Ownership and Ideas

by Sheldon Richman
Ownership and Ideas

Like many libertarians, I’ve learned a lot from Murray Rothbard on a wide variety of subjects. Of course, no one gets everything right, especially someone as intellectually ambitious, multidisciplinary, and prolific as Rothbard. Nevertheless, reading the work of the man who left such a mark on the modern libertarian movement is as profitable as it is pleasurable.

While rereading For a New Liberty (first published in 1973) recently, I confess I was puzzled, which is not the frame of mind Rothbard normally leaves me in. In deriving property rights, he used the example of a “sculptor fashioning a work of art out of clay and other materials.”

Here’s the passage that had me scratching my head:

Let us waive, for the moment, the question of original property rights in the clay and the sculptor’s tools. The question then becomes: Who owns the work of art as it emerges from the sculptor’s fashioning? It is, in fact, the sculptor’s “creation,” not in the sense that he has created matter, but in the sense that he has transformed nature-given matter — the clay — into another form dictated by his own ideas and fashioned by his own hands and energy. Surely, it is a rare person who, with the case put thus, would say that the sculptor does not have the property right in his own product. Surely, if every man has the right to own his own body, and if he must grapple with the material objects of the world in order to survive, then the sculptor has the right to own the product he has made, by his energy and effort, a veritable extension of his own personality. He has placed the stamp of his person upon the raw material, by “mixing his labor” with the clay, in the phrase of the great property theorist John Locke. And the product transformed by his own energy has become the material embodiment of the sculptor’s ideas and vision.

I find it odd that Rothbard wants us to ignore, even if only for the moment, the “original property rights in the clay and the sculptor’s tools.” It’s odd because to establish the sculptor’s ownership of the finished work of art, all we need to know is that he owned the clay and tools. The artist’s inspiration, creative genius, and labor — while undoubtedly important to the production of the finished product — add nothing to our ability to determine who owns the sculpture. If he owns the inputs, he owns the outputs. Period. (I elaborate on this in “Intellectual ‘Property’ versus Real Property.”)

As Rothbard acknowledges, when we talk about creation, we don’t mean it literally, as though a product comes from nothing. As libertarian thinkers have always understood, when we create things, we only change other already existing things from a less valuable (useful) form to a more valuable (useful) form. (At least that is the goal.)

Rothbard intends his example to demonstrate the injustice of depriving the sculptor of his product. He apparently thought that emphasizing the artist’s creativity would be the clearest way to highlight that injustice. “By what right,” he asks, “do [others] appropriate to themselves the product of the creator’s mind and energy? In this clear cut case, the right of the creator to own what he has mixed his person and labor with would be generally conceded.”

Again, he seems to derive ownership of the final product from “the creator’s mind.” Yet his second sentence, which is actually in tension with the first, indicates that we cannot ignore who owns the inputs. Had the sculptor mixed his person and labor with clay he stole from someone else, we could not conclude that the sculptor owned the final product simply because he exercised creativity and exerted effort. (He might have exercised creativity and exerted great effort in stealing the clay.) And if it would be wrong to steal the sculpture when the artist owned the inputs, then it would be equally wrong to steal the inputs themselves — before the creative act occurred. Ownership of the inputs is both necessary and sufficient for ownership of the outputs. References to mental processes add nothing to the story.

Now, I realize that Rothbard asks us to ignore the ownership of the inputs used by the sculptor only for the moment. A page later he focuses on who owns the clay:

The man or men who had extracted the clay from the ground and had sold it to the sculptor may not be as “creative” as the sculptor, but they too are “producers,” they too have mixed their ideas and their technological know-how with the nature-given soil to emerge with a useful product. They, too, are “producers,” and they too have mixed their labor with natural materials to transform those materials into useful goods and services. These persons, too, are entitled to the ownership of their products.

Of course, if the producers of the clay sold it to the sculptor, then ownership was transferred to the sculptor, and as noted, that’s sufficient for legitimate ownership of the final product.

But note that even here Rothbard muddies things when he mentions that the producers of the clay “mixed their ideas and their technological know-how” in the process of making the clay. Why talk about ideas and know-how to establish ownership of the clay when it’s enough to say that the producers acquired the land through purchase or homesteading (or lease or gift). The contents of their heads add nothing to the matter.

Why am I making such a big deal of this? Surely, Rothbard understood that if you mix your labor with inputs you legitimately own, then you necessarily also own the outputs. My concern is that his repeated references to the producers’ ideas, as though they are essential to establishing ownership, introduce confusion into his analysis. He inadvertently reinforces the erroneous notion underlying patents and other forms of so-called intellectual property (IP). Someone who believes that ideas are essential to establishing ownership of products might be tempted to think that ideas themselves are products subject to ownership. Ridding ownership theory of the intellectual element will help to avert the IP mistake. (Again, this is not to deny that ideas are important to all human action.)

Rothbard did not make the mistake I refer to. He rejected patents. According to Rothbard, no independent inventor could be legally barred from making and selling his product because someone else had already come up with the idea for that product. That position constitutes a rejection of intellectual property. However, in The Ethics of Liberty, he argued that the copyright principle is applicable to inventions as well as to literary and artistic works. Thus inventors could reserve the right to copy their products. The prohibition on copying would not be merely part of the contract between buyers and sellers. For Rothbard, all third parties would be also affected, even someone who found the product after it had been abandoned. The finder, in Rothbard’s view, may not legitimately copy the product because the right to reproduce it has been reserved by the inventor (or to whomever the inventor transferred the copyright to). Presumably, the product would display the copyright symbol to notify everyone that this right has been reserved and therefore does not adhere to the object.

