Microsoft and Tangibility of Software

December 18, 2006 10:01 AM by Stephan Kinsella (Archive)

One argument against intellectual property is that property rights should be recognized only in scarce (rivalrous) resources. Some refer to this quality as "tangibility," somewhat inaccurately in my mind, but it's at least a similar concept. Anyway, the basic idea is that, say, "software" is not property because it is not tangible or scarce; therefore, copyright in software is illegitimate.

Of course advocates of copyright in software have to maintain that lack of tangibility is no barrier to software's being protected by property rights. Like, say, a Microsoft. So it's somewhat ironic to see Microsoft arguing that the intangibility of its software makes it different from normal, physical property for purposes of a US patent law provision that makes an exporter of technology liable for patent infringement if the thing exported is combined outside the US with a computer to result in a device covered by a US patent. In other words, Microsoft wants to have it both ways: software ought to be covered by copyright, even though software is not tangible. Yet, because it's not tangible, it should not be counted like a tangible component would for purposes of the patent-export law.

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Comments (89)

Sasha Radeta

Stephan said: Anyway, the basic idea is that, say, "software" is not property because it is not tangible or scarce; therefore, copyright in software is illegitimate.

The problem with this statement is obvious to anyone who knows what the economic scarcity means. The economic definition of scarcity is this: when the price of a good is zero, demand exceeds supply. Only if the supply of free goods exceeds or equals the demand for free goods do we say those goods are not scarce. Scarcity implies the condition of limited resources, where society does not have sufficient resources to produce enough to fulfill unlimited subjective wants.

Copyright did not artificially create scarcity by restricting any possible supply of software, just as restrictions of possible supply by any capitalist (private owner) do not create scarcity. Creation of private property rights and copyright (specific terms of use that explain that the owner sells only certain personal uses of his product) are only the logical response to pre-existing issue of scarcity. If copyright did not exist, the issue of scarcity would be far more visible in markets for software... Without any profit incentives from mass marketing, software developers would never make massive sales of their products. Software would become so rare and valuable that fewer firms or individuals could afford them and they would have no interest in giving it away for free (just as you would not give your diamonds or secret technology for free)...

To say that software is not scarce implies that in the absence of markets and private property rights (zero prices) we would have larger supply of current software products than its demand. This quasi-communist assumption presupposes that software creators would somehow be far more willing and able to create their products for free - than it is currently the case. I don't even have to explain why this assumption is absurd based on law of supply and demand...

We can conclude that software is scarce - and that property rights and limited terms of use are the response to greater demand than available supply at zero-price point.

As far as patent protection go, Microsoft is correct in asserting that software contained in a patent-violating product is intangible and not the subject of some alleged violation.

Published: December 18, 2006 12:06 PM
Stephan Kinsella

No, poor Sasha, scarcity does not mean "when the price of a good is zero, demand exceeds supply." It is used here specifically to refer to resources that are rivalrous. "To say that software is not scarce .." It is microsoft itself that is in effect making this argument when it attaches importance to the fact that, and admits that, its software is not tangible--as noted, "tangibility" is a crude synonym for rivalrousness (scarcity).

Published: December 18, 2006 12:13 PM
Sasha Radeta

Poor Stephan,

You don't even realize that you only confirmed definition of scarcity that I provided.

If you had any understanding of basic economics, you would know why scarcity is characterized by supply exceeding supply when price is zero. It basically means that if private property exchanges did not exist (zero prices) - there would be more wants and needs for software than willingness and ability to supply it.

This makes available software “rivalrous.” In order to assign property rights and to exchange software, designers write them on some tangible hardware. But that does not mean that Microsoft is responsible for patent violations by someone else's hardware, just because these producers purchased Microsoft's software originally written on some other hardware (CDs) and decided to incorporate it into their product.

Published: December 18, 2006 12:49 PM
David C

Sasha Radeta Said,
Copyright did not artificially create scarcity by restricting any possible supply of software, just as restrictions of possible supply by any capitalist (private owner) do not create scarcity.

This is wrong, so everything else that follows is wrong too. The natural supply and demand is not in the bits of information, but in the time and efforts that go into creating it. Copyright controls force the market to center around content controls at the expense of information services that it would gravitate toward naturally. This distortion leads to all sorts of strange side effects (like the RIAA suing millions of it's best customers, like Microsoft trying to force terms on its customers all the time instead of the other way around)
Software would become so rare and valuable that fewer firms or individuals could afford them and they would have no interest in giving it away for free.

This is also wrong. For example, Linux has majority market share in the data center space (and growing) in spite of the fact that it's GPL license specifically attempts to cancel out many of the restrictions of copyright. This didn't happen because of hippie free love, but because of raw free market forces. What happened? Society entered the information age, information is becoming commoditized, and the service value is starting to exceed the content value of information. When the content and copying restrictions in Microsoft products started getting in the way of profits, people started using something else.
I know this first hand because I worked in a large retailers data center that had it's Windows NT servers crash every day. The computers were hooked up to thousands of sites, and when down they were costing the company over a million dollars per hour. They flew in experts from all over the planet, hired coders to rewrite the TCP stack, but still they crashed every day. When they identified a bug in the OS, they demanded that Microsoft fix it but Microsoft told them to buzz off (probably cause they were working on XP). If Linux was common at the time, I have no doubt that they would have hired coders to fix it in spite of the fact that all their competitors and everyone else in the universe could benefit from that fix free of cost. Thus, free market forces improve Linux and further drive it's adoption, and further create industries that center around support and services that drive its adoption further.
The bottom line is that copyrights are more like a micro-regulation that controls how people use information at their disposal in the information age, rather than a free market property right. Informations non locality and non exclusive nature are pretty much going to force that truth, no matter how strongly people think it's a property.

Published: December 18, 2006 12:49 PM
Sasha Radeta

David C,

You chose the wrong thread and completely wrong arguments.

There is "natural" or "artificial" market supply and demand. Inputs used to produce software are scarce (valuable, price bearing) - just because final good that people want and need is scarce. Read Aristotle.

The fact that Microsoft is aware of this scarcity and it is trying to control the supply of its own products - is not fundamentally different from any who does not want to produce everything he hypothetically could. By selling copyrighted items, Microsoft is refusing to sell commercial use of their products just to anyone. It is their private property right to do so - and it would hold in a perfectly free market.

----

Your example with Linux is irrelevant. If service value is higher than value of the product itself (as it sometimes happens) - it is up to producers whether or not they will use copyright contracts. Microsoft calculated that they don't have such interest - and it would be their private property right not to sell commercial use of their products.

You may claim that you "know better" than Microsoft - but they have a right not to listen to you and not to follow Linux. Also, think about book authorship and other products for which "service value" is non-existant and which completely rely on direct sales. Without copyrights and with prices of final goods approaching zero, you would have those effects that I described (massive reduction of supply).

Published: December 18, 2006 1:12 PM
David C

The fact that Microsoft is aware of this scarcity and it is trying to control the supply of its own products - is not fundamentally different from any who does not want to produce everything he hypothetically could.

Well, it's all right if Microsoft wants to try and control the supply of their own products. But that's not what they are doing, the taxpayers and government do that for them thru the copyright system. If Microsoft decided to monitor all their users, only work with hardware that would enforce their restrictions, and forced them to sign contracts at time of purchase, then that would be controlling their supply. But that's not what they do, instead they try to get the government to control how people use information at their disposal, and more recently try and get the government to regulate chip makers to include DRM.
Your example with Linux is irrelevant....

Nonsense, you said that theory A implies B, I said Not B and proved it, thus theory A is crap. It was logic 101.

Published: December 18, 2006 1:24 PM
nate

Software is very weird.

It's the one thing that costs the same to make one copy as it costs to make a near infinate amount of copies.

Since it's all just digital data then you can trivially easily copy the most complex software.

Also once you wrote a peice of software to do a task it is not always nessicary to ever write another peice of software to duplicate it's functionality, unless you have a better way of doing it. A more complex application can simply incorporate the command or the source code of the simplier program to increase functionality.

Also not only does it cost nothing per unit for software the cost of producing the software is significantly more inexpensive then producing other objects..

A small team of coders with 300 dollar computers from walmart can produce software which rivals software put out by people like IBM or Microsoft.

This is dirt cheap compared to openning up a car manufacturing plant or getting a supply chain developed for textile manufacturing.

This means that there is also no geographical boundries as the majority of people in the world can afford to do software development.

The only thing that gives software any commercial value at all in terms of traditional demand driven market is the licensing of the software (both copyright and patent licensing) and the skills of the programmers and support staff that a company or person will have to hire to maintain the software and adopt it to new purposes.

Especially interesting is the patent licensing terms. Due to the nature of software patents it is easy to patent trivial inventions even though it's not suppose to technically work that way.

Since Microsoft potentially faces world-wide compitition for it's products from any intellegent group of driven people then it is very vunerable in a market that it's only way to restrict supply and is by using copyright licenses.

Effectively Microsoft can drive prices up using copyright restictions, but then this also increases the likelihood for profit for people that want to uncut them in terms of prices.

Since development costs are so low, and per unit cost is zero, then it can only truly compete on the software support side of things, which Microsoft has always lost money doing.

Now you have companies like Redhat were their income only comes from support and they are profitable at it. You can download their software for no-cost in source code form and you can get CentOS installation software that will duplicate Redhat's software 100%.

However patent licensing is much more interesting to Microsoft.

Right now only the most wealthy corporations can do patent licensing stuff successfully.

Due to the nature of software patents and the complexity of software then any non-trivial peice of software will violate software patents.

So large companies, in order to avoid lawsuites, do a large amount of cross-patent licensing. IBM buys Microsoft patent licenses, and then sells back licenses to Microsoft.

It is not nessicary to determine the nature of violations or weither or not the violations actually exist.

Microsoft for instance I beleive has gotten 5 to 6 thousand software patents this year alone. I don't know the exact figure, but I am guessing that a software patent is going to cost a company over a 100,000 dollars to get, with legal costs and lawyers and all that.

So in effect then what software patents do is raise the price of producing commercial software to the point were only the very richest corporations can do it and profit from it.

But it still requires copyright protections so that it's possible for Microsoft to go after businesses that would simply download pirated versions of Microsoft software without paying them anything.

Also it prevents people from taking Microsoft's source code, spending the money to cut out and replace the patented portions, then releasing it under a different product name. This would lower development costs for rival software companies to a point were Microsoft would again loose profitability.

I donno. The issues dealing with software are very weird when compared to something that is physical that depends on natural resources and supply chains and distribution channels and all that.

It's also a issue starting to face the entertainment industry with digital data.

Anybody with a few dozen thousand dollars to burn and a internet connection can now do their own TV show or radio show. The big industries required in teh past to cover promotion, distribution, and production costs are seeing their reason for existance slowly flowing away.

So your going to start seeing these folks doing very wacky stuff to raise the cost of production in a effort to keep new players out of the market.

Things like royalties insanity, trying to sue and charge people for every logo or song fragment or image that makes it's way into any sort of media. Look around your house with it's labelling and trademark or walk down a busy street in a big city and you'll see and hear why would it be so expensive for anybody to do anything in a environment like that.

Also DRM plays a big part of that. It claims that it will help prevent priracy, but in effect it's a attempt to solidify and control distribution channels.

For example take Itunes and Ipods from Apple.

A person buys a Ipod and tries out Itunes. They buy a few songs and after a year or two of owning it they probably have a few hundred dollars worth of songs in their ipod and in their computer.

Now say that person's Ipod gets broken. They have to buy another Ipod. Due to the DRM in songs purchased from Itunes they can't use a Microsoft Zune or a Sandisk mp3 player to play those songs.

If they purchase a competing product then they loose access to itunes.

And since we now have the DMCA then it's illegal for companies like Microsoft or Sandisk to break the encryption on the itunes songs and make their devices compatable.

On the flip side.. The average time for a song to appear on Itunes till it shows up on a P2P file sharing network is about 30 seconds.

So DRM in Itunes does zero to prevent piracy, but dramaticly puts Apple in a very clear advantage over it's competitors. It's the only one that has the agreements with RIAA and friends and it currently dominates the market, with millions and millions of dollars worth of songs floating around on people's harddrives that are only compatable with it's hardware.

Pretty bizzare stuff.

Published: December 18, 2006 1:27 PM
Sasha Radeta

Also, David C failed to realize why charging only services and providing completely free product (bundle sale) would not make any sense for Microsoft - but it would for Linux. In spite of that bug that he described, Microsoft software is far more common and there are more and more people who can offer their Microsoft related services without paying a dime to the company.
On the other hand, because Linux is not so common, the services in this OS are still profitable enough for the company, while they cannot possible compete with Microsoft - with any price (hence trying to reduce copyright).

But we are not here to give business advice to "poor" Microsoft, who should follow Linux according to David C :-) We are talking about economic principles here and why software is scarce (including related services that Linux sees as a bundled product with their software).

The copyrighted terms of use (limited supply of commercial uses of some product) are essentially the same as restrictions of any kind of supply by a capitalist producer. Socialists often have this issue with capitalists not producing everything they theoretically could, but this is the consequence of their lack of understanding of basic economics.

Legally and from a libertarian standpoint, Microsoft's right to contractually restrict commercial use of their software products - is the function of private property rights that we hold sacred here.

