The Utilitarian Idea of a Monopolistic Right in Intangible Property

By Barry Neil Shrum, Esquire and Nathan Drake

The classical libertarian, Frédéric Bastiat, is quoted as saying:

In the full sense of the word, man is born a proprietor. . . . Faculties are only an extension of the person; and property is nothing but an extension of the faculties. To separate a man from his faculties is to cause him to die; to separate a man from the product of his faculties is likewise to cause him to die.

According to a recent article, entitled The Copyright Monopoly is a Limitation of Property Rights, the author, Rick Falkvinge, writing for TorrentFreak.com, argues that copyright is merely “a limitation of property rights” and is “not a property right.” This conclusion is incorrect and totally without any basis in U.S. history, not to mention world philosophy. Article 1, Section 8, Clause 8 of the United States Constitution directly refutes that by granting Congress the power

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.

Our Forefathers, in this case James Madison and Charles Pinckney, based the idea of intellectual property rights on John Stuart Mill’s utilitarian philosophy. In other words, they were quite willing to violate the property of the few – i.e., the "rights" of individuals to use someone else’s intellectual property however they choose – if doing so would serve to advance the greater good of society as a whole. So, the original drafters of the Constitution did. They did not intend to grant partial ownership to the creator, but rather “exclusive rights” for a work derived from their intellect and creativity. That is to say, the idea that copyright is a monopoly is not the "carefully chosen" "rhetoric from the copyright lobby" of recent vintage as put forth by Falkvinge is completely false: rather, it is an idea that our Forefathers debated and discussed, and carefully chose to bestow upon Authors and Inventors.

Many fail to grasp the idea that the ownership of an intellectual property such as copyright is no different than ownership of real property, such a person owning their own house or piece of land. Both forms of ownership are based on societal laws and give the owner inherent rights to do with the property as they please. Just as the government prohibits individuals from reproducing and distributing copyrighted works, so does the government prohibits individuals from trespassing onto another person’s personal property or stealing their possessions. Are the latter "government-sanctioned private monopolies" that impose "limitations of property rights" on individuals other than the owner? You bettcha! That is, in fact, what a monopoly is: allowing an individual to control something to the exclusion of other competitors.

The significant different between real property (i.e. the chair in Mr. Falkvinge’s analysis), and a copyright (i.e. the DVD in aforesaid analysis), is that the chair is a tangible object, and its essence is easily grasped by our senses. A DVD, on the other hand, is a physical object which embodies, for example,  a movie, or intellectual property, that is intangible and more difficult to conceptualize. When purchasing a copyrighted work such as a movie, one has to realize the two forms of property contained within that physical object that is the DVD. Falkvinge draws his analogy between the chair and the DVD as follows:

When I buy a movie, I hand over money and I get the DVD and a receipt…after the money has changed hands, this particular movie in mine.

This statement is factually and legally incorrect. Although the purchaser owns the physical embodiment of the DVD – and in fact may dispose of it any way he or she chooses – the purchaser does not own the intellectual property embodied within the DVD, and may not exercise dominion, or monopoly, over that property. The creator of the work, in fact, owns the intangible property encoded in the DVD, and the creator is within his/her rights, according to section 106 of the United Sates Copyright Code, to reproduce and distribute the work as they please due to the time, creativity and money that produced the work. The owner of the physical object containing the movie has no such rights. Our Constitution is what controls this fact, not just the copyright laws Congress has passed under its authority.

