Hollywood, Feds seize control of Internet? The SOPA bill

[NeilUnreal]

I don't have the details, but apparently a judge has ruled that selling "used" mp3s is legal under the "first-sale" theory applying to tangible property. However, I don't think his argument was so much that digital items are tangible property as it was that music copyright holders can't have it both ways: they can't both claim that mp3s ARE property for the purposes of theft, but ARE NOT property for the purposes of other laws that pertain to property. (Such as a the "first-sale" theory and the right of a consumer to sell used property unencumbered.)

This should be interesting...

-Neil

[Challenger Grim]

As always, we tend to agree more than disagree (still owe you that drink), so some things I'll just be leaving out since I'd just be echoing an agreement.

I don't think that's how genes work.

But it's how great science fiction works.

Lying is different from copying. Fraud should be illegal. We seem to agree on this.

Yeah, but when it comes to less tangible property, I consider "copying" to be a form of lying.

Example?

It's also worth noting that small-time creators don't have a "piracy" problem, but an obscurity problem.

Yeah, but if a "big-time" creator took a small-timer's work and then copied it with his name on it? Whether you steal a song, story or artwork. The fraud is at least some of what intellectual property rights is supposed to protect.

Copyrights really just benefit big-time creators and big media conglomerates. (Who keep getting legislation passed to keep things under copyright forever, and recently even to move the line backwards in time and re-copyright things already in the public domain. http://www.wired.com/threatlevel/201...ight-decision/ Peter and the Wolf was in the public domain. Now it's not.)

Hey, what did I say earlier?

I've never been fully comfortable with libertarian denials of creative endeavors as part of private property, but on the other hand, there is some grade-A insanity in some current copyright and patent laws right now. (and SOPA/PIPA would have just compounded the issues)

1) You work to create a, say, sweater, out of your own materials. You then own the thing. You "deserve" that property and its use. The product itself is your compensation (the fruit of your labor). You do not however deserve compensation from others, who may not wish to purchase it from you.

Price is just whatever you and someone else happen agree to exchange for. You can ask for whatever price you wish. But it depends on finding someone else willing to make that exchange.

We're using "deserve" in slightly different ways. I'm not saying you can make something and then demand someone pay you for it. But, say someone else does wish to purchase my sweater. Setting aside the whole, "they can demand it for a penny, and I can demand a trillion dollars for it"... maybe not deserve, maybe "reasonable" is a better term. Is it not 'reasonable' that if we're negotiating price, that I be compensated for the time spent constructing the sweater instead of the price just coming from the value of the raw materials.

Prices are not determined by costs. Say you spend lots of money/work creating your toaster. And suppose I independently invent the same thing, but with less cost. Consumers don't care that yours cost more, their buying price will be the same for each.

Uh... doesn't cost play SOME role in price?

Just as how buyers are not willing to compensate less efficient producers for their inefficiency, by paying for the extra cost of the inefficiency.
Any two units of the same good will have the same price by consumers even if they had different costs. Prices are determined by the quantity of supply and the demand, not by the costs of producing the units of that supply.

Oh... ok.

I understand that's how it works in theory, but not sure it comes out that way in practice. Say I invent a widget. It's something that's never existed before but is totally awesome. Friend of mine sees it and is like "How much you want for that?"

So far we have 1 demand and 1 supply. How much does the widget cost? With a possible dream that if more people see my widget, they'll want it too (thus, advertisement increasing demand). At least in my experience, the seller of the widget usually calculates the price based upon how much the raw materials were plus the time, effort, and skill that went into making the widget.

Or if I go to get my car repaired, the bill has a listing for "parts" and "labor", not how many people were demanding the mechanic that day.

But then what you are getting at is that without IP there will be less incentive to invest in R&D than some people consider optimal.
Thus a common argument for IP is that it is desirable to increase the incentive to invest in R&D.
To that I respond:

1) Even if it were desirable, it still seems to be immoral, for the reasons I gave before that IP is unjust.

2) There are arguments that can be made in the other direction. For example, to stay competitive, one must keep innovating to stay on the cutting edge. But a patent grant means that I can rest on my past success and thus reduces incentive to keep innovating. It is not clear that IP increases innovation/creation on the whole. (Other points are that the additional R&D due to the distorted incentives may be more R&D than is actually economical--may be at the expense of more urgent uses of those resources. Or that additional resources are used up in dealing with politics, patent litigation, Or inhibited innovation for fear of being sued for IP infringements.)

