Kinsella on Liberty Podcast, Episode 190.
Also available as PFP143 (which contains the official audio instead of the iPhone audio).
Video below. This version is taken from my iPhone recording. My notes used for the speech are pasted below. Also below is a video of the Q&A panel session following the talk.
On Life without Patents and Copyright: Or, But Who Would Pick the Cotton?
Bodrum, Turkey (Sep. 13, 2015)
- A pleasure to be at PFS or, as I’m starting to think of it, the Land of Successive Hangovers
- Hoppe: does not do interviews because he does not like to repeat himself
- So I thank him for asking me to speak on intellectual property for the first time ever
- My topic: What would life without IP be like?
- Or: But how will people make money in an IP-free world?
- Subtitle: But who would pick the cotton?
- Questions about IP are often confused. There are at least three separate, though possibly related, issues:
- Should we have patent and copyright law? (A political-normative question.)
- Given that we do, how should people respond in today’s world? I.e., Life with patent and copyright. (practical and ethical question).
- What would an IP-free world look like? Life without (A prediction.)
- Summarize case against IP
- Propertarian; utilitarian
- As for the second and especially third issues, the questions:
- Questions are not arguments and are not always sincere
- Sometimes loaded or rhetorical
- But who will pick the cotton if we eliminate chattel slavery?
- Illegitimate (and hidden/disguised) argument
- Why do you support intellectual communism? (loaded)
- How many brands of cars, or toothpaste, will we have in a post-communist world? (prediction and disguised argument)
- But you’re an IP lawyer
- Didn’t realize I was so powerful—my personal choice of career has somehow changed the structure of moral reality. I guess I’m like the libertarian Beyonder or Molecule Man
- We cannot deny that changing state law will have no effect.
- If state legislation had no effect, we would not mind them
- Eliminating a bad law will have effects, just as imposing a bad law will have effects
- So it can be reasonable to ask what effects removing a bad law will be, so long as one is not implying “and unless your answer satisfies me, we will keep the bad law in place”
- With that said, let’s consider the second two questions
- 2: how should people respond? Life with patent and copyright.
- Mainly a practical and ethical question
- Infringing IP is exclusively a prudential, not a moral, issue
- If you can get away with copyright piracy or patent infringement, there is nothing whatsoever wrong with it
- Torrents, etc.
- In many fields it is difficult to avoid employing IP, given its existence
- Publishers will insist on the assignment or license of copyright
- Patents are often necessary for defensive purposes
- We must be careful to avoid conspicuous copyright piracy to avoid severe penalties and imprisonment
- Innovators and companies face the risk of being sued for patent infringement by patent trolls and large competitors
- That said, it is arguably immoral (unlibertarian) to use patent or copyright law aggressively (offensively), for example to sue an innocent person for patent or copyright infringement,
- or to engage in patent and copyright “trolling”
- But it is moral to countersue someone for patent infringement (defensive)
- Firms in some industries engage in patent pooling for mainly defensive purposes
- And many companies today try to avoid or minimize dealing with IP:
- My booklet “Do Business WITHOUT Intellectual Property”
- Trade secrets instead of patents
- They pledge not to use patents offensively (Twitter, Tesla)
- They employ Creative Commons licensing to mostly “opt out” of the copyright system
- Much of the software industry employs open-source software (e.g. GNU general public license)
- Authors should be careful assigning copyright to their books to publishers,
- and at least try to use a will or Creative Commons license to ensure that their works will not disappear after their death (“orphan works” problem)
- If you can get away with copyright piracy or patent infringement, there is nothing whatsoever wrong with it
- Life without patent and copyright.
- What are the likely effects of abolishing patent and copyright?
- First: We can look at cases in today’s world where there is no IP or where it is often evaded
- Fashion industry
- culinary recipes, jokes, perfume
- books, music, movies in the face of widespread piracy from technology and in countries where IP is not as strictly respected or enforced (e.g. China)
- Second: the bad consequences that come now from IP would disappear
- jail for pirates
- Threats to Internet freedom
- No prohibitions on jailbreaking your own phone
- No patent lawsuits from patent trolls or competitors
- No monopolies on pharmaceuticals (much lower prices for drugs)
- Fewer cartels/oligopolies (e.g. smartphone industry)
- Prices for consumer goods would fall (costs to producers would fall—no patent royalties or licensing fees, no expensive patent attorney or litigation fees)
- We woud not have had to wait 50 years for the movie version of Atlas Shrugged
- Some sequels may have even been written (Catcher in the Rye example)
- Netflix would have a much larger selection of movies
- There would be no website or youtube DMCA takedowns
- There would be no judges ordering the destruction of movies (Nosferatu), no judges ordering people not to read books they had purchased (Harry Potter), no judges banning the publication of novels (Catcher in the Rye)
- How would people adapt?
