Archive for October, 2010

Are libertarians interested in Lessig's call for cross-partisan action (campaign reform and Constitutional amendment) to clean up Congress?

October 9th, 2010 No comments

As I have previously noted, renowed Harvard Law professor Lawrence Lessig is also seriously concerned about political corrpution and the Citizens United decision.

I recommend to readers his recent Washington Post op-ed, his related WaPo interview by Fred Hiatt and his August talk to TED Boston (which can be found here, though Lessig has yanked it because of an apparently spurious Lincoln quote about corporations).

In addition, as I think there is a role for libertarians to play in informing the discusssion, I copy here his September call for a non-partisan effort to reform Congress at Fix Congress First! (emphasis added): 

Where We Are, Where We’re Going

September 22, 2010

By: Lawrence Lessig

On Thursday, the House Committee on Administration will take a vote on the Fair Elections Now Act — the bill that we, along with many others, have been pushing for the past two years. The Committee will pass the bill. With a bit of luck, and a lot more pressure, the managers of the bill believe it could have the votes to pass the House as well. If they’re right, and if the Speaker allows the bill to come to the floor, then for the first time in a generation, the House will have ratified fundamental and effective campaign finance reform.

This optimism will surprise many of you. As I’ve travelled to talk about this issue, the overwhelming attitude of people who want better from our government is that our government is incapable of giving us better. The House ratifying Fair Elections would be the first, and best evidence, this skepticism might be wrong. It would also be a testament to the extraordinary work of organizations like Public Campaign and Common Cause (especially the campaign director, David Donnelly), as well as many others, including MoveOn, the Coffee Party, You Street (as in “not K Street”) and many of you. This victory would give American voters an idea worth fighting for. It would be a critical victory, at least if we can gather the final few votes needed in the House. (You can help in that by using our Whip Tool).

But we should recognize that this victory would also be just a first step. I don’t believe the Senate will pass this bill this session, which means the fight must begin again in January. So as we’ve been at this now for almost two years, I wanted to give you a sense of where we are and where we’re going. I also want to begin to share with you my own sense of how to get there.

This isn’t a short letter. But I hope you’ll take the time to read it. (Here’s a PDF if you want to print it). We all need to understand the kind of fight this will be. And after many sleepless nights thinking it through, I believe I have a sense of what victory will require.

Reform Movements, Past

The fight to win in the House has been a traditional legislative battle waged effectively and well. I joined this fight late, and I’ve been happy to help however I can. But the kudos here goes to those I’ve already mentioned. Fingers crossed, they will have done what the experts thought was impossible.

But as I’ve said many times before, we cannot rely upon this inside the beltway fight alone. The change that the Fair Elections Now Act would effect would change Washington fundamentally. There are too many inside DC who depend upon the system as it is — for their own wealth, and future. They are not about to permit this fundamental change, and they have not yet even begun the fight against it.

Instead, the battle to pass this reform will require something that none of us have seen in our lifetime — a broad based, cross-partisan, citizens movement that demands fundamental change in how our government works.

This movement must take aim at the core corruption that is our government. Not the corruption of bribery, or improper (as in illegal) influence. Instead, it must attack the in plain sight corruption of the current system of campaign finance. Our Congress has become dependent upon their Funders. Their attention is devoted to their Funders. And like a 5 year old watching his dad on his BlackBerry, we get that we’re no longer the most important souls in their lives. In a very precise sense of the term, this Congress has been corrupted by this competing dependency. We must change this.

