Notes

__________________

For libertarian views in favor of blackmail laws, see Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), pp. 85-86; and Richard Epstein, “Blackmail, Inc.,” University of Chicago Law Review 50 (1983): 553.

For libertarian arguments against defamation (libel and slander) laws, see Block, Defending the Undefendable, pp. 50-53; and Rothbard, The Ethics of Liberty, pp. 126-28; in favor, see David Kelley in David Kelley vs. Nat Hentoff: Libel Laws: Pro and Con, audiotape (Free Press Association, Liberty Audio, 1987).

F.A. Hayek also appears to be opposed to patents. See The Collected Works of F.A. Hayek, vol. 1, The Fatal Conceit: The Errors of Socialism, ed. WW Bartley (Chicago: University of Chicago Press, 1989), p. 6; and Meiners and Staaf, “Patents, Copyrights, and Trademarks,” p. 911. Cole challenges the utilitarian justification for patents and copyright in “Patents and Copyrights: Do the Benefits Exceed the Costs?” See also Fritz Machlup, U.S. Senate Subcommittee On Patents, Trademarks & Copyrights, An Economic Review of the Patent System, 85th Cong., 2nd Session, 1958, Study No. 15; Fritz Machlup and Edith Penrose, “The Patent Controversy in the Nineteenth Century,” Journal of Economic History 10 (1950): 1; Roderick T. Long, “The Libertarian Case Against Intellectual Property Rights,” Formulations 3, no. 1 (Autumn 1995); Stephen Breyer, “The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs,” Harvard Law Review 84 (1970): 281; Wendy J. Gordon, “An Inquiry into the Merits of Copyright: The Challenges of Consistency, Consent, and Encouragement Theory,” Stanford Law Review 41 (1989): 1343; and Jesse Walker, “Copy Catfight: How Intellectual Property Laws Stifle Popular Culture,” Reason (March 2000).

On scientism and empiricism, see Rothbard, “The Mantle of Science,” in The Logic of Action One; Hans-Hermann Hoppe, “In Defense of Extreme Rationalism: Thoughts on Donald McCloskey’s The Rhetoric of Economics,” Review of Austrian Economics 3 (1989): 179.

On epistemological dualism, see Ludwig von Mises, The Ultimate Foundation of Economic Science: An Essay on Method, 2nd ed. (Kansas City: Sheed Andrews and McMeel, 1962); Ludwig von Mises, Epistemological Problems of Economics, trans. George Reisman (New York: New York University Press, 1981); Hans-Hermann Hoppe, Economic Science and the Austrian Method (Auburn, Ala.: Ludwig von Mises Institute, 1995); and Hoppe, “In Defense of Extreme Rationalism.”

It is by no means self-evident that patents encourage an increased absolute quantity of research expenditures. But certainly patents distort the type of research expenditure being conducted.... Research expenditures are therefore overstimulated in the early stages before anyone has a patent, and they are unduly restricted in the period after the patent is received. In addition, some inventions are considered patentable, while others are not. The patent system then has the further effect of artificially stimulating research expenditures in the patentable areas, while artificially restricting research in the nonpatentable areas.

A thing rendering such unlimited services is, for instance, the knowledge of the causal relation implied. The formula, the recipe that teaches us how to prepare coffee, provided it is known, renders unlimited services. It does not lose anything from its capacity to produce however often it is used; its productive power is inexhaustible; it is therefore not an economic good. Acting man is never faced with a situation in which he must choose between the use-value of a known formula and any other useful thing.

See also p. 364.

the cost of producing any service or good includes not only labor, capital marketing, and other cost components, but also fencing (or exclusion) costs as well. Movie theaters, for example, invest in exclusion devices like ticket windows, walls, and ushers, all designed to exclude non-contributors from enjoyment of service. Alternatively, of course, movie owners could set up projectors and screens in public parks and then attempt to prevent passers-by from watching, or they could ask government to force all non-contributors to wear special glasses which prevent them from enjoying the movie. ’Drive-ins,’ faced with the prospect of free riders peering over the walls, installed—at considerable expense—individual speakers for each car, thus rendering the publicly available visual part of the movie of little interest.... The costs of exclusion are involved in the production of virtually every good imaginable. There is no compelling justification for singling out some goods and insisting that the state underwrite their production costs through some sort of state-sanctioned collective action, simply because of a decision to make the good available on a nonexclusive basis.

Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” pp. 284-85. There is no way to show that ideas are clearly public goods. Moreover, even if ideas were public goods, this does not justify treating them as property rights, for the same reasons that even wealth-increasing measures are not necessarily justified, as discussed above.

