Chapter 9: Intellectual property

The constitution states:

There shall be no property rights over creations of the mind, as they are non‑scarce and do not inherently give rise to conflicts. Intellectual property rights such as trademarks, patents, or copyrights shall not exist.

Under this constitution, intellectual property does not exist. There are no patents, no copyrights, and no trademarks. Ideas are non‑scarce: one person’s use of an idea does not prevent anyone else from using it. Because ideas can be copied without depriving others of their use, they do not create the kind of conflicts that property rights are designed to resolve.

Traditional IP laws grant artificial monopolies to creators and inventors. That’s their purpose. In a genuinely competitive market, such monopolies wouldn’t exist. New ideas could be copied, improved, and reused immediately, accelerating innovation rather than slowing it. In practice, IP protections are frequently used by powerful corporations to suppress competition, entrench incumbents, and extract rents, turning IP into a tool of crony capitalism rather than a mechanism for public benefit.

This constitution adopts a different approach. Cultural, scientific, and engineering projects are financed before the intellectual output is created. Funding may come from crowdfunding or from tax‑funded public services, allowing society to support valuable work without granting monopolies over the resulting ideas.

Examples of initiatives that may be funded include:

• A self‑driving car algorithm
• Breakthrough battery technology
• Energy‑efficient solar roof tiles
• Literary works such as film scripts or books
• Music, podcasts, computer games, or movies
• Digital platforms for video streaming, social media, news, or e‑commerce
• Medical innovations such as vaccines, diagnostic tests, or antiviral drugs

Because anyone may propose an initiative, and because tax revenue represents a significant share of GDP, trillions of dollars in the case of the United States, this system is expected to unleash an unprecedented level of creativity and innovation. Without artificial monopolies, ideas can circulate freely, competition can flourish, and the benefits of new knowledge can be shared by all.

Supposed benefits of IP protection

The main justification for IP protection is that it benefits society as a whole by promoting innovation and creativity.

• Incentivizing innovation: Granting exclusive, time-limited rights (like patents and copyrights) provides a powerful financial incentive for individuals and companies to invest the significant time, money, and resources required for research and development (R&D).
• Economic growth: IP-intensive industries are major contributors to economic growth, job creation, and tax revenues. Strong IP systems can attract foreign investment and enhance international trade by providing a stable legal framework for business.
• Public disclosure: In exchange for temporary exclusive rights, inventors must disclose detailed information about their inventions (e.g., in patent documents). This published information enters the public domain after the IP expires, allowing others to build upon existing knowledge and avoid duplicated R&D efforts.
• Market efficiency: IP rights create a level playing field for competition based on talent and ideas, not just capital. They allow small businesses and startups to compete by protecting their innovations from being immediately copied by larger entities.

Relationship to cronyism

The relationship between cronyism and intellectual property (IP) rights is a subject of significant debate. While IP is designed to promote innovation, critics argue that the system can be manipulated by powerful corporate interests to create a form of crony capitalism that stifles competition and harms the public interest.

How cronyism can manifest in IP:

• Expanding scope and duration of IP: Major lobby groups have successfully pushed for the expansion of IP protection beyond its original scope and length, such as extending copyright terms repeatedly. Critics argue these extensions disproportionately benefit large media corporations that hold vast portfolios of older content, while inhibiting new creativity and innovation that might build upon existing works once they enter the public domain.
• Lobbying for favorable regulations: Corporate lobbying can lead to regulations and enforcement mechanisms that are difficult for smaller competitors to navigate. For example, large companies might use extensive patent portfolios to threaten costly infringement lawsuits against startups, even when the claims are weak, effectively blocking competition and creating entry barriers.
• "Rent-seeking" through legislation: Instead of engaging in productive activity, companies may invest heavily in "rent-seeking" activities, using political influence to gain preferential treatment, subsidies, or market privileges. In the IP arena, this can involve pushing for specific legislation that creates a temporary monopoly or grants special tax breaks related to certain patented technologies.
• Selective enforcement and abuse of power: The IP system can be used to suppress competition through mechanisms that protect favored businesses. An example cited by critics is a court ruling that placed the burden on a farmer to police his fields against genetically engineered pollen drift, rather than on the patent holder to prevent the spread of its property, illustrating how legal interpretations can favor powerful corporations.

How to finance projects without IP protection

There are substantial disadvantages to IP protection, and it is claimed these outweigh the purported benefits. The justification for this claim hinges on an explanation of how cultural, scientific and engineering projects with substantial innovation and creativity would be financed in a society where the IP is not protected.