3) In fact, IP often/usually is seen in practice to reduce innovation/production. I used to be swayed by the above argument for IP until I read the book Against Intellectual Monopoly (full text for free, here: http://www.dklevine.com/general/inte...al/against.htm). It documents countless cases of IP being no help or detrimental, and lack of IP having superior market results (more innovation/creation/production). So many cases showing the same result again and again that the result becomes almost tedious. One finding is that the profits from "first mover" advantage (staying one step ahead of your competitors) is huge and is sufficient motivation to invest in innovation.

It has a whole chapter on your example of pharmaceuticals. "the modern pharmaceutical industry developed faster in those countries where patents were fewer and weaker." The earlier heavily patented U.S. market was slow and underdeveloped, while German companies like Bayer had no German patents but innovated much more and were more successful. Any incentive created by patents were more than offset by the increased legal restrictions on innovation caused by patents. Another example discussed is that Italy's market also was depressed after introducing drug patents in 1979.

Some interesting quotes from my notes:

• "[...] according to the chief scientific officer at Bristol Myers Squib, Peter Ringrose, who told The New York Times that there were ‘more than 50 proteins possibly involved in cancer that the company was not working on because the patent holders either would not allow it or were demanding unreasonable royalties".
• "more than half of the top selling medicines around the world do not owe their existence to pharmaceutical patents."
• "...the study showed that 10 times as many basic drug inventions were made in countries without product patents as were made in nations with them."
• Much (75%) of R&D resources are spent on creating redundancy to get around patents "Insofar as new drugs are replacements for drugs that already exist, they have little or no economic value in a world without patents – yet cost on the order of $800 million to bring to market because the existence of patents forces the producers to “invent something” the USPO can pretend to be sufficiently different from the original, patented, drug."

Interesting, I'll refer the above to some friends of mine and look at it if I get the time.

But then we still have to wonder: what's then causing the decrease in innovation now. Are you coming down in favor of the biology explanation then? That some people just can't create like American/Europeans can?

[joel]

Yeah, but when it comes to less tangible property, I consider "copying" to be a form of lying.
[...]
Yeah, but if a "big-time" creator took a small-timer's work and then copied it with his name on it? Whether you steal a song, story or artwork. The fraud is at least some of what intellectual property rights is supposed to protect.

Perhaps it would be useful to distinguish the different areas of existing IP law?
I'm opposing patents and copyrights, but I am more sympathetic to trademarks (with caveats mentioned above in the example of the fake rolex, where the buyer knows it's fake).

Is making your own instantiation of the idea of the wheel lying/immoral, because others thought of it first? (Making a "copy"--not claiming that you thought of it first.)

Is it not 'reasonable' that if we're negotiating price, that I be compensated for the time spent constructing the sweater instead of the price just coming from the value of the raw materials.

But that's not how prices are determined. (Though in a unique bargaining occasion, you might use arguments as to why it's reasonable. It still may be that the 'reasonable' price is higher than they are willing to pay.)

When you have a number of buyers, even the cost of the raw materials that went into it doesn't matter. Only demand and quantity of the existing supply determine prices.
A producer may insist on a price equal to his costs (including labor), but if that price is higher than the supply-demand price, then he's going to have unsold units sitting on his shelf, and suffer losses. What I'm saying applies to all costs, labor, capital, land, etc--not just raw materials. Once you have produced a good, the costs are history, and should no longer affect one's decisions. You may regret that the costs were too high, but all anyone can decide now is what to do from here.

Uh... doesn't cost play SOME role in price?

Yes, but in the other direction. Costs are determined by selling prices. But the explanation for this is more involved.

The cost is money spent on producers' goods, and thus depends on the prices of the producers' goods.
These prices too are determined by demand and quantity of supply.
But producer goods are not demanded for their own sake, but only for their ability to produce consumer goods. Thus it is demand for consumer goods that creates demand (and thus price) for producer goods--without which the price of producer goods (and thus money costs) would be zero. The demand for producer goods (demanded by producers) is determined by the producer's expected selling price of the consumer good. (E.g., if the cost were greater than the expected selling price, then he would not do it--would not demand those producer goods.) Thus it is consumer goods prices that are determined first, which determines the demand for producer goods.

