KOL217 | Intellectual Property is the Bastard Child of the Gatekeepers

music hello this is James Newcomb and

welcome to episode number 14 of music preneur making money making music

today’s topic is intellectual property and I’m gonna warn you right now if you

think that intellectual property is imperative for civilization to survive

if you think that artists cannot survive or thrive without intellectual property

well you’re not gonna like this episode at all in fact you may as well just press stop right now but hopefully

it will give you at least a little bit of clarity on what is at best a confusing topic especially in this day

and age so let’s get to it with my guest stephan kinsella welcome to the program

stephan kinsella thanks glad to be here alright this is music preneur making

money making music and this is a topic that I have wrestled with over the years

and I’ve come to the conclusion that intellectual property is a huge barrier

to musicians monetizing their efforts it creates a lot of problems for musicians

and I realize that by saying this that a lot of people disagree with me or they

just they maybe I’ve turned them off already but you know what I am NOT gonna beat

around the bush anymore I tried to I tried to deal with this sort of at a back door way and I say screw it and the

best person that I thought of to tackle this issue and tell us why intellectual

property is a hindrance to progress and innovation is stephan kinsella and he is

the author of against intellectual property as well as a free pdf called doing

business without intellectual property and you can get that PDF at music

preneur com slash resources so Stefan I want to start out with I guess the major

problem with intellectual property is that it really does not fit in with the

traditional concept of property as as we know it is do I have that correct yeah

that’s that’s part of the way to look at the problems with it you know I I think

you mentioned I am actually a practicing patent attorney mm-hmm and I intellectual property attorneys

I’ve done this for 24 something years as a as a practice as my career I’m also a

libertarian and I’ve always been very interested in property rights and

justice and individual rights and also in the creative works you know the the

the intellect you know the creations of scientists and philosophers and artists and singers so

it’s not like I’m opposed to these things but just from what I’ve seen in my career and in my studies of

individual rights and property rights and learning a little bit more about the

history of and how these systems actually work patent and copyright in particular I’ve come to the conclusion

and I came to conclusion twenty-something years ago that these

laws are completely incompatible with justice with property rights they should

be completely abolished and they do not achieve the purported functions that

most people believe people are so used to these the ideas artists are so used to a system that is dominated by and

influenced by copyright especially copyright we’ll talk about for musicians and for these kind of entrepreneurs

novelist writers movie movie makers people like that that they they feel hostile when they

hear a criticism of these they basically think you’re insulting the creative enterprise itself right they think

yours because you’re saying they’re not worthy of having property rights a businessman can have property rights and their land in their factories and

buildings but but artists are not entitled to because they’re not as important that’s how they they take that

but when you start pointing out all the problems that IP as a practical matter

causes the average typical creative person they start to see yeah maybe this

bargain is not such a good idea well

let’s talk about how intellectual property is not property and the way

that I understand it from what you say is that like here I’m holding a pencil right now that I’m taking notes with

this interview no one else can own this pencil only I can have possession of it

at one particular time whereas the words that I’m saying right now well how can I

say that I own those words or how can I say that I own this combination of words and and that’s I guess that’s where we

have to start to understand how the concept of intellectual property is

problematic yeah and look the way I look at it the way I’ve come to describe it over the years it’s I sometimes rely

upon some of the concepts of a basic law you don’t have to be a lawyer to understand this and also some of the

concepts of Austrian economics I don’t know if we need to get into Austrian economics here too much you don’t need

to know the works of Hayek or Mises to really understand this it’s pretty common sensical but if you just

understand the purpose like step back and think about man in society why we

have laws why we have rights what the function of these things are what the function of property rights are

you’ll see why patent and copyright are completely incompatible and just as a patent is like a grant by the state that

gives you basically a monopoly over the use of a given intention for roughly 17 years copyright is a monopoly granted by

the state to be the only one who can say reproduce and broadcast and copy

a creative work like a novel yeah or or

a song or a song or even even software which was not clear for a while because

software has functional aspects that finally the court said yeah this is so-so software actually subject to both

patents and copyrights and trademarks so it’s it kind of kids all the bases the

fundamental thing is we live in this world a world of scarcity now by scarcity it’s an economic term it just

means there are things we want to use and we need to use to live tools land

food lumber things like that in even your body and this just means that only

one person can use these things at a time there’s a possibility of conflict but when humans in society see these

kind of violent conflicts some of us prefer to live in a peaceful society or cooperative one where we don’t have

these violent conflicts and the only way to avoid that problem is for people to choose not to do it which means if

there’s a resource or a good that could be used by only one person at a time like your pencil we have to assign an

owner to that thing so we have a rule that everyone in society respects which identifies the person who has the right

