The Basics of Copyright

September 1st, 2012   Submitted by Wendy McElroy

I argue for copyright based on contract rather than upon natural rights because no natural ownership exists in freely expressed ideas. Ownership exists only in ideas that are protected by prior agreement or that remain unexpressed.

What is the difference between a contractual and a natural right?

Natural rights are the direct consequence of self-ownership, which is the jurisdiction every human being has over his own body. Self-ownership can be viewed as a property claim. Logically speaking, there are only three positions possible on the question of who owns you. You are a self-owner, which is freedom; you are owned by someone else, which is slavery; you are unclaimed property. Self-ownership says you are autonomous.

Exercising autonomy involves certain natural freedoms or individual rights. For example, freedom of speech is a natural right because it is required as part and parcel of your tongue being able to enunciate the thoughts in your own mind. In other words, exercising this aspect of your autonomy logically requires freedom of speech. Those who deny freedom of speech to you are denying it is your tongue and staking a claim for their de facto property in your body. They are enslaving you.

By contrast, a contractual right is one you possess as an indirect consequence of self-ownership. It does not exist with individuals in isolation but only in relationship to other people,to the obligations for specific performance that you assume toward others.(Under natural rights, the sole duty is to respect the autonomy of others – that is, to leave them alone.)

The monosyllables “yes” and “no” have an almost magical power in the legal realm because they definitively express your autonomy to others. When you say “yes” to someone – for example, you agree to sell a car for $500 – you give that person a limited but enforceable claim upon or against you. That limited but enforceable claim is a contractual right and it does not exist prior to the word “yes.”

An idea you generate, including the words through which it is expressed, is protected from others by virtue of your self-ownership. If the expression is private, then there is no way other people can use your idea without violating your autonomy. To use a B-movie scenario, they would have to torture you to obtain the rocket fuel formula…or, at least, rifle through your desk drawers. Just as you have a natural right to speak so, too, do you have a right to be silent and to preserve the idea for your own use.

When you publicly express an idea, you lose the shield of protection offered by your autonomy. Public expression is the equivalent of throwing the idea onto the wind in much the same manner as you might toss dollars out of a window. Strangers who gather up the discarded bills are no more thieves than those who use the distributed idea.

The only valid way to protect a distributed idea is through contractual rights such as those embodied in non-disclosure agreements. If you distribute the idea to people who have agreed to confidentiality in advance, then you have a limited but enforceable claim against them if they breach the agreement. You retain control of the idea. Without such an agreement, you have thrown the idea onto the wind.

(Note: There is a general litmus test to distinguish between a natural right and a contractual one. You do not need anyone’s agreement to claim a natural right. Whether your neighbor has agreed not to in advance, he has no business breaking your arm. When a ‘right’ requires someone else’s agreement, then it is contractual.)

As the 19th century egoist James L. Walker explained,

If any person wishes to live by imparting his ideas in exchange for labor, I have nothing to say against his doing so and getting cooperative protection without invading the persons and property of myself and my allies…{He] is welcome to all the property in ideas that he can erect and maintain without government. No one can speak or write, and yet have the same advantage as if he were silent….But whatever he can do by contract, cooperation, and boycotting…let him do so at his pleasure.

Thus, I advocate a free market copyright that is enforceable by virtue of an explicit contract. I attempt to be meticulously clear because my position is often portrayed as “anti-copyright.” This is inaccurate. I am anti-state; I am anti-intellectual property as a natural right. But I want every single protection for my ideas that can be achieved through the consent of others. Why do I want protection? For the same reason George Bernard Shaw rejected it. Shaw said he did not want to be paid 30 or 300 times for the same piece of work. For myself, I like the idea of repeated payments but I do not like it enough to use the state as an enforcement arm or to claim natural rights where I know none exist.

Other fundamental objections to ideas as a form of natural property exist. For example, intellectual property runs counter to the purpose of the concept of property; it also contradicts the essential characteristics of property.

The purpose: If ideas are problem-solving devices, then the concept of property arose to answer the question of scarcity. In a world where food magically appeared in your hands whenever desired, there would be no need for property in food. It is only because food is a scarce good for which men compete that it is necessary to ascertain a proper owner. As Benjamin Tucker phrased it, “If it were possible and it it had always been possible, for an unlimited number of individuals to use to an unlimited extent and in an unlimited number of places the same concrete thing at the same time, there would never have been any such thing as the institution of property.” Distributed ideas are not scarce. They can be used by an unlimited number of individuals to an unlimited extent in an unlimited number of places at the same time.

Essential characteristics: Two related characteristics of property are alienability and transferability. In other words, it has to be possible to alienate a good from one person and transfer it to another. Not all transfers need to be complete or final; for example, a house may be rented rather than sold. But, in principle, it must be possible to alienate the good in order for it to qualify as property. Walker stated, “The giver or seller parts with it [property] in conveying it. This characteristic distinguishes property from skill and information. Bread is property.”

Intellectual property is a complex issue that can become tortuously tangled when analyzing current legal claims. But the fundamentals are simple and they should be revisited frequently.

Tags: , , , ,

70 Responses to “The Basics of Copyright”

  1. Seth KingNo Gravatar says:

    Great article! But just to be clear, when you’re talking about contractual agreements whereby one person agrees to non-disclosure, I can understand there being a limited amount of recourse if that person violates the contract and discloses the information. However, to be clear, you’re not saying that others, once informed of the secret cannot act once the secret is out. In other words, Coke’s secret formula is released. The person who released it could be in some trouble, but the average Joe who now has the formula is still free to replicate the recipe, yes?

  2. You state it well Seth. Yes. There would be a limited but enforceable claim against the fellow who broke his confidentiality agreement with Coke but no liability for those who used the information once it was in the public domain. After all, they entered into no agreement.BTW…when I say “limited”, I do not mean insignificant. The damages assessed might be considerable.

    • Seth KingNo Gravatar says:

      I’ve been pondering the idea recently that it is still unjust to enforce a violated contract. For example, levying penalties or jail time. Instead, contracts should be protected by collateral.

