Forbes recent published a symposium entitled Blank Slate. Its purpose was to inject a relatively thought provoking reform-minded discourse into various areas of modern civilization such as higher education and prisons. Interestingly enough, one author notes the double-sided, hypocritical stance some advocates of free-markets have on monopolies and specifically patents:
The sole point of a drug patent is to outlaw a free market in the production of a new drug for 20 years, thus ensuring far higher drug prices than a competitive market would ever allow. This ugly bargain is well-meaning—those monopoly profits motivate inventors to discover wonderful drugs that will prolong and enrich our lives But that doesn’t change what the patent system is: a blunt, market-distorting tool that the government uses to manipulate private behavior.
Unfortunately the author’s prescription for change involves a prize-reward mechanism managed by the State. Market intervention begets yet more market intervention; they caused the problem in the first place and are now called into action to fix it. A History of Folly indeed.
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*burying face in palms*
Brian Drum: Yes, people pay for books whose informational content is public domain. In that case, they are buying it to have a physical copy, and all of those attendant benefits, not just to access the information. In those cases, the disparate publishers compete on physical quality of the book, readability, etc. Those will continue to be published and people will still buy them. No one disputes this.
The problem is with *new* books (new informational content). In that case, one publisher will pay an author for his work. They then have to produce the physical book and market it. In the absence of IP, their competitors can take that same informational content, and produce it, without having to pay the (significant) cost of hiring an author. They can then easily outcompete the publisher that paid the author. Ergo, it doesn’t pay to produce informational content, since someone can easily “rip you off”. Ergo, the incentives to do so plummit.
You now know what everybody else already knows before debating intellectual property. I hope this explanation has brought you up to speed.
Person, their competitors can [will] produce it, without having to pay the (significant) cost of hiring an author.
The fallacy of coincidence equalling causation again.
The present environment of large publishing houses (record labels, movie studios, etc) pre-paying authors (producers, musicians, etc) is simply speculation on future sales in an environment of monopolistic legal IP regulation. Change that environment, such speculation will also change to fit the new environment.
For example, L. Neil Smith has published a book online, for a reasonable price, himself. He gets all the money, directly. He has completely bypassed every argument you have against repealing monopoly IP regulation.
My other example, that by posting the text for free the Mises Institute has increased the sales of expensive books, directly belies your argument against the viability of publishing freely available content.
By basing your argument for IP laws only on the fact that without them things will have to change, is not an argument at all. Of course things are going to change, and all change is dangerous to those who, like yourself, believe your livelyhood depends upon the status quo.
I only claim that cancer victims are likely to be better at it than patent examiners. And if not better at it themselves, then more likely to hire someone who is. Patent examiners, whether it’s their official purpose or not, direct entreprenuerial resources into different forms of research, but they do so haphazardly and without any regard for the costs.
True, but in the absence of IP restrictions, many existing treatments will be much cheaper and so I will have less need of insurance to pay for them. So their policy better offer me something to justify the premiums.
Is every joint agreement between companies a cartel?
No, the individual importance of the cure to non-freeloaders is exactly the same either way. The only additional “harm” is to those who caused it. That’s a strange thing to worry about.
I think Howland has it right: “For example, L. Neil Smith has published a book online, for a reasonable price, himself. He gets all the money, directly. He has completely bypassed every argument you have against repealing monopoly IP regulation.” and: “By basing your argument for IP laws only on the fact that without them things will have to change, is not an argument at all. Of course things are going to change, and all change is dangerous to those who, like yourself, believe your livelyhood depends upon the status quo.”
The State grants IP protections for the benefit of The State. Free Association can cure any ill, if we are so inclined. Franklin showed us as much with his “Green Tree” Insurance schema that provided Fire protection services to its members. A situation, that today, is widely believed to be “impossible” w/o State intervention.
As a matter of fact, the mutual insurance company platform is probably the best organization to tackle a great many issues: everything from education, police, fire protection and mail delivery to roadways, merchant marine, and space exploration can and should be tackled by the Free Market with no need from a hypothecated State.
Have we become so successfully infantilized that we are left arguing how best the State should regulate us? as opposed to understanding that we best regulate it?
