Market vs. Monopoly: Beating the 'Intellectual Property' Racket

Thomas L. Knapp
Oct. 28, 2013

The strongest argument in favor of the fiction of “intellectual property” is consequential rather than moral: Creators of good things — novels, songs, drugs, what have you — we are told, will essentially go on strike if government doesn’t guarantee their profits by vesting them with monopoly “rights” to ideas. Instead of writing that next blockbuster or producing a cure for cancer, they’ll content themselves with flipping burgers or digging ditches for a living, and we’ll all be worse off.

I’m not big on consequential arguments. Absent moral foundations, they’re equivalent to noting that I can’t make money as a bank robber unless the banks are required to leave their vaults unlocked. That may be true, but it’s not a good reason to give me what I want, is it?

As it happens, though, even this “trump card” argument for “intellectual property” monopolies falls flat on its face when we stand it up against both history and current events. A great many works still considered classics — all of Shakespeare’s plays being the preeminent example — pre-date 1710′s “Statute of Anne,” the first modern copyright law. Even at the height of the copyright age, right up to this very day, many authors have guaranteed their own incomes by selling subscriptions to the work before its release (and often before its creation) or finding other ways to monetize it that don’t rely on copyright protection.

Take, for example, libertarian author L. Neil Smith who, I should emphasize up front, is a staunch defender of “intellectual property” and shouldn’t be taken as a supporter of my own claims here. Back in the early part of the decade, I played a small role in a “subscription” drive for a novel (Ceres) which he wanted to write, but which he wasn’t getting the deal he wanted on from the traditional publishing industry. In fairly short order, his fans filled out the subscription campaign, paying him in advance to write the novel, with various rewards available based on their level of payment. Granted, those rewards did include some “intellectual property” incentives (if I recall correctly, the higher subscriber levels would have received a portion of film rights sales and such), but the point here is that based on his reputation — for the quality of his work, and for his track record of completing more than 20 previous books — people who wanted to read his stuff paid for that stuff in advance, when copyright protection had no role in compelling them to do so.

Even without prior payment, artists can manage to get rewarded for their work. Comedian Louis CK, known for his standup comedy specials and other entertainment forays, decided to skip the middleman for Live at the Beacon Theater. He financed production himself, then offered the performance as a $5 download, politely ASKING people NICELY to pay for it. Per Wikipedia, the download grossed more than $1 million in its first two weeks of release, allowing Louis CK to reimburse himself the $250k in production costs, pay out $250,000 in bonuses to the people he worked with, donate $280k to charities, and pocket a $220k profit.

Trent Reznor’s popular band Nine Inch Nails did something even crazier in 2008: They released the album Ghosts I-IV as a free download (including freedom for non-commercial reproduction), with various “upgrades” available … and grossed $1.6 million in sales. The “physical” release of the album hit #14 on the Billboard 200 album chart.

I could go on (Cory Doctorow, who releases his novels as free downloads and still sells hard copies like hotcakes, deserves a shout-out), but I’d run out of space before I ran out of examples. All of the works in question enjoyed copyright protection. None of them relied on that protection for their creators’ ability to get paid.

These days, via Kickstarter, Indiegogo and hundreds of other web sites, “crowd-funding” is quickly becoming the way that artists and creators get their projects funded. The day is not far off when the standard way to get a book published or an album or movie released will be to go straight to the people who want to read, hear or watch it instead of to middlemen who bundle non-existent “rights” into packages that reward said middlemen far more than artists or audiences. When that model reaches full bloom,the “piracy” that dying class of middlemen complain about so much will be recognized as a feature, not a bug: Every “pirated” download potentially creating a new fan for the next round of crowd-funding and the creation of the next work.

“Intellectual property” has always been a morally bankrupt anti-concept. Now it’s becoming a financially bankrupt revenue model. Good riddance.