Social norms are not a topic in which we are especially
expert. Still, it is a relevant topic: property rights are never
enforced only by the law-and-order system, or even by costly
private monitoring of other people's behavior. Broadly accepted
and well functioning property rights systems rest also, one is
tempted to write "primarily," on a commonly shared sense of
morality.
Then it quotes another economist, Eric Rasmusen :
Video rental stores and libraries, of course, reduce
originator profits and hurt innovation, but that is a
utilitarian concern. What is of more ethical concern is that
whenever, for example, someone borrows a book from the
public library instead of buying a book, he has deprived the
author of the fruits of his labor and participated in
reducing the author's power to control his self- expression.
Thus, if it is immoral to violate a book's copyright, so too it
would seem to be immoral to use public libraries. Libraries
are not illegal, but the law's injustice would be no reason
for a moral person to do unjust things. The existence of
children's sections would be particularly heinous, as
encouraging children to steal.
To entirely deter copying would require a norm inflicting a
considerable amount of guilt on copiers, since legal
enforcement of copying by individuals is so difficult. To
partially deter it would be undesirable for two reasons.
First, it would generate a large amount of disutility while
failing to deter the target misbehavior. Second, it would
reduce the effectiveness of guilt in other situations, by
pushing so many people over the threshold of being moral
reprobates. At the same time, the benefit from deterring
copying by individuals, the increased incentive for creation
of new products, is relatively small. I thus conclude that
people _should_not_feel_guilty_about_copying_.
> well functioning property rights systems rest also, one is tempted to write "primarily," on a commonly shared sense of morality.
I feel that is true of most general laws -- for example basic law and order is hinged on a collective sense of morality. If 80% of the population decided all of the sudden to riot, break windows, and flip over cars, there are just not enough policemen to keep the peace. But it just so happens that most people do not find that behavior acceptable and would actually step in to help enforce the peace.
When it comes to information products, I think it is very simple (and this just my uneducated feeling) -- individuals see it as copying not stealing. They copy a product, but the owner still has the original. In their minds there is a huge difference between that and walking into an individual's backyard and taking a shovel from the shed.
Now I know it is a copyright issue and each stolen copy is potentially a lost sale, but I am just highlighting how I think the majority thinks about it.
Really, this has been debunked? If I can get something at a cheaper cost (whether by stealing or some legal mechanism) then I won't get it from another mechanism.
For example, I used to rent seasons of shows on DVD (and on some rare occassion bought boxed sets from Costco). Haven't done that in years. Just wait for Netflix. Now Netflix isn't stealing, BUT if bit torrents just became completely legal right now, I'd probably cancel my Netflix subscription.
I'm not saying that every "stolen" copy is a lost sale, but it does sound like the potential qualifier is pretty accurate.
I think the reason to the strong reaction against the term "potential lost sale" is because this is often used by the *IAA to then massively overstate the losses from piracy. It has the potential to be a lost sale, but the question is how likely was that person to buy the product if an illegal version had not existed?
For example, without piracy, many of my friends (young twenties/teens, so we grew up with piracy) wouldn't have the same taste in music or movies without piracy because we simply would have never found a lot of the stuff we now greatly enjoy. The chances they would have purchased a good deal of their favorite media without piracy existing are utterly minuscule, and to say it's a possible lost sale somewhat glosses over the details, although it is technically correct. That's not to say all piracy would never be purchased, but I think that's the case for a lot of piracy. This is just my personal opinion, but I believe I've seen more statistics that point this way than.
It's not even a logical assumption in the first place — just one that the _AAs have tried very hard to push. Look at any paid product's conversion rates and then try to say with a straight face that every illegal download is potentially a lost sale. The "potential" is extremely low, similar to how every trip to the supermarket is a potential mugging. I would guess that only one in fifty is even potentially a lost sale in any meaningful sense. (And that's not even factoring in the converse truth that some percentage of piracy actually amounts to gained sales from the pirates either paying for a later version or getting their friends to do so)
Regardless of your stance on piracy, the "illegal download ≅ lost sale" numbers are not remotely reasonable.
In games, pirates seem to outnumber legitimate customers roughly 9:1, but pirates convert to legitimate customers (in the face of DRM or other obstruction of the pirated form) at a rough rate of 1 customer per 1000 defrayed pirates.
Saul Williams had a relatively contemporary offering of a free/$5 album that in two months (and with producer Trent Reznor's extra exposure) sold as many copies as his previous album had sold in four years while garnering four times as many free downloads. He's had two albums since, but I don't know what the sales are like for either of them.
It's also worth noting that there were a fair number of torrented downloads of both albums, which should shift numbers closer to the observed game piracy numbers.
Well, they made a whole book about this :) They argue that the "first mover" advantage is actually large enough to take care of the problem in the case of both books and pharmaceuticals; music isn't actually a problem as people actually making it earn close to nothing from reproduction anyway; software wouldn't be so much different than it is now, etc.
