The Problem With “Idea Ownership”

The topic of Intellectual Property is a very touchy topic for many people. Artists and Inventors especially are the most defensive of Idea Ownership more than anyone else. When you look at the topic of IP (Intellectual Property) from the perspective of a content creator, It makes sense why some would feel the need to be defensive of it. From their perspective, IP is a necessary evil to prevent people from re-uploading or making a copy of other people’s original work without their consent. It seems like a perfectly reasonable defense of IP until you start asking tougher questions. Who determines what is original? Isn’t all art derivative from reality? Why is an artist obligated to exclusive monopoly over their work? What if there’s a competitor that can offer something better than the original creator? Shouldn’t said competitor be able to create another version of an established invention or artwork if they have an idea on how to improve it? These are just some of the moral problems that come with IP ownership. In this blog post, I’ll explain why a world without IP wouldn’t be as scary as most people think it is. In fact, I would argue a world without IP would empower smaller artists, lead to more competition, lower political polarization, make healthcare more affordable, and radically improve artist compensation. Before I explain why IP abolition would objectively make our society better in nearly every aspect, we must first explain how IP even works and how IP is defined.

The Different Types of IP: Intellectual Property comes in various forms depending on what country you live in and what laws are in said country. For the sake of simplicity, I’m going to focus on American IP laws since I live there at the time of writing this. My critiques and analysis of IP also apply to other countries as well. The types of IP include:

1. Copyright – Copyright is the most well-known form of IP. Stephen Kinsella defines this form of IP as the following:

“Copyright is a right given to authors of “original works,” such as books, articles, movies, and computer programs. Copyright gives the exclusive right to reproduce the work, prepare derivative works, or to perform or present the work publicly. Copyrights protect only the form or expression of ideas, not the underlying ideas themselves. While a copyright may be registered to obtain legal advantages, a copyright need not be registered to exist. Rather, a copyright comes into existence automatically the moment the work is “fixed” in a “tangible medium of expression,” and lasts for the life of the author plus seventy years, or for a total of ninety-five years in cases in which the employer owns the copyright.

Against Intellectual Property by Stephan Kinsella page 10

2. Patents – Patents are another form of Intellectual Property commonly used for inventions such as original AI algorithms, modern medicine, and machinery. Kinsella defines Patents in further detail as the following:

“A patent is a property right in inventions, that is, in devices or processes that perform a “useful” function. A new or improved mousetrap is an example of a type of device which may be patented. A patent effectively grants the inventor a limited monopoly on the manufacture, use, or sale of the invention. However, a patent actually only grants to the patentee the right to exclude (i.e., to prevent others from practicing the patented invention); it does not actually grant to the patentee the right to use the patented invention. Not every innovation or discovery is patentable. The U.S. Supreme Court has, for example, identified three categories of subject matter that are unpatentable, namely “laws of nature, natural phenomena, and abstract ideas.” Reducing abstract ideas to some type of “practical application,” i.e., “a useful, concrete and tangible result,” is patentable, however. U.S. patents, since June 8, 1995, last from the date of issuance until twenty years from the original filing date of the patent application (the previous term was seventeen years from date of issue).”

Against Intellectual Property by Stephan Kinsella pages 10-11

3. Trade Secrets – Another common form of IP is Trade Secrets. Trade Secrets are by far the least egregious form of IP. Kinsella explains what trade secrets are in his book:

“A trade secret consists of any confidential formula, device, or piece of information which gives its holder a competitive advantage so long as it remains secret. An example would be the formula for Coca-Cola®. Trade secrets can include information that is not novel enough to be subject to patent protection, or not original enough to be protected by copyright (e.g., a database of seismic data or customer lists). Trade secret laws are used to prevent “misappropriations” of the trade secret, or to award damages for such misappropriations. Trade secrets are protected under state law, although recent federal law has been enacted to prevent theft of trade secrets. Trade secret protection is obtained by declaring that the details of a subject are secret. The trade secret theoretically may last indefinitely, although disclosure, reverse-engineering, or independent invention may destroy it. Trade secrets can protect secret information and processes, e.g., compilations of data and maps not protectable by copyright, and can also be used to protect software source code not disclosed and not otherwise protectable by patent. One disadvantage of relying on trade secret protection is that a competitor who independently invents the subject of another’s trade secret can obtain a patent on the device or process and actually prevent the original inventor (the trade secret holder) from using the invention.”

