According to ABC News on November 4, recent Republican wins in gubernatorial elections in both New Jersey and Virginia prompted Ohio congressman John Boehner to say:

“There’s a political rebellion going on in America, and what we saw last night was just a glimpse of it.”

Mind you, Boehner is not referring to New Hampshire’s “Free State” (although I heartily support the movement, the name is oxymoronic and self-contradictory – rather like saying “White Black” or “Alive Dead”) Project, the throngs of consistent non-voters, or the content of this website. What he’s suggesting is nothing less than so preposterous a notion that a return to the GOP side of the coin in government at any level is some kind of victory. To wit, that yet another flip-flopping in the endless conundrum of idiocy involved in electoral politics makes some kind of substantial difference.

News to Boehner (not that he doesn’t, at root, know it already): Shifting power from one group of usurping thugs to another constitutes nothing of any value at all. Voting and elections will not eliminate taxation. It will not increase individual liberty. These endless dispicable goings-on can only and exclusively produce the opposite result. To lend any legitimacy to political government in any form – by voting or otherwise – is to essentially endorse bullying, thievery, kidnapping, and outright murder – so long as those committing such tyrannical atrocities are in the employ, at taxpayer expense, of course, of a government.

This scatalogical conclusion cannot hold water whenever even a modicum of reason and compassion is applied to such a notion. It is, at day’s end, only a lunatic or a psychopath who believes that it’s perfectly all right to impose services (that’s right, impose, since taxpayers have no real choice to choose to not purchase services that those in government propose to provide whether anyone in particular wants or consents to them or not) literally under the threat of property seizure, imprisonment, and even death. Yet, through the tragedy of government-controlled tax financed public schools, mass media, and mass conditioning – to say nothing of outright armed intimidation – this view is the prevailing one amongst American society. It is only, at present, organizations such as Center for a Stateless Society and other free-market anarchist groups who are truly speaking out in a way that proposes real and effective “change” – certainly not the Obamanoids and other hardline statists whose every solution stems from ever growing and more intrusive government…an institution that relies almost exclusively on violence for its survival.

Yes, there is a political rebellion going on in America – but not the phony one espoused by John Boehner. It’s happening right here at C4SS and other similar websites. It’s happening whenever more people become principled non-voters. It’s happening whenever people quit their government jobs, never to go back. It’s happening whenever people find practical means of withholding money from the government. It’s happening in the increasing attention this subject and philosophy is getting on the Internet – the core of modern alternative media. It’s happening every time someone becomes thoughtful and decides to set down the violent gun wielded by the State in lieu of respect for the liberty and property of others. This is where the real political rebellion is happening.

And wherever and whoever you may be, I’d like to invite you to join us in evolving your mind, and changing the world.

Gene Quinn, a patent lawyer and IP-hawk, has recently challenged the anti-IP movement — in the tone of a belligerent drunk announcing he can lick anyone in the bar– to back up its contentions with facts and arguments.  Such facts and arguments are lacking, he taunts (in an Eric Cartman voice?), for the obvious reason that none exist.

When people like Stephan Kinsella call his bluff, Quinn generally manages to weasel out of it.  Most recently, Quinn was scheduled to debate David Koepsell, but at the last minute cancelled because he (ahem) got sick.  Quinn, in lieu of the original debate format, later participated in a pathetic exchange of soundbites on the Laura Flanders show.

The weightiest of Quinn’s “unanswerable” points is the supposed insufficiency of marginal cost-based pricing for recouping high R&D costs.

Quinn’s argument assumes an obsolete industrial model, and ignores the extent to which the capital-intensiveness and overhead cost of innovation itself are themselves affected by IP.  Patents can tip the balance between alternative business models, promoting an artificially high-capitalized, high-overhead, bureaucratic model of R&D.

Patents are one way of dealing with R&D cost.  But another way is modular design, which economizes on development cost by reusing the same R&D effort for a particular module or platform over a wide family of products.

Open source, P2P design models may also be considerably cheaper because they are more agile (see Eric Raymond, “The Cathedral and the Bazaar”); for example, homebrew CNC machine tools generally achieve Factor 10 or Factor 20 cost reductions over their proprietary equivalents.

Patents also tip the balance toward less agile forms of production in another way:  the legal process of securing a patent is an enormous outlay that can only be amortized by large-batch production.

And the process of gaming the patent system diverts R&D dollars into some very wasteful avenues.  For example, most drug R&D cost goes, not to developing the version actually marketed, but to securing patent lockdown on all the major possible variants (so a competitor won’t market a rival drug).

Artificial property rights are a source of additional capitalization costs and overhead.

Also, studies have shown that the total productivity benefits from the cumulative effects of incrementally tweaking designs, and all the other Hayekian stuff that goes with a tinkerer observing a technology in operation and fiddling with it, outweigh those from major generational leaps.  So an IP regime that incentivizes major generational leaps, while erecting transaction costs against derivative development, seems of questionable benefit.

Defenses of both patents and copyright based on the inadequacy of marginal cost pricing to recoup up-front outlays are wrong-headed in another way.

