DON’T STEAL THIS ARTICLE On the Libertarian Critique of Intellectual Property^*

by Greg Perkins

Marxist scholars don’t have much interest in defending individual rights, private property, and free markets — so their antipathy to intellectual property rights in patent and copyright isn’t surprising. In contrast, there are a significant number of libertarian scholars who proclaim individual rights and free markets to be good and desirable, yet who share an antipathy to intellectual property. That is, they systematically defend material property rights while decrying intellectual property as a confused, destructive, and morally bankrupt idea that should be abolished for the protection of our true individual rights.

In making their case, these libertarian scholars¹ cite a blizzard of puzzles and problems surrounding intellectual property. They see incoherency: how is it that, unlike all other rights, intellectual property rights should abruptly vanish after some set number of years? They see arbitrariness: why single out for reward the mental work behind the practical inventions of industry, but deny it for the mental effort behind the theoretical discoveries of science that make those inventions possible? Besides, they maintain, the line between invention and discovery is inherently vague and artificial. And they see a fundamental contradiction: inalienable rights cannot logically conflict with one another, but they find that intellectual property rights violate material property rights in an automatic and unchosen transfer of partial ownership to inventors and authors. Owners of paper and ink can use their property in certain ways only by permission of copyright holders; owners of metal and tools can use their property in certain ways only by permission of patent holders.

To resolve such issues, these libertarian scholars seek a theory of property that will firmly establish material property rights while excluding intellectual property.² Stephan Kinsella explains its basis:

Let us take a step back and look afresh at the idea of property rights. Libertarians believe in property rights in tangible goods (resources). Why? What is it about tangible goods that makes them subjects for property rights? Why are tangible goods property?

A little reflection will show that it is these goods’ scarcity — the fact that there can be conflict over these goods by multiple human actors. The very possibility of conflict over a resource renders it scarce, giving rise to the need for ethical rules to govern its use. Thus, the fundamental social and ethical function of property rights is to prevent interpersonal conflict over scarce resources. …

Others [in addition to Hoppe] who recognize the importance of scarcity in defining what property is include Plant, Hume, Palmer, Rothbard, and Tucker.

Nature, then, contains things that are economically scarce. My use of such a thing conflicts with (excludes) your use of it, and vice versa. The function of property rights is to prevent interpersonal conflict over scarce resources, by allocating exclusive ownership of resources to specified individuals (owners).³

Thus Kinsella concludes that “[t]he problem with IP rights is that the ideal objects protected by IP rights are not scarce…” Property rights “are not applicable to things of infinite abundance, because there cannot be conflict over such things.”⁴ As our first patent examiner, Thomas Jefferson, put it: “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”⁵

Finally, Kinsella points to the ironic twist that “IP laws create an artificial, unjustifiable scarcity” which “itself needs a justification.” On this last, he quotes Arnold Plant:

It is a peculiarity of property rights in patents (and copyrights) that they do not arise out of the scarcity of the objects which become appropriated. They are not a consequence of scarcity. They are the deliberate creation of statute law, and, whereas in general the institution of private property makes for the preservation of scarce goods, tending … to lead us “to make the most of them,” property rights in patents and copyrights make possible the creation of a scarcity of the products appropriated which could not otherwise be maintained.⁶

Other contemporary libertarian scholars echo the same ideas, and Tom Palmer’s analysis emphasizes the same essential points regarding the basis of property and our right to it:

The key to all of this is scarcity. … Tangible goods are clearly scarce in that there are conflicting uses. It is this scarcity that gives rise to property rights. Intellectual property rights, however, do not rest on a natural scarcity of goods, but on an ‘artificial, self created scarcity.’ That is to say, legislation or legal fiat limits the use of ideal objects in such a way as to create an artificial scarcity that, it is hoped, will generate greater revenues for innovators… But the attempt to generate profit opportunities by legislatively limiting access to certain ideal goods, and therefore to mimic the market processes governing the allocation of tangible goods, contains a fatal contradiction: It violates the rights to tangible goods, the very rights that provide the legal foundations with which markets begin.⁷

The above stands as the core theory offered in the libertarian case against intellectual property rights. What is particularly striking is that none of the contemporary heavyweights like Palmer and Kinsella grapple with the meaning of individual rights in general, nor their still-deeper basis in ethics, epistemology, and human nature. That is, their chief observation begs the question: is the splendid characteristic of conflict-prevention the central purpose of property rights, or merely a benefit — is it the cause or an effect? To determine this, we need to investigate the source of rights in general. These scholars seem hesitant to do so, but Ayn Rand wasn’t, and her perspective illuminates the central difficulty in their case: they have missed the essence of all rights.

