 Goods, scarce and non-scarce, written by Jeffrey Tucker and Stefan Kinsilla, narrated by Bob Riley. Scarcity and scarce goods. Why are tangible goods property? This is a central question of Stefan Kinsilla's against intellectual property. The reason for property is that, quote, There can be conflict over these goods by multiple human actors. The very possibility of conflict over a resource renders it scarce, giving rise to the need for ethical rules to govern its use. Thus, the fundamental social and ethical function of property rights is to prevent interpersonal conflict over scarce resources. End quote. On this point, we can cite Hoppe's theory of socialism and capitalism. Where Hoppe writes with singular clarity, quote, Only because scarcity exists is there even a problem of formulating moral laws. Insofar as goods are super abundant, free goods. No conflict over the use of goods is possible and no action coordination is needed. End quote. The logic for this insight Hoppe draws from Rothbard and the term free goods he takes from Mises. Hoppe writes, quote, To develop the concept of property, it is necessary for goods to be scarce so that conflicts over the use of these goods can possibly arise. It is the function of property rights to avoid such possible clashes over the use of scarce resources by assigning rights of exclusive ownership. Property is thus a normative concept. A concept designed to make a conflict-free interaction possible by stipulating mutually binding rules of conduct norms regarding scarce resources. End quote. Even in the case of the Garden of Eden, where super abundance would mean that all things we ever wanted were in our grasp, Hoppe explains that there would still be a need for property rights. This is because the human body itself is scarce. Choices about who can use it and how it can be used necessarily exclude other choices. One cannot simultaneously eat an apple, smoke a cigarette, climb a tree, and build a house. Likewise, as Hoppe notes, quote, Because of the scarcity of body and time, even in the Garden of Eden, property regulations would have to be established. Without them and assuming now that more than one person exists, that their range of action overlaps, and that there is no pre-established harmony and synchronization of interests among these persons, conflicts over the use of one's own body would be unavoidable. I might, for instance, want to use my body to enjoy drinking a cup of tea while someone else might want to start a love affair with it. Thus preventing me from having my tea and also reducing the time left to pursue my own goals by means of this body. In order to avoid such possible clashes, rules of exclusive ownership must be formulated. In fact, so long as there is action, there is a necessity for the establishment of property norms. End quote. A property right in one's scarce body is a precondition for action, even in the face of superabundance. Hoppe goes so far as to say, that the body is the prototype of a scarce good. Here he agrees with Jefferson's teacher Count de Stut de Trasse, quote, Property exists in nature, for it is impossible that everyone should not be the proprietor of his individuality and of his faculties. End quote. Quote, the answer to the question, what makes my body mine, lies in the obvious fact, that this is not merely an assertion, but that for everyone to see, this is indeed the case. Why do we say this is my body? For this, a twofold requirement exists. On the one hand, it must be the case that the body called mine must indeed, in an intersubjectively ascertainable way, express or objectify my will. Proof of this, as far as my body is concerned, is easy enough to demonstrate. When I announce that I will now lift my arm, turn my head, relax in my chair or whatever else, and these announcements then become true, are fulfilled, then this shows that the body which does this has been indeed appropriated by my will. If to the contrary, my announcements showed no systematic relation to my body's actual behavior, then the proposition this is my body would have to be considered as an empty, objectively unfounded assertion, and likewise this proposition would be rejected as incorrect if following my announcement, not my arm would rise, but always that of Muller, Meyer, or Schultz, in which case one would more likely be inclined to consider Muller's, Meyer's, or Schultz's body, mine. On the other hand, apart from demonstrating that my will has been objectified in the body called mine, it must be demonstrated that my appropriation has priority, as compared to the possible appropriation of the same body by another person. As far as bodies are concerned, it is also easy to prove this. We demonstrate it by showing that it is under my direct control, while every other person can objectify, express itself in my body only indirectly, i.e. by means of their own bodies, and direct control must obviously have logical temporal priority, precedence, as compared to any indirect control. The latter simply follows from the fact that any indirect control of a good by a person presupposes the direct control of this person regarding his own body. Thus, in order for a scarce good to become justifiably appropriated, the appropriation of one's directly controlled own body must already be