to use that resource so that’s just property rights yeah so it’s i if you

wanted to be precise you wouldn’t say the pencil is property what you really would say is the pencil is a resource and you have a property right in that

resource or basically you or the owner of that resource the reason the word property is used is a property sort of

means a characteristic right yeah so when you use a pencil it’s an extension of yourself hmm right you’re closed

extent it helps you extend your influence out into the world and for some things that you use all the time it

might become very intimately associated with your your very being like your pair of glasses maybe so you would say these

things are a property of of that person and then people start overtime calling

it it’s his property and when they say it’s his property what they really mean is this his characteristic but they tend

to think of property as describing the object itself the technically average is called

resources a resource that’s owned so the entire property rights system which is what the whole legal system ultimately

is about simply is there to answer the question when there’s a dispute between two or more people over who gets to use

a type of resource over which there can be disputes right so there’s some object some thing that multiple people want to

control whether it’s someone’s body or someone’s home or someone’s pencil the

property system simply gives us an answer to that question it says who the owner is and then we identify the owner

and everyone goes away and the owner gets to use it as he sees fit and anyone else who interferes with that is then

seen it’s a trespasser or as a criminal okay so that’s how property rights work

but you’ll notice that that applies only to things that there can be conflict

over these scarce resources something like a pattern of information or knowledge that’s in your head is not the

same kind of resource it’s and this is where a human of Austrian economics comes into it under the Aussie and I’ll

just say one part one little thing about Austrian economics not to turn off your guests although I find Austrian

economics tacit well I’d like to talk about Austrian economics because I mean for us to I mean if we’re going to

tackle this issue then we let’s just dive into the woods so I how uh first of

all let’s destroy describe Austrian economics and how this is more or less

leads to this conclusion that we’re talking about yes so in Austrian economics has nothing to

do with the economics of Austria or Australia even I think Tom Wood Tom woods once had a debate about seven

eight years ago with the CEO of a ing the big insurance company and about that it was about the crash or something and

he this guy says I don’t know why Woods keeps talking about Austrian economics that Austria has got such a small

economy compared to the US you know and so it’s just one school of economics

like there’s a Chicago School which is associated with Milton Friedman and the monetarists there was there was a number

of thinkers and philosophers they came out of Vienna Austria at the turn of the

well around the 1900s and they developed a distinct School of Economics

it was started by people like carl menger and friedrich von wieser and then Ludwig von Mises and Hayek so it’s just

a different type of economics a little bit of different than the Chicago School and one strand of that is the the school

founded and perfected by Mises and Mises had a unique way of looking at the

problems of economics and that is he calls it human action human action and all he did was he carried in for our

purposes we don’t have to get the technical economics but more of the framework of it or the methodology which

is that Mises recognized that humans act and that there are certain logical

implications of that and that’s how he deduces his body of economic laws but what it means to act is for a human

being to look around the world and to have some conception of where he is

and what the future is what feature is coming and he anticipates some future

that’s coming that will happen without his intervention in other words something is coming something’s going to

happen and I don’t like that I’m dissatisfied by that and I am aware I know I’m aware enough of the way tools

operate the way my arms can move the way we can intervene in the physical processes of the world that I could take

an action and change things for the better so that’s all human action is in general terms so if I start feeling

hunger I realize that if I don’t procure some food in about an hour I’m going to be very hungry or maybe I’ll die I’ll be

weak right so that that thought frightens me or makes me uncomfortable so I think well how can i satisfy this

well I’ve eaten before so I know I need to eat well how do I eat I have to find food well how do I get food I have to

maybe make a spear and go spear some fish so you think of things like that those thoughts are informed by your

knowledge of the world your knowledge of what’s possible your knowledge of what might be coming your knowledge of what

tools are available that you could possibly manipulate and then you go out you make a choice

and you do it so you can see there’s two fundamental components to human action

all human action number one involves the employment of the scarce resources or

means and number two it’s guided by knowledge so you have information or

knowledge that about what you think might happen in the future and about how the laws of physics work right how if

you sharpen a spear and throw it in the water gravity will take it down and if it hits the fish it will kill the fish

and you can catch the fish and you can use fight fire to cook the fish etc so you see all human action especially

successful human action that is an action that achieves what you wanted to achieve is a combination of knowledge

and employment of scarce resources now the scarce resources are these

things that we talked about before that could there could be conflict over those like only I can eat that fish only I can

use that spear so if there’s another person around who wants that spear or

wants that fish and he physically takes it from me I’ve been deprived of the use

of it and we might have to fight over it so that’s violent conflict right so a property rights system emerges among

people who prefer cooperation and it emerges to settle disputes about those

resources that we use in action but you see that’s only one part of human action the other part again is the knowledge

that you possess it makes no sense to have property rights for the knowledge because the knowledge is not something

people can fight over my knowledge of how to use a sharp rock to make a spear

tip my knowledge of how to throw the spear at a fish and kill it is knowledge

that anyone else can use at the same time there may be thousands of other people who also know how to do this or

they might have learned it from you from observing you right the fact that they copied what you did or learned from what

you did doesn’t take anything from you whatsoever there’s no conflict there

they’re not taking the knowledge from you because you still have that knowledge so this is fundamentally why

intellectual property rights or incompatible with real property rights because they attempt to assign

property rights in the knowledge part of human action as well as in the scarce

resources part of human action but this literally cannot work no look see I I

personally believe as a libertarian that patent law and copyright law should be abolished