      Perhaps individuals would be asked to put up bonds for the value of the broken contract. If it’s a minor contract the bond may only be a few hundred dollars. But if it’s a multi-million dollar contract, then the individual would be asked to put up a multi-million dollar bond just in case the contract is violated. This would do wonders to incentivize keeping one’s promises and would also prove the trust worthiness of an individuals. Those who constantly violate the contract will lose their bonds, and hence, never be able to afford to get involved in big contracts, because they’ll never be able to afford the bond money.

      • DRKNo Gravatar says:

        It seems to me that the type of penalty for violating a contract between any number of parties, would be the choice of those parties that signed on the dotted lines. I wouldn’t think this would be anyone else’s business or concern.

        • Seth KingNo Gravatar says:

          All I’m saying is that if a person fails to uphold their end of the contract, it is ethically wrong to go beat him up, cage him, or steal his property.

          I view a contract sort of like a debt. If you default, the only justifiable recourse the lender has is collecting the collateral you posted, that some third party(whom they’ve contracted with) is currently holding in case you do default.

          • Bob RobertsonNo Gravatar says:

            Don’t explicit contracts contain their own “penalties” clause?

            If it did, that is what I would go to first. After that, mediation or adjudication.

          • Seth…all contracts should have civil remedies that devolve to some form of restitution…perhaps with punitive damages in some cases. Caging someone acts against the idea of restitution because you remove him/her from the possibility of the productive work through which restitution can be provided. The legal scholar Randy Barnett argues for all rights violations to be addressed as civil matters rather than criminal ones and, so, for the elimination of the standard distinction between civil and criminal law. I have some problems with Randy’s argument but I agree with it overall.

      • Seth, another method would be ostracism from the market for failure to abide by arbitration. Something akin to the Law Merchant in the Middle Ages, or even the eBay model of today.

  3. Fritz KneseNo Gravatar says:

    You are correct that copyright law lis ridiculously complex. I would support your concept of copyright as somewhat pragmatic, but ultlimatelydoes it make any difference? Those with the power make the copyright system however they want it. They want it to protect the ruling elite and control the rest of us. They do not care about your definlition of the difference between natural and contractual rights. They will break your arm whenever it suits their purpose natural or contractual rights be damned!
    Copyright is similar to patent law. My dad worked for a giant corporation as a janitor years ago. He worked around their engineering department. That department had a direct line to the patent office. When something new came in that they thought they could use, the engineers slightly redid it and the patent office predated the corporation’s patent application. So the corporation got the patent and the real inventor got screwed. This is the sort of thing one should expect with government controlled patent or copyright law. I have never liked the concept of ownership of ideas. Pragmatically, I do not see how one could protect ideas without strong and honest government. I think all government is dishonest but especiall so as it becomes stronger. So patent and copyright law tends to serve athe purposes of the ruling elite and screws the rest of us.

    • Good to see you Fritz. I fear you are correct that almost any copyright or patent law will be used by the ruling elites to enforce their privileges. This can be said of almost any law, of course, but copyright and patents are particularly vulnerable because the property being claimed is an intangible and, so, open to more interpretation and wiggle-room than the transfer or production of a hard object like a chair. What we are seeing now with the draconian prosecution of individuals for trivial crimes is indicative of precisely the abuse to which you point. What was the latest one? — (as I remember) a man has been assessed $600,000+ for downloading several songs in his teenaged years… Whenever there is such disproportionate punishment, it is a sign that the law has no justice behind it but must be enforced by ‘show trials’ and excessive measures.

      • Fritz KneseNo Gravatar says:

        Actually I do not think that “justice” has much to do with any man made law. Since one man’s justice is another man’s persecution it is hard to see that any absolute law could be based in justice. Just like the old Russian 5 year plans, nothing works well from the top down. That, of course, is the beauty of the free market in theory at least, since everything works from the bottom up.
        I have a friend who is well into his 70s. He tells me that everything we see or hear about government is a “dog and pony show” to keep our minds off the fact that everything is ultimately controlled by the international financiers who’s families have kept control for at least the past 400 years. He makes a good point. My dad and I used to argue as to whether politicians were intentionally corrupt, which was Dad’s position, or perhaps just opportunistic and following the path of the least resistence (my position then). I was probably thinking of the inherent difficulties with conspiracy theory. Dad told me, “Fritz, they are not that stupid”. I think that many of we libertarian or anarchistic types have a hard time understanding the truly evil, deceptive nature of the political animal. I have a tendency to always believe people are basically honest but prone to making mistakes. But the political animal uses my basic honesty against me by having no regard for honesty and saying or doing anything that looks expedient.
        Another friend told me years ago that most people just wanted to live and let live, but that a small percentage of people lived for power, life and death power. These people would rather die than live without the potential of obtaining such power. He said we needed to find a way to identify these people early and eliminate them. So perhaps he was a closet power monger himself! But he makes a good point. It is nearly impossible to deal with power mongers once they have become entrenched. Wouldn’t it be nice if they could be isolated young and kept away from positions of power?! I guess it is like the old idea of the philosopher king. The only people who might not abuse power are those who do not desire it in the first place.
        A quick question for you, would you agree that government either causes or exacerbates every major social problem? This seems so obvious to me, but most people do not see it at all. So I sometimes wonder if I am just old and cynical? Well, yes I am, but am I wrong?

        • Bob RobertsonNo Gravatar says:

          To your last point, I believe you are correct. Using a coercive method doesn’t actually solve anything, it just shifts the costs.

          • Fritz KneseNo Gravatar says:

            I will have to disagree that coercive methods are never effective. Virtually all human disincentive is based upon coercion from spanking kids to going to war. I just want to get government out of the picture as a monopolistic organ of coercion. I do not expect to see a sea change in human nature to being non-violent or even non-coercive.

            • Bob RobertsonNo Gravatar says:

              “I will have to disagree that coercive methods are never effective.”

              Which is fine, except that I didn’t say that. I said, and I quote, “Using a coercive method doesn’t actually solve anything, it just shifts the costs.”

              The alternative to using a coercive method trying to solve a problem is to use a voluntary method. The problem, if it can be solved, is solved by human action. If it can be solved, then it can be solved coercively, or voluntarily.

              Slavery, for example, was “solved” voluntarily in most of the world, and coercively in the United States.

