Based on my comment on this thread:
Re the issue of the prices charged for things like apples etc.–see my post Imagining the Fate of Copyright in a Future World.
Imagine 1000 years from now, if we still have these ridiculous IP laws …. Say you need some music–to play in your department store’s elevators, to go with a scene in a movie, etc.–you can choose between an almost infinite supply of older, public domain work, or pay for a new tune that is still under copyright. That will force new works’ price to be almost zero.
One concern I have is that the IP socialists would at that point come up with a new IP right–basically a renewal of copyright held by someone who “rediscovers” older work forgotten in the almost infinite pile of public domain work. Imagine living in a world where Michael Jackson’s work, or the music of the 70s, had been basically forgotten and lost, a needle in a haystack, surpassed by all the music over the ensuing centuries … then some DJ starts playing it, people rediscover it anew.. shouldn’t he get credit for this? After all, it takes a lot of work to loook thru all the old stuff and find “what to recommend” (a lot of IP law is based on the Marxian labor theory of value, the idea that you should be rewarded if you labor on something, as in the old “sweat of the brow” copyright law doctrine). Shouldn’t the discoverer be rewarded for this? After all, if he’s not, you consumers would never have heard of Michael Jackson, would not have the pleasure of knowing what (free) tracks to play at your party. What’s the harm of awarding the DJ a monopoly? After all, you would never have found that needle in an infinite haystack, so no one is worse off, and everyone is better off. Copyright can never die; it only gets reincarnated. O brave new world! That has such laws in’t!
{ 82 comments }
← Previous Comments
Andras says:
“It might work for a composer…”
who cares? that’s a private issue. unless, of course, music is necessary for the collective – we the people!
“By the way, the cost is not socialized more than any other properties and it is only temporary.”
agreed, but two wrongs don’t make a right. i’m not for the socialization of justice or defense costs either. i disapprove of all socialization of costs.
it’s not wrong or right, it is social engineering, a compromise to avoid the two extremes of Galambos or Kinsella. All homesteadings are similar!
Newson,
If you think I support “labor theory of value” from what I have written, then you are an idiot.
I am talking about exactly the opposite of “labor theory of value”. I am saying value is imputed from the consumer good to the producer goods (using prices) that are related to that consumer good, all the way down to orginal factors of production, land labor and capital.
It is because of this fact that there is a calculation problem in socialism. Whether full blown socialism or IP socialism.
Absent prices there is no way for the producers to direct scarce resources because prices are signals that direct production.
Peter Surda,
When we were arguing on IP on moral grounds, you showed me you didn’t know about ethics. Now with this cost accounting point you are showing me you don’t even know basic economics.
If you think prices form through the practice of cost accounting you have a lot to learn. Unfortunately I dont have time to teach you.
Jay Lakner,
I have written a lot on the ethical foundations of private property but I don’t want to switch arguments here. I can only say that “scarcity” has nothing to do with property rights, which is an ethical issue. “Scarcity” is a concept about economics.
Regarding the calculation argument.
You are confusing prices of IP and prices of suplementary factors.
Right now, Shakespeare’s works are public domain. Which means regarding IP it is free.. But still there are books being published and sold. So there is a price for a certain reproduction of “Hamlet”.
But the price of the said “Hamlet” reproduction doesn’t include any signal regarding the actual IP. It sends signals regarding the quality of the print, or maybe the marketing effort or the distribution network. But the price of IP regarding Hamlet is ZERO.
When IP socialist claim, there are other ways of making money with this IP stuff, they are actually right. There are ways. But since people pay for different things regarding these ways, there still is no prices for IP thus signals.
A live concert fetches price, but it is the price of the live performance and nothing else. If anyone can sing a certain song and two bands do give live concerts singing the same song, what do you think is the thing that separates these two concerts giving them value? It is not the song but the performance. Even if the song has something to do with total value of the concert, there is no way know how much since the song by itself is worth zero.
So the calculation argument stands.
If there are no property rights regarding IP, there can not be exchanges of IP. If there are no exchanges there are no prices for the IP. and if there are no prices there is no way to direct the scarce resources that are needed to produce them.
Kerem,
The price is for the transmission of the story, via recording, spoken word, re-enactment, or dead tree scrolls. The price is based the vector of communication which entails labour or scarce goods.
A teacher does not teach ideas owned by others, and he is not remunerated for the “theft” of those ideas, but rather for their transmission and explanation, which are acts of labour.
You’re half right. There are no property rights regarding IP. But that does not preclude exchange of labor or the IP manifest in physical, scarce and unique property.
