Against the artificial scarcity of IP law

Issues of abundance and scarcity are very important to our way of thinking about peer production.

The following comes from a classic libertarian essay against intellectual property, from Stephan Kinsella.

I found the section discussion IP from the point of view of scarcity and abundance to be very illuminating, and I want to share the significant excerpts. Please note that I’m working from a draft version that may differ in details from the official published version. For references to external citations, see the original document.

Original source: Journal of Libertarian Studies, Volume 15, no. 2 (Spring 2001): 1–53, 2001 Ludwig von Mises Institute (

Argument 1: Property Rights are a proposed solution to scarcity

Stephan Kinsella:

What is it about tangible goods that makes them sub¬jects for property rights? Why are tangible goods property?

A little reflection will show that it is these goods’ scarcity — the fact that there can be conflict over these goods by multiple human actors. The very possibility of conflict over a resource renders it scarce, giving rise to the need for ethical rules to govern its use. Thus, the fundamental social and ethical function of property rights is to prevent interpersonal conflict over scarce resources.

As Hoppe notes:

“[O]nly because scarcity exists is there even a problem of formulating moral laws; 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. Because only then does it become possible to avoid otherwise inescapable and unresolvable conflict.”

Others who recognize the importance of scarcity in defining what property is include Plant, Hume, Palmer, Rothbard, and Tucker. Nature, then, contains things that are economically scarce. My use of such a thing conflicts with (excludes) your use of it, and vice-versa. The function of property rights is to prevent interpersonal conflict over scarce resources, by allocating exclusive ownership of resources to specified individuals (owners). To perform this function, property rights must be both visible and just. Clearly, in order for individuals to avoid using property owned by others, property borders and property rights must be objective (intersubjectively ascertainable); they must be visible.

For this reason, property rights must be objective and unambiguous. In other words, “good fences make good neighbors … it is clear, given the origin, justification, and function of property rights, that they are applicable only to scarce resources.

Argument 2: Ideas are not scarce.

Stephan Kinsella:

ideas are not scarce. If I invent a technique for harvesting cotton, your harvesting cotton in this way would not take away the technique from me. I still have my technique (as well as my cotton). Your use does not exclude my use; we could both use my technique to harvest cotton. There is no economic scarcity, and no possibility of conflict over the use of a scarce resource. Thus, there is no need for exclusivity.

Similarly, if you copy a book I have written, I still have the original (tangible) book, and I also still “have” the pattern of words that constitute the book. Thus, authored works are not scarce in the same sense that a piece of land or a car are scarce. If you take my car, I no longer have it. But if you “take” a book-pattern and use it to make your own physical book, I still have my own copy. The same holds true for inventions and, indeed, for any “pattern” or information one generates or has. As Thomas Jefferson — himself an inventor, as well as the first Patent Examiner in the U.S. — wrote, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”

Since use of another’s idea does not deprive him of its use, no conflict over its use is possible; ideas, therefore, are not candidates for property rights.

Argument 3: IP Law creates artificial scarcity where none exists

Stephan Kinsella:

Ideas are not naturally scarce. However, by recognizing a right in an ideal object, one creates scarcity where none existed before.

As Arnold Plant explains:

“It is a peculiarity of property rights in patents (and copyrights) that they do not arise out of the scarcity of the objects which become appropriated. They are not a consequence of scarcity. They are the deliberate creation of statute law, and, whereas in general the institution of private property makes for the preservation of scarce goods, tending . . . to lead us “to make the most of them,” property rights in patents and copyrights make possible the creation of a scarcity of the products appropriated which could not otherwise be maintained.”

Bouckaert also argues that natural scarcity is what gives rise to the need for property rules, and that IP laws create an artificial, unjustifiable scarcity.

As he notes:

“Natural scarcity is that which follows from the relation¬ship between man and nature. Scarcity is natural when it is possible to conceive of it before any human, institution¬al, contractual arrangement. Artificial scarcity, on the other hand, is the outcome of such arrangements. Artificial scarcity can hardly serve as a justification for the legal framework that causes that scarcity. Such an argu¬ment would be completely circular. On the contrary, artificial scarcity itself needs a justification.”

Thus, Bouckaert maintains that “only naturally scarce entities over which physical control is possible are candidates for” protection by real property rights.

Only tangible, scarce resources are the possible object of interpersonal conflict, so it is only for them that property rules are applicable. Thus, patents and copyrights are unjustifiable monopolies granted by government legislation. It is not surprising that, as Palmer notes, “[m]onopoly privilege and censorship lie at the historical root of patent and copyright.” It is this monopoly privilege that creates an artificial scarcity where there was none before.

Argument 4: Unjustified IP law impinges property rights where they are justified

Stephan Kinsella:

Let us recall that IP rights give to pattern-creators partial rights of control—ownership—over the tangible property of everyone else. The pattern-creator has partial ownership of others’ property, by virtue of his IP right, because he can prohibit them from performing certain actions with their own property.

IP rights change the status quo by redistributing property from individuals of one class (tangible-property owners) to individuals of another (authors and inventors). Prima facie, therefore, IP law trespasses against or “takes” the property of tangible property owners, by transferring partial ownership to authors and inventors. It is this invasion and redistribution of property that must be justified in order for IP rights to be valid.

because the only way to recognize ideal rights, in our real, scarce world, is to allocate rights in tangible goods. 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.

For example, by inventing a new technique for digging a well, the inventor can prevent all others in the world from digging wells in this manner, even on their own property.

There is … no reason why merely innovating gives the innovator partial ownership of property that others already own.

Conclusion by Stephan Kinsella:

The law, then, should protect individual rights to one’s body, and to legitimately acquired scarce resources (property). There is not a natural right to ideal objects—to one’s intellectual innovations or creations—but only to scarce resources.

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