* * Rand noted that rights — including property rights — are ultimately based in the needs of man’s life: if a man is to live, he must be able to act to sustain his life. An objective morality defines the broad principles by which men must act to sustain their lives, and a proper government preserves the conditions required for men to do so when living among others. This is why Rand described a right as “a moral principle defining and sanctioning a man’s freedom of action in a social context.”⁸ More broadly, she explained,

“Rights” are a moral concept — the concept that provides a logical transition from the principles guiding an individual’s actions to the principles guiding his relationship with others — the concept that preserves and protects individual morality in a social context — the link between the moral code of a man and the legal code of a society, between ethics and politics. Individual rights are the means of subordinating society to moral law… The principle of man’s individual rights represented the extension of morality into the social system — as a limitation on the power of the state, as man’s protection against the brute force of the collective, as the subordination of might to right…

There is only one fundamental right (all the others are its consequences or corollaries): a man’s right to his own life. Life is a process of self-sustaining and self-generated action; the right to life means the right to engage in self-sustaining and self-generated action — which means: the freedom to take all the actions required by the nature of a rational being for the support, the furtherance, the fulfillment and the enjoyment of his own life.⁹

The immediate corollaries of the right to life are the rights to liberty, property, and the pursuit of happiness. Each flows from an essential aspect of the Objectivist ethics, which is itself rooted in epistemology and the nature of man.¹⁰ Consider liberty. Reason is our basic means of survival and so rationality is our primary virtue; in general, we must have the liberty to grasp the nature of the world and act accordingly to live. That is, the right to liberty flows from a recognition of our primary virtue of rationality. And consider happiness. It is our emotional reward for achieving values over time, the emotional experience of living. The right to life entails the right to pursue and achieve values to serve our individual lives — and the concomitant right to the pursuit of our individual happiness. That is, the right to the pursuit of happiness flows from a recognition of the individualistic, egoistic nature of life and morality.

Finally, consider property. While other animals adjust themselves to nature, man adjusts nature to his own needs by creating the values that sustain his life — everything from food and shelter, to transport systems and communication networks, to medical technologies and art. We need to produce, keep, use, and dispose of values to serve our lives, and productiveness is the virtue by which we do so. The right to property flows from a recognition of the cardinal virtue of productiveness. Rand singled out the right to property as having special significance in the implementation of all rights:

The right to life is the source of all rights — and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.¹¹

This brief sketch of the Objectivist view of rights indicates why, contrary to the view of libertarians opposed to intellectual property, the essential basis of property is not scarcity — it is production. Their complaint that intellectual property is an oxymoron because ideas are not scarce in the same way as apples has no merit, for the concepts of property and ownership lie fundamentally in the need for men to produce and enjoy values in support of their lives — not merely in the narrower and subsidiary need to avoid conflict with one another in that enjoyment.

* * Studying the most challenging puzzles and problems raised by libertarian scholars against intellectual property will help us to better understand the requirements of man’s life as the basis of rights in general, production as the basis of property in particular, and the role of the mind throughout. In each case we will dive below the surface to appreciate the implications of essential facts from ethics, epistemology, and the nature of man to enrich our understanding of intellectual property and reinforce the principles at play.

Consider the issue of recognizing inventions as intellectual property while excluding discoveries. Kinsella discusses how “the distinction between the protectable and the unprotectable is necessarily arbitrary” in his view:

[P]atents can be obtained only for so-called “practical applications” of ideas, but not for more abstract or theoretical ideas… But the distinction between creation and discovery is not clearcut or rigorous. Nor is it clear why such a distinction, even if clear, is ethically relevant in defining property rights… [I]t is arbitrary and unfair to reward more practical inventors and entertainment providers, such as the engineer and songwriter, and to leave more theoretical science and math researchers and philosophers unrewarded. The distinction is inherently vague, arbitrary, and unjust.¹²

To gain some purchase on this issue it is helpful to distinguish between wealth and other things we value in markets. Carefully drawing this contrast, economist George Reisman describes wealth as specifically material economic goods.¹³ Goods, as beneficial and life-preserving rather than merely any object; economic goods as against “free goods,” which are benefits that do not need to be created (such as air and sunlight); material economic goods as existing benefits to men’s lives — rather than potential economic goods, or mere proxies (like stocks and money) or means (like labor) or preconditions (like ideas). Labor and ideas are valued as economic goods, not because they are themselves wealth, but because they are the indispensable means to wealth.

