Intellectual Property Isn’t a Thing

I’m sure you’ve read about the passed EU copyright measure. There’s plenty of sites telling you it’s a terrible set of laws that will destroy the internet.  There is considerable organized opposition to the measure.

I’m not here to retread that well-worn path. I think the whole issue is ridiculous. Such a set of laws is an unfeasible anti-pattern because I propose that intellectual property isn’t a thing. I know, blasphemy, right? Not only in our industry, but economics at large hinge on the notion of intellectual property: patents, trademarks, and copyrights. I propose that all of these have actually been strategies that stifle innovation by enabling complacency and corporate monopolization.

Please, massage out that sore knee from jerking into the underside of your desk and let me explain my thinking here. Successful strategies need to identify the natural state of things, the desired state, and what work needs to be done to move from actual to desired. This ends up being a compromise between natural freedoms and a social contract, as discussed by Hobbes and Locke. The only way such a system can work is through consent to the social contract. Thus setting aside the further analysis on tyranny, revolution, and the state, I’m focused on the natural state of an inventor, artist, or brand promotor creating and distributing their invention, artist, or brand. Essentially, I’m talking about value creation.

This natural state of being able to create and trade value is tantamount to free speech. Individuals have a similar natural state to say whatever they want. Again, I’m not yet commenting on the ethics or morals around saying whatever you want. We’ll get there. Bear with me. All I’m identifying right now is that left on their own, individuals can say whatever they want, and do whatever they want to create value for themselves. Basically, unless otherwise disabled, you can always go pick berries to sustain yourself. However, in this natural state, anyone else is able to copy you. If they can figure out what you created, they can copy it for themselves. Again, no getting into the ethics of such a thing. Just saying, it’s the natural state of things.

The common thinking is that in order to incentivize creators to create things the rest of us can benefit from, either through general access or trade, we need to protect creators by giving them a monopoly on capitalizing on that creation. This is altering the natural state of things. Again, not yet commenting on the morals and ethics (M&E). I’m just pointing out that in the natural order of things when you make something, others can copy it. The laws evidence a desire to change that natural state by limiting the freedom of others to copy your creation. This may be desirable. Most people generally agree that we’ll compromise our natural state of freedom of speech to needlessly yell “Fire” in a crowded space to protect the sanctity of such a warning when someone does capitalize their freedom of speech to warn others in the event of an actual fire. I think we should examine the natural state a little further before we take such an assumption as a rule.

Let’s set aside the premise that creators need protections. Let’s just focus on what happens in the natural state without such laws. A creator creates a thing, let’s say it’s the plow, which is a nice invention, and I want to use it as an example because it has a physical presence. I want to focus on the natural state when there are physical objects, and then reexamine it with intangible objects. Let’s say you invent the plow: good invention. You need to farm food for yourself, maybe your family too, and a plow makes that easier. Great invention. Good job. Now, you have two options: 1. You can use your plow to farm better for yourself. That’s a fine, respectable strategy. You get to work less or produce more food, which means you’ll eat better. Awesome, good job. Enjoy the free time. Teach your kids how to make plows. Make it a family tradition. Alternatively, 2. You can trade your creation to me. Let’s focus on the physical plow for now. You always have the option of offering to trade the plow. You could make a second one, and deliver it, too. That’s simple capitalism. Now, current thinking is that you would need protections when making such a trade. What are the options available?

You want to trade me your creation: a plow. It’s a new thing, which has never been seen before. Let’s assume you can convince me of the benefit of owning a plow. Thus, I want the plow, and you invented it, and you have one to trade me. Setting aside any option including violence or theft, I can buy your plow, or I can figure out how to make one myself. The second option is the one you ostensibly need protection from as the creator.

I want a plow, and I don’t know how to make one. You have a plow and the expertise to make more. The most efficient strategy is to simply buy yours. Figuring out how to make my own plow is going to take a lot of work, and I have to somehow get the details of your creation so I can duplicate it. Then I have to make it. I have to judge the unknown expenditure of creating my own against the known expenditure of just buying yours. I’m likely to simply buy yours. So, in this scenario, I propose you don’t need protection. You clearly have an incentive to create things.

In fact, we’re almost into the prior art clause of patent law. If the cost to create it myself is lower then the cost to buy yours, then we have a natural expression of prior art. If your creation is so basic and obvious, why should I pay you for creating it? I may pay you for the service of creating one for me, but that’s a different analysis.

This is where I see we can transition to intangible objects. This would be akin to the knowledge of how to create a plow. Let’s extend past the trading of the initial plow, and past copying your idea for my own direct benefit, and let’s look at the idea of the plow. Under current law, you have a protection over your idea. There are a lot of specifics depending on the thing being protected. You can copyright the expression of an idea, but not an idea. You can patent an idea in the form of an algorithm. I want to hit at the concept of intellectual property. Most of the legal specifics are irrelevant. The general goal of all the legal wrangling is to give the creator protection of their idea. The theory being that if I could simply start making my own plows and selling them in competition with you, why would you both to create the plow in the first place?

I hope that sounds as ridiculous to you as it sounds to me. First, I think the entirety of the history of life shows that everything tries regardless of potential competition. If the conceit that humans wouldn’t do anything if there’s potential competition were true, we’d still be walking prey to death on the open plains. The whole idea is patently absurd. However, let’s examine it. What happens when we give a creator this protection? They create. Once. Bam. Authors have lifetime protection. However, only their specific expression. Ok, at least in art we can build on ideas. Funny talking mouse? Cool. How about a sarcastic, nihilistic, self-destructive talking horse? Works fine. Mostly. Reuse is a major problem. I’d like to look at physical inventions. You invent the plow. Now you have some long period of time where only you can make a plow. I have to come up with another way to achieve the same result of a plow. Sure, this forces innovation. Now I have a monopoly on my idea, and now we have two plow designs tied up. How many plow designs are there? Can we both make enough plows to meet the demand? We could license the rights. Even then, there is a limited source of plows. With no competition that driving innovation, no one with a patent has to really care about improving the product. Either through efficiency or by improving the product for trade. Apart from perhaps attempting to improve profit, do we really care to make a better plow? What about the natural state of having no such protection?

