[quote]Intellectual Property Free market fundamentalists claim that the same principles that apply to (material) property rights should also extend to intellectual property. Namely, that intellectual property ownership rights should be perpetual. The problem with this approach is quite evident. Imagine the following scenario: it is 1687 and Isaac Newton publishes his Principia Mathematica. Immediately afterward he establishes Newton Inc., and drafts a license agreement in which anyone who uses Newton’s principles of mechanics for commercial use must pay Newton Inc. a 90% cut of all revenue – not such an outrageous contract, considering the huge impact the Principia has had since publication. Given perpetual intellectual property rights for the Principia, Newton Inc. could have easily become an enormous corporation, controlling the vast majority of the world’s capital and natural resources. At the same time, such monopolistic practices would have brought technological progress to a standstill. Thus, given the inevitability of market failure when perpetual intellectual property rights are granted, government must intervene – in one way or another – and modify and limit IP rights to balance between an individual’s property rights and technological (and economic) progress. Property Rights Similar to IP rights, there may be times when government must intervene to modify property rights. One reason for this is the following: property rights laws cannot anticipate technological advancements. Case in point, until the 20th century the laws governing private property stated that owners of real estate also had unlimited air rights. Or, as originally encoded in medieval Roman law: “For whoever owns the soil, it is theirs up to Heaven and down to Hell.” With the advent of the airplane, it became unreasonable for individuals to possess such extensive rights. Thus, government had to intervene and place legal limits on air rights, such that landowners would only have rights to airspace that they could reasonably use. Indeed, air travel (and later satellites and space exploration) would not have been possible had airline companies had to negotiate – on individual basis – with millions of landowners on whose “property” they would be trespassing. As we’ve seen in the examples above, in a free market property rights laws cannot be static or absolute. Government has to modify these laws to prevent market failures or economic stagnation, and to allow technological progress. This means that true laissez-faire capitalism cannot work – neither in theory nor in practice – since active government intervention in the economy is indispensable to a well functioning economy.[/quote]