Originally posted at mises.ca on February 28, 2013
The following is adapted from a recent presentation at a Mises Toronto Pub night.
Let me start off by saying I have a lot respect for Robert Wenzel.
Robert Wenzel is the editor and publisher of EconomicPolicyJournal.com, a very popular–and very Austro-libertarian–finance and economics blog. Mr. Wenzel hosts “Morning Coffee with Murray Rothbard”, and his posts are littered with quotes from Mises, Hayek, Rothbard, and many others. He seems to always have a great quote from a great thinker ready. He is also a very interesting person. He is full of stories, from fending off muggers, to picking up women, and making $100,000 with drunken homeless bums.
Wenzel is a ruthless defender of Austrian and libertarian ideals. He has viciously (and correctly, in my opinion) attacked prominent figures many consider to be libertarian, on the grounds of them holding decisively unlibertarian, or even anti-libertarian ideas. Some people he has attacked on these grounds include Megan McArdle, Gary Johnson, Bruce Bartlett, Tyler Cowen, and Rand Paul. Many criticize him for it, but I believe it necessary to distinguish between libertarian and non-libertarian ideas, so when those who are new to libertarianism hear new ideas, they can better distinguish between libertarian and non-libertarian values. He has also compiled the very useful 30 day reading list on becoming knowledgeable libertarian.
He has personally answered many questions I’ve had about Austrian economics and libertarianism, and he even thanked me for contributing to his famous (and truly excellent) speech to the New York Fed.
So it is with some heaviness and unease that I write this article. Because I actually like and admire Mr. Wenzel for what he’s done and what he continues to do, to attack him as I will be doing here is a double edged sword. But I believe that this issue demands a full frontal and sustained attack, because as things currently stand, people are literally dying–and facing serious fines and jail time–due to people who, like Mr. Wenzel, believe that intellectual property (IP) is necessary and justified. I believe that these deaths (and fines and jail time and threats of expensive legal action) are completely unnecessary, and IP as a notion is entirely unjustified.
On January 23rd, Wenzel made a blog post entitled “Examining Jeff Tucker Intellectual Property Theory”. For those who don’t know, Mr. Tucker made his name as the editor of Mises.org, bringing the Institute to the digital age through his pioneering work on the website. Mr Tucker is also, following the footsteps of patent attorney and libertarian rights-theorist Stephen Kinsella, anti-intellectual property. (The animosity between Tucker and Wenzel has existed since 2009, and this is merely its most recent manifestation.) In that post, Wenzel attacks Tucker for holding onto non-libertarian notions of property. This is a serious charge against anyone claiming to be libertarian, a philosophy founded and predicated on property theory. But in order to examine Wenzel’s allegation, we need to first define what intellectual property is, and then understand libertarian property theory.
What is Intellectual Property?
Intellectual property is a temporary government grant–or government monopoly–for a “creation of the mind” so that the person given the grant can exclude anyone else from using your creation. There are many different types of IP: patents, copyrights, and trademarks are the most commonly discussed, but other kinds exist as well including trade secrets, industrial designs, circuit board topographies, and still more. These different kinds of IP are in essence different names to the same right (the right to exclude others from using an idea you had) for different goods. For example, patents only apply to inventions, copyrights for publishable works, etc. They also differ in the length of time that they are enforceable; patents last for 20 years, copyrights typically last for the lifetime of the author plus 50 years.
What is libertarian property theory?
Everyone acknowledges that property exists. No one, not even Proudhon, truly believes that “property is theft”. The only difference between libertarianism, and communism, and other political theories, when it comes to property is how property rights ought to be defined and distributed in society. In libertarian theory, property begins with ”you own your own body”. From there, to acquire new property, you must either homestead un-owned property, or contract (or trade) for previously homesteaded property. The principle of nonaggression, a staple in libertarian theory, in fact comes after establishing self-ownership; because aggression is defined as a trespass or attack on another person’s property, it is a derivative of property rights–not the other way around.
The point of libertarian property theory is to solve the problem of conflicts arising from scarcity. Libertarians acknowledge that we live in a world with heterogeneity and scarcity. Two people cannot use the same land for opposite purposes; the World Wildlife Fund cannot use the same hectare of land as a wildlife conservation, while Shell digs it up for oil.
Examining Wenzel’s Allegations
While Wenzel in his post brings up many arguments defending intellectual property, in the interest of time I will reply to six.
