Courtesy of Aaron — This excellent lecture will, it seems, be among the last of this sort given by the sharp and articulate Lawrence Lessig. I’ll confess I’m still somewhat agnostic on the subject of intellectual property, but whatever the status of the general principle, it’s clear that the lobbying power of copyright holders has gone way too far. Retroactive extentions of copyright fly in the face of the constitutionally stipulated purpose of IP, which is to “promote the Progress of Science and useful Arts” — a function tied to an incentive effect that is manifestly absent for works created in the past. And I hope it’s clear on face that granting record companies a license to hack is a bad idea.

But what about IP in general? As fellow Catoite and gentleman-scholar Tom Palmer has asked: “Are Patents and Copyrights Morally Justified?” [PDF] Libertarians have a problem here: even if we’d rather like creators to have an incentive to produce life-saving drugs and kick-ass albums, we’re supposed to be hesitant at the very least about restricting the free-speech and property rights of large numbers of people in order to provide that incentive. Now, if property rights in “ideal objects,” as Tom calls them, are genuine rights, there’s no issue. My intellectual property then restricts your ownership of your computer or body or other property only in the same sense that my ownership of my face restricts your ownership of your baseball bat by preventing you from swinging it in a certain direction. But if they aren’t genuine rights, then laws against “copyright infringement” are themselves a kind of infringement on ordinary property. Sure, it’ll still be possible to get a kind of de-facto copyright in some cases through a combination of “piggybacking” on tangible property rights (by retaining one stick — the right to make a copy — in the bundle of rights that constitute ownerhsip of the material instantiation of a work) or software-backed contract (i.e. “clickwrap”). But as Tom points out, that leaves no remedy against third parties who get a copy anyway through accident or a single breach of contract, and is a far cry from copyright as we know it.

IP differs from corporeal property in a few salient ways that make it doubtful whether it can be treated similarly. Idea consumption is nonrivalrous, so in at least one way, the scarcity rationale behind property isn’t present — there’s no tragedy of the commons for MP3 downloads. That also means that I’m not depriving someone of the value of their labor when I copy their work: they can still enjoy it. On the other hand, the force behind the idea of the “tragedy of the commons” comes largely from the fact that it’s pareto-dominated by property: it’s tragic because everyone would be better off under a property regime than in a prisoner’s-dilemma style dash to exhaust resources first. Everyone, presumably, would will a property rule in order to avert that outcome. But mightn’t IP work the same way? Scientist X would like to invest energy in the invention of a drug, provided he could be compensated at a level which is equal to or lower than the value of the drug to consumers who would willingly buy it. But if the absence of IP rights means he can’t expect to be remunerated, all are worse off. And all, presumably, would will a property rule to allow mutually benefical exchange. (Couldn’t those who want the drug form a consortium to rent his research services? Transaction costs would likely be prohibitively high, especially if some can expect to free-ride by getting an illicit copy of the drug once it’s produced. And, more salient still, it may be the case that research costs are justified only when we count the income stream from all future sufferers of the illness.)

Now, any rule that’s pareto-optimizing has quite a bit going for it, but the example above is only a just so story. We can construct one that cuts the other way. Many valuable works will be created even in the absence of compensation potential: witness the WWW. There may be many people who would like to be able to charge for their creations, but are willing to do so even if they can’t. And perhaps, for some anyway, the benefit of getting what others produce free is greater than any benefit they could extract from sales of their works. In this scenario, the prisoner’s dilemma is different: everyone would rather consume free ideas, but will “defect” and charge for their own if they can.

Unfortunately for theorists, the real world probably mixes both of these scenarios. Both IP and its absence will be pareto-optimal, since some people place a very high premium on the creations lost without property incentives, and others will get more value out of the free ideas and works which get created anyway. So that’s not much help. So how about a baseline analysis? Instead of trying to compare all possible outcomes, we can just look at how people fare before and after a patent issues. Now, again, because copying doesn’t deprive creators of their works, they aren’t made worse off by “piracy” relative to the status quo ante. What about the population at large when we have copyrights? On face, it might seem like they’re made worse off, because they’re no longer entitled to do something with their property (instantiate a certain work) that they otherwise would have been able to. But because IP protects only new works, this is not interference with a prior use. Except as an abstract logical possibility, I did not have an ability to play, say, an Elliot Smith song on my computer until he wrote and recorded it. And perhaps, without IP, he wouldn’t have written it. (Patents are a little different, of course, since preicsely similar artistic works, unlike inventions, are extremely unlikely to be created by distinct people.) So insofar as IP limits my prior freedoms, it does so only in the exact same sense that appropriation of real property does: a first-possessor prevents me from using land of which I might have, but did not, make (significant) use.

I’m a little too tired to follow this train of thought to its conclusion. It’s probably worth considering whether interfering with tangible or intellectual property (or “property”) entail treating the improver/creator as a “mere means,” but I’ll need to think about that quite a bit more before I can get anything coherent out of it. Comments are welcome.