A neoliberal framework for intellectual property

When I was younger I was very libertarian, and like many libertarians I was very sceptical of intellectual property. It might seem strange to a non-libertarian—libertarians love property rights!—but it's obvious to a libertarian. Property rights over your body, your land, your house and your tools are in direct conflict with intellectual property: if someone has a right to control how an idea is used, it prevents you from using the things you "really" own in ways that you like.

If Apple has a right to the Apple logo, I can't draw it on my house or car and sell stuff out of them. If Apple has a right over using a type of glass in phones I cant use my factory, my machine tools, my raw materials and indeed my hands and thoughts in ways I very well might want to.

I was convinced by the elegance of Roderick Long's argument:

Information is not a concrete thing an individual can control; it exists in other people's minds and other people's property, and over these the originator has no legitimate sovereignty. You cannot own information without owning other people.

Suppose I write a poem, and you read it and memorize it. By memorizing it, you have in effect created a "software" duplicate of the poem to be stored in your brain. But clearly I can claim no rights over that copy so long as you remain a free and autonomous individual. That copy in your head is yours and no one else's.

But now suppose you proceed to transcribe my poem, to make a "hard copy" of the information stored in your brain. The materials you use — pen and ink — are your own property. The information template which you used — that is, the stored memory of the poem — is also your own property. So how can the hard copy you produce from these materials be anything but yours to publish, sell, adapt, or otherwise treat as you please?

But I've changed my mind. The reason regular property rights are good is not because we have a fundamental moral right to sovereignty over certain objects. Robert Nozick is wrong that "mixing labour" with things makes them morally yours in a way that other considerations can never trump. In fact the reason that property rights are good institutions is that they make us happier and freer, and that they have good consequences: rich societies where individuals feel autonomous under a rule of law.

Though the two sorts of rights conflict, the justification for both is closely analogous. Monopolies generate investment. If fields are owned in common, they produce a lot less. Most people are somewhat selfish, and do not improve fields when they stand to benefit only very little from each marginal improvement. A field that will feed 10 would feed 100 or 1,000 if separated into many privately owned plots. Indeed: an individual can feed themselves off far less land if they own it exclusively than the share they effectively use when it is part of the commons.

Some restrictions on property rights are good. Internet libertarians have arguments over not just redistribution, but even simple questions like whether it's okay to break into someone's mountain hut to get shelter in a blizzard. It's obvious that some restrictions on property rights make the world better. This approach accepts that automatically: property rights are there for human flourishing and rule-of-law systems automatically build some beneficial restrictions into them.

Things are similar for ideas. If you give people monopoly control of their idea then they may produce—or share—more ideas. If an idea is genuinely new, then its being produced or shared with you makes you better off and freer. It's all well and good to say I am restricted by not being able to make iPhones—but would I really have been able to make them without Apple?

The trade-off is follow-on innovation. Yes, patents may promote innovation. But they also restrict it: you cannot freely improve on the ideas of others if they have patented them. Their patent may encompass uses that you would have come up with, or propagated, but which they never discover or make use of.

But patents also promote follow-on innovation. Isaac Newton discovered the calculus but did not share his discovery for years. When you register a patent you get exclusive rights, but you must also bring the idea into the public domain. Without patents firms would have an incentive to be extremely secretive and keep crucial ingredients from the scientific and research community.

It might also matter what level you are at. Instituting short, clear, restrictive patents may increase innovation, but expanding these into long and fuzzy rights may reduce it. This is the famous Tabarrok Curve. And it may matter what our alternatives our. Even if patents work well, innovation prizes may work similarly with fewer drawbacks and restrictions on freedom.

A neoliberal approach to IP recognises that it may be a necessary evil—but it may not, and we might have too much or too little of it, or be doing it in the wrong ways. This is a question that has to be answered empirically.