In Defense of Napster and Against the Second Homesteading Rule
N. Stephan Kinsella
by Stephan Kinsella: The
Greatest Libertarian Books
bad boy Napster has come
under fire. In a lawsuit filed earlier this year by the Recording
Industry Association of America (RIAA)
on behalf of its members, the RIAA contends that Napster's service
"enables and facilitates piracy of music on an unprecedented scale,"
and seeks to shut down Napster for infringing the copyrights of
its members. U.S. District Court Judge Marilyn Hall Patel initially
granted the RIAA a preliminary injunction, effectively ordering
Napster to shut down. However, the injunction has since been stayed
by the U.S. Court of Appeals for the 9th Circuit, pending an appeal.(1)
case gives rise to the question: Should Napster be shut down by
force of law? The answer can be yes only if Napster is violating
the individual rights property rights of others. To
determine this we can ask a two-pronged question: (1) Is Napster
violating any positive law?, and (2) If so, is the law legitimate?
The second question is necessary because, even if Napster is technically
in violation of a legal prohibition, we can only say that Napster
"should" be subject to the law's punishments, if the law is itself
legitimate. To hold otherwise is to adopt legal positivism and the
moral relativism from which it springs. Let us, then, take each
of these two questions in turn.
does Napster violate U.S. copyright law? In the Napster system,
Napster users A and B "find" each other by using a directory maintained
by Napster. Napster user A then copies the digital music file (e.g.,
an MP3 file) of Napster user B,
using file transfer software provided by the Napster service. This
is known as peer-to-peer file sharing. However, the file is transferred
from B to A over the Internet, not through Napster's servers. Napster
does not itself do any copying. It is more like an intermediary,
who introduces A and B, who then may copy files from each other.
It is clear, then, that Napster does not directly infringe any copyrights,
because it does not itself reproduce music files.
this reason, Napster has been accused only of "contributory" infringement
(contributing to the direct copyright infringement of its consumer-users)(2)
and of "vicarious" infringement (profiting from infringing activity
under its control). Napster has several defenses available under
the strongest defense to contributory infringement is the "staple
article of commerce" doctrine. Under this doctrine, a provider of
technology used to perform the direct infringement is not liable
as a contributory infringer, if the technology is capable of commercially
significant noninfringing uses.(3)
If a product has both infringing and noninfringing uses, then the
sale of the product is not necessarily contributing to others' acts
of infringement. Paraphrasing the NRA,
selling technology doesn't infringe people do! It was under
this rationale that the Supreme Court permitted the sale of VCRs,
which can be used both for copyright infringement and for legal,
noninfringing uses (such as time-shifting).
Napster's service is capable of numerous commercially significant
noninfringing uses, such as promotion and distribution of songs
from independent record labels or new artists, and free (authorized)
distribution of songs, in addition to sampling and "space-shifting"
(the process of sharing files between hard drives and players).
Thus, because Napster can be used for these and other significant
noninfringing uses, it is not a contributory infringer.
for vicarious infringement, there is only liability if Napster has
both (1) the right and ability to supervise the infringing activities
of its users; and (2) a direct financial interest in the infringing
activities. However, despite the District Court's ruling, there
is no way for Napster to distinguish between legitimate and illegal
copying by its users. Thus, it does not have the "ability" to supervise
any infringing activities.
Napster is not liable under either theory if its users are not direct
infringers. There are two such arguments. First, Napster's users
themselves may have a fair use defense to copyright infringement.
Most consumer copying is not for commercial purposes, but for sampling
or space shifting, which arguably constitute fair use. If Napster
users have a fair use defense, they are not direct infringers.
under the Audio Home Recording Act (AHRA), consumers have a right
to create and transfer digital music for noncommercial purposes.(4)
Because Napster users typically share files for free, the copying
is arguably for a "noncommercial purpose." Thus, either due to a
fair use defense or the AHRA, Napster users are not direct infringers,
meaning that there is no direct infringement to which Napster can
contribute or be vicariously liable for.
of Copyright Law
assuming Napster violates positive copyright law, we must inquire
into the legitimacy of the law. Unlike most other federal laws,
copyright law is clearly authorized by the Constitution.(5)
This, however, does not mean the law is legitimate, only that it
is constitutional. The question is whether copyright law is justified,
i.e. is it in accord with our natural rights?
us recall that copyright gives an author partial rights of control
ownership over the tangible property of everyone else.
