Libertarianism and Copyright (with Radu Uszkai)

Radu Uszkai joins the show today to talk about if the case against intellectual property can be strengthened by appealing to the work of F.A. Hayek.

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Radu Uszkai joins the show today to talk about if the case against intellectual property can be strengthened by appealing to the work of F.A. Hayek. Intellectual property is deeply rooted in our understanding of our own creativity. Intellectual property rights and copyright actually emerge as a result of creative revolutions. The copyright story of Mickey Mouse is probably the best-known. Throughout this episode they discuss the role of copyright in the movie industry, fashion industry, and more.

Is intellectual property actually property? What is Hayekian skepticism? What did Hayek think of copyright? Why are incentives important? What is the difference between plagiarism and copying? Is copyright protection necessary for creativity?

Further Reading:

The Use of Torrents in Society, written by Radu Uszkai

Against Intellectual Monopoly, written by Michele Boldrin

Related Content:

Why Property Rights Matter, Free Thoughts Podcast

Intellectual Property, Encyclopedia of Libertarianism

Libertarian Views of Intellectual Property: Rothbard, Tucker, Spooner, and Rand, written by David S. D’Amato

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0:00:07 Aaron Ross Powell: Welcome to Free Thoughts. I’m Aaron Ross Powell.

0:00:09 Trevor Burrus: And I’m Trevor Burrus.

0:00:11 Aaron Ross Powell: Joining us today is Radu Uszkai. He’s Assistant Lecturer at the Bucharest University of Economic Studies and Associated Researcher at the Center of Institutional Analysis and Development, Eleutheria and at the Research Center for Applied Ethics. Welcome to Free Thoughts, Radu.

0:00:26 Radu Uszkai: Thanks. Thanks, Aaron and Trevor, for inviting me here. It’s a great honor to be here.

0:00:32 Aaron Ross Powell: We’re going to talk about intellectual property today. And I wanna start with just that, that very phrase, because I think one of the interesting parts about intellectual property is the question of is it really even property in the first place.

0:00:48 Radu Uszkai: That’s a good question to start this discussion, because a huge chunk of time, effort and papers have been dedicated to exactly this question, right? Whether or not we could actually talk about assigning, ascribing property rights in relation to basic ideas, to immaterial stuff like ideas. And within, let’s say, the broad libertarian position, classical liberal-libertarian tradition, this is quite a topic of contention because we actually don’t have a unified libertarian stance on intellectual property. I mean, I’m not so sure that we have a lot of unified stances on a lot of stuff, but on intellectual property, we actually lack something like this. So, I mean, some classical liberals and libertarians like Ayn Rand, for example, she says that individuals have the right to the product of their mind. Another new scholar, Bryan Cwik, he’s also famous for arguing in the Lockean framework in favor of ascribing property rights to ideas.

0:02:07 Radu Uszkai: But there is also this strong tradition against ascribing such rights, and especially due to the reason that we’re talking about, about immaterial objects like ideas. There’s this quite famous paper written by Stephan Kinsella, who’s, I guess, quite famous in the general libertarian movement. And one of his counter arguments and critiques of intellectual property actually stems from the nature of immaterial objects, right. So he says that we typically and generally ascribe property rights, and property actually as an institution makes sense when we talk about scarce objects like, I don’t know, bicycles, laptops, so on and so forth, because there is a possibility of conflict in relation with them. Whereas when you talk about property rights like ideas, there actually might not be a way in which you could actually say that you could steal something, right? So if you cannot steal something, if there’s no possible conflict with regards to an object, then maybe even the phrase “intellectual property” actually doesn’t make sense.

0:03:29 Trevor Burrus: Does it matter how the philosopher… So we’ve had this question of different justifications for property. Does it matter that, like Lockean justification of property, for example, or some sort of Kantian, how does that affect the intellectual property debate?

0:03:48 Radu Uszkai: Well, it matters a lot because… And it also matters a lot because if you take a closer look at various legal frameworks, both existing and in recent history, you can basically observe that, for example, European laws have this Kantian/Hegelian flavor. European laws generally tend to favor this personhood approach to property rights when it comes to ideas, whereas the American system tends to be more utilitarian in its outlook. So it’s… It matters because, for example, some might argue that Locke is not right when it comes to property, but that person could still argue within a utilitarian framework, for example, that we need intellectual property rights because without intellectual property rights, individuals wouldn’t have incentives to be creative. So it doesn’t matter whether mixing your work with something that is previously unknown is the basis of property; what matters is whether or not we have the right set of institutions in order to, let’s say, increase the aggregate welfare at a social level. So it matters a lot because those positions aren’t necessarily coherent.

0:05:20 Aaron Ross Powell: We’re talking today about an essay that you wrote, and we’ll put a link up to this in the show notes, but the interesting contribution of your essay is to bring Hayek into this picture. So what does Hayek specifically bring to discussions of intellectual property? Because he doesn’t seem to have said much actually about it himself.

0:05:42 Radu Uszkai: Yeah, he actually didn’t. There are some scarce remarks, for example, in The Fatal Conceit, but what I take from Hayek when analyzing social life and institutions is something that I call Hayekian skepticism with regards to… I don’t know, orders, with regards to state-enforced institutions. So Hayek is really interesting because he’s fundamentally skeptical with regards to whether or not copyrights or even patents, but he’s mostly focused on copyrights, actually do function as incentives for creators to be creative. And it’s also interesting because copyrights and especially copyrights, not only patents and other examples of intellectual property rights, are basically direct creations of the state. And it’s interesting if you take a closer look at the specific history of copyrights, for example, in England, we see that copyrights are closely associated, for example, with religious words, with monopolies which kings and queens of medieval and early modern Europe tend to allocate, and they don’t necessarily respond to a need on the market of ideas or the market in economic terms. So it’s, I guess, interesting to analyze this institution and its evolution and its meaning or its justification in present day, in the present day global context with these two lenses.

0:07:28 Trevor Burrus: So in the Hayek context, though, you said he doesn’t talk about it much. It sounds like I think in your essay you found all of the examples of him talking about…

0:07:37 Radu Uszkai: I hope, I hope… All of Hayek’s quotes on copyrights and intellectual property are in my paper.

0:07:43 Trevor Burrus: Yeah. And they’re sort of asides almost, but how does that relate to… How did he think of physical property? Is there any connection between how we might expound on Hayek’s views on intellectual property and how he felt about physical property?

0:07:57 Radu Uszkai: Well, if we take a closer look at what intellectual property rights or at one of the consequences that establishing intellectual property rights has, it’s basically what he, and not only he, but a lot of liberals and classical liberals who discussed this topic called for scarcity, right? So ideas once produced aren’t scarce, as opposed to material objects, right? If someone authors, I don’t know, a poet, a poem or something like this, then basically that poem can become something that’s close to a public good. It’s basically the ideal public good, right? We could all listen to the same poem in the same time, without being in any rivalry situation when it comes to enjoying it. So when we talk about intellectual property rights, we’re talking about actually establishing false scarcity in order to stimulate human creative processes. Whereas property rights in relation to material objects, they are basically a result of the fact that goods are scarce. It’s a way of, by trial and error, as Hayek would put it, it’s a way in which we basically manage to live in a world in which material objects are scarce.

0:09:27 Trevor Burrus: Well, that’s the interesting part too, ‘cause there’s the part of Hayek that says that the physical property rights had a evolutionary element to them; they emerged in a sort of natural way, which is something very big for Hayek. Not top-down constructivist rational ordering of society, but a bottom-up solving of problems, as you mentioned. And as you pointed out, not only is that not true about intellectual property and where it came from, but also it has a very constructivist rationalist the-state-tried-to-control-things origin, which I didn’t know until I read your essay, actually. But it’s even truer now. They’re always manipulating copyright, like say the duration or stuff, for the purposes of constructing a more rational order, which might just mean that Mickey Mouse never runs out of copyright, for example.

0:10:15 Radu Uszkai: Yeah. There’s these two economists, Michele Boldrin, he’s Italian if I’m not mistaken, and David K. Levine. They are the authors of this 2008 book, if I’m not mistaken, called Against Intellectual Monopoly. And they have this chapter titled The Evils in Disney. And it’s basically about this, about how basically Mickey Mouse would be copyrighted forever and ever and ever, even if Walt Disney is kind of dead for a long time. So it’s interesting if you analyze within a public choice framework, what happens when states give either creative individuals or companies such a power, how they basically tend to abuse it, and how they tend to lobby international organizations like the World Trade Organization to impose a strong protection of IP rights at global level, as actually a pre-condition for free trade agreements. So it’s, like again, a really interesting point again to look at within a public choice framework.

0:11:28 Radu Uszkai: And what I wanted add, sorry for interrupting you, what I wanted to add is that the semantic part of how intellectual property rights appear is like really interesting, because they emerged as explicit form of privileges. So in Venice, for example, in medieval Venice, this is the way they were actually entitled, as “privilegi,” privileges. And in other places that they were basically framed as monopoly because they actually do function as monopolies, right? A company or an individual have a monopoly with, a monopoly right with regards to reproducing a certain idea or an immaterial object like a formula or something.

0:12:01 Aaron Ross Powell: I was hoping you could speak to, in your essay you raised, so we have this story that you just told of these institutions setting this up and granting monopolies and privileges. But you also talk about this fascinating, I don’t know, cultural or even conceptual shift that seemed to drive it, in terms of like the role of… Changing views of the role of the human mind in the creative process. And so you compare it to like the Greeks, which one of the striking things if you read Greek literature, Greek poetry is it always starts with, “Sing, O muse,” or some sort of appeal to the muses. Can you talk a bit about that? ‘Cause I found it, I found it totally fascinating.

0:12:54 Radu Uszkai: This is something that at a certain point, I don’t know, if this lockdown continues even more, and if I get a break from teaching online, or if I get fully accustomed to doing this, I would actually like to write a paper on this. Because I find the early modern pre-Enlightenment, and actually a bit of post-Enlightenment, to be actually an absolutely fascinating, fascinating time in our history. Because it’s interesting to see how intellectual property rights and copyrights emerge as a result of certain, let’s call them, let’s be amateur armchair historians and call them revolutions, right? We had a technological revolution. We had the invention, Gutenberg’s invention, which basically fundamentally reduced the costs associated with reproducing books. But we also had this ongoing economic revolution, which basically contributed to this emergence of a middle class who had the resources to send their kids to school, to also use reading as a way of spending their free time, so on and so forth.

0:14:11 Radu Uszkai: But also, and this is really important, and it comes from some French philosophers which I’m not necessarily a fan of, I’m not necessarily a fan of Foucault. But it’s interesting the way in which Foucault, but not only Foucault, analyzed this evolution, or actually emergence of this modern notion of being an author, and of what authorship means. Because as you mentioned, Aaron, if we take a closer look at creativity in ancient Greece, the ancient Greeks tend to, they tended to look at the creative process as not necessarily being the result of your efforts. So for them, I don’t know, a Lockean argument in favor of intellectual property rights would have something to be desired. Poets or sculptors, or I don’t know, artists in general, they weren’t the originators of the ideas, but they were basically a vehicle for muses of gods to send some messages, or transmit something with aesthetic value.

0:15:20 Radu Uszkai: This started to change a bit in Roman and especially in Byzantine times. But mostly during the Middle Ages, they were more or less Greek in their outlook, because it wasn’t necessarily the priest who was the creator of something, even if we’re talking about science. Priests had this special link with God, and it was more or less God or certain saints who talked through them. But this starts to change when there are more books available, because books become easier to reproduce and less costly. But also when capitalism emerges, when people started to enrich themselves, when people start to see the value of having an education, and when they start to learn reading, and when they start loving… Doing stuff like writing poetry, composing music, so on and so forth. So authorship, this idea of individuals as being creators, it’s an invention of this early modern/Enlightenment period.

0:16:33 Trevor Burrus: It’s interesting how that works with, you kind of mentioned, with the Lockean concept of property. Because although Lockean concept of property where you mix your labor with the land has something to do with scarcity, it also seems kind of like a moral claim based on effort. And a lot of people who are critics of that method of acquiring property, people like Georgists and socialists and people like this, say that ultimately this would mean that the property is only owned by the people who got there and put their hands in the dirt, and that’s not just or equitable. But it’s not easy to make a piece. I mean, going back to this idea of the creation of the author, and thinking that that person did this, like, you know, JK Rowling did this, or Stephen King, or Pearl Jam, that they made this piece of music, and that their effort should be rewarded. This is not about scarcity; this is about rewarding effort. That bringing something into the world that didn’t exist before, and that they therefore deserve compensation and maybe rights over it. Is that a good argument or does that make sense at least conceptually?

0:17:36 Radu Uszkai: So even if… I used to be more and more radical on this topic. I’m not as radical as I used to be, let’s say, in my youth, even if I’m not necessarily old. But what you’re saying makes sense, because I’m not saying in any way that Locke doesn’t make sense, or that Kant doesn’t make sense. I do say, and I will say this every time I get the occasion, that Hegel doesn’t make sense. Anyone who’s ever read Hegel, hopefully, has the same feeling.

0:18:05 Trevor Burrus: I’m with you on that one, yeah.

0:18:08 Radu Uszkai: So Hegel doesn’t make sense. Also the same with regards to the thinking about the role of incentives, and why incentives are important within a utilitarian outlook. It’s really interesting, Trevor, to think about the relationship between a creator and his or her creation, because JK Rowling created something out of almost nothing. So she didn’t actually created that out of nothing. Pearl Jam also created something out of something, right? Because no one creates something ex nihilo like, I don’t know, the Christian cosmology. There was nothing in the beginning, and then God created the earth, or something like this. But it is an effort that creative individuals like musicians, or sculptors, or, I don’t know, whatever artist you might think of, actually has to endure in order to produce something.

0:19:13 Radu Uszkai: So I guess… And I’m saying this as a critic of the institution of copyrights, that being a creative individual establishes some sort of a moral claim with relation to what you produce. So you can not only reasonably but you can forcefully, claim the status of an author in relation to what you produce. The question is whether having such a moral claim to authorship also entails something that we think of as a property right. And this is where I think or this is where I find this shift a bit contentious, because it’s not clear, again. If property rights are, I don’t know, the only institution we could use in order to, let’s say, compensate them for the effort that they made during their life time in order to bring about pieces of art or artistic productions. So there is no necessary link between, again, having a moral claim to being an author and receiving something that could be considered a property right, there is no necessary condition.

0:20:30 Aaron Ross Powell: Does this mean that we should conceptually, I guess, if I try to rephrase what you’ve said, that there’s almost like a distinction between copying something and plagiarizing something?

0:20:42 Radu Uszkai: Yeah, that’s…

0:20:44 Aaron Ross Powell: In the sense that as the author I have, I wrote this novel and it’s my novel in the sense that I’m the creator of it, I’m the author of it. And so I have a moral right to that relationship to it. And so, if you copy it… So if we say I don’t have property rights in it, then you simply copying it, but continuing to give me credit doesn’t necessarily violate that particular moral claim that I have. But if instead you copy it and stick your own name on it or potentially take my name off of it, then you’ve done something wrong because you’ve violated that. And if that’s the case then does that mean that we can see reason to have, say, no, nothing that looks like copyright, but still, laws against or penalties in the case of outright plagiarism?

0:21:40 Radu Uszkai: Absolutely, and I’m really happy that you made this distinction because this is also something that I actually had a presentation at a conference on, is especially this topic. Exactly this topic, sorry. So having this moral claim to authorship means that plagiarism is really problematic. But in order to argue that plagiarism is problematic, you don’t necessarily need property rights in the sense of copyrights. When we began talking about whether or not it makes sense to ascribe property rights in relation to ideal, to immaterial objects like ideas, we talked a little bit about the role of scarcity and taking into account the fact that ideas aren’t scarce, you can not say that you’re stealing something. Now, when someone plagiarizes something, the difference as opposed to copying is that, well, you actually are stealing something. You’re stealing… Let’s say, that you write a book or a poem, and I like it so much that I’m just going to copy it and stick my name onto it. You actually have a new book, it came out, right? I’m going to just stick my name on the book and say that that’s mine.

0:22:56 Radu Uszkai: In a case like this, I actually steal something from you. It’s a theft of identity, and your identity, it’s actually a scarce object. There is only one Aaron Ross Powell who wrote the book, that book in the world. So it is a case that to be made that plagiarism is highly problematic due to, let’s say, Lockean concerns or Kantian concerns with regards to authorship. But this doesn’t necessarily entail that copying your book or, I don’t know, making it available on certain international databases is necessarily problematic from a moral standpoint; sure it is from a legal standpoint, but laws aren’t necessarily just all the time.

0:23:45 Trevor Burrus: It’s interesting, I like this connection because there could be many moral duties that arise from the act of authorship, and copyright doesn’t have to be one of those. If, let’s say we got rid of copyright tomorrow and then JK Rowling publishes another Harry Potter book and someone decides to just re-publish that book without her name on it and, without, just say, with a different name on it. Sure it would be out there in the marketplace, but it might be a violation of some moral code. But it also could be the case that if you go and you buy the non-real one, there is social cost and people say you’re not giving the author money, you should be giving the author money. So if you see someone with a knock-off Harry Potter, you might just chastise them and say, “You’ve done something wrong.” Even though we’re not going to say you broke any law, necessarily, you’ve done something wrong by buying a knock-off and not giving her her due. And that, we see that happens with a lot of the sort of name your price, where people, if you ask them to pay for something, what they’re willing to pay on, say, SoundCloud, they will pay and they think that they should pay, they feel an obligation to pay. So that maybe fulfills the moral claim here without going all the way to copyright.

0:25:01 Radu Uszkai: And I actually fully endorse this, I mean, I do think that we have a supererogatory duty to do this with regards to, I don’t know, our favorite musicians, writers, poets, so on and so forth. So I really do feel that it’s something that we should do. What I find problematic is the idea that people could be punished for copying books or music and making them available in, I don’t know, digital libraries or making them available on torrent trackers, or so on and so forth.

0:25:02 Trevor Burrus: You have a footnote, too, in your paper, which popped in my head even before I saw the footnote, about fashion. Because they don’t have… Fashion is a world where there is no intellectual property and we still revere and we still have brands and people still make a lot of money and there’s a lot of innovation. How is that related, do you think, to the freedom of the fashion industry?

0:26:00 Radu Uszkai: Well, I mean, it’s… I mean, I use this example in order to argue that you don’t necessarily need strong copyright protection or even any copyright protection in order to have, I don’t know, to spur creativity. It depends a lot on the specific incentives that people have in their own market niche. So I’m not necessarily willing to say that, I don’t know, were we to abolish our current copyright institutional global framework, we would have, I don’t know, more musicians or better music. Though were we to take a closer look at the music that, I don’t know, is quite popular nowadays, and were we to look at the way in which copyright protection has increased, I don’t know, maybe there is this bizarre correlation between the two.

0:26:50 Radu Uszkai: But going back to my previous idea, it’s, again, a counter example to those who argue that we need strong copyright protection in order to have creativity and even to have profits. And it’s something that should make us think whether or not copyright protection in general or strong copyright protection like we presently have nowadays is necessary or morally warranted in the first place, and whether or not actually copying stuff is bad, because one of my… And it’s not fully my contention, but I constantly find it hard to believe that we could have lived in a world with Netflix, Spotify, with Steam, for example, for gamers with, I don’t know, 3D cinema without piracy and without people who constantly broke laws with regards to copyright protection because… And this is something that… I don’t know, I might be wrong, I hope I’m not, but I tend to believe that this ubiquity of copyright infringement in the infancy of the internet is what tended to spur innovation when it comes to offering consumers some sort of a premium.

0:28:24 Aaron Ross Powell: So far, we’ve been talking about creative outputs as if they’re all kind of the same thing, that there’s artists and there’s what they make, and then there’s markets and copyright and notions of property that exist. But what we’re really talking about a lot of different markets. There’s music, there’s books, there’s movies, there’s fashion, as we just mentioned. And depending on how distinct they are from each other in their features, it might be that finding an example of something functioning in one doesn’t necessarily carry over to the other. So let’s take the fashion, Radu, that you mentioned earlier as an example of here’s a market that seems to function, incentives that seem to function without copyright. So people can… There are fashion designers, and they design clothes. And then, other companies, other individuals can come along and make copies and sell copies of those clothes. But in fashion, there’s a notion of authenticity, that the authentic item is the item that was made by this fashion designer or the fashion designer’s brand and the other things are knock-offs.

0:29:36 Aaron Ross Powell: And so, when you go and you see the designer purses for sale at the street vendors in a city, you know that those are knock-offs, and they’re not the authentic thing, and there’s a status with owning the real thing. But in a lot of markets, especially ones for digital content, the notion of authenticity doesn’t seem to make much sense. A authentic Kindle file that I get from Amazon of a Stephen King novel is identical in every way we can think of to that same Kindle file I pirate off of a BitTorrent website. And the experience of owning it is identical. There’s no distinguishing the two. Or similar with a file that I download off a BitTorrent of an album versus those files streaming to me on Spotify. And so, in the absence of that, can we really say that a situation like the fashion industry would work in these other arenas if there’s no functional way for authenticity to work?

0:30:39 Radu Uszkai: This is a really good question and it’s a really tough question because, again, it should involve a tremendous amount of research. But I’m going to start by totally agreeing with this, the premise of basically your question or, let’s say, the assumption. Any sane discussion with regards to copyright should take into account that there is no one-size-fits-all solution because, let’s say, creativity is so diverse from field to field. So it’s interesting to, if you were to take a closer look at the fashion industry, a lot of what we tend to think about fashion are actually positional goods. It’s one thing to own a Louis Vuitton bag, but it’s a completely different thing to own a, I don’t know, a Voius Luitton bag which looks the same, but it has some different letters switched. When it comes to, I don’t know, books, as in your example, we don’t, as you mentioned, actually care about the authenticity of the copy that we own. It doesn’t actually make a difference for me if I own your book in a physical form, or if I own it on my laptop. If I have it on my laptop, sorry. If my purpose is to, I don’t know, read it and use it as a teaching material for my students. Although, where I can make just a short digression, there are ways in which you could talk about authenticity. If you own a book which has an autograph, for example, it’s something that a copy that you pirated from BitTorrent couldn’t actually be thought of as a replacement.

0:32:38 Radu Uszkai: But in that case, the book means something more than just, I don’t know, the ideas that you have access to by reading it. So, going back to what I earlier said, one, let’s say, sane person position when it comes to actually discussing about copyright policy in the real world, in this non-ideal world that we live in, is to take a closer look at the fact that there’s no one size solution that fits any creative domain. It works in fashion, not having copyright protection due to its specificities. Maybe it might not work in music. Maybe, due to the fact that, I don’t know, artists wouldn’t have copyright protection, hypothetically, they would be less creative and therefore we would have less quality music, so to speak. Now, this is an empirical claim. We could, at least in part, test this claim. And the economists I mentioned in the beginning, Boldrin and Levine, from the book Against Intellectual Monopoly, actually took a closer look at the impact that the introduction of copyright for opera compositions and for opera composers. So what impact did it have in the 18th century? And one interesting conclusion that they arrived to is that, well, while the UK had the strongest copyright regime in place at that specific time and place in the world, they had the fewest composers in Europe at the time.

0:34:26 Radu Uszkai: So again, sure, we could say that the world was a bit different in the 18th century but if it’s an empirical claim, this is a way in which we could, well, basically test it and see whether or not we would have people being creative, composing if you’re talking about composers, or writing if you’re talking about authors. If we were to come back to this comparison between fashion and writing books, for example, maybe you could make the case that some small protection could be needed on a broad utilitarian framework. And it’s something that… And this is an argument that Tom Bell makes from, I don’t know if he’s still at Mercatus. But if I’m not mistaken he was also a guest in your podcast a couple of years ago. And his argument is that, well, basically the biggest problem with the copyright regime and system nowadays, it’s actually that it’s like Jabba the Hutt. It basically grew and it’s like this disproportionate blob. It tends to favor certain specific business interests, and it doesn’t actually serve the purpose that it used to serve in, I don’t know, 1790. That’s the date that he goes back to.

0:35:57 Radu Uszkai: So as a short answer to your question, I generally tend to say when it comes to, I don’t know, whether or not we should reform our current copyright system, is that, first and foremost, we don’t need the same copyright regime and copyright protection to each creative field that we might think of. But there is a strong argument to be made in favor for lowering protection for artists no matter what type of field they’re into.

0:36:27 Trevor Burrus: It’s interesting, because with Aaron’s question, with fashion, it could be the case that the authenticity element of fashion… You said it’s a positional good, also, so that matters. But the authenticity of fashion and what has occurred, one of the things that you learn, you learn this in law school if you take intellectual property, is that there is… So many of these bags have the logo on them as the pattern, essentially. And one reason for that is because the logos can… There’s a trademark element there where… So they’ve adapted a type of authenticity and a method of designing these bags within the property regime that they are in. And if you imagine taking away one of these other ones that don’t matter as much for authenticity, imagine taking away all the copyright protection. It ends up becoming a business proposition, where do you sell super ultimate editions of Harry Potter or a Stephen King that are signed? And that’s how you say, “We’re going to give you a special physical copy so don’t buy the knock-off,” and all the different things that they could come up with for not buying the knock-off.

0:37:35 Trevor Burrus: And maybe even the view of what authentic is would change based on the industry itself changing. And also, it’s just possibly the case that they’re… Like musicians are making too much money, and maybe authors are making too much money. Like Spotify, people are complaining all the time on Spotify that musicians aren’t paid enough. But I’m not exactly sure how much musicians should be paid. And people make music for free all the time. I’ve done it for years. And so, essentially, they’ve captured a [0:38:03] ____ and that in the face of “knock-offs” they would have to charge less or provide a service like Spotify that is so good and so easy that it actually makes pirating no longer attractive. And then maybe feel like that you’re giving something back to the artist too. So, all those things together would create a more, sort of, market friendly and just actually in line with the expectations without rent-seeking involved, and something that Hayek, I think, would be behind.

