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From Greg's article

Regarding the former, Rand observed that material property "can be left to heirs, but it cannot remain in their effortless possession in perpetuity: the heirs can consume it or must earn its continued possession by their own productive work."17 Value evaporates if a farmer neglects his land, an apartment owner neglects his building, or the owner of a business neglects its operation. Even a trust-fund baby must manage his investments lest they wither or be lost due to mismanagement -- consider the recurring story of lottery winners who quickly find themselves back where they were before winning. People may enjoy a lucky "leg up" in accumulating wealth, but they must be productive to maintain and grow that value, or suffer its disappearance. That is, they must earn its continued possession by their own productive work. Even under such favorable circumstances, the specific basis in ethics of the right to property -- the cardinal virtue of productiveness -- continues to stand as a broad requirement.

In contrast, intellectual property cannot be so consumed and requires no productive effort on the part of its holder to maintain its value. No work would be demanded of an heir to intellectual property: he may continue to apply the idea to produce wealth, but he could just as well sit back and soak up royalties from others who use the idea to produce wealth. The owner of intellectual property need not earn its continued possession. Seeing the implications of this, Rand commented that if intellectual property were held in perpetuity, "it would lead to the opposite of the very principle on which it is based: it would lead, not to the earned reward of achievement, but to the unearned support of parasitism."18 That is, a distant heir would effortlessly enjoy a share of the wealth being produced by others who alone are keeping the idea alive, embodying it in new life-serving goods. In the role of mere heir to intellectual property, one could not earn any part of that wealth.

The argument that value evaporates if a farmer neglects his land is limited in sight. In reality, a farmer can always rent out his land. How is this any different than a patent holder renting out his idea? While it's true that some property, aka buildings, deteriorate over time, others such as land do not and can last in perpetuity barring an earthquake swallowing the land or a comet destroying the Earth.

asked Jan 13 '12 at 20:00

Humbug's gravatar image

Humbug
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edited Jul 22 '13 at 10:23

"There is no difference in principle between the ownership of land and the ownership of airways." - Ayn Rand, http://www.criminalgovernment.com/docs/aynrand.html

(Jun 11 '13 at 19:26) anthony anthony's gravatar image

I've read that article. My question isn't just land vs. airwaves but land vs. airwaves vs. IP.

It seems to me that virtue only comes into play with IP because IP is unlimited whereas airwaves is limited.

(Jun 11 '13 at 20:49) Humbug Humbug's gravatar image

Rands answer was that intellectual property represents a static claim to dynamic wealth, while regular property represents a dynamic claim to static wealth. She felt that this distinction warranted the differential treatment you ask about, for the reasons Greg explains in the passage you quote.

To see why this treatment is warranted, one must keep firmly in mind the principle of property, its context and validation. Remember that property is not an intrinsic absolute. It is a contextual absolute.

CONTEXT:

What does it mean to say someone owns something? It means that they have the exclusive right to possess, use, and dispose of that thing.

But why do they enjoy this right? What makes the thing theirs, and why does it matter that it is theirs?

First, every man has the right to life. Second, a man must live through the use of his rational faculty. He must be free to take the rational actions necessary to sustain his life--hence the right to liberty. One such action he must take is that he must produce the values he needs to sustain his life through thought and effort. However, merely being free to produce is not sufficient to protect a man's right to life. If one produced values but was unable to exploit them to sustain his life (e.g., if others could freely take the values away from the producer), then the produce could not live. Thus, if a man is to enjoy his right to life, he must be able to exploit the values that he creates. This is the principle of property--if you create a value, you should be able to exploit it.

DISCUSSION:

If the principle of property requires that the creator of a value be able to exploit the value, what do we do when the creator of the value is no longer around to exploit it (i.e., has died)? It seems, at first, that the principle of property should cease to operate--the value that was once owned is, owned no more. Indeed, keeping the reason supporting the principle of property in mind, it is the extension of ownership of a value beyond the life of the creator of the value that requires justification, rather than the other way around. The default position would be to end ownership at death.

But what of the fact that the owner transferred the property, does this not change things? Consider the transfer of property in general. Why do we respect the ownership of a person who did not create a value, but instead obtained ownership from the person who did create the value? Clearly the original owner can do whatever he wants with the property, including relinquishing title to it---but why do we think the person to whom the property is transferred has any moral claim to it at that point (after all, they did not create it)? One answer is that we presume the recipient of the property traded a value for the value. By trading a value, the recipient gains a moral claim to the object of the trade. The validation for this principle depends on the general validation of property: for a man to live qua man, he needs to be able to exploit the values he creates; one of the most important forms in which he can exploit such values is trading the values with other people; however, if one cannot keep the values one trades for, then trade becomes useless. Thus, in order that men might trade values with each other, it must be possible to transfer ownership of property. (note that even "gifts" really involve a trade, albeit a spiritual value in return for a material one)

But what about transfers at death? Does the notion of transfer solve the problem of continuing ownership after death? First, we must ask what trade has occurred here? What value does a dead man receive? Further, transfer depended upon the right to exploit ones values through trade, but the donor is dead and thus has no need for trade. Once again it appears that there is no strong reason that compels us recognize the continuance of ownership after death.