The only effect of abolishing IP is to do away with monopoly rents from design or content ownership as such.  It doesn’t affect the rents that result from the transaction costs of setting up production, or from being first to market and knowing one’s market better than the competition.

These things, which all fall under the head of what Chris Anderson calls “freemium,” are sources of value that would exist even without rents from IP as such. So it’s still possible to make money from being first mover, and from the authentication advantages that come with being identified as the product’s developer; you just can’t make as much money from it.

High among “freemium” services, for the majority who value time and convenience along with bare price, is authenticity:  buying a copy that’s certified to be complete, defect-free, and in the format you need.

And in general, the person who originally develops a product is likely to have a better knowledge of his market, and be in a better position to profit from an ongoing relationship with his market as he develops products geared to their particular needs — especially if he also serves the market through customization and customer support.

Shakespeare worked without copyright, which meant he made money by actually performing the plays with his theater company.  That meant, in turn, that he got lots and lots of little piles of money from keeping on writing plays and performing them, instead of collecting a big pile from a one-hit wonder.

BTW:  Most of Shakespeare’s work was done on the folk culture model, with heavy reliance on mashups from other storytellers, and hence would be illegal under modern copyright law.

In the realm of physical production, the first company to develop a new product will have first-mover rents for the time it takes to duplicate the process.  After that, it will have rents from customer goodwill.  That goodwill will include the common sense assumption that the company will be best at offering upgrades to a product it originally developed, and will probably be the most reliable source of customer support.

To sum up:  the producers who find themselves being driven out of business by competition based on marginal cost are generally the corporate dinosaurs who CAN’T survive without monopoly rents on IP, because they really are too stupid to think of any other way to make money.

In theory, government exists to protect those whom it “serves” — to defend their rights at home, and to guard against invasion by the armies of other governments which (once again, in theory) would violate those rights rather than merely becoming the new monopoly provider for their defense.

In practice, however, government policy tends toward the opposite. At home, the defense of — or even minimal respect for — rights is routinely sacrificed on the altar of “defense” against foreign enemies; abroad, governments work together to coordinate in support of each others’ rights violations.

If two governments are seen cooperating, it’s a good bet that they’re negotiating a treaty to regulate away your right to trade across borders (which themselves are nothing more than imaginary lines on the ground, drawn by politicians to make this kind of thing “necessary”).

If two governments are seen at loggerheads, you can safely bet that the rights and welfare of their respective subjects have little or nothing to do with the argument, and that in fact those rights and that welfare will be the first items on the chopping block when as the argument escalates to sanctions, sabre-rattling and possibly war.

Case in point: The US trade embargo on Cuba. For going on 50 years now, the rights and welfare of both Cubans and Americans have taken second place to the alleged desire of the US government to topple Fidel Castro’s communist regime.

I say “alleged,” because the real purpose of the embargo from the US standpoint certainly isn’t to “protect” the US from Cuba, which hasn’t represented a significant military threat since the Soviet Union blinked first in the “missile crisis” of the early 1960s. Nor is it to bring down Castro, whose regime has benefited immensely from it. Rather, its real purpose is to pump anti-Castro Cuban-Americans in Florida — held in sway by an “anti-Castro dissident industry” whose principals are far more interested in amassing wealth and influence in the US than in actually liberating Cuba — and subsidy-seeking sugar producers (who don’t want to have to compete with Cuban sugar imports) for campaign money and November votes.

And while Castro’s regime and that of his successor, his brother Raul, have always talked a good anti-embargo game, they’re Johnny on the spot and ready to escalate tensions with the US any time it looks like the matter is up for serious reconsideration. From their standpoint, El Bloqueo may be the single best guarantee of their continued hold on power. It gives them a ready-made foreign enemy — an enemy to blame for the failure of Castro’s socialist revolution and an enemy to wave at its subjects as a military threat against which those subjects must stand united.

What would be the result of an end to the embargo — assuming, as it is never safe to do, that both governments were actually willing to drop it into the wastebasket of history?

On the economic side, consumers and non-rent-seeking producers in both countries would benefit. Sugar in particular would get cheaper in the US as American producers were forced to compete in an open market instead of being “protected” from Cuban cane. Goods of all types would get cheaper in Cuba as American imports which only have to be shipped across 90 miles of ocean arrive to compete with their European equivalents. Producers in both countries would have new markets opened to them, and capital from both countries would have new, competitive places to flow to.

On the political side, citizens of both countries would regain at least some freedoms their governments have denied them. Freedom to travel. Freedom to trade. Freedom to engage with each other. Only the two regimes would lose, and the things they’d lose — opportunities to indulge in control and corruption — are things they were never rightfully entitled to in the first place.

The beneficiaries of the embargo are the politicians of both governments and their rent-seeking paymasters. The rest of us take it right on the chin. To understand any government policy, ask the question the Romans asked when looking into lesser criminal matters: “cui bono” (“who benefits”). The actions of the ruling class are seldom undertaken for the benefit of the ruled.

Translations for this article:

• Spanish, ¿Quién se beneficia del embargo a Cuba?