Tagged: Economics Toggle Comment Threads | Keyboard Shortcuts

  • aaeru1 6:19 pm on June 27, 2013 Permalink | Reply
    Tags: Economics   

    “If you cant compete against the $300 copying machine, you’re saying you can’t compete at all. because there is already several billion of them sold into the market.”

    mine
     
    • texasgulfmoving.com 8:24 pm on June 28, 2013 Permalink | Reply

      Thank you for every other magnificent post. Where else may anyone get that type of
      information in such an ideal way of writing? I’ve a presentation subsequent week, and I am on the look for such information.

  • aaeru1 5:42 pm on June 20, 2013 Permalink | Reply
    Tags: Economics,   

    Rufus Pollock: Copyright is a Monopoly! (And isn’t like normal property) 


    The equation of ‘intellectual property’ (IP) such as copyright with (traditional “real”) property is frequently made, especially by those advocating its extension. However, this equation is fundamentally erroneous and results in very serious misapprehension of the nature and effect of IP. In particular, patents and copyright confer monopolies in a way that ownership of real property does not.

    How is it different?
    ‘Real’ property like an apple, a car or an acre of land can only ever be used by one person/entity at one time — in economist’s terminlogy they are ‘rival’ goods. Giving someone exclusive rights over them therefore does no harm — only one person can have it and via trade we can ensure the person who values it most ends up with it 1. Here, creating property rights leads to an efficient outcome (at least in our simple case — in more complex setups we would need to think about complementarities, transaction costs etc).

    By contrast, a copyright in, for example, a particular text confers not simply control over this or that particular book containing the text but over every instance of such a book. This is the very essence of a monopoly: being sole supplier of some good!

    And it has all of the standard consequences of the monopoly: prices rise relative to what they would have been and access is reduced relative to its efficient level in which the price equals the cost of reproduction (i.e. we have a “deadweight” loss).

    Furthermore, this cost of monopoly can be particularly serious when we have extensive “reuse” — i.e. new work builds upon old — as the monopoly inhibits not only access by users but the creation of new creative work.

    The difference then between “normal” property and “intellectual property” is the difference between giving someone control of one apple (the apple they bought say) and control of all apples. The latter results in significant harm and inefficiency while the former does not.

    Now, of course, the fact copyright is a monopoly does not mean it is per se bad. After all, we are deeply concerned with the incentives to create and the copyright monopoly helps provide such incentives.

    We may therefore be willing to tolerate the ex-post costs of a monopoly because of the ex-ante benefits it provides in incentivizing and rewarding the creation of new work. But this is fundamentally a trade-off and one which gets worse as the monopoly is extended — a completely different situation from that with “real” property.

    This point is made elegantly by Macaulay (opposing a copyright term extension in the 1840s):

    “It is good that authors should be remunerated, and the least exceptionable way of remunerating them is by a monopoly. Yet monopoly is evil. For the sake of the good we must submit to the evil: but the evil ought not to last a day longer than is necessary for the purpose of securing the good.”

    This is not something one would write about normal, ‘real’, property.

    • Rufus Pollock

    http://rufuspollock.org/2011/01/31/copyright-is-a-monopoly-and-isnt-like-normal-property/

     
  • R 1:25 pm on May 27, 2013 Permalink | Reply
    Tags: Economics, ,   

    Fundamental property rights come first over artists/industry survival 

    Well, this is the disconnect I guess. You admit you only hold this view because of the detrimental effects (you think) are impacting the industry. You are asserting that a fundamental aspect of property rights and consumer rights as it has existed since the beginning of trade should be adjusted and recodified on a per-industry basis, not because it’s inherently bad or unethical, but just because you think it’s a threat to the industry’s health. Which means you are essentially arguing for protectionism for corporations–consumers are free to exercise their consumer rights only up to a certain point, but if that free exercise is perceived to threaten the viability of the industry, then their rights must be limited in order to save the industry.