Published: December 18, 2006 1:30 PM
Sasha Radeta

David C,

It is not Microsoft's fault that the government established the monopoly over copyright and its enforcement. But the government did not invent "terms of use" types of contracts and Microsoft could protect the copyright of its software even in a perfectly free market.

As far as your Linux example goes, your "logic 101" only shows that you don't understand economics 101. The fact that Linux can profitably bundle their expensive services to a free product does not mean that Microsoft has the interest of doing the same thing. It certainly could not apply to book authors. Anyway, that has nothing to do with legal issues and the right of Microsoft to refuse to sell commercial use of their product to you anyone else.

Published: December 18, 2006 1:37 PM
Stephan Kinsella

"Mixing labor" is horribly misleading and a sloppy metaphor: if I turn a piece of land into a farm, did I *actually* mix my labor? I mean, is there like an amount of labor "in" the soil?

It's really sloppy and imprecise.

I've always liked this observation of Huelsmann's:

Only in a metaphorical sense could one say that prices reflect or contain information on present conditions. ...

... It is asserted that prices communicate abridged relevant information. This, however, is only a metaphorical expression.

It is not prices that coordinate the actions of sellers and buyers of tin; prices are the outcome of (coordinated) action, not its coordinators. It is property, rather than knowledge, that coordinates the separate actions of different people. The terms coordination and communication rather obfuscate than adequately express this fact. This is another example of the dangers linked to the use of metaphors in scientific discourse.

p. 29 of this article

Published: December 18, 2006 1:46 PM
Sasha Radeta

Stephan,

what are we talking about here? Labor mixing acquisition of property (which states the fact that you can mix your body's physical output with soil and make it yours)? Economic definition of scarcity? Software copyright and Microsoft's position?

You are very confused.

First of all Huelsmann (is that how we spell it) is correct: "only in a metaphorical sense could one say that prices reflect or contain information on present conditions..."

An increase in current prices of inputs, for example, communicates the past increase in prices of final goods (the cause for increase of input prices).

Prices are the outcome of human actions - and their existence communicates that scarcity exists! If a good or service was not scarce - it would be completely free. That is not the case with software, regardless of possibility for theft (someone taking unauthorized use for free).

Published: December 18, 2006 2:00 PM
David C

Sasha Radeta said,
"Also, David C failed to realize why charging only services and providing completely free product (bundle sale) would not make any sense for Microsoft - but it would for Linux."

I failed to realize nothing. Microsoft is an unnatural monopoly because copyrights are an unnatural monopoly. Of course it wouldn't make sense for Microsoft.
"... while they cannot possible compete with Microsoft - with any price (hence trying to reduce copyright)."

What are you saying, that reducing copyright makes you more competitive? Well, of course it does because copyrights are are anti free market restriction on how people use information.

"The copyrighted terms of use (limited supply of commercial uses of some product) are essentially the same as restrictions of any kind of supply by a capitalist producer."

But, that's the whole point. It's not. No one is trying to force the farmer to grow the maximum amount of wheat on his land, but rather the farmer is trying to say, we can't grow the same wheat that he first discovered and growed on his land on our land.
"Legally and from a libertarian standpoint, Microsoft's right to contractually restrict commercial use of their software products - is the function of private property rights that we hold sacred here."
Well, then give them a contract they can sign. If I send you $100 in the mail with a note attached that says "by opening this you owe me $200" - I know of no Libertarian that would recognize that as a valid contract. I also know of no contract that is beholden to third parties.
"if the government did not invent "terms of use" types of contracts and Microsoft could protect the copyright of its software even in a perfectly free market."

Well, lets let the market decide that, shal we?
"As far as your Linux example goes, your "logic 101" only shows that you don't understand economics 101."
Economics 101, the natural supply of information is infinity, the natural supply of information services is not infinity. Thus a free market will center around information services and not content controls.
"Anyway, that has nothing to do with legal issues and the right of Microsoft to refuse to sell commercial use of their product to you anyone else."
You have a right to refuse to sell me your pink paint, but you don't have a right to tell me I can't paint my walls the exact same pink no matter how much effort you put into mixing your paint.

Published: December 18, 2006 2:00 PM
Sasha Radeta

David C,

you got lost in that "natural" - "not natural" nonsense.

Just as you cannot force a cattle producer to sell the maximum amount of output he can theoretically produce - you cannot force Microsoft to sell the commercial use of product to everyone.

Your assertion that supply of "information" in a free market is infinity is a nonsense. You cannot access all information you may want and need and some information must be purchased. The property right is established by writing your information on some piece of hardware - and than selling it with some terms of use (including copyright, if you choose to do so).

Like you said: I have a right to refuse to sell me your pink paint, but I don't have a right to tell you that you can't paint your walls the exact same pink. If you can figure-out how to create that pin color yourself - then no copyright would be necessary.

The same goes for Microsoft: they have a right not to sell you commercial use of their product (including reproduction rights)... You don't have to buy it - but no one should prevent you from independently developing the software that would do the same thing.

Published: December 18, 2006 2:15 PM
nate

""Like you said: I have a right to refuse to sell me your pink paint, but I don't have a right to tell you that you can't paint your walls the exact same pink.""

Well actually in software, that is what patents do. They give you the right to tell people that they can't make compatable software.

The cost of producing software (compared to other complex modern things) is quite small. Individuals with PCs is what you need. Also the cost of making one copy of software is the almost the same as making 30,000 copies of that same peice of software.

So a lot of the traditional market forces stuff does not apply here.

Right now Microsoft makes the majority of it's money from selling Windows OS and selling MS Office...

Which is ironic since the majority of people who own Windows do not pay much for it. With big name computer resellers such as HP, Gateway, or Dell get a huge discount on software they provide bundled with their hardware. Say you go and buy a Dell computer the amount of money that you spend on Microsoft software in a basic home PC is going to be right around 30-40 dollars.

And that is going to get eaten fairly quickly the the costs of supporting that sort of thing. So essentially Microsoft is already giving away their software for nearly free for the vast majority of people that use it.

Of course they do this because the presence of their software on eveybody's computer makes it easy to extract money from other sorts of markets (mostly business server and desktop related)

Published: December 18, 2006 3:40 PM
David C

Sasha Radeta: you got lost in that "natural" - "not natural" nonsense.
Natural as in natural law, it's a common libertarian concept. BTW, natural law rights don't have an expiration date.
Sasha Radeta:Just as you cannot force a cattle producer to sell the maximum amount of output he can theoretically produce - you cannot force Microsoft to sell the commercial use of product to everyone.
Yeah, but it's my God given right to sell my copy of his cattle. ... and the industry thrives rather than falls apart.
Sasha Radeta:Your assertion that supply of "information" in a free market is infinity is a nonsense....
OK, I should have said the costs of making a copy approach zero, but of creating information does not. Same diff. But, the assertion that information copied freely is harmfull for a market so we need the government to come in and demand personalized restrictions is what's nonsense.
Sasha Radeta: The same goes for Microsoft: they have a right not to sell you commercial use of their product (including reproduction rights)... You don't have to buy it - but no one should prevent you from independently developing the software that would do the same thing.
Or independently copying it. Microsoft has no right to tell me what I can do with information at my disposal. If they don't like that no one forces them to make their software, or to put millions of copies out there, or to make it copyable.

Published: December 18, 2006 3:53 PM
nate

(I'd like to say that I am for very much strong copyright protections at the current time)

Published: December 18, 2006 4:01 PM
David C

nate,
It seems to me that the problem with copyrights is not cost, but control. For example, I work with virtual machines a lot. With Linux I can just make 10 coppies, and have 10 opperating systems running on the same computer without delay, apporval, or problem. It saves me a lot of money and time, but try doing that with a Microsoft product, it's a major headache and they change the terms all the time. Their restrictions seriously inflict on my ability to go about my business more than the cost of licensing ever would. Sometimes I create opperating systems, sometimes I transfer them over to another system, sometimes I destroy them when I no longer need them. With Linux ... easy, with Microsoft a major pain in the neck. The same is true with Music. Those concert halls are filled up with people paying $50-$300 per seat. The problem isn't with the cost, but all the restrictions and control that must come with copyrights in order to secure them as a "property". Those must also be restrictions on freedom, because it is simple to make content take any form, and because the human brain is the only "technology" smart enough to distinguish between free speech content and copyright content.

Published: December 18, 2006 4:16 PM
Sasha Radeta

Nate,

Just like Rothbard insisted on copyright protection - not on patents per se - I also say that INDEPENDENT DISCOVERIES cannot be prohibited. Piece of software that can easily be discovered on one's own cannot be copyrighted, because you cannot prove that someone violated his contract with you and actually copied your item against terms of use.

---

What David C does not understand is that you do not have a "God-given right" to pay for only certain uses of someone's product and than just go ahead and use it any way you want (against your contract, just like a passenger who wants to go to the first (business) class on the airplane, although he only paid for the "economy" class).

Microsoft has a private property right to tell you what you can do with their product at my disposal. If you accept the contract that states these terms of use, you legally bound yourself to these conditions. Commercial use, including reproduction, belongs to those publishers who pay for that kind of use and create different kind of contracts.

Published: December 18, 2006 4:18 PM
Stephan Kinsella

Sasha, "Just like Rothbard insisted on copyright protection - not on patents per se - I also say that INDEPENDENT DISCOVERIES cannot be prohibited. Piece of software that can easily be discovered on one's own cannot be copyrighted, because you cannot prove that someone violated his contract with you and actually copied your item against terms of use."

This is yet another example of how ignorance of the field one is expounding on about can lead to error. Rothbard thought copyright would apply to inventions--his example was a mousetrap, I believe. Inventions are covered today by patent law, and original creative works of authorship by copyright. Copyright only covers copying; so independent creation is a defense--though it is rare. Patents do not work this way, for a reason: if you have an independent invention defense, it defeats the whole purpose of the patent system which is to encourage inventors to publish their inventions, and earlier. An earlier inventor who keeps quiet can actually be prevented by the patent obtaiend by a later inventor who does publish the invention by means of the patent application process. If you allow an independent inventor defense then all IP protection of inventions--whether you call it "copyight" or not--falls apart. Because once general scientific knowledge is "out there," it makes it even more likely for someone else to "independently invent" the "copyrighted" mousetrap. Either that, or you don't really have an independent inventor exception.

So Rothbard's confusion in thinking copyright could apply to inventions is taken up here by Sasha, to breed more confusion.

And not only this: anyone halfway familiar with the way patent systems work--with the detailed rules and practices governining the difficulties of defining exactly waht the invention is, what is claimed--would realize that the mere idea of "stamping" a device "copyright" in no way could ever serve to capture what is the "invention" contained in that thing--or is it multiple inventions. Moreoever, there is no way to stamp "copyright" on a method or process, but only on a physical thing; yet many inventions are just processes or steps.

The whole idea of protecting inventions by use of some kind of contractual copyright stamp is utterly ridiculous.

Published: December 18, 2006 4:26 PM
Sasha Radeta

This is yet another example of Stephan's ignorance of the field.

First he fails to see why demand for scarce goods must be greater than supply when price is zero (and what it implies)

Now he thinks that by allowing independent discoveries based on knowledge that is "out there" - we could not prevent copying of software or written literary works that are not "out there" and where you can prove that someone did not created their versions on their own - but through violations of their terms of use.

I could not reproduce "Democracy: The God That Failed" on my own... and neither could I do develop Windows XP OS on my own. Mises Institute and Microsoft could prevent me if I tried to reproduce these products and all my profits would belong to them.

Published: December 18, 2006 4:50 PM
David C

Sasha: First he fails to see why demand for scarce goods must be greater than supply when price is zero (and what it implies)
Well, I don't. The uptake on (freely copyable) Linux in the marketplace is over 20% per year, and every data center in California is paying 6 digits for high end Linux software development skills. Oracle didn't decide to make it's own Linux distribution, and Microsoft didn't decide to make a 200 million dollar deal with Novell Linux because uncompensated copying is loosing in the marketplace, but rather because free market forces are causing it to kick butt. We are not in fairy land, when a theory makes predictions that don't match up with the real world, than that theory is wrong. Copyrights are not property and are anti free market crap.
Sasha: I could not reproduce "Democracy: The God That Failed" on my own... and neither could I do develop Windows XP OS on my own. ...
Well, Shash, I'm sure you couldn't and neither could they. Both are made up from thousands if not millions of pieces of knowledge and information out there taken freely and assembled in form. That they have a right to do this with out everyone elses permission, but we don't have a right to do it with out theirs because they declare it a property, is nonsense. A restriction on freedom with the nonsensical label "property" is still a restriction in freedom. Property rights defined by incentives are feelings, not property.

Published: December 18, 2006 5:27 PM
nate

Well I am a bit confused about what you guys are saying.

It would be a nice way in a discussion like this to make very evident what portions of other person's comments your commenting on.

I like to use double quotes, but html tags are nice.

But I'll try my best to clear up the confusion between copyrights and patents. I am not lawyer though, so keep that in mind.

Now Copyright vs Patents. These things are very different items, different concepts and covered by completely different sorts of laws and such.

Generally speaking you have 3 sorts of law that get dumped together when your talking about 'Intellectual Property'. Trademarks, Patents, and Copyrights.

Trademarks: They are designed to protect business's good name and protect consumers against fradulant products.

These things are things you have to register with the government to go into effect.

