 Okay. Hey, this is Stefan Kinsella with a rare original episode. This will probably be Kinsella on Liberty 369 and today I'm talking with my friend Greg Moran, and we're going to talk we're going to do basically a post mortem of my SOHO forum debate on intellectual property with Richard Epstein back in November. Greg and I, Greg went with me and we talked about it a lot after, and we should have recorded this right then when it was fresh, but we'll see what we can do. Greg wants to say hello and introduce yourself. Yeah. Hello everyone. I'm Greg Moran. I've been involved in Liberty Movement stuff for past 10 years or so. I own a small business. So that's kind of my area of expertise, I guess some real world implementation of some of our ideas and how government has impacted it. I try to be a benefactor where I can to help any of these areas of our movement to push the ball forward as much as we can. Okay. And so my podcast feed is most people listen know is usually just copies of appearances on other programs or speeches or appearances I just started this years ago because it was a convenient way to just assemble them on occasion about every 30 if the episodes maybe I'll do an interview or something or an independent episode. So Greg and I actually we traveled last year was a heavy traveling year for both of us I think right. We went where do we go together we went to Alaska biking with Juan Carpio. Freedom Fest was first in South Dakota. Freedom Fest in South Dakota in Alaska. And then Turkey, Turkey Hoppa's property freedom society. Yeah, and then us, and then we did. We did November. What was St. Petersburg first. Yeah, that was the Mises support summit St. Petersburg and then we did Turkey in September Hoppa's PFS property freedom society meeting. So lots of fun. It was in November, New York. Yeah, Houston in December so. That's right. Ron Paul's thing in Houston. Yeah. It was a busy year. I'm going to take off most of next year until, until maybe a Turkey in September. Just stay home and try to get some things written. And your hardcore Rothbardian Austrian and big Mises Institute supporter yourself. Yeah, yeah. And I think and you kind of played a, the final transition where, you know, I had been exposed to Rothbard first and read his for New Liberty and that really opened quite a bit in terms of my interpretation of things that I've been taught. You know, every chapter I went into that it was one of, oh, well he's crazy this there's no way he can justify this and then by the end of the chapter you're like, yeah, okay, I can see that that makes sense. But I think IP, that's sort of the final linchpin and the whole thing that once you accept and understand why it's not legitimate, then everything else comes into focus because that's that's sort of the last message that's the last point where most people kind of can't get a hang up and kind of feel like well we still need the state to manage this and once you understand basically understand what property is right and everything else falls into place. Yeah, it's interesting because, as I've said many times, I mean I had so many talks on my podcast feed and elsewhere on IP. I mean I've they blur together I know lots of people listen to all them or some of them and sometimes people say what's the best one and usually it's one of the most recent ones because I keep finding new ways to pitch a recapitulate the argument. I mean basically I wrote this thing in 19, I don't remember 98 or 99 or 2000 for the JLS it was a long article which they later published as a monograph in 2008 but it was just one of a series of libertarian legal articles that I was writing and I wrote it, partly because I, there was a huge gap in or bad treatments of it in the literature and I was a patent lawyer and a libertarian so I thought, I'll tackle this and, you know, I've sort of been typecast in a way that's probably two thirds of my invitations on programs and conferences is on IP, which I don't really even mind it because it has been a goldmine of forcing me to figure out number one ways of arguing for it, and also sorting out property and contract and all these things. And so it's kind of deepened my understanding of libertarian legal theory in general, which is still my main interest but and so my original article is a little monograph and I stand by pretty much everything in it, although I'd probably be a little bit harsher on trademark than I was then. I kind of gave it an outclaws saying that to the extent it covers fraud but you know, to the extent it covers fraud we already have fraud law so it's really something beyond fraud law. And I probably would emphasize or define what I meant by scarcity, more as the concept of economic rivalrousness, because when you say scarcity a lot of people will equivocate and they'll say oh, well good ideas are scarce. So they're using the word scarcity in a different sense but if you if you call it rivalry or rivalrousness then they can't say that they can't say ideas are rivalrous because it's a classic example of something that is not rivalrous. Go ahead. And a quick question on that because I've tried to kind of clarify things for myself I kind of take notes on my own and try to gel these ideas and one of the thoughts I had is that is, is there a distinction between scarcity and rivalrousness. So, in, in one sense, air is not scarce but it's technically on the atomic level it's rivalrous. So, you would have to have at least both of those things to be the case. Correct. Well, so I think that gets into a whole area of, of, of the proper understanding, like the realms of economics and human action, combined with the physical or causal realms so I think in terms of Mises he focused on scarce means of action and by means he meant the things that you can employ to interfere with the causal and material things happening in the world around us to achieve your ends. And he distinguished that from background conditions or has some and Rothbard uses similar terminology. So, background conditions are like facts about the universe you know like the fact that we have three dimensional space to move around in and, and I think he sort of lumps that in with that things that are technically physically scarce in the sense you just mentioned, but that are so that are so plentiful that we don't bother to economize them. So if you don't in your action regarded or you or have to treat it as something to be economized, then he treats it as a background condition of action. And I do think there maybe can be a little work done to clarify some of that because he also has some comments like in a division of labor we employ other people as means, but what he means there so he used the word means and different senses. So sometimes you use it in the term mean scarcity scarce means. Sometimes you mean uses to mean things that we just use to get our ends achieved so if I hire someone to make a cake for me. The way I got the cake was to employ someone but they're not technically a scarce means of action in the sense of an object that you can own right. So there's a little bit of fuzziness and some of these definitions. And I think the way hopper gets at it. Because, see, unlike Rothbard and my. So Mises focused on scarcity to a degree. Although one thing he neglected and which I think everyone neglects is like in the proxy logical framework to simplify it. We humans envision a future coming we're not happy with what we think is coming, and we look around to see what means to change it to achieve a better future so that's what the action is. So it means that action has two fundamental things that are essential for successful action one is the availability of these, these sort of levers or these tools, these things we can grapple with and grasp and command and control to change the course of events to causally interfere with things. So that's what means is we'll call scarce means or I might call scarce resource or a tool, or a material, you know, object. But you also have to have knowledge that guides your actions your decisions, and property rights emerge for the first, because those resources are the things you can have conflict over. So I've actually developed a concept called conflict ability which I think gets at the essence of the things that can be owned, anything that you use to achieve your ends as a means that is conflictable that you can have conflict with other people over. That's what you need property rights for. So I think that this idea of conflict ability is roughly the same as rivalessness and scarcity in the economic sense. So hop emphasize that scarcity and economic sense is distinguished from scarcity is the opposite of super abundance. Most people think of scarcity is the opposite of abundance. So they think, like, some things are relative terms like, if everyone likes bananas and there's like a few bananas around there, they're very scarce. There's a lot of bananas where they're cheap, they're abundant. But in the economic sense of scarcity, which is the opposite of super abundance. Even if you have billions of bananas on the world they're they're technically scarce because each banana is a is a is a conflictable resource that you can have a conflict over. I do think that it's sort of like in math, like, you know when we do these limits like in calculus and you can think of abundance at the limit become super abundance. So if something becomes so plentiful in a practical sense that you don't have to economize like air, then you can treat it like it's super abundant. So that's why it's not considered a scarce means anyway that gets into the weeds a little bit but that's sort of how I think about it. Yeah, but the bottom line is that action is a practical thing and property rights are a practical thing designed to come up with norms or rules that specify who owns the things that we can have a conflict over which are conflictable or scarce resources. That makes sense. Yeah, I was just going to throw in one comment or thought that super abundance perhaps could be interpreted. I feel like I was talking about with air, where it's something that it requires no worker effort on anyone's part so even even bananas may be super but they may be very very abundant they grow everywhere, but it still requires that somebody go and cultivate them and they're still work involved in that whereas something like air is just it's simply everywhere. Correct that that could also be time and place dependent so if you're on a space colony you're on the moon. They're probably be property rights in air because it is not. Yeah, and lots of sci-fi novels air is something people own. I mean, or else watch a nigger movie and the moon is harsh mistress and the way I think about it is that technically speaking, so hoppa comes up and other people come up with these thought experiments like the Garden of Eden or the land of cockagney or cocaine or have you pronounce it. This this land of super abundance. It's not really a realistic example sort of like Rothbard's evenly rotating economies not a realistic example is it's almost unimaginable, but they do these unrealistic thought