Would we buy this argument for other products? Say that lots of people are shoplifting from a store, to the point that others are starting to think that it’s OK to steal from stores. We could tell the store owner: “Don’t whine to us about that, or demand government intervention to protect your supposed property rights; choose another business model that isn’t harmed by shoplifting! Start carrying only promotional goods with lots of logos, which some advertisers will pay you to carry. Or just rely on the voluntary contributions of paying customers. In any case, come up with something, don’t demand government help in the form of police or courts.”It’s true, of course, that IP has important features not shared by traditional property (non-rivalry in consumption, most notably). But as Eugene correctly points out, that’s distinct from the “always another business model” argument.
I don’t think we would... Rather, we’d think that the store owner should be protected by the government — by having the legal system enforce property law — from consumer infringement of its property rights.
A related anti-IP argument is the claim that “protection of intellectual property diverts investment from ideas that aren’t legally protected to those that are.” For instance, if technological production techniques are protected but managerial techniques are not, then firms will find it more worthwhile (than it would be otherwise) to invest in the former than the latter. But a variant of Eugene’s question applies here as well: Would we buy this argument for other types of investment, such as those in traditional property assets? Currently, land ownership is relatively well protected, but ocean ownership is not. As a result, people will be more likely to make improvements in their land (draining swamps, removing pests, fertilizing the soil, etc.) than to make improvements in the oceans (encouraging growth of fish stocks, cleaning up pollutants, etc.). Is this an argument against private property in land? Or is it an argument for finding ways to create private property in the oceans, if possible? I think the latter.
So I’m not understood, I’m not necessarily advocating the extension of IP to any particular category where it doesn’t already apply. Just as it might prove impossible or prohibitively costly to privatize the ocean, it might be impossible or prohibitively costly to extend IP to some new categories of ideas. It’s also possible that, given changing technology that increases enforcement costs, it could be sensible to strip IP protection from some areas previously covered. My point is that the efficient choice will depend on the costs and benefits of such protection.
7 comments:
SL 101 -- It seems to me that you're making the case against any government enforcement of property rights whatsoever. Or maybe you're just saying that government enforcement should be the last resort. But either way, you're admitting the basic point of the post, which was that traditional property and intellectual property are symmetrical in this respect. That is, you're advocating a similar enforcement regime for both, and thus implicitly admitting that the diversion-of-investment argument and the other-business-models arguments aren't unique to IP.
I think the plausibility of Volokh's counter-example depends on the fact that it is clearly unjust to steal stuff from a store. Volokh adds a bunch of consequentialist worries (fewer people will own stores, etc.), but this is just hocus-pocus: the reason that government intervention is uncontroversially justified here is because property are uncontroversially at stake.
Now, if the anti-IP argument were just, "There are other business models available that free copying wouldn't make unprofitable, so therefore the government shouldn't prohibit free copying," then it would of course beg the question in a rather crass way, and Volokh's counter-argument would demonstrate that. But I've never heard the argument that Volokh makes used in that way. Rather, the dialectical context of the argument is always a response to protectionist arguments in favor of IP restrictions: "If we don't have IP, then how ever will the movies get made / the musicians get paid / the drug research get done / etc.?" Answer: try a new business model; your broken business model is not my problem. This is a perfectly legitimate consequentialist response to the attempt at a consequentialist argument in favor of IP restrictions; it doesn't address the justice of free copying, but that's because it's responding to an argument that explicitly disregarded questions of legitimate property rights in favor of a plea for protectionism.
Taken from the standpoint of justice, Volokh's response here puts the argumentative cart before the argumentative horse.
And insofar as this and other points are intended solely as consequentialist replies to the argument, and not as appeals to justice, the entire argument depends on the presupposition that socialist calculation of the "right" levels of drug research, songs, movies, etc. is possible. Which it isn't.
Rad Geek -- If you're already convinced that IP is wrong on pure justice grounds, then you're right. But I think those defending IP are questioning your claim of justice to begin with. IP advocates are not usually saying, "Yeah, IP is unjust, but the consequences of not having it are so great that I'm willing to advocate injustice." On the contrary, they are saying that justice has something to do with consequences. Such consequences include the question of what kind of regime provides the best (that is, most efficient) incentives for creative work.