Against Intellectual Property by Stephan Kinsella pages 11-12

The reason why Trade Secrets are less terrible than other forms of IP like Patents is that they’re enforced by private contract rather than coercive government action:

“Trade secrets are easier to justify than patent or copyright. Palmer argues that they “emerge” from common law-type rights, and are, thus, legitimate. Trade secret law allows damages to be obtained for, or an injunction to be issued to prevent, acts of “misappropriation” of a trade secret. This can be applied against the person who has improperly acquired the trade secret or who divulges the secret contrary to a contractual obligation, and also against others who know that they are obtaining the secret from such a person. Suppose employee A of company X has access to X’s trade secrets, such as its secret formula for a soft drink. He is subject to an employment agreement obligating him to keep this formula secret. He then jumps to X’s competitor, Y. Y wants to use the formula it learns from A to compete with X. Under current law, so long as the secret formula has not been made public, X can get a court order to stop A from revealing the secret to Y. If A has already revealed the secret to Y, X can also get an injunction to stop Y from using or publicizing the formula. Clearly, the injunction and damages against A are proper because A is in violation of his contract with X. More questionable is the injunction against Y, because Y had no contract with X. In the context in which such situations usually arise, however, where the competitor Y wants the trade secret and knows the defecting employee is in breach of contract, it could be argued that the competitor Y is acting in conspiracy with or as an accomplice of employee A to violate the (contractual) rights of trade secret holder X. This is because A has not actually breached his trade secrecy agreement until he reveals trade secrets to Y. If Y actively solicits A to do this, then Y is an accomplice or co-conspirator in the violation of X’s rights. Thus, just as the driver of the getaway car in a bank robbery, or the mafia boss who orders an assassination, are properly held liable for acts of aggression committed by others with whom they conspire, third parties can, in narrowly defined cases, be prevented from using a trade secret obtained from the trade secret thief.”

Against Intellectual Property by Stephan Kinsella pages 56-58

4. Trademarks – The final type of IP that’s commonly used in western nations is Trademarks. Kinsella defines Trademarks as:

A trademark is a word, phrase, symbol, or design used to identify the source of goods or services sold, and to distinguish them from the goods or services of others. For example, the Coca-Cola mark and the design that appears on their soft drink cans identifies them as products of that company, distinguishing them from competitors such as Pepsi®. Trademark law primarily prevents competitors from “infringing” upon the trademark, i.e., using “confusingly similar” marks to identify their own goods and services. Unlike copyrights and patents, trademark rights can last indefinitely if the owner continues to use the mark. The term of a federal trademark registration lasts ten years, with ten-year renewal terms being available. Other rights related to trademark protection include rights against trademark dilution, certain forms of cybersquatting, and various “unfair competition” claims. IP also includes recent legal innovations, such as the mask work protection available for semiconductor integrated circuit (IC) designs, the sui generis protection, similar to copyright, for boat hull designs, and the proposed sui generis right in databases, or collections of information. In the United States, federal law almost exclusively governs copyrights and patents, since the Constitution grants Congress the power “to promote the progress of science and useful arts.” Despite the federal source of patents and copyrights, various related aspects, such as ownership of patents, are based on state law, which nevertheless tend to be fairly uniform from state to state. Federal trademarks, by contrast, not being explicitly authorized in the Constitution, are based on the interstate commerce clause and thus only covers marks for goods and services in interstate commerce. State trademarks still exist since they have not been completely preempted by federal law, but federal marks tend to be more commercially important and powerful. Trade secrets are generally protected under state, not federal, law.

Against Intellectual Property by Stephan Kinsella pages 12-14

Now that we’ve explained what IP even is, it’s now to talk about why IP isn’t a legitimate form of property.