I think these laws should not be laws okay so that’s just a normative position but I also state as a lawyer and just as

an analyst of this kind of a legal system it is literally impossible to have a property right in an idea

so the copyright system doesn’t really grant property rights and ideas what it

really does and the reason is because all law is based backed up by force

that’s physical force physical force is always applied to physical things in the world that is to the scarce resources in

the world so for example if if if a

publisher Sue’s a pirate for knocking off one of their authors books what they

really want is the use of force issued by a state court against the defendant

which either takes his money from him right and turn it in the form of damages or maybe puts him in jail even so puts

his body in jail or issues an order from the court compelling him not to print this book using his printing press so

all of these results are always basically the same as as the end result

of a dispute over those resources so what you could say is that a copyright is really a transfer of money from one

person to another right so it’s always really a dispute over a resource it’s just a disguised

way of doing it because we call it a property right in ideas and if you breach that copyright in ideas then the

damages would be a payment of money right when really we’re really you could just reword the copyright law and it

could say everyone owns their money unless someone does the following action

in which case they they have to give their money to someone else so you see it’s just a basis for an excuse to

transfer money it’s really redistribution of wealth which basically socialistic so it takes it takes

property from its legitimate previous natural owner and it transfers it to someone else just like taxes would do

for example so in a sense it’s no different than a tax okay so by having

Stephan on this program you’re sort of guessing my political leanings I tend to

be libertarian as well tend to be I am a libertarian okay so I want to play the

role of the ignorant please leave here because I’m more or less am you said

that let’s break down what you just said so you’re saying that the pencil is a

extension of myself it it allows me to express myself okay a lot of people will

say well that is why we need intellectual property law in the first

place is because well my my song that I just wrote that is an extension of

myself and it is but look and then and

now let’s take what you said later in your in your argument the only way that

IP law how do I want to say this you

sort of assumed that the content creator has absolutely is completely powerless

to do anything to circumvent this like you use the example of JK Rowling in

another article that you wrote and in

this example like JK Rowling she has I

don’t I’m trying to find the right words to say this but you just have this idea that the content creator is absolutely

powerless and the only way that they can protect their own content is through

this law but you say that if the content creator it takes some pro action they

can actually flourish in yes in in ways

that the IP law ence them from doing so yep well let’s say I think I know where you’re heading

with some of this so let’s go back to the pencil for a second okay my argument is not that you have a property right in

the pencil because it’s because it’s an extension of yourself what I was trying to explain there is

the reason the word property is misused is because we we come up with the word I

mean the word propriety just means you’re the proprietor or owner of something so or who’s the one who

properly should be able to use this thing so I’m just explaining why the word property has morphed over time and

ends up being used to refer to the thing owned itself the reason you have the right to the pencil is not because it’s

an extension of yourself because you could imagine other extensions of yourself that you don’t have a property

right to so for example or characteristics so let’s say for example you have a certain weight right now yeah

right and you have a certain color maybe you have a certain age right and you

might have a certain style of laughing there are many characteristics of you

that help define what your nature and identity is but you don’t own those

characteristics if you owned your weight I don’t know what it is but let’s say it’s a hundred and seventy three pounds

that means you would own everyone else in the world that weighs 173 pounds so the problem is you can’t own universals

or characteristics of things so it is true the pencil can be considered to be

an extension of yourself and that’s why we like to say it’s it’s your property it’s a property of you but the reason

that you own it is because you have a better claim to it and it’s the type of thing that can be owned so one thing I

didn’t mention was how we assign these property rights it’s not just arbitrary if we want to have a voluntary society

that’s cooperative and peaceful and productive and everyone can get along at least possibly we come up with these

property rights to assign the ownership of these possibly disputed things but

those property rights have to be assigned to based upon some fair rules some kind of objective rules that

everyone could recognize as being fair and those turn out to be only two rules

okay and creation by the way is not one of them which I’ll get to those

two rules are number one if it’s an unknown thing just sitting out there no one’s using it there is no owner of it

like something in the virgin wilderness if you are the first person to start

using it and do it in a demonstrable way where there’s property boundaries or borders set up around it you know you

