IP in a World Without Scarcity

Things are valuable because they are scarce. The more abundant they become,they cheaper they become. But a series of technological changes is underwaythat promises to end scarcity as we know it for a wide variety of goods.The Internet is the most obvious example, because the change there isfurthest along. The Internet has reduced the cost of production anddistribution of informational content effectively to zero. In many cases ithas also dramatically reduced the cost of producing that content. And ithas changed the way in which information is distributed, separating thecreators of content from the distributors.More recently, new technologies promise to do for a variety of physicalgoods and even services what the Internet has already done for information.3D printers can manufacture physical goods based on any digital design.Synthetic biology has automated the manufacture not just of copies ofexisting genetic sequences but any custom-made gene sequence, allowinganyone who want to create a gene sequence of their own to upload thesequence to a company that will “print” it using the basic building blocksof genetics. And advances in robotics offer the prospect that many of theservices humans now provide can be provided free of charge bygeneral-purpose machines that can be programmed to perform a variety ofcomplex functions. While none of these technologies are nearly as far alongas the Internet, they share two essential characteristics with theInternet: they radically reduce the cost of production and distribution ofthings, and they separate the informational content of those things (thedesign) from their manufacture. Combine these four developments – theInternet, 3D printing, robotics, and synthetic biology – and it is entirelyplausible to envision a not-too-distant world in which most things thatpeople want can be downloaded and created on site for very little money.The role of IP in such a world is both controverted and criticallyimportant. IP rights are designed to artificially replicate scarcity whereit would not otherwise exist. In its simplest form, IP law takes publicgoods that would otherwise be available to all and artificially restrictstheir distribution. It makes ideas scarce, because then we can bring theminto the economy and charge for them, and economics knows how to deal withscarce things. So on one view – the classical view of IP law – a world inwhich all the value resides in information is a world in which we need IPeverywhere, controlling rights over everything, or no one will get paid tocreate. That has been the response of IP law to the Internet so far.But that response is problematic for a couple of reasons. First, it doesn’tseem to be working. By disaggregating creation, production, anddistribution, the Internet democratized access to content. Copyright ownershave been unable to stop a flood of piracy with 50,000 lawsuits, a host ofnew and increasingly draconian laws, and a well-funded public educationcampaign that starts in elementary school. Second, even if we could use IPto rein in all this low-cost production and distribution of stuff, we maynot want to. The point of IP has always been, not to raise prices andreduce consumption for its own sake, but to encourage people to createthings when they otherwise wouldn’t. More and more evidence casts doubt onthe link between IP and creation, however. Empirical evidence suggests thatoffering money may actually stifle rather than drive creativity amongindividuals. Economic evidence suggests that quite often it is competition,not the lure of monopoly, that drives corporate innovation. The Internetmay have spawned unprecedented piracy, but it has also given rise to thecreation of more works of all types than ever before in history, often bymultiple orders of magnitude.Far from necessitating more IP protection, then, the development ofcost-reducing technologies may actually weaken the case for IP. If peopleare intrinsically motivated to create, as they seem to be, the easier it isto create and distribute content, the more content is likely to beavailable even in the absence of IP. And if the point of IP is to encourageeither the creation or the distribution of that content, cost-reducingtechnologies may actually mean we have less, not more, need for IP.IP rights are a form of government regulation of market entry and marketprices. We regulated all sorts of industries in the 20th century, fromairlines to trucking to telephones to electric power, often because wecouldn’t conceive of how the industry could survive without the governmentpreventing entry by competitors. Towards the end of that century, however,we experimented with deregulation, and it turned out that the market couldprovide many of those services better in the absence of governmentregulation. The same thing may turn out to be true of IP regulation in the21st century. We didn’t get rid of all regulation by any means, and wewon’t get rid of all IP. But we came to understand that the free market,not government control over entry, is the right default position in theabsence of a persuasive justification for limiting that market. Theelimination of scarcity will put substantial pressure on the law to do thesame with IP.A world without scarcity requires a major rethinking of economics, much asthe decline of the agrarian economy did in the 19th century. How will oureconomy function in a world in which most of the things we produce arecheap or free? We have lived with scarcity for so long that it is hard evento begin to think about the transition to a post-scarcity economy. IP hasallowed us to cling to scarcity as an organizing principle in a world thatno longer demands it. But it will no more prevent the transition thanagricultural price supports kept us all farmers. We need a post-scarcityeconomics, one that accepts rather than resists the new opportunitiestechnology will offer us. Developing that economics is the great task ofthe 21st century.