Are Intellectual Property Laws Necessary in a Free Society?

by Ian Tartt

Intellectual property is largely ignored by most people, but hotly debated amongst libertarians. Some defend it while others reject it. This article attempts to show why intellectual property is something that libertarians should oppose.

The basic problem with the idea of intellectual property is that it essentially says that you can own an idea and control what other people do with it. For one thing, the only way to “own” an idea is to keep it to yourself; once you tell someone else about it, they can then do as they like with it. Some would consider that theft, especially if there is a violation of a copyright or patent involved, but there is a crucial component to theft that is missing in this case: the loss of physical property.

Suppose you walk into a store, grab a CD, and walk out without paying for it. You’ve deprived the store owner of physical property without justly compensating them for the loss, which means you’ve stolen from them. Now suppose you’re listening to several songs online (the same number of songs on a standard CD) and you download them without paying for them (called pirating, but not the fun kind that involves Jack Sparrow). You haven’t deprived the website owner of anything, because those songs are still on that website, and most people who pirate media would have gone without the media if they couldn’t get it without paying for it, so you’re not even depriving the website of any revenue. Because of this, piracy, along with other violations of intellectual property laws, is not theft.

From here, we can move on to examine two big problems with intellectual property laws. The next few paragraphs will talk about how they violate property rights, and the ones after that will show their negative economic effects. Property rights are based on homesteading, which is simply mixing your labor with unowned resources. Trading with the legitimate owner of a piece of property and collecting abandoned property are additional ways you can legitimately acquire property. These are often called the economic means. Intellectual property laws invoke the political means, which is an unjust way to acquire property. Taxation and eminent domain are examples of the political means. All manifestations of the political means are based on theft, and intellectual property laws are no exception.

If Person A and Person B both create, completely independently from one another, a new type of machine and both machines perform the same function and operate in the same fashion, then they are each the owners of their respective machines. Should their machines bring some value for business, such as the production of goods, then they can compete to see whose machine is better or who can use it in a way that better satisfies customers. In this way, they’re respecting each other’s rights to use their machines. But under the current laws, Person A could take out a patent on the design for his machine, which would give him some amount of control over Person B’s machine.

Since Person A did not homestead Person B’s machine, Person B has not abandoned his machine, and Person A did not acquire Person B’s machine through trade, that means that Person A has effectively stolen Person B’s machine. Even if the patent merely prevents Person B from selling his machine or using it to compete against Person A, it is still preventing Person B from exercising his full rights over his machine. Being able to do as you like with your property, as long as you don’t violate anyone else’s rights, is an essential component of property rights. Therefore, being denied full access to your property is a violation of your rights, and since intellectual property laws violate your rights by denying you full access to your property, they are illegitimate.

Some people may not be satisfied with those arguments. They might disagree with the stated justification for property rights, or say that intellectual property laws are essential for the smooth functioning of society. This paragraph will show how they can be used to bring about the antithesis. The previous paragraph briefly discussed competition. In the free market, there are multiple providers for every good and service (except for services which the government has monopolized, but that’s a subject for another article). This means that each provider has to offer quality stuff at reasonable prices in order to keep their customers and stay in business. If their quality is far lower than that of a competitor, or their prices far higher, then they will lose customers to that competitor; this will happen even faster if both their quality and prices are worse than those of their competitor.

Historically, this resulted in prices decreasing over time. The more efficiently a firm can produce, the lower its costs of production will be, which can then be passed forward to its customers in the form of lower prices. To keep their customers, other firms will strive to increase their efficiency so that they too can offer quality goods at low prices. This is how the free market benefits both producers and consumers.

But intellectual property laws throw a wrench in this beautiful system. Person A, with his patent on the design for his machine, can prevent Person B from using his similar machine to compete with Person A. So Person A can reap the benefits of more efficient production while using the strong arm of the state to prevent Person B from doing the same, meaning he has an unfair advantage. Because this restricts competition, customers don’t get to enjoy the benefits they would with more competition.

Over time, perhaps Person C will develop a new machine that is even more efficient than the one Person A patented, or the patent could expire. Either of those scenarios would bring about the benefits of competition, but at a much later date than if intellectual property laws did not exist. Because of this, intellectual property laws are basically a shield which inefficient or uncreative producers can use to protect themselves from competition, which results in greater inefficiency and stagnation by preventing others from improving on their stuff. The free market, on the other hand, rewards efficiency and creativity while punishing inefficiency, leading to a more dynamic society.

What would a society without intellectual property laws be like? It would be more respectful of property rights. It would be more efficient and careful with resources. The market would more accurately reflect the dollar votes of the customers. Budding entrepreneurs would be able to get into the market more easily. Corruption and lack of creativity would decrease as honesty and originality increased. The government would be severely crippled in its ability to pick the winners and losers, which also means that lobbying for special favors would be far less effective. Freedom would increase for everyone across the board. These are some positive changes that would take effect after the abolition of intellectual property laws. There are likely many more benefits to be gained, so let’s do what we can to make this happen.