proceeding as though the old laws can somehow be made to work, either by grotesque expansion or by force. They are wrong. The source of this conundrum is as simple as its solution is complex. Digital technology is detaching information from the physical plane, where property law of all sorts has always found definition. Throughout the history of copyrights and patents, the proprietary assertions of thinkers have been focused not on their ideas but on the expression of those ideas. The ideas themselves, as well as facts about the phenomena of the world, were considered to be the collective property of humanity. One could claim franchise, in the case of copyright, on the precise turn of phrase used to convey a particular idea or the order in which facts were presented. The point at which this franchise was imposed was that moment when the "word became flesh" by departing the mind of its originator and entering some physical object, whether book or widget. The subsequent arrival of other commercial media besides books didn't alter the legal importance of this moment. Law protected expression and, with few (and recent) exceptions, to express was to make physical. Protecting physical expression had the force of convenience on its side. Copyright worked well because, Gutenberg notwithstanding, it was hard to make a book. Furthermore, books froze their contents into a condition which was as challenging to alter as it was to reproduce. Counterfeiting and distributing counterfeit volumes were obvious and visible activities - it was easy enough to catch somebody in the act of doing. Finally, unlike unbounded words or images, books had material surfaces to which one could attach copyright notices, publisher's marques, and price tags. Mental-to-physical conversion was even more central to patent. A patent, until recently, was either a description of the form into which materials were to be rendered in the service of some purpose, or a description of the process by which rendition occurred. In either case, the conceptual heart of patent was the material result. If no purposeful object could be rendered because of some material limitation, the patent was rejected. Neither a Klein bottle nor a shovel made of silk could be patented. It had to be a thing, and the thing had to work. Thus, the rights of invention and authorship adhered to activities in the physical world. One didn't get paid for ideas, but for the ability to deliver them into reality. For all practical purposes, the value was in the conveyance and not in the thought conveyed. In other words, the bottle was protected, not the wine. Now, as information enters cyberspace, the native home of Mind, these bottles are vanishing. With the advent of digitization, it is now possible to replace all previous information storage forms with one metabottle: complex and highly liquid patterns of ones and zeros. Even the physical/digital bottles to which we've become accustomed - floppy disks, CD-ROMs, and other discrete, shrink-wrappable bit-packages - will disappear as all computers jack-in to the global Net. While the Internet may never include every CPU on the planet, it is more than doubling every year and can be expected to become the principal medium of information conveyance, and perhaps eventually, the only one. Once that has happened, all the goods of the Information Age - all of the expressions once contained in books or film strips or newsletters - will exist either as pure thought or something very much like thought: voltage conditions darting around the Net at the speed of light, in conditions that one might behold in effect, as glowing pixels or transmitted sounds, but never touch or claim to "own" in the old sense of the word. Some might argue that information will still require some physical manifestation, such as its magnetic existence on the titanic hard disks of distant servers, but these are bottles which have no macroscopically discrete or personally meaningful form. Some will also argue that we have been dealing with unbottled expression since the advent of radio, and they would be right. But for most of the history of broadcast, there was no convenient way to capture soft goods from the electromagnetic ether and reproduce them with quality available in commercial packages. Only recently has this changed, and little has been done legally or technically to address the change. Generally, the issue of consumer payment for broadcast products was irrelevant. The consumers themselves were the product. Broadcast media were supported either by the sale of the attention of their audience to advertisers, by government assessing payment through taxes, or by the whining mendicancy of annual donor drives. All of the broadcast-support models are flawed. Support either by advertisers or government has almost invariably tainted the purity of the goods delivered. Besides, direct marketing is gradually killing the advertiser-support model anyway. Broadcast media gave us another payment method for a virtual product: the royalties that broadcasters pay songwriters through such organizations as ASCAP and BMI. But, as a member of ASCAP, I can assure you this is not a model that we should emulate. The monitoring methods are wildly approximate. There is no parallel system of accounting in the revenue stream. It doesn't really work. Honest. In any case, without our old methods, based on physically defining the expression of ideas, and in the absence of successful new models for nonphysical transaction, we simply don't know how to assure reliable payment for mental works. To make matters worse, this comes at a time when the human mind is replacing sunlight and mineral deposits as the principal source of new wealth. Furthermore, the increasing difficulty of enforcing existing copyright and patent laws is already placing in peril the ultimate source of intellectual property - the free exchange of ideas. That is, when the primary articles of commerce in a society look so much like speech as to be indistinguishable from it, and when the traditional methods of protecting their ownership have become ineffectual, attempting to fix the problem with broader and more vigorous enforcement will inevitably threaten freedom of speech. The greatest constraint on your future liberties may come not from government but from corporate legal departments laboring to protect by force what can no longer be protected by practical efficiency or general social consent. Furthermore, when Jefferson and his fellow creatures of the Enlightenment designed the system that became American copyright law, their primary objective was assuring the widespread distribution of thought, not profit. Profit was the fuel that would carry ideas into the libraries and minds of their new republic. Libraries would purchase books, thus rewarding the authors for their work in assembling ideas; these ideas, otherwise "incapable of confinement," would then become freely available to the public. But what is the role of libraries in the absence of books? How does society now pay for the distribution of ideas if not by charging for the ideas themselves? Additionally complicating the matter is the fact that along with the disappearance of the physical bottles in which intellectual property protection has resided, digital technology is also erasing the legal jurisdictions of the physical world and replacing them with the unbounded and perhaps permanently lawless waves of cyberspace. In cyberspace, no national or local boundaries contain the scene of a crime and determine the method of its prosecution; worse, no clear cultural agreements define what a crime might be. Unresolved and basic differences between Western and Asian cultural assumptions about intellectual property can only be exacerbated when many transactions are taking place in both hemispheres and yet, somehow, in neither. Even in the most local of digital conditions, jurisdiction and responsibility are hard to assess. A group of music publishers filed suit against CompuServe this fall because it allowed its users to upload musical compositions into areas where other users might access them. But since CompuServe cannot practically exercise much control over the flood of bits that passes between its subscribers, it probably shouldn't be held responsible for unlawfully "publishing" these works. Notions of property, value, ownership, and the nature of wealth itself are changing more fundamentally than at any time since the Sumerians