The last best example of this sort of change is a movement that is as misunderstood as any in American history — the Progressive Movement. Most of us today think the “progressives” were liberals. No doubt many were. But as I described in a piece for the Huffington Post, Progressivism was actually a multiparty movement. It was a Republican, Wisconsin Senator Robert La Follette, who took up the Progressive cause for the Right, by challenging a sitting Republican President, William Howard Taft. La Follette lost, but he inspired Republican Teddy Roosevelt to return from the wilderness to wage a third-party campaign against Taft. In that election of 1912, America had an extraordinarily broad range of ideologies to choose among: Eugene Debs ran as a Socialist, Taft ran as a “standpat” Republican, and two Progressives ran between these two extremes: TR, a former Republican, and Woodrow Wilson, a new kind of Democrat. Almost 70% of Americans voted for these two leading Progressives, with Wilson — the more conservative, small government, pro-liberty Progressive — beating Roosevelt by almost 15 points.

Of course, the Liberal Progressives of 1912 wanted different things of government from the Conservative Progressives. But despite these differences, they shared a common recogniti All Progressives believed that government had become corrupted. That with its appointed Senate, and enormously powerful corporate funding of elections, our democracy, they all believed, was no longer a democracy. The government had become dependent not, as Federalist No. 52 puts it, “upon the People alone.” Instead, it was the People who were left alone, as the government did what ever it could to curry favor with the richest and most powerful in society.

Progressives of all stripes wanted to restore that democracy — again, not because they all agreed upon a single platform for government action, but because they all believed that the platform of democracy had to be restored if we were to be true to the best ideals of the founders.

Cross-partisanship was thus the first feature of that Progressive Movement. Headlessness was a second. Though there were many important Progressive leaders, the Progressives had no single leader. Every Progressive group did their own work in their own field. None tried (for long at least) to claim the authority of the movement as a whole. Everyone recognized a common need to reform a corrupted government, and worked with astonishing public commitment to achieve that reform in addition to the particular policy objectives that their wing of the Movement wanted to push.

Finally, there was one more critical element to the Movement’s success: citizens. This was not ultimately a movement controlled by politicians. Of course, we remember the movement for its politicians. TR, and Wilson, and perhaps now that I’ve mentioned him, La Follette. But politicians were not the lifeblood of that movement. Citizens were. There were thousands of leaders in hundreds of fields, from women’s suffrage to the temperance movement, to labor reform, to judicial and electoral accountability. These citizens were the giants. Yet the overwhelming majority of these people never dreamed of running for office. They had been awoken from a slumber by the repeated and grotesque excesses of a corrupted government. And they worked hard to end that corruption, not to become famous senators, or president. But so that they could go back to their private life, and do the private things they wanted to do.

It was this cross-partisan, headless, citizens movement of passion that changed the American government at the turn of the last century. Not in perfect ways. In some cases, not even in smart ways. But the point to remember is that this change happened in the only way real change ever does: From the many, putting aside key differences, to focus the swarm upon the key problem in government: corruption.

Reform Movements, Today

As hard as this might be to believe — given the way most of us are oriented by party leaders who want to keep us loyal to the way things are now — each of these elements of the old Progressive movement is returning to American politics.

Start with passionate citizens: We have not in our lifetimes seen as angry and frustrated a citizenry as we now have. That anger sometimes expresses itself poorly, but we need to get beyond this critique. From the Tea Party to the Coffee Party to the millions of Americans who call themselves “Independents,” America is filled with citizens who are desperate to end the corruption that is our government. Many of these citizens thought they had their reform leader in 2008. All of them are now looking for the leaders who can deliver the reform that 2008 didn’t.

“Leaders,” not “leader.” The key here is the plural. We are used to movements in the style of Mussolini: charismatic leaders, like FDR, Kennedy, Reagan, who unite millions to a cause. But that’s not what’s happening here. No doubt there are leaders, but none who can pretend to speak for the full breadth of this movement. Indeed, my heroes are people like Mark Meckler, and Jenny  Beth Martin, who however much I disagree with them on policy substance, conceive of the movement they are trying to build (the Tea Party Movement) as a swarm, not an army; as headless, not the borg. This is the model of real reform. It is the model that our reform too must make successful.

