 I'm joined now by Stefan Kinsella, he is a Houston area patent attorney and also a very well-known libertarian theorist, a leading anti-IP proponent. Stefan, thanks for joining me. How are you? Hey Albert, I'm doing well. I'm in fine fettle, as some people might say. You're coming out with a new blog post that you've been working on and this apparently has to do with your views on IP. I'm looking forward to getting into it with you. Before we start, I just want to ask you, how would you describe the nature of this post? Is it something that is revolutionary, divergence from your original stream of thought or is it kind of a clarifying post? It's just clarifying. I think over the years as I've struggled to come to grips with intellectual property and how it relates to property theory and to gain a deeper understanding of it, I mean a lot of the insights I've had and the way I think about property law seem fairly trivial and simple after the fact and maybe they are, but sometimes you circle back to something simple. I've experienced in interminable debates since I started loudly proclaiming my opposition to IP law in 1995, I've had so many debates with people and had so many experiences arguing the same things over and over and over and over again and I've gradually seen ways of describing property rights, purpose of libertarianism, the nature of IP and things like that which have caused me to reformulate some of my arguments and the way I present them. For example, in my little monograph in 1998, 1999, 2000 against intellectual property which I still stand by pretty much everything in it, I'd probably tweak it a little now and I'd add some things to it, but it didn't occur to me to frame some of the arguments like I would now. I've come up with other ways of framing it that make more sense to me and that also seemed to appeal to other people. What I was posting about on Facebook the other day which you and a few other people picked up on was I had another insight and a lot of these insights seem really trivial and people make fun of them, but to me that's how I make incremental progress. It had to do with Bitcoin. In a sense, the advent of digital technology, basically the emergence of the internet in 1990, fivish and the advent of piracy and widespread digital file copying and all these things sort of caused a need for people to revisit their previous assumptions about property rights and intellectual property law, copyright and patent because up until then it wasn't a big issue and it only affected the material realm. But now we have the internet which is the world's biggest copying machine and people can copy left and right and people that are used to saying that ideas are property are going to start calling that theft or piracy and the government is going to crack down on it and people are going to fight it and then libertarians are caught in the middle because they sort of sense that there's really nothing wrong with learning things and copying and what we call competition on the free market which requires emulating, seeing what other people are doing and emulating it and yet that runs afoul of our previous sort of a background notions of property rights that you have a property right and ideas. So the intellectual property or the internet, the digital revolution required a rethinking or revisiting I would say of the foundations of property theory which libertarians have done and my impression which is probably biased is that by and large most clear thinking principled libertarians today are extremely knowledgeable about the flaws of the IP mentality and they're against it. So the digital revolution caused or required a rethinking of intellectual property and then there's different ways you can explain the problems with it right you can look at the consequences you can point to the history the original purposes of it you can point to the fact that it's largely a creature of state legislation and you can point to problems with the state itself and legislation so there's different ways you can approach that problem and the purpose of what I'm talking about here is not really about IP although it stimulates that thought it had to do with Bitcoin so when Bitcoin emerged Bitcoin was like another event like the advent of digital technology Bitcoin has required a lot of Austrians and libertarians to sort of step back and rethink some of their foundational premises about the nature of money the nature of property and even intellectual property and things like that contract theory so why can I interrupt for a second Stefan sure why would why would you say that about Bitcoin and not for instance some of the digital advancements that preceded it Bitcoin is unique in the sense that it's that it's competing in the monetary realm but we've had other digital advances that facilitated you know widespread copying and things like that what why do you think Bitcoin is is special in the sense that it makes us think about our ideas a little bit more carefully well so yeah so just just having the internet itself and having the ability to copy information right digital the digitization of information cause this sort of this this prospect of widespread easily available dissemination of information just copying information itself which threatened the existing patent and copyright model especially copyright so that's why that caused that well the other all the other business models that were built upon the internet I think didn't really add anything new as a theoretical challenge it was already there with the copyright problems that you know basically there's a clash between the copyright interests people that want to keep information contained and people that are in favor of technology and the internet and digital information there's obviously a conflict there and that had to come to a head and then libertarians because we focus on ideas and principles try to sort this out try to figure out what the right side to be on is etc I think that battle's been one I think we're cleaning up right now there's a few stragglers and I think that's a great thing left libertarians anarchist libertarians Rothbardian libertarians principle libertarians libertarian suspicious of legislation and the state they're all pretty much against IP which is a fantastic thing so I think that battle's been one we're mopping up right now that we have a few straggling randians which are kind of dying out