The infrastructure already in the ground that a telecom put in is a sunk cost. Yes the telecom needs to recoup it, but ...
This goes back to my earlier point about how it's possible to achieve an economic boost now by releasing (or stealing) existing IP and letting everybody monetize it. Also see China. However, if the original creators don't recoup their cost and/or realize that they can't recoup them in the future, they will stop providing new IP (or infrastructure). Alternatively, they'll provide in a way that is unreleasable (see my high-finance post) or in a way where it really serves as advertising for other sales channels (like Loner's(?) comment about how some authors deliberately release part of their catalogue to pirate repositories in order to get more readers).
I therefore argue that this economic boost will be temporary rather than permanent.
In short, I see internet piracy as an unsustainable one-time boost to the consumer economy like burning the furniture to keep warm; or raiding the supermarket during a riot. It feels glorious to get free groceries that day(*), but in the future, the supermarket will either close down operations; lock the door better; or provide inferior goods.
(*) And all sorts of arguments would be made about how it's better for everybody that supermarket groceries are free.
(Then it was argued that bananas are rival goods whereas software is not. From the creators point of view, that's irrelevant because---and this is the important concern---the creator's paycheck is certainly rival and they might not want to work for less or free.)
(There's also the argument as to whether "supermarkets" are a good idea in the first place. In terms of IP, the argument was whether R&D is better done by fewer professionals (who get paid) or releasing the IP would allow more amateurs (unpaid) to make more progress. There are arguments either way. See e.g. linux, some music, or the ERE book for the "more amateurs" argument. See pharmaceuticals, hardware development, textbooks, movies, some other music... for the professional argument.)
I can't speak to the rest of the world but in the USA, the internet infrastructure is maintained by private companies. Verizon, Comcast, etc., control the point of use infrastructure and other companies are responsible for the infrastructure outside of the cities (the low population areas that fiber and cable need to be laid in order to connect major cities). Fiber needs to be maintained, the electricity that powers the internet has to be paid for. The various vans, trucks, cable, switches, fiber, etc., are hard goods that need to be purchased and replaced. All of this has an associated cost. So I say this humbly - you're mistaken - the internet most definitely has a cost. I recommend you to research it so you're better informed.
Very little of these costs and revenues are affected by file sharing. While the IP is there, and expensive, it's only useful to organizations that aren't pirating.
However, if the original creators don't recoup their cost and/or realize that they can't recoup them in the future, they will stop providing new IP (or infrastructure). Alternatively, they'll provide in a way that is unreleasable (see my high-finance post) or in a way where it really serves as advertising for other sales channels (like Loner's(?) comment about how some authors deliberately release part of their catalogue to pirate repositories in order to get more readers).
I therefore argue that this economic boost will be temporary rather than permanent.
I agree. So what does get made in this environment? Who thrives?
I therefore argue that this economic boost will be temporary rather than permanent.
So what happens, when this temporary boost runs out?
In short, I see internet piracy as an unsustainable one-time boost to the consumer economy like burning the furniture to keep warm; or raiding the supermarket during a riot. It feels glorious to get free groceries that day(*), but in the future, the supermarket will either close down operations; lock the door better; or provide inferior goods.
During the temporary boost period, the winners will be those who are superior at execution and the losers will those who are superior at innovation. Anything that has already been innovated is made available at a lower cost (thanks to the superior execution and competition) and consumers rejoice.
When/as the temporary boost runs out, innovators, having learned their lesson, shifts their innovation efforts to goods that can be controlled without having to rely on IP laws. If the law won't prevent losses, you have to do it yourself by making R&D much harder to steal. (Keep high-finance and weapons tech in mind as areas where IP is hard/impossible to enforce.)
There are several ways to do this. They can keep the prototypes for themselves like in high-finance. They can sell only to consumers they trust absolutely like in military tech. They can sell the service only while retaining control over the tool. An example would be medical diagnostics where instead of selling the software, they sell the individual diagnoses. Companies like 23andMe would be an example of this. The changing form of gaming is another example: Instead of releasing the full software, the company instead makes playing entirely reliant on a platform, for example, by keeping the actual game-engine under control while receiving joystick commands and sending back all/much/most of the video data over the internet. Instead of selling the OS to a desktop computer, they can switch to a server/client model retaining the OS. That's the approach Apple is taking with their eco-system. Also Google Chrome. In agriculture, seeds can be engineered so the resulting plants are sterile thus farmers have to come back and buy again and again. Cars and vehicles may be designed in a way where the only way or rather the lowest cost way of repairing them requires access to diagnostics tools that only they control ... or chips which are hard to copy... or something else that only they control.