If you choose not to protect your trademarks (actively go after people who infringe) then there is a good chance you can loose them.

There is no time limit on them. As long as you reregister and such then they can go on for a very long time.

Copyrights: In my mind they are based on the basic laws of ownership, that is you created it therefore it's yours to control and own. Covers most creative acts.. programming, art, books, etc. etc. It only covers your work though. Other people can make their own thing that may look like yours, but as long as it's truely independant then it's ok.

Originally mostly intended for commercial endevors. This is to prevent one company from 'stealing' content from other company or individual for commercial gain. It never affected or was intended to affect normal people originally because the technology was so that only people that could copy were ones that were willing to put a substantial capital investment into printing presses.

Corporations going after individuals, I beleive, is a rather recent phenominom.

copyrights are automaticly given. Everything from a small doodle on a napkin in a bar, to the most expensive movie ever made.. they are covered the same law.

Copyrights expire. Generally 95 years, was originally 20 years or so.. not sure on the actual term, but since the 1950's the length of the copyright has been extended dramaticly. People blame it on Dinsey because every time mickey mouse is about to enter the public domain they lobby congress to extend copyrights.

You can choose if and how and when you want to excersize your copyrights. You don't loose them until the term expires.

Patents: Intended to place a temporary monopoly on concept or invention.

Unlike the concepts behind trademarks and copyrights, which go back thousands of years, patents are very recent idea. It's something that was used by the U.S. government to entice the great minds and inventors of Europe to come to America were they could profit from their ideas. This was used to great effect in the first hundred or so years of our republic. Contrasted to Europe were inventors and researches generally worked for the state and their inventiosn became property of the state, more or less.

This is one of those classic tradeoffs of freedom for more freedom, which was discussed quite a bit back in the day.

So the reasoning goes like this:
Society agrees to sacrific the ability to use certain ideas and places a exclusive monopoly on this idea or invention for a individual or company, which they can then use or license out for profit.

The patent expires rather quickly, 7 years (I beleive), so there is financial incentive to take the profits you gain from the patent and make new inventions that are then patented.

In order to get a patent you have to publish the details of your invention for academics and other inventors to study and understand so they can use those ideas to create new patents of their own.

This discourages the use of trade secrets, and increases the financial incentive for creativeness.

since the patent is temporary then sociaty in general gets to reap the rewards of the research.

the state of the art moves forward rapidly and everybody profits with just a temporary sacrific made by the majority of the people.

So you see they are very very different things Copyright vs Patents, but can easily be confused.

One is long term, one is short term.

One covers only your own work. The other covers the work of other people.

One is based on 'natural law'-type thinking, the other is based on sociaty trade off-style thinking.

Software is weird because it's covered by both patents and copyrights.

Personally I think that patents form a very important function, but that they've been abused heavily. With software patents they retard innovation and punish software programmers instead of rewarding them.

Also it's worth noting that currently the patent office is the only portion of the government that is _profitable_, which isn't a good sign.

A good agruement against software patents are aviable here:
http://lpf.ai.mit.edu/Patents/patents.html

A nice quote from Bill Gates himself (then CEO of Microsoft).
http://www.bralyn.net/etext/literature/bill.gates/challenges-strategy.txt

""If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today. I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique. If we assume this company has no need of any of our patents then the have a 17-year right to take as much of our profits as they want. ""

As for copyrights I think they are very nessicary.

For example: Linux.
Linux is licensed under the GPL. The GPL is termed as a 'copyleft' license to try to point out that it's purpose is opisite of most 'copyright' licenses.

The GPL uses copyright law to ensure that people cannot take somebody else's code, modify it, and then redistribute it without openning up the code for modification and redistribution themselves.

In effect then this is used to keep Linux as a commercially viable software product. If it wasn't for the GPL and they just dumped the code into the public arena then other software makers would take the code, add their own restrictions, then release it putting the original programmers out of business.

How this works is how it similarly works for Microsoft or any other software maker.

hope that clears up some confusion.

Published: December 18, 2006 5:53 PM
Axel Riemer

Sasha: "The economic definition of scarcity is this: when the price of a good is zero, demand exceeds supply."

I take issue with this. It is certainly a correct representation of the concept of scarcity, as anyone who has seen a demand-supply curve can visually attest. Diminishing marginal utility and return force the demand and supply curves to be the way they are, (curving up to the down to the right, and curving up to the right respectively), so that at the y-axis (where price is zero) if the demand curve is below the supply curve, they will never meet. This implies that no producer can even give a consumer a good (this takes care of goods that exist for which there is no demand, like nuclear waste) for free.

However, copyright and patent monopolies force us to subsidize a good at a price set by an entity other than the market. Are we asked to subsidize goods that would not be scarce (these would be goods not demanded at price zero)? Of course not, because in order to subsidize them, we must buy them: obviously goods not demanded are not bought. So the only goods subsidized are goods that would be scarce.

How scarce?

I refuse to believe that the government, or a company with a government granted monopoly is competent to judge the correct price that would be set by consumers in the free competitive market.

Of course, this puts no obligation on companies with monopoly protection to produce or sell anything at any price but their own.

Being libertarian and pro-market, I deny that a monopoly has any benefit, or would be sustainable without the threat of government force.

Published: December 18, 2006 6:08 PM
Sasha Radeta

David C,

As I already explained, Linux has the economic interest to bundle their (in many cases free) software with their more expensive services. Microsoft does not have such interest and its software is more commonly used and those services can be commonly provided outside of Microsoft.

---

I could not independently reproduce Microsoft or Mises Institute's property - which they already produced on their own. If I start reproducing their items - it is clearly in violation of my terms of use - which expressly prohibited commercial use and copying (I did not pay for that use).

When it comes to any kind of human-made product, its production is always based on some pieces of knowledge and inputs. If you are able to create a product that is uniquely designed - no one could force you to sell its commercial use.

Microsoft's copyright is indeed a restriction of freedom of theft - just like any other implication of private property rights. Just as you cannot "upgrade" your airline seat for free and without their consent - you cannot freely "upgrade" your terms of use of Microsoft's product and against their will.

Published: December 18, 2006 6:19 PM
Sasha Radeta

Nate,

I'm not advocating current government-run monopoly of copyright protection. I am only talking about original, contractual copyright, that would exist in a perfectly free market. I am also against government's mandate on copyright establishment and expiration - which implies that government owns all products.

Published: December 18, 2006 6:23 PM
Sasha Radeta

Axel,

Copyright could exist as voluntary, free-market, contractual restriction of supply of some forms of uses of a product (just like any owner can restrict their production based on supply and demand conditions). If you own some product, you can contractually agree with some users on what will be their actual terms of use. You don't have to allow the commercial use of your product to everyone, and to many producers (like book-authors) this would be the only way to survive in the market. And if customers accept these terms of use - they must respect them.

Published: December 18, 2006 6:33 PM
David C

Sasha, You assume on faith the premise that copyrights are a property. And then you go to show that you have no right to do this or no right to do that because they are a property. That's called circular reasoning, it's not rational. You must prove that they are a property first. (good luck)
Nate, If it wasn't for copyrights, no one would be able to add their own restrictions so there would be no need for the GPL. Any incentive to control the binaries would be dead, thus so would incentives to control or hide the source. The industry would still evolve into the service model that GPL industry has now. Also, free software is improving all the time and people who create forks must constantly merge those improvements into their new code base. Thus there is strong incentives to minimize forks in a world free of copyright restrictions anyhow.

Published: December 18, 2006 6:35 PM
Sasha Radeta

David C,

You are basing your argument on a false premise. I do not think that "copyright is property" as you try to impute. I clearly stated that "copyright" in a perfectly free market could exist as a -contractual restriction of commercial uses- of someone's item.

If you own something, you can restrict certain uses and allow (sell) others. That’s why all contracts, including restrictive terms of use, stem directly from property rights.

Published: December 18, 2006 6:41 PM
David C

Sasha, oops sorry about that. Your position is a lot different than where I thought you were coming from. But I think making a copyright system contractually is a lot more compliated than is being protrayed here. If Microsoft can make a perfect closed system thru contract and technology without regulating everybody else to death, or trying to control 3rd parties who signed no contract, then I wish great power to them. However, in practice I have serious doubts.

Published: December 18, 2006 7:07 PM
nate

""I'm not advocating current government-run monopoly of copyright protection. I am only talking about original, contractual copyright, that would exist in a perfectly free market. I am also against government's mandate on copyright establishment and expiration - which implies that government owns all products.""

I don't think I understand what your saying completely.

So your saying that it should work out that a company A gets a contract to use software from company B then if company B violates that then they can be sued (presumly in a government court)?

Then how is that different from now? Copyright licenses are just a form of contracts and copyright law is setting up the sort of limitations and scopes of those sort of contracts.

the only obvious difference I see is that it's agreement you make when you buy or obtain the software versus having to write up a formal document and having it signed and witnessed and such.

It works out that copyrights is automaticly. You don't have to go the government to register them or anything like that.

The government law works, as my understanding, works out to only realy establish 'Fair use', which is uses of copyrightable material that can't be restricted, and for the length of time before copyrighted material enters into the public domain.

The only F-ed up part of it is the DMCA, which is very recent (thanks Bill Clinton + republican congress!) which sets up all sorts of extra controls and regulations that go far beyond the original intent of copyright.

That places all sorts of additional burdens and restrictions on everybody from people making compatable software to hardware makers to end user which is most unacceptable.

Published: December 18, 2006 9:01 PM
Sasha Radeta

David C,

The aim of my contractual copyright would not be to regulate someone's life to their death - but to regulate the use of my product - as long as it exists. These terms of use simply state what is precisely exchanged in a market transaction - and what is still the right of the author. Such contract would not be more unusual than any other contract: from professional sports labor contract to conditional gambling contracts.

I saw to major objections to voluntary copyright:
- The "third party violation" issue - which is a simple tort issue, easily resolvable.
- The issue of independent discovery, which is also in many cases easy to resolve.

I would not be pessimistic about such contractual relations... I would be more concerned about the world in which contracts could be freely violated because that would be a dark world without private property rights.

Published: December 18, 2006 9:44 PM
Sasha Radeta

Nate,

In a perfectly free market there are no government's courts... An yes, if you violate any free market contract (including violations of terms of use) you would get sued in that free market...

The difference between voluntary copyright and our current system is clear: all provisions of these contracts are established by the sides in contracts - and the government (third party outside of contract) does not determine how long will such contract be valid, as if they own everything there.

Linux example is actually great, becuase not everyone want or needs all of copyright controls. That eventually becomes a part of pricing mechanism and it is up to sellers and consumers to negotiate and determine their terms of exchange.

Published: December 18, 2006 9:54 PM
nate

How does this enforcement work in this totally free market?

If I run a company and choose not to be a good citizen then couldn't I just tell somebody to F-off if they try to sue me?

Say I am company A and am in competition with company B. We both are in the same markets and both have similar budgets and resources...

So they develop software using their resources, then I take their software then use my resources to develop it further then use what tehnical measures at my disposal to lock them away from using it themselves.

So then third party companies, when deciding to choose which company to work with, can choose me with a technically superior product or my competitor with a inferior product, but better ethics.

Now the natural choice would be to go with the one with better ethics, but then that would put that third company in a disadvantage from their own competitors that may choose my software.

How do you see something like that ultimately resolving itself? (it's a natural scenerio since it's not rare for people to attempt to do that now)

Also shouldn't there should be a limit to the scope of copyright? Having things aviable in the public domain is very valuable assit to a society as is fair use.

Would you have it that copyrights are non-transferable so that the purpose of the copyright dies with it's author? (then there is a issue of copyrights owned by corporations)

Published: December 18, 2006 10:14 PM
rtr

All of Sasha Radeta's examples of contract are contradictory examples of coerced servitude. He is just too slow to realize that they are servitude. On the one hand he claims you cannot force a woman to have sex against her will, even if she previously contracted to provide such, and on the other hand he maintains one can be forced to turn over all of the products of one's labor for life for as little as a pencil if they so specified to in a contract.

The fact is contracts are legitimately cancelled all the time in a free market. This happens when someone quits their job, when someone is fired from their job, when someone is divorced. Sasha Radeta's thinks involuntary coercion applies to all time forward if at any time temporarily agreed to in the past. This violates freedom of association, this violates a standard of continuing mutual voluntary agreement, and this violates ownership of tangible actually existing property. It's wholly UN-libertarian.

The fact is if you can't force a woman to have sex against her will, even if she previously agreed to in the past, you can't force a soccer player to continue playing for any team. Freedom means voluntary freedom of association and that entails the liberty to change at whim whom and how one associates with others regardless of any prior contracts.

Trade is final where one real thing is transferred to another for another real thing. You can't get ideas back or control them. You can't circumscribe ideas. You can't lease ideas and then claim exclusive ownership of ideas. For it is obvious multiple people can inhabit the same idea at the same time whereas in the real material physical world it is impossible for two people to inhabit the same place at the same time. Claiming copyright is as absurd as claiming ownership of the process of procreation or ownership of the air which is breathed by multiple people. They are coercive offensive acts of war, plain and simple.

If copyrights were real property someone could still own the method of creating fire, someone could still own the wheel, someone could still own the idea of wearing clothing, and bequeth ownership down to their progeny. That there are also arbitrary limits of time, that there are arbitary "fair use" exceptions, only further shows that the claims are without merit. Claimaints seek to enforce by violent means. And they seek to express themselves through a common language(s). They did not originate these claims in their sole created jibberish "language" which is understood by nobody else but themselves.