experiments or gadenkin experiments to illustrate to isolate one phenomenon to analyze it right. So I do think there's some analytical problems with thinking seriously about super abundance I think technically speaking in a strict sense. The concept of super abundance only applies to information or knowledge, because that is something that can be infinitely copied and used by an infinite number of people. At some time without conflict. And that is that that that second ingredient of human action which I was going to say I think has received short attention in the Austrian literature they focus on means and in economizing using these means, but very relatively little attention is given to knowledge and when it is given attention it's done in a sort of misleading way like by the Hayekians talking about knowledge being dispersed but that's not the key thing I think the key way to look at it is from a praxeological lens. What I'm going to say is that, like, the key thinkers, in my mind would be Roth, Mises Rothbard didn't hop up. Mises did focus on scarcity, but only to a certain extent, but he didn't focus on knowledge. I mean he recognized it on occasion but it's like side side comments. Rothbard seemed to me not to focus on scarcity so much but on other other economic analyses. Rothbard revived it because he's more of a Misesian than Rothbard was more of a Kantian. So hop of refocused on scarcity and because of his keen focus on scarcity. He used that in his property theory, which made him more of a radical libertarian than than Mises. He also allowed him instantly to see the problem with intellectual property like he he's so such a deep praxeological thinker building upon Rothbard and Mises, like getting the radical politics from Rothbard and the and the praxeology from Mises. He instantly saw the problem, like back in 88 with with IP he just said look, a formula or knowledge is infinitely usable you can't own that he instantly saw that because he had such a clear understanding of praxeology. So that's how I look at it and I think my kind of my contribution is just kind of assembling those three strands of thought. And I think the rivalrous component that's the most critical part particularly to the discussion on IP. So I was reviewing the debate again before we had this our conversation here and one of the things that struck me is that I know going into it, you were instructed that the debate was to focus on a more libertarian standpoint rather than theoretical one. Yeah, the problem with that approach is you really were forced to debate with one arm time behind your back. What what what Epstein essentially does is and he it's a very good analogy which appeals to a lot of people to say well with real tangible goods. We have exclusive rights in these things that we can incentivize people to develop these goods and give them an incentive to develop these goods because if everything we're held in common then this incentive wouldn't exist so clearly, if this, we all understand that this makes sense with real goods. So obviously it would work with ideas and intellectual property as well. So given that it's like well yeah I guess okay well if you give someone a certain right for a certain period of time it will incentivize them. That it's sort of begging the question because it just says okay well we just to make the assumption legitimate right when in fact it's not because of the rivalrous component of it. Right. That's the whole reason that we define property in the way we do. The reason that you give someone exclusive right in their farm versus the other person is because they can't both farm it at the same time. Whereas the idea that it doesn't exist so that that was kind of something I picked up on that kind of actually made your job a lot more difficult. Yeah, going into a whole, you know, there's only limited amount of time so there's only so much you can go. Correct. Well, let me set up the background so why are we doing this, this talk today. So, as I mentioned earlier so my podcast feed is just when I get invited on someone show or to speak I just record it and I put it on here. And I've never been, you know, like, I've never I've never hardly ever in my life asked someone to be on their show I'm not a sole promoter I don't care I only go where I'm asked to go. But I did think that so whole forum which I'm a fan of an Amara for years. I, you know, I ran into Jean Epstein, I think one time at at Stringham's place in New York about four or five years ago and I said, you know, you should do IP sometime. And then I ran into a pork fest this year, and we talked for a long time and I said you should do IP. Yeah, I don't care if it's me. I mean I'm probably the best at it but there I can. Here's four or five other people who could do it. And Jean kept wanting it to be. He said well to get it done right we're going to need to focus on empirics and examples in the pharmaceutical case. So we finally got Richard Epstein to agree to do it and he's an of course a Chicago type utilitarian libertarian. And so he's pro IP classical liberal he's. He's pro IP, and his argument is basically the standard, you know the standard Chicago argument. It's not a principled case at all right it's not a proper terrain argument. And in my view, I've always been like even with Iran I've always been like right space like what's the right thing to do what's moral. But my, my argument always from the beginning from 82 since I've been a libertarian was. Yeah, any trust laws wrong, because even if two businessmen could collude and set prices they have a right to right, or even if you know you could offer to pay someone a below subsistence wage, then the minimum wage is still wrong. And the secondary argument that oh well, as a practical matter people can't collude like cartels are not feasible. Given given enough time, these things won't last and that's correct the argument from people that that that that say that we have to have intervention, but we can't possibly let this, you know, persist for more than five seconds we have to have someone come in and try to override it. We know that if you just allow enough time these things basically have to sort themselves out that if you're going to have a cartel then someone is going to undercut them someone's going to figure out how to compete against that or someone under underpaid then someone's going to come in and pay them a little bit more and essentially the problem sorts itself out. So, you know, and I think over the over the years the argument to me is once people get it the IP thing they see it is so clear it's like one of the, it's one of the clearest libertarian arguments it's sort of like the drug war it's like there's no good arguments for it and there's really no good argument for IP once you understand how to approach it. And like I was going to say earlier, I agree with everything in my first article that was over 20 years ago and I have come up with other arguments and ways of presenting it so I do plan to write something later. But I just wanted the ideas to get out there and so forum has a big thing so I did that's the like one of the few times I've kind of like twisted someone's arm to have me on so Jean agreed to it and I was happy to comply with his wishes to mend it in a more utilitarian way. I was kind of optimistic that I would win but the more I thought about it it's like Epstein is so smart he knows so much he sell he's so authoritative he knows how to drop a lot of buzzwords and things that are slightly over people's heads so they assume he knows who he's talking about. Plus the audience was it was a COVID audience so it was New York, everyone had to be vaccinated so that automatically reduces the number of radical people in the audience so. Yeah, so I lost but it was, you know, it was close and I was it was I did the math it was one vote like yeah and yeah, and I made the mistake of inviting two people, or alerting two people to it who tuned in who I'm pretty sure voted against me so I actually got two votes against me. It was my fault, but I didn't care. I didn't really care I just didn't want to lose badly I wanted to present the case I just won't. I didn't care what the audience thought to be honest I wanted to. I wanted people what ends been over 10,000 or 14,000 views now so that's good so I just wanted to read it and you did change vote so those were all when I changed that so that was good. And in the end, so I did start out with the pharmaceutical stuff and empirical stuff, because that's what I was asked to do. But in my closing I did go with this more principal thing about praxeology and the difference between knowledge and scarce means. The problem with the empirical approach is that it's not principled, and it's ad hoc, and there are like an endless number of cases that they can demand that you answer. And even if you answer them they will just come back with another one it's sort of like if a welfare status. If we say well, I'm against welfare for moral reasons because it requires theft. But they don't care about morality they care about feeding the poor, you know, or whatever, or housing the poor. So if you say if you give a historical examples and use economic reasoning and other other reasoning to show that well it's very likely that, you know, the poor would be able to, they do they do better in a capital society without welfare because you know they'd be richer and they've had more opportunity for jobs and they'd be charity for the rest. So if you show that, then your welfare opponent will just say well can you guarantee that it's like well I can guarantee it but you can't guarantee it either because social security is about to go bankrupt. And even if even if they accept that it would work they'll they'll just turn to the next thing they'll say well what about, what about clothing, what about housing what about education, like it's a never ending barrage of demands that you give them guarantees and this is what YP guys do, they basically have this idea in their mind that that they're that the free market and capitalism are roughly good but there can be market failures because of what they call hold out problems and free rider effects, which reduces the otherwise ideal of an ideal free market, but so they think there's market failure, and the government can come in and identify these and fix it with interventions, and the interventions seem on their face to be violations of property rights. But these utilitarians believe that yeah they do hurt people some degree, but they break these log jams in these market failures and they overall increase the size of the pie of wealth for everyone. So, and you can use that surplus that you generated by this government intervention to compensate the people that you took from that's Richard Epstein's whole takings idea. So that's their that's their theory right. The eminent domain argument. Yeah, take a taking eminent domain or condemnation we admit we're taking it from someone but society benefits on the whole so it's okay. Yeah, so so but Epstein in his book takings he basically uses that theory to say look