Disadvantages of IP Regulation
by Ethan Glover, Wed, Sep 25, 2013 - (Edited) Wed, Nov 11, 2015
For the first time, I was graced with the argument that being anti-intellectual property is a socialistic and communistic idea. The easiest thing that stands out is of course the misunderstanding of what socialism and communism are. This is exactly why I have my “Commonly Confused Words List” [Discontinued], to avoid such claims and to have proper discussion. But just to establish clarity I’ll give the most basic difference between these two systems. Socialism says that the only property that can be owned is the production of ones own labor. The means of production is owned by the community. Meaning the people decide collectively what is made, how much is made and how it is distributed. Communism is the same thing except that it takes away all private property to include the goods that each individual personally produced. Meaning, everything is publicly owned. In political practice, this means the tight management of everyone’s lives, what they earn and where they live. I know there will be all kinds of arguments against the claims of each one I just made, but I guarantee those arguments will only build on what I’ve just said, not refute it.
That being said that is not the purpose of this article. As is mentioned in the introduction to the “Commonly Confused Words List” [Discontinued] I do not argue definitions. It is a waste of time. The reason I bring this up is to show that being against IP doesn’t fit into either one of these things. Simply because intellectual property is not property at all. Ideas can not be owned, and no one can put restrictions on the production of others. Socialism and Communism both call for the strict management of what people produce and what they are allowed to produce. Intellectual property laws do just that. Really, the argument given to me could be reversed. Intellectual property IS socialistic and communistic by their most basic definitions. Getting on to the point, these are the disadvantages of regulating intellecutal property rights.
But Who Will Pay The Artists?
One of the common concerns when it comes to getting rid of intellectual property is that artists and writers will not be able to make money. After all, if everyone just pirated everything the artists will either starve or have no incentive to create in the first place. The fact is that most solutions to piracy and the stealing of “intellectual property” do not come from the government or any laws. It must always be remembered that when the government puts something down on paper and tells people, “No.”, that doesn’t necessarily mean people will stop doing it. This is like how banning guns won’t stop crimes and murders, it only makes the victims more vulnerable and unable to defend themselves. Intellectual property won't stop copying and sharing, it will only make victims of those who use their property in a way that they see fit.
For every single kind of artist or (seemingly) IP dependent profession, we can easily come up with solutions to piracy and inevitably use “piracy” as an advantage (as most TV shows do). For instance, music bands can make their money from live performances. When they fully submit themselves to the free market, that is when they stop hiding behind the right to a monopoly on their own songs, they subject themselves to competition. Ideally a band should be the absolute best at what they do and the performance of their particular kind of style. People who give motivational speeches, and often speak extemporaneously, do not have the ability to copyright recordings of that talk. It is the payment of actually speaking and performing that these people make their money on.
There is also the inevitable, “Artists can’t make ALL their money on live performances, they need album money too!” This is of course immensely false, but I’ll entertain the idea anyways. When considering such an argument it is hard not to point at the existence of “DRM”. That is the locking down of mp3’s and even DVD’s/movie downloads in such a way that it can not be shared. With music, we can see services like Spotify, iTunes, and Google Music. Spotify and Google Music use an online streaming model in which you can buy music and listen to it, but you can’t download it. You can share it via the services which uses advertising (or in the case of Spotify, premium services) as a way to gain more money out of the service in order to better fund the artists. ITunes has done a great job of allowing for “offline play” which does mean downloading, but it locks down the actual music by utilizing unique file extensions. I am not an expert on how this works or if it works, I am personally a Spotify fan, but as I understand it that is how Apple has solved the issue, any corrections are welcome. The point is, however that these companies don’t use the law and constant court battles as a way to fight “intellectual property violations”. Instead, they offer superior services and offer the artists money as a way to create these services. With the artist's permission, and by working with their studios they are able to guarantee high quality music.