Voluntary agreement is inherent in trade, when one thing is exchanged in whole for another thing. Contract cannot violate a standard of voluntary agreement at a future time, and this is precisely what happens if someone changes their mind and ceases to wish continued association with another. Contract is not trade, and contract is thus at risk of future time and continued voluntary agreement into future time, as opposed to trade, which occurs in present time, and requires no enforcement whatsoever. This is privately voluntarily exhanged for that. And that voluntary agreement must also apply to contracts for every point in time going forward in time.

Published: December 19, 2006 12:26 AM
Sasha Radeta

Nate,

for on more on privatized law enforcement and private courts read Hoppe ad Block. That is not our topic here. I explained and described copyright contractual mechanisms and I really don't want to spend more time on that. If you use someone else's product in ways that you did not pay for, you will trespass and commit theft by keeping the product from that unauthorized use (it belongs to author). That goes for any proven commercial use of someone's product.

-----

rtr,

I know you are still upset because in last Stephan's post I really lectured you on basic economics... But why do you go back to that?

And why are you telling lies about me? I never said that anyone can be forced into labor (for a pencil or for a million dollars), because that would constitute enslavement.

This is what I said about labor contracts on another thread:

---------------------------
"...not all market-exchange contracts are the same but they all have in common exchanges of property title exchanges. In Dan Coleman's example, after you sell your labor services for a pencil, that pencil becomes your property - and you owe services to your buyer. If you decide not to provide your services you will have to pay damages to your buyer. If these damages were specified by contract - you will pay exactly those damages. If these damages were unspecified - you will pay the amount equivalent to current value of your non-provided service and any other cost that the other side might have incurred due to your cancellation (it may be 1 pencil or more).

There is no confusion there and no contradiction with the copyright contract. Your attempts to deny centuries of legal reality based on pure logic are futile and ridiculous."
------------------------

In that same thread, you said that: "trade requires zero enforcement whatsoever." That just illustrates what kind of economist you are! If you pay me $1,000,000 to perform my services for you in seven days, but I fail to show-up on that day and instead drive-out to Mexico, you think that enforcement is not necessary??? My god, you are a joker! You think that force would not be necessary at all to protect private property.... how funny, considering that scarcity and conflict motivated property creation at the first place (but conflict resolution principles do not determine property distribution as communist claim).

As far as contractual copyrights go, you are completely clueless about anything that involves law... I mean, look at this sentence:

Contract cannot violate a standard of voluntary agreement at a future time, and this is precisely what happens if someone changes their mind and ceases to wish continued association with another

Hold on!!!!! Are joking??????

You say that if you decide to steal from someone (at a future time) - by using their products in ways that only their publishers paid for - you are exercising "voluntary agreement"???!!! You say that if a lottery decides not to pay anything to winner, because they "change their mind," that is a "voluntary agreement". Of course that contractual copyright is calling for force against theft and idiocy. Any contract must be enFORCEable in order to protect private property rights and to make any sense.

Well, you cannot "upgrade" your terms of use and use someone else's products in ways you did not pay for. I already explained this to you. Read it:

"You cannot just transfer property title on some good or service during a voluntary - and than "change your mind" and keep it. If that was the case, there would be no private property protection. You can change your mind and try to return copyrighted item to its owner (if he chooses to accept it back - he doesn't have to if sale was final). But you certainly cannot "change your mind" and than use his item in ways that you didn't pay for (more expensive, commercial use). You cannot "change your mind" in order to commit theft - in any kind of market transaction or a strict conditional contract (like labor, marriage, or even gambling contract according to Kinsella)."

I will not even comment that nonsense about copyrighted wheel and fire. You need to first learn what contracts are - then we can discuss history of private property and contracts.

I really cannot have any meaningful discussion with people who think that free market refers to freedom of theft and contract violations... people who don't have any concept of contract law and basic economics. RTR, you eliminated yourself from any further discussion.

Published: December 19, 2006 1:54 AM
Axel Riemer

Getting back to some of the main thread... The real problem here is a basic difference of opinion. Sasha's positions are all realistic and follow very logically, provided that ideas are property. If ideas are property, then the owner has every right to negotiate contracts and deals. Those who make contracts with the owner/author must abide by their contracts or suffer penalties, as with contracts today. The difficulty arises for contracts that are violated by third persons, and how to deal with them. However, if ideas are property, it is still a breach of the contract, and there must be a penalty, either on the second person for allowing the breach, or on the third person for taking advantage of the breach. I tend to think that deciding between the two would depend on the circumstance and customs of the time. It used to be common practice to hang a man for horse theft in the west, but practices change. We may see some common law emerge with IP.

However, if you do not believe that IP is ownable private property, then any discussion of contracts and ownership or third parties is absolutely without any basis in reality. If ideas are a non-scarce, non-rivalrous resource, then all of this IP law is simply a way for the government to intervene and warp the creative process.

So until that question, of whether ideas are property and can be owned, is answered, I don't think our two sides will be even able to see each others' points.

Published: December 19, 2006 2:53 AM
ktibuk

First about RTR's comments. He is confusing labor contracts which are inailenable, and copyright contracts which is about something alienable.

Rothbard is very clear on these subjects. If you make a labor contract you can get out of it and you can not be forced to pay a penalty, because you cant seperate yourself from yourself and exchange it. If you would enforce labor contracts that would leed to servititude.

But copyright contracts are different. You are giving away intellectual property. And this IP is alienable. The hard part is this property can be copied infinitely thus there is no point of returning it after it is leaked.

And for third party argument.

This is just silly. Please someone tell me what the difference is in below examples. Regarding only and only third party enforcement.

A rents an apartment from B in conditions that he will leave as he found it after the term of the lease. C, a third party, comes in and trashes the apartment. C doesnt have a contract with B the owner.

A buys a copyrighted movie to show in its movie theatre. C comes in as a paying customer and secretly copies it and sells it on the street.

As for third party enforcements all is the same.

The only difference is one product can be copied the other can not.

Hence the problem is not third party enforcement. Third party enforcement is a convenience issue not an ethical once.

The main problem here is scarcity and Sasha explained it very well.

If two sides makes a copyright contract this implies there is scarcity. Otherwise no one would pay for the first contract. Forget the third parties.

Published: December 19, 2006 4:06 AM
andy

Sasha,

It takes human resources to make a program, there would be no program without people using scarce resources - thus, software is scarce (I don't agree, but I hope I got your message clearly and I'm not constructing a straw man).

It takes scarce resources to make an invention. There would be no invention without people using scarce resources. Including such inventions as a 1-click shopping on Amazon. Thus, ideas are scarce and I am not allowed to make a 1-click shop if I saw it on Amazon first (I am, however, if I didn't see amazon first...).

Do you think that ideas/information are scarce?

IMO program is information. Once created and published, it is not scarce, because, once created, it perfectly fits your definition of non-scarce resource (everybody could have it with zero price). New, non-existent programs are scarce. Copyright protection protects only existing programs - it creates artificial scarcity.

That said, I think that the world without copyrights would be full of closed machines, much like the gaming consoles, mp3 players, mobile phones etc. The software being created would be different - there wouldn't be necessarily less software.

As for GPL: I don't think this is a correct example, because the GPL itself rests on copyright protection. The BSD license much better resembles the free-of-copyright world. Most companies obviously prefer GPL over BSD :-/

Published: December 19, 2006 6:12 AM
Sam

Oops:

. . . Unlike the concepts behind trademarks and copyrights, which go back thousands of years, patents are very recent idea . . .

Sorry poor nate but history would agree with David C and rtr that ideas and concepts can't be owned in any way. Actually copyright didn't until 1709 when English Parliament granted it for authors. Patents did exist in Ancient Greece for recipes (12 months grant). But reality is societies have generally agreed that it is the final product you own, not the ideas that went into creating them.

Published: December 19, 2006 7:25 AM
rtr

I've provided examples of legitimately cancelled contracts within a free market. What need is their for making arbitrary exception categories regarding "labor contracts"? A contract is a contract, and Sasha Radeta has agreed that "labor" contracts can be cancelled at whim at any time because you cannot force servitude. If "labor" contracts can be cancelled at whim, then any contract can be cancelled at whim. Contracts are conditional and extend into future time, as opposed to trade, which is final, and limited to present time.

That's the difference between trade and contracts. Trade is mutual voluntary transferrance of real actual existing property which increases the wealth of all parties. Trade is final. Contracts are not final because valuation is not necessarily constant such that mutally beneficial exchange may cease to exist in the future.

Sasha Radeta: "I never said that anyone can be forced into labor (for a pencil or for a million dollars), because that would constitute enslavement."

Yet you clearly contradicted yourself by saying: "If you decide not to provide your services you will have to pay damages to your buyer. If these damages were specified by contract - you will pay exactly those damages." What exactly was unspecified in the contract that called for lifetime product of your labor in exchange for a pencil? You misunderstand that there is absolutely no difference in regards to economic value whether something is a good or something is a service. Whether you force someone to provide a good is no different then forcing someone to provide a service. Since you can't force someone into servitude in the example of sex, you also cannot force someone into servitude with providing any other possible example of a good either.

Trade does indeed require no enforcement whatsoever because the nature of trade is that it is *voluntary* and *mutually beneficial*. You don't need a gun or a lawyer to give some coins for a big mac. Theft is not trade. Theft is non-voluntary taking.

Ideas are not exclusively ownable products in a market! No matter how much you might wish exclusive ownership of a idea, once the cat is out of the bag you cannot put it back in the bag except by coercive force. Your only choice is to remain silent and not share your idea. You cannot force silence on others. Others must agree, and continue to agree to not copy. You can't force them to. An idea is no longer exclusively ownable once it is shared, leased, or traded. That's why you rest your case on continuing contract. However, you cross over from voluntary agreement into involuntary coercion once someone no longer wishes to freely associate according to the prior terms. You claim labor cannot be forced. Well, neither can labor be prohibited. Suppression of labor and forcing of labor are both offensive violent coercive acts.

You claim return of any property which may have been exchanged is dependent upon the seller accepting return in case of a cancelled contract. Again, you are once again back at coercion and confiscation of labor and goods above and beyond the actual exchanged goods which were not and are not voluntarily forthcoming from the buyer.

You are talking about simple leasing. If you lease a car and cancel the contract that does not entitle the seller to your house. The seller gets his car back and keeps any deposits or payments which were actually exchanged. The buyer's house was not traded for the use of the seller's car for one month. It's obvious these copyright leaser sellers want to circumvent the clearly understood rules of voluntary exchange. If you wanted the buyer's house the seller should have explicitly offered a trade of the buyer's house for the car, which obviously, the buyer would have rejected as non beneficial to himself.

Published: December 19, 2006 9:15 AM
David C

Sasha,
I have a huge problem with this tort thing, and matters of duplicate is not a trivial matter. Almost all major inventions are progressive, and duplication is very very common, maybe not in literature, but definitely in programming, math, and invention. The rubix cube, the phone, the airplane, the integrated circuit, RFID, the list of duplication is nearly as long as the list of invention.
So you can argue that you have a privacy right because it is really no one elses business what creative activities you do unless you want to make it someone elses. You can argue you have a contract right because it's a basic fundamental right to make agreements with people. You can argue that you can have a property right with physical items because their non exclusive nature, and respect for human dignity.
But my perception is that you are claiming an additional right to control how everyone uses a piece of information once the cat gets out of the bag. Well, what about a press leak - do you claim a right to control that too? Can a politician? I hope you see the slippery slope and the clear lack of boundaries. I hope you can see that that "right" is not, and can never be local, which means massive growing levels of government at a global and galactic level to ensure universal enforcement as society becomes more information based. The non local nature of information is more telling about its nature as a property right than anything else.
The act of disseminating alone is skipping the contract option and giving up that privacy right and acknowledging the non exclusive nature of information. If someone you enter a contract with disseminates without your permission, then the liability rests with that person alone, because anything else would supersede the rights of other people to engage in free and private activities and hold people binding to contracts they didn't make and can not know of. Society has rights in regards to contract and privacy too, not just the creator. In sum, copyright implies that the act of creation gives a magical right to bypass every one elses rights relating to contract and privacy.

Published: December 19, 2006 9:42 AM
ktibuk

"I've provided examples of legitimately cancelled contracts within a free market. What need is their for making arbitrary exception categories regarding "labor contracts"? A contract is a contract, and Sasha Radeta has agreed that "labor" contracts can be cancelled at whim at any time because you cannot force servitude. If "labor" contracts can be cancelled at whim, then any contract can be cancelled at whim. Contracts are conditional and extend into future time, as opposed to trade, which is final, and limited to present time."

Wrong.

Labor contracts which usually involve a future labor service are different than lease contracts which involve alienable things, whether tangible or untangible.

The reason labor contracts are not enforcable is because these contracts are promises for future labor services.

If the laborer promises to deliver a labor service in the future but changes his mind you can not enforce it.

But if for example labor service was given but money hasnt been paid for it, then the contract can be enforced. Because the other side of the contract, money is alienable.

Copyright contracts are these kinds contracts and they can be enforced and this is not called servtitude.

