I'll approach it with respect to the pharmaceutical industry 'cause that's where we started and I agree with you that it's an especially difficult sector in which to imagine greater innovation without IP than with it. We know that patent law discourages innovation in more than one sense and that it imposes costs on the system, consuming resources that might otherwise be applied to research. So the question how much innovation there would be on net without IP law. Patent agents/attorneys must be paid to write and protect patents. Would be inventors have a sense of this, and do not know what patents exist on what inventions. Many patents exist on inventions that are never produced. Many people/companies, known as "patent trolls", make their living by simply owning patents and suing anyone trying to produce the patented products. Not having the time or resources to research existing patents or afford the $2-$10million estimated necessary to defend the average patent(much higher in the pharmaceutical industry), many(most, I'm sure) would be inventors just don't bother. The majority of the $2.6billion and 12 years necessary to bring a drug to market, if it every makes it past the regulatory hurdles, is not research costs, but costs imposed by regulations and hoops to clear in order to obtain FDA approval. If we could consider the research costs alone, imagining no FDA, no regulations whatsoever, and no taxes, that research cost would still be cheaper without IP law than with it. Bear with me here. This will make sense, you'll see. We know that the Labor theory of value is defective beyond repair. It fails to account for Time Preference and uncertainty, but it has a more fundamental flaw, in that it assumes objective valuation of labor. There is no objective valuation in the real world. All value is subjective. A watch worth $10,000 to you may not be worth that to me. A drug worth $10,000 to a sick person will probably be worth $0 to a healthy person. From our own perspectives, each of us values everything in ordinal units, not cardinal units. It makes sense to say I value coffee more than pasta right now, but it makes no sense to say that I place 55 units of value on coffee and 34 units of value on pasta right now. I may want to type this, and I may want to sit here and do nothing. If I wanted to do nothing more that I want to type, I would not be typing right now. When at the store to buy something to reduce pain, I may prefer Ibuprofen to an alternative. When I see Motrin available for $9 and generic Ibuprofen available for $2, knowing that there is no substantive difference between the two, I will choose the generic brand. If the generic is not available or is more expensive, there is a price point at which I would opt for something else(aspirin, maybe) instead. If the price or availability of all alternatives were different, there is a price point at which I would prefer pain over parting with(or obtaining) the amount of money necessary to obtain the medicine. For any terminally ill person, there is a price point at which that person would prefer death to paying the price of the cure. If the price of a new drug is $10[SUP]80[/SUP], zero units of that drug will sell because there is nowhere near that much money in the world. So value is necessarily interpersonally subjective and necessarily relative with respect to comparative wants or preferences. These facts must be accounted for by any correct theory of value. Now it follows that some valuation of the end product must exist in the mind of the actor before he ever acts. Now it follows that some idea of a final sale price must exist in the mind of the producer before production ever begins. Everything being produced in an economy bids for goods and resources(including labor of all types) available in that economy, affecting their prices. If the estimated inputs for a product exceed its estimated maximum sale price in the mind of a producer, that product will not be produced, otherwise it will bid for, affecting the prices of, goods and resources in that economy. Now it follows that estimated final sale prices of all goods and resources(including labor of all types) in an economy are affecting the prices of all goods and resources being produced in that economy. Finally, we have the correct(the Misesian) theory of value; that price is imputed upward toward the higher order goods, from final sale price of consumer goods all the way to the primary sector. Now back to IP law with that in mind. Since competing producers bid against each other for inputs to their product, competition results in a lower sale price than a good produced by a monopoly. One expecting monopoly status on a good he's developing will be willing to bid higher on the inputs that go into developing and producing that good than one not expecting monopoly status on that good. Researchers, lab techs, chemists, doctors, everyone involved in researching new drugs would still be working without IP law, they would just get paid less. But, without the uncertainty caused by IP law mentioned above, more producers would be willing to enter the market, putting upward pressure on the price of that labor. But then, even some individuals can be expected to compete. The price of the labor going into developing new drugs would level off at something the market can bear while producing output(new drugs). The competing developers working on a cure for the same illness can't all be first to market but, for the one who is, first-mover advantages other than temporary monopoly status(which would admittedly be short with drugs) still exist without IP law. Brand recognition is one. I mentioned the qualitative difference between generic Ibuprofen and Motrin earlier; there ain't none. For whatever reason, though, some people are still willing to pay 400%-500% of the price of the generic for Motrin. Also, not all competing developers would come up with the same cure, and some cures would be stumbled upon in search of others(Viagra is an example of this), so there definitely is small, incremental development in drug research. That's all I can think of right now. I hope this helps us see that it is not obvious that IP law provides for a net gain in innovation. I know I included all(the one's I can think of) problems caused by existing government in this, and that that can be seen as cheating, but I don't see any point in thinking of them separately because governments can't be expected to do anything right.
