Law in the Internet Society
Everything That Can Be Shared for Free, Should be Shared For Free

With the advancement of technology, sharing knowledge on the internet, for the first time in the human history, reduces the costs of learning to zero. As books, music and movies become extremely accessible, copyright and the patent laws turn into hurdles on the road to the democratization of access to knowledge.

Before the Sui Dynasty, the selection of officers were done through Chaju (recommendations for offices). A prerequisite of any office appointments is to be knowledgeable in the Confucius Classics (Liujing). Even though there were only six books to be mastered, education was prohibitively expensive. The books were written on bamboos, which were expensive to maintain and reproduce. Only a handful of prestigious families had the resources to teach their children about the classics, which, in return, secure all the important positions of the government for these houses. These houses arranged marriages among themselves and established a monopoly of power for over a thousand years.

What came to destroy the monopoly was the invention of paper. Full rooms of bamboo books were replaced by paper copies that could be easily transported and transferred. Papers were also cheap to produce. Any landowners who were able to feed their families, could afford to educate their children. Offices started to be filled by people of poor upbringing. The few houses that had dictated the politics for over a thousand years were gone.

Now comes the age in which knowledge and education costs are nearly zero. So close we are to free sharing of knowledge in digital forms, yet the copyright and patent laws stand in the way. Intellectual property is an artificial invention of law that is used to deprive the public of the opportunities to receive education. Intellectual property lacks the characteristics of property and should not receive the protection of property laws.

Property rules were developed over a long period of time. Land was the most important form of property. Property rights solve the problem of externalities. When a community owns a forest, individuals have incentives to take as must as he can from the land. By doing so, he externalize most of the costs, and obtain all the benefits. If everyone does the same in the community, the resources will be depleted quickly, and the future generations’ interest will be harmed. Property is the sole and despotic dominion over a thing. By giving property owners such right, we give them all the benefits of the land and also force them to internalize all the costs. In contrast, a similar concern does not apply to knowledge. Sharing knowledge does not diminish the knowledge or deprive the future generations’ ability to access knowledge. Sharing knowledge actually enables others to create more knowledge and makes knowledge more accessible to the future generations.

Property rights give an owner the sole discretion to price his property. The presumption is that people are rational, and the market will function to ensure efficient distribution of resources. If resources are scarce, this arrangement ensures that resources can be possessed by the people who value them the most. Knowledge lacks the nature of scarcity. When knowledge can be distributed at the cost of zero, any distribution will be efficient. The owner of intellectual property should not have the right to price knowledge however he wants.

Property right is in a rem right, which means that it is the right in a thing or a piece of land against everyone in this world. In rem rights in property create certainty in everyday transactions. For example, when a piece of land has an owner, you only need to contract with the owner in order to receive the permission to build a dam. Otherwise, you have to contract with everyone on this land to build the dam. However, the use of knowledge by one does not affect its use by another. In rem right is not necessary to protect the transactions of knowledge.

In order for anything to constitute property, it must be scarce. Intellectual property lacks the nature of scarcity, and, therefore, property rights should not apply. Some people argue that the lack of protection of intellectual property will discourage people from creating. This argument is wrong because, first, there is no evidence that people ever lacked the incentive to create even when there was no intellectual property law. Second, even if we want to encourage creation by making it profitable, the court is perfectly capable of using the liability rule to price any creation. If the Delaware court is capable of determining a fair price for a stock, courts are capable of doing the same thing for a book.

The history of China shows that the power was dispersed after the access of knowledge became dispersed. First time in human history, the powerful and the privileged are losing control of who should be educated and how they should be educated. As the cost of knowledge sharing approximates zero, intellectual property laws become the only way to artificially inflate the price of education to prevent access to knowledge for all, for free, and forever. To conclude, everything that can be shared for free, should be shared for free.

I recognize this argument, having made it in class and elsewhere, not with primary regard to Chinese history, for the last two decades, so I'm probably not the best person to spot its weaknesses. But I'm sure you would agree with me that those of us who believe what you say here are not winning the agreement of power at the moment anywhere, and are hardly likely to, least of all in China. You can't attend Columbia Law School—where we make mysterious exceptions to our basic principles in order to allow the children of corrupt Chinese officials to attend our school under false names—without being aware that the CCP's philosophy for the development of Chinese society is to replace cheap bamboo books with really expensive Ivy League diplomas. Your historical parable elegantly tells us what we should continue to expect.

Like the dotCommunist Manifesto, your essay shows what would be at stake if people tried to replace the Chinese Communist Party with a Chinese communist party. May we, or at least you, live to see the day....

Lianchen: This paper (pdf warning) from the St. Louis Fed might interest you. Related to patents specifically rather than IP generally, but rebuts the "innovation" point using Econometrics, which I personally find fun as a former student of the discipline. Anyway, money quotes:

A closer look at the historical and international evidence suggests that while weak patent systems may mildly increase innovation with limited side-effects, strong patent systems retard innovation with many negative side-effects. Both theoretically and empirically, the political economy of government operated patent systems indicates that weak legislation will generally evolve into a strong protection and that the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Hence the best solution is to abolish patents entirely through strong constitutional measures and to find other legislative instruments, less open to lobbying and rent-seeking, to foster innovation whenever there is clear evidence that laissez-faire under-supplies it.


Economists fought for decades – and ultimately with great success – to abolish trade restrictions. It will not escape the careful reader that patents are very much akin to trade restrictions as they prevent the free entry of competitors in national markets, thereby reducing the growth of productive capacity and slowing down economic growth. The same way that trade restrictions were progressively reduced until reaching (almost complete) abolition, a similar (albeit, hopefully less slow) approach should be adopted to “get rid” of patents.

As a side note, I'm someone who has previously supported IP rights but no longer do. In hindsight, I think the word "monopoly" was pretty key in accelerating my conversion (as in "the government should not be arbitrarily granting monopolies to private corporations"). Not sure why, but there is just something about that word that can really offend one's liberal sensibilities. I'm also not a huge fan of the board game, but that's probably unrelated.



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r3 - 12 Jan 2016 - 02:57:23 - ShayBanerjee
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