Vera Verba

In the past few posts I have been discussing current intellectual property law - how its enforcement is actually nothing more than a government enforced monopoly on the reproduction of patterns, and how this distortion of the free market causes a great deal of economic harm. I have also discussed the true free market value of creation as expressed by the various ways that only the recognized creator/inventor of a specific piece of Intellectual Property can capitalize on that role, and the additional market advantage available to sellers of “authorized” copies, even when no government enforcement of a monopoly exists. In this post I would like to take a look at how the world might run with a concept of Intellectual Property that did not break the free market.

First I want to clearly admit that a true free market system without government enforced pattern monopolies would not have produced all of the cool stuff that our broken system has. Those who support Pattern Monopoly are always quick to point to the amount of research required to produce new beneficial drugs or the amount of money that gets spent on the latest block buster movie with the biggest and best explosions - they say that without our current intellectual property law, such things would not be created. And it is true that a real free market system would probably not produce all of the exact same things that the current system does.

However, saying that the existence of certain impressive works produced under our current system shows us that pattern monopoly law is a good thing, is the semantic equivalent of saying that the existence of the pyramids of Egypt proves that slave labor is a good thing.

Sure the Egyptian pyramids are great, and continue to produce value even now for tourists who go to see them. And it is quite possible that without the use of slave labor they would never have been built. However, it is easy enough to prove that any use of slave labor does more economic harm than a system in which people work willingly for agreed compensation. (Note that Slavery, like Intellectual Property, is a corruption of the useful idea of property.)

Likewise, the best wonder drug you can name and your favorite movie are both really cool things to have in the world, but the system of pattern monopoly law that produced them is doing more overall harm than good. Without pattern monopoly law, there would be greater economic value - more good and less evil in the world. This is true even if the greatest works might not always be quite as impressive as those produced in a system that distorts the market towards expensive investment at the cost of individual liberty.

So given that the right to be known for ones creations is a legitimate property right, but having the government stop other people from reproducing those creations without your approval is not, what is the best system for protecting true free market intellectual property?

Current laws against false advertising and trade mark infringement provide us with clues as to the proper way to prevent theft of free market intellectual property.

As long as each buyer is well informed when they make the choice to buy an authorized or unauthorized reproduction of some pattern, the free market will properly reward inventors and authors. So the problem here is one of making sure the buyer is always well informed. The reputation capitol associated with an act of creation is very much like the value invested in the idea of branding. The reason we grant exclusive use of a certain trademark to a particular person, is that this mark is supposed to inform the consumer about who created the product in question. When someone else uses this mark, they are stealing the reputation capitol of the person who normally uses the mark.

Trademark differs from copyright, in that the former is protecting against a form of identity theft, and the later is enforcement of a monopoly on production of a pattern. Using someone else’s trademark is an attempt to fool people into thinking that you are that person - it is a form of fraud or false advertising that steals that persons reputation capitol. This sort of theft of reputation is exactly what we are trying to prevent in a good free market intellectual property system, so we can use a similar idea.

I would suggest that a simple solution for protecting the value of creation would be a single mark indicating that all the parts of any product sold were authorized by the individual inventors or artists who had registered their intellectual property. Also perhaps a date or time in years to idicate that works or inventions before a certain time have not been authorized.

This would allow complex devices - an automobile for example - to carry a single mark indicating that all the inventors of the various important component parts had been legally compensated for the right to say that their invention was being used in an authorized manor. Older inventions - unregistered ones like the wheel, or even registered inventions that were no longer as novel - would no longer need to be authorized by the inventor, based on the market solution for the number of authorized years that people were found to be willing to pay for. Works of art - music, books, video - would likewise be immediately obvious to the buyer as an authorized copy or a knock off, with the year of authorship clearly shown.

In addition to this simple mark, all manufacturers should make available somewhere (online for example) an easy to reference list of all component registered inventions and works, and whether they were individually authorized or not, to allow a more complex understanding of which creations were authorized. This would allow particularly interesting or novel creations to draw some demand for authorization greater than less interesting and obvious ones. And of course any manufacturer would be free to advertise older authorizations separately from the normal simple authorization mark.

Proper information flow concerning acts of invention/creation would allow the market (that is - the individual people) to reward all true intellectual property to the precise level of value we collectively place on it.

Note that such a system need not even be enforced by government in order to work, it could simply develop as a societal norm. One of the great things about free market solutions is that they do not require both a “carrot” and a “stick.” Less or more carrots properly rewarded suffice to do the job. Enforcement agencies are not necessary for a weaker product or service to fail in the market - this is a natural effect of market forces combined with good information flow. Regulatory and enforcement agencies can give the appearance of improving the market by screening out bad products and services, but they invariably also screen out new and better products and services - protecting the normal rather than encouraging the superior.

Sadly, because the existing system is strongly self perpetuating, no matter how good the system I have just described is - I fear we can’t get there from here - at least not without some other major changes to our political systems. As long as money can buy law (and I don’t think anyone will argue with me that this is not currently the case) the monopoly profits generated from the current system will be used by those that have a vested interest in continuing those monopolies to perpetuate the bad law we currently have.

It is likely that only revolution, or a new frontier, can rid us of the very bad intelectual property law that we are currently burdened with.

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[Paul points out to me that revolutions (violent overthrow of existing government, as opposed to non-violent spontaneous cultural changes) don’t tend to work either. Invariably they just lead to a new set of bosses enforcing the same sort of rules that worked well for the previous bosses. But he also (very astutely) notes that some armed conflicts that get labeled as “revolutions,” are actually the struggle of a new frontier to break away from an older power, rather than a new group seizing control of an old power. He says “I consider the American Revolution to be something of a defense of a frontier, rather than the French/Russian revolution type.”]