Or rather, if there are exchanges, what is being exchanged is not IP, but labour or scarce, unique and tangible property. Without the communication vector, there is no IP. There are only thoughts in your head, no different than the thoughts you have about the smell of a rose, the sight of a sunset, or the taste of a delicious meal.
I have shown this to be completely false.
I’ve been a libertarian theorist for a few years now, and I got the against-IP argument immediately, because it is common sense, it is rationally coherent and it is defensible within a framework of libertarian ethics.
It boggles my mind that people still struggle with it. Objectivists, well, that’s a different story. You guys live in a la-la dreamland right next door to the Rothbardian natural rights crowd.
In fact, the truly radical position is the one that supports arbitrary claims against the property of others, typically through state violence. That is the outlandish and indefensible position in my opinion.
@Kerem Tibuk:
While I don’t think you’re a troll like Silas, you still miss some obvious things.
Before you can bring up the ethics argument, you need to describe the rules that demarcate ownership. You use the term “copy”, yet stopped there and have not explained how to determine copying, besides “it’s obvious”. You need to specify where on the causality scale you draw the line. So, how about you explain, in your opinion, the difference between causality and copying?
With regards to cost accounting: that is the base of economic calculation argument. Cost accounting explains how businesses make decisions. You fail to understand that.
> If there are no property rights regarding IP, there
> can not be exchanges of IP.
Of course they can. You use the term “property rights” in two distinct meanings, creating a sentence that has no logical value, just like Silas. You may disagree with my assertion that the right to exclude is not necessary, but you cannot deny that the right to exclude is not causally related to exchanges of the product. Just because you decide to draw the property line differently than me does not mean that those extra parts magically gain all features of actual property.
Peter Surda,
What you don’t understand about “calculation argument” is, Mises was not talking about a single firm and its calculation regarding accounting. Jay Lakner made the same mistake and I called on it.
What you are talking about is technical process with given cardinal numbers called money prices.
Mises is talking about the formation of those “given cardinal numbers called money prices” that you would need to be able to do simple arithmetic. He is saying prices can not form absent private property thus, even if you wanted you would have no input regarding accounting.
Also in real life from the point of an individual person or firm, finding out the sale price might seem simple an technical. You find out about the cost of factors of production in money prices, you add them up and add a profit. Or you may even look at the competitor and copy his prices, up or down a little.
This process may confuse a lot of people who doesn’t know economics. And it already did. Until the marginal revolution, everybody thought the costs determined the price. And labor theory of value is also based on this fallacy. But of course they didn’t have an answer to the question, where does the prices of the production goods come from.
The fact is value is imputed from the consumer good to the production goods, via money prices. Yes, on an individual level a person decides how to price a certain good, but there is a reality called the market which is a reference point. If the individual fails to price the product according to the market price he is out of business. If it was as simple as you think it is, a simple accounting, nobody would go out of business.
DixieFlatline,
I don’t understand your point, since you mix your assumptions on IPs legitimacy regarding property and economics. I will try to expand my argument.
Hamlet is a pattern of words produced by William Shakespeare.
And as of now this pattern, which I will refer to as IP from now on, is unowned. Public domain. It is free. Anyone can use these pattern as he wished. If IP socialist got their way and abolished all copyright laws and private property rights regarding IP, every play or novel would be treated the same way as Hamlet.
Now, there are lots of reproductions of Hamlet. And they fetch a price. But the price of the pattern is not included in these prices. Other things are, but there is no price for the pattern itself.
So whatever the prices of this consumer good, reproduction of Hamlet, it doesn’t relay any signal regarding the pattern. It only sends signal regarding the print quality, distribution network, etc. These signals are useful regarding book publishing, no doubt. But these prices of Hamlet reproductions have no price signals regarding the pattern itself.
Shakespeare is dead of course. But lets imagine that he was alive, and the reason the pattern can not fetch a price is IP rights are abolished.
In this case, Shakespeare would have no way of receiving signals regarding the pattern (other people that participated in the book production would receive signals but not Shakespeare).
Since he has scarce resource regarding production he has only certain options. He can either write dramas, or comedies or not write at all but go and work as a carpenter, etc. Since the product of his labor has no price, the price of his labor can not be calculated. Therefore absent IP rights, all the production IP would be a hobby or a very primitive industry.
Also the same is true in the event that a publisher got in the middle and assumed all the risk and paid Shakespeare upfront. Then the problem would be the publishers instead of Shakespeare but there would still be a problem. There would be no signals either directing Shakespeare or the directing the publisher that would eventually had to direct Shakespeare.