At this point, what are the options? I see three: (1) ownership can pass to the intended donee despite the absence of a strong justification, (2) ownership can pass to someone else, or (3) the value can become unowned. I read Rand as saying that option (1) is what we do simply because it is better than the other options. She essentially says, "yeah, you are right, the heirs don't have a very strong moral claim to the property, but their claim is better than that of anyone else." Further, she notes that they do have to be virtuous to keep the property, and in this sense they deserve it. If they do not deserve it, they will not keep it long.

Rand goes on to explain that the heirs taking the property, even if the justification for their doing so is slight, hurts no one. The value will be dispersed to those more deserving in short order if the heirs are unworthy.

This is where the distinction between intellectual property and regular property enters. With regard to intellectual property, can we still say that (1) is the best option? Unlike with regular property, the heirs need exercise no virtue in order to keep it. The worthy and unworthy heir alike will keep the property. Further, all the other problems Rand and Greg point out will occur. Such funcionalistic arguments used to bother me because they seemed unprincipled. However, as I have tried to explain, they are proper here because the case we are considering is at the border, if not outside, the context of the principle. There is no strong principled reason why the heirs should keep the property, but we generally follow that path because it is better than the other choices. That is not the case with IP however, so we do not follow it in that case.

Now, all that being said, I cannot think of a reason why patents only receive 20 years of protection. The argument I laid out only justifies ending protection at the death of the creator. I do not think ending it before his death is proper.

[note: Extending it for a definite period beyond his death is proper (as in the case of copyright, which lasts for the life of the author+70 years), because it allows third parties to make contracts with the owners and not be burned if the life of the author is cut short.]

answered Jan 21 '12 at 13:16

ericmaughan43's gravatar image

ericmaughan43 ♦
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I would like to begin by saying thank you very much for your efforts. I agree with you whole heartedly on the context. My mind is still refusing to integrate the discussion. I will see if we can get to the bottom of that with a series of question.

Can you explain this concept "intellectual property represents a static claim to dynamic wealth, while regular property represents a dynamic claim to static wealth" within the context of a single life? What makes this concept valid? If this concept is only valid with the context of transfer after death, let me know and I will adjust the Q.

(Jan 21 '12 at 15:27) Humbug Humbug's gravatar image

Take a pile of money, for example. The claim to it is dynamic because continual virtuous effort is required to maintain the value--if the heir is a bum, the money trickles away until it is gone. The wealth is static because the pile of money is no more and no less than it is.

Contrast this with intellectual property. The claim to it is static in that no virtuous effort is required to maintain it--if the heir is a bum, he keeps the property anyway. The wealth is dynamic in that as knowledge grows, previously unknown applications of the idea are discovered, and the scope of what the

(Jan 21 '12 at 15:46) ericmaughan43 ♦ ericmaughan43's gravatar image

property covers increases. For example, when the car is invented, the scope of the property owned by the inventor of the wheel is increased. The "pile" of wealth is constantly changing.

(Jan 21 '12 at 15:49) ericmaughan43 ♦ ericmaughan43's gravatar image

I focused on transfers at death, because I do not think limiting property ownership to a term less than the life of the creator is justifiable according to Objectivist property theory--if the owner of the value is alive, he must be allowed to exploit the value, whether it is static, dynamic or whatever. However, limiting how long a property interest will exist after the creator of the value has died is a different matter (or at least, I argue as much).

(Jan 21 '12 at 15:55) ericmaughan43 ♦ ericmaughan43's gravatar image

I would like to remove death from the picture as it creates extra layers of abstractions that, at this point, I don't think is necessary. We can introduce it later once the lower layer has been integrated.

Note that in my question, I used land as the comparative example, not money. Can you revise your comparison of dynamic vs. static base on that context?

(Jan 21 '12 at 15:58) Humbug Humbug's gravatar image

Others might have something to say without death in the picture, but as I have stressed, I do not think any limitation prior to death is appropriate, so there you go. As for land, I readily admit that it is more difficult to see the static/dynamic contrast there (which is why I avoided it :-)) However, I'll give it a quick go:

(Jan 21 '12 at 16:26) ericmaughan43 ♦ ericmaughan43's gravatar image

-The value of the land is not intrinsic. The land must be used for something to be valuable. Thus, merely holding the land forever will not hold on to the value of the land. Even renting the land out to others requires upkeep. If it is being used for farming, for example, the owner must be virtuous in ensuring that the nutrients aren't depleted (crop rotation, etc.) or that toxic chemicals aren't being dumped on it. He cannot literally just sit there and rent it out in perpetuity. If he does nothing to look after it, he eventually will have nothing of value to rent out.

(Jan 21 '12 at 16:29) ericmaughan43 ♦ ericmaughan43's gravatar image

How are you defining land? Black's law dictionary defines it as "An immovable and indestructible three-dimensional area consisting of a portion of the earth's surface, the space above and below the surface, and everything growing on or permanently affixed to it."

The value of the three-dimensional area does last forever, without any upkeep (*). The value of that which is growing on it or permanently affixed to it does not.

(Jun 11 '13 at 19:24) anthony anthony's gravatar image

(*) In fact, the greatest determinant of the value of that three-dimensional area is not what is done to it, but what is done to the areas adjacent to it. If you own land in a growing part of town, it's going to go up in value even if you do nothing with it. (You might not make a profit due to the property taxes, but surely Rand was opposed to property taxes.)

(Jun 11 '13 at 19:38) anthony anthony's gravatar image
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Asked: Jan 13 '12 at 20:00

Seen: 2,355 times

Last updated: Jul 22 '13 at 10:23