- Harder to make money selling information
- But then easier to use widely available information to improve your own content
- And it’s better for the consumer
- Concrete examples:
- Academic/scholarly papers and books
- Technical innovation/R&D
- Harder to make money selling information
- First: We can look at cases in today’s world where there is no IP or where it is often evaded
On Life without Patents and Copyright: Or, But Who Would Pick the Cotton?
Bodrum, Turkey (Sep. 13, 2015)
STEPHAN KINSELLA: Thank you, Hans. It’s a pleasure to be here once again at the PFS. I think this is my seventh or sixth for sure. Hans is right. I was at the first meeting, and it was great, and it’s gotten better every year since. So it’s good to be at the PFS, or as I’m starting to think of it, the land of successive hangovers. I talked to Hans the other day. He told me he doesn’t do a lot of interviews. He gets requested to do podcasts because he doesn’t like to repeat himself, so I appreciate his asking me to speak on intellectual property for the first time ever. It’s all right. When I’m not known as Hoppe’s amanuensis, I’m known as Mr. IP, which is – it’s fine. I’ve accepted that instead of being the handsome guy from Louisiana or the guy who’s written 17 articles with Walter Block.
So I am an IP attorney. I often get the question how can you be an IP attorney and hate IP? It’s a strange question I think but hasn’t harmed me too much. Usually I’ll give a talk on IP, and people come up and they say oh, I agree with you. IP is horrible. Would you please write a patent for me? So it hasn’t harmed my career for some strange reason. I really don’t understand it. It’s almost like hiring an oncologist to help you with your cancer. That makes no sense, right? My topic is, “Life Without Patent or Copyright,” and I have a subtitle: “Or, But Who Would Pick the Cotton?” Sometimes people ask how would people make money in an IP-free world, which is the question that’s really behind this one. The problem is questions about IP are often confused, and so when I talk to people and when I think about these issues, I try to separate the issues and look at it differently.
There are at least three separate issues to consider. The first one is a normative question. Should we have patent and copyright law? It’s a libertarian question. The second question is a practical one. It’s really life with IP instead of life without IP. It’s given that we do have an IP system, patent and copyright. IP means intellectual property by the way. Patent and copyright are two of the biggest types of IP. Trademark, trade secrets, and other things are other types, which I probably won’t mention much today. Okay, so the second question is given that we have IP, how should people react to it and what should we do about it? And then the third, which is more or less the main topic today, is what would an IP-free world look like, which is really a prediction. So that’s a question about what would the world look like if we didn’t have IP?
These are all separate questions, and they’re often intermingled, but let me start with the first briefly. Is anyone here not familiar with why IP is horrible, or can I just skip that? See my 100 other lectures on this on my website. But in short, the problem with IP is that it is a violation of property rights.
The libertarian view is that there are property rights assigned to scarce resources over which there could be conflicts, scarce resources in the world that we need to employ to have successful action, and these resources’ nature is such that there could be conflict. And to avoid having conflict and to be able to use these resources productively and peacefully, we establish property rules.
So there’s an owner of a resource, and everyone knows the boundaries or the borders of this resource, and they can live in cooperation with each other. And the libertarian rule is that the owner of the resource is the first user of the resource or someone he has given it to by contract or someone to whom he owes compensation because he’s committed a torte against them. Those are basically the three rules of libertarian property rights, and IP basically says someone who has not contractually acquired a resource, who has not originally appropriated the resource, who is not owed the resource because of a torte committed against him, that person has a veto right over how other people use their legitimately owned resources.
That is what IP is. If I have a copyright, I can use state force to prevent you from publishing a book using your own paper and ink. If I have a patent, I can use the state force to prevent you from making a mousetrap using your own wood and steel, which is in law what we call a negative servitude. That means I have a partial property right in your rights even though I didn’t acquire that right contractually. So all we have is the state expropriating property, transferring it from one person to another, taking my property, and leaving me with some ownership but transferring a negative servitude to other people who have nothing to do with the resource. This is why IP is theft and wrong. That’s the nutshell case against IP. That’s the principle propertarian case against IP.
