Intellectual Property

Private property is the cornerstone of the market system. A well-functioning free-market economy requires that property rights be clearly defined and protected so that people can engage in trade. Most libertarians agree that such rights should be extended to physical property, but they differ about property rights in ideas (i.e., intellectual property). More specifically, they differ about whether patents and copyrights are legitimate.

Many market-oriented economists believe that intellectual property rights must be protected. In principle, they argue, people would have little or no incentive to invent and develop goods that they will ultimately bring to market. Consider prescription drugs, for instance. Such drugs have benefited millions of people, improving or extending their lives. Patent protection enables drug companies to recoup their development costs because for ...