put a fence up around a little Hut now you’ve homestead in this land so we call that homesteading or you could call

it original appropriation so the first way to come to own a resource is to be

the first one to own it when it was previously unknown the only other way to

come to own a resource is to acquire one that’s already owned from someone else

voluntarily from them that is by contract or gift or donation so those are the only two ways to come to own

something most people think that creation is mixed in with this or as

part or is another way of coming to own resources like if you make something you should own it but that and then they

then they analogize from that they say well if I make a new horseshoe and I own that new horseshoe what if I make a new

song like why shouldn’t I own the song because you’ve already agreed that people that make things own them the

problem is that’s actually not true it is not true that people that make things own them and let me explain why making

something just means transforming it or producing a new arrangement of that

thing so to make a horseshoe I need to have some iron or fur some metal I also

need to have an anvil and a hammer and a fire and some place to make the horseshoes right so I already own some

kind of resource like iron ore or whatever you gonna make our shot off

yeah okay so I already own this hunk of metal I don’t know if I found it I’d

mind it myself or if I purchased it from someone but I acquired ownership of this ore and then I used my labor my effort

my intellect my ideas my time to transform it into something that’s

better better for me maybe better for customers or whatever when you do that you increase your wealth because the

things you have are more valuable now but you don’t increase your property rights you don’t add new property rights

to the world it’s not like you didn’t own the horseshoe before and now you own it it’s

like you own this metal arranged in a certain way and now you still own the metal even though it’s arranged in a

different way so creation is actually not a source of ownership and this can

also be seen if you imagine a thief or an employee someone who transforms a

resource the raw materials owned by someone else so let’s say I sneak into

your house at night and I take your stash of iron ore and I make a bunch of horseshoes out of them does that mean I

own the horseshoes no because I actually would trespasser and I you might not have wanted them to become horseshoes so

I I might actually owe you damages for trespassing on and and and ruining your your iron ore or if you’re an employee

working for someone and look I have a I have a horseshoe Factory I have a thousand employees making horseshoes I’m

just paying them a wage to make the horseshoes that’s the deal they’re using my metal transforming it

into horseshoes which I own so just because you transform or create

something doesn’t mean you own it and in the cases where it does it’s not because you transform it it’s because you

already owned the raw materials that went into it so this is the reason why the creator of a song doesn’t own the

song because owning the song would mean owning other people’s bodies basically

jeez you could prevent them from singing the song or typing it out on paper so

that’s that’s one way to look at it the other thing is if you realize the nature and the history of these rules I mean

look copyright came about when the printing press started emerging and the ruling

classes you know the religion the church and the state started getting nervous because before they had control over

these scribes these people that had to hand copy everything one by one and they had control over this through the church

but now the printing press started threatening this and started threatening to to allow mass prude mass printed

mass-produced works to get out into the hands of the people even if the church and the state didn’t want them to read

this stuff okay or it wasn’t the approved version so for a few century the state used various mechanisms to

keep control of this it was a type of thought controller censorship they had the stationers company which is the official printing guild in England and

then when that monopoly that lasted about a hundred something years started to expire by then you had the printing

industry had built up but they were all in cahoots with the state because they they would only print things the government and the church would allow

them to print and if you had to print a book you had to go through the the official printing company to do it so

you see the the government and the church kept control of what books were printed using this mechanism and when

the stationers companies monopolies started to expire Parliament established

the statute of monopolies I’m sorry the statute of Ian statute of monopolies was

how they got patent started the statute of Anne basically started modern

copyright so copyright comes out of the states and the church’s ability to

control what could be printed so you can see that the roots of copyright lie in

censorship and you can see that it has operates this way today imagine you’re some artists and you want you know you

you you rewrite a new poem you make a new painting you photograph a certain

scene even if you photograph it independently and originally but you

stand in the same location that some other photographer did you take a picture of the same natural items you

could be sued for copyright infringement if you post a song on YouTube someone

can send a DMCA takedown notice claiming that they own a copyright in some aspect of it and they will be taken down so if

you have a documentary you want to produce a documentary it’s almost impossible to do documentaries now

without stripping them of lots of content because you can’t get permission from people that have bits and pieces of

things you wanted to use in your documentary so there’s a tremendous hampering of artistic freedom under the

copyright system one of one resource

that I found very helpful was against intellectual monopoly by baldra and

Levine a couple of professors I believe in st. Louis is it yes and from what I understand they set

out to disprove what you’re saying right now and they were going to I guess

they’re going to prove that intellectual property the whole concept of intellectual property is legitimate and

they in their studies their research they ended up completely changing course

completely disagreeing with themselves what what they had at the outset and

wrote this book called against intellectual monopoly do I have that right yeah that’s right let me let me