first poked cuneiform into wet clay and called it stored grain. Only a very few people are aware of the enormity of this shift, and fewer of them are lawyers or public officials. Those who do see these changes must prepare responses for the legal and social confusion that will erupt as efforts to protect new forms of property with old methods become more obviously futile, and, as a consequence, more adamant. From Swords to Writs to Bits ============================ Humanity now seems bent on creating a world economy primarily based on goods that take no material form. In doing so, we may be eliminating any predictable connection between creators and a fair reward for the utility or pleasure others may find in their works. Without that connection, and without a fundamental change in consciousness to accommodate its loss, we are building our future on furor, litigation, and institutionalized evasion of payment except in response to raw force. We may return to the Bad Old Days of property. Throughout the darker parts of human history, the possession and distribution of property was a largely military matter. "Ownership" was assured those with the nastiest tools, whether fists or armies, and the most resolute will to use them. Property was the divine right of thugs. By the turn of the First Millennium AD, the emergence of merchant classes and landed gentry forced the development of ethical understandings for the resolution of property disputes. In the Middle Ages, enlightened rulers like England's Henry II began to codify this unwritten "common law" into recorded canons. These laws were local, which didn't matter much as they were primarily directed at real estate, a form of property that is local by definition. And, as the name implied, was very real. This continued to be the case as long as the origin of wealth was agricultural, but with that dawning of the Industrial Revolution, humanity began to focus as much on means as ends. Tools acquired a new social value and, thanks to their development, it became possible to duplicate and distribute them in quantity. To encourage their invention, copyright and patent law were developed in most Western countries. These laws were devoted to the delicate task of getting mental creations into the world where they could be used - and could enter the minds of others - while assuring their inventors compensation for the value of their use. And, as previously stated, the systems of both law and practice which grew up around that task were based on physical expression. Since it is now possible to convey ideas from one mind to another without ever making them physical, we are now claiming to own ideas themselves and not merely their expression. And since it is likewise now possible to create useful tools that never take physical form, we have taken to patenting abstractions, sequences of virtual events, and mathematical formulae - the most unreal estate imaginable. In certain areas, this leaves rights of ownership in such an ambiguous condition that property again adheres to those who can muster the largest armies. The only difference is that this time the armies consist of lawyers. Threatening their opponents with the endless purgatory of litigation, over which some might prefer death itself, they assert claim to any thought which might have entered another cranium within the collective body of the corporations they serve. They act as though these ideas appeared in splendid detachment from all previous human thought. And they pretend that thinking about a product is somehow as good as manufacturing, distributing, and selling it. What was previously considered a common human resource, distributed among the minds and libraries of the world, as well as the phenomena of nature herself, is now being fenced and deeded. It is as though a new class of enterprise had arisen that claimed to own the air. What is to be done? While there is a certain grim fun to be had in it, dancing on the grave of copyright and patent will solve little, especially when so few are willing to admit that the occupant of this grave is even deceased, and so many are trying to uphold by force what can no longer be upheld by popular consent. The legalists, desperate over their slipping grip, are vigorously trying to extend their reach. Indeed, the United States and other proponents of GATT are making adherence to our moribund systems of intellectual property protection a condition of membership in the marketplace of nations. For example, China will be denied Most Favored Nation trading status unless they agree to uphold a set of culturally alien principles that are no longer even sensibly applicable in their country of origin. In a more perfect world, we'd be wise to declare a moratorium on litigation, legislation, and international treaties in this area until we had a clearer sense of the terms and conditions of enterprise in cyberspace. Ideally, laws ratify already developed social consensus. They are less the Social Contract itself than a series of memoranda expressing a collective intent that has emerged out of many millions of human interactions. Humans have not inhabited cyberspace long enough or in sufficient diversity to have developed a Social Contract which conforms to the strange new conditions of that world. Laws developed prior to consensus usually favor the already established few who can get them passed and not society as a whole. To the extent that law and established social practice exists in this area, they are already in dangerous disagreement. The laws regarding unlicensed reproduction of commercial software are clear and stern...and rarely observed. Software piracy laws are so practically unenforceable and breaking them has become so socially acceptable that only a thin minority appears compelled, either by fear or conscience, to obey them. When I give speeches on this subject, I always ask how many people in the audience can honestly claim to have no unauthorized software on their hard disks. I've never seen more than 10 percent of the hands go up. Whenever there is such profound divergence between law and social practice, it is not society that adapts. Against the swift tide of custom, the software publishers' current practice of hanging a few visible scapegoats is so obviously capricious as to only further diminish respect for the law. Part of the widespread disregard for commercial software copyrights stems from a legislative failure to understand the conditions into which it was inserted. To assume that systems of law based in the physical world will serve in an environment as fundamentally different as cyberspace is a folly for which everyone doing business in the future will pay. As I will soon discuss in detail, unbounded intellectual property is very different from physical property and can no longer be protected as though these differences did not exist. For example, if we continue to assume that value is based on scarcity, as it is with regard to physical objects, we will create laws that are precisely contrary to the nature of information, which may, in many cases, increase in value with distribution. The large, legally risk-averse institutions most likely to play by the old rules will suffer for their compliance. As more lawyers, guns, and money are invested in either protecting their rights or subverting those of their opponents, their ability to produce new technology will simply grind to a halt as every move they make drives them deeper into a tar pit of courtroom warfare. Faith in law will not be an effective strategy for high-tech companies. Law adapts by continuous increments and at a pace second only to geology. Technology advances in lunging jerks, like the punctuation of biological evolution grotesquely accelerated. Real-world conditions will continue to change at a blinding pace, and the law will lag further behind, more profoundly confused. This mismatch may prove impossible to overcome. Promising economies based on purely digital products will either be born in a state of paralysis, as appears to be the case with multimedia, or continue in a brave and willful refusal by their owners to play the ownership game at all. In the United States one can already see a parallel economy developing, mostly among small, fast moving enterprises who protect their ideas by getting into the marketplace quicker then their larger competitors who base their protection on fear and litigation. Perhaps those who are part of the problem will simply