This, to say the least, seems peculiar because, like today’s patent law, it would permit inventors to dictate to others — who entered into no agreement — how they may act with respect to their own physical property and with respect to other people. For example, if I saw a wheelbarrow, for which the inventor had claimed to reserve the right to reproduce, I would be legally prohibited from fashioning my own wood and metal into that form and from selling it to someone else without the inventor’s permission.

How would that be consistent with the natural right to be free from aggression? How would it be consistent with the right to ownership through homesteading and other legitimate acquisition? (For a discussion of the problems with the reserved-copyright approach, I refer readers to Stephan Kinsella’s Against Intellectual Property. Also see his “The Case Against IP: A Concise Guide.” For refutation of the claim that IP is necessary for innovation, see Michele Boldrin and David K. Levine’s Against Intellectual Monopoly.)

For the sake of justice and freedom, we ought not to falsely found ownership on ideas and creation.

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  1. The whole area of Intellectual Property (IP) is incredibly difficult – for example it is fairly clear (as Sheldon Richman explains) who owns a physical pot, who owned the tools, and the materials that made the pot – there you go…..

    But the IDEA of a pot? The ownership of IDEAS.

    Can one own an idea in the same sense that one can own a pot?

    Perhaps one can in theory – I do not deny it.

    However, I do know that trying to base an economy on copyrights and patents in PRACTICE will not work.

    The Californian idea (for California is the ultimate example of It) that if people have lots of clever ideas it does not matter if the place they live in is a very bad place (because of TAXES and REGULATIONS and other such) to actually make things – will not work (not in the long run).

    “What does it matter if the stuff is all made in China – in fact it is a good thing, as it means we can sit on the beach here in California and not see any factories, whilst still getting paid for every product made” seems to be the attitude.

    It will not work – China (and other places) will not respect IP. Perhaps they should in theory (I do not deny it) – but they will not (not really – although they may execute a few manufacturers now and then as a gesture) respect IP in practice.

    I repeat that perhaps copyrights and patents should be respected – but in practice betting an economy on such things is folly.

    In American terms……..

    San Francisco (which bases its economy on people having clever ideas – for stuff that is then made far away) may be a nicer place to live than “dirty Houston” (a big American city where stuff is still made) – but I know which city has the better future.

    And it is not San Francisco.

    Ditto LA – a city that bases its economy on people having clever ideas for films and television shows that are then made far away (sorry – but one can not support a city of millions of people like that).

    And why should the clever people pay very high taxes anyway? There are other beaches in other parts of the world – why do they have to sit on Californian beaches?

    This system can not last – period.

  2. Paul,

    You’re right — can’t support a city of millions on the entertainment industry. And if LA did so, LA wouldn’t exist. LA is the largest manufacturing center in the western United States. It’s also home the fifth largest port in the world.

  3. Thomas, Californian manufacturing is in trouble – if you really did not know that before I have just said it, then I have now informed you of the fact.

    As for the port – this would be the port which the railroad does not even reach?

    The port where you have to load the train cargo onto trucks – and then unload them again (so the cargo can be loaded onto the ships)?

    And I also believe it is a unionised port – please correct me if I am mistaken.

    The idea that California can just go on with the high government Welfare State (“public services” spending (and therefore high taxes) and with the endless regulations it has, is just wrong.

    Wake up and smell the coffee.

    • Paul,

      I agree with you — California manufacturing is in trouble and has been for some time.

      What you seemed to be saying, however, is that Los Angeles was built on the motion picture industry. That’s simply not the case. For obvious reasons, the motion picture industry is quite good at blowing its own horn, but it has never been the economic mainspring of LA.

      Personally I expect the motion picture industry to pretty much abandon LA over the next decade or so.

      That process has already begun in recent years as filming follows special “tax credit” schemes around the country (and the world) and as the need for proprietary real estate like the huge LA-area studio lots decreases due to the availability of CGI and other technologies that make it easier to simulate an environment without having a huge physical set structure.

      My own state (Florida) has a “tax credit” scheme, but I’ve argued against it. To me the better way to get Hollywood film bigwigs to move operations to this area is to point out that Florida has no state income tax (California has a 12% top state income tax rate, and even tries to assess that income tax on people who only work part time, and do not live, in the state — pro sports players pay income tax whenever they play a game in the state!) and has lower property taxes and sales taxes than California.

      Consider an actor who makes a million bucks a year — he’d save $120,000 in state income taxes by working in Florida rather than California. And he’d pay lower property taxes on his home. And he’d spend less of his money on sales taxes when he bought something.

      When, not if, some of the A-List actors and directors tell the studios “we don’t work in California any more, they take too much of what we earn,” there will be a mass exodus from Hollywood.

  4. Thomas – I apologise if I gave the impression that LA was built on the entertainment industry.

    My point was that (by, de facto, gradually driving manufacturing industry out of the State – by taxes and regulations) the government of California was acting as if someone like LA (a city of millions of people) could live on the proceeds of a few rich guys who think up films and television shows (films and television shows that are often made elsewhere anyway).

    I again apologise if I gave a false impression of what I was trying to say.

    I agree that no industry should receive special tax treatment.

    For example South Dakota has neither a State Income Tax or a State Business Tax (no Corporation Tax) – yet the budget is balanced and the Sales Tax is lower (not higher) than that of either California or Florida.

    The problem with government (at all levels) is that it SPENDS TOO MUCH MONEY.

    It does not have a “revenue problem” – it has a SPENDING problem.

    But then on this (at least) we can agree.

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