I'm enrolled in a university class where homework and materials are served on a website. In order to access this website, one most obtain an "access code" which permits use of the website. Without this access code you cannot complete any of the work in the class. In order to protect against "piracy", this "access code" is obscured behind a scratch-off sticker hidden inside a brochure hidden inside a special-edition, university-specific textbook which cost me around $100. The access code can only be used once and is invalidated after the class term, so I cannot go back and re-examine the class materials after the class is over.
Simple enough, right?
Turns out that was the easy part. Register an account, enter the access code, the class ID, and you're in. Do one homework assignment, that's okay. Open the next.
"This content requires Adobe Flash Player, which is not supported by your device."
[internally screaming]
I understand that the textbook companies want to save money. I understand that there are ATMs out there that are still running on Windows 98. But I paid $100 for this. I didn't negotiate the price with the textbook companies--my professor apparently did the negotiation for me--but I paid $100 for this. And this is the Internet equivalent of a gym giving people a well and bucket and calling it a drinking fountain. Or a landlord giving tenants a latrine and calling it a toilet.
Adobe Flash is basically an obsolete technology. Microsoft Edge doesn't even support it at all. It's disabled by default in Firefox and Google Chrome. In fact, Adobe itself will stop updating Adobe Flash by the end of 2020. And for someone running a heavily-customized open-source web browser on Gentoo Linux such as myself, the chances of being able to successfully get a proprietary, closed-source plugin like Adobe Flash to work are slim. Regardless, I installed three versions of Adobe Flash and spent around 4 hours looking for a way to get Adobe Flash Player to function, now, within my web browser. Then I gave up. So, okay. I can set aside my principles and my desire for privacy to install a proprietary browser that will run Adobe Flash Player by default. Off I went to obtain a Google Chrome binary (Chrome, of course, though being billed as "open-source", is in fact closed-source since there is in fact no source code you can compile yourself to produce a binary equivalent to the one provided by Google. Google's actual "open-source" browser is Chromium). Sure, Google Chrome is basically spyware that monitors everything that happens on your computer and actively listens on your microphone, but for me it had the advantage of being distributed as a binary, easy to download in a pinch (for which I believe homework qualifies), and supporting Adobe Flash natively.
So I lose my license virginity, get Chrome, navigate to the website, log in, enable Adoble Flash, open my homework, and everything should work, right? Well, apparently not. There's one additional component to this proprietary software shitheap that was missing. It was Microsoft's proprietary core fonts. (And holy shit, do they make my favorite websites look disgusting. Verdana has nothing on Liberation Sans Serif). Yes, for some reason, the developers of this software failed to account for the possibility that people using it might be using a non-Windows machine (you know, like some kind of OS where it's not necessarily a given that you have the Microsoft fonts pre-bundled with Microsoft Office products...). So I fuck myself with licenses again and download the fonts. And finally I can do my homework--the way the Developer(s) intended.
Can you spell "proprietary"?
So what does this have to do with "intellectual property" (henceforth abbreviated as "IP")? In a world without IP, there would be little incentive for Adobe's developers to hold on to the Adobe Flash code for longer than it would be useful to them. If Adobe Flash weren't the proprietary shitware it is--say, if it were open source--it is entirely feasible that the software could be distributed and developed by people outside of Adobe. It'd be easier for software developers and vendors to integrate Flash into their applications. Since people could study the internal workings of Flash, it would likely lead to more effective, efficient use of Flash. Et cetera. All the benefits people extol when talking about open source software that are absent here.
There is, of course, a technical distinction between the concepts of "open source" and IP, but the concepts are related. And I hope my software engineering Communist "friends" will hear me out when I say that capitalism is, in fact, compatible with open-source software.
It seems strange to a lot of people that a libertarian or a capitalist could attack IP--after all, aren't we supposed to be pro-property rights? And indeed, that is true. We are pro-property rights. Our problem is with not with property rights, but with the idea that "intellectual property" can be considered property. Our argument is that intellectual property as a concept itself is flawed.
One important property of property is exclusivity: Use of it by one person precludes use of it by another. This is what makes private property useful as a concept. This is the basis of the concept of "theft". If I steal your car, you can no longer drive your car around. If I steal your ball, you can no longer toss it around. This is obviously not true for ideas. Once an idea is created, it is not a scarce resource. The ability to create an idea may be scarce. The ability to use a specific instance of an idea may be scarce. But an idea itself is not scarce. If I "steal" your recipe for a cake, you may still use your recipe to your heart's content.
