Property and Technology

In this chapter, the dependence of property rights on government’s policy choices and their vulnerability to theft are both illustrated in the theoretically rich and institutionally challenging case of intellectual goods, ideas rendered in some symbolic medium. The peculiar qualities of these goods make it especially hard for sellers to prevent thieves (“free riders”) from stealing their value and thus make voluntary exchange with willing buyers possible. This induces a continuous competition of technologies, in which free riders seek the technological means to steal the value of intellectual goods and sellers seek the means to exclude them. When free riders have the technological advantage, sellers must turn to the law to protect their ability to sell to willing buyers. The law’s response is intellectual property, discussed here as copyright, an unusual species of property having only limited duration and subject to “fair use,” legalized theft under certain circumstances.