Sunday, September 29, 2013

Kinsella's Kool-Aid - The Real Reason Libertarians Oppose IP

UPDATE:  Readers have pointed out some factual errors in this article, and I wish to correct them. I have indeed read Kinsella's book "Against Intellectual Property", but I have also read many of his other published articles, and had a podcast conversation with him, in addition to various email and discussion thread interactions.

My confusion arises over the use / non-use of the words "scarce" (which appears in the book) and "rivalrous" (which does not). In many subsequent writings, Kinsella uses "rivalrous" to mean what "scarce" means in the book.

As always I appreciate substantive criticism, and I do apologize for sloppy research here. However,  I don't believe this is likely to change my opinion on the issues.  For posterity I will leave the article and comments below as they are, now relabeled "first draft", and work on a revised version of "Kinsella's Kool-Aid".

-Alexander Baker  October 4, 2013


Kisella's Kool-Aid - First Draft

The Austro-Libertarians have given what I consider to be the correct theory of economics. In the process, they earned my respect, and they accomplished both of those things the same way: by steadfastly adhering to a consistent set of core principles, then diligently exploring all of the implications, regardless of whether the conclusions reached might be popular or not.

Sadly, on the issue of intellectual property, many libertarians, led by Stephan Kinsella, have abandoned academic rigor and principle. Instead, they repeat the basic tenets of Kinsella's attack on IP, without ever stopping to consider if Kinsella has given a defensible thesis. He hasn't.

Kinsella Doesn't Define Key Terms

Kinsella's anti-IP position is crucially founded on showing that IP is not scarce, and not rivalrous. Scarcity of physical goods gives rise to possible conflict, thus necessitating the allocation of property rights in physical things. Since IP is not scarce and not rivalrous, Kinsella argues, there is no need and no justification for IP.

However, a careful reading of Kinsella's central work "Against Intellectual Property" reveals a very troubling shortcoming: he does not define "scarce" and does not define "rivalrous". To fail to define the very terms upon which a thesis stands is inexcusable. The reason for Kinsella's subterfuge becomes clear upon studying the book. He pulls the clever, but intellectually dishonest trick of smuggling his conclusion into his premise.

Kinsella Smuggles his Conclusion Into his Premise

Consider: "Rivalrous" means that "use by one interferes with use by another". Clearly we also need to understand what "use" means. I would define use as "experiencing the value or benefit of". With these definitions in mind, we can test whether or not something is rivalrous, and thus whether it is rightful property.

But Kinsella never defines those terms explicitly, and that's where it gets sneaky. Throughout the book, Kinsella mentions that one can "use" an intellectual work without interfering with someone else's use. But what he means is that they do not interfere physically. Do you see how this works? Kinsella is implicitly including "physical" into the definition of "use", and therefore into the defintion of "rivalrous".

In context, we can conclude that Kinsella is defining "rivalrous" as "physical use by one interferes with the physical use by another". Obviously, if property requires rivalry, and rivalry must be physical, then property must be physical. Thus Kinsella assumes his conclusion. Had Kinsella defined his key terms explicitly, he could have written a very, very short book!

Why Have the Mises Scholars Endorsed Kinsella?

It's clear Kinsella wanted to attack IP, by all means possible, and he's been very successful at doing so. But the question reamins: why? After all, Kinsella himself is a patent attorney and a successful author, having earned over $1,000,000 in royalties, according to him. Why would Kinsella take such a position, and even more importantly, why would the Mises scholars embrace a theory so obviously lacking in academic rigor?

The answer, I'm afraid, is all too plain to see. The Mises scholars have long ago realized that their own intellectual property simply isn't worth very much. That is not to say it is bad. Indeed, I feel that the Austro-libertarian literature comprise the finest books ever written. But the simple fact is that books and videos on economics and philosophy are never going to sell as well as those about Harry Potter or NFL football or the Kardashians, or whatever.

The Napster Generation

The early 2000's saw the great advent of Napster and other file sharing sites, where millions of mostly young people were happily sharing songs and movies, without a care in the world for copyright violations. Then they got caught. The fight was on, as media giants began suing file-sharing sites, and even individual users.  The libertarians, led by Kinsella, sensed a golden opportunity.

Since their own intellectual property is not worth very much anyway, they schemed, why not create a theory denouncing the very concept of intellectual property? This is an immensely attractive idea to the Napster generation, desperate for guilt relief about their iPod's full of pirated content. Join the libertarian movement, drink Kinsella's Kool-Aid, and you never have to feel bad about downloading ever again! Those big, bad media companies just want to use the coercive power of the state to enforce their monopoly, and destroy your freedom.

