How Copyright Can Be Viewed As Anti-Property

from the removing-rights dept

One of the regular discussions we get into around here is over the question of whether or not things like copyright and patents are really property. The IP lawyers who insist that it's just like property focus on a rather simplistic (and wholly inaccurate) explanation of why it is property: which is that if it's a bundle of rights that can be transferred, then it is property. But that's misleading. Because it mixes up a couple of key elements that make this definition quite inconvenient. The key among them is that those who hold IP rights rarely sell them (yes, it does happen, but it's a rare transaction when it does). Instead, they mostly license the rights. And that's rare with real property. Again, it does happen sometimes, but not very frequently -- and, when it does, it's always represented quite clearly as a rental or a lease rather than a purchase. It's not even thought of in the same framework. So, you have a major difference right there.

And, in fact, there's a reasonable argument that when most of the transactions are licenses but are represented as purchases, it's actually very much against the basic principles of property, rather than for them. Martin points us to a fascinating and thoughtful writeup, by Nicklas Lundblad, originally written in Swedish, but the Google translation is quite readable, that discusses how the recent actions by Amazon to delete purchased George Orwell ebooks on the Kindle demonstrates just how anti-property "licensing" is (my own edit of part of the translation):

What is interesting with the time, however, is that it illustrates an example of a conflict that has not been seen very often - between the copyright and ownership of individual copies of a work which we have purchased legally. As noted in the article above, we would probably flinch [if someone] knocked on the door, courteously explained that the publisher who sold us the last part of Harry Potter no longer wants to provide a paper edition, and that therefore they had brought with him a little gasoline to burn up our copy . Most of us would probably shut the door again, put on a little coffee and [laugh]... [if anyone] would try their hand at this. But in the transition to the digital economy it will make it harder for us to protect our own space and our property, as more and more terminals are now sold [with what is] charmingly called a "kill switch". The iPhone will have, like the Kindle and other terminals: an opportunity to, at a distance, without our consent in the case (but we have certainly agreed to it in any agreement anywhere) change the content of the technologies we use.

And that very fact is incredibly anti-property. The idea that something we believe we have legitimately purchased can suddenly be snatched away from us, at a distance, with no recourse is not property. It's the opposite of property. In the comments to our original post, someone pointed out that for all the copyright maximalists who like to refer to infringement as "theft," Amazon's deletion of 1984 was a lot closer to "theft" in that people who had purchased something suddenly found that it was gone. Poof. That is extremely anti-property, and anti-free market -- and that's a problem:

The original article goes on to note that while a contractual agreement is the cornerstone of the free market, a license agreement built on copyright is quite different. It's built with a very strong imbalance, backed up by government protectionism, that changes the free market structure. Lundblad notes:

The license is like a parody of a contract because the contract coordinating effect been eliminated from the outset by a law which gives one party all the bargaining power.

While I have no doubt that this will upset and anger the folks who believe that copyright is absolutely 100% property, it's a rather compelling explanation of how copyright isn't just not like property, but in many ways is anti-property in that it violates some of the basic tenets of true property and true property rights.

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Just Because A Market Benefits From A Gov't Handout Doesn't Mean It's Good Overall

from the looking-at-the-bigger-picture dept

Arnold Kling rips apart a particularly silly New Yorker article by James Surowiecki which attempts (and fails) to show that libertarian economists are hypocrites. The basic reasoning from Surowiecki is that libertarian economists believe strongly in market forces -- but, at the same time, the stock market has reacted positively to news of a potential economic stimulus package. Thus, he concludes, libertarians should support the stimulus package (the market says so!) even if the concept of an economic stimulus package goes against libertarian ideals.

This is silly and wrong for a number of reasons, but it brings up a mistake that I've been seeing made around here all too frequently: the idea that if one market benefits from a certain government handout, then clearly "the market" has benefited overall. So, of course the stock market is looking forward to a government handout -- because those involved in the stock market will benefit from such a handout. However, that does not mean that it's really the best thing for the wider economy. Surowiecki's mistake is thinking that the stock market is a proxy for the overall economy. That's the sort of mistake made by someone totally unfamiliar with the stock market -- so it's a bit surprising to see Surowiecki make it.

As for the similar arguments I've been seeing around here, some of our more vociferous patent system defenders have been posting links to studies that have showed that certain industries have benefited from patent protection. Well, duh. But, of course, those industries don't represent the larger market. So, for example, there is some evidence out there that pharmaceutical companies have benefited from patent protection, but there's also even more evidence that doing so has come at a huge cost to actual healthcare, which has a huge multiplier effect on the economy (in a bad way). The fact that one single segment of an industry benefits from government handouts -- whether in the form of a stimulus package or a gov't granted monopoly -- is hardly proof that the wider market is aided by it. In fact, historical evidence suggests just the opposite. Investment is put towards these more inefficient (on purpose!) markets, rather than what would best serve the wider market.

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No, Second Life's Bank Crash Did Not Predict Real World Bank Crash

from the get-real,-people dept

MSNBC is running an article claiming that last year's virtual bank collapse in Second Life somehow foretold the current financial crisis. It makes for a good headline, but it's simply not true. The factors that resulted in the real world financial crash, as compared to the one in Second Life were entirely different. While there may have been some similarities (people not taking the time to understand the risk of certain investments) to compare the two is a pretty big stretch. From there, the article gets even worse, pretending that both financial crashes show that free markets don't work.

That's simply not true.

The eventual crash actually does show that free markets can work properly, punishing those who took risks without fully understanding the risks. The response in Second Life, to ban banks like the one that crashed, seems like the wrong way to go about things as well. Yes, many people were fooled, and ended up losing money, but that should help educate people not to blindly rush into putting money in a totally unregulated "bank" that made promises that were clearly beyond reasonable (40% interest?). Having regulations that prevent outright fraud (lying) seem reasonable, but banning all banks in response to such a poorly run one seems like going to far. The problem isn't just with the fact that it was an "unregulated free market." It was with the fact that people blindly believed that something too good to be true was legit.

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