An analysis of Against Intellectual Property
N. Stephan Kinsella. Journal of Libertarian Studies Volume 15.2 (Spring 2001) p. 1–53 Ludwig von Mises Institute http://mises.org/books/against.pdf
Many debates over the particulars of intellectual property (hereafter, IP) unquestioningly accept the premise that a person (or corporation) can own certain types of ideas. In order to properly examine the ethics of intellectual property law as it presently exists in the United States we must proceed cautiously and begin by asking the right questions. If we ask, “How long should a copyright last?” we take for granted that copyrights should exist in the first place. If we ask, “How many dollars should the violator of a patent be fined?” we have already assumed that it is just to use institutionalized force to resolve this manner of disagreement. Stephan Kinsella, in his article “Against Intellectual Property,” argues convincingly for the abolition of intellectual property law and the abandonment of the notions that people can or should want to own ideas. I agree wholeheartedly with Mr. Kinsella and I provide an analysis of his position below, with particular emphasis on his refutations of utilitarian and natural-rights justifications for IP.
The Constitutional foundation of intellectual property law in the United States lies in Congress’ charge, “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” (U.S. Const. art. I, § 8, cl. 8). In other contexts, the invocation of the Constitution may prove to be a sound legal reference or an effective rhetorical technique. In the determination of ethical principles, however, arguments from authority and tradition are of no value. Moreover, simply because an idea has been written down in a certain way does not make that idea necessarily true or valid. In essence, the fundamental ethical issue at hand is: can ideas be property? A related matter of more immediate practical importance is: should the legal system protect alleged ownership of such “property”?
Arguments in favor of IP are generally either based on claims of natural-rights or are made on utilitarian grounds. Natural-rights claims are generally made in the context of thinking of an author as a creator entitled to the fruits of his or her labor. This view casts thoughts and ideas as similar to tangible products by claiming that both are products of a creator’s mind and labor.
Utilitarian defenders of IP claim that, “the ‘end’ of encouraging more innovation and creativity justifies the seemingly immoral ‘means’ of restricting the freedom of individuals to use their physical property as they see fit” (ibid, p. 12). Unfortunately for their proponents, these arguments suffer the same problems as any attempt to justify any right or law via utilitarianism. Even if overall utility could reasonably be maximized, no moral, ethical or justice-based justification has occurred. For example, even though overall utility may be increased by stealing money from the richest 10% of people and distributing it to the poorest 90% of people, the clear injustice of such an action is not justified by the pleasure of the plunderers, no matter how great the increase in utility. After all, “wealth maximization is not the goal of law; rather, the goal is justice—giving each man his due” (ibid, p.12) . Upon close consideration, such comparisons of interpersonal utility are clearly illegitimate and impossible to calculate. Yet even if we accept the utilitarian premise, no conclusive evidence exists which demonstrates that IP law increases overall utility or wealth.
Julio Cole, in his paper, “Patents and Copyrights: Do the Benefits Exceed the Costs?” conducts a meta-analysis of research conducted on the benefits and costs of IP law. He presents evidence from studies performed on the impact of patent law reform conducted in Japan in 1988:
Their main finding was that “the average response in terms of additional R&D effort and innovative output was quite modest.”  An econometric analysis using Japanese and U.S. patent data on 307 Japanese firms confirmed that the magnitude of the response was quite small.
Additional studies have reached similar conclusions. One survey conducted of seven different sectors of manufacturing concluded:
Patent protection was estimated to be essential for the development and introduction of less than 10 percent of their inventions. Indeed, in office equipment, motor vehicles, rubber, and textiles, the firms were unanimous in reporting that patent protection was not essential for the development or introduction of any of their inventions during this period.  Cole, 88
Although these studies indicate that the benefits of patent protection are not as significant as many assume them to be, they do not discount any benefit altogether. However, to look at the benefits without looking at the costs would leave our calculations incomplete. A system of patent protection requires significant resources to be devoted to legal and administrative bureaucracies. Monopolies are granted for inventions, many of which would have been developed even without the guarantee of a monopoly. Patents, by their very nature, slow the spread of technical progress, such as when Henry Ford had to waste time and resources fighting against a small group which was trying to dominate the automobile industry through patent control . Successors to the Wright brothers found themselves hamstrung by repeated litigation over wing design. Many patents are also obtained to block competitors from innovating; often the registrants of such “defensive” patents seek only to litigate and not to produce or manufacture the subject of their patents.
But if there is no guarantee of a patent, some might still argue, innovation will stagnate due to insufficient incentives to invest in research and development. There are many reasons why this is not necessarily true. Being the first to market and having a legitimate claim as the original author or inventor of a thing both have real value. Many people who express fears regarding the absence of IP protections highly value original authorship (as do I). In a market without IP law, we would be absolutely free to reward original authors with our business and to ignore impostors. New types of organizations might even spontaneously emerge to serve as reputation clearinghouses, functioning as agencies through which concerned consumers could be assured that their purchases support only original authors and inventors who have clean reputations and who have not merely replicated the ideas of another. I think that we do ourselves a disservice if we blindly assume that our concerns are not also shared by many others. Unfortunately, because such freedoms do not presently exist, it is often difficult to imagine what a world without IP law might look like.