Freedom is a dangerous business, and Liberty can be a corrupting vice, but no trade of either will increase our Security, or multiply our bounty. Nothing can come from without that isn’t already within. The idea that there exists a munificent State that somehow, by its very existence, makes us better neighbors is a Myth that shares a proper seat within the Pantheon of Greek lore.
Apparently, it is absolutely amazing (if not proof of alternate universes) that GM, Toyota, and Honda make new models each year, spending millions of dollars in research and design, in the absence of model patents. Ditto for Sony and Sanyo with Tvs.
There is such a thing as branding, even if you are intentionally ignoring the elephant in the middle of the room. In a market with no FDA, where the products are so high risk/high reward, brand reputation would be PARAMOUNT. In being the first to develope a pharmaceutical, you will gain brand reliability – look at Bayer, one of the earliest pharmaceuticals. What’s their tagline?
Next, Person, like many who worship the state, underestimate the reality of drug production and marketing. Even knowing what a pill is made of, it takes ALOT of work to make something that has the same bioavailability profiles, just to mention one aspect of drug product design, without getting into the even more complicated raw material fabrication arena.
Finally, it is true that patents are entirely divorced from market forces. You get the same protection regardless of the products worth. An insurer WILL have an incentive to pay for research into cures, if only to cut costs, even if they’re “stolen” afterwards. And once again, you have the branding issue – are you going to pay more to company A, who will offer a cure 6 months before B (and that would be an absolutely astounding turnaround based on reverse engineering)? For things like cancer, most people will.
And one last bit of reality that the patent worshippers consistently overlook is that charity (or more often government) is the source of “cure” discovery. Large “private” (scare quotes because big pharma subsist at the teat of many states) pharma does not invest much capital in cures – a common term in the industry is “orphan drug”, as the cure will destroy any market. Do you think these companies don’t realize that ED treatments, BP treatments, baldness treatments, and ulcer treatments are their biggest revenue sources? Where do you think they’re focusing their R&D? The true breakthroughs in the “cure” arena come from charitable or government funded discovery, which is then sold to big pharma to run the FDA gauntlet and market. Subtract the state, and the same will be true – charity will fund most of the big breakthroughs.
I had thought that state-granted IP rights are necessary and helpful on the balance, but am reconsidering. The biggest practical problems are that, (i) in the case of copyright, IP holders successfully seek rents by winning eternal extensions for copyrights that should long ago have expired, (ii) the patent office is understaffed and, facing huge numbers of highly technical applications, are granting patents for ridiculous things, and (iii) it is possible for some to obtain patents that are overly broad but not used, allowing a holder/purchaser of the patent to extort royalties from active companies that had developed their own technology that is later claimed to infringe an unused patent.
I had also thought that some degree of patent protection is appropriate for pharmaceuticals, given the huge R&D costs and the relative ease of making a generic.
Curt: The fallacy of coincidence equalling causation again. The present environment of large publishing houses (record labels, movie studios, etc) pre-paying authors (producers, musicians, etc) is simply speculation on future sales in an environment of monopolistic legal IP regulation. Change that environment, such speculation will also change to fit the new environment.
Correct. But I’m interested in knowing if, even in the hypothetical, there are any market-based methods of making money from production of intellectual works that aren’t completely laughable. That’s what I’m interested in finding out here so I can resolve the tension between my two competing interests (morality of IP vs. consequentialist concerns). Unfortunately, some people, and I’m not going to name any names, consider any such inquiry to be merely representative of them trying to cling to the status quo, or want to aggress against people, or some such garbage.
For example, L. Neil Smith has published a book online, for a reasonable price, himself. He gets all the money, directly. He has completely bypassed every argument you have against repealing monopoly IP regulation.
No, he hasn’t. He still, I believe, asserts copyright over these works. If that’s not the case, and he allows reproduction without any payment to him whatsoever, then those who still “buy” those works from him are, in essence, making charity contributions. And if you think charity contributions are a viable solution to the provision of goods, why don’t you consistently apply this to the entire market and agitate for a gift economy?
My other example, that by posting the text for free the Mises Institute has increased the sales of expensive books, directly belies your argument against the viability of publishing freely available content.
