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Pragmatism and Intellectual Property


By Nathan Nicolaisen

Libertarians often argue over the pragmatism of intellectual property at the expense of the ethical aspect of restricting knowledge by force. The question posed in Butler Shaffer’s A Libertarian Critique of Intellectual Property is, “…by what reasoning can the state create and enforce such interests upon persons who have not agreed to be so bound?”[i] This is the core of all voluntary interactions, and the question of whether or not intellectual property is profitable is not critical for the libertarian.

Of course there will be winners and losers by granting IP rights to some at the expense of others, but Shaffer’s point is that it is wrong to enforce contracts upon those who have not voluntarily accepted the terms.  This crucial tenet of libertarian ethics is essential in understanding why so many libertarians are opposed to intellectual property.  Few people, and even fewer libertarians, if any, contend that inventors should not be rewarded for their efforts. Rather, the chief objection to intellectual property is that inventors may not use the force of government to prevent others from peacefully employing that knowledge.

Even if we ignore the ethical and moral objections, however,  numerous problems arise in the application of intellectual property laws. For example, how do we properly credit long-dead inventors for providing us with their discoveries?  Do we track down their offspring and pay royalties?  If it’s impractical to grant perpetual IP rights, then exactly how long should they last? Patent term length in the United States is twenty years while copyrights last seventy years after the last surviving author’s death.[ii]  What makes it right to grant patents for twenty years, but not nineteen?  What happens at seventy years that makes copyrights invalid at seventy years and one day? 

The question seems trivial, but is nevertheless revealing.  If IP rights are truly rights, they must be inviolable and universal, unconstrained by time and place and not established by the arbitrary laws by the state. Economists frequently warn of the unintended consequences of market intervention by the state, and Shaffer notes that it is well established that corporations with teams of lawyers and vast financial wealth are more able to file, receive, and defend their IP claims than are small proprietors.  As a result, individuals and smaller businesses are crowded out of the marketplace of ideas and discouraged from competing in fear of infringement and ensuing litigation.[iii] The result is a centralization of knowledge by large institutions.  In turn, this presents a barrier to creativity and innovation and stifles a society’s ability to cope with new challenges. 

Intellectual property puts restrictions on what can be developed from prior innovations.  Laws that purport to promote innovation and the creative capacity of humans to invent and express themselves artistically actually limit them.  As Shaffer humorously puts it in his book, “To so constrain creativity would be akin to forcing painters to work within the boundaries of paint-by-the-numbers kits.”[iv] Shaffer notes that historians examining the importance of creativity often find that its prevalence and expression among a population is important to a civilization’s longevity.  The diversity of ideas and “cross-fertilization” among disciplines is necessary in the development of mankind.  On the other hand, centralization of the society’s knowledge through IP poses a threat to improving our current state.[v]  

Shaffer warns of the monopoly on the genetic manipulation of food by Monsanto, for example, as a serious moral hazard. Here, Shaffer’s concern is not over whether or not genetic food modification should occur, but that if only one institution is legally permitted to engage in it, it poses a serious risk. A Libertarian Critique serves as a useful introduction to the discussion and basic arguments on the immorality and impracticality of intellectual property.  It is easy to forget the coercive basis of IP rights.  When an infringement lawsuit is filed and won against a peaceful competitor, the state removes the competition by initiating force against them.  Without the state to use coercion against competition, inventors must do it themselves.  Without the state, inventors and their customers would be appalled with initiation of force one’s competitors.  Thus, question is not strictly, “Should inventors and artists be granted legal monopolies over their work?”  Maybe the question that should be posed is, “If you were to create something and I used that same idea and reproduced it with my own resources, would you personally initiate force against me to stop?”  Here is the true nature of intellectual property.

Nathan Nicolaisen is a senior at Luther College in Decorah, Iowa studying business management and mathematics.

[i] Butler Shaffer, A Libertarian Critique of Intellectual Property, (Auburn, Alabama: Mises Institute, 2013), 22.
[ii] These numbers are from most recent legislation.  Patents and copyrights prior to this legislation have different terms lengths, supporting the idea that intellectual property is not property if its terms are arbitrary.
[iii] James Bessen and Michael Meurer, Patent Failure:  How Judges, Bureaucrats, and Lawyers put Innovators at Risk, (Princeton University Press, August 2009), 170.  The chart displays a percentage of patents held by individuals versus the total number of patents granted.
[iv] Butler Shaffer, A Libertarian Critique of Intellectual Property, (Auburn, Alabama: Mises Institute, 2013), 48.
[v] Shaffer cites several historical examinations that freedom of creativity has on society on pages 52 and 53.


Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

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