Subject: How FSBs and liberal economists can be allies [was: universities struggling to avoid making money]
From: "Stephen J. Turnbull" <>
Date: Tue, 27 Aug 2002 14:36:21 +0900

Followups to (sorry, shoulda done this already; if
appropriate for the other channels, feel free to speak up).

Let's try to cut this back to what's relevant to FSB.  For those who
think it's too damn long, anyway, an Executive Summary:

(1) Friedman & Co. are _liberals_ first, economists second, and
therefore our natural allies.  We need to show them how freedom _as
they understand it_ is harmed by excessively strong IP.

(2) The most plausible argument _for this purpose_, which also happens
to be that closest to the needs of FSBs, is that strong IP increases
the power of "blocking innovations".

Such blocking innovations can "suck up" all the "surrounding freedom",
thus limiting consumer choice (and of course, vitiating developers'
freedom).  Although unproved, this possibility is too dangerous for
experiments with stronger IP to be justified at present, especially in
light of historically new technologies like software itself, which
argue for _weakening_ IP.

>>>>> "Ben" == Benjamin J Tilly <" <>> writes:

    Ben> "Stephen J. Turnbull" <> wrote:

    >> And my central point is that Friedman & Co, advocates of strong
    >> property rights though they are, often will take positions
    >> against extension of property rights in this arena.  If so,
    >> less extreme thinkers should be _more_ persuadable.

    Ben> Friedman & Co are advocates of strong property rights and are
    Ben> against the extension of existing property rights _for the
    Ben> same reason_.


    Ben> They want people to benefit economically for generating
    Ben> useful economic activity.

This is true, but it is not why they support strong IP and oppose
copyright extension.  Friedman and Co. are 100% in agreement with
Richard Stallman on this point!  _Freedom_ is what it is _all_ about.
That's why they call themselves "liberals."  The economic benefit to
individuals and to society is a happy accident, which derives from the
basic rationality of the human being, under conditions of freedom.

Extension of existing copyright is bad in Friedman's view because it
is (purely) a public taking.  All public takings, as such, reduce
freedom by concentrating resources in the hands of a capricious
authority.  IP, like other property, is good because it places
resources in private hands, and defines the rules which make free
contracting (foresighted exercise of freedom in society) economically
possible.  Furthermore, when vested in the developer, there is no
public taking; the public has no access until the developer publishes,
which she is free to _not_ do.

That's what he says in _Free To Choose_ and _Capitalism and Freedom_,

    Ben> Many copyright holders are for copyright extension and strong
    Ben> IP again for one reason.  They view the creation of
    Ben> intellectual property as an act of creation as real as any
    Ben> creation of physical objects or the development of property.

Granted.  I didn't mention that argument myself because if there is a
natural right to intellectual property, the game is over.  Free
Software is dead (although the kind of Open Source Richard Stallman
loves to deride remains viable).  Nor do we have any common ground
with those who espouse that view.

    >> Granted, there really isn't a middle ground for FSB and
    >> Friedman that I can see [...].

    Ben> The identification of a middle ground requires first figuring
    Ben> out why each side holds the positions that they do

Which FSers have signally failed to do.  (The burden is on the FS side
for historical and pragmatic reasons.)  The liberal economists, as I
wrote, are strongly on the side of freedom for its own sake.  We do
not make common cause with them, however; instead, some of us berate
them as agents of the devil for supporting freedom of contract, which
implies the freedom to sell your free software rights.

In fact, to me this is precisely why Russ Nelson inter alia is
justified in insisting that Open Source is as much about freedom as
Free Software is.  Why shouldn't developers and users be free to
choose closed software or open source software as they (jointly)
perceive the tradeoffs between the forms vary?

Now, since at the time of innovation, the technology of the innovation
is privately held (ie, a secret), such contracting (bargaining over
license terms) is theoretically possible.  And this would allow the
balancing of consumer (including follow-on developers) and developer
interests.  However, the information, transaction, and enforcement
costs would be overwhelming (especially for second-order developers,
viz, FSBs).  Thus, the liberal interpretation of IP (strong or
otherwise) is as a way to shortcut the transaction costs of
contracting.  It's not an issue of proper reward; it's one of
facilitating trade.  (Why do all the rights initially vest in the
developer?  "Possession is nine-tenths of the law."  Initially the
developer possesses the idea.)

Then the danger of strong IP is not strong IP for each idea.  Instead,
it is the fact that since ideas are used in combination, the more free
software there is, the more valuable the remaining proprietary ideas
become (to the extent that they are "blocking innovations", ie,
necessary to some important product).  This (theoretically) means that
a few blocking innovations could cause efficiency losses, and
implicitly losses of consumer freedom to choose, far out of proportion
to their "standalone" importance (eg, probability of independent

Theoretical though that argument is, I think it's strong justification
for treating strong IP warily indeed.  We just don't know enough, and
we could do serious long-term damage by excessive grants.

Admittedly, it's not an argument that will warm the hearts of free
software advocates.  But it's precisely the argument that is closest
to the issues of free software business (among those I'm familiar
with).  And it has potential to form a middle ground with liberal
economists like Friedman, as well as social choice theorists like
Arrow (who remarked a couple of weeks ago that he is personally
sympathetic to the idea of free software although as far as he knows
he doesn't use any ;-).

    Ben> I don't believe that the reasoned economic arguments of
    Ben> Friedman and friends are the main line of thought among
    Ben> people who support strong IP.

Neither do I.  But helping it to become the political mainstream is
the only hope I see to turn the tide.

    Ben> While it is easy to dismiss Congress and the RIAA as "pork
    Ben> barrellers", flipping the "bozo switch" there prevents you
    Ben> from hearing or being able to address the arguments that
    Ben> influencing people towards strong IP.

I'm not dismissing _them_.  I'm dismissing the possibility that we
will be able to change their minds, the vast majority of them.  The
combination of strong self-interest and a plausible moral principle is
extremely difficult to overcome.  The only universally successful
strategy is to outlive the holders of such "incorrect" thought.  :-)

My wisecrack aside, how do you propose to "address" the moral argument
for perpetual IP?  if it cannot be conclusively refuted, how do you
propose to flush out the pork barrellers from among the genuinely moral?

    Ben> The fact is that the arguments for strong IP and long
    Ben> copyright terms that you hear today [...] fall into an
    Ben> intellectual tradition that goes right back [...].  While you
    Ben> might not _agree_ with them,

But I _do_ agree with those arguments, in a Panglossian world.  Just
as I agree with Richard Stallman's, in that world.  The problem is
that both can't be right, although neither can possibly be wrong, in
the world that I actually live in.

So I propose, with Friedman, that we allow them to contract their way
out of their dilemma.  That is the only solution compatible with

[1]  FSB is historically unprecedented because software makes it
possible for uncoordinated individuals to have big economic effects.
But this is not recognized by either economists, lawyers, or political
scientists to date.

[2]  This doesn't mean that the system can't be made substantially
more efficient.  Of course it can, and Friedman & Co. recognize that.
It just shows that issues of transactions costs are second-order
issues in their scheme of things.

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