KOL253 | Berkeley Law Federalist Society: A Libertarian’s Case Against Intellectual Property

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Kinsella on Liberty Podcast, Episode 253.

I spoke today on “A Libertarian’s Case Against Intellectual Property,” at the Federalist Society, University of Berkeley-California. It was well-organized and there was a perceptive and interesting critical commentary by Professor Talha Syed.

This is the audio I recorded on my iPhone; video below; line-mic’d audio here.

My speaking notes pasted below.

Youtube:

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A Libertarian’s Case Against Intellectual Property
Stephan Kinsella
Kinsella Law Practice, Libertarian Papers, C4SIF.org
UC-Berkeley Law School Federalist Society
Oct. 11, 2018

General background: A Selection of my Best Articles and Speeches on IP

• Intellectual Property:
  • Legal rights enforced by law having to do with products or creations of the mind, the intellect
  • patent, copyright, trademark, trade secret
  • semiconductor maskwork, boat hull designs, database rights, moral rights, right to one’s “likeness,” reputation rights (defamation, libel and slander, law)
  • punishment for depicting religious figures in drawings
  • “cultural appropriation”
• Why IP?
  • Ayn Rand “Patents are the heart and core of property rights.” … “Intellectual property is the most important field of law.”
  • US Commerce Dept. Study 2012 purporting to show that “intellectual Property-Intensive Industries” Contribute $5 Trillion, 40 Million Jobs to US Economy” [USPTO/Commerce Dept. Distortions: “IP Contributes $5 Trillion and 40 Million Jobs to Economy”]
  • 2018 Nobel Laureate in Economics Paul Romer: economic growth — and the technological innovation it requires — aren’t possible under perfect competition; they require some degree of monopoly power [patents] [Douglas Clement, Creation Myths: Does innovation require intellectual property rights?;
  • Some studies: patent trolls alone cost $29 billion and total costs much higher globally ($1 Trillion/year, or more, given the “cumulative” effect of innovation) [Reducing the Cost of IP Law;Costs of the Patent System Revisited]
  • US continually foisting higher patent and copyright protections on other countries via trade agreements and treaties, e.g. NAFTA, USMCA, TPP (“IP Imperialism”)
  • Copyright distorts culture and threatens Internet freedom (censorship, takedown notices) [“Death by Copyright-IP Fascist Police State Acronym”; “SOPA is the Symptom, Copyright is the Disease: The SOPA Wakeup Call to Abolish Copyright,” “Where does IP Rank Among the Worst State Laws?”, “Masnick on the Horrible PROTECT IP Act: The Coming IPolice State” ]
• It’s important to get this issue right
• I’m an IP lawyer and also a libertarian since high school (1982) [How I Became A Libertarian]
• My IP struggle: problems with Rand, researching the issue
  • Tom Palmer, Wendy McElroy, Hans-Hermann Hoppe, Mises
  • Finally realized IP is unjustified around the time I passed the patent bar (1994)
  • Given my knowledge of IP law I spoke and wrote more and more on this topic, even though I’m more interested in other areas of libertarian legal theory
• But I’ve found that sorting out this issue is crucial and helps sort out many other legal and policy issues
  • property and rights theory, Contract, fraud, causation and the law, and the nature and source of wealth and human prosperity [See my upcoming book, Law in a Libertarian World]
• The question is not “Is IP a good idea?” or “What kind of IP protection should we have?” but rather What type of laws should we have; what laws are just, or justified?

Purpose of law and property

• The question is not “is IP a good idea?” or “what kind of IP law should we have?”
• Garden of Eden
  • Scarcity, conflict [Hoppe, TSC, chs. 1-2; Of Private, Common, and Public Property and the Rationale for Total Privatization”]
  • All rights are property rights [Rothard, Human Rights as Property Rights]
  • Law is a set of rules enforcing property rights
  • To permit conflict-free use of resources
  • Allocates ownership of a contested resource in the case of a dispute
  • Basic rules:
    • Self-ownership, for bodies
    • for previously unowned, scarce resources:
      • original appropriation (homesteading)
      • contractual transfer
      • Transfer for purposes of rectification (restitution)
    • These give rise to a body of rules for property law, torts, contract, fraud, and criminal law

