Kinsella on Liberty Podcast, Episode 234.
This is a debate on IP between me and a noted Bitcoin expert, Craig Wright, hosted and moderated by the Vin Armani show.
I was in London to attend the inaugural 2018 meeting of Mises UK and to hang with my boys Lee Iglody, Jeff Barr, Doug French, and Hans Hoppe, and had challenged Wright to a debate during a few twitter run-ins (still on-going); I accepted and since I happened to be in London, Wright set it up and we did it at a local studio, with Armani moderating from Vegas.
Further comments appear on my Facebook post and also on the Youtube post (below).
Update [7/17/19]: I had my buddies Jeff Barr and Doug French in the room watching, and after the debate, invited Craig to drinks in the hotel bar. We had an interesting, if a bit bizarre and intense, discussion for an hour or so. But in the ensuing weeks, things between us devolved on Twitter. Wright had promised to produce “proof” of patents stimulating innovation during the debate, and apparently, like with many of his promises to produce something, never came through. I pointed that out on Twitter and he eventually ended up blocking me, as well as the podcast’s host, Vin Armani, who at the time was, with Wright, a fellow BCH advocate (Vin is still a BCHer but Craig has split off again with his BSV). Of course, in the meantime, Wright has amped up his risible claims to be Satoshi and has been involved in a number of controversial issues in the bitcoin/crypto community. What a character.
Also: during the debate I referred to him as Dr. Wright, since he claims to have several PhDs, but now I am not sure he has any legitimate PhDs, other perhaps than one in “theology”, so I should not have called him “Dr.” That was too deferential. On the other hand, he did pay for the venue and related costs, so I was being polite.
Youtube (with captions):
Original Youtube (which contains a large number of comments; see below):
Intellectual Property Debate: Stephan Kinsella vs. Craig Wright
Stephan Kinsella, Craig Wright, and Vin Armani
Vin Armani Show, London and Las Vegas, Jan. 27, 2018
VIN ARMANI: Welcome everyone to today’s debate. We are debating intellectual property. The two opponents are Stephan Kinsella and Craig Wright. Stephan Kinsella is an attorney in Houston, director of the Center for the Study of Innovative Freedom and editor of Libertarian Papers. He is one of the foremost libertarian experts on intellectual property.
And Dr. Craig Wright is an inventor, computer scientist, and businessman who is one of the earliest minds behind Bitcoin. He’s the chief scientist at nChain research and development company involved in Bitcoin and blockchain technologies. So today what we are going to be debating is the following resolution resolved. Intellectual property law is a legitimate and useful institution that belongs in the emerging global sphere of blockchain technology and cryptocurrency.
Craig Wright will be arguing for the resolution, and Stephan Kinsella will be arguing against. This debate is going to consist of a series of five-minute statements and rebuttals, a series of rounds. The first round is going to be an opening statement from each of the debaters. We are going to start with – did we say we’re starting with Craig Wright? So we will start with Craig Wright who is arguing for the resolution. Dr. Wright, if you will.
- CRAIG WRIGHT: Thank you. So basically what we’re looking at is the idea that intellectual property has no value from other people. Now, I would argue it does, not because of the common constraints and whatever else people put about scarcity and what they think about copying but for a number of reasons first as the scarcity of good ideas. There are many ideas out there in the world, but good ideas there are very few. And then implementing those is another thing altogether. Why not everything? Well, very simple. If we have every single algorithm, we can just create everything, and we have no actual application.
The reality is that, contrary to what many people say, we have much evidence actually benefiting the implementation of intellectual property. We have a number of natural experiments around the world such as in China, in other places in Asia, everywhere from Singapore right up to India. And in all of those places, when intellectual property laws have been removed and then when they’ve been added again, we have a lot of evidence in support of what they do, not in helping big incumbents, in fact, the opposite.
In India, for instance, in recent re-additions of intellectual property laws and opening up of the different opportunities they had in that country, opening it up to small startups, we have a scenario where there was immediate 60% increase, not in the number of patents filed by large companies but by small startups. That actually followed through not only in India but to Indians in America in many different areas.
So what we’re looking at is, I think, something where we have the rights of an individual to their own creation. If we think about the rights of a homestead, when someone starts an initial property and creates it, then I would argue that there’s actually more rights in intellectual property than even the homestead for the simple fact that, when you homestead, there’s land there before. You either put a fence, you do whatever else, and you have an act, an act of creating intellectual property, at the same time is an act.
But it’s something where you create from nothing. You actually – from not something existent before. You develop something new. On that, many will argue that if we didn’t do it, someone else would. For instance, if there wasn’t an invention X that was patented, someone else will come along and invent the same thing, which seems fine, a tabula rasa world. We just pour information in, and people come up with new ideas. Except, if we think about that for a moment, if Charles Dickens never existed, if Shakespeare didn’t exist, would we actually have those works? Would there be another Charles Dickens? Would we have A Christmas Carol? Would someone have written that piece of work and created it?
Now, in this, we have the argument, of course, that it’s different and we can just protect it with trade secrets if we want. But the truth of the matter is, when we’re looking at the alternatives, and I’ll explain this through here, trade secrets actually lower incentive. A perfect example was ZeniMax and Oculus. Oculus CTO went across, took IP and source code, and of course now there’s a lot of problems between Oculus, and it slowed innovation in a lot of new areas.
