A Spontaneous Order

A Spontaneous Order: Property

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At the core of every political theory is a methodology for the assignment of property rights. In fact, this must be so; for in order to determine the aggressor and victim in any violent interpersonal conflict, one requires some theoretical basis for determining who owns the good in contention (this good in contention may include one’s very own body). If the source of conflict does not concern a dispute regarding the control of a scarce resource, then said conflict would fall outside the scope of property norms. The distinguishing factor between conflicts which involve a dispute over the rightful control of scarce resources and those which do not is that the employment of violence may be a just means to reconcile the former type of conflict, however such violence would never be warranted when addressing the latter.

For instance, if I take a mango from you, whether or not this is an act of aggression (as defined by the NAP) is entirely dependent upon who actually owns the mango. If you picked this mango from my yard without my consent, then my seizing it would be just. However, if you bought this mango at the store, or picked it from your own mango tree, then my seizing it would be unjust and would constitute an act of aggression against your property. Thus, a theory of property is integral to any objective system of interpersonal ethics. Without such a theory, all attempts to resolve such disputes would ultimately be arbitrary, and in all likelihood unjust.

Of course, the characterization made above is contingent upon accepting the libertarian theory of private property. If one used a more socialist theory of property, then it may very well be the case that the role of victim and aggressor would be the reverse.

To use another example, the libertarian principle of “self-ownership” would condemn rape as being an unjust act, not because of the aesthetics of rape (or the lack thereof), but rather because the rapist has infringed upon the victim’s property right over his/her body. However, if our theory of property permitted someone to own another person, as is the case with chattel slavery, then this same act would be considered a justified exercise of one’s property right over his slave.

It is important to keep in mind the distinction between “ethics” and “aesthetics.” We must be careful not to conflate the two as is so often done. The practical significance behind such a distinction is the ability to determine in which context violent recourse is justified, and in which context it is not. In other words, violence used as a response to that which is merely distasteful but not aggressive, is, and must always be, unjustified.

Naturally, the question you may be asking yourself is “how do we distinguish between ethics and aesthetics?” The answer is by formulating a rational theory of property. However, before we expound upon such a theory, let us first reflect upon the function and purpose of having a theory of property in general. Hoppe explains his meta-ethical position:

Only because scarcity exists is there even a problem of formulating moral laws; insofar as goods are superabundant (“free” goods), no conflict over the use of goods is possible and no action-coordination is needed. Hence, it follows that any ethic, correctly conceived, must be formulated as a theory of property, i.e., a theory of the assignment of rights of exclusive control over scarce means. Because only then does it become possible to avoid otherwise inescapable and unresolvable conflict.[1]

In other words, the function of a theory of property is to provide a means to determine the just acquisition and transfer of scarce goods. That is to say, to determine who gets what.

In essence, the core of all physical conflicts between individuals is a dispute over the use and control of some scarce (economic) good. This could be a bowling ball, money, land, a factory, etc. It is because we live in an environment where the desire for many resources exceeds their availability that we must apply some arrangement of property laws if we wish to mitigate and resolve violent conflict amongst individuals. As only those goods which are scarce can be the objects of violent conflict, non-rivalrous goods are not subject to ownership claims. Therefore, we may conclude that the concept of “property” may only be applicable to that which is scarce/rivalrous. Tucker and Kinsella dispel some common misconceptions of what it means for something to be scarce:

But let’s be clear what we do not mean by the term scarce in the sense that it applies to this discussion. Something can have zero price and still be scarce: a mud pie, soup with a fly in it, a computer that won’t boot. So long as no one wants these things, they are not economic goods. And yet, in their physical nature, they are scarce because if someone did want them, and they thus became goods, there could be contests over their possession and use. They would have to be allocated by either violence or market exchange based on property rights.

Nor does scarcity necessarily refer to whether a good is in shortage or surplus, nor to whether there are only a few or whether there are many. There can be a single “owner” of a non-scarce good (a poem I just thought of, which I can share with you without your taking it away from me) or a billion owners of scarce goods (paper clips, which, despite their ubiquity, are still an economic good).

