KOL472 | “What Is Property? And What Is Not? — Part 2 — Fireside Chat on Intellectual Property with Albert Lu,” Capitalism & Morality (Vancouver)

Kinsella on Liberty Podcast: Episode 472. This is my second talk this morning at Jayant Bhandari's (@JayantBhandari5) Capitalism & Morality 2025 (Vancouver) conference. Part 1: KOL471 | “What Is Property? And What Is Not? — Part 1," Capitalism & Morality (Vancouver). https://youtu.be/T-hBIZMYPro?si=TGjZCGr9nHj8iJdI In my first talk I focused on the the role of scarce means (conflictable resources) in action. I had to finish my talk before turning to the second part of action one needs to analyze to fully understand property rights and the intellectual property debate: the knowledge that guides actors in the use of means. In this second part, "Fireside chat between Stephan Kinsella and Albert Lu," I picked up on where I left off in Part 1, and briefly discuss the knowledge aspect of action, and apply this understanding of the nature and structure of human action in detail to IP. (I've known Albert for year and previously appeared on his podcast.)  (( KOL193 | The Economy with Albert Lu: On IP and Double Counting (3/3) KOL192 | The Economy with Albert Lu: On the Legal Significance of Ownership (2/3) KOL191 | The Economy with Albert Lu: Can You Own Bitcoin? (1/3) KOL171 | With Albert Lu Discussing Stossel and IP KOL139 | Power and Market Report with Albert Lu: Law, Careers, Scholarship; Intellectual Property Law Policy, Law, and Career )) Slides, video, transcript below. For more on this, see Libertarian and Lockean Creationism: Creation As a Source of Wealth, not Property Rights; Hayek’s “Fund of Experience”; the Distinction Between Scarce Means and Knowledge as Guides to Action and, for the application of this framework and approach to IP, see The Problem with Intellectual Property. My topic is similar to some recent ones, to-wit: KOL259 | “How To Think About Property,” New Hampshire Liberty Forum 2019 and KOL420 | There Ain’t No Intellectual Property: The Personal Story of a Discovery (PFS 2023). For relevant background see also Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023), e.g. chs. 2, 9, 14, 15, et pass. The audio is from my iphone. I will replace it with the video and better audio at a later date. I have replaced the podcast audio with the better audio. The video is forthcoming. Powerpoint slides (Powerpoint - pptx file): Rick Rule and Albert Lu a few weeks ago on the conference: https://www.youtube.com/live/9I_GfpnkAiU?si=-YNX1ZbYwOyaXURN&t=972 Grok shownotes: Introduction and Context [0:13] Albert Lu opens the fireside chat by expressing pleasure in reuniting with Stephan Kinsella after eight years, highlighting their late-night email exchanges and Kinsella's expertise in intellectual property (IP) from a libertarian viewpoint. Lu sets the stage for discussing IP, Kinsella's specialty, which was not covered in the prior talk, and shares his own background as an engineer involved in patents 30 years ago. Engineer’s Perspective on Patents [1:04] Lu recounts his experiences dealing with patent attorneys, illustrating how the process crystallizes the case against IP. He describes typical interactions where attorneys push for broad, vague claims to block competition, leading to absurd patents like the iPhone's rounded corners. This stifles innovation, as engineers must navigate "landmines" of existing patents, favoring large companies with portfolios for cross-licensing while disadvantaging small innovators. Mechanics of Patents and Their Impact [5:19] Kinsella explains patent drafting, where claims start broad and narrow down, debunking the myth that patents disclose useful information—they are written obscurely to confuse competitors. He criticizes the "patent bargain" as one-sided, granting monopolies without true disclosure, as products reveal workings upon sale. Large firms build patent "war chests," leading to costly lawsuits, cross-licensing, oligopolies, higher prices, and barriers for small inventors. Arguments for and Against Intellectual Property [9:35] Kinsella outlines utilitarian and natural rights arguments for patents: the former claims monopolies incentivize R&D to fix "market failure," but lacks evidence and creates government-backed monopolies conflicting with antitrust laws. The natural rights argument, rooted in Locke's labor theory, mistakenly treats labor as ownable. Kinsella argues ownership arises from homesteading or contracts, not creation, and IP conflicts with scarce resource rights, restricting knowledge which guides action but isn't ownable. Patents as Restrictions on Property Use [19:44] Lu prompts Kinsella to elaborate on how patents prevent manipulation of one's own property. Kinsella responds that liberty presumes freedom unless infringing others' rights, but patents grant non-consensual restrictions, akin to negative servitudes without agreement. Examples include copyrights on yoga poses or tattoos, effectively claiming