So, what is IP, really? IP is not a form of property but an artificial restriction of my ability to use my property as I please. For instance, if you patent your cake, what you are really doing is telling Big Daddy (the government) to imprison me if I try to bake a similar cake, even if I use my own ingredients. You are allowed to do certain things with your own property which I am not allowed to do with my own. Economically, this might be analogized as a tax upon consumers/lower-order producers and a subsidy for the higher-order producers, whom others must pay to gain limited use of some kind of IP.
In terms of deontology, the existence of IP can only be justified through the use of positive rights, which infringe on others' rights in order to provide for one's desires--in other words, "rights for me but not for thee". Which, absent a voluntary agreement over such restrictions, is another phrasing of "might makes right". Which violates the universalizability principle and precludes one from arguing about anything at all.
Chances are, if you're a libertarian, you've probably heard this argument. And if you're not a libertarian and you believe that you have a right to healthcare, education, security, etc. regardless of whether or not that infringes upon others' rights, then you may not be satisfied by the argument. You may be thinking in a bit more of a principles-be-damned (or in the words of Louis Rossmann, "ideas shouldn't own people"), consequentialist fashion. "Without the incentive of an exclusive monopoly over a product, who will develop new technology? Who will develop the medicines that cure our diseases?"
A lot of libertarians try to weasel around that question by simply referring to the "who will pick the cotton" thing. "Morality and principles trump your utilitarianism", they say. And if you're a libertarian, that's all fine and good. But being a bit of a utilitarian myself, I'm going to try to do something that a lot of libertarians don't do: lay out an informal vision of a world without IP, and why our world, with IP restrictions, looks the way it is, from software to media.
Now. Let's return to IP. For simplicity, let's start by examining one field where IP is prevalent: Digital music. Digital music alone is not subject to scarcity. It can be freely copied at no expense to the possessor of the original (ignoring the cost to the possessor of allowing a person to access the original, such as the electricity and time expended during the exchange); thus, like air, it is not, given these simplifications, a scarce resource.
What I am getting at is that we can make simplifying assumptions to reduce music down to the form of pure "intellectual property" and demonstrate the irrationality of putting a price on IP, to avoid any complications introduced by other costs. If there were zero costs in land, electricity, computing resources, etc. to hosting a server which provides music for downloading, then, within the purview of interpersonal exchange, digital music (as pure IP) would not be scarce, and people would not need to negotiate the purchase of music because they would already have access to all the music they would need.
If we were to further simplify away the personal costs of listening to music--the expenditure of time and computing resources to serve the ends of searching for, obtaining, and listening to music--we would be able to say that music would not be a scarce resource, but a general condition of existence. Of course, in the real world, these assumptions are not the case, but it should be obvious to anyone that the determining factor in the price of the $0.99 iTunes track is not the electricity it took for Apple to dump the file from a CDN to your phone.
If something about the route this argument has taken seems off, you're right. While it is true that people will not pay money for a Britney Spears song which they are permitted to freely download online (absent the threat of a lawsuit), the argument often posed is not that people will be unable to hear music in the absence of IP but rather that people will not be "incentivized" to create new music, and therefore our world would be very boring. By the language of this statement it is implied that something is, in fact, scarce here, and thus people do place a value somewhere in this chain that makes it "make sense" to pay a musician.
The key to this issue is the distinction between "music" in general (i.e. musical works which already exist and are readily accessible) and "new music". The value we speak of is derived from new music, which, for our purposes, may be considered a consumer good, as it is (in most cases) the final good in the process of providing for the consumer's enjoyment. Unlike pre-existing music, new music is clearly a scarce resource, as, for most, it cannot be obtained immediately by those who desire it to come into being, nor can its benefits be instantly realized.
This scarcity reveals the role of the musician within this new, IP-free economy. As with most industries in the economy, most people do not have the means available or are simply unwilling to independently create the scarce resource, i.e. new music, themselves. They may lack the equipment or skills necessary to produce the music; hence, they may decide to exchange money or something else for a musician's services in creating new music. From this viewpoint, the musician's contribution to the creation of new music functions as a producer's good, which contributes to the end production of and derives its value from the end consumer good, that is, the new music.
So in a free market economy, people who desire the enjoyment of "new music" might, if they so desire, simply exchange directly for a musician's services in creating new music. This exchange may take many forms: private commissions/patronage paid for production of a musical work, donations, crowdfunding, pay-what-you-want schemas for music downloads (which are functionally donations), payment for access to the first instance of a work, payment involved in a voluntary contract regarding use of the work, etc.
