Intellectual property rights : neoliberalism’s hiding behind the veils of utility

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Intellectual property rights -

neoliberalism’s hiding behind the veils of utility

Ingrid Horjus - 6069096

Master thesis Political Science –

Political Theory and Political Behaviour University of Amsterdam

Supervisor: Marcel Hanegraaff Second Reader: Enzo Rossi

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Abstract

The prevalent consequentialist justification of intellectual property, which claims that intellectual property rights are morally justifiable because of their beneficial consequences for innovation and ultimately human welfare, brings trouble for neoliberalism (and

everyone else) who is committed to the principle of negative liberty. As it happens, social utility has to be always attained, which means that negative liberty at times can be curtailed for the sake of this good. The expanded system of intellectual property that is present today entails such curtailment of negative liberty, as it requires of the state to intervene

extensively and continuously in order to create the necessary temporary monopolies. The only way for neoliberalism to support this system is to let go of its commitment to negative liberty, and subsequently accept a bigger role of the state. Ultimately, neoliberalism cannot have it both ways.

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1. Introduction

‘’The Trade Related Intellectual Property Rights (TRIPS) Agreement of GATT/WTO has globalized US-style patent laws. This has far-reaching consequences and impacts not only on our capacity to provide for our basic needs of food and medicine, but also on democracy and sovereignty. The universalization of patents cover all subject matter, including life forms, has resulted in patents invading our forests and farms, our kitchens, and our medicinal plant gardens. Patents are now granted not just for machines but for life forms and biodiversity; not just for new inventions but for the knowledge of our grandmothers (Shiva, 2001: 3).

As Shiva (2001) contends, intellectual property rights have been subject to a significant expansionism. This expansionism has reached out into the domain of the natural world, and by means of the TRIPS agreement, into almost every part of the human world, including the less developed world. Both the natural world and the less developed world are particularly vulnerable, which has led to a lot of controversy about the ruthlessness of intellectual property rights. An often cited example here, is the problematic access for poor people to life-saving HIV medicines as a consequence of strongly enforced pharmaceutical patents (see ea. Pogge, 2005). Another prime example concerns the patenting of new plant varieties by large multinationals such as Monsanto. Especially, the fact that these seeds earlier on belonged to everyone or to a certain population, and now can become someone’s private property, provides ground for controversy (Shiva, 2001; Website Greenpeace; Pellizzoni, 2011). As both these examples and the quote of Shiva show, intellectual property rights touch upon different aspects of a person’s life, primarily in terms of its welfare and its liberty. This gives ground for an investigation into the justificatory grounds of this right to intellectual property.

However, firstly, it has to be pointed out that this trend of expansionism can be traced back to more or less the 1970s-1980s (Shiva, 2001; Chaipinit and May, 2010;

Andersen, 2006; Landes and Posner, 2009). It can be considered as no coincidence that this is also the time in which neoliberal thought was gaining ground (Harvey, 2005; Jessop, 2007; Chaipanit and May, 2010; Thorsen and Lie, 2006; Saad-Filho and Johnston, 2005).

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5 Landes and Posner (2009) for instance argue that this expansion roughly began with the Copyright Act of 1976 in the United States, as part of a so called ‘deregulation movement’ that began more or less at the same time until present day (Landes and Posner, 2009: 403-404). This ‘deregulation movement’ was triggered by the ideological forces that were present at that time: the advocates of the free market (Ibid: 414). In the end, this has led to a so called ‘pro-patent era’, which started out in the 1980s in the United States and

subsequently advanced internationally (Andersen, 2006: 315-316). The TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement of 1995 has especially played a big role in this (Shiva, 2001; Harvey, 2005; Gathii, 2011; Aoki, 1998). As it happens, by means of this agreement, intellectual property rights have become universal in their scope. Since intellectual property rights ultimately give ground to a certain distribution of welfare in the world, these developments should not be taken lightly.

Moreover, one has to realize that ideas, knowledge and inventions have become increasingly important, as we are living in a world of rapid technological change that thrives on innovation. This can also explain the commonly used term ‘knowledge-based economy’ (Jessop, 2007; Chaipinit and May, 2010; Andersen, 2006). However, its value is not something that is just there. As it happens, knowledge and ideas are not by nature scarce, which makes that scarcity needs to be created by the state, in order to make it have value on the market place. The state therefore intervenes in the market and creates a temporary monopoly, which takes the shape of an intellectual property right (Cole, 2001; May, 2007; Palmer, 1989). The valuableness of ideas and knowledge can be related, amongst other things, to the amazing amounts of money companies spend in the area of Research and Development. It also gets reflected by the enormous amount of patents that are filed and accepted. Ultimately, this results in companies seeing knowledge and ideas as a primary source of growth opportunities. For example, the large corporation International Business Machines Corp (IBM) collected the most US patents for the 21st time in a row, and with a tally of 6.809 patents in 2013 it set itself an annual record. 31 percent of these patents came from abroad, and are due to having a pool of inventors from 41 countries. In this, they are ‘helped by its push into big-data services, which glean insights by mining large quantities of information’ (Website Bloomberg).

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6 developments. In the scientific world, there is a lot of debate around the different normative justifications of intellectual property rights between scientists who defend one or another justification and scientists who reject them all. There is also a considerable amount of research into the (at times lamentable) practices that surround intellectual property rights. There is little theorizing, however, that connects the prevailing and strongest justification, namely the consequentialist utilitarian justification (Chandra, 2010; Resnik, 2003), to the dominating discourse in today’s world: neoliberalism. Remarkably, there seems to be a striking connection between the two, which could also explain why neoliberalism seems to thrive on it in respect to intellectual property. In short, this consequentialist utilitarian justification argues that intellectual property rights are a necessary means to incentivize innovation and with that economic productivity, which will ultimately maximize human welfare (Sonderholm, 2012; Chandra, 2010; Resnik, 2003). Thus, this justification justifies intellectual property by referring to the beneficial consequences this will have for overall human well-being, whether this is on the short or long term (Ibid). In this thesis, it will be shown that this justification is problematic for neoliberalism’s commitment to negative liberty. As it happens, the institution of intellectual property requires a vast and continuous amount of government intervention, which takes the shape of temporary monopolies. This brings liberty to some, while restricting that of a lot of others.

The above will be the focus of this thesis. This has led to the formation of the following research question: to what extent can neoliberalism hold on to the principle of negative liberty, while at the same time advocating (the expansion of) intellectual property rights by means of a consequentialist utilitarian justification? This research question will be answered by means of the argument set out below. The structure of the argument coincides more or less with the structure of this thesis, except for the first part (up until the provisional conclusion). As it happens, the first part functions the other way around. In this first part, there has been assigned an extra chapter for the other main justifications of intellectual property: the self-ownership justifications, which will also lead to an understanding of the difference between tangible property and intangible property.

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7 1.1 The argument

Premise 1: The consequentialist utilitarian justification of intellectual property rights is part of neoliberalism.