And finally, cross-partisanship: The Tea Party Movement has been framed as right wing. Its most successful candidates are on the far right of the Republican Party (localized at least: Scott Brown is no Rand Paul, but he is the Right of Massachusetts). But the most significant and important part of the Tea Party Movement is the demand for fundamental change, not just a change in parties. And in this respect, they are no different from many of us on the Left. No doubt, we don’t have common ends. But we do have a common enemy. And we need to find a way to push a common movement that defeats this common enemy, through the peaceful mode of revolution given to us by our framers: Democracy.

In the next two years, I want Change Congress to help this Neo-Progressive movement. That may well not be the right name, given how misunderstood the term “progressive” now is, but it is the right idea. We need to build a community of citizens, each taking the initiative to teach a message to Republicans, Democrats, and Independents alike: that regardless of your party, regardless of what you want government to do (or not do), the current system is the enemy. And regardless of what you want government to do (or not do), you won’t make progress to your ends until this system fundamentally changes.

This lesson won’t come from lectures by law professors. It won’t be taught by senators, or candidates for president. We will only spread it if we can get at first thousands, and then millions, to carry the word friend by friend. In house parties, over dinner, in Rotary Clubs, and in small meetings. We need to provide the tools, and build a platform to help spread the message. But the message here is not Read-Only. It is Read-Write. We must give citizens the resources to enter into this debate, and then encourage them to spread the message as broadly as they can.

This will make our work somewhat different from others in this movement. The standard form of digital advocacy today is clicktivism — finding ways to get people to react to messages, to push support (and of course, raise dollars) to one group and then another. The strategy is simple: Build a list of people who agree with you, and push their buttons so they click yours in return, and send you cash, and support.

We want to do something different. We want to build a conversation that engages a wider and wider community, focused on the single objective of fundamental reform. We want that community to spread the message. Not just our message, or my message, but their message, or at least a message remixed, hand-made, by them.

Here’s how are are going to do this.

We’re first going to build out more explicitly the cross-partisan character of Change Congress [now Fix Congress First]. Already our board has an extraordinary mix of talent. In the next 6 months, we will expand that mix more. All of these leaders are leaders in their own field. None of them intend to be leaders in government. Indeed, as I think about who to recruit to this list, the single question I ask myself is this: Can this person inspire others without others believing the inspiration is just the first step to their own political campaign?

Second, while we continue to build the board, we will also strengthen the communities that it supports. Today, many of you associate the work of Change Congress with me. If we are successful, next year, the vast majority of Change Congress followers will not even recognize me among the many who are pushing this message. None of us, me especially, will try to claim control of this movement. All of us, and me especially, believe there is only a movement when there are many cells of strength each pushing in its own way. Remember: A swarm, not an army; headless, not the borg.

Third, as we multiply the parties, and multiply the leaders, we will push to spread tools that anyone can use to learn, spread, and teach the message. Through SlideShare, we will make available the assets anyone needs to craft this story in the shape that makes most sense to them. Through our video channels on Vimeo, YouTube, and, we will make available as many of the telling of these stories as possible, for you to use however you can to do the same with your friends. The mission here is shared. The responsibility is all of ours. And through the work of all of us, we will build a recognition of the kind of change that is needed here.

Justice Louis Brandeis, perhaps the greatest, and certainly the most misunderstood, Progressive of the last century, warned “the greatest menace to freedom is an inert people,” and demanded “that public discussion is a political duty.” When I first read that quote, it sent a chill down my spine. For of course: We, as a People, have become “inert.” We have not lived up to our “political duty.” We have instead allowed the professionals to take over our politics.

But we have a chance to do something here. It will take an enormous effort to teach and then persuade. We don’t have easy anger to tap into here. But as I’ve found as I’ve given more than a hundred talks over the past few years, there is real anger and real commitment to this issue once the issue is understood. Our role in this must be this ground campaign — building a large and powerful base that recognizes the peculiar corruption of this Congress, and how it must change.