The other case is a negative case, and that is the main argument given for IP now is not the natural rights argument because it’s incoherent. The main argument is that – is a utilitarian argument, that we need IP to stimulate innovation or to have more innovation than we would have otherwise.
Without IP we wouldn’t have enough books written, enough movies produced, enough pharmaceuticals produced, etc., and therefore the state needs to step in and give temporary monopolies in the form of copyright and patent in the hopes of optimizing the production of innovation in society. That is the simple argument. It’s never stated that plainly because it’s so stupid, but – and in fact there’s no evidence whatsoever for this. All the studies that empiricists do—empirical economists do—indicates otherwise, indicates that the patent system reduces innovation, imposes billions of dollars of cost on the economy annually. The copyright system censors free speech, reduces the flow of knowledge. If you were a real sincere utilitarian, you would actually be opposed to IP because the evidence is against it. So those are the two basic arguments against IP.
Now, the second question and the third, I want to make a point. People say, but how would I make money in an IP-free world So I want to make a point that we have to keep in mind that questions are fine, but questions are not arguments, so we have to keep that in mind. If you ask a question that’s fine, but it’s not necessarily an argument. Quite often, questions are not sincere, or they’re loaded, or they’re question begging, or they’re just rhetorical. And the reason my subtitle is, “But Who Will Pick the Cotton,” is suppose I present the libertarian case against slavery, and suppose we have slavery and I’m saying we should abolish slavery. And someone says, but who would pick the cotton? That is not a good argument against my case that slavery is immoral and should be abolished, and it’s probably not a sincere question either. I mean the real answer would be I don’t know who would pick the cotton, or maybe someone would pick the cotton, and slavery has to be abolished.
Okay, so we have to keep that in mind. Other types of questions are like why do you support intellectual communism? That’s kind of a loaded question, or, but you’re an IP lawyer. It’s as if Stephan Kinsella, one person living in Texas, happens to have the power of the Beyonder or the Molecule Man. I can change the structure of moral reality by my choice of career. It’s bizarre. It’s possible that there’s a right and wrong to an issue despite my personal choice of career.
So these kinds of questions – another would be like we have communism. We have one supplier of toothpaste and cars, and they’re all crappy, so one says, well, I don’t want to abolish communism. I’m not sure how many cars there would be or how many car brands there would be. Who would make the toothpaste? How many brands of toothpaste would there be? And unless you can tell me in a free society how many brands of toothpaste there would be, we’re going to keep communism. I might not know how many brands of toothpaste there are going to be. I could guess, but the answer is let’s free things up and see.
So when I get the question about how would movies be produced in a free society, how would I get paid for this in a free society, we might have some ideas and I’m going to go into those. But if I don’t have an answer it just means I can’t predict what a liberated society would look like. It doesn’t mean that we shouldn’t liberate society and restrict it – free it from these patent and copyright restrictions.
Now I also want to make another point. We can’t pretend that abolishing IP would have no effect. The only reason we oppose – as libertarians we oppose some laws is because laws do have an effect. If a law didn’t have an effect, we wouldn’t mind it. If the tax law was totally ignored, I wouldn’t mind. If the drug war was just a hortation from the state but they didn’t put anyone in prison, we wouldn’t be railing against the drug war. It wouldn’t really be a drug war at all.
So the only reason we oppose laws is because they do have an effect, because they are enforced, which means that if you get rid of these laws, society will change because it’s changed by the imposition of a law in the first place. So we can’t deny that getting rid of something, some law, would not have any effect. I don’t deny that. So it is possible that there’s an overproduction of some types of goods now because of patent and copyright and there’s an underproduction of others. And if these laws are lifted, the overproduced goods and services will go down, and the underproduced ones will go up. This doesn’t mean that patent and copyright should not be abolished.
So I will – I entertain questions about what would an IP-free world would look like as long as the question is not formed effectively as, all right, I want you to tell me what an IP-free world is going to look like. And unless you can tell exactly to my satisfaction, I’m going to still support IP. I don’t accept that.
