Facebook Success Shows Why Intellectual Property Laws Are Stifling


Last week, social media site Facebook finally filed its IPO in a bid to raise $5 billion and begin selling stocks later this spring. Facebook’s success has been based on fulfilling a consumer demand by providing a social networking site that is user friendly and has a generally broad appeal to both younger and older audiences. Freedom to use and expand upon other older ideas is what has helped launch Facebook to a status never seen by Friendster, Myspace, or many other social networks that existed before it. 

All of the site’s success comes despite current intellectual property law, and the site is a shining example of why we should be against intellectual property (IP) laws. IP laws stifle the market by giving monopoly privilege to the “owner” of the idea(s) for an arbitrary number of years and distorting real property ownership.

IP laws are designed to ensure some individual would be the sole financial profiteer of his or her “own” idea; otherwise, we would prosecute every time someone used another’s protected idea. (Ex: Every time you hum your favorite tune, you would be fined.) I would argue that Facebook, the entertainment industry, and companies alike would still be successful without IP protections from the government. In the case of Facebook, people chose it over the other options. Facebook was a better product; it built better upon ideas and provided what consumers wanted in a higher quantity than did any competitor. If the real story is anything like the movie, The Social Network, then Mark Zuckerberg made a better product than the Winklevoss twins — even if it was “their idea” first.

As one IP expert Stephan Kinsella says, “First, 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?”

As Kinsella says, the goal of law is justice and not wealth maximization to certain individuals.  An objector may say that the goal of law is to protect property. I agree. However, IP laws distort property ownership. IP laws give someone the power to dictate what I can or cannot do with my own real world property.

It is with the case of some IP laws that since someone owns the concept, no one else can therefore use it. Why not? Are they at any loss if I organize my property in the same way they did? If I own a piece of wood, paint brushes, and the paint, why could I not paint the pattern I wish into it? If I really own my property, I should do with it as I please so long as it harms no one, and there is no harm done by my painting a pattern on my piece of wood.

If IP laws are really so important and are, in fact, real property, then why do they last for arbitrary numbers of years? Some last for seven years, some for 99 years. Why not have real permanent ownership if someone really can own an idea?

With government using IP laws to severely restrict our liberties — especially on the internet (SOPA/PIPA/ACTA) — it is time the intellectual property debate is opened to the masses. The success of groups like Facebook building off older social network models, the desire for the liberty to sing a karaoke version of our favorite song on YouTube, and the protection of our property are all at stake. We need a free market of ideas because ideas are the only way to drive social and economic progress. To achieve this free market of ideas, we need to dismiss the very idea of intellectual property.

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