Notice, this has nothing to the with the motivation of Shakespeare to keep writing because he can not enjoy the fruit of his labor. That is the genius of Mises argument. Even if Shakespeare was a selfless being, the perfect socialist man, a slave to the society, he wouldn’t know what to do with his time.
@Kerem Tibuk
I see that you still don’t comprehend how cost accounting works. You assume that it is only used in the technical aspect of accounting. But that’s incorrect. Cost accounting is also used to determine what and how to produce and thereby facilitate business decisions. And that closes the circle of the economic calculation argument. Without markets, the prices in calculations are missing and the businesses can’t determine consumers’ desires (outputs) and their own ability to satisfy them (inputs). They have to supplement the market prices for other values and that decreases the precision of calculations.
Now, there is nothing wrong with supplementing market prices for other inputs per se. Cost accounting does it a lot. Often the costs of gathering the precise information outweight the gains that it might produce, and mathematical formulas are used instead to either determine the price or to assign costs to outputs. Often it is physically impossible (or irrelevant from business perspective) to break up the costs of inputs into individual parts. IP, on one hand, might help to establish a closer relationship between inputs and outputs and allow for certain businesses to increase the precision of cost accounting. But it also increases the price level and volatility of the inputs, potentially outweighting the gains described in the previous sentence.
You bringing up the marginal revolution misses the point. You think that it means that there is some objective “value” of the outputs. But value is subjective. That is one of the contributions of the austrian economic theory. I think you repeated one of the errors of the labour theory of value, it also assumes that the value is objective.
Furthermore, you are inconsistent in your claims with regards to prices of immaterial properties. On one hand, you claim that they are impossible without IP, on the other hand you admit that they are there but merely work differently.
Plus, you do not confront the difficult objections. You have not replied to Jay Lakner’s list of potential copyright violations, you have not replied whether my book summary refers to Harry Potter or Ender’s game. You have not explained how exclusion is causally related to market functions, and what the difference between causality/externalities and copying is. Without those, your theory is full of gaping holes.
Peter Surda,
This is the last response I am going to write to you regarding calculation argument, because either you can not comprehend it, or you are just trying to muddy the argument by introducing irrelevant concepts.
Cost accounting has nothing to the with the calculation argument. It is irrelevant.
No one, even the full blown socialist do not deny the need for accounting so it is a red herring. If some poor soul would argue that there was no need for accounting, maybe your mumblings would make sense. But there is no disagreement there.
The question is not if cost accounting is needed or not, the question is whether it is possible without private property or not.
And the answer is, it is not.
So if you abolish private property rights regarding IP, there is no way to direct production because no calculation regarding the production of IP is possible.
It is as simple as that…
@Kerem Tibuk:
- you confuse accounting with cost accounting
- you incorrectly assume that just because you chose to apply the label a good “property”, it automatically gains features of other goods that are property. This is a fallacy of composition, see http://www.nizkor.org/features/fallacies/composition.html
- you dodge difficult questions
Peter, Dixie–great comments. You should see the complete irrationality of the Objectivists on display in On Intellectual Dishonesty, Relativism, and Subjectivism, in their attacks on me, Mises Institute, etc.
You guys should weigh in over there. SK
Kerem Tibuk wrote:
**********
If there are no property rights regarding IP, there can not be exchanges of IP.
**********
False. You do not need to have “intellectual property rights” in order to exchange ideas and patterns. That is the nature of information.
Person A has a good idea.
Person B desires to know that idea.
Person A offers to release the idea for $X.
Person B values the idea more than he values his $X.
An exchange is made.
Person B now has that idea.
Person A also has that idea.
As the idea is transmitted from person to person, its price reaches zero because it is infinitely reproducible.
Hence ideas have a constantly declining price which eventually reaches zero.
**********
If there are no exchanges there are no prices for the IP. and if there are no prices there is no way to direct the scarce resources that are needed to produce them.
**********
The only important price is the initial price of an idea since the value of every idea rapidly declines to zero.
Now, you have made the assumption that we need to stablise the price of an idea in order to be able to direct the scarce resources to produce an idea.
But we cannot produce an idea which has already been produced. Therefore, artificially setting prices for existing ideas has no affect on our ability to direct scarce resources towards the production of new ideas.
If we erect a system of IP laws, all we succede in doing is altering the magnitude of the initial price of an idea and changing the nature of its price depreciation.