Premise 2: Neoliberalism claims that the principle of negative liberty is to be put above anything else.

Premise 3: Inherent to the consequentialist utilitarian justification is the fact that 'social utility' (aggregated human welfare) is to be put above anything else, which means even at the expense of one’s negative liberty.

Provisional conclusion: The consequentialist utilitarian justification of intellectual property rights is in principle conflicting with neoliberalism’s commitment to negative liberty.

Premise 4: If neoliberalism subsequently would argue that it orders negative liberty and the aggregated good principles lexically, it would need to commit itself absolutely to negative liberty, which means ultimately anarchism.

Premise 5: The current institution of intellectual property is anything but anarchistic. Instead, it requires the state to intervene and create a temporary monopoly. This creates negative liberty for some and restrains that of a lot of others.

Conclusion: This leaves neoliberalism the option to either (a1) commit itself fully to negative liberty, or (b1) allow (temporary) restraints on negative liberty by the state for the sake of ‘social utility’. This conclusion implies that in the case of a1 neoliberalism cannot support intellectual property (a2); and in the case of b1 neoliberalism can support

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2. Justifying intellectual property – on the basis of what?

Throughout its history, there has been a lot of discussion around intellectual property rights, whether it has been between those in favor and those against; or about its content, its reach and its depth. Let us first begin with defining intellectual property rights as such. According to the World Trade Organization (WTO) intellectual property rights are: ’’the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time’’ (Website WTO). In this, one has to distinguish between different types of intellectual property, among which copyright, trademarks and patents are probably the best known (Ibid). It is beyond the scope of this thesis to give special attention to each type of right on its own, though there are some considerable differences. Next to this, the definition points out that intellectual property rights are so called temporary rights. For instance, according to the TRIPS agreement, an invention must be protected by means of a patent for at least 20 years. This implies that after the expiration date, the invention will be made available to the public at large, in other words it will become part of the public domain (Ibid). Lastly, it is important to emphasize that intellectual property rights are exclusive rights, which makes them

private rights. This means that a person can exclude, by means of these rights, other persons from using his/her ‘creation of the mind’. Moreover, it also implies that these other persons have the duty to refrain from using this ‘creations of the mind’, unless the owning person gives permission to use them (Waldron, 1992: 842-844).

In essence, this means that such a right of intellectual property enables one person to exclude many other persons. In the area of tangible property rights this is commonly accepted, which makes that people, in general, easily accept intellectual property rights on the same grounds. Intellectual property rights, however, are different from tangible property rights in some important respects, which will be explored in further detail in the next

chapter. This together with the earlier described trend of neoliberal expansion in the area of intellectual property gives enough reason to further explore its justificatory grounds.

Generally, one can distinguish between two lines of argumentation, which are primarily used in the justification of the current institution of intellectual property: ‘self-ownership justifications’ and ‘utility justifications’ (Chandra, 2010: Intro: 8). The former refers to the

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9 so called ‘Lockean’ natural rights argument and the derived desert-labour rationale,

whereas the latter refers to the consequentialist utilitarian justification of intellectual property rights (Ibid; Hettinger, 1989; Papaioannou, 2006). The former will be the focus of this chapter, while the latter will be the focus of the subsequent chapter. This analysis will also show the differences between tangible property on the one hand and intangible property on the other hand, as the self-ownership justifications are the principal

justifications of tangible property. One has to bear in mind though, that these justifications are often also used in a complementary way, which often gives an institution its stability (Chandra 2010: Ch. 4: 1)

2.1 Self-ownership justifications

Self-ownership justifications, the principal justifications of tangible property, depart from the natural rights theory of John Locke. This theory basically contends that each person has a natural (property) right in its own person, in other words to its body, its talents and its labour. When a person then mixes his labour or talents with an earlier held in ‘common’ resource, that person is naturally entitled to enjoy the fruits of that labour, which results in an exclusive property right over that resource. In the end, this argument gets extended to also include so called ‘intellectual labour’, which presumably gives right to own the resource in question (Chandra, 2010: Ch.3: 2-6 Spinello, 2007: 12; Sonderholm, 2010:1112). A derived, but yet powerful justification for intellectual property is the

libertarian ‘desert labour rationale’ (Chandra, 2010: Ch. 3: 5-6). For example, Ayn Rand, a prominent libertarian, argues that: ‘’Patents and copyrights are the legal implementation of the base of all property rights: a man’s right to the product of his mind’’ (Rand, 1967: 130). In this rationale, the argument is put forward that one deserves to be rewarded for the effort one has made (Ibid). This follows from the idea that a person should be naturally entitled to pick the fruits of its talents and capabilities. The only just holding of a resource follows then either from the above or from free exchanges between individuals (Papaioannou, 2006: 80). These self-ownership justificationsare linked to a particular type of liberty: negative liberty (Papaioannou, 2006; Arneson, 1991). Arneson (1991) expresses this relationship between the idea of self-ownership and negative liberty as follows: ‘’Owning

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10 himself, each person is free to do with his body whatever he chooses so long as he does not cause or threaten any harm to non-consenting others. No one is obligated to place herself at the service of others in the slightest degree’’ (Arneson, 1991: 36). Thus, the natural right to one’s body and intellectual labour, implies that one can do as he pleases with his

property, as long as he does not conflict any harm upon another.

However, the above outlined justifications of ‘self-ownership’ are far from uncontroversial. Even libertarians themselves are divided on the issue. It is beyond the purpose of this thesis to discuss extensively the plausibility of these justifications of

intellectual property, some short remarks, however, seem warranted. First of all, it has to be pointed out that tangible private property rights are very different from intellectual property rights. Tangible resources, such as a car and a piece of land, are scarce and confined to a particular place in space and time, whereas intangible resources, such as knowledge and ideas, are not. Chandra (2010) speaks in this respect of the excludability’ and ‘non-rivalrousness’ of intangible resources. By non-excludability is meant here that it is inherent to ideas that one person cannot exclude another person from possessing his idea. By non-rivalrousness is meant that one person cannot diminish the amount of ideas for another person to have (Chandra, 2010: Ch. 4: 7). Hence, intangibles are not by nature scarce. Cole (2001) speaks in this respect of artificial scarcity, since scarcity is not just there; it has to be created by the very institution of intellectual property itself, this in order to generate a monopoly rent for their holders (Cole, 2001: 80). May (2007) also stresses this point when he argues that there is nothing natural about the institution of intellectual property. While tangible property rights may have developed as the result of ‘social conventions’; intangible property rights were developed as ‘commercial rights, necessary for capitalism to function (May, 2007: 20-21).