Nor does scarcity necessarily refer to tangibility only, to the ability to physically manipulate the thing, or to the ability to perceive something with the senses; airspace and radio airwaves are intangible scarce goods and therefore potentially held as property and therefore priced, while fire is an example of a tangible good of potentially unlimited supply.[2]

What indicates the rivalrous or non-rivalrous nature of something is whether use of it inhibits future use or another’s simultaneous use. That is to say, if my use of something X precludes any other use of that same something X, then X is rivalrous. Conversely, if my use of something X does not preclude any other use of X, and if my use of X does not subtract from any future use of X, then X is not rivalrous, and could therefore never achieve the status of “property.” Moreover, because property is only applicable to goods or things which have the capacity for mutually exclusive usage, then those things which are super abundant cannot be considered property, as no conflict over them may possibly arise. Thus, only scarce (economic) goods may warrant the application of property norms to govern their usage. Jeffrey Tucker and Stephan Kinsella expound further upon rivalry/scarcity as being the essential elements of property:

Instead, the term scarcity here refers to the possible existence of conflict over the possession of a finite thing. It means that a condition of contestable control exists for anything that cannot be simultaneously owned: my ownership and control excludes your control… An example of a necessarily non-scarce good is a thing in demand that can be replicated without limit, so that I can have one, you can have one, and we can all have one. This is a condition under which there can be no contest over ownership. As Hoppe says, under these conditions, there would be no need for (property) norms governing their ownership and use… This non-scarce status might apply to many things but it always applies to non-finite things, that is, goods that can be copied without limit, with no additional copy having displaced the previous copy and with no degradation in the quality of the copied good from the original good… So it is with all things: if there is a zero-sum contest over its possession, it is scarce; if there need not be rivalry over its ownership, and its capacity for copying and sharing is infinite, it is non-scarce…[3]

Property, necessarily being comprised of scarce/rivalrous goods, requires acquisition. According to libertarian theory, there are exactly two just means of acquiring property:

  • Original Appropriation (i.e., non-lockean proviso homesteading/first user)
  • Voluntary Exchange (i.e., giving, trading, buying, selling, etc.)

A common objection to the practicality of the “original appropriation” means of acquiring property is that hardly any person is able to trace the ownership of land to the time when it was originally appropriated.  As such, whether or not the chain of title to a good is legitimate can be impossibly difficult to ascertain. Rothbard trenchantly answers this concern:

It might be charged that our theory of justice in property titles is deficient because in the real world most landed (and even other) property has a past history so tangled that it becomes impossible to identify who or what has committed coercion and therefore who the current just owner may be. But the point of the “homestead principle” is that if we don’t know what crimes have been committed in acquiring the property in the past, or if we don’t know the victims or their heirs, then the current owner becomes the legitimate and just owner on homestead grounds. In short, if Jones owns a piece of land at the present time, and we don’t know what crimes were committed to arrive at the current title, then Jones, as the current owner, becomes as fully legitimate a property owner of this land as he does over his own person. Overthrow of existing property title only becomes legitimate if the victims or their heirs can present an authenticated, demonstrable, and specific claim to the property. Failing such conditions, existing landowners possess a fully moral right to their property.[4]

Finally, to own something means to have the exclusive right to employ this good in any way one sees fit, so long as such employment does not entail aggression against the property of another. As a practical matter, property must have objectively verifiable borders if one wishes to demonstrate the validity of his title.

