I had always accepted the view that patents and copyrights were
but the legitimate extension of property rights into the realm
of 'ideal objects.' However, some arguments by Tom G. Palmer and
Benjamin Tucker (among others), have convinced me that
copyrights and patents are not forms of legitimate property
rights, but of illegitimate state-granted monopoly.
These ideal objects are non-tangible economic goods. They
include such constructs as ideas, databases, algorithms,
computer programs, music, literature, etc. They differ from
tangible property in that they can be infinitely multiplied
without concomitant lessening of size or quality. They remain
economic goods in that they are scarce-someone must produce them
and they are valuable.
Intellectual property rights in the US fall into several
categories: patents, copyrights, and trade secrets for example.
Trade secrets protect ideas but rely upon private measures, not
state action, to maintain exclusivity. This in contrast to the
non-contractual protections characterizing patents and
copyrights.
The 'publicness' of a good, which allows free-ridership, is not
an inherent characteristic but a function of the manner it is
produced, marketed, or even of the relevant unit in which the
information is imbedded. Further, costs of exclusion are
involved in the production of all the goods I can think of. Why
single out some goods and insist the state underwrite their
production costs via a state-sanctioned collective action, all
because of the decision to make the good available on such a
non-exclusive basis that it is converted from a potential
private good into a public good.
Is it right to create property rights whenever the specter of
freeridership arises? Magicians embed their intellectual good
within illusions. To reveal the trick enables consumers to
produce their own illusions. Yet, if they decide to appear on
TV, some viewers might use the slo-mo feature of their VCR to
'free-ride'. Should we create property rights in illusions and
restrain VCR owners from using slow-motion?
Markets for ideal objects can and do function in the absence of
enforceable intellectual property rights. Fashions, business
strategies, scientific principles and math formulas, jokes,
magic tricks, new words and slogans are all examples of ideal
objects unprotected in the U.S. Also works on which
copyrights have expired or were never applicable (such as the
Congressional testimony of Lt. Col. Oliver North).
In addition functioning markets existed for foreign authors in
the U.S. in the 19th century. The free market paid royalties to
British authors even though those authors received no copyright
protection in the US until the extension of copyright protection
to foreigners in 1891. The American publishers paid the royalty
in order to obtain advance galleys, even though they themselves
had no legal protection against competitors who could legally
copy their new releases and sell them. In the absence of state
protection the authors and publishers used several voluntary and
contractual arrangements for the internalization of
externalities.
The problem shifts to being one of marketing. Although current
publishers so used to operating with a copyright may think this
analysis strikes at the foundations of the publishing biz, it is
aimed at the present selling methods.
American laws over intellectual property are rooted in the
English patents and copyright system. The Crown issued patents
for new inventions with the aim of securing control of endeavors
thought to be of political import; or to raise money through the
granting of monopolies. Copyright served to ensure state control
over the press in an era of tremendous political and religious
dissent. As Tom Palmer remarked in his recent paper on
Intellectual Property, "Monopoly privilege and censorship lie at
the historical root of patent and copyright." Many times the
state granted monopoly privilege with no concern for the
original inventor. Venice in 1469 (One of the earliest patents I
could find) granted to John of Spyer a monopoly over the art of
printing itself. Queen Marys' chartering of the Company of
Stationers in 1557, granting its monopoly over printing, was an
attempt to control a new, threatening technology, primarily to
suppress Protestantism.
I stress here I do not condemn the current theoretical arguments
for intellectual property rights on the basis of its'
unwholesome historical origin. I point out its' genesis to
counter the myth that patents and copyrights arose from the
mists of historical common law.
Any service or good has, as a component of its' cost of
production, not only the costs of labor, marketing, capital,
etc., but also the cost of exclusion. For the owner of a movie
theater, these exclusion costs include paying for walls, ticket
windows, ushers. These serve to exclude or fence out
'freeriders'. Now they could set up projectors and show the
movies on low level stratus clouds (ok, screens in parks), and
then attempt to prevent casual passerbys from watching. The
method of marketing their product is their choice. In the case
where their marketing decision results in the publicness of a
good, it seems to me to be grossly unjust to ask the government
to force all who might potentially see the show without paying
to kick in some bucks, whether they DO in fact see the show or
not. Or to force passerbys to don glasses that prevent them from
viewing the movie. Yet the proponents of property rights in
ideas choose such a method when they attempt to get every person
purchasing a blank tape to pay a royalty to a third party.
Alternatively, as with DAT tape recorders, their proposals seek
to ban or cripple entire technologies. This method, done in the
name of preventing technologies which are capable of recording
publicized (broadcast) music without loss of fidelity, would
make mere ownership of tangible property (DAT recorder) a crime.
I view proposals for such an implementation of property rights
in ideas, which wipe out other areas of property rights
altogether, as inconsistent.
If we privatize the enforcement of contracts, let those who want
to "own" ideas pay for the enforcement of that contract. Market
forces will probably lead the computer programmer to tie a
perceived value to the registration of their program (cheap upgrades,
technical support, etc.); rather than paying for a protection agency
that tries to police the digital information realm. But they would
be welcome to try to enforce a contract against copying a program
that the purchaser would sign when he buys the product. I just
wouldn't subscribe to a protection agency that used some of my
subscription fee to police copyright protection.
Pat Fallon
pfallon@postoffice.ptd.net