It’s another hot summer day and nothing cools the heat like a large cone of ice cream. Due to our relatively free economy, I have the choice between many different sellers, brands, and types of the frozen treat. A relatively new concept is one where ice cream shops mix your choice of ice cream and toppings on a super-cooled stone slab before placing the mix in a cone. Someone, somewhere, conceived of this recipe and sought investors to bring it to market. Based on patent theory, no one would have invested time and money on this new idea unless he was assured protection by a government-issued, government-enforced patent.
Don’t tell that to the entrepreneurs and investors who have brought similar, and successful, ideas to stores near you. I can go to either a local Cold Stone Creamery or a Marble Slab Creamery when I finally succumb to the heat later this afternoon. Ok, one does use a granite slab while the other uses marble, but their concepts are close enough that, supposedly, the opportunity for any return on investment ends once competitors begin opening stores down the street.
Based on patent theory, gone is the ability to earn back the capital invested in order to bring this idea to market. Any hope for a return on investment and profit disappears, and the entrepreneur is simply left with his managerial income. This is due to other entrepreneurs seeking profit by entering the stone slab ice cream market and driving profit out of the financial picture. The uncertainty of a return on investment due to competitors quickly adopting a new idea stops development of that idea, thus hampering the market. Or, so the patent theory goes.
As the market continually shows, patent theory is false. Pure competition works in the ice cream market, so it will certainly work in all markets. It does not matter whether the idea is a new drug or a new way to serve ice cream, the market does not need patents to function efficiently. Rothbard was right, patents are not needed in any market, whether pharmaceutical or ice cream.
Lucky for me, and my sweet tooth, patent theory is false and I get to face the cool decision of which slab to use as the base of my next ice cream cone. Granite or marble, which will it be?
Jim Fedako is a former professional cyclist who lives in Lewis Center, OH, and maintains a blog: Anti-Positivist.
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One thing that IP advocates typically forget when they argue that there are no incentives for new technology in the absence of IP law is that producers are not just competing with each other for customers, they are competing with every other possible use of a person’s money. If an ice cream vendor discovers a cheap way to make better ice cream and is immediately copied by all the other ice cream vendors, he still benefits because more people will spend more money on ice cream instead of other things. He doesn’t gain any advantage over his competitors in the ice cream industry, but they are a tiny fraction of the people who are chasing after the same consumer’s dollars.
Actually, that ice cream vendor does gain an advantage (albeit not indefinitely) until at least one other vendor copies the idea. The original innovator, however, will still benefit after this point: that vendor will likely be known as the originator of the innovation, and may gain a reputation for innovation in general. Furthermore, other vendors may not copy the idea correctly (having not arrived at the idea themselves and perhaps not fully understanding all the nuances involved).
To add to your original point, the expense (money and time) of having to file a patent may delay deployment of many ideas until sufficient resources are available to file, not to mention sucking those resources away from developing new ideas and causing reduction in the number of conceived ideas which are brought to market.
Sell your labor, sell your ideas – what’s the difference? All these nonsensical efforts to boil down this complex subject to “no IP rights exist”. The most frequent I read are:
1 – “ideas are non-scarce”. Nonsense. Ideas are indeed scarce and the market believes they are scarce: there’s positive price for ideas (for instance strategic CEOs) irrespective of IP laws. The question is whether the government should be involved – which is not proven true or false by this specious line of argument.
2 – (Thus) ideas are “non-conflicting”. Again, nonsense – there’s a conflict when person A – who has worked to develop an idea (and owns their own labor and effort) – and person B who would like to get the results without payment. So who are the socialists? If the government simply rolls over and allows stealing, I’d say that’s a bad state of affairs just like taxation.
Too bad this article is a total straw man: no one – even the pro-IP guys, advocates what this article describes. And even if pro-IP people did, it wouldn’t demonstrate either for or against government involvement, only that pro-IPers have lost their marbles. Come up for air anti-IP guys.
“…there’s a conflict when person A – who has worked to develop an idea (and owns their own labor and effort) – and person B who would like to get the results without payment.”
Do you also believe that there’s a “conflict” between the fact that some people wish to enjoy my good looks for free and the fact that I’d like to be paid for their enjoyment. So what?
If someone doesn’t like the fact that someone else can use their ideas without payment, they should keep their ideas to themselves. I can’t “steal” someone’s particular idea because they will always have use of it.