 

Intellectual Property

Intellectual property (IP) is a classification given to the class of legally-protected rights to non-scarce goods – such as ideas, music, and the expression of patterns. The three most common categories of intellectual property are copyrights, patents, and trademarks. In his monograph “Against Intellectual Property,” Stephan Kinsella provides a cogent definition of each of the categories of intellectual property:

Copyright

Copyright is a right given to authors of ‘original works,’ such as books, articles, movies, and computer programs. Copyright gives the exclusive right to reproduce the work, prepare derivative works, or to perform or present the work publicly. Copyrights protect only the form or expression of ideas, not the underlying ideas themselves. [5]

Patent

A patent is a property right in inventions, that is, in devices or processes that perform a ‘useful’ function. A new or improved mousetrap is an example of a type of device which may be patented. A patent effectively grants the inventor a limited monopoly on the manufacture, use, or sale of the invention. However, a patent actually only grants to the patentee the right to exclude (i.e., to prevent others from practicing the patented invention); it does not actually grant to the patentee the right to use the patented invention.[6]

Trademark

A trademark is a word, phrase, symbol, or design used to identify the source of goods or services sold, and to distinguish them from the goods or services of others. For example, the Coca-Cola® mark and the design that appears on their soft drink cans identifies them as products of that company, distinguishing them from competitors such as Pepsi ®. Trademark law primarily prevents competitors from “in-fringing” upon the trademark, i.e., using “confusingly similar” marks to identify their own goods and services. Unlike copyrights and patents, trademark rights can last indefinitely if the owner continues to use the mark.[7]

Intellectual property (IP) is a concept that entails granting the “creator” exclusive rights over particular patterns of information, be they a process, design, picture, painting, song, book, or logo. It must be understood that these so called “IP rights” do not grant to a given creator the permission to reproduce original works; rather, they grant them the legal authority to prevent others from replicating these original works with their own property.

For instance, under a system of intellectual property, if one were to patent a go-kart design, and the next day he discovered that you were building a go-kart to the very same specifications that he had just patented, then he would be able to legally threaten to have force initiated against you as a means to halt your go-kart production. The fact that you would have been building this go-kart with your own supplies would be immaterial.

Herein lies the logical issue with upholding IP: that its enforcement necessarily results in the delimiting of someone’s rights over his legitimate (scarce) property. So called “rights” believed to exist by IP proponents come into conflict with rights to legitimate property. Thus, we know from the outset that “IP rights” and legitimate property rights can not logically coexist.

Again, the goods to which intellectual property rights are asserted fail to meet the criteria for property because they are mere patterns of information which are themselves not rivalrous/scarce. Once discovered or created, their production is inexhaustible; they are “free goods” for which neither ownership nor economization is needed or applicable.

Though the coexistence of intellectual property with legitimate property is conceptually incoherent, it would nonetheless behoove us to go over some of the common assertions made in favor of IP:

 

I own my labor and that which I create, including intellectual products, therefore IP is valid!

This point is brought up quite often, and has proven to be very misleading. In the first place, one does not “own” his labor, for labor is just something you do and not a thing to be owned. It is true you do own your body, and you can use your body for labor if you wish, but it is the body that is owned, not the labor. Thus, what grants one the right to sell his services is the ownership he has over his body not his labor.

In the second place, creation itself is not sufficient in establishing property rights. For example, if I go to your house and use your ingredients to create a cake, I do not thereby own the resulting cake with the attendant legal ability to repel those who invade upon it! Conversely, if I make a cake with my own ingredients, I do not own the resulting cake because I “made it,” but rather because I owned the materials used for its creation.  Again, we only own that which we originally appropriate or receive through voluntary exchange.

Further, the term “creation” itself is a bit misleading, for we never actually create anything. Rather, we transform matter that is already in existence into a form that we find to be more suitable to our ends. The right to own “created goods” must finally rely on them being scarce; there must be a possibility to use these goods in incompatible ways if they are to be ownable.

 

But wouldn’t using someone else’s creation without his permission be theft?

This is another common misconception, even within the libertarian movement. This idea pervades our culture with common phrases like “you stole my idea!” or “you pirated my music!” Whether something may be stolen is contingent upon whether or not it can be owned, as stealing is the unjustified taking of someone’s owned goods. It has already been established that patterns of information are not “ownable” since they are not rivalrous/scarce. What cannot be owned cannot be stolen.

