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Written by Christophe Cieters.

Along with and resulting from self-ownership there is another central concept which lies at the core of all capitalist ideologies.[1] Private property in its capitalist sense[2] means that somebody is the owner of a certain thing. Such ownership need not – and often does not – coincide with or relate to legal ownership.

Ownership means that the owner is morally legitimized in full control of the use of his property (which includes the right to exclude others from using it), has the right to any benefit from the property (he owns the fruits of the tree which is his, the minerals mined from his land, the rent gained from his house,…) and the right to transfer, sell or even destroy the property as he sees fit.[3]

The German sociologist Franz Oppenheimer observed that there are essentially two mutually exclusive ways to acquire property: through work or through robbery. The first he called the “economic means” (production and exchange), the second he defined as the “political means” (seizure of another person’s goods or services through force or violence) (Oppenheimer, 1926). Based on negative liberty, self-ownership and the inherent non-aggression principle that flows from it, it need not surprise that in libertarian philosophy only the so-called economic means of acquisition are deemed to be just.[4]

The kind of property which concerns us here is the relationship between human beings and material things, based on self-ownership and arising from homesteading (the first acquisition of a previously unowned material thing)[5] or through voluntary exchange (the transmission of ownership from owner A to owner B of something that has been homesteaded by A or acquired in a similar previous (sequence of) exchange(s) which had A as the recipient of ownership up to that point).

The homestead principle is a formulation of how an unowned resource becomes property. It was Locke who took the first steps in formulating the concept as such when he said that because one owns himself, “the labour of his body and the work of his hands” consequently also belong to the self-owner. It follows that in the case of the first human being who started exploring the world when no homesteading had yet been done, “whatsoever, then, he remove[d] out of the state that nature hath provided and left it in” and was in other words as of yet unowned, “he hath mixed his labour with it, […] and thereby [made] it his property” (Locke, 1690).

It is important to note that it is a useful but potentially misleading metaphor to speak of “owning” one’s labour. “The right to use or profit from one’s labour is only a consequence of being in control of one’s body” (Kinsella, 2001). As you control your body you are free to undertake a certain action or not, the decision to do so is yours to make (perhaps because somebody offers you something which you want in exchange for you performing the labour). But it is irrelevant to speak of owning the actual action as such (Rothbard, 1998): the point is the fact that through self-ownership you have control over “doing something” (i.e. “labour”) or not.

Locke elaborated with an example by remarking that “he that is nourished by […] the apples he gathered from the trees in the woods has certainly appropriated them to himself. Nobody can deny [that] the nourishment is his. I ask, then, when did they begin to be his? When he digested? Or when he ate? Or when he boiled? Or when he brought them home? Or when he picked them up? […] It is plain, if the first gathering [i.e. first occupation] made them not his, nothing else could”. Ergo his effort involved in being the first to gather them from their unowned state has “put a distinction between them and [the] common […], they became his private right. And will anyone say he had no right to those acorns or apples he thus appropriated because he had not the consent of all mankind to make them his? Was it a robbery thus to assume to himself what [supposedly] belonged to all in common?” (Locke, 1690, emphasis added).

Or more precisely: belonged to nobody at all. The phrasing used here by Locke can be confusing if one does not think it through, therefore some caution is warranted. Owning something in common does not mean the same as owning equal shares with voting rights of a company where a certain percentage would have to agree to a course of action along the stipulations of the company’s charter. Instead, it was to signify that initially, before any homesteading had been done, everything was open to homesteading by anybody who happened to do it. If all people own a bank deposit in common, all have access to it and any one of them is free to spend and consume it as he pleases, and this necessarily without one common owner being able to object to its use by any other common owner as long as it is in common ownership. One cannot justly exclude an owner from doing with his property – that which he owns – as he pleases. Each common owner is in other words free to separately act as if he were the single owner. Even if that would mean eating the “commonly owned” apple and putting it in his individual stomach like our hungry protagonist did, or likewise withdrawing (part of) the deposit from the common account and putting it in a new private one to which others have no access. Essentially then, when a material thing is commonly owned by all, it is for all intents and purposes “unowned” as it is freely consumable or withdrawable from the supposed “common” (i.e. de facto non-existent as far as private appropriation is concerned) ownership. It is in this sense that Locke continued by stating that “it is the taking any part of what is common,” i.e. freely accessible by all and as of yet unowned and not yet homesteaded by somebody else, “and removing it out of the state nature leaves it in, which begins the property” (Locke, 1690, emphasis added).

It is important to recognize that the rightful acquisition of previously unowned material things through homesteading does not depend on the express consent of others. The apples I have gathered or “the ore I have digged in any place, […] becomes my property without the assignation or consent of anybody. The labour that was mine, removing them out of that common state they were in, hath fixed my property in them” (Locke, 1690, emphasis added).

For clarity’s sake I remind my reader that the above obviously requires that the person doing the homesteading had not “sold his labour” in question to somebody else when doing so. Supposing that he did trade his labour to somebody else, the result of that labour would not be his but belong to the person for whom he agreed to perform the required task – that is the trade they made in one hiring the other. If A hires B to gather previously unowned apples from a previously unowned patch of forest, then those apples by B’s gathering become not B’s property but A’s due to the fact that B sold his performance of the task – and consequently its results – to A.[6] In similar fashion, If A hires B to use A’s resources and convert them into a new material thing, then it is not B who owns the product by the mere fact of B being the one who did that part of the work: since it is A who owned the resources and it is B who sold his time and effort to A in its making, A is the just owner of the end result. This has confused entire generations of Marxists, but common sense can go a long way.

Along the same lines, only that which was up to then previously unowned can be homesteaded. If C gathers and eats apples from trees in D’s garden without D’s permission, C did not homestead those apples but stole them from D as they came from D’s property which D either homesteaded himself or acquired through exchange.