Before I get into the perspective of this I want to get into other examples from other mediums. With TV and movies we see Netflix, Hulu and Amazon Prime. With the advent of high speeds of the wide and open internet people have come to prefer to simply sit down, sign on and watch a movie. Online streaming gets rid of all kinds of hassles. It is convenient, and the popularity of Netflix is a testament to that. Netflix uses deals and payments to producers in order to gain access to the streaming of the movies, not because of the law, but because this allows them to provide a premium service. Netflix has a reputation for providing high quality video, on demand at any time. Can anyone say the same for “piracy” in which people do not work with the artists but work behind their backs? Absolutely not. Even through the selling of physical products like DVD’s and Blu-Ray’s we again see DRM in which the disks can not be ripped and copied. This is of course fine to do in a truly free market without intellectual property.
Next we get to the medium of books, and I apologize if this all seems repetitive, but the goal here is to show the existing solutions, provide and environment in which you as the reader can think of your own without the use of government, and draw out as many points as possible on the subject. I promise as I get further into this article that I will cover more than just how artists make money. Anyways, books! Stephan Kinsella made many points against intellectual property by referring to J.K. Rowling, the author of Harry Potter. As Rowling develops fans she becomes well respected as the original author of her work and as new editions come out she will make money on the physical copies she sells to the stores. When those books are copied, stores are unlikely to buy them even though they may be able to get it cheaper or print it on their own. First, printing of course costs money, but customers see this as dishonest. Much like what we see with things like fake Rolex’s and Gucci. While these these fakes exist at cheaper prices, there is a very large market for the “real thing”. Kinsella, in the video below offers the solution of Rowling taking pre-release buys and only releasing the book once a certain amount is released. For a person with a high reputation, this is certainly not a problem.
Other points made in the video include the placement of small speakers in outdoor theaters showing yet another creative way to create profits.
Because I know you’re just jonesing for one more, I may as well cover painters and drawers, the traditional, visual artists. Artists currently make their money by drawing logos, creating animation and designing websites. People still use these services because it means a unique design meant for their needs that has not been seen before. If it is copied by another company, that company chooses to be boring, when something is copied over and over it becomes bad marketing. It’s like creating a WordPress blog and using the twenty-twelve theme without changing it at all. Many people prefer to purchase “premium themes” not because they are afraid of being thrown in jail for using the hundreds of thousands of open and great themes, but because they see the price as a way to know what they use is unique and well built by a professional with a good reputation. The act of purchasing art is the act of knowing its value. Sometimes, within the price itself there is value. Within the world of art, people admire originals, and many artists are willing to recreate the same painting, drawing or sculpture over and over but each product is absolutely unique. This of course is not the model of all artists but is certainly the most common as it allows for freelancing and the dependency on reputation. One example of another, unique model is Jon McNaughton. He not only sells copies of paintings but sells classes on painting through live workshops.
Perspective and Being Realistic
To gain proper perspective on all of this we can use the page of mine that I have already referenced, “Commonly Confused Words List”. [Discontinued] As a way to establish definitions I use the Oxford English Dictionary, this is not a free service and is locked down for most users. However, I can access it through my library as I am sure many people can. When there are alternatives like The Free Dictionary and Wikipedia, why do I bother with OED? Because it is a superior service that utilizes more resources and aims for professionalism rather than simply being open source. It is a service that requires more funding than the services which anyone can edit or which simply crawls the Internet for other definitions. Torrents and pirating is easy, with the proper security it is practically impossible to get caught. Why do people buy music and movies anyways? Simply because it is better and because many people prefer to support the artists they like. Piracy has actually been proven to improve sales, and the strategy of putting out early “releases” through torrents is a strategy used heavily by marketers. It increases the hype and cultural talk of the products.
Through the above basic arguments, it becomes evident that the argument of “But who will pay the artists?” becomes much like “But what about the poor?” If people are so concerned with the poor and their ability to live, why is it that they need to government to act on that concern? In a so-called system of “democracy”, if the majority wants to donate, why don’t they just donate? Obviously, when the majority are concerned about the poor, how can it be said that the opposite would be true in a free society? The existence of freedom does not instantly make people evil. In the same way, if people are so concerned about artists with the lack of intellectual property, that is if the majority believes certain artists are worth payment, how can it be said that those artists would make no money? If there is a market for music performers, visual artists, public speakers, writers and movie producers there are ways to make money. In fact with a free market, there are ways to make a lot of money.