Beyond this, stealing requires the legitimate owner to no longer have access to that which has been stolen. If I take your car, you no longer have access to your car. However, if I copy your recipe, your access to your recipe has in no way been impeded by my copying. You still possess this recipe. It just so happens that now I, too, have the recipe. No theft has taken place. It would be absurd for me to accuse you of stealing my car if it were sitting in my driveway and you just happened to build one yourself with the same design. Similarly, it would be equally preposterous to assert that copying is stealing, when the supposed “victim’s” access to that which he claims has been stolen has in no way been diminished.

 

If someone profits from my idea without my permission, then the money he made is essentially money he has stolen from me!

Often times a musical artist or an inventor will claim that the unpermitted reproduction of his music or invention will dig into his profits, because such reproduction would yield a larger supply of the good in question relative to his monopoly production. This addition to supply thus renders him unable to sell his music or invention for as much as he would have otherwise been able. However, his belief that this unauthorized reproduction and sale is tantamount to theft implies that he owns the buyers’ money before they hand it over to him. This is, of course, fallacious reasoning.

We only have legitimate claim to that which we originally appropriate or receive through voluntary exchange. We do not own someone’s money before he gives it to us. The fact that a customer may have given his money to the original artist had he not purchased a product from a copycat does not alter this truth. Furthermore, one is not entitled to and does not own the value of something. For example, if my neighbor refuses to mow his lawn, the value of my property may be reduced in the eyes of most people, but this alone in no way means that my neighbor has infringed on my property rights. Again, no one has legitimate claim over the value of anything, because value is simply a subjective determination and we certainly do not own the subjective determinations or evaluations of others.

 

If there is no IP system, people won’t be as incentivized to create and innovate!

While the claim has a plausible ring to it, it is dubious at best. The IP system actually serves to suppress ingenuity! But how is this? Well, because as a creator of any sort, one would immediately experience limitations upon what information he would be permitted to use in pursuit of his invention, song, or whatever else he is attempting to create. In other words, the suppression of innovation would take the form of all the information whose use and access would be safeguarded under the auspices of copyright, patents, trademarks, etc. One would not be able to avail himself of the body of many others’ work as it would be “protected” by IP and thus become inaccessible or costly to attain.

Moreover, IP is approximate; it does not simply preclude the reproduction of exact replicas, but rather the reproduction of that which is too similar to the original. So let’s say I take your go-kart design and make some small improvements to it. I could still be sued under IP law for patent infringement. Thus, the limitations, whether they are the threshold for similarity or the longevity of the IP in question, must always be arbitrary.

Beyond this are the time, resources, and energy spent on the training and employment of the overseers of an IP system, as well as the time and money used to apply for a copyright or patent. These are all factors which, had it not been for the IP system, could have otherwise been allocated to more productive ends.

The threat and practice of litigation associated with the enforcement of IP laws create further costs. Such lawsuits have cost many millions to conduct and many millions more are used to keep legal teams on staff for larger businesses. Again, this represents huge amounts of resources and time that could have been spent in more productive ways, but are instead wrapped up in the legal system.

A less obvious cost of the IP system is the chilling effect it has on small businesses. There are thousands upon thousands, if not millions, of patents and other IP certifications of which one may never be apprised and yet will still be subject to a forfeiture of his liberties if he is found to be in violation of any one of them. Powerful corporations have the advantage of being able to afford a legal team to keep on staff to secure many hundreds of IP certifications, be they patent or copyright, and to use them as leverage against other large businesses to deter them from suing on the grounds of IP infringement. This tactic is tantamount to a “mutually assured destruction” defense, where one company will refrain from suing the other on the grounds of IP infringement for fear that this other company may sue them in return on similar grounds.

Smaller businesses, however, do not have the capital to build up such a defense or gain such leverage, so they are at an artificial disadvantage in the battle for IP weapons as compared to their larger counterparts. Worse yet, many may decide to abandon their plans for entrepreneurship, as IP liabilities would constitute one more cost that they are simply unwilling to bear.