Of course, the entire premise in the case of appropriation through being the first to put something into use is that the material thing being homesteaded was initially unowned, since only unowned things can be justly appropriated without exchange.[7] Homesteading theory in other words says that the first ownership in history came about with the first homesteading, before that moment everything was unowned.[8]

However, let us suppose for a minute – as this is commonly claimed by avid collectivists who attack the unequal distribution of property which the mechanics of homesteading can bring along – that the above was not the case. Instead, some assert the claim that at the beginning of history everyone started off with “rights to an equal share of the earth’s surface and resources”[9], just like that and thereby de facto without any homesteading of unowned objects ever being involved.

But ownership of something does not just appear out of thin air, so where would this initial equal a priori endowment of shares come from without homesteading? This is never explained with any sense of logic or consistency. At best the argument used in defence of this supposed initial equal distribution is that it seems “more fair” to the collectivist making this claim than the possible unequal distribution resulting from homesteading.[10] But merely claiming that something is “(un)fair” without supporting it with a plausible explanation – aside from arbitrary irrational personal preferences – proves nothing. Much like how in Western law a person is considered innocent until proven guilty[11], the burden of proof for the existence of such an a priori equal distribution of shares ex nihilo lies with the people who claim it and thereby make an ontologically positive claim, not with the people who make the ontologically negative claim that there is no reason to suppose its a priori existence without such evidence. At the time of writing I have no knowledge of such evidence and therefore no reason to presuppose such claims throughout the arguments presented in this book.

But let us not take the easy road! Even if, purely for the sake of argument, we were to grant this magical ex nihilo existence of a priori equal shares any relevancy anyway, the implications concerning unequally distributed property (as would result from the concept of homesteading which was for this reason being challenged) would not be any different. Since people with those proposed initial equal endowments would still be self-owners, “they would be free to carry on whatever capitalist acts between consenting adults they wished to undertake” (Gordon, 1998). Consequently, the hypothetical initially equal shares could after some time likewise end up in any proportion that happened to come from those exchanges. The only difference ultimately being that – instead of passing through homesteading – the first ownership would somehow be freely granted by a mysterious initial equal distribution, the existence of which is as we saw in itself doubtable at best.

Peering through the collectivistic mysticism then, the assumption that material things were unowned before the arrival of the first person to homestead them as opposed to their ownership “somehow” being granted at birth can hardly be called implausible.[12] There is no earthly reason to assume that people begin with property rights of the kind which Cohen and others of his persuasion suggest, aside from their personal and ultimately whimsical preferences.[13]

There are in short two fundamental principles upon which the libertarian theory of just property through homesteading rests: the first is self-ownership[14] and the second is the absolute property right over previously unowned scarce material natural resources of which one is first to occupy them and bring them into use (Rothbard, 1982). Material things, once they have been homesteaded, can by definition not be homesteaded again by somebody else. After the first homesteading, the just ownership can only be voluntarily exchanged. Also note that there is no requirement of said property being in continual use; if something is mine I am free to decide whether or not to use it, for whatever amount of time and for whatever reason.

The qualification of property being “just” is important.[15] Suppose, for example, that A steals B’s watch and that several months later B apprehends A and grabs the watch back. B would in this case be perfectly legitimized in doing so. If A should prosecute B for theft of “his” watch, it would be an overriding defence on B’s part that the watch was not really and justly A’s because he had previously stolen it from B (Rothbard, 1982).

However, when looking at the world we live in today it would be impossible to trace all ownership or exchange of property back to its original homesteader and those he or she exchanged that property with. Even if we could, it is entirely possible that – somewhere in the chain of ownership – material things changed hands not by economic but by political means (Rowley et al., 1988). Rectifying every single one of these “unjust” ownership titles would at first glance therefore necessarily result in chaos. But in fact the problem solves itself: the burden of proof lies with the person who disputes the title, not with the person who is currently holding it.[16] “If the objector cannot make good his claim, the present possessor owns his land legitimately. Absent a clear proof by the objector that land has been forcibly wrested from him or his ancestors, the current possessor’s claim holds good” (Gordon, 2009).

The fact that homesteading and just exchange brings along full property rights over material things – and the notion that homesteading is what grants property in the first place – has some interesting implications, not in the least towards what we have come to know today as “intellectual property” (IP). “Intellectual property rights are rights in ideal objects, which are distinguished from the material substrata in which they are instantiated” (Palmer, 1990).[17] In effect, what IP legislation does – be it through patents, copyrights, trademarks or other means – is that it creates legal monopolies over “creations of the mind” (schematics, music, texts,…) by prohibiting anybody but the legal “owner” of the IP to make use of that which is protected by IP licenses.

IP legislation is often defended through the use of utilitarian arguments, stating that creating monopolies through IP creates an incentive for people to develop new inventions, which would otherwise be missing or insufficient (Lemley, 2005).[18] While capitalism can easily be defended on utilitarian grounds (Rothbard, 1962) (Hoppe, 1989)[19], its own foundations as such are not concerned with utilitarian dogma in any way whatsoever: individual negative liberty is the main concern – that utilitarian benefits follow from this is a welcome bonus, but nothing more (Hazlitt, 1964) (Marks, 2007). Even if “higher utility” (which is in itself a very vague and extremely subjective concept) was somehow proven to be achievable through some sort of invasion of private property, this would not thereby be justifiable on libertarian grounds.[20] Likewise, even if it were indisputably so that by implementing IP legislation the amount and rate of innovation is increased – which to be clear, it is not (Cole, 2001)[21] – this would not mean that these IP laws are thereby justified.