Basically, a lot of innovation can and would go towards access control instead. In the abstract, compartmentalization is the easiest way: They would only release part of the full product while turning the rest into a membership model (an excludeable good).
Those who excel at execution would find it impossible or very hard (unprofitable) to try to copy these models and would thus have to compete ever harder on products that get increasingly inferior to the leading edge. High-finance and military technology are good examples of how that works with non-innovating companies competing on who has the lowest fund fees or the largest military rather than the best one.
Any field where it is possible to innovate access control would see commonly available technology fall farther and farther behind what's available to a limited number of companies.
At this point consumers would start getting pissed about how everything is turning into a bill and how/why they always have to deal with the same company for everything and how they can't even repair their own tractors anymore. There would also be complaints how those who can't afford to pay get entirely excluded because no cheaper alternatives exist except the distinctly "old" ones.
Patents and IP protection laws exist to prevent this situation from happening.
I think the confusion in this thread is because we've gone from the original question of do we personally download illegally, to should anybody ever download illegally, to will capitalism wither and die if we download illegally. And on top of that is the moralistic layer that gets people's backs up.
But I was serious when I asked earlier if the real macro issue here is livelihood and not copyright/IP distribution. If everyone (or in this intellectual experiment, everyone producing IP) had a secure basic income that covered all their physical needs, would the arguments for or against copying it significantly change.
If everyone (or in this intellectual experiment, everyone producing IP) had a secure basic income that covered all their physical needs, would the arguments for or against copying it significantly change.
That depends on people's motivations for working to provide the IP. It would make a difference on the margin for sure. I'm not convinced it would change the entire system since some people also have wants that go beyond physical needs.
At one end of the money ...
Academic research is an example of where those who do the research are paid an income that's significantly below what they could command elsewhere giving IP away for (almost) free in return for the freedom to work on (almost) what they want. Hardworking grad student with a masters degree who would make $30-50 in industry with its limitations essentially give that up in return for an effective wage (salary/hours spent) of less than $10.
At the other end ...
When I worked in finance, the sentiment was that junior employees were given just a "living wage" in order to make them hungry. Of course their idea of what a living wage = what industry paid elsewhere (making widgets); and in that regard academic wages would then be starvation. So I don't think these guys would be giving away their 6-8 figure incomes away in return for a grad student salary.
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Another dimension is fame. You have people working for fame who will work for very little in order to get famous. See youtube or reality TV for very many examples. People who work in classified settings will never be famous and neither will their work. They are therefore paid more money than similar work is paid in industry or academia.
A third dimension is power. Similar arguments.
A fourth is calling/meaning. Similar arguments.
So overall, all we can say is that people have different needs and different motivations and that a given economic/legal/cultural system rewards these in certain ways; and that if the reward matrix is changed, then people will figure out ways to respond to maintain their "income" along those dimensions which consequentially will change the production vectors. This second-order response seems to be ignored by several commenters above. It's similar to the broken window fallacy but perhaps sufficiently different that it has or could have it's own name.
Add: I do detect some third-order responses in that it is hoped that those affected would not respond to maintain their "income" but rather their existing value system. E.g. upon losing their income, they would learn to like to work for free rather than focus on finding ways to keep getting an income. However, I think it's Utopian to consider the third order before resolving the second order.
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The ERE book came up as an example earlier in the thread as something that was published "outside the system" so to speak. However, the ONLY reason I finished that was because I was FI on a living wage and was able to quit my job. Insofar I had to make money on the ERE ideas, they would have taken a much more "conventional form". There would be no book. There would be more affiliate posts on the blog as I spent my time researching products and services instead of researching out-of-the-box ideas. This forum or parts of it would be closed and available in some kind of subscription model and I would spend most of my time commenting in the closed section; probably focusing more on investment advice or finding good deals. I'd leave the open section unmoderated or in the hands of volunteers and rarely check on it. Alternatively, I would be doing 1 on 1 consulting and setting people up with plans based on the ERE principles. I would have kept the systems theory, WOG, etc. ideas for myself and instead used them to generate success stories for my coaching business instead.