Incidentally, this reveals what is wrong with the Keynesian idea that depressions are caused by a lack of aggregate demand. They are assuming (perhaps unconsciously, by not thinking of it at all) that cost prices are a fixed given. So then if aggregate demand drops, then of course all businesses are all going to go out of business because they are no longer profitable (because revenue fell below costs). But, realizing the above, a drop in consumer demand causes a drop in consumer prices, and thus a nominal drop in the demand for producers goods, and thus a drop in business costs. There is no reason why business cost prices wouldn't drop proportionally, thus leaving businesses just as profitable as before. (Noting also that the generally lower prices mean that the money unit is worth more than before, thus the smaller nominal revenue ends up being the same real revenue.)
And if the drop in consumer demand is due to people cutting back so that they can save/invest more, then the additional investment (in producing producers' goods) increases the supply of producers' goods, and thus causes a further drop in producer-good prices, and thus a drop in business costs, making businesses more profitable, and making it profitable to expand production. Therefore, far from being the cause of depression, this (restriction of consumption--saving) is how economic growth occurs.

At least in my experience, the seller of the widget usually calculates the price based upon how much the raw materials were plus the time, effort, and skill that went into making the widget.

Or if I go to get my car repaired, the bill has a listing for "parts" and "labor", not how many people were demanding the mechanic that day.

Part of the confusion does come from thinking from the limited perspective of an individual businessman. A small-businessman sees cost prices as given. He needs cotton, and must pay the market price for cotton. He may not think about the fact that all the producers using cotton as input constitute the demand for--and thus price of--cotton. And that his demand for cotton adds to the demand and thus increases the price of cotton.

It is also observed that selling prices in general tend to be about equal to costs. Which can cause people to think the cause-and-effect is in the wrong direction.

And so the individual businessman thinks in terms of his costs causing his selling prices. Though it would be better to say that the difference between costs and selling prices determines whether the businessman will produce at all. And that those decisions by producers is what determines the demand for producers goods, and is thus what determines those costs.

That may seem a bit circular, but it arises because of different producers producing different things.
Suppose the production of consumer goods X and Y both require cotton, and supppose these are the only two production processes that use cotton. The price of cotton will be determined by an equilibrium between the two industries--the point which maximizes consumer satisfaction. From this equilibrium, if some of the cotton supply were shifted from production of X to Y, then more Y would be produced and less X, but the consumers value the increase in Y less than they value the amount of supply of X that is lost. This will make the Y industry suffer losses, and X profits, which will push the allocation of cotton back to equilibrium. That is, X-producers will have the profit incentive to buy more cotton and Y-producers the loss-incentive to buy less cotton.

Or suppose consumer demand shifts from good Z to X (but not to Y). The consumers thus indirectly demand that the cotton supply be allocated more to X. How does this happen? First the price of X will rise, making it profitable to buy more cotton, which drives up the price of cotton, and this higher price causes Y-producers to buy less cotton. (And the sequence in the other direction, if consumer demand shifted away from X to Z.)

In more detail:
Looking at just X-producers, the price of X is determined by the quantity of X and the demand. The price of cotton will tend toward equalling the marginal revenue from cotton. That is, the increase in revenue due to producing more of X due to using one additional unit of cotton. If the price of cotton were greater than his marginal revenue, then he would cut back in production (or go out of business entirely). This both causes the supply of X to drop, (which increases the marginal revenue of cotton), AND reduces the demand for cotton, thus decreasing the price of cotton. As production of X is reduced then eventually the price of cotton will equal marginal revenue. (Or it never does, which means that no production of X will occur, because consumers won't allow any cotton to be used on X because they demand it be used on Y, and value every unit of Y produced more greatly than a single unit of X.)

The same is true of producers of Y. So the equilibrium allocation of cotton arises when the price of cotton equals the marginal revenue of cotton for both X and Y. And this is also what determines the price of cotton, because the same is true of all the other costs (or "factors"): labor, tools, etc.
That is, the price of each factor will tend toward the marginal revenue from each, which will tend toward being the same in every line of production that uses that factor. (And thus the sum of the prices of the factors in a given line of production will tend to equal the selling price of the product).

