Private Property or Social Goods

Intellectual Property and Morality

                                                                                    -Michael J. Malone

 

Intellectual property is any idea, invention, discovery, symbol, image, expressive work, “in short any potentially valuable human product (broadly, “information”) that has an existence separable from a unique physical embodiment.”[1]  Ethical justification of exclusive intellectual property rights is a formidable task.  Relying on John Locke’s theory, that property rights in material goods flow from prior property rights in one’s body,[2] or similar theories of entitlement to ‘desert’ resulting from one’s labor[3] have been discussed elsewhere and shown problematic. [4]  I shall address these arguments, but show them short thrift, focusing primarily on the utilitarian argument which is increasingly scrutinized by economists but remains largely unexplored by philosophers.

I will not pretend to offer a solution to the complex problems related to intellectual property here but will merely insert a note of caution that should be kept in mind in the formulation of an ethical intellectual property regime, that intellectual property can be justified only as a recipient right by appealing to utility, and thus litigation demanding retribution from individual violators of intellectual property rights is unjust.

            Arguments based on the Lockean theory (of property rights) attempt to justify intellectual property rights as flowing from prior property rights in one’s own body.  From self-ownership comes individual autonomy.  Locke argues that should one choose to labor in the creation of some material good, property rights in that good follow from self-ownership.  In other words, since I own my body, I own anything I choose to produce with my body.  That may be so, but extending this argument to claim exclusive ownership of intellectual property is a fallacious generalization.

While physical property can be intuitively understood as the product of individual labor, this is atypical of intellectual property.  Intellectual property is not created ex nihilo.  By and large intellectual property is created by combining individual labor with a prior social stock of intellectual property.  Thus, under Locke’s theory, the laborers who created the stock of intellectual property that contemporary innovators draw from are equally entitled to property rights in any new creation, perhaps in proportion to labor exerted.  This counter argument is clearly articulated by Robert Nozick when he wonders whether, in pouring a can of tomato juice into the ocean, he ought to gain the ocean or lose his tomato juice.[5]

The ‘desert’ argument is similar in that it claims individuals are entitled to some remuneration for their efforts.  Utilizing this theory to justify exclusive intellectual property rights is not persuasive, however, as it conflates the distinction between entitlement to some desert, and what that desert should be.  Edwin Hettinger suggests that “[p]roperty rights in the created object are not the only possible reward.  Alternatives include fees, awards, acknowledgement, gratitude, praise, security, power, status, and public financial support.”[6]  Again, a strong counterclaim can be made that entitlement to economic remuneration through free market transactions is not a just desert.  While the individual laborer is entitled to remuneration for their efforts, they have no claim to remuneration through the arbitrary conglomeration and demand supply relationships of the free market economy.

This argument has been explored in depth by John Christman in his egalitarian analysis of property rights as justified by appeals to self-ownership.[7]  He makes a distinction between control rights and income rights.  The former consisting of “the rights to use, possess, manage property, and the right to capital.”  The latter being the right to increased benefit from relinquishing ownership of an asset.  Christman notes that

for income rights to be exercisable, it must be the case that (a) other people       have certain preferences, (b) others have certain information, (c) barriers and transaction costs have a certain structure and/or (d) relatively permanent social structures have been set up allowing for (a) through (c) to arise and stabilize.[8]

 

Since these conditions are not controlled by individual economic agents, such agents are not entitled per se to benefit from their arbitrary structure.

While both of these theories provide insufficient justification for exclusive intellectual property rights, some economists and utilitarian philosophers have found powerful arguments for justification in studying the rational interaction of economic agents in conditions of scarcity.[9] 

The Tragedy of the Commons is a well known intuitive model which is often generalized to the case of intellectual property.  It tells the tale of several farmers sharing a common pasture upon which they graze their sheep.  As told by Professors Eloise Malone and Charles Cochrane the story proceeds as follows

As the common meadow is owned by everyone, it is the responsibility of no one.  The total number of sheep grazing this pasture is at the maximum sustainable amount of grass the pasture can yield to maintain the sheep.  It is in the farmers’ collective interest not to allow any additional sheep to graze in this pasture and to try to secure an agreement among themselves to that effect.[10]

 

Unfortunately, an agreement is not forthcoming.  Self-interest clashes with group rationality and each farmer sneaks several additional sheep into the flock.  As the flock size exceeds the carrying capacity of the land the grass is consumed more quickly than it is naturally replenished.  Degradation of the pasture ensues, followed by the death of the sheep which graze the pasture.  Thus the farmers, who rely on the sheep for their livelihood, fall into poverty. 

The obvious solution provided by economic analysis is the enclosure and privatization of the common meadow.  The reason being, self-interest of individual farmers will be held in check by the pasture owner, with strong rights to exclude, who does not want to deplete his land.  The question remains, however, whether enclosure and privatization is an ethical solution in all cases.  For the utilitarian argument to be persuasive, enclosure and privatization must provide more aggregate utility than any alternative solution.