I am not sure what it means to say that rights, which are relational concepts that only apply in a social context, are “inherent” in an individual, or that they are “functions” of anything. The former notion verges on the positivistic (in implying rights have a “source,” as if they could be decreed by God or government), and the latter borders on the scientistic (in using the precise mathematical and natural-sciences notion of “functions”). And the argument for property rights is not based on a need to “ration” scarce items, but, instead, on the need of individuals to employ means to achieve ends, and to avoid interpersonal conflict over such means. Thus, scarcity is not the “basis” for property rights, but a necessary background condition that must obtain before property rights can arise or make sense; conflict can arise only over scarce resources, not abundant ones. (As pointed out in the preceding footnote, Objectivism also holds that conflict-possibility is just such a necessary condition for property rights.)

Moreover, the scarcity-based argument set forth here is no more a “function of society’s needs” than is Franck’s Objectivist approach. Franck believes that men “need” to be able to create things in order to survive—in a social setting where the presence of other men makes disputes possible. “Thus,” law should protect rights to created things. But the scarcity-based argument recognizes that men “need” to be able to use scarce resources and that this requires conflicts to be avoided; thus, law should allocate property rights in scarce resources. Whatever the relative merits of the creation-based and the scarcity-based positions, the scarcity argument is not more collectivist than the creation argument, and the creation argument is not more individualist than the scarcity argument.

Kelley, in “Response to Kinsella,” p. 13, writes:

Property rights are required because man needs to support his life by the use of his reason. The primary task in this regard is to create values that satisfy human needs, rather than relying on what we find in nature, as animals do.... [T]he essential basis of property rights lies in the phenomenon of creating value....Scarcity becomes a relevant issue when we consider the use of things in nature, such as land, as inputs to the process of creating value. As a general rule, I would say that two conditions are required in order to appropriate things in nature and make them one’s property: (1) one must put them to some productive use, and (2) that productive use must require exclusive control over them, i.e., the right to exclude others.... Condition (2) holds only when the resource is scarce. But for things that one has created, such as a new product, one’s act of creation is the source of the right, regardless of scarcity.” (emphasis added).

My reasons for disagreeing with Kelley here should be apparent, but let me point out that all human action, including creation of “values,” has to rely on the use of scarce means, that is, the material stuff of the world. Each act of creation employs things made of already existing atoms; neither this fact, nor the recognition of it, is animal-like in any pejorative sense. That men, as opposed to animals, wish to create higher-order values by using scarce resources does not change this analysis. Second, Kelley advocates two separate rules for homesteading scarce resources: by first use of the resource, and by creating a new, useful, or artistic pattern with one’s own property, which gives the creator the right to stop all others from using a similar pattern, even with their own property. As discussed below, these two homesteading rules are in conflict, and only the former can be justified. Finally, Kelley states that the creator of a new product owns it because he created it, regardless of scarcity. If Kelley here means a tangible product, such as a mousetrap, such a good is an actual, scarce, tangible thing. Presumably, the creator owned the scarce raw materials which he transformed into the final product. But he does not need to have a right in the ideal object of the mousetrap-idea or pattern in order to own the final product itself; he already owned the raw materials, and still owns them after he reshapes them. If Kelley instead means that, by creating a pattern or idea, one acquires the right of control over all others’ scarce resources, then he is advocating a new type of homesteading rule, which I criticize below.

Hegel argued:

The substance of an author’s or an inventor’s right cannot in the first instance be found in the supposition that when he disposes of a single copy of his work, he arbitrarily makes it a condition that the power to produce facsimiles as things, a power which thereupon passes into another’s possession, should not become the property of the other but should remain his own. The first question is whether such a separation between ownership of the thing and the power to produce facsimiles which is given with the thing is compatible with the concept of property, or whether it does not cancel the complete and free ownership on which there originally depends the option of the single producer of intellectual work to reserve to himself the power to reproduce, or to part with this power as a thing of value, or to attach no value to it at all and surrender it together with the single exemplar of his work. (Hegel’s Philosophy of Right, p. 55, quoted in Palmer, “Are Patents and Copyrights Morally Justified?” p. 853 n. 138)

And, as Kant noted:

Those who regard the publication of a book as the exercise of the rights of property in respect of a single copy—it may have come to the possessor as a [manuscript] of the author, or as a work printed by some prior publisher—and who yet would, by the reservation of certain rights, ... go on to restrict the exercise of property rights, maintaining the illegality of reproduction—will never attain their end. For the rights of an author regarding his own thoughts remain to him notwithstanding the reprint; and as there cannot be a distinct permission given to the purchaser of a book for, and a limitation of, its use as property, how much less is a mere presumption sufficient for such a weight of obligation? (Immanuel Kant, “Was ist ein Buch?” in Die Metaphys ic die Sitten, ed. W. Weischedel [Frankfurt a.M..: Suhrkamp Verlag, 1977], p. 581, translated and quoted in Palmer, “Are Patents and Copyrights Morally Justified?” p. 853 n. 138)

For an alternative translation, see Immanuel Kant, Essay Three: Of the Injustice of Counterfeiting Books, trans. John Richardson, ed. and rev. Stephen Palmquist (Philopsychy Press, 1994).