This determines the price of each factor of production (from consumer demand), and this price serves as the mechanism to allocate resources according to consumer demand.


The same is true for the mechanic. A producer may or may not try to adjust to consumer demand on a day by day basis (or minute by minute). He may instead find that the average demand over time is more stable and may adjust production according to that, over a longer time horizon, and so he may charge the same price even on a day when demand is higher or lower. Though in other cases, prices do adjust--higher during peak times. It will still be the case that prices and costs tend toward being equal because that is the equilibrium price for costs, as determined by consumer demand. Not that prices are determined by costs.

(My explanation here does not take into account time-discounting. Instead of the marginal revenue of cotton, it should be the time-discounted marginal revenue. To learn more about all of what I've been saying, see Rothbard's Man, Economy, and State http://mises.org/rothbard/mes.asp . He explains all of this better than I. But I'm willing to explain further and answer questions. Rothbard doesn't get to pricing of the factors of production until chapter 7, after discussing time-discounting in chapter 6, and pricing in general in chapter 4. However, he does have a section introducing factors and "costs" in chapter 5. There he makes the argument that once you have produced a good, the costs are already sunk, and don't enter the picture any more--don't affect the determination of the market price of that good.

In a footnote he quotes the 19th-century economist Jevons, "Labor once spent has no influence on the future value of any article: it is gone and lost forever. In commerce bygones are forever bygones and we are always starting clear at each moment, judging the values of things with a view to future utility. Industry is essentially prospective, not retrospective."

But then we still have to wonder: what's then causing the decrease in innovation now. Are you coming down in favor of the biology explanation then? That some people just can't create like American/Europeans can?

I haven't looked into decrease in innovation (how is that even measured?). So I don't know.
The book I quoted gave numerous examples of how patents/copyrights have seemed to reduced innovation, so they could be a cause of this.

Also the existing capital supply is often the limiting factor in the economy. There are often way more known ideas/techniques than can be economically implemented, given our existing capital. That is, we just aren't rich enough yet. Or more precisely, it would require using capital in ways that are less urgent than other uses. This is why third-world countries, even if they had economic freedom, would not instantly become modern economies. They have yet to save up capital (though this can be sped up if mobile capital can be invested there by foreigners).

So, perhaps a capital limitation might be misinterpreted as a deficiency in innovation?
And it seems modern governments are doing everything in their power to restrict capital creation and even to consume/destroy the capital that our ancestors worked hard to save up over centuries. (Keynesians fail to realize that you can't "stimulate" capital back into existence. If we wipe out our capital stock, then it will be gone for a long, long time. We will have to (through "austerity") save up over centuries again.)
Perhaps this causes the economic stagnation which is misinterpreted as a lack of innovation?


The idea you raised, that without manufacturing being local, the local people don't innovate, is interesting. And then outsourcing is blamed. The solution to that would be free enterprise and the free mobility of people and capital across national borders.

[Darth Executor]

At first that does seem so. But it turns out that the two ideas (tangible property vs "intellectual property") are opposed to one another (and cannot be different kinds of property coexisting).

If I own tangible property (say a toaster), okay, I have a "monopoly" on that toaster (in a very narrow sense).
But if one has an enforced privilege to be the only producer/seller of toasters (i.e. via patent grant), that is more properly a monopoly (the sole producer of a particular kind of thing).

If I have tangible property, I may do as I please with it without encroaching on other people or their tangible property. I could, for example, form it into a toaster.
If you had the "IP" on the idea of a toaster, then that diminishes my tangible property rights--I can no longer do what I like with my tangible property; I'm not allowed to form it into a toaster.
If you take IP to its logical conclusion (where all ideas are owned), then it diminishes all tangible property rights to virtually zero. No human action is possible.
On the other hand, tangible property rights imply that you can't have a monopoly on ideas--since I may form a toaster with my own property if I like.

It is true that IP places a restriction on what you can do with your physical property. However, tangible property rights also place a restriction on what you can do with your physical property. My inability to buy a gun and use it to shoot people is a restriction on what I can do with my property (my gun). I also cannot drive my car on someone's private property without their permission, or drill for oil on their land, or use my hands (which are my property) to extract a wide screen TV from my neighbor's living room without his permission. Tangible property rights are in conflict not only with IP, but with themselves as well.