quarantine themselves in court, while those who are part of the solution will create a new society based, at first, on piracy and freebooting. It may well be that when the current system of intellectual property law has collapsed, as seems inevitable, that no new legal structure will arise in its place. But something will happen. After all, people do business. When a currency becomes meaningless, business is done in barter. When societies develop outside the law, they develop their own unwritten codes, practices, and ethical systems. While technology may undo law, technology offers methods for restoring creative rights. A Taxonomy of Information ========================= It seems to me that the most productive thing to do now is to look into the true nature of what we're trying to protect. How much do we really know about information and its natural behaviors? What are the essential characteristics of unbounded creation? How does it differ from previous forms of property? How many of our assumptions about it have actually been about its containers rather than their mysterious contents? What are its different species and how does each of them lend itself to control? What technologies will be useful in creating new virtual bottles to replace the old physical ones? Of course, information is, by nature, intangible and hard to define. Like other such deep phenomena as light or matter, it is a natural host to paradox. It is most helpful to understand light as being both a particle and a wave, an understanding of information may emerge in the abstract congruence of its several different properties which might be described by the following three statements: Information is an activity. Information is a life form. Information is a relationship. In the following section, I will examine each of these. I. INFORMATION IS AN ACTIVITY ============================= Information Is a Verb, Not a Noun. ================================== Freed of its containers, information is obviously not a thing. In fact, it is something that happens in the field of interaction between minds or objects or other pieces of information. Gregory Bateson, expanding on the information theory of Claude Shannon, said, "Information is a difference which makes a difference." Thus, information only really exists in the Delta. The making of that difference is an activity within a relationship. Information is an action which occupies time rather than a state of being which occupies physical space, as is the case with hard goods. It is the pitch, not the baseball, the dance, not the dancer. Information Is Experienced, Not Possessed. ========================================== Even when it has been encapsulated in some static form like a book or a hard disk, information is still something that happens to you as you mentally decompress it from its storage code. But, whether it's running at gigabits per second or words per minute, the actual decoding is a process that must be performed by and upon a mind, a process that must take place in time. There was a cartoon in the Bulletin of Atomic Scientists a few years ago that illustrated this point beautifully. In the drawing, a holdup man trains his gun on the sort of bespectacled fellow you'd figure might have a lot of information stored in his head. "Quick," orders the bandit, "give me all your ideas." Information Has to Move. ======================== Sharks are said to die of suffocation if they stop swimming, and the same is nearly true of information. Information that isn't moving ceases to exist as anything but potential...at least until it is allowed to move again. For this reason, the practice of information hoarding, common in bureaucracies, is an especially wrong-headed artifact of physically based value systems. Information Is Conveyed by Propagation, Not Distribution. ========================================================= The way in which information spreads is also very different from the distribution of physical goods. It moves more like something from nature than from a factory. It can concatenate like falling dominos or grow in the usual fractal lattice, like frost spreading on a window, but it cannot be shipped around like widgets, except to the extent that it can be contained in them. It doesn't simply move on; it leaves a trail everywhere it's been. The central economic distinction between information and physical property is that information can be transferred without leaving the possession of the original owner. If I sell you my horse, I can't ride him after that. If I sell you what I know, we both know it. II. INFORMATION IS A LIFE FORM ============================== Information Wants to Be Free. ============================= Stewart Brand is generally credited with this elegant statement of the obvious, which recognizes both the natural desire of secrets to be told and the fact that they might be capable of possessing something like a "desire" in the first place. English biologist and philosopher Richard Dawkins proposed the idea of "memes," self-replicating patterns of information that propagate themselves across the ecologies of mind, a pattern of reproduction much like that of life forms. I believe they are life forms in every respect but their freedom from the carbon atom. They self-reproduce, they interact with their surroundings and adapt to them, they mutate, they persist. They evolve to fill the empty niches of their local environments, which are, in this case the surrounding belief systems and cultures of their hosts, namely, us. Indeed, sociobiologists like Dawkins make a plausible case that carbon-based life forms are information as well, that, as the chicken is an egg's way of making another egg, the entire biological spectacle is just the DNA molecule's means of copying out more information strings exactly like itself. Information Replicates into the Cracks of Possibility. ====================================================== Like DNA helices, ideas are relentless expansionists, always seeking new opportunities for Lebensraum. And, as in carbon-based nature, the more robust organisms are extremely adept at finding new places to live. Thus, just as the common housefly has insinuated itself into practically every ecosystem on the planet, so has the meme of "life after death" found a niche in most minds, or psycho-ecologies. The more universally resonant an idea or image or song , the more minds it will enter and remain within. Trying to stop the spread of a really robust piece of information is about as easy as keeping killer bees south of the border. Information Wants to Change. ============================ If ideas and other interactive patterns of information are indeed life forms, they can be expected to evolve constantly into forms which will be more perfectly adapted to their surroundings. And, as we see, they are doing this all the time. But for a long time, our static media, whether carvings in stone, ink on paper, or dye on celluloid, have strongly resisted the evolutionary impulse, exalting as a consequence the author's ability to determine the finished product. But, as in an oral tradition, digitized information has no "final cut." Digital information, unconstrained by packaging, is a continuing process more like the metamorphosing tales of prehistory than anything that will fit in shrink-wrap. From the Neolithic to Gutenberg (monks aside), information was passed on, mouth to ear, changing with every retelling (or resinging). The stories which once shaped our sense of the world didn't have authoritative versions. They adapted to each culture in which they found themselves being told. Because there was never a moment when the story was frozen in print, the so-called "moral" right of storytellers to own the tale was neither protected nor recognized. The story simply passed through each of them on its way to the next, where it would assume a different form. As we return to continuous information, we can expect the importance of authorship to diminish. Creative people may have to renew their acquaintance with humility. But our system of copyright makes no accommodation whatever for expressions which don't become fixed at some point nor for cultural expressions which lack a specific author or inventor. Jazz improvisations, stand-up comedy routines, mime performances, developing monologues, and unrecorded broadcast transmissions all lack the Constitutional requirement of fixation as a "writing." Without being fixed by a point