History of IP

• Sybarris cooking competition 500 BC
• History: patents used to grant monopolies. Statute of Monopoly 1623.
• Copyright resulted from state and church censorship of the press, culminating in the Statute of Anne 1709 [See Fogel, The Promise of a Post-Copyright World]
• then the US Constitution in 1789: ““To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
• Originally seen as exceptions to natural law and property rights, as privileges granted by the state to encourage innovation or artistic creation.
• Defenders began to refer to it as “intellectual” “property” rights. Modern beneficiaries of IP are Hollywood, the music industry, and the pharmaceutical industry. [“Intellectual Properganda”]

Arguments for IP

• Utilitarian and deontological
• Problems with utilitarianism
  • In general: Austrianism/subjective value
  • Ethical problems with utilitarianism
  • The empirical evidence itself
    • Burden of proof: the Constitution
    • It was just a “hunch” at first
    • What it has to show: value of innovation and cost of the system
    • What it has shown [“The Overwhelming Empirical Case Against Patent and Copyright”]
      • Fritz Machlup, 1958: “No economist, on the basis of present knowledge, could possibly state with certainty that the patent system, as it now operates, confers a net benefit or a net loss upon society. The best he can do is to state assumptions and make guesses about the extent to which reality corresponds to these assumptions. … If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one.”
      • François Lévêque and Yann Ménière (French economists, 2004): an economic analysis of the cost and benefits of intellectual property “is no more within our reach today than it was in Machlup’s day” [1950s].
      • Boston University Law School Professors (and economists) Michael Meurer and Jim Bessen concluded (2008) that on average, “patents place a drag on innovation” … “the patent system fails on its own terms”
      • economists Michele Boldrin and David Levine: “The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless the latter is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity.
    • But regardless of the empirical data on these issues, we should oppose IP regardless, in principled grounds, just like we oppose antitrust law and the minimum wage on principled grounds, not because of empirical data
      • For example antitrust law is primarily unjust because businessmen have a right to collude and “set prices”
      • And the minimum wage is unjust because it does not violate someone’s rights to offer to pay them a small wage to do a job
      • So we have to turn to more principled, or “deontological,” views of rights to fully address the IP issue
    • Locke and the Labor Theory of Property
      • [KOL 037 | Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory; Down With the Lockean Proviso ;“The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism,” ]
      • Locke’s big mistake: too many metaphors
      • Labor theory of property
      • Has led to vast confusion about the nature and basis of rights and the source of wealth
      • Led to the labor theory of value à Marx and communism, death, destruction, impoverishment, the Cold War, the nuclear arms race, and the lack of clean and safe Thorium nuclear fission reactors instead of Uranium (needed to breed Plutonium for nuclear bombs) [Locke, Smith, Marx and the Labor Theory of Value ; see also Hoppe’s Introduction to Democracy for a more “revisionist” theory of modern history]
        • Carbon-free, plentiful energy, no waste, no meltdowns
        • admittedly this is a counterfactual, and thus speculative
      • Nobody owns labor, or action, or value [Cordato and Kirzner on Intellectual Property;Hoppe on Property Rights in Physical Integrity vs Value,]
      • Nobody owns information, or patterns, or knowledge
    • Mises’s praxeology:
      • Human action is the employment of scarce means (material resources), guided by knowledge, to achieve some future end goal that would not otherwise occur.
      • Use of means to causally interfere
      • successful human action requires access to and control of scarce means, and knowledge about cause and effect.
      • To have conflict-free, cooperative human action, in society, property rights are assigned to the scarce means.
        • Makes no sense to do this for knowledge. Knowledge is non-rivalrous.
      • IP is similar to normal property rights
        • Richard Epstein, Adam Mossoff
        • Irrelevant
        • Humans could be owned too (chattel slavery). What the legal system can do is irrelevant to what it should do

• IP rights are involuntarily imposed Negative servitudes [Intellectual Property Rights as Negative Servitudes ]

• Auxiliary argument: patent and copyright require legislation
  • Anarchist libertarians are against legislation [Legislation and the Discovery of Law in a Free Society,]
  • Even minarchist libertarians have good reasons to be against legislation as a means of making law

The future of IP

• Special interests are fighting harder than ever
• The Internet, digital files, encryption, torrenting have made it virtually impossible to successfully enforce copyright law
  • EFF/cypherpunk John Gilmore: “The Net interprets censorship as damage and routes around it”
  • sci-fi author Cory Doctorow: The Internet is “the world’s most efficient copying machine” and “It’s the twenty-first century. Copying stuff is never, ever going to get any harder than it is today”
• 3D printing may do the same to patent law, over time
  • Just as 3D printing of guns is causing trouble for enforcement of gun regulations

Thomas Paine: “a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason.”