As we set out to take a closer look at IP legislation and its (in)compatibility with the homestead principle in order to determine whether or not intellectual property can be called “just” property, we are in fact encouraged to examine the reasons behind homesteading itself and deepen our understanding of it. IP legislationy mankind should or would even bother with formulating moral laws of property and ownership in the first place, and especially how easily they are misunderstood.[22]

The first documented instances of what could be called a form of IP legislation can be found as early as Ancient Greece, where around 500 BC there were culinary competitions which provided the winner with the exclusive right of being the single authorized producer of that specific dish for the following year.[23] Sporadic issuing of legal monopolies by monarchs or other political leaders and its symbiotic relation to abuse and corruption can be found throughout the centuries that followed[24], while the first systematical granting of patents vaguely resembling the mechanics still used today originated in 15th century Venice (Frumkin, 1945) and have stayed active within most legislative systems in one form or another ever since. It is however safe to say that, before the establishment of the “Designs Registry” in the United Kingdom of 1839 (later transformed into the “Patent Office” in 1876), intellectual property with any kind of real enforcement of its artificial monopolies was de facto virtually nonexistent.

One cannot help but anxiously wonder if that means that before the mid-19th century there was actually a constant and gross violation of (intellectual) property rights being perpetrated; right from when Homo habilis first reared his head around 2.4 million years ago up until the moment that – after mankind had helplessly suffered from millennia of abuse and infringements against IP – governments heroically stepped in to save the day by finally granting IP owners their well-deserved legal monopolies.

Perhaps all of us are at this very moment violating the IP rights of a hapless Homo erectus who was the first to invent artificial sheltering (i.e. a hut, a tent or a house) around 500.000 years ago (BBC News, 2000). Did he not homestead his idea by rightfully being the first to put it into use, much like we would homestead a coconut or a banana from a fruitful tree on an island we ourselves just discovered?

Most of us make daily use in one way or another of an ingenious circular device which rotates on an axis and can be used for such a wide-ranging array of applications as the performance of labour in various machines (grinding, cutting, polishing,…) up to and including the facilitation of movement and transport. Yet chances are that – like myself – none of my readers pays what he or she in the logic of IP is supposedly due to the inventor/IP owner (or any of his remaining descendants to which his property might have been justly transferred) of this incredibly valuable and truly revolutionary invention: the wheel. Neither have car manufacturers, toy companies or gyroscope users ever since.

When pondering the implications of IP, how could we be allowed to freely boil an egg without reimbursing the person who first came up with the recipe and technique to do so? And what if he never wanted anybody to copy his recipe in the first place – possible reimbursement or not – in order to fully profit from his monopoly himself without licensing it to others? When we were kids and we made crude bows out of twigs and twine, were we not in fact violating the rights of some anonymous bushman by copying a design which was rightfully his and only his, like we are not (legally) allowed to copy the design of, for example, vacuum cleaners today (Uhlig, 2000)?

And why should we not have to pay the ingenious IP owner who first mixed milk with honey like we would be forced to pay a pharmaceutical company that comes up with a new kind of cough syrup if we were to brew it ourselves? If we tie a knot in a rope to rig a sail, how is this at its core not a comparable use of IP like we would use a patented technique in biotechnology or a complicated process for chemical compound analysis today? And what about words, sentences, texts, entire languages, DNA sequences from plants or animals[25] and certain colours? Does the architect who designed a house for somebody else own it as well to a degree if he owns its design? Or the inventor of the tools that were used in building this house? Perhaps the companies that designed the hard- and software used by the construction company thereby also own part of the design and building? What about the individual who was the first to ever draw a straight line like the architect did on the plans?

Did the second caveman who sharpened a stone violate the rights of the first? What about somebody who owns a knife factory, or somebody who uses one of the knives that it makes? Is a person A violating the rights of an artist B if he covers one of B’s songs?[26] If so, were the rights of the first person C who ever played “do re mi” being violated by B in using that principle to make the song that was covered by A? And did person C in turn violate the rights of a person D who was the first to tap on a tree in a semi-rhythmical pattern and thereby invented music which would in the logic of IP legislation then be his private property in the same manner as the song? And while we’re at it, why does IP differentiate between public and private (non)commercial use of a song? If it truly is a matter of a rights violation in any case, then why would there be a difference whether it happens in private or in public and whether there is a profit motive involved?[27]

If Martine sees a colour which she likes and uses her own dyes to try and recreate it, whose property is she violating?[28] Is she violating somebody’s IP by putting her furniture – or that of a client who hires her as an internal architect – in a certain pattern like she saw in a magazine or on TV like she would be legally violating IP if she was to use her own materials to recreate an existing painting?

If one can copyright a song or another text and can thereby rightfully prohibit all other living beings from using their vocal chords to utter those same words, why would it then not be possible for a government (or a non-official individual who supports it on a personal level) to copyright a book and sound recording full of slanderous material about that group or government and then prevent anybody who disapproves of that group or government from uttering or printing pamphlets with those words or sentences for full-scale distribution as in the case of a song? If I invent something and build it, using my own material property, and a person in China happened to do the exact same thing at the exact same time using his own material property, did either of us violate the other’s IP in using a same pattern which we applied on our own separate property (the scarce materials like metal and plastic that were used and shaped into a similar thing)? Does it depend on which one of us got to a patent office first? But why would it take a patent office to establish a right over something?[29] If intellectual property is somehow – just like material property – about morally justified ownership, then why does it expire after a certain period of time?[30] And is not all of science and modern life in general essentially based on the fact that we are “standing on the shoulders of giants” (Salisbury, 1159) whose IP we are thereby supposedly violating? Is a modern chemist who claims IP rights over a discovery not violating previous IP rights of the first chemists upon whose previous knowledge he is building (as he claims something which is by the exact same proposed logic already another person’s IP)? If those original chemists who came up with the basics of the science of chemistry were still alive today, would they be exempt from the IP claims of the modern chemist, if so on what grounds, and how could it then be that the modern chemist could profit from the first chemist’s IP by claiming IP over it himself?