0:38:33 Radu Uszkai: Yeah, that’s quite a Hayekian point. And this is actually one of the points I’m making toward the end of my paper, I try to give this, let’s say, broad Hayekian reading of why Spotify or Netflix or other platforms like this appeared, and whether or not we should blame, but in the good sense, copyright infringement and piracy. Because again, I fail to see how Spotify would emerge without, again, having, especially in the infancy of the Internet, so many sources for pirating your music, for example. And it’s interesting. And again, it’s something that also happened to me and to a lot of my friends who actually used to do this. So I used to pirate almost everything. I’d mostly pirate all the books I have and I’d read up to this point, and especially, philosophy and academic textbooks which are really expensive as a result of this forced scarcity.

0:39:40 Radu Uszkai: Without piracy, Romania would have been even more backwards. So if you consider Romania backwards right now, imagine how bizarre it would be for you to interact with us without having access to pirated books. It would be absolutely insane. But jokes aside, it’s something that, for example, I stopped doing. So I don’t pirate music anymore, I use Spotify. I started to buy vinyls, however, because I do search for a premium when it comes to this experience.

0:40:16 Trevor Burrus: I’m with you on that.

0:40:17 Radu Uszkai: And again, it’s interesting because in the absence of piracy… Again, I thought, I think, I tend to think that it would be… Or, they would have had a difficult case to make for a service like Spotify or iTunes or the likes. So in this sense, this is another Hayekian, let’s say, insight that I deploy in the paper, that piracy, that copyright infringement is a discovery mechanism. It’s a way in which we, as customers, could think, could test something and see whether or not it makes sense to endure, let’s say, the opportunity cost of paying, I don’t know, $20-ish for vinyl or, I don’t know, paying €100 for a festival in, I don’t know, Belgium or something. And there are some studies who tend to mostly agree with this point that the people who are most prone to actually spend more money on movies, on books, on music or on live performances are people who actually have this mixed pattern of pirating but also of buying stuff. So it’s not the people who tend to avoid totally piracy that are the most willing to give more money, for example, to artists in concerts.

0:41:46 Radu Uszkai: So I guess this is one of the most… This is one of the benefits, the fundamental benefits that actually, piracy brought forth for artists, companies and generally, to the market. It, again, just to make an analogy with Spotify, think about how immersive and interesting the gaming experience is nowadays as opposed to how it used to be, I don’t know, 10 or 15 years ago. I mean, 10 years ago, all my friends pirated their video games. Now, all of them are on Steam and it’s a social event. It’s not only, I don’t know, a random guy or a random girl just sitting in, I don’t know, at her desk and playing. It’s a social experience, it’s an immersive social experience that it’s actually a premium that Blizzard is offering as opposed to just having a pirated version on your laptop. But again, I do see a correlation between these two.

0:42:53 Trevor Burrus: I can completely confirm that. I used to pirate a ton of music, but I did it as a music discovery mechanism. I would look at all the concerts that were coming to town and download stuff of the bands without knowing that if I maybe I’d wanna go to the show. And then even after I downloaded something, I would then go and buy their vinyl because I didn’t feel like I really owned it and I wanted to give back to the artist. Now, I’m not sure that I’m normal in that regard, and I also have a lot of vinyl records, but it shows that it’s possible to think about how free sharing of stuff can help out the artists themselves and change their business model. As someone, as an intellectual who writes things, I would not want my stuff to be locked down under the kind of copyright that would make it illegal to copy it or things like this. And if someone says, “Oh, I listened to… ” Or, “I read your piece.” Or, if we had Free Thoughts on some sort of paywall or something, “That’s not better for what you’re trying to accomplish.” And most musicians would say, “I just ultimately want people to listen to my stuff.”

0:43:56 Aaron Ross Powell: It seems, though… I’ll go back to things being different for different markets, that these arguments… The one market that seems like it would not function in this regime is movies. So right now, yeah, we have Netflix and Amazon Prime and HBO Go and this ever-growing list of services you can pay $5-15 a month to get access to. But the reason that we have that is because piracy copyright was enforced. And so, what I mean is that we use… You subscribe to Netflix because it has some titles that you want to watch. You don’t really subscribe to Netflix as the robust discovery system that Spotify has. Spotify brings a lot of value on top of just giving you access to an enormous catalog. Netflix doesn’t. The other ones really don’t. It’s just this is the easiest way to get access to these things, but I think the reason that it’s the easiest way to get access to these things is because making an easy-access system that skirts copyright is risky for those people who would do it.

0:45:04 Aaron Ross Powell: And so, by way of example, there was an app that was around for a while, I think, called Popcorn Time that you could download on your computer and basically, was Netflix for BitTorrents. You’d load it up and you would see a list of just like cover art for a whole bunch of movies, often movies that were still in the theaters. And you just double-clicked on one and it started playing, and you could stream it to your television and whatever. And you could also, it had a search engine. So it was basically a Netflix interface, but behind the scenes, it was BitTorrent and it was pirating things. And the reason that we pay… That so many people are willing to pay $15 a month for Netflix is because Popcorn Time is prevented from rolling out to as many platforms and as widely because of copyright. And in movies in particular, you wanna support the artists, but we don’t tend of think of movies that way. There are some people who are really into them who will buy the DVD just to support the independent filmmaker, but most people won’t.

0:46:19 Aaron Ross Powell: You don’t really tend to buy much merchandising for most films because films are like a, “I watched it once and I’m done with it.” Whereas an album is something that like, “I’m going to listen to this album hundreds of times.” So, is that market sufficiently different that we… I guess, so is the story of the emergence of Netflix and Amazon Prime different from the story of the emergence of Spotify. And is it the case that if we got rid of copyright in movies, especially with digital distribution, that we basically wouldn’t have a film industry because… So Trevor can sit at home and he can make music. Trevor can’t sit at home and make a movie. These are incredibly expensive things to make that require a whole bunch of people, huge upfront costs and so on. They’re not really… There are student films and amateur films, but most of us only watch those on like when Red Letter Media makes fun of them on YouTube. Is that industry sufficiently different that this story doesn’t work with it?

0:47:27 Radu Uszkai: So this is a really good question because you’re absolutely right. The fixed costs associated with, I don’t know, producing a blockbuster, for example, are pretty huge. But I would have some, let’s say, counter questions. I know… I usually don’t answer to questions with some questions, but I do have some, let’s say, more or less rhetorical questions. Do we actually really need another Avengers movie?

0:47:56 Trevor Burrus: Yes, we do. [chuckle] Sorry, Radu, we do.

0:48:00 Radu Uszkai: I don’t know, man. I like you, but I don’t side with you on this. Sure. We wouldn’t have movies like this anymore, maybe. Because another claim that I make in my paper is that what about crowdfunding and platforms like this? Like I don’t know, Kickstarter, for example, could they prove to be a useful way of basically producing art and artistic goods like movies, or documentaries, music, so on and so forth? Well, I mean, there are some positive, let’s say, results of musicians or even movie producers who financed at least part of their movies through such financing, but not at the level needed for, I don’t know, producing another Avengers movie. But the thing is, copyrights tend to distort the market, right? Because they force scarcity and that’s why things actually cost more than they should cost. That’s why you have to pay actresses so much. That’s why you have, basically, fixed costs associated… That’s why, at least in part, the fixed costs are so high. But coming to a previous point I made, if we’re talking about, I don’t know, reforming the current copyright regime and system, maybe if, I don’t know, we say, like Trevor, that we need another Avengers movie, then maybe we could still say as libertarians or classical liberals that there should be a case for a minimal protection when it comes to the copyrights in relation to movies.

0:49:54 Radu Uszkai: But what’s interesting, and where I actually don’t necessarily fully agree with what you said, Aaron, is that… And I used to do this especially when writing my PhD thesis because actually my PhD thesis is about this, about torrenting stuff, piracy, and then the, let’s say, ethical implications of this. And I used to do this each year when I was enrolled as a grad student here in Bucharest. And I took a closer look at the movies, the top 10 movies with the biggest budgets of the year and the amount of time that it was copied, torrented, pirated online. And it’s interesting that, actually, there’s actually a positive correlation between the amount of downloads and the success at the box office. I’m not saying that it’s a correlation between those two, but it’s obvious that having a movie that’s heavily pirated doesn’t negatively impact your income. And again, even if piracy used to be… Because piracy actually is decreasing as alternatives like Netflix or Amazon Prime or Hulu appear. Even when piracy was, let’s say, internet piracy, online piracy was in its prime.

0:51:11 Radu Uszkai: Actually, the budgets for movies increased, actually, the movie-going experience began to be more immersive because more 3D technology was being used. And it’s stuff that you cannot have at home regardless of the fact that you have, I don’t know, the most complex home cinema system available. So, it could still be a case… We could still make a case that copyright infringement, at least, should be tolerated and not criminally prosecuted because it would be quite difficult to actually argue that piracy, for example, and illegal copies actually harm the financial interests of actors, of producers, of companies like, I don’t know, Disney. And having mentioned Disney, I’m pretty sure that they’re going to make a lot of money by selling, I don’t know, baby Yoda trinkets than by the amount of money that they receive through online movie streaming platform.

0:52:15 Trevor Burrus: I think you hit something important where you would have to… Clearly, there is a huge demand for these big Avengers movies and I’m definitely one of those people. And so, you… Tomorrow, IP goes away and you try and figure out how you can make sure that we could make this movie and that people can come see it but it won’t be copied in a way that affects… That it’s not worth it to make the movie in the first place. And so, you could imagine theaters… Buying theaters that are essentially locked down, so then you kick-start this and if you wanna come see it on the big screen with all these technologies that Radu mentioned, “We’re going to put it in 3D, we’re going to put it with Smell-O-Vision and all this crazy stuff to get you to come to the theater,” and then you go to this place and they’re not going to let you film it or anything and you pay to get in and experience it like an amusement park ride, I’d still think that they would exist, but even better. This is the most important part, Radu, there would be tons more Avengers movies because it wouldn’t just be owned by Disney.