Several counterexamples exist which suggest enclosure is not the most efficient solution in the case of intellectual property.  Perhaps the most obvious example is open source software[11], which James Boyle calls

[An] existence proof, that in some cases we may not have a tragedy of the commons but… a comedy of the commons.  [It is] a happy situation in which collective management of a resource is actually better in purely cold hard economic terms as well as perhaps in other more social contexts.[12]

 

Boyle suggests that once we recognize this counterexample it becomes apparent that we do things this way often.  Academia is organized in a similar fashion; reputation building matters more than economic remuneration for publication.  Thus privatization of academic research serves only to prohibit access through higher prices, providing little benefit.  Without intellectual property rights, in an academic context, scholars would still publish purely due to non-economic incentives.[13]  Publications would be more widely available, at less cost.  Thus, there would be increased aggregate utility in society.  Moreover such a solution would provide more equity than the current system, a side effect with little weight in a utilitarian conception of morality, but nonetheless important to note.

Proponents of enclosure generalize the tragedy of the commons to include the case of intellectual property, and in so doing fail to recognize some fundamental characteristics of intellectual property.  The ‘tragedy’ stems from depletion of a scarce resource, and scarcity is not a common characteristic of intellectual property.  While a large flock of sheep may deplete the resources of the common meadow, distribution of a commonly owned publication to a large population depletes nothing.  Any scarcity of intellectual property in the marketplace is artificial; it is a product of enclosure, rather than a preexisting condition which enclosure aims to ameliorate. 

In fact, creation of scarcity is oft noted the goal of the legal regime of intellectual property rights.  By giving creators the exclusive right to sell their creation, supply can be limited, which increases the equilibrium price in the market, allowing creators to recover the high fixed costs of creation.  Without such a mechanism, it is argued, there would be no incentive to produce intellectual property.  Actually, there would be a disincentive to do so, rational agents would simply wait for others to innovate, letting them bear the fixed costs of innovation, then duplicate their efforts without being burdened by these costs themselves.

From these intuitions it follows that intellectual property rights are what Lawrence Becker calls ‘recipient rights’.[14]  A bearer of such a right is entitled to some reward for their creativity, but it is problematic to determine the form of this reward and specifically identify the duty-bearers.  In this case the right bearer is entitled to some reward because creation of a certain amount of intellectual property is necessary to reach maximal social utility, and an incentive system is a requisite means in attaining this end.  I would like to suggest that, while entitlement to remuneration through free market activities is difficult to justify, utilizing the market system to reward bearers of recipient rights is convenient.  Furthermore, as the bearer of a recipient right cannot demand remuneration, but may simply assert that someone ought to remunerate them, this system is appropriate in the case of intellectual property.

As policy, the choice of free market remuneration for bearers of intellectual property rights is not a bad one.  However, the inability to justify entitlement to such remuneration should be kept in mind, especially in legal proceedings in which right bearers demand compensatory retribution from violators of their intellectual property rights.  The duty-bearer in this case is a ‘generalized other,’ no specific entity can ethically be singled out as responsible for providing remuneration.  Formation of an ethical intellectual property regime should proceed cautiously with this in mind; right bearers cannot morally demand retribution for violation of intellectual property rights from specific individuals.



     [1] William M. Landers, and Richard A. Posner. The Economic Structure of Intellectual Property (Cambridge, MA.: The Belknap Press of Harvard University Press, 2003), 1.

     [2] John Locke, Second Treatise of Government, chap 5.

     [3] Lawrence Becker, Property Rights: Philosophic Foundations (London: Routledge and Kegan Paul, 1977), chap. 4.

     [4] For an in depth discussion see Edwin C. Hettinger, “Justifying Intellectual Property,” Philosophy & Public Affairs 18, no. 1 (Winter, 1989): 31-52.

     [5] Quoted in Hettinger, Justifying Intellectual Property, p. 37.

     [6] Hettinger, Justifying Intellectual Property, p. 41.

     [7] John Christman, “Self-Ownership, Equality and the Structure of Property Rights,” Political Theory 19, no. 1 (Feb., 1991): 28-46.

     [8] Christman, Self-Ownership, Equality and the Structure of Property Rights, p. 36.

     [9] See for example, William M. Landers, and Richard A. Posner. The Economic Structure of Intellectual Property, 1-424.  Ironically Judge Posner has written previously about the limitations of morality in law, and still concludes that intellectual property law in the United States is inefficient from a purely economic point of view.

     [10] Charles L. Cochrane, and Eloise F. Malone. Public Policy: Perspectives & Choices (New York, NY.: McGraw-Hill College, 1999), 60.

     [11] The ‘open source’ software movement is a frequently cited example of the efficiency of a system of unrestricted commons under limited control.  How far this example can be extended as analogous to other areas of intellectual property is debatable.  For a good overview of what the movement is about see Eric S. Raymond, The Cathedral and the Bazaar: Musing on Linux and Open Source by an Accidental Revolutionary (Sebastopol, CA.: 1999).  The book is a compilation of a series of essays most of which are available individually on the internet (under the same license as open source software, of course).

     [12] James Boyle, The Second Enclosure Movement?, Conference on the Public Domain, 34 min., 2001. Audio Recording. available via < http://law.duke.edu/pd/realcast.htm >.

     [13] And students would certainly not be dissuaded from writing research papers, although their academic merit is often questionable.

[14] Lawrence C. Becker, Property Rights: Philosophic Foundations, 14-15.