They take the quite extreme point of view that all intellectual property should be completely abolished. They make IMO a definitive point on the complete uselessness of patents in general; the case against copyright and trademarks is somewhat less clear.
Sure, I skimmed it a bit, but don't have time to read it at the moment.
As for the summary of their points, thanks for posting them - I think there's ample room for debate, and that each thing is probably a bit different - software patents are different from drug patents, for instance.
Patents has been used exclusively to stifle competition and have a very bad record of actually hampering progress. Even the canonical case of pharma is debunked thoroughly.
For copyright, the case is quite clear too, though it may still be possible that a short copyright (14 years, for instance) may still be better than nothing at all.
Trade secrecy are treated page 188. Basically, it is much more used than patents, so suppressing patents won't change things much. Revealing secrets through patents is very inefficient anyway.
Do you currently feel that the existence of libraries is contributing to that purported underproduction?
Maybe you should redefine your "normal" level of production? There are two, valid, competing concerns here, that of the content producer and that of society. After all, the point of copyright, according to the US constitution is to "promote the Progress of Science and useful Arts". Allowing content producers to make money is merely a means to that end, not an end onto itself.
> Do you currently feel that the existence of libraries is contributing to that purported underproduction?
Not really. I don't think it overlaps enough to cause much of a problem. They don't have the ease of use that downloading stuff does.
> Maybe you should redefine your "normal" level of production?
Without any IP laws, you could, in a thought-experiment world, spend millions of dollars to create a movie, release it, and not make one dime back on it. That would be the last such movie produced. That's "underproduction".
> Allowing content producers to make money is merely a means to that end, not an end onto itself.
Oh, I agree completely with that. Historically, it's been a pretty good means to that end as well. Lately, many cracks are appearing in the foundations, but I have yet to read of a convincing replacement for it. I think things like MacOS, Hollywood movies (well, some of them), and books by professional authors are a good thing for the world, and am not sure that amateurs will replace them.
> Without any IP laws, you could, in a thought-experiment
> world, spend millions of dollars to create a movie,
> release it, and not make one dime back on it. That would
> be the last such movie produced. That's "underproduction".
This is technically true, but IP laws don't provide any guarantee to the contrary. They are irrelevant to that thought experiment. Copyright does not guarantee profit.
There's a decent argument to be made that this would happen more often without IP laws, but then you're moving away from the thought-experiment world. Doing that makes it not clear-cut.
All of this is anything but clear-cut. However, I think that in a no-IP world, producing 'commercial' movies as we now know them would be far trickier.
Of course copyright does not 'guarantee' profit: you can make a shitty movie and lose money. However it provides some protection for content producers and indicates a fairly clear path to making money: make something and sell it.
Libraries are different in that they don't remove scarcity, giving a value proposition for both purchasing the book and the library option, if the books are borrowed out further people are unable to read the book at the same time.
A digital example where there is a balance would be iOS, you don't see big antipiracy efforts from developers because there is plenty of market happy to pay for goods.
The real issue is when a content producer can't make anything at all on their time/ money investment, libraries on the whole have never caused this the way digital downloads may.
Point 1, by this logic, I would be more likely to buy a new DVD release of a movie if the video rental store was currently out of stock of said movie to rent.
I would think people would be with point one, more so with books at a library where the wait is usually going to be longer than a day. That app you liked does support the current logic of most iOS developers, the high piracy lead to higher sales so it's not worth doing anything about. If at some point in the future though the piracy made sales so low as to not make the investment in making the app worth wild then you have a problem.
I use the words artists and content producers interchangeably, I guess thinking in terms of the word artist makes their work sound more unique and valuable than content producer.
I can't speak for them; my viewpoint is that since information goods are non rivalrous and non excludable, they are likely to be underproduced, and therefore it makes sense to fund them from public subsidy.
But how to channel taxes to produce the information goods people want? My proposal is to set up a series of "Content Compensation Funds" and taxpayers get to choose which fund their taxes go to -- http://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-fo...
I am no free-market fundamentalist, but I think the idea of the government sticking its nose into the production of books, movies, music and software to that degree is not entirely to my liking. It also has a number of practical issues: someone could happily snarf down zillion-dollar blockbuster movies, yet dedicate all their taxes to some indie musician they like. At least it has some semblance of a market to it, rather than simply having the Minister of Information Goods who decides who gets what, but I'm not convinced it's as good as a "real" market.
That's funny because, imho, patents and copyrights are "the government sticking its nose into the production of books, movies, music and software to a degree that is not entirely to my liking". They also have a number of practical issues e.g. investment in minor, yet patentable, variations on drugs rather than more fundamental research on non-patentable innovations or lobbying to extend copyright terms funded by those receiving the money from copyrights. I'm not convinced it's as good as a "real" market.
Yeah, like I said elsewhere, the current system has problems - some of them serious - but I have yet to see anything that makes a lot of sense as a replacement. And yes, it's not a 100% "real" market, and thus the quotes - I didn't realize I'd need to spell it out. I thought it's obvious to anyone who studies this stuff that IP is only "property" due to laws and regulations, rather than some natural state of rivalrousness and excludability, like an automobile.
My best guess is that reconfiguring the current compromise in favor of consumers, rather than some producers (copyright extensions, etc...) might be the best course of action, but I am not convinced 100% of anything.
It is obvious that IP only exists thanks to governments, that's why it's odd to be complaining about Government intervention when all that is being proposed is a different kind of government intervention to correct market failures.
I copied the "quotes" on real because it applies to both solutions, in both cases you're creating some kind of market with the hope that it functions better than no market at all, or any alternative market.
The problem (or at least part of it) is that people, even those that have thought about it for a while, are too quick to accept the current IP mess as natural, unchangeable, morally correct and real, when it is none of those things.
I think the sort of IP market that existed prior to fast broadband and easily reproducible goods is a lot closer to a functioning market than wonky systems where all users of broadband are taxed and can 'spend' their taxes on things they don't consume, completely out of proportion to their actual costs to produce.
I'm not saying public subsidies should be off the table, just that this proposal and others I've seen don't seem to be as good as reforming the current system.
I think the type of market before IP protection when authors published serially and collected advances (e.g. Dostoyevsky, Dickens) was closer to a functioning market than the current system where authors, programmers, and pharmaceutical companies shoot their whole wads into the market and hope for a return on their sunk costs rather than attempting to actually sell their labor.
IP laws can be a net win for everyone. Let's leave the giants like MSFT be and use a simple example:
Dentist needs billing software. He's going to pay through the nose and face a free rider problem if he just pays some guy straight up to write it and release it under a liberal open source license. The software may not get written at all!
If, OTOH, the developer says he'll take a tenth of what it costs him to write it, and the dentist introduces him to 20 of his friends, the dentists all pay less than the labor costs, and the developer makes more money. And the software gets written.
Sure, simplified a lot, and ignoring various options, but you get the idea.
> It also has a number of practical issues: someone could happily snarf down zillion-dollar blockbuster movies, yet dedicate all their taxes to some indie musician they like.
If a person thinks the level of production of zillion-dollar movies is OK, but that there should be more indie musicians, that would be a sensible thing for them to do. If lots of people think like that, then the sorts of information goods they like will become better-funded, and information goods that few people like will become less well funded, which is surely a feature rather than a bug.
The purpose of an economy is to make things people want; I believe my solution achieves that. Of course, I don't think it's the only way information goods will be funded, or necessarily even the largest one. I think the Coasian solution -- where people group together to commission a work -- is attractive, and will become increasingly important as the internet reduces transaction costs.
Underproduction is simple. You'll notice it when you find yourself lurking on the 'Net to find something that would suit your desires, and find none (or spend a long time until you find something). When there are too many such cases (so it's not just picky guys lurking for rare things) — it would mean that there's an underproduction.
For example, at some time you feel a desire to watch some hard sci-fi present-to-past accidental time travel causing an alternate war history movie¹, but don't know any, except for those you've already watched. And you fire off a new tab and start lurking around.
Not exactly kids on the steets begging for MP3s, but someone spending considerate amount on time begging^W searching for something they want, but don't know.
___
1) Hopefully, that — while still being somehow generic — would be a quite narrow definition where not too many movies would fit.
At the extreme end: imagine the world without any commercial:
* Software
* Pharmaceuticals
* Books
* Music
* Movies
Now, I'm not saying that we'd arrive at that extreme, but you get the idea, no? That's "underproduction" in my mind - it'd be a poorer world with drastically smaller quantities of those things.
Social norms are not a topic in which we are especially expert. Still, it is a relevant topic: property rights are never enforced only by the law-and-order system, or even by costly private monitoring of other people's behavior. Broadly accepted and well functioning property rights systems rest also, one is tempted to write "primarily," on a commonly shared sense of morality.
Then it quotes another economist, Eric Rasmusen :
Video rental stores and libraries, of course, reduce originator profits and hurt innovation, but that is a utilitarian concern. What is of more ethical concern is that whenever, for example, someone borrows a book from the public library instead of buying a book, he has deprived the author of the fruits of his labor and participated in reducing the author's power to control his self- expression. Thus, if it is immoral to violate a book's copyright, so too it would seem to be immoral to use public libraries. Libraries are not illegal, but the law's injustice would be no reason for a moral person to do unjust things. The existence of children's sections would be particularly heinous, as encouraging children to steal.
To entirely deter copying would require a norm inflicting a considerable amount of guilt on copiers, since legal enforcement of copying by individuals is so difficult. To partially deter it would be undesirable for two reasons. First, it would generate a large amount of disutility while failing to deter the target misbehavior. Second, it would reduce the effectiveness of guilt in other situations, by pushing so many people over the threshold of being moral reprobates. At the same time, the benefit from deterring copying by individuals, the increased incentive for creation of new products, is relatively small. I thus conclude that people _should_not_feel_guilty_about_copying_.