I take from your reply that you are sincere in this dialogue – this was my belief until I saw some actions that seemed to indicate otherwise. Thank you for clarifying.
Before I attempt to answer your question, allow me to offer some background. For me personally, this question of IP as property is somewhat interesting from a theoretical standpoint, but not a terribly important concept to spend energy on. Again, I say for me. Obviously, for some people, it is tremendously important.
Second, when it seems to me that the market will provide a reasonably good policing and regulation system, I do not concern myself with understanding the purity of the theory behind an alternative. One significant example of this is fractional reserve banking. Both Mises and Rothbard have offered that the market will regulate this practice just fine. I agree. So why get so hung up about 100% reserves, or if it is fraud or not?
For me, the same thing applies to IP. There is no doubt that in a libertarian society, “inventors” will attempt to control something like the formula for Coke, or “authors” the words in a book, via agreements of some sort. How will you stop them – by attempting to demonstrate via a tremendously complex logical construct designed to prove to them that they cannot? What if they disagree with your theory and attempt to control it anyway?
So what happens next? I don’t know. In a free-market for enforcement, I suspect at minimum there will not even be an attempt to protect most of the frivolous IP stuff (whistling a tune, copying a written passage on the internet), as – without the state aid- it will be too expensive to attempt to do so. But the formula for Coke? Surely, when billions of dollars are at stake, the attempt will be made. I will offer, below, my thoughts on how the market might sort this out.
Now to your question:
How you can say an idea is property that is the result of applying one's brain to the physical world...when knowledge guides action, and therefore the idea must exist prior to any sort of action in the physical world?
Too complicated, and would require too much time for me to deal with (given my view that a market solution will work just fine), whatever the answer. Call that a cop-out or a failure on my part – my feelings won’t be hurt. For me, the answer is simple: I created the formula for Coke. It is mine. I have authority over control, use, and disposition of the formula. It is no different than if I built a chair – I built it. It is mine. I have authority over control, use and disposition of the chair.
You will reply that if someone else produces a bottle of Coke, it does nothing to stop me from doing the same. But I say it isn’t the bottle of Coke that I own (or merely the right / ability to produce one), it is the formula. Ownership (control, use, and disposition) of the formula is indivisible, just as ownership of the chair is.
I concede that your logic might be more elegant than mine. It is unimportant to me that this might be so. I return to the beauty of the market in resolving such issues. I am certain that in a libertarian world, Coke would attempt to protect its formula. After that, I say let market forces figure out the result.
I find it interesting that you continue to skip over my pointing out the non-rivalrous nature of the Coca-Cola formula...
I believe I addressed this above, I only include your statement here for completeness. If not, I guess that means I have skipped over it again.
…and how your concept of having a property right in it, allows you to come into my home and dictate what I can or cannot do with my own ingredients.
You can do what you want with your ingredients, to include stumbling upon my formula. If you copy it via obtaining it from an avenue that traces back to me or someone I have contracted with, however, I guess we will have a disagreement.
How might this be resolved in a libertarian world? I assume that a libertarian world would see rival insurance companies and all of the stuff of libertarian conflict-resolution dreams. I suspect insurance companies that develop a skill at defending intellectual property will win market share from customers willing to pay the price. I, for my blog, won’t be a customer at the price demanded. But I suspect Coke would.
For the possibility to earn countless millions in fees, insurance companies might actually develop a good argument on Coke’s behalf – better than anything Wenzel might come up with and certainly better than anything I have written to date. You will certainly be free to file a pro-bono argument for the other side. You will be free to explain your position to your heart’s desire – scarcity, non-rivalrous, etc. All of it. In the end, someone will make a judgment. To the extent the market appreciates this particular judge's decisions, he will gain market share.
This brings me to Hoppe – whatever your interpretation of his statement at The Daily Bell, the following seems clear: while he obviously sees the theoretical case regarding IP in the same way Kinsella does, he also obviously leaves room for the market to sort it out. When considering the entire statement, can you truly conclude otherwise?
I have no doubt that my answer is not intellectually satisfying for you. You won’t get better from me on this subject – there is little point for you to continue to try; call me a lost cause, if you like. I find more satisfaction in thinking and writing about other issues related to NAP, Austrian economics, and decentralized societal structures. This is where I prefer to spend my limited intellectual capital.