Every trade is actually a contract. Just because mostly tangible things exchange hands and there is a mutual unspoken agreement among almost anyone this doesnt change the fact.

When there is a trade of oranges and apples there is a contract involved. There is an agreement on the exchange of the property. If there wasnt a contract every exchange could have been nullified after with one party changing his mind.

RTR you need to read Rothbard again and again. Otherwise you wont get rid of your confusion.

Contracts are the basis of property rights with only one exception. Future promises of labor services.

This is the exception not the rule.

Published: December 19, 2006 10:16 AM
rtr

There's no economic difference between labor services and alienable goods. They're both scarce and are valued by human actors. Any distinction is arbitrary from an economic perspective.

You could pay someone in advance to do a job and they could then not do the job. Someone could do a job in advance and then not be paid for their work. That's why the market evolved toward weekly, bi-weekly, and monthly paychecks, rather than yearly or decade-long paychecks. There's risk. There's margin calls. There's down payments. There's deposits. There's market punishment for failure to deliver in the form of credit ratings, blackballing, reputation, etc.

It's between the parties involved to settle their trades, return goods that can be returned, arbitrate disputes. But no matter what you wish, no matter what you claim, it's absolutely impossible to return an idea so that the originator once again has exclusive ownership of the idea. All you can do is enforce servitude in the manner of confiscating goods or labor of the new idea co-owner, or enforce servitude by prohibiting labor of the new idea co-owner. Or you can just let the claims of fantasy of exclusive ownership of ideas go.

So is there a contract involved in holding hands? Don't be ridiculous.

Published: December 19, 2006 10:53 AM
Sasha Radeta

Axel and Andy,

I don't have much time to read all of the responses, but I'll try to clarify my position:

Ideas and information are scarce (there are less of them than we want and need for our production and/or leisure, and you can sell information and knowledge) - but in order for information to be ownable and exchangeable they must be written on something tangible. Then you can make a contract with someone that will determine his/her terms of use of that object and its contents. That's where contractual copyright comes from.

-------

rtr,

Just the fact that you don't understand that wheel and fire could never have been copyrighted (independent discovery issue) shows that any discussion with you is probably pointless... Not to mention your notion that force and contract enforcement is not present in voluntary market transactions.

But I will not ignore you this time...

I don't understand what is so confusing to you about labor contract. Although you cannot force someone to work (work is unalienable) - you can certainly enforce a labor contract by making a violator pay for services that were not provided. You can even sue someone who promised their future labor services - if you specified cancellation damages in your contract, or if you incurred other damages as the result of that breach of contract.

I don't know what to tell you. Watch Court TV, if you are boycotting legal literature. People get sued all the time when they violate labor contracts. Read about transfers of professional soccer players... artists' contracts that cannot be broken without paying damages... or wedding planers who don't show up at the arranged day and get sued... or people who get sued for violation of their pre-marital contracts, and who pay some consequences for their cheating. By the way, some sales specify that they are final and you cannot "change your mind". I'm sorry.

But at any rate, you cannot EVER change your mind by "upgrading" your service without your seller's consent and without paying anything. You cannot rent one flat in my building and than "change your mind" and than occupy also another one. The same goes for copyright: you simply cannot "change your mind" by using my product for purposes you did not pay for. You can change your mind and be dissatisfied with personal use of my product, which you could try to exchange (and I may refuse to accept this). But you cannot "change your mind" by "upgrading" your use against the word of your contract, because that is nothing but a theft. Period.

Your lack of understanding of basic legal concepts is just too great to be corrected on this blog. And there is no point of repeating same thing over and over... I just don't understand how you get your motivation to write so much nonsense.

Published: December 19, 2006 11:29 AM
rtr

So wheels and fire can't be copyrighted but automobile brakes and windshield wipers can be copyrighted? How about electricity? How about any pharmaceutical drugs that do anything? How about any of the 5,000 or so patents Microsoft applied for this year?

How is my notion of force and contract enforcement not present in voluntary market transactions? We've already agreed you can't force someone to have sex against their will even if they previously agreed and signed a written contract. What's the difference between forcing someone to work and forcefully taking the fruits of their labor?

The seller can have his property back if and when the lease is terminated. It's only more fantasy to introduce an idea of "upgrading" use. If you disagree how your leased product is being used then you can have it back at any time, if it's really a product that is being *leased*. In terms of OS software that would be your original cd and manuals. Somehow you still think that claims can go above and beyond the actual physical products which were or weren't exchanged in the form of "damages" or claims against "unalienable goods". Again, you are in violation of your own principles with the contract example whereby a pencil was traded in return for all the future products of your labor. That's plainly and simply servitude to enforce by violent coercion the transferance of any and all future unalienable products of your labor. How do you expect to live when eating unalienable food puts you in violation of your contract?

Published: December 19, 2006 2:45 PM
Dan Coleman

rtr,

I had noticed that Sasha seemed to ignore the "pencil for slavery" example in the last thread of comments.

Under Sasha's system, my "slave" would, after cancelling the contract, still owe me every product of his labor for the rest of his life! These are Sasha's "damages" for an unfulfilled contract. It seems clear to me that this is involuntary servitude.

Published: December 19, 2006 3:36 PM
rtr

Indeed, Dan Coleman. I thought that had nicely settled the argument to whether contract could exist in violation of future mutual voluntary agreement. At any rate, it's interesting to note how markets have evolved to deal with that problem; credit derivatives, margin, credit ratings, reputation, bi-weekly and monthly pay checks, deposits, pre-paid cancellation fees, etc. The list goes on and on.

Published: December 19, 2006 4:05 PM
Sam

But then D. Coleman, suppose someone said to me that if I mowed his lawn and clipped his hedges, he'd give me $20. Suppose then after I mowed the lawn and clipped his hedeges he decides he doesn't want to pay me.

Are you saying that I have no right to ask for that $20? That it would endanger his right to feel obligated? Or he now decides that he will only pay $5? Or he decides now he pay the $20 in installments of $1 per decade for the next 200 years? Tough luck to me if he dies or misses payments. And finally suppose he didn't pay and I have metal pipe with me with which I crack his head open, is that violent coercion or simply retaliation for a thief who stole my time and labour?

Published: December 19, 2006 11:46 PM
Sasha Radeta

Dan Coleman,

How can you say that I ignored your "pencil for slavery" example - when I even repeated my response on this thread!? Everything I said about "rtr" applies to you, as well.

---

rtr,

go to some physics classes and you will learn why Nikola Tesla was "the man" and why it is to prove that no one else independently invented Tesla's coil or alternating electric current. There is a huge difference between those inventions and the invention of fire throughout the globe (independently). Enough of that silliness!

As far as your forced sex example goes, I already told you what the difference is: labor is not alienable. You cannot force someone to work, but you can force them to pay damages specified or not-specified by labor contract. So there is no inconsistency: labor laws are still enforceable as evidenced in our every-day life (from soccer teams to Hollywood). I don't know where you got that silly idea that you can just break the contract (and commit a theft in terms of use) by "changing your mind?"

If you know anything about contract law- you would know that after you transfer the property title on some products- that property no longer belongs to you. In a copyright agreement, you conditionally transfer any unauthorized copies to the author. In other words, these "fruits of your theft (labor)" are not yours. You conditionally sold them in exchange for personal use of that product. That's not a bad contract... I want to believe that most people are not jerks and thieves who want to pay for personal use of some product - and than try to "upgrade" their terms of use for free and without the seller's consent.

-----

Sam,

Good illustration, although a tad bit too violent :-)

Published: December 20, 2006 1:08 AM
Sasha Radeta

I hope this will be my last posting on this thread (I will try to explain to rtr and Dan Coleman why their enslavement example is not any kind of proof that contracts could be vilolated at will, regardless of someone else's violated property rights):

The fact that someone's total and unalienable control over one's body (the nature of our existance) theoretically excludes someone else's sole control (ownership) over someone else's body - makes slavery contracts even hypothetically invalid from a stict legal perspective. Subsequently, we cannot have slavery contracts in which someone can be forced to work. Instead, we have labot contracts, in which violators must pay some damages (other than labor).

If you hire me as a cook for you wedding and I refuse to show up, you cannot force me to show up and work adn cook for you. But you can sure as heck sue me for damages, because i did not provide service and products that belonged to you.

--------

Now back to copyright:

As I explained you in many different examples from labor to premarital contracts - they cannot be violated if they specify some property title transfer. Period! That's the basic application of private property rights. That's why Stephan Kinsella did not even try to invalidate legality or libertarianism of voluntary copyright contracts, but instead he tried (and failed) to demonstrate that they would dissolve on their own (and I provided logical evidence on why they would not). Give it up... EOD.

Published: December 20, 2006 1:39 AM
ktibuk

RTR

"There's no economic difference between labor services and alienable goods. They're both scarce and are valued by human actors. Any distinction is arbitrary from an economic perspective."

All your talk about servtitude is an ethical argument not an economic one. And this IP debate has both sides in it.

If you talk about scarcity, demand and supply, etc only, you are entering in an economic debate which you already lost.

But if you want talk about property "RIGHTS", honoring or enforcing contracts based on these rights, and servtitude this is an ethical argument.

If you want to look at this from purely an economic point of view, like Mises, you can do so but you can not say what you have been saying.

Notice Mises' name doesnt appear in these discussions but Rothbards and Hoppes do. Because Mises never entered into an ethical discussion.

You are getting more confused by the time passes.

Published: December 20, 2006 3:37 AM
ktibuk

And Sasha,

"As far as your forced sex example goes, I already told you what the difference is: labor is not alienable. You cannot force someone to work, but you can force them to pay damages specified or not-specified by labor contract. So there is no inconsistency: labor laws are still enforceable as evidenced in our every-day life (from soccer teams to Hollywood). I don't know where you got that silly idea that you can just break the contract (and commit a theft in terms of use) by "changing your mind?""

You are mistaken that in the case of not honoring a future labor promise or a contract, the laborer owes any damages.

He does not.

All the current legal enforcements like soccer players, artist whatnot are actually against natural property rights.

Future labor contracts are not enforceble in any way. Forcing the laborer to work or making him pay for the damages (which would again is making him work for that promise) is the same thing.

Bu this has nothing to do with the copyrights and IP anyway. No relevance what so ever..

Copyright contracts are not labor contracts. Yes labor is involved but the product, the knowledge, is alienable. Copyright contracts are not future labor contracts for any party. The creator doesnt promise a future labor, nor the buyer of the creative work to eachother.

And for the wheel, electricty or whatever invention.

Independent discovery and deciding on this issue is a convenience issue.

It should be decided in court.

If I make and invention and sue someone with the same invention for stealing, I have the burden of proving the theft.

In some cases like a complex book proof is easy, because no way someone else can right exactly the same book.

But inventions which look simple after they are known are harder to decide.

So inventors would try to find a way to protect their inventions. Like Coca Cola have been doing for years.

And when Rothbard was talking about putting a copyright on a mouse trap he as talikng about this issue.

The problem with patent laws is, it assumes the late comer as a thief ex ante. No trial no nothing.

Rothbard wasnt confused about anything the way Stephan so arrogantly supposes. He was right on the stop and I wonder why this discussion is still going on after Rothbard already took care of it.

I know it would be hard to improve on Rothbard but this IP thing is really ridiculous.

Published: December 20, 2006 3:57 AM
Sasha Radeta

ktibuk,

Thanks for your great comments. We share appreciation for Rothbard. However, I have a different approach when it comes to labor contracts.

You mentioned "future labor contracts" when you referred to "current contract" (current promise) that involve future labor services. I think it is important to make a distinction there. Allow me to explain… Analyze this critically and tell me what you think:

Labor contract by definition involves promise of future labor services. Whether you get paid in advance or after job completion - it does not change the nature of this contractual promise of future service. Bear in mind that promise of future labor service is countered by other side's promise of future compensation. There is a current exchange of property titles: money now belongs to you, while your labor now belongs to me. This contract should be enforceable like any other of the same nature. The only difference here is that delivery of property (for which titles are already exchanged) is scheduled for some future day.

If contract specifies damages (clear-cut case), or even if it doesn't specify them, you still did not provide service that someone was entitled to. That is not fundamentally different from someone who sells their house, transfer their title - but then realizes he made a mistake and tries to prevent the owner from moving in.

In addition, you have real damages caused by the breach of contract (my wedding-day examples with cooks, planers, etc).

Published: December 20, 2006 6:16 AM
rtr

Sasha Radeta: "labor is not alienable. You cannot force someone to work, but you can force them to pay damages specified or not-specified by labor contract."

So labor is not "alienable"? Copyright and ideas are even less "alienable" than labor. Labor at least exists in the physical and material world.

From dictionary.com:

al·ien·a·ble

–adjective Law.
capable of being sold or transferred.

So since those who claim copyright are attempting to sell something which is not alienable, ideas, are copyright claimants who trade for alienable goods guilty of the crime of fraud? Or are all contracts involving copyright simply illegitimate on the grounds that inalienable things cannot be enforced, like labor?

Who cares if labor laws are enforced in everyday life? So is taxation.

How can there be any theft of something that is not alienable? Ideas are not capable of being sold or transferred. Thus, ideas are also not capable of being stolen either! If the emperor's clothes do not fit, you must aquit!

But Sasha Radeta you are still at the mercy of the pencil for all the fruits of labor for life contract. You cannot eat except by charitable permission of the contract holder. You've failed to address that contract, yet again.