The author has partial ownership of others' property, because, by
virtue of his copyright, he can prohibit them from performing certain
actions with their own property. The author, for example, can prohibit
a third party from inscribing a certain pattern of words on his
own blank pages with his own ink.
is, by merely authoring an original expression of ideas, by merely
thinking of and recording some original pattern of information,
the author instantly, magically becomes a partial owner of others'
property. He has some say over how third parties can use their property.
Copyright changes the status quo by redistributing property from
individuals of one class (tangible property owners) to another (authors
of original works). Prima facie, therefore, copyright law trespasses
against or "takes" the property of tangible property owners, by
transferring partial ownership to authors. (The same is also true
of other forms of intellectual property, or "IP," such as patent
law.) It is this invasion and redistribution of property that must
be justified in order for copyright law to be valid. Can this be
most common defense of copyright laws is utilitarian. It argues
that creativity and wealth are increased by granting monopolies
to writings so as to "encourage" authors. Without a copyright in
their works, many authors would not bother to write novels, software,
or other types of works. In fact, most utilitarians ground their
defense of all property rights in utilitarianism. Conservatives
and libertarians should be wary of adopting utilitarianism. It is
a thoroughly incoherent and immoral doctrine, for several reasons.
even if a given policy could increase "net" wealth by redistributing
property from A to B, that does not justify the policy. The goal
of law is justice, not wealth maximization. B may be helped "more"
than A is harmed by redistribution, but how does this justify the
harm done to A? By the reasoning of utilitarians, we could not condemn
every act of theft, rape, or murder; we would have to weigh the
benefit to the thief, rapist, or murderer against the harm suffered
by the victim, to determine whether or not the crime should be permitted.
In cases where the aggressor enjoys his crime "more" than it harms
the victim, it is not a crime at all, and should be permitted, since
net wealth is increased. Clearly, this is a wholly immoral and unprincipled
only is utilitarianism morally insufficient to justify property
redistribution, but it is incoherent as well. As Austrian economists
have shown, the utilitarian weighing of costs against benefits requires
the impossible be done, namely making interpersonal utility comparisons,
as when the "costs" of copyright laws are subtracted from the "benefits"
to determine whether such laws are a net benefit.(6)
In short, there is no way to compare the benefit to B and the detriment
to A of a given redistributionist policy, because values and disvalues
have no cardinal magnitude. The reason for this is that values are
subjective and ordinal, not cardinal.(7)
even if we set aside the problems of interpersonal utility comparisons
and the justice of redistribution and plow ahead and employ standard
utilitarian measurement techniques, it is not at all clear that
IP laws do lead to an increase or decrease in overall wealth.(8)
That is, it has not been demonstrated that the "costs" of copyright
and other IP laws outweigh the benefits of such laws.
analysis is thoroughly confused and bankrupt: talk about increasing
the size of the pie is methodologically flawed; there is no clear
evidence that the pie size is increased by IP rights; and in any
event pie growth simply does not justify the use of force against
the otherwise-legitimate property of others. For these reasons,
utilitarian defenses of IP are not persuasive.
Law and the Second Homesteading Principle
advocates of copyright and other forms if IP try to justify IP with
natural lawtype arguments. For example, some say that the
author "creates" a work, and "thus" is entitled to own it. However,
this argument begs the question by assuming that the authored work
is property in the first place; once this is granted, it seems natural
that the "creator" of this piece of property is the natural and
proper owner of it.
"creation" does not justify ownership in things. If I homestead
a farm, there need be no "creativity" involved, in the copyright
sense; I need only be the first possessor of the land. On the other
hand, if I carve a statue into your block of marble, I do not thereby
own the resulting statue. In fact, I may owe you damages for trespass
or conversion. Thus, creation is neither necessary nor sufficient
is scarcity that is the hallmark of ownable property, and it is
by first possession that one comes to own such ownable property.
This can be seen by examining the purpose and nature of property
rights. Were things in infinite abundance, there would be no need
for property rights. But in the real world, there are scarce resources.