And like I said before in the post of mine that you did read, of course someone more interested in spreading the ideas than making money is going to distribute the intellectual works and not assert copyright. (The physical books they encourage purchase of, do, of course, have copyright protections.) This doesn’t address the production of intellectual works on the market, for monetary gain, however. In other words, it is beside the point. I’m interested in knowing if people will still have *monetary incentives* to produce intellectual works.
By basing your argument for IP laws only on the fact that without them things will have to change, is not an argument at all. Of course things are going to change, and all change is dangerous to those who, like yourself, believe your livelyhood depends upon the status quo.
And now you’ve decided to go below the belt with accusations about my “livelyhood[sic]” being dependent upon IP protections. The idea that someone might have serious philosophical interest in a topic, and be worried about the implications of no IP protections, is, I suppose, foreign to you.
PR :I only claim that cancer victims are likely to be better at it than patent examiners.
With all due respect, now you’re way, way out in left field. First of all, even if that is the choice (it’s not), cancer victims are, on average, ordinary people. Patent examiners are, on average, well-versed in some kind of technology (not necessarily as well as they should be, but far more than the average). If that is how you’re framing the question, you’ve already lost. Second, the only impedence patent decisions would have on research is poor decisions that cut off too much “idea space” that was unjustified by the author’s discovery, so it’s comparing an ideal market to a real alternative, and this thus an unfair comparison. Third, you’re confusing original decisions regarding which path to pursue, with veto power over possible paths. In both cases, entrepreneurs (who you hope to be wholly consisting of people with cancer!), not patent examiners, are making the base-level research decision, so comparing cancer-entrepreneurs (who *originate* research paths) to patent examiners (who veto potential paths) is an invalid comparison.
Long story short, you’ve lost me on this part.
in the absence of IP restrictions, many existing treatments will be much cheaper and so I will have less need of insurance to pay for them. So their policy better offer me something to justify the premiums.
True, but be careful to account for all the changes when shifting to a free market. On the free market, there are many treatments cheap enough not to need insurance, but then that will just mean you will start insuring the ones that are today REALLY expensive. You’ll still find some treatment expensive and desirable enough that you’ll want, and have to insure — trust me.
me:So in other words, not only do you believe cartelization is possible
you:
Is every joint agreement between companies a cartel?
Every joint agreement *that requires all companies in the industry to agree to it in order to be effective* is a cartel, yes. What you proposed — insurers trying to reduce their clients’ risk of dying from cancer by funding research that, once successful, would be freely available to all — does require all health insurers to cartelize, because of they don’t, like I said above, the ones that don’t will poach the customers of the ones that do.
me:But if they hadn’t been born, then the importance of the cure drops as well,
you:No, the individual importance of the cure to non-freeloaders is exactly the same either way.
I’m talking about the imporantance of the cure relative to other, general social priorities. IP rights have the effect of directing investment for cures in proportion to the severity of the malady. If and insofar as there are freeloaders, this connection — which helps to properly allocate resources among conflicting concerns — is severed, and misallocates resources. That was my point.
[in] the absence of IP, their competitors can take that same informational content, and produce it, without having to pay the (significant) cost of hiring an author. They can then easily outcompete the publisher that paid the author
So let me get this straight since I obviously have no idea what I’m talking about:
If this is the situation then what you are in fact claiming is that since A has produced the first available supply of goods instantiating X, A now has a de facto ownership claim on B and all other agent’s property (goods, body, and mind). Now this quite simply violates the NAP since A’s ownership claim is made simply by decree.
Now maybe you accept that such a claim is illegitimate, but yet still maintain that it is necessary in order for A to earn a monetary profit and cover his expenses in hiring B to produce/discover X. But why? How is the situation any different than the production of any other good? Every producer takes a risk in investing factors in the production of a lower order good. Why is not everyone then entitled to an enforceable claim to a guranteed profit?