And the strategy may work out for them, I'm sad to say. Libertarianism appears to be more popular than ever, and that's a good thing, as far as it goes. But to me, libertarianism is nothing without a strict adherence to principle. If we must sacrifice principle for membership, count me out. I just don't see eye to eye with intellectual communists.

Hans-Hermann Hoppe's Cursory Statement on Intellectual Property

Dr. Hans-Hermann Hoppe has offered here what appear to be his rather cursory conclusions about IP, quoted below.  It is my sincere hope that my interspersed comments will inspire Dr. Hoppe to consider the issue more deeply.   

Intellectual goods are not free
Hoppe: I agree with my friend Kinsella, that the idea of intellectual property rights is not just wrong and confused but dangerous. And I have already touched upon why this is so. Ideas – recipes, formulas, statements, arguments, algorithms, theorems, melodies, patterns, rhythms, images, etc. – are certainly goods (insofar as they are good, not bad, recipes, etc.), but they are not scarce goods. Once thought and expressed, they are free, inexhaustible goods.
Intellectual objects are neither free, nor inexhaustible. Free goods, such as atmospheric air, exist naturally and arrive to humans in useful form, without needing any kind of production process. Intellectual goods, such as songs, do not exist naturally, and must first be produced by human effort, and thus are not free goods.

Hoppe says "once thought and expressed, [intellectual goods] are free  . . ."  This is like saying "Once a car has been manufactured, it is free . . ." One can easily pretend that something is free, if one ignores the cost of producing it. This is quite reminiscent of the socialist mindset, which loves to assume the existence of wealth, and debate how it should be distributed. It is a plain fallacy.

Intellectual goods are not inexhaustible

Intellectual goods are not "inexhaustible" in the economically relevant sense. It is true that, given sufficient expenditure of resources and labor, any number of copies of a song can be made, to meet consumer demand that may exist to listen that particular song. But the exact same thing is true of physical goods. Given sufficient expenditure of resources and labor, any amount of aluminum foil can be manufactured, because the quantity of raw aluminum in the earth's crust is, for practical purposes, infinite. Does this make aluminum foil "inexhaustible"? No.

Aluminum foil is scarce because it requires human effort and resources to produce it,  not because of how much raw aluminum exists. The exact same is true of intellectual goods. Both the original creation and duplication of intangible consumer items require an expenditure of time, labor, energy and other resources. Both necessarily entail an opportunity cost, just as with physical goods. These facts render intangible goods scarce, and arise from the very nature of things, not the imposition of law by the state.

Intellectual Goods Are Rivalrous

Hoppe: I whistle a melody or write down a poem, you hear the melody or read the poem and reproduce or copy it. In doing so you have not taken anything away from me. I can whistle and write as before. In fact, the entire world can copy me and yet nothing is taken from me.

Here, Hoppe is reprising Nina Paley's claim that "copying is not theft". In Kinsella's terms, Hoppe is saying that IP is not rivalrous. But neither Paley nor Hoppe nor Kinsella have bothered to define "rivalrous" and prove what they assert. In fact, IP is rivalrous, and if I compose a melody, and you copy and distribute it, you have indeed taken something from me. To show how, let us begin with the definition of "rivalrous":

Rivalrous - having the quality such that use by one interferes with use by another

We must also consider what "use" means, and we must be very careful. If our definition of "use" contains or implies physical use, we would automatically be limiting the concept of "rivalrous" to the physical realm, which is, of course, the entire issue up for debate.

Use - to experience the value and benefit of

When I compose and record a song, my intent is to mass produce copies of the song, and sell them on the market. The original song is a producer good, like a factory, allowing for song copies to come rolling off the assembly line. My use, therefore, is not listening to the song. For me to use my song,  i.e. for me to experience its value and benefit, I must sell as many copies as the market will bear. If you copy and distribute my song, you are interfering with my use. You have trespassed, and damaged me by the reduced market value of my song.

Reduction in Market Value as a Measure of Damages

Kinsella and others have responded to the above argument about market value damages. For me to hold you liable for the reduction in the market value of my song, they say, is tantamount to me having a legal claim on the money in the pockets of all those potential customers. In fact, I have no rightful claim on another person's money, nor do you, and both of us have an equal right to exploit the market by selling copies of the song, so Kinsella's argument goes.

In other words, Kinsella holds that if a reduction in market value is the measure of damages for a trespass, then the underlying property claim is invalid. This position is untenable, because a reduction in market value is precisely the measure of damages resulting from trespass to physical property, accroding to long-standing principles of Common Law.