The basis of property rights is that the property was presumably worked for or somehow obtained legitimately, and thus you are entitled to reasonable use of it, as well as to the right to place restrictions on what others can do with it. Writing a book or developing a drug also requires time, money and talent the developer invests in the product and should thus be allowed the same protections that a craftsman receives for making a table. The issue of what and to which extent IP should be protected is up for debate of course, as is the case with physical property. But I see no reason why investing my resources in an intellectual product should be any different from doing so with a physical product.

[Raphael]

I don't have the details, but apparently a judge has ruled that selling "used" mp3s is legal under the "first-sale" theory applying to tangible property. However, I don't think his argument was so much that digital items are tangible property as it was that music copyright holders can't have it both ways: they can't both claim that mp3s ARE property for the purposes of theft, but ARE NOT property for the purposes of other laws that pertain to property. (Such as a the "first-sale" theory and the right of a consumer to sell used property unencumbered.)

This should be interesting...

-Neil

The argument I see them using on that is that if I sell you my old mp3, then I must make sure I'm not keeping a copy.
Afterall if I sell you an old hardcopy of a book, I don't keep it as well.

But it will make a nice messy argument that should have some lawyers rubbing their coils together gleefully.

[NeilUnreal]

The argument I see them using on that is that if I sell you my old mp3, then I must make sure I'm not keeping a copy.

That does make sense; I didn't read the original judgement, just a second-hand post about it. Still, as you say, things are likely to get messy.

On a related note, MakerBot-type technologies are extending the legal battle into the physical world.

-Neil

[Raphael]

That does make sense; I didn't read the original judgement, just a second-hand post about it. Still, as you say, things are likely to get messy.

On a related note, MakerBot-type technologies are extending the legal battle into the physical world.

-Neil

Maybe I put it in a confused way. This is the way I see they will argue against that (I'm not agreeing with the argument)

Let's say I have a Queen LP (which my brother has nabbed, but that's a different story) and I sell it to you. I don't have the LP any more, because you have it now.
But if I sell you an mp3, I'm keeping my original mp3 and just giving you a copy.
And that is different.
Selling the mp3, unless I delete my copy, is like me pressing my own copies of my Queen LP and selling you the copies, which is something the law does prohibit.
Either you're going to have to have each audio file DRM'd to the point where it takes on the same properties of physical media (so one I sell you the file, I can't play it anymore) or we're going to have some very interesting legal battles

I think that perhaps the judge in this particular ruling has made a mistake, because I think it's created a mess. I can only hope that the mess is sorted out in such a way that actually has a positive affect on legitimate consumers. (because most of the RIAA's and the MPAA's schemes especially around DRM, only affect legitimate users....and it affects them negatively).

[joel]

It is true that IP places a restriction on what you can do with your physical property. However, tangible property rights also place a restriction on what you can do with your physical property. My inability to buy a gun and use it to shoot people is a restriction on what I can do with my property (my gun). I also cannot drive my car on someone's private property without their permission, or drill for oil on their land, or use my hands (which are my property) to extract a wide screen TV from my neighbor's living room without his permission. Tangible property rights are in conflict not only with IP, but with themselves as well.

True, but in a different sense. In those cases you are doing what you want with someone else's tangible property, and not merely affecting your own property. Affecting their property is the reason.

Thus one difference in the two senses is that, isolated (or confined to my property), I may do as you wish with my gun/bullets. Whereas IP claims to extend everywhere in the universe, and thus there is nowhere I can go to use my gun or make a gun, etc (if someone had IP on it). Even if/though my doing so does not affect the other person's property, which is the reason for what you say about tangible property.

Another difference is that if we were consistent about IP, it would apply to all ideas and would not have a limited term, but would be perpetual, handed down forever. So someone today should have ownership of the idea of fire, or the wheel. Taken to its logical conclusion, IP would make it virtually impossible to act--without using any ideas that no one else thought of first. Thus it would virtually eliminate tangible property rights altogether. Which is not the case for tangible property.