Of course, the arguments that Eugene and I are responding to are not irrelevant. As Eugene pointed out, the other-business-models argument does demonstrate that new ideas and inventions will still be made without IP protection. But that doesn't mean we couldn't do better.
As for the connection to socialism, you're right that there's a calculation problem here. But how was the calculation problem solved in the context of other kinds of productive effort, such as (in my example) improvements in land? By privatizing land, thereby creating decentralized incentives to individuals to act upon local and tacit knowledge. Ideally, we'd like to give idea creators similar incentives. Is that easy? No. I'm not at all sanguine that IP (in its current form) is the best way to create the proper decentralized incentives. But I'm unpersuaded by arguments that attempt to dismiss IP on grounds that, if taken seriously, would imply dismissing traditional property as well.
Glen,
I agree with you that the justice of IP restrictions is part of what's up for dispute, and I agree that argument Volokh discusses isn't used as a response to arguments to the effect that "IP is unjust, but it has good consequences, so we should have IP laws," and I don't know of any IP advocates who argue that way.
What I am saying is that Volokh's reply to the argument begs the question against his interlocutor, because the intuitiveness of his counter-example depends on the idea that free copying is analogous to shoplifting. What's doing the intuitive work in the counter-example is the fact that shoplifting is theft, and thus justifies forcible intervention whether or not there are other business models available to the shopkeep. It has nothing in particular to do with whether shopkeeps would be able to support themselves using other business models that aren't vulnerable to widespread shoplifting. (They might very well be able to; any shop that sells inexpensive commodities just eats the losses from a certain amount of shoplifting anyway.) But you can't extend the same argument to IP laws and have the same intuitive result without first making some further argument to demonstrate that free copying is theft, or relevantly like theft.
It's true that Volokh would have a case against his interlocutor if the interlocutor's argument were simply, "There are other business models available, so therefore IP laws are illegitimate." The case would be: "Look, there's this other case where having business models available doesn't delegitimize government intervention. So that can't be a sufficient condition for the illegitimacy of the law." But nobody that I know of makes that argument, so if that's what Volokh is responding to he's just attacking a strawman. Instead, the context in which people make the sort of argument he's discussing is in refuting a protectionist argument for the legitimacy of IP laws (rather than positively proving their illegitimacy). So the point isn't that having other business models available delegitimizes government intervention. It's that the availability of other business models undermines one of the intermediate steps in the protectionist argument (the claim that there wouldn't be "enough" production of songs, drugs, or whatever if IP laws were repealed). I happen to think that consequentialism of the sort demanded by these protectionist arguments is morally indefensible, and that the injustice of protectionism is a more important point to stress than the fact that the consequences won't really be what the protectionist claims that they will be. But I don't see that Volokh's actually engaged with the argument in its actual dialectical context.
I'm not sure if I'm clarifying or muddying my point, so I'll just leave off there.
As for the socialist calculation problem, my complaint isn't with property rights as such. It's with the idea that what you do or don't have property rights in can be determined by deliberating over what the right level of X to produce is, and then incentivizing people accordingly through the recognition or fabrication of new forms of property titles. Since there is no way even in principle to determine what the "right" level is independently of an actual market process it makes no sense to try to set the rules of markets based on such calculations. If the argument being made for private land titles were "Oh, well, if we don't have private land titles then not enough land will be cultivated, so let's start recognizing those in order to get more land cultivated," then I would think that that argument was just as bad as the ones made for restrictions on free copying. The case for recognizing private property titles in X has to be made on other grounds than whether "enough" X will or will not be produced, because there isn't any way to determine how much "enough" is until you've already engaged in a market process -- which is to say, until you've already determined what sort of things are going to count as transferrable property and which aren't.
The main problem with IP (I would rather call it Intellectual Monopoly rights, IM) and difference with real property is not covered in the post. The reason why we have property rights for physical things depends on the fact that physical property is undivideable. If I have a guitar I made and play it, you cannot have it too. If you have it, I cannot have it too.
What this means is that with physical property there is somebody who is in control of the thing at any moment (or no one is).
Without property rights for physical things, we all face huge risks about the future. If we invest in having a guitar to play, somebody may just take it away from us and our investment was in vain. If we invest in a field to produce food for us, somebody may just come and take the food and make our investment in vain.