Mises’ calculation argument only affects scarce resources. A physical object is scarce and its price is determined partly by this scarcity. Once a physical object is produced, it cannot be duplicated infinitely. Producers use prices to determine how many resources need to be directed towards producing this object.
An idea is produced once, and only once. After that, no more resources need to be directed to the production of that idea. There is no need for the idea to have a price because the idea no longer needs to be produced.
All an idea needs to have is an initial price.
Assigning ownership of an idea to an individual therefore has no effect on calculating how many scarce resources should be directed into further production of this idea.
Even if you think it’s fallacious, do you at least understand the argument I making here?
This debate should go to kinsella.org.
Mises is spinning in his grave!
Andras, excellent idea. I’ve noticed how aside from AGW, IP discussions generate many times more discussion than anything else on this blog, and every discussion about IP always falls back into the same ruts. It would probably be considerate to move the bulk of it to Kinsella’s blog, especially the discussions which center on Mr. Kinsella himself.
Kerem,
And that is the problem. My point is incredibly simple, and you do not understand it.
What is being exchanged, is the costs of exchange. The opportunity costs of sharing an exclusive idea, the labour costs of the act of negotiation and transmission, and the overhead costs of the vector materials (if there are any).
This is why people pay for Hamlet in book form today, even though the arbitrary IP monopoly has lapsed. They are paying for the content, not the idea which is already available in other forms (such as online) for (relatively) free.
Until you can distinguish between property, and non-property, such as the way you perceive the smell of a rose (an olfactory pattern), you’ll continue to chase your tail on this topic because your premises are flawed.
Now that I have further explained my position, you’re welcome to assault it if you feel it lacks merit.
I didn’t read the balance of your comment, so I won’t be commenting on that. We really need to go back to first premises on this, because that is where the errors lie in nearly all such arguments.
@NSK,
Dude, I’m out in the worst economy in decades trying to make bank. I saw Kerem and some long winded Objectivist rambling on about the same, old, tired, backwards positions, and just can’t summon the energy to be your cavalry reinforcements.
These folks all get to vote, they all think they have a right through the state to control your property, even the Objectivists. They are incredibly dangerous. In our lifetimes, we cannot protect ourselves from their bad ideas, simply because there are too many to convert, and too much bad propaganda working against us.
So what we can do is gather nuts for the winter, and when these IP monopolists come for their rent seeking armed to the teeth,and threatening to jail us in rape rooms, we can pay them off, before they use violence against us for having a similar idea as them, only later, unregistered or slightly different.
It is almost impossible to discuss these topics with anyone who thinks that the state, in any way, constitutionally or democratically is legitimate. And I will bet dollars to cents, the IP monopolists in this thread, are also able (and anxious) to justify war, taxation, and the security/legal monopoly.
Monopolist is as monopolist does.
Kerem Tibuk wrote:
**********
In this case, Shakespeare would have no way of receiving signals regarding the pattern (other people that participated in the book production would receive signals but not Shakespeare).
Since he has scarce resource regarding production he has only certain options. He can either write dramas, or comedies or not write at all but go and work as a carpenter, etc. Since the product of his labor has no price, the price of his labor can not be calculated.
**********
I’ll try and further elaborate on my point since I’m not sure if I explained it well enough in my previous post.
The “price” of any particular intellectual work cannot direct Shakespeare as to what to spend his time on.
Intellectual works are independent of one another. The price for “Romeo and Juliet” gives Shakespeare no signals as to the price of “Romeo and Juliet and the Temple of Doom”.
Any price that can be established for “Romeo and Juliet” can only be used to calculate the production of “Romeo and Juliet”.
But “Romeo and Juliet” has already been created. You don’t have to go through the process of creating it again, ever.
Compare this to physical property such as the price of a pair of shoes. The price indicates what consumers are willing to pay and this enables us to calculate how many resources to direct into the production of additional shoes of the same type. I cannot use the price of shoes to calculate the profitability of producing chairs
Similarly, the price of “Romeo and Juliet” indicates what consumers will pay for “Romeo and Juliet”. But this price cannot be used calculate anything other than going through the entire process of re-creating “Romeo and Juliet” from scratch. Also, the price gives Shakespeare no indication as to how to direct his resources into his next intellectual work because he won’t know the price of that work until after he finishes it.