partial ownership over others' bodies or resources, violating true property rights. Willful Violation and Systemic Issues [27:17] Lu discusses how engineers are advised not to read patents to avoid "willful" infringement penalties, contradicting disclosure claims and encouraging ignorance. Kinsella agrees, noting this fosters dishonesty in fields like music copyrights, where influences are denied to evade liability. He extends this to defamation law, a form of IP, which amplifies lies by implying unlitigated claims are true. Historical Perspectives on Intellectual Property [29:19] Lu shifts to the Founding Fathers, noting Ben Franklin's refusal to patent inventions like bifocals to spread ideas freely. Kinsella recalls Franklin and Jefferson (an inventor and first patent examiner) declining patents. He shares Jefferson's quote likening knowledge to a candle flame—sharing doesn't diminish the original—highlighting knowledge's non-scarce nature versus physical theft. The Founders intuited IP flaws, possibly from British monopolies, though the Constitution authorized it, benefiting the educated class. Conclusion [31:56] Lu wraps up the chat, thanking Kinsella and the audience as time runs out. Transcript: Fireside Chat with Stephan Kinsella and Albert Lu Below is the cleaned-up transcript of the fireside chat between Stephan Kinsella and Albert Lu, identified as Part 2 of the discussion related to KOL471: What is Property? What is Not?, with topical section headings, timestamps, and speaker indications. Introduction and Context 0:13 [0:13] Albert Lu: Thank you, Jayant. It’s a pleasure to sit down with my friend Stephan. I haven’t seen him in about eight years since I moved from Houston. I’ve learned a lot from him over the years, and just yesterday, after his talk, we exchanged emails late into the night. I want to discuss intellectual property, his specialty, as we didn’t cover it in his earlier talk. His libertarian perspective offers valuable insights. First, I’ll share my experience as an engineer dealing with patent attorneys, which primed me for Stephan’s case against intellectual property. Engineer’s Perspective on Patents 1:04 [1:04] Albert Lu: Thirty years ago, I was involved in patents as an engineer. Dealing with patent attorneys crystallized the case against intellectual property for me. Typically, you sit down, and the attorney says, “Tell me about your invention.” You start, “I’ve got this thing,” and they interrupt, “Stop. You can’t patent ‘thing.’” You describe what it does, and they push for the broadest claims to prevent competition. This leads to absurd patents, like the iPhone’s rounded corners. Engineers must navigate these “landmines,” which stifles innovation. Only big companies with patent portfolios can cross-license, leaving small innovators at a disadvantage. [4:05] Albert Lu: That’s my practical case against intellectual property, but Stephan has a well-constructed legal framework. I’d like him to explain it. To preface, his earlier talk focused on property rights and scarce resources, but didn’t cover knowledge, which guides action. Combining these concepts clarifies the case against intellectual property. [4:23] Stephan Kinsella: My earlier talk discussed how humans use scarce resources in action, but I didn’t cover knowledge, the second key aspect guiding behavior. Property rights apply only to scarce resources, not knowledge, which underpins the case against intellectual property. My book, Legal Foundations of a Free Society, available free online at stephankinsella.com or on Amazon, elaborates on this. Mechanics of Patents and Their Impact 5:19 [5:19] Stephan Kinsella: In patent law, we learn to draft claims defining the invention’s scope, starting broad and narrowing down. The claim is that patents disclose valuable information, but this is nonsense. Applications are written obscurely to confuse competitors, who spend time avoiding infringement rather than learning. The “patent bargain” grants a 17-year monopoly for disclosure, but most products inevitably reveal their workings when sold, making the bargain one-sided—a monopoly to block competitors. Large corporations amass patent war chests, leading to lawsuits, cross-licensing, and reduced competition. This creates oligopolies, raises consumer prices, and stifles small innovators who lack resources to litigate. Arguments for and Against Intellectual Property 9:35 [9:35] Stephan Kinsella: Patents destroy innovation and grant state-backed monopolies. The utilitarian argument claims monopolies incentivize R&D by protecting profits, alleging market failure without them. There’s no evidence for this, and true monopolies arise from government grants like patents. Antitrust laws paradoxically penalize patent misuse, creating a schizophrenic system. The natural rights argument, rooted in Locke’s labor theory, claims creators own their inventions. This stems from a flawed assumption that labor is ownable. You own your body and its actions,...