Any enforcement of A’s claim against C is not only illegitimate from an ethical standpoint, but is also completely arbitrary. How long is A’s ‘claim’ supposed to remain in effect? 20 years? 75 years? 100 years? Any chosesn length of time is completely arbitrary. But wasn’t the reason d’etre of A’s claim to recoup monetary costs incurred in hiring B? Then why does the claim not expire once these costs have been covered? “Oh but surely A is entitled to a return on his investment over and above his costs!” Then will A’s ‘claim’ expire once a ‘fair’ return has been achieved? But what would a ‘fair profit’ be, and who would decide? We have now fallen into a drak abyss of complete arbitrariness.
Now if A’s claim really is legitimate then why should it expire? Should not A or his assignees retain this claim for all time? Would it not be a violation of A’s rights if such a ‘right’ was to extinguish at a later arbitrarily decreed date?
The main confusion in the whole scenario stems from misunderstanding the nature of X and the complete neglect of the fact the all stages of production necessarily occur in time.
In regards to X it must be understood that it is not a physical thing and is not scarce. There is no such thing as a stock of X or a unit of X. Once someone has acquired X, he always has it. And neither does an individual’s act of acquring X reduce the availability of X to all others. What is scarce is the means of acquiring X (i.e. books, lectures, turoring services, a pattern of bits in a computer, etc.). These instantiations are scarce and do become a means to an actor’s end, the end being the acqusition of X. Being scarce goods (the instantiations of X) can thus legitimately become property. It makes no sense to speak of a property right in X beyond a property right in an instance of X.
My final remark is in regards to time. The whole ‘problem’ of the incentive to produce/discover X arises by neglecting the role of time in production. The above scenario can be divided into three broad segments of time:
The mistake being made in declaring that there is no incentive to produce/discover X is the assumption that the length of stage 2 is zero. It is implicitly assumed that somehow, once A has produced his stock that C will be able to immediately produce his own competing stock. With this assumption it is thus declared that no one will invest in creating X since he will be immediately be undercut by C.
But if the realization is made that there is a significant time period in which A is the sole supplier of an instance of X on the market. It is precisely during this period that (assuming instances of X are in demand), A can recoup his investment of producing X and earn an entrepeneurial profit.
There is no need to enforce some arbitrary time period in which A is the sole legitimate producer of instances of X. Such a time period already naturally exists! If A cannot recoup his sunk costs during this time period, then it is his fault! He has made an error. Either he has overestimated the value consumers place on instances of X and paid to much to have X discovered in the first place, or he has underestimated the demand and priced too low or not produced enough stock. The incentive to create X is no different than the incentive to produce any other product. Being the first producer simply involves a bigger risk, and some people will be more successful at such an endeveaor than others.
I should not forget to mention that there are many ways that A can seek to maximize his income during time period 2. As one example he can make it as hard as is economically feasible for C to actually produce his own stock. Such things as copy protection, software activation, etc. are examples of such attempts.
And last but not least it should be noted that for the sake of simplicity I have assumed that consumers consider units of S0 and S1 as units of the same good. If this assumption is discarded then it becomes possible for A to maintain an advantage in the market even during time period 3. This could occur if, for example, consumers consider units of the ‘original’ S0 has more valuable than units of the ‘imitation’ S1.
Sorry for the extremely long post…
quasibill:Apparently, it is absolutely amazing (if not proof of alternate universes) that GM, Toyota, and Honda make new models each year, spending millions of dollars in research and design, in the absence of model patents. Ditto for Sony and Sanyo with Tvs.
These are incremental improvements, not the result of fundamental research. The most important changes involve paradigm shifts, not the year-to-year refinement of previous breakthroughs. Moreover, much of the “innovations” are pioneered by just one firm, not because others aren’t aware of the possibility, but because they don’t want to take the risk that consumers might not want it. These innovations earn a return not so much because they are technological improvements, but because they adequately anticipated market demand. There’s a big difference between “this formula cures cancer” and “this car design accomplishes something drivers may or may not want”.
There is such a thing as branding, even if you are intentionally ignoring the elephant in the middle of the room. In a market with no FDA, where the products are so high risk/high reward, brand reputation would be PARAMOUNT.
Branding is important *now*. If you can prove you are providing the *identical* medical formula for a sliver of the cost, that branding in technologically advanced areas won’t be as PARAMOUNT.
Next, Person, like many who worship the state,
Wow, that was low. I thought I just got done proving my anti-statist credentials on the Carson thread. Instead, I get this innuendo. How about if I said:
“Next, quasibill, like many drunk drivers, opposes random driver testing.”
