The issue here is non-rivalrousness – sometime known as ‘public goods’.

Clearly the ecnomic notion of property collapses without some form of scarcity. For most goods, such as corn, their materiality supports their rivalrousness. Immaterial goods have a problem. There is no point in having any law about such goods unless they can be rendered rivalrous, and that is what patents and other IP legislation is designed to achieve. Clearly, as technology evolves, it sometimes renders the law ineffective, as we saw with Napster. But this cannot be grounds for denying the need.

Whether it is, in fact, necessary for a society to implement such legislations seems to me an empirical matter rather than an economic one. After all the notions of property are grounded at law and in no other way.

Likewise it seems remarkable to me that Hayek should make so free with the struggles writers and composers have with making a living, especially when they are so vulnerable to publishers ripping them off and property-izing their work by packaging it. Why on earth should the publishers’ investment be more worthy of protection than the author’s or the composer’s?

Or the case for a small government

For typical economists nonsense about IP, see econlog:

My favourite Hayek quote:

Just to illustrate how great out ignorance of the optimum forms of delimitation of various rights remains – despite our confidence in the indispensability of the general institution of several property – a few remarks about one particuilar form of property may be made. [...]

The difference between these and other kinds of property rights is this: while ownership of material goods guides the user of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopaedias, dictionaries, textbooks and other works of reference could not be produced if, once they existed, they could freely be reproduced.

Similarly, recurrent re-examinations of the problem have not demonstrated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period.

The Fatal Conceit: The Errors of Socialism, 1988 (p. 35) Friedrich von Hayek

The history of their transportation to the US, and of the various political shenaginins involved, is interesting and revealing for those of us who argue that the declaration that ‘markets are efficient and a-political’ is itself a profoundly political and interest-oriented statement.