In Locus

Now, free software advocates – and free culture advocates – hate the term “intellectual property.” The argument against IP rails against its imprecision and its rhetorical dishonesty.

Prior to the rise of the “intellectual property” as an umbrella term, the different legal regimes it refers to were customarily referred to by their individual names. When you were talking about patents, you said “pat­ents,” and when you were talking about copyrights, you said “copyrights.” Bunching together copyrights and trademarks and patents and other rules wasn’t particularly useful, since these are all very different legal regimes. On those rare instances in which all of these laws were grouped together, the usual term for them was “creator’s monopolies” or “author’s monopolies.”

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Seen in this light, “intellectual property” is an incoherent category: when you assert that your work has “intellectual property” protection, do you mean that you can sue rivals to protect your customers from deception; or that the government will block rivals if you disclose the inner workings of your machines; or that you have been given just enough (but no more) incentive to publish your expressions of your ideas, with the understanding that the ideas themselves are fair game?

When you look at how “IP” is used by firms, a very precise – albeit colloquial – meaning emerges:

“IP is any law that I can invoke that allows me to control the conduct of my competitors, critics, and customers.”

That is, in a world of uncertainty, where other people’s unpredictability can erode your profits, mire you in scandal, or even tank your business, “IP” is a means of forcing other people to arrange their affairs to suit your needs, even if that undermines their own needs.

For capitalism’s philosophers, the rent/profit distinction was key. Rents bred complacency and stagnation. The feudal lord got the same rents no matter what. There was no incentive to re-invest those rents in better agri­cultural tools or advanced training for serfs. If your serfs invented a better scythe that let them bring in the harvest in half the time, you, their lord, got no benefit from it. What’s more, the lord on the next estate over faced no threat from the competitive edge your serfs’ bold innovation conferred.

But profit was always subject to competition. For capitalism’s theoreti­cians, competition undergirded capitalism’s virtues. The fear of a rival taking your business with a product that’s better and/or cheaper sets the capitalist on a continuous hunt for efficiencies and in­novations that deliver better products at lower prices. The fear of a rival luring away your best workers – who are not bound to you the way that serfs were bound to their lord’s land – forces you to find ways to keep your staff happy and thus loyal.

To understand this distinction, think of a capitalist who operates a coffee shop that is put out of business by a newer, better coffee shop down the road. That coffee shop tempts away the capitalist’s customers, poaches their best baristas, and eventually the capitalist is un­able to pay rent and goes out of business. The capitalist is ruined.

But what about the landlord who owns the build­ing that the coffee shop once occupied? They’re great. After all, they own a building on the same block as the hottest coffee shop in town. They didn’t have to do any work, but the value of their asset went up, and the next capitalist who comes along will have to part with even more of their profits in order to pay the rent on that asset.

Think of every enshittification as being preceded by an argument. Some people say, “We should extract this surplus: it will make our bosses happy, make our shareholders richer, and increase our bonuses.”

When the people on the other side of that argument said, “If we do what you suggest, it will be make our product worse and it will cost us more money than it will make us,” they tend to win the argument.

When all they can say is, “Yes, this will make us more money, but it will make the product worse,” they forever lose the argument.

The elimination of competition – and the ensu­ing capture of regulation – removed the discipline imposed by the fear of customers defecting as the product degraded. The harder it is for users to leave a service, the easier it is for the factions within a company to best their rivals in the debate over whether they should be allowed to make the service worse.

That’s what changed. That’s what’s different. Tech didn’t get worse because techies got worse. Tech got worse because the condition of the ex­ternal world made it easier for the worst techies to win arguments.