The same researchers would not be working to those ends. Look at what happened with education. Teachers used to be valued, that valued position in society drew in the best and the brightest among us and education at one time brought those with the most potential into contact with those most capable of fanning exceptional talent. Today we don't value teachers. The best and brightest among us do not choose to teach. They go into research, become entrepreneurs, consultants... the mark of genius in our society is no longer becoming a professor at Harvard or Cambridge it's retiring at thirty. Our educational system has been steadily producing less value for almost five decades. We now have a president who demands further reductions in investment into education and has been personally sued with claims his Trump University alternative to real education is worthless. The same trend is now repeating in medicine. Many of our better doctors are retiring early, transitioning to different industries, closing their doors to most insurance programs, or otherwise leaving the profession. I don't doubt that there is a long line of people waiting to replace them, the problem that we as a society do not want to admin is not all doctors, teachers, or scientists are equal. Pick one at random and you have a fifty percent chance he graduated in the bottom half of his class. I understand education, medicine and other solutions we value are expensive. It may even be the right decision to pass laws that make that work less profitable and therefore more accessible. But an inescapable consequence will be our best and brightest will choose that work less often. That a hundred less capable people are lined up to take that lesser reward does not mean our standards of living won't decline. A hundred Bill and Teds are not equal to a single Newton or Feynman.
Okay, you're saying that the most ingenious people wouldn't take those jobs if they pay less. I guess that might be right, but I don't know. Newton made his money late in life at the Royal Mint, a job he quit Cambridge for. He didn't make that much at Cambridge. Feynman earned $380/month at Los Alamos($3800 today), the average middle school teacher's salary. He made $3990/year at Cornel($39,989 today). I don't think any teachers even start off that low now. Edison was an entrepreneur. Einstein was way out of his professional field when he made his greatest contributions. The thing is, though, eliminating patents and regulations would open the game up to sole proprietors. Another Robert Kearns could stumble across the cure for cancer in his kitchen after ten "big pharma" companies spend billions and decades failing. He would have to produce and sell it himself, of course, instead of letting one of them steal it from him like Ford did to Kearns.
Newton was born rich. There was great prestige associated with Royal positions, Cambridge, the Manhattan project, and a chair at CalTech. That prestige no longer exists. Yes there is a random element in research. Anyone could get lucky and stumble onto a great solution. But in my experience if you bet on luck, you'll loose more than if you bet on talent. Talented people seem to get lucky more often.
His daddy was rich. His daddy died. I thought this was about the lower pay not attracting great minds to drug research. I don't understand where you're going with it now.
My concern is reducing incentives for creating intellectual property will likely reduce the production of that property. If you effectively deny the property even exists by removing all intellectual property rights... I am concerned that very large reduction in incentives will have a significant impact. I do think there are abuses of IP law and I don't think our patent and copyright system is perfect or even always produces the best results. I'm just expressing that going to that extreme may not be a better approach.
My position appears extreme, yes. In the grand scheme of things, I don't think it's anywhere near as extreme as the system in place now. I haven't denied that intellectual property(ideas) qualifies as property. That argument can be made, and I think it prevails against its negation, but all I've put forward here is a case that the truth of the utilitarian proposition that IP law results in more net innovation than no intellectual property law is not obvious. Introducing the moral case against IP law(which effectively introduces a way for the IP owner to control what others do with their own physical property) would just add more reasons to oppose intellectual property law.
