The non-existence of intellectual property demands the existence of copyright. Observe:
Let’s begin from the assumption that there is no such thing as intellectual property – only physical property.
Pretend I have written some music, played it, and recorded it onto a CD at a material cost to myself of some £3000 and 40 hours of labour time. My CD is physical property only, and my estimation of its worth is £3000, plus let’s say £120 for labour (at £3 an hour, that’s a bargain), plus an ideal, though small, profit margin of 8% – a grand total of £3370.
I could make 337 copies of this CD, which would also be my property, and sell them for £10 apiece – fine. But it’s not in my interest to do so unless I sell all 337 copies at once. Because once I’ve sold the first copy, which is after all only physical property, the new owner of that CD can duplicate it and give it away for free, thus making my £10 copies less attractive in the marketplace and therefore less likely to find willing buyers.
Possibly my solution here is to invite pre-orders. Once 337 people have pre-ordered and pre-paid – and the £3370 is comfortably in my bank account – I can send out all of the CDs at once. Fine.
But suppose more than 337 people order a copy of my CD. Very well; I shall make more copies and make those available for pre-order and pre-payment too. In fact, I will make as many copies and sell as many pre-orders as the market demands; but nobody will receive their CD until that demand is exhausted and the profit guaranteed (by its presence in my bank account), because the minute I actually hand over the first disk, everything on it ceases to be my property and can be made available for free.
My other option is to make no additional copies of the CD, and to sell my single existing copy for £3370. (This is, for example, what happens with unique pieces of art.)
Essentially, therefore, if the CD and everything encoded on it is purely physical property, I have absolutely no incentive to make it someone else’s property until I have received the compensation I desire. This is not so much a problem if I sell it as a single entity to one buyer for £3370 (although I think few people would pay that amount for a music CD).
But if I want to sell copies of it at reduced cost to multiple buyers, it makes sense for me to hold onto all copies until I have as many confirmed buyers as possible. This could end up being ridiculous; there could be a time lag of literally years between when the first buyer pays me and when I send him his copy.
Buyer #1 obviously does not want to wait years; in fact, since he has already paid me for his copy of the CD, it is now his property, and I have no right to withhold it from him. But if I send it to him immediately, the CD and everything on it becomes his property, and he can duplicate it and give it away for free, meaning people will be less likely to buy copies from me, meaning I am likely to make a massive loss. In fact, if I sell him his copy for £10, he makes his property available for free, and nobody buys copies from me, I have made a loss of £3360.
But wait! There may be another way. Let us say that I agree to sell a copy of my CD to Buyer #1 as long as he agrees not to make the material on it freely available for x number of years, x being the time during which I reasonably predict demand for my music CD to exist. This will naturally involve a reduction in price to compensate him for voluntarily restricting his use of his property, but fine. If I can get all of my buyers to agree to the same terms of sale, they will get their property, and I will get my money, and all will be happy.
And lo and behold, we have just invented ‘copyright': the agreement by which the buyer gets his purchase of property at a discounted price in return for not making that property freely available for x number of years. This enables the seller to compensate for that discounted price by making up the difference in volume of sales.
Since we have copyright, as a good way to satisfy both buyer and seller with respect to their property and money, I therefore conclude that intellectual property does not exist.