Thus, intellectual property rights are created in order to make so called ‘creations of the mind’ ready for the marketplace. In this regard, intellectual property does far more than to just to let a person have self-ownership over its creations. As it happens, a person does not just have the natural right to use and possess that what is the result of his labour; it has the right to the profit of it (Hettinger, 1989: 39-40). Problematic here is that it becomes hard to defend that one person ‘naturally’ is entitled to gain the whole market value, since both the labour itself and the market value are social products (Ibid: 38). It is no coincidence that

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11 the welcoming message of Google Scholar states: ‘standing upon the shoulders of giants’. Put differently, ideas and knowledge are built upon earlier and contrasting ideas and knowledge. From the above follows that it becomes hard to point out who exactly is the rightful owner of such an idea or invention, and what exactly her rightful share is. Even more difficult then, is to maintain that one deserves this all on the basis of her talents and capacities.

Lastly, it has to be pointed out that intellectual property owes its existence to the tangible object in which it gets its shape. As it happens, one cannot patent or copyright the idea or the written text itself; only the expression of it (Chandra, 2010: Ch. 3: 5; Hettinger, 1989: 32; Palmer, 1989: 281; Kinsella, 2008: 15). This is where libertarians get particularly divided on the issue, since according to some this violates other, already existing property rights. In effect, when a person obtains an intellectual property rights, it holds a right to ‘every physical embodiment of that work or invention’ (Palmer, 1989: 281; Kinsella, 2008: 15). To exemplify this, one could imagine a person buying a CD of his favorite artist in a music store. The act of buying this CD, makes this person the rightful owner of his property, which would imply that he can do as he pleases with the CD: possess it, use it, share it, sell it, copy it etc. This is not the case, however, since the copyright on this CD makes part of the CD property of the artist: in this case the songs. In the end, this person cannot copy or share the music without infringing the artist’s rights to his property.

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3. The consequentialist utilitarian justification of intellectual property

As is shown above, self-ownership justifications run into quite some trouble when this is extended to the area of intellectual property. This is a reason, amongst others, why a lot of scholars argue that the consequentialist utilitarian justification is the stronger

justification for intellectual property (Chandra, 2010; Hettinger, 1989; Lewin, 2007;

Sonderholm. 2012; Resnik, 2003). Hettinger states in this respect: ‘’The strongest and most widely appealed to justification for intellectual property is a utilitarian argument based on providing incentives’’ (Hettinger, 1989: 48). It is no surprise then that this justification is also largely used in debate around intellectual property rights (Chandra, 2010; Resnik, 2003). Chandra states in this respect that: ‘’Laws related to intellectual property today are premised usually on overtly utilitarian concerns’’ (Chandra, 2010: Ch. 4, p. 2). This has been especially the case after the 1980s, when the expansion of the institution of

intellectual property took form (see introduction).

The purpose of this chapter is to explore in further detail this consequentialist utilitarian justification of intellectual property rights. According to Sonderholm (2012), this is the best defense for intellectual property, which he puts as follows: ‘’intellectual property rights are ethically justifiable because they incentivize innovative Research and

Development (R&D) which in turn increases overall human welfare'' (Sonderholm, 2012: 1112). In order to really understand what this means today, we’ll have to go back to its early roots. Therefore, the ideas of the most influential utilitarian thinkers will be explored first, with special attention to their vision of ‘the ultimate good’ and its basic premises. This will subsequently give the possibility to compare these earlier ideas to the ideas that

surround intellectual property. Ultimately, it will be shown that in utilitarian theory ‘social utility’, here understood as aggregated human welfare, always has to be put above anything else, this means even at the expense of other values such as liberty and equality.

One has to realize here that utilitarianism, like also neoliberal theory, does not consist out of a fixed set of principles and ideas, which have always been the same throughout history. As with other philosophical theories, it has been developing under continuous critiques, without reaching to a certain point of conclusion. For practical reasons, utilitarianism will be explored in so far it seems to be relevant for the argument.

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13 One has to further take into account that utilitarianism is a particularly economist approach to how a society should be designed. In essence, it applies classical economic principles to the political sphere (Website Encyclopedia Britannica).

3.1 A short historical introduction to utilitarian thought

Utilitarianism knows a long history of thinkers, of which John Stuart Mill and Jeremy Bentham are considered most important. Jeremy Bentham (1748-1832) laid down the basic framework, by stating that any action or measurement, whether taken by an individual or a government, should depart from the principle of utility.1_{According to this principle, an}

action or measurement should be approved or disapproved to the extent it promotes or opposes the greatest amount of happiness in a society, in other words an action that promotes ‘the greatest happiness for the greatest number’ (Bentham, 1789: 14; Bentham, 1776). Bentham understood happiness here as the enjoyment of pleasure and the security from pains (Ibid: 51). In this context, Bentham famously has stated: ‘’Nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do, as well as to determine what we shall do.’’ (Ibid: 13).

As one already may notice, this is a particularly consequentialist type of argumentation. Hence, the morally rightness of an act or a rule in utilitarian thought depends on its perceived consequences, of which good consequences are those that

maximize social utility. In other words, one has to constantly balance the possible benefits against the possible costs. Thus, utilitarianism is in general subject to consequentialism, which basically justifies certain means by its end. John Stuart Mill (1806-1873), who elaborated further on Bentham’s utilitarianism, stated in this respect: ‘’Questions about ends are, in other words, questions what things are desirable. The utilitarian doctrine is, that happiness is desirable, and the only thing desirable, as an end; all other things being only desirable as means to that end’’ (Mill, 1879: 38). This points out that utilitarianism is a particularly flexible theory in its means; though less in its end. As it happens, ultimately happiness needs to be prioritized.

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14 Lastly, it seems important to point out that utilitarianism is premised on a belief in individualism. The individual is herein seen as a self-interested, rational human being, a so called homo economicus (Mill, 1879). The free market is considered to be crucial in this respect, since the free market will lead to the most efficient allocation of (tangible and intangible) resources (Chandra, 2010: Intro: 8). In the end, society is here to be seen as merely the aggregation of the individuals living in it, which means that social utility needs to be understood in terms of the aggregation of all individual utilities (Mill, 1879: 38).

3.2 Intellectual property rights: in the name of innovation and human welfare

Now that the basic principles of utilitarian thought have been laid down, the focus will be on the specific utilitarian justification of intellectual property. Important in this regard, is to remember that this utilitarian justification is preferred over the self-ownership

justifications, due to the significant differences there are between tangible property and intellectual property (see chapter 2.1). Although, the self-ownership justification, along with to some degree the desert labour rationale, do give the right to intellectual property ‘its initial plausibility’ (Chandra, 2010: Ch. 4: 5). This taken together with the fact that a strict utilitarian argument would have to assess every act upon its perceived consequences, makes that intellectual property is generally justified on the basis of rule-utilitarianism (Chandra, 2012: 5; Moore, 2003). Rule-utilitarianism, in contrast to act-utilitarianism, evaluates certain general rules upon its beneficial consequences; the individual acts as a consequence have to correspond to the general rule (Chandra, 2012: 5). In the end, this implies that some sort of connection is being created between natural rights theory on the one hand, as in some kind of commitment to general rules, and consequentialism on the other hand. This provides intellectual property the necessary space to move around in. As it happens, particular acts, which at first sight seem unjustifiable, can be justified by referring to the general positive consequences it will have in the future. A prime example of such an, at first sight, undesired practice, is the problematic access for the poor to HIV medicines. These short-terms costs get justified by the referring to the long-term benefits (Sonderholm, 2012; Rosenberg, 2004: 86-90).