Unsurprisingly, a good portion of these models have historical precedent and are still in use today. Fundraising needs no explanation here. Patronage/commissions are what funded the painting of many religious works. (To those who think the "open source" universe would only be full of crap, go ahead and tell me that the Sistine Chapel has no artistic value.) And commissions remain a funding model for many artists, digital and traditional, today. In medieval times, bards were paid to compose stories and music in commemoration of nobles and their ancestors.
These are the funding models that would supply the creation of new music, or new intellectual works, according to consumer demand where it is necessary.
Now, I shall address a few caveats and objections.
Firstly, one caveat--my forecast of the hypothetical future is not airtight. That's just the nature of the future. A lot of libertarians would say that it is unreasonable to ask someone to try to predict the primary and secondary effects of future changes within the economy for the sake of argument--and if we were able to predict the future with certainty, we'd be rich. The funding models I have laid out here may or may not be adopted at some point in the future when intellectual property protections have been abolished.
There is a second caveat, which is specific to using music as an example here in that it is obvious from sites such as Soundcloud and YouTube that many people engage in the activity of creating new music for psychological enjoyment alone (i.e. a hobby), and so even ignoring any exchange economy at all, some new music will be produced regardless. While an exchange economy may still exist in this case, it will likely function to serve the needs of consumers who are not satisfied by the music that comes into being as a result of the non-exchange-based actions of hobbyist musicians. Regardless, our goal was to produce an argument which can apply even in situations where this caveat is absent, and I think this was achieved.
Thirdly, I am not saying that open-source would be the only model that exists in an IP-free world. There are other ways, such as NDAs, trade secrets, and EULAs, which can serve to restrict access to source code/equivalents in a voluntary universe; however, I would like to point out that the existing system *encourages* the development of closed-source, proprietary systems, the reason being that it allows companies to sue those, including potential competitors, who "violate" their IP protections. This is why "defensive patents" exist. Most of the modern oft-maligned tech monopolists, e.g. Facebook, Google, exploit this fact quite often.
In fact, it's possible that these very IP protections are the reason that modern software and services are concentrated into the hands of so few companies--if you've ever tried to apply for and protect a patent yourself, you may have realized that such an undertaking is a job for a billion-dollar company and not a private individual. I would propose that without government-based IP, software would trend towards a more open-source model.
There is a common objection--the oft-cited viewpoint of the musician: "How will I make money if I can't establish a monopoly over the production and distribution of music?". My answer to this argument is blunt.
The market is not some all-powerful being which exists to give people money (it's not The State). The market exists as the result of willing, voluntary exchanges between self-interested individuals--nothing more and nothing less. Those artists who profit off of suing other people over IP violations or legally enforcing strict monopolies over the distribution of their music will likely lose most in a transition away from IP, as they will lose their government-provided monopoly.
To make this reasoning a little clearer, suppose a government used tax money to pay people to dig ditches and fill them up. A person proposes that this is a waste of money and that the money could be diverted towards better uses, such as the construction of a road, or better yet, just lowering taxes and letting people keep more of their own money. The ditch-digger/filler workers protest. "How will I acquire an income if you don't pay me to dig and fill up ditches?" they say. Like the ditch-digger/fillers, at least a portion of the artist's income may indeed come from a government-protected source, and this may disappear in the absence of IP. Yet no sane person, aside from the ditch-digger/fillers, would argue in favor of continuing this use of tax money.
Some people might point to a particularly large ditch and say, "Look! This ditch is one of the largest in the world. Surely such ditches would not exist were ditch-digging activities not subsidized by the government." And this is correct. Such ditches would indeed not exist. My answer to this is: should such ditches exist? You may find their existence intellectually stimulating--but keep in mind the nature of the government which you, obviously unwilling to pay for such works yourself, are petitioning to "pay for" such works. The nature of government is not as a producer--a provider of useful goods and services--but violence. When you say "the government should fund" anything, what you mean is that other people ought to be forced at gunpoint to pay for things that you want. It's just theft by proxy.
It is certain that in the event of any alteration to market conditions, people on the margin will lose money. Some people might lose their jobs and have to look for new ones, because their product is no longer useful. Inversely, some people might find themselves with increased profits or find a new job in the altered field, say, musicians who are particularly adept at designing a musical work to a customer's specifications.
This is something that politicians often either ignore or are ignorant of--the greatest benefit to society comes not with creating jobs or keeping them around, but in creating value. The fact that candlemakers lost their jobs in the transition to the electric lightbulb does not mean that we should have opposed the development of electric lightbulbs. The fact that carriage drivers lost their jobs in the transition to the automobile does not mean we should have opposed the development of cars. We cannot oppose all economic changes on the basis that some people lose their jobs. Even viewing things from a strictly supply-demand standpoint, we understand with interventions like price controls that there results an unequal shift in the percentage of surplus acquired by the producer or consumer--it is not equally distributed, and a reversion to the non-intervention scenario may indeed result in the loss of surplus for some parties but an overall increase in surplus. (Take that, "socialists"!)
