Thursday, September 18, 2014

Why Subjective Valuation Supports Intellectual Property

"Value" is a purely subjective human emotion. One man's trash is another man's treasure. This fact makes trade possible and mutually beneficial. When two people voluntarily agree to trade, it means that they value the things traded in reverse order. Both parties expect to derive a benefit of the bargain.

A Poor Argument For IP

Some proponents of intellectual property have tried to support their position by noting that IP infringements will tend to reduce the value of their property. For example, if I created a song, and you made copies of it without my permission, then my existing copies would be worth less on the market. Hoppe and others have correctly noted that one cannot have a property right in the value of a thing.
Thus, the fact that unauthorized copying might reduce someone's individual valuation (or the market valuation) of the original is not a valid argument in favor of IP.

Not an Argument Against IP Either

But the subjective nature of value is not an argument against IP either. To see why, let's apply the same logic to physical property. Making additional copies of a bicycle will increase the supply, thus reduce the value of the previously existing bicycles. Does this mean that property rights in bicycles are invalid? Of course not.

Value = Use

To get to the bottom of how subjective valuation correctly applies to copyright, consider this: value is synonymous with (or very closely related to) "use". When I use something, I am in that moment deriving value from it. My value. My subjective value.
Two people can use the same one thing in two very different ways. For example, a little toddler will use a pair of baby shoes to protect her feet while learning to walk. After she's outgrown them, her mother will use the shoes as a keepsake. Same shoes, different use.
We can see that "use" is just as subjective as value. Thus, one cannot presume to know what "using" a thing even means to another.

What Does "Interfere" Mean?

The necessity for property rights applies to rivalrous things. Rivalrous means that use by one interferes with use by another. Clearly, one cannot presume to know what "use" even means to another person, for "use" is every bit as subjective as "value". Until we understand what the individual means by "use", we have no basis whatsoever to form an opinion as to whether somebody else's use does or does not interfere.