So let’s talk about – before a life without IP, let’s talk about life in a world with IP, the world we have now. How should be people live in this world that we live in today? Now, this is mainly a practical and an ethical question. So first I would say if you recognize that patent and copyright are completely illegitimate and monstrous interventions into the free market and violations of property rights, there is nothing immoral whatsoever about infringing patent and copyright if you can get away with it. I’m not saying it’s prudential in every case. I think people should be careful, but there’s nothing immoral whatsoever about copying information, competing with people, using information that’s publicly available, emulating it, etc. So it is – in my opinion, there’s nothing un-libertarian or immoral about it. People that pirate movies—nothing wrong with it whatsoever, maybe a little risky. I don’t do it. I don’t think I could play dumb American if I got caught.
And we also have to recognize that in today’s world in many areas, fields of business and technology and life it’s difficult to avoid using IP or being faced with threats of IP because it does exist and it is enforced. So, for example, authors often have to assign their copyrights to publishers to get published because publishers insist on it.
Companies necessarily need to obtain patents for defense – at least for defensive purposes or to satisfy their investors. We all have to be careful to avoid copyright piracy if it’s conspicuous because you might go to prison. And companies are always hiring patent lawyers like me to advise them and to look at their portfolios and look at competitors and their patents to make sure they’re not infringing patents.
Now, I would say in my opinion, I’m not an ethicist, but I believe – personally believe it’s immoral. It’s immoral to use IP offensively as a person. I don’t do it. I refuse to participate in offensive patent lawsuits for example. I think it’s wrong to be a copyright troll. I think it’s wrong to sue someone for copyright infringement. People are going to do it, but I don’t think we should even given that the system exists. However, I think there’s nothing wrong with using IP defensively. If one of my clients were sued for patent infringement, I would have no qualms about using one of our patents or one of my clients’ patents to counter-sue the person attacking them. To me this is a defensive use of force, and it’s permissible.
Another thing people do now in the face of IP is a lot of firms in certain industries collaborate, and they pool their patents together to have a defensive patent pool. One company might have 10 patents. Another might have 15. A bunch of them get together; they have a larger pool of patents to draw on to defend themselves if one of the members of this pool is sued by a patent troll of an outside – another competitor for example, someone outside the pool. And people in the pool agree not to sue each other, so you have all this money being wasted acquiring patents and techniques, things being done just to be able to operate freely in the market because of the patent system. It’s a horrible waste of funds, but these are things some people do.
I actually have a booklet some of you might want to look up. It’s on – a liberty.me booklet. I wrote it about two years ago. It’s called Do Business Without Intellectual Property, and it summarizes a lot of what I’m talking about today. And it discusses things companies can do other than this in today’s society if they want to try to lower their cost and not be liable for copyright or patent infringement and not use the patent system. So, for example, some companies can and maybe should in some cases use trade secrets instead of patents, keep the information secret. It doesn’t work in every case, but in some cases that’s a good strategy. Some companies are even pledging not to use patents offensively, like Twitter has done that and actually signed an agreement with all their employees so that the employee can block the company from using their patents offensively. They can still be used defensively but not offensively.
Tesla, the electric car company, has actually opened up all of its patent technology to its own competitors to build the market up so that they can compete in a real developing electric car market. A lot of authors and independent songwriters and musicians and authors use creative commons to release their work for free into the commons to liberate it from the shackles of the copyright system. A lot of the software industry uses open-source software, which is similar to the creative commons, that – like they’ll use the GNU—G-N-U—general public license to liberate software from their shackles of copyright. So people are actually trying to get out of the system that is in place.
I would also say that in today’s world, authors should be careful not to assign the works to their books to publishers if they can avoid it. Self-publish in some cases because otherwise when you die your work might become an orphan work and disappear from the face of the Earth, or in your will, make sure that in your will you grant your – you open up your copyrighted works to the world so that it doesn’t disappear so that family members or descendents down the line don’t keep it from being published by refusing to grant permission.
So these – this is consequences of living in a world with IP. Now, let’s talk about life without patent and copyright. So let’s say we somehow achieved a miracle, and we were able to abolish patent and copyright despite the lobbying efforts of the pharmaceutical industry and Hollywood and the music industry in the United States, which is largely responsible for this morass that we have in the entire world. So the question really is what would the world look like, what are the likely effects of abolishing patent and copyright? So the first thing we can do is we can look at cases in today’s world where there is no copyright – where there’s nothing like copyright and patent or cases where it’s being widely evaded.