The distinction between wealth and its preconditions lets us clarify the ethical significance of inventions: inventors use their understanding of nature (often involving discoveries made by scientists) to solve specific problems in human welfare. Inventors are not recognizing some general fact about reality, but creating a recipe for producing wealth, thereby enabling the production of specific life-serving objects which would not have existed without their mental work. The crucial distinction between discovery and invention lies in their object: facts of nature are what they are and exist waiting to be discovered, while inventions are objects which would not exist without a creator. So intellectual property rights are a recognition of a crucial precondition of the life-serving creation of wealth — and they are not, contrary to this complaint, a general reward for mental effort that is arbitrarily denied for some classes of thought.

Moreover, a failure to distinguish between practical invention and theoretical discovery in intellectual property protection would work directly against the very purpose of individual rights. It would be unjust and contrary to the requirements of man’s life to protect discoveries as intellectual property, by making possible the demand that people ignore facts and act on known falsehoods in lieu of paying for the privilege of living. It would mean people being prohibited from acting in accordance with a fact once it is known — including barring their taking life-sustaining actions and using that knowledge to create new, life-serving objects. In contrast, there is no injustice when inventors or artists peacefully withhold the use of their recipes for manufacturing things that could not otherwise exist. Indeed, injustice would lie in denying creators the right to set their terms for providing the necessary means to life-serving wealth.

* * This brings us to the central problem cited by libertarians opposed to intellectual property: that intellectual property rights conflict with material property rights. Palmer introduces the issue this way:

Arguments such as Spooner’s and Rand’s encounter a fundamental problem. While they pay homage to the right of self-ownership, they restrict others’ uses of their own bodies in conjunction with resources to which they have full moral and legal rights.¹⁴

And I’ll let Kinsella flesh it out with his explanation of the exact nature of the alleged “taking” involved in intellectual property rights:

Let us recall that IP rights give to pattern-creators partial rights of control — ownership — over the tangible property of everyone else. The pattern-creator has partial ownership of others’ property, by virtue of his IP right, because he can prohibit them from performing certain actions with their own property. Author X, for example, can prohibit a third party, Y, from inscribing a certain pattern of words on Y‘s own blank pages with Y‘s own ink.

That is, by merely authoring an original expression of ideas, by merely thinking of and recording some original pattern of information, or by finding a new way to use his own property (recipe), the IP creator instantly, magically becomes a partial owner of others’ property. He has some say over how third parties can use their property. IP rights change the status quo by redistributing property from individuals of one class (tangible-property owners) to individuals of another (authors and inventors). Prima facie, therefore, IP law trespasses against or “takes” the property of tangible property owners, by transferring partial ownership to authors and inventors. It is this invasion and redistribution of property that must be justified in order for IP rights to be valid.¹⁵

The first thing to note is the plain fact that people are routinely prevented from using their material property when it would violate any right — so the protection of intellectual property rights would not be unique in so “controlling” other people in their use of their material property. For example, my neighbor’s person and property rights are not violated when he is not allowed to spontaneously whack me in the head with his fully-owned two-by-four. His rights are not violated in preventing him from using his tangible truck to pull up to my house and drive off with my entertainment center. We are all restricted from using our persons and property to violate the rights of others, and such restrictions do not themselves constitute an infringement of rights because nobody has the right to violate rights.

It is bad enough that these libertarian scholars ignore such an obvious point, but the evasion reaches full bloom in Kinsella’s explanation of the alleged “taking” caused by the appearance of intellectual property. The charge is that, as intellectual property comes into existence, liberty is lost in a magical transfer of partial ownership from the owners of material property to an author or inventor, thereby unjustly preventing them from doing something they were otherwise free to do with their own property. But in no sense is any ability, permission, or liberty lost. Recall that intellectual property rights protect the manufacture of creations — objects which did not and would not otherwise exist. Before a novel has been written, absolutely nobody has the power to publish it, so its being authored cannot remove any liberty previously enjoyed by printers. And before some better mousetrap is invented, nobody has the power to produce it — so its being invented cannot deny manufacturers any previously enjoyed freedom.