In short, the ERE site would look a lot more like the average personal finance site.
Patents and IP protection laws exist to prevent this situation from happening.
And I agree with you.
Now look at what isn't happening in your model. All the economic spaces that are currently occupied by corporate interests. Do they simply not exist, without the current suppliers? What about the creators working in those spaces, do they all just become call center employees?
@Riggerjack - Are you simply arguing against regulatory capture? I haven't brought that into the discussion yet because I think it would overcomplicate things given the number of people who still argue for the possibility of "free lunch".
Alternatively, would you be willing to settle for "Patent and IP laws are intended to prevent this situation from happening"?
I think the confusion in this thread is because we've gone from the original question of do we personally download illegally, to should anybody ever download illegally, to will capitalism wither and die if we download illegally. And on top of that is the moralistic layer that gets people's backs up.
This may be because I am some form of retarded. I don't know how to answer the first question, without working out all the others. But there is an answer.
Regulatory capture applies, sure. We can tie that in, I think of it as a separate branch, but I am happy to explore it.
What I am trying to get to, is what happens, when an economic niche, no matter the size, get abandoned as not profitable.
Very extreme, niche example: Smith was once a high value trade. Tech changed, how we make things changed. The value of the tooling changed. In the 70's, retrotech changed. Smithing again became much more popular. Still, only harbor freight and a few very high end toolmakers are making anvils. Today, finding an old, ringing anvil is difficult and expensive. There are "pickers" combing Europe for barn anvils, filling containers and shipped to the states to fill this demand.
When a field is abandoned by the professionals, what happens in that space?
--> I therefore argue that this economic boost will be temporary rather than permanent.
I think you are right. In a world without IP, or with less IP, (or with some degree of piracy) I think it is very likely that we would see less content created. On the whole, I’m just not sure I agree that it’s the equivalent to burning furniture, and I’m not sure Humanity would come out losing out of this arrangement.
Take China for instance. I think Humanity gains more when China breaks IP then when it does not (see my link to Chomsky higher, up; development brings people out of poverty, etc., setting aside for an instant the associated environmental problems). Yes, it’s correct to point out that less IP will likely be created in the future. But I think a lot of that IP is of low-value. I guess this stance is a radical one, but I’m not sure I’d mind if the absence of IP prevented the creation of the iPhone, of the latest tweak on an antidepressant, and certainly of the latest high-finance software. I think it’s the same for books. Maybe it’s different for others, but I know or suspect very strongly (from reading the authors’ bio and watching interviews) that all of my favourite and most impactful books would have been written even in the absence of IP (or indeed were written before IP was even a thing).
I think that my way of thinking comes out of a thought I’ve had for a while: we have enough technology. We know much, and much that we fail to apply, and we’d gain more by disseminating widely what we know than by creating shiny new “knowledge”. For instance, we stress the importance of IP to develop new drugs, etc., but we could instantly improve life expectancies by 10 years just by getting people to stop smoking and to walk 10 minutes a day. In the same way, the ERE book/forum/blog (which were created for the fun of it), as well as older classics and blogs (created not only without intent of profiting from copyrights, but even with the known cost of having to host it), have had more impact on my life (and contributed positively to it) than pretty much all the other books I read.
As for innovations being transformed into services, well, possibly some of it would be. But because of competition, and because some people like owning rather than renting, I think we’d still see many things sold as products. Again, this is speculation, but I think that on the net, we’d gain from weakening IP, and not only in the sense that we’d profit from the short term effects (using now-unlocked technology), but in a more permanent way.
-->However, the ONLY reason I finished that was because I was FI on a living wage and was able to quit my job.
Really? From having read the book, the blog, and most of your posts, I admit that I find it hard to imagine that you, Jacob, would indeed have ever turned into the marketer you describe. You becoming FI even happened (from what I understood) out of this desire to build a lifestyle that would allow you to do what it was that you found interesting. For obvious reasons, I cannot contest the statement, so I will accept it. On the other hand, many authors (including me), when they really like some topic, just find/make the time (just like people became/become artists even if the pay is meagre, etc.; Voltaire pursued FI just to be able to write, etc.) and it certainly is the case with the authors or works that have impacted me.
Well, I think people will participate regardless. Some of them anyways. By definition, if you are intrinsically motivated, you will participate whether or not it is profitable. Many people are actually it doing it just now and are happy to share their music, poetry, etc., in niches that are unprofitable.
If things continue roughly apace with today's trajectories, we can expect:
IP supported creative industry to recess behind paywalls, or other means of enforcing IP. Jacob has cataloged these, nicely. At the same time, industry will look to other channels. Note how HBO is now selling a subscription thru Amazon, to sell to cord cutters.
At the same time, areas will be abandoned as unprofitable, opening up fields to amateurs.
Fields of amateurs have different possibilities than were open when that field was covered by corporate interests.
Does anyone disagree with any of those conditions?
Well, if there is any disagreement, I will address it when it comes up.
What can we expect from a field of amateurs?
Projects will be small and cheap. And there will be lots and lots of them. With low barriers, we can expect quality to be very highly variable. That which would have been fine tuned, will be released rough. The lowest quality, which never would have seen the light of day, years before, will be common. But also, the most intricate and elegant, which would have been destroyed by committees and management, or lack of profit margin, will get it's day in the sun.
There is nothing about amateurs that makes them inherently altruistic. So I expect every avenue between hobby and monetization to be explored. As with today, I doubt there will be a strong correlation between the best work, and the most money, but there will be some correlations.
At the same time, pirates are driving more and more industry content behind defensive barriers. The price of those walls will drive up the costs of being behind those walls, and the market share of industry will continue to drop. Industry will concentrate on what it does best, high production value, mass marketing. There will still be boy bands and Star Wars movies, and they will be as popular/profitable as ever. Industry will pioneer ways to use file sharing for publicity, while marketing less easily replicated products.
I think the confusion in this thread is because we've gone from the original question of do we personally download illegally....
The original question:
Hard yes? Hard no? Yes for some sources of media but not others? Teaming up on subscription passwords -- for Netflix vs. for the Wall Street Journal? What's you personal policy and why? What are your lines in the sand?
The original question primed the discussion to be wider than what you're perceiving. The "and why?" is what expanded the discussion.
If everyone (or in this intellectual experiment, everyone producing IP) had a secure basic income that covered all their physical needs, would the arguments for or against copying it significantly change.
No because the cost in human capital remains high to serve up internet content. The infrastructure is vast. The money or taxes required to keep it running has to come from somewhere - IP provides the tax base for doing that. People mistakenly believe that only greedy capitalist are eating at the IP trough. The little guy is eating there too.
Sectors which make above-average use of IPR exhibit a collective trade surplus with countries outside of the EU. This surplus of €96 billion contributed to a lowering of the overall trade deficit for the EU of 0.3% of GDP. With 42% of EU GDP (value added) and 28% of employment being generated by IPR intensive industries, the implication is that value added per employee in IPR intensive industries must be higher than in the rest of the economy. This, in turn, enables companies in those sectors to offer their workers higher remuneration than the non-IPR intensive sectors, as shown in Figure 2. Overall, remuneration in IPR-intensive industries was 46% higher than in other sectors. This positive differential holds across all five IPRs for which the calculation was made.
Above, I described the hollowing out of a supply curve, as industry art retreats behind walls, and amateurs start filling in from below.
But nature, and the economy, hates a vacuum. I expect some industry forays at the edge of the abandoned areas, but they won't do well. Industry has overhead, and that overhead isn't optional. Supporting that overhead, with the diminished returns from IP is perilous. Because of this, industry will be experimenting with the same exotic financing that has worked for the amateurs. Most of those exotic financing schemes won't work at that scale, but some will.
And from the pool of amateurs, some will be standing out, head and shoulders above the rest. Some will be banding together to tackle larger projects, and there will be a huge influx of former professionals, looking for ways to market their skills. Collaborations between members of this pool will be filling in the supply curve.
Think movies being made by semipermanent troupes of actors and stage personnel. Much like theatre groups of today, but since they don't have the industrial competition, producing movies on a subscription basis.
Given more time, the market evens out, as file sharing gets "baked in". It just becomes a regular part of the marketplace.
At the most expensive end, industry still controls the high production value end of the market. Boy bands and Star Wars are still doing fine, but marketing is more granular, and financing will be more... Interactive. To make their markets work, industry will need to be much more engaging with their audience. More "extra content" at premium pricing, more press junckets, actor blogs and tweets, etc. But they will hold on to the top of the market.
But what is interesting, is everything that is not a product aimed at the lowest common denominator, is being made by people who are passionate about what they are making. They will have to be, because they won't be paid as well, and the stars don't fly as high. But there's still plenty of room to make a living, and have small fame.
Now, if we were talking about coal mining, people working limited hours, for limited pay may be a source of concern. But we are talking about art, writing, coding, etc. We are talking about professions best done when the Muse strikes. Where production is only casually connected to time spent. We as a society are richer for these people having more freedom to create, and flexibility to learn to create. The deeper talent pool means that whatever your tastes, there is more of, and more variety of whatever content you like. And alternative financing means a closer relationship between content creators and consumers, while also making more content free for helping artists develop their audience.
And that's how I see file sharing affecting the market, long term. Same products, just more of them. The same people making those products, just, again, more of them. What's missing, is all the industrial support staff. The lawyers, accountants, secretaries, producers, assistants, interns, caterers, financiers, etc. And in their place are writers, coders, and artists.
I'm having a hard time finding how our current situation is superior to this, so I am all in for piracy. I believe it will lead to a better world.
But that is just tracking strategic advantage. It's just the most likely end state, if nothing drastic changes.
If we embrace piracy, legalize it and make it legitimate, things go bad. The slow changes I described stop being slow. Instead, the sudden collapse of the old model without time to develop new financing techniques means that growth from the bottom is stunted, and the barriers protecting the top fail. The sudden changes means huge disruption to the lives of everyone associated with the industry. Spillover into neighboring industries will also be a problem as refugees from IP industries will have to make sudden, forced changes. As near as I can tell, the legit path is strewn with hazards.
And at the other end of the spectrum, cracking down on piracy is bad as well. It protects current industry interests, and the current split between content creators and industrial support. Artists still hope to make pennies on the dollar. Creators will still have to be chosen by industry representatives. And to make sure this holds, we will need to store enormous numbers of otherwise law abiding citizens in our prison system. All the while, IP is still will be under constant attack from outside our borders. This will be a constant thorn in international agreements, trade and otherwise.
Worse still, are the possibilities empowered by the "copying is stealing" mindset. This is a legitimate viewpoint. But if I am describing an elephant, this is the tail. Not an interesting view, with no great insights viewable from here. And there is a definite focus on the negative outputs of the elephant, from the tail. If enough people believe this, the really ugly possibilities kick in. The political forces get brought to bear on a significant minority, with all the negative outcomes that usually brings. Or, industry takes to an active defense, attacking it's attackers. With the force disparity that billions of dollars brings to the table, and the collateral damages, etc. The only thing currently keeping this in check is the sense within the general public (audience) that extralegal enforcement would be unjust. When a majority feels morally superior to a victim class, however, they don't offer any real impediment to abuse. This is the purpose of the "copying is stealing" campaigns. To help the audience identify with the interests of the industry, rather than the artists.
That's about the way I see it, anyway. Sorry if I drone on at too much length over such a silly little topic, but I am a bit confused by how other people see this subject. I know, lots of people think we can't predict the future, and are likely to read what I wrote skeptically. Please do. If I missed something, let me know.
But if I am describing an elephant, this is the tail. Not an interesting view, with no great insights viewable from here. And there is a definite focus on the negative outputs of the elephant, from the tail. If enough people believe this, the really ugly possibilities kick in. The political forces get brought to bear on a significant minority, with all the negative outcomes that usually brings.
Let's continue with the elephant analogy and the myopic lens of only staring at the tail. We both agree that the tail is still part of the elephant. What is done to the tail is felt by the rest of the elephant and it's the rest of the elephant that reacts as a whole - pull an elephant's tail and see what happens. By only focusing on the yet to be verified future creative utopia, we believe pulling the elephant's tail has no downstream negative outcomes.
IP protection has consequences but its current effects are evident because the current system is filled with creative content and vast infrastructures (youtube, instagram, etc) to serve up that creative content. So my side of the argument is based off of an existing model with tangible results. The creative niche you're talking about is already here but it's only served up via an existing infrastructure that dwarfs the resources if its creators. Scouring Europe for anvils to ship to the US? How are those anvils arriving on North American shores and how are they delivered to their intended recipients? There's an entire elephant involved from beginning to end.