Let’s see if we can’t be a little more dignified.
underestimate the reality of drug production and marketing. Even knowing what a pill is made of, it takes ALOT of work to make something that has the same bioavailability profiles, just to mention one aspect of drug product design, without getting into the even more complicated raw material fabrication arena.
Again, such replication hasn’t been pursued *because* of patents. Once copycatting becomes legal, lots of money will be poured in these.
Finally, it is true that patents are entirely divorced from market forces. You get the same protection regardless of the products worth.
How is it divorced from the market when that protection itself then has a value proportional to the technology’s usefulness?
An insurer WILL have an incentive to pay for research into cures, if only to cut costs, even if they’re “stolen” afterwards.
Until he realizes people are going to cheaper insurers who can provide him the same benefit.
And one last bit of reality that the patent worshippers consistently overlook is that charity (or more often government) is the source of “cure” discovery. Large “private” (scare quotes because big pharma subsist at the teat of many states) pharma does not invest much capital in cures – a common term in the industry is “orphan drug”, as the cure will destroy any market. Do you think these companies don’t realize that ED treatments, BP treatments, baldness treatments, and ulcer treatments are their biggest revenue sources? Where do you think they’re focusing their R&D? The true breakthroughs in the “cure” arena come from charitable or government funded discovery, which is then sold to big pharma to run the FDA gauntlet and market. Subtract the state, and the same will be true – charity will fund most of the big breakthroughs.
Even granting the charity argument, charities work the same with or without patents — if there are no patents, they fund research, if there are, they fund research and give away the patent. They’re irrelevant in deciding one over the other.
Brian — this is the 30th and last time I’m going to say this to you, okay? I understand the moral problems associated with IP. I’m concerned about the practical consequences of world without it. That’s why I’m asking the questions that I am. It’s great that you’ve got a clever proof that “IP rights are immoral”. Except for me, all of that goes out the window when I realize the implication of no IP rights is that many products just won’t be brought to market, in anticipation of how someone will provide them without the cost of producing the intellectual work, but the tiny cost of reproduction. Let’s see if we can finish this thread without me having to explain that to you a 31st time, k?
Person,
Why are you so enthralled with the proposition of *monetary rewards* from an anonymous “market”?
quasibill hits the nail on the head by propounding the strength of one’s brand-equity.
We may be enraptured by the idea that we are but atomistic beings in an impenetrable jungle, aka “The Market”. But, I suggest we slow down and take a look at our actual experiences among that Flora and Fauna. Not so similiar? Right, our lives, for good or ill, are informed, in the main, by what is at hand, not vaguely distant, and our greatest impact lies selfsame. ( if you’re going to go all “internet” on me, the previous is true in a meta-physical sense, as well )
As an example: If my IP advantage is in commodities trading(due, of course, to Austrian enlightenment on Money & Credit) do I start building my book of clients amongst those who know me? or, start by cold-calling the White Pages?
Simply, if your *intellectual works* are any good, you start by edifying those closest to you. If their word of mouth isn’t enough for you to go “viral”, you have a different affliction that the “Market” will similiarly cure.
Person,
Now I am sure that you are dazzling yourself with your incredibly repetitive sarcasm, but what’s the point? Your claim that you are interested in answers is inconsistent with your behaviour.
I realize my post was long and perhaps you could not be bothered to read the whole thing. Why take the time to consider my argument against your incentive ‘problem’ when you can skip ahead to your next witty jab against a convenient straw man of moralism.
Assert claim. Arrogantly dismiss any responses. Rinse and repeat…..Trolling
Linux is project that could exist with or without IP laws. But your argument goes further and claims that *everything* can work this way: bread production, haircuts, etc.
As far as I know, anybody can bake bread and cut hair today. (There are probably places in the world where those things are restricted – I remember an article here a while back about some US city where flower-arranging required a license – but …). If your argument is that without state-imposed restrictions on bread-baking and hair-cutting, no bread would be baked and no hair would be cut, you’re going to have a hard job convincing me!
copyright law, which allows consumers to choose this Windows, which they obviously prefer
Don’t be daft! Windows comes pre-installed. Most computer buyers don’t know an OS from a SCSI controller, and don’t even know there’s a choice, except maybe between a “Mac” and a “PC”. (Like my sister, who thinks MSIE is “the Internet”). Those who actually make a choice choose Windows because that’s what their friends use.