Here’s how you can help:

  1. Visit Don’t simply sign up for the mailing list. Instead, read about the Fair Elections Now Act. Skim the blog to get a sense of the current conversations happening around election reform. Convince a friend, online or off, about the need for fair elections. If we can get one million people each to have a real conversation about corruption and campaign finance, we will have succeeded.
  2. Do join the Fix Congress First mailing list if you’d like to stay informed. Better yet, tell us if you’d like to volunteer, and we’ll let you know when opportunities arise.
  3. Visit the Fix Congress First whip tool to see which members of Congress haven’t yet supported the Fair Elections Now Act. Call your representative if he/she is not a supporter, or send your thanks if she/he is.
  4. Use your networks. Spread the word. Take things into your own hands. Tell us how we can help you and how we can do better.
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Robert Reich is Right … about "The Secret Big-Money Takeover of America"

October 9th, 2010 No comments

And since Robert Reich has invited readers to “send this post to your friends”, I’ve taken the liberty of cross-posting it below.

Before we start, let me remind my readers that I’ve done a fair bit commenting on what I regard as the profoundly mistaken and wrong-headed Citizens United decision. I post this not to aggravate, but to point to a possiblity of reaching a shared agreement on problems.

Here’s Reich (my emphasis and comments in brackets)

The Secret Big-Money Takeover of AmericaThursday, October 7, 2010

Not only is income and wealth in America more concentrated in fewer hands than it’s been in 80 years, but those hands are buying our democracy as never before – and they’re doing it behind closed doors.

Hundreds of millions of secret dollars are pouring into congressional and state races in this election cycle. The Koch brothers (whose personal fortunes grew by $5 billion last year) appear to be behind some of it, Karl Rove has rounded up other multi-millionaires to fund right-wing candidates, the U.S. Chamber of Commerce is funneling corporate dollars from around the world into congressional races, and Rupert Murdoch is evidently spending heavily.

No one knows for sure where this flood of money is coming from because it’s all secret.

But you can safely assume its purpose is not to help America’s stranded middle class, working class, and poor. It’s to pad the nests of the rich, stop all reform, and deregulate big corporations and Wall Street – already more powerful than since the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators.

Credit the Supreme Court’s grotesque decision in Citizens United vs. the Federal Election Commission, which opened the floodgates. (Even though 8 of 9 members of the Court also held disclosure laws constitutional, the decision invited the creation of shadowy “nonprofits” that don’t have to reveal anything.)

According to FEC data, only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.

Last week, when the Senate considered a bill to force such disclosure, every single Republican voted against it – thereby revealing the GOP’s true colors, and presumed benefactors. (To understand how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)

Maybe the Disclose Bill can get passed in lame-duck session. Maybe the IRS will make sure Karl Rove’s and other supposed nonprofits aren’t sham political units. Maybe pigs will learn to fly.

In the meantime we face an election that marks an even sharper turn toward plutocratic capitalism than before – a government by and for the rich and big corporations — and away from democratic capitalism.

As income and wealth has moved to the top, so has political power. That’s why, for example, it’s been impossible to close the absurd tax loophole that allows hedge-fund and private-equity managers to treat much of their income as capital gains, subject to a 15 percent tax (even though they’re earning tens or hundreds of millions a year, and the top 15 hedge-fund managers earned an average of $1 billion last year). Why it proved impossible to fund expanded health care by limiting the tax deductions of the very rich. Why it’s so difficult even to extend George Bush’s tax cuts for the bottom 98 percent of Americans without also extending them for the top 2 percent – even though the top won’t spend the money and create jobs, but will blow a $36 billion hole in the federal budget next year. [Not that I endorse all of Reich’s agenda.]

The good news is average Americans are beginning to understand that when the rich secretly flood our democracy with money, the rest of us drown. Wall Street executives and top CEOs get bailed out while under-water homeowners and jobless workers sink.