anyway we had a few empirical menarchists who give a half-hearted half-defense of IP like Richard Epstein and David Friedman sort of Adam Moss off is doing his best as an objective is law professor to try to fix iron rands flawed view of copyright but no one really thinks this is going anywhere they've they've lost and they know it and we're mopping up at this point but when Bitcoin emerged the thing is libertarians are enthusiastic about Bitcoin they've never been enthusiastic about the state's ability to stop copying of information right they were uneasy about that that's what caused this sort of big debate so libertarians and especially the radical libertarians have been enthusiastic about Bitcoin and I think the first thing that happened was Bitcoin is like a new type of currency or money or whatever you want to call it or classify it as and it really was not easy to be handled according to this traditional Austrian or free market view of money because you know we've been analyzing the way money really did emerge in the world which is through physical scarce commodities like gold or silver or other other commodities and so the economic theories that were built up around it were centered on that you know and nothing means is in his theory of money and credit could have imagined a digital currency like we have now or whatever you want to call Bitcoin so when it emerged it sort of caused or it made it necessary for people who want to think about this in principle terms and clear Austrian terms to revisit Austrian theory what about Mises regression theorem how does that apply to this does money have really have to be a commodity was Mises trying to prove by his regression theorem that only commodity could be money and if he did was he right and can Bitcoin be money or not and even if you know theorists say that it can't be money you look around and it looks like people are using it as something like a money so we have to explain that phenomenon so that caused a maybe a doubt or a need to to revisit Austrian theory now that's economics in terms of libertarianism libertarians especially a lot of the Rothbardians have opposed fractional reserve banking as opposed as in addition to fiat you know money the Federal Reserve type money government money for various reasons on normative or political or rights-based grounds and I agree with all those so then the question becomes what is this what is this new Bitcoin thing how do we handle that normatively so we came to a point I won't say a crisis but a point where this Bitcoin thing doesn't look like it's going away we need to find a way to analytically handle it we need to understand it economically and hopefully within Austrian economics and and normatively so you have all these proponents of Bitcoin in the libertarian and quasi-Austrian sphere and yet everyone is talking about this new phenomena with a vocabulary that's widely I mean this very is all over the place some people call them coins some people call it a currency you know some people call it digital money whatever so what are you so well this gives rise to why I started writing about it because I'm thinking from the from the authoritarian and intellectual property mindset and when I hear people say that you own your Bitcoin okay they make these statements you own your Bitcoin now I believe as Mises did he's got a great chapter or so on this in socialism where he talks about ownership of the jury ownership and de facto ownership doesn't really go into this actually in human action I'm not sure I didn't carry it over but it's a great discussion it distinguishes between in the world of human action resources or things that we do in the world that are say de facto that are real things that we can use to accomplish things and then the odds or the shoulds or the norms things that that legal rights protect so he makes a distinction between say legal rights and I guess natural rights right or rights to odds that people should have or the situation faced by Robinson Crusoe on a desert island he's got a series of means at his disposal he can do certain things with it but in when society enters the picture and other people into the picture then we start talking about what you should do what the law should be who should be able to control these things so there's a distinction so there's a distinction between actual ownership in a sense which is what most people I think think of to be honest so when you have your typical Bitcoin enthusiasts saying I own this Bitcoin they're not speaking like a lawyer would like I would right or even like a careful political theorist would they don't mean that there's a legally recognized right to own that Bitcoin in fact they never carefully define what the Bitcoin is which is part of the problem so which I was grappling with what they mean is this is a workable system and I have the practical ability to change that ledger entry in Bitcoin right Bitcoin so Bitcoin to me is a is a distributed ledger it's a ledger distributed across a bunch of decentralized servers around the world with a certain protocol certain set of rules for people that want to participate in that scheme or that game or that ledger system so a Bitcoin is just a way that we describe metaphorically the way that this system works we can use the the metaphor of Bitcoin to refer to one entry in a series of units right which are defined by the scheme so it's basically one of a unique number of finite entries in this in this ledger scheme and the ledger scheme is maintained in identical copies of the blockchain stored on many people's computers around the world so that's a fine way to use metaphors to understand the way a system works but then people start thinking of of the Bitcoin as a thing that can be owned now when I hear the word ownership as a lawyer and as a libertarian I think of legal ownership that means the right to control it doesn't mean the practical ability to control it means the right to control in fact those things are separate in the law we distinguish possession from ownership possession is in a sense the the practical ability to use a thing ownership is the legally recognized right to use a thing and they can be different so for example if you own a car you have both the practical ability to use it and you have the legally recognized right to use it but if someone steals the car from you for that period of time when you're don't have the car someone