Yahoo! v. Facebook

Last evening The Huffington Post Dallas published a column by the Dallas Mavericks owner and software investor, Mark Cuban. In it, Cuban writes that he hopes Yahoo! will “tear apart Facebook with as large an award as it possibly can get.” The issue is over patent violations, and Cuban does a make a good case in favor of Yahoo!, despite his (mostly consistent) objection to patent law.

While Cuban does not reject the idea of Intellectual Property (IP) entirely, he nevertheless brings to light very two important issues: the effect of patents on innovation and ways in which to bring social change. Cuban writes that he “[hates] patent laws,” although his hatred runs only “99 percent” deep, as he admits that “There are plenty of examples … where the patent was put to legitimate use….”

Sadly, this is an all-too-common line of thought. Some good comes from a certain institution, so we shouldn’t reject it entirely. We just need the right regulations, the right regulators, and then we’ll be alright. The thought that it’s a systemic ailment, or that it can never work as it is laid out on paper, evades most people. This inconsistency is what keeps many from going all the way philosophically, and ensures the status quo never fully changes.

He does however nail down the essential role IP has in the economy, which is “To protect companies with original IP from smarter, faster, aggressive companies who catch the imagination of consumers and advertisers.” The real challenge is in making this a well-known fact among the public. That’s where the lawsuit comes in.

The reason Cuban hopes that Yahoo! wins is for the exposure. Most know little of the impact IP laws have on our liberty or the damage they do to economic growth; few reject the idea outright. Since there is no chance of formal legislative change for the good, given the direction we’re moving (SOPA, PIPA, ACTA, etc.), something else will have to serve as the catalyst. His opinion is that “it’s going to take a consumer uprising to cause change.”  And, “what better way to create a consumer uprising than to financially cripple and possibly put out of business the largest social network on the planet?, Cuban asks.

Similar to the Stop SOPA campaign, which only had as much affect because of the huge exposure, the thought of having your favorite website shut down motivated people to barrage the congress with complaints. Perhaps having one of the most popular websites in history dismantled over some obscure and draconian laws would be an effective tool in that fight.

In the end though, I’m not sure that two tech giants duking it out in federal court is the best solution, even if it’s effective. Certainly a more desirable method would for people to be slowly educated on the reality of IP. Using an arm of the state to undo one of its creations seems to be the wrong approach.

Any reform would no doubt be coopted by the IP lobbies, anyway. We’d probably be left with something worse in the end, and we’d have the same situation, where no one knows the true cost of IP. Better to help educate and treat the disease, rather than just the symptoms.

Everything Is A Mash-Up (Even This Title)

CNN featured a story on Paul Miller, perhaps better known as DJ Spooky, as part of a series on creativity. Miller uses technology to blend various media and remix seemingly disjointed work into one collaborative piece. Todd Leopold followed Miller, and explains how the creative process isn’t one of individuals working independently, but instead is a long process of derivative works from earlier ideas.

Leopold writes: “Even people who seem to come up with new ideas out of thin air are building on the discoveries and advances of others — whether they’re aware of the influences or not.” This is why the concept of IP laws can’t work alongside innovation and creativity; one is necessarily at odds with the other. And while advocates of Intellectual Property (IP) argue that measures such as SOPA/PIPA are meant to foster creativity, it simply cannot do this by restricting the creative process described above.

In the article Leopold refers to Kirby Ferguson, a filmmaker who’s produced a series on YouTube called “Everything is a Remix.” Ferguson says that “creativity isn’t magic,” and he convincingly proves this thesis. The videos, which can be seen here, here, and here, are fabulous demonstrations of the evolution of ideas. We learn that Star Wars, Avatar, and Led Zeppelin are remixes; and so too are the printing press, computer, and phonograph.

Proponents of IP have long claimed that protection is necessary to incentivize production, much in the same way that domestic producers argue for protective tariffs. But just as such intervention in the manufacturing sector hinders economic growth on net, so too does government involvement in the area of ideas. There is a moral case to be made for allowing individuals to use their own scarce property as they wish. To prohibit this necessarily requires that freedom of private property is abridged. A utilitarian case can also be made for permitting emulation.