Clearly, something very strange is going on here.

Let us first take a moment to consider the following: “if there were only one man on earth, the idea of property would never occur to him. Since he would be free to dispose as he wished of all the utilities about him and would never be confronted with others’ rights limiting his own, how could it enter his mind to say: ‘this is mine’? These words presuppose the correlative: this is not mine, or this belongs to another. Mine and thine are inseparable; and the words ‘property’ or ‘ownership’ necessarily imply a relationship, since they indicate with equal clarity both that a thing is owned by one person, and that it is not owned by another” (Bastiat, 1850A). In other words, the need for and relevancy of clear demarcations of ownership stems from the existence of more than one human being, the economic reality of material scarcity and the fact that because of this – as the saying goes – you cannot have your cake and eat it too.[31] Only because of the existence of scarcity “is there even a problem of formulating moral laws [concerning property]; insofar as goods are superabundant (‘free’ goods), no conflict over the use of goods is possible and no action-coordination is needed. Hence, it follows that any ethic, correctly conceived, must be formulated as a theory of property, i.e., a theory of the assignment of rights of exclusive control over scarce means. […] only then does it become possible to avoid otherwise inescapable and irresolvable conflict” (Hoppe, 1989).

Let us follow all of this through. Imagine that a young entrepreneur named Frederick has traded with several people and through his trading ended up with a certain amount of good X (which could be gold, balloons, clothes, etc.), a box of nails and some nice oak wood out of which a skilful carpenter with the right tools could make a magnificent table. Frederick is not a skilled artisan himself, but he asks around and comes into contact with Cedric the carpenter who says that he can help Frederick with making the table. Credric is the proud owner of the tools of his trade (different saws and hammers, measuring devices,…); some of which he made himself out of resources he owned and some of which he got through exchange with other people.

Both men come to an agreement where in exchange for a specified amount of Frederick’s good X, Cedric will use his tools and expertise to make Frederick a table out of the latter’s oak wood and nails. Both men are true to their word and do as they voluntarily agreed. This leaves Frederick with a superb piece of furniture to use or sell as he sees fit and carpenter Cedric free to fully enjoy his newly acquired amount of good X. Who is the owner of the table? Quite clearly, Frederick is. Yet he was not the one who did the actual manual labour involved in shaping the wood and nails into the end product; Cedric did. So how come Cedric did not homestead the table, as he was the one who we could suppose “mixed his labour” with it?

Keeping in mind everything we have up to now discussed in this Chapter combined with the above example, we arrive at an important and – though logically implied – frequently misunderstood point: “the focus on creation distracts from the crucial role of first occupation as a property rule for addressing the fundamental fact of scarcity. First occupation, not creation or labour, is both necessary and sufficient for the homesteading of unowned scarce resources” (Kinsella, 2001, emphasis added).[32] Frederick already owned the nails and the oak wood and exchanged good X with Cedric to come to “own” the result of Cedric’s time and effort involved in shaping the nails and the wood into a table. He consequently does not have to rely on the fact of creation to own the table, but only on his ownership of the factors used in making it.[33] “One reason for the undue stress placed on creation as the source of property rights may be the focus by some on labour as the means to homestead unowned resources” (Kinsella, 2001, emphasis added). However, “first occupancy, not labour” in terms of necessarily backbreaking or skilled work – as it is frequently misunderstood[34] – “is the act by which external things become property” (Palmer, 1990, emphasis added).

From the above we conclude a few important things. First, the concept of property is de facto only relevant in terms of scarce goods: as a result only scarce goods can be owned and therefore be somebody’s private property. Exactly like it is irrelevant to speak of “owning a certain amount of nothing” (“nothing” is non-scarce, you can have as much of it as you like without having to summon matter into existence or take it away from somebody else), to speak of owning a non-scarce object is irrelevant as well: if A has a non-scarce object and B wants to have the same none-scarce object, then – by its being non-scarce – its supply is by definition infinitely able to meet any level of demand, and ownership of it has no meaning. Furthermore, where initial property is concerned, “under the libertarian approach, when there is a scarce (ownable) resource, we identify its owner by determining who its first occupier is. In the case of ‘created’ goods (i.e., sculptures, farms, etc.), it can sometimes be assumed that the creator is also the first occupier by virtue of the gathering of raw materials and the very act of creation (imposing a pattern on the matter, fashioning it into an artefact, and the like). But [as we have seen with the table in our earlier example,] it is not creation per se that gives rise to ownership” (Kinsella, 2001). Indeed, “by focusing on creation and labour rather than on first occupancy of scarce resources as the touchstone of property rights, IP advocates are led to place undue stress on the importance of ‘rewarding’ the labour of the creator, much as Adam Smith’s flawed labour theory of value[35] led to Marx’s even more deeply-flawed communist views on exploitation”[36] (Kinsella, 2001).[37]

Via this short detour we now come back to IP legislation. Imagine Walter who – in order to put his recent acquisition of construction materials and his homesteading of a patch of land on a newly discovered island to good use – designed, built and owns a certain building. All onlookers agree that it can be called a work of art in its own right. As owner of the building, Walter is morally legitimized in preventing others from accessing it, he is morally free to rent out his property or not and can unilaterally grant or deny its occupancy to anybody he wishes.

Essentially, intellectual property means that one can supposedly own thoughts and ideas in similar fashion. According to IP proponents, just like Walter owns the material building, it is possible for him to also own its non-material design: the idea behind it. In order for such ideal objects (the mental aspect of inventions or information of any kind) to be a possible subject of homesteading (and thus appropriation and ownership) in the same manner as material objects are, they need to be open to the same two coexisting conditions. He who wants to claim his ownership needs to be the first occupier of the object (or latest recipient of its just exchange), and the object itself – as we saw earlier – needs to be scarce.[38] We also saw that the creation and ownership of something might coincide, but both can occur completely separate from one another.

So are ideal objects ownable like material objects are if we test them on all the necessary and implicit conditions that need to be fulfilled in order to acquire just ownership of an object?

Clearly, Walter has full and just ownership of the material object which is his building. Through his personal effort and exchanges he owned all the factors of which the building is the combination. He himself homesteaded the land on which it was built and through exchange he became the owner of all the other resources that went into its construction and were at some point homesteaded and exchanged by somebody else. The material building is a scarce resource: many people have a want or a need for it, but as Walter and his family fully occupy it, it is impossible for others to do the same.[39] It is in short his private property.

Now, what about the ideal side of his building? Its design was invented – we might say created – through Walter’s thought process. Had Walter not invented it, it is unclear when and whether the design had ever been created in similar form. But creation and ownership do not always coincide, so we need to look yet further. Since Walter first came up with the design, it is unique in the sense that nobody had thought of it before and he was the first to construct a building according to it, he definitely is what we could easily call “the first occupier of the idea”.

So what about scarcity? Walter himself obviously wanted his invention. What is more, we hypothesized that numerous people were enthralled by the superb design of his building and could imagine wanting to live in one just like it. Its desirability and the possible existence of a human want or need for it is therefore a matter of fact. But does Walter’s “consumption” of this ideal object – the design – mean that it excludes its consumption or use by others like with scarce material objects?

It is clear that there are different principles at work here. It is impossible for Conrad to eat the same candy bar (material object) that Walter ate, but – legal restrictions aside – it is entirely possible for Conrad to use the same design (ideal object) as Walter did for performing a certain action or behaviour (which might include Conrad using his own (homesteaded or exchanged) resources to construct a similar building or candy bar for himself). One person using the design does not lead to the exclusion of the other or a material property rights violation in any possible way whatsoever. While the effort an sich in relation to the creation of an invention can be hard to come by (experts get hired and thereby exchange their effort and expertise for things they want because of this; for example in the case of various types of consultants, physicians, lawyers,…), the ideal object itself is obviously not scarce at all. Unlike scarce material objects like a specific apple or a specific building, the reproduction of ideal objects does not require the materialization of matter ex nihilo. Instead, ideal objects can be copied infinitely – and this without hindering anybody in their full use. As a result, property rights concerning material objects (scarce) on the one hand and ideal objects (not scarce) on the other are inherently and fundamentally different.

But does this need to be a problem for the existence of morally justified intellectual property as opposed to being merely an arbitrary and unjustified legal construction?

A second fundamental problem is that when property rights are recognized in ideal objects, this by default means that self-ownership is compromised[40] and property rights in inherently scarce material resources are then inescapably, involuntarily and unilaterally diminished.

Let us consider the following example which supposes the existence IP rights (aside from purely legislative constructions). Say that an active and hard-working individual named Mike was able to rightfully homestead a piece of land with rich mineral deposits. He sets out to mine said minerals and through trades here and there he ends up with the tools, machines and resources to potentially pour all kinds of metal in whatever shape or form he desires. Since he is the owner of the minerals which he mined from his homesteaded property, he is thereby entitled to use them in whatever way he sees fit. He is free to stack the minerals into piles, juggle with them, perhaps sit on them as he thinks about what he will do with them or melt and thereby transform them into whatever shape or form he wants. As they are his private property, he is the one who freely decides what to do with them and does not need any permission but his own to be allowed to do so.[41]

Meanwhile (in some other distant part of the universe) a person named Timothy invents a tool and goes to a government agency that lets him patent the pattern and idea of a steel object with a handle and a sharp edge – a knife – which thereby becomes his legal IP.[42] What this effectively means is that all of a sudden Mike supposedly can no longer freely do what he wants with his private property: he can no longer shape it into the form of a knife. If Timothy’s IP was indeed a relevant concept, he would thereby in other words become “a partial owner of the tangible property […] of others, not due to first occupation and use of that property (for it is already owned), but due to his coming up with an idea,” unilaterally (Kinsella, 2001).

As we can see, this situation is incompatible with the homesteading principle that grants ownership to the first occupier of a scarce resource after which only voluntary trade can grant property rights over this already owned private property. “For me to have an effective patent right – a right in an idea or pattern, not in a scarce resource – means that I have some control over everyone else’s scarce resources (Kinsella, 2001). By his patenting of an idea, Timothy would unilaterally claim a degree of control over Mike’s private property, with or without Mike’s voluntary agreement. We can only observe that the arbitrary notion of intellectual property, even when it is enforced through legal constructions, is in fact a direct violation of morally consistent capitalist property rights and is thereby ultimately in direct contradiction to self-ownership, its implications and the very basis of libertarian morality.

Instead, “IP rights imply a new rule for acquiring rights in scarce resources, which undercuts the libertarian homesteading principle,” which unequivocally states that “it is the first occupier of a previously unowned scarce resource who homesteads it, i.e., becomes its owner”. Since the first occupier is the owner of the material object unless he voluntarily exchanged it with somebody else, a de facto non-first “latecomer who seizes control of all or part of such owned property,” through force or fraud as opposed to mutually consensual voluntary exchange, “is simply a thief, because the property is already owned. The thief effectively proposes a new and arbitrary homesteading rule to replace the first-occupier rule, namely […] ‘I become the owner of property when I forcibly take it from you’. Of course, such a rule is no rule at all”. Because of an individual person’s self-ownership and the resulting principle of homesteading, the thief’s rule is unjust along the lines of libertarian morality. Proponents of IP rights must therefore “propose some homesteading rule along the following lines: ‘a person who comes up with some useful or creative idea which can guide or direct an actor in the use of his own tangible property thereby instantly gains a right to control all other tangible property in the world, with respect to that property’s similar use’. This new-fangled homesteading technique is so powerful that it gives the creator rights in third parties’ already owned tangible property” (Kinsella, 2001, emphasis added). But the mere proposal of a different homesteading theory does not make it just.

If we are to summarize all of the above, we see that patterns and information as such are ideal objects and cannot be owned due to the logical implications of the reasons stated. What is more, IP legislation “creates scarcity where none existed before” (Kinsella, 2001)[43] through purely legal constructions that – as opposed to private property of scarce materials which has always been with mankind, with or without legal systems – only were being considered like they are today from the 15th century.

The complete arbitrariness of IP legislation when it is compared to that of the ownership of material objects also sheds some additional light on how artificial IP legislation really is. Ownership of your house or other scarce objects in principle never goes away due to sequential heritage or if you yourself were to live forever. By contrast, legal IP in the US for example[44] – as dictated by its very constitution itself – simply “expires” after a “limited period of time”. The United States Constitution, Article I, section 8, clause 8 says that “the Congress shall have power […] to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right” (CULS, 1787, emphasis added) to ideal objects. From its very wording it is clear that the underlying “ownership” of IP – which is not even mentioned – was never considered to be the moral basis for modern IP legislation. IP legislation was merely the result of faulty utilitarian reasoning[45] which was supposed to incentivize more people into inventing new things. This “limited period of time” has throughout various new IP legislations for copyrights went up from “until 20 years after the death of the original copyright owner” in the US Copyright Act of 1976 to 70 years by the time of the Copyright Term Extension Act of 1998. And this, through these laws, purely on a legislative basis: any kind of overarching principle resembling actual “moral ownership” which could be claimed to account for these differences in periods of expiring ownership is de facto lacking: if intellectual property were the same as regular property – which by contrast does not have to base itself on subjective utilitarian principles – there would be no logical reason whatsoever to have it expire after an inconsistent amount of time.[46]

But as we saw earlier, any moral principle of “ownership” never had anything to do with IP legislation at its conception or in its current continuation. IP is based on ultimately arbitrary and mistaken utilitarian principles which have as only basis for their supposed justification the valuations of the heavily lobbied bureaucrats who provide the legislation. It has for example been observed that through this constant lengthening of expiration dates by the issuing of new IP laws, old copyrights like Walt Disney’s copyright of Mickey Mouse are being kept alive by consecutive prolongments of copyright terms through lobbying, while they should have expired decades ago under their initial copyright legislation.[47]

To be clear, it is also – especially perhaps when talking about ideal objects – important to realize that although possession and ownership of something often coincides, these two concepts are not interdependent.

The fact that A owns item X does not mean that A currently possesses it (e.g. A lent his privately owned X to a friend B who now currently has it in his possession) and the mere fact that B possesses something does not mean that B thereby owns it (B currently possesses X which A lent him, but A is its owner). Since A is the owner, A can rightfully demand B to give X back since B merely possesses X. However, a different person C who is neither the owner nor the possessor cannot demand from B that he hands over X which B possesses but does not own.

In other words: when we forget about A for a moment and consider an interaction between only the two other individuals B (who possesses X even though he does not own it) and C (who does not own nor possess X), then C cannot demand B to hand over X from B’s possession into C’s possession simply based on the fact that B does not own X: this is because C does not own X either. Consequently, B has no obligations towards C as C has no claim on that which is not his property and C cannot force B who is a self-owner into doing something he does not want without a rightful claim which B would be violating if he were not to give in to it.

This then also follows: if A invents something and can keep it secret, or A can get others to voluntarily agree not to disclose it once they know it (for example because A agrees with them in a contract that they can use the secret information but cannot disclose it), then there is no problem between the involved parties in terms of determining the absence or presence of possible rights violations. But only then are the parties bound by it: A cannot unilaterally impose restrictions on somebody’s use of their private property while they did not enter into contract with him in which they agreed to those restrictions. Only when somebody voluntarily agrees to a restriction (aside from the inherent consequences of self-ownership and the non-aggression principle) is it justifiable, due to private property resulting from self-ownership.

Say that A has developed a formula X which explains how to make truly delicious cookies. A clearly possesses the formula, but since it is a pattern, an ideal object, A does not own X. B wants to have this formula (perhaps because B simply likes to eat those cookies and wants to make them with his own resources without having to buy them from A, or because B – thinking he can do it better – wants to produce and sell them using his own resources). Even though A does not own X itself, since he is a self-owner he is in no way required to explain to B how it works or provide B with the tools or information to either find out himself or make it easier for him to do so in whatever shape or form. A is after all in charge of his own actions and B cannot justifiably force self-owner A to explain anything to B against A’s wishes. Clearly, the fact that A does not actually own X as such does not mean that he is somehow deprived of the admiration for formulating it and baking delicious cookies, it also does not prevent him from selling such cookies, nor does it in any way whatsoever translate into B having a claim on A to give him X to which B has no ownership claims which would – if they existed – override A’s possession upon demanding a return of property.

Similarly, B who does not own X either cannot claim any actual material cookies from A – which are A’s owned private property. B can of course ask A whether he is willing to give B the information, even though A – because of his self-ownership – is not involuntarily required to give in to the demand merely because B asks it of him.[48] As a result of B’s request for information, several things could happen. Perhaps A freely explains X to B. Perhaps A – for whatever reason which need only be relevant to A – does not want to spend any time or effort to explain it, which is his full right as a self-owner. But it is also entirely possible that A offers to give X to B under contract of B paying A for its use and agreement not to disclose the information to anybody else. It is then not A’s transfer of ownership of X that B in that case paid for, but the service of A’s voluntary disclosure of what was in A’s unowned possession. In this case, if information is leaked to a person C by B, then B can be liable for breach of a voluntary contract – if of course the contract was agreed upon as such.

