Wednesday, January 17, 2007


"[This] reminds me of renowned liberal economist Frederic Bastiat's satirical article 'A Petition,' where he (satirically) suggests that sunlight should be banned in order to protect the candlemaking industry."

Internet Piracy
The RIAA (Recording Industry Association of America) and MPAA (Motion Picture Association of America) have for half a decade been fighting a losing battle to prevent copying and downloading of their products on the internet.

In 1997, it became law in the United States that it is illegal to share copies of copyrighted products such as software, movies or music with friends and family members if the value of the work exceeds $1,000. The penalty is 1 year in prison, or if the amount exceeds $2500, up to five years. It was this law and the efforts of the RIAA that shut down Napster and changed how it worked to a subscription service after being one of the most popular programs on the internet.

Apple's response was to create I-Tunes which charges 99 cents a download of songs, which can only be played on one source. Although their catalog is small (I can never find what I'm looking for on it, but I only look for fairly obscure music), the business has been successful.

While I sympathize with these industries, still bruised from fights in the 70's to prevent copying of their product on tape, their efforts to control and maximize profits from their products are not succeeding. Further, their legal efforts have only succeeded in making the industry look like a bunch of bullies and thugs as young people are arrested and jailed for trading files on programs such as KAZAA. At present, the RIAA is not going after people who download music, only those who share it, similar to the approach of narcotics enforcement: get the dealers, and there will be no users.

At the website Techdirt, Mike sees a connection between French merchant guilds and modern day music companies, relating a story of furor that resulted when tailors began making cloth buttons to sell, enraging the button maker's guild:
Requiring permission to innovate? Feeling entitled to search others' property? Getting the power to act like law enforcement in order to fine or arrest those who are taking part in activities that challenge your business model? Don't these all sound quite familiar? Centuries from now (hopefully much, much sooner), the actions of the RIAA, MPAA and others that match those of the weavers and button-makers of 17th century France will seem just as ridiculous.
Commenters at Techdirt responded:
Keep on this Mike, it's a fascinating research topic. I hope you get a publisher to take a book of your own on it one day.

Protectionism is an ancient common theme, the alchemists, the swordsmiths, the stonemasons, the brewers all have this in their history. The aims are always benign to start with, to protect (literally, in a good way) otherwise etherial knowledge that was only passed down word of mouth from generation to generation. Then it becomes the task of controlling it, to become gatekeepers of knowledge, and finally it becomes an offensive to stamp out rival knowledge. And it's cyclic, with hubris always before fall, often involving the destruction of the very knowledge the gatekeepers sought to preserve.

History has shown one thing to be consistent. You can have paradigm shift or incremental progress, evolution or revolution. It really is either/or. If you block the flow of progress eventually it will come busting through depite all your efforts. Evolution and incremental progress are always more comfortable than revolutionary movement, and yet generation after generation there are those who will stand their armies before an irresistable force. Blocking irresistable forces causes more misery in the end than allowing them to roll gracefully by.

I read a fascinating book (whos title escapes me for the moment) on
strategic control of technologies, well before 9/11 and the "terrorism" hysteria. It brought up all these familiar arguments. That the common man was not responsible enough to have forbidden knowledge. That popularisation would debase high standards (of safety for example). That the means to innovate should be restricted.

Before shaking your head in agreement, consider that this (rare and possibly classified text) was all about biotechnology and nuclear technolgies. Does that change anything with such a scary context? I argue that it does not, in a reality where box-cutters and public transport become the preffered tools of destruction.

As a psychological observation I have one thing to say that fits perfectly into your picture of the "economics of abundance". What is the mindstate of the protectionist? Is it that he fears his means of income is threatened? Is it that he fears losing control over knowledge and the means of production will disempower him? Only a little, it is more subtle. The protectionist fears the end, the limit. His greatest fear is that "that's all there is", there is no better way, nothing more, nothing beyond. He fears he has reached the peak of achievement and can never do better, it is an intellectual mid-life crisis of a kind, and so begins the quest to build a wall around what he has.
-by misanthropic humanist

At the risk of being flamed. . . .

These are not the same situations.

The RIAA and MPAA want to keep people from stealing their property. The button makers wanted to keep people from making a new kind of button. The RIAA and MPAA are not (YET) stopping people from making their own new music and movies.

I don't like the tactics these organizations are using anymore than you, but they do have a right to protect their intellectual property.

Now, if the button makers were going around arresting people for reusing buttons on different clothes than they were originally sewed to you'd have a better comparison.
-by Dan

I see your point, but one could argue that they are the same. The button makers were making buttons to fit a specific design, basically selling copies of the original button, for use on clothing. Tailors began making their own buttons, basically producing their own copies of the button makers item. When I buy a CD I am buying the a copy of the music industries original. People can now download music, making their own copies of the music industries item.
-by Anonymous Coward

It's about the business model. Mike is pointing out how instead of changing their business model, the button makers turned to the government to protect their industry. This is exactly what the RIAA and MPAA have been doing over the past 10 years. Instead of changing their business models, the RIAA and MPAA have turned to the government to extend the life of copyright, to make it illegal to circumvent copy protection schemes, having the ability to file lawsuits willy nilly with little to no repercussions, and so on, to protect their out-of-date business model.
-by Mousky

So how come so how come when another party (see here allofmp3's like) make-it in sales, without their initiative, consent, whatever, with same kind of legal product (because they are legal in their country) are slapped down and constrict by pressure (see Credit Card refusal to collaborate) and their money in legal fees (up to 20% from sales) were turned down

