Changes of Mind Pt 3

The moon looks mean
And the crew ain't stayin'
There's gonna be some blood
Is what they're all sayin'
--Jay Ferguson

Part 1, Part 2

Intellectual property. It used to be 'obvious' to me that intellectual property (patents, trademarks, copyrights) were truly property and deserved protection under the law. Leonard Read and others have since persuaded me otherwise.

Laws to protect property rights are necessary when property is scarce. Tangible goods fit this requirement. Taking goods from a person denies that person the use of the good. IP does not meet the scarcity requirement. IP can be infinitely reproduced--without denying use of the IP to a claimed 'originator.'

Moreover, ideas that serve as inputs to IP do not have clean title. A new idea is an extension of old ideas. Clearly establishing ownership of a new idea is impossible.

Granting Congress power to grant exclusive rights to ideas is one of the inconsistencies found in the Constitution. When people are granted legal monopolies over ideas, innovation is curtailed and markets are less free.

Sovereign debt. Treasuries and other country bonds were just another asset class to me. The 'safety' of Treasuries made them particularly attractive during times of turmoil.

However, government-issued debt can only be repaid on the backs of citizens. Buyers of government bonds tacitly condone the use of government force to confiscate economic resources from the citizenry so that bondholders can be repaid. Taxpayers who do not like the terms of the deal cannot walk away; they are forced into the arrangement at the point of a gun.

In effect, bondholders are contracting with government agents to shake down its citizens. It is in this way that debt markets resemble slave markets.

I endeavor never to own sovereign debt again.

More to come...

position in Treasuries