It’s pretty clear that Stephan Kinsella is advocating for the abolition of IP to justify Rothbard’s anti-intellectual, anti-capitalist act of plagiarism. Kinsella’s communistic/collectivist proposal has no room in our civilized world. The world has achieved phenomenal success because of this legal principle and the philosophy of Aristotle which is the basis of America’s Constitution. IP exists even in socialist countries because the free-market system compels the socialists to respect rational standards. China joined the WTO in 2001 after it vowed to recognized rational principles like IP right, property rights, among others.
Suppose you have discovered a cure for cancer and AIDS, under Mr. Kinsella’s collectivist terms everybody who did not share your hard work and who did not spend so many years of labor, money, energy and efforts could simply loot the product of your own mind. Under the terms of Mr. Kinsella, everybody has the right force Bill Gates, Apple, and the inventors who worked hard just to profit from the products of their mind and ability. This simply shows that anarcho-capitalism is anti-individualism and is part and parcel of collectivism. It is a prelude to everything that a rational man should be afraid of. It is anti-man and anti-capitalism at best. Kinsella’s proposal and his anarcho-capitalism will only lead to a mob rule wherein only the potential dictators and the mystics can have an advantage over rational men.
Kinsella’s anti-capitalist/collectivist proposal suggests that man is a slave and that men have the right to the property and the product of the minds of other men. That man is compelled by some sort of social contract to share his property and the products of his mind to his fellowmen. The philosophy behind his proposal is “man is his brother’s keeper.” This simply means that anarcho-capitalism is gateway to various kinds or derivatives of collectivism. The axiom of Kinsella’s proposal is this Marxist credo– “FROM EACH ACCORDING TO HIS ABILITIES, TO EACH ACCORDING TO HIS NEEDS.” Ergo, Kinsella’s proposition is the best mystical tool for the looters and the moochers who only rely on the ability and energy of thinking men. Yes, Mr. Kinsella, you are a closet collectivist. You’re a collectivist but you just don’t know it.
Note: This is my reply to Mr. Kinsella…
http://fvdb.wordpress.com/2009/12/08/on-intellectual-dishonesty-relativism-and-subjectivism/
Froilan Vincent Bersamina wrote:
**********
It’s pretty clear that Stephan Kinsella is advocating for the abolition of IP to justify Rothbard’s anti-intellectual, anti-capitalist act of plagiarism.
**********
So Stephan Kinsella’s conclusion of the illegitimacy of IP, which was logically deduced from sound starting assumptions, is really just one big ploy to exonerate Rothbard of some alleged plagarism many years ago?
Possible? Well anything is possible.
Probable? No.
“Pretty clear”? Definately not.
**********
Kinsella’s communistic/collectivist proposal has no room in our civilized world.
**********
To conclude that intangible things cannot be classified as a form of property is certainly not a collectivist proposal, especially since it was derived from starting principles which honor the sanctity of the individual.
**********
The world has achieved phenomenal success because of this legal principle and the philosophy of Aristotle which is the basis of America’s Constitution.
**********
There is no way of knowing whether the world would have achieved less success absent of IP. In fact, the world could have achieved more success. We just don’t know. Hence your conclusion is highly illogical.
**********
IP exists even in socialist countries because the free-market system compels the socialists to respect rational standards.
**********
Socialism is a system which places restrictions on what individuals are entitled to do with tangible goods. IP places restrictions on what individuals are entitled to do with tangible goods. IP is therefore a form of socialism.
Hence your explanation for IP presence in socialist countries is highly illogical.
**********
Suppose you have discovered a cure for cancer and AIDS, under Mr. Kinsella’s collectivist terms everybody who did not share your hard work and who did not spend so many years of labor, money, energy and efforts could simply loot the product of your own mind.
**********
Your use of the word “loot” automatically implies that an intangible entity is a legitimate form of property. You need to demonstrate this first. Furthermore, your reasoning implies that cures for cancer and AIDS, despite the fact that they are infinitely reproducible, should not be immediately available to everyone but only a select few. If you were trying to make some sort of moral argument, you failed dismally.
**********
Under the terms of Mr. Kinsella, everybody has the right force Bill Gates, Apple, and the inventors who worked hard just to profit from the products of their mind and ability.
**********
Under the terms of Mr. Kinsella, Bill Gates/Apple/investors can no longer use force on individuals to prevent them from using their own physical property in non-aggressive ways.
**********
This simply shows that anarcho-capitalism is anti-individualism and is part and parcel of collectivism. It is a prelude to everything that a rational man should be afraid of. It is anti-man and anti-capitalism at best.
**********
This conclusion does not follow from your previous comments.
Rational man should be afraid of coercive organisations that initiate force against him.