A Quinnipiac poll earlier this year found overwhelming support for a millionaire tax.

But what the public wants means nothing if our democracy is secretly corrupted by big money.

Right now we’re headed for a perfect storm: An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government. The three are obviously related.

We must act. We need a movement to take back our democracy. (If tea partiers were true to their principles, they’d join it.) As Martin Luther King once said, the greatest tragedy is “not the strident clamor of the bad people, but the appalling silence of the good people.”

What can you do?

1. Read Justice Steven’s dissent in the Citizens United case, so you’re fully informed about the majority’s pernicious illogic. [link added]

2. Use every opportunity to speak out against this decision, and embarrass and condemn the right-wing Justices who supported it.

3.  In this and subsequent elections, back candidates for congress and president who vow to put Justices on the Court who will reverse it.

4. Demand that the IRS enforce the law and pull the plug on Karl Rove and other sham nonprofits.

5. If you have a Republican senator, insist that he or she support the Disclose Act. If they won’t, campaign against them.

6. Support public financing of elections.

7.  Join an organization like Common Cause, that’s committed to doing all this and getting big money out of politics. (Personal note: I’m so outraged at what’s happening that I just became chairman of Common Cause.)

8. Send this post to your friends (including any tea partiers you may know).

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Is Mises relevant on Copyrights? See article by Bettina Bien Greaves, his student, translator, editor and bibliographer

October 6th, 2010 No comments
Allow me to bring to the attention of readers who are following and/or participating in the growing discussion of IP and copyright (helpfully spearheaded by IP attorney Stephan Kinsella) a very interesting article by a student of Ludwig von Mises.
Bettina Bien Greaves, who was personally acquainted with Mises and is one of his most highly-cited annotaters, penned a 2004 arcticle entitled “Misese on Cpoyright” that, with the permission of the author, I reproduce in its entirety below.  The article was originally posed at The Freeman (the online site of The Foundation for Economic Eductation). FEE describes Mrs. Greaves as a Contributing editor and formerly “a longtime FEE staff member, resident scholar, and trustee. She attended Ludwig von Mises’s New York University seminar for many years and is a translator, editor, and bibliographer of his works.” 
A 1995  article at Capitalism Magazine introducing Ludwig von Mises’ Economic Policy: Thoughts for Today and Tomorrow (a book based on six lectures delivered by Mises in Buenos Aires in 1959) states that Mrs. Greaves “is regarded as ‘Mises’ Most Loyal Student’ and as the foremost authority on the works and ideas of Ludwig Von Mises. From 1951 to 1969, with her late husband, Percy L. Greaves, Jr., Bettina Bien Greaves attended Mises graduate seminar in economic theory at New York University.” According to a 2005 article by Greaves posted at LvMI (“To What Extent Was Rand a Misesian?“), Greaves compiled Mises: An Annotated Bibliography, and also edited several collections of articles. She received the Schlarbaum Prize in 2002, Further references to her at LvMI are here.
And now, without further ado, Mrs. Greaves’ article (emphasis and indenting added):

Mises on Copyrights 

The widespread reproduction and “sharing” of copyrighted music on the Internet led a friend to ask me what Ludwig von Mises would have thought about the situation. The more I pondered the question, the more I concluded that Mises would have considered this just another case where copyright law must play catch-up with new technology.

Many people believe they should be allowed to reproduce and “share” copyrighted material free of charge, some because they don’t want to pay for the privilege and others because they believe it is wrong to grant monopolies to authors, composers, musicians, or anyone at all for that matter. But there is more to the problem than monopoly.

Mises once said, more or less facetiously, that while he had known book authors who opposed patents because of the monopoly privilege they give inventors, he had never known a book author who opposed copyrights because of the monopoly privilege copyrights give authors. Mises may have had Murray Rothbard in mind, for in Man, Economy, and State and Power and Market, Rothbard defended copyrights and criticized patents. Rothbard said it was possible for an inventor independently to come up with precisely the same invention that someone else had developed earlier and had already patented. In that case, the earlier inventor would receive patent protection and the other would be out of luck. Rothbard considered that unfair.