Sasha Radeta: "The fact that someone's total and unalienable control over one's body (the nature of our existance) theoretically excludes someone else's sole control (ownership) over someone else's body - makes slavery contracts even hypothetically invalid from a stict legal perspective. Subsequently, we cannot have slavery contracts in which someone can be forced to work. Instead, we have labot contracts, in which violators must pay some damages (other than labor)."

Slavery contracts? Nobody is forcing you to work in the pencil for all the fruits of your labor contract example. But if you work, including procurring food, that food and anything else you produce doesn't belong to you by contract, according to you yourself.

Sasha Radeta: "As I explained you in many different examples from labor to premarital contracts - they cannot be violated if they specify some property title transfer. Period!"

Ok, then acknowledge according to you in the pencil for all the fruits of your labor for life contract you are not allowed to eat. All the fruits of your labor for life was clearly specified property title transfer.

Published: December 20, 2006 8:59 AM
rtr

ktibuk: "All your talk about servtitude is an ethical argument not an economic one. And this IP debate has both sides in it."

No, actually it's value-free simple observation. Just like Mises observed people are either freely trading with one another, or they are not; there is no in between third possibility.

Trade is either voluntarily conducted, contracts either continue to be voluntarily agreed to, or they are not voluntarily agreed to. If a contract is enforced against someone who changes their mind about the contract in the future, then logically, if the contract is enforced against them, they are being sujected to servitude, the opposite of trade.

Published: December 20, 2006 9:12 AM
Sasha Radeta

ktibuk,

Contracts derivable from the right of private property are enforceable (I don't care about the term "natural" when it comes to these issues). Or as Rothbard stated: "contract should only be enforceable when the failure to fulfill it is an implicit theft of property."

At the first look, our example with the person who completes the contractual sale of his house - but refuses to move out - does not seem like a theft. After all, he just "changes his mind" and decides to keep "his" house and to refuse "ex-buyer's" money. So there is no theft, because there is no exchange at all, right?

WRONG! We have to honor the fact that contract was signed and property titles were exchanged. In other words, house is now buyer's property and money is now seller's property. Seller's occupation of someone else's house is nothing but a theft. The fact that he is preventing the delivery of his money does not mitigate the theft of the buyer's property (house). Buyer values that house more than that money (which he clearly demonstrated by making his purchase). Buyer does not want to be forced to take seller's money and to accept the theft of his house.

This brings us to question: can a unilateral mistake of a seller make a contract voidable, just by itself? The answer is no! Not even bilateral mistakes can make a contract voidable (see Raffles v. Wichelhaus). But even more important question: can voluntary market exchange ever be considered a "mistake," which buyer knowingly exploited (voidable situation). The answer is NO! Voluntary market exchange implies that both parties were benefiting from it at the moment of contract signing. Ex post facto analysis by one side does not count when we analyze circumstances when voluntary contract was formed.

---

It is not difficult to see how this would be comparable with labor contracts, in which physical exchange of already transferred property is scheduled for some future day.

It is also easy to see that this issue has nothing with do with contractual copyrights. Even if you argue that any buyer has a "right" to change their mind and force seller to accept the return of his merchandise (which he doesn't have to if transaction was final) - that does not mean that you can unilaterally change your terms of use to your advantage (theft).

------------------------------------------

rtr,

When I said that labor is unalienable, I referred to this unique characteristic of self ownership (already described in this thread):

The fact that someone's total and unalienable control over one's body (the nature of our existance) theoretically excludes someone else's sole control (ownership) over someone else's body - makes slavery contracts even hypothetically invalid. "slavery contract" is an oxymoron.

However - physical property that contains some idea is alienable. You can committ a thef by using someone's products in ways you did not pay for. That is absolutely clear to anyone who does not refuse to think. Relax... You will not be able to win this argument by ignoring simple logic that is self-evident even to a child.

Published: December 20, 2006 9:30 AM
Sasha Radeta

Also rtr,

- Please stop insinuating that property that contains some unique idea or design cannot be ownable - because it can... Such property cam be subject to copyright;

- If copyright contract does not force you to work - than it is not a "slavery contract." You conditionally transferred property title for all fruits of your potential theft - in exchange for personal use of that particular product. That is an absolutely valid contract and you will have to live with it. I will repeat this until you finally get this point: you cannot unilaterally "upgrade" your terms of use, because that is nothing but a theft. If buyers were able to behave like that in the airline, in their apartment buildings, in shops, or anywhere else - there would be no private property rights.

Published: December 20, 2006 9:40 AM
rtr

Sasha Radeta: "However - physical property that contains some idea is alienable."

Physical property is alienable by virtue of being physical property. Some idea which may or may not be contained in physical is wholly immaterial to it's being pysical property.

Sasha Radeta: "You can committ a thef by using someone's products in ways you did not pay for."

Where's the beef and where's the theft? Only physical property can be stolen.

Sasha Radeta: "Please stop insinuating that property that contains some unique idea or design cannot be ownable - because it can... Such property cam be subject to copyright;"

Property can be ownable by virtue of being property. Ideas are not property. It's a physical impossiblity to return transfer of an idea. Thus, copyright is an oxymoron in exactly the same way "slavery contract" is an oxymoron, though servitude is plainly understand as being forced to do something against one's voluntary will.

Sasha Radeta: "If copyright contract does not force you to work - than it is not a "slavery contract." You conditionally transferred property title for all fruits of your potential theft - in exchange for personal use of that particular product. That is an absolutely valid contract and you will have to live with it."

Or die with it in the case of the pencil for all the fruits of your labor example.

*Conditionally* transferred? Something has either been exchanged or it has not been exchanged. Something is either voluntarily exchanged or it is not voluntarily exchanged. If voluntary exchange is not forthcoming, then both parties maintain their prior property. If at any time exchange is forced against one's present will, that's clearly involuntary theft. If something is conditional, it's *conditional*, and it cannot negate the need for voluntary mutual agreement at the time of *actual* exchange.

If you want damages, then you need to procur an advance deposit on those potential damages. That would qualify as finalized voluntary trade.

Published: December 20, 2006 10:33 AM
Sasha Radeta

rtr,

If physical property is alienable - that means that it can be stolen. Unauthorized use of a physical property is called theft. Isn't that so?

If you use a product in ways you did not pay for (violating a copyright agreement) - you are committing a theft. There is no point of arguing against this.

No one claimed that ideas per se are ownable - I only claimed that ownable property may contain idea or a unique design. The owner of such property may choose which use of his product is allowed. He may choose to sell personal use, while restricting commercial use, including the reproduction of his product's design or content. That is a perfectly valid free market contract.

That has nothing to do with your silly pencil example - where some person may choose not to work, but he will have to pay damages for undelivered goods (just like a person who refuses to deliver goods, like in our example with a house sale).

If you want damages, an advanced deposit is absolutely not necessary. After signing a contract that mentions these damages, you already conditionally transferred the property title of that money. Whether the sides in contract decide to have this money delivered in advance, before damages occur, or if they agree that damages will be paid after the damages happen - it is completely in sovereignty of sides in contract.

You still demonstrate a complete lack of understanding of contract law and the very meaning of contractual relations. With all respect, you are not fit for this discussion.

Published: December 20, 2006 9:41 PM
andy

Ideas and information are scarce (there are less of them than we want and need for our production and/or leisure, and you can sell information and knowledge)

Sasha, you are confusing terms. English is not my mother tongue, but it seems to me that you lump together 'new information, idea' and 'existing idea'. Of course there is scarcity of new ideas, that's why a company may still be motivated to pay programmers to work on opensource project. Once the information,idea,program exist, it definitely satisfies a definition of abundant good - everybody CAN have it for zero price. This does not hold for physical goods - even if it is produced, it is not enough for everybody forever.

Published: December 21, 2006 3:54 AM
ktibuk

Sasha.

"Labor contract by definition involves promise of future labor services. Whether you get paid in advance or after job completion - it does not change the nature of this contractual promise of future service."

It does change. If it is only promises that has been exchanged then contract is void, unenforceable.

Just as you quoted from Rothbard

"contract should only be enforceable when the failure to fulfill it is an implicit theft of property."

When there is only promises involved there is no property involved tangible or intangible, hence no implicit theft.

And RTR

It is amazing even after you give the definition of alienable you still cant grasp the idea.

"From dictionary.com:

al·ien·a·ble

–adjective Law.
capable of being sold or transferred."

So ideas can not be transferred? That is just plain funny. "Gorillas have the smallest penis size relative to the body mass in all of mammals." There.. I transfered knowledge, and idea to you. And for free. I am still me. You dont have any future control over me. I just transfered knowledge to you. You could have given an alienable propery to me inexchange of the idea I have given to you. That could have been a knowledge you had, so we would teach eachother and both benefited from this trade. Or you could have given me some tangible property, like money commodity.

What do you think education is? Have you paid for college? If you did what did you pay for?

Since you dont believe in transferring ideas and believe they are not property do you advocate free education for all? Since ideas, knowledge is not scarce, not property then it should follow that they are free goods?

Labor on the other hand is not transferable. It is an impossibility in this universe. You cant take total control over some other persons mind even for a period of time. Maybe in scifi movies with hypnosis and stuff. But not in this real world.

On a side note.

I amazes me how an intellectual, who just produces and sells intellectual property for a living can be against IP.

Published: December 21, 2006 4:11 AM
Sasha Radeta

Andy,

You kind of contradicted yourself. You said that one the idea exists (takes place) it automatically becomes abundant (non-scarce) good. But if that was the case, why would companies pay for ideas that exist in human minds (of their experts)? Why would students pay for their education? Well, simply because ideas can exist somewhere - but still be scarce - because people cannot just freely, at will, access other people's minds.

You fail to recognize that same analogy goes for ideas that are stored on someone's hardware. People cannot just have a free access to someone else's property. The owner of such items may choose to sell only the personal use of his products, while restricting the commercial uses. That's copyright.

----------

ktibuk,

I am consistent with Rothbard, as well as the common law. Go back to the meaning of term "contract." In my example with the house sale - two sides did not exchanged empty "promises." They exchanged property titles. Contract IS NOT voidable based on ex-post-facto understanding of unilateral mistake, or even a bilateral one. That prevents wedding planners and other professionals to book 100 of events for one day and then to cancel 99 of them at the last moment (to screw their competition).

In my example, the person who bought the house values it more than money for which he entitled the seller. If the buyer is prevented from entering his house (for which he now holds the property title) and forced to keep the sellers money - that is still an implicit theft. The buyer does not value that money as much as his acquired house (of which he is now unlawfully deprived) - and he does not want to be coerced into another (reversed) exchange.

Published: December 21, 2006 8:21 AM
rtr

ktibuk, you cannot transfer an idea *back* so that the idea once again is possessed by a sole owner. If I tell you that the earth is round, not flat, it's a physical impossibility to get that idea back from you. If you think it, you know it. And that's it. The idea now belongs to you as well, and that has not in the least dminished or taken away my ownership or anyone else's ownership of the idea that the earth is round, not flat.

That's why ideas are not property. Ideas are not circumscribable. Ideas are not scarce. Ideas are not tangible. Ideas are not exclusively ownable. Thus, it is absurd for anyone to claim copyright ownership of an idea as the second they publicly make their claim the idea is no longer *by definition* solely owned by the creator, but also owned by anyone who hears, sees, reads, or independently thinks the same. And that multi-ownership doesn't in the least diminish the resource of the idea. That idea is habitable by all with zero space limitations, unlike physical property in the material world which is subject to physical space limitations.

Published: December 21, 2006 8:23 AM
Sasha Radeta

rtr,

Unfortunately for you, the copyright is not based on the notion that ideas can be transferred back (still that obsession with voidable contracts). Copyright is based on the notion that you own your mind and your hardware in which idea can be stored. And if you own that hardware, you can make voluntary contracts with other individuals, allowing them certain uses of that piece of property and its content - while restricting the others. That's all.

Published: December 21, 2006 8:35 AM
rtr

Sasha Radeta, it's a physical impossibility for an idea to be stolen. Only physical things can be stolen.

Ideas are not products either. Products are things like books, with inked words on paper pages. Copying words on my own paper pages with my own ink doesn't in the least violate the "use" of your original property, which was a specific book with specific inked words on specific paper pages. You don't own the blank paper pages of others. You don't own the ink of others. It's none of your business what others use their own labor to put on their own paper pages with their own ink. It doesn't belong to you.

There's no such thing as "conditional transfer" of property. Property is *EITHER* voluntarily exchanged, *OR* property is not voluntarily exchanged. Property is not transferred until it's *actually* transferred. ktibuk is right that a promise is not a transfer of physical property. A promise is no different in characteristics than is an idea. It's not physical. It's not property.

If you're leasing a book and you object to how the book is being used then you can get back that specific book you leased. You have no title whatsoever to other books which contain pages and ink not owned by you no matter what someone may or may not have promised. You never even had property title to the ideas contained within a book. The only thing you had property title to was the specific book you "leased".

Published: December 21, 2006 8:45 AM
rtr

Copyright is an oxymoron. Copyright is no notion of property whatsoever. Indeed, you own your own mind and the hardware in which your ideas can be stored. That's all. You don't exclusively own ideas. You don't exclusively own "content". You only exclusively own actual physical property. You can make contracts, you can make promises, but that doesn't negate the need for the exchange of actual physical property at the time of actual exchange to be voluntary for it to be called trade, and not theft. That's really all.

