Its sometimes argued that without the state intellectual property
could, and should, continue under contracts. Aside from the obvious
pragmatic concerns, this "consent" based approach fails to legitimize
To put it concisely: you can not sell something you do not own.
Intellectual property (IP) can not be brought into being by the act of
selling, it must already exist in order to be sold.
To understand why this is so we must understand the nature of extortion.
Consider a highwayman who demands payment from people in order to
allow them to use the road. If you view the situation only very
shallowly it may appear as a market exchange, the highwayman gets money
and the traveler gets to use the road. After all, the traveler can
choose to keep his money by not using the road. However, this view
neglects the key fact that the highwayman has no right to determine the
use of the road. There is no exchange, only extortion, backed by
Furthermore, by agreeing to pay the victim does not cause the
highwayman to become the owner. Any rights signed away to an
extortionist are not actually transferred.
The highwayman is an obvious criminal, but there are many other
"transactions" that fit the same category of extortion. The most common
being the sale of land never converted into property through homsteading. The seller is not actually giving up
property, he is merely charging a fee in exchange for not committing
violence against any person who attempts to homestead the plot. The
landholder demanding payment for allowing a person to settle unused
land is no different than the highwayman demanding payment for allowing
the person to travel the road.
The fact that the buyer is willing to pay the fee in order to pass,
or to work the land, does not vindicate the criminals; for the same
reasons that a consenting victim does not vindicate a mugger. The
victim is unjustly impoverished and the criminal is unjustly enriched.
Intellectual property belongs in this same category. An IP owner
demanding royalties from the economic exchanges of other people is
nothing more than rent seeking. Royalties, like money to the highwayman, buy nothing but
immunity from violence.
Unlike real economic exchange, IP is not mutually beneficial, it is exploitive.