of publication the liquid works of the future will all look more like these continuously adapting and changing forms and will therefore exist beyond the reach of copyright. Copyright expert Pamela Samuelson tells of having attended a conference last year convened around the fact that Western countries may legally appropriate the music, designs, and biomedical lore of aboriginal people without compensation to their tribes of origin since those tribes are not an "author" or "inventors." But soon most information will be generated collaboratively by the cyber-tribal hunter-gatherers of cyberspace. Our arrogant legal dismissal of the rights of "primitives" will be soon return to haunt us. Information Is Perishable. ========================== With the exception of the rare classic, most information is like farm produce. Its quality degrades rapidly both over time and in distance from the source of production. But even here, value is highly subjective and conditional. Yesterday's papers are quite valuable to the historian. In fact, the older they are, the more valuable they become. On the other hand, a commodities broker might consider news of an event that occurred more than an hour ago to have lost any relevance. III. INFORMATION IS A RELATIONSHIP ================================== Meaning Has Value and Is Unique to Each Case. ============================================= In most cases, we assign value to information based on its meaningfulness. The place where information dwells, the holy moment where transmission becomes reception, is a region which has many shifting characteristics and flavors depending on the relationship of sender and receiver, the depth of their interactivity. Each such relationship is unique. Even in cases where the sender is a broadcast medium, and no response is returned, the receiver is hardly passive. Receiving information is often as creative an act as generating it. The value of what is sent depends entirely on the extent to which each individual receiver has the receptors - shared terminology, attention, interest, language, paradigm - necessary to render what is received meaningful. Understanding is a critical element increasingly overlooked in the effort to turn information into a commodity. Data may be any set of facts, useful or not, intelligible or inscrutable, germane or irrelevant. Computers can crank out new data all night long without human help, and the results may be offered for sale as information. They may or may not actually be so. Only a human being can recognize the meaning that separates information from data. In fact, information, in the economic sense of the word, consists of data which have been passed through a particular human mind and found meaningful within that mental context. One fella's information is all just data to someone else. If you're an anthropologist, my detailed charts of Tasaday kinship patterns might be critical information to you. If you're a banker from Hong Kong, they might barely seem to be data. Familiarity Has More Value than Scarcity. ========================================= With physical goods, there is a direct correlation between scarcity and value. Gold is more valuable than wheat, even though you can't eat it. While this is not always the case, the situation with information is often precisely the reverse. Most soft goods increase in value as they become more common. Familiarity is an important asset in the world of information. It may often be true that the best way to raise demand for your product is to give it away. While this has not always worked with shareware, it could be argued that there is a connection between the extent to which commercial software is pirated and the amount which gets sold. Broadly pirated software, such as Lotus 1-2-3 or WordPerfect, becomes a standard and benefits from Law of Increasing Returns based on familiarity. In regard to my own soft product, rock 'n' roll songs, there is no question that the band I write them for, the Grateful Dead, has increased its popularity enormously by giving them away. We have been letting people tape our concerts since the early seventies, but instead of reducing the demand for our product, we are now the largest concert draw in America, a fact that is at least in part attributable to the popularity generated by those tapes. True, I don't get any royalties on the millions of copies of my songs which have been extracted from concerts, but I see no reason to complain. The fact is, no one but the Grateful Dead can perform a Grateful Dead song, so if you want the experience and not its thin projection, you have to buy a ticket from us. In other words, our intellectual property protection derives from our being the only real-time source of it. Exclusivity Has Value. ====================== The problem with a model that turns the physical scarcity/value ratio on its head is that sometimes the value of information is very much based on its scarcity. Exclusive possession of certain facts makes them more useful. If everyone knows about conditions which might drive a stock price up, the information is valueless. But again, the critical factor is usually time. It doesn't matter if this kind of information eventually becomes ubiquitous. What matters is being among the first who possess it and act on it. While potent secrets usually don't stay secret, they may remain so long enough to advance the cause of their original holders. Point of View and Authority Have Value. ======================================= In a world of floating realities and contradictory maps, rewards will accrue to those commentators whose maps seem to fit their territory snugly, based on their ability to yield predictable results for those who use them. In aesthetic information, whether poetry or rock 'n' roll, people are willing to buy the new product of an artist, sight-unseen, based on their having been delivered a pleasurable experience by previous work. Reality is an edit. People are willing to pay for the authority of those editors whose point of view seems to fit best. And again, point of view is an asset which cannot be stolen or duplicated. No one sees the world as Esther Dyson does, and the handsome fee she charges for her newsletter is actually payment for the privilege of looking at the world through her unique eyes. Time Replaces Space. ==================== In the physical world, value depends heavily on possession or proximity in space. One owns the material that falls inside certain dimensional boundaries. The ability to act directly, exclusively, and as one wishes upon what falls inside those boundaries is the principal right of ownership. The relationship between value and scarcity is a limitation in space. In the virtual world, proximity in time is a value determinant. An informational product is generally more valuable the closer purchaser can place themselves to the moment of its expression, a limitation in time. Many kinds of information degrade rapidly with either time or reproduction. Relevance fades as the territory they map changes. Noise is introduced and bandwidth lost with passage away from the point where the information is first produced. Thus, listening to a Grateful Dead tape is hardly the same experience as attending a Grateful Dead concert. The closer one can get to the headwaters of an informational stream, the better one's chances of finding an accurate picture of reality in it. In an era of easy reproduction, the informational abstractions of popular experiences will propagate out from their source moments to reach anyone who's interested. But it's easy enough to restrict the real experience of the desirable event, whether knock-out punch or guitar lick, to those willing to pay for being there. The Protection of Execution =========================== In the hick town I come from, they don't give you much credit for just having ideas. You are judged by what you can make of them. As things continue to speed up, I think we see that execution is the best protection for those designs which become physical products. Or, as Steve Jobs once put it, "Real artists ship." The big winner is usually the one who gets to the market first (and with enough organizational force to keep the lead). But, as we become fixated upon information commerce, many of us seem to think that originality alone is sufficient to convey value, deserving, with the right legal assurances, of a steady wage. In fact, the best way to protect intellectual property is to act