Intellectual Property is an Anti-Concept

Revised: November 06, 2015

The views and opinions in this article written by Chris LeRoux with significant contributions by Tal Salsa do not represent the views and opinions of other people that write on peacefreedomprosperity.com.

“A people averse to the institution of private property is without the first element of freedom.” ~Lord Acton

The term intellectual property (IP) is an anti-concept, an unnecessary and rationally unusable term which serves only to confuse. Rand wrote, “The purpose of anti-concepts is to obliterate certain concepts without public discussion; and, as a means to that end, to make public discussion unintelligible, and to induce the same disintegration in the mind of any man who accepts them, rendering him incapable of clear thinking or rational judgment. No mind is better than the precision of its concepts” (Capitalism: The Unknown Ideal, 180). No category of IP can be rationally distinguished. Rather, the metaphysical and epistemological problem of universals has been confused with economic issues of property rights. The question isn’t what may be owned, for anything that exists can, in theory, be owned. Let us consider.

Private property is any existent acquired through homesteading: non-coercive appropriation, production: non-coercive transformation, or exchange: voluntary contract. All property derives from an intellectual choice to use existents for particular objectives. Mises wrote, “Production is a spiritual, intellectual, and ideological phenomenon. It is the method that man, directed by reason, employs for the best possible removal of uneasiness” (Human Action, 174).

Ownership means “exclusive control” (Rothbard, Man, Economy, and State, 107). If exclusive control results from homesteading, production, or exchange, then it is just. If ownership results from aggression: the initiation of physical violence, coercion: the threat of physical violence, or fraud: the failure to honestly fulfill a voluntary contract, then it is unjustly acquired or stolen property (Rothbard, Ethics of Liberty, 141, 217). Ownership, exclusive control, means one can give away, rent out, share partial ownership, sell outright, sell with conditions, and even destroy.

Stephan Kinsella has re-introduced the anti-usurist’s alleged requirement for “complete alienation” in exchange, re-framing it as rivalrousness (The Limits of Libertarianism?: A Dissenting View, 2014). The anti-usurists claimed interest was illegitimate since failure to pay did not lessen the lender’s original capital (The Turgot Collection, 180, 190). Based on this assertion, they justified prior restraint and suppressed the enforcement of interest in voluntary contracts. Yet this violated the property rights of all parties, regardless of whether the lenders’ capital was diminished, for it violated their exclusive control, their ability to buy and sell their property under voluntary conditions. Similarly, Kinsella insists that the violation of exclusive control is not criminal if the person’s original property is not diminished, in his opinion, by the violation. Thus if someone intentionally violated a voluntary agreement not to disclose, Kinsella’s position is it is not fraud because the owner still retains residual control of their property. It echoes the thief who says the person they robbed was so rich that they didn’t really need what was stolen from them.

Yet any intentional violation of an owner’s exclusive control is aggression, a criminal violation of the law of private property, which is absolute, axiomatic, eternal, objective, and universal. No one may ever lawfully initiate aggression, coercion, or fraud (Hoppe, The A priori of Argumentation and Economics and Ethics of Private Property, 18), even if the criminal believes their victim has no damages. Damages are a secondary issue to the occurrence of crime. An owner can therefore sell under any condition agreed to voluntarily, excluding that which would initiate aggression, coercion, or fraud against third parties (Money, Bank Credit, and Economic Cycles, 552) or requiring the evidently impossible (Ethics of Liberty, 208). A contractual provision for interest, not to disclose, not to reproduce, not to redistribute, for example, meet the requirements of Rothbard’s title-transfer theory. The exchanges represent not mere promises but rather agreements to transfer titles to particular existents named in the contract. The conditions represent no harm to third parties, nor do they attempt to transfer inalienable property (Ethics of Liberty, 207). Any intentional violation is thus criminal. As Rothbard and Turgot explained:

In our title-transfer model, a person should be able to sell not only the full title of ownership to property, but also part of that property, retaining the rest for himself or others to whom he grants or sells that part of the title (Ethics of Liberty, 219).

A man then may let out his money as lawfully as he may sell it; and the owner of money may do either one or the other, not only because money is equivalent to a revenue, and a means of procuring a revenue, not only because the lender loses, during the time of the loan, the revenue he might have procured by it, not only because he risks his capital, not only because the borrower can employ it in advantageous acquisition, or in enterprises from which he may draw large profits; the owner of money may lawfully draw the interest of it by a more general and decisive principle. Even if all the foregoing were not the case, he would none the less have the right to require an interest for his loan simply because the money is his property. Since it is his property he is free to keep it, nothing obliges him to lend; if then he does lend, he may attach conditions to the loan as he sees fit (The Turgot Collection, 57).