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15 intellectual property rights. Recall, the consequentialist utilitarian justification justifies intellectual property rights by referring to it being a necessary means to incentivize innovation in a society, which will lead to more economic productivity, and with that increasing overall human welfare (Sonderholm, 2012; Chandra, 2012; Shiffrin, 2009; Lewin, 2007). In analyzing this, according to Lewin (2007), one has to make a distinction between the likely consequences that are assumed to happen (positive judgments) and the different values attached to different consequences (normative judgments). As it happens, both are necessary to do justice to this justification (Lewin, 2007: 442). One has to bear in mind though, that easily a bias is created when one focuses upon the consequences, and not so much upon the respective costs.

Building on upon this distinction, it can be established that in terms of positive judgments, this justification makes two assumptions: 1.) (stronger) intellectual property rights will incentivize innovation, and 2.) increasing levels of innovation will lead to increasing levels of human welfare. The question whether the consequentialist utilitarian justification of intellectual property holds on basis of these assumptions is clearly an empirical one. It is not the purpose of this thesis to verify this. Nevertheless, it is important to emphasize that one has to remain critical in this regard. Regarding the first assumption for instance, one has to balance, in line with utilitarian thought, between the assumed welfare gains and assumed the losses (Palmer, 1989: 262). For instance, Heller and Eisenburg (1998) point at the possibility of discentivizing innovation, when intellectual property rights are (too) strong. They speak in this respect of a so called ‘tragedy of the anti-commons’, which is basically a situation in which a lot of persons, with all differing interests, have an exclusive right to intellectual property. In this situation too many barriers have to be taken, which often results in discentivizing innovation (Heller and Eisenburg, 1998: 699-701).

Then, in regard to the normative judgments that are part of this justification, one can firstly identify a certain positive valuation of the concept of innovation. Godin (2011) argues that in today’s world innovation has become an end itself. But this has not been always the case; in the last 2500 year innovation was seen as principally something

negative. He argues then that innovation is a particularly political, ideological concept that has been deliberately made uncontested by governments (Godin, 2011: 26-27). This is

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16 particularly interesting when one considers that innovation is not necessarily always

beneficial to society, let alone to all of society. One could argue for instance that fire arms, and consequently war, is not beneficial to society, since it brings insecurity and a lot of destruction. In the end, it is to be suspected that this would bring decreasing levels of either happiness or human welfare.

Secondly, this specific justification of intellectual property refers to a different end than the one put forward by the earlier utilitarians. While Mill and Madison identified the ‘ultimate good’ in terms of happiness, that is the enjoyment of pleasure and absence of pain, this justification refers to the ultimate good in terms of human welfare. The reference to human welfare makes this justification part of welfarist theory, which basically argues that morality should be principally concerned with human welfare or human well-being (Keller, 2009: 82). Following utilitarian thought, human welfare is not only the focus: it needs to be maximized. Regardless of the different terms scholars employ (such as welfare utilitarianism, welfarism or just utilitarianism), the justification of intellectual property right basically holds the following: ‘’The morally best course of action is the one that maximizes future welfare or minimizes future ‘ill-fare’’ (Rosenberg, 2004: 86). In his defense for intellectual property, Rosenberg (2004) lays the emphasis on future human welfare: the collective of people that now and in the future will live in this world; the aggregation of all their individual welfare. This is in line with the earlier discussed rule-utilitarianism.

Ultimately, by means of this approach, utilitarianism can justify a rule, which might have negative consequences for people now, while pointing at the positive outcomes for future human welfare (Rosenberg, 2004: 86-90). This gives rise to all sorts of (consequentialist) problems. An often cited example is that one cannot always predict the future (Ibid). Finally, this raises the question of what is exactly meant by human welfare or human well-being. Is this something material like the income of an individual or that of a country (GDP)? Or has this to be taken more broadly: to not only the income, but also the resources one has? Or, instead, can this also be something more immaterial, like feeling good about oneself? According to Keller, welfarism claims a certain amount of neutrality in this: ‘’To some extent, welfarism is neutral between competing views about welfare. It says that morality is all about welfare, whatever welfare turns out to be’’ (Keller, 2009: 84). Departing from this neutrality, and the idea that utilitarianism is a particularly economic

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17 approach that promotes certain policies (see Sonderholm, 2012), one has to relate human welfare to its identified policy goal: commodification (see also chapter 8). It is no surprise then that Rosenberg (2009) identifies per capita income as the most useful tool to measure social utility (Rosenberg, 2009: 87-88).

3.3 Social utility (aggregated human welfare) above anything else

Inherent to utilitarianism is the fact that social utility, here aggregated human welfare, has to come at the first place, even at the expense of other important liberal values such as equality and liberty. For instance, regarding equality, Mill claims that everyone in principle has the equal right to the means and ends of happiness: ‘’The equal claim of everybody to happiness in the estimation of the moralist and the legislator, involves an equal claim to all the means of happiness, except in so far as the inevitable conditions of human life, and the general interest, in which that of every individual is included, set limits to the maxim; and those limits ought to be strictly construed’’ (Mill: 1879: 66). This means that a person’s own happiness is not more important than another person’s happiness, and that of society as a whole (every person’s happiness) (Ibid: 19). This account of impartiality is however limited, to the extent it does not endanger the ultimate end of maximizing happiness, which is assumed to be equal to the public interest. Thus, the ultimate good comes ultimately before accounts of equality.

In the case of intellectual property rights, this means that every person in principle has an equal right to the means and ends of human welfare, to the extent it does not impede social utility. More concretely, this means that in a situation, in which two people would make a claim on the same resource, utilitarianism would prescribe to give preference to the person that can contribute most to social utility (Stein, 2009: 492). This gives ground to an unequal distribution of welfare, since a person’s does not have an absolute claim to a certain resource. Instead, it is dependent of its expected contribution to social utility. In the case of intellectual property rights, this would mean that in the example of two companies with more or less the same patent claim, the company that can contribute most to human welfare would have the preference.

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18 both the individualist philosophies of utilitarianism and neoliberalism. For instance, John Stuart Mill famously argues in respect to negative liberty: ‘’The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant . . . Over himself, over his body and mind, the individual is sovereign’’ (Mill, 1859: 14-15). Thus, negative liberty, and subsequently little government intervention, are highly valued by Mill (and also later utilitarians), and is solely based on utility (Ibid: 15-16). This implies that in a situation, in which negative liberty does not bring about beneficial consequences, negative liberty should be restrained. Therefore, also further government intervention can ultimately be justified on the basis of social utility (see chapter 7). Nevertheless, Mill (and later utilitarians) reason that generally taken negative liberty brings about the most beneficial consequences, especially in relation to the workings of the free market (Ibid: 131).