on it. It's not enough to invent and patent; one has to innovate as well. Someone claims to have patented the microprocessor before Intel. Maybe so. If he'd actually started shipping microprocessors before Intel, his claim would seem far less spurious. Information as Its Own Reward ============================= It is now a commonplace to say that money is information. With the exception of Krugerrands, crumpled cab fare, and the contents of those suitcases that drug lords are reputed to carry, most of the money in the informatized world is in ones and zeros. The global money supply sloshes around the Net, as fluid as weather. It is also obvious, that information has become as fundamental to the creation of modern wealth as land and sunlight once were. What is less obvious is the extent to which information is acquiring intrinsic value, not as a means to acquisition but as the object to be acquired. I suppose this has always been less explicitly the case. In politics and academia, potency and information have always been closely related. However, as we increasingly buy information with money, we begin to see that buying information with other information is simple economic exchange without the necessity of converting the product into and out of currency. This is somewhat challenging for those who like clean accounting, since, information theory aside, informational exchange rates are too squishy to quantify to the decimal point. Nevertheless, most of what a middle-class American purchases has little to do with survival. We buy beauty, prestige, experience, education, and all the obscure pleasures of owning. Many of these things can not only be expressed in nonmaterial terms, they can be acquired by nonmaterial means. And then there are the inexplicable pleasures of information itself, the joys of learning, knowing, and teaching; the strange good feeling of information coming into and out of oneself. Playing with ideas is a recreation which people are willing to pay a lot for, given the market for books and elective seminars. We'd likely spend even more money for such pleasures if we didn't have so many opportunities to pay for ideas with other ideas. This explains much of the collective "volunteer" work which fills the archives, newsgroups, and databases of the Internet. Its denizens are not working for "nothing," as is widely believed. Rather they are getting paid in something besides money. It is an economy which consists almost entirely of information. This may become the dominant form of human trade, and if we persist in modeling economics on a strictly monetary basis, we may be gravely misled. Getting Paid in Cyberspace ========================== How all the foregoing relates to solutions to the crisis in intellectual property is something I've barely started to wrap my mind around. It's fairly paradigm warping to look at information through fresh eyes - to see how very little it is like pig iron or pork bellies, and to imagine the tottering travesties of case law we will stack up if we go on legally treating it as though it were. As I've said, I believe these towers of outmoded boilerplate will be a smoking heap sometime in the next decade, and we mind miners will have no choice but to cast our lot with new systems that work. I'm not really so gloomy about our prospects as readers of this jeremiad so far might conclude. Solutions will emerge. Nature abhors a vacuum and so does commerce. Indeed, one of the aspects of the electronic frontier which I have always found most appealing - and the reason Mitch Kapor and I used that phrase in naming our foundation - is the degree to which it resembles the 19th-century American West in its natural preference for social devices that emerge from its conditions rather than those that are imposed from the outside. Until the West was fully settled and "civilized" in this century, order was established according to an unwritten Code of the West, which had the fluidity of common law rather than the rigidity of statutes. Ethics were more important than rules. Understandings were preferred over laws, which were, in any event, largely unenforceable. I believe that law, as we understand it, was developed to protect the interests which arose in the two economic "waves" which Alvin Toffler accurately identified in The Third Wave. The First Wave was agriculturally based and required law to order ownership of the principal source of production, land. In the Second Wave, manufacturing became the economic mainspring, and the structure of modern law grew around the centralized institutions that needed protection for their reserves of capital, labor, and hardware. Both of these economic systems required stability. Their laws were designed to resist change and to assure some equability of distribution within a fairly static social framework. The empty niches had to be constrained to preserve the predictability necessary to either land stewardship or capital formation. In the Third Wave we have now entered, information to a large extent replaces land, capital, and hardware, and information is most at home in a much more fluid and adaptable environment. The Third Wave is likely to bring a fundamental shift in the purposes and methods of law which will affect far more than simply those statutes which govern intellectual property. The "terrain" itself - the architecture of the Net - may come to serve many of the purposes which could only be maintained in the past by legal imposition. For example, it may be unnecessary to constitutionally assure freedom of expression in an environment which, in the words of my fellow EFF co-founder John Gilmore, "treats censorship as a malfunction" and reroutes proscribed ideas around it. Similar natural balancing mechanisms may arise to smooth over the social discontinuities which previously required legal intercession to set right. On the Net, these differences are more likely to be spanned by a continuous spectrum that connects as much as it separates. And, despite their fierce grip on the old legal structure, companies that trade in information are likely to find that their increasing inability to deal sensibly with technological issues will not be remedied in the courts, which won't be capable of producing verdicts predictable enough to be supportive of long-term enterprise. Every litigation will become like a game of Russian roulette, depending on the depth of the presiding judge's clue-impairment. Uncodified or adaptive "law," while as "fast, loose, and out of control" as other emergent forms, is probably more likely to yield something like justice at this point. In fact, one can already see in development new practices to suit the conditions of virtual commerce. The life forms of information are evolving methods to protect their continued reproduction. For example, while all the tiny print on a commercial diskette envelope punctiliously requires a great deal of those who would open it, few who read those provisos follow them to the letter. And yet, the software business remains a very healthy sector of the American economy. Why is this? Because people seem to eventually buy the software they really use. Once a program becomes central to your work, you want the latest version of it, the best support, the actual manuals, all privileges attached to ownership. Such practical considerations will, in the absence of working law, become more and more important in getting paid for what might easily be obtained for nothing. I do think that some software is being purchased in the service of ethics or the abstract awareness that the failure to buy it will result in its not being produced any longer, but I'm going to leave those motivators aside. While I believe that the failure of law will almost certainly result in a compensating re-emergence of ethics as the ordering template of society, this is a belief I don't have room to support here. Instead, I think that, as in the case cited above, compensation for soft products will be driven primarily by practical considerations, all of them consistent with the true properties of digital information, where the value lies in it, and how it can be both manipulated and protected by technology. While the conundrum remains a conundrum, I can begin to see the directions from which solutions may emerge, based in part on broadening those practical solutions which are already in practice. Relationship and Its Tools ========================== I believe one idea is central to