else has the possession of the car and you have the ownership of it still doesn't do you much good unless that claim of ownership could result in you recap recapturing your car or getting a payment a restitution for it so analytically we have to distinguish these things okay so when I hear a bitcoin enthusiast say I own my bitcoin I was prone to say well no you don't own the bitcoin and they take that as an insult or as a criticism of the system they think I'm being a bitcoin detractor and I'm not I'm actually a bitcoin proponent I think it's an amazing system and it emulates it's designed as a system to emulate features of property rights just like if you play the game monopoly you know there's a finite amount of fake dollars there they're designed to make the game work according to the ways people want to play it but it doesn't mean they're really dollars doesn't mean they're really money it's just the rules of an internal system that people have adopted and agreed to participate in for their own benefit I'm not disparaging it all by saying that that is just the truth but as a lawyer and as a libertarian look there's a saying in the law that a right without a remedy is hollow which means it's not really a right in other words if all you can do is say I have a right I have a right to have angels watch over me or something like that but it doesn't it's just a saying it doesn't mount to anything it's really not a real right a real right is something that's legitimately and practically enforceable in a given social system right a given society it has an effect it has a consequence um and therefore when someone says I have a right to something as a lawyer as a libertarian I think well okay if if you say you own bitcoin number 212 what does that mean in actual legal terms if you have an ownership of that bitcoin what that means is you could go to a court even in a private society and they could issue a ruling saying you own this bitcoin instead of person number c but who would the ruling be issued against let's say c is long gone someone stole your password and they use that password or your encryption key to transfer a hundred of your bitcoins in your account to someone else to pay for something let's say because someone else is now c person c is an innocent person who is selling widgets on amazon you paid him the thief the so-called thief stole my bitcoins and paid um for this item from person c using my bitcoins now if i get a ruling from a court saying i own the bitcoins well i guess that means c is in possession of my stolen bitcoins similar to a case where if i own a watch and someone steals it from me and sells it at a pawn shop and person c ends up buying it even if the thief is long gone right theoretically under regular property law if i find the person c who bought the watch even if he's a good faith buyer he didn't mean any harm i can get my watch back because of property rights i own the watch my ownership never ceased i still own the watch i can get it back if you say bitcoin is ownable the same situation would have to apply there would have to be a legal mechanism where someone makes some kind of order or decree or declaration saying i own that bitcoin now what does that mean if bitcoin is just an entry in a distributed ledger a ledger that's distributed and kept in information across many people's computers well what does that mean that some random person in bangladesh who has a copy of the blockchain now has an obligation to open up his computer and make an entry change in the way his magnetic hard drives or pointing information around do you follow me so this is the problem so to my mind owning a bitcoin is analogous or similar or basically identical to owning reputation rights which rothbard criticized in the ethics of liberty if you own a reputation right it means you have a property right in other people's brains because your reputation is what people think about you so if you have a property right in your reputation that means you have a right to force people to change their minds right if you have a property right in a bitcoin you have a you have the right to use force to force people to change their bitcoin blockchain entries on their own servers and i don't see how you get that right this is the problem there's no contract see this is the point the distinction between your your your bank account at chase bank down the street or your or your website account with go daddy you have contracts with all these people if someone uses your password to infiltrate your account they're they're actually committing trespass because they're using someone's property without their consent they're using the bank's property without their consent or they're using go daddy's servers without their consent or they're using whatever i own my money in the bank without my consent okay just like if i leave my door open on accident to my house or unlocked it doesn't mean that someone who walks into my house just because they can right just because the doors unlocked doesn't mean they have a property right to use my house or to take things from my house just because you can do something doesn't mean you have the right to it depends upon the consent of the owner but all this presupposes the owner is an owner of something that they own right like chase bank owns its bank facilities and its servers go daddy owns its physical servers and and so on bitcoin as i understand it is set up on purpose to be a quasi or pseudo anonymous system where there are no contracts required there's no terms of a service that you have to click on i agree to the following in order to make a transaction it's just a scheme that some people are following and the scheme determines who owns or who has the right to control a given bitcoin entry in that ledger and if someone steals or even guesses my password and they use that to enter that data into the blockchain network and causes all these thousands of people around the world to agree to change and update their pointers and their system at the same time or roughly the same time then they're doing that voluntarily and i don't have the right to make them undo that which would be the implication of me owning bitcoin so this is actually all background to be honest albert to why the issue came up of how do you explain this and where the real dilemma is so in a way everything i've said so far is kind of background on what i really wanted to get to