Against Monopoly

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Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Are Libertarians For Intellectual Property?: Comment on David Koepsell's "Why I Believe Gene Patenting is Wrong"

My comment on the debate between Randy Mayes and David Koepsell on human gene patents at the IEET was posted in "Are Libertarians for Intellectual Property?" (Institute for Ethics & Emerging Technologies, Aug. 26, 2009:

Mr. Koepsell,

I read with interest your comments above criticizing IP from a self-professed libertarian perspective. I am a libertarian and a practicing patent attorney and I too oppose patent rights (one of the few patent attorneys who dare to)--patents are, as you say, unnatural and artificial privileges granted by the state at the expense of real property rights. My website contains various articles, books, and speeches on this topic, including Against Intellectual Property, and my recent speech "Intellectual Property and Libertarianism." I'm also affiliated with the Mises Institute, so I suppose Mr. Mayes has my work in mind when he unfairly, uncharitably, and falsely disparages and dismisses us as "idealogues."

I heartily agree with you when you write that you are "consistently confused by "libertarians" who support a government-sponsored monopoly of any kind" and that patents "are the grant by a government of an artificial monopoly of the practice or sale of a useful art or product."

Given that you recognize this, it is not clear why you seem to draw back (at least in this post; I have not yet read your book, which I intend to do) from a more sweeping critique of patents in general. E.g., you write, "IP laws only conflict with notions of justice when they impinge on some other, grounded right, as I argue they do with the genetic commons." IP laws always impinge on property rights. That is their purpose and nature.

I must say I sympathize with your comments about conflicts of interest on the side of IP advocates--isn't it striking that almost every patent lawyer or big company that benefits from this state monopoly is in favor of the practice? You are right: the patent industry benefits patent lawyers, so of course they tend to mindlessly repeat the state propaganda that supports their profession's existence.

As for Mr. Mayes's comments, he writes:

"Your confusion related to libertarianism and what libertarians think is probably due to several reasons. What libertarians think is not universal. Libertarians at the Ludwig von Mises Institute are ideologues. They do not want the state involved period, so this provides an argument against patenting DNA for them. Civil libertarians are complaining about freedom of speech restrictions from patenting DNA, which is a week argument.

"Pragmatic or mainstream libertarians housed at the Cato Institute and CEI are interested in IP as an extension of individual rights. Ayn Rand regarded IP as the base of all property rights: a man's right to the product of his mind. In the process, freedom of speech issues arise as well as the monopoly issue which create the confusion. Since the right to own property is the most fundamental right for mainstream libertarians, this overrides the speech and monopoly issues."

Well, as for free speech, I grant you that it is more endangered by another state-granted pattern-privilege, patent law's cousin, copyright (see my post Book Banning Courtesy of Copyright Law). Some Cato scholars support IP rights, but not all (see the work of Tom Palmer, for example--are they idealogues too, now?). Ayn Rand's defense of IP was seriously confused, and she would never have granted that IP so important that it "overrides" "speech and monopoly issues." IP rights are not an extension of property rights; they quite obviously undercut and invade property rights--a patent gives a right to its holder to legally force someone else not to use their own property as they see fit.

As for the repeated claims by various defenders of IP and critics of Mr. Koepsell to the effect that patent protection is "needed" to "incentivize" various forms of innovation--Mr. Holman in his review refers to "the important role gene patents have played in incentivizing the development of life-saving therapeutics" as if this is obvious and uncontroversial--this is the same old bankrupt utilitarian reasoning that is triply flawed. First, as I point out in Against Intellectual Property, utilitarianism is morally flawed--you could justify all sorts of horrible policies, including legalized theft, this way; and it is methodologically flawed since it is based on the unscientific notion that utility can be cardinally measured and interpersonally compared (the insights of Austrian economics shows that this is not the case).

But even if we ignore the ethical and other problems with the utilitarian or wealth-maximization approach, it is bizarre that utilitarians are in favor of IP when they have not demonstrated that IP does increase overall wealth. They merely assume it does (or say they assume it does) and then base their policy views on this assumption. It is beyond dispute that the IP system imposes significant costs, in money terms alone not to mention liberty costs. The argument that the incentive provided by IP law stimulates additional innovation and creativity has not even been proven. It is entirely possible even likely, in my view that the IP system, in addition to imposing billions of dollars of cost on society, actually reduces or impedes innovation, adding damage to damage (see my post What are the Costs of the Patent System?).

But even if we assume that the IP system does stimulate some additional, valuable innovation, no one has established yet that the value of the purported gains is greater than the costs of the system. If you ask an advocate of IP how they know there is a net gain, you get silence (this is especially true of patent attorneys). They cannot even point to any study to support their utilitarian contention; they usually point to Art I, § 8 of the Constitution, as if the back-room dealings of politicians two centuries ago is some sort of evidence. In fact, as far as I've been able to tell, virtually every study that attempts to tally the costs and benefits of copyright or patent law either concludes that these schemes cost more than they are worth; or that they actually reduce innovation; or the study is inconclusive. There are no studies showing a net gain (see my post "Yet Another Study Finds Patents Do Not Encourage Innovation"; and, in this connection, I also highly recommend Boldrin and Levine's Against Intellectual Monopoly and their blog Against Monopoly, to which I contribute).

Instead, we hear repetitions of propaganda trotted out by the state to justify its artificial legislative schemes. But the truth is that anyone who accepts utilitarianism should, based on the available evidence, be opposed to IP. That they are not is telling--it is like those who claim to be environmentalists or fret about "global warming" but never advocate nuclear power, the obvious solution to the "problems" they pretend to be worried about.

Update: Interesting, I noticed you quoted one of your correspondents as having written "I spoke before the Pennsylvania Bar Association IP Section in Philly in 2007 and introduced them to the ontology of IP and social reality (used computers and software to make my points) and was greeted as a Galileo"--

I lived and worked in Philly in the late 90s and was a member of the IP section of the Pennsylvania Bar Association an indeed Founding editor (1997) of the PBA IP Law Newsletter (and Editor-in-Chief till 1999), I published in that journal an article entitled "Is Intellectual Property Legitimate?" (Winter 1998, later republished in the Federalist Society's newsletter).

Update II: A patent attorney who gets it!

[Cross-posted at StephanKinsella.com]


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