However, Rothbard said it was inconceivable that a second author would ever succeed in arranging words in the same order as they had appeared in a previously published book without having knowledge of the earlier book. Being a unique production, a book is entitled to copyright protection.

Mises, of course, didn’t talk about monopoly itself as being “good” or “bad.” Monopolies could exist on a free market in the rare case when the owner of a factor of production controlled the total supply of that factor. And in the even rarer case that the demand for a monopolist’s product was such that buyers were willing to pay an above-market price for it, he might be in a position to reap a greater financial gain by restricting production and selling fewer units at a higher price per unit. Mises considered this perhaps the only instance in which producers could violate consumer sovereignty with impunity.

The case of government-created and/or government-protected monopolies was another matter. He didn’t discuss them from the point of view of their “morality” or “immorality,” however. He simply talked about their economic aspects, saying that government-granted monopoly privileges change the situation by introducing coercion into the picture. Such privileges make consumers pay higher prices for the monopolized good or service and force them to restrict their consumption of other things. Government grants of patent and copyright protection are examples.

However, it appears from what Mises wrote in Human Action that he wasn’t opposed to copyrights and patents as such. A patent or copyright is defined as an agreement on the part of the government to protect the property rights of an inventor or author to his creation for a certain period of time. The inventor or author pays a price for this protection: he agrees to turn his creation over to the public, at no cost, when the protection expires.

Now if the government is to protect property, it must define that property.

Technological development is nothing new, and when it affects the character of a form of property, it inevitably requires the refining and redefining of the rights of individuals to their private property. The copyright laws have had to be revised and adapted whenever new methods of production and reproduction were developed. The Encyclopedia Britannica says that according to Roman law, when a person wrote words on a parchment, the composition belonged to the owner of the blank materials. This definition of ownership must have arisen when monks copied manuscripts laboriously by hand, letter by letter, on valuable parchment sheets furnished by their monastery.

The Development of Printing

When printing came along and books could be copied more cheaply, the question of property rights became more urgent. However, William Blackstone (1723–1780), the authority on British law, said the rights of an author “being grounded on labor and invention” were “too subtle and unsubstantial a nature to become the subject of property and the common law, and only capable of being guarded by positive statutes and special provisions of the magistrate.”1 Copyright was looked on as “a doubtful exception to the general law regulating trade,” which at that time was generally opposed to monopoly.

Again according to the Britannica, British law began to protect intellectual property with copyrights in 1709 as “in the nature of personal property. . . . A man’s own work, in this view, is as much his as his house or his money, and should be protected by the state.”2 This, of course, puts the onus on the government to define what personal property is copyrightable.

James Madison, fourth president of the United States, had been a participant in the 1787 constitutional convention in Philadelphia. The U.S. Constitution that he helped to write gave Congress the power to secure “for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Several years later, Madison, when listing the various forms of property the government was “instituted to protect,” included a person’s intellectual property, his “opinions and the free communication of them . . . [their] enjoyment and communication.”3

By the nineteenth century, the idea that published books would be copyrighted was widely accepted. Washington Irving, after whom Irvington-on-Hudson, New York, was named, was one of the first American authors to earn a living from royalties received from his books, although not a handsome living—he was usually close to broke. Charles Dickens was another prolific author who relied on the royalties his books earned under British law. His attitude toward America turned somewhat negative when pirated versions of his books were published in the United States.

It may be impossible to describe all the changes that have been made in copyright law over the years in response to the different ways copyrighted material might be disseminated. Adjustments have been made from time to time. For instance, arrangements were worked out over several decades to compensate musicians whose works were played on mass-produced recordings, in movies, and on radio and TV broadcasts. And as photocopy machines proliferated, it was determined that copying excerpts from copyrighted works for reference, research and study fell within the law’s “fair use” principle.

The government’s protection of an author’s or an inventor’s creation makes it possible for the creator to ask a monopoly price. Although monopoly prices generally benefit sellers, harm buyers, and infringe the supremacy of the consumers’ interests, Mises saw copyrights and patents as an exception to this rule. He wrote in Human Action—and here I quote with some interpolation in brackets:

If on a competitive market one of the complementary factors, namely f [a recipe or invention], needed for the production of the consumers’ good g, does not attain any price at all, although the production of f requires various expenditures and consumers are ready to pay for the consumers’ good g a price which makes its production profitable on a competitive market, the monopoly price for f becomes a necessary requirement for the production of g. It is this idea that people advance in favor of patent and copyright legislation. If inventors and authors were not in a position to make money by inventing and writing, they would be prevented from devoting their time to these activities and from defraying the costs involved. The public would not derive any advantage from the absence of monopoly prices for f. It would, on the contrary, miss the satisfaction it could derive from the acquisition of g.4

External Economies

Later in the book Mises discussed patents and copyrights further, pointing out their “external economies,” that is, the benefits they furnish to persons other than those who produced the protected material.

The extreme case is shown in the “production” of the intellectual groundwork of every kind of processing and constructing. The characteristic mark of formulas, i.e., the mental devices directing the technological procedures, is the inexhaustibility of the services they render. These services are consequently not scarce, and there is no need to economize their employment. Those considerations that resulted in the establishment of the institution of private ownership of economic goods did not refer to them. They remained outside the sphere of private property not because they are immaterial, intangible, and impalpable, but because their serviceableness cannot be exhausted.

People began to realize only later that this state of affairs has its drawbacks too. It places the producers of such formulas—especially the inventors of technological procedures and authors and composers—in a peculiar position. They are burdened with the cost of production, while the services of the product they have created can be gratuitously enjoyed by everybody. What they produce is for them entirely or almost entirely external economies.

If there are neither copyrights nor patents, the inventors and authors are in the position of an entrepreneur. They have a temporary advantage as against other people. As they start sooner in utilizing their invention or their manuscript themselves or in making it available for use to other people (manufacturers or publishers), they have the chance to earn profits in the time interval until everybody can likewise utilize it. As soon as the invention or the content of the book are publicly known, they become “free goods” and the inventor or author has only his glory.5

Mises went on to say that this problem has nothing to do with the genius who creates out of the sheer urge to do so; he does not wait for encouragement. But:

It is different with the broad class of professional intellectuals whose services society cannot do without. . . . [I]t is obvious that handing down knowledge to the rising generation and familiarizing the acting individuals with the amount of knowledge they need for the realization of their plans require textbooks, manuals, handbooks, and other nonfiction works. It is unlikely that people would undertake the laborious task of writing such publications if everyone were free to reproduce them. This is still more manifest in the field of technological invention and discovery. The extensive experimentation necessary for such achievements is often very expensive. It is very probable that technological progress would be seriously retarded if, for the inventor and for those who defray the expenses incurred by his experimentation, the results obtained were nothing but external economies.6

Controversy Continues

Mises understood that patents and copyrights are controversial. “They are considered privileges, a vestige of the rudimentary period of their evolution when legal protection was accorded to authors and inventors only by virtue of an exceptional privilege granted by the authorities. They are suspect, as they are lucrative only if they make it possible to sell at monopoly prices. Moreover, the fairness of patent laws is contested on the ground that they reward only those who put the finishing touch leading to practical utilization of achievements of many predecessors. These precursors go empty-handed although their contribution to the final result was often much more weighty than that of the patentee. . . . [T]his is a problem of the delimitation of property rights. . . .”7

It should be noted that merely because copyright grants a monopoly privilege to the producer of intellectual property, there is no guarantee that buyers will pay a monopoly price should the producer choose to ask it. Many books, poems, and musical compositions don’t sell well, or may not sell at all, and their authors and publishers may suffer losses. As Mises wrote, “Under copyright law every rhymester enjoys a monopoly in the sale of his poetry. But…[it] may happen that . . . his stuff . . . can only be sold at their waste paper value.”8

Also, the producers of some copyrighted intellectual property, eager to spread their ideas, readily grant reprint permission for free. For instance, this is true of most articles in The Freeman.