presupposed as justified. It thus follows, if the justice of an appropriation by means of direct control must be presupposed by any further reaching indirect appropriation, and if only I have direct control of my body, then no one except me can ever justifiably own my body or put differently, then property in of my body cannot be transferred into another person, and every attempt of an indirect control of my body by another person must, unless I have explicitly agreed to it, be regarded as unjust. But let's be clear what we do not mean by the term scarce in the sense that it applies to this discussion. Something can have zero price and still be scarce. A mud pie, soup with a fly in it, a computer that won't boot, so long as no one wants these things they are not economic goods, and yet in their physical nature they are scarce, because if someone did want them, and they thus became goods, there could be contests over their possession and use. They would have to be allocated by either violence or market exchange based on property rights. Nor does scarcity necessarily refer to whether a good is in shortage or surplus, nor to whether there are only a few or whether there are many. There can be a single owner of a non scarce good, a poem I just thought of, which I can share with you without your taking it away from me, or a billion owners of scarce goods, paperclips, which despite their ubiquity are still an economic good. Nor does scarcity necessarily refer to tangibility only, or the ability to physically manipulate the thing, or to the ability to perceive something with the senses. Airspace and radio airwaves are intangible scarce goods, and therefore potentially held as property and therefore priced, while fire is an example of a tangible good of potentially unlimited supply. Instead the term scarcity here refers to the possible existence of conflict over the possession of a finite thing. It means that a condition of contestable control exists for anything that cannot be simultaneously owned. My ownership and control excludes your control. Replication and non scarce goods. In contrast there are non scarce goods. A classic statement on them comes from Frank Fetter's economic principles. Quote, some things, even such as are indispensable to existence, may yet, because of their abundance, fail to be objects of desire and of choice. Such things are called free goods. They have no value in the sense in which the economist uses that term. Free goods are things which exist in superfluity, that is, in quantities sufficient not only to gratify, but also to satisfy all the desires which may depend on them. An example of a necessarily non scarce good is a thing in demand that can be replicated without limit, so that I can have one, you can have one, and we can all have one. This is a condition under which there can be no contest over ownership. As Hoppe says, under these conditions there would be no need for norms governing their ownership and use. This non scarce status might apply to many things, but it always applies to non-finite things, that is, goods that can be copied without limit, with no additional copy having displaced the previous copy, and with no degradation in the quality of the copied good from the original good. Jefferson himself made the lasting statement that clearly distinguishes the two types of goods. Quote, If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself. But the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine, as he who lights his tapered mind receives light without darkening me. That ideas should freely spread from one to another over the globe for the moral and mutual instruction of man and improvement of his condition seems to have been peculiarly and benevolently designed by nature when she made them, like fire, expansible all over the place without lessening their density in any point, and like the air in which we breathe, move, and have our physical being incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property. The idea is not just the spawn of enlightenment thought. Saint Augustine also took note of the peculiar goods quality of words. The words I am uttering penetrate your senses, so that every hearer holds them, yet withholds them from no other. I have no worry that by giving all to one, the others are deprived. I hope instead that everyone will consume everything, so that, denying no other ear or mind, you take all to yourselves, yet leave all to all others, but for the individual failures of memory. Everyone who came to hear what I say can take it all off, each on one's separate way. Imagine if Jefferson and Augustine's descriptions of ideas applied to finite things. Let's say that someone owns a magic bagel. He could give a friend a bagel, and another would magically appear in its place, allowing him to keep his bagel at the same time. The very act of giving it away would create an exact copy of it. A neighbor could do the same. Potentially everyone in the world could have an identical bagel. All equally delicious. This magic bagel would then constitute what has been traditionally called a free good, or what we are now calling a nonscares good. Something that can be possessed unto infinity, and by an unlimited number of people, without displacing or degrading the original. With free