government justified, because on occasion it can it can identify a market failure because by a hold out problem or free rider problem and take some property to make a road or whatever and it could tax people to do that and they're better off because they have a road that they couldn't have had without government takings or eminent domain, and the person you took from you can pay him compensation, and everyone's better off. And he says but by this logic, most federal government programs don't satisfy this test so they're unconstitutional or they, because they violate the takings clause and they, they actually don't make us better off. So like the, you know, the FDA likes lots of administrative agencies he says they just don't fail but they don't pass the test. The problem is, in other writings he supports intellectual property, because he just makes this abstract argument that well if there's a market, if the hold out problem, and if the government can actually identify it and if the government can grant these limited monopolies on patents and copyrights. Then they can make us all better off because the value of the extra innovation and creativity that we generate by these market interventions is greater than the cost of these programs in the first place these takings. The first shows it so that was my first my first 1517 and a half minutes. I just went through all the, literally all the well known studies that I'm aware of all of them. Well there's a few more on my side but I'm not like I didn't bury the ones that are on his side because there are none. I just went like if you're going from an empirical point of view, all the evidence shows that there's what shows that there's no evidence that the patent system, say for example generates net innovation. Or they conclude that it actually slows down innovation for obvious reasons because it prevents you from competing with someone and you can rest upon your monopoly for 17 years you don't need to innovate as much. It distorts innovation. So I so like my view is that the burden of proof would be on the Chicago guy Epstein like to show okay. Just like you condemned all the administrative agencies because they don't pass the takings test IP doesn't pass the takings test unless you can show with evidence with some empirical study. Okay, so when he can, when he condemns the other programs is not passing the test, but what, what method is he using to do that and and is he applying the same method to IP or is it simply. He's using a method opinion or it seems like because and I quote in one, as I just rewatched it he says. He's basically saying you you offer no evidence to support this position, but I think on balance. It probably is not the case right he just thinks the whole argument as well. My personal subjective deal. It's probably not true so we'll just proceed from assumption and go from there so if he is able to say well for these government programs, we can show that they don't meet this test and why couldn't we apply those same standards to IP. And it's because essentially I don't see actually how you could unless you perform an experiment between two different countries and you make and you make comparisons because they're all counterfactual whether or not this government program. You know, maybe some welfare program actually did on net would have perhaps, you know, created a handful of people greater than the amount that was taken or however you can. I don't think you can but let's say somehow hypothetically you could. Well it's still a counterfactual so it's kind of the same problem. I read the whole book, but it's been a while I was in law school, and so I can't remember exactly how he goes about attacking these programs. He gives, I think he, I don't think he uses empirical studies that much maybe some degree does, but I don't think he relies on a burden of proof thing either I don't think he just says well. The components of the FDA, or the National Dower for the Arts or the or the FCC or whatever the or the FTC. He, I don't think he says they haven't satisfied their burden of proof, I think he actually comes uses reason to show why it's, it just seems unlikely that these programs generated net surplus that they can make us all better off. He makes and then he shows well in the case of roads, you can see why it would, although I don't know if he uses data for all those. But the point is, I think he uses reasoning to critique these, this panoply of alphabet agencies and the federal government, similar to the way I critique IP, like mine is partly burden of proof, partly I'm relying upon all the studies that have been done like economists have been trying for 75 years to study this and they always conclude that, look, you just don't have any evidence, or it seems it seems like it actually dampens innovation so it's a, they keep saying the system is broken but they've been saying that for 50 years. At a certain point in time it's like it's not broken this is the way the system works you know. So the point is he's just not applying his own methodology, but the thing is, if you have this ad hoc approach, then even if I, and so he did the exact thing that's the problem. I first went through all the studies, and then I gave like a bunch of examples of just horror stories of how copyright and patent have been applied, and the result has been just an obvious injustice like everyone in the audience would agree it's obviously just an obscene seem to agree with all those, but he's like well, don't throw the baby out with the bathwater so this is a problem if you don't have a principle approach, even if I give examples illustrating it. They're just going to say well, yeah, but that's not the system I'm in favor of a system that's reformed and gets rid of those rough edges, but preserves the core beneath that's really good. There's no way to argue against that in a, in a 45 minute presentation when they're just going to keep hitting you with, well what about poets, what about what about authors of novels, what about documentary filmmakers. What about an employee who wants to start a startup and needs to sell us. I mean, they just going to come up with one example after the other and even if you answer all those. They'll just keep coming up with more they'll never be satisfied and the way I had the word that the resolution to entice Epstein to do it to make it easy for him to win was all patent and copyright should be abolished. So all he had to do is put a little bit of like reasonable doubt that like, yeah can sell it might be right that everything you mentioned is a problem, and we should radically reform the patent system and the copyright system. But that doesn't show we should abolish all of it because maybe there's a core left and Epstein seems to think that at least on occasion there's these market failures that patent and copyright law can solve so that was the uphill battle I was facing which was fine with me. Well, and I was just actually going to push back a little bit on the way you presented or the example cited against the abuses of intellectual property or copyright. So, I mean, I agreed they're all horrible, but in terms of persuading the audience, very few of them probably have the effect of changing minds. So for example, a lot of them were, well this person did this, and they went to jail or they were fine because they violated this copyright, which we would say yeah that's ridiculous but to someone who believes in copyright say well yeah of course they've been finding on the jail because they broke the law. Yeah, and that's a copyright they were stealing value so of course so Yeah, and Epstein. Yeah, absolutely only a couple where it was like, oh my god yeah that's really actually horrible. That's that's that's correct this is sort of I won't say question begging but it's like if you view it as a property right. That's justified, then you have to enforce it because and that's what Epstein says about injunctions like he says well. If you have a property right you need to have an injunction to enforce it, whereas to me an injunction for copyright patent is one of the worst things because it makes the effect so much harsher. I think the example you had about Ford that that was probably the best one because it basically said look we have this patent. Well the patent holder to able to restrict other manufacturers from using these safety measures yeah yeah It literally cost people lives. Yes, they literally did so that one I don't see how they could argue back against that other than you know just well on net you know okay you got to break a few eggs I guess but I don't know. Yeah. Yeah, it's it's it's that is true that is one. That's one drawback of just citing outrageous because not only that lots of people don't have a. They don't have this view that a lot of us have like I view that all rights are what Hillel Steiner called composable which means, and I like I ran had this view that rights can't conflict actually if you properly identify and allocate rights which are always rights, then they, it's impossible for human interest to truly conflict because there's a property system that identifies who's the owner of a given conflictable thing so there is. So, but most people don't think that way they think that there's always. There's always a possibility of a conflict of interest, and the law has to sometimes compromise and balance these things, which is what Epstein's view is like with respect to. Like I pointed out that the copyright act restricts freedom of the press, because it prevents you from publishing certain things which the First Amendment says Congress can't do. So on a facial reading of the First Amendment, it, it would prohibit the copyright act from being enacted because it, it restricts freedom of speech and freedom of the press. So, what the Supreme Court has done and what Epstein seems to believe is that you have to balance these interests like they're competing interests and the court, that's what the job of the courts is, like in the old days the job of courts was to do justice to like find the owner of a resource in the case of a dispute about a resource in a fair way. And now the job of the court is to interpret statutes that compete with the that are in conflict with each other because they're just decrees of a committee, and there's no guarantee that they're consistent with each other. So it makes it look like our rights are in conflict and intention and not always composable, because everyone's illegal positives now and they think that law is the only source of our rights is the law and the law comes from a legislature, which is just a kind of bureaucrats and there's no guarantee that they're consistent with each other or even that they're just. So that's what the job of the courts are now is to balance competing interests like any trust law, people admit that any trust law is in tension with patent law because patent law grants monopolies and any trust law outlaws monopolies. So the courts say well, you can't. You can't subject someone to liability under the antitrust law for merely having a patent because the government