put this uh their work into context the way that some of us probably yourself

and me would approach these type of issues is from more of a rights-based or

a principled approach so we sometimes talk about what natural human rights are and this is connected with property

rights and so most of the argument I’ve given is practical but that’s because property it’s a practical institution

but we’re explaining basically that a copyright or a patent basically violates

someone’s rights because a copyright prevents me from using my property as I

see fit a patent prevents me from using my property as I see fit so that’s a violation of my natural right to

property my natural ownership of my body and myself that’s one way to look at it okay

the the prevailing way that most people nowadays look at things is more more

pragmatic or utilitarian or consequentialist you could say basically people look at the effects of laws and

they say well I mean you and I would say the purpose of law is to do justice and

you do justice by protecting people’s rights you protect people’s rights by identifying what those rights are and

all rights are property rights and they should be identified according to the first user principle and contract like I

mentioned earlier so that’s sort of the libertarian analytical approach to this but nowadays everything is sort of all

soupy and and and not as precise people say well we need a law here because we

need this effect so people say well we don’t have enough stimulation of

arts so therefore we need the government to have the National Endowment for the Arts and take some money from some

people in the form of taxes and then have a government agency that distributes its money to dn’t you know

to needy artists right who otherwise would not have enough money to engage in

their projects so the argument there is there’s some optimal amount of artistic production in society and we’re below

that optimum and the government can use its laws to tweak things to achieve this optimal result and a similar argument is

used nowadays for copyright even though copyright arose as a method of censorship and thought control now it’s

defenders who are entrenched in Darrius industries right they use these utilitarian

justifications and so the argument for copyright would be that if you don’t

have copyright then it would be hard for some artists to make money because

someone could just knock off their work it would be hard for me to license my my

music right without copyright now Bolger and Levine approach it from that point

of view they just or utilitarians who look at look at the law like economists do and they say does this law have the

optimal effects that it claims or does it not and they were under the assumption like everyone else is that

you need copyright and patent they’re like a normal part of a capitalist

Western property rights system that you need that to stimulate the arts and innovation

maybe we can improve it maybe we can tweak it but let’s just do a study let’s see we should be able to prove that that

the existence of copyright and patent have benefited society enormous Lee we should be able to show this so they

started doing empirical studies looking for evidence looking for example looking for data and over time they both

realized oh my god cat patent copyright actually deter innovation and they

distort the cultural fields and they hamper innovation and they reduce the content and they caused bullying and

they extract money from consumers and XYZ so they basically concluded in their

book that copy and patents should basically they’re not quite as radical in libertarian as you

and I are but they they ultimately conclude the patent and copyright do not do what their claim to do and that we’d

be better off without them ma’am well we mentioned earlier JK Rowling and I want

to talk a little bit about practical application of how musicians music

preneur can work within the system in which we are currently and I was just

about to say something well well let’s get well I could take off from what you

just said though I liked I like your depression a music preneur because it recognizes the entrepreneurial aspect

right and and what okay I got it what I was saying is that people who are still

listening to this they’re I’m gonna assume that you’re into what we’re saying may not totally agree quite yet

may you probably want to listen to this again I’m gonna have several resources for you to read more about it but I’m

gonna assume that people still listening to this they want to they’re here

because they want to make some money with their music and I want to talk about how can we work within the system

that we’re currently in yeah because copyright it’s it’s good if you are a

major publishing source not so good if you’re an independent so what are some

avenues that people can pursue so that they can ensure maximum exposure for

their music but at the same time protect their integrity yeah and here’s where

some of the some of the advice and things I’ve seen and come up with you

know half of it as my lawyer hat and what I what I’ve seen assisting clients and and talking to people who are

creators of different types we have we

have two separate patents and copyright let’s stick with copyright here Pat the way you respond to the patent system is

different than the way you respond to the copyright system my view is that

that patents damaged us materially more than copyrights do my estimates you know

patents probably cost us a trillion dollars or more a year in lost innovation and cost and on the world on

a worldwide basis copyrights don’t cause as much say measurable material harm but

I think copyright is even worse than patents because number one the terms

last a lot longer they last over a hundred years in most cases and it’s

being used it’s used by copyright bullies and by states to restrict like

Internet freedom if you remember SOPA almost passed a couple years ago and it’s probably gonna pass in some form

eventually piecemeal form in fact the was the treaty that was a the TT TTP

that Trump is apparently against it hillary claimed to be against at the last minute had some so polite

provisions in it which would have put them into a treaty with like countries that have mounted to forty percent of

the world so far is remind me so that would be sorry that was a Stop Online Piracy Act if that would in a federal

law that made it much easier for companies to basically kick you off the

internet for life as a punishment for engaging in piracy so it would basically

restrict Internet freedom or take people to web sites down if there’s an allegation of copyright infringement so basically in the name of copyright which

is allegedly a property right of creators you have you have this being

used as an excuse by the state to increase state control and big corporate control of the internet and restrict