Why You Can’t Own Ideas: The main problem with the concept of idea ownership is the fact that it contradicts the very purpose of ownership in the first place: scarcity. When you compare ideas to real-world property the two aren’t comparable in the slightest. For example, let’s say you have a car that you worked really hard to get and I decide to steal the car for myself. That’s obviously theft because I deprived you of a scarce good you obtained voluntarily through hard work and voluntary transactions. This is why property rights exist in the real world. It allows us to determine who owns what so that violence and legal disputes can be reduced. Property ownership derives from self-ownership. You are the rightful owner of your own body. To imply otherwise would be an endorsement of slavery. If you don’t own yourself, what’s stopping others from claiming ownership over you? To reject self-ownership would be the equivalent of rejecting your right to autonomy. Therefore self-ownership is important to maintaining autonomy over oneself.

But what does any of this have to do with property ownership? The answer is pretty simple. You own yourself therefore you have the right to own property. Property ownership is a byproduct of self-ownership. But this logic can’t be applied to ideas. This is because ideas have zero scarcity. An idea can be copied one time or one billion times and it wouldn’t make the concept any more or any less scarce. This makes “Idea Ownership” a contradictory term.

“What About The Artists?”: Another common defense of IP is the false idea that IP is a “necessary evil” to allow artists and inventors to receive compensation for their hard work. There are two main problems with this argument:

1. Just because an artist or inventor makes something doesn’t mean they’re obligated to compensation. If no one wants to buy the invention or artwork then the creator of said original work doesn’t deserve anything. Value is based on the subjective interest of consumers, not based on how much work an artist or inventor puts into something. If there’s no demand, then there’s no value.
2. There’s no evidence that IP regulation is necessary for preventing the loss of sales of original artwork. If anything there’s evidence of the opposite. For example, the Game of Thrones is the most-watched TV series of all time back in 2019. This made HBO a lot of money. Game of Thrones is also famous for being the most pirated TV series of all time. This proves that IP is useless at protecting artists from people re-uploading their work. It also proves that Piracy alone doesn’t lead to financial losses.

The usual pro-IP counter-argument to these facts usually goes something like “Ok so IP doesn’t work that well. So what? Re-uploading other people’s artwork is still immoral so IP should still exist as legislation to punish pirates who steal other people’s work”. There’s a problem with this argument. The problem is that it assumes that piracy is somehow similar to real-world theft(which it isn’t). If you still aren’t convinced that copying ideas isn’t theft I recommend checking out this song:

How To Profit In A World Without IP: Another argument I get regarding IP is how will artists be able to profit in a world without IP regulation? If IP doesn’t do anything against piracy then how would a world without IP be any better? I’m going to let the book “Against Intellectual Monopoly” answer that question:

“When an innovator comes up with an idea for a new product he makes copies of it to sell, and those copies are his property in the same way his socks are. The sale of ideas is all about copies – it is only copies of ideas that can be sold. I am even less able to sell “my idea” than to sell myself. In the presence of patents, when an inventor sells the exclusive rights to an idea what is being traded is a copy of the idea plus the right (acquired by the buyer) to now prevent the original inventor from using her idea. Alternatively, when an inventor licenses the use of his idea, what is being sold are just copies of the idea, while the right of telling owners of such copies what to do with them remains with the original inventor. I either sell objects containing copies of my idea–books, CDs, how-to-do-it manuals, trousers with a low cut, multi-purpose gadgets, etc. –or teach my idea to other people directly, and charge for that. Either way, I am selling copies of my idea. In the first case the copies are contained in the objects, in the second case the copies are contained in the minds of the people I have taught. When I write a book and publish one hundred thousand copies, it is one hundred thousand copies of my idea that I am trying to sell. Once I willingly sell a copy of my idea to you, for example a copy of this marvelous book, you become the owner of that copy and I retain my idea together with all the other copies I have printed and not yet sold. In the absence of “intellectual property” you can do what you want with your copy of my idea – the book you purchased from me – in the same way you can do what you want with the ice grinder you bought yesterday from someone else. Without “intellectual property” there is something you can do that you cannot legally do in the world we currently live in: you can spend your time and your resources to make new copies of the book you purchased. If you were to change the title or the name of the author or engage in some other fraudulent deception, that would be plagiarism – which we are not in favor of. But if you change the cover, the quality of the paper, the fonts, the chain of distribution, or the media carrying the original text in a straightforward fashion – or even modify the text with a clear acknowledgment of the original contribution – in the absence of copyright, no property right would be violated. Obviously, if you elected to do so, your copies will compete with the copies I am trying to sell and, possibly, with the copies that other purchasers of the book may have decided to produce. Do the innovators lose because of this? Probably, although there are circumstances in which not even this is true. The good news is that, in most circumstances, everybody else gains a lot more than the innovators lose. Good economic laws and institutions are not designed to make a few lucky people super-wealthy, but to make the average consumer better off. Three desirable features of a world without “intellectual property” should be noted:

1. The number of copies available to consumers is higher and the
price is lower, thereby making consumers better off.

2. The initial innovator still earns a substantial amount of money.

3. The market functions whether there is one or many innovators
– and socially beneficial simultaneous innovation is possible.