RIAA ans MPAA stick to same platform sale : cda/whatever, ignoring what they are selling, who cares this day about a cd , so soft and easy to deteriorate, all want digital format, high quality, playable on all supports at affordable prices to kick out free, high compressed, low quality digital music available on share networks

yes, we wanna buy the music, yes we want to buy the films, yes i want to go with my external hard drive at shop and say how much this movie costs, please put-it on my hard-drive and mark-it as purchased on my personal card, so i can retrieve-it again at service price anytime i will desire from shop.

i want to see a shop offering this : come with your personal digital support and get your movie from us: high definition, rental for 3$ , 1-5 views, no copy option, media player included , full purchase, 12-15$ option to retrieve at any time again for only 1-2$ service cost ...

same thing for music/music albums/ whatever including print-outs, etc ...

and i wanna see them worldwide so i can get them too here in belgium ,without having to download lower quality ones from share networks, due to traffic limitation.
-by simon

In Holland and later in England the newly literate craftsproducing class changed how they ran their businesses. Men like Jack of Newburry hired 100 apprentices and gave them material to weave and collected the cloth when they were done. Because he, unlike his father, could read and keep track of his business with double entry book keeping he didn't have to live in common with his apprentices.

The guilds objected, as they did in your exerpt so Jack simply moved out of town.

This was the beginning of capitalism and the incredible wealth of the West.
-by Elin Whitney-Smith

The RIAA doesn't care if you use innovative new tools to make your OWN music. What they care about is using new technology to steal the work of other people - people who have put in the time to make a product and are setting a price for their property which people are then free to pay for or not in a voluntary transaction.

I honestly would like somebody to explain to me how so many seem to be for the piracy of intellectual property. It's just mystifying to me.

Are we saying that just because we can pirate music and movies now from the privacy of our own homes - that just because the technology exists to allow us to do so, that it's okay to do it?

The technology exists to counterfeit money failry easily, but nobody thinks that's okay.

I just don't see why it's so bad that people who make movies and music want people to pay for the product they've made if they choose to consume it.

It's great that some people are making their own content and want to distribute it for free. Awesome. But that doesn't mean that NOBODY, then, should have the right to create content with the intention of charging users for what they've made if that be their choice. Just like any other product.

I can put in the time, money and effort to create teddy bears and give them away for free through the mail if I wanted to. Nobody disputes that. But if I wanted to charge people for those bears, nobody would bat an eye. So why do people think that those charging for movies and music shouldn't have the same right?
-by David

The last few comments are finally getting to the point of the discussion, IMO. With computers, the internet, mp3s and so on, the incremental cost to produce an additional copy of a song, or movie is dropping towards zero. No more records to stamp, jewel boxes to mold, cassettes to record, boxes to ship, shelves to stock, cashiers to hire, train and pay, stores to light and heat. Just an instant and nearly costless transfer of bits.

People know this to be the case. If I wanted to make a copy of one of my CDs, the material cost would be less than a dollar, based on retail prices for blank cds, jewel cases, etc. But in a store it would cost $10 to $20. People know this, they aren't dumb. So if the incremental cost of producing a copy of a movie or song is dropping, why isn't the price charged for a movie or song not dropping as well?

Because the industry wants to continue to charge the same amount for a product that is costing them less and less to produce and distribute. And when people see the inherent greed and look for an alternative way, the industry wants to go after them legally, to force them to pay the artificially high price based on an obsolete, high priced distribution system.

If the industry was to charge for a movie or song closer to their actual cost of production, then the problems of piracy would dwindle, because the differential between the cost that the industry can produce for and the pirate can produce for converge. Loss of profit motive for the pirate.

The internet and technology is an excellent way to force the cost out of products, so that they are priced closer to their actual cost of production. That is what piracy is doing - forcing the industry to price closer to cost, and that is what the industry is fighting so hard to prevent.
-by Sam
Along with many others, perhaps most, I feel little loyalty to record companies and their cutthroat ways. Artists are used and thrown aside, Payola is still being engaged in to promote music, and the product that you get is dull and often has at best 2-3 good songs on a disc of 10 or more. The primary reasons people started downloading in the first place were these:
  1. Product availability - I'd like to have this song by Bill Monroe but where would I buy it?
  2. Junk Filler - I don't want to buy a whole CD when there's only a couple good songs on it and the rest is junk to make a full CD
  3. Cost - A CD that takes 25 cents to stamp sells for 20 bucks or more? Are you joking?
  4. Sharing - hey, listen to this song, its sweet!
The recording industry has not exactly gone out of its way to be respectable, appreciated, and liked. That said, stealing from these companies is not somehow justified, you can't rob Bill Blogsmith's safe just because Bill happens to be a jerk.

When tapes and the VCR became widely available in the 1970s and 80s, a battle was fought to prevent people from being able to record them - to this date you cannot record straight off a CD to a VCR, there is video "noise" put on the screen to destroy the image. The compromise was to put a surcharge on every audio and video tape sold (and now every blank CD and DVD) that the recording and movie industries got to compensate them for theoretical loss of business.

I believe that in time, copyright laws are going to have to change to reflect the way information moves today. When it was up to publishing companies to print books and record companies to create records, there were gatekeepers who could control their products and allow only select, approved distribution. The internet has destroyed this entirely and because of that, new rules and procedures will have to come about.
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