Friday, April 29, 2011

On intellectual property abolition, part 3

A number of libertarians call intellectual property rights (IPR) as intellectual monopoly rights. They argue that IPR is "evil because granting artificial rights to non-property restricts everyone else’s property rights."

One such article is by Jock Coats in the Adam Smith Institute blog. Coats' short paper today, Intellectual property: an unnecessary evil, argues further that

..."intellectual property" is a contemporary conceit to conceal crude market interference through state granted privilege with the flimsiest gossamer of respectability. The primary origins of patents lie in maintaining the state’s coffers, and of copyright in state censorship of ideas.

Property rights arise from a desire to prevent conflict over scare resources. Ideas, patterns, recipes and processes are non-scarce. Intellectual monopoly laws impose different time periods and restrictions...

19th century libertarians ranked Intellectual Monopoly as state created privilege that impoverishes the majority. We should heed them: they are still destructive, unnecessary, statist and evil.

It was a friend in facebook, a young German liberal thinker, who posted that article. I mentioned to him that top anti-IP libertarians like Stephan Kinsella want the abolition of all forms of IP -- copyright, patent, etc. They argue that ideas can never be owned. If I am an aspiring rock or rap star, I composed several good rock/rap songs, then I cannot say "I own" those songs. My friend replied,

You will still be recognized as the producer of that song and be able to make money with it, even without IP protection (contract law is sufficient). And with modern technology it is becoming increasingly difficult to protect IP and in the process of protecting them you are causing more harm to the principles of liberalism/libertarianism than otherwise. And by composing a rap song you will undoubtedly use some other form of IP in the process and should you not pay royalties to the inventor of rap? That seems absurd. And your song won't be scarce, if I copy it, I'm not taking anything away from you. Earning money will be more difficult for you, I grant that. But doesnt that create an incentive for quick production of new IP? This will create more dynamism and make it more difficult for monopolies to emerge, a major criticism of market-sceptics. And physical property - which must be protected - is being attacked on by protection of IP, as the ways you can use the former can be limited throuh IP protection.

I suggested in my earlier paper, On intellectual property abolition, part 2, that
it should be up to the IP owner if he wants to share his invention for free to all, or to be protected. Very often, the cost of enforcement is much much larger than the benefits of full enforcement, say of fighting song piracy, so many IP owners, except the big ones like The Beatles and U2 perhaps, won't bother full enforcement of their IPR.

I think the bigger debate on IPR is on expensive inventions like drug molecules. If the cost of inventing a new beer molecule (or compound of molecules) is not very high, then the new beer inventor/s may not press for full IPR protection. But in the case of drug molecules where the average industry cost of producing one successful molecule (successful meaning safe, hurdled dozens of clinical trials, and effective as killer of a particular disease) is up to $1 B, then such inventors will try to seek full IPR protection whenever possible.

One big opposition to IPR by the libertarians, liberals, anarchists and other shades of free marketers, is that it is a government (usually the Intellectual Property Office) that gives IPR. If that is a big problem for them, then it can be solved by having a private entity, say a federation of industry players, that can give such IPR. I discussed this in my other paper, IPR and medicines, part 7.

Do the anti-IP people consider a molecule or an atom as "non-tangible"? I still have to dig about this. But for me, a newly-invented molecule (or compound of molecules), say a drug molecule, tire molecule, beer molecule, etc. are tangibles. Water is a tangible object, it is composed of 2 atoms of hydrogen and 1 atom of oxygen (H2O). See also my other paper on the different molecules currently in R&D stage to treat prostate cancer alone, IPR and medicines, part 8.

The more directly related to health a molecular invention is, say a new anti-cancer drug, a new weight-loss food supplement, a new skin whitener, etc., the bigger the cost of inventing them. Inventors and manufacturers have to entertain the possibility that they can be sued someday by their customers if the latter will suffer some adverse health results, or at least if the promised "miracle" did not happen. If there is huge costs in the R&D of such drugs or food supplement or ointment, if there is huge costs in possible future legal battles over the safety of such new products, then the inventors and manufacturers need to price their new invention at a higher level, via the temporary monopoly period (a patent, copyright, etc.).

Some anti-IP libertarians can unwittingly merge ideologically with the leftists and socialists in arguing for the eradication of IPR in drugs. The higher price of new and patented drugs compared to off-patent and older ones is, for them, proof of the evil of IPR. And this is another dangerous mistake that free marketers from whatever shade should avoid committing. Pricing is a private property right. It can never be communal or government right.

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