Libertarian and IP Answer Man: The Problem of Intangible Goods

by Stephan Kinsella on October 9, 2025

Respected sir,

I have read your work on intellectual property and I also read Dr. F. Hayek’s essay on intellectuals and socialism. I did not think they were connected until now. A friend of mine when I presented your arguments against intellectual property to him expressed it thus,

“Your so called brand of libertarianism recognizes no property besides tangible property. And that is a problem. Already, our age is highly materialistic. People judge personalities based on the amount of money and the number of admirers they have. According to these criteria, someone like the buddha, jesus christ, saint thomas aquinas would be judged to be a (financial and social) failure at least for the duration of their life time. This holds true for all people who render intangible services. Scientists, Artists and Philosophers. (Not all artists produce tangible works of art. They include poets, who will be affected by your scheme for abolishing intellectual property.) The problem I agree is in society’s culture and not with capitalism in particular. But abolishing intellectual property will make the materialism worse. Flashy self help books will win out over works that have real substance like john locke’s essay on human understanding. Scientists of the stature of Einstein or Ramanujan will be reduced to the jobs of clerks. Philosophers like Charles S. Peirce, Aristotle, St. T. Aquinas, Leibniz, Descartes will wallow in poverty while people like justin beiber make millions and have hundreds of thousands of followers. Because most of the ordinary public does not have the taste to appreciate them. Well if lay society cannot appreciate these people for their services and does not wish to provide for their life sustenance, is it any surprize that such people rush over to the side of the state for sustenance and respect. As advisors to the state, these intellectuals are suddenly given prestige. They now have monetary compensation for their services which they judge their work deserves to have. More than the work of some internet sensation or pop-star, their work will now have prestige and its rightful precedence. Is it any surprise that makers of oscar nominated films which fail at the box office, sopranos, poets, scientists and philosophers all suddenky start calling for more state intervention with them as advisors? Finally without intellectual property or the state to sustain them how would your system ensure that the people who render such intangible goods (for which the lay public remains ever ungrateful) not starve out and die of neglect ?”

I know that if justice and respect for the non-aggression principle demand the starving, poverty and neglect of a Leibniz on one hand and a sea of wealth for teenage pop-stars then so be it. But I also know that in general, utility and morality proceed hand in hand. The free market has both justice as well as beneficience. So my question is only this, will the abolishing of intellectual property really lead to a more materialistic culture because only tangible goods are rewarded with life sustenance and prestige ? If this is so, then I still accept the abolition of intellectual property based on the non-aggression principle but it will make my task of pursuading others of the morality of abolishing IP a hell lot more difficult…

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[3 days later]

I really apologise for my stupid question on the problem of intangible goods. Intangible goods cannot be exchanged for tangible wealth. It would be like bartering Maxwell’s equations on the nature of electromagnetic radiation against a sack of apples or against bars of gold – totally absurd. Intangible goods can only be rewarded with intangible benefits like respect, emulation etc. To make money out of an intangible idea, intellectuals would have to pair with entrepreneurs the way script writers pair with film makers. They would have to convince entrepreneurs of the practical applications of their ideas. As regards materialism it is highly hypocritical to condemn the masses for materialism while desiring money and a high number of admirers for one’s own intangible ideas. You were right about the abolition of intellectual property after all. Sorry again for my stupid question.

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KINSELLA:

It’s not stupid, I just didn’t have time to answer yet. I think one reason people are confused is they use the same word or concept for different reals: they use ownership to mean both possession and ownership for example; the former is an economic and descriptive category only, the latter is juristic, legal, and normative. Same with concepts like sale or exchange. Economically exchange means one thing, legally another. If A and B exchange an apple and an orange, that is economic exchange of possession. If the legal system recognizes ownership, it is also a legal exchange of title or ownership, but it need not be.

Likewise if I give you my apple “in exchange” for you performing some service, that is an economic exchange but not an exchange of possession–only possession of the apple changes. If there is a legal system that recognizes contracts and ownership, then the right way to characterize that transaction legally or juristically is that I transferred possession and ownership of my apply to you, conditioned on a specified event — your performing an action (service). Economically we can describe this as a “sale” of your labor or service or action as long as it is kept in mind that this is just another way of describing praxeologically the nature of my action of handing over possession of the apple: I give you apple (means) to induce you to perform action I desire–this the end of my action; the reason I act. We call a “sale” in analogy to exchanges of possessed objects like a banana for an apple but there is a difference in that in this case only one possession is transferred in exchange for a service. But these are all economic descriptions. Legally speaking in an exchange of apple for orange, there are two bilateral, mutual, related, and mutually-conditional title transfers; in the sale of a service, there is only one title transfer: that of the money or object “paid” to the service provider.

Let me know if this makes sense. I did not read your email in detail yet. Why don’t you read this first and also the following related posts and writing, and then come back to me if you have further questions, we can do it by email or if necessary a brief zoom call to discuss. In the meantime, see the following. Please read all of this carefully and them come back to me with any followup questions.