Ideas are different. If we invest in an idea, and somebody comes and copies it, we still have the idea. True, we might not be able to sell it for as good a price as we could, if government didn't give us a monopoly to that idea. But that is alltogether on a different level than the primary reasons for private property in physical realm. Property does not exist to protect trading; trading is a beneficial side effect of enforced physical property rights.
Another big difference between physical things and ideas comes from the fact that a physical thing is a natural monopoly (there is just one particular item); there may be other items very much like it, but you cannot take a look at your friends guitar and press a button and have a copy of it. The same does not hold for ideas.
Intellectual property rights give a government granted monopoly on the idea to a certain party. Economists know that monopolies are bad and cause problems in the market place. So why should monopolies be good in this case?
In the age of mercantilism, government granted monopolies for merchants to international trade of goods. Their arguments for keeping their monopolies were pretty much the same as current intellectual monopolists arguments. Government had made trade of certain goods property of a private party. Perhaps we should let that become private property again? Would it be better to live in a world, where McDonalds patented the idea of franchising and there would basically be no other chain restaurants, tv-franchizes, etc?
Government intervention in the area of ideas creates a private monopoly where otherwise the conditions would be closer to perfect competition than ever seen anywhere else.
RG: "What I am saying is that Volokh's reply to the argument begs the question against his interlocutor, because the intuitiveness of his counter-example depends on the idea that free copying is analogous to shoplifting. What's doing the intuitive work in the counter-example is the fact that shoplifting is theft, and thus justifies forcible intervention whether or not there are other business models available to the shopkeep."
You may be right that some of Eugene's analogy's rhetorical power comes from our belief that shoplifting is theft and therefore wrong, regardless of consequences. But I think Eugene's point still stands even if you "factor out" that rhetorical element. The point is that we could imagine making the same argument ("shopkeepers, find a new business model") in favor of eliminating laws against shoplifting. The question, for both shoplifting and IP, is whether a given legal rule creates the right incentives.
"It's that the availability of other business models undermines one of the intermediate steps in the protectionist argument (the claim that there wouldn't be "enough" production of songs, drugs, or whatever if IP laws were repealed)."
I don't think it really undermines that argument. Eugene conceded that some ideas will be created regardless of whether we have IP, and alternative business models may be part of the reason. But the claim, from sophisticated IP defenders at least, is not that we won't produce any ideas, but that we won't produce as many as we should.
"As for the socialist calculation problem, my complaint isn't with property rights as such. It's with the idea that what you do or don't have property rights in can be determined by deliberating over what the right level of X to produce is, and then incentivizing people accordingly through the recognition or fabrication of new forms of property titles."
It's not really about coming up with the actual value of X ex ante, and then creating property to reach that specific X. It's about coming up with a property regime that will induce people in a decentralized economic system to reveal X through their actions. That's what's amazing about the property system in material assets -- that it (mostly) internalizes costs and benefits in a way that brings about efficient outcomes, without any planner having to know the efficient outcome to begin with. Likewise, with IP, ideally what we want is a set of rules that will reveal the amount X of ideas worth producing.
Admittedly, this is a more difficult matter with IP than with material property, because economic theory tells us that ownership in perpetuity will give correct incentives for material assets but not for ideas. So there is a kind of planning problem in deciding the length of copyright and patent terms. But it's not on the same order as the planning problem we'd have if, say, we incentivized idea creation by offering prizes for specific inventions. A virtue of the present system is that it leaves decisions about which ideas to produce up to private agents, who make calculations according to their own perceptions of costs and benefits.
"I don't think it really undermines that argument. Eugene conceded that some ideas will be created regardless of whether we have IP, and alternative business models may be part of the reason. But the claim, from sophisticated IP defenders at least, is not that we won't produce any ideas, but that we won't produce as many as we should."
An opponent of the IP laws might well say the same thing. We won't produce as many ideas (and implementations of those ideas) as we would without them. The reason for this is that IP laws create a monopoly on a certain idea and most ideas are 95% old ideas combined with 5% (or less) new ideas. Since all the old ideas are monopolized, the only one capable of actually creating the new idea is the monopolist.
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