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Property Title Records and Insurance in a Free Society


Opponents of intellectual property often point out that modern patent and copyright are purely legislated, artificial schemes. For anarcho-libertarians and libertarians opposed to legislation as a means of forming law, this is yet another stake in the heart of IP. (See my post The Mountain of IP Legislation, and my article “Legislation and Law in a Free Society.”)

So it’s not surprising that one retort of the IPers is to argue that patent- and copyright-like rights “could” evolve in common law courts. Even though they didn’t; even though the idea of statutorily enacted schemes arising from judicial decisions is more than implausible: it’s ridiculous. Some of them simply posit that there could be private “title” offices in a free society akin to real property title records in use today: you just go down and “register” your “idea”; later, when you sue an “infringer” of “your” idea in court, you can prove you “own” it by introducing evidence from the IP title records office. For example, in a recent Mises blog threat, someone suggested there might be some private invention title office (my reply). And the anarcho-libertarian Tannehills, in their classic The Market for Liberty, argue (pp. 58-59):

Ideas in the form of inventions could also be claimed by registering all details of the invention in a privately owned “data bank.” Of course, the more specific an inventor was about the details of his invention, the thought processes he followed while working on it, and the ideas on which he built, the more firmly established his claim would be and the less would be the likelihood of someone else squeezing him out with a fake claim based on stolen data. The inventor, having registered his invention to establish his ownership of the idea(s), could then buy insurance (from either the data bank firm or an independent insurance company) against the theft and unauthorized commercial use of his invention by any other person. The insurance company would guarantee to stop the unauthorized commercial use of the invention and to fully compensate the inventor for any losses so incurred. Such insurance policies could be bought to cover varying periods of time, with the longer-term policies more expensive than the shorter-term ones. Policies covering an indefinitely long time-period (“from now on”) probably wouldn’t be economically feasible, but there might well be clauses allowing the inventor to re-insure his idea at the end of the life of his policy.

One problem with the Tannehills’ reasoning was the question-begging assumption that it’s “theft” to use an idea if it’s “unauthorized”; this presupposes there is property in information.

The idea of private IP arising on the market, and idea-title registry offices, is utterly confused and implausible.

Under current law, ownership of real (immovable) property is proved by records kept by government offices. Of course, in a private society this function would be handled by private agencies. But not surprisingly, the state coopts this function in order to know who the owner is and what the “market value” is so as to enable it to extract taxes. (For more on how the state coopts key institutions to gain increasing power over its subjects, see Hans-Hermann Hoppe’s Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order, pp. 62-66.) For example, a main purpose of the Domesday Book, an English land survey in 1086, “was to determine who held what and what taxes” were owed. And as noted in the fascinating study by Mayer & Pemberton, A Short History of Land Registration in England and Wales:

The Romans introduced a form of land registration to England and Wales [, to form] the basis of a land tax called tributum soli.

Similarly the Anglo-Saxons had a land tax (Danegeld), which would have required details of land ownership. The culmination of this system was the Domesday Book (1086)—an unique and almost complete survey of landowners, at least at manorial level, it is the crowning achievement of the administrative system of Anglo-Saxon England.

… According to the Anglo-Saxon Chronicle, William the Conqueror “by his foresight … surveyed so carefully that there was not a hide of land in England of which he did not know who held it and how much it was worth”.

The Domesday Book was just about the last land register in this country for taxation purposes.

So, yes, there would be private land title records services in a free market, just like there would be private roads, even though today’s state has arrogated to itself the monopoly right to provide these services. For movable property (personalty), other evidentiary and procedural rules would develop as to how to prove ownership–such as the maxim “possession is nine-tenths of the law“.

So, in a private order society we would have claims to scarce resources such as land proved by records filed with private record-keeping agencies. When someone buys property they hire experts (lawyers, title companies) to examine the records to verify that the putative owner has good title; and they would probably purchase title insurance to compensate them if some defect in title showed up. The point is: for every scarce resource that matters, that is valuable to actors and potentially contestable, owners would have an interest in having a way to prove their ownership in the event of such a contest. For every such resource, whether movable or immovable, there would be a way to determine the owner. And in a libertarian society, that rule would be based on the idea of Lockean homesteading and contractual title transfer. (See my What Libertarianism Is.) This means that the person who is the first (or earlier) owner, or someone who can trace their title to such a person, “wins” in a contest over a “latecomer.”

So just try to imagine an “idea registry” office. As many have observed, the IP owner really wants control over others’ scarce resource. He wants to use his IP claim to persuade state courts to use physical force against his competitors, say, to coerce them into not using their own resources (bodies, factories, etc.) in certain ways. It comes down to a claim of ownership of those resources. To file an IP claim you have to claim partial ownership over everyone else’s property. The problem is these things are already owned. So these filings would be rejected as bogus; the claimant is just an illegitimate latecomer.

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