The basis of property rights is that the property was presumably worked for or somehow obtained legitimately, and thus you are entitled to reasonable use of it, as well as to the right to place restrictions on what others can do with it. Writing a book or developing a drug also requires time, money and talent the developer invests in the product and should thus be allowed the same protections that a craftsman receives for making a table. The issue of what and to which extent IP should be protected is up for debate of course, as is the case with physical property. But I see no reason why investing my resources in an intellectual product should be any different from doing so with a physical product.

But this argument would require monopolies for everything. The person making profits does so because he saw an opportunity first. Others may see the first person making profits and thus enter into competition. With IP, no market competition is possible--only monopolies.

Suppose Alice does a lot of work/investment researching the best place to grow bananas. And at the end she finds that Florida is best, that it would be more profitable than existing uses for land in Florida, and that no bananas are yet growing there. Surely Alice does not have a right to prevent everyone else from that day forward from growing bananas on their own Florida land. On the contrary, anyone else, whether or not they get the idea from Alice's banana farm, has the right to start growing bananas on their own land. Yet IP would grant her a monopoly on the idea of growing bananas in Florida, legally forbidding other Florida land-owners from growing bananas on their own land.

The same is the case with a drug. You legitimately own the tangible instances of the drug you create, but don't have a monopoly on the idea. Although if you can keep the idea secret, then you have the right to that privacy (protection from trespass).


As for the basis of property rights. As above, the restriction/protection of property rights is to keep others from affecting your property. But my making use of an idea does not affect the idea. You may still act on the idea as you please. My having the idea does not diminish your having it and use of it.
Like in this fun song, http://www.youtube.com/watch?v=IeTybKL1pM4 "If I steal your bicycle, you have to ride the bus. But if I just copy it, there's one for each of us."

(One might here try to argue that it affects the market value of the idea, in that if I create and sell a bunch of instances of X, then it may decrease the price and/or quantity for the other guy to make and sell instances of X. But this is not something protected in tangible property either. For I can legitimately do something that affects the market value of other people's tangible property--e.g., creating a superior product, or not maintaining my own house, thus reducing my neighbor's property value). Property right is not a right to a market value, nor a right to have others exchange with you, nor a right to a return on investment, but only a right to the use of the thing itself. This was elaborated further in my discussion with Challenger Grim above.)

And, as I said in my earlier post, one part of the basis of property rights is that it is the moral way to deal with the fact of scarcity (because if I take your bicycle, you don't have it). But IP imposes scarcity where there is none (If I copy your bicycle you still have the full use of yours and of the idea of bicycle).

[Darth Executor]

True, but in a different sense. In those cases you are doing what you want with someone else's tangible property, and not merely affecting your own property. Affecting their property is the reason.

Which is indistinguishable from doing what you want with someone else's intellectual property.

Thus one difference in the two senses is that, isolated (or confined to my property), I may do as you wish with my gun/bullets. Whereas IP claims to extend everywhere in the universe, and thus there is nowhere I can go to use my gun or make a gun, etc (if someone had IP on it).

There is nowhere in the universe that you may go and legitimately murder someone with your gun either.

Even if/though my doing so does not affect the other person's property, which is the reason for what you say about tangible property.

But doing so does affect the other person's property. If their IP is their property, your using it without permission affects someone else's property. If you are using my drug formula to develop drugs and sell them to people, those are people who will no longer buy the drugs I developed with my formula. I worked to produce that formula. Without my intellectual work there would be no formula. And yet somebody else is stealing customers away from me despite the fact that they didn't spend a cent to develop the formula and would not make a cent if it wasn't for it.

Another difference is that if we were consistent about IP, it would apply to all ideas and would not have a limited term, but would be perpetual, handed down forever. So someone today should have ownership of the idea of fire, or the wheel. Taken to its logical conclusion, IP would make it virtually impossible to act--without using any ideas that no one else thought of first. Thus it would virtually eliminate tangible property rights altogether. Which is not the case for tangible property.

This is untrue. A lot of people don't claim IP to a lot of the things they come up with and instead voluntarily choose to make it widely available. Nobody claimed IP on the wheel, or fire. Furthermore, ideas can be developed independently, which is why IP would not be applied to every idea, only those that can reasonably be concluded to be the result of individual effort as opposed to luck or merely fraudulently claiming something like fire as your own invention.

But this argument would require monopolies for everything. The person making profits does so because he saw an opportunity first. Others may see the first person making profits and thus enter into competition. With IP, no market competition is possible--only monopolies.