For example, suppose you own a car that would sell for $20,000 on the market. A trespasser comes along and smashes up your car so badly that it is not worth repairing. The best you can do is sell the car as scrap metal for $500. The trespasser is liable to you for damages, and the correct measure of damages is $19,500, i.e the reduction in market value of the car.

Since market value reduction is the only available measure of the damage caused by the trespasser in this case, does this mean that the car is not valid property? Of course not. Does it mean that you, as owner of the damaged car, are asserting a bogus claim on the money in the pocket of the person you wish to sell the car to? Of course not.

Once again, Kinsella, Hoppe and the rest of the anti-IP crowd refuse to apply the logic of their argument against IP to the phsycial property we all agree is valid. I, however, insist on just such a consistent application of logic, and this is the driving force behind Intellectual Space.

A Meaningless Distraction
Hoppe: If I didn’t want anyone to copy my ideas I only have to keep them to myself and never express them.
Of course I have a right to not produce works of music, in the same way Ford has the right not to manufacture cars. This says nothing whatsoever about the property rights enjoyed by me and Ford with regard to the music and cars we do manufacture. Hoppe's statement here is simply not an argument.

Copyright is Valid, Patent is Not
Hoppe: Now imagine I had been granted a property right in my melody or poem such that I could prohibit you from copying it or demanding a royalty from you if you do. Doesn’t that imply, absurdly, that I, in turn, must pay royalties to the person (or his heirs) who invented whistling and writing, and further on to those, who invented sound-making and language, and so on? 
Well, no. Hoppe here is conflating copyright and patent, as if they were the same thing. They are not. Copyright applies to finished works, while a patent applies to inventions and methods. For reasons I discuss in detail elsewhere, copyright is legitimate property, while patent is not. Thus Hoppe could claim a copyright in his melody or poem, without owing royalties to the inventor of whistling. Murray Rothbard was Hoppe's mentor, and Rothbard drew the same distinction between copyright and patent. Hoppe would do well to carefully consider Rothbard on this subject, as he has clearly done in every other area. 

Logical Trickery: The Shifting Definition
Hoppe: In preventing you from or making you pay for whistling my melody or reciting my poem, I am actually made a (partial) owner of you: of your physical body, your vocal chords, your paper, your pencil, etc. because you did not use anything but your own property when you copied me.
Stop. Underlined above is the exact moment when Hoppe smuggled "physicality" into the definition of "use", just as I warned against. Hoppe says that the copier did not use anything but his own body in the act of copying, but that is begging the question. Only by assuming that the intellectual good is not property can Hoppe make that claim, and this is, of course, the very issue up for discussion. In fact, the copier did use something besides his own physical body - he used the intellectual property belonging to someone else.

As shown above, unauthorized copying is a trespass, because it reduces the market value of the good, the same way that breaking all the windows will reduce the market value of a house. Thus the copying represents the initiation of force, validating the usurpation of the copier's rights, according to libertarian principles.

Begging the Question
Hoppe: If you can no longer copy me, then, this means that I, the intellectual property owner, have expropriated you and your "real" property.
Begging the question again. If copying is not a property violation, then yes, demanding a royalty is expropriation. But if copying is a violation of legitimate property rights, then demanding a royalty is simply rent seeking, perfectly consistent with libertarianism.

All Property Rights Impose Limitations on Others
Hoppe: Which shows: intellectual property rights and real property rights are incompatible, and the promotion of intellectual property must be seen as a most dangerous attack on the idea of "real" property (in scarce goods).
All property rights impose limitations on the behavior of others. You can fire your gun, but not at me. You can chop down trees, but not my trees. You can distribute recorded music, but not my recorded music. Unless I say so. The notion that IP differs from physical property in this way is absurd. Once again, the intellectual communists want a double standard, applying a rule to IP that they are unwilling to apply to physical property.

The Mises Test of External Reality

And again, Hoppe repeats the unsupported assertion that only "real" property is scarce. I've shown  above that IP is scarce, because it entails an opportunity cost to produce, to copy, and to distribute. And according to the Ludwig von Mises test of reality, intellectual objects are just as real as physical objects, because they have just as much potential for affecting the outcome of human affairs.

YouTube is Glorious

Intellectual property is not dangerous. Like all property rights, IP is necessary for society to flourish. As just one shining example of how IP enforcement leads to a brilliant and beautiful result, consider YouTube. One can visit YouTube today and choose from hundreds of millions of hours of original entertainment and education, of almost any style and substance imaginable. The explosion of human creativity and diversity on display is mind-boggling. We are all so much richer for YouTube, and I would like to express my sincere gratitude and amazement that such a thing is here.

By the way, YouTube enforces copyright.