So how is ‘intellectual property’ generally defined among the “anti-IP” adherents? According to Stephan Kinsella:

So it’s a fairly incoherent term of positive law to describe a group of somewhat related legal rights. They are called intellectual property because the legal theory goes that they arise from the creation of the intellect.

Kinsella and I agree the term IP is incoherent, and what could be more dangerous than the state deciding what can or cannot be private property based on an incoherent term? Since the term IP adds only confusion, it is clearly worse than worthless and should be dropped. Indeed, the “anti-IP” adherents are far from unanimous on what constitutes IP. Some of them are against x being private property and some of them against y, which could be expected since all property is intellectual in origin and the distinction therefore clarifies nothing. Thus we must re-examine what is erroneously labeled IP within the traditional framework of private property. Private property is not defined by the state but is established by metaphysical fact, the fact of non-coercive homesteading, production, or exchange. Private property is simply the natural way of things absent violence.

The “anti-IP” adherents react with proper outrage to private property violations within the state IP system. Yet the state itself is criminal since it is a coercive monopoly funded by extortion, theft, and slavery. The free market anarchist can properly wash their hands of the entire mess, calling to “privatize everything”, without limiting their objections to certain absurdities within that system. But, if the free market anarchist intends to analyze policies within that system or theorize about the functioning of a future free market society, they must have a rational standard on which to base their conclusions. The distinction of being intellectual in origin clearly will not serve. But, there is no need for any new concepts to deal with these issues. Was the existent in question non-coercively homesteaded, produced, or acquired in exchange? Then it meets the definition of property. Obviously the “anti-IP” adherents are correct that involuntary terms of use conditions are illegitimate. Yet this has nothing to do with what can or cannot be private property. The enforcement of involuntary terms of use conditions are always a criminal violation of private property.

Can one own an idea? Can an idea be homesteaded? Yes, an idea can be non-coercively appropriated via non-coercive observation and integration. Can an idea be produced? Yes, justly acquired observations and ideas can be non-coercively transformed into new ideas via concept formation. Finally, can a justly acquired idea be exchanged? Yes, a justly acquired idea is under the exclusive control of the owner. The idea can be abandoned, given away, destroyed, sold outright, or sold via voluntary, restricted terms of use contracts.

What if two people produce similar ideas? What if two people produce nearly identical wheels? So what? They still each own their justly acquired ideas just as they each own their justly acquired wheel. So now imagine two people have made two very similar wheels resulting from very similar ideas. If there was a trespass of private property or a voluntary contract violation, it is criminal. If not, they both produced and own a similar wheel and that is all there is to it. Certainly the “anti-IP” adherents are correct that absent trespass or contract fraud, one party cannot claim that since they made the wheel first, others cannot make one similar to it. But if one produced the wheel first and sold it to the other with a do not reproduce clause, the contract is valid and its violation would be theft via fraud. The issues of copyright, patent, trademark, etc., are all easily resolved by consistent application of the law of private property. For instance, one can sell a book, ebook, joke, machine, poem, recipe, software, smell, song, tool, etc., with voluntary terms of use conditions but not involuntary terms of use conditions. There is no category of existents which cannot be owned and sold via voluntary, restricted contract and legitimately enforced privately, for example via voluntary, third party arbitration, insurance, and security contracts using performance bonds, private reputation ranking systems, and social and economic ostracism. As Rothbard explained:

There is, however, an exception to the right to use and disseminate the knowledge within one’s head: namely, if it was procured from someone else as a conditional rather than absolute ownership. Thus, suppose that Brown allows Green into his home and shows him an invention of Brown’s hitherto kept secret, but only on the condition that Green keeps this information private. In that case, Brown has granted to Green not absolute ownership of the knowledge of his invention, but conditional ownership, with Brown retaining the ownership power to disseminate the knowledge of the invention. If Green discloses the invention anyway, he is violating the residual property right of Brown to disseminate knowledge of the invention, and is therefore to that extent a thief. . . Hence, our theory of property rights includes the inviolability of contractual copyright [and contractual patent]. . . it should be noted that many, if not all, of the problems could be easily surmounted. . . by the promisee’s requiring a performance bond of the promissor in the original agreement. . . Since money, of course, is alienable, and since such a contract would meet our title-transfer criterion, this would be a perfectly valid and enforceable contract. . . Failure to meet the performance bond will then be an implicit theft of the property of the owners. . . Furthermore, in its centuries of use, almost no creditors bothered to sue in the courts for “damages” (in a “writ of covenant”), since the “damages” had been fixed in advance in the contract itself [some emphasis and bracketed comment mine] (Ethics of Liberty, 194, 212 – 213).