has issued the patent, but if they go too far and abuse it then that's an antitrust problem so they try to balance these conflicting provisions and same with copyright in the first amendment. And fc seems to buy into that too, but so this is again the problem that ad hoc on principle, non-appropriate approach to things. What happened when you essentially tried to within the law legislate preferences rather than principles to the extent that you could legislate principles but these are basically just preferences well, we want competition, but not too much, you know, we don't want, you know, basically these big companies to collude and harm harm the consumer, but maybe if they collude just a little bit and benefit them then that's okay so they're trying to balance out all these things and it's really it's just not possible but they I guess do the court system. It's imagined that we can treat all of these on a case by case basis and a certain class of individual society can can kind of act as a grand overseer and guide the ship and make sure that everything is as we prefer it to be. Well what's what's astounding is they have this idea of. So, the Chicago types have this idea of ideal or perfect competition, which is unrealistic. And the problem with that is, when the real free market doesn't live up to their idea of perfect competition and instant transmission, instant costless transmission of knowledge, all this stuff, then they call it a market failure and justify intervention to stop it so they come up with the unrealistic model of that's the ideal. And when when the real free market doesn't apply with it then they want to they want to tweak it to become more ideal even though it's not realistic I mean the whole thing is corrupt. But what's what's ironic is so they're I their ideal is perfect competition. And yet their argument for patent and copyright is that competition itself is a market failure so it's like they're willing to tolerate competition when it's difficult so if you if you're an entrepreneur and you come up with a brick and mortar business. Then if it's successful, you will you will attract competition people will start competing with you and they'll drive your cost down to the marginal cost of production over time this this is how the market works. So it becomes more difficult for you to make a profit if you're the first guy, you can make a profit more easily at first because you're the first guy, but then when you attract competition, it gets harder and harder to make a profit doing what you were doing so it's just the way it goes, but in intellectual goods and services that is things like the patent and copyright cover inventions and creative works. Things where the market value of the good or service is heavily dependent upon its, its arrangement, its pattern, which means that in some cases, competition is much easier than it is for brick and mortar because I mean, if I'm if my business model is writing a book and selling the book, it's very easy in today's technology for someone to copy the book. So competition is very easy and quick. And this bothers the, the Chicago guys because competition apparently, if it's too easy is a market failure to them because it doesn't allow you to recoup your costs, I mean that's their focus is recouping costs, you know, all over the time. So that's what's ironic is that they want to, they want to force a realm of human action. The idea, the knowledge aspect which, which we're lucky that that is a non scarce resource because we can replicate and copy and all use this information, and all have successful human action, because we can use this knowledge freely. So they want to subject it to the type of scarcity that's naturally part of the scarce means the conflictable means of action. So they want to slow, they explicitly say they want to slow down the spread of knowledge so that there will be more knowledge to, to be created in the first place. It's so much social engineering it's incredible. Yeah, and it's kind of counter counterintuitive but it's, it's, it's kind of. Basically, the two things are working against each other so the idea is that well, we're going to for IP we're going to give you monopoly over this idea because by having the monopoly that will incentivize you that will incentivize production of different things whether new inventions or the arts, however, so by having this monopoly right we incentivize production and competition, but on the flip side, they say well if we didn't have this then there would be a monopoly. And that would represent market failure and then that would decrease competition so it's like I don't, it doesn't really make any sense that well if we impose this system it's going to incentivize these benefits to the market system this production of new goods and services and inventions. And if we lack it, then the same thing will happen naturally but we won't get these answers we benefit so it's kind of it's contradictory in that way. Yeah, I think it's almost. Well someone sent me a note after they thought that like it was striking f scenes answer to what what I thought was a pretty good gotcha because he, he seemed to concede that the original copyright system that was called a founders copyright like 14 year terms maybe extendable 28 years. Now it's 140 or something roughly. He seemed to concede that the original term is about right and that 140 years is way too long. So, you know, I asked them I said well, I understand you'd prefer 14 years to zero. But apparently when you have a copyright system, it will grow and metastasize and turn into 100 plus your system. It's like a 30 year or a 14 year term. It's not feasible it's like, it's like, it's like saying Menarche is possible there's different menarche states always turn into into megastates so there's no there's no reason to think it's possible to have a small copyright term it will always grow because a special interest behind it will always push forward and the public will be confused and they'll go along with it. So I said, if your choice was 140 years or zero. What would you choose because zero is closer to 14 years than 140 years right. And he says I would still take 140 and someone Romans said that's just amazing because that doesn't even make sense from his point of view. I don't even understand how he could say that it seems like he would, he could give me that one without losing the debate he could say well I would rather zero than 140. I think there might have been a question the audience about that or something came up later basically he said that well it 140 is not as harmful as it appears because most of the value is derived in the first seven or 14 years and after that. There's very, very little value from the original author after that point. And so on net society isn't really losing anything because anyone that would try to copy it after that time frame would only be able to gain that gain that residual so it doesn't matter. Of course, of course, I mean, I mean, you know, there is the orphan works problem which is that, you know, over over time works. People just don't republish these works because they could be sued for massive copyright infringement. So they just disappear so there's yeah there might be no market 50 years later. So there's no incentive for the the original copyright holder or their heirs to even monitor it and get permission or even be able to be findable. So no no publisher can republish it because they don't even know who to contact. So it becomes a black market benefits the resale market. So a lot of these books that are off. The original publisher doesn't publish anymore and I don't know if it's I guess not off copyright but they just refuse to publish it or they can't be found. Some publishing agreements have a reversion clause right where like if it goes out of print for a certain amount of time the rights revert back to the author, or to his heirs, and that that's fine but but you still don't always know how to track them down or who they are. If the book is just so out of demand. I mean it would be great if you can have Google books do what they originally wanted and just have everything up like project Gutenberg. It that's out of print, but they're not out of copyright yet so they can't do that. Because I'll be sued by authors unions and authors guilds and things like this, even though the original copyright holders are nowhere to be found and don't even know about it don't even care. That's the biggest demand for because if you look for somebody's books the only ones you can get are the original used ones and some of them can be several hundreds of thousands of dollars so obviously somebody wants them. Yeah, yeah. Yeah, so. I don't know, I thought, I don't remember we had we you and I talked a lot about it that night we had more ideas we forgot now but. I had those one. Two others with one I was going to bring up. And this was a point I was going to make actually I guess when I had my introduction I didn't bring up that my background is in chemistry, PhD and organic chemistry. So, I'm familiar with how research universities function and that whole environment. And one of the things that that struck me quite a bit was Epstein. He basically talks about how, and this is one of the tropes that everyone uses they always go to drugs, because they always seem oh well these companies are going to spend billions of dollars doing this drug, and then it's just going to be easily copy that's what he said he said a billion dollars develop a drug reverse engineered quite easily right and then they lose it. And I'm here to say no I'm a chemist and I've worked in a lab and I know how this whole process works. It is not quite easily. Yeah, that's completely I agree it's completely false. But the point where we have journal articles telling us how to make these things. And we have problems making them. So, it is is not trivial. Now, yes granted you're going to have you throw a lot of people behind it, trying to reverse engineer but it's very difficult because a lot of what drug development is is that will look to nature and find natural products, and it takes, it can take up to a year or more simply to get a structure on the thing just to see what it is. Now you have to come up with a pathway a chemical pathway to produce it first correct and then it might be completely different pathway if you're going to do it at an industrial scale so it there's no way is it an easy process at all best best case if someone came up with some new, you know, drug and they reverse engineered it. Maybe five years, maybe. Yeah, well, well not only that. My understanding is that, even if you knew exactly how to make the chemical to make the pill, right, that apparently some generics are not as good as the name brands, because of the way the pill is formulated and the way it's absorbed in your body and the way that the quality control is done. So quite often the insurance companies make you take the generic and you have to get special permission to take the name brand one because it's actually better. Even though there's no patent anymore and all that it's