Progress stops if copying is restricted, since everything is a remix. Civilization would literally stand still if no further derivative work is done. In fact regression would ensue if intellectual monopoly is fostered and encouraged. Imagine for a moment the state we’d be in were it not for the freedom for Thomas Edison to “[improve] electric lamps,” or if Henry Ford couldn’t combine the assembly line, interchangeable parts and the automobile. For the sake of civilization, please, copy, emulate, innovate, improve, and encourage others to do the same.

Oh The Irony

Rachel Maddow featured this brilliant segment on her show tonight. In it she highlighted the total hypocrisy on display by members of congress who are cosponsors of SOPA/PIPA. It seems that Senators Roy Blunt and Claire McCaskill used  ”pirated” pictures for their official Twitter pages, since neither photographer gave permission to use “their property.” Not that they should have to get permission, since IP is bunk, but it’s still a tad ironic.

Another former “lawmaker” turned industry shill made the ridiculous claim that sites who went black today engaged in an “abuse of power.” Chris Dodd, the guy who promised not to become a lobbyist and then quickly became a lobbyist, spoke on behalf of the MPAA and essentially said that these companies shouldn’t be using their influence to further their corporate interests.

‘Cause, you know, the MPAA has never used its influence to push their agenda. At least when these private companies did it they weren’t trying to use the coercive power of government to achievetheir goals. It all sort of reminds me of “lawmakers” who are addicted to nicotine, caffeine, alcohol, and Lord knows what else, and then proceed to write “laws” meant to prohibit certain drug use.

Robert Levine’s IP Delusion, Part 2

In Part 1 of my critique of Robert Levine’s Salon.com interview I noted that online companies are simply the medium between producer and consumer. I cited examples from history where IP laws restricted innovation, and cases where their absence allowed for more creation, not less. In this essay I hope to refute the claim that IP is a legitimate form of property and shed light on more of its history.

Over time, property rights emerged as a way of mitigating conflict over scarce goods. If there is a finite amount of something, say pizzas, it is possible that at some point, conflict over the use of a pie may arise. Establishing property rights, and institutions to enforce those rights and arbitrate disputes, tends to reduce conflict. However, if there are an infinite number of pizzas, or such a device exists to infinitely reproduce the pies, then the problem of scarcity disappears, along with the need for property rights.

Hans Hermann-Hoppe explains this concept by using the Garden of Eden as an example, where everything is in abundance. However, “outside the Garden of Eden, in the realm of scarcity, there must be rules that regulate not only the use of [property] but also of everything scarce so that all possible conflicts can be ruled out (emphasis in original).”

Intellectual Property is essentially information. Whether it is the particular design plans to an engine, the arrangement of musical notes, or the pixels of a digital image is immaterial. None of these meet the scarcity requirement to necessitate property rights. Each can be infinitely reproduced, without denying their use by the original owner.

Thus, IP should not have the protection against theft that scarce property enjoys. Theft is defined specifically as “the felonious taking and removing of personal property with intent to deprive the rightful owner of it (emphasis added).” Theft is not therefore a synonym for duplicate.

What about the profits from IP that are “lost” by someone copying a work and selling it or giving it away? We can’t know a priori that such profits would be realized absent copying, so we can’t know for sure that any loss was indeed incurred. What the “pirating” shows is that someone was unwilling to pay the artificially high “market” price. The true market price in this case is what someone was willing to pay for a copy.

In fact, the use of “pirating” to describe copying is ironic given the history of the word patent. Stephan Kinsella, an IP lawyer himself, has found that the word patent was used by governments to authorize actual piracy. A letter of patent was written to a privateer, who was then granted special permission to commit real piracy, you know, attack foreign ships, kill the crew, seize their property, etc.

In the course of the interview Levine quotes Supreme Court Justice Sandra Day O’Connor regarding copyright and free speech. “The framers intended copyright itself to be the engine of free expression,” she said. An interesting argument indeed, considering the actual wording from Article I, Section 8 reads: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries[.]”

I didn’t read anywhere in that clause anything about free speech. And if somehow it could be gleaned from that, why would the Anti-Federalists have insisted on the 1st Amendment’s free expression clause? The history of copyright laws is rooted not only in protection for guilds, but also in censorship. So to suggest that copyrights are intended to secure rights to free expression could only be described as Orwellian.