If however a person C discovers the secret on his own – perhaps by observing that there are suspicious amounts of trucks labelled “chocolate” going into the cookie factory – and was under no contract with A and did not violate any private property (which he by contrast would have by for example breaking into A’s desk drawer which contained a piece of paper with the formula X written on it), then – unhindered by any agreed upon or causal prohibitions – C is free to use his own private property to make cookies along pattern X himself: C thereby does not violate any private property rights in merely exercising his own, as pattern X is “unowned” which within this situation ceteris paribus leaves no rights to be violated through its parallel use.[49] Likewise, if on his part A were to try and prevent C from working out X by sending trucks labelled “acid” into his cookie factory every now and then, he would not be violating any of C’s rights either.

Further exploration of the disputed justification of IP can be found in the references.[50] In terms of its relevancy for this book however, I hope that it has served its purpose in both demonstrating the fundamentals of libertarian ideology and giving readers a first glimpse of the vast differences between capitalism and corporatism (a direct result of collectivism) which we will come to examine further in following Chapters.

Footnotes

[1] Capitalism is a system in which goods and factors of production are privately owned and traded. See for example (Butters, 2007).

[2] As opposed to its current legal connotations or as it is understood in collectivist systems.

[3] Automatically, this prohibits external interference in the enjoyment of one’s property.

[4] More on the political means in Chapter 5.

[5] Which in other words had not already been homesteaded before.

[6] In doing so we could also conclude that this allowed A to homestead that patch of forest, through B.

[7] As there is de facto no paradoxical “owner of unowned property” to exchange it with. If there is an owner already one cannot justly appropriate what is owned without exchange – that would be robbery.

[8] Note that some claim that “property is theft” (Proudhon, 1840). However, if one does not agree with the existence of property then he has no business criticizing others for theft of it in the first place. The concept of “theft” necessarily presupposes property. Proudhon and his following thereby simply shoot themselves in the foot when they exclaim such things.

[9] See for example (Cohen, 1995)

[10] For a more in-depth discussion of the call for “equality”, see Chapter 4.

[11] Although Belgian tax laws for example would beg to differ.

[12] See burden of proof above.

[13] A possible purely theological debate about this matter is beyond the scope and relevance of this book.

[14] See Chapter 2.

[15] Unless stated otherwise, when talking about “property” and “ownership” throughout the rest of this book, I mean “just property” and “just ownership” in the libertarian sense. “Unjust property” (acquired by political means) will be discussed in following Chapters.

[16] This principle also exists in common legislature and can be traced back through the Code Napoléon to Roman Law (Dhondt, 2003). Many modern systems of law still apply it to this day. For example: in Belgian law, article 2279 BW says that possession amounts to title – the person who in good faith controls a good is deemed to be its legitimate owner until proven otherwise.

[17] For an extensive overview of what kinds of intellectual property statutes exist, see for example (Raysman et al., 1999) and the website of the World Intellectual Property Organization (WIPO), which is a specialized agency of the United Nations: http://www.wipo.int/portal/index.html.en

[18] Which is basically a differently stated “free rider” argument. More on this in Chapter 5.

[19] Would it be better to be poor (or rich) in North versus South Korea?

[20] See the following Chapters.

[21] See (Boldrin et al., 2005). Also think about things like open source software, wikipedia, etcetera. Absence of enforced IP legislation and freedom of information (see the internet) would quite possibly only speed innovation up. Also see the case of the fashion industry in (Blakely, 2010), YouTube user content, “citizen journalism”, 3D printing, etc.

[22] Which is relevant to keep in mind as we discuss the basis of democracy in Chapters 4 and 5.

[23] As described in Deipnosophistae by Atheneaus.

[24] For example, England’s “Statute of Monopolies” of 1623 was an attempt to mitigate the rampant corruption in the issuing of patents (monopolies) by King James I of England between 1614 and 1621 (Levy, 1911).

[25] “In 1988, a Harvard University biologist was granted [the first] patent for a mouse that had been engineered for increased susceptibility to cancer. […] It established a precedent within patent procedures for patenting genetically modified [organisms]” (CRG, 2002). “Over the past twenty years, many patent applications have been filed that are drawn to subject matter relating to genes. The filing rate of applications relating to genes has dramatically increased in the past few years. Currently, over 20.000 applications relating to genes are pending before the USPTO [alone]. Since the first gene related applications were filed, approximately 6.000 patents have issued which are drawn to full-length genes from human, animal, plant, bacterial and viral sources. Of these 6.000 patents, over 1.000 are specifically drawn to human genes and human gene variations that distinguish individuals. […] The complexity of some of these [patent requests] is almost unimaginable. For example, we received a DNA sequence listing as part of a patent application that, had it been submitted on paper, would have totalled more than 400.000 pages” (USPTO, 2000)

[26] For example, the song “Happy Birthday To You” – which I assume most if not all of my readers are familiar with – despite its age still falls under copyright legislation, and several lawsuits have in fact been initiated by the company currently owning it for both commercial and non-commercial use of the song in public (for example because of its use in restaurants when it is sung whenever a celebrated person is being brought a birthday cake; some restaurants now avoid this by singing the song “For He’s A Jolly Good Fellow” instead, which – curiously – does not fall under copyright law). For more on the specifics of the song “Happy Birthday To You” in relation to IP, see for example (Brauneis, 2008).