Published: December 21, 2006 9:07 AM
ktibuk

This has become a sircular argument, but I will make a few ponits.

Returnibility is irreleveant in trading tangible or intangible things. You cant return a tangible property either. At least according to private property and trade rules. That return you are talking about is whole new trade because evaluations change all the time.

Of course you cant have total control on the IP. It is much harder than tangible property.

But ideas and knowledge are scarce, people pay for them not because they are coerced but because they choose to.

If you acknowledge the first ever trade as legitimate (the first instance a particular idea is sold), how can you oppose the rest.

You would pay me for me to teach you something.

You accept this.

But since it is hard for me to stop you from teaching that idea to someone else, you claim that knowledge is worthless, a free good, not scarce etc.

This is purely an enforcement convenience issue.

Nothing else.

And for promises, Rothbard is very clear on this issue. He gives detailed explantions and examples. It is hard for me to relay all that from here. Please go back and read Rothbard again.

In the market if you break your promises market can punish you because you wouldnt have good reputation. But no legal enforcement is possible.

Before any property has transferred the trade has not started so it does not exist.

And promises are not IP. They are totally different things. Thats why a promise can not be enforced but a contract of a copyright can.

Published: December 21, 2006 10:13 AM
Sasha Radeta

rtr,

Have I ever said that ideas can be stolen? Try to calm down and stop hallucinating.

First of all, you can transfer your property any way you want to. You can make a conditional title transfer based on some exterior condition. You can entitle someone to your property subject to their satisfaction of some condition (as in labor contracts and some inheritance cases). You can transfer your property based on other side's satisfaction of some financial conditions ("buying on the installment plan"). You simply lack some basic understanding of how private property rights apply to the real world.

Your limited understanding of contracts prevents you from understanding that copyright is based on the exchange of titles of actual physical property.

If you purchase my book in exchange for money plus any damages in the amount of unauthorized copies (conditional transfer) - you cannot say that you own any unauthorized copy you decide to make. I own them based on our voluntary exchange of real property. Based on any definition of enforceable contracts, my ownership of any damages you may cause is perfectly valid. You cannot unilaterally decide to change our terms of exchange (reducing your obligations) - because that is a theft.

If you buy only the personal use of my product (explicitly excluding commercial ones, including reproduction) - but you decide to "upgrade" your terms of use without my consent (like a coach passenger who sneaks into the first class) - you are trespassing. That's the theft I was referring to... and not some abstract "theft of idea" notion that is only a product of your hallucinations.

Published: December 21, 2006 10:19 AM
Sasha Radeta

ktibuk,

Promises per se are not enforceable, but property title transfers (with a scheduled future delivery of the actual goods to their owners) are enforceable. I hope you understand the distinction.

Published: December 21, 2006 10:31 AM
rtr

ktibuk, I can sell you the air you are breathing. It doesn't mean I ever actually owned in the past, present, or future the air you are paying me to breath. But if you contract with me to pay for the air you are breathing, you can cancel that contract at anytime. And I have absolutely no recourse to force you to continue paying me for the air you breath, precisely because the air you are breathing is not a physical property I can exclusively own. Just like ideas.

The relevant FACT is it's a physical impossibility to return an idea. That fact is a distinguishing characteristic from real physical property, which is able to be return transferred.

Explain how the specific idea that the earth is round, not flat, is scarce. Is that idea ever used up no matter how often and how many people think that idea? No, specific ideas are not scarce. They are never used up. They can be inhabited by as many people who think it, whenever, or wherever they may be.

Now compare the idea that the earth is round, not flat, to the physical material existence of an apple. If you eat that specific apple, that's it, the apple is gone. That's why apples are scarce, and ideas are not scarce.

You're right that people choose to pay for ideas, just as you may choose to pay me for the air you breath. But that's a choice that cannot be coercively enforced by another, whether they were promised such payment indefinitely, or whether they wave a contract in your face. You can't force someone to pay for something you don't own. If they voluntarily wish to do so, that's their choice, keyword being choice.

Published: December 21, 2006 10:54 AM
rtr

Sasha Radeta: :If you purchase my book in exchange for money plus any damages in the amount of unauthorized copies (conditional transfer) - you cannot say that you own any unauthorized copy you decide to make."

That's just it, you have no authority regarding copies because you don't own property in or of the ideas which may or may not be in your specific physical book. You have no authority regarding what others do with their owned real existing blank pages and ink.

If you contract with me to pay me for the air you breath I cannot force you to continue trading your property to me if you change your mind and decide to cease paying me for the air you are breathing. What am I going to do? Take away the air you are breathing? Likewise, what are you going to do with ideas someone may have paid you for? Take those ideas back? Nope, you are stretching for false justification to commit violent aggressive actions to forecefully the take the real existing property of others under the bogus guise of the oxymoronic term "copyright". That's absurd.

Published: December 21, 2006 11:26 AM
Sasha Radeta

rtr,

You are hallucinating again. I never said that I "own property in or of the ideas" (whatever that means). I own my physical property - and I can sell you the specific use of it.

When you make a purchase of a book, in addition to money you provide you also entitle the seller with any unauthorized copies (you give him title to any damages that may ocurr as a result of your trespassing into a commercial use).

You unintentionally supported my whole argument with you nonsensical "air-sale" example ("nonsensical" because when it comes to air we normally breathe it is not a scarce resource that is sold - but we can talk about the air tanks in SCUBA diving... plus, this deals with the issue of "limited privilege in cases of necessity"... An airline cannot kick you out of their moving plane, even if you are trespassing).

But my whole point was this (excuse the emphasis): YOU CANNOT CANCEL PROPERTY TITLE TRANSFERS BY "CHANGING YOUR MIND"! That was my whole argument on why copyright contracts must hold.

You don't even know what you are arguing anymore.

Published: December 21, 2006 12:28 PM
rtr

That's the whole point, Sasha Radeta, you can sell a lease specifying use of a specific book, with specific pages, with specific ink. You cannot and have not sold a lease or sold any property of any other specific books with other specific pages and other specific ink. It doesn't matter what content or ideas may or may not be contained in those other specific books with other specific pages and other specific ink. You've already admitted you can't own content, you can't own ideas, precisely because content and ideas are not physical property.

So what are you going to do if the contents and ideas of your book are on the internet? Claim the internet for yourself? Claim all the computers that belong to others for yourself?

If the property hasn't been transferred at the time of trade, then indeed the transaction is cancelled if someone changes their mind. It isn't a final transaction, it isn't a final trade, until both parties have transferred what they agree to transfer. If it makes you feel better, agreement has not been executed until the goods are indeed voluntarily traded. Until that time, any contract, any promises, and conditionals, are as good and meaningful as a might possibility. If it doesn't voluntarily come to you from the other party, coercing it is nothing but theft.

At any rate who cares what words or what ink pattern splotches are on the specific pages of your specific book. You don't and can't own meaning, ideas, or content, as you've already admitted, such things are not ownable, such things are not property. The only thing you can regulate or contract is the use of the specific pages with specific ink in your specific book. As long as those specific pages with that specific ink is sitting on someone's bookshelf, your book isn't being used commercially, and thus, you lose. The content may as well be random jibberish, may as well be the word "the" written 1,000,000 times, may as well be anything in any possible arrangement whatsoever; you never owned any of that content, you never owned any of those ideas, and thus you never had any authority to make a contract regarding those ideas, as you have already admitted, ideas can't be owned, ideas can't be stolen.

So I guess every book author with a copyright claim in it is in violation of every other book author with a copyright claim in it. What do they all have in common physically? They are bound pages with ink. Copycats indeed! What? Is the book unpatentable now too?

Published: December 21, 2006 2:24 PM
greg

SR> The economic definition of scarcity is this: when the price of a good is zero, demand exceeds supply.

Ridiculous. When the market price of a "good" is zero, it is no longer a good, it is something worthless, by definition. Goods are not ideas. Ideas are not property.

Published: December 21, 2006 2:44 PM
rtr

And lest we forget, regulating, prohibiting, contracting, *copying*, is regulating, prohibiting, contracting, *labor*, which we've previously established is unenforceable servitude.

Published: December 21, 2006 3:24 PM
Sasha Radeta

Greg,

You need to read more, or read more carefully. We can always decide to set the price of any good or service to zero (that's called state socialism). But what happens at that moment (we're talking about markets for "goods," not about something worthless)? It happens that quantity demanded becomes large, while quantity supplied goes drasticly down - and shortages exist. That is a symptom of scarcity that exists in markets for software - and it is also a symptom of your economic ignorance.

-----

rtr,

You may hallucinate about "idea ownership" all day long. I never advocated such thing and your messages about that nonsense only illustrate the weakness of your arguments. Trust me, you're not going to accomplish anything by replying to something I never even said.

We both know what the whole point of our discussion is: you have a right to sell a certain use of your product and to restrict other uses. If you think that your authorship is worth anything, you will certainly care about your "ink patterns". If I buy the personal use of your book - and I pay $15 for that plus the obligation to pay the amount of all damages from unauthorized use (copies + profits)... that is a perfectly valid contract.

I cannot say one year after the exchange happen:
-"Geez, I really overpaid this book - let me give myself a nice fat upgrade... I will just take for free that commercial use that belongs only to the author."
And imagine if I also said:
"I think that I should also give myself a nice fat discount... I will take back the amount of damages that belongs to the author (based on property title exchange) - screw you!"

That is nothing but a theft and aggression. It is not aggression when some author tries to collect his property, for which he obtained the property title in a voluntary market exchange. If someone publishes the author's works against the terms of use - wherever that person publishes it - that author will use his resources to track him down and to collect his damages.

Like you said, you cannot "change your mind" and adjust the outcome of a voluntary market transaction by violating someone's property rights (in both terms of use and damages for which the author has the property title).

Regards.

Published: December 21, 2006 4:11 PM
Sasha Radeta

But Greg, don't feel too bad: the author of this thread (Kinsella) failed to even recognize the issue of scarcity in labor markets.

Published: December 21, 2006 4:21 PM
rtr

Sasha Radeta your argument was completely stripped and defeated.

1.) Labor cannot be compelled, even by contract, such as forcing sex, or prohibiting copying.

2.) Ideas are not property.

3.) There are no copies of your book. There is still just your book, your pages, your splotches of ink on those pages. That's all you can sell, that's all you can pretend to just "lease".

4.) Any other books which may mirror yours are made with different specific materials, different specific pages, and different specific splotches of ink. Any comparison of content is a comparison of non material non tangible property. Even a change in font is a completely different book than your original, unless you again want to fantasize that you can sell non material non property ideas, which you can't.

5.) Your contract is invalid on multiple grounds:

A.) It's enforces/prohibits labor in the form of labor on copying

A-1.) Terms of use are also prohibitions on labor. If I want to spit on "your" book, that's my right. If I want to toss "your" book into the ocean, that's my right also. If I want to burn "your" book, it's burned. You gonna sue those who's libraries may burn with your book in them? Your argument is so weak, you couldn't claim damages if the actual physical manifestation of your book was deliberately destroyed. Why? Because you have no property claim on that book, let alone any other property claims which was not your original book. Deliberately burning the book you sold is not theft nor agression. And nor is "copying" it. Ideas can't be stolen. Labor cannot be compelled. You're done, friend. Check mate.

B.) It mentions as property things like ideas which are not property.

C.) Real goods were not actually voluntarily exchanged to you.

Published: December 21, 2006 4:53 PM
greg

SR> We can always decide to set the price of any good or service to zero (that's called state socialism).

"We" can't, and the price isn't zero. Fairies and elves didn't produce while "we" were asleep, even in a socialist state. What fantasy land are you living in? When A exchanges the product of A's labor for B's product of labor, "they" don't set the exchange price to zero, by definition. If "they" did, it would be another thing: gifting. But gifting costs the giver. What you say makes no sense. Some things, like air, cost zero and are needed/valued, but we don't call air scarce (usually). That is why it costs nothing.

SR> ...it is also a symptom of your economic ignorance. [And] ... don't feel too bad: the author of this thread (Kinsella) failed to even recognize the issue of scarcity in labor markets.

{laughs} No one cares about "scarcity of labor." They care about what labor accomplishes -- that's what is scarce. The fact that a real person has to sit/stand/jump/dance to manufacture the accomplishment is merely incidental. If everyone could leisurely sip mimosas under their cozy cabana without working a second, then that is what they would do.

Published: December 21, 2006 8:18 PM
Sasha Radeta

Greg,

You obviously made a logical lapse and forgot about basic economics and what I really said, while trying to be a smart-mouth. Give it up.

I did not say that giving away goods for free is a free-market outcome, and you know this well.

Yes, we can experimentally set prices of some good to zero after something is produced - just 1to see what would happen (politicians did this for particular goods and services in socialist economies). And what happen in those cases are extreme shortages (Q demanded is greater than Q supplied). That's the definition of scarcity. Such condition normally does not exist for air, harmful weeds, pollution, but they do exist for software or labor.

You also did not understand the significance of that definition of scarcity: product came to existence before markets were established. At the dawn of civilization, only those products that were scarce (for which demand exceeded supply at that moment without markets and zero prices) got to be owned and exchanged.