    I don’t think I can put into words my disgust at this demeaning display of groveling at the feet of your game developer overlords. Less a die-hard laissez-faire capitalist, but because even a capitalist would accept that sometimes industries die and that’s the way the world works. As much as I enjoy games, there is no inherent good in this industry to claim ‘public good’. The ends do not justify the means here; there is nothing that makes the gaming industry inherently worthy of preservation, not to the point that would justify carving out a special exemption for them. Just because your favored set of content producers couldn’t properly adapt does not justify rewriting the rules of what “property ownership” means and fundamentally removing the ability to preserve, inherit, pass on, lend, and share its products.

    The industry does not come first; consumers do.

    • modified from neogaf post about first sale doctrine, but it is applied in the same way to real property rights and the right to manufacture copies of your own property for others. Substitute “industry’s health” with “artist’s rights to a living”.

    http://www.neogaf.com/forum/showpost.php?p=59545309&postcount=1361

     
  • R 8:34 pm on April 10, 2013 Permalink | Reply
    Tags: Economics   

    Produce and serve customers. But don’t produce and serve customers at the expense of other people who produce and serve customers. 

    Anyone who uses guns to go around dismantling VN TL projects IS an enemy of the average fans who just wants to have as much translation as possible (which the free market provides). It means produce and serve customers. We appreciate that. But don’t produce and serve customers at the expense of other people who produce and serve customers. In the market for translations, whoever can do it at the fastest speed, at the lowest cost, and at the necessary quality wins. Serve your customers in the way they wish to be served, not in the way you wish to serve it (Not 2+1 years later). Because if you don’t, someone in the free market will do it for you.

    Mangagamer destroys a Da Capo III fan translation: http://visualnovelaer.fuwanovel.org/2013/03/da-capo-iii-fan-translation-cease-desisted-by-mangagamer/

    2nd part of my letter to an attorney from Greenville, Delaware (US) who was employed by Mangagamer to threaten me: http://fuwanovel.org/faq/3

    House Republicans: Copyright is not free market https://www.techdirt.com/articles/20121116/16481921080/house-republicans-copyright-law-destroys-markets-its-time-real-reform.shtml

     
  • R 5:41 pm on January 29, 2013 Permalink | Reply
    Tags: Economics   

    Copyright is a granted privilege that artists were given as a reward for the publishing of their art, instead they think it’s property! 

    There was a paradigm shift, and those government monopolies are no longer working anymore (bcuz enforcement on the net is impossible), but instead of recognizing that their government can’t help them make money anymore, they don’t even understand that copyright is a granted privilege that they were given as a reward for the publishing of their art, instead they think it’s property! ….in other words they are not even CLOSE to understanding why their business model from the 20th century isn’t working anymore (especially in Japan). And this really saddens me. Many artists who could have been making a living off their fans, don’t know how to, or don’t have the control or have not even heard of the ideas anyway, because their publishers don’t understand how to. In fact they don’t want to know, because their publishers have a financial interest to keep things the way they are.

    That’s why I always say, the best thing that the West can give to the Japanese is not their money. It’s their ideas. I heard there is a Pirate Party Japan now. So those ideas are spreading, and we have hope of a more efficient way to support artists in the coming years, because the copyright idea is dying slowly, bit by bit.

    • Random message to a random.
     
  • R 11:48 pm on October 4, 2012 Permalink | Reply
    Tags: Economics   

    Boldrin and Levine: The goal of economic efficiency 

    “The goal of economic efficiency is not that of making monopolists as rich as possible, in fact: it is almost the opposite. The goal of economic efficiency is that of making us all as well off as possible.”

    • Boldrin and Levine, author of Against Intellectual Monopoly

    “Competition is not a gala dinner, and getting rid of inefficient firms while allowing efficient ones to blossom is exactly what competition is supposed to accomplish.”

    http://mises.org/daily/5108/Ideas-Free-and-Unfree-A-Book-Commentary#part9

     
  • R 6:08 am on September 11, 2012 Permalink | Reply
    Tags: Economics   

    Nina Paley: Competition is Stