Without Intellectual Property

How would the world look like without Intellectual Property? What are the current success stories and possible alternatives if some or all forms of IP were repealed (or became unenforceable)? This page attempts to list a few examples.

Writing

Academic and Ideological Authors

Even today, most authors never make much money writing books, and some actually print their works with their own money. Others are willing to accept payment in copies of their works (often in the form of off-prints of journal articles). Much scientific and academic writing is of this kind. For many of these authors, writing for publication is a way to increase their “brand-name capital” in order to obtain higher incomes from other activities.

Other authors are interested in spreading their views, so they presumably have no interest in discouraging reproduction of their writings — provided their authorship is acknowledged, they would be quite happy if others were willing to reprint them with their own resources. The output of this type of writing would evidently not be much affected by the absence of copyright.

Professional Writers

Some writers do it for a living. If there is no other way to reward them, then the absence of copyright would most likely reduce their literary output. The question is whether copyright is the only way to guarantee an income for this type of writer. Plant, for one, thought that writers would find a way to sell their product, provided that a demand for it exists at all. (Copyright does not create this demand, it only provides a means to monopolize a demand once it exists.)

We cannot know a priori what kinds of market structures would dominate in a different legal setting, though possibly there would be greater reliance on salaried writers for subscription-type publications, perhaps with content more or less “given away” as loss-leaders to stimulate sales of other products. This is the business model underlying present-day journalism, which essentially hires staff writers in order to help sell the main product, which is advertising.

There are many other examples of such arrangements. Early radio broadcasters, for instance, were subsidized by radio manufacturers, who were willing to lose money on broadcasting in order to stimulate demand for radio sets.

Title "Lotteries"

In the case of book publishing, the absence of copyright protection would likely result in a smaller number of titles published. This would not necessarily be a bad thing, since what we really want is not more titles, but more good books at lower prices. Plant argues that the copyright system has a somewhat perverse consequence in that it encourages publication of more titles, but not enough copies of the books people really want to read.

Because of the nature of his business, a publisher cannot be sure of the success of a new title, and most titles do not cover their costs. However, a successful title can be quite profitable, and these profits subsidize losses from unsuccessful titles. Since a publisher cannot know beforehand which new titles will be successful, publishing has some aspects of a lottery: in order to make money on successful titles, the publisher has to take a chance on many different titles, most of which he knows will be failures.

Copyright affects this situation by increasing the profitability of successful titles: in terms of the lottery, copyright protection increases the "prize" without affecting, on the other hand, the risks involved. Ceteris paribus, we expect that, with equal risks, a larger prize will induce a player to buy more "tickets." Therefore, more titles will be published under a copyright system, but the resulting monopoly position guarantees that the books people really want (the successful titles) will be published in smaller quantities and at higher prices.

Sponsorship

With attempts to enforce copyright increasingly becoming nonviable, writers may turn to other sources of funding, like sponsorship.

There may be a revival of the patronage model, with wealthy fans supplying the writers they admire with the funds they need to concentrate on their work. In truth, we already have an indirect version of this in the form of arts foundations underwritten by private donors. This notion of a writer being personally sponsored by a rich individual may seem unusual, but, unless one wants to dismiss the entire corpus of Western literature written before the 1700s, it has to be admitted that the arrangement can produce great books.

The technology that led to this dilemma also offers an alternative in the form of crowdsourced patronage. The best-known of these new funding platforms is Kickstarter, a website that allows people to raise money for all kinds of projects, including books (and magazines and bookstores). The donors don’t own any rights to the results, but their donations can win them such unusual benefits as having characters named after them in a forthcoming novel.

On Kickstarter, book proposals have attracted from as much as $85,000 (for a memoir about psychedelic visionary Terence McKenna, to be written by his younger brother) to as a little as $324 (to commission original cover art for a self-published e-book). The more modest the goal, the more likely it will be met. The average successful proposal seems to run a few thousand bucks — not as much as a traditional hardcover book advance, certainly, but more than what many writers might get from a small press.

Any patronage system would necessitate some manner of creator compliance with the patron's wishes; that is what the patron is paying for. However, with a large number of potential patrons on the market, a given writer does not need to feel dependent on financial arrangements with a particularly disagreeable patron; he is free to find another patron — or even to work for a multitude of patrons simultaneously.

Patronage can be expressed monetarily, but it need not be. In-kind patronage — such as that performed by numerous online magazines that publish essays by contributing authors — is another mechanism by which writers can find resources to support their endeavors.

Self-Patronage

"Self-patronage" means writing during one's leisure time while pursuing another occupation as a primary income generator. If another person with an above-average income can serve as a patron for a writer, then it is just as easy for the writer himself to earn an above-average income in a profession of his choice and then use it to subsidize his writing.

This is a promising option for many writers today, and it should not be dismissed as a viable long-term model for the creation of quality output. Self-patronage is tremendously efficient; it frees the writer from having to get clearance from any external entity to write or publish what he pleases. Moreover, it frees the writer from needing to satisfy a mass audience; he can make his works as sophisticated, specialized, or controversial as he pleases. If they gain notice and admiration, this can result in some added bonuses for the writer; if they fail to catch on, he is not endangered in his livelihood and can always try again.

With the ability to publish for free on the Internet, writers no longer require access to large institutions or wealthy individuals in order to spread their ideas to a large audience. They do, of course, need to compete with a much larger pool of creators than has ever existed — and this may result in difficulties for quality work in getting notice commensurate with its merits. However, because self-patronage eliminates the costs of getting external clearance, a writer can be as productive as he is motivated to be.

Online-Content Sites

A remarkable development on the Internet in recent years has enabled hundreds of thousands of writers to earn modest income streams from advertisements that appear on the pages where their work is published. Large commercial websites typically contract with numerous advertisers and establish an infrastructure for writers to conveniently publish a variety of works.

Various commercial enterprises with a variety of compensation mechanisms have evolved to enable layman writers to earn small revenues from their work without needing to have expertise in marketing or salesmanship. The methods have their shortcomings, but a few years ago they did not exist at all. Within a few decades, it may be possible for large numbers of authors to earn a living by writing and publishing their works on the Internet without being members of any syndicate or media organization's staff.

Larger Initial Advances

Writers seeking to publish their works via the "traditional" system could come to expect larger initial advances from publishers as a tradeoff for smaller, less stable, and generally diminishing royalty streams. The publisher would pay the writer a larger one-time fee, getting in exchange the first-mover advantage over the competition.

British novels during the 19th century did not have copyright on their works in the United States; instead, they typically sold the rights to a first printing of their work in the United States. Thereafter, the original US publishers of these authors would not owe them royalties and would therefore not be obligated to pay this additional expense, putting them on par with potential later publishers of the same works. The British authors made more money selling their works in the US in this manner than they did under the copyright and royalty system in Britain. Moreover, their works became significantly more popular in the United States than those of their American contemporaries.

Creating more

If there is a first-mover advantage that lasts several months or years, irrespective of whether intellectual property exists, then a given author who chooses to adhere to the "traditional" publishing system could pursue the strategy of writing and publishing a new work every time the first-mover advantage of the previous work has been exhausted. An author could not expect to live off the royalties from a single work — even a widely popular work — forever but would need to keep creating in order to maintain his revenue stream.

This is not far off from the current situation; after all, most published books do not sell nearly well enough to assure the authors even a modest stream of lifetime earnings. Moreover, such a system would incentivize creation of further works.

Indeed, prior to the introduction of copyright, European classical composers found it necessary to continually create music, as their older and already-famous pieces were often performed internationally without any compensation given to them. Even so, some of these composers managed to be phenomenally prosperous as well as prolific.

The most famous composer of the early 18th century, and one of the most prosperous, was Georg Philipp Telemann (1681–1767), who is thought by some to be the most prolific composer in human history, with over 3000 works to his name. Telemann's status is rivaled by Simon Sechter (1788–1867), who wrote over 8000 works, many of them short fugues, and who endeavored to create at least one short composition every day. Neither composer lived under a copyright regime.

Virtually all of the big names of classical music — Bach, Vivaldi, Haydn, Mozart, Beethoven, Schubert, Chopin, Brahms, Berlioz — composed without copyright and were not dismayed when their works were performed without their participation or consent. Composers through the Romantic era would often borrow passages from their peers and predecessors and develop creative orchestrations and variations thereof. This was not considered to be theft but rather the ultimate compliment.

Computer software

Many claim that if software could be copied freely, then software developers would have no incentive to create it. Note, however, that hardware manufacturers would have an incentive to support software development (and perhaps even give it away), since the availability of more and better software increases the demand for hardware.

Music

There might be greater reliance on such collateral sources of income as personal appearances, lectures, consulting, live performances, etc. If musical recordings could be freely copied (which increasingly happens to be the case now), musicians would still have an incentive to compose and record music in order to stimulate the demand for live performances.

Rolling Stones

The rise of illegal file sharing and the correspondingly steep worldwide decline in CD sales have made these tough times for record companies and recording artists alike. But the Rolling Stones are doing very nicely.

Mick Jagger, who's "beady oversight" of the band's financial affairs has helped make it one of the richest in rock ’n’ roll history, says: "There was a window in the 120 years of the record business where performers made loads and loads of money out of records. But it was a very small window — say, 15 years between 1975 and 1990."

Touring is now the most lucrative part of the band’s business. The Bigger Bang tour, from 2005 to 2007, was the highest-grossing tour of all time raking in $558 million. "The band has also been ahead of the curve in recruiting sponsors, selling song rights and flogging merchandise.

Grateful Dead

A notorious example of working outside the traditional notions of copyright is the band Grateful Dead. The band not only encouraged concertgoers to record their live shows, they actually established "taper sections" where fans' equipment could be set up for the best sound quality. When nearly every other band said "no" the Grateful Dead created a huge network of people who traded tapes in pre-Internet days. The broad exposure led to millions of new fans and sold tickets to the live shows. They become one of the most successful bands of all time. The band has had 19 gold albums, 6 platinum albums, and 4 albums that have gone multiplatinum.

Fashion

Advocates of intellectual property say, and conventional wisdom holds, that without IP protections, artists will be without the incentives necessary for them to create. Or at least they, the artists, will not be afforded the protection to profit from their work. This is because “pirates” could come along and copy their work and underbid the prices, or another designer could pass the work off as his or her own. Either way, they argue, free riding would stand in the way of artist profits. However, Kal Raustiala, of UCLA, and Christopher Jon Sprigman, of the University of Virginia, have found that regarding the fashion industry “copying may actually promote innovation and benefit originators.” This they call the “piracy paradox.”

In The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, Raustiala and Sprigman show that indeed it is copying that provides the incentives for designers to continuously innovate. For if one producer is able to copy another, and provide the same goods at a lower cost, then in order to compete, the first producer must constantly be introducing new items. The result of such an arrangement is that more, better goods are produced, and their prices tend to fall. Jeffrey Tucker has made the same argument. He describes that the pace of innovation and creation in the industry occurs quite rapidly, and that because of emulation, consumers are continually being offered better goods at lower prices. He uses Talbot's and Walmart as an example, wherein the latter takes its cues from the former, and within a short period of time, consumers may purchase essentially the same garment at a lower price.

Directly selling information

People will pay for information they think they can make money from. That's why they paid for those stock tip newsletters, and why companies pay now for Bloomberg terminals and Economist Intelligence Unit reports. There have always been people in the business of selling information, but that has historically been a distinct business from publishing. And the business of selling information to consumers has always been a marginal one.

Owning the channel

What about iTunes? Apple controls the default path onto the iPod. They offer a convenient list of songs, and whenever you choose one they ding your credit card for a small amount, just below the threshold of attention. Basically, iTunes makes money by taxing people, not selling them stuff. You can only do that if you own the channel, and even then you don't make much from it, because a toll has to be ignorable to work. Once a toll becomes painful, people start to find ways around it, and that's pretty easy with digital content.

The situation is much the same with digital books. Whoever controls the device sets the terms. It's in their interest for content to be as cheap as possible, and since they own the channel, there's a lot they can do to drive prices down. Prices will fall even further once writers realize they don't need publishers. Getting a book printed and distributed is a daunting prospect for a writer, but most can upload a file.

Movies

Movies could evolve into advertisements. Many already feature prominent product placement.^{[citation needed]}

Or they could return to their roots and make going to the theater a treat. If they made the experience good enough, audiences might start to prefer it to watching pirated movies at home.

Sponsorship doesn't need to involve advertisements or significant influence on the final product. Monty Python star Terry Gilliam made a short film that was wholly financed by an Italian pasta company. The film, which will be screened at the London Film Festival, follows another short he made in 2010, backed by a US drinks manufacturer.

"It wasn't selling out," the 70-year-old film-maker told the BBC. "The only stipulations were the film had to be made in Naples and nobody gets killed in it. I did exactly what I wanted to do."

"Making a short is a lot easier than doing feature-length movies, where most of your time is spent raising the money," the director said. "This took no time to raise the money. All the time was spent making the movie."

According to Gilliam, such affiliations can be beneficial to both parties - provided the backer adopts a "hands off" approach that ensures the film-maker's creative freedom.

"I think it might be happening more," he said. "The company gets its name up there [on screen], but the audience gets to see a real film."

Keeping the physical form

There should remain some market for printed books, at least. While in the past publishers tried to produce books as cheap as possible, that worked as long as buying printed books was the only way to read them. If printed books are optional, publishers will have to work harder to entice people to buy them. There should be some market, but it's hard to foresee how big, because its size will depend not on macro trends like the amount people read, but on the ingenuity of individual publishers.

Some magazines may thrive by focusing on the magazine as a physical object. Fashion magazines could be made lush in a way that would be hard to match digitally, at least for a while. But that is probably not an option for most magazines.

Research

A significant proportion of scientific research is done without any expectation on the part of the scientists concerned that they will earn the private market return accruing to any innovations that they may develop. In the G5 economies, higher education accounts for about one fifth of all R&D done, ranging from 16.8% in France to 23.6 in Japan. The figure for the UK is 18.5%. Scientists working in universities and related research institutions may be said to fall into this description, although increasingly research in universities is being informed by the priorities and prerogatives of external industrial concerns. Given the typically small monetary rewards available for pure research, what motivates these researchers?

Such researchers may be motivated by a love of knowledge, or the satisfaction gained from puzzle solving but economists have come to recognise that the most plausible explanation for such behaviour is that scientists are interested in establishing priority and the status and monetary rewards that flow from attaining priority. Scientists are concerned to be the first to communicate a significant new development in their field. Although the earning profile is rather flat in science, “A variety of extra-institutional awards await the successful scientist in the form of prize money and speaking and consulting fees.”

Boycotting as an alternative to IP

If there wouldn't be IP laws, how could one deal with certain activities that would be still highly undesirable? As Roderick Long points out: "Suppose I pirate your work, put my name on it, and market it as mine. Or suppose I revise your work without your permission, and market it as yours. Have I done nothing wrong?"

On the contrary, Long argues that is definitely a rights-violation - but not a violation of the author's rights, but those of the customers. By selling one person's work as though it were the work of another, he is defrauding those who purchase the work, as if he sold soy steaks as beef steaks or vice versa. All the author needs to do is buy a copy (so he can claim to be a customer) and then bring a class-action suit against the fraud.

There are other legal options available to the creators of intellectual products. For example, many software manufacturers can and do place copy-protection safeguards on their programs, or require purchasers to sign contracts agreeing not to resell the software. Likewise, pay-TV satellite broadcasters scramble their signal, and then sell descramblers.

None of these techniques is foolproof, of course. A sufficiently ingenious pirater can usually figure out how to get around copy protections or descramble a signal. And conditional-sale contracts place no restriction on third-party users who come by the software in some other way. Still, by making it more difficult to pirate their intellectual products, such companies do manage to decrease the total amount of piracy, and they do stay in business and make profits.

There are more organized and effective ways of securing voluntary compliance, however - like the strategy of boycotting those who fail to respect the legitimate claims of the producers. Research conducted by libertarian scholar Tom Palmer has turned up numerous successful instances of such organized boycotts. In the 1930's, for example, the Guild of Fashion Originators managed to protect dress styles and the like from piracy by other designers, without any help from the coercive power of government.

Something more formal can easily be imagined. In the late Middle Ages a voluntary court system was created by merchants frustrated with the inadequacies of governmentally-provided commercial law. This system, known as the Law Merchant ("law" being the noun and "merchant" the adjective), enforced its decisions solely by means of boycott, and yet it was enormously effective. Suppose producers of intellectual products — authors, artists, inventors, software designers, etc. — were to set up an analogous court system for protecting copyrights and patent rights — or rather, copyclaims and patent claims (since the moral claims in question, though often legitimate, are not rights in the libertarian sense). Individuals and organizations accused of piracy would have a chance to plead their case at a voluntary court, but if found guilty they would be required to cease and desist, and to compensate the victims of their piracy, on pain of boycott.

As one example, the first edition of The Lord of the Rings to be published in the United States was a pirated edition from Ace Books. The author, Tolkien, could not take legal action against Ace. But when Ballantine came out with its own official author-approved American edition of The Lord of the Rings, Tolkien started a campaign against the Ace edition. The Ballantine edition was released with a notice from Tolkien in a green box on the back cover stating that this was the only authorized edition, and urging any reader with respect for living authors to purchase no other. Moreover, every time he answered a fan letter from an American reader, Tolkien appended a footnote explaining the situation and requesting that the recipient spread the word among Tolkien fans that the Ace edition should be boycotted.

Although the Ace edition was cheaper than the Ballantine, it quickly lost readers and went out of print. The boycott was successful.