              Hopefully, this expansive expansion of my statement will help you to realize what it was I was saying, rather than the illusion you thought you read.

  4. StormNo Gravatar says:

    Collateral may work somewhat, but a reputation service whether tied to insurance or protection agencies would likely be more effective in my opinion. The violator of a contract would be subject to being reported and that violation made public so that others would be less likely to do business with the individual, or would demand an even higher level of collateral.

  5. Rick DiMareNo Gravatar says:

    Wendy, nice article (and I enjoyed your new book as well). As I see it, the problem with intellectual property (IP) rights is, as usual, that lawyers have gotten a hold over them and twisted the original IP protections intended by the Constitution.

    IP rights were only initially allowed for about 17 years, and not intended to be held by corporate persons (who have unlimited legal life). They were also originally intended only to compensate the author/inventor for unpaid labor during research and development, and not much more than that, and rarely beyond the author/inventor’s natural life (unless perhaps s/he died with dependents, for example, and was still owed some value on the IP rights).

    The meaning of “limited times” in the Constitution’s IP Clause has been totally thrown off track by the legal system, and hopefully raising awareness about it, as you’re doing, will help: “Congress shall have power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Article 1, Section 8, Clause 8

    • Thanks Rick and I am pleased you liked “The Art of Being Free.” The Constitution certainly tried to reign in run-away IP but there is next to nothing of the Constitution left in real world of law these days. It always interested me that Lysander Spooner, a Constitutional attorney, argued so vehemently for copyright in a perpetuity that extended even beyond the author’s death. Perhaps this was after the man turned against the Constitution instead of writing in support of it? I should check that out.

      • Rick DiMareNo Gravatar says:

        Looks like IP rights are just another casualty of a distorted tax/monetary system and inappropriate interpretation of post-14th Amendment corporate “personhood,” a personhood that was clearly intended for former “natural person” slaves, but somehow was hijacked by legal fictions (corporations).

        Maybe the fact that natural persons can sometimes represent themselves in courts, and corporate persons can only be represented by lawyers, has something to do with it (not that I’m recommending natural persons necessarily should represent themselves).

        • Fritz KneseNo Gravatar says:

          Many problems with our society could be cured by getting rid of the concept of the corporation being treated as a special case individual in court. This simply allows rich folks to hide from responsibility behind corporate skirts. If corporations were treated as big partnerships, then all owners would have responsibility. We all should be responsible for our actions. Indeed, that may be the real definition of a free society.

          • Rick DiMareNo Gravatar says:

            The funny thing is that if you look at the Supreme Court cases decided directly after the 14th Amendment, which is when the word “person” (contained in the 14th) began applying to corporations and protecting them, there really is no legal support for the exalted status that modern-day corporations receive, especially privately-owned corporations.

            But the legal system has never really questioned or looked closely at the circumstances under which courts recognized corporations as “persons” in the late 19th century. In other words, corporations were only regarded as “persons” in the relatively limited circumstances under which the legal fiction entity (the corporation in name) would be regarded as being separate from the actual humans that ran them (officers and directors).

            But the human actors were never supposed to be protected from liability to the degree they are today (other than maybe accidental or mildly negligent behavior, but of course, again, more leeway for negligence is allowed for governmental or fully-public corporations).

            • Rick DiMareNo Gravatar says:

              Just wanted to add that the word “pirate” is an adulterated version of the word “private” or “privateer,” which were private parties hired by monarchies to loot and pillage under full protection of the sovereign, i.e., their liability was limited by the sovereign, just like the modern-day privately owned corporation enjoys limited liability from state and federal governments.

              • Fritz KneseNo Gravatar says:

                Your points are well taken. I knew but never considered the analogy between privateers and today’s corporations. Thank you.

  6. SteveNo Gravatar says:

    I would like to ask you to clarify a few things if you would. First, you claim this article is an argument in favor of contract based copyright protection; however, you don’t define in any meaningful way, what copyright is or what such a contract would entail. Are you speaking of a strictly p2p written contract or could it be oral? How about implied as in “by buying this book you are agreeing to. . .”? You seem to use copyright interchangably with IP in that you describe different forms of IP and call it copyright.
    Second, you make unfounded assertions without explaining such as ” If ideas are problem-solving devices, then the concept of property arose to answer the question of scarcity.” This if-then statement doesn’t follow on it’s own but then you don’t provide a definition for property. Then there is ” Logically speaking, there are only three positions
    possible on the question of who owns you. You
    are a self-owner, which is freedom; you are
    owned by someone else, which is slavery; you are unclaimed property.” You make this assertion with no explanation to the implication of being unclaimed property but even if you ignore that fact, because you haven’t explained this concept I don’t know what to make of it. Are you legitimizing the institution of slavery? You list it as an option. I think a much better explanation is that moral agents or free-will agents if you prefer, aren’t property. Instead, property ownership is not an extention of aelf-ownership (which would be a misnomer and seems to be circular logic) but rather the natural extention of a moral being acting on the physical world to create usible items from raw resources. There are other points I’d like to address as well but I think this will do for now since I need to return to work.

    • Happy to clarify Steve. Please remember, however, that this is a very short article that was written to express my opinion on one topic. Thus it did not explore and should not have explored ‘side’ issues like “what does unclaimed property” mean. But the topic *would* make an interesting (albeit separate) article in its own right.

      As for any confusion of copyright with IP…Copyright is a subcategory of IP and it is rather like referring to “beef” as a meat sometimes. The fact that I reach similar conclusions from basically identical arguments for patents etc. means that I draw no political difference between forms of IP. I *do* argue in a distinct manner against patents due to the ‘discovery’ aspect of that claim which does not apply to copyright. But using the term “IP” in some instances is not a sleight-of-hand. I am often guilty of being wrong but I always try to be as clear as possible.

      You quite correctly say that I make assertions without explanations. Again, this is a very short, straight-line exposition of my views on copyright. If you go to the various essays I have written on IP, you will find that I deal with both sides of the argument, give background etc. For example, 0

      • SteveNo Gravatar says:

        Fair enough. I’ll reserve any argument for when I better understand your position.

