IP Hyperinflation

A couple of months ago, I found myself in conversation with an Iraqi gentleman. He had, it seemed, been in the UK for many years, but (recalling a harrowing story told to me by an Ethiopian taxi driver in Seattle years ago) I didn’t press him about why he had left his country. We talked instead about humankind’s inability to live peaceably with itself, and with suitably violent hand gestures he made the point that when one person, or one people, has wealth someone else will want to take it from them. Such is human nature, and such is the lesson of history. Greed leads to war. Well, I guess I already knew that ...

It is not only nations fighting over oil, but in a much smaller and less destructive way conflicts break out every day over what we are pleased to call intellectual property. Today a friend issues a sort of manifesto, speaking of contesting “every flaky thing said against IP”. But IP has become terminally flaky itself – even the new Intellectual Property Enforcement Co-ordinator in the States is making meaningless statements about intellectual property theft.

The IPEC – or “IP Czar’, as she has inevitably been dubbed – has a very important consumer protection role to play, too important to get bogged down in slogans. We should all leave to one side the fact that counterfeiting and piracy involve the misuse of private property rights: that analysis – the property metaphor, as Bill Patry would have it – clouds the issue. Trade mark law rightly protects consumers, but for years it relied on the self-interest of traders protecting their goodwill to achieve this. In the complicated modern world, it is right for governments to protect their citizens against dangerous goods like the Czar’s adulterated toothpaste; it is right, for other reasons, to fight the trade in counterfeit designer goods, because it has an effect on employment on both sides of the equation – destroying good jobs making the real thing, creating bad (low-paid, unregulated, unsafe, sweatshop jobs) jobs making the counterfeits. I almost wrote ‘knock-offs’, but a glib phrase like that understates the seriousness of the problem.

While the argument continues to be made in terms of intellectual property theft, stressing (perhaps not deliberately) the impact on the assets of rich and remote companies who charge so much for their products that ordinary people cannot afford them (but how could they remain exclusive and aspirational if they were not expensive?), the full gravity of the situation will never be appreciated. People will continue to buy counterfeit handbags and watches on the street, imagining any crime involved in that to be victimless – or, at least, having no sympathy for the only victim in sight.

A similar calculus applies in the copyright world. Record companies, film studios and software houses stand between the consumer of pirate product and the ultimate victims. Writers find it harder and harder to make a living as electronic books become more common and shorter works are simply misappropriated (a much better, though less emotive, word than ‘stolen’) on the Internet. But the public, perhaps feeling overcharged for CDs and DVDs for too long, has either lost sympathy with the whole notion of copyright or never understood it anyway.

I am drawing the line there – if I get started on patents it will never end ... but, by sheer coincidence, today I have also learnt (via Google Alerts) of an audiobook edition of Stephan Kinsella’s monograph Against Intellectual Property (Mises Institute, 2008; Mises Store; PDF; Scribd; HTML). The book has a go at a number of sacred cows, urban myths and dodgy metaphors – not the perfect antidote to intellectual property hyperinflation, but important reading. Well, anything connected with von Mises, and which discusses trade mark problems by reference to Rothbard Burgers, has to be worth a look.