Do Intellectual Properties Need Legal Protection?

The eminent economist Friedrich Hayek was a staunch defender of how essential private and “several” property is to a modern free society. In his book, The Fatal Conceit, Hayek includes some very interesting discussion about the evolution of property laws from the communal structure of primitive societies. He offers very clear reasoning as to the importance of private property ownership, while admitting that the “institutions of property, as they exist at present, are hardly perfect;” and require further evolution (p. 35).

While Hayek is unyielding in his defense of private property ownership, he takes a markedly different view with respect to intellectual properties, such as copyrights and patents. Hayek writes (p. 36-37):

“The difference between these and other kinds of property rights is this: while ownership of material goods guides the use of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopedias, dictionaries, textbooks, and other works of reference could not be produced if, once they existed, they could freely be reproduced.

“Similarly, recurrent re-examninations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period (Machlup 1962).”

When Hayek died in 1992, the Internet was still a rather arcane tool used only by a relative few. I wonder what he would think of efforts like Wikipedia, a reference work which anyone willing to do so could readily replicate? If some intellectual properties should be considered worthy of copyright, and others not worthy of it, as Hayek proposes; who should make that decision? Should such a decision be made by class or on a case-by-case basis? If by class, how would the rule be kept current with developments that might render it obsolete? If case-by-case, what kind of system would govern the decision making?

I admire Hayek a great deal, although, I don’t completely agree with him on every issue. I believe that the current state of American intellectual property law causes many problems. But I think that the model to which Hayek alludes could also prove rather problematic. What would it be like to have no property laws governing the vast majority of intellectual properties? It sounds scary, but Hayek also implies that society would naturally evolve and implement rules sufficient to govern the matter without any kind of central authority creating the rules. Once those rules have become accepted through a natural evolutionary process, they would likely be officially codified.

I have seen a lot of whining about the current state of our intellectual property laws. But I haven’t seen much discussion about what should be done. I’m putting the matter into my puny brain so that it can do background processing and information gathering. I’d be interested in reasonable thoughts others might have on this issue.