Against Intellectual Monopoly

stick to English and not use the mathematics so favored
by economists. The brave and the curious can find all the mathematics they
want in the references listed in the final notes.
    We are going to imagine a world similar to that in Switzerland or in the
Netherlands in the late nineteenth century, in which there are no patents -
and there are no copyrights as well. When an economically valuable idea
comes to their mind, entrepreneurs can spare one another an insane race
to the patent office, profitably invest the money that would otherwise go
to lawyers, and get down to the business of selling to consumers the new
thing they just invented. We have amply seen in Chapters 2 and 3 that a
state of affairs in which patents and copyright are absent does not mean that
innovation is a profitless enterprise conducted only by great altruists. Here,
we see why this ought to be so even according to economic theory.
The Fruits of the Idea Tree
    When innovators come up with an idea for a new product, they make copies
of it to sell, and those copies are their property in the same way their socks are. The sale of ideas is all about copies - it is only copies of ideas that can be
sold. I am even less able to sell "my idea" than to sell myself. In the presence
of patents, when an inventor sells the exclusive rights to an idea, what is
being traded is a copy of the idea plus the right (acquired by the buyer)
to now prevent the original inventor from using her idea. Alternatively,
when an inventor licenses the use of his idea, what is being sold are just
copies of the idea, while the right of telling owners of such copies what
to do with them remains with the original inventor. I either sell objects
containing copies of my idea - books, CDs, how-to manuals, trousers with
a low cut, multipurpose gadgets, you name it - or teach my idea to other
people directly, and charge for that. Either way, I am selling copies of my
idea. In the first case, the copies are contained in the objects; in the second
case, the copies are contained in the minds of the people whom I have
taught. When I write a book and publish 100,000 copies, it is 100,000 copies
of my idea that I am trying to sell.

    Once I willingly sell a copy of my idea to you - for example, a copy of
this marvelous book - you become the owner of that copy and I retain my
idea together with all the other copies I have printed and not yet sold. In
the absence of "intellectual property" you can do what you want with your
copy of my idea - the book you purchased from me - in the same way
that you can do what you want with the ice grinder you bought yesterday
from someone else. Without intellectual property there is something you
can do that you cannot legally do in the world we currently live in: you
can spend your time and your resources to make new copies of the book
you purchased. If you were to change the title or the name of the author
or engage in some other fraudulent deception, that would be plagiarism -
which we are not in favor of. But if you change the cover, the quality of
the paper, the fonts, the chain of distribution, or the media carrying the
original text in an honest straightforward fashion - or even modify the text
with a clear acknowledgment of the original contribution - in the absence
of copyright, no property right would be violated. Obviously, if you elected
to do so, your copies will compete with the copies I am trying to sell and,
possibly, with the copies that other purchasers of the book may have decided
to produce.
    Do the innovators lose because of this? Probably, although there are
circumstances in which not even this is true. The good news is that, in most
circumstances, everybody else gains a lot more than the innovators lose.
Good economic laws and institutions are designed not to make a few lucky
people super wealthy, but to make the average consumer better off. Three
desirable features of a world without intellectual property should be noted:

    • The number of copies available to consumers is higher and the price is
lower, thereby making consumers better off.
    • The initial innovator still earns a substantial amount of money.
    • The market functions whether there is one innovator or many - and
socially beneficial simultaneous innovation is possible.
    How can innovators make a substantial amount of money in the face of
competition from all of their customers? Take this book. We own our original