As mentioned above, the “anti-IP” ideology is at least partly the result of confusion regarding the problem of universals. Those suffering from this confusion are cast adrift in economics without a metaphysical and epistemological anchor. Indeed, “anti-IP” adherents do not seem to agree on what they are against, and additionally, why they are against it. The opposition of the more consistent communists is not so proximately based on confusion regarding universals. Rather the confusion conflating existents with universals explains, at least in part, how those who tend to favor, or even believe they consistently favor private property, have come to find themselves allied with anarcho-communists and other statists against freedom. Of course, the free market anarchist understands and agrees with their abhorrence of the current statist system almost entirely built on involuntary terms of use conditions, which is slavery. But the “anti-IP” adherents have thrown the baby, property rights, out with the bathwater, involuntary terms of use conditions.

Theoretically, anything that exists and only things that exist can become property. This is likely what the “anti-IP” adherents mean when they sometimes drop concerns of rivalrousness and claim that property is limited to physical, scarce, or tangible things. From this formulation however, they proceed to claim, in varying arrays of combination, that ideas, sounds, odors, or a myriad of other existents cannot be property. This is a non sequitur, an example of context-dropping. They have lost sight of whether a word is referencing a particular existent or a theoretical universal which does not in reality exist outside of consciousness (Rand, Introduction to Objectivist Epistemology, 82-88). They have wandered into the problem of universals, very likely completely unaware.

For ideas can exist inside the mind, in the form of neuro-electrical signals and related existents (http://en.wikipedia.org/wiki/Biological_neural_network and http://www.nature.com/news/brain-decoding-reading-minds-1.13989 and http://news.discovery.com/tech/biotechnology/internet-telepathy-thoughts-transmitted-online-140903.htm). Sound can exist in the form of “a vibration that propagates as a typically audible mechanical wave of pressure and displacement, through a medium such as air or water” (http://en.wikipedia.org/wiki/Sound). Odors can exist in the form of “one or more volatilized chemical compounds” (http://en.wikipedia.org/wiki/Odor). And so on. Any “instance” of a universal, any existent, can be owned.

When someone produces an entirely original idea, they could be said to possess a non-coercive monopoly. This is no different than any innovator in the market. Jevons, Walras, and Menger each independently came to a similar subjective, marginal utility theory of value (Rothbard, Classical Economics: An Austrian Perspective on the History of Economic Thought Volume II, 9). The first to have the idea could be said to have had a non-coercive, monopoly. If all three had the epiphany at the exact same nanosecond, no monopoly could be said to have existed. Regardless, such a natural, non-coercive, monopoly, when it may exist, does not imply or justify prior restraint on someone else producing a similar idea, as the “anti-IP” adherents rightfully point out. Each obtained ownership of their idea of subjective, marginal utility without initiating any aggression, coercion, or fraud, and each was free to dispose of their property as they saw fit.

Any innovation people consider beneficial is likely to eventually be emulated, but profit margins are increased in the meantime (Mises, Profit and Loss, 6). Even if voluntary, restricted contracts limit knowledge of or prohibit reverse engineering of a new technology, someone is likely to come up with a similar idea to reach a similar objective. They may or may not achieve the exact same ends by the exact same means, but as long as there is no prior restraint, trespass, or fraud, there is no conflict necessary. A commodity in two different places, including a network of neuro-electrical energy (ideas) in the minds of two different people, is necessarily a different commodity (Mises, Human Action, 90, 257-259), except where that idea was acquired and defined via voluntary, restricted contract as explained above by Rothbard.

Now if one uses the word “wheel” to refer to a universal, an attribute or attributes abstracted from identifiable characteristics of an existent(s), rather than a specific, existing wheel or an existing idea of wheel in the mind of an individual, then discussion of ownership is a non sequitur. Universals do not exist independently of consciousness. There never was a Platonic form for “wheel” or such an existent as “wheelness” that could be appropriated. Ideas are produced in the mind. Of course, one can own their idea of a universal or even own their solution to the problem of universals. And perhaps Plato had a natural, non-coercive monopoly on the concept of universals at one time. But universals per se do not exist and thus cannot be owned. And, if universals did exist somewhere, they could be owned. The “anti-IP” adherents fail to make the necessary distinction between existents, which can be owned, and universals, which cannot be owned, in their use of the anti-concept `intellectual property’. Thus, they spread confusion and communism.

“To call an object or thing property is confusing or misleading.” ~Stephan Kinsella (2.05.2014)

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