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28 Comments

  1. Avatar of maluka
    maluka May 26, 2014, 4:32 am Reply
    You just substituted the word value for use and repeated the same agument you yourself titled ” a poor argument” by replacing “value” for “use” whicht you claim are (somewhat) synonyms anyway.
    How does coping a song from something else than the master record interfere with the musician making copies from his master record? He can still produce as much copies as he wants.
  2. Avatar of Alexander Baker
    Alexander Baker May 26, 2014, 4:44 am Reply
    I explain rivalry of intangible goods in:
    http://homesteadip.liberty.me/2014/05/25/why-intangible-goods-are-scarce-and-rivalrous/
    As homesteader of a song, I own 100% of the productive capacity. When you begin making copies, I own less than 100%. I want to make 100%. Thus I cannot make “all I want”. Thus you interfere.
    • Avatar of maluka
      maluka May 26, 2014, 4:50 am Reply
      That’s what I mean. That is a restatement of the “I am entitled to the full value”-argument, you yourself titled “poor”.
      You still own a hundred 100% of the productive capacities of your master record and your copies. You can make as many copies as it possible for you. No body takes the tiniest bit of your copies or your master record away.
    • Avatar of Skyler J. Collins
      Skyler J. Collins May 26, 2014, 4:48 pm Reply
      If your creation prevents me from using my already-owned scarce resources however I choose, then you’re creation interferes with my property rights. IP is unjustifiable. You don’t homestead nonscarce information, you homestead (or trade for) scarce resources. See Tucker and Kinsella: http://mises.org/daily/4630
      • Avatar of Alexander Baker
        Alexander Baker May 26, 2014, 5:22 pm Reply
        Using that exact same reasoning, we can “prove” that physical property rights are invalid. If I homestead a piece of land, I can now prevent you from walking where you used to walk, thus interfering with your use of your own body.
        Intangible goods are scarce, and are rivalrous.
        • Avatar of Skyler J. Collins
          Skyler J. Collins May 30, 2014, 2:47 am Reply
          If I used to walk there, then it would seem that I (and whoever else used it) was the resources first user, and hence it’s owner. See Long on “public space”: http://c4ss.org/content/14724
          If two or more people can use an idea without interfering in the other’s use of the same idea, its nonscarce.
          • Avatar of Alexander Baker
            Alexander Baker May 30, 2014, 3:09 am
            I don’t think walking on land qualifies as homesteading, but it’s arguable. And that’s the point. What, exactly, qualifies as “using” a resource? And where, exactly, are the boundaries? Property rights assignments require arbitrary human judgments. And that’s OK.
            Yes, if two or more people can use an idea without interfering in the other’s use of the same idea, then it is nonscarce (more precisely, non-rivalrous).
            You have simply stated the definition.
            Give some thought to the problem of deciding what constitutes “use”. Use is synonymous with value, which is subjective.
  3. Avatar of Dave Burns
    Dave Burns May 27, 2014, 1:19 am Reply
    “Until we understand what the individual means by “use”, we have no basis whatsoever to form an opinion as to whether somebody else’s use does or does not interfere.”
    This is irrelevant unless the meaning for “use” you end up with depends on other people not using it, even though they could do so without access to any actual real physical property of yours. And that would be begging the question.
    A rivalrous consumption good cannot be consumed by multiple persons at the same time. A rivalrous production good cannot be used for production by multiple producers at the same time. Torturing the definitions and bringing in Austrian ideas about subjective value doesn’t help.
  4. Avatar of Skyler J. Collins
    Skyler J. Collins May 30, 2014, 3:25 am Reply
    Alexander: “Use is synonymous with value, which is subjective.”
    Use: take, hold, or deploy (something) as a means of accomplishing a purpose or achieving a result; employ.
    Value: the regard that something is held to deserve; the importance, worth, or usefulness of something.
    They don’t sound synonymous. The use of something may be valued by someone, but so may any other characteristic. Value is a subjective determination of worth based on any number of characteristics, including possible uses. To say that they are synonymous is simply wrong. And to say that a diminishing of value in the minds of others diminishes its use is wrong. It’s a non-sequitur. The value will go up or down from zero to billions or more in the minds of each and every person, while it’s use(s) will remain constant so long as it isn’t physically changed.
    Your use of an idea will be constant, while the value of that idea will change in the minds of everyone.
    • Avatar of Alexander Baker
      Alexander Baker May 30, 2014, 3:51 am Reply
      Um, notice how “usefulness” is in your definition of “value”?
      As I said in the article, use and value are closely related. The take-away point is that usefulness is subjective. Therefore the definition of “rivalrous” has a subjective element to it.
      • Avatar of Skyler J. Collins
        Skyler J. Collins May 30, 2014, 10:39 pm Reply
        “or” is in both definitions, but that doesn’t make it synonymous. “Use” is a characteristic, like shape, color, texture, state, etc. etc. How we value, or the worth we prescribe, to each characteristic is subjectively determined. That doesn’t make the characteristics synonymous with value. Characteristics, like use, resides objectively in the thing, whereas value resides subjectively in everyone else’s minds. Use is only interfered with if the thing is physically interfered with. Which is exactly what patent and copyright do to everyone else’s real property. They interfere, via the state, with the owner’s use of his real property. Hence the re-distribution of property rights that IP entails. Theft, in other words.
        • Avatar of Alexander Baker
          Alexander Baker May 30, 2014, 11:28 pm Reply
          “Use is only interfered with if the thing is physically interfered with.”
          You’re free to define “use” that way, but then all you’ve done is smuggled your conclusion into your premise. With that definition, Kinsella could have written a very short book:
          Property rights only apply to rivalrous things. Rivalrous means that use by one interferes with use by another. Interference must be physical. Therefore property rights only apply to physical things. QED.
          And that is the sum and substance of what Kinsella did, although he goes on for 60 pages.
          • Avatar of Skyler J. Collins
            Skyler J. Collins May 31, 2014, 12:56 am
            That’s *the* definition of use. I’m not smuggling in anything. You’ll have to pick a different word if you don’t like what it means.
            “Property rights only apply to rivalrous things.”
            Now you’re getting it.
          • Avatar of Alexander Baker
            Alexander Baker May 31, 2014, 1:26 am
            Sigh. Here’s A definition of “use’, from google:
            take, hold, or deploy (something) as a means of accomplishing a purpose or achieving a result; employ.
            (note – deploy something)
            Here is a definition of “thing” from free dictionary:
            An entity, an idea, or a quality perceived, known, or thought to have its own existence.
            Substituting and editing, I get:
            Use – deploy an idea as a means of accomplishing a purpose or achieving a result
        • Avatar of Matthew Crouch
          Matthew Crouch July 10, 2014, 2:58 pm Reply
          > “or” is in both definitions, but that doesn’t make it synonymous.
          Skyler, I just want you to know that I had a *robust* laugh right here. I’m a 30-day free-trial l.me member right now, but you have persuaded me to pay to stick around.
          Baker’s semantic flailings are sometimes painful to watch; you cheered me up.
      • Avatar of Skyler J. Collins
        Skyler J. Collins May 30, 2014, 10:40 pm Reply
        And your equivocating “use” and “usefulness”. They aren’t synonymous. The former is an objective characteristic, the later a subjective determination, like value (quite similar, but not the same thing, either.)
        • Avatar of Alexander Baker
          Alexander Baker May 30, 2014, 11:34 pm Reply
          Skyler, do you agree or disagree that “to use” something is subjective? Reconsider the example I gave in the article, about baby shoes. Or make up your own example. Two reasonable people can have very different views about what it means “to use” something, right?
          What does it mean “to use” my house? I can’t be every place in my house at once. What if a trespasser comes in my house without permission, but is very careful to avoid me, and only uses those parts of the house that I am not using at the time?
          Is he interfering? Why or why not?
          • Avatar of Skyler J. Collins
            Skyler J. Collins May 31, 2014, 12:59 am
            No, possible uses is not subjective. They are demonstrably objective. A thing can be used any number of ways. Each use (objective) will be more or less useful (subjective) to each person, but the [way of using] a thing is not subjective.
            I don’t know if he’s interfering with your use, probably not, but he is interfering with your right as owner to prescribe use.
          • Avatar of Skyler J. Collins
            Skyler J. Collins May 31, 2014, 1:01 am
            “I don’t know if he’s interfering with your use, probably not, but he is interfering with your right as owner to prescribe use.”
            I should add, “… of your rivalrous (scarce) resource.”
          • Avatar of Alexander Baker
            Alexander Baker May 31, 2014, 1:33 am
            If I walk across un-owned land, have I put it to use, sufficient to appropriate the land as my own? If so, how much land, precisely?
            If I look at the beautiful painting on my wall, am I putting it to use?
            If I look at the beautiful mountain range out my window, am I putting it to use?
  5. Avatar of Skyler J. Collins
    Skyler J. Collins May 31, 2014, 5:36 am Reply
    Alexander: “Use – deploy an idea as a means of accomplishing a purpose or achieving a result”
    Yes, and your use of that idea (manifest in the real world through your real property) in no way interferes with my use of the same idea (manifest in reality through my real property). You use your real property in Arrangement A, and I use my real property in Arrangement A, and neither of us interferes with the others’ use.
  6. Avatar of Skyler J. Collins
    Skyler J. Collins May 31, 2014, 5:38 am Reply
    Alexander: “If I walk across un-owned land, have I put it to use, sufficient to appropriate the land as my own? If so, how much land, precisely?”
    Have you beaten a well-worn path? Then yes. The path area containing the path is yours. See the Long article I already linked to.
    Alexander: “If I look at the beautiful painting on my wall, am I putting it to use?”
    Sure. But so what?
    Alexander: “If I look at the beautiful mountain range out my window, am I putting it to use?”
    Sure. But so what?
  7. Avatar of Skyler J. Collins
    Skyler J. Collins June 4, 2014, 2:59 pm Reply
    Alexander: “Use – deploy an idea as a means of accomplishing a purpose or achieving a result.”
    And how do we get from their to value? Or, more importantly, to the use of force to prevent the use of an idea by others?
    • Avatar of Matthew Crouch
      Matthew Crouch July 10, 2014, 4:01 pm Reply
      “And how do we get from their to value? Or, more importantly, to the use of force to prevent the use of an idea by others?”
      It’s admittedly kind of hard to follow, but it works if you stand really far away and squint your eyes so that everything is blurry:
      There is a sense in which “use” is subjective. Like “value” — you agree that value is subjective, right? Great! There’s consumer use and producer use (sometimes these overlap but keep squinting); these don’t interfere with each other. There’s also “productive capacity” .. when I say “there” I mean it’s in “intellectual space” so “there” doesn’t really mean that it is somewhere. Still with me? Great!
      Now because of the subjective stuff (see above) you can’t say definitely that someone’s [producer] use doesn’t interfere with someone else’s, ’cause you can’t say what use is, really. Also don’t forget rivalrous. “Using” something subjectively, for certain purposes, makes those things rivalrous. ‘Cause of productive capacity and value. The subjective-ness of “using” makes productive capacity rivalrous, ’cause of value. It’s a lot like a bicycle factory. Just picture a bicycle factory in your squinty mind’s eye, and we’re good.
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