You propose that there needs to exist a coercive organisation that initiates force against man.
It is your views that are anti-man and anti-capitalism.
**********
Kinsella’s proposal and his anarcho-capitalism will only lead to a mob rule wherein only the potential dictators and the mystics can have an advantage over rational men.
**********
If you believe that a state-less society necessarily must produce inadequate protection you need to explain, from fundamental principles, why.
There has been a lot of work done in the area of the private production of protection and it clearly shows that your above conclusion needs to be justified.
**********
Kinsella’s anti-capitalist/collectivist proposal suggests that man is a slave and that men have the right to the property and the product of the minds of other men.
**********
You have it backwards.
IP laws place restrictions on what man is entitled to do with their own property. Hence is it IP laws that enslave man.
Tangible things needs to be labeled property because of their scarcity. Multiple individuals can’t use the same tangible thing.
Intangible things are not scarce. They are infinitely reproducible. Multiple individuals can all use the same intangible thing. By labeling intangible things as a form of property, you are limiting the freedom of man.
Froilan Vincent Bersamina, it is your anti-capitalist/collectivist proposal that truly suggests man is a slave.
**********
That man is compelled by some sort of social contract to share his property and the products of his mind to his fellowmen.
**********
He doesn’t have to share the products of his mind. He can keep it a secret. But if he does decide to reveal the product of his mind, and it enters into another mind, to claim he still has ownership of that idea is to claim partial ownership of another man’s mind.
**********
The philosophy behind his proposal is “man is his brother’s keeper.”
**********
Assigning property rights to intangible materials inhibits the freedom of man. One man must refrain from employing the most efficient means to achieve his ends purely because another man says so.
It is the pro-IP position that is more in line with the above quote.
**********
This simply means that anarcho-capitalism is gateway to various kinds or derivatives of collectivism.
**********
The anarcho-capitalist position is that every individual is entitled to use his/her property in any way they wish as long as they are not negatively infering with another individual’s property.
I don’t know what definition of collectivism you’re using, but it certainly doesn’t in any way describe anarcho-capitalism.
**********
The axiom of Kinsella’s proposal is this Marxist credo– “FROM EACH ACCORDING TO HIS ABILITIES, TO EACH ACCORDING TO HIS NEEDS.” Ergo, Kinsella’s proposition is the best mystical tool for the looters and the moochers who only rely on the ability and energy of thinking men. Yes, Mr. Kinsella, you are a closet collectivist. You’re a collectivist but you just don’t know it.
**********
This is just nonsense propaganda. It is slander and completely false.
Froilan Vincent Bersamina, your entire post is an emotionally charge piece of propaganda full of false assumptions, unjustified statements and illogical conclusions. If you think it will have any effect on the readers of Mises.org, then you are much mistaken.
If you truly think your opinions are correct, then you will need to demonstrate them with sound reasoning from fundamental principles through to logical conclusion.
if anarchists are against the socialization of all costs, including law and order, how can anyone in good faith accuse them of being socialists? this, of all the slurs, is the most ridiculous.
you want to share? go ahead. you don’t want to? fine, put up a fence and buy a pooch. but don’t bully the neighbours into paying for palings and dog-food.
Jay Lakner,
“False. You do not need to have “intellectual property rights” in order to exchange ideas and patterns. That is the nature of information.
Person A has a good idea.
Person B desires to know that idea.
Person A offers to release the idea for $X.
Person B values the idea more than he values his $X.
An exchange is made.”
The assumption in this mental construct (the calculation argument) is, patterns are not private property. Thus they can not be exchanged for anything. You are changing the assumption in the middle of the argument.
If ideas can not be owned, person A can not own the idea and act whatever is implied by “ownership” regarding the idea. If you claim he can exchange the idea with Person B this means you concede to the fact that Person A owns the idea, hence idea being Person As property.
“Person B now has that idea.
Person A also has that idea.
As the idea is transmitted from person to person, its price reaches zero because it is infinitely reproducible.
Hence ideas have a constantly declining price which eventually reaches zero.”
So? Apples can be produced so abundantly that apples can have declining prices that eventually reaches zero. What has this have to do with anything?
IP can be property or not. You are treating IP as property, but with quickly increasing supply, thus decreasing prices.
DixieFlatline,
Your comments make no sense to me at all. Are you really responding to me?
“Until you can distinguish between property, and non-property, such as the way you perceive the smell of a rose (an olfactory pattern), you’ll continue to chase your tail on this topic because your premises are flawed.”