The truth of the matter is that the lack of intellectual property improves artistic performances, increases creativity and the customer wins. As an example, when people are not forced to pay for teachers (ie. public schools), suddenly they must be good at what they do in order to keep their jobs and to keep their value. When you place a monopoly on accreditation, suddenly you can charge $700 for information on the “public domain”. Getting rid of this can only be an improvement for society.
When you allow for real time adaptation, that is when you allow people to innovate in the moment without fighting through governmental red tape, you see better products, more creativity, more opportunity and a larger more thriving free market. Adaptation and the free market always wins over government and law. Private contracts and the possibility of individuals making their own decisions allows for that adaptation and free market trade. When it comes to “crony capitalism”, or more accurately, mercantilism, it always harms one person, it always holds somebody back. Intellectual property is much the same. When you can not use your owned resources in a free way, and when you have not agreed to only use it them in a certain way, this is harmful to you. Within the free market, with voluntary interactions, all parties benefit. Some say that using someone else’s ideas and profiting off of them is harmful. That’s like saying I’m not allowed to learn. I am not allowed to watch other people make mistakes and learn from that because the ideas that they tried that lead to their failures is “copyrighted”. What if I heard of someone using the strategy of telling stories as a way to exceed in a job interview and used that myself? In that case, the person who thought of it is obviously using it with the idea of monetary gain, when I go and do the same is it illegal? This sounds ridiculous but it is like saying hitting a child on the behind is OK but hitting their face is not. These thin and arbitrary lines are dangerous and are just a way for some people to get what they want at the expense of others.
The people who support intellectual property create specific cases where some things are OK, and others are not, but it’s all arbitrary. Why do these people get to decide, why is it that they must solve other peoples problems and why must we all obey those arbitrary lines? If only you were in charge, right?
But Who Will Pay The Businesses?
From the world of artistry, it is only right to examine other areas of how intellectual property and copyrights are used. A prime example would be the recipe for Coca-Cola which has been a closely guarded secret for a very long time, living in vaults, and only being known to trusted individuals at the top of the company. Of course, it is now publicly displayed, but it shows how a company may build a reputation for itself by guarding the secrets to its production very closely. When a food company or any company wants to protect recipes or production methods it may have employees sign a non-disclosure act. This is a contract, not intellectual property law. Why would you need IP here? It is like charging someone for assaulting someone while under the influence of alcohol. What does it matter what he was under the influence of? The crime of assault already exists, why build on it and complicate things? Any company can make non-disclosure agreements a part of their regular practice. Apple is famous for doing this, they often do not even allow employees to carry electronics such as cell phones into work as a way to protect products that they are developing. But when the new iPhone comes out, and everyone is freaking out about Siri you will almost immediately see 100 products that are just as good or even better on the Android app store. Apple gets its reputation by being innovative and creative. They are the originators and deserving of respect while the imitators are just that, imitators. That is exactly why Apple can command more money while most of those apps are free and dependent on Google ads.
Expanding on the idea of non-disclosure agreements, there is also terms of service. I have already talked about sites like Netflix and Hulu. Both of those websites, despite having clear security systems that don’t allow for downloads, make the user agree to a Terms of Service before they can access the sites. Those terms include rules on piracy and sharing. Again, this form of contract is much different from IP laws (and “social contracts”) in that you must actually agree to it before it applies to you.