If, on the other hand, patents were disclosed, it would have added a lot of value to a lot of new organizations. We found that the innovation and investment in that circle basically dried up for awhile. It went from about a billion dollars down to about a hundred million after that particular case. Now, that was because of trademark violations, but if it was a patented technology, then ZeniMax would have had it out there unsearchable. And unlike the Oculus IP, it would have been easy to distinguish because, with trademark, you can never actually tell whether the person who asserts ownership truly does.
At the same time, when a patent is there, there are times to actually go out there and complain and say that it shouldn’t be filed, etc. So you have opportunities to go out into a court of law and argue this point. So what I’ll argue is that we have a position where the creator has a right to their creation enforcing that to be something that is in the commons. Against the will of the creator, we take a scarce idea, and they are, and we make it effectively intellectual communism. It is an intellectual communism of the commonance where we start actually creating a socialist force to say you have to put your particular invention out there in a way we deem, not you.
VIN ARMANI: All right, thank you very much, Dr. Wright. Arguing against, once again, just for the audience, the resolution is intellectual property law is a legitimate and useful institution that belongs in the emerging global sphere of blockchain technology and cryptocurrency. Arguing against the resolution now with a five-minute statement please, Stephan Kinsella.
STEPHAN KINSELLA: Sure. Thank you. Intellectual property is a difficult issue until you finally get it, and then it becomes easy and it opens up your understanding of other aspects of economics and property law. But because it’s difficult and because we’re trying to overcome centuries of IP laws, which people take for granted, it’s important to approach this matter systematically and with clear definitions instead of the more scattershot approach Dr. Wright’s using.
So first, a definition. Intellectual property refers – is a term used by proponents of certain laws, patent and copyright primarily, and other subsidiary types of intellectual property law called trademark law, trade secret law, and also defamation law, which is not normally considered to be an IP law by the legal profession, but it’s very similar in its effect to trademark, which are both reputation rights. These are all called IP rights, and they’re called IP rights by the advocates because they are prima facie obviously restraints by the government. They’re monopoly grants by the government on how people use their property, and to sell these government grants of monopoly privilege, the proponents started calling them intellectual property rights. And they added the word intellectual to distinguish it from normal property rights, which last forever, unlike patent and copyright.
So just as a quick summary, patents cover inventions. Copyrights cover artistic works. Trademark and trade secrets and defamation law cover other things. My contention is that intellectual property laws are completely unjust and illegitimate and un-libertarian. And the reason is because these are laws that give other people the right to interfere with or to take outright existing property rights, so basically it’s tantamount to theft. Contrary to the claims of advocates of patent and copyright, they do not foster innovation.
Rather, it hinders and distorts innovation, and it censors free speech in thought, and it threatens the freedom of the internet. There’s nothing good about these laws and their consequences, and furthermore, the purpose of law is not to foster innovation or to further some policy goal of the current congress. The purpose of law is to protect rights and to do justice, to protect property rights.
So the question is what are property rights, and how should they be determined and allocated? Why do we have property rights? Property rights are basically a solution to the fundamental fact of scarcity in the world. When humans act, they can have conflict with each other over the use of their bodies and other scarce resources that they use.
And by scarce resource, we don’t mean something that’s not abundant, like good ideas are scarce. We mean something that’s rivalrous, a clear economic concept, something of which there can be physical conflict. Now, when humans act, they employ both ideas and knowledge as well as scarce resources to act, to achieve things to happen in the world. So they’re both essential to action. They’re both important. Just because you’re against intellectual property doesn’t mean we’re against the importance of ideas.
Ideas are crucial to any successful human action. To have an action, you have to know what you’re going to do, know how to achieve it, and you have to have available means to act with. So you have to acquire knowledge, and you have to acquire scarce resources. But because there can be conflict over the scarce resources, we develop property rights so that we can use these resources in a conflict-free way. So they’re allocated in accordance with two basic principles: homesteading or original appropriation, the Lockian idea of the first person to start using a resource in the commons that was unowned has a better claim to it than anyone else, and then contractual transfer.
The owner of the resource can transfer it to someone else by transfer. Those are the only two rules that we need to determine who owns a resource over which there could be a dispute. So the problem with intellectual property is it comes up with a third rule, and it says that you own someone else’s property if you came up with an idea that is similar to the way they’re using their property. So basically it amounts to legalized theft. Vin, do I have more time, or is that my five minutes?
VIN ARMANI: You have about 45 seconds left.
STEPHAN KINSELLA: Okay, I’ll just say quickly one thing, and I can address this later if I have more time. The mistake Craig is making is he’s assuming that creation is a source of ownership, and that’s completely incorrect. In fact, he gave an example of putting a fence up or something around land and creating intellectual property. Of course, land has nothing to do with intellectual property.
It is true that the human intellect and innovation and ingenuity went into the activity of doing that, but the land is not intellectual property at all. Creation is a source of wealth. That’s what people need to understand. What creation means is you own a resource, that is, a scarce, physical, material thing, and then you use your intellect and your labor and your effort to modify that thing. And therefore, you make it more valuable to you or to your customers, and therefore, you’ve created wealth, but no new property rights arose from that. If you fashion raw iron that you own into a horseshoe, you’ve created wealth, but you’ve not created any property rights. So creation is not a source of property rights, and that is a fundamental mistake that undercuts a lot of the arguments for intellectual property rights.
VIN ARMANI: All right, excellent. Thank you, Stephan. The first question now in this back-and-forth round will be to you. You’ll have five minutes. Craig will have up to five minutes to rebut, and then the reverse will happen on the next question. So Stephan, thank you for that definition of terms. But I really want to get into the question of whether or not intellectual property law is legitimate. So my question to you is you’ve argued in your work that intellectual property, as an institution, is illegitimate on ethical, legal, and cultural grounds. Can you please expand on why this is true?