You are incorrect when you say that no one cares about scarcity of labor (anyone who managed at least a household knows why such statement is absurd - the issue of scarcity gave birth to property rights and market exchanges). But of course we care more about what labor accomplishes - just like we care more about what goods accomplish (our end goals of personal satisfaction or production).

So you failed to say anything meaningful, but you were not ready to admit that economic definition of scarcity makes perfect sense.

------------------

rtr,

You can only make me laugh. Of course that you think my arguments were "stripped and defeated" because you imagined many statements that I never made. That is the only way you can provide rebuttal - by arguing with yourself.

1) Nobody here argued that labor can be compelled - you hallucinate.

2) Nobody argued that ideas per se are property (on the contrary, we insisted that copyrights must deal only with the use of tangible and exchangeable property) - you hallucinate.

3) There are copies of my book. That's why we have COPY machines... and no, that's not a metaphor. And I can lease my product or sell it any way I want to - without "pretending" (whatever you meant by that) - you hallucinate.

4) In exchange for the use of your book I can give you the property title on any damages if unauthorized copies of that item occur. Basically, I transfer you the property title on any such "mirror book" that was made when I trespassed against your exclusive use of that item. You are now legal owner of paper, ink... these books in their entirety.

5. My contract is valid on grounds that it is a voluntary exchange of property title. There are only certain conditions that would make some contract voidable. You don't know a single one. Please educate yourself. The arguments that you tried to use are ridiculous:

A) Contracts always prohibit some form of "labor" that is in violation of that contract. The only way that a contract can be enforceable is by prohibiting action (labor) of contract violation. You don't even realize how silly your first pseudo-argument is, just from a primate intelligence standpoint. I don’t know where you got that insane notion about freedom of any kind of “labor” – but surely, it was not on this planet.

A-1) Terms of use specify what use of my product is allowed. Any "labor" that is not mentioned in terms of use is trespassing and theft. If you don't like the use I offer - don't buy them. However, you cannot pay for these allowed terms of use and than give yourself an "upgrade" like in my airline seats example (that's stealing).
B) I never mentioned that ideas are property. You hallucinated again.

C) Property titles of real goods were "exchanged to me," although your mental defense mechanisms will prevent you from understanding that. Money that I paid for personal use of your book and property title on possible damages that I gave - are all "real goods."

Regards.

Published: December 21, 2006 11:08 PM
Fred Mann

Sasha writes:

"In exchange for the use of your book I can give you the property title on any damages if unauthorized copies of that item occur. Basically, I transfer you the property title on any such "mirror book" that was made when I trespassed against your exclusive use of that item. You are now legal owner of paper, ink... these books in their entirety. "

Does this mean that I have to pay for all copies that come into existence if a stranger finds my copy of the book that I accidentally left on the beach?
If so, I don't think many people would buy books in the first place. Why purchase something as trivial as a book if it could cost you untold amounts of money if you should lose track of it?
Of course, I have to ask, because the language you use above is extremely garbled. First of all, one doesn't "trespass against your exclusive use of that item". That's not a proper use of the term "trespass". I guess what you mean is "violate the 'terms of use' agreement"? Also, how can one give someone "the property title on any damages?" Do we own "damages" now? If so, I'll give you ten dollars for that sack of damages.
Speaking of damages, a very interesting problem arises if we entertain your free-market copyright scenario (one of MANY) .....
How are we to know that any damage occurred at all? Presumably, you use the term "damages" to refer to some perceived loss of sales that results from some unauthorized copies coming into existence. But of course, we don't know if any of these sales would have actually occurred. (In fact we can never know if ANY sales *would* have occurred *AT ALL* given a different set of circumstances.) How do we know that these people (or any people) would have bought your book? We don't even know if these "potential customers" would have even known of the book's existence, were it not for the specific set of circumstances which brought it to their attention/posession (i.e. if it wasn't for the unauthorized copy, these people may have never seen/read *any* copy of your book.)

Published: December 22, 2006 1:44 AM
ktibuk

:-)

We are repeating the same things over and over mostly but once in a while new ideas pop up.

RTR said

"Explain how the specific idea that the earth is round, not flat, is scarce. Is that idea ever used up no matter how often and how many people think that idea? No, specific ideas are not scarce. They are never used up. They can be inhabited by as many people who think it, whenever, or wherever they may be.

Now compare the idea that the earth is round, not flat, to the physical material existence of an apple. If you eat that specific apple, that's it, the apple is gone. That's why apples are scarce, and ideas are not scarce."

First returnability was introduced, now "using up".

The only thing that is used up in this universe is time. Thats it. No other matter or energy is ever lost. They only change shape.

So this, as returnability, is not a distinction between tangible and intangible property.

You are right, when you divulge an idea knowledge, you can not take it totally back. You can not erase a memory.

Once it is out there, it can spread, etc.

But this is not a scarcity issue per se.

There is definitely scarcity in the production and the first trade before it all spills out.

Sepecific, usefull, subjectively valued knowledge which contains utility, isnt free everywhere. We dont live in a garden of eden of ideas. We still dont know dont have zillions of knowledge that contains utility.

If it were then everyone opposed to IP would certainly be right.

Some people produce knowledge. Some of these give it away for free, either as a gift like tangible property (mises.org is an example), and some give it away free because transaction cost of the sale would be too high.

But please try to understand.

These ideas are not like air we breathe. They are not free as anyone could obtain them without effort and conflict.

They are not scarce.

Hence they are property.

Enforcement is a technical issue.

Published: December 22, 2006 6:09 AM
Sasha Radeta

Fred Mann,

I already explained how contractual copyright would provide enough safeguards to deter anyone from copying book he/she "accidentally finds" or steals (makes no difference). We are repeating ourselves too much as ktibuk noted, but what should I do when you bring the old question back… pretend that you “got me?”

As in any contract, you cannot be excused for a third party action that causes your breach of contract (otherwise, third party would have a "license to steal" and no contract could ever be enforced... that would be a good-bye to market exchanges). But if you are liable for the amount of damages based on contract - you are going to seek a tort case against that third party that caused you that damage. This third party knows that in all likelihood you can claim that your book was stolen, and a "finder" who reveals himself will have a hard time to prove that it wasn't stolen. That would shift the cost of your liability to this third party. That will finally avert these "finders" from putting someone else's property into a commercial use.

As far as your objection to the term "damages" goes, I am only referring to predetermined amount to be paid in case that breach of contract occurs. If you don't like it - don't sign it. You think that not too many people would buy books based on these conditions - but you forget that most of the people aren't thieves - and those who are... well, they should pay. People who neglect other their obligation ("absentminded" as Stephan put it) should not be excused for their actions; otherwise, you would have another type of "license to steal."

Published: December 22, 2006 6:38 AM
Sasha Radeta

Also Fred,

You said: >>First of all, one doesn't "trespass against your exclusive use of that item". That's not a proper use of the term "trespass".

REALLY?! That's interesting! I'm just kidding, it's absurd.

- Using term trespass when it comes to unauthorized use (contrary to terms) is absolutely appropriate. Trespass is an unauthorized use.

---

In addition, you said: >>Also, how can one give someone "the property title on any damages?" Do we own "damages" now?

- Of course you own the means to produce these damages (in the amount of unauthorized copies and/or their profits). You heard RTR.... it's your paper and ink, but someone else's commercial use of the book. In a copyright contract you would transfer property title on any potential damages to the author at the time of exchange. That is a conditional transfer of property that will occur only in the event that specified conditions (from unauthorized use or trespass) take place. Implicit contracts of that type prevent lottery or a casino from "changing their mind" once someone wins their jackpot. They also prevent an employer from "changing his mind" once the labor contractor satisfies conditions specified in their agreement. Once you trespass (go against your terms of use) and you create conditions that would produce those damages, the other side can exercise his property rights over those unauthorized copies (jackpot).

Published: December 22, 2006 7:04 AM
Fred Mann

Sasha writes:

"But if you are liable for the amount of damages based on contract - you are going to seek a tort case against that third party that caused you that damage. This third party knows that in all likelihood you can claim that your book was stolen, and a "finder" who reveals himself will have a hard time to prove that it wasn't stolen. That would shift the cost of your liability to this third party. That will finally avert these "finders" from putting someone else's property into a commercial use. ... As far as your objection to the term "damages" goes, I am only referring to predetermined amount to be paid in case that breach of contract occurs. If you don't like it - don't sign it. You think that not too many people would buy books based on these conditions - but you forget that most of the people aren't thieves - and those who are... well, they should pay."

First of all, this is the "leak fee" which I referred to earlier ... a flat fee for any and all unauthorized copies that result from your breach (or "leak"), as opposed to a fee which takes into account all copies that came into existence as a result of your book falling into the wrong hands (this would be truly ridiculous and incalculable).
Now the real problem I have with these statements is that you categorize the third parties as "thieves". If I find your book on the beach, I am NOT a thief. Period. YOU lost it. I am not guilty of anything whatsoever. You can not hold ME responsible for YOUR actions. Using "accidental finder" in quotes like that doesn't negate this either. People really *do* innocently lose things and innocently find things. But if you think you can make the case that this third party IS guilty of some transgression/trespass/crime, then do it here. I don't think you can .... prove me wrong.
Also, if you go with a flat fee, then if a thief thinks he can recoup that fee plus a significant profit by violating the terms and making copies, he will. The solution to this is to make the fee significantly high. Of course if you do this, you have now provided a massive disincentive to purchase the book in the first place!!! The risk of having to pay this fee would force me to keep tabs on my books constantly. I certainly would be reluctant to take a book with me on my vacation if I knew I had to contact the authorities if I lost it. Did I lose that book in Orlando ... or was it Miami? Who wants that kind of hassle? All for a $10 or $20 book? I don't think this is going to work out for you.
The only thing I will concede is that your use of "trespass" may be acceptable ( Although, Kinsella doesn't seem to think so, and he's a lawyer, so who knows). But it is certainly not the common use -- which refers to transgressing onto real physical property.

Published: December 22, 2006 3:12 PM
greg

SR> And what happen in those cases are extreme shortages (Q demanded is greater than Q supplied).

Shocking! It is almost as if you're saying markets may not be in equilibrium at all times!

SR> You also did not understand the significance of that definition of scarcity: product came to existence before markets were established. At the dawn of civilization, only those products that were scarce (for which demand exceeded supply at that moment without markets and zero prices) got to be owned and exchanged.

That was pure rubbish. Demand and supply are facts of the exchange market (whether barter or monetary), not a world without them.

Published: December 22, 2006 3:25 PM
Sasha Radeta

Well Greg,

It's not my fault you tried to disapprove the basic definition of economic scarcity (QD>QS if P=0).

Of course that's common sense and I don't need to spend any more time on your jokes.

As far as your "rubbish" goes, you are forgetting that before the first exchange took place, we needed to have someone's demand (wants and needs) and someone else's supply (willingness and ability to sell). I'm not talking about hypothetical demand and supply curves based on past "facts of exchange".

You just keep on joking.

------------------

Fred,

Your "leak fees" are just forms of damages that confirm my basic point: you have right to formulate these damages in a free market contract - and to enforce them based on your private property rights.

However, a "flat fee" would be regressive and counterproductive. It would punish the small violators the most, hence stimulating larger violations. If all violators pay a flat fee of $1,000 - a person who only copies and sells one unauthorized item will be punished the most, while those who sell thousands of copies would laugh at this "punishment".

That's why the logical way of deterring contract violation is not a flat fee, but a fee that will be in proportion to the actual violation. Plus, if we say that the commercial use belongs to the author - than it is normal for him to create a contract, which will state that any unauthorized product from such use will belong to him.

As far as your "third party" issue goes - I think I already answered it. It is true that people lose their things all the time, but other people would be deterred from putting it into a commercial use in a perfectly free market. A finder does not have a better claim on found item than its original owner. Even without the actual reports to the "authorities," the threat of a large tort case and theft claim is too great for anyone to ignore it.

Published: December 22, 2006 10:58 PM
Fred Mann

What you say only makes sense if *ideas* are property. If the third party copies the book at the beach (forget the feasibility issue of that), what has he taken? Nothing. As you said above, ideas are not property.
In this case the third party has not trespassed/transgressed, and he certainly has not stolen anything if he leaves the book where he found it on the beach. He also has no contractual obligation with respect to the contents of the book.
So how does the book's original owner have a claim against the third party?
"Hey, you stole the ideas out of my book! Put 'em back in there!!!"

Published: December 23, 2006 1:31 AM
Sasha Radeta

No Fred, you are incorrect.

In order to prove that someone replicated someone's physical item (that contains idea) - contrary to the explicit terms of use - one never has to mention "idea theft." All he needs to prove is that restricted physical characteristics of that item (like patterns of typed words) were beyond doubt replicated.

I also never said that the book owner has a claim against the third party. Now you are hallucinating. I only said that third party's actions can result in a "TORT" issue between this finder and the buyer who lost the book.

Explanation for Fred: I am positive that you know that "TORT" is an injury - OTHER THAN breach of contract. I am sure that you also know that by referring to TORT - I automatically excluded the possibility that third party "finder" has any contractual obligations. We are talking about non-contractual injury that could be recovered by the buyer - in order to pay for his contractual liability to the author.

So why are you going back to Kinsella's old pseudo-arguments that I refuted a long time ago? That's not very nice.

Published: December 23, 2006 4:23 AM

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