goods or nonscares goods, there is no conflict over ownership. You could say that you have a property right in the magic bagel, but it would be meaningless because anyone could take it by the act of replicating it. It cannot be owned in the traditional sense. I could of course keep my magic bagel under wraps and never let anyone know about it. But that changes nothing about its magic properties. It remains a good that can be copied without limit, and my ability to keep the secret is a result of my property right in my ability to control the scarce resource of my body. Under these conditions, the status of the bagel as a free good is due to its replicability. If it could not be so replicated, if its magic went away, it would become a scarce good. Once it became public, there would be a contest over ownership of that bagel. If I have it, you can't have it. Quote, nonscares goods do not need the assistance of prices to ration their availability. They are free gifts that can be shared the world over. End quote. So it is with all things. If there is a zero sum contest over its possession, it is scarce. If there need not be rivalry over its ownership and its capacity for copying and sharing is infinite, it is nonscares. Does that sound fanciful? With regard to bagels, it is. But what if something like the magic bagel example becomes real? Yesterday, we could replicate information with photocopiers and print any number of perfect copies with a laser printer. And now we can copy and reproduce documents and files digitally. What if so-called 3D printers became widespread? These are devices that can fabricate various material objects by using a recipe. In principle, one could see a bagel or car that he likes, find or create a blueprint or recipe for it, and have a copy printed using one's own 3D printer, energy, and raw materials. One can only imagine the IP police stopping people from using their 3D printers to make useful tools and goods based on the idea that in doing so is somehow stealing the property of others that is still sitting in their homes. In any case, for now, the technology for 3D copying and printing is in its infancy. Not so for digitally encoded information. For example, consider a file on your hard drive. It can be packaged up and sent via email. The file does not disappear. A perfect copy of that file appears in someone else's email. That person could similarly forward a copy of the file to another person. This can happen billions and trillions of times without compromising the integrity of the first file. In effect, this file is like the magic bagel, a nonscares good. If the file is on a server, it can be accessed by billions of people, each of whom could similarly host the file until it multiplies without limit. Consider the power of this nonscares good. That file might contain a database with all the world's financial transactions for last month. The record of those transactions would be nonscares. The file could contain images of all the paintings in the National Gallery of Art. These images would be nonscares. It could contain videos of all college lectures given in the United States last semester. Again, nonscares. All of this is possible and practicable. We experience this every day. We do this every day. All the files in the world-wide web, unless they have been specially coded to be otherwise, constitute free goods. It seems clear that we are moving into a world in which we have to account for the existence of massive and growing numbers of goods that are not scarce, in the sense that they are potentially replicable into infinity. These goods fall outside the strict confines needed for rationing. There need be no conflict and hence no need for traditional property rights for them. Goods, scarce and nonscares. One helpful way to understand this is to classify all goods as either finite and therefore normally scarce, or nonfinite and therefore naturally nonscares. This distinction appears from time to time in the history of thought. Property rights are essential for scarce goods. It is these scarce goods that serve as means for action, while nonscares goods that can be copied without displacing the original are not means but guides for action. It would be ridiculous to speak of some kind of social ownership over scarce goods. Scarce goods can only be owned by one person at a time. Sure, you can share them, but that is just a means of allocating a scarce good that changes nothing about the intrinsic nature of the good. In the end, all attempts at socializing scarce resources lead to state ownership and the well-known chaos associated with it. But let us return to the bagel, this time one without magic properties. What about the recipe and the skills that made it? The recipe and skills can be copied by anyone. Anyone can watch and learn. The recipe can be shared unto infinity. Once the information in the recipe and the techniques of making it are released, they are free goods, nonscares goods, or non-finite goods. What are some more examples of such naturally occurring nonscares goods? One person can share an idea, and it can spread unto infinity, never reducing or degrading the quality of the original. Fire might be considered another example, as Thomas Jefferson said. A match can light a log without displacing the fire