On Property and Scarcity

Stephan Kinsella writes in his book “Against Intellectual Property” in the chapter “Property and Scarcity”:

Nature, then, contains things that are economically scarce. My use of such a thing conflicts with (excludes) your use of it, and vice versa. The function of property rights is to prevent interpersonal conflict over scarce resources, by allocating exclusive ownership of resources to specified individuals (owners).

Robert Wenzel argues that an idea should be categorised as “scarce” because it is theoretically possible that it could reside in one person’s mind only (his “Drudge formula”), and because someone is prepared to pay for this idea (which classifies it an ‘economic good’ that can fit on an ordinal value scale).

But what if this idea is also in another person’s mind simultaneously? Wenzel would still have his idea, and could continue to use and sell it. Thus, both people would have the ability to use and sell this idea, and no interpersonal conflict need result. Ideas can be shared without depriving anyone of its use, which is why an idea is not a scarce good, and can be replicated as many times as there are people who can understand it.

It is this misunderstanding of the basics that cause Wenzel’s argument on “scarcity” to fall flat.

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About Chris Becker

Chris Becker is Market Strategist and Economist at ETM Analytics. Becker is Co-Founder of the Mises Institute South Africa. Visit his personal blog chrislbecker.com. Follow him on twitter @chrislbecker.
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