Of course, that’s not the only step electronics companies can take. Hardware developers will often encase their most important bits under hard plastic that makes it difficult to reverse engineer their products. Whether or not this is accepted or OK is totally up to the customer and their willingness to purchase or rip the company off. A great example can be seen in the idea of tethering cell phones, which is the act of using apps to connect your cell phone to a computer and use the data as an internet service. At first phone providers didn’t like this and tried to make people purchase separate tethering plans at an extra cost. Most people found this to be unacceptable because it meant paying extra to use the service they were already paying for in a way that they wanted to. This led to all kinds of hacks and free apps that made free tethering totally possible. Cell phone companies tried to take it to court, but even the state turned down the notion and decided that tethering is OK. Of course if I can use my phone in the way that I want, why can’t I use my computer or pen and paper in a way that I want? That is, why can’t I rip CD’s that I bought and share them with others? Why can’t I download music that other people bought and shared? Why can’t I write what I want without the fear of being sued? The short answer is that I absolutely should be able to, and there’s no reason to say I shouldn’t. I have the right to my own body and actions so long as I do not harm others and their rights to their own bodies and actions. (Which is exactly what IP does.) The point of all of this is that it is the market and people that decide what is worth paying for, not special “rules”. If people refuse to pay for books, there might be less authors. That is supply and demand. If people see the number of books decreasing and become worried, there are solutions and ways to work around piracy. That is the entire magic of the free market. If people want it, they can create it. If people see a problem they can find solutions. The only catch is that they must be allowed to do so unencumbered. Special rules that apply to everyone outside of harm, can only hold back the individual who has a right to live his life as he sees fit, can only be and only ever will be harmful.
Not THOSE Businesses, The Small Ones!
Possibly the most thorough and most logical argument I have heard against IP makes the point of small businesses depending on it. Although as all arguments against IP and liberty do, it falls through the cracks. In reality, intellectual property only hurts small businesses. The phenomenon known as “patent trolling” is very real. This is when ideas are taken from small businesses who don’t patent their product and then are sued for violating copyright. The legal system is often used in this way as a way to destroy small businesses and decrease competition, allowing the so called “evil large companies” to maintain a monopoly on particular products. Ideally, anyone who can create a product should be able to sell it as they see fit. In the same way that it is OK to knit sweaters and sell them to people in the neighborhood or online, it should be OK to print off books and sell them for a cheaper price. Of course, a lot of people, even after all the arguments I have presented, will see that statement and think, “Oh my! No way!”, and that’s exactly the point. Not many people would be willing to buy from that person in the first place, not that there’s anything wrong with it, it’s just kind of strange, and it doesn’t look very good. At the same time, if someone develops a revolutionary kind of motor and shows off his cars ability to get 100 mpg a lot of people would look at that and want to buy one of their own. This could lead to a profitable business for that person if it weren’t for intellectual property laws. When you allow people to start locally without registering their business and getting inspected and going through all these loops, you allow people to develop a reputation locally before they’re innovations are put on the public board for all to see and copy. It allows them to remain a secret long enough to get their start. And of course, as was explained above, keeping production secrets is a great way to maintain power over competitors. When you are the best you are the best. Imitators/competitors often fail simply because their only goal is imitation. They are not willing or are unable to go the extra mile and continue to improve, that is what customers like to see, and that is what they will always gravitate towards.
Finally, there is the fear that inventors will not be able to pitch their ideas to investors without having it stolen. Again, a simple one to answer with the magic of contract. A written agreement is the only proper way to solve the issues of “intellectual property”. When you make a company sign an agreement that they will not copy or use your idea when you pitch it to them, they are now bound by law. The fact that you claim originality over a particular idea not yet in the federal database does not make you the partial owner of the actions and resources of others. Not only that but people might be surprised to find that companies pay top dollar for engineers and “innovators” as full time work. There are companies dedicated to creating things for other companies. Models of protecting anything they come up with definitely exist and it does not only involve the use of government law.
One final argument that I’ll bring up before I start to wrap things up is the fear of straight up copycats. While this is what I’ve been talking about this whole time there is a more specific thing I want to address. For many people, even those who don’t accept IP, there is such a thing as fraud against a product. That is, if I blatantly copy an entire business model to include their name and logo, is that fraud? Without IP laws, can we still punish that by law? In all honesty, this kind of fraud and IP are the exact same thing and neither one falls in line with the non-aggression principle. That’s not to say everyone is going to run out and build their own McDonald’s and start selling Big Macs. First of all, it takes millions of dollars to do such a thing and without an incredible amount of funds, it would be impossible to copy a business exactly. Key differences would stand out. As I said before, private solutions trump public solutions every time. If McDonald’s were to fight this they might create an app that shows you the “Official McDonald’s Locations”. In reality, as Coca-Cola has done, they should be protecting their recipes and methods for making burgers, and in fact they do. While reverse engineering may be a cinch, knowing the right suppliers or cooking methods may be a different matter. The point being that differences between the two companies would certainly emerge and the one who produces a better product will certainly win. If one is able to target a particular market while the other targets another, everybody wins.