from the match. The timetables are another example. The grade school teacher doesn't give up this knowledge when drilling it into the students. An image of anything qualifies too. One person can look at another and memorize what he or she sees, without somehow taking or replacing the original. A tune is the same way. It can be shared and replicated without limit. I can sing a song, and you can sing the same song without taking the song from me. I can sing a song, and you can sing the same song without taking the song from me. These goods are all nonscares, and thereby require no economization. Once they are released, they need not be priced. There is no structure of production attached to their reproduction or allocation, hence there is no structure of production for the dissemination of ideas. To be sure, nonscares goods can be economized, and therefore commercialized by rationing the scarce means of their distribution. For example, a professor whose time and body are scarce is paid to share nonscares ideas. This is a service, but once the professor's ideas are shared, they enter into the realm of all nonscares goods. What is paid for, in fact, is not the idea itself, but the presentation, the time required to share, the labor services of teaching, all of which are scarce goods. It is the same with a book or article. What is scarce is the medium through which the idea is expressed, which is why books, articles, and web access cost money. The ideas conveyed in them, however, are copyable without limit. This is not an insight that applies to digital media alone. This is true regardless of the technology involved. Whether we are talking about a scribe working on vellum in the eighth century, or a writer working on a web-based document in the 21st century, the ideas conveyed in the words and the image of the words themselves are nonscares goods, while the medium through which they are conveyed is scarce. The range and importance of nonscares goods has been vastly expanded by the existence of digital media. As to whether a good is naturally scarce or nonscares, the test here is simple. If the good can be taken, shared, without displacing the original, it is always nonscares. If taking the original means that it can no longer exist in the possession of the original owner or possessor, it is a scarce good. All goods fall into one or the other category. All non-goods, unwanted things necessarily a contingent category, can of course be similarly classified. At the same time, it is also true that most things are bundles of scarce and nonscares goods. A book is a nonscares text conveying nonscares ideas on scarce paper and taking up scarce space on a shelf. A key that unlocks a door is made of scarce metal, but its functioning is due to the nonscares shape of the cut of the key, a shape that is infinitely copyable. A concert by Lady Gaga is a scarce human body backed by scarce instruments and microphones producing music and sound, which immediately become nonscares in the performing and hearing. Tying a shoe employs scarce laces with scarce hands guided by replicable nonscares skills and techniques, replication and civilization. Nonscares goods do not need the assistance of prices to ration their availability. They are free gifts that can be shared the world over. How important are these goods? Given that they are inclusive of all information, art, know-how, and anything else that can be possessed and copied without displacement, they are hugely important. Without these gifts, the whole of learning, imitation, and world culture would come crashing down. We are not truly human without being part of human civilization, and there can be no civilization and progress without the spread, dissemination, and accumulation of knowledge. To be human is to be part of a learning society, a communicating society, and information sharing society. Society is emulation based. As it stands, the existence of the nonscares good is the basis of all intellectual progress, the foundation of technological and artistic progress, and thereby a boon to civilization. It is also at the core of enterprise. Entrepreneurs succeed by first imitating others who have succeeded. Their nonscares experience and ideas are first copied and then improved, with the goal of profit. The example of success that entrepreneurs follow is itself a nonscares good. Anyone with the means to do so is free to copy the successful idea and replicate it. The nonscares good is the fuel of the competitive process. In contrast, a scarce good cannot be shared without limit. It is necessarily owned and controlled by only one person at a time. Even the attempt to share implies displacement, while I have it, you do not. To acquire it requires either homesteading unowned resources or stealing, transforming, or contractually acquiring trading for, already existing resources. Trading is what gives rise to rationing and allocating by the price system. Quote, to be human is to be part of a learning society, a communicating society, and information-sharing society. Society is emulation-based. Again, it would be preposterous to speak of socialism in scarce goods, because it is physically impossible to imagine two simultaneous owners of the same scarce good. However, it is possible to speak of something like socialism