Monday, September 19, 2016

To Oppose Intellectual Property Rights Is to Oppose Private Property Rights at Their Very Foundation

Stuart K. Hayashi

Private property is wealth. As inventions and innovative expressions of ideas are the foundations whereby new wealth is created, private property rights, as such, are the result of intellectual property rights. I argue in defiance of the assumption that the only true private property rights are over tangible units of new inventions, such as smartphones. What is ignored in that assumption is that we would not be able to wield these tangible units of new inventions -- our smartphones -- if not for the inventor’s legal ability to control and exercise ownership over his or her design of that new invention, that new smartphone.

Many people who call themselves "libertarian" would scoff at the above paragraph as absurd. What I just said is anathema particularly to those influenced heavily by Murray N. Rothbard or even by Chicago-school economist Arthur Plant. After all, reply the enemies of intellectual property rights (IP rights or IPRs), were there not codified private property rights in ancient Sumeria? When John Locke said that the homesteader's improvement of the land for human usage is what gave the homesteader the right to that land, was Locke not speaking about a right that predated any conception of intellectual property rights?

My response is that when you recognize the homesteader's right to the land he improved, you are recognizing an intellectual property right in a relatively primitive form. And John Locke at least implicitly understood this; hence his defense of copyrights. Moreover, it is misleading to say that because the ancient Sumerians talked about private property without formally recognizing intellectual property rights, that it follows that ownership over objects and land is somehow a philosophic precursor to intellectual property rights.

The Right to Homestead Land As an Early Implicit Recognition of Intellectual Property Rights
First, when a homesteader lays claim upon a parcel by improving it, we should recognize which of his faculties is most responsible for that improvement. To make a piece of land livable, it's not as if the homesteader simply goes through physical motions. He doesn't randomly plant a shovel into the ground every which way; he doesn't dig a hole and then randomly go to another spot and dig. The homesteader needs a plan. The homesteader first has to plan on how the land is to be improved. He must plan where to dig ditches. He must make a plan if he is to forge a cabin; he must select which types of trees to use (there are variations in species). He must make choices in what crops to plant. If he installs an irrigation system, he must determine where to place specific pipes.

When you, as a homesteader, convert unclaimed wilderness into a homestead that is habitable for you, it is not primarily your physical motions that are responsible for this, but the actions of your mind. The homesteading of land is an early example of how X becomes your private property on account of how you have employed your intellectual labors to making X into something of value -- that is, something for human enrichment. The homesteading of land is an early form of intellectual property rights.

Didn’t People Already Have a Night-Watchman-State Liberal Idea of Private Ownership Before There Was Any Recognition of IP? Doesn’t That Mean Private Ownership of Land and Tangible Items Is Natural, Whereas IP Is Some Aberration? On Both Counts, No
What about the point of how the idea of private ownership in land and objects existed in ancient Sumeria, predating the idea of intellectual property? That does not refute any contention that intellectual property is the fundamental. Recall that the ancient Sumerians' conception of private property rights was relatively primitive -- definitely more primitive than the conception that what John Locke pioneered in and which the American colonies developed.

The constitutional liberal republican Night Watchman State conception of private ownership over land -- the most appropriate conception -- is actually relatively new, having been pioneered by John Locke and developed in the American colonies. Their idea is that you own the land outright. That is, as long as you aren't impinging upon anyone else by force, you can do whatever you want with your own land. And that includes your being able to sell it to a willing buyer.

True, never in history has any government been fully consistent in recognizing the Night Watchman State understanding of land ownership. Even in the colonial period and in the nineteenth century, the USA had some irrational restrictions on what you could peaceably do on your own land. But the difference is that when the American colonies applied Locke's understanding, they recognized that your right to do whatever you wanted with your own land, peaceably, should be recognized as the default. That is, even in the American colonies, people believed in restrictions on what you could do with your own land -- even restrictions that ultimately initiate the use of force -- but they recognized that if you advocate such restrictions, the onus is upon you to argue for such restrictions. It's not the case that the onus be upon the landowner to explain why he ought to be free to do what he wants peaceably on his land. Even in the early days of the republic there was eminent domain, but the homesteaders' claim on his land was still the default position, and anyone agitating for eminent domain had to make his case.

That's the relatively new development. In ancient Sumeria and Greece and Rome, the the default was for the government to have complete control. Even if you were a wealthy landholder such as Cicero, the idea was that you should have that control only at the permission of the State. That is why Cicero spoke of how he was worried that, even in his own time, politicians kept using the power of the State to redistribute control over land. That you traditionally didn't have complete peaceful control over the land you "own" was even more apparent in England from the Middle Ages even on into the nineteenth century. That's why you can read about so many ridiculous rules about inheritance in historic novels such as Jane Austen's. Until the 1800s, it was even illegal for a widow to inherit her husband's land if there was another male in the family who outranked her when it came to a "chain of command" in terms of who can inherit what. It was classical liberals like Elizabeth Barrett Browning (a free trader) who had to get that law changed.

