The moral claim for intellectual property – that an inventor has the exclusive right to the application of a certain idea in the form of a monopoly granted by the state – has long been on shaky ground. Reductio ad absurdum, where would the monopoly stop? When the inventor dies? 70 years afterward, as current copyright law is structured? In perpetuity? Starting from the premise that ideas are non-rivalrous – as Thomas Jefferson put it in 1813, “he who receives an idea from me, receives instruction himself without lessening mine” – Sheldon Richman takes aim at the utilitarian argument for intellectual property protection, the notion that it encourages innovation, in a piece posted today.

He writes, “the implied cost-benefit analysis is a sham. Defenders tout IP’s hypothesized benefits while presuming the costs are virtually zero. Ignored are the costs in innovation never ventured for fear of legal reprisal, in resources consumed during litigation, in talent diverted to protecting IP rather than producing useful goods, and so on.”

Rather, innovation in a free market is dependent on the ability – within reason – to imitate competitors because innovation usually occurs in small steps. Richman puts it beautifully, “copying combined with product differentiation equals rising living standards.” The alternative is artificial scarcity induced by a government-enforced monopoly, which leads to higher prices and less innovation.

In today’s dynamic market with falling production costs and increased fear of competition, a firm depends more and more on its intellectual property rights. Enter patent trolling, copyright litigation used as a scare tactic against file sharers, and new legislative attempts to protect IP holders.

On a very related note, anyone who uses Wikipedia, Google or hundreds of other sites are finding their pages darkened today in a blackout protest against pending copyright legislation in both houses of Congress. SOPA and PIPA haven’t been brought up for a floor vote yet, but net activists are making their concerns known, as is the Heritage Foundation’s lobbying arm, which promises to list the vote on congressmen’s legislative scorecards. Support for the bills comes largely from the music industry, Hollywood and the Chamber of Commerce.