STEPHAN KINSELLA: Well, that’s the argument I just gave basically, and I don’t know if I made many cultural arguments except for the distorting effect of copyright on culture and trademark as well. But in that case, I’m just pointing to the negative consequences of an unjust law. From my perspective, the fundamental question is an ethical one, and it’s in the question of what’s right and wrong, what’s just.
The people who argue for IP normally do so in a confusing fashion. They mix together two fundamental arguments. One is a more principled argument like Craig is trying to make, which is this Lockian argument that if you create something, you own it. That’s transparently false, however, because number one, if patents and copyrights or inventions and artistic works were legitimate, ownable things, then the patent and copyrights should not expire after a fixed amount of time like 17 years for patents and 100+ years for copyrights.
They would last forever in perpetuity, and I hope Dr. Wright would not propose that because that would just make it even worse. So if they expire arbitrarily after a certain time, they’re definitely not like normal property rights, which is why the word intellectual is put in front of them. And then the other argument that they make is that utilitarian or empirical one that it enhances innovation. It enhances the wealth of the world. It causes more creations to come into being.
And as I said before, that is not the purpose of law. The purpose of law is not to go around passing around laws to tinker around with things, giving people special rights to incentivize them to act in a better way so as to have more innovation. The purpose of law is to do justice, and the way they do justice is to respect people’s property rights and to enforce those.
So any law that undercuts the basic Lockian libertarian property underpinnings of our system is unjust because it basically takes people’s property. In a sense, it makes everyone else a slave of other people. If I am not free to use my factory to make an iPhone knockoff let’s say, my rights to use my physical property as I wish are being violated. I have never agreed to a negative servitude. I’ve never agreed to a restrictive covenant where I can’t use my property a certain way.
I’m not causing trespass against someone else’s property when I use my property to make a competing automobile or car or watch or phone, and therefore hampering my freedom is a violation of my human rights. If you tell me I can’t write a sequel to a novel or make a movie or express myself as I see fit because it violates someone’s copyright, you’re restricting my freedom of speech and the freedom of the press, freedom of expression and communication.
These are all things that libertarian law would oppose. Libertarians should be in favor of people’s freedom to do whatever they want with their property as long as they don’t violate the rights of. That means trespass against the property of another. It has nothing to do with how much innovation we’re getting and things like that. And to that point, we’ve had about 200 years of modern copyright and patent law.
We’ve had enough time for the advocates of it to prove, to come up with clear, empirical proof, not anecdotes like Dr. Wright has come up with clear proof that the patent system, for example, does result in greater innovation, the value of which is greater than the cost of the system, and believe me, the cost is tremendous. Billions and billions of dollars are spent on lawyers like me every year. Lots of research has never gone into it because you wouldn’t be able to sell a product because of patent thickets. So the cost of the patent system is severe and huge. I believe it’s on the order of trillions of dollars per year of lost innovation that we could otherwise have.
And in these 200 years, none of the advocates of IP have ever been able to come up with a clear empirical case that it does benefit us that the amount of value that is created by these new innovations allegedly stimulated is positive or what the value is. They should be able to tell us what the value is, and they never can. In fact, all of studies indicate that the patent system hinders and hampers innovation, and thus impoverishes the world and makes us worse off.
We’re living in a technologically inferior world today, which hurts everyone’s lives because of the patent system. It should be abolished immediately. I’ve been doing patents for over 20 years now. And I have never seen a clear case of all the patents I’ve written where the invention patented was invented because of the patent system. Instead, it’s come up with because of a necessity to solve a problem and to sell a product, and then they run to the lawyers to get a monopoly on it because they can, which further wastes the time of inventors and engineers.
So that’s my argument for it. It’s destructive of human life, it’s destructive of innovation, and it censors free thought and free speech, and therefore, I’m completely and totally against patent and copyright. And there are other arguments for trademark, trade secret, and defamation law, but they’re different in their own rights, and I can’t get to that right now. I’ll rest here.
VIN ARMANI: Thank you very much. So Dr. Wright, if you would like to rebut that, you have up to five minutes to do so. Just to remind you, I know that you did get into some questions of utility on this last question. Just to remind you, Dr. Wright, that you will have an opportunity to speak on utility directly after this. But if you would like to rebut any of the statements made by Mr. Kinsella, you have up to five minutes to do that now.
- CRAIG WRIGHT: Certainly. What I’ll first note is most of the arguments we’re hearing are circular. Intellectual property is not property because it’s not property because it’s not property. Effectively, what we’re doing is we’re finding a circular argument about why it’s not. We’re saying it’s not Lockian, so therefore, it can’t exist. We have agreements within people. We have agreements within society, and some of the claims are just plain false. We have this idea that nothing has been done and that my anecdotes are there.
Mine aren’t anecdotes. They’re very well-researched, NBER, etc. Most countries around the world have a lot of publications with a lot of data. And so what happens is we get this idea that it’s just empirical. So that was a comment I heard back from Mr. Kinsella. It’s just empirical. I have a Twitter. Now, the reality is we have a lot of data with natural experiments with the reduction of these laws, which led in every case, in every single country, not one, every one, 100% with a high R-squared value against this.