Internet freedom which is very dangerous of course so the point is copyright the

good thing about copyright is that you don’t have to participate in the system you you do get a copyright automatically

you can’t help it under federal law and international law as soon as you produce any kind of creative work you have a

copyright but you don’t have to register it you don’t have to enforce it and in fact you can you can use Creative Commons

licenses or other mechanisms in the field of software you can use the software type licenses and you can

participate in a system of open open sourcing things and I really think and

the other thing you can do is try to try not to deal with try not to assign your copyrights away

to a to a music studio or or one of these publishers because then you lose

control of it okay and then they’re gonna use it like bullies and they’re gonna charge crazy prices for your book

they’re gonna make it hard for your name to get out there because piracy is going to be more limited so unless you’re

really in it solely for the money right now and you have the capacity to make so much money as a legit as a regular sort

of mainstream artist that even getting only 15% of the royalties because the

movie in the music studios and the book publishers are going to take the bulk of it right then I think you’re better off

being independent so my next book I’m going to self-publish I’m not gonna go to a publisher because they’re gonna it

would delay me by a year they’re gonna insist on some changes which I don’t want to make right and then they’re

gonna publish it for way higher price than I want to they’re not going to consent to me putting a free pdf online let’s say for marketing purposes or to

get my name out there there’s just so much liberty and freedom that you have and especially with the technology now

right I mean we all heard stories of these guys that are publishing well if

you talk about music itself of course I think we all know by now that a lot of musicians make their money from gigs

right from from certs but no who’s gonna pay you to do a gig or for a concert if

they’ve never heard of you I mean it’s gonna be a smaller deal so I mean most concerts that go to the musicians have a

stack of CDs and yeah they’re selling them I don’t think they’re making their money off the CD sometimes they give them away they want people to know their

music right so i think it was cory doctorow a science fiction author who

said uh the real the real danger that you know a budding artist faces is not

piracy its obscurity you know so it just makes no sense to try to restrict

a budding fanbase so of course these are practical things that you can do you

could also be careful not to you know assign away your works unknowingly and

then there are practical things you can do you can you can use open source music as sort of backgrounds in your podcasts

and things like that instead of using you know a 20-second cut from a from a popular artist risking getting shut down

or sued by their by their studio etc yeah the music that I use for this

podcast I just I know the guy that produced it and I just sent him a message and said hey can I use your song

for my podcast he said sure no problem well you know one interesting thought experiment it’s a little bit on a

tangent here but it’s a present time you can just use public domain work which is basically work that’s say more than 70

years old so a lot of times people use old cartoons and old advertisements and

old book manuscripts and classical music from 100 plus years ago because they

know that that’s safe right right in a way this distorts the culture because we have the last 50 years worth of stuff is

like not on the Shelf of the tools you can use so it distorts the culture a little bit but imagine the world in ten

thousand years okay let’s just go way into the future the body the body of

human artistic output that is going to exist on pita drives you know in

people’s pockets it’s gonna be immense and even if we still have copyright law which blocks the last 70 years 70 years

of music you’re gonna have 10,000 more years of great music to draw from so like 99.9% of all human artistic output

would be available in the public domain and so it won’t be as big of a barrier to creative freedom in 10,000 years

right just the fraction of new stuff will be so much smaller you know I when I started this business

music preneur I registered the word music preneur along with the tag line making money making music and I didn’t

do that because I wanted to prevent anyone else from using that word if

anything the more people that use it the better it is for me because that the name of my business and more brand

recognition the better as far as I’m concerned but the reason that I registered it and register put in the

paperwork in July here it is January still haven’t heard from the government they move at their own special speed but

that’s another story but the reason that I did it is because I didn’t want someone else to profit off of my success

and what I mean by that is let’s say that this business takes off and it’s

worth five million dollars two years from now three years from now whatever someone could register the word music

preneur and then contact me and say hey you can’t use that word anymore if you want to use it you have to pay me

seventy thousand dollars a year or a month or something yes and and and now

you’re getting to when you say register you’re talking about trademark which is yet another type of intellectual property right

which we haven’t even touched on well maybe maybe we’ll talk about that in the future yeah we can and I can just say

briefly here that I’m opposed to trademark as well but for other reasons

I think in today’s climate it makes total sense to register your trademark but again what you can do with that is

trademark it’s a little bit different than copyright and patent you you don’t have to enforce a patent or a copyright but trademark has the feature where if

you don’t enforce it then you could lose it over time and then again you’re facing the danger that you think you

might face before which is someone else might register that as a trademark and then prevents you from using your own

name so what you can do is trademark it and then whenever you see someone else using it you just send them a letter and

you say you’re using my trademark I’m happy to give you permission to do so for a dollar a year yeah you know or

some marginal fee so that you have an official license they recognize your trademark but they’re in the clear

you’re not threatening them and you keep your trademark alive that way so there are little tips and tricks like that

that you can you can do to navigate within the existing system right well

you know you’re the Austrian system of economics and I know I know that this is

a music podcast but you know we’re entrepreneurs – so you have to understand the the way things work with economics

as well so that’s why I want to that’s why I’m not bashful about having stephan kinsella on here too because you just

have to understand the world if you want to be an entrepreneur but the the system

of property that you’re describing that’s very much in the tradition of John Locke versus like a Hobbes whatsit