understanding liquid commerce: Information economics, in the absence of objects, will be based more on relationship than possession. One existing model for the future conveyance of intellectual property is real-time performance, a medium currently used only in theater, music, lectures, stand-up comedy, and pedagogy. I believe the concept of performance will expand to include most of the information economy, from multicasted soap operas to stock analysis. In these instances, commercial exchange will be more like ticket sales to a continuous show than the purchase of discrete bundles of that which is being shown. The other existing, model, of course, is service. The entire professional class - doctors, lawyers, consultants, architects, and so on - are already being paid directly for their intellectual property. Who needs copyright when you're on a retainer? In fact, until the late 18th century this model was applied to much of what is now copyrighted. Before the industrialization of creation, writers, composers, artists, and the like produced their products in the private service of patrons. Without objects to distribute in a mass market, creative people will return to a condition somewhat like this, except that they will serve many patrons, rather than one. We can already see the emergence of companies which base their existence on supporting and enhancing the soft property they create rather than selling it by the shrink-wrapped piece or embedding it in widgets. Trip Hawkins's new company for creating and licensing multimedia tools, 3DO, is an example of what I'm talking about. 3DO doesn't intend to produce any commercial software or consumer devices. Instead, it will act as a kind of private standards setting body, mediating among software and device creators who will be their licensees. It will provide a point of commonality for relationships between a broad spectrum of entities. In any case, whether you think of yourself as a service provider or a performer, the future protection of your intellectual property will depend on your ability to control your relationship to the market - a relationship which will most likely live and grow over a period of time. The value of that relationship will reside in the quality of performance, the uniqueness of your point of view, the validity of your expertise, its relevance to your market, and, underlying everything, the ability of that market to access your creative services swiftly, conveniently, and interactively. Interaction and Protection ========================== Direct interaction will provide a lot of intellectual property protection in the future, and, indeed, already has. No one knows how many software pirates have bought legitimate copies of a program after calling its publisher for technical support and offering some proof of purchase, but I would guess the number is very high. The same kind of controls will be applicable to "question and answer" relationships between authorities (or artists) and those who seek their expertise. Newsletters, magazines, and books will be supplemented by the ability of their subscribers to ask direct questions of authors. Interactivity will be a billable commodity even in the absence of authorship. As people move into the Net and increasingly get their information directly from its point of production, unfiltered by centralized media, they will attempt to develop the same interactive ability to probe reality that only experience has provided them in the past. Live access to these distant "eyes and ears" will be much easier to cordon than access to static bundles of stored but easily reproducible information. In most cases, control will be based on restricting access to the freshest, highest bandwidth information. It will be a matter of defining the ticket, the venue, the performer, and the identity of the ticket holder, definitions which I believe will take their forms from technology, not law. In most cases, the defining technology will be cryptography. Crypto Bottling =============== Cryptography, as I've said perhaps too many times, is the "material" from which the walls, boundaries - and bottles - of cyberspace will be fashioned. Of course there are problems with cryptography or any other purely technical method of property protection. It has always appeared to me that the more security you hide your goods behind, the more likely you are to turn your sanctuary into a target. Having come from a place where people leave their keys in their cars and don't even have keys to their houses, I remain convinced that the best obstacle to crime is a society with its ethics intact. While I admit that this is not the kind of society most of us live in, I also believe that a social over reliance on protection by barricades rather than conscience will eventually wither the latter by turning intrusion and theft into a sport, rather than a crime. This is already occurring in the digital domain as is evident in the activities of computer crackers. Furthermore, I would argue that initial efforts to protect digital copyright by copy protection contributed to the current condition in which most otherwise ethical computer users seem morally untroubled by their possession of pirated software. Instead of cultivating among the newly computerized a sense of respect for the work of their fellows, early reliance on copy protection led to the subliminal notion that cracking into a software package somehow "earned" one the right to use it. Limited not by conscience but by technical skill, many soon felt free to do whatever they could get away with. This will continue to be a potential liability of the encryption of digitized commerce. Furthermore, it's cautionary to remember that copy protection was rejected by the market in most areas. Many of the upcoming efforts to use cryptography-based protection schemes will probably suffer the same fate. People are not going to tolerate much that makes computers harder to use than they already are without any benefit to the user. Nevertheless, encryption has already demonstrated a certain blunt utility. New subscriptions to various commercial satellite TV services skyrocketed recently after their deployment of more robust encryption of their feeds. This, despite a booming backwoods trade in black decoder chips, conducted by folks who'd look more at home running moonshine than cracking code. Another obvious problem with encryption as a global solution is that once something has been unscrambled by a legitimate licensee, it may be available to massive reproduction. In some instances, reproduction following decryption may not be a problem. Many soft products degrade sharply in value with time. It may be that the only real interest in such products will be among those who have purchased the keys to immediacy. Furthermore, as software becomes more modular and distribution moves online, it will begin to metamorphose in direct interaction with its user base. Discontinuous upgrades will smooth into a constant process of incremental improvement and adaptation, some of it manmade and some of it arising through genetic algorithms. Pirated copies of software may become too static to have much value to anyone. Even in cases such as images, where the information is expected to remain fixed, the unencrypted file could still be interwoven with code which could continue to protect it by a wide variety of means. In most of the schemes I can project, the file would be "alive" with permanently embedded software that could "sense" the surrounding conditions and interact with them. For example, it might contain code that could detect the process of duplication and cause it to self-destruct. Other methods might give the file the ability to "phone home" through the Net to its original owner. The continued integrity of some files might require periodic "feeding" with digital cash from their host, which they would then relay back to their authors. Of course files that possess the independent ability to communicate upstream sound uncomfortably like the Morris Internet Worm. "Live" files do have a certain viral quality. And serious privacy issues would arise if everyone's computer were packed with digital spies. The point is that cryptography will enable protection technologies that will develop rapidly in the obsessive competition that has always existed between lock-makers and lock-breakers. But cryptography will not be used simply for making locks. It is also at the heart of both digital signatures