1. Wenzel begins by attacking Tucker’s claim that by understanding IP, we can “clarify fundamental notions in economics generally”, by quoting Ludwig von Mises as saying,
“It is beyond the scope of catallactics [i.e., economics] to enter into an examination of the arguments brought forward for and against the institution of copyrights and patents.”
At first this seems like a damning blow. But if we understand the full context that Mises was speaking in, we understand that he was indeed talking about judging the policy prescription of IP as being beyond catallactics. But don’t take my word for it; Robert Murphy, who wrote the Study Guide to Human Action, explains Mises’ position on this issue as,
“It is beyond the scope of catallactics to recommend where the property rights should be drawn in such matters, however.”
In other words, economics cannot say whether we ought or ought not have intellectual property, but it can describe a world under either circumstance.
2. Wenzel goes on to say that in a world without IP, secrets can’t exist. He writes:
“I may, for example, tell you a secret only if you agree not to tell anyone else. This could not occur in Tucker’s world, secrets couldn’t exist.”
But this isn’t true. Secrets can exist, but they only bind the people involved in the original secret discussion. If one party chooses to betray the pact of keeping information secret, only that party can face punishment. On the playground, people who can’t keep a secret are called gossip queens, and other children are wary of sharing information with them. In the real world, adults can publicly shame those to breach trust egregiously.
3. Wenzel then goes on to say that in a world without IP, production, innovation, and even general business would be slowed. He claims:
“It may result in some businesses choosing not to disclose their projects to potential financiers for fear their projects might be stolen without non-disclosure protection.”
But this sort of behavior happens all the time today. You can find many books and articles and forums where inventors express extreme skepticism of sharing there inventions with others, especially large businesses. In fact, even today, it is not unheard of that a large company meets with a small inventor who has an unpatented (or some cases, patented) product, tells the inventor that their product is no good, but then 6 months later comes out with a national campaign of an imitation product. But in a world without IP, businesses and inventors would be more careful in dealing with others–but this time with justification.
4. Wenzel then makes the claim that Tucker is wrong to claim that eliminating IP will necessarily improve production. He goes on to say,
“it will be impossible to measure net production, especially because of the difficulty in measuring product that isn’t producedÂ becauseÂ of lack of IP protection.”
While it is true that you cannot say with 100% certainty that production will increase, we can say that as a matter of history, whenever there has been no IP, innovation was relatively higher in an industry than after IP was implemented. The specific historical studies I’m thinking of include pharmaceuticals in the Switzerland in the 1800s, the US publication industry in the 1800s, the rise of Hollywood in the early 1900s, and software development in the 1960s through 1980s.
5. Wenzel’s next point is to say that what Tucker is proposing is in fact a violation of the non-aggression principle, because he is against enforcing contracts:
“In fact, dictating that a contract can’t be enforced that two people initially agreed upon is a case of aggression against the party that is being damaged by the lack of enforcement of the contract.”
But Wenzel ignores the fact that IP, as it is currently practiced today and as it has been practiced historically, has been a tool to punish people who would not have signed any contract. When old ladies are sued by RIAA for downloading Kelly Clarkson songs, they never signed any contract with the RIAA promising to never download any song ever. But this is the essence of IP as it is espoused today.
6. Wenzel closes by attacking Tucker’s claim that republishing someone else’s book under your own name is merely a vice, not a crime. Wenzel claims that this point is apparently a “core principle” of the anti-IP society. But as Tucker said, plagiarism is a vice–meaning it is a frowned up action, though not illegal. Plus, in a libertarian society, if someone publishes the entire works of William Shakespeare under their own name, and someone genuinely believes them and is then harmed somehow, the plagiarist can then be sued for fraud.
Throughout his attack, Mr Wenzel associates IP almost strictly with secrets, and as a consequence does not address the issues of real-world IP: namely, that people who never agreed to any contract can be sued for damages to a party that has not had any property trespassed or damaged.
Is IP consistent with libertarian property?
The idea of property is to solve the problem of conflicts arising from scarcity. But intellectual property does no such thing; in fact, it creates property conflicts in situations where there is no scarcity.
An idea is not scarce like regular property. An idea is scarce when it exists only in your mind, or on a piece of paper. But if you share your idea with someone–if you “give” your idea to someone–unlike normal property, you still have your own idea. If I discover 2+2=4, and tell you about it, I don’t immediately forget that 2+2=4. With intellectual property, however, unless you get express permission from me to do otherwise, you must forget ever learning of it.