Thomas Hobbes so where do you think the

the philosophy behind this intellectual property comes from is not definitely

not John Locke and the founding of America that’s type of where does it have its foundation well I think the the

historical foundation is in for copyright was really in this thought-control censorship and in

patents it was more protectionism like the the keying granting a monopoly to

one of his cronies in a given town like the only guy who could export cheap skin or something so he just did that to get

loyalty from this guy and maybe the guy would give him kickbacks help him collect taxes things like that but something that Bulger and Levine were

saying they said that England had these copyright laws but then English British

authors would sell their books in the US or in the colonies where there was no law and they would flourish whereas in

Britain they didn’t do as well well yeah what happened was well now we have more

of an internationalist system where we have these treaties like the Berne Convention so all these countries most

of the countries in the world agree to abide by certain minimum standards but which is how the US and the copyright

the the music industry Hollywood and the software industry have sort of in the end the the pharmaceutical industry

especially have exported our copyright and patent laws to the rest of the world for the benefit of a big American

corporations but in the beginning in the beginning of the Industrial Revolution in the beginning of the United States we

had a copyright in the patent system but there were no international treaties and so we had copyright here but it didn’t

extend to foreign authors so some foreign author Charles Dickens would he could his book

could be knocked off in the US because he was a foreign author but it turned

out that they did better in markets over here then local authors did because their works were easy to knock off and

spread and they could became popular and they gave speaking tours and things like that so yeah and musicians these days

they shouldn’t be worried about people knocking off their music it’s if anything it’s help it helps bolster

their brand it helps them sell tickets I would I would look at it like this you know in a cop in a copyright free world

people can copy your stuff without your permission but they can do that now I think there is piracy going on right so

we’ve reached a point where it’s not going to ever get harder to copy things the Internet’s the world’s biggest

copying machine and it’s only gonna get easier from here on out to copy so our

authors of works that are easy to copy someone who makes a movie someone who

does photography a painting rights novels whatever they’re they face they face the

fact that it’s easy for people to copy what they’re doing so that’s a fact no matter how draconian we make the laws

trying to make a few examples out of the few people that we can catch that’s that’s happening so they have to face

that reality already you know I would say that in in a world look artists

thrive on freedom they’re about freedom they should be for freedom they should be for justice right and just as they

have learned from others and always will learn from others and borrow from others they’re part of an incremental process

they’ve added their small piece to advance whatever they’re doing in their field but they stand on the shoulders of

others and others are gonna stand on their shoulders this is part of the you know the way the world works I would

also say this look an entrepreneur is someone who sees some kind of gap in the

market or some kind of way to make money he invests his time and resources hoping to make a profit now in a sense this is

an economics insight profit is an unnatural thing in other words the more

profit you’re making the more you’re going to attract competitors and they’re gonna come in and start feeding with you and widdle your profit

away down to basically the natural rate of interest in society so profit is always an unnatural thing that happens

because in entrepreneur spots some anomaly in the market that he can temporarily exploit so every

entrepreneur in the world faces the prospect of competition they just try to become better or have a better

reputation or get there first so as a simple example if you know if I notice

there’s this craze of taco restaurants spreading around the country right like up until now it’s been pizza and

hamburgers but notice that you know hey Arizona they really like those tacos there so I start a little chain of taco

restaurants in in in Texas let’s say and they’re popular now I might be the first

one and I can charge a lot for the tacos at first but soon you know someone’s down the streets gonna who’s looking for

a way to park their money or something to do they’re gonna say well I’ll start Joe’s taco stand I’ll start competing

with this guy and they start taking some of the business away so it’s only a matter of time before there’s lots of them and it’s harder for the original

guy to make the same profit he used to so he’s got to keep innovating or maybe he goes out of business eventually right

so you have McDonald’s and Burger King in the hamburger industry and you have Taco Bell and Taco Cabana and in the

taco industry the point is every entrepreneur faces the challenge of

figuring out how to make a profit even though he’s going to eventually face

competition so in abstract terms that’s exactly the situation of some musician

who wants to profit from their work the only difference is one of degree not of kind that is it seems to them like it’s