        • In a nutshell, my position is: there is no justification whatsoever for copyright or patents enforced by government; there is no natural right to protection of ideas through copyright or patents; there can be an acquired right through contract but I suspect that such contractual rights are not feasible in many if not most situations. I still *like* the idea of contractual copyright and patent and, so, I explore the possibility.

          • “there is no justification whatsoever for copyright or patents enforced by government; there is no natural right to protection of ideas through copyright or patents”

            I totally agree 100%. That is just a another form of slavery, where people can control the property and minds of others through government edicts and guns.

    • Bob RobertsonNo Gravatar says:

      For serious scholarly works on the subject, try “Against Intellectual Property” and “Against Intellectual Monopoly”:

  7. HReardenNo Gravatar says:

    I think this idea of enforcing a copy right or patent via contract impractical. Why would someone purchase a product that someone invented or something someone wrote if before thy could see it or shown how it works thy have to sign a contract of secrecy and not copying it for profit? Perhaps I don’t understant this concept. Say for example someone invents a new engine and a manufacturuing company wants to see how it works because they are intersted in manufacturing it. The inventer would have to get them to sign a contract before he shows it to them because once they see it they will know how it is mae and wotks and could copy it? Why would someone sign a contract just to see a new invention? It just seems an impractical why to conduct business. The same holds true of books and written works. Perhaps I am not understanding this concept.


    • Stephan KinsellaNo Gravatar says:

      HRearden: Wendy’s point is that the only way such forms of copyright etc. are legitimate is if they are contractual; that does not mean any conceivable contract is practical or will be attractive to the buyer. I suspect that anyone selling a product with an inventive aspect, or a book, say, who tries to get the consumer to agree to onerous terms, will find few takers. Why would I buy a $15 Harry Potter book if I have to promise to pay millions of dollars in damages if a friend sees it and copies it or if I write my own novel or make a movie later that has “similar” themes etc.–that is, if I learn from or am influenced by it at all? I would move on to the next publisher/author, who has more reasonable terms, or just get a pirated copy.

      As for the contractual aspects–be aware that not everyone views contracts as conventionally viewed, as “enforceable promises.” Rothbard and Evers see contracts merely as transfers of title to owned scarce resources by the owner. In this conception it is impossible to breach a contract; rather, certain actions trigger certain transfers of title. For example I might promise to transfer $1M to you “if I tell anyone else the plot of the novel”. If I tell others the novel’s plot, I am not breaching the contract; I am just performing an action that serves as a condition or trigger for a transfer of monetary damages payment to the other party. Again, I think most consumers would be leery of conditions on how they use the things they buy from others. If I guy a gun, or a shovel, or a car, I want to fully own it, and be free to use it as I see fit without the supervision of the seller; I want the relationship ended. The natural situation in such a sale is for the seller to get paid, and then be done with it.

      It can be different in the case of a publisher negotiating with an author, or other special circumstances, of course. One can imagine the producer of a movie relaasing it to a movie chain on the condition that it not be leaked, etc.

      • Stephan…thanks for posting. I am aware of the Rothbard “transfer of title” view of contract, which I share. Of course, IP contracts would involve not so much a transfer of title but a non-exclusive right of use with stated restrictions, rather like renting a house. When I said “enforceable claim,” I was thinking specifically of a claim for remedy if the contract were breached and title/right of use was not successfully transferred.

        I think one difference between you and me on IP is that I would like to see contractual rights emerge wherever it is feasible. That said, I freely admit it is not feasible (in any model I’ve seen) to provide contractual protection of books or ideas in general. If this is the case, as I suspect it is, then game over for copyright. There is no “real” property in ideas or words….and I say this as one whose living depends upon them. Stephan, I think you are correct on this point; I think I am wrong. But I’m not sure of it yet.

        The publishing world needs to move past the 1950s model of how authors make a living. It is not merely obsolete but also obstructive.

      • HReardenNo Gravatar says:

        Thank you for replying. That is an interesting idea. I wonder if Rothbard protected ownership of the idea and held a patent on it. lol Certainly it is something to consider as an alternative. I am not however convinced that the concept of copyright and patent should be abolished.


    • Scott BieserNo Gravatar says:

      Non-Disclosure Agreements (NDA’s) are in fact commonly used in business, in a variety of circumstances. It is not much of a stretch for a manufacturer to sign an NDA before a secret process can be shared with him. When I worked for a computer games publisher, we used NDA’s as a matter of routine with developers coming to us with proposed products.

      What I find less practical is contractual copyrights for general publications. Aside from the problem of asserting, without the evidence of a signature, that a purchaser of a book had indeed read and assented to the copyright agreement, there is the likelihood that the book might be lost, or given away, and end up in the hands of someone who could in no way be said to be bound by contract.

      • Bob RobertsonNo Gravatar says:

        Hi, Scott. Love your work.

        There may truly be no way to have what we call today “copyright” without the edifice of the State, simply because it’s impossible to hold someone to a contract they didn’t sign. Or “implied” contracts, click-through licenses, EULA, shrink-wrap licenses “By opening this package, you promise to deliver unto Satan your first-born son…”, etc.

        The author has one perfect monopoly: The choice of when/where/to_whom to release their work. That’s how I make my living, since I am paid to work on projects my employer wants. They get my work, I get their money.

        I think it was my comment that someone who couldn’t figure out how to make their living as an author without “Copyright” would just have to “not give up their day job” that caused El Neil to declare me his enemy and throw away some 15 years of collaboration. I never was able to discern how he expected “Copyright” to work without the state.

        I personally believe that obscurity is far more destructive to the career of an author/artist than copying. Fame and fortune seem to go together.

        Glad to see you here.

      • Scott:

        Sorry I didn’t get to meet you at Libertopia; my best wishes to you regarding those issues.

        Regarding your comments about NDAs: I agree with you here: “What I find less practical is contractual copyrights for general publications.” But to me this is not an argument for copyright, but rather a further argument against it: many people argue that copyright is just the outcome–or could be the outcome–of some private contractual schemes. But it is not and cannot.

        You also write:

        Just as the original farmer appropriates land from the un-owned physical commons to create a productive farm, and therefore owns the farm and the produce grown upon it, the artist or writer appropriates un-owned language and concepts from the commons of our cultural heritage to create a *work* of art or literature. That work is the property of its creator.