I think Kinsella does a decent job of explaining the heart of his argument in this article: https://mises.org/blog/intellectual-property-rights-negative-servitudes The best way, then, to categorize patent and copyright legally would be to view them as nonapparent negative personal servitudes: a nonapparent charge on a servient estate (that is, the land, personal property, or body of some person) for the benefit of the holder of a patent or copyright, where the charge imposes on the owner of the servient estate the duty to abstain from doing something on or with his property/estate. In other words, it is quite clear that patent and copyright divest owners of property (and self-owners of their bodies) of some of their property rights by assigning to IP holders a negative personal servitude that was never purchased by the holder or contractually or voluntarily sold by the original owner. This helps make it clear that IP robs people of property rights.
That's a great article, thanks! - - - Updated - - - And Genzyme can prevent competitors from making a drug similar to Fabrazyme, because of its patent monopoly (because it’s a life-saving drug in short supply, this is helping to kill people).
Removing all IP laws denies the existence of intellectual property, under the law. The law is how we define what we allow and do not allow as a people. Removing the concept of intellectual property from our laws asks this country to deny the existence (or at least ignore the existence) of those ideas as property. You may introduce moral arguments and many people who share your morality may feel bound by them. But as a nation we only agree to be bound by our shared laws, not your moral views. Your moral arguments will not effectively control what may or may not be done in this country. They do not provide an effective mechanism for someone to establish ownership of a developed process, identifying mark, or original work.
Copyright and patent law is a compromise. Like Longshot points out, it's requires us to respect the boundaries of ideas created by other people in the same way we respect the boundaries of homes made by other peoplerestricting our liberty to come and go as we please. But the consequence of not respecting those boundaries is people have much less incentive to create. It's human nature to resent others freely taking from you the things you built. I'm not saying no one will ever write a song simply to write it, or even build a bridge if no one gives him credit for having done so... but I think it's clear less folks will toil in laboratories for decades to cure an illness that doesn't effect them if they are offered no right to own or sell the product of their labor. And then who do we blame for all the folks who die because that life-saving drug was never developed?
Longshot pointed that out? That's weird. Yes that's human nature, and it's right to resist when someone tries to take your property away from you. If, however, I build a precise copy of your house on my own landed property with my own materials, do you have a right to take it away from me? If I play a particular chord progression to a particular beat before you do, do I then have the right to forcibly prevent your fingers from playing that progression to that beat? A bridge is a physical object that we can't both use for mutually exclusive purposes at the same time. An arrangement of notes, or words, or a recipe for a chemical compound, those things are not like that. We made law because we all recognize that we need to coexist and much of what we need to exist is scarce so that conflicts can arise over it. Ideas are not scarce. I think you're ignoring all incentives to innovate other than the monopoly granted by IP and all the disincentives to innovate caused by IP. Who do we blame for the deaths of those who can't afford existing drugs because of IP?
That's just not true. "Scarce" means insufficient to a demand. For something to be scarce, its supply must be finite. If you extract and mix enough cement to make enough concrete to pour the foundation for your house, that doesn't make it so that I can draw from your supply enough cement to pour a potentially infinite number of foundations. For me to pour another foundation, I would have to make more cement. The number of copies of your house is limited by room to put them(so land is scarce), materials from which they are built(so materials are scarce), and manpower needed to put them all together(so labor is scarce). If we set out to build an infinite number of copies of your house, we would reach points at which the available materials, room, or labor is exhausted, and we would have to replenish the supply or stop. At no point would we ever exhaust the ideal model of the house. Ideas are never scarce in any sense. Either they do not exist, because no one has thought of them yet, or their supply is potentially infinite in that they can be reproduced ad infinitum at zero cost.