for a good that is nonscares by its nature, precisely because it can be infinitely copied. The nonscares good is private so long as it is never revealed. It must remain a secret. Once the secret is out, the good becomes part of the commons, or socially shared if you will, because everyone who encounters it can use it. Technology has worked to create ever more goods that have become part of the nonscares category, and this might be seen as a major feature of technological development for all time. Austrians on Free Goods Austrians have always, if sometimes only implicitly, recognized the existence of the nonscares good, which is precisely the good in question with regard to intellectual property. Menger's 1871 book, Principles of Economics, begins with the definition of a good that excludes the concern over scarcity. Something is a good in Menger's view, when it is casually capable of satisfying a human need. This is a very broad definition. For something to be good, said Menger, there must be human knowledge of this cause and effect connection, along with command over the thing, so that the relationship between cause and effect can be realized. Among these goods, he includes goodwill, family connections, friendship, love, religious and scientific fellowships, all of which fall into the class of things that can be replicated without displacement. Only later, in the opening chapter, when discussing the issue of property, does Menger introduce the notion of scarcity and hence the need for economizing. Seeing property as a subclass under the larger division of goods implies the existence of what Ludwig von Mises called a free good, something that is available in superfluous abundance, which man does not need to economize. Mises says that though they are not the object of any action, they are useful and even essential for production. Giving the example of a recipe, he writes that these free goods or non-scarce goods render unlimited services. A free good does not lose anything from its capacity to produce however often it is used. Its productive power is inexhaustible. It is therefore not an economic good, but it is no less important. Quote, these designs, the recipes, the formulas, the ideologies, are the primary thing. They transform the original factors, both human and non-human, into means. Ideas and information are non-scarce goods because they serve as guides to action in the use of scarce means, to transform scarce things in the world to achieve the actor's desired end. As Mises wrote, quote, action is purposive conduct. It is not simply behavior, but behavior begot by judgments of value, aiming at a definite end and guided by ideas concerning the suitability or unsuitability of definite means, unquote. Murray Rothbard elaborated, quote, there is another unique type of factor of production that is indispensable in every stage of every production process. This is the technological idea, unquote. Rothbard points out that once the idea comes about, it no longer has to be produced. It is an, quote, unlimited factor of production that never wears out or needs to be economized by human action, unquote. This is precisely what a non-finite, non-scarce good is, an unlimited factor of production. Federer also glimpses that ideas themselves are non-scarce goods, quote, the gain to the general welfare, however, can result only when the new inventions are actually embodied in machines. An invention is only an immaterial idea, and the machines in which inventions are incorporated are wealth which has a capital value. Further, a gain can result only when the usance of the machines is not so high as to absorb the larger part of the gain in efficiency. Not all labor-saving inventions call for more elaborate or more costly machines. Some are merely better methods and require no more equipment or even less. Some of them are simpler and less costly than the forms they displace. These, unless patented, are free goods, uplifting the efficiency of production without money and without price, unquote. Although Federer assumes the existence of patent rights and does not question their legitimacy, he recognizes that methods, which are merely recipes, a type of information, are non-scarce goods. He calls them free goods that are freely available and increase efficiency and productivity. That is, unless they are patented, thus making them artificially scarce. One of the longest and most searching essays on this topic is by Eugen von Bumbarwerk in his article Whether Legal Rights and Relationships Are Economic Goods. In this piece, Bumbarwerk points to several features of things that make them economic goods, among them physical possession and the power of disposal and control. The notion of scarcity as a precondition for calling something an economic good is presumed but never stated outright. However, Bumbarwerk added critical elements to the idea of the good, noting that personal services must also be included in this category. Whether such are truly goods is not inherent in the service itself, but depends on the subjective response to that service, thus introducing to the idea of a good subjective component. Here, Bumbarwerk keenly observes the interplay between materially scarce and subjectively non-scarce goods. Be it granted that the poet's soul must have