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My task here is to write a response to Larry Lessig’s meditation on the free-software movement and its relationship to the general law of copyright (see “The People Own Ideas!”). But as the dry tone of my first sentence suggests, we have very different approaches to our common topic. Lessig is a master at weaving personal vignettes with structural arguments. The vignettes are intended to introduce an intimate personal dimension to the arcane world of intellectual property. His readers receive a gut-level education about the immense impact that legal rules have on ordinary people, whose voices, he tells us, can only be heard above the din if they speak in unison.

I demur. The selective imagery of eager students in Porto Alegre, Brazil, “remixing culture” using free software does nothing to address the central policy issues around intellectual property. The complex trade-offs needed to govern software and copyright aren’t illuminated by the artful juxtaposition of real users of free software with the nameless stick figures stuck with proprietary alternatives. One could as easily paint a picture of high-spirited inner-city youths mastering Microsoft Office under the benevolent gaze of the Bill and Melinda Gates Foundation. Neither helps.

Private and Common Property
My qualified defense of proprietary software rests on my general approach to property rights. It may seem odd that I see land law as a place to begin thinking about copyright law in the digital age, but in the law, continuity counts for more than novelty. While we always have to tend to the differences among different forms of property, we are likely to make fewer mistakes by proceeding carefully from established understandings.

Every legal system in history has blended two separate property regimes: the private and common. Both are important to software and copyright. Private property confers on individual owners exclusive rights to the possession, use, and disposition (sale, lease, mortgage, gift) of some given tangible resource. Virtually all civilizations start with a decentralized system in which the person who first takes an unowned thing is entitled to keep it against the rest of the world. Providing a plot of land or individual object with a single, determinate owner facilitates its effective use. The farmer who sows today knows that she can reap tomorrow, without fearing the incursions of others. The ability to sell, lease, or mortgage property allows for everything from a simple transfer of land from person A to person B to the formation of complex cooperative ventures among multiple parties. The GNU General Public License (GPL) that Lessig so admires offers a shining example of how this last, iterative process works.

Any system of private ownership requires state enforcement, first, to protect private property from forced occupation, misappropriation, and invasion, and second, to enforce voluntary deals. But any theory of property rights that includes a key role for the state should also emphatically reject the use of centralized state power to determine who shall own what resource or why. Governments, for instance, should not pick technologies.

In all legal systems, however, a system of private property rests on an infrastructure of common property. The air we breathe, the roads we travel, and the language we speak cannot easily be reduced to private possession. They remain part of the commons because their separation impedes respiration, transportation, and communication. At the edges, we recognize useful exceptions. Although everyone may use the word “monopoly” to describe a market with a single seller, only Hasbro may market a board game with hotels and a jovial top-hatted mascot under that trade name. The private creation of a trade name pulls that name out of the linguistic commons for the limited purpose of identification.

Owners and Nonowners
These simple observations can be generalized. Property rights are organized to minimize the obstacles to human prosperity and well-being by maximizing the public benefit that emerges from the self-interested actions of many individuals. Common property works when we want, say, to travel freely on a river. Private property works when the development and trade of separable assets creates enormous gains. But the justification for private rights in everything from sponge cake to software has to be social. Private property provides the right incentives for innovation, from which nonowners benefit through voluntary exchange.

In general, private property is a great bargain for society. Let’s assume that Bill Gates’s net worth is $45 billion. That’s a lot, but it’s no big deal compared to the gains his customers have received from purchasing Microsoft products. My copy of Microsoft Office may have cost me $500, but that is a tiny fraction of my gains in productivity. The most important gains from all forms of property, whether tangible or intellectual, accrue to the nonowner who buys the products of the owner. The price one actually pays for a thing is almost always less than the amount one would pay if necessary. The difference, called consumer surplus, is a pure gain for the buyer, and it exists because private ownership gave the seller the incentive to create or maintain the thing. In other words, granting a temporary patent or copyright monopoly to get the benefit of a new product now – rather than having to wait for some free product later on – is usually a good deal for both the producer and the consumer. This system of property rights isn’t antithetical to free software or “free culture.” Indeed, it is their very foundation. Let’s start with software.

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