Thus, even though different principles can play a role in the formation of intellectual property rights, the ultimate good of aggregated human welfare has to be always put above anything else. This subsequently implies that other valuable principles like negative liberty, equality or democracy at times can be pushed aside, when they are conflicting with this ultimate good.

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4. Neoliberalism – in the name of liberty…

To different extents, scholars have identified a so called increase in neoliberal practices since the late 1970s (Harvey, 2005; Jessop, 2002; Palley, 2004; Saad-Filho and Johnston, 2005). This includes practices like privatization, deregulation, new-public management (managerialism) and a shrinking welfare state (Ibid). Harvey (2005) argues in this respect that: ‘’Neoliberalism has, in short, become hegemonic as a mode of discourse’’ (Harvey, 2005: 3). With this he refers to a profound incorporation of neoliberal thought into peoples’ understanding of the world. As has been argued in the introduction, this increase in

neoliberal practices can also be identified in the domain of intellectual property. More concretely, it can be concluded that intellectual property rights have been strengthened and expanded under neoliberal auspices. In this chapter, neoliberalism as a body of thought will be explored. First, a theoretical definition of neoliberalism will be presented and explored thoroughly. This will at the same time give the opportunity to explore the philosophical underpinnings of neoliberalism in more detail: (deontological) natural right theories and consequentialism. In turn, this will connect neoliberalism to the consequential utilitarian justification of intellectual property rights. In the end, this all will lead to what is at the heart of neoliberal thought: the principle of individual (commercial) freedom, more concretely negative liberty.

However, neoliberalism is far from being something new; it has its origins in the interwar period and was further developed in the postwar years by the so called Mont Pèlerin Society. Initiated by Friedrich von Hayek, this diverse group of liberals gathered in the Swiss village of Mont Pèlerin in order to revive liberalism, in a time in which socialism and collectivistic planning was prevalent. They perceived a failure of the classical liberal ideals, however, which led to a search for the causes and subsequent improvements

(Mirowski and Plehwe, 2009). In this, they drew from different theoretical approaches such as the Austrian School, the Chicago School of Economics, the Freiburg School of ordo-liberalism and Lippmann’s realism (Ibid: 12-14). In the end, this led them to publish a ‘statement of aims’, which mainly advanced a truly competitive market, the rule of law and limited government activity in order to preserve individual freedom, especially economic freedom (Ibid: 22-24).

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20 The above already shows that neoliberalism is a particularly heterogeneous body of thought. Mirowski and Plewhe (2009) argue in this respect that neoliberalism, in the first place, has to be approached as a ‘historical thought collective of increasingly global

proportions’ (Ibid: 4). As will be showed later on, also Harvey (2005) and Thorsen and Lie (2006) emphasize this heterogeneity (Harvey, 2005: 2; Thorsen and Lie, 2006: 14). It is no surprise then that scholars often leave neoliberalism ill-defined; or when they do define it, disagree upon its definition. Especially, the different roles assigned to that of the state by different neoliberals provides ground for controversy (see chapter 3.1). This reflects itself also in the variety of intellectuals that is supposed to pertain to this neoliberal body of thought, such as Friedrich von Hayek, Milton Friedman, James Buchanan, Robert Nozick, Ayn Rand and Murray Rothbard (Gamble, 2013: 1).

Key in analyzing neoliberalism then seems to be separating its theory from its practice, which often differs from theory. The focus in this thesis will be on neoliberal theory. This is related to the fact that not the expansion of intellectual property rights (the practice) is being put central in this thesis; instead its theoretical underpinning: the consequentialist utilitarian justification. Furthermore, it seems crucial to search for the common denominators in neoliberal thought, without forgetting that it is a heterogeneous body of thought. Therefore, where it seems to be necessary, its differences will be outlined. Moreover, it is essential to remain neutral here, especially when considering that the term neoliberalism is mostly used by its critics, and has gotten subsequently a particularly negative connotation (Thorson and Lie, 2006; Boas and Gans-Morse, 2009). Following from this particularly negative connotation and from its heterogeneity, the term

neoliberalism often also is being avoided. Instead, terms like economic liberalism,

economic libertarianism, public choice economics, and to some extent conservatism tend to get associated with it (Gamble, 2013: 1). Gamble (2013) in The Oxford Handbook of Political ideologies chooses for the term economic libertarianism over that of neoliberalism (Ibid).

4.1 Defining neoliberalism – a theoretical perspective

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21 definition of David Harvey (2005).2_{The advantage of this definition over that of Harvey, is}

that this definition is more neutral and clear, especially when considering that Harvey constructed his definition in order to provide a framework for his further analysis.

Moreover, Harvey’s definition is focused upon neoliberalism’s practices, whereas Thorsen and Lie’s definition focuses upon neoliberal theory. The first part of the definition goes as follows: ‘’Neoliberalism is, as we see it, a loosely demarcated set of political beliefs which most prominently and prototypically include the conviction that the only legitimate purpose of the state is to safeguard individual, especially commercial, liberty, as well as strong private property rights (cf. especially Mises 1962; Nozick 1974; Hayek 1979). This conviction usually issues, in turn, in a belief that the state ought to be minimal or at least drastically reduced in strength and size, and that any transgression by the state beyond its sole legitimate purpose is unacceptable (ibid.)’’ (Ibid: 14). This definition is however not yet complete, as Thorsen and Lie subsequently argue the following: ‘’Neoliberalism

generally also includes the belief that freely adopted market mechanisms is the optimal way of organizing all exchanges of goods and services (Friedman 1962; 1980; Norberg 2001). Free markets and free trade will, it is believed, set free the creative potential and the entrepreneurial spirit which is built into the spontaneous order of any human society, and thereby lead to more individual liberty and well-being, and a more efficient allocation of resources (Hayek 1973; Rothbard [1962/1970] 2004)’’ (Ibid: 14-15).

In this definition, the emphasis lays first and foremost upon individual liberty, and then in particular commercial liberty, together with strong private property rights. Next to this, the second part of the definition provides another important key element of

neoliberalism: the free market and free trade. Ultimately, the role of the state herein is nothing more than to provide the framework for the above to function, which can vary from a minimal state to a reduced state. Following the definition, these seem to be the core elements of neoliberal theory, in other words the common denominators in neoliberal theory.

2_{Harvey his definition goes as folllows: ‘’Neoliberalism is in the first instance a theory of political economic}

practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices” (Harvey 2005:2).

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22 Furthermore, it has to be pointed out that this definition suggest that neoliberalism should not be seen as a full, complete ideology. Hence, neoliberalism is defined in terms of ‘a loosely demarcated set of beliefs’. In this, Thorsen and Lie follow Harvey’s definition (2005), in which he defines neoliberalism as in the first place a ‘theory of political economic practices’ (Harvey, 2005: 2). The reason why Harvey argues this, is different from that of Thorsen and Lie however. As it happens, Harvey investigates into the practices of neoliberalism, which according to him differs from its theory. According to Harvey (2005), neoliberal theory is nowadays being used by economic elites in order to ‘re-establish the conditions for capital accumulations and to restore the power of economic elites’ (Harvey, 2005: 19). Thorsen and Lie in contrast argue that neoliberalism is not ‘a complete ideology’, because neoliberalism for instance doesn’t say anything about whether there should be a democracy and free exchange of political thought. This argument is exemplified by referring to the application of neoliberal theory by authoritarian regimes such as that in Chile under Augusto Pinochet (Thorsen and Lie, 2006: 15). This argument falls easily short however, since different neoliberal theorists might not have an extensive opinion about democracy; though they might not need to do this when this is not their primary concern. As it happens, neoliberals seem to be primarily concerned with defending individual liberty against collectivist creeds, which is a tendency inherent to democratic government (especially without constitutional barriers).

Lastly, the definition points implicitly at neoliberalism’s different philosophical underpinnings, which are by no surprise diverse. The basic point of departure in

understanding the philosophical underpinnings of neoliberalism, is the ‘Lockean’ theory of natural rights (Syll, 2011: 1; Peters and Marshall, 1996: 35). In short, this argues that a person by nature has a right to himself, which also gives him a right to liberty and to the property that is a consequence of his labour, as long as it does not infringe another person’s rights (Ibid; Tuckness, 2012) (see also chapter 2.1). The first subsection of the first part of the definition is a typical example of this, by referring to the a priori centrality of liberty and property rights. Then, the second subsection of the second part also departs from natural law, by referring to a so called ‘spontaneous order of any human society’. In other words an order that is just there by nature as a consequence of the unintended actions made by self-interested individuals (Hayek, 1967; Raico, 2010). According to the definition, it is

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23 believed that this will lead to more individual liberty and more human well-being. This type of argument is a typically rule-utilitarian argument, since it combines a (deontological) natural rights argument with utilitarianism (see chapter 3.2). Next to this, the first subsection of the second part of the definition is an efficiency maximizing argument in advocating the free market: a particularly consequentialist type of reasoning. Lastly, the part about the state (the second subsection of the first part) depends completely on the neoliberal theorist you take, varying between notions that there should be almost no state at all (an example is Rothbard’s anarcho-capitalism) to a more extensive state than the so called minimal state (Thorsen and Lie, 2006: 12). In the end, this short analysis displays that the philosophical underpinnings of neoliberalism can be divided into two categories more or less: (deontological) natural rights theories and consequentialism (at times rule-utilitarianism).

Lastly, Thorsen and Lie argue that neoliberalism could also include a perspective on moral virtue: ‘’ the good and virtuous person is one who is able to access the relevant markets and function as a competent actor in these markets. He or she is willing to accept the risks associated with participating in free markets, and to adapt to rapid changes arising from such participation (Friedman 1980). Individuals are also seen as being solely responsible for the consequences of the choices and decisions they freely make: instances of inequality and glaring social injustice are morally acceptable, at least to the degree in which they could be seen as the result of freely made decisions (Nozick 1974; Hayek 1976)’’ (Thorsen and Lie, 2006: 15). The above shows, amongst other things, that moral virtue in neoliberalism is being linked to the values of the market place. A virtuous person here is one that knows how to respond to the signals transmitted by the market: an

entrepreneur. Moreover, it displays that neoliberalism emphasizes the moral value of the individual, in that every individual should have the freedom to make its own, independent decisions, and is in this solely responsible for their own well-being (Harvey 2005: 65; Nozick, 1974). This can also partly explain why neoliberalism supports the dismantling of the welfare state. Peters and Marshall (1996) argue in this respect that is also ‘the most fundamental and unifying premise of neoliberalism’: the belief in individualism (Peters and Marshall, 1996: 63; Mises, 2009). Like in utilitarian theory, the individual is herein seen as a homo economicus, which is mainly based upon the assumptions of individuality,

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24 rationality, and of the maximization of self-interest (Ibid). It goes without saying that at least a minimum amount of individual freedom is crucial to (moral) individualism, in other words a notion of negative liberty, which shall be the subject of the following chapter.

4.2 The principle of negative liberty above anything else

As the definition already has pointed out, neoliberalism is ‘most prominently and

prototypically’ concerned with the principle of individual liberty, especially commercial liberty, together with private property rights (Thorsen and Lie, 2006: 14). Harvey (2005) argues along such same lines, by stating the following: ‘’According to theory, the

neoliberal state should favour strong individual private property rights, the rule of law, and the institutions of freely functioning markets and free trade. These are the institutional arrangements considered essential to guarantee individual freedoms’’ (Harvey, 2005: 64). This quote shows that neoliberalism sees individual liberty as an end in itself. Strong individual property rights, the rule of law, and the free market are means to this end. Subsequently, Harvey argues the following: ‘’The legal framework is that of freely negotiated contractual obligations between juridical individuals in the market place. The sanctity of contracts and the individual right to freedom of action, expression, and choice must be protected. The state must therefore use its monopoly of the means of violence to preserve these freedoms at all costs. By extension, the freedom of businesses and

corporations (legally regarded as individuals) to operate within this institutional

framework of free markets and free trade is regarded as a fundamental good (Ibid). The emphasis here lies on the purpose of the state to preserve economic and political freedom. Especially, economic freedom of both individuals and businesses and corporations needs to be promoted in order for the market to work properly. This economic freedom refers to the idea that so called contracts have to be freely negotiated in the market place, in other words horizontally between equal individuals. It is no surprise that this freedom is crucial to both strong private property rights and the free market. For example, if a thousand persons get coerced by one person in buying his product, it will give a wrong signal to the rest of the producers of that same product, which will impede the ‘spontaneous order of the market’. Private property rights function in more or less the same way, since there is no reason in it

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25 to call it a ‘private’ property right, when someone gets coerced by another person or the state.

Thus, individual freedom, whether economic or political, is to be pursued as an end in itself. Milton Friedman states in his book Capitalism and Freedom, the following in this regard: ‘’Economic arrangements play a dual role in the promotion of a free society. On the one hand, freedom in economic arrangements is itself a component of freedom broadly understood, so economic freedom is an end in itself. In the second place, economic freedom is also an indispensable means toward the achievement of political freedom’’ (Friedman, 1962: 15). It needs to be stressed here that neoliberalism is concerned with one particular kind of economic en political freedom: negative liberty (Thorsen, 2012; Peters and

Marshall, 1996; Plant, 2004). Following Berlin, negative liberty basically refers the liberty from coercion by others, whether this is by another person or the state. In Berlin’s own words: "liberty in the negative sense involves an answer to the question: 'What is the area within which the subject — a person or group of persons — is or should be left to do or be what he is able to do or be, without interference by other persons’’ (Berlin, 1969: 2-3). Berlin famously contrasts this to positive liberty: the idea of being the master of one’s own life (Ibid: 10). This depends on ultimately on the capabilities one has, which depends in turn on the resources one has. This connects positive liberty with conceptions of

distributive justice, which comes mainly into existence nowadays by means of the welfare state. This concept of positive liberty is refuted amongst neoliberal theorists, especially since state intervention in the market is claimed to be undesirable for various reasons (Plant, 2004; Thorsen, 2010).