and the aforementioned digital cash, both of which I believe will be central to the future protection of intellectual property. I believe that the generally acknowledged failure of the shareware model in software had less to do with dishonesty than with the simple inconvenience of paying for shareware. If the payment process can be automated, as digital cash and signature will make possible, I believe that soft product creators will reap a much higher return from the bread they cast upon the waters of cyberspace. Moreover, they will be spared much of the overhead presently attached to the marketing, manufacture, sales, and distribution of information products, whether those products are computer programs, books, CDs, or motion pictures. This will reduce prices and further increase the likelihood of noncompulsory payment. But of course there is a fundamental problem with a system that requires, through technology, payment for every access to a particular expression. It defeats the original Jeffersonian purpose of seeing that ideas were available to everyone regardless of their economic station. I am not comfortable with a model that will restrict inquiry to the wealthy. An Economy of Verbs =================== The future forms and protections of intellectual property are densely obscured at this entrance to the Virtual Age. Nevertheless, I can make (or reiterate) a few flat statements that I earnestly believe won't look too silly in 50 years. - In the absence of the old containers, almost everything we think we know about intellectual property is wrong. We're going to have to unlearn it. We're going to have to look at information as though we'd never seen the stuff before. - The protections that we will develop will rely far more on ethics and technology than on law. - Encryption will be the technical basis for most intellectual property protection. (And should, for many reasons, be made more widely available.) - The economy of the future will be based on relationship rather than possession. It will be continuous rather than sequential. And finally, in the years to come, most human exchange will be virtual rather than physical, consisting not of stuff but the stuff of which dreams are made. Our future business will be conducted in a world made more of verbs than nouns. â Original: https://groups.csail.mit.edu/mac/classes/6.805/articles/int-prop/barlow-economy-of-ideas.html ⧠/# ⧠|
John Perry Barlow |
1994 |
9263 |
46.3 |
| Copywrongs |
Copywrongs ========== by Samuel Edward Konkin III https://en.wikipedia.org/wiki/Samuel_Edward_Konkin_III Samuel Edward Konkin III July 1, 1986 Original: https://archive.lewrockwell.com/orig11/konkin1.1.1.html Having done every step of production in the publishing industry, both for myself and others, I have one irrefutable empirical conclusion about the economic effect of copyrights on prices and wages: nada. Zero. Nihil. So negligible you'd need a Geiger counter to measure it. Before I move on to exactly what copyrights do have an impact on, one may be interested as to why the praxeological negligibility of this tariff. The answer is found in the peculiar nature of publishing. There are big publishers and small publishers and very, very few in between. For the Big Boys, royalties are a fraction of one percent of multi-million press runs. They lose more money from bureaucratic interstices and round-off error. The small publishers are largely counter-economic and usually survive on donated material or break-in writing; let the new writers worry about copyrighting and reselling. Furthermore, there are a very few cases of legal action in the magazine world because of this disparity. The little 'zines have no hope beating a rip-off and shrug it off after a perfunctory threat; the Biggies rattle their corporate-lawyer sabres and nearly anyone above ground quietly bows. Book publishing is a small part of total publishing and there are some middle-range publishers who do worry about the total cost picture in marginal publishing cases. But now there are two kinds of writers: Big Names and everyone else. Everyone else is seldom reprinted; copyrights have nothing to do with first printings (economically). Big Names rake it in â but they also make a lot from ever-higher bids for their next contract. And the lowered risk of not selling out a reprint of a Big Name who has already sold out a print run more than compensates paying the writer the extra fee. So Big Name writers would lose something substantial if the copyright privilege ceased enforcement. But Big Name writers are an even smaller percentage of writers than Big Name Actors are of actors. If they all vanished tomorrow, no one would notice (except their friends, one hopes). Still, one may reasonably wonder if the star system's incentive can be done away without the whole pyramid collapsing. If any economic argument remains for copyrights, it's incentive. Crap. As Don Marquis put in the words of Archy the Cockroach, "Creative expression is the need of my soul." And Archy banged his head on typewriter key after typewriter key all night long to turn out his columns â which Marquis cashed in. Writing as a medium of expression will continue as long as someone has a burning need to express. And if all they have to express is a need for second payments and associated residuals, we're all better off for not reading it. But, alas, the instant elimination of copyrights would have negligible effect on the star system. While it would cut into the lifelong gravy train of stellar scribes, it would have no effect on their biggest source of income: the contract for their next book (or script, play or even magazine article or short story). That is where the money is. "You're only as good as your last piece" â but you collect for that on your next sale. Market decisions are made on anticipated sales. Sounds like straight von Mises, right? (Another great writer who profited little from copyrighting â but others are currently raking it in from Ludwig's privileged corpse â er, corpus.) The point of all this vulgar praxeology is not just to clear the way for the moral question. The market (praise be) is telling us something. After all, both market human action and morality arise from the same Natural Law. In fact, let us clear out some more deadwood and red herrings before we face the Great Moral Issue. First, if you abolish copyrights, would great authors starve? Nope. In fact, the market might open a trifle for new blood. Would writers write if they did not get paid? Who says they wouldn't? There is no link between payment for writing and copyrights. Royalties roll in (or, much more often, trickle in) long after the next work is sold and the one after is in progress. Is not a producer entitled to the fruit of his labor? Sure, that's why writers are paid. But if I make a copy of a shoe or a table or a fireplace log (with my little copied axe) does the cobbler or wood worker or woodchopper collect a royalty? A. J. Galambos, bless his anarchoheart, attempted to take copyrights and patents to their logical conclusion. Every time we break a stick, Ug The First should collect a royalty. Ideas are property, he says; madness and chaos result. Property is a concept extracted from nature by conceptual man to designate the distribution of scarce goods â the entire material world â among avaricious, competing egos. If I have an idea, you may have the same idea and it takes nothing from me. Use yours as you will and I do the same. Ideas, to use the 'au courant' language of computer programmers, are the programs; property is the data. Or, to use another current clichĂ©, ideas are the maps and cartography, and property is the territory. The difference compares well to the differences between sex and talking about sex. Would not ideas be repressed without the incentive (provided by copyrights)? 