An Austrian perspective on IP

The Mises economics blog views intellectual property as a modern form of mercantilism:

It was thought in the middle ages that most all products required monopoly production. The salt producer would enter into an agreement with the ruler. The ruler would promises a monopoly in exchange for a share of the revenue. It was thought that this would guarantee access to a valuable commodity. How can anyone make a buck without a guarantee that his hard work would be compensated?

Well, it took time but eventually people realized that competition and markets actually do provide, as implausible as it may seem. As the centuries moved on, markets became ever freer, and we no longer believe that the king must confer a special status on any producer. They still do it, of course, but mostly for open reasons of political patronage.

And yet in this one area of “intellectual property,” all the old mercantilist myths survive. People still believe that a state grant of monopoly privilege is necessary for the market to work.

To me, the most damning point about the wrongness of intellectual property is the fact that the quality of literary and theatrical output was much higher prior to the IP era. I think Jeffrey Tucker is correct to point to historical monopolies as a means of clarifying the relevant issues, as government-protected intellectual property markets show much the same defects that monopoly theory would cause one to expect to see in any commodity market in which legal monopolies were granted.