These things can be used and controlled by only a single person.
of this fact of scarcity, there is always the possibility of interpersonal
conflict over scarce resources. If I take your lawnmower, you no
longer have it. If I take over your house and your land, you lose
control of it. These tangible goods are scarce. Property rights
exist to allocate ownership in scarce resources to a specified owner,
thereby permitting conflicts over the use of these scarce resources
to be avoided (and resolved). Thus, it is only things that are scarce,
in the economic sense, that can be property. This is why, for example,
there can be ownership of tangible, scarce resources such as land,
cars, printing press, paper, and ink. Moreover, in the libertarian
and conservative view, these property rights in scarce resources
are allocated in accordance the Lockean homesteading rule, in which
unowned scarce resources are homesteaded by the first possessor.(9)
intangible "things" covered by copyright are simply not scarce,
in this sense. An idea or pattern of words, for example, can be
copied by others an infinite amount of times, without "taking" the
idea from its originator. Unlike tangible property, several persons
can use the idea at the same time, independently. If you copy my
novel, I still "have" the novel, and you have it, now, too. Ideas
are not scarce and are not property. As Thomas Jefferson, himself
an inventor and the United States' first Patent Examiner, wrote,
"He who receives an idea from me, receives instruction himself without
lessening mine; as he who lights his taper at mine, receives light
without darkening me." For this reason, copyrightable works should
not be viewed as property, and copyrights should not be granted.
fact, because ideas are not property, granting property rights in
them has to end up diluting the property rights accorded to actual,
scarce resources. And this is exactly what we see. As pointed out
above, to grant an author a copyright in his novel means that he
now has partial ownership rights in all others' tangible property.
For example, an author, Arthur, can prevent Brown, owner of Blackacre,
from using Blackacre to recreate Arthur's book-pattern. Yet by the
Lockean homesteading principle, once the unowned tract Blackacre
is homesteaded by Brown's first possession of it, Blackacre is no
longer unowned, and no longer subject to homesteading. There is
no unowned property left to homestead. Thus, no action by Arthur
can result in his homesteading part ownership of Blackacre. Brown
is the first possessor and owner of Blackacre, not Arthur.(10)
by explaining the situation in these terms, we can see why Arthur
has no copyright in his authored work: not only is Blackacre not
subject to homesteading (it is already owned), not only is Arthur
not the first possessor of Blackacre (Brown beat him to it)
but Arthur is not a possessor at all of Blackacre. Arthur could
not even homestead an unowned tract of land, Greenacre, by merely
writing a novel. The act of writing a novel is not an act of possession
of Greenacre, much less first possession of it.
grant Arthur rights in Blackacre, merely by virtue of setting down
in writing an original expression of ideas, requires the Lockean
homesteading rule to be undermined by a new, second homesteading
principle. This new rule provides a second way that an individual
can come to own tangible property. To-wit, the copyright advocate
must propose some homesteading rule along the following lines: "A
person who comes up with some creative idea which can be used to
imprint a pattern on his own property, thereby instantly gains a
right to control all other tangible property in the world, with
respect to that property's similar use." This new-fangled homesteading
technique is so powerful that it gives the creator rights in third
parties' already-owned tangible property. This second rule of homesteading
has no justification whatsoever, and can only dilute and undermine
private property rights just where they are needed, in scarce resources.
For these reasons, property rights in ideas are not justified, and
Napster should not be penalized by such unjust laws.
Further information about the Napster lawsuit may be found at:
See, e.g., the RIAA's
motion for preliminary injunction and Napster's
brief appealing the district court's preliminary injunction.
Gershwin Publishing Corp. v. Columbia Artists Management, Inc.,
443 F.2d 1159, 1162 (2d Cir. 1971); see also Melville B. Nimmer
& David Nimmer, Nimmer on Copyright (New York: Matthew Bender,
2000), § 12.04[A].
Corp. v. Universal City Studios, Inc., 464 U.S. 417,
442 (1984); Nimmer on Copyright, § 12.04[A][b].
Audio Home Recording
Act of 1992, 17 U.S.C. §§ 10011010.
Const. art. I, § 8.