'Au contraire' the biggest problem with ideas is the delivery system. How do we get them to those marketeers who can distribute them? (Ed. note: most readers probably know the answer to this in 1996, this was written in 1986) My ideas are pieces of what passes for my soul (or, if you prefer, ego). Therefore, every time someone adopts one of them, a little piece of me has infected them. And for this I get paid, too! On top of all that, I should be paid and paid and paid as they get staler and staler? If copyrights are such a drag, why and how did they evolve? Not by the market process. Like all privileges (emphasis added), they were grants of the king. The idea did not â could not â arise until Gutenberg's printing press and it coincided with the rise of royal divinity, and soon after, the onslaught of mercantilism. So who benefits from this privilege? There is an economic impact I failed to mention earlier. It is, in Bastiat's phrasing, the unseen. Copyright is a Big publisher's method, under cover of protecting artists, of restraint of trade. Yes, we're talking monopoly. For when the Corporation tosses its bone to the struggling writer, and an occasional steak to the pampered tenth of a percent, it receives an enforceable legal monopoly on the editing, typesetting, printing, packaging, marketing (including advertising) and sometimes even local distribution of that book or magazine. (In magazines, it also has an exclusivity in layout vs other articles and illustrations and published advertisements.) How's that for vertical integration and restraint of trade? And so the system perpetuates, give or take a few counter-economic outlaws and some enterprising Taiwanese with good smuggling connections. Because copyrights permeate all mass media, Copyright is the Rip-off That Dare Not Mention Its Name. The rot corrupting our entire communications market is so entrenched it will survive nothing short of abolition of the State and its enforcement of Copyright. Because the losers, small-name writers and all readers, lose so little each, we are content â it seems â to be nickel-and-dime plundered. Why worry about mosquito bites when we have the vampire gouges of income taxes and automobile tariffs? Now for the central moral question: what first woke me up to the problem that was the innocent viewer scenario. Consider the following careful contractual construction. Author Big and Publisher Bigger have contracts not to reveal a word of what's in some publication. Everyone on the staff, every person in the step of production is contracted not to reveal a word. All the distributors are covered and the advertising quotes only a minimal amount of words. Every reader is like Death Records in Phantom of the Paradise, under contract, too; that is every reader who purchases the book or 'zine and thus interacts with someone who is under contract â interacts in a voluntary trade and voluntary agreement. No, I am not worried about the simultaneous creator; although an obvious victim, he or she is rare, given sufficient complexity in the work under questions. (However, some recent copyright decisions and the fact that the Dolly Parton case even got as far as a serious trial â means the corruption is spreading.) One day you and I walk into a room â invited but without even mention of a contract â and the publication lies open on a table. Photons leap from the pages to our eyes and our hapless brain processes the information. Utterly innocent, having committed no volitional act, we are copyright violators. We have unintentionally embarked on a life of piracy. And God or the Market help us if we now try to act on the ideas now in our mind or to reveal this unintended guilty secret in any way. The State shall strike us â save only if Author Big and Publisher Bigger decide in their tyrannous mercy that we are too small and not worth the trouble. For if we use the ideas or repeat or reprint them, even as part of our own larger creation â bang! There goes the monopoly. And so each and every innocent viewer must be suppressed. By the Market? Hardly. The entire contractual agreement falls like a house of cards when the innocent gets his or her forbidden view. No, copyright has nothing to do with creativity, incentive, just desserts, fruits of labor or any other element of the moral, free market. It is a creature of the State, the Vampire's little bat. And, as far as I'm concerned, the word should be copywrong. â Original: https://archive.lewrockwell.com/orig11/konkin1.1.1.html ⧠/# ⧠|
Samuel Edward Konkin III |
1986 |
1709 |
8.5 |
| A New Argument Against Copyright |
A New Argument Against Copyright ================================ by John Beverley Robinson https://en.wikipedia.org/wiki/John_Beverley_Robinson John Beverley Robinson April 23, 1891 Original: https://www.libertarian-labyrinth.org/wp-content/uploads/2020/04/08-02.pdf _To the Editor of Liberty:_ What is an âideaâ? Is it made of wood, or iron, or stone? Possibly of paper? Is it animate or inanimate? Animal, vegetable, or mineral? Do you see what I am trying to get at? An idea is nothing objective. It is neither produced nor discovered; neither a product of industry, nor unclaimed land, nor a _fera naturae_. Ambiguously as the word has been used, both by metaphysicians and in common talk, every shade of meaning given to it has been but a variation upon one fundamental sense; that an idea is, after some fashion, an intellectual process. That is to say, the idea is not any part of the product; it is a part of the producer, or, if you will, a part of the labor of producing. Ideas are not â cannot be â produced. They âgrow.â Given heredity, education, circumstances, and the rest of the environment, and that the manâs ideas will be so and so, whether he builds, or talks, or writes, is determined. Moreover, there is no reason why we should confine the word âideaâ to a mental process so striking in size or quality as to seem to us out of the common. Every act springs from some corresponding idea. The copyist expresses ideas as truly as does the author. Ideas of arrangement, ideas of appropriate text, script, or engrossing hand; all the ideas which mark the grades of excellence in copyists. Each one, having used as much thought as the work in hand requires, be it steam-engine-construction or philosophy-writing, has also used a complementary amount of physical exertion; and as a result of his labor he possesses his engine or his manuscript. Either one he may now destroy, or conceal, or sell. If he sells, the value is determined for the purchaser largely by the amount of advantageous novelty contained, or, as we metaphorically call it, by the âideaâ embodied in it. But the âideaâ is not any more the thing sold in the case of a book than it is in the case of a horse-shoe. In either case the man who has the best âideasâ produces the best work, and every labor product, in that sense, embodies the ideas of the producer, just as it embodies his physical exertion. The idea is the intellectual exertion made in producing; and, as such, is a part of the body of the producer. The working of the mind cannot be sold; only the material of nature, transformed by labor, whether mental or physical, can be dealt in commercially. Consequently the âideas,â the mental processes, like the physical processes, of each one are his own to use as he pleases. If he uses them to labor, the product of his labor is still his. It is vain to talk of protecting property in ideas as far as he in whom the ideas originate is concerned. He holds his ideas by the same title that he holds his body, wherever chattel slavery is not admitted. The only legitimate use of ideas is to produce something desirable and therefore exchangeable, be it song, speech, plough, or book. After the product has been exchanged, the producer has nothing more to do with it. What is really sought by patent and copyright laws is indicated in the very word âcopyright.â Not to protect ideas, but to confer the privilege of copying a material product. It is not in the interest of the poor devils, the author and inventor, but in that of the capitalist and publisher, that they are enacted. They seek to erect another species of legal property, necessarily and avowedly involving monopoly, ostensibly in the interest of the producer, really in that of the investor and exploiter. As for the compensation of authors, why should they not be able to get as good compensation for the out-and-out sale of their labor as anybody else can? When liberty to labor exists, there is no doubt that they will be able. Nor need the publishers fear liberty. It is only the excessive pressure of the present slavery that makes it worth anybodyâs while to shove worthless, copyrighted books, as a venture, upon an overstocked market. When we can all of us freely satisfy our desires for books, it will be quite as much as publishers can do to keep up with the demand for new authors, without troubling themselves to run competitors out of the trade. â Original: https://www.libertarian-labyrinth.org/wp-content/uploads/2020/04/08-02.pdf ⧠/# ⧠|
John Beverley Robinson |
1891 |
798 |
4 |