[27] When I violate somebody’s scarce material private property by using (stealing) his car against his wish, I am violating his property rights whether or not I do it for commercial or non-commercial use and whether or not I do this privately or publicly. Why should it be any different with IP if – aside from a purely legal constructions of artificial monopolies – moral rights are involved like with scarce material property.

[28] Perhaps the most well-known examples of trademarked colours are Red Bull’s red and Deutsche Telekom’s magenta (Pütz-Poulalion, 2007) or Louboutin’s red soles of shoes.

[29] “Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty and property existed beforehand that caused men to make laws in the first place” (Bastiat, 1850B).

[30] More on IP and its expiration later in this Chapter.

[31] “Scarcity” is the fundamental problem of unlimited human needs and wants in a world of factually limited resources. All material things are subjected to scarcity: food, (luxury) cars, books, minerals, land, trees, and so on ad infinitum. Their consumption or putting into use by one person excludes the concurrent consumption by another. On the other hand, supposing for a moment that we were some kind of deity and could simply wish anything into existence, scarcity to us would de facto be non-existent and irrelevant. This is important to remember for what follows below.

[32] To be able to own an apple one does not have to be the one responsible for the creation of its subatomic particles; one needs to be the first to occupy it and thereby remove it from its state of nature (the possibility of which is automatically excluded by somebody else owning the tree it fell from).

[33] Just like the labour involved in stealing Fredericks’s resources would not make them the thief’s simply because the thief’s labour was involved in doing so. Creating a table out of them would not change the situation either: the resources and whatever the thief formed them into are still the just property of the person he stole them from. The only thing the thief perhaps acquired through this kind of labour is the obligation to reimburse the damages caused to the persons whose rights he violated by stealing their property.

[34] A caveman has to spend little to no effort or skill – labour – on being the first occupier of a cave. But through his first occupation he becomes its owner; if somebody were to arrive a week later and would forcibly try to remove him and his family from his cave, the new arrival would be violating the property rights of the first. Obviously, one could argue that “occupation” is a form of labour, and there is nothing wrong with thinking of it as such, as long as it is thereby clear that “labour” does not always have to involve exhaustion, sweat or a hammer.

[35] Smith held that the amount of labor put into producing a good determines its value (Smith, 1767). More on this later.

[36] In Marxian ideology, “exploitation” refers to the alleged subjection of producers (the proletariat) to work for passive owners (the bourgeoisie) for less compensation than is equivalent to the actual amount of work that was done (Marx, 1844).

[37] For more information about the labour theory of value, see (Whitaker, 1904). For an explanation of the capitalist theory of value, see Chapter 5.

[38] Since as we have seen before, otherwise the concept of ownership is simply irrelevant.

[39] Exactly like the eating of an apple makes it impossible for a different person to eat that particular apple as well.

[40] For example when one is not allowed to sing a copyrighted song. But it is from self-ownership that property stems; to negate self-ownership is to negate property.

[41] The one and only restriction is that he himself as a logical deduction cannot violate the private property rights of other people: he would then also contradict his own ownership of private property.

[42] Whether or not Timothy himself – after or before patenting his invention – actually made this tool with some material resources to see if his invention works is essentially irrelevant as the focal point is the ideal object. It is also of no consequence whether or not Timothy simply “got lucky” or worked exceptionally hard on figuring out the design of a knife.

[43] More on the de facto negative off-optimum effects of State intervention in the market in Chapter 5.

[44] The US policy of IP legislation has in recent times – even though differences of course exist – been the principle guide of that of other political bodies like the UN WIPO agency and the Council of the European Union, and can consequently for all intents and purposes within the scope of this example be extrapolated to them. See for example (COEC, 1993).

[45] See note 35 and a more in-depth discussion in (Cole, 2001). Also see Chapter 5.

[46] Even the famous Parisian Eiffel Tower cannot escape the absurd paradoxes of IP constructs: “an obscure clause in EU copyright rules means that taking and sharing photos of the tower taken in the evening is actually a violation that could land tourists with a fine. The Eiffel Tower was built in 1889 which means that it falls within the public domain, so tourists can snap away liberally during the day. But the impressive lights that illuminate the attraction at night are technically a [sufficiently recent] art work, so ‘reproducing’ requires the permission of the artist. On its website, the Eiffel Tower confirms that uses of photographs are subject to certain restrictions. ‘Daytime views from the Eiffel Tower are rights-free,’ it reads. ‘However, its various illuminations are subject to author’s rights as well as brand rights. ‘Usage of these images is subject to prior request from the ‘Société d’Exploitation de la Tour Eiffel’” (Mail Online, 2014, emphasis added).

[47] In fact, the Copyright Term Extension Act of 1998 has often been called the “Mickey Mouse Protection Act” as it was the result of extensive lobbying of the US Congress by – among others – the Walt Disney Corporation, which provided the involved politicians with “donations of campaign cash [totalling] more than $6.3 million in 1997-98” alone (Sprigman, 2002). Also see for example (Menn, 2008), (Bucknell, 2008).

[48] Just like A cannot be forced against his will to mow B’s lawn just because B asks him to do so.

[49] “Unowned” in the sense that – through its being an ideal pattern – ownership of X is irrelevant. Obviously though it is important to keep in mind that when we talk about ideal objects being “unowned” this is merely a metaphor: it is not the same as the unowned state of scarce material objects which have not yet been homesteaded but to which the concept ownership is applicable.

[50] Also see (Kinsella, 2010) for an overview of infamous IP lawsuits.

_____________________________

Christophe is a guns and gold loving anarchist from the geographical area known as Belgium. He spends his days slaying dragons and rescuing damsels in distress, invigorated by bathing in statist tears on a daily basis. He was put on this world to kick socialist ass and chew bubblegum – and he is all out of bubblegum.

If you enjoyed this post, please consider purchasing his book The Road to Anarchy and leave a review.

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