For artists to have to rely on concert revenue if they wished any revenue at all would mean much of what we listen to simply wouldn’t be made.
If that were true, there would be no music today. After all, who would learn to play an instrument, form a band, write music, etc., if they didn’t know they could make money at it? Since only 0.00001% of would-be musicians actually do make money at it, nobody would do it, by your argument!
Brian Drum: Sorry for the extremely long post…
Excellent post. Thanks, Brian.
Person: Again, such replication hasn’t been pursued *because* of patents. Once copycatting becomes legal, lots of money will be poured in these.
Do you even pay attention to what you say? Nobody would put money into developing drugs (or whatever) if they can’t patent them, but people would pour big money into copying technology only if they couldn’t patent them? I feel like I’ve wandered through the looking glass.
Investment banks have to deal with this sort of problem all the time. A lot of derivative products are custom made for clients, yet there is nothing stopping a competitor from offering the exact same product for a better price. Banks can’t patent financial products, yet the market in the last 2 decades as seen so much innovation as to completely mute the point of using patents.
Banks compete by innovating faster, then coming to market first. They also compete on reputation and execution. I think it can be helpful to compare this market to others.
Person,
I do realize that my shot was low, and I regret it. However, you have earned a reputation as a troll for 1) not reading the material available on this site that addresses your question 2) not responding to the comments made, rather just summarily dismissing them, and 3) referring to an author on this site as a hack, and summarily dismissing his work.
Now, I’ll be the first to admit I find Kinsella somewhat obnoxious and arrogant (actually, from some of what I’ve read, he himself may be the first to admit that
), but his scholarship is first rate. Anyone who dismisses him as a crank and makes no attempt to address his points establishes themselves as a mere troll. That so many on the site seek to engage you in a discussion, while you merely seek to proclaim your superiority, speaks highly of those commentors, not you.
Finally, I do find it at least a bit amusing that someone who argues that he knows that the market would make the current road system cheaper and better than the government turns a 180 and says the government will provide pharmaceuticals better than the market. I’m sure you think you’re talking about the market, but IP is not market based, it is state created.
Now, for your “response”:
“Branding is important *now*. If you can prove you are providing the *identical* medical formula for a sliver of the cost, that branding in technologically advanced areas won’t be as PARAMOUNT”
Once again, you are skimming right past the whole point. You are assuming something that isn’t true. I’ll point out the statement that contains the logical fallacy(ies), and leave the rest for you, because obviously you aren’t reading what I’ve been writing: “If you can prove you are providing the *identical* medical formula for a sliver of the cost”
“they fund research and give away the patent.”
No, not really. But that doesn’t change the fact that whoever receives the patent DIDN’T DO WHAT YOU ARE CLAIMING JUSTIFIES THE PATENT. As you note, patents do nothing in this situation, other than act as an artificial barrier in the market for a set time. And since these are the true breakthroughs that you seem to be worried about, as opposed to the incremental improvements in say, the 2nd gen beta blockers that are the rage of patent dependent big pharma R&D, you need to address this issue a little more fully before I can take your dismissal as more than a “I don’t want to address that because I can’t.”
And of course, you didn’t touch the part about the insurance company branding and being able to sell itself as providing cutting edge cures before its competitors, as even your obfuscation can’t avoid the validity of that market construct.
Banker, “Banks compete by innovating faster, then coming to market first. They also compete on reputation and execution.”
I’m very pleased that you have presented the same forces at work within banking that I exemplified with GE Plastics. The same “time to market” and “reputation” make the margin, which has nothing to do with patents. Bravo!
I’ve seen the same thing in computer systems over and over, both hardware and software, in the decades I’ve been in the business.
Indeed “comparing this market to others” seems to have some serious parallels, maybe such a study will make it into a Mises “working paper” some day. :^)
Person, “I’m interested in knowing if, even in the hypothetical, there are any market-based methods of making money from production of intellectual works that aren’t completely laughable.”