Another common scenario that arises in discussions about IP is the practice of taking someone else's work and misrepresenting it as one's own. This is really an issue of fraud, not theft. For example, let us say that a musician, Muno Bars, offers the service of producing music for a commission. Let us say that a customer commissions Muno Bars to produce a unique, original musical work, under contract. Muno Bars then copies a work produced by the band Chill and the Fan and delivers it to the customer, misrepresenting it as an effort of his own.
By doing this, Muno Bars has conducted fraud: he lied to the customer and failed to provide the services described within his contractual obligations. While it could be argued that strict IP enforcement could function as an ancillary measure in preventing fraud, this is about as valid as arguing that we should stop violent crimes by banning violent video games. The crime is in the fraud itself, not the "IP theft".
Now that we have established some fairly solid arguments against IP as well as a vision for a world without IP, I shall spend the remainder of this article complaining about the costs of intellectual property.
One of the obvious costs of intellectual property is to the customer--as mentioned prior, IP acts as a tax on the consumer and lower-order producers and a subsidy to the higher-order producer of intellectual works. This manifests both in the form of the disutility of paying for access to restricted works and having to deal with closed-source, segmented, proprietary systems. One example of this disutility, if you remember, is my plight in trying to do my homework.
Another instance of this can be found in the WINE project--an open-source software project that, in short, functions as a compatibility layer to allow alternative operating systems (Linux, BSD, macOS) to run Windows programs. WINE explicitly disallows developers who have worked for Microsoft, seen Microsoft source code, or even looked at Microsoft disassembly from working on their project due to potential legal issues with copyright and NDAs. WINE also has to employ "black box testing" rather than disassembling Windows code (i.e. trying to study the software by plugging in inputs and examining outputs), not only because software disassembly is a violation of the Windows EULA, but because it is illegal in many countries due to copyright law.
This hampers WINE's effectiveness, limiting users' ability to migrate from Windows to other platforms by increasing the labor required. Many people stay on Windows machines or keep a Windows partition because of specific programs that cannot be run through WINE (most often, video games, or anti-cheat software for video games). So one of the more deleterious consequences of intellectual property law may be that it presents major legal barriers to reverse engineering/study of proprietary software and development of similar "bridge layers", again, giving companies legal advantage to keep their users in a "walled garden" proprietary-software environment.
One might argue "nobody has the time to reverse engineer Windows". And I would reply that since somebody obviously did take the time to reverse engineer Windows, with no financial profit, even when severely hampered by the legal apparatus, somebody obviously had the time to do it and wanted to do it badly.
And then: "Windows is such a massive, bloated project, there's no way it could be reverse engineered with a proper disassembly". And this is probably right--if one does not account for the time dimension. Without the restriction of IP laws, projects such as WINE could have been used to migrate programs and files off of Windows software to other operating systems long before this state of affairs. They could have developed alongside the operating system (and given that Windows likes to maintain backwards compatibility, different versions would not have been a significant barrier), and there might have been corresponding incentives to develop software on other operating systems, like... GNU/Linux. In other words, in an IP-free universe, Windows might not be running on 76% of desktop computers, and the Super key might not have a Windows logo on it.
Another of the major costs of intellectual property is to entrepreneurs and businesses. There are significant legal costs involved in acquiring and protecting a patent. "Okay, just don't acquire a patent," say you. Meet the patent troll.
Patent trolls, or "nonpracticing entities", are companies or individuals that specialize in the process of buying up/acquiring massive amounts of patents and enforcing them against parties who may have originally owned the patent, or had no intention of copying an existing product, or whose product falls far outside the scope of the patent, sometimes without even manufacturing/supplying the patented good or service. Such patent trolls often mail form letters to hundreds or thousands of small companies at a time, demanding licensing fees.
Their entire existence is based upon the current legal apparatus--they are the aforementioned government-subsidized ditch-diggers/fillers, who can sue other people who dig ditches for other reasons. Large companies with the necessary resources can also engage in patent troll-like practices. The licensing fees demanded by patent trolls are usually within the range of thousands of dollars. The alternative--engaging in litigation, can range in costs from the millions to the billions of dollars (which is also a reason we should favor private arbitration over state courts!). Needless to say, the fact that IP law provides for the existence of such parties is a major pain in the ass for small and large businesses, particularly in the tech industry.
For more on intellectual property, see Stephan Kinsella's Against Intellectual Property.