Indeed, far from losing any power or liberty, the options available to owners of material property only increase with the appearance of intellectual property: they are presented with at least the potential to use their property in the production of new, life-serving objects in collaboration with an inventor or artist.

* * Finally, we turn to the subtlest issue we will explore: time limits. Libertarians opposed to intellectual property see unprincipled arbitrariness in protecting it for some given number of years; for if intellectual property is legitimate, why wouldn’t we provide unlimited protection as with material property? But they also note that if there were no time limits, then people would become mired in impossible record-keeping, drained by endless royalties, paralyzed in innovation. In the face of both limited and unlimited protection seeming unprincipled and heinously impractical, they reject intellectual property protection altogether — and this is further justified in light of their scarcity-based theory of property.

Certainly the practical point about the crushing burden of endless royalties and record-keeping is a useful sign that unlimited patent and copyright protection is a bad idea we should reject. But that alone does not constitute the full case against the idea; we also need to look to the nature of man’s life to identify what is wrong with unlimited intellectual property rights. Further, in seeing the trouble there, we can identify what gives rise to the need for time limits in the first place — and we can identify principles to guide us in the delicate challenge of determining just intellectual property durations which are not arbitrary.

Our starting point is the examination of what would be entailed in owners enjoying both material and intellectual property in perpetuity. First, recall that in discussing wealth as material economic goods we carefully distinguished it from its essential means (ideas, labor). In the present point, this distinction appears again in understanding material property rights as a claim on a specific amount of existing wealth, where intellectual property rights are a claim on limitless potential future wealth in the application of an idea.¹⁶

Regarding the former, Rand observed that material property “can be left to heirs, but it cannot remain in their effortless possession in perpetuity: the heirs can consume it or must earn its continued possession by their own productive work.”¹⁷ Value evaporates if a farmer neglects his land, an apartment owner neglects his building, or the owner of a business neglects its operation. Even a trust-fund baby must manage his investments lest they wither or be lost due to mismanagement — consider the recurring story of lottery winners who quickly find themselves back where they were before winning. People may enjoy a lucky “leg up” in accumulating wealth, but they must be productive to maintain and grow that value, or suffer its disappearance. That is, they must earn its continued possession by their own productive work. Even under such favorable circumstances, the specific basis in ethics of the right to property — the cardinal virtue of productiveness — continues to stand as a broad requirement.

In contrast, intellectual property cannot be so consumed and requires no productive effort on the part of its holder to maintain its value. No work would be demanded of an heir to intellectual property: he may continue to apply the idea to produce wealth, but he could just as well sit back and soak up royalties from others who use the idea to produce wealth. The owner of intellectual property need not earn its continued possession. Seeing the implications of this, Rand commented that if intellectual property were held in perpetuity, “it would lead to the opposite of the very principle on which it is based: it would lead, not to the earned reward of achievement, but to the unearned support of parasitism.”¹⁸ That is, a distant heir would effortlessly enjoy a share of the wealth being produced by others who alone are keeping the idea alive, embodying it in new life-serving goods. In the role of mere heir to intellectual property, one could not earn any part of that wealth. This follows from Rand’s point that

Intellectual achievement, in fact, cannot be transferred, just as intelligence, ability, or any other personal virtue cannot be transferred. All that can be transferred is the material results of an achievement, in the form of actually produced wealth. By the very nature of the right on which intellectual property is based — a man’s right to the product of his mind — that right ends with him. He cannot dispose of that which he cannot know or judge: the yet-unproduced, indirect, potential results of his achievement four generations — or four centuries — later.¹⁹

Thus by looking further into the meaning and purpose of property, we see how unlimited protection of intellectual property rights would not be analogous to unlimited material rights protection and would in fact be the very opposite in important ways.

Regarding the delicate challenge of determining specific limits for the protection of various classes of intellectual property, the scope of “fair use,” and so on: as with the above issues surrounding intellectual property, legal philosophers must look to politics, ethics, and the nature of man for the appropriate guiding principles to develop just implementations — not interfering with the freedom of creators to profit by their creations while at the same time not enabling parasites to burden the productive.