Industries with especially high research and development costs (as well as those with especially long development lifecycles) are often cited as a primary reason for the necessity of IP law. Perhaps for products such as pharmaceuticals, some the resources freed up by the abolition of the systems of IP enforcement could be redirected towards collaborative research labs, or towards organizations which offer prizes for the development of certain types of research. The X-Prize is one such example which already exists today; there is even an ongoing competition in medicine for the development of inexpensive genomics techniques 5.
I find utilitarian arguments for IP law to be not only unconvincing, but also fundamentally misguided.
We must remember that when we advocate certain rights and laws, and inquire into their legitimacy, we are inquiring into the legitimacy and ethics of the use of force. To ask whether a law should be enacted or exist is to ask: is it proper to use force against certain people in certain circumstances? It is no wonder that this question is not really addressed by analysis of wealth maximization.”
Kinsella, Against Intellectual Property, 15
Another basis of argument in favor of IP law stems from a concern for natural rights. This line of reasoning claims that IP is created and therefore the creator should enjoy property rights over such creations. A problem with creation-based rights, however, is that only certain types of creation end up being protected and the distinction between protected ideas and unprotected ideas is necessarily arbitrary.
Philosophical or mathematical or scientific truths cannot be protected under current law on the grounds that commerce and social intercourse would grind to a halt were every new phrase, philosophical truth, and the like considered the exclusive property of its creator. Ibid, 15
Accordingly, only ideas which represent “practical applications” are patentable. However, the distinction between these two types of ideas is nebulous at best. Even experts in patent law will often disagree over whether or not a given idea is patentable. Should an inventor successfully navigate this first arbitrary process, he or she is then subject to arbitrary rules concerning the scope and duration of the patent in question. When speaking of ethics, it becomes patently absurd to proclaim, for example, that the duration of nineteen or twenty-one years is unethical while the duration of twenty years is ethical. Unbounded rights to IP (i.e. any idea, infinite duration) are so absurd as to barely warrant mentioning. Such ideal rights would avoid arbitrariness but would grind social intercourse to a halt.
A more important problem that arises for natural-rights justifications for IP law comes from an emphasis on the creation aspect of innovation rather than the function of scarcity in the establishment of property. For example, if I create something with your resources, I do not rightfully own the result merely because I have created it.
Leaving aside IP for a moment, property in general can be described as the delineation of just ownership and rightful control over tangible, scarce resources. Self-ownership (you own yourself, I own myself) lies at the nexus of property rights and is generally accepted as axiomatic. Tangible (i.e. physical) resources such as land, real estate and chattels may also justly be called property. These two claims are obvious, but why?
What is it about tangible goods that makes them subjects for property rights? Why are tangible goods property? A little reflection will show that it is these goods’ scarcity—the fact that there can be conflict over these goods by multiple human actors. The very possibility of conflict over a resource renders it scarce, giving rise to the need for ethical rules to govern its use. Thus, the fundamental social and ethical function of property rights is to prevent interpersonal conflict over scarce resources. Ibid, 19
Accordingly, we can see how property rights have arisen as a way to avoid and mitigate potential conflict over scarce resources. However, when a resource is not scarce such conflict becomes impossible. You and I can both think the same thought simultaneously without the need for one of us to be excluded. We cannot both sit in the same chair simultaneously (not comfortably anyway!). We can argue about who came up with an idea first but if you “take” “my” idea to use yourself, you have not “taken” anything; I still have the original idea, in its entirety, in my head. If you take my chair, I have to sit on the floor.
Brevity precludes further analysis at this point but it is worth noting that an issue as important as the validity of Intellectual Property law deserves far closer consideration than is presented here. I hope merely to have scratched the surface of an issue in which we are all stakeholders by reframing the focus of IP discussions towards fundamental ethical issues and away from the arbitrary particulars of legal implementation. Discussing the ethics of owning ideas is essential to an honest understanding of modern IP law. I have found much to agree with in the writings of Stephan Kinsella and I implore you to read his writings yourself; my humble ramblings and paraphrasings are no substitute for his expertly articulated arguments, all of which are readily available online, for free .
- Here Kinsella is paraphrasing Justinian. See The Institutes of Justinian: Text, Translation, and Commentary, trans. J.A.C. Thomas (Amsterdam: North-Holland, 1975).
- Internal quote from: Mariko Sakakibara and Lee Branstetter, “Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms,” Working Paper 7066, National Bureau of Economic Research, April 1999.
- The original study may be found here: Edwin Mansfield, “The R&D Tax Credit and Other Technology Policy Issues,” American Economic Review 76 (May 1986), p. 193.
- The group was the Association of Licensed Automobile Manufacturers (ALAM), see: James J. Flink, “Henry Ford and the Triumph of the Automobile,” in Technology in America, pp. 181–82.
- See http://genomics.xprize.org/competition-details/prize-overview
- See http://mises.org/daily/author/301/Stephan-Kinsella
Cole, Julio H. “Patents and Copyrights: Do the Benefits Exceed the Costs?” Journal of Libertarian Studies Volume 15, no. 4 (Fall 2001), pp. 79–105.
Kinsella, N. Stephan. “Against Intellectual Property.” Journal of Libertarian Studies 15, no. 2 (Spring 2001), pp. 1–54.
Kinsella, N. Stephan. “Ideas Are Free: The Case Against Intellectual Property.” Ludwig von Mises Institute Daily Article #4848, November 23, 2010.