Digital Expression and Exclusionary Rights

-- By AlexWang - 25 Apr 2012

In thinking about digital expression as intellectual “property,” I think there are two interesting observations worth pointing out. The first is that digital media lacks the fundamental aspect of physical property that underlies the traditional view of property rights as exclusionary rights, digital expression lacks scarcity. This raises the question of why the concept of ownership should exist at all for virtually inexhaustible, non-rivalrous goods. The second is that the granting of “limited” monopolies to incentivize creation of future digital expressions assumes the production model of separate producers and consumers and high fixed costs. A collaborative production model where each producer produces for herself and shares her products to everyone else may do better.

Surely there's something new that can be said after almost thirty years of constructing digital commons? This introduction states the obvious and draws the conclusion that something "may" be true. In the meantime free software transformed the IT industry and Wikipedia changed daily life for every literate person on earth. Start here instead with your central idea, which is not the old part we've all written about before but the new one your giving us for the first time.

What is property?

The Blackstonian view of property is that “the sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.” The “bundle of sticks” view

Those aren't the same. You might have actually pointed to Blackstone if you needed him for something, but if the something you needed him for was the idea that property is a bundle of rights you didn't find it there, in the quote you didn't link from a document you almost certainly didn't read.

sees property as a “social institution that structures people’s relations with each other and the state regarding the control and transfer of scarce resources.”

You smuggled "scarcity" in there. Electrical power is property, and it is made of the same electrons that your digital bits are. Are electrons scarce unless they're not? If you think this part through carefully, you'll find something important that is presently not quite so clear to you.

What is important from the Blackstonian view is exclusion and what is important from the modern view is idea of scarce resources. They are interrelated and their relation underlies the traditional view of physical property rights as exclusionary rights. We have the idea of property rights in things as exclusionary rights because these things are scarce. I exclude you not because the thing is mine (that would be conclusory and circular) but because there would be less for me if I did not.

Not necessarily. In the first place, the legal institutions don't depend on motive. In the second place, your attribution of motive is too narrow. A few moments' thought will reveal counter-examples concerning both realty and chattels. This piece of loose reasoning is at the center of your argument, which means that more fundamental revision is necessary.

I exclude you because the loss from not excluding you would be higher than the cost of exclusion.

Evidently false.

And it is not that things are rivalrous that is the problem but that they are scarce. Even if resources are non-rivalrous, there is still a need for exclusion insofar as they are scare. We may not be able to exclude others, but it would be better if we could. This is the tragedy of the commons – scarce, non-rivalrous goods.

Excuse me? Did you find that in Hardin, and if so, where? The classic examples of over-appropriation of natural resources involve rivalrous uses. Even if you think it's somehow appropriate not to acknowledge my work, or that of Yochai Benkler, Larry Lessig, or any of my other colleagues and comrades, one would think Elinor Ostrom would be noticeable, by virtue of winning the Nobel Prize and all....

Insofar as property rights are exclusionary rights, the underlying property must be scarce.

"Must" in a logical sense, in an ethical sense, in a rhetorical sense?

No Scarcity=No Property

Ideas are obviously not scarce,

Depends where.

but sometimes the physical expressions of ideas can be scarce. Digital expressions of ideas, however, are not scarce, or at least should not be because once they exist, there is virtually no cost to create them. The marginal cost of producing a copy is zero. Thus digital expressions, although non-rivalrous, are potentially inexhaustible because they can be costlessly made. There is no tragedy of the commons here. But if something is not scarce, why make it excludable, namely why is it property at all? The argument for enforcement of intellectual “property” rights because it is property seems to get it backwards. The argument goes: (1) intellectual property is property; (2) the creators have property rights; and (3) the right to property is a fundamental, constitutional right that the government must enforce. But the scarcity that underlies the right of exclusion in property does not naturally exist. In fact, intellectual “property” is only scare because the government legally imposes an artificial scarcity by establishing a monopoly. The government enforcement of exclusionary property rights is really its creation.

Incentives

But even rejecting that intellectual property is “property,” there is an independent argument for government imposed monopolies – the incentive argument. The argument goes: if we do not limit the naturally unlimited things that exist today, no one will create them for tomorrow (which we will also have to limit so that there is something for the day after tomorrow). This seems like a facially valid assumption – future earnings from exclusion will fund present investment. Every firm operates under this model and the higher the fixed costs, the more important reliable future earnings.

There are two problematic assumptions in this model. One is that the producer produces only to sell to others and two, producers create from scratch. Sometimes people make things for their own personal use. They are the producer and the consumer and the cost of production is outweighed by the utility of personal consumption. Here, there is no incentive problem.

But what has that to do with the distribution monopolies created by copyright? Is this whole supposedly big-deal objection about the theoretical significance of the potential liability for infringing patent claims by "making" for personal use, which has no natural history whatever? If so, so what?

Additionally, a lot of times what is useful to one person is useful to a lot of other people, and if the product is digital, the producer can share it costlessly with all others. More complex things that require lots of fixed input cost might be a problem. Here, personal utility might not be able to overcome the production costs. But in a collective commons system, where everyone agrees to share, namely where producers do not have to produce from scratch, the cost of production decreases significantly. For anyone to be willing to produce something, the personal utility need only be higher than the marginal cost of adding onto what already exists. This is model of open source software and it works incredibly well.

Why "incredibly"? The important point would be that it works credibly well. But as you don't provide any facts or reveal to the reader any obvious way to find the facts, and as you don't bother to point out any examples that will be familiar to the reader in daily life, whether it is credible or incredible the reader cannot learn from you.

It is true that if you want to create from scratch to sell to others, you need a monopoly on your product to recoup the costs,

Also evidently false. The Free World does that under copyleft terms all the time.

but there is no need to produce from scratch. Some things, like software, can be transferred costlessly from one person to another. If the fixed cost is zero, the price should only be the variable cost, which may not even be passed on to other consumers if the utility of personal consumption exceeds it. Imposing property rights on digital expressions may actually disincentivize future production, because it increases the costs of production – either do it from scratch or pay for the inputs.

This is confusion.

Conclusion

From an ex post view, digital expressions should not be excludable. Exclusionary rights should only exist for things that are scare and digital expressions are not naturally scarce – they can be copied ad infinitum at no cost.

From an ex ante view, digital expressions should not be excludable. Having a collective commons systems may actually incentivize more creation because of lowered input costs.

This seems to me preparation for writing the essay. Most of the ideas here are expressed less clearly than they are in the essential sources you don't mention and may not have consulted. (The work done by my co-authors in the dotCommunist Manifesto deserves that praise, even if my own contributions do not.) You didn't need Blackstone for this exercise (which makes your not reading him more appropriate than your quoting from but not linking him). But you did need to read, consider, and discuss the views of other thinkers who have moved the ball pretty far forward from where you're leaving it here.

I think the best route to improvement, then, is to focus more clearly on the new ideas you are contributing atop the foundation already in place in the writings of others you can link to. Then your outline can briefly state the principles already worked through by others, and present your own new contributions as the essay's central theme.

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