You Can’t Have A Healthy Market Economy Without Property Rights. Why Do So Many In Tech Blogosphere Want To Abolish Cyber Property Rights And Cripple The Cyber-Economy?- Part 1 of 2

You Can’t Have A Have A Healthy Market Economy Without Property Rights. Why Do So Many In Tech Blogosphere Want To Abolish Cyber Property Rights And Cripple The Cyber-Economy?- Part 1 of 2

By David Lowery

Can you imagine the outrage if leading voices in Corporate America started advocating that we abolish all individual private property rights? Citizens could no longer own any property. All property would be collectivized. Citizens could no longer profit by creating and owning things. Further what if these same corporate voices used the justification that private property rights were hindering their ability to innovate?

We’d all laugh. Or man the barricades. This would never happen, right?

Well it is happening. This is exactly what many in the tech blogosphere are arguing we should do in the cyber-economy. These faux revolutionaries are arguing that Intellectual Property and the Internet are incompatible so in the name of “freedom” Intellectual Property must go. In the cyber economy ALL property is intellectual property. This means these folks are advocating for no private property in cyberspace. What does that sound like? Depending on your political leanings this is either some sort of corporate feudalism or a radical form of socialism.

Humans have had a lot of experience with both systems. Feudalism and radical forms of socialism have been practiced in many countries all over the world. Neither of these systems fostered democracy, free speech or anything anyone would regard as freedom. But more importantly these two systems stifled innovation and crippled the economies of the countries that were subjected to these political systems. Generally in order to encourage innovation and wealth creation an economic system must reward and incentivize everyone involved in the process. For example you can’t just reward the distributors of a product and neglect to reward the manufacturer of the product. You would not build a system that incentivized and rewarded innovation in the distribution and servicing of cars but refused to allocate any revenue to the manufacturer of cars.* There would be nothing for the distributors to sell. The only way the system might work is if the distributors managed to steal cars from the innovative neighboring economy that incentivizes and rewards the car creators. BTW this is exactly how YouTube and File-sharing sites manage to survive.

Now I’ve read enough mystical pseudo revolutionary garbage about the web to know what the responses will be to what i’ve just said. They generally fall into three categories:

“The Internet is different”

“Old Economic laws do not apply to the cyber-economy”

“A magic beaver lives in a spaceship under the Googleplex”

The Internet is different than what? This is never satisfactorily explained. Seems like a funny point but no one has ever been able to convince me (or themselves ) once I press this point.

Old economic laws do not apply to the cyber-economy? Yes they do. There is nothing different or new about the cyber-economy. Goods with near zero marginal costs? We have those in regular-space. We’ve had them for hundreds of years. The list goes on and on. If it makes any difference Google’s Chief economist Hal Varian also thinks the old economic laws apply.

While it’s entirely possible that a magic beaver lives in a spaceship under the Googleplex other pseudo religious and mystical properties assigned to the technology industry and in particular the web are just not true. I will bet anyone $1,000 dollars that 5 years from today The Technological Singularity has not occurred.  The Technological Singularity is a Nerd reverse creation myth. Abolishing intellectual property is not gonna turn the web into a super intelligent being and usher in a new age of peace, prosperity and enlightenment.

There are many more quasi religious narratives about the web. Some milder and some stranger. I don’t mean to single out this one. They all need to be debunked and challenged. For all they do is empower demagogues and commence hunts for Apostates.


I realize that what I am saying about robust property rights and healthy economies is nothing new. It’s a rather elementary and banal critique of the Copyleft’s proposed cyber-economy. What is more interesting is why there are so few other voices out there challenging these wackjobs? Why is it left to the singer of a moderately successful cult rock band to challenge this nonsense? That’s the real story here. Where are the grown-ups?

It think it has something to do with those quasi religious narratives about the web. It encourages fanatics, nut jobs and unreasoned discussion. I mentioned last week that there is a mathematical argument to be made that the internet is making us stupider. Well there is also a very good argument to be made that the web is actually stifling free speech. It is certainly not always the place for reasoned discussion. It’s a land balkanized by ossified opinions and guarded by trolls.

The web is a place where people go to hear their own deeply held opinions parroted by others. There are few places that you may have a fair and balanced discussion. And If you say the wrong thing in the wrong neighborhood you find yourself in trouble. That’s why their are few “grown-ups” on the web. Most are not willing to endure the stream of hate mail, nasty Facebook comments, angry tweets and out-and-out threats that the tech blogosphere DELIGHTS in unleashing on anyone with which they disagree. That is why this rather radical idea of abolishing all intellectual property has taken hold. The grown-ups don’t wanna be called names by generation gimme.

Tomorrow Part 2. I examine specific individuals advocating for the abolition of private property in Cyberspace.

4 thoughts on “You Can’t Have A Healthy Market Economy Without Property Rights. Why Do So Many In Tech Blogosphere Want To Abolish Cyber Property Rights And Cripple The Cyber-Economy?- Part 1 of 2

  1. Another great post. My two cents:
    1. It seems to me that the “New Economics of IP” tend to start with socialism and end in feudalism (much like “real” socialism, albeit for different reasons) – witness Lessig’s “hybrid economy”. In the case of the Web, it all boils down to where the buck stops – that is, where we encounter scarcities that cannot be overcome by pillaging. An example: it has arguably become possible for just about anyone to create/rip video and post it to the Internet, however providing the infrastructure to host, index and stream all that video content is another matter entirely. You need a large company to handle the infrastructural bit – like YouTube – and they’re in the prime position to make money. YouTube thus becomes a digital equivalent of a feudal lord, providing real-estate and extracting rents (in this case: they make all the money and may generously share some of it with the content uploaders/owners). This is perhaps even more obvious in the case of Amazon’s self-publishing platform and the various plagiarised/knock-off/wikigenous “books” that they sell (see this article from Time).

    2. Part of the problem with getting “grown-ups” to participate in these discussions is that IT and the internet are still the realm of specialist and – to a lot of people – esoteric knowledge. The techies say: “we know a lot more about all these technological issues than you do” and a fair-minded, mature person will likely concede the point. Once the tech-apologists have browbeaten anyone who disagrees into accepting that they cannot voice a considered opinion without a profound knowledge of the inner workings of internet technology, they’re free to make the most inane statements about the implications of this technology unopposed.

    The fact that technical issues have no actual bearing on the discussion, which involves simply what possible uses of technology are permissible and which of them are prohibited and punishable seems to escape both sides of the debate.

    1. Faza.

      Excellent point on the Socialism to Feudalism. It does all end in some sort of corporate feudalism. I agree. Without property rights in cyberspace the only way for a small stakeholder to make any money is through labor.


  2. Ben Folds made a post yesterday for “aspiring musicians” that, as of just now, a half million people have “liked” on Facebook.

    One section caught my eye:

    “We talk a lot about how computers and internet have changed and will change music. Usually what people are talking about is the distribution of music and not music itself. That’s not really something an aspiring musician should be all overly concerned with.”

    I see where he’s coming from but really…?

  3. “that the tech blogosphere DELIGHTS in unleashing on anyone with which they disagree.”

    The tech blogosphere is not unique in this regard. It’s common to virtually every polarized topic that gets discussed on the web. But otherwise, yes.

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