How can an innovator make a substantial amount of money in the face of competition from all of his customers? Take this book. We own our original manuscript, which is necessarily the source of all future copies. Our original manuscript is, therefore, like a capital good such as a shoe factory, and its competitive price reflects the future profits it will generate. When a publisher buys the book from us, the price it is willing to pay reflects the fact that it will be able to make copies and sell them to other people, who can make copies in turn. Absent copyright, how much would have a publisher be willing to pay us for the manuscript? That would have depended upon its expectations about how many other publishers we could have sold the manuscript to, and how many copies of the book they would have brought to the market; beside some estimate of the potential market size, obviously. Sometimes publishers’ expectations will be too optimistic, which leads to losses; some other times they will be too pessimistic, which leads to exceptional profits. If one replaces the words “book” and “manuscript” with “plants” and “seeds” one gets a description of how the market for agricultural plants worked before patents were introduced. If one leaves those words were they are one gets a description of how the market for English authors’ manuscripts worked in the USA until roughly 1890.”

Against Intellectual Monopoly by Boldrin & Levine pages 140-142

Basically what the authors are saying here is that in a world without IP, artists and inventors will get paid based on production rather than distribution. In a world without IP, publishers will pay artists/inventors for their artwork/inventions in order to make copies of it. Publishers will have a market incentive to do this based on their expectations of how many other publishers would’ve done the same as well as the expected sales of said artwork or invention copies. There are also other ways artists and inventors can make money through the production of goods such as crowdfunding or commissions. For further information, watch this video by Uniquenameosaurus:

How IP Ruins American Healthcare: IP doesn’t just hurt the entertainment industry, it also hurts America’s private pharmaceutical industry as well. A common argument regarding why healthcare is so expensive by leftists is due to “capitalism”. According to them, the profit-driven nature of free-market capitalism makes healthcare expensive. This sounds like a fantastic argument if you have no knowledge of how the industry actually works or any understanding of basic economics but falls flat once you start analyzing how the industry currently functions. For one, selling your own prescription drugs in the United States is illegal due to patent law. Importing your own drugs from other countries into the United States for personal use is also illegal because it isn’t FDA approved. The American Medical Association also limits how many medical licenses states can give out. These are just some reasons why healthcare is so expensive in the first place in the United States. America’s healthcare industry isn’t a free-market system despite what leftists will try to have you believe. I plan on talking about healthcare in greater detail in a future blog post. For now, I want to focus on how Big Pharma corporations use patents to limit competition. Patent laws by definition give the patent owner a legal monopoly over their patent. This makes market competition effectively illegal. This is why Big Pharma corporations can get away with artificially inflating prices for drugs. Thanks to artificial barriers in the marketplace like patents, Big Pharma corporations can get away with charging whatever price they want for healthcare regardless if people want to provide an alternative or not.

How Abolishing IP Would Reduce Polarization: Currently western nations are in the middle of a culture war. Both progressives and conservatives want control over the media to push their beliefs onto the masses. The rise of social media also increased polarization by allowing individuals with extremist beliefs to communicate their ideas to others more easily. If IP didn’t exist, western nations would suffer from significantly less political polarization (at least in the entertainment industry). This is because if an entertainment franchise like Star Wars went “woke” in a world without IP, people can just make their own version of Star Wars that doesn’t have progressive identity politics. Without IP, progressives wouldn’t have as much control over entertainment as they do now. This means politics in entertainment would be far more balanced than it is today, which would lead to less political polarization and more national unity. Obviously the “culture war” would still exist due to social media and movements like GamerGate but it wouldn’t be as prevalent as it is now.