So, for example, the fashion industry exists now, and it’s extremely profitable and extremely creative and lucrative, and there’s many successful companies even though their dress designs and things like this can be knocked off right away. Okay, so they manage to make a profit because they just keep coming up with new designs every fall, and then the old designs get made at lower prices by knockoffs and by cheaper boutiques. This actually happens. The fashion industry actually works without IP except because of the – there’s lobbying by the fashion industry, by the way, to add a type of IP or to extend copyright to fashion designs.
Let’s hope that doesn’t happen But sometimes fashion designers, desperate to have some kind of protection over their designs, they will use trademark law, which is another type of IP. And they’ll take their logo, which is protected by trademark, and they’ll put their little logo all over their purses. You guys ever seen – you know Chanel and Louis Vuitton. This is the reason why their logos are slapped all over their apparel so that they have some trademark protection so they can use some type of IP to stop people from knocking those things off. It would be like buying a Mercedes and seeing the little symbol all over the car as part of the design. It’s odd. So this is a way that IP has distorted culture.
Culinary recipes—chefs are extremely creative. Restaurants are coming up with great recipes all the time, and there’s nothing stopping one restaurant from copying another and they do this sometimes. But quite often they come up with their own recipes because they want to distinguish themselves. So lacking IP in the restaurant industry doesn’t prevent great restaurants from existing, so same thing with jokes in the comic industry. Comics can knock each other off, and they have their own policing system for this. When someone is caught using a joke someone else wrote, the other comedians shun them. There’s no IP law in that, but there’s a private sort of shunning mechanism, okay.
Same thing with perfume, by the way. Perfume is not protected by IP, and quite often there’s a knockoff of Chanel No. 5 in the drugstore for one-tenth the price or even less, and sometimes some people buy that. Some people buy the real thing. If you want to give your girlfriend a present for Valentine’s Day you’re probably going to buy the real thing.
The software industry operates, as I said, largely without copyright because of the use of open-source licensing, and it’s very innovative and creative even without that. And books and music and movies are protected by copyright, but because of the ability of people to torrent and copy, engage in piracy, they are still profitable even though the copyright system is effectively breaking down for those types of works. And yet, authors and musicians and the movie studios are still making money selling books, selling movies, etc.
So second, we can say this, the likely effects of abolishing patent and copyright. Well, we can say this. The bad effects that we know happen now would disappear. The censorship that copyright imposes would be gone. There would be no jail threatened for people engaged in piracy. Kim Dotcom, his house would not have been raided by 59 federal agents and SWAT teams from four different countries with helicopters in his home in New Zealand.
Aaron Swartz, the brilliant young man who helped invent RSS, which is the technology behind podcasting, one of the most important developments of our time and creative commons, another important development and who helped stop SOPA, the Stop Online Piracy Act, which is one of the greatest threats to freedom in recent decades in America – he wouldn’t have committed suicide as he did two years ago because he was facing a long time in prison for copyright piracy.
So that wouldn’t have happened. That’s one effect of the copyright. You wouldn’t have Aaron Swartzs committing suicide. You wouldn’t have people facing prison terms for jailbreaking their own iPhones, which is the law in the United States. You wouldn’t have patent lawsuits from patent trolls or your competitors. You wouldn’t have monopolies on pharmaceuticals. Drugs wouldn’t – AIDS drugs wouldn’t cost $1000 a month in Africa. You wouldn’t have as many cartels and oligopolies, which are caused by the patent system such as in the smartphone industry.
Prices for consumer goods would fall a lot. We’re paying the price for the patent system right now because producers have to pay licensing fees to patent trolls, and they have to pay fees to attorneys like me to obtain patents and to engage in litigation defensively. Billions and billions and billions of dollars every year are spent by these companies because of the patent system. That would be gone, so the cost to producers would be much lower so prices for goods would fall a lot, so all consumers would be better off.
Maybe we wouldn’t have had to wait 50 years for a movie version of Atlas Shrugged. Maybe a good one would have been made. And if a bad one would have been made, someone would just remake it. Maybe we would have had a sequel to Atlas Shrugged by now, which no one would write because they’d get their pants sued off by the greedy and copyright Nazi objectivist state of Ayn Rand. By the way, Catcher in the Rye, the famous novel – a sequel to that was written years ago. And his estate sued the publisher and the author, and the judge banned the book from being published because it was a derivative work under copyright law, so copyright law actually literally results in book banning and censorship and has – and does prevent sequels from being written.
