In a comment on my

In a comment on my blurb for Will Thomas's cipro article, my revered colleague, Damon Chetson, replies that intellectual property rights are a myth.

One of the interesting divisions among libertarians is the split between IP communists, like Damon, and pro-IP rights people, like myself. Some IP commies claim that the point of property rights is to create a system of efficient allocation for things that can't be used by everyone at once. There's no point in having a car, say, if you don't have a right to exclude others from using it whenever they want, because if they're using it, you can't. And if you don't divide up common areas into parcels of property, everyone will race to plunder whatever they can from the limited stock of resources. However, the molecular structure of cipro (or the sequence of words in a novel, etc.) is costlessly replicable. Thus allowing everyone to use it doesn't keep the inventor from using it. Therefore, there's no point in attributing a right to use that structure of molecules (or sequence of words, etc).

My reply is that property rights aren't based solely on the necessity of assigning entitlements of use to things that everybody can't use at once. We need to distinguish the moral basis of rights from the reasons we have for respecting other's rights. The basis for my right in my car is that I bought it from someone who had a right in the car. Your reason for respecting my right to my car is that we're all better off in a system that efficiently allocates entitlements of use for rivalrous goods. With IP, the basis of my right to a certain molecule is that I discovered it. Now, here's where the IP commie comes in… “But do we really have a reason to respect that right? Wouldn't we all be better off if we didn't?”

This, I think, is the hard question. John Locke, the ur-rights theorist, argued that you have a right of original acquisition if you “mixed your labor” with the thing, and if you “leave enough and as good” for others. The tragedy of the commons problems that show that property rights are required for leaving enough and as good (required, because if no one has rights to the commons, it disappears due to abuse and plunder), apply equally to IP, but in a different way.

Think of the land of ideas as an abstract commons — everyone can wander in and explore. The problem here is that the commons is such a vast wasteland that it is incredibly difficult to find the oases of value in it. The tragedy of the intellectual commons isn't due to everyone racing to take what they can before others get to it, but due to no one bothering to go into it to discover its amazing treasures. If there are no IP rights, some people will go into the commons for fun (open source-like folks), and will be happy to share what they find. However, most people will be discouraged if they know that they won't have rights over what they find there. And so many amazing, life-enhancing things will be left unfound.

The question is: Under IP communism, will the value that comes from the public diffusion of the things that are found make up for the value that is lost from the things that are not found, due to disincentive? And would this be a good enough reason to override the basic moral rights of discoverers and creators? Not easy questions.

The IP commie argument that in an open source world people will simply respond to different incentives, and therefore gladly contribute their intellectual effort for the commonweal, smacks too much of the regular commie argument that the abolition of property altogether will only bring out the best in all of us, which will bring forth utopia. We all know how that worked out.

  • “As he says, firms are not stupid, and will not pay for a BA degree if a BA is not teaching anything to their potential recruits. “

    This is a silly statement I’ve heard repeated multiple times. You don’t have to assume that firms or students are irrational to argue that the “BA is not teaching anything to their potential recruits.”

    Theoretically, it’s pretty straightforward. Good future workers know they need to go to college to signal their ability to firms and firms know that they have a much higher chance of finding good future workers in the college group. Furthermore, employers are much less likely to have their competence called into question if a hire with a degree doesn’t work out than if they hire a worker without a degree (because of the correct perception of the low likelihood of that hire being a wise choise).

    Turning to a hypothetical example, if college ended tomorrow, I am confident that firms would quickly snap up smart young men and women. At first, firms would still prefer candidates with a degree, and it would take about a year and some nice magazine features before they end up being able to sell to corporate that they can hire and train smarter 18-year-olds for less money and in place of 4-year colleges we’d have colleges more like master’s programs competing to show their value-added.

    The question is how to credibly signal to good future workers that a four-year college degree isn’t necessary to be considered as a candidate and to convince firms that there are enough good future workers without a four-year college degree to make it a wise investment. This critical mass exists in some places outside the US. An Indian software company hires kids who are bright but are not going to college due to pressure to start making money right away. They train them, and in nine months, they produce at the level of college grads. Their resumes are not as marketable, they can code just as well as the rest. Often, better.

    I’ll be writing up an overview of education shortly, and was interested in reading the opinions of this group. But I find the first quote to be repeated far too often.

  • mari dupont

    There’s an article buried somewhere on National Review explaining how college degrees suddenly became “mandatory” for the most unlikely entry level jobs as a result of lawsuits filed against employers who used apptitude tests (rather than educational credentials) to screen job candidates. Supposedly black and latino candidates weren’t scoring as high and weren’t getting hired and claimed discrimination etc etc . So, employers may not be as dazzled by a BA as you think…But since I work in the tech/entertainment world where a college degree is completely meaningless–the richest people I know are all self-taught in their particular area–I admit to being somewhat biased towards Mr. Murray’s view.

  • Jason Malloy

    I understand Dr. Murray’s dissatisfaction with the BA system, but the system is set-up in such a way, it seems, that any party that defects will injure themselves. This hurts his argument, because he is arguing for a more practical system, but the party that follows his advice will not be acting in a practical, self-interested manner.

    This is why in previous articles he has hinted that lower ability people would get a bigger financial return from trade school rather than college. But since that isn’t true, his argument is a harder sell.

    Similarly he argues that employers would do better with a CPA type of exam than going by a degree. This could be true (And in fact certain ridiculous anti-discrimination laws might be one reason the system is so inefficient). But it could also not be true, as Bryan Caplan suggests.

    So if it hurts the young person to defect, and if it hurts the employer to defect, this makes Murray’s pitch a hard sell. He needs to more fruitfully come up with a plan about how things can change. And that will require appealing to those with the power to change it that it is in their best interest to do so.

    Specifically, if he could convince employers that an IQ test or a CPA type exam would be the legally safest, most efficient, and most profitable route, the value of the BA for the low ability person would indeed drop dramatically.

    Unfortunately this would overwhelmingly help rich, smart people at the expense of poor, stupid people. (if the BA system truly is currently elevating tons of underqualified dumb people into the ranks of the middle and upper middle class). And this undercuts what I think Murray has always wanted: the best deal for the left half of the bell curve.

  • Jason Malloy

    Bryan Caplan’s response is close to what I said, as I thought it would be.

    I disagree with Caplan though that employer decisions already prove the BA is a trustworthy signal. He has a naive Beckerish view on the efficiency of markets (e.g. employers who racially discriminate would go out of business). As far as I know, no employers have ever collected data on IQ tests vs. humanities degrees. I think it’s very doubtful that college is screening out “lazy” people in such a way that college wage premium is maximally profitable.

    It’s a very real possibility that the whole inflated BA system is based on bad, inefficient. and costly selection decisions by employers. If employers are acting a certain way before there is data to justify it, then I think there is a good possibility that they aren’t acting on some indirectly obtained knowledge, but on habit and tradition. This is why good data really can improve markets.

    Also…

    “You can try jawboning Microsoft into switching to certification tests. But can we really believe that Murray has seen a profit opportunity that Bill Gates hasn’t?”

    Gates is notorious for relying on IQ tests, so this was a bad example. Also I don’t know how important college is in MS hiring decisions, but I think it hasn’t been denied yet that technical degrees like engineering actually do usefully signal job-applicable knowledge, unlike, e.g., an English degree.