Under the constitution these are financed before rather than after the IP is generated. This can be achieved with crowdfunding or using tax funded public services. For example there can be public services for developing a new:

• algorithm for a self-driving car system
• battery technology
• energy-efficient solar roof tile
• music album
• book (fiction or non-fiction)
• film script
• computer game
• movie
• video streaming service
• smartphone
• social media platform
• e-commerce platform
• vaccine
• diagnostic test for a disease
• antiviral drug

The fact that anyone can write an initiative, together with the fact that (depending on the tax rate) a reasonable percentage of GDP is available to fund them, it is expected there will be an explosion of creativity and innovation under the constitution.

Note that there can easily be funding for projects costing billions of dollars.

Why Research Can Still Be Funded Without IP Protection

1. Public Service Contracts Include Research: Initiatives can define public services that explicitly fund research (e.g., medical research, renewable energy, software development). Citizens allocate part of their consumption tax to these services if they value the outcomes. Operators then run research projects under profit-and-loss discipline, just like other services.
2. Funding Through Popular Demand: Even without IP protection, citizens benefit from new knowledge, technologies, and medicines. If people want these innovations, they will allocate tax to research services, ensuring funding. This creates a direct democratic mechanism for prioritizing research areas.
3. Open Knowledge Model: Since IP is not protected, research outputs are non-scarce and freely shareable. This accelerates innovation because discoveries can be built upon without legal barriers. Public funding ensures researchers are compensated even though their outputs are freely available.
4. Profit-and-Loss Discipline for Research Operators: Operators must deliver useful results to attract continued funding. Ineffective or wasteful research services lose support, while successful ones grow. This mimics market competition, but with citizen-driven funding rather than patents or monopolies.

Impact on innovation

The removal of intellectual property does not slow innovation; it accelerates it. Patents and copyrights restrict the use of ideas by granting exclusive control to a single party. This slows the spread of knowledge, delays follow‑on improvements, and raises the cost of entry for new innovators. When these monopolies are removed, ideas circulate freely, and innovation becomes faster, cheaper, and more collaborative.

In a no‑patent environment, every new discovery or design becomes available to all producers immediately. Competitors can build upon each other’s work without waiting decades for legal restrictions to expire. Incremental improvements, alternative designs, and new applications emerge far more rapidly. Innovation becomes cumulative rather than sequential, with many independent contributors advancing the state of the art at the same time.

The pharmaceutical industry provides a clear illustration. Under patent protection, only the patent holder may manufacture a new drug, even if others could produce it more efficiently or improve its formulation. Without patents, any capable manufacturer may produce the drug immediately, and any researcher may refine or extend the underlying science. Competition drives rapid improvements in manufacturing processes, delivery mechanisms, and therapeutic effectiveness. The pace of medical progress increases, not decreases.

The same dynamic applies to software, engineering, entertainment, and scientific research. When ideas are not locked behind legal barriers, developers can reuse existing components, artists can build upon prior works, and scientists can replicate and extend experiments without restriction. The cost of innovation falls dramatically because innovators no longer need to license ideas, navigate patent thickets, or fear litigation. Resources that would have been spent on legal compliance and defensive patenting are instead directed toward productive research and development.

By eliminating artificial monopolies, the constitution creates an environment in which innovation is driven by competition, collaboration, and open access to knowledge. The result is a faster rate of technological progress, broader participation in creative and scientific work, and a more dynamic and responsive innovation ecosystem.

Impact on consumers

The abolition of intellectual property has profound consequences for consumers. When ideas, designs, and creative works are not subject to artificial monopolies, the cost of accessing them falls dramatically. Because information is non‑scarce and can be copied without depriving anyone else of its use, the natural price of cultural and scientific output in a competitive market is effectively zero.

This means that every film, television series, book, song, or computer game ever produced would be freely available to everyone. Even the latest blockbuster movie, released moments ago, could be copied and shared at no cost. The same applies to software, educational materials, scientific papers, and engineering designs. Consumers gain immediate, universal access to the full library of human creativity and knowledge.

The effect is equally dramatic in pharmaceuticals and medical technology. Patents currently allow manufacturers to charge monopoly prices for medicines, often many times higher than the cost of production. Without patents, any capable manufacturer may produce a drug as soon as it is developed. Entry and competition place downward pressure on prices and margins. In practice, this means that medicines which today cost hundreds or thousands of dollars per dose would fall in price by orders of magnitude, becoming affordable to all.