IP laws, rather than securing property rights, in fact encroach on them. If I assert “rights” to my writing and you choose to copy it, either for profit or personal use, than I am projecting a certain amount of control over your property. By legally prohibiting you from using your computer and printer, or pen and paper, I have appropriated in some way, your rights to property. For its not only the mere possession of property, but also the free use of it, that make property of any value.

There is no inherent right to IP, as it does not meet the requirement for legitimate property. For some, the consequences of abolishing IP would be failure and poverty, but a system based on legitimate property rights and freedom is far superior to any system designed by the politically well connected. Everything else they touch is soured and corrupt, why should we expect this to be pure? The alternative to the present IP legal framework would simply be freedom: freedom to emulate, to improve, and to share.

Robert Levine’s IP Delusion, Part 1

Yesterday I wrote on the topic of Robert Levine’s interview at Salon.com, and promised to cover his IP arguments. This will be the first in a series, since there is a great deal to cover. I intend to go more or less point by point, and refute the errors in Levine’s argument. Note: For a primer on what I believe to be the correct libertarian perspective of IP, see Stephan Kinsella’s Against Intellectual Property, and his archive at Mises.org.

When asked to name the winners and losers of the digital age, Levine declares a short-term victory for the technology sector, and says the losers are large media companies. The long term loser, he says, is everyone. Interestingly enough, he ignores the group for which all of this is meant to serve: the consumers.

It’s ultimately for consumers that businesses innovate in the first place, as well as why artists create. In order to earn a profit, firms look to produce valuable goods; to put food on the table, artists hope to please their patrons. IP laws are nothing more than monopoly grants. And the same evils that accompany monopolies in real things come with intellectual property. In their absence, consumers would have access to more and better content, because without IP laws, rapid emulation and improvement are possible.

For instance, ten years after the Wright Flyer cruised over Kitty Hawk, NC, the United States had improved very little on the airplane. By the time of the First World War, Europe had surpassed the U.S. in aviation technology in large part due to the Wright brothers’ patent. It wasn’t until the industry was opened up to competition that so many advances were possible.

I’ll apologize here for the lengthy quote, but must rely on it to highlight the problems in Levine’s argument.

…most online companies rely for their content, and hence for their money, on traditional media companies. If they destroy that business model, it’s unclear what they’re going to have to distribute. If you look at YouTube, eight of the top 10 videos are major-label music videos. If the major labels shrank to the point where they can’t make videos, YouTube isn’t much of a business.

Online companies are only the intermediary between producer and consumer, so it really doesn’t matter who the producer is. Whether the traditional media companies, or rather, their business models, survive or not, the internet can still marry supply with demand. As far as clarity of what’s going to be distributed, we can’t know this regardless of who’s doing the production. Whether it’s a traditional record label or an independent artist using YouTube to market himself, consumer preference will ultimately decide.

It does not follow that because some of the highest rated videos are from major-labels, that YouTube would become irrelevant for the business in their absence. All that shows us is that major-labels continue to provide the most popular products. If these traditional companies get left behind there’s still going to be a “top ten” on YouTube. The logical equivalent to this would be wringing our hands over Michael Phelps’ eventual retirement from swimming. His departure won’t mean that swimming as we know it will end; there will always be a gold medal winner, and who knows, maybe there’s someone faster out there.

Finally, he describes the process of IP laws coming about as a way of regulating new technology, such as the printing press. He says that under that system both media and technology companies thrived. So far, I agree. Authors and book publishers sought to protect themselves against competition, and those who were granted monopolies dominated the market.

But his conclusion that anything outside of this is going to result in the “[destruction of the] Culture Business” is short-sighted. It looks only at “what is seen” while ignoring “what is unseen.” We see that big media and technology companies thrived. We don’t see what could have come about as a result of copying, emulation, and, ultimately, improvement. Copyrights and patents stifle innovation by limiting others from the opportunity to experiment and improve upon earlier designs. In fact, without the freedom of artists to copy one another, as Jeffrey Tucker points out, much of classical music would never have been written.