Youtuber Academic Agent made a youtube video defending Intellectual Property back in the year 2021. Normally I don’t bother responding to Youtube videos but I’m willing to make an exception regarding Academic Agent. This is because this video contains five major unique arguments regarding Intellectual Property I haven’t heard of until I watched it recently. I won’t be covering every argument he makes in the video because:

1. Some of the points he makes are things I don’t disagree with personally.
2. Most of the arguments he makes are based on the five major points I’m about the mention.

This is why I won’t bother focusing on every minor statement made in the video since doing so would be a waste of time.

The Homestead Principle: The Homestead Principle is defined by Rothbard as the following:

“The homestead principle asserts that these assets are to devolve, not upon the general abstract public as in the handout principle, but upon those who have actually worked upon these resources: that is, their respective workers, peasants, and managers. Of course, these rights are to be genuinely private; that is, land to individual peasants, while capital goods or factories go to workers in the form of private, negotiable shares.”

How to Desocialize by Murray Rothbard

Basically, the Homestead principle is the idea that individuals the mix their labor with an unowned piece of land for a unique purpose are allowed to own said land privately. The purpose of the Homestead principle is to determine who is the rightful owner of a specific piece of property to avoid violence and reduce legal disputes regarding the property. Academic Agent tries to use the Homestead Principle to justify idea ownership. If a human can mix their labor with an unowned piece of land and create a farm with said land, then why can’t the same concept apply to Intellectual Property? The main flaw of said argument is that he misunderstands the purpose of the Homestead Principle in the first place: determining the owner of scarce resources. The keyword being here is “scarce”. Ideas have no scarcity for reasons mentioned in the article previously. Therefore the Homestead Principle can’t apply to idea ownership.

Comparing IP To Other Services: The second major argument Academic Agent makes is comparing idea ownership to other intangible services like Financial Analysts. The problem with making such a comparison is that no one has a legal monopoly over analyzing economies. Anyone can become a Financial Analyst if they do the research and learn the material required to do so. Only Walt Disney can own ideas like Mickey Mouse in our current society, however. This creates a legal monopoly that prevents competitors from improving previously established franchises. This gives megacorporations like Disney the power to exploit their consumers as they’ve done for Star Wars and other franchises. Academic Agent provides no argument against how to prevent the exploitation of Intellectual Property by its “owners” in his video.

The Tragedy of the Commons: Another argument Academic Agent makes is claiming that the Tragedy of the Commons somehow applies to Intellectual Property. For those who aren’t aware:

“The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will lower the yield a shared limited resource, even to the point of ultimately depleting it, even when it is clear that it is not in everyone’s short or long term interest for this to happen. This dilemma was first described in an influential article titled “The Tragedy of the Commons,” written by Garrett Hardin and first published in the journal Science in 1968.”

Mises Wiki

The problem with the Tragedy of the Commons argument is that it doesn’t apply to IP in the slightest. I’ve already proven that Piracy has no effect on the success of the sales of an IP earlier in this same blog post. This means the value of an IP can’t be degraded by common ownership.

The Alleged Limitations of Originality: The fourth argument Academic Agent makes in favor of IP is the false idea that originality is limited to the minds of the creator of a particular idea. This argument ignores the existence of high-quality fanfiction that’s well-received by its respective fanbases. Not everything a creator makes is guaranteed to be better than what their fans create. For example, in the video game industry fans often create high-quality modifications that are better than the original game itself.

Time Ownership vs IP Ownership: The fifth and final major argument Academic Agent makes comparing Time Ownership with IP Ownership. According to Academic Agent, individuals own their own time therefore they have the right to own ideas. The problem with this argument is that time is always scarce while ideas can never be scarce. Individuals have different levels of available time to them depending on how busy they are. This means time is always scarce for everyone. Ideas on the other hand will always be infinite and can’t be quantified. Comparing Idea Ownership to Time Ownership is also a terrible idea due to the fact that no one has a monopoly over time itself. Intellectual Property grants an artificial legal privilege over something that isn’t scarce while Opportunity Cost simply measures how individuals spend what little time they have. This makes IP Ownership and Time Ownership a false comparison.

In conclusion, A world without IP wouldn’t lead to the death of creative freedom or prevent artists from making money. It would actually do the opposite. Although imagining a world without IP may seem terrifying, it’s only because we’ve never tried any alternatives to IP itself.