        I have read Kinsella’s work and his position denies that property originates in a person’s labor. When I objected he accused me of supporting a “labor theory of value,” which is nonsense. What I support is a labor theory of _property_, first described by Locke, and which is the basis for most libertarians’ concept of property rights.

        Most libertarians are confused by Locke’s own confused argument and his overly metaphorical way of arguing for rights. His labor theory of property, as you accurately describe it, did, IMO, give rise to the labor theory of value, and also to what I refer to as property “creationism”. Labor is just an action, however. It is not some substance that we own. We no more own labor than we own actions. ations are just what you do with things you own, including your body. I discuss this in various posts, namely: Hume on Intellectual Property and the Problematic “Labor” Metaphor. (And in others: Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’; Locke, Smith, Marx and the Labor Theory of Value; see also Rand on IP, Owning “Values”, and “Rearrangement Rights”;  and Thoughts on Intellectual Property, Scarcity, Labor-ownership, Metaphors, and Lockean Homesteading.)

        Locke is wrong that you own your labor, and he is wrong in arguing that the reason why you own things you homestead is that you have mixed with the unowned thing, something that you do own (labor). Rand is wrong to rely on this to argue that we own “values” that we “create.” Values are not things. Value is subjective, a relationship between an actor and some end of action, whether the end be a scarce resource or some outcome desired by the actor. As Mises explains, value and preference are demonstrated in action; and as Rand herself echoes, values are things you act to gain and or keep. That is, when you act, you always seek some end, and thereby you demonstrate that you do value the end you aim at more than others, which are opportunity costs of the action.

        The confusion lies in thinking that creation is one of 3 sources of ownership. It is not. Rand hersefl recognized that we do not metaphysical create things; we only rearrange them. Mises, Rothbard say the same thing. When we labor on an already-owned scarce resource that is a raw material or factor of production, we rearrange it to result in a more-valuable object. In this way we create wealth or value, that is, we and/or others value the rearranged thing more than it was valued before. But no new property rights are thereby created. To produce requires ownership of the factors; production is the rearrangement or transformation of already-owned things. It results in wealth, or increases the value of the things owned, but does not result in new ownership.

        The mistake stems from this sloppy, overly metaphorical way of thinking that Locke used in his argument. He double-counted by saying we own labor; it’s sufficient to say you own your body. Ownerhsip of your body is sufficient to let you do what you want with it–to act as you please, to labor as you please. You don’t own your labor, however, and you don’t own your action. You own only scarce resources, such as previously-unowned things you homestead, or your body.

        Not that Locke himself, and the founders, did not believe that his homesteading idea applied to IP. He did not think it meant you had a natural right to own ideas that you create, even if you expended “labor” to “create” these ideas. (Despite strained arguments to the contrary by people like Adam Mossoff, Merges, and Eric Claeys.) SEe the links above on this.

        When you act (yes, labor, fine) on a previously unowned resource you establish a better claim to the property than anyone else since you have an earlier claim than they do (see on this Hoppe and de Jasay, even Hume). Not because you “own” the labor you mixed with it. Not that anyone who argues they should be able to take the object from you is himself making an ownership claim, that is, he wants to take it and have title to it. But having title to it means he wants to be protected from anyone who comes later and tries to take it from him. He would object to this, which means he is recognizing that as between two possible claimants for a given contestable resource, the latecomer loses. But if you work backwards wtih this assumption, this means the first homesteader has a better claim than anyone in the world, since everyone else would be a latecomer. The only person who has a better claim would be someone the original owner contractually assigns title to.

        It is a fact that nonscarce things like patterns of information can NOT be owned. This is not a normative argument: it is a fact. It is literally impossible to own a novel, a poem, a painting, a design for a motor. All disputes are always, necessarily, over who gets to control (own) a particular scarce (rivalrous, contestable) resource. If Bieser sues me for making copies of his drawing, what he wants is for physical force (from the state courts) to be used against my body or my owned objects, to either take these things (such as money in the case of damages) or to coerce me not to use my body or owned objects in certain ways (e.g., if he gets an injunction from the court ordering me not to print certain patterns on my own paper with my own ink). To enforce rights in “IP” always necessarily requires undermining already-existing property rights in already-existing things. Legally speaking, IP rights are negative servitudes (negative easements) (see my post Intellectual Property Rights as Negative Servitudes): it grants to the IP holder a veto right over how others use their own bodies or other owned scarce resources. I.e., the IP holder is made a co-owner with others, in their own property. It is a trasnfer of proeprty rights. A negative servitude or easement is perfectly legitimate if it is voluntarily granted by the original property owner; this is often done among neighbors in the form of restrictive covenants, say, where you agree not to paint your house outlandish colors unless your neighbors agree; they have a veto right. BUt it is not legitimate if the state just grants this veto right to people, when the burdened estate owner has not agreed to it.

        Bieser goes on:

        Just as the original farmer appropriates land from the un-owned physical commons to create a productive farm, and therefore owns the farm and the produce grown upon it, the artist or writer appropriates un-owned language and concepts from the commons of our cultural heritage to create a *work* of art or literature. That work is the property of its creator.

        This argument is flawed in so many ways. First, it analogizes a work of art to land, while ignoring the difference between them: the land is a scarce resource, a pattern of information is not. Only scarce things are ownable things. Second, this argument would not justify modern copyright, and certainly not patent; patent affects even people who independently invent something. Copyright also covers more than just literal reproduction; it prevents people from making derivative works. If I write a new Han Solo novel I am also making a new pattern, but this is itself prohibited by copyright. and all this is based on the ridiculous idea that the only actions people are entitled ot perform are actions that are not similar to actions others have performed in the past. It is truly a breathtakingly stupid idea.

        When published, it is true the work is no longer “scarce” in the same sense a physical object is said to be scarce. But neither is it superabundant in the same sense that the air and the oceans are. It is limited in time, as it did not exist before some person first labored to generate it.

        Equivocation. The physical object that carries the pattern–say, a physical book–is a scarce object, but the pattern in it is not. And the pattern is not scarce just because it required labor to generate it. Information, once made public, is nonrivalrous, no matter how much effort is required to produce it. Every economist recognizes this. No one can seriously deny this.