like it's just simply not that easy. But by the way, this is true. And if you could persuade Epstein and these guys, they would they would view that as a good thing Okay, I can breathe a sigh of relief. The pharmaceutical industry doesn't have easy competition. That's a great thing. I mean, it's actually not a good thing. It's just the fact right like their argument is wrong. But it would be a good thing if it was if it was easy like if we had more competition, it would be good. It's not a bad thing it would change business models, but that's not a bad thing. Like if the world if the world of scarcity of the world scarce material resources was more like information that would be a good thing because that's what it would mean to move into a world of near super abundance right the post scarcity idea the thing when things are the world when things are cheaper. That's a good thing. Not a bad thing so right this is what we want we want people to copy drugs. We should we should we should not want to make knowledge. More scarce by by imposing artificial scarcity to make it more like the world of of scarce physical resources. We should want the world of physical resources to become more abundant. Because what the information and knowledge are that's what we that's the goal is to have more economic productivity and more wealth. Right, right, we don't want more more barriers in place and so that's that's another area where it's contradictory because the claim is made that basically well the the the patent bargain is that well we give you this period of exclusive rights and you disclose how your invention is made. Okay, so that's the world benefits from that because now we have this information about how this this drug or device however it's constructed so that when it goes off patent then we can all benefit from this, but it's even even before even before it goes off patent so like you published a patent right away. So even though you can't make the product you can start experimenting and learning from it you can get ready to do something else when the patent expires. Yeah. And I find it contradictory because the claim is well, we need this in order to disclose this otherwise we'd have all these trade secrets and this information would not be out there. However, the flip side is he's saying, but if we don't have the patents, then these things will be easily copied. So, which one is it, these things can be easily copied by yes, no that's exactly the patent in order to disclose it so that we can easily copy it at some point later. No, and there's been studies on this which I have on my C for SAF blog. It's like the misunderstood function of disclosure so basically most people think that the patent bargain, and by the way FC mentioned the copyright bargain, I think he skipped there's no copyright bargain. If you had figured out because you asked him I don't I've never heard of that and I didn't know he yeah I think he just he's not he's not practicing patent attorney he's, he's a law professor and he's a consultant he's not a registered and I think he understands in detail how people that practice it do it. But most people think that the government grants you a monopoly to incentivize production but technically speaking that might be an argument behind it, but the way the law is written, the patent bargain is, we're going to give you a monopoly. And if you disclose how to do it, and the argument there is that you would otherwise keep it secret. But the problem with that argument is, is this for most types of products. When you sell it on the market, you ought you necessarily reveal the, the design, I mean people see it. Yeah, for most things you can you can easily copy it and reverse engineer it if it's a little bit more complicated. So for those types of products. They couldn't keep it as a trade secret if they want to sell it. So when you give them a monopoly monopoly on it to reveal the way it's made. You're giving a monopoly for doing nothing because they would have revealed how it's made anyway, and for the rare types of innovations that you can keep as a trade secret like let's say you come up with a new, a new process for mixing chemicals in a chemical plant or refinery or something. That allows you to make this product like gasoline or something like that. It allows you to make it more efficiently, more cheaply so you can undercut your, your competitors the gasoline you're selling is not patentable because it's the same product. You need it in a more efficient way, and you don't need to sell the nozzle, or the, or the mixing method when you sell it so those things you're able to keep as a secret. And in those cases you probably still keep it a secret. So, in the cases where you, you, you disclose is probably cases where you had to disclose it anyway, so the public's not getting anything back. It's just, it's just, it's all make wait argument to perpetuate the monopoly some industries have, have grown reliant upon. One other thing I was going to touch on I wasn't sure if you, if you were familiar with it because I don't recall if you touched on it or not was the he kept citing the by dole agreement or standard I guess was something in the early 90s. And so that was kind of how he tried to underpin his argument that well we had the system where everything was in the public domain. And nobody wanted to produce any drugs and nobody wanted to compete no one wanted to do anything. And so they changed something at some point said okay, yeah, now we can have these agreements, and then everyone started producing all these drugs, but to me the argument back would have been, well, how long was that for and did they all know that it was probably going to expire anyways and we would return to the status quo of the patent system so of course you tell them well for five years we're not going to impose any sort of patents. Okay well we'll just wait five years until the time runs out and then we'll go back but I wasn't familiar with that law or system well I'm not real familiar with it has something to do with who owns patents when governments funding the research and all this kind of it's an interplay between the FDA drug approval system and the patent system but you know, first of all, you could, as I pointed out briefly, Switzerland and Italy for like 4050 years in the, in the 19 in the 19 in the 20th century, didn't have a patent system that covered pharmaceuticals and they were like among the world leaders of pharmaceuticals so it's not like we all the sudden had pharmaceutical produced because of by dole. He just does a lot of relying upon its own authority and hand waving most people don't know what by dole is and when Epstein says all the 1950 something patent act was written by these two brilliant patent lawyers how does he know he's not even a patent lawyer. It's just ridiculous. And he acts like oh we now have the Obama patent system. The Obama America events act did not replace the 1952 patent act it just made some amendments to it and they're all trivial. Like the biggest change was it changed the who the in the case of a conflict like two independent inventors under the old system in the US it was first. It was first to invent. Like if if two guys filed for patent applications on different dates. The first guy to file wouldn't necessarily win if there was an interference proceeding, it would be the guy that could prove he conceived of it first. Okay, most of the rest of the world has a first to file system and under the Obama. American then second 2009 I think they changed it to first to file so we're more like the rest of the world so. But it's trivial it doesn't make a difference because those things are very rarely like 20 or 30 proceedings a year under the old act it from the public's point of view it doesn't matter if a or B has the patent. Right. So it's totally irrelevant. It didn't change the structure. Now what has changed the patent system a little bit it's been some court cases, not the, not the Obama act. And court cases, going back and forth on patch, statutory subject matter like can you patent business methods, and whether you can have an injunction issued to protect your patent grant, they've made it a little bit harder to get an injunction, which to my view is a good thing because it takes some of the teeth out but the Epstein it's it's bad, but that was because of the Supreme Court that wasn't because of Obama's act so he's just wrong. So he just so my view is that he seems to be critical of the FDA. But because it's so intertwined with government funding and research and the by dole act and the forced disclosure that the FDA process makes you do and the extra costs it adds and then increases your, your inability to recoup your cost. It increases the so called need for patents as a patch to fix the problem caused by the FDA system in the first place but he seems to oppose most of the FDA system, but he's still in favor of the patent system anyway. I mean I think I talked to rich to Gene Epstein that the host and the moderator and the founder of the debate series, but either before after. Roger Lee conceded, mostly for the sake of argument, because I don't really quite mean this but I said look, because some people say, Stephen, you're against the patent system and you're right that the, that the FDA system is bad to independently, but would you concede that as long as we have the FDA we need the patent system because the FDA imposes all these costs on companies makes it hard for them to recoup their costs because it increases the cost and it also lengthens the time to market, which reduces their lead time and it also forces them to disclose their chemical formulas during the process so that their generics are ready to go right quicker. So it reduces their natural lead time they would have on a real free market. So would you can see that we need patents that like in other words we can't abolish patents until we abolish the FDA. I actually don't believe that because I think that the role of patents is misunderstood, and that things would. We should independently abolish each, but I said okay I would I would grant you one thing I would be okay with this because it would be a move in the right direction. The majority of cost caused by the FDA is not the innovation itself like I think I've read that the the mRNA vaccines came up will come up within a very short time because the technologies there. It was it was cut it was doing the clinical trials and all this, which is not the patentable stuff. So, and the FDA imposes all these clinical trial requirements and all this kind of stuff. I would say that so long as the FDA is basically restricting you from selling a drug unless they grant you a license and the license. Basically the cost of the license is is not really the innovation itself but it's the clinical trials they force you to go through. So let's say they cost half a billion dollars, and you get a drug going and then a generic says okay, we've got our facilities ready to go and they asked the FDA would you extend the license to us. And the FDA would say, Okay, you can, we're going to give you a license but you have to share the cost of the clinical trials the first company had to do. So like let's say the first company had spent half a billion. Then the generic would have to fork over for over half of that, and then if a third one comes up they'd have to fork over a third and give it to the other guys. I'd be perfectly fine with that. It wouldn't be ideal, but but that would that would alleviate all the concerns of these guys that the FDA process imposes these costs and you need patents to solve it. Don't solve it with a patent solve it by equally applying this license requirement to everyone equally so that it's a more of a level playing field something like that right. Like that I think that would be a reason I've never heard anyone propose that I think that would be a reasonable regulatory fix and it'd be fairly minor to just instead of having the FDA grant the generic the license so they can instantly compete with the first guy who had to pay all these costs that the FDA required, make them share it just make them make everyone share the cost. I think the only counter argument would be well they're there, you know, there's generic countries companies and other countries and they would just, you know, they're in India they'll just make it. Ignore it they don't care. So, well yeah but the patent system doesn't fit the doesn't fix that anyway because if they don't have a patent, then the patent system will stop it and but they probably do have a patent because these pharmaceutical companies for a billion dollar drug, they're, they can afford to file the patent in multiple countries so they will file it in India too so they will have a patent there anyway. Yeah. Yeah, so you get up with the hodgepodge system. I don't know how that would. Well I think what would happen is so you but in practice yeah so if you have will you have this system in the US where you have to share the cost but in the other countries you have a, you know, the old style patent system. Well, I mean, the FDA only corporation so. But the FDA only governs the US I mean you can't you can't make the FDA govern the whole world through the United Nations so I'm simply saying that that that would be so probably what you'd have is you'd have like a first and a second and a third American generic would pop up and after after a while they would all be sharing one fourth of that cost. Yeah, and after five or 10 are doing it, then they're sharing one tenth of cost so maybe then an Indian or Chinese company would would would do it and I don't know if their FDA would require something similar but anyway I think it'd be an improvement but I was also going to say I think that one, one, one reason that these these the old guard like Epstein and the, the old school libertarians, and so called free market. The reason they're all in favor of the patent system is basically, they're stuck in the old analog way of thinking like they are used to a world from the 1900s the industrial revolution when things were mechanical and analog and physical and competition worked a certain way. They're just used to the incentive structure that that developed in the free market in those days, like that's how they understood economics like you come up with a new idea, you get some investors you build your facilities. If your product is successful you can charge what you could think of as a monopoly price for walk because you have no competition at first, you gradually track competition but the incentives all align and blah blah blah. So that's how they're used to thinking of things. And when the information age started. They just tried to shoehorn that into their analog age, they wanted to, they want the world to fit their models instead of adapting their models to fit the changing world. And I do think that maybe the younger generation will become more and more skeptical of IP because the younger people are used to file sharing they're used to open source software right they understand that you don't need a monopoly on your software to develop good software in fact I guess over half or most of it is good software is done using the semi open source model right. So I do think that maybe just the old fogies need to just die out and and the modern generation will become more amenable to anti IP ideas. Yeah, I think in particularly with music file sharing that type of thing young people like they want to access the music they want it to be free they don't want to, you know, pay too much but they understand that there is an artist that's producing it and so they're very amenable to kind of some of these new methods of artists companies. The artists have been forced to do because of the you know the collapse of the old reporting industry style system so you can have patrons and you can have, you know, special supporter levels and whatever and they're more than happy to spend that as long as they are getting their free or cheap music or through Spotify where it's it's kind of commoditized and it's like you know it's a fixed cost and I can get as much as I want and so they're they're very amenable to that I don't think there's there's very few out there that are like well it shall be free and I should never have to pay for it ever. They obviously understand that somebody is producing it so it's really essentially kind of a free market. The free market has been forced to sort of solve this problem because the technology, the technological barriers just kind of destroyed the old, the old system. Yeah, and I think that's teaching these people it's a teaching moment sort of like the collapse of communism was a teaching moment people are generally skeptical since we planned economies now although we creeps back up on us but in abstract they understand it better than they did in 1970. You know, these young people see these warnings at the beginning of movies like it's an FBI offense to copy this movie, but are all these stupid PR these these public service announcements like you wouldn't download. You wouldn't download someone's car it's like. Yeah, you would, if you have 3D printing make a car you actually would download a car. So they laugh at this stuff now just like just like most young people don't think that marijuana is like come on marijuana is not some life destroying. What do they call it in the 50 zombie weed or killer killer weed or your reefer madness yes like everyone laughs at that stuff now so I have some optimism. Like you said copyright is almost a dead letter because of. I mean, you can get the big companies because they're they're subject to the jurisdiction of the courts but every day average millions of billions of users just torrenting and file sharing encrypted files. It's it's done it's copyrights already hard to enforce and my hope as I've said many times maybe I'm naive about this. Curious what you think but my hope is that 3D printing, which I think we're in the dot matrix phase we're not even a dot matrix phase like you know and now analogize it to the way printers developed. When I was young they were line printers and dot matrix printers and then they finally became in jets, and then laser jets and then color laser jets, and they were all hyper expensive but now they're great right. So if something like that can happen with 3D printing, although I think it's going to take a long time but I could imagine a future, say 50 years from now, when lots of advanced things can be 3D printed on a relatively inexpensive 3D printer what do you think about that. I think, yeah, there's possibilities I mean I see a lot of some science fiction I don't know enough about the topic to really come in intelligently on it but you know things like programmable matter and, and sort of these kind of nano scale devices. Well, if you get to the point where you could print a house. I don't I don't really see how that would function because it's very easy to write about, you know from a science science fiction standpoint, but it might not be efficient. I just don't see how that would happen I know you know how that the Star Trek approached, you know, sort of things where you have these matte replicators like that sort of the idea we can just take energy we just can. Yeah, anything. Well, if you could make food with it and if energy is basically plentiful because of nuclear or some other innovation and energy. So maybe it's still mass production is better but mass production can be regulated that's just like centralization and cryptocurrency like that's the problem with mass production that can be regulated, but everyone can do what they want on their own. I think these things can be made more efficient. Yeah, methods can be developed where you can, you know, for example, maybe we could pull metals out of the ocean much more efficiently so we wouldn't need to mine anymore and it would become incredibly cheap to have unlimited amounts of steel titanium gold or whatever. And through that method now we can construct these devices in much more efficient way so I think there's no ends to how much more efficient these processes can become but I just, I don't foresee there ever being a world where you just going to snap your fingers and there's, you know, you can have a car suddenly appears in your. Yeah, I suppose it might be roughly free because robots might make it in big factories but. And I guess, yeah, the main reason to have your own 3D printer would be to evade patent law which probably won't be enough economic motive, although you could, I think even at the beginning of COVID I heard this story. I think it was partly debunked but it's a good illustration. These ventilators are short supply and there was some part that you needed to replace some little cheap like plastic connector part, you know, like a $2 thing, but because it was part of a patented system or something. And it was a scarce supply and it was like, you know, 5000 bucks or something crazy. So someone just 3D started 3D printing a bunch of them. Yeah, so it's an example of how in a certain narrow cases 3D printing could let you evade the negative impact of patents patent imposed scarcity, I think. Yeah, I think there's some some devices some materials that are amenable to that sort of thing but then some, some are not some that are not yet right so I'm imagining 15 years from now. You know, components, chemicals, things like that chemical mixtures. Yeah, I don't see how you're going to print that. But you know, you never know, maybe, maybe 10,000 years 50,000 years. That's kind of that's more my time horizon if such a thing is possible where we. Yeah, basically, you'd have to manipulate be able to manipulate matter on the subatomic scale. Yeah, you're a thing is possible then all that's are off but I don't see that. You're too much of a realist to be a libertarian libertarians hate when you're realist like when you say yeah we're going to have liberty and maybe 500 years they get pissed off like no I want it tomorrow. Yeah. And when they don't achieve it then they stamp their feet and they, they, they leave libertarianism and they work with, they work with the all right or post libertarianism or something