Please cite the patent advocate who argues that, in the absence of patents, there will be no innovation in anything.
I’ll wait.
- Josh
You haven’t been watching the Proprietary verses OpenSource software war-of-words. “No innovation in anything” is exactly what the pro-proprietary forces argue.
Mark – Give up on the straw man – your example confuses a public-domain immediately-accessible item (your image) with IP. No one on any side of the argument supports your example.
You have the right to sell your labor on your own terms. You own it. How does that suddenly become different if your labor is imbedded in a product that is idea based?
Now if you want to make an argument that without IP the market would protect IP even better, go ahead. But this straw man, no conflict, no scarcity nonsense is garbage. It doesn’t support the conclusion at all.
The more unique and useful an idea, the more “conflict” and “scarcity” will emerge. Only with the most contrived examples does this stuff make any sense.
Jim, I believe intellectual “property” is an invalid concept, so I have no concern about “protecting” it.
You say “The more unique and useful an idea, the more “conflict” and “scarcity” will emerge”
Wrong. An idea cannot be scarce and any “conflict” over an idea is as ridiculous as a “conflict” over the use of my image.
The statement that your ideas can be “imbedded” in a product is pure metaphor. Perhaps the spirit of God can be embedded in a product as well.
As Mr. Kinsella points out, property rights are needed to resolve conflicts over physical property. However, intellectual property interferes with rights to tangible property, so it cannot be valid.
Ideas are non-scarce. Two proofs:
1. Who will pay you for ideas? Note, I don’t mean “who will pay you for patents” (government monopolies); nor do I mean “who will pay you after you have successfully implemented your ideas?” I mean, specifically, if you just have ideas, will anyone pay you for them? Probably not. Most people have ideas; but cashy money goes to those who successfully implement useful ideas.
2. If an alchemist invented the Philosopher’s Stone, that could convert base metals into gold, then gold would become worthless. Why? Because it would cease to be scarce: anything that can be replicated without bound, is not scarce. Any given idea can be replicated without bound. A story can be re-told, and embellished as well; this is the essence of traditional storytelling. An invention can be copied or improved on.
Patents artifically convert a non-scarce resource into a scarce one.
And as Mark observed, intellectual “property” interferes with real rights to tangible property. It is, in fact, the antithesis of property. Admittedly, many IP proponents know this and argue for its “benefit to society” instead. Jim Fedako’s brief article illustrates that there is no a priori argument in favour of IP as an economic benefit or requirement.
Paul – sure there is an a-priori argument. You guys commit the “stolen concept fallacy” over and over. You can’t undercut the foundation of rights and then assert “only concrete rights exist”. Clearly concrete rights are an extension of incorporeal rights, such as the right to self-ownership … which is an abstract idea, a concept, not a physical thing like your body. The idea is expressed in action with your body.
Frater – Nonsense and you know it. CEOs get big bucks for ideas they’ve not yet had. Good ideas are not replicable without bound, hence the enormous positive price the market gives to CEOs.
Mark – Read above – the stolen concept fallacy. Never asked you to defend IP, but instead explain how the anti-IP position necessarily follows from the “scarcity” and “conflict” arguments, both of which are actively contradicted by market participants. This is akin to saying “gravity is approx 9.8 m/s^2″ and you say — no it’s not. Look at the real world. (some) Ideas ARE scarce. There IS conflict for some ideas because they can be taken (even by force). Really, you guys are framing the debate by focusing exclusively on the non conflicting portion of ideas (more than one person can have the same idea) rather than acknowledging that the market does not hold your view and won’t hold it.
“Clearly concrete rights are an extension of incorporeal rights, such as the right to self-ownership … which is an abstract idea, a concept, not a physical thing like your body.”
Certainly, but no one has ever proposed stealing (i.e. depriving you of) those incorporeal things.
“IP” proponents aren’t the least bit concerned about having their ideas or intellect stolen. What they’re concerned about is punishing other people for enjoying copies of those ideas once they’re “in the wild”. That’s why IP is the antithesis to property: it goes beyond one’s right to have (own) thoughts and ideas, and extends to controlling other people so they can’t do the same. Ridiculous.
Paul — that’s not what Kinsella is saying. he’s making the claim that the only cohesive view of property rights is tangible, a view I find nonsensical and unworkable. Bottom line — in any given area, there will be acceptable and unacceptable behavior which is non-tangible. Said another way, you cannot marry your sister.
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