Uncovering the folly that is ‘Intellectual Property’

Against Intellectual Property
by N. Stephan Kinsella (2008 The Ludwig von Mises Institute)
70 page paperback; $6.00
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It is not often that a reader can be bought up to speed on an entire intellectual theory in one short session of reading, let alone one that so decisively goes against the grain.  But that is what N. Stephan Kinsella has achieved in his short but seminal work published in 2008 by the Mises Institute, Against Intellectual Property.

To be sure, the topic in question, intellectual property (including copyrights, patents, trademarks and trade secrets) is a potentially daunting one that is steeped in legal intellectualism and has been hotly debated for centuries.  But it is not the aim of this short essay to do full justice to the breadth and scope of this debate, but rather to clearly articulate the correct foundation from which all property rights, including Intellectual Property (IP) rights, should be considered.

While actually a deep economic issue that goes to the very heart of what is the essence of private property, IP has been universally accepted in modern democratic societies without much thought of the issue by the very people who must administer such laws and the people whom such laws impact.  Most people regard IP as the natural order of things and that, without IP innovation would cease as the incentive to create new inventions would disappear.

Kinsella shows that both assertions could not be further from the truth.  Intellectual Property laws are not natural at all, but arise from and require administering by government bureaucrats.  Absent government intervention and the threat of force through various law enforcement agencies, IP would not exist.

Furthermore, there is little evidence to show that IP laws generate more research and development and more innovation, and in fact some academic studies have shown that environments without IP laws have as much if not more technological innovation than environments with IP laws.  Indeed, IP laws may also deliver too much research in some areas and distort the provision of current consumer goods and research and investment away from what society actually needs and desires.

Kinsella shows that the need for private property arises from natural scarcity.  The essence of scarcity is that one’s use of a resource or good necessarily excludes another from using or consuming that resource.  Hence land is scarce, food is scarce, cars are scarce, and umbrellas are scarce.  Most tangible resources are scarce, although there are some exceptions like the air we breathe, which is scarce in principle but not in practice.  Non-scarce resources cannot be considered property, which is why no one person can own non-scarce resources and why they are generally free to consume.

Natural scarcity therefore forms the basis for homesteadable property, which Kinsella shows is the only legitimate form of private property.

The author then goes on to demonstrate that ideas are non-scarce and that they cannot be homesteaded like normal scarce goods.  Ideas therefore cannot be legitimately regarded as property.  IP laws should be scrapped.

Kinsella does make a point of distinguishing between Copyright, Patents, Trademarks and Trade Secrets.  Copyright and Patent law should be abolished, Trademark (brand) infringement can be dealt with under normal fraud laws (Kinsella argues that the infringement is against consumers in the form of fraud rather than against the brand being copied), and trade secrets can be legitimately guarded by companies or individuals using legitimate means to keep their secrets secret, but should not have state laws to protect them.

This is a clear and hard-hitting rebuttal of the pro-IP view, it runs against the mainstream grain, and will get under a lot of people’s skin – just the kind of book we like here at Human Action!  But more importantly, it is sound and sensible, and is superbly well referenced to boot, displaying the author’s academic pedigree.  N. Stephan Kinsella is easily one of the leading opponents of IP law and with this essay has set the standard for the libertarian view of IP.  Some free market economists such as South Africa’s Free Market Foundation, and many others, still support the upholding of IP laws as part of their greater mandate to support respect for private property rights in general.  While these folk are well-meaning, they have conflated two separate things – real, scarce, homesteadable tangible property, and pseudo, non-scarce, intellectual property.

Free market economists should stop making this error and start separating real property rights from pseudo property rights, and understand that IP laws are really nothing but rights granted by the government to a select few privileged individuals.

The Libertarian movement is greatly indebted to Kinsella and this body of work.

We leave you with one of Kinsella’s best insights: the granting of IP rights in the form of copyright and patents actually allows the holder of those “rights” control over  the tangible property of third parties, thereby robbing those third parties of the ability to use their real tangible property as they see fit.  In other words, IP laws help some limit the legitimate property rights of others, and unfairly transfer effective ownership of that tangible property from some to others.  To find out how intangible IP laws enable this tangible theft, you better read this book…

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