like, yeah. Anyway, one other thing I was going to bring up. Well I think one of the things that you could have stressed a little bit more and we did talk about afterward was the mentioning of I think you said patents cost upwards of $100 billion a year. And yeah, that that it actually I did a rewatch you actually did point it out, but you probably should have hammered on that a bit more which was that, you know, basically well okay costs 100 billion but are we getting 300 billion in output. Well, that's not really clear that that's the case but I think people need to understand it's like well yeah if, if you just did away with this whole system. That's 100 billion dollars that could be put toward. Yeah. New innovation. Yeah, training people into new fields, whatever, well, it's just essentially just wasted on lawyers right. It's the it's the broken window fallacy is the scene in the unseen, which I think I alluded to but yeah I could have hammered that home. You know hopper wrote me after and he had a really good point which I thought of before, but I never really. I don't know if I put it down. You know, Hans point, Hans is such a praxeologist such an Austrian so so f scenes argument like was like, well there will be some. There'll be some innovations that are just not economically viable without the patent system. Right. And, and some of the people in the audience are saying something similar about like artistic work like well, why would, why would I write a novel if I if people can knock me off. And I had point for novels I did point out like what I mean there's massive piracy right now and yet we have an abundance of stuff. And Hans was like, yeah, maybe we have too much shit, you have too much crap out there I mean, would we really be worse off if like one third of this crap is being produced now wasn't. Yeah, wasn't produced I mean, really. No but his point on the pharmaceuticals and other things was like, it's kind of it's sort of similar to the point we're making about the opportunity cost of these programs like the scene in the unseen. Yeah, if the patent system costs 100 billion a year that's taking resources away from people that they would have done something else with right. And so, you don't know what that was because it's never exists but you're hurting us in that way. But Hans's point is like, well, you know, by demonstrated preference in the way that the free market works. But if an entrepreneur thinks of a given pharmaceutical project or some other business project that he can't make a profit out of. That's a sign he shouldn't do it. But the patent system is artificially making you do something that is basically a malinvestment you're investing too much money in something because the patent system allows you to. It's a malinvestment and yeah, I mean, because the argument I don't know if I made it into debate, but some people like Alex Tabarak and and some socialists have argued less replace or augment the patent system with a price system. Like instead of giving people government granted monopolies to let them charge a monopoly price to recoup their cost. We just tax people and we give them these big prizes. He recommended like tens of billions of dollars for pharmaceuticals and I did the math like you have a patent system covers more than pharmaceuticals so if you if you generalize that proposal to cover everything the patent system is supposed to incentivize. We're talking 234 trillion a year or more, which is more than we tax people right now. But the point is, so if you say that okay we have this level of innovation right in a free market without the patent system because market failure, but the optimum is here. And if we have a patent system we can get closer to that optimum. Well there's still drugs up here that we're not creating because they're still not economically viable, even with the patent system. So we should tax people in addition to that to get ever. It's like the goal of it's like these people think the goal of the economy is to just pick some random variable and maximize it like, like instead of the goal of law being justice the goal of law is to maximize innovation. Where did that become the goal of law to maximize innovation because everything comes at a cost. If you maximize innovation you might reduce standards of living right or comfort or lifespan or whatever. And the same thing I kind of reflect on after the debate was what, why is there a goal to maximize the arts, music, literature, books, whatever, what, why is it the government's interest at all to maximize these things as somehow they, I mean I could, you know, just for the sake of argument I could wrap my head around why they would have a patent system okay well there's going to be inventions and drugs that are going to raise our standard of living these are useful functional devices that that enhance standard of living right okay yeah you can say well the arts does the same thing but not really in the same no no it's like you can live without this movie or this song, you can still survive. And it's not like without it, they simply wouldn't exist I mean I think that's just completely irrational to believe. And even in the evidence exists is that like you said the real world right now copyright is essentially a dead letter for many of the things particularly music, and yet people still produce these, these songs, and most of them 99% don't go anywhere so basically there's still this huge, there's still a incentive to produce it even though the chance that you're going to win that you're going to be the one that you know gets the copyright and you become successful is extremely limited so it's not only that I mean, even if we stopped production of new artistic works which is impossible I mean, maybe you cut it by half let's say which is not even possible but let's say you cut it by half. Even if you stopped it I mean there's so much accumulated culture that we, I mean there's billions of stuff out there. There's no one in their lifetime can ever go through it so in a sense we have. We have a reservoir of artistic stuff that books, movies, you know, we actually have enough to live on for a whole life already. Yes, any artist why why do you do this. No, none of them ever say oh it's for the money. No, it is our passionate that's their nature that's why they produce their art. Yes, and it's that's also not going to do it because there's no chance that they can copyright is absurd. Yeah, and all my C for si if I have another post about a study and analysis done by I think Devlin, but it's called a call the myth, the myth of patent law, and it's related to that. The one about the myth about patent disclosure, but the other myth is that people do things for economic or for catalytic or monetary incentives, but it's not even true for inventions like first of all most people invent. It's because they're passionate about this scientific area, they want to do it, just like people write novels for their own reasons usually and paint paintings. Or they do do it for economic reasons but it's because they're selling a product or they have a business and they want to improve their product so they can get more customers. Yeah, so they're not doing it. In fact, I've prosecuted. Probably over 1000 patents over the years from dozens of companies and I've interviewed in every time I interview the engineers who invented. I don't think I've ever once seen any clear reason to believe that the invention that these guys came up with, they came up with because they know that there's a patent system that gives them a reward for it. The invention is because they're trying to solve a problem to make their product better like oh I want to make this laser, like my customer wants this laser to have a cleaner signal. And so, to do that I've got to move this lens over from here to here but to do that I've got to find a way to attach it. And no one's been able to figure out so they think about it oh here's how I attach it. Oh, we have a patent lawyer on staff let's file a patent on it while we're doing because we might that might be worth something to our investors. Okay, but they didn't invent it because of a patent system. They simply filed a patent because as a patent system, but the invention came because they needed to solve a problem. And I think this is like 99.9% of the case. Very rarely do people say, I'm going to sit down in a room and brainstorm and come up with ideas. Well, actually they do that they so you have engineers at a company and they have brainstorming sessions, and sometimes the goal is to file patents but they're just doing that to stop competitors from competing with them and to have a big wall of patents. So it's a game, but it's not really true innovation it's just it's just noise. Right, it's actually more harmful they're coming up with a lot of good ideas that they have no intention of pursuing. Correct. So if we just get a patent on it, then if anyone else has the same, basically, we're assuming that no one else would ever have the same idea so if someone does, then we're all worse off because this company just gets the idea patented and then shelled it and has no interest in doing it. And not only that so the Rothbard and Milton Friedman point out like one, one bad effect of the patent system is it distorts things it skews innovation. I don't know how much of an effect that is to be honest because again I don't think people come up with inventions because of patents, and I actually don't think that they. I don't think the patent system stimulates innovation but they to the extent it does something it does distort it. So you could imagine a case where, and especially pharmaceuticals. So, for example, I mean, I'm not a big expert on what do you call homeopathy or natural remedies and all this naturopathy or natural. But I do think there are some natural remedies that are just simply old, old remedies that are not patentable anymore. Right. And pharmaceutical companies, they would prefer to have a pharmaceutical that is patentable because they can charge a higher price for it. And given the quasi socialized messed up medical system we have the prescription system and the insurance system. All these things play together to incentivize them to push doctors push these new patentable things onto the public, which the insurance and pay for and the government subsidizes. And they're sometimes not as good or more dangerous than a natural remedy but no one can make a lot of money off of that so they don't. So just the existence of patents probably heavily to support distort healthcare. Right, it might be a more natural balance of new innovative pharmaceuticals and old time, you know, time tested remedies. What do you think about that. No, I think that's, that's definitely the case because if you know you can obviously basically the patent creates this false, basically high, high, you know, monopoly privilege. So that's where resources are going to be directed. Whereas, if you have ideas or you have existing remedies for things that are known. Well, you could develop a business around that but if you say well, I can get