The combined impact on consumers is transformative. Cultural works become universally accessible, education becomes radically cheaper, and life‑saving medicines become widely affordable. The removal of intellectual property eliminates artificial scarcity, unleashes competition, and ensures that the benefits of human creativity and scientific progress are shared by everyone.

Benefits

Cultural Benefits:

• Explosion of creativity: With no copyright or IP restrictions, art, literature, and music can be freely remixed and shared. This accelerates cultural innovation and collaboration in ways traditional systems suppress.
• Artists gain autonomy: Because funding comes directly from citizens’ allocations, creators aren’t beholden to publishers or advertisers. They can pursue their vision more freely.
• Shared cultural wealth: Everyone has access to movies, books, and research outputs without barriers, enriching society’s collective knowledge and culture.

Innovation Benefits:

• More collaboration: Without IP barriers, researchers and firms can share knowledge freely.
• Faster scientific progress: Research outputs are open by design, so discoveries spread instantly and can be built upon without legal battles.
• Reduced duplication of effort: No patents mean researchers and firms don’t waste resources reinventing or litigating. They collaborate instead.
• Reduced litigation: No patent disputes or copyright battles.
• Citizen-driven priorities: Innovation aligns with what society values most, not just what monopolies find profitable.
• Incentives are aligned with demonstrated value, not monopoly rights: In traditional IP systems researchers rely on patents, copyrights, or trademarks to secure exclusive rights and profits. Under the constitution, researchers rely on public service contracts funded by voluntary tax allocations. Their incentive is continued funding based on demonstrated value, not monopoly rights.

Impact of eliminating patents on pharmaceutical prices

The best empirical proxy for a “no‑patent world” is what happens when patents expire. That’s the moment when monopoly protection ends and competition becomes legally possible.

The evidence is extremely consistent: Prices fall sharply when patents expire. When a drug loses patent protection and generics enter, competition drives prices down.

The literature overwhelmingly finds that patents, not production costs, are the primary driver of high pharmaceutical prices. The following studies show that when patents expire and generics enter, prices fall dramatically typically 80–95%:

• Grabowski & Vernon (1992) – Brand Loyalty, Entry, and Price Competition in Pharmaceuticals Shows large price declines after generic entry.
• Frank & Salkever (1997) – Generic Entry and the Pricing of Pharmaceuticals Classic paper documenting steep price reductions once generics enter.
• CBO (Congressional Budget Office) Report (1998) – How Increased Competition from Generic Drugs Has Affected Prices and Returns in the Pharmaceutical Industry Finds price drops of 60–90% after patent expiry.
• FDA (U.S. Food and Drug Administration) – Generic Competition and Drug Prices Shows that with 6+ generic competitors, prices fall by 95% relative to the patented price.
• Danzon & Chao (2000) – Does Regulation Drive Out Competition in Pharmaceutical Markets? Finds that generic competition places downward pressure on prices.

This is the closest real‑world analogue to the proposed system: No monopoly → many producers → prices collapse.

The more competitors, the lower the price. The magnitude of the price drop depends on how many firms enter the market. More competitors mean faster and deeper price reductions. In a world with no patents at all, entry would be immediate and global, so competition would be even stronger.

Patents keep prices high by blocking competition. Patents give drug companies the legal right to exclude competitors, allowing them to set high prices. Misuse of patents, such as filing dozens of overlapping patents to extend exclusivity, keeps prices high for decades.

Without patents, entry and competition would tend to reduce prices and margins. Pharmaceutical manufacturing costs are often tiny compared to monopoly prices. Examples in the real world: A pill that costs $1 to manufacture may sell for $100 under patent protection. After patent expiry, generics often sell for a few dollars. Competition gives producers reason to reduce prices and production costs.

Even pro‑patent sources acknowledge that patents allow companies to charge premium prices during exclusivity. They simply argue that this is necessary for R&D, but the price effect is not disputed.

So what happens in a system where patents are removed entirely? That means immediate competition from any capable manufacturer. No monopoly pricing window, no evergreening, no patent thickets, and no regulatory barriers tied to IP.

The result is straightforward: Drug prices would fall dramatically, likely by 80–95%, and remain low permanently. This is not speculation; it is exactly what happens every time a drug loses patent protection in the real world.

How Tax-Funded Public Services Enable Art Without Copyright

Creativity can thrive in a system without copyright.

