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Intellectual Property Redux

Written by Darrell Anderson.

The origins of the concept of property are lost in antiquity, but today the concept of property is rooted in the concept of scarcity. Today the concept of property exists primarily to help humans create knowable boundaries, and to help reduce conflict and avoid violence. That is, the physical things humans need or want do not exist abundantly or immediately. Scarcity does not always mean unavailable or nonexistent, only that supply is limited or restricted in some fashion with respect to a specific moment in time.

Scarcity arises from several causes:

1. A fixed stock of resources (finite spherical planet).

2. Human desire (unlimited).

3. Population dynamics (more people means more demand on a finite spherical planet).

4. Humans are restrained by the time domain (they can act only sequentially and don’t live forever).

5. The Second Law of Thermodynamics (there are no perfectly efficient energy conversion processes and all physical things are subject to decay).

Modern debate arises about what exactly can be considered property. Little controversy exists with respect to tangible objects subject to the concept of scarcity. Many people claim, however, that intangible objects are not subject to the concept of scarcity, and therefore not subject to the basic principles of property.

That latter claim is only partially true.

The basic nature of these intangible objects is recognized in the concept of ideas and knowledge.

Granted, once an idea or knowledge is created, distributing and consuming that information is not subject to the same concept of scarcity as tangible objects. True, the medium through which information is distributed and consumed — books, CDs, computers, etc., are subject to scarcity, but today, with technology providing an ability to distribute and consume that information with such low costs, the debate is quickly becoming meaningless.

The realm of production, however, is where scarcity still plays a role. That scarcity is primarily noticeable in the resource of time. An author might write a book and although there are costs involved with respect to electricity to run a computer, paper to read drafts, etc., the primary investment is time.

In the physical realm, humans can act only sequentially or linearly. Although an individual can set other processes in motion in parallel, such as running a dishwasher while typing on a keyboard, nobody can initiate both acts at the same time. As creatures restrained by the four dimensions of known existence, humans cannot be at two places at one time. They must set both acts in motion in a sequential and linear manner.

To write a book means an author is limited in performing other concurrent acts. Because humans cannot be in two places at one time, the old adage that time is money becomes important to many people.

If an author desires to write for pleasure or artistic rewards only, then the concept of time investment is largely insignificant. However, if an author hopes to seek compensation for that investment of both time and previously acquired knowledge, then production time is an important issue. The more time an individual invests in writing a book, the less time available to devote to other pursuits. Eventually people realize that putting beans on the table and receiving some remuneration becomes important.

This is a dilemma facing all humans. All humans must consume or they die. Thus, they produce primarily because they must consume. Only after satisfying needs and wants do humans produce for non-survival reasons.

Because humans must continually consume they must continually produce. Thus, they always have sought ways to produce more efficiently. Improving efficiency means less labor, fewer resources, increased production, lower costs, etc. The ultimate goal is to produce with perfect efficiency, otherwise known as perpetual motion. Perpetual motion is the ability to maintain output without further input.

The real debate deeply embedded in the intellectual property (IP) controversy is the never-ending desire to create perpetual motion — that endless desire to get something for nothing. To consume without production. Yet, perpetual motion is impossible. Nonetheless, humans continue pursuing that goal. The trick then is not to produce perpetual motion, but virtual perpetual motion. People try to create virtual perpetual motion by creating artificial scarcity. Artificial scarcity is creating scarcity where none previously existed. Increasing scarcity tends to increase demand. Increasing demand tends to increase prices. People try to create artificial scarcity through political privilege.

So the root problem is not the concept of IP, but why do humans insist upon trying to create perpetual motion?

The primary reason is that humans are creatures subject to fear and uncertainty about the future. Unlike other animal species, humans are unable to ignore the time domain. Humans are always concerned about tomorrow and being able to satisfy needs and wants. Thus, to create virtual perpetual motion is to create an ability to provide future exchange power and to ignore the time domain.

So people try to write the next great novel, create the next great invention, etc., and then hope they never have to produce ever again. People try to embed the concept of property into the realm of intangible information in the hopes of creating virtual perpetual motion. They hope to create a perpetual revenue stream — to keep beans on the table without additional production.

Because humans exist at both physical and metaphysical levels, and because humans are incapable of ignoring the time domain, the psychological side of this fear never can be totally eliminated but only reduced. Thus, the goal then should be to reduce those fears to a point where they are manageable and tolerable.

Is there a way to reduce this fear and uncertainty about the future? Within the aggregate, the technology existing today provides humans the ability to produce sufficiently such that all humans could be fed, clothed, and sheltered and still have plenty to go around. So the problem is not technology or ability.

Although technology today provides an ability for everybody to eat, be clothed and have a roof over their head, the real world results are far different. Fear and uncertainty still exist at high levels. Many people in the world are starving, have little clothing, and possess almost no shelter. The problem is not the aggregate ability to produce, or the aggregate desire to consume, but in the manner in which the products of labor are distributed. The problem is deeply embedded in the way in which humans exchange with one another.

Only by addressing fundamental root flaws in the way the current exchange model functions will there be hope to reduce this effect. The primary flaw in the modern exchange system is that the token symbols used to represent exchange — currency, are no longer tied to the linear world of production. If those token symbols were tied directly to how humans produce, then the impact and desire to overproduce and get something for nothing would greatly diminish. Fear and uncertainty would decrease.

The entire IP debate is heated today because technology is now at a point where people can produce, distribute and consume at costs far below anything imaginable only a few decades ago, let alone anything ancestors might have imagined. That dramatic increase in efficiency means reduced profits. Reduced profits means less artificial scarcity, which means less virtual perpetual motion. The result is the modern day mad scramble to squeeze a nickel out of anything that moves.

Most people would think that zero cost of production and distribution and no limits on consumption is exactly what humans have always strived for. Technology continues to reduce the size of that chasm. But something is awry with the basic exchange system that prevents humans from reducing their fears about the future. Something is monkey wrenching the overall process of producing, distributing, and consuming at a low cost. Something is still driving that insane desire to create a dog-eat-dog world. Something that creates huge imbalances in the way in which humans exchange.

The basic component that is monkey wrenching the exchange system is rooted in an uncertainty to predict future exchange power. That uncertainty is manifested in two mechanisms: (1) the printing press of central banking where currency is introduced without a corresponding exchange of wealth and (2) compound interest, an exponential mathematical function that mocks the linear nature of human existence. The root problem is that those token symbols of exchange are no longer tied to the real world way in which humans can only act and produce linearly.

The result is that all humans are subject to an exponential increase in their fears and uncertainty about the future. Thus, they look for ways to move money to make money rather than focus on rational production and subsequent exchange.

The entire debate about intellectual property is a symptom of deeper problems.

Finis.

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