Thus, it can be concluded that negative liberty is to be put above anything else in neoliberalism. It is therefore no coincidence that neoliberalism is often associated with libertarianism, and more specifically so called ‘right-libertarianism’ or economic libertarianism’ (Gamble, 2013; Thorsen and Lie, 2006; Widerquist, 2008; Syll, 2011). According to the Encyclopedia Britannica, libertarianism is a political philosophy that: ‘takes individual liberty to be the primary political value’ (Website Encyclopedia

Britannica). In addition, this implies that other political values are of less importance, and will be consequently played down. This is also what Thorsen (2010) argues in the

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26 Nozick – to view what Berlin called negative liberty as an overriding value. Freedom from state sponsored interference in the economy and the lives of individual citizens is so important to them, that they consider other central liberal values such as democracy or social justice to be of derived importance, or not important at all’’ (Thorsen, 2012: 215). The ultimate question is then to what extent, if any, are there put limits to this negative liberty? There is no unambiguous answer to this question, due to neoliberalism’s different philosophical underpinnings. As has been analyzed in the preceding chapter, on can find on the one hand (deontological) natural rights arguments, and on the other hand consequentialist (at times rule-utilitarian) arguments. In short, the difference between the two is that the former departs from a given set of principles (a priori reasoning); whereas the latter reasons towards the assumed beneficial consequences (a posteriori reasoning). More concretely, theorists who advance more a natural rights type of argument, refer to individual liberty primarily in terms of self-ownership. Along these lines, negative liberty is understood as the ‘private property right’ one has by nature over its own body, its talents and the resources that are the product of this (see chapter 2.1). This gives this approach a certain rigidness, since these ‘natural rights’ cannot be violates. For example, the renowned libertarian Robert Nozick argues in this respect that individual freedom and autonomy is a natural good to every person, which cannot ever be violated (Plant, 2004; Nozick, 1974). Theorists who on the other hand advance a more consequentialist (at times rule-utilitarian) argument are given more flexibility, since only the end is definite; not the means. These type of theorists generally take a more economical approach, in that they advance the free market and strong private property rights, because of the assumed beneficial consequences they have for efficiency and human welfare (Wolff, 2005: 1605-1606). Next to Milton Friedman (see chapter 3.1), also for instance Friedrich von Hayek argues along

consequentialist lines in defending individual freedom. In his book The Constitution of Liberty he argues the following: ‘’What is important is not what freedom I personally would like to exercise but what freedom some person may need in order to do things

beneficial to society. This freedom we can assure to the unknown person only by giving it to all’’ (Hayek, 2011[1960]: 84).

Thus, we can establish that negative liberty, the freedom from coercion by others, in neoliberalism is being put above anything else. The extent to which negative liberty is

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27 being prioritized, depends whether one reasons from natural rights theory or from

consequentialist (rule-utilitarian) theory. It should be no surprise that this can lead to paradoxical practices, like the case of intellectual property rights will show in this thesis.

4.3 The further connection between neoliberalism and utilitarianism

As has been shown earlier on in this chapter, consequentialism, at times rule-utilitarianism, is part of the neoliberal justificatory framework. The advantage of using a consequentialist argument is that it provides a certain flexibility (see also chapter 3.2 and 3.3), which comes in useful in the case of intellectual property rights. As it happens, in order to enforce intellectual property rights, temporary monopolies have to be created, which requires a large amount of government intervention (see also chapter 7). As a result, some degree of people their negative liberty will be curtailed, as the terms ‘temporary monopoly’ already indicates. In view of the fact that negative liberty is the primary value in neoliberal theory, one therefore has to rely upon consequentialist justifications. It needs to be emphasized again that neoliberalism is a particularly heterogeneous body of thought, which includes theorists who are in favour of intellectual property and theorists who are against. Regarding those who are in favour, one can find theorists defending intellectual property by referring to either self-ownership or utility, or sometimes both. Though, one can assume that

neoliberalism as a body of thought will support intellectual property rights, since these are, like tangible property rights, crucial to the workings of the free market (see also chapter 7). Harvey (2005) agrees upon this, which makes him argue in a particularly

consequentialist utilitarian way: ‘’Intellectual property rights are protected (for example through patents) so as to encourage technological changes. Continuous increases in productivity should then deliver higher living standards to everyone’’ (Harvey, 2005: 64). In this respect, ‘technological changes’ can be equated to ‘innovation’, and ‘higher living standard to everyone’ to ‘more human welfare’. Yet, one may rightly counter argue that rule-utilitarianism is not that much used by neoliberal theorists. Consequentialism on the other hand, is part of the neoliberal justificatory framework. Interesting in this regard, is to ask oneself in what respect consequentialism differs from utilitarianism? The difference seems to lie primarily in the fact that utilitarianism advances one particular end, that of

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28 maximizing human welfare (at least in the case of intellectual property). Interestingly, in this regard, neoliberalism and utilitarianism do not seem that far apart. As it happens, both neoliberalism and utilitarianism are focused upon the ‘pie getting bigger’, not how it is divided. Following Harvey (2005), neoliberal theory leaves the distribution of welfare to the market place only: ‘’Under the assumption that ‘a rising tide lifts all boats’, or of ‘trickle down’, neoliberal theory holds that the elimination of poverty (both domestically and worldwide) can best be secured through free markets and free trade (Ibid: 64-65). This corresponds in turn with neoliberalism’s commitment to both negative liberty and (moral) individualism. As it happens, in neoliberal theory, every individual is held responsible for its own freely made decisions and well-being (Ibid; Thorsen and Lie, 2006: 15). This also corresponds to the neoliberal opinion about the welfare state. As Plant (2004) earlier on has argued, neoliberalism confines itself to negative liberty only, and leaves as a consequences no room for any account of distributive justice, which would require a positive notion of liberty (Plant, 2004: 25). Utilitarianism in turn, departs like neoliberalism from the rational, self-interested individual. Negative liberty and the free market are highly valued herein, because of the assumed beneficial consequences this will have for society, in other words because of their assumed utility. The distribution of welfare is herein not subject of any concern, since it aggregates individual utilities, which makes it blind to interpersonal differences (Sen, 1979: 468; Rawls, 1977).