Unfortunately, I don’t believe that’s possible. You’ve ridiculed every method presented, along with the presenters. You go ahead and laugh, but please stop saying everyone else is wrong for not seeing the joke.
Person –
I’m interested in knowing if, even in the hypothetical, there are any market-based methods of making money from production of intellectual works that aren’t completely laughable.
There are, and all of them were tested in practice, and worked (although it is kind of hard to compete against producers of information whose business models are subsidized by the “free” state enforcement of monopolistic “rights”):
1. Locking up intellectual work within some physical embodiment (Digital Rights Management, and such). Satellite TV and radio work this way – they require posession of physical token in order to enjoy the performance. Perfect DRM is impossible, but it doesn’t have to be perfect – it is sufficient to discourage a large part of users from circumventing it.
All hi-tech hardware companies do business this way, with no exceptions. Patent battles sometimes ensue, but nearly anyone recognizes that they are lose-lose propositions; besides, anyone with any clue about hardware design knows that any electronic gadget out there is illegal – it is nearly impossible to design anything without violating somebody’s patent. The risk of patent litigation is treated as a cost of doing business.
2. By offering convenient distribution – i.e. iTunes model for music sales. News and stock exchange quotes are freely available, but there’s a value in freshness, so quick delivery makes is worth paying for. Etc.
3. Giving away the product for free, but charging money for services around the product – i.e. tech support, customization, etc, etc. A lot of software businesses work this way.
4. Giving away recordings, but charging money for live performances. Grateful Dead.
5. Giving away the intellectual work, but selling exclusive, author-signed, collectibles.
6. Giving away the intellectual work which embeds advertisement. Google.
7. Running the intellectual work as a process on the company’s servers, allowing only paid users to interact with it (multi-user computer games).
8. Collecting donations. There are people who made millions developing popular “shareware”.
9. Deleloping public-domain intellectual works as a way to establish credentials for being an expert in a specific field, and thus increase income from consulting or contracting services. The Open Source carrer model. Having contributions to a popular project on one’s resume does impress employers.
10. Selling trustworthiness of the work (i.e. if I’m selling software, I can both publish the source code for anyone to copy *and* claim that it should be bought directly from me to ensure that it was not maliciously altered in order to compromise the victim’s system).
11. Searching for, and giving access to parts of a large body of publically-available works on as-needed basis (Lexis-Nexis).
12. Selling credibility of a particular information source. (Legal guides, legal advice, Kelly Blue Book, etc).
13. Setting up non-profit consortiums collecting contributions from many beneficiaries of the work. Pretty common in high-tech – all standards bodies work essentially this way, although there’s an ever-present danger of antitrust litigation.
Often, these consortiums give the chance for stakeholders to pursue their agendas, so as to get the preferred (by the stakeholder) technology declared standard.
14. Selling notoriety gained as a result of creation of intellectual works for monetary gain (advertisement, lecture circuit, etc).
Anyone who claims that copyright-free and patent-free intellectual works development is impossible ought to take his head out of whatever pile of collectivist propaganda it is stuck into, and just take a look around.
It is a common knowledge among the producers of intellectual works of any kind that relying on copyright protection for income is a sure sign of a sore loser.
Oh, and, by the way, the presense of copyright notice on a work does not mean that its author benefits from it or has any plans to enforce it – it simply costs nothing, so there’s no harm (and no gain, as those who understand the IP laws surely know) in pasting it on everything.
Excellent list, averros. I would like to add patronage or sponsorship to it. A great body of now freely available classical works was produced this way. There will always be at least some people who appreciate author’s works who will pay to continue to receive this service. It’s a pretty much established fact in the free world.
In my estimation, claiming that advancement in arts/content creation will stop without a criminal gang enforcing arbitrary patent and copyright law is simply laughable. Not only that, it flies in the face of practically everyone who has published a discovery prior to the advent of government mandated protection. Which I would guess is the bulk of human discovery.
What it comes down to is accepting government protection for what it is… the immoral initiation of force. Humans will always find a way to do what they love. The government’s job is to disrupt this process so they can gain a living at others expense.
darjen, well said
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