What we have is, in India, with the reduction of IP protection, IP dried up. Basically, the only IP law that ended up being enforced was against large organizations building their own patents in their own area. We then had China. We then had Singapore. We then had many, many countries, and we’ve even had ones lately in Africa. Over the last few years, we’ve had new experiments in these countries where, with the opening of IP law and basically because of WTA sort of constraints, the implementation of all of this, we’ve actually seen up to 60% increases in the amount of intellectual property growth.
So this claim that that’s not true is absolutely false, not anecdotally. There are over 2000 studies that I know of, not one, not two, over 2000. And not a single one of those refutes these things. What you get, self-serving papers where someone has an experiment, not reality, they create a game scenario. And they say it doesn’t work because. They don’t test it on real human action. They don’t see what actually happens, so there’s a difference.
We also have this disingenuous idea that we have 200 years of copyright. We don’t. There was actually copyright, as I’ve been pointing out, in the lex judica, in – well, basically the 4th century A.D. in Rome, copyright existed. Patent existed. Letters of patent go back 3000 years that we know of. So we have the whole idea of what is a letter of patent. Every city in Europe that was actually founded after Rome fell was done so, if it wasn’t going to be collapsed in a small amount of time, under a letter of patent.
Guilds were often in letter of patents, so this is actually quite – not new. I’m not advocating guilds and whatever else. And at the same time, there are many sort of bad areas about law, but the idea that something that is basically baby in the bathwater and we have to throw it all out because something is not ideal doesn’t mean that the law is not good.
Now, what is law? At the same time, we have agreements between individuals. Saying that individuals cannot, in their own terms, agree laws, that is wrong. I will say, quite frankly, if a community, a society decides that these are the laws we think work best for us, that is the law that should be there as long as they don’t infringe on certain basic rights that we have. Now, this idea that you’re infringing on the rights of people because of their IP, well, I’m also being infringed as a creator if someone takes my ideas and just uses them.
I have the right to take my creation and use it however I will. I don’t own a horseshoe because I own a horseshoe. I own a horseshoe because I somehow have the iron, which means someone else dug it out of the earth. I didn’t do that myself. I got it from someone, and then I created using it, and I created value in society. I actually create value. It doesn’t just suddenly appear otherwise. That taking of a raw lump of iron and making it into a horseshoe is value creation. Now, the floor that some argue is that this is a Marxian idea, but the Marxian idea was actually basically that I have the right to the amount of effort.
VIN ARMANI: Dr. Wright, we’re going to hold it here. It’s gone over time a little bit. But you do – you can expand on that. If you’d like to continue, you have another five minutes, and within that, what I do want to ask you though, I believe we’re getting into the utility question at this point. Both of you obviously participate in the legal system in this way, so there is at least – regardless of Mr. Kinsella’s ethical issues with intellectual property, you both at least find some legitimacy in it enough to participate in that world.
My question, taking that legitimacy for granted perhaps, is about utility, and Dr. Wright, you’ve claimed that intellectual property laws serve a valuable place in the market. You’ve claimed that they spur innovation. You’ve claimed that they enable greater prosperity. Can you please tell us what’s the mechanism by which this is occurring, not just the fact that it does, but could you expand and explain the mechanism that would be the evidence of this occurring please? You’ve got five minutes on that.
CRAIG WRIGHT: Certainly. This is where I was mentioning things like trade secrets. Now, due diligence, the value of trying to chase down thefts, whatever else, is actually very difficult. Now, the idea of being able to know everything that’s occurred when you’re buying a company is nearly impossible. I’m sorry, but I don’t care how good your idea is, if you have it written down on a piece of paper and you’re coming to someone for funding or whatever else, then there is no way that funder knows that your idea has not been stolen, has not been copied, has not been anything else no matter how many agreements you actually sign.
We saw with the resignation of the CTO of Oculus following the allegations and then legal cases between ZeniMax that this actually can be something that even large incumbent corporations such as Facebook have no way of tracing down. Now, Facebook and Google, which are another example, Google Waymo and [indiscernible_00:26:53] and I don’t name these companies, so I’m sorry about the ridiculous IP names that we have. But any of these end up in court, not because of patents but because of trade secrets, people having intellectual property that has been stolen, not because it’s been copied fairly or whatever else, but under agreement they’ve taken it to a third party.
All of these are sources of uncertainty, not just mild uncertainty, but in the cases there, billions and billions of dollars. So all of these where we’ve had trademarks, secrets stolen or whatever else, we easily see that there would have been much more certainty in the market. So if you have a valid patent that has gone through the process and has been tested and whatever else, then what you’re going to find is more certainty, not less. So this argument that everything is uncertain is actually, well, not real.
I can tell you with my company or sort of the company that I’m with. I won’t say my. I founded it, but that’s it. With Jimmy up there and others and myself, we look at proposals all the time, so we’re becoming VCs or vulture capitalists if you will, like I’ve had to deal with VCs before, so call ourselves even vulture capitalists. If you actually want to go out there and be certain, you need to know about what you’re investing in. And I don’t care how many signatures you get from how many people in an organization, people will do whatever they can to get funding in desperate times.
Compare that to how much certainty you get comparatively, and I know the claims about only 2% of patents make money. The actual statements of real scenarios are about 50%, or they’re making money probably means 1% over the total investment. And the number that go to court is actually far lower than have occurred. The reality is with the number of filed cases, if we take how many court cases actually go on the tickets every year and consider that against the other, you would expect one year’s worth of patent filing to end up with 1000 years worth of court cases.
