Is Intellectual Property Essential? Kevin Flynn Hackers vs. Walt Disney Backers

Part 5 of a series: The Great Fallacy
of Intellectual Property

In this series of posts, I'm arguing that the central economic theory of intellectual property law is wrong. That theory is that IP, or some other form of externally provided reward, is, as a general matter, necessary to encourage people to innovate and create.

What I'm arguing about here is the general case.

That is, to what extent does it make sense to adopt, as a starting assumption, the classical economic rationale for IP?

So to frame the issues, let's note that a couple of things should be abundantly clear and beyond debate:

1. There is some valuable creative/innovative activity that would not take place without external rewards.
2. There is some valuable creative/innovative activity that would take place even in the complete absence of external rewards.

Tron Legacy hero Kevin Flynn is an advocate of freeing software from IP protection. But you can bet Disney, which spent $180M to make the film, is no advocate of freeing movies from copyright.

Both aspects are exemplfied in some way in the new Walt Disney Studio's film, Tron Legacy.

[NON-SPOILER ASSURANCE: Info from the first five minutes or so of the movie is discussed here. (Far, far less than you would get from the trailer.)]

In Tron Legacy, the computer genius who created the Tron world, Kevin Flynn (played by Jeff Bridges), speaks of how information wants to be free. Decades later, his son heroically liberates his father's company's new operating system by posting it freely on the internet. 

Indeed, free software has accounted for billions of dollars worth of innovation – all of it produced without the external incentives offered by intellectual property rights. 

There's irony, however, to the fact that the movie delivers a high-5 to the concept of software freedom: The fact that Disney produced it.

Disney is one of the world's most ardent promoters of ever more expansive proprietary rights over intellectual assets. Disney is in large part responsible for getting Congress in 1998 to retroactively extend the terms of copyrights for movies and books that were produced as far back as the 1920s. 

While the extension of copyright was a windfall for lobbyist-wielding entertainment conglomerates, there's no doubt that going forward, big movie studios make the decisions they do based on copyright's incentives. Tron Legacy, for example, cost $180 million to produce. There is no way that Disney would have greenlighted the film without the assurance provided by copyright law that Disney could, assuming the film is a success, recoup its investment and garner a profit. 

Here's a short non-exhaustive list of valuable intellectual assets whose development almost certainly required the incentive of external rewards, such as those made possible by intellectual property rights.

• Virtually all large-budget major motion pictures
• Virtually all large-budget television series
• Many or most new pharmaceutical compounds (but not including additional forms of delivery of those compounds, such as extended release forms)

Now here's a short non-exhaustive list of valuable intellectual assets whose development, I think we can all agree, would have happened with or without the extrinsic incentives provided by intellectual property rights.

• The vast majority of photographs taken by individuals and posted to Flickr
• The vast majority of blogs
• A huge proportion of videos on YouTube
• A very large proportion of short stories and poetry
• A substantial proportion of documentaries and short-subject films
• Advertisements and commercials
• A very large proportion of patentable software technologies
• A very large proportion of patentable business methods
• Virtually all patentable surgical techniques

Now, that's not to say that creators of those categories of assets don't appreciate having intellectual property protection; it's just to say that the IP-enabled possibility of reaping extrinsic financial rewards was not a necessary encouragement for the people developing those assets.

And then there are examples of valuable intellectual assets that, it would seem, would not have come into existence but for the ability to opt-out of the intellectual property regime:

• Wikipedia
• Linux
• The catalog of GNU-GPL-licensed free software titles

So, the question to explore is: How should we characterize the general case?

That is, do people need the incentive of copyright or patent to create assets such as:

• Popular music compositions
• Popular music recordings
• Symphonic music recordings
• Novels
• Non-fiction books
• Inventions in the fields of electronics and computer hardware
• Advances in industrial machinery
• Advances in materials
• Recombinant DNA technologies / gene sequencing
• Fine art
• Fine photography
• News articles / conventional journalism

My argument is that it is erroneous to assume that most of the value to be found in the above categories of creativity and invention would not be created but for the extrinsic incentives enabled by copyright, patent, and other intellectual-property rights.