Saturday, 3 November 2012

Intellectual 'property' can be infringed, but not stolen

Copyright and patents are licenses for monopoly. They give the holder various rights to determine whether and how other people may use certain ideas, specifically, exclusive rights to commercial benefits. The logic of this is to allow rights holders to obtain a 'fair share' of the benefits to society as a whole that accrue from inventing neato medical gadgets or producing a blockbuster movie. It provides rights holders, whether individuals or more likely corporations, with a commercial incentive to produce more of these socially appreciated things because they can charge prices for access to them, and the more popular their ideas, the more money they will be able to make.

But it is misleading to call these licenses 'property'. Doing so leads to misunderstanding the justification for copyright and patents, such as in terms of some distorted Lockeian labour theory of value. It also leads to misunderstanding how they work, for example that they can be 'stolen' like regular property.

The Lockeian theory of value, in which people come to acquire property rights over something in the world by 'mixing their labour with it', was Locke's answer to the problem of just acquisition. Locke's (theological) argument that God had given the world to all of mankind, knocked out the argument that the world belonged to divinely mandated royal families (descendants of Adam, they claimed). But Locke needed a further positive argument to justify his bourgeois property ethic, that the world can come to belong in particular to 'the industrious and the rational' and not for example to the nomadic native Americans.

Well, though the metaphor of mixing labour with things is rather fraught, one can see what Locke's getting at. The person who builds a house for himself and his family intuitively has a claim to that house which someone who merely strolls along after the work is done does not. The problem is that copyright and patents do not merely protect one's right to keep what one has created for oneself. They are rights over what other people may do with them. Other people are not allowed to buy a copy of your book from you and then, for example, write their own guide to the book (e.g. the Harry Potter Lexicon). More dramatically, patents prevent other people from producing and distributing your whiz bang lifesaving medical gizmo/drug cheaply to save the lives of babies in poor countries. And that applies even if they invented it independently .

I don't see much in common between this right to control what others may do with the ideas you came up with first, and the properly Lockeian right to the house you built, which is all about leaving people alone. I don't think one can claim to own an idea and all the good things that may come from it in the same way one can claim to own a field that one has plowed, sowed, and improved by one's own labour and all that grows in it. This is not a 'natural justice' right but an artificial 'positive law' right: the two kinds stand in relation to each other as personal identity stands to corporate personality. In other words, actual societies made up these rights to further particular purposes, and can make them up differently if they so choose.

Ideas are quintessential public goods in that they are non-rivalrous and not (without a great deal of effort) excludable. I'll come back to non-excludability below. Non rivalrous means that anyone using an idea does not prevent other people from using it simultaneously. For example, lots of people can sing Happy Birthday, without anyone being left without any Happy Birthday to sing. There can never be a shortage of Happy Birthday. (Yes, believe it or not, it is under copyright.)

That's different from property as ordinarily understood. The point about Locke's theory of acquisition was to justify why, given that God gave the world to everyone in common, some people (the bourgeoisie) should have exclusive property over some parts of the world. The reason property matters is that once one has built one's house, one naturally wants to be able to live in it. If others come along and say they want to live there too, there is a problem since there is only the one house to go around.

Some people believe that intellectual 'property' is stolen when 'pirates' copy and distribute it without permission, or the employees of restaurants sing Happy Birthday at a children's party. This is a very strange perspective, since, by definition, a non-rivalrous good cannot be stolen, only shared.

Moreover, since the more widely an idea spreads, whether a catchy tune or a new antibiotic, the greater the public demand for it must be, it would seem that the pirates' actions benefit society while leaving the originator of the great idea in full possession of it. The reason for this is the well known deadweight loss of monopoly: monopolists set prices at a level that maximises profit, not at the level that maximises sales (as they would be forced to do under competition). That means that many people who would be prepared to buy the product at a price above the cost of production are unable to, which means that economic welfare is lower than it could be (an inefficient market).

The harm done to the originator of the idea has nothing to with theft in the usual dictionary sense, in which something that is acknowledged to be yours is taken away from you without your consent and you don't have it anymore. Rather, the exclusive rights to control how their idea is used have been infringed, which is more akin to being cuckolded than mugged. In terms of material harm, some sales they might have made if they were the only source of the product may have been lost. In the same way, by giving a friend a lift to the airport you are reducing the income of taxi-drivers (also often a monopoly).

The market value of an idea - the total rents people and companies expect to flow to them because of their monopoly right to reproduce it - is reduced. This, one may note, is the same kind of harm that is involved when house prices fall because the 'wrong sort of people' move into a neighbourhood or a noisy factory opens nearby. While we may acknowledge that such a hit to your notional wealth can be of real significance, we would not normally consider this 'theft'.

Non-excludability means that it is very difficult (but not impossible) to prevent people from using the good, without for example paying some contribution to its upkeep (such as a road toll, or the surcharge on blank cassettes and CDs in Germany which goes to musicians). This is of course the bane of public goods and the real - economic - reason for copyright and patent licenses. If no one can be excluded from making use of the good in question, then no one can be made to contribute to defraying the costs of producing and/or maintaining it. So no one will bother to write novels and no company would publish them anyway, and the end result will be far fewer of these wonderful ideas that the whole of society benefits from.

This is the actual moral justification for patents and copyright: to support the long-term commercial feasibility of producing new ideas and turning them into goods society can benefit from. It's a strong justification, to be sure, but it is considerably less broad and deep than what the concept of intellectual property conjures up.

That is because this justification is empirically contingent. It not about sacred principles (deontology), but maximising the good (utilitarianism), and so it comes down to a matter of logistics. The proper scope it defines for these licenses depends on contingent facts about the world, and especially the economy, rather than some timeless intuitions or armchair reasoning about natural justice.

Do patents really incentivise innovation across all industries, or only in some? How long do they need to last for to maximise benefits, i.e. to hit the right trade-off between incentivising productive innovation and minimising the price-gouging of the public that anti-competitive monopoly licenses produce? Given that the great ideas of the present are the materials from which future innovations are built, can the privatisation of ideas go to far and actually block innovation? (cf. Michael Heller's The Gridlock Economy.) Are they always the best incentive, or even the best kind of license? For example, society wants diseases cured, but Big Pharma only wants to treat your disease (i.e. get you to buy something expensive everyday) because that's the incentive patents give them. (For a better way, see Thomas Pogge's Health Impact Fund.)

Once we start thinking of copyright and patents in terms of licenses rather than the misleading intellectual 'property' we can start actually working out what kind of license regime is morally justified in terms of maximising the benefits to society that can be delivered by new ideas, rather than maximising the private monopoly rents of the corporations who have acquired 'ownership' in them.

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