0:53:10 Trevor Burrus: We could all go make an Avengers movie right now, we could make 30 different Spider-Man movie and the one that’s trying to win is not because they own the IP. Anyone can make a Spider-Man movie but you have to make the best Spider-Man movie to get people to come out, so it’d actually be even better. It’d be so many Marvel movies, Radu, you wouldn’t even be able to contain yourself.

0:53:30 Radu Uszkai: And we might actually have a better ending for Game of Thrones?

[chuckle]

0:53:36 Trevor Burrus: Yes, that too, because someone would just go to remake it.

0:53:39 Radu Uszkai: And there’s also, I mean, because, Aaron, you mentioned JK Rowling. There’s so many good fiction written by amateur writers, by people, again, who aren’t professional writers like JK Rowling. Stuff written within the universe of JK Rowling which can only exist in on, I don’t know, forums online and cannot be sold by those individuals because, well, they would infringe on JK Rowling’s copyright to the universe that she created. So yeah, Trevor, yeah, that’s also a point I should have made, yeah, not having copyright protection for Avengers might actually mean that this could be a way of spurring innovation, but it would also be important to, let’s say, re-think the way that, I don’t know, the consumer ethics that we have. So were we to live in a world without copyright protection, without strong copyright protection, if we like something, I don’t know, if you like Avengers, then we should be the types of individuals that should be, that should contribute to, I don’t know, crowd-funding and crowd-funding campaigns to finance, I don’t know, the production of our preferred Avengers scenario. Presently, and I wanted to say this, I wanted to make this idea in a special context, and I guess this is it. It’s something that my former PhD supervisor mentioned at a certain point when we were talking and it’s not something that I actually spend a lot of time thinking about, but I always found it such a fascinating idea.

0:55:27 Radu Uszkai: At one point, he said something like, “Well, Radu, don’t you think that copyrights, in a way, function as minimum wage laws?” And when he first told me this, I was like, “I don’t know what’s exactly the link.” But technically, they actually function the same way in which minimum wage law functions, right? You need to pay someone something like this otherwise you don’t have access to that. It’s also a way of, well, making something that isn’t scarce or isn’t as scarce as it would be if you institute it, scarcer. It’s something that, I guess, we should take into account, the, let’s say, pragmatics of instituting copyright protection, be it strong or not. But I am going to say that, well, I have no idea whether or not, I don’t know, a world without complete copyright protection when it comes to movies might actually be work like I’m saying right now, but I’m positive that we don’t need a strong copyright protection in order to have access to, I don’t know, a ton of, I don’t know, immersive experience when it comes to movies, books, music, so on and so forth.

0:56:51 Aaron Ross Powell: The core of the Hayekian project as it pertains to building out the rules of a society is a focus on spontaneous order from bottom-up growth and a recognition that knowledge is widely dispersed throughout society and that we’re typically better off if people can act upon their localized knowledge and then use markets and prices and mechanisms of that sort to aggregate that knowledge rather than really smart people at the top trying to command things. Given that, and given that we currently have a entertainment industry, a publishing industry, a music industry, a fashion industry, and so on, that exists within these regimes of robust copyright, how do we apply the Hayekian analysis going forward? If we’re good Hayekians and we want to replace copyright with a bottom-up system, how do we go about that? Do we just abolish the whole thing and see what evolves?

0:58:12 Radu Uszkai: That could be, let’s say, a plausible strategy. Let’s see what actions, what institutions emerge as a result of human action and not of human design. And there are some arguments that, I don’t know, for example, David Friedman and other libertarians and other capitalists tend to argue for which aren’t… They aren’t necessarily Hayekians, but they do make some sort of point which is similar to the whole spontaneous order tradition, that you could have competing, let’s say, legal frameworks for intellectual production, protection. So this could be a really interesting social, political and moral experiment. Just trash the whole system and see what emerges and especially see what emerges if you don’t have cronyism. Because right now you have big companies like Disney, like Sony who constantly lobby governments worldwide to increase the level of protection for the goods that they buy, because…

0:59:31 Radu Uszkai: And it’s something that a lot of the people who actually tend to argue within a Lockean or Kantian framework, in favor for intellectual property tend to, I don’t know, they just tend to minimize the importance of this. So they spend a lot of time talking about the moral claim that individuals have in relation to their creation. Kantians and Hegelians say that, well, we should own, I don’t know, a poem or a musical composition because it’s basically a part of our personality, of our identity. It’s a way of asserting, basically, your will in the external world. But if you take a closer look at who owns most intellectual property, well, it’s not artists. It’s mostly, again, big companies who use their power to lobby the government. It’s not, I don’t know, small artists actually trying to make a living. Most of them are more or less either in favor of abolishing copyrights all together or in favor of a weaker protection for copyrights.

1:00:48 Radu Uszkai: So, were we to do this, were we to, again, burn it all down, like, I don’t know, Rome burnt and let’s see what emerges from this, I don’t necessarily know whether a no copyright work would emerge, I’m not so sure. But I’m pretty sure that without cronyism, the world that would emerge would be one with fundamentally less copyright protection and with fundamentally more creativity.

[music]

1:01:29 Aaron Ross Powell: Thank you for listening. If you enjoy Free Thoughts, make sure to rate and review us in Apple Podcasts or in your favorite podcast app. Free Thoughts is produced by Landry Ayres. If you’d like to learn more about libertarianism, visit us on the web at www.libertarianism.org.