        Kinsella has remarked that it is a strange notion of property that has a time-limit on it, but it’s not strange at all. For while the farmer obtained his land from the natural world, the artist appropriated his raw materials from a social commons that had been created from the prior labor of those who came before him. Therefore, a moral debt is owed to that commons

        A moral debt? What a ridiculous “defense” of state-granted monopoly privileges. There is NO MORAL DEBT AT ALL that comes from learning and taking advantage of knowledge accumulated over the centuries by previous men! And if there were, this is an argument against IP not for it; it shows that everyone is using ideas from others for free, and has no right to lock up theirs with IP.

        , which the artist repays by releasing his work to the commons after enough time for him have enjoyed the fruits of his labor. (What that length of time should be is a detail to be arrived at by the same social processes that determine the details of other laws.)

        This argument is so transparently ridiculous that comment on it is hardly needed. BUt it is clear that no libertarian can take this seriously.

    • HRearden:

      What you are talking about happens today in the read world: it’s called “Non-Disclosure Agreements.” When you have an idea for a business, you don’t want others to get a hold of your trade secret, your million dollar idea, until you at least have your business up and running. NDAs are pretty much available as boilerplates, they are so standard.

      Absent coercive laws that try to turn non-property (ideas, digital works, images, etc) into property, people would deal with each other this way. I imagine that works like digital books would no longer be sold by units, but would be available for free download, and the author will find other ways to make income (speaking engagements, annual subscriptions to supplemental material, hard copy sales, etc).

      Stephan, I wanted to tell you that it was *your* book, Against Intellectual Property, that finally killed off the last of my IP proponentship. Your argument that IP is nothing more licensed, limited control over *everyone* else’s property was the killer argument for me.

  8. Digital LibertyNo Gravatar says:

    I’m no expert in any of this, but one thing I think gets overlooked is that intellectual property (like books, songs, movies, software) is more than just freely expressed ideas. These things are the product of someone’s labor.

    The ability to quickly and inexpensively replicate these things today doesn’t eliminate the fact that it isn’t easy to create the first copy, or that thousands or even millions of people may get value from that thing. It isn’t the “thing” that is scarce, it is the ability to produce it in the first place. You aren’t paying for your physical copy so much as you are rewarding the work and skill that went into it.

    • HReardenNo Gravatar says:

      Very good point. I have not heard this adresed by those who claim IP doesn’t exist. Why bother creating anything if yo can copy what someone else has created? Ideas can not be collectively owned. In the former USSR the state did not recognize a man’s right to his own ideas. The non-recognition of IP is an aspect of collectivism.


      • Bob RobertsonNo Gravatar says:

        Be careful, we’re getting into the “Labor Theory of Value” realm.

        The fact is that nothing has value unless someone is willing to pay for it. People go to remarkable creative lengths to build model railroads, yet almost no one ever makes money doing so, because no matter how hard someone works on it, no matter how much time and effort it takes, there is no market value unless it is traded on the market.

        If I remember correctly, some “artist” put a lump of his own solid waste into a can, marked it “Artist Sh**”, and sold it for a ton of money.

        Not recognizing what is called today “Intellectual Property” is not collectivism. If anything, making it utterly illegal to put three circles into a particular pattern (the Mouse shall never go public domain!) is what is collectivist, since it is locking away what is now a century of creative works from being built upon.

    • DRKNo Gravatar says:

      It’s up to the individual to figure out how he can generate an income off his skills and labor. Unless a person has entered into a contract it’s just plain wrong (akin to slavery) to expect a hillbilly like me, and the other 6 billion+ people on this planet to stay current with IP laws.

      • HReardenNo Gravatar says:

        I’m not ok with theft. DRK your statement really takes the cake. Seriously, if someone works hard and sacrifies to develope an idea a hillbilly like you is being enslaved if they can not come along and steal it? Really? You are encouraging laziness and theft by such thinking.


        • SteveNo Gravatar says:

          HRearden, you seem to be completely ignorant of the argument against IP (based such statements as “Very good point. I have not heard this adresed by those who claim IP doesn’t exist.” and ” The non-recognition of IP is an aspect of collectivism.”). Rather than ingage you at this time, I suggest you read “Against Intellectual Property” by Stephen Kensella you can find it in pdf form at If after reading it you still believe any of the comments you’ve made here are valid then we can discuss them. I honestly don’t know how any rational person can support IP after reading his very thorough, and rational deconstruction of IP (unless you support state monopoly protection). So if you’re interested at all in understanding the argument against IP please read that short book.

          • Scott BieserNo Gravatar says:

            I have read Kinsella’s work and his position denies that property originates in a person’s labor. When I objected he accused me of supporting a “labor theory of value,” which is nonsense. What I support is a labor theory of _property_, first described by Locke, and which is the basis for most libertarians’ concept of property rights.

            Just as the original farmer appropriates land from the un-owned physical commons to create a productive farm, and therefore owns the farm and the produce grown upon it, the artist or writer appropriates un-owned language and concepts from the commons of our cultural heritage to create a *work* of art or literature. That work is the property of its creator.

            When published, it is true the work is no longer “scarce” in the same sense a physical object is said to be scarce. But neither is it superabundant in the same sense that the air and the oceans are. It is limited in time, as it did not exist before some person first labored to generate it.

            Kinsella has remarked that it is a strange notion of property that has a time-limit on it, but it’s not strange at all. For while the farmer obtained his land from the natural world, the artist appropriated his raw materials from a social commons that had been created from the prior labor of those who came before him. Therefore, a moral debt is owed to that commons, which the artist repays by releasing his work to the commons after enough time for him have enjoyed the fruits of his labor. (What that length of time should be is a detail to be arrived at by the same social processes that determine the details of other laws.)

            • SteveNo Gravatar says:

              I agree with you Scott, concerning the origin of property rights. It’s one thing I disagree with Kinsella on. I’m not sure I understand you argument in favor of IP though. I don’t think anyone would argue that a painter owns his painting or a sculptor his sculpture and may sell it for whatever price it might fetch on a free market. One can’t have an ownership in the design though. If I see a picture of a house and it inspires me to create a similar painting; the first painter can’t then come to me and claim ownership or even partial ownership in what I have created from my own mind with my own tools can he? Unless I have claim that the painting I have created was actually created by tge first painter which would be fraud not a violation of the first painter’s property rights.