Netflix would have a much larger catalog of movies. There wouldn’t be a million YouTube takedowns a day as is happening now because of the copyright systems Digital Millennium Copyright Act takedown provisions. Literally a million videos are taken down in a day automatically by YouTube because of fear of copyright liability. There wouldn’t be judges ordering the destruction of movies such as happened with the Nosferatu movie because it was a – held to be too close to Dracula. Movies were ordered – the negatives were ordered destroyed by the judge.
There wouldn’t be judges ordering people not to read books that they purchased as happened in Canada. A few years ago, one of the Harry Potter sequels was in the bookstore, and the bookstore accidentally sold it a few days before its release date to some people. And so the publisher freaked out and ran to a judge and got an emergency order, ordering these customers not to read the books until two weeks from now or something, and don’t – if you have read it, don’t discuss it with anyone. That’s what the judge said.
And you wouldn’t have judges banning the publication of sequels like Catcher in the Rye or Atlas Shrugged 2. Now, how would people adapt in such a world? It might be harder to make money selling information. That’s possibly true. But then, on the other hand, it would be easier to use information.
Documentaries right now are often blocked because they have a scene of a sculpture in the background or those – a movie poster on a building that’s in there, or there’s a song playing in the background on someone’s radio, and they can’t publish their documentary. Documentarians would be able to have more freedom to do things like that, and it would be better for the consumer. Prices would fall. There would be no – DRM models just wouldn’t work anymore because people would just go to alternative methods. If you buy a Kindle book, there’s no way you would use Kindle if they have DRM. You would just go to – you’d go to piracy. So for – publishers would have an incentive to open things up and have unrestricted digital information in terms of music, software, things like that.
Now, let’s take some concrete examples. The – and again this is the problem with this question. People pepper you. They demand. They want to know what’s the world going to look like without IP because I’m afraid. I’m afraid of getting rid of government censorship and restriction of competition and the grant of monopolies that protect you from competition. I’m afraid of a world like that. Even though I’m supposed to be a libertarian I’m afraid. So you need to tell me. You need to tell me. They’ll say what about music? What about novels? And so I say, well, I can think of a few models based on what some people have done and based upon just being a creative lawyer or whatever. But then they’re never satisfied. The list of questions is infinite. They’ll say, well, what about poetry? It’s like whatever answer you give them they’re going to go on to the next one.
It’s very similar to talking to your standard American leftist liberal who has a – is in favor of the welfare state to take care of the poor, and libertarians often fall back on this sort of soothing don’t worry; it’s going to be fine in a free society. We’re going to have charity, and there will be – there will be plenty of charity. Don’t worry. And then the liberal says could you guarantee that? Because if you can’t, we need to have a welfare system. So – and of course you can’t guarantee it. Are you telling me there will never be one single person who can’t get charity? No, I can’t guarantee that. All right, we’re keeping the welfare system.
We need – we have to provide healthcare for people too because you can’t guarantee that there would be charity hospitals out there. We need to have public schooling because I can’t guarantee that everyone is going to be able to find a nice charitable, free high school for poor people or something like that. So it’s the same thing here. They want to demand there is never going to be a case where the way someone is doing something right now won’t be able to continue. They want a guarantee that J.K. Rowling, the Harry Potter author, the richest woman in England I believe because of the success of the movies and her books, they want to guarantee that it would be exactly the same. I don’t know if it’s going to be exactly the same.
Musicians will still make money. Music will still be produced. We know that. Maybe they would make less money off of their albums, and that would be what they use to advertise them to advertise their music to get popular so that they can sell tickets when they go on tour, which is what’s happening right now actually. They’re not making as much money on MP3 sales because people are using Spotify, and they’re pirating it, so bands become popular. And they can sell out large stadiums and make hundreds of millions of dollars a year touring or a lot of money touring.
You know, movies used to be made before the modern era, and they were financed by the prospect of selling tickets to show movies in theaters. Now, there is piracy right now. There’s – a lot of the young kids, they want movies on their computers, and they don’t pay for them. Yet still moves are making billions of dollars by – just from box office sales alone. Nowadays, they have secondary and tertiary streams of income. They started showing moves on television. They would charge the rights for that after a couple of years.
And then – so on airplanes and then in hotel rooms and then putting them on cable. These things didn’t exist in the 1950s, and yet there were still blockbuster movies. So even if those secondary and tertiary streams of income disappear altogether, which they wouldn’t, there’s no reason to believe that movies couldn’t be made still just by selling tickets to show them in the theaters. And then piracy is going to happen soon after, and the money is already made, so there’s no reason to believe that movies couldn’t be made.