easier for people to compete because their product is purely digital and easy to copy unlike a taco stand where you

have to buy a building and it might take a few years to get some investors and build the you know it hire some

employees and start making competing tacos so it’s not as easy to compete in certain fields where the key aspect of

the product is a an easily copyable pattern of information on a disc and as

I said with the internet and with digital technology and with storage becoming cheaper and cheaper and cheaper copying is just very very easy

now right so what that means is it’s simply easier for people to compete with

you in certain fields if you have a certain business model so all this means is it’s up to the musical entrepreneur

to recognize this and to try to find a way to make a profit despite the fact

that he’s going to have competition so you know you can you can sing at a

concert and that’s not something anyone else can do if you’re famous for a given it with a given group of fans you are

the only one they want to hear right right so you can charge you could charge a reasonable amount for a concert or for

a bar mitzvah or to to to make a song for someone you know for their kid’s birthday I don’t know help them do a music video

like Rebecca Black yeah good luck yeah so the point is it’s not the job of the

law and it’s not the job of economist either to tell entrepreneurs how to make

money that’s the entrepreneurs jobs they have to be aware of the of the of how

different business models can be easily copied or competed with and take that

into account and some business bottles might not be viable because they’re just too is too hard to maintain a profit but

that’s always been true in human history well Stefan we’re running short on time and but I want to close with just a

couple of thoughts from you we you mentioned earlier ten thousand years imagine the world ten thousand years from now this may be a little difficult

to do that but I’d like to imagine you’re well versed in this and and

judging on what you’ve seen in the past where do you see the world in ten years from now in the realm of intellectual

property I don’t see any any statutory

or legal progress that’s significant in patents or copyrights coming anytime soon and that’s because the interests

are so entrenched but the good thing is it’s becoming easier and easier to get

around these laws so in the field of copyright number one like I said it’s it’s so it’s getting easier and easier

pirate and that is putting a lot of pressure on publishers to act more like they would have to act in a free market

anyway it’s also getting easier to encrypt things so that you’re not going to be caught as easily right to use VPNs

for your for your dial-up so that you don’t get caught torrenting as easily and also the spread of the in the

software field we saw this earlier we saw that I’m not really I don’t really know what percentage but I would guess

maybe half of the software in the u.s. let’s say is probably generated by some

kind of a open model it’s not trivial it’s a lot it could be even more than

half that has led to the widespread sort of basically doing an end run around

copyright without copyright the model would still be different you wouldn’t need a license at all but it you’re

you’re emulating more what a copyright free system would look like now in the field of books and music I think you’re

seeing in the last 10 or 15 years a similar phenomena slowly starting to happen with the increasing use of

Creative Commons to sort of partly open up your work surface your photographs people’s paintings you know and the rise

of self-publishing which helps get around this the publishing industry and the gatekeepers which really are a relic of the the old

censorship and copyright system so I think that the publishing industries are going to start kind of crumbling more

and more and you’re gonna have more and more independent artists so that’s I see copyright becoming more and more

irrelevant because few a few people choose to use it and more people can get around it and evade it I put a note

saying forcing the establishment to act like entrepreneurs I love that all right Stephan is it stephan kinsella

dot-com is the website great read if you

are interested at all in what he said I promised that I didn’t get any I didn’t

understand more than 40% I have to listen to this again myself so it’s not

something that you can just listen to and and understand and one take it takes in some cases many

many years to really grasp what we’re talking about here so Stefan I want to

say thank you for being on the show hopefully we can do it again if people have some questions that they wanted

some clarification on but really appreciate it thanks again you’re welcome happy good

the show notes for this episode can be found at music preneur comm / IP very

easy to remember music preneur comm / IP it’s going to have a outline of the conversation with

stephan kinsella and myself and i’m also going to make the PDF doing business

without intellectual property available right there on that show notes page so I

hope you enjoyed it I hope that it at least gave you a bit of a balanced

perspective on this topic I learned quite a bit just listening to Stefan in

this interview and I had and I’ve studied this topic for several years now so there is always something to learn

and you know what if you have questions if you need clarification on something

that Stefan said send me an email send him an email he responds – he responds

to every email I’ve sent him so I don’t see any reason why he wouldn’t respond to you I’ll just say that she heard his

interview on this podcast and he is more than happy to share his knowledge and

provide any clarification so I don’t know if if there’s enough questions then

maybe we can have him back on and do a little Q&A on the topic of intellectual property so that does it for today I’ve

got an exciting announcement that I’m going to share on this Friday’s episode

it’s not quite ready for public consumption yet but come this Friday it’s going to be ready to go and it

involves a free ebook for you and even an opportunity for you to make a little

money as an affiliate with a product so this

is James Newcomb signing off thank you for listening and look forward to seeing you next time