              • Scott BieserNo Gravatar says:

                If you paint a similar picture it’s not going to be the same as the first painting. Your own perception of the house, and the way your hand works with the tools, are going to be different than the first painter’s, so it will be a different painting. It might be criticized as derivative but unless you make an EXACT copy of the original painting I don’t see an IP violation.

            • AnonymousNo Gravatar says:

              “appropriates un-owned language and concepts”: The question of this thread is if and how language and concepts can be owned; you cannot start by assuming language and concepts can become owned via homesteading, that’s a circular argument.

              “appropriates un-owned language and concepts from the commons of our cultural heritage to create a *work* of art or literature.”: A previous man’s output work of art or literature is your input of language and concepts. Written inputs and outputs are the same kind of thing, they don’t change nature from concepts to works as they pass through a brain. You should give inputs and outputs the same legal treatment.

              Also, please define what obligations you offer to place on the reader when they buy permission to “read” your book. If you intend something like “I want you to pay me a nickel every time you think of Mickey Mouse”, I’m not going to be interesting in buying.

        • Bob RobertsonNo Gravatar says:

          Labor Theory of Value.

          Also, if you don’t like your work being copied, don’t release it.

          • You make Benjamin Tucker’s point. If you want to your ideas as property, then keep them to yourself. Do not throw them onto the wind and then argue that those who receive them have also received a legal obligation toward you.

    • Fritz KneseNo Gravatar says:

      It seems that most people assume that no research, writing, or music will be made without patent or copyright protection. Frankly I think that is BS. The very fact that we are writing here for free indicates that humans want to think and communicate those thoughts with others. I think the best music today comes from non-professionals who simply love to play and sing. Killing off the profit motive would get rid of a lot of junk music intended for the tonedeaf masses. (Was that elitist or what?!) In a real free enterprise society scientifically oriented people would be able to do most research inexpesively without being a slave to a giant corporation or government lab. But even assuming that technology would suffer without patent law, how can an anarchist justify governmental interference with individual liberty to protect intellectual property?!

      • Bob RobertsonNo Gravatar says:

        I believe that the “anarchists” who support “property in ideas” do so based upon the principle that without the author, THAT idea would not exist. They therefore own THAT idea no less than they would own a chair that they built, etc.

        The problem I see with this is one of enforcement. Without the state creating arbitrary rules, what rule “should” be followed? How closely must a derivative be to be THAT idea? Mr. Bieser, for example, states that it would have to be “an exact copy” akin to a copy of a movie, or an entire book. But does changing the names count? Changing the order of the scenes? Editing out part, or adding a part?

        This is where I worry. Ownership becomes not a matter of physical reality, but of opinion. And people’s opinions differ.

      • Copyright protection is actually a rather recent development. Most of the great literature throughout history has been written in circumstances without IP protection. But you are quite correct Fritz. I often hear the argument that no creative work would occur without copyright and patents.Absurd.

        • Bob RobertsonNo Gravatar says:

          Ms. McElroy, much creative work was also produced on contract, music written “for events”, portraits for hire, and the like. Bach’s “Goldberg Variations” were composed for, and paid for by, Mr. Goldberg.

          One of the consistent arguments in favor of IP that has been used in my own discussions on the matter were Hollywood Bluckbuster Movies. That the only way a Waterworld would get made is the astounding return on investment that copyright makes possible.

          On balance, I think the music of Bach, the sculptures of Michelangelo, the paintings of Leonardo, the plays of Shakespeare, all created on commission or for performance, without copyright, have enriched the culture of the world far more than “Waterworld”.

  9. Digital LibertyNo Gravatar says:

    Oh, and I realize I’m completely ignoring the fact that the real inventor or artist is usually screwed out of the money generated by IP because it goes to their employer or publisher instead. I think that’s a separate issue and a different problem. As is the question of whether IP should be transferable.

    I guess what I’m saying is, it’s not my intent to be defending current copyright or patent laws. I just want to see authors, musicians, film makers, etc. get compensated in proportion to the number of people who enjoy or get value from their work.

    • Rick DiMareNo Gravatar says:

      Very good point, Digital Liberty. The publisher or employer (and ANY corporate, “artificial legal person”) is not supposed to share in the “natural person” author/inventor’s work, for which the natural person author/inventor has likely not yet been properly compensated for researching and developing.

  10. I’ve addressed the whole of the wrong-headed concept of intellectual property elsewhere where I believe I’ve addressed every irrational argument for IP. There are no rational arguments for it.

    Here I will only make three obvious points:

    1. The concept of “property rights” is frequently invoked to defend the pseudo-concept “intellectual property rights,” but the two are actually contradictory.

    If I buy the book, “Atlas Shrugged,” it belongs to me. It is my property. I own it, fair and square. If it is my property and my property rights are protected, I can do anything I want with that property. I can read it, burn it, or use it for toilet paper if I choose to.

    I can also copy it. If I copy it, those copies are also my property, because I produced them with my own equipment and my own materials by my own effort. If I have property rights I may sell any property I own to anyone who is willing to pay for it, including the copies I made of Atlas Shrugged.

    So-called intellectual property rights, in fact, are an abrogation of property rights, and someone can use government force to prevent me from using my property as I choose.

    2. If I have an idea I may used that idea in any way I choose. It does not matter whether I’m the first person to have the idea, or the last person to have that idea. It is my idea, however I arrived at it, either on my own or learning it from someone else. The supposition that anything ever justifies using force to prevent anyone from using their own ideas is as evil a concept ever hatched in any collectivist’s perverted mind.

    3. Finally, adapted from my own article:

    I understand the sentiment behind the idea of copyright, especially if you happen to be an author. “I know the hours of effort and creative energy that went into creating this book, dammit; why should some copy-cat punk cashing in on my effort be able to deprive me of the profit I could otherwise make?”