In this scenario, you create plows regularly for trade. However, I figure out how to create plows too, and start creating the same plow, which is also for trade. What happens? Well, we’re in competition. If the demand is higher than our production, then we’re cooperating more than competing. We can both produce our maximum supply and still have demand left over. We may saturate the market eventually, but this is simply an endgame scenario that highlights what will occur in a more normal situation. Namely, where supply can slightly exceed demand by increasing production. When the supply side has the ability to exceed demand, then you enter a price war scenario. Demanders are no longer waiting for the product to be available. I say this is similar to when a market is approaching saturation. When the suppliers are able to produce product past the point of saturation, they are effectively producing in excess of demand as I just described.

Thus, you, the person who copied you, and anyone else who is making plows for trade make up the suppliers. If anyone else is smart, they’ll start making plows for trade until the supply exceeds the demand at any given moment. Basically, we have stock on the shelves. The average economic situation. If you work on commission, congratulations. You’re in the sweet spot of the market. However, in this case, we have all the incentives in the world to improve the supply. We could start by managing our manufacturing better so we never have too much invested in idle stock. We could improve the efficiency of the production. Not only to reduce costs but also to improve on production time. If I can create plows on demand, I can out-compete you by not having to make any predictions. I can ride the market right up to saturation as fast as I can push it and win so long as I profit on the total runs of sales. Replicators make everything awesome. I can also improve the design to differentiate my plow from everyone else’s. Sure, everyone could quickly copy my innovation, but that’s actually going to drive me to create more not less. That means that any innovation only buys me as much lead time as it takes my competitors to copy me. Thus, I innovate again, and again.

I have to keep innovating until I have nothing left. It may seem cruel to wring creativity out of people like that. However, this simply forces the creator to leverage their innovations intelligently and often. Collecting the reward, society pays for the innovation as quickly as possible to ensure no one else has time to copy the innovation. It encourages risk. It encourages saturating a market, exactly what we want with innovative ideas. It encourages global saturation. You have to get it into the hands of LA movie stars, midwest farmers, foundry workers, and sustenance farmers all over the world. If you miss getting your product into any market first, you’ve just given all that money to anyone who can copy you. Imagine if Apple had every incentive to get worldwide wireless data access out as quickly as possible because if they were delayed launching in any market, then anyone else could step in.

This is all before we analyze the market value of providing the service of creating. I hate copyright. Possibly the most idiotic idea humans have ever come up with. If you’ve stayed with my insanity so far, I hope you see the method to my madness when we apply all of this to copyrights. Why do we want to incentivize artists to create once? Why do we not want to leverage the natural state of allowing duplicates to drive the artist to create new art? Charles Dickens was lazy. Why not let them profit for as long as they can produce copies until someone else can copy it? In the past, this gave a lead time of first months, then days as printing technology improved. Back then, we may have needed copyright to help us get past that technological hurdle. I mean, it does seem to be a problem that after I publish my first edition, one typesetter pulling an all-nighter could enter the market on an equal footing. This was exacerbated by the need and difficulty of predicting demand because we didn’t exactly have on-demand printing back then. What about now when CTRL-A, CTRL-C, CTRL-V makes me a publisher? Well, fortunately, we also have more direct payment methods. Now we get to my point of providing the service of creating. In the past, the creation of an idea was simply the table stakes of creating a physical product. Even classic verbal performances, such as traveling minstrels and storytellers, were effectively producing a performance, or copy on demand. Now, the creation of the idea into a transmissible form such as a PDF is trivial. I don’t have to figure out how to get my book printed. All I have to figure out is what book to create. This is the same problem Dickens faced. The production has been democratized and commodified to the point that the real value is in the idea. What Dickens really faced was the difficulty for the customer to fund his service of creating.

Now we have Patreon, Indiegogo, Kickstarter, and they all serve to allow us to basically subscribe to an artist’s creations. Sure, it may be a jerk move to buy their art and start printing copies. However, now I face the problem of promotion and distribution, and I am dependent on the original artist to create again. This is a losing strategy. The success of the crowdfunding market shows that people are will to “subscribe” to an artist’s creations to ensure they get more creations. They’re incentivized to create more art as fast as possible. At least as fast as we the demanders expect based on our payment.

I really want to focus on my use of demanders there instead of the classical consumer terminology. Because of the idea that what is really important is the market’s demand for something. Not its ability to consume. Humans will find a way to consume what they demand. The Suppliers will find a way to produce to meet demand. The Beanie Babbie and comic book speculation crazes show us the market can profit quite well even when there is no capacity to consume. Also, it’s the demand that drives the direct crowdfunding market. Because you can’t really consume digital art. I can consume 100% of the value of any piece of art including keeping an archive copy for future reconsumption and broadcast copies. However, I’m not creating more art. Everyone has an interest in supporting the artist so they will create more.

This might be complete insanity and my proposal could bring about the end of civilization. I haven’t been able to find a case in history where people having to deal with reality, as a group, has ever worked out poorly. We didn’t have a reliable supply of food, so we invented agriculture. I seriously doubt that the first surplus farmer was worried about anyone else learning how to farm.

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