Lest we be driven by the difficulty of that challenge into entirely abandoning intellectual property protection, we should note that just as unlimited intellectual property protection would encourage destructive parasitism in future heirs, the absence of intellectual property protection would encourage destructive parasitism in present manufacturers.

Abandoning intellectual property protection is saying that the author who invests thirteen years in writing a bestseller has no more right to profit from its sale than anybody else. It is saying the studio that risks $100 million on producing a blockbuster movie has no right to set the terms of its use to enjoy blockbuster profits, even though it retains the sole right to suffer the losses of a flop. The same is true for the labs that invest billions in developing mechanical, electronic, and virtual tools and toys that improve peoples’ lives. It is saying that biotech companies who risk vast fortunes and decades of sweat in striving to create life-saving drugs and population-sustaining crops should simply give away the benefits of their risk, toil, and dedicated genius.

It is true that the sudden abandonment of intellectual property rights would be a boon for manufacturers and customers, instigating a burst of wealth-creation as they deployed formerly protected ideas more freely. But this would be short-lived and stagnation would soon follow as those who might have risked, invested, toiled, and dedicated their genius to the next opportunity simply shrug. Creators would stand aside and not bother, or they would spend their minds on developing those (much more limited) things which aren’t easily copied and imitated. Having killed the proverbial goose that lays the golden eggs, countless life-serving creations would come more slowly or not at all. Why risk a billion dollars and half a lifetime attempting to develop a cure for cancer if others can profit by that achievement any way they see fit? Then decline would follow stagnation as shifting conditions in populations and resource availability bring new challenges that will go unmet.²⁰

But again, disastrous practical results alone are not a full justification; they are only a (very strong) hint that there is a deeper explanation we must appreciate, an important fact we need to respect. In this case, the numbingly unjust and destructive results are ultimately caused by the denial of the crucial role of ideas in wealth-creation. Rand summarized it this way:

Every type of productive work involves a combination of mental and physical effort: of thought and of physical action to translate that thought into a material form. The proportion of these two elements varies in different types of work. At the lowest end of the scale, the mental effort required to perform unskilled manual labor is minimal. At the other end, what the patent and copyright laws acknowledge is the paramount role of mental effort in the production of material values; these laws protect the mind’s contribution in its purest form: the origination of an idea.²¹

* * Looking below the surface to understand the role of reason in man’s life and its connection to property rights is essential to grasping the importance of intellectual property — and to achieving its proper implementation. But this is precisely what has gone missing in the accounts of libertarians against intellectual property. In a telling aside, Kinsella writes:

Even Rand once elevated patents over mere property rights in tangible goods, in her bizarre notion that “patents are the heart and core of property rights.”²² Can we really believe that there were no property rights respected before the 1800s, when patent rights became systematized?²³

Consider: people employed reason before Aristotle systematized logic; they used geometry before Euclid organized the field; they lobbed rocks with catapults before Newton formulated the scientific principles by which missiles fly. There are countless cases where an implicit or partial understanding of a deep truth developed before some thinker explained and systematized it. Rand often commented that it was the advent of the Industrial Revolution that made it possible to fully appreciate the central role of reason in man’s life: it was there all along, but hard to see in such stark relief until that point in history. The crucial role of reason in production was not fully recognized until then, and so the essential role of the mind — of ideas — in wealth-creation was not yet fully grasped, either.

As the Industrial Revolution unfolded and it became easier to publish information and mass-produce objects for wide distribution, people began to grasp more fully the fundamental role of ideas in wealth-creation. They began attempting to protect the interests of the creators of ideas — in fits and starts, justified by troubled appeals to utilitarianism in the US²⁴ and mystical appeals to extension of personality in Europe.²⁵ But problematic justifications and inconsistent implementations do not invalidate the reality of intellectual property.

Now as we enjoy the rise of the information age, the critical role of reason in the life of man is more prominent than ever, and facing the implications squarely is paramount. So it can be no accident that in addressing a reader’s query about intellectual property, Rand opened her essay with an integrative statement reflecting this fundamental fact and inviting us to appreciate its fuller meaning. “Patents and copyrights are the legal implementation of the base of all property rights: a man’s right to the product of his mind.”²⁶