In the end, the consequentialist utilitarian justification of intellectual property provides neoliberalism with a convenient argument, because it can point at the beneficial consequences for society; while at the same time avoiding any account of subsequent distribution. Moreover, it can use the rhetoric of the free market and the free individual, while at the same time giving way for government intervention (see also chapter 7). Sen (1993) argues along similar lines the following: ‘’Forceful use is often made of the

language and rhetoric of ‘freedom’ in defending the market mechanism, e.g., in the form of claims that the market system makes people ‘free to choose’, to use Friedman and

Friedman (1980) evocative words. But the economic theory of market allocation has tended to be firmly linked with a ‘welfarist’ normative framework. The successes and failures of competitive markets are judged entirely by achievements of individual welfare (for example, in terms of utility-based Pareto optimality), rather than by accomplishments in

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29 promoting individual freedom’’ (Sen, 1993: 519). In the end, this implies that there exists some sort of bias towards welfarist theory as the basis of judgment in economics, instead of what a particular act or rule does for negative liberty. The same case seems to apply for intellectual property rights, which prompts that this is inherent to the welfarist approach.

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30

5. Provisional conclusion

In chapter 2, the principal justification of tangible property, the self-ownership justification, has been examined more thoroughly. It has been proven that this justification is far more controversial when it is being applied to the case of intangibles, in other words intellectual property rights. Therefore, in general, one relies upon the consequentialist utilitarian justification of intellectual property, which has been the focus of chapter 3. In this chapter, it has been established that intellectual property rights along consequentialist utilitarian lines are merely a means to a certain end, that of maximizing human welfare. This end has to always be attained, in order to avoid any inconsistency in its theory. In chapter 4, it has been concluded that negative liberty, the freedom from coercion by others, in neoliberalism is being put above anything else. The extent to which negative liberty is being prioritized, depends in turn on the philosophical point of departure: (deontological) natural rights theory or consequentialism (rule-utilitarianism). Consequentialism is here obviously the answer to a less rigid understanding of negative liberty. At the same time, this brings about the connection with the consequentialist utilitarian justification of intellectual property rights. Moreover, this connection gets promoted by the fact that both utilitarianism and neoliberalism are only concerned with increasing human welfare, not with the eventual distribution of it. Neoliberalism runs into trouble, however, when it takes its commitment to the principle of negative liberty seriously. As it happens, social utility, in other words aggregated human welfare need to be always attained, which implies that negative liberty in some cases needs to be ignored. Thus, even though negative liberty is highly valued by both neoliberalism and utilitarianism, it has to be constrained when this is necessary for social utility. In other words, in the hypothetical situation that the level of human welfare starts to decrease as a result of a too high level of negative liberty, negative liberty will have to be constrained. In the end, the consequentialist utilitarian justification is particularly flexible though, as the end gets justified by the means. Ultimately, this flexibility makes this justification susceptible for state intervention, which is at the same time a very requisite for intellectual property to function (see chapter 7). This can also explain why

neoliberalism would ultimately rely upon such a type of argument, as one can point at the benefits, while disguising the costs: the curtailment of negative liberty.

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31

6. Lexically ordering the solution? Anarchism would have to be the

answer.

In the above, it has been concluded that the consequentialist utilitarian justification of intellectual property rights is in principle conflicting with neoliberalism’s commitment to negative liberty. One possible way for neoliberalism to avoid this conflict would be to lexically order the principle of negative liberty over the aggregated good principles. In other words, it would use the aggregated good principles without giving it the priority over everything else. The following two chapters will show, however, that neoliberalism cannot rely upon such a lexical ordering for two reasons. Firstly, because an absolute commitment to the principle of negative liberty ultimately means anarchism.3 This is problematic for the institution of intellectual property, since this is anything but anarchistic (see chapter 7). Secondly, because this could cause serious problems for the consequentialist utilitarian justification itself. It has to be noted though that the following chapter will purely serve as an analytic tool in order to understand how far neoliberalism can take the principle of negative liberty, without becoming inconsistent in its theory. In turn, this will have its implications for the role of the state in neoliberal theory and the right to intellectual property itself.

6.1 The lexical order of no vertical order at all

First of all, for the sake of the argument, it needs to be clarified what lexically ordering exactly means. In a Rawlsian fashion, lexically ordering means that negative liberty has the absolute priority, in other words negative liberty would have to be satisfied first before moving on to the aggregate good principles (Rawls, 1971: 61; Gaus, 1998: 14; Arneson, 2006). More concretely, this means that gaining even the slightest increase of negative freedom or averting any loss, no matter how small, should be chosen over gains of any size, or averting any losses, even when they’re big, in the aggregated good principles (Ibid).

3_{Some libertarians, such as Robert Nozick (1974), argue in response that anarchism by nature ultimately will}

result in some kind of state, whether one calls it a state or not. That is why he defends a very minimal state (Nozick, 1974).

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32 More concrete, in the case of intellectual property, this implies that negative liberty at all times should be chosen, even when the level of human welfare would be seriously endangered, and at the same time just a little bit of negative liberty could be gained. Put differently, there are no compromises possible. It needs to be stressed here that this absolute prioritizing of negative liberty is different from the ‘social utility above anything else’ and ‘negative liberty above anything else’ premises. In both situations, social utility and

negative liberty are put first, yet they don’t have to be satisfied first before one can move on to other principles. In other words, one can still consider other relevant issues, as long it does not oppose social utility and negative liberty.

In addition to this, it needs to be stressed again that negative liberty concerns the freedom from coercion by other persons, regardless of whether this coercion originates from another individual or the state.4 Coercion thus needs to be understood as being under the authority of another person, a group of persons or the state (Berlin, 1958; Thorsen, 2012; Cohen, 2011). As a consequence, one can argue that every hierarchical relationship in essence is a form of coercion by others. The state and its laws are such a hierarchical institution, which functions by way of master - subject. Therefore, the state and its laws can be seen as a coercive institution. One has to ultimately recede to anarchism in order to avoid this. As it happens, anarchism believe in absolute liberty: ‘’anarchists believe in liberty in liberty both as an end and means, and are hostile to anything that antagonizes it’’ (Chartier and Johnson, 2011: 31). Therefore, anarchism advocates a society without a state, which is completely arranged by voluntary, horizontal associations (Ibid: 26). Market anarchism, as a specific current of anarchism, identifies another form of coercion related to capitalism. They argue that capitalism is a system of economic privileges, which construes a hierarchical relationship between the labourer and the owner of the means of production by means of the hierarchical institution of the state. Therefore, market anarchists do not believe in the system of capitalism. Instead, they believe in a system of a free, competitive market: one without privileges and monopolies (Ibid: 1). In this respect, they argue that negative liberty can be equated to competition, whereas monopolies are the very opposite

4_{Cohen (2011) criticizes Berlin on this point, as he also identifies the lack of money as a lack of freedom, as}

he states: ‘’The woman prevented by her poverty from traveling to Glasgow faces just such a closed door.

(Under a “smart-card” technology for controlling access to the train, that will be literally true, in a physical sense)’’ (Cohen, 2011: 179). Thus, also non-human practices may coerce somebody.

Intellectual property rights : neoliberalism’s hiding behind the veils of utility