However, as Dale Halling has pointed out to me, the ancient Romans were beginning to have some idea of intellectual property; they were starting to recognize a form of copyright. As William Blackstone says in Commentaries on the Law in England:

The Roman law adjudged, that if one man wrote any thing on the paper or parchment of another, the writing should belong to the owner of the blank materials meaning thereby the mechanical operation of writing, for which it directed the scribe to receive a satisfaction; for in works of genius and invention, as in painting on another man’s canvas, the same law gave the canvas to the painter. As to any other property in the works of the understanding, the law is silent; though the sale of literary copies, for the purposes of recital or multiplication, is certainly as antient as the times of Terence, Martial, and Statius.

Therefore, no, that many people living in times prior to the Renaissance and Industrial Revolution had some conception of private ownership over land but barely any conception of IP, doesn't prove that private ownership over land is very basic and obvious whereas IP is somehow some corrupt derivative of that idea. Rather, as people gained a more coherent understanding of what private property rights truly are, people increasingly came to accept, intellectually, both IP and the constitutional liberal republican  Night-Watchman-State interpretation of land ownership.

You Should Own Tangible Units of New Inventions But Not IP? It’s IP That Made Possible Those Tangible Units of New Inventions
In what period in Western history did the West finally begin to produce great wealth -- when, after 100,000 years of starvation being the norm for humans, starvation actually became the exception in the West? It was in the period starting in the high Middle Ages and then Renaissance and coming into even greater force during the Industrial Revolution. This is not a random coincidence. The first patents were recognized during the high Middle Ages and Renaissance, and it was during the Industrial Revolution when patent law matured, becoming sophisticated enough for consistent and more uniform application.

We have heard this straw-man claim that the first letter patents in the high Middle Ages were granted for monopolies on trading cards and such. That is actually not true. The very first patents in the high Middle Ages and Renaissance were indeed for inventions. Galileo was familiar with patents; he studied up on them when he developed his improved telescope. Patents were also a form of deregulation. At the time, many medieval guilds restricted the number of people who could practice a trade; that was one means whereby they discriminated against Jews, barring Jews from almost every trade except moneylending. One way that monarchs were able to get around this was to award patents to foreigners -- allowing a foreigner to enter the kingdom and practice a particular trade even without having to join the guild. It was only later when Queen Elizabeth tried to raise revenue by demanding kickbacks from companies to whom she awarded patents. Queen Elizabeth's corrupt practices don't say anything about the justness of patents per se.

Consider how production improved because of James Watt's model of the steam engine. Watt's model made possible the locomotive and the steamboat. Consider how John Deere's steel plow and Cyrus McCormick's mechanical reaper improved farm production. All of these men said that investing their time and effort and capital into developing their particular models of their particular machines would not have been worth it if not for their being able to protect their models through patents. This is what caused the explosion of wealth of the Industrial Revolution.

The creation of new wealth is what made possible our ownership over tangible objects, such as smartphones and electric toothbrushes. But what made possible the development of these tangible items was the intellectual labors of such inventors and engineers as James Watt and John Deere and Cyrus McCormick -- labors that would not have been rewarding to these men if not for their ability to safeguard their labors in intellectual property rights. Intellectual property is indeed what makes possible our ownership over tangible items like smartphones and electric toothbrushes.

Locke’s Homesteading Principle and the Resource “Scarcity” That IP Addresses
When you recognize Chester F. Carlson's rightful ownership and control over his model of a xerographic photocopier, you take Locke's homesteading principle to its logical conclusion. Suppose you went to previously uninhabitable land, and then, through your planning for five years, made it a suitable habitat for humans. And then the government said that this land is still public domain -- still the commons -- and therefore everybody else ought to be able to trample on your land and live on it free? And suppose it was said that if you used force to keep these trespassers off the land, that would render you the bully? You're the real-estate bully? Even Murray Rothbard would admit that you, the homesteader, are the victim.