    The answer is, in the real world, there is no such thing as a “profit I could otherwise make,” there is only the profit you can and do make. You might write a book that is objectively and artistically superior to Hugo, Dostoevsky, and Rand put together; but if no one is interested in it, you will have no profit. No matter how many hours of effort and creative energy you put into a book, if nobody wants it, all the copyrights in the world will not earn you one penny.

    Copyrights only matter if a book is successful and sells well. Books that don’t sell do not need to be protected, because no one is going to be interested in copying and printing them. But if a book sells well enough to tempt others to copy and print it, it has already made a profit for the author. Copyrights are only an attempt to make more profit, by coercively preventing others from entering the market.

    But, if it is profitable to the copy-cats to print additional copies of the book, it would be profitable to the original publisher as well. If the copy-cat’s version is cheaper, the original publisher has an advantage over the copy-cats, he already has the original, already has a developed market, and already has the “tooling” to produce the book, which probably only needs modifications to produce a less expensive version. Of course the publisher won’t produce a cheaper version if he can use government force to prevent anyone else from producing a cheaper version.

  11. JdLNo Gravatar says:

    A couple of comments/corrections. You repeat the falsehood that copyright protects ideas. It does not. I’m sure that cases can be cited in which courts have mis-applied the law, but copyright does, or should, protect only finished products, not the ideas behind them. Thus, if I write a spreadsheet program, copyright does not prevent you from writing and selling a competing product which has all the features mine does; it only prevents you from making a profit selling the program that _I_ wrote. Why, I wonder, do anti-copyright types find it necessary to resort to lies in order to try to bolster their arguments?

    Second point: the idea that a better, stripped-down copyright law should apply only to those who have purchased a copy of the product, not those who got ahold of it through some back door means, is silly IMHO, because it would render copyright useless. If a hundred people purchase a work and one of them anonymously leaks it to the world, and a million people subsequently download it for free, what set of steps will detect who the malefactor is? None. So your “improved” copyright law is exactly worthless. But that was your plan, no?

    I do agree that using the criminal enforcement arms of governments to enforce copyright is overkill. I think that aggrieved parties should be responsible for bringing civil suits against those who have violated their copyrights. In practice, this would make things like individual file sharing immune from suit, but would allow those who make money selling someone else’s creations to be sued for damages.


    Presenting J.Neil Schulman and “Alongside Night”

    Celebrate a joyous blow for freedom: the shooting of the movie “Alongside Night” has commenced! Written by Prometheus Award winning author J. Neil Schulman and starring Kevin Sorbo (Hercules, Kull the Conqueror), “Alongside Night” is a prophetic movie about the economic and social collapse of society. At its core, however, “Alongside Night” is an optimistic vision of rebellion and the triumph of freedom. The book is a libertarian masterpiece; the movie will be a blockbuster.

    Come and applaud the movie, come and ask J.Neil questions, but be sure to come…
    When: September 10, 8:00 p.m. ET
    Where: Laissez Faire Books blog
    Moderated by Wendy McElroy

    S.F. author L. Neil Smith and graphic novelist Scott Bieser will also be in attendance. For my review of the novel “Alongside Night” click here.

    • Bob RobertsonNo Gravatar says:

      Very glad to hear it!

      A side note, J.Neil is an advocate of Copyright, and has gone to great lengths on his own blog to support his position.

      While I am not convinced by his arguments, they do make good reading to see how his position is expressed. If I remember, I’ll post a link to it when I get home, I think I still have it.

      • Thanks Bob. I’d appreciate the “share.” Yes, J. Neil and I could not be much farther apart on the issue of IP but that man does know how to write a novel. BTW, the graphic novelist Scott Bieser will be in attendance as well as L.Neil Smith.

    • Fritz KneseNo Gravatar says:

      Really glad Alongside Night is becoming a movie. I am not familiar with the book, but since it won the Prometheus Award I will definitely try to find it. I think The Probability Broach would make a great movie as would Heinlelin’s classic Time Enough for Love. But I doubt any reference to a book predicated on the concept of group marriage would make it into a movie. It sure is a great book.

  13. Bob RobertsonNo Gravatar says:

    If I may make one point which I think needs to be made:

    Were state-enforced Copyright and Patent abolished this instant, it still would not make fraud “legal”.

    I could not make the false claim to be the creator, with or without I.P.

    This is where the Creator Endorsed Mark comes in. When Balentine Books published The Lord of the Rings in America, the answer was not to bring the axe of the state down. The answer that worked was for Prof. Tolkien to come out and say that those books were not authorized by him, and would the people who so loved his work please buy authorized copies so that he could get paid. And so they did.

  14. Bob RobertsonNo Gravatar says:

    Ok, here, have another article on “The Issue Of Copyright”:

  15. UCSNo Gravatar says:

    It seems to me that the violator of the contract could easily be used as a buffer by third parties to completely bypass responsibility.

    Example, company C wants the ability to copy the design of Inventor A. Since they want to avoid liability for taking that design without paying royalties, they find Proxy B. A poor man with little or nothing to lose, or even someone who is sick.

    C pays B a small fee to purchase a copy of A’s product, and agree to the non-disclosure. B then gives the product to C, who can immediately deconstruct and start distributing A’s design without repercussion.

    It seems to me that a distinction needs to be made between those who give their designs/art/ideas freely to others, and those who do not.

    IMO, it needs to be the responsibility of a producer to contact the original creator and arrange for royalty, if any, before creating and selling someone else’s designs/writing etc.

  16. MAMNo Gravatar says:

    IP doesn’t exist.

    “The power to destroy a thing is the absolute control over it.” -Muad’Dib

    You cannot destroy an idea therefore you cannot control it.

  17. mwicNo Gravatar says:

    As always with Kinsella, one thing led to another and I ended up on a super-old thread. Anyway, reproducing anything like copyright via contracts would never work, and here’s why:

    In summary: The penalties in the contract for leaking the information would have to be *enormous* (to compensate for the fact that the previously-secret idea is now freely usable by the entire world), e.g.:

    … You are responsible for securing this Justin Bieber song (the Content) from online publication and reproduction. In the event that your copy is appropriated and published online, you will be liable for the resulting lost sales, up to ( $0.99 X 7 billion) maximum.