With the new technological developments that now make it so easy to reproduce and “share” musical compositions, we are entering a whole new ball game. Without copyright protection, musicians, authors, and composers are in the position of having to bear all the costs of production while the benefits go to others. Thus the new technology calls for further refinement of the rights of private property owners.

Contributing editor Bettina Bien Greaves was a long-time FEE staff member, resident scholar, and trustee. She attended Ludwig von Mises’s New York University seminar for many years and is a translator, editor, and bibliographer of his works.


  1. Encyclopedia Britannica, 11th ed., 1910, vol. 7, p. 118.
  2. Ibid.
  3. James Madison, “Property,” March 27, 1792;
  4. Ludwig von Mises, Human Action (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1996 [1949]), pp. 385–86.
  5. Ibid., p. 661.
  6. Ibid., pp. 661–62.
  7. Ibid., p. 662.
  8. Ibid., p. 277.
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Some comic relief from politics as usual? Donald Duck meets Glen Beck in "Right Wing Radio Duck"!

October 4th, 2010 No comments

No wind-up needed: [View:]

The clip was conceived and edited by YouTube user “Rebelious Pixels” (Jonathan McIntosh), whose website notes:

This is a re-imagined Donald Duck cartoon remix constructed from dozens of classic Walt Disney cartoons from the 1930s to 1960s. Donald’s life is turned upside-down by the current economic crisis and he finds himself unemployed and falling behind on his house payments. As his frustration turns into despair Donald discovers a seemingly sympathetic voice coming from his radio named Glenn Beck.

This transformative remix work constitutes a fair-use of any copyrighted material as provided for in section 107 of the US copyright law. “Right Wing Radio Duck” by Jonathan McIntosh is licensed under a Creative Commons BY-NC-SA 3.0 License – permitting non-commercial sharing with attribution.

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"Welcome to the Age of Seawalls" (or, getting ready for the climate change that ain't happening)

October 4th, 2010 No comments

Bradford Plumer, associate editor at New Republic, uses the quoted language above to grab our attention for a piece by Stevew Nash (largely behind a paywall) about how cities in the United States are preparing for sea-level rise.

Says Plumer: “The picture’s pretty bleak. Most states and localities aren’t doing much planning at all. And when they are taking action, they’re actually making things worse.”

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Criticism of US IP imperialism (and shallow WSJ support) by Reuters and foreign Left-Keynesians

October 4th, 2010 No comments

Says lefty Australian economist John Quiggin (whom I have referred to earlier in other contexts), in a piece titled “How the Americans stole the Ugg boot” (emphasis added):

The world would be a lot better off without intellectual property, or at least with a return to the more reasonable rules of the 19th century (14 years copyright, limited patents restricted to actual inventions, trademarks to identify products rather than to stifle competition) and the attempts of the US government to defend IP monopoly rights are one of the many reasons American “soft power” is such a perishable commodity.

Quiggin refers to a great piece in Reuters by Felix Salomon (“How the WSJ magazine fails its readers“) that responds to a WSJ puff piece on Deckers Outdoor Corporation, which, according to Quiggin, is an “American trademark troll company that has stolen the name ‘Ugg boot’ then used ‘intellectual property’ laws to impose the absurd claim that the only genuine Uggs are those made in China.”

Australians have apparently been making “Ugg boots” for decades, but now find themselves unable to promote such boots abroad; such is the ‘Uggly’ stuff that is fuelling a growing re-think of IP laws.

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