KOL333 | Jeff Tucker: Understanding IP: An Interview with Stephan Kinsella (2010)

In the past, free-market economists and libertarians have sort of given this issue a pass. They took it for granted. It’s been in a corner all by itself. Now people are wondering, and as we start looking more closely at it, we can see that a lot of the assumptions about IP have been wrong.

I think that likewise in libertarian theory certain things become interesting at a certain point. In the past, as you mentioned in your talk yesterday here at the Supporters’ Summit, it was not as easy as it is now to replicate information. There was sort of a tie in previous times between a good that was produced, like a book, and the information in it. The information in the book was in the physical copy of the book, so you could easily find a way to sell that. Now, with information being so easy to copy —

And, of course, as Cory Doctorow mentions in one of his articles and speeches, do we think we are going to get to a point where it is going to get harder to copy and to spread information? No, it’s only going to get easier.

These things have made people confront the issue of the morality and the politics of sharing information.

The roots of patents — this is something I will mention in the speech at the Supporter’s Summit. I was mentioning it to you the other day. Ironically, the origins of patents are in piracy, literally in piracy. Nowadays you hear the defenders of IP attack so-called pirates. Of course, as you and I have discussed, they are not pirates at all, because real pirates kill people and break things and take things from you and make you worse off. IP pirates don’t do that.

One of the original uses of what is called letters patent was a grant to Francis Drake. Drake became a privateer, which is nothing but a legalized pirate. He went around the world using these letters patent, granted to him by the Queen of England, to plunder and to steal and to bring the treasures back home. He was literally a pirate authorized by a patent. So patents and piracy do go hand in hand actually. [See The Real IP Pirates.]

You can see why Mises, even though he didn’t devote a lot of attention to this issue, didn’t go off track too far because his focus on the structure of human action kept him from doing that. He saw the role of ideas as a guide to human action. It was not the means of action. The means of action are scarce resources, which have to be economized, but Mises saw that human action is guided by ideas. So he glimpsed, although he didn’t unfold it too much, he glimpsed that ideas — as you mentioned in your speech — that ideas cannot be destroyed. They can last forever. They’re infinitely reusable. They’re malleable, which also, I guess, Hayek would see as well with his emphasis on tacit knowledge.

And a lot of utilitarian-minded people just assume that if you’re skeptical about intellectual property then you are anti-intellectual or you are hostile to the role of ideas. Of course, it is the other way around. Intellectual property hampers innovation. Intellectual property literally imposes censorship on people. It literally prevents you from using knowledge that you have. So, basically, getting rid of IP, one of the goals there is to enhance innovation and to enhance intellectual freedom.

Most laymen get this confused all the time. I’m a practicing patent lawyer so I’m always explaining to people, no, that’s not a copyright, that’s a trademark. No, that’s not a trade secret, that’s a patent. They get these things confused. It is, of course, especially bad when you’re advocating IP and you don’t even really know what you’re talking about. If you want to think about it critically and understand it and even be critical of it, you do need to understand exactly what the legal system is.

Between the three thinkers that you mentioned, Hayek, Rothbard, and Mises, I think Rothbard was, of course, overall the best on IP. Unfortunately, he only gave it a little bit of attention. If he had only devoted more attention to it. I think he thought it was a fairly obvious issue. He dealt with it; he put it aside.

So this idea of contract and Rothbard’s really clear idea of what property rights are — Rothbard was one of the first to see that it’s a little bit misleading to talk about these derivative rights as independent rights, like the right to free speech. There is a right to property. Rothbard is able, for example, to reject reputation rights because he saw that that means owning someone else’s brain basically. Your reputation is what other people think about you. So Rothbard’s clear focus on property rights as the foundational right led him to be clear on reputation rights, which I believe is a type of IP right as well. It’s got the same arguments.

Now, China is improving, more or less, as far as we can tell, in general. Their property rights are getting better. Their economy is improving. If they adopt this Western mentality that if they are going to become capitalists they need to adopt a strong IP system, this could actually impede their growth. It could trap capital, for example. It could hamper innovation.

As part of this course, I may do some more research to expose exactly the role of innovation, say in China, to see how the lack of IP there is helping them. So we can uncover lots of things in the course.

It will be educational. I will go into the history of it. The history is just fascinating. If you are in favor of IP, you can at least see all the different arguments offered and maybe find what some of the holes are in your arguments — see what work you need to do.

For example, most people, at least implicitly, have a utilitarian argument for intellectual property, even Ayn Rand. Basically, her argument was utilitarian, which is why she wanted a finite term for copyrights instead of an infinite term.

The utilitarians always say they are in favor of IP because it promotes general prosperity, it promotes innovation, but they never show that it does. If you’re really serious with this argument, why don’t you do some research, try to come up with an argument and evidence to establish your case? Tell me how much benefit the economy has from patents and copyrights. What are the costs? What are the benefits? What is the net? Show how you know this.

They say, “No, I’m not in favor of that.”

If you get them to agree on all of these egregious examples, then what they end up being in favor of is a type of IP system that wouldn’t really bother us that much, any more than a 1 percent tax would really be something that would be the main issue of the day.

Finally, everything fell into place, primarily from Rothbard and Misesian theory. I found that this issue is difficult, but once you see it, it’s one of these issues that sets peoples’ minds on fire. It frees you to think about other things in different ways. It’s like five or six other walls also fall in your mind on topics that you already had a view on. Now you can see them in a different light — about economic theory and libertarian theory.

The Founders put this clause in the Constitution. This is another thing we will uncover, too, which is fascinating. There is a common assumption that because is in the Constitution therefore it is a natural right — and that it was thought to be a natural right by the founders. Of course it wasn’t. Even Locke and the Founders, none of them believed this was a natural right.

The Founders, and maybe you can’t blame them, they were doing a lot at the time, they had a lot on their hands, they made an assumption. They assumed this would be a net benefit for society.