12 September 2003

Rivals for Affectation

Professor Solum has some further thoughts on the concept of "intellectual property", in response to some musing by Professor Volokh on the subject. You may recall an extended discussion that Professor Solum and I had on the subject in July; I think, in the end, that we implicitly agreed to disagree.

In any event, the "rivalrousness" debate continues, this time between Professor Volokh and Professor Solum. Professor Volokh notes that

But that makes sense only if you see property law as focused solely on securing the rights to use. If property law—in land and in goods—also legitimately protects the right to exclude, not just as a way of protecting the right to use but also as a way to give people enough incentive to invest time and effort, then intellectual property law does make sense even if such property is nonrivalrous.

(Emphasis in original.) This is much more elegantly stated than my version. Professor Solum's response is illuminating, although perhaps not in the way that he intended:

Intellectual property is not a club good…. [T]he "intellectual property," the information that constitutes the MP3 file, is not a pure private good, because consumption is nonrivalrous. (Consumption of the CD is rivalrous. Consumption of the internet connection is rivalrous. But these are not the intellectual property.)…. Moreover, the intellectual property is not a club good. Why not? Because there is no optimal size of the club. Unlike wells and movie theaters, there is no net social welfare gain that derives from limiting the number of consumers through pricing. If too many people crowd into a theater or too many people attempt to use a well, there is a net loss of social welfare. If everyone who wants to do so listens to a song, there is a net gain of social welfare.

(Bold emphasis in original; italics and ellipses added.)

This is an interesting position that fails to persuade, for three reasons. First, it relies upon another a priori definition of an economic property for its force. That definition may well have some value; however, it was conceived in the absence of significant concepts of intellectual property (as I understand it, the concept of a "club good" goes back at least to Mill, and is at least implicit in both the "tragedy of the commons" and in Malthus). Second, it continues to elevate rivalrousness to the single most critical element in determining whether something is (or is not) "property." But we've already agreed to disagree on these two issues.

Third, and perhaps most important, a critical factual predicate (the italicized phrase) appears to be incorrect. The Framers of the Constitution—whoever they may be; in this context, I suppose that I mean the delegates who voted to approve the initial text that was adopted, collectively—said otherwise. The Intellectual Property Clause (Article I, § 8, cl. 8), gives Congress the power

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

While this does not explicitly state that price may be used as a means of securing that "exclusive Right," it does demonstrate that there is—or at least could be—a "net social welfare gain that derives from limiting the number of consumers through pricing." Under the classical theory of supply and demand, a reduction in supply of a good (or service, in more recent theory) without a change in demand will increase the unit price of that good (or service). That the Framers were familiar with at least this abstract description of classical economic theory is pretty much incontrovertible, as it both underlies the text they adopted and appears with some frequency in Madison's notes of the debates at the Constitutional Convention. Granting authors and inventors an "exclusive Right," in those terms, necessarily gives authors and inventors the right to limit the supply of "their respective Writings and Discoveries." Congress's concern in the Intellecual Property Clause was to create a net social good (promoting progress in science and "useful Arts"). Thus, a price restriction could—and perhaps even clearly does—result in a social good, however indirectly.

In the end, what this really points out is that economics is not, despite the protestations of some of its more radical proponents, a value-free method of reasoning. The key qualifier in all of the above is "net." If one looks at the entire system of intellectual property, the answer that one might arrive at may well be different than when looking at a subset of that system, let alone a single piece. This is one of the problems with the emphasis on "rivalrousness" (which, in clearer English, might well be termed "end-user reproducibility") as a measure of the propriety of treating a large class as property: by its nature, an inquiry into end-user reproducibility is both fleeting—it depends upon technical means and skills available at the moment of measure—and limited to homogeneous economic goods/services. At an extreme, the logical structure of such an argument might be stated like this:

P: RGB 999966 is an unpleasant color.

p: RGB 999966 is a shade of green.

C: Therefore, shades of green are unpleasant colors.

What end-user reproducibility does implicate is the efficient unit price for a specific identifiable economic good/service, not whether the (or a?) class of economic goods/services that includes that specific identifiable economic good/service is or is not property. This again depends upon an a priori definition and syllogism:

P: "Property" is all rivalrous.

p: "Intellectual property" is not rivalrous.

C: Therefore, "intellectual property" is not a proper subset of "property."

So why should authors and other creators care? Well, leaving aside their bank accounts—starving artists do not create art; starving artists push up daisies—it demonstrates the tension among the "marketplace of ideas" model of First Amendment law and the "marketplace of ideas" implicit in the Intellectual Property Clause. The distinctions and similarities belong in a law review article, not a blawg. The existence of some similarities and distinctions, however, needs to at least be in the autonomic hindbrain of authors and other creators of intellectual property.

Most important, though, it does not answer the question that plagues the politics of the Left: if not the status quo, then what? It is all well and good to criticize intellectual property in an abstract sense; it clearly does have significant flaws, and does create some unfortunate inefficiencies caused by translation. Intellectual property is also subject to serious abuse. I am open to suggested alternatives, but they need to be demonstrably superior as a complete system than reliance upon the metaphor of intellectual property.