Crowd-sourcing is being resorted to a lot now: Go Fund Me, Indiegogo, etc. These types of things could be used. I mean throwing some examples out there. I want to write a novel. I’m a popular author, novelist. I want to write another novel, but I’m not going to invest the time to do it unless there’s an audience out there. If my fans will each pledge to pay me $10 and 100,000 fans sign up, I’ve got a lot of money right there in the bank. You could do it that way even if piracy would happen soon after.
Let’s take the case of J.K. Rowling again. J.K. Rowling didn’t write Harry Potter expecting to be a billionaire. She wrote it because she wanted to write. She might have hoped to make some money, but she didn’t know how popular it would become. So let’s suppose she had written the first Harry Potter book, but let’s suppose she sold it on Amazon on the Kindle, so for $0.99. Well, a million copies might have been sold, so suddenly she is a millionaire literally even though there’s piracy going on.
And then piracy starts, and her sales fall away let’s say. Let’s take the worst fears of the copyright advocates. So J.K. Rowling says, well, I’ve got millions of fans out there in the world, and she does an Indiegogo campaign. And she says if I get a million dollars or $10 million pledged from 10 million fans around the world, I’ll release a second novel, which I have ready to go. So she gets $10 million, releases the novel. Piracy starts. Well, she’s made $10 million. Now some guy comes up and he says hey, I’m going to make a movie based upon Harry Potter. It’s a popular novel, and I’m not going to pay her a cent because I don’t need to because there’s no copyright. And another company says, well, I’m going to make a better one, and so he approaches J.K. Rowling and says, look, there’s three companies out there that are producing versions of the first Harry Potter novel right now as a movie.
And they’re not paying you anything. If you will consult with us and you’ll give it your blessing, I bet it will be a better movie, and a lot more of your fans will see the authorized version than the other, and we’ll pay you 10% of the box office sales. Okay, so now she’s got another $50 million. It’s easy to see how, in different areas, you can make money even though there’s no IP. The bottom line really is that the legal issue, the libertarian issue about whether there should be IP law is distinct from the entrepreneurial question about how do I make money in a free world.
It’s really the entrepreneur’s job. I’ve heard the expression and I’ve used it before. Your failed business model is not my problem. Ultimately, it’s up to the entrepreneur in a world of freedom to figure out how to make money, and as Benjamin Tucker, one of the famous anarchist libertarian from over a century ago who was a famous opponent of IP, he said one time if you want your ideas to yourself, keep them to yourself.
If you publish information to the world, if you make knowledge public in some way, you cannot expect other people not to use that information. You have no right for them not to use that information. If you sell a product and the product’s design is apparent, then you are taking the risk that you’re going to have competition, and the reason you do that is to make a profit.
So you have to make a choice: Do I want to sell this product or not? The cost of doing that is I’m telling something to the world. If you want to keep it to yourself, you’re free to do that. But if you sell a product, if it’s successful, it’s going to send a signal. People are going to start copying you, and then you might have to innovate yet again, which is another reason we can expect there to be more innovation. People can’t rest on their laurels as much as they can now. You have a patent that lasts 17 years, so you don’t need to innovate as much. You have a monopoly protecting you from competition. Without the patent system, people would have to keep innovating.
Okay, in the US, maps used to be covered by copyright, but in the Feist decision it was held that maps are just pure data, pure information. And therefore, they’re not subject to copyright protection, and yet we still have maps, don’t we? Although sometimes mapmakers play these little tricks. They’ll put a fake cul-de-sac somewhere that doesn’t exist on the map so that if someone copies it now they’ve committed copyright infringement because there’s something original in the map. In other words, it’s a lie. The map is actually false. It’s a lie, so copyright actually encourages mapmakers to distort the maps and to lie to the world so they can sue people. So maybe we wouldn’t have bad maps without copyright. Sometimes every now and then there’s someone driving down a country road, and they’re like, I want to find that cul-de-sac. It’s like, it doesn’t exist.
Academic and scholarly papers are written now for no money. There’s no reason to think they wouldn’t be produced. They’re written for other reasons, for reputation or to get the word out. Look at Walter Block. He doesn’t get paid for all those journal articles he writes.
So in conclusion, I will say that a life without patent and copyright – it’s unpredictable exactly what it would look like, but we can predict that it would be better. So thank you very much.