originated thought and emotion, and be it further granted that only in another soul and through intellectual powers can those thoughts and emotions be reproduced. But the path from soul to soul leads through the physical world for one stretch of the journey, and on that stretch the intellectual element must make use of the physical vehicle, that is to say, of the forces or powers of nature. The book is that physical material vehicle. As Joseph Salerno notes, Bumbarwerk employed the example of the production and consumption of a poem to illustrate that the good is inextricably bound up with the want satisfaction process that traverses and links the objective and subjective realms. Scarce goods, non-scarce goods, progress and intervention. Why does all of this matter? It is interesting on the level of theory, but it is also critically important as a practical matter. Enterprise in our time is increasingly dependent on a clear understanding of the difference between scarce and non-scarce goods. In the current recession, for example, the bust hits scarce goods, and it is the scarce goods sector that the government is attempting to stimulate. But the non-scarce sector, which is not subject to the structure of production, and therefore is resistant to business cycle effects, continues to thrive and has been unaffected by the machinizations of bad macroeconomic policy. But it is affected by intellectual property regulation. Institutions such as Google and the Mises Institute have discovered the secret of giving away non-scarce goods, search services and digital books, and restricting commercial operations to allocating only scarce goods, teacher services, physical books, and advertising space on screens. This combination of giving away the non-scarce good and selling the scarce good has permitted both institutions to grow through service. But this distinction is also exceedingly helpful for understanding economic theory. It clarifies the absolute necessity of property rights and free movement of prices for all scarce goods, exactly as classical economists have said. It also illustrates the need to completely decontrol access to non-scarce goods and to permit the voluntary learning and sharing process to take its own course. Quote, Menger's intentions were to reconstruct classical economics on firmer foundations by grounding the supply and demand theory of price and the theory of monetary calculation in the choices and actions of consumers and to repair its superstructure by healing the rift between the theory of price and the theory of distribution. Menger boldly proclaimed his intention of subsuming all the branches of economics under a reconstructed price theory in his preface to Principles, writing, Quote, I have devoted special attention to the investigation of the causal connections between economic phenomena involving products and the corresponding agents of production, not only for the purpose of establishing a price theory based upon reality and placing all price phenomena, including interest, wages, ground rent, etc., under one unified point of view, but also because of the important insights we thereby gain into many other economic processes here to for completely misunderstood, end quote, emphasis added by the present authors. Joseph T. Salerno, Carl Menger, the founding of the Austrian school in Randall T. Holcomb, 15 great Austrian economists, Auburn, Alabama, Mises Institute, 1999, at page 80. Non-scarce goods are a great gift courtesy of the structure of reality, a boon to humankind, a vast treasure of resources, tools for making the world a relentlessly better place. The failure to understand the distinction between scarce and intrinsically non-scarce goods might also help to explain the persistence of socialist ideology. For example, one possible explanation of the predictable socialist impulse of religious leaders, intellectuals, and artists is that their primary work consists in the production and distribution of non-scarce goods, salvation, ideas, and art, and that this accounts for the failure of the people in these professions to come to terms with the relentless reality of scarcity. In summary, the world has given us two types of goods, one type that demands allocation through property and prices, and one type that can be infinitely copied. In the production and distribution of scarce goods, there is no substitute for the commercial marketplace, and the notion that the government should ever restrict replicable non-scarce goods or grant protection to a single monopolistic producer of non-scarce goods is contrary to freedom, material advancement, and social peace. Special thanks to B. K. Marcus, Doug French, Jeffrey Herbner, Raymond Walter, David Gordon, Robert Murphy, and Joseph Salerno for comments. Authors Contact Jeffrey A. Tucker Jeffrey Tucker is editorial director of the American Institute for Economic Research. He is author of It's a Jetsons World, Private Miracles and Public Crimes, and Bourbon for Breakfast, living outside the status quo. Send him mail. Stefan Kinsilla Stefan Kinsilla is an attorney in Houston, director of the Center for the Study of Innovative Freedom and Editor of Libertarian Papers. This has been Goods, Scarce and Non-Scars, written by Jeffrey Tucker and Stefan Kinsilla, narrated by Bob Riley.