Art as a Public Service: Citizens can propose initiatives to fund cultural services, e.g., film production, publishing, music creation. These initiatives become service contracts with private operators (studios, publishers, collectives) who produce works under profit-and-loss discipline. Funding comes from voluntary tax allocations, just like for other services.

Citizen-Driven Demand: People value movies, books, and music, so they allocate part of their consumption tax to cultural services. The more popular a service, the more funding it receives. This ensures art is created in line with what society actually wants, rather than what monopolies or gatekeepers decide.

Open Access Model: Since copyright doesn’t exist, works are non-scarce and freely shareable. Artists are compensated through the tax-funded service contract, not through exclusive rights. This means creators are paid upfront or through ongoing support, while audiences enjoy unrestricted access.

Competition Among Operators: Different operators (film studios, publishing houses, art collectives) compete for citizen allocations. Those who produce higher-quality or more appealing works attract more funding. This mirrors the free market, but without copyright monopolies.

Consequences: More art, more accessible: Works are freely available to everyone, reducing barriers to culture. Reduced litigation: No copyright disputes or piracy issues. Citizen-driven priorities: Funding flows to the kinds of art people want most. Stable income for creators: Artists are paid through service contracts rather than uncertain royalties.

Art thrives because creators are funded upfront through tax-supported service contracts, while audiences enjoy unrestricted access. The incentive shifts from restricting access to delivering value that citizens want to support.

Example: A Blockbuster Movie

In today’s copyright system: A studio invests millions to produce a film. It relies on copyright to prevent duplication and piracy. Revenue comes from ticket sales, streaming rights, and merchandise, all protected by exclusive rights. If piracy spreads, profits collapse, so the studio spends heavily on enforcement.

Under the constitution: Citizens propose a Film Production Service initiative. If enough people value new movies, they allocate part of their consumption tax to this service. The operator (a studio) receives funding directly from tax allocations, based on popularity and citizen ratings. The movie is released freely. Anyone can watch, share, or remix it. The studio earns revenue through the service contract, not through restricting access. Competition arises: studios must produce films people actually want, or they lose funding.

Artists would gain more control over what they produce compared to publishers

Artists have more say because funding bypasses publishers and flows directly from citizens. Publishers can no longer dictate terms through copyright monopolies or advertising. they must compete to support artists rather than control them.

In today's system publishers decide what gets produced, often prioritizing marketability, profit, or risk avoidance. Artists must conform to publisher demands to get funding and distribution.

Under the constitution: Citizens directly fund art through tax allocations. Publishers become facilitators, not gatekeepers. Artists have more freedom to pursue their vision, knowing their audience can support them directly.

Artists gain autonomy: They can create based on their vision and audience demand, not publisher mandates. Publishers lose control: They shift from gatekeepers to service providers, competing to support artists effectively. Citizens shape culture: Funding flows to the art people value most, ensuring cultural output reflects society’s preferences.

Funding Comes Directly From Citizens, Not Publishers. Under the constitution, artists are funded through tax allocations to cultural public services. Citizens decide which services (and therefore which artists) receive funding. This bypasses publishers as gatekeepers. Artists don’t need to convince a publisher to invest; they need to convince the public their work is valuable.

No Copyright Monopoly Publishers today rely on copyright to control distribution and profits. Without copyright, publishers lose their monopoly power over works. Artists are paid through service contracts, so they don’t depend on publishers to enforce exclusivity.

Profit-and-Loss Discipline Applies to Operators. Operators (publishers, studios, collectives) succeed only if citizens allocate tax to them. If publishers try to dictate content that doesn’t resonate, citizens can redirect funding to other operators or directly to artists. This forces publishers to follow artistic demand rather than control it.

Direct Democracy in Culture. Citizens vote and allocate tax continuously. If an artist’s vision is popular, funding flows to them regardless of publisher preferences. This democratizes cultural production, giving artists more autonomy.

Reduced Dependence on Commercial Advertising. Since funding comes from tax allocations, artists don’t need to tailor content to advertisers or publishers seeking profit margins. They can focus on producing art that resonates with audiences.

Non‑disclosure agreements

The constitution states:

Voluntary agreements that restrict the disclosure or use of information, such as non‑disclosure agreements (NDAs), are valid and enforceable, provided they do not impose obligations on non‑parties.

Summary

Tax-funded public services allow research to thrive even without IP protection because:

1. Citizens voluntarily allocate tax to research services they value.
2. Operators are funded under profit-and-loss discipline.
3. Outputs are freely shared, accelerating innovation.
4. Incentives shift from monopoly profits to delivering real, demonstrable benefits.