But the same principle applies even more strongly to Chester F. Carlson's development of his model for a xerographic photocopier. He labored for over five years on his model. Patent-haters cite Chicago economist Arnold Plant in saying that recognizing Carlson's IP doesn't address any preexisting "scarcity" of resources, but that is untrue. Carlson invested hours each day on this when he could have put those hours to use working at a job that would provide him steadier income and more job security. Carlson had to expend natural resources and machinery for research and development to test his model -- natural resources and machinery that existed "finitely" and could have gone to other uses. Now suppose that, after Carlson developed his model of xerographic photocopying, the government said that all-comers -- all firms that already had more capital than Carlson did -- could pirate his model.What if the State told Carlson that his model was public domain and still in the commons? And what if it said that if Carlson used lawsuits to protect the value he created, that it would prove him to be a "patent bully"? Carlson's efforts then would have been for naught, just as a homesteader's efforts would be for naught if he retained no power to drive trespassers off his improved land.

Moreover, other inventors who saw that Carlson was unable to control and profit from his creation would correctly conclude there is no reason for them to create other new models, just as future homesteaders would see no reason to improve any land if the land they improved was still considered "public domain." Unimproved land is not "scarce" -- all of Antarctica is uninhabited -- but improved land is "scarce." Likewise, vague general ideas are not "scarce," but practicable models for new methods of wealth creation are "scarce," as are the tangible resources invested into the development of these new models. If you cannot have exclusive private ownership over the land you improved, there will be a much greater "scarcity" of improved land. Likewise, if you cannot have exclusive private ownership over the specific new model of wealth creation you developed, then such helpful new models will be developed ever more rarely in the future. And the fewer inventions we have in the future, the fewer improved tangible products we will have. We all like to brag about having smartphones, but we would not have smartphones if inventors could not claim ownership and control over their specific original designs of smartphones.

The abolition of intellectual property rights would mean that if I try to charge a licensing fee to those who use my original designs, the fee I charge could be no greater than $0.  This chart shows what would happen to the quantity of original, practicable designs produced in the future.

John Locke himself had some understanding of this, which is why he supported copyrights. Your being able to copyright your original artwork -- which would not have existed if not for your investing your “scarce” time and “scarce” labor and “scarce” art supplies -- is the application of Locke’s homesteading principle to a still more essential part of life and wealth creation.

Yes, to recognize intellectual property rights is to apply Locke's defense of private property rights in general. And to denigrate intellectual property rights as invalid is to fail to uphold, as a consistent principle, Locke's defense of the origin of private property rights.

Addressing Straw Man 1: “Monopolizing” the Industry
At this point, the common rejoinder from Rothbardians goes, "But if you own your homestead, you don't gain a monopoly on all the real estate in the country. But if you have a patent on the brassiere, then you monopolize the entire market on brassieres for 17 years." That's a straw man, because a patent does not claim ownership over a vague general category of product; it claims ownership over a new aspect of functional design in a particular model of product.

In 1914, Mary Jacob Phelps patented a brassiere. In 1921, Mary Dresbach patented a brassiere. In 1927, William Rosenthal -- cofounder of what would become the Maidenform Company -- patented a brassiere. Note that these are all in intervals shorter than 17 years. What happened was that when Mary Jacob Phelps patented her design -- which consisted of two cloths tied together -- she did not claim ownership over this whole category of product; she only claimed ownership over her own design. William Rosenthal pioneered in developing the underwire bra. Mary Jacob Phelpls's patent did not preclude the Maidenform Company from selling its own type of bra. No, patents do not give anyone a monopoly on a whole industry or general category of product.

Addressing Straw Man 2: “I Invented It at the Same Time You Did, But Only You Get the Patent!”
That is also worth noting when people talk about simultaneous invention. Patent-haters like to say, "What if someone comes up with the exact same invention as you at the exact same time, even though neither of you knew what the other was doing? Only one of you will get the patent, thereby unfairly screwing the other party."

 That is another straw man because, while separate parties, working independently, can hit upon the same general idea simultaneously, they do not arrive at the exact same precise design simultaneously. The model for an integrated circuit that Jack Kilby developed at Texas Instruments was not exactly the same as the model that Robert Noyce developed for Fairchild Semiconductor. When two companies go to court over patents, it is usually over the "overlap" -- that is, the area where the two designs are very similar. What often happens is that the contesting firms agree to "pool" their patents -- they place their patents into a single trust. That was the arrangement to which Texas Instruments and Fairchild Semiconductor both agreed with respect to the integrated circuit.  The "simultaneous invention" talking point therefore fails to demonstrate the wrongfulness of the institution of patents.

I cannot go over all the straw men propped up by patent-haters. But it should suffice to say that intellectual property rights are indeed the foundation whereby we gain tangible forms of wealth that we claim as private property. To say, "Private ownership over tangible items is legitimate but you do not have a right to control and profit from your design of a new type of tangible item," is to engage in the stolen-concept fallacy. To be against intellectual property is to be against the principles that make possible our ownership over tangible units of new inventions -- and therefore to be against private property rights per se.