The bridge you create, an infinite number of people can walk across it. But for that to happen, you have to bring together rock and cement, girder and nail. Considerable effort and part of your finite time on this earth has to be paid to bring that solution into existence. You invest that time and set a toll for it's use to recover your investment, so others can can share both in the cost of its creation and the benefit of its use. The same is true of designs. For my idea to exist, I have to bring together measure and observation, relationships between density of cement, length of girder, strength of steel. I assemble my idea with considerable investment of effort and my finite hours on this earth. Our IP laws recognize my right to set a toll on that design in the same way you set a toll on your bridge. If you really believe my idea is valueless that I have no right to recover the effort and time I invested in creating it, if ideas are so abundant that there is infinite supply of them to meet your demand for solutionsprovide your own design. Pick another of those infinite designs and use yours. If you would prefer to use the solution I built, pay my toll. Share in the cost of bringing that scarce solution into existence.
There are all kinds o things that are true of the bridge and not true of its blueprints. The bridge itself is rivalrous; we can't both use it for mutually exclusive purposes at the same time. We NEED property rights in the bridge to deter us from fighting over it or settle a dispute over it, should one arise. We can both use its blueprints for mutually exclusive purposes at the same time. A potentially infinite number of people cannot walk across the bridge. A limited number of people can fit on it at a given time, and it will wear and decay. We cannot both collect tolls on the bridge. We can both come up with the exact same idea for a bridge independently. Had you invented The Bridge, and built one, that would obviously entitle you to require a toll of anyone who would use the bridge you built. Would it give you a right to forcibly prevent everyone else from building another bridge anywhere else? IP law defeats the purpose of law by creating conflict where no conflict would otherwise exist. I do not say that any idea is valueless, but you do not have a right to recover anything, because that would entail a right to the patronage of others.
We can both collect tolls on the bridge, states and federal governments both collect some tarrifs. There are bridges in China so old no one alive knows when they were created... but yes, if you want to split hairs a infinite number of people can neither walk across those bridges nor build new bridges from a set of blueprints. There are a finite number of people on this earth which will end in a finite number of years. But I believe I've made my pointthat bridge and a design were assembled with effort and hours of a man's finite life. He has a right to ask compensation from those who use what he offers, even if countless people cold use them. When folks would wish to take what a man built without compensation, IP law allows that conflict to be resolved. Same as should someone claim their right to free travel allows them to walk through the home for which you hold title.
That wasn't me. I was quoting Kinsella. Kinsella's argument is basically this: We live in a world of scarce, rivalrous resources. A scarce, rivalrous resource is one which two people can't control at the same time. For instance, a pencil. There are not infinite (or even a superabundance) of pencils, and if one person is writing with a particular pencil nobody else can do so at the same time. So, he argues, given the nature of scarce, rivalrous resources, we need to establish societal rules. For any particular scarce, rivalrous resource, we need some rule that tells us who is entitled to control that resource. So for example, the law might state that only the current own of the pencil is legally entitled to control the pencil. He owns the pencil. Such rules of ownership are necessary to avoid constant conflict over these scarce, rivalrous resources. Further, he argues, that when it comes to the world of information, there is no scarcity nor rivalrousness. If I tell you a funny joke, you can go tell someone else that joke without impacting me or anything I own. If I show you how to start a fire with flint and steel, you, the next day can use your own flint and steel to start your own fire without impacting my ability to continue to do so. In fact, anyone could do so, and that would not impact my ability. Kinsella's argument is that only scarce, rivalrous corporeal things can be fought over, because only one person can control them at a time. On the other hand, an idea or information doesn't need to be fought over, because anyone who understands that idea or information can use it without impacting anyone else's ability to use the same idea. He concludes that using force to prevent someone from using his own body or property in a peaceful manner based on an idea is an unjust violation of established laws of ownership.
If I revealed that joke to everyone you planned to perform it for, it would impact you and your ability to book performances, sell that joke or enjoy telling it. If you were the author of that joke, you would likely have less incentive to create the next one. My actions would impact you andunless others were able and willing to produce equally funny jokesit would deny the world all the jokes you might have otherwise created. Assuming the right to reveal information can have impact. Ask Hillary.
My apologies for using imprecise language. Let me restate Kinsella's stance: If I tell you a funny joke, you can go tell someone else that joke without violating my physical body or any corporeal thing I own.