Last, but certainly not least, are the guaranteed sacrifices of liberty associated with the IP system.  To enforce IP is to limit, at least to some degree, an innocent person’s peaceful use of his property. Those who advocate for IP on purely utilitarian grounds would do well to recognize these costs and rethink their position. The burden of proof that IP increases innovation falls upon the advocates for such a system. Some of the costs are concrete, and ironically include factors which hinder innovation itself.

Finally, even if IP were proven to enhance innovation and prosperity, would it be our place to impose such a system, given that it necessarily abridges one’s rights to his legitimate private property? The truth of the matter is: the only things that must be done to maximize wealth are to refrain from committing aggression while pursuing our own self-interests. Coercion may still exist, but this does not justify establishing an institution with the sole right and obligation to commit aggression for this only exacerbates the very issues it’s charged with solving.

The market, on the other hand, serves to regulate, allocate, and equilibrate much more efficiently and effectively than any mixed or controlled economy can, precisely because it does not rely upon central planning to effect such adjustments. In free markets, everyone has to play by the same rules, and every exchange is mutually beneficial. However, under a Statist paradigm, a select group of people are able to ignore the limitations set upon the rest of the citizenry, and benefit themselves at the expense of others. In essence, free markets promote win-win outcomes, whereas the State can only produce win-lose or zero-sum games.

 

What if someone puts their name on my work and publishes it as his own?!

Let’s say I publish a book and claim to be the author when in reality I am not. My patrons would be buying what they believed to be a book written by me, but in actuality, and contrary to my advertisements, it is not. Once discovered, I may be tried on grounds of fraud, rendering the use of IP as a legal remedy superfluous. In other words, doing this would be held as a violation of property rights (theft), as I would be accepting the property of others without fulfilling my condition of the contract, which is to provide an original work.

 

Could I make a contract telling the buyer not to reproduce my thing?

Yes, however there are two detrimental effects associated with this choice. First, this may deter the consumer from purchasing your product as he may not be comfortable with assuming such liability. Second, it would not be binding to third parties. Let’s say that you bought a movie and I came over to your place to watch it, then proceeded to make a movie of my own with a very similar plot. Even though I am in essence copying this movie, I could still not be held legally liable as I am not a signature on the “no copy” contract. As a practical matter, such a method to reduce free riders may prove to be ineffective.

 

Am I just supposed to let everyone copy my work now?

Not necessarily. The only actions prohibited to you as a means to protect your work from being copied without your permission would be using or threatening physical force against others or their property. Drive-thru movie theaters, for instance, used to attract loiterers attempting to enjoy the show without paying. In response, theaters began installing individual car speakers to prevent free riders from hearing the movie, thus incentivizing them to purchase a ticket. Information held on CDs is protected by the use of elaborate encryption methods and registration requirements to effectively mitigate free riders. Book authors or musical artists still have the advantage of being first to market and can rely upon tours, book signings/readings, and other live performances or merchandising as a way to reap profits. The truth is there are countless numbers of ways in which one can protect himself from free riders without resorting to aggression.

 

References

[1] Hoppe, Socialism and Capitalism, 158.

[2] Kinsella, Stephan, and Jeffrey Tucker, “Goods, Scarce and Nonscarce” (editorial published at Ludwig Von Mises Institute, Auburn, Alabama, August 25, 2010). mises.org/daily/4630.

[3] Kinsella and Tucker, “Goods, Scarce and Nonscarce.”

[4] Murray N. Rothbard, “Justice and Property Rights,” in Property in a Humane Economy, Edit. Samuel L. Blumenfeld (Lasalle: Open Court, 1974), 121.

[5] Stephan Kinsella, “Property Rights: Tangible and Intangible,” in Against Intellectual Property. (Auburn: Ludwig Von Mises Institute, 2008), 10.

[6] Kinsella, Against Intellectual Property, 10.

[7] Kinsella, ibid, 12.

 

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