The umbrella of intellectual property, and more specifically Article I, Section 8, Clause 8 of the Constitution, also include the concept of patents. In the article, when Falkvinge compares the limitations copyright places on the purchaser of a DVD to the endless opportunities an ostensibly-expired patent gives the purchaser, he erroneously concludes that " patents are not relevant for this discussion." Oh, but they are. First, one cannot legitimately compare a patent with limitations that have expired to a copyright that currently retains its exclusive rights and limitations. In fact, one author has asserted that it is patents¸not copyrights, that place a greater restriction, or monopoly, on property rights. In Man, Economy, and State, Murray Rothbard concluded:

The patent is incompatible with the free market precisely to the extent that it goes beyond the copyright.… The crucial distinction between patents and copyrights, then, is not that one is mechanical and the other literary. The act that they have been applied that way is an historical accident and does not reveal the critical difference between them. The crucial difference is that copyright is a logical attribute of property right on the free market, while patent is a monopoly invasion of that right. Rothbard’s point is that businesses should not be restricted from independently designing and creating a product using natural laws and principles, even if it turns out to be similar to a patented product, even though our legal structure often operates in that manner.

But the greater point to made here is this: accepting the validity of a patent monopoly requires the acceptance of a copyright monopoly. Both rights are granted by the same Constitutional clause and, a priori, both are relevant to any discussion of government-granted monopolies. Second, simply because an individual purchases the physical embodiment of a chair design does not imply that they acquire full rights to disassemble, analyze, reengineer and distribute the chair commercially. To play with Falkvinge’s analogy, imagine that instead of chair, we are discussion the purchase of a new automobile, let’s say a Ford Mustang. Does one who purchases an automobile by virtue of that sales transaction, gain the right to deconstruct and reverse engineer the product, and start his or her own manufacturing facility to churn out duplicate cars in order to compete with Ford? Why, because there is intellectual property that is embodied in the automobile, just as there exists intellectual property embodied in a DVD, a CD and, yes, even an MP3 or an MP4. Based on the utilitarian teachings of John Stuart Mill, our society believes in rewarding an individual for the “fruits of their labor.” When labor is applied to raw goods by an individual in order to create an original expression of an idea, our society has agreed that this product is the property of the individual that created it. Our Constitution grants the creator of such product a limited monopoly in the exploitation of that creation. This brings me to my final point:

The copyright is, in fact, a “government-sanctioned private monopoly.” The ideology behind the monopolization of intellectual property is to “promote” and incentivize people to create works with the understanding and confidence that the time, energy and financial hardship involved will be fairly compensated. Without any supreme authority protecting the interests and livelihood of creators, the motivation to develop such a work arguably decreases dramatically. The implementation of the monopoly grants the property rights in the creator. As with all property rights, that grant places limitations on the persons who do not own the property.

So, the idea that "monopoly" is an evil concept which the lobbyist have attempted to associate with a "positive word such as ‘property,’" as Falkvinge argues, is historically, philosophically, and logically false. It is rather a concept that has been with us since the Code of Hammurabi first described laws regarding property; it was passed down to us by our Merry Old Ancestors from England; it is a right the participants of the Oklahoma Land Rush had to fight to exercise; and it is these rights – the right to exercise control over one’s intellectual creations – that assure a society in which ownership of property is exercised by the appropriate party by wielding their monopoly against those that would steal it away.

So yes, Mr. Falkvinge, a copyright monopoly is a limitation of property rights. But it is also a means by which the owner can exercise his or her property rights. The limitation is, in fact, on those who would steal their rights. So if this is a limitation on your rights to freely distributed copyrighted product, I’m ok with that and I think the majority of our society is as well.

As the French economist François Quesnay succinctly said: “Without that sense of security which property gives, the land would still be uncultivated.” In other words, if we don’t grant a monopoly to our "cultivators" of ideas, the landscape will be baron.

See also, Cleveland, Paul A., Controversy: Would the Absence of Copyright Laws Significantly Affect the Quality and Quantity of Literary Output? A Response to Julio H. Cole, Journal of Markets & Morality 4, no. 1 (Spring 2001), 120-126

Technorati Tags: Falkvinge,TorrentFreak.com,Constitution,Copyright,Copyright Law,Bastiat,John Stuart Mill,Utilitarianism,Monopoly,Property Rights,Intellectual Property