That doesn’t happen. The reality is, I’m sorry; there are very few patent infringement cases. There are some cases that make a lot of money. There are some that are obviously foolish. There are some patent trolls, but a lot of these really come down to other problems in the system. They come down to the misalignment of how people can get funding for litigation. They come down to other things such as this. How am I going for time, by the way, Vin?
VIN ARMANI: You have about one minute left.
CRAIG WRIGHT: Great. So what we’re looking at is IP law is really about an intermixing of human ingenuity and creativity. That’s what we’re talking about. It’s a compromise between different stakeholders and different values and outcomes. So I admit and I’m not the first to do this, that when we have old 1970-type models of patents and copyright laws, they’re wrong. They need to be updated. But that doesn’t mean you can’t have law, you can’t have agreement, and communities themselves can actually form agreement.
And this idea that I have to be told how I’m going to sell my own product, I’m sorry; that’s just wrong. I do not live in Stalin’s world. I don’t really care. I make something. It is mine. If I choose to give it away freely, I choose to give it away freely. If I make something, I, me, if I work under contract, I chose to work under contract. I’m not a slave. I own my rights. Everyone who is forced to give up their rights, that is slavery. Thank you.
VIN ARMANI: All right, thank you very much for that. Mr. Kinsella, you have five minutes to rebut, and then I will have immediately a question for you after that, so Mr. Kinsella.
STEPHAN KINSELLA: All right, I can just – in five minutes I can only do so much. Quickly, I refer listeners to my website, C4SIF.org. Just go to the slash AIP page and look at my post of “The Empirical Case Against Patents.” The empirical evidence is just overwhelming. There are no studies that Dr. Wright is referring to. Most recently, the economists Boldrin and Levine have a paper on patents where they exhaustively studied the data, and they said the case against patents can be summarized briefly. There is no empirical evidence that they serve to increase innovation and productivity unless you identify it with the number of patents awarded but not with innovation itself.
As for communist and socialist, in my view, if you read Hans-Hermann Hoppe’s Theory of Socialism and Capitalism, he identifies the essence of socialism, which is the institutionalized interference with private property rights and private property claims. And intellectual property law does that. So it is actually intellectual property law that is socialist because it amounts to a taking of private property rights. As for the self-serving argument, I’m a patent attorney, so it would be in my interest to favor the system, but instead I call for its abolition.
As for the host’s idea that because I participate in the system I endorse its legitimacy, that would be like saying an attorney representing a defendant accused of a drug crime agrees with the drug system, or that an oncologist agrees that there should be cancer because they’re fighting to stop them. I totally reject that. As for copyright and patent existing long before 200 years ago, I’m well aware of that. I said specifically the modern copyright system, which did start with the US Constitution in 1790/1791 with the patent and copyright laws.
But they were modeled after the earlier laws, which Dr. Wright mentions, like the practice of monarchs and states granting letters of patent, which were clearly protectionist, mercantilist, anti-competitive monopoly privilege grants, so I don’t think that helps him. The Statute of Monopolies in 1623 in England is what is the early basis of US patent law. Get it? It’s a monopoly. We’re against state-granted monopolies. The Statute of Anne in 1709 is where modern copyright law came from, but there are, of course, antecedents before that.
Even in 500 B.C. there was the Greek city state of Sybaris where there was a cooking competition, and whoever won would have a monopoly on making that dish for a year. So there are, of course, antecedents. There have always been people that have been trying to reduce competition and who hate the free market.
As for uncertainty, the certainty of patents is ridiculous. The system is based upon totally non-objective principles. It’s run by a government bureaucracy, and patent and copyright law in particular are the creatures of legislation and statute. They could never have arisen on a common law or private property-based system. And it is actually having a legislation-based state that causes uncertainty, as Hans-Hermann Hoppe has written about, and as I’ve written about in my long paper in the 1995 JLS on legislation and uncertainty because the very existence of a legislation – a legislator – what’s the word I’m looking for? The legislature – the existence of a legislature makes you uncertain about what the laws will be in the future because they can change the law from day to day.
As the saying goes, when the legislature is in session, no man’s property is safe. As for not throwing the baby out with the bathwater, you do want to do that if it’s Rosemary’s baby we’re talking about, and that is what patent and copyright are. Briefly, I can say as for trademark, and I elaborate on this in my papers, but I can briefly explain the reason why trademark and trade secret and defamation law are illegitimate. Trademark law basically grants reputation rights, and as Rothbard explained in his argument against defamation law, which says something similar, you can’t own your reputation because that is what other people think about you.
And if you have a right to your reputation, that means you have a right to what other people think about you, which means you have a partial ownership of their brain, which means they’re your slave. So defamation law is completely illegitimate as is trademark law, which has a similar type of argument. Trade secret law is illegitimate because you don’t need a law to keep things secret.
You have the right to keep whatever you want secret. What trade secret law does is it gives the so-called owner of a trade secret, which is just information that’s held private and confidential and it gives you some competitive advantage in the marketplace as long as it’s held confidential. It gives you the right to go to a court to get an injunction to use state force against, not just your employees who left and who are revealing the information, which could be covered by contract law alone. It gives you a right to go against third parties who are not parties to any contract, and that is wrong as well.
And an example of that is when the Apple iPhone 4 I believe was left on a bar by a careless employee. And some guy found it, and a couple of days later, the feds, with Apple employees, burst into this guy’s apartment under the auspices of trade secret law to take it back from him so…
VIN ARMANI: We’re at five minutes now, Stephan. Thank you.
STEPHAN KINSELLA: I’ll close there.