This argument is not about distingusihing between property and non property.
This argument is a mental construct where there are two possible cases. Either IP is property or not.
This calculation argument starts with the assumption “IP is not property”. And it shows that when IP is not property, no sophisticated production where there is division of labor is possible.
@Kerem Tibuk:
> The assumption in this mental construct (the
> calculation argument) is, patterns are not private
> property. Thus they can not be exchanged for
> anything. You are changing the assumption in the
> middle of the argument.
The issue here is with using the term “property” in two distinct meanings. Even IP opponents posting on this site have no problem with the claim that the originator’s instance of the idea belongs to him. That is sufficient for our claims to be correct. But your claim is that if the originator is not in control of other peoples’ instances (copies) of the original one, all hell breaks lose. This is the fallacy of composition that I was talking about earlier: you claim that if the originator’s ability to control his instance is prerequisite for something (e.g. calculation, ethics, profit, …), it also means that his control of other instances is a prerequisite for the same thing. This is a simple logic error.
> If ideas can not be owned, person A can not own
> the idea and act whatever is implied by
> “ownership” regarding the idea.
Even if ideas cannot be owned (I do not claim this is correct, I am just assuming it for the sake of argument), the originator of the idea can still own his instance(s) of that idea. As it has been said many times before, not only by me but also in the B&L book and probably other contributors on the site, you cannot use or trade immaterial goods directly. You can only do that with their manifestations (even if the manifestation is just a change of neural pathways in your brain).
Kerem Tibuk wrote:
**********
This calculation argument starts with the assumption “IP is not property”. And it shows that when IP is not property, no sophisticated production where there is division of labor is possible.
**********
I’ve already debunked this. The price created by granting ownership of an idea can only be used to calculate the re-creation of that one specific idea. It gives no indication as to the price of uninvented ideas. Hence there is no calculation problem.
Peter Surda,
“The issue here is with using the term “property” in two distinct meanings. Even IP opponents posting on this site have no problem with the claim that the originator’s instance of the idea belongs to him.”
Well, that is their contradiction.
“That is sufficient for our claims to be correct.”
No it isnt.
“But your claim is that if the originator is not in control of other peoples’ instances (copies) of the original one, all hell breaks lose.”
“The control” depends on other peoples actions. Thus this issue (property issue) is an ethics issue. Crusoe would have no problem regarding “the control” this pattern ob his island. When Friday comes, ethical dilemma starts. Friday has to make a choice. Is he going to respect Crusoe’s control or not. If there are two choices and the agent, Friday, can distinguish between them then this is an ethical dilemma.
“This is the fallacy of composition that I was talking about earlier: you claim that if the originator’s ability to control his instance is prerequisite for something (e.g. calculation, ethics, profit, …), it also means that his control of other instances is a prerequisite for the same thing. This is a simple logic error.”
Fallacy is yours my friend. You have to learn what ethics is first.
And this was not an ethics discussion but an economic one.
Peter, ask yourself. If you had a contradiction-free sound theory, why would you need to try to muddle and confuse every argument?
Jay you haven’t debunked anything. The fact is you don’t know economics and you proved this to be so in your latest remark.
Please go and ask advice from other IP socialists that at least knows basic economics. There are a lot of them in this site, and somehow they refuse to engage in this calculation debate.
If only people with no knowledge of economics get in the argument regarding this calculation problem of IP socialism, that must tell you something.
fv bersamina says:
“It’s pretty clear that Stephan Kinsella is advocating for the abolition of IP to justify Rothbard’s anti-intellectual, anti-capitalist act of plagiarism.”
rothbard wasn’t against copyright, just patent. even those on this site who dislike rand are familiar with her views. would that you reciprocate.
jay certainly is owed several hundred dollars for his time and sweat in these long postings. but how to calculate what his time is worth? ktibuk too, qualifies for a payout. now how many jays goes into one ktibuk?
that is the calculation problem.
>> The issue here is with using the term “property” in
>> two distinct meanings. Even IP opponents posting
>> on this site have no problem with the claim that the
>> originator’s instance of the idea belongs to him.
>Well, that is their contradiction.
No, it isn’t. Claiming that immaterial goods can be owned is different from claiming that manifestations of immaterial goods can be owned. The IP opponents on this site have shown many times, using different approaches, that owning the manifestations is completely consistent with the notions of markets, economic calculation, ethics, and in order for those to work.