Let's assume for a second that a naturally arising monopoly is inherently a bad thing. One could also make the argument that with no IP rights companies would have no incentive to develop further ideas because they would be spending money on research that would end up benefiting the competition as well. At best, they would get a small head start before other companies catch up to them. Research is already pretty risky because you're gambling on developing something new with no guarantee of satisfactory results. The end result would be technological stagnation, which I would argue is worse than a monopoly.

Suppose Alice does a lot of work/investment researching the best place to grow bananas. And at the end she finds that Florida is best, that it would be more profitable than existing uses for land in Florida, and that no bananas are yet growing there. Surely Alice does not have a right to prevent everyone else from that day forward from growing bananas on their own Florida land. On the contrary, anyone else, whether or not they get the idea from Alice's banana farm, has the right to start growing bananas on their own land. Yet IP would grant her a monopoly on the idea of growing bananas in Florida, legally forbidding other Florida land-owners from growing bananas on their own land.

This example is about as inane as claiming the first guy who lands on Mars has the right to crown himself its emperor and sole ruler.

As for the basis of property rights. As above, the restriction/protection of property rights is to keep others from affecting your property. But my making use of an idea does not affect the idea. You may still act on the idea as you please. My having the idea does not diminish your having it and use of it.

Really? There is no difference between being the only one allowed to create and sell a drug and giving everybody a crack at it (including people with more infrastructure in place who are better able to capitalize on it)? It would cut into my profits considerably. Just like my squatting on half your land and extracting your oil would cut into your profits.

And, as I said in my earlier post, one part of the basis of property rights is that it is the moral way to deal with the fact of scarcity (because if I take your bicycle, you don't have it). But IP imposes scarcity where there is none (If I copy your bicycle you still have the full use of yours and of the idea of bicycle).

And if this was true nobody would bother with IP. But it simply isn't. Stealing ideas does impose scarcity. The incentive to develop IP is reduced, because your time would be better spent developing physical property instead. There is also an incentive to guard ideas (as opposed to selling rights to its use). If someone develops a cancer drug, and made it widely available, it would take little time for competitors to reverse engineer it and develop their own. The developer could instead choose to administer the drug for exhorbitant prices at a secret location only to people who can pay, and keep them there until the drug is out of their system to ensure the knowledge of its development does not spread. This would make the formula for the cancer drug (an intellectual property) a scarce good, because it cannot be easily developed or found in nature, and because the individual developing it has a monetary incentive to refuse to make it widely available.

[Augustine2004]

Darth Executor seems to have forgotten about clicking on the | I agree | button before he is allowed to download some software. I mean the COLA. That idea could be used for other intellectual products such as eBooks or even paper books.

[NeilUnreal]

I always liked the classic Borland Turbo Pascal book-style license:

"You must treat this software just like a book ... [it] may be used by any number of people ... may be freely moved from one computer location to another, so long as there is no possibility of it being used at one location while it's being used at another."

If people were honest, or the DRM issues could be worked out, that would be a great way to license music and videos.

-Neil

[joel]

Which is indistinguishable from doing what you want with someone else's intellectual property.

It is distinguished.
I cannot affect an idea. However much I use the idea, it doesn't use it up, or destroy it or deprive you of it. You have it too. As I quoted Jefferson before, "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."

This is distinguished from my using up, or destroying/altering, or depriving you of your tangible property.

There is nowhere in the universe that you may go and legitimately murder someone with your gun either.

That is affecting (destroying) someone else's (tangible) property or person.
On the other hand, I may isolate the effects of my actions to my own property and thus use my property however I wish. Isolated, I can fire my gun all I want.
IP on the other hand claims to prohibit uses of my property that don't affect someone else's property.

But doing so does affect the other person's property. If their IP is their property, your using it without permission affects someone else's property. If you are using my drug formula to develop drugs and sell them to people, those are people who will no longer buy the drugs I developed with my formula.

I answered this in my previous post. This is the case even with tangible property. There is no right to a market value--not in ideas, not in tangible property.

And yet somebody else is stealing customers away from me despite the fact that they didn't spend a cent to develop the formula and would not make a cent if it wasn't for it.