into this other thing and potentially I can make you know 100 times more. I'm going to do that and then no one else is going to work on the thing that's known because the profit incentive is lower there. Yeah, I think it definitely kind of distorts things in that in that way. I don't think it's kind of similar to. I've heard another argument from somebody I know where they said well, the patent system actually incentivizes innovation, because it, once you get the patent for something that no one else can copy it so it forces everyone else to come up with a different The example was well, I think Xerox Park, they got the early on it got the patent for the mouse and I think Apple bought the patent so that no one, no one else could produce the mouse just the way Apple had done it so that's why they had that single click mouse, single button mouse that that was their their patented idea and because of that everyone else had to come up with two button mouse and track balls. Yeah, isn't this wonderful because we came up with all this new new variants of things and but it kind of begs the questions like but why would you assume that they wouldn't do this anyway. People get into the market not to just produce other products other people were producing so the company that I was founded 40 years ago by my father, and the whole reason that it was developed was to solve problems in the market that he was he was suffering problems, and he came up with solution so it was it was problem driven production. It wasn't well. I have an idea for a company. Let's go see what everyone else is doing and I'll just copy what they're doing. Nobody wants to do that because that's that's a much more difficult road to take on if you're going to start a new business because you've already you're already going against an established, you know player in the field you want to differentiate you do except for things that are like interoperability, like, like, you know, if, if a standard develops like in the size of a laser printer cartridge. I mean, now you have, you know, Canon Epson HP, none of them fit with each other because of patents. But is it because of the I mean, I guess in the existence of the patent but I could see that occurring in a system without patents because each one they want their customer to only buy their toner so they're going to make it a specific way so they have no no no so so here's what I think happens there so I think like. Well, just imagine a simple example like railroad tracks and you know you want them to be the same width from state to state and from country to country so the trains can go so certain things you need standards on right and interoperability. So cars might differ but they all have the same rough size and will base you know all that kind of stuff, and they all use the same kind of gasoline because if you have 10 types of gasoline then the distribution system doesn't work right. So I think what happens in printers is HP they make most of their money selling all of them right they make most of the money selling the cartridges but they sell them at a really high price. The reason they're able to do that is because they they're able to stop generics from selling a cartridge that would fit in there for one 10th one fifth of the cost. The way they're able to do that is they just they they have their guys brainstorm a patentable invention which is not that useful but it's just it satisfies the standards of patentability like a circuit that does something unique but not really necessary. So they put half of the circuit on the printer and half on the, in the cartridge so that they mate with each other so that to make a cartridge that works with this printer you have to, you have to have a circuit on there, and you would infringe their patent so they, so, so then other companies come up with a different size. You see Canon HP and and and Epson and all these guys and brother, all competing making different features of printers but they might make them the same cartridge, or they might not. Yeah I don't know it's hard to say, but the point is artificially making someone work around. So a good example would be like that that one click patent by Amazon so they patented the idea of you have your shopping cart on your website full of goods and you just push one button to buy. So instead of having to push to like pushing, I want to buy this. I confirm it. They simplified it by having one button one click and they got a patent on that. So Barnes and Noble had to intentionally impair their website to make a second click so they wouldn't infringe a patent. So yeah it forced them to do work around but it's not good. So anything people will do a work around if you outlaw marijuana, then people that want to get high they will find something else they'll smoke, you know, incense and die. Okay, it's not good to make people do workarounds and do the less the second most efficient thing it's not good. So I guess the argument against the patents then would be it, the things that we want everyone to copy because is such a good idea makes that impossible so it produces a net harm to society. Yeah, if it imposes artificial heterogeneity I think in incompatibility, which is less efficient in some cases. Yeah, yeah, yeah, that's true because you know the car to potential. I don't know I'm not sure about the printer cartridge thing because they make so much money on those cartridges so I could see them wanting to Yeah, I think what but so even if the standard is like a VHS beta thing maybe correct the original printer if they became had if they had had say monopoly presence in the market. That would have sort of forced the issue it's like well you know 80% of the printers use this cartridge, I guess we'll just use the same cartridge because then people will buy our printer, and they know it won't be difficult to get this replacement because everyone sells this Well, it could be that so HP starts out and then brother and the other start competing maybe they have different size cartridges, but the point is for each one of these guys a generic could just make a cartridge that could fit in there. Because there would be no patent to stop that and the just the threat of generic competition would keep them from charging this crazy high price was the patent system enables, whether they will be stand standardization among things like that I don't know because some things, it would like the VHS tape I mean you could have had beta max and VHS you could have had blu ray and HD DVD, but people don't want to have to have so many sources of things. I mean, you do have multiple sources now like if you want to buy music you can stream it, you can buy the MP3, you can buy the LP, you can probably still buy the CD. So there are multiple formats of things, but they don't, they don't multiply to infinity. And they, if they happen naturally it's fine, but if they happen, because they serve different market needs. Well, there's some things that are natural monopolies and I think and that's, that's where the real problem comes in with the state tries to intervene they recognize that oh well there's this natural monopoly. Well, it's monopoly with this is bad we have to stop it. So things like Facebook they're sort of a natural monopoly. Yeah, I would AOL with a natural monopoly and we need to break it up. Well, obviously, that was not necessary because, like I said earlier, all these things resolve with time, eventually you know everything AOL was going to dominate the internet and the Justice Department is getting involved in breaking them up. Well, AOL is a joke now. I don't even know if they're even around anymore. Yeah, and you can just they're just like an email service. Yeah, there's something different there. You could argue that like Bitcoin could be if it's universal money. I don't I don't I think it's from an Austrian point of view is probably inaccurate to call it a natural monopoly because it's not like it's Rothbard and these guys point out like the only actual legitimate monopoly is something backed up by the threat of force. So state monopolies. I don't know if there's another better term for but I guess in the sense of, it's natural that, well, everyone just kind of chose. Yeah, yeah, yeah. Time for one social media platform and most people tended to go there. It wasn't like there was some law that saying, well no one else can develop this and or you have to use it so I was kind of. Yeah, in the language of the antitrust statutes in the US. Facebook would be a monopoly, but it's from my point of view it'd be a natural one so there's nothing wrong with it like if it emerges in the market and then force being used as top competitors. You know, in my space did fall to Facebook and Facebook is sort of facing competition. I mean network effects only go so far. I don't think they always guarantee one player for money I think it would and will that's my guess. In language, it would seem to but it doesn't right. I mean, I think what happens for language is there's a lingua franca. There's a second language it becomes universal and that used to be French. It's the term lingua franca but now it's English. So a set a universal second language useful but apparently people have value having their own historic cultural language so they preserve it even though there's some costs to having that. So some things that have a network effects don't go to winter takes all they go to winter takes most or wouldn't take second place or something like that. I think for money is going to be winter takes, when it takes all or when it takes most any monopoly ever. That's 100% that I'm not even sure even government monopoly I suppose I don't know. No, nothing's perfectly enforceable just like we never had pure communism you know they but but it has monopolistic aspects because it's backed by force so and that's again the Austrian view that demonstrated preference and subjective value, and the Austrian view of utility. As as ordinal not cardinal and it's not intersubject intersubjectively interpersonally comparable. That's the distinction between this mechanistic Chicago view of the economy right as you tell you tools you can sum up and there's market failure there's an ideal model of perfect competition that the real market doesn't fly with etc. Anyway, I think we've probably gone on long enough anything you want to conclude with or say before we go. I think we pretty much covered everything. What do we, you know I discussed maybe doing this on other topics what we're going to call it conversations with Greg or something. What I forgot what the name or think it up. I don't remember now we'll have to brainstorm some. Yeah, maybe we'll do this later so people listen to Greg and I may do occasional conversations about some topics that I've wanted to discuss but which might be random interviews I get they don't always ask me what I want them to do so we're gonna I will maybe dissect a few issues that way. I'll try to push back where appropriate so it's not a total yes man here. Yeah, yeah. Okay well thanks a lot and we'll chat later. Okay. Thanks everybody bye bye.