In a Free Market, Information Wants to be Free

I just read a piece by Peter Frase, a graduate student in sociology at City University of New York, in which he exposes (“Anti-Star Trek: A Theory of Posterity,” December 14, 2010) the irony of state intervention being used to save “the market” from unfettered competition (or, as some call it, “socialism”).

Frase points out that the Federation of Star Trek: The Next Generation is, “in essence, a communist society. There is no money, everyone has access to whatever resources they need, and no-one is required to work.” The communism of Star Trek is enabled by two technological components: the replicator, which can instantly produce a copy of any object at virtually zero cost; and some vague form of free energy.

In other words, this communism results, not from any kind of nationalization or other government action, but from the spontaneous effects of technology that makes goods and services “too cheap to meter.” This isn’t exactly a new idea. A number of free market economists, starting with Carl Menger, have recognized in theory that a good could be so abundant as to be a “non-economic good.” That is, because the supply exceeded any demand for it even when it was virtually free, it was a non-scarce good with no need to economize on it.

And from the opposite direction, Marx saw his communist model of distribution “to each according to his need” as something that would be made possible by the economy of abundance growing out of the productive forces unleashed by capitalism. The forces of production would achieve a level of productivity that could no longer be contained within the bounds of the capitalist system.

Against this future scenario, Frase posits an “anti-Star Trek” which “takes these same technological premises: replicators, free energy, and a post-scarcity economy,” but arranges the social system so as to “maintain a system based on money, profit, and class power” despite the abundance created by replicators.

The only way to counter the free market effects of abundance — i.e., competition driving price down to marginal cost — is to create artificial scarcity through government intervention.

The function of the market price system is to allocate scarce goods. Competition tends to drive the price of reproducible goods to a normal value that reflects the marginal cost of production. When goods are abundant, the marginal cost of production is zero. To prevent this from happening, “the economy of anti-Star Trek rests on a specific state-enforced regime of property relations” — so-called “intellectual property.” Under the system of artificial property rights in anti-Trek, you can only obtain a replicator by buying one from a company that licenses you to use it. It’s illegal for anyone to use their replicator to make you one, even though it’s technically possible and can be done at zero cost, because that would violate the patent of the company that licenses them. And every time you make anything with the replicator, you have to pay a licensing fee to the company that owns the patent rights to the design of that good.

In order for capitalism to exist — i.e., for a rentier class to live off the income from property — the state must intervene in the market to prevent market competition from spontaneously creating socialism.

There’s a whole school of left-wing free market anarchists, dating back to nineteenth century America, that sees socialism not as something that results from state seizure of the economy or suppression of the market, but from market competition itself. The way these thinkers — the individualist anarchists, of whom I am one — envision socialism coming about is simply by abolishing all forms of artificial property rights and artificial scarcity, and allowing market competition to destroy all the rents resulting from them. Where there is no enforcement of entry barriers or cartels in the supply of credit, the interest rate on a secured loan approaches zero. When the state ceases to enforce absentee title to vacant and unimproved land, market competition eliminates the portion of land rent that results from such artificial property titles. And where there is no enforcement of artificial scarcity through patents and copyrights, market competition effectively socializes all the productivity benefits of technological progress.

So in a sense, the people who call us of the free culture movement “Copy Communists” are correct. But we’re also the only consistent free marketers when it comes to information. What the Intellectual Property Nazis call “Communism” is the inevitable result of the free market. What they call “capitalism” is impossible without the interventionist state manufacturing scarcity on behalf of privileged feudal overlords.

Capitalism can only survive with government intervention. Unfettered market competition is the path to true socialism.