Even supposing IP, I could legitimately come up with an even better idea that makes yours obsolete, and thus I would "steal" your customers away. This is how market competition works. Market competition is not theft.
(The market value of something is not the same as the thing itself.)

Just like in my banana example that you scorn, people may see the idea and enter into competition with Alice by growing bananas on their own Florida property. Even though they merely got the idea from seeing Alice doing it, without having spent a cent doing all the research that Alice did, and would not have have realized its profitability without seeing Alice making huge profits. This is common in market competition, that a very few people are the first to see profit opportunities, and other competitors follow, benefiting from the first-mover's skill/research/etc.

This is untrue. A lot of people don't claim IP to a lot of the things they come up with and instead voluntarily choose to make it widely available. Nobody claimed IP on the wheel, or fire.

Then it's unowned, and available to be homesteaded and thus owned. (If ideas are ownable.)

Furthermore, ideas can be developed independently,

Yet another logical problem with IP.

which is why IP would not be applied to every idea, only those that can reasonably be concluded to be the result of individual effort as opposed to luck or merely fraudulently claiming something like fire as your own invention.

Why not "luck"? Tangible property can be acquired by "luck."

One could also make the argument that with no IP rights companies would have no incentive to develop further ideas because they would be spending money on research that would end up benefiting the competition as well. At best, they would get a small head start before other companies catch up to them. Research is already pretty risky because you're gambling on developing something new with no guarantee of satisfactory results. The end result would be technological stagnation, which I would argue is worse than a monopoly.

I addressed this in post #74 above (http://www.theologyweb.com/campus/sh...55#post3363455 ), referencing the book Against Intellectual Monopoly.

In short, there are other factors that cause IP to reduce the incentive to invest in innovation, factors which may outweigh the positive incentive. And empirically, IP is not found to increase innovation in practice, but if anything it stifles it.

This example is about as inane as claiming the first guy who lands on Mars has the right to crown himself its emperor and sole ruler.

The point is that my banana example is what IP does. The whole effect of IP is to grant a monopoly to the first person who sees a certain market opportunity. Why wouldn't this extend to all market opportunities?

Really? There is no difference between being the only one allowed to create and sell a drug and giving everybody a crack at it (including people with more infrastructure in place who are better able to capitalize on it)? It would cut into my profits considerably. Just like my squatting on half your land and extracting your oil would cut into your profits.

Again, I answered this before. There is no right to a market value (or profits). Other peoples' actions (such as competition) may legitimately affect the market value of your property (including tangible property).

Your example of stealing my oil is different because it does not merely affect the market value of my oil, but affects the oil itself--depriving me of it. On the other hand, your discovering oil on your own property would legitimately cut into my profits, by reducing the market value of my oil. Likewise your persuading people to use less oil, or any number of things.

And if this was true nobody would bother with IP. But it simply isn't. Stealing ideas does impose scarcity.

It's not possible to literally steal an idea, which would imply depriving you of 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."
Except perhaps by bashing you on the head to make you forget it--but then that would be affecting you tangibly.

Neither does it impose scarcity, since you still have it, like lighting my taper at yours does not diminish your light. It does not create scarcity, but, on the contrary, increases its availability.

The developer could instead choose to administer the drug for exhorbitant prices at a secret location only to people who can pay, and keep them there until the drug is out of their system to ensure the knowledge of its development does not spread. This would make the formula for the cancer drug (an intellectual property) a scarce good, because it cannot be easily developed or found in nature, and because the individual developing it has a monetary incentive to refuse to make it widely available.

Keeping a secret is possible. With or without IP. Trade secrets are common today, when someone decides to keep a secret instead of patenting it.

[Augustine2004]

I'm surprised nobody is not booting me around TWeb for mixing up 'EULA' with 'COLA'
End-user license agreement
cost of living adjustment.

Sheesh, what a bunch of idiots, myself included.

Market value is really only subjective. Usually it's someone's guess what price any given thing would fetch.

[Sparko]

I'm surprised nobody is not booting me around TWeb for mixing up 'EULA' with 'COLA'
End-user license agreement
cost of living adjustment.

Sheesh, what a bunch of idiots, myself included.

Market value is really only subjective. Usually it's someone's guess what price any given thing would fetch.

We have learned to just ignore you most of the time, Augustine2004.