On the defects of utilitarianism and interpersonal utility comparisons,
see Ludwig von Mises, Human
Action, 3d. rev. ed., Chicago: H. Regnery; Murray N. Rothbard,
"Praxeology, Value Judgments, and Public Policy," esp. pp. 9099,
and "Toward a Reconstruction of Utility and Welfare Economics,"
Logic of Action One (Cheltenham, UK: Edward Elgar, 1997),
esp. pp. 9099; idem, Man, Economy and State (Auburn AL: Mises Institute,
1993); Jeffrey M. Herbener, "The
Pareto Rule and Welfare Economics," Review of Austrian Economics,
v. 10, no. 1, 1997: pp. 79106; Anthony de Jasay, Against Politics:
On Government, Anarchy, and Order (London and New York: Routledge,
1997), pp. 8182, 92, 98, 144, 149151. On scientism and empiricism,
see Rothbard, "The Mantle of Science," in The
Logic of Action One; Hans-Hermann Hoppe, "In
Defense of Extreme Rationalism: Thoughts on Donald McCloskey's
Rhetoric of Economics," Review of Austrian Economics
3 (1989): 179. On epistemological dualism, see Luwdig von Mises,
Ultimate Foundation of Economic Science: An Essay on Method,
2d ed. (Kansas City: Sheed Andrews & McMeel, 1962); idem, Epistemological
Problems of Economics, George Reisman, trans. (New York:
New York University Press, 1981); Hans-Hermann Hoppe, Economic
Science and the Austrian Method (Auburn, Alabama: Ludwig
von Mises Institute, 1995); idem, "In
Defense of Extreme Rationalism."
It is not merely that all costs do not have a market price.
As Mises showed, even for goods that do have a market price, the
price does not serve as a measure of the good's value. As
Mises states: "Although it is usual to speak of money as a measure
of value and prices, the notion is entirely fallacious. So long
as the subjective theory of value is accepted, this question of
measurement cannot arise." Ludwig von Mises, The
Theory of Money and Credit, H.E. Batson, trans. (Indianapolis:
Liberty Fund,  1980), p. 51 (in chapter 2,"On the Measurement
of Value"). Also: "Money is neither a yardstick of value nor of
prices. Money does not measure value. Nor are prices measured in
money: they are amounts of money." Ludwig von Mises, Socialism:
An Economic and Sociological Analysis, 3d rev. ed., J. Kahane,
trans. (Indianapolis: Liberty Press, 1981), p. 99); see also Mises,
Action, pp. 96, 122, 204, 210, 217, 289.
See Julio H. Cole, "Patents and Copyrights: Do the Benefits
Exceed the Costs?" (forthcoming; [email protected])
for an excellent survey and critique of the cost-benefit justification
for patent and copyright. See also Tom G. Palmer, "Are Patents and
Copyrights Morally Justified? The Philosophy of Property Rights
and Ideal Objects," Harv.
J. Law & Publ. Pol'y 13, no. 3 (Summer 1990), pp. 818,
820821, 850851, and idem, "Intellectual Property: A Non-Posnerian
Law and Economics Approach," Hamline
L. Rev. 12 (1989): 261, 300302,
for useful discussions of evidence in this regard; also Boudewijn
Bouckaert, "What is Property?", Harv.
J. Law & Publ. Pol'y 13, no. 3 (Summer 1990): 812813;
Leonard Prusak, "Does the Patent System Have Measurable Economic
Value?," AIPLA Quarterly
Journal 10 (1982): 5059; idem, "The Economic Theory Concerning
Patents and Inventions," Economica 1 (1934): 3051.
On ethical justifications of the libertarian conception of individual
rights, including private property rights and the Lockean homesteading
rule, see Hans-Hermann Hoppe, A
Theory of Socialism and Capitalism (Boston: Kluwer Academic
Publishers, 1989), ch. 7; idem, The
Economics and Ethics of Private Property (Boston: Kluwer
Academic Publishers, 1993); Murray N. Rothbard, The
Ethics of Liberty (New York and London: New York University
Press, 1998 ); idem, "Justice and Property Rights," in The
Logic of Action One (Cheltenham, UK: Edward Elgar, 1997);
N. Stephan Kinsella, "A Libertarian Theory of Punishment and Rights"
of Los Angeles Law Review 607 (Spring 1996) (previous
version); idem, "New
Rationalist Directions in Libertarian Rights Theory," Journal
of Libertarian Studies 12, no. 2 (Fall 1996): 313326.
This assumes that Arthur does not have a contract with Brown
which prohibits Brown from making a copy of Arthur's book-pattern.
For further discussion of this matter, see my monograph Against
him mail] is
an intellectual property attorney in Houston. The views expressed
herein are merely the current speculative opinion of the author,
and should not be attributed to any other person or entity. He has
never used Napster and does not download MP3 files. A more detailed
exposition of some of the ideas in this article can be found in
the author's article Against
Intellectual Property. The author thanks Gil Guillory for helpful
comments on an earlier draft. His personal website is located at
© 2009 Stephan Kinsella
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