New APPS

By Gordon Hull

In the two previous posts, I first suggested that Thomas Merrill’s logical argument for why the right to exclude was the sine qua non of any conception of property was inconclusive.  I then offered a brief reading of the Foucauldian distinction between juridical and biopower, applying it to Locke to suggest that in Locke’s case, both aspects of power were present, but juridical was dominant.  In what follows, I want to argue that the opposite is the case with the contemporary Demsetzian account: here, biopower is dominant.  In other words, a look at endpoint historical instances of property theory suggests that the view of power underlying them has changed from Locke’s time to ours, even as the (quasi-juridical) right to exclude remains a common thread.

To return to Merrill’s thoughts on exclusion, how might we combine exclusion with Foucauldian theories of power?  An initial argument is straightforward, and goes something like this: any conception of property that says the right to exclude is essential retains at the very least that much of a juridical understanding of property.  Since rights are an aspect of juridical power, and since juridical power is about the right to repress and to prevent, it’s easy enough to see the exclusionary right as juridical.  Merrill’s arguments about the priority of the right to exclude over the right to use and develop suggests that any biopolitical emphasis on optimization is ultimately secondary to a basic ability to repress.  Importantly, Merrill extends his argument to commons-based regimes: any internal use privileges are secondary to the initial ability of the villagers to exclude non-members.  In short, even as we increasingly live by biopolitical regimes, juridical power retains its force at the very core of those regimes: the property right which has been the central feature of capitalism.

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By Gordon Hull

As I suggested last time, the current neoliberal expansion of IP hinges on the acceptance of monopolies, and the relation between deadweight loss (as advanced by Arrow) and incentives theory (as advanced by Demsetz) is accordingly essential to understanding it.  Here I want to expand on that point, and then say something about contemporary theory.

The debate is one that Demsetz’s side is winning.  When term limits came before the Supreme Court in Eldred v. Reno, a set of seventeen economists – including such neoclassical luminaries as Arrow, James Buchanan, Ronald Coase, and Milton Friedman – submitted an amicus curiae brief to the Supreme Court opposing the 1998 Copyright Term Extension Act (CTEA).  These economists made arguments precisely in terms of incentives and deadweight loss: a further increase in term length is highly unlikely to make a meaningful difference to incentives to create works, while likely to burden the public with reduced access, and other creators with greater licensing fees.  They conclude:

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By Gordon Hull

In rereading Philip Mirowski’s critique of Foucault on neoliberalism (as it’s presented in Never Let a Serious Crisis Go to Waste, his book on the 2008 financial crisis), I noticed a limit in Foucault’s analysis that I hadn’t really thought about before.  Although Foucault correctly sees that a key (if not they key) feature in the transition from classical liberalism to neoliberalism is the realization that markets are something that the state can create and curate, he does not see that neoliberalism also puts a lot of weight on the neoclassical tolerance for monopolies.  This is a significant reversal from classical liberalism.  I work on intellectual property, which is a legal regime that attempts to create markets in intellectual goods by way of granting monopolies to their creators, which means it’s hard to ignore the tolerance of monopoly.  But the point is worth expanding on more generally.

As Foucault points out (as will be apparent, all of my references will be to Birth of Biopolitics; I’m not aware the topic comes up elsewhere in his work), classical liberalism – the “liberal art of government” (BB 65) – requires anti-monopoly legislation for the “freedom of the internal market to exist” (BB 64).  Competition, if left unchecked, will tend to lead to monopolies.  By the New Deal, and the political opposition is engendered, liberalism faced a “crisis … due to the inflation of the compensatory mechanisms of freedom” (BB 69) such that anti-monopoly legislation could be perceived as part of a “’legislative strait-jacket” (BB 68).  The ordo-liberals thus pick up on the “problem of competition and monopoly” but “do not depart in any way from the historical development of liberal thought” (BB 119).  For early neoliberalism, the “problem will be to demonstrate that monopoly is not in fact part of the economic and historical logic of competition” (BB 134).  Instead, they look at what non-economic policies are supposed to have led to monopolies, and argue that competition and markets do not, without these external distortions, lead to monopolies.  They also reframe the problem with monopolies, which is that they will distort the operation of the price mechanism (BB 136, citing von Mises).  The essential claim is thus that a monopolist will have to charge market prices, or competition will unseat him.  So intervention is not necessary (BB 137).

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