I suppose that if someone asked me what is the subject that libertarians get into the most debates about with each other, I would probably say foreign policy (ie, should or would a libertarian polity even have a “policy” at all?); but then I might say that in second or third place would be intellectual property rights. It never fails to get the fur flying, metaphorically anyway. Here is an example of a fierce opponent of IP who is also an equally robust defender of property rights in everything else, at the Ludwig von Mises Institute, Stephen Kinsella.
My SQOTD a few days ago created a comment thread where IP came up. Now, I am not going to reprise the arguments for or against IP – here is a great essay by Tim Sandefur on the subject and here is another defending IP – but ask a slightly different type of question from readers, which is: what happens if state-created IP rights no longer existed? Could or would such things ever exist under any kind of Common Law system? How would new, potentially immensely useful ideas, come into being if folk could immediately copy them?
It is not good enough, I think, for a person to respond: “well, if writing books/making music/etc no longer pays, then take up bricklaying or perform live, or teach kids for a fee, or whatever.” I do not find such answers entirely satisfactory. In the age of the Information Economy, when so many people create value not by hard physical labour but increasingly, by manipulating ideas and concepts, it seems glib, to say the least, to shrug one’s shoulders about this.
So here are some ideas I have about what would happen. Remember, this post is not about my defending or attacking IP, but posing the question of what happens in a non-IP world, and whether we like the results:
More prize competitions to stimulate inventions, such as the Ansari X-Prize. Consistent libertarian opponents of IP should, of course, want the prize-winning funds to come from private donors and businesses, not the state. I happen to think that such prizes are a great way to foster innovation anyway.
Drugs: we might see a fall in the number of drugs being brought to market, if copying could be done. Bringing drugs to market is notoriously expensive; of course, libertarian anti-IPers might retort that a lot of the cost is caused by regulatory agencies such as the FDA in the US and their international counterparts, and they have a point; even so, reputable drug firms do not want to kill their patients, so trials and tests can take many years, even in a purely laissez faire environment. So we might have fewer drugs being sold and developed from what would otherwise be the case. We cannot measure this shortfall, but it seems a fairly reasonable guess that such inventions might decline. IP opponents need to address this, or at least state that this is a cost that “we” (whoever “we” are) are willing to pay. (This is a bit like the argument that getting rid of limited liability companies could harm, rather than help, economic growth but that the price is worth paying if we remove other problems allegedly connected to LL).
Contracts. Some firms, fearing that staff might defect and take blueprints of ideas to competitors, might insist on non-disclosure rules on staff in the event that they leave. This might actually lead to pretty draconian contracts being enforced in certain sectors, such as drugs and software, though not always easy to enforce in practice. Again, this would depend on the circumstances of individual firms, the sectors they are in, barriers to entry, etc. But some firms might be able to draw up such contracts particularly if the supply of labour for such jobs exceeded present supply.
Secrecy and concealment. Some firms, such as makers of radical new inventions, would go to far greater lengths to build them in such a way that the design was concealed, making it harder for people to get hold of the object, break it apart and reverse engineer it. It may still happen anyway, but firms might go to all kinds of ploys to try and make their stuff harder to copy, not always in ways we would like. Such efforts are a cost; again, is this a cost that outweighs the alleged negatives of IP?
And as a matter of practical reality, we might see some individuals get so enraged at having their ideas copied that this could get quite nasty. If a composer of a piece of music sees his score copied by someone who cannot even be bothered to acknowledge the source, and who performs it live and earns a fortune, then the composer might find out ways of seriously ruining the career of the performer, such as by libelling that person, blackmailing them, even physical violence. Do not forget that libel laws, for instance, are in part a way that the legal system tried to prevent folk killing each other in duels over affairs of honour. No-one likes the plagiarist, and opponents of IP need to accept that such conflicts might arise. I am not saying that the example of the irate composer would be justified in what he might do, but we are talking about likely outcomes, whether we approve of them or not.
One other consequence of a world without IP is that it makes enforcement of property rights in non-rivalrous stuff – such as land, movable goods – even more important in economic life than it is now. Property is inseparable from wealth creation, since if we cannot have the security of knowing that we can build up a store of wealth, then we cannot plan ahead and deal with our fellows in peaceful, voluntary ways. Good fences and good neighbours, and Englishmen in their castles, etc, etc.
Anyway, comment away. Play nice in the sand-box.