Property Rights, Patents, and American Flag Clip Art

by on February 9, 2009 · 14 comments

Ben Klemens, whose work I’ve praised in this space in the past, has a new essay up that I found a little bit aggravating. It’s on the perennial question of whether it makes sense to describe patents and copyrights as property. I’ve been a critic of the term “intellectual property” for a few years. Ben’s on the other side.

What I disliked most about Ben’s piece was the condescending tone he takes toward property rights activists (like me). Klemens has little patience for property rights activists whose websites have “lots of clip art of flags and eagles,” and who are under the delusion that the holders of property rights have some kind of moral claim against government interference with those rights. Klemens also critiques neoclassical scholars who “will try to trip you up into thinking that society is built around natural, objective property rights rather than social construction.” Klemens concludes by arguing that “Sure, IP law is artificial, but physical property law is equally artificial; we’re just so used to it that we’ve forgotten.”

Now look, on some level this is indisputably correct. God doesn’t strike trespassers down with lightning; property rights are defined and enforced by fallible human beings. The problem is that Klemens argument proves too much. The same reasoning can undermine any moral or legal rights. On some level a woman’s right not to be raped is a “social construction,” but I don’t think that in any way diminishes the strong moral claim that each and every woman has not to be raped, regardless of what the rest of us regard as “socially optimal.”

The crack about the eagles and American flags seems to imply that only ignorant rubes believe that property rights could have a moral dimension. Sophisticated thinkers know that property rights exist by the grace of the legislature, and so if the government decides that the “socially optimal allocation of rights” involves taking your house and giving it to a wealthy developer so he can build a shopping mall, that’s too bad for you but it doesn’t raise any more profound moral issues.

The problem with this is that it completely ignores how our actual system of property rights came into being. Ben’s right that most people have forgotten how we got our modern system of property rights, but the things we’ve forgotten are almost precisely the opposite of what he imagines them to be. Traditional property rights are not and never have been the creation of governments. Indeed, government efforts to create new property systems from whole cloth tend to be abject failures. People ignore them, and the government lacks the resources to impose them on an unwilling population. This is the situation you saw on the American frontier during the 19th century, and it’s the situation you see today in many third-world countries with dysfunctional property systems. The formal property rules were and are radically out of step with the informal property rules that actually govern the day-to-day lives of ordinary people.

In contrast, successful systems of property rights tend to emerge spontaneously from the bottom up, and are simply recognized and reinforced by the government. Over time, consensus emerges among neighbors about who owns what and what people may do with their properties. The job of the courts and the legislature isn’t so much to decide who owns what (ordinary people already know that) but simply to record and ratify the already-existing social consensus and handle disputes at the margin.

To bring things back to the patent and copyright debates, I think the right lesson from the analogy to physical property rights is exactly the opposite of the legal positivism Ben seems to be defending. In reality, legislatures have very limited powers to impose property-like systems on an unwilling populace. When a property-like legal regime is widely ignored or evaded (think software patents or peer-to-peer file sharing) that’s a strong signal that the legislature needs to re-write the law to make it work “with the grain” of peoples’ existing attitudes and expectations.

In contrast, when the formal law is well-aligned with peoples’ expectations, it tends to attract the passionate support of ordinary citizens—the kind of people who like to adorn their websites with clip art of eagles and American flags. It’s not a coincidence that there are thousands of passionate property rights activists who are mobilizing against eminent domain and asset forfeiture, but surpassingly few pro-copyright or pro-patent activists who are mobilizing against fair use and the Bilski decision. (Patrick Ross doesn’t count.) Traditional property rights are an organic legal institution that emerge spontaneously from peoples’ day-to-day interactions. Software patents are an invention of the patent bar that has been vigorously rejected by rank and file software developers. I think it’s both philosophically misguided and rhetorically counterproductive to equate the two.

  • André

    The most important argument is scarcity. Software patents are privileges for an object that is not scarce. For an economist it sounds absurd to apply an incentive system stimulate more “production” of something ubiquitious as software ideas. Indeed, this is how software patents work. Double your patent attorney staff and you can obtain at least twice the patents. Software concepts are meritless. The gap is implementation. As of your criticism of property vs. IP I would say that we need to think about the emergence of the right. A hat is a physical object you can grab and take with you, you can eat an apple. The rights are secondary. IPR put artificial objects into existance and enable us to trade with them as if they were real property. Not unlike the financial bubble. As of copyright our legal fiction is that they emerge from us, the authors. As of patent there is no right prior to the application and subsequent grant, it is property put into existance by the government.

  • Rory Macmillan

    The debate gets more interesting as you begin to unbundle the property rights, and indeed it leads to counter-intuitive results. In the telecom field, we are accustomed to unbundling property rights over physical property and regulating them, requiring owners to make property available to competitors in the form of interconnection and network access obligations. The intellectual property community is not as accustomed to this, insisting on protecting the absoluteness of property. Yet IP is an increasingly important driver of today's telecom sector — patents over handset technologies, copyright over applications, copyright over content. Premium content is being recognized in some jurisdictions as a bottleneck or essential facility, e.g., the BSkyB v Virgin dispute in the UK. How long until regulatory thinking unbundles intellectual property rights to the same degree it already has unbundled physical property?

  • Ben Klemens

    Much of my post was dedicated to people who describe a simplified, monolithic source for property rights. Sites like these really do equate property rights with “traditional western moral values”. A good number of the people I've met who do insist on never using the term `intellectual property', and a good number of Neoclassicists, also fall into this category, though the assumed monolithic source changes from God to the Constitution to the Market.

    You're not in that boat: in your discussion, you manage to describe the source of property rights without recourse to Bible verses (or blinking text), which is why I read the TLF and not the sites I linked to above.

    Instead, you describe our rights as an evolution and negotiation among the entire society over what works best and makes the most sense. In that sense, we're on the same page: your essay here stresses the societal evolution of a consensus, while my essay wound up talking more about the next step of legal codification of that consensus. [My version posited that property rights answer the question of what is socially optimal, but didn't say who was providing the answer to that question, or how. I instead just jumped to the concrete legal rulings.] Both the societal beliefs and legal codes are filled with details and conflicts that show how hard it is to write down a single concept of property.

    And I certainly agree with you that when the legal codification doesn't match the societal thinking, the law is a lot more likely to have it wrong.

  • Patrick Ross

    Hi Tim,

    Thanks for the shoutout, even if it wasn't meant in a positive way. I haven't heard from you in awhile! Nice to see you're still on your property rights crusade; I happen to like that label myself, hope you don't mind if I use it too.

    I've never written about Bilsky to my knowledge, and if you read the rather old link of mine you include you'll see I am not attacking fair use, but rather the claim that it is a “right.” The law doesn't stipulate it like that; people have a right to view it that way in the abstract, but under current law it is not in fact a right.

    That said, I invite you to explore our web site, our writings, our videos, our blog, and you'll see I view fair use as a critical safety valve. All property rights, real and intellectual, have limits on them for the good of society, and I wouldn't want to live in a world without such limits. I just happen to feel that our current balance between rights and fair use is a good one; I recognize many in the digital space disagree with me, even if this isn't something most citizens feel is a critical issue in society right now.

    Also, I was intrigued that you took issue with the tone of Klemens' piece (which I have to admit I have not yet read). I strongly welcome your call for civility and enthusiastically support your campaign. You might be interested in my thoughts on the subject here and my commitment to civility:

    Patrick Ross

  • LEAK


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