A name is no different than a product and there is no reason why intellectual property should apply to certain things and not the other. If someone were to start calling themselves by my name that’s fine, many people have my name, I can’t expect them all to pay me royalties, and I can’t expect to have to pay others for the use of my own name. If someone were to take my picture from the internet and make a meme out of it or even post it in the bio of a serial killer, well, so be it. …and NOW a few heads are turning, and I have a feeling I’ve just created a topic for another time. I’ll stop there because it really is a separate issue and I promise to expand in the future. Feel free to post your arguments for and against below. Let’s stick to intellectual property and wrap things up.
It Ain't Real, Time To Own Up
Intellectual property laws are not necessary simply because private solutions trump public solutions. However, intellectual property is not property to begin with.
By saying that intellectual property and copyrights are OK, it is like saying you can copyright the apple and not allow people to grow it on their own and even sell it. Where do you draw the line on what is and isn’t subject to IP? The only way that the anarchist or libertarian may put restrictions on what people can and can’t do is if that person is harming others. Sharing music simply doesn’t harm others, and there is no way to tell people what they can and can’t do with their property. When I buy a computer and download a song, that is not harmful to anyone, it is not theft, it is the copying of another file that exists on a server elsewhere. The only possible way for intellectual property to exist within the free society is by private contract. The only way to bind people into actions in a legal way is through contract. Of course, if the purchase of every music album meant the signing away of your property rights to that album, the sales of albums would plummet. When you think about it, this is only the recognition of the current IP system. If with every album people were clearly reminded of their inability to share it or rip it, even if that meant a bright red sticker that read, “YOU MAY NOT COPY/DISTRIBUTE/SHARE THIS ALBUM IN ANY WAY, YOUR PURCHASE OF THIS ALBUM IS AN IMPLIED CONTRACT”, what do you think would happen? Sales would drop, and the more creative bands would purposely put their music into the public domain and sell the albums with a bright green sticker stating the exact opposite.
An Out Of Place Video and A Conclusion
The video below may not seem like it has anything with this article, but give it a chance. Give it a watch, listen carefully and consider all points. It is a TED talk by Mike Rowe about working jobs that don’t seem “fun”. If you need to, take a break, clear your mind and come back. This will help to avoid the confusion of watching something a little off topic.
Getting back to it! When considering issues of a moral and legal nature, what do you first consider? The anarchist and libertarian always considers, “Who owns the property?”. Just like the crab fisherman Captain was surprised about the word “OSHA” when it comes to safety, the anarchist should be surprised by the notion of “government” when it comes to protection. The fact is that when it comes to safety it should be up to the individual, not the collective. That of course doesn’t mean everyone is totally on their own, but they should be free to choose who protects them and their property. No one may steal my money (my property) in order to help other people. All interactions must be voluntary. Property is always the very first consideration, even over protection. Rowe says that life would be a little better if you could work a little less. Indeed, it would be better if you could just write a book and live off the monopoly on sales, sue people for quoting it whether they knew they were doing it or not and force people into some sort of social implied "contract" when it comes to your book that they never heard of. My favorite quote from the above speech, and I attribute it to Mike Rowe not because it is the law but because I want people to consider the person who said it is, “Innovation without imitation is a complete waste of time.” Imitation is what makes the world we see today possible. By learning from others and building off of the successes of others society as a whole is able to grow and thrive. With all innovation comes imitation. To put a limit on that is to put a limit on society. When we recognize the things that hold us back, we are able to make the reversals that we need. Anagnorisis, Peripeteia.