As I explained before, once you assume that immaterial goods can be owned, you need to determine their boundaries. You keep claiming that these boundaries are evident and natural, yet avoid the opportunities to show how to determine these boundaries even in extremely simple cases. Without boundaries, there is no property.
> “The control” depends on other peoples actions.
What are you talking about? You cannot control immaterial goods, only their manifestations.
> When Friday comes, ethical dilemma starts.
> Friday has to make a choice. Is he going to
> respect Crusoe’s control or not.
But you extend the control issue into immaterial area. Just like you can’t control reputation, honour, love and value, you can’t control ideas. These are only concepts that exist in people’s minds. In order to control them, you would need to control people’s minds. That requires ownership of other people (slavery).
> Fallacy is yours my friend.
Where exactly is my alleged fallacy?
> You have to learn what ethics is first.
You have not addressed my objection. Logic trumps ethics.
> Peter, ask yourself. If you had a
> contradiction-free sound theory, why would you
> need to try to muddle and confuse every
> argument?
How about you start confronting arguments? You have demonstrated a lack of comprehending of simple logic operations, understanding of the economic calculation argument and applicability of your own theory on simple occurences of everyday life. You have been provided with many opportunities to do so and while you pointed out some contradictions in your opponents’ arguments, the difficult ones remain ignored.
Kerem Tibuk,
Did it ever occur to you that the reason why others haven’t weighed in on this argument is because you have no argument?
Or perhaps that the others have tried to argue with you in the past and know from experience that the process is akin to banging one’s head against a brick wall?
Either way, I can fully appreciate their position.
Usually when I fail to get my point across I blame my own lack of communication skills. I am not a writer and I sometimes misword things or explain things in a confusing way. But in your case I’m beginning to think that the problem might be you, rather than me. However, I am going to try one last time.
You wrote:
**********
If there are no property rights regarding IP, there can not be exchanges of IP. If there are no exchanges there are no prices for the IP. and if there are no prices there is no way to direct the scarce resources that are needed to produce them.
**********
Your argument seem to rest on your belief that an item must be ‘property’ in order to have a price.
This is true for tangible goods and indeed there will be calculation problems if tangible goods do not have an owner attached to them.
However, this is not true for intangible goods. Due to the nature of intangible goods, ‘possession’ is a sufficient prerequisite for exchanges, and therefore price.
Let me use a simple example. I may be in possession of the knowledge of how to build a fire by rubbing two sticks together. I do not own this intangible entity and hence it is not my property. However, it is in my possession. Others may wish to obtain this information and be willing to pay a price for it. True, the price reflects the labor I expend teaching this information, but a component of that price is the intangible good itself. If the intangible good is common knowledge, then this component will be very small. If the intangible good is uncommon, then this component will be large.
Why is only possession required for intangible goods while tangible goods require ownership? It’s due to the specific differences between tangible and intangible goods. In fact there are two key differences between tangible and intangible goods that explain this.
1. An exchange of tangible goods is a zero sum game. The trader has to relinquish his possession of the item in order to pass possession of that item to another. An exchange of intangible goods is not a zero-sum game. In fact, giving another individual possession of an intangible good duplicates that intangible good. When one individual communicates an intangible good to another, it multiplies and becomes a possession of both the trader and the tradee.
2. Tangible goods can be modified, damaged, consumed, destroyed, etc. While someone can possess a tangible good, they need to own that tangible good to have the right to alter it in any way. Intangible goods cannot be modified, damaged, consumed, destroyed, etc. In fact, any modification to an intangible good multiplies it into a new intangible good while in no way harming the original.
It is the limited supply and fragility of tangible goods that leads us to label it as property. If it is everybody’s property but in your possession, and you alter it in any way, then everyone else may object. However, the infinite supply and indestructibility of intangible goods means that there is no possible way you can negatively affect others through modifying it. (Afterall, it can’t be modified)
That is why possession is the only prerequisite for the exchange of intangible goods, while outright ownership is required for the exchange of tangible goods.
On a side note, I hope you noticed that the above two differences can be summed up by one simple statement: tangible goods are scarce.
Now let’s get to the topic of economic calculation.
The calculation problem, as applied to tangible goods, is simple:
If there is no ownership, there are no exchanges.
If there are no exchanges, there are no prices.
If there are no prices, then producers do not receive the signals necessary to direct production.
Does the above reasoning apply to intangible goods? No.
Since possession is all that is required for exchanges (and therefore prices) of intangible goods, there is no need to assign ownership to intangible goods.
Hence, there are no calculation problems in the absence of IP laws.
← Previous Comments
Comments on this entry are closed.