VIN ARMANI: And, of course, there – after this round of questioning, you will also both have closing statements, so you can pick it back up from there. So now what I’m going to do, with no rebuttal on either side, I’ll start with Stephan Kinsella. I’m going to ask questions. You will have five minutes each. These are just things that I’ve pulled out myself, questions that I have from statements that you’ve made in the debate so far.
So Stephan, in your opening statement, you explicitly said that intellectual property censors free speech, and I think in a way you may have alluded to that just now as well with your statements about defamation. That’s a pretty strong claim, especially for people’s understanding in the west of the value of free speech. Do you stand by that? Will you expand on why you believe there’s an equivalence there?
STEPHAN KINSELLA: Absolutely. In fact, I can give some examples, and I’ll mention a few from the top of my head here, but if people want more examples, go to my website, C4SIF.org/aip, which means against intellectual property. And look for my post about the trade – the copyright and patent horror files, and I just detail some examples. I stopped collecting them about ten years ago because there are just too many, but certainly.
There are some notorious cases where trademark or copyright law have been used to threaten people not to perform certain yoga moves. That’s moving your body in a certain way. There’s been threats against people with certain tattoos or designs on their faces because the tattoo has a copyright. What are they going to do? Be forced into court and told to have their face re-tattooed?
The fundamental fact is that you can’t – you are – it is a criminal violation to print certain works that are said to infringe copyright. You can go to jail. In fact, Kim Dotcom is still facing extradition to the US because of having a website with hyperlinks on it. There was a grad student in England called James Dwyer I believe, D-W-Y-E-R, who simply had a website with hyperlinks pointing to someone else’s site that hosted pirated content.
And the US tried to extradite him to come to the US to face criminal – federal criminal charges. It ruined his grad school career for several years. There was a sequel written to The Catcher in the Rye, and the estate of the author took this guy to federal court in the US—this was a few decades ago—and got the book banned. The court ordered the book to be never published and destroyed. This is literally book banning by the courts in the name of copyright.
The famous vampire movie, Nosferatu, was held by a court to have infringed the copyrights of the estate of Bram Stoker, Dracula, and copies of the movie were ordered burned and destroyed. I think a few survived luckily, so we now have it. So there’s any number of cases. Oh, one of the pioneers of internet technology Aaron Swartz, the poor guy uploaded some papers, academic papers to the internet because they’re behind these stupid pay walls. And he was facing decades in federal prison, and he committed suicide. It was one of the most tragic cases.
And then you have milquetoast advocates for copyright reform who want to be mavericks like – I’m not going to mention names, but it’s easy to find, saying that, well, he should have gotten some punishment, but that was too severe. Well, I think these people bear some complicity in the death of this poor guy. You have to be for total copyright abolition. Of course it censors free speech. If I wanted to make a movie or if I want to write a novel and include sections from someone else, I should have every right to do so.
And I would just say one more thing. You’ll notice that the advocates of copyright and patent law, they will mix together arguments, the creation argument Dr. Wright is doing and then the utilitarian argument, and they just mix these things together. And then they’ll also throw in things like fraud and plagiarism, which – like, for example, if I sell a bootleg copy of a novel, they say, well, that’s fraud. Well, it’s not fraud. I’m not pretending to be the author. It’s not plagiarism. Plagiarism is not even illegal.
If I wanted to make a copy of the Bible tomorrow and put my name on it, or if I wanted to publish Stephan Kinsella’s Romeo and Juliet tomorrow, I would be looked at as a fool, but it’s not a copyright violation because the copyright is long expired. So plagiarism has literally nothing to do with copyright. And believe me, the owners of vast archives of copyrighted material would not be happy if the pirates simply didn’t put their own names on it and kept the original creator’s name on it. That’s not what they want. They want to stop you from copying, so absolutely.
In fact, I think that the patent system does far more physical damage to the human race in terms of monetary damage and lost innovation, probably trillions a year. I mean we could be having flying cars by now or something if not for the patent system hampering innovation over the last 200 years. But the copyright system I think is arguably worse because the patents last a – I mean the copyrights last a lot longer, and they’re threatening internet freedom.
And the internet is the greatest tool that we have to fight the state I believe because we have communication, and it’s decentralized. And we can get around the state this way, and if anything threatens the freedom on the internet, it’s a big danger to human freedom, and it aids the state. And copyright is being used with these six-strikes-and-you’re-out laws and these YouTube takedown notices with the ICE system seizing websites, taking them down for having pirated content. Anything that threatens internet freedom is a severe threat to human liberty, and libertarians should recoil in terror and fear from copyright law for that reason. So the copyright law is very insidious and extremely evil, and the patent system does more actual tangible damage in my opinion.
CRAIG WRIGHT: We can’t hear you, Vin.
STEPHAN KINSELLA: Can’t hear you.
VIN ARMANI: I’m sorry. I was so dialed in. Dr. Wright, we have been – this question is now for you. We’ve been talking in this debate about some pretty high-level philosophical principles. I want to bring it down to some specifics, specifically for you here. You’ve argued throughout this debate that IP spurs – has a utilitarian value in spurring innovation and creating more prosperity.
But your critics—myself included—argue that one of the major reasons for the growth of blockchain technology and Bitcoin specifically is due to the open-source nature of the space and the lack of intellectual property. So I want to ask you, with this space specifically in mind, why do you believe that IP is appropriate for this space since you yourself are pursuing patents in this space?
CRAIG WRIGHT: Money is very simply information. Now, this idea that all information needs to be free or whatever else is false. All information doesn’t need to be free, and it comes at a cost. It’s scarce. If you just have everything, you have data. You don’t have information. If I copy every single paper ever created, I do not have information. I have data. There’s a big difference there. Actionable information matters. Now, when we’re talking about some of these things, what we’re talking about is an individual right to use things. Now, the creator can choose. Now, we haven’t seen this space grow as it should.
We’ve actually seen it grow a lot smaller and be fragmented. We’ve seen many [indiscernible_00:44:32]. We’ve seen the splitting of the system. And our target isn’t really each other. It shouldn’t be. Instead of splitting up everything that people want and sort of being small and divided, what we should do is not have everyone attacking the corners but rather looking at our one enemy and our one true – something we need to fight. We need to take on Visa. We need to take on PayPal. We then need to look at the central banks, not banks because banks can actually have a function when they aren’t sort of hampered by the regulations that we have. We need to have a space where individual players can actually form something – an individual – basically a system that will grow and not fragment.
Everyone else wants it to fragment. The banks want it to fragment. The central banks want it to fragment. They want millions of these because then each is controllable. So right now, what we have is a system that is becoming very easy to regulate, very easy to get around, very easy for governments to start putting their thumb down on.
We have gone from a system that at one stage was the one, not centralized as people say. Being one doesn’t make centrality in the way that people argue. One money isn’t bad. One money actually allows anyone on Earth to start actively engaging in trade. And that doesn’t stop competition. It doesn’t stop people doing things. It doesn’t stop new nodes in Bitcoin unlimited, in Bitcoin ABC, in our software, etc. that we have. That’s competition, and even though it’s on the same blockchain with Bitcoin Cash, we have six different players all doing the same thing, proposing different things, saving up different scripts.
So the reality is you can actually have these things and can actually limit it. So I have things that I don’t care whether people say they’re – someone else will think of them. They haven’t. Still, we filed our patents. No one else has been doing it. No one else has come up with a solution to some of the things we’re releasing this year as much as everyone else has been trying, as much as Core have been sitting there saying we’ll find a way. We have, and that cost us a lot of money. It cost a lot of time, and this idea that if everything was just going to be given away we would still invent is wrong, this idea that the evidence shows things.
As Mr. Kinsella showed, there are studies. Unfortunately, what he’s not pointing out those studies are computer models. Those studies aren’t actual real-life, actual human action. No studies existing – I’ve pointed there’s at least 2000 studies, not small studies, at least 2000. There are ones in Africa, ones in India, ones in wherever else. Why is this going to take off? Not because there are 600 forms of money in a particular country. No bimetal system works. Governments put in bimetallism. Natural life doesn’t. We had silver acted as a metal in most of Rome.
Silver acted as a metal in most of China, not with gold or the other until the government stepped in. It’s when the government steps in and we start saying what will be money that it changes. This is legal tender. You must use it. When people have a choice, they choose what’s easiest. And trying to balance between 50 different currencies is not ever the easiest. So we can say all these things about why it’s good, bad, or indifferent.
But the truth of the matter is what we’re trying to do is open up innovation, and that doesn’t happen by allowing fragmentation. It doesn’t happen by having lots of small projects that have no link anymore. All of this happened not because of control being sort of diversified. It happens because a few small groups decided for the rest. So this idea that everything was free, well, it’s not. But it was put out there, and other people can compete. But that doesn’t mean that you had open access to the Bitcoin code to do whatever you want. We didn’t.
VIN ARMANI: We’re going to leave it there, but since – actually, if you would like, Dr. Wright, I think at this point what we’re going to do is we’re going to grab a closing statement from each one of you. Since Stephan started, then we will have you, Craig, finish it. Start on this last thing, and then, Stephan, you can have the last word on this. So there’s been a lot that we’ve covered and some things that obviously we have not gotten into. So any final thoughts that you have, Dr. Wright? You are first up on this. You will have five minutes, and then, Mr. Kinsella, you will be after that.
CRAIG WRIGHT: Okay. First of all, I’m going to rebut a couple of bits like this Swarz case. The Swarz case was actually not about copyright. That is the defense. That is free speech needs to be out there. The reality was that a physical system was broken into. A physical system was accessed. Electronic controls were bypassed because someone broke into a building, accessed security controls, and then physically altered a machine so that they could actually copy things remotely to a person in Canada.
They re-cabled systems. They broke systems. Basically, the argument is it should be okay because it’s free speech to break into your house. That’s what Mr. Kinsella’s argument here is. Well, your front door wasn’t secured enough. I mean, well, yes. You have a lock, but I’m sorry, I got to drill through it, blow up the hinge, and then basically go in there and do what I want. So therefore, after I set the webcam up in your house and embarrassed you by posting all the pictures of you having sex with your wife, that’s okay because, well, it’s your responsibility to protect your system, so therefore, the end.
We then have the Apple case. What we have is theft. We have this thing called theft by finding. It’s a type of larceny. If you actively identify the owner of a product, not you’ve looked for them and decided you couldn’t, then you have committed theft. This goes back to common law. We’re not talking anything new, so the disingenuous statements about how none of this existed by Mr. Kinsella over there is basically taking out of context the fact that all of this goes back to common law.
When I mentioned republic in Rome and those laws, these were actually enacted in what was equivalent to common law of the time. It was judicial law that was handed down the same way it was in early Europe, in early Saxon Europe that was, where different people would go on a circuit and be a magistrate for a time, and the law would evolve, not written—common law. Even Rome started with common law. Everyone remembers Rome as this authoritarian state with an emperor. It wasn’t. Before the time of Marcius, Rome was actually a republic, which is a different thing all together. And before that, they had law. They had law that was dictated in a common law sense.
So we have this little fact here that even without contract, that third party who grabbed and broke into that device, they didn’t just find it. They didn’t just take it away. They physically took someone else’s property, the Lockian argument that Mr. Kinsella keeps using. They took that property and accessed it. They violated that person’s physical property rights to gain access to intellectual property.
By Mr. Kinsella’s own argument where he has claimed property rights are physical, he has put an example where someone has physically stolen goods, gone off intentionally because it’s a new product, and sought to sell them on market knowing, not just suspecting, knowing after breaking in that this was stolen property. If you received stolen property and you sell it on, you and the person who knowingly receives it are in breach. What libertarian here will say that the receipt of stolen property is okay? I dare any libertarian to say you have the right to steal my car because you could get in there and joyride.
I dare you to tell me that one. I dare you to say my goods are yours to do what you want with. So we have a case here where we have lots of evidence according to Mr. Kinsella’s site, lots of evidence of studies. I can make a computer model that says anything. Computer models aren’t reality. This is the old argument that goes back to our friend Mises. Mises didn’t like all these mathematical models that were used by people like Keynes for a reason.
He didn’t like them because they weren’t honest because you could make them say anything you want. When you look at econometric models and you start tweaking how they’re going to work, small changes make very radical differences. And as for none of this being available, I’m going to put it all up on a website. I’m going to actually start populating all of this. For every one of his, I’m going to do ten. For every one of those things, I’m going to put a model so that you can tweak and see what happens.
VIN ARMANI: We’re going to leave it there. Thank you, Dr. Wright. Stephan Kinsella, you are going to have the last word in this debate, and you have five minutes to do so, sir.
STEPHAN KINSELLA: All right, just quickly I’ll hit on a few things before the main meat. But if Swarz committed trespass, then he could have been punished under regular trespass law, but he was facing criminal copyright charges of decades in federal prison, which is clearly unjust.
As for the Apple case, yes, it was Apple’s property. They had a right to get it back. My point was to show that trade secret law can affect third parties. Trade secret law was actually used in that case, not some kind of property law, which should have been the law used. As for the history of copyright and all this stuff, I would refer people to an article. It’s on my site, C4SIF.org/resources. It’s by Karl Fogel. It’s “The Surprising History of Copyright.” So it’s a very illuminating description of the history of this whole area of copyright.
And I’d like to say I agree with Dr. Wright on a couple of things, which is good. I agree with him that one money is possible and maybe desirable, and I agree that information doesn’t have to be free. If information – if someone wants to keep information private, they have certainly a right to do so. But when you put a product into the stream of commerce that has publicly accessible features like the design of an iPhone, you make that information public.
When you publish a novel and decide to publish it, the information is out there, and then you can’t tell people what not – that they can’t use the information that they’ve learned from you. It is absolutely clear that libertarians who believe in the basic principles of property rights in tangible scarce resources like I think we do, we believe that people have the right to own their bodies and their cars and their houses. If you believe in those rights, then it is clear that any system that undercuts those rights and that is at least prima facie a violation, the burden is on the person presenting it.
The burden is not on me to show that copyright and patent law are invalid just because we have those systems because, after all, we’ve had slavery in the past, and we’ve had a drug war. We’ve had taxation and wars and the Federal Reserve and government schools, lots of laws that exist which are clearly unjust. The burden is on someone to justify those laws, and you have simply given no argument for intellectual property law. And, in fact, there are no good arguments for intellectual property law if you accept the basic principles of property rights.
As for the studies you talked about, I would just refer people to the book, Against Intellectual Monopoly by Boldrin and Levine, which is online for free. It’s linked at my website, and it’s on their site, AgainstMonopoly.org. They exhaustively go through the empirical argument that your side has to put on. The burden is on you. And the evidence is not in the form of computer studies. I only know of one study on my site by Andrew Torrance which is a computer model. All the others are looking at the evidence that’s presented and looking at the evidence that was produced by advocates of IP and showing that it was a bad argument being made.
So what I would like to emphasize is that we have to realize that, as libertarians, as people who believe in property rights and justice and the free market, we are in favor of competition. We’re not against competition. We’re not afraid of competition. We’re in favor of the acquisition of knowledge and the sharing of knowledge and the learning of knowledge and emulating what other people do and competing with other people. Competing is good, learning is good, and emulating other people is good, and the free market is good, and we should oppose any system that interferes with free market competition, which is what patent and copyright law do.
VIN ARMANI: Excellent. Thank you both. I just want to say, gentlemen, this was wonderful that – and I want to thank you both and I think the audience would like to thank you for putting this on with such short notice. I think it’s a testament to both of your integrity to step out of the online world of Twitter and to sit down with each other and to actually hash this out. So I want to really just solute you both for that; eye-opening debate. I thank you guys for this.
I don’t know that the issue is settled. I’m telling you I’m looking through the comments, and it seems that both of you have made some strong arguments, and it seems that the audience feels that way. We’ll have to go back on the look-back through this, but I want to thank you both for this, and I’m sure that I will get a chance to interact with both of you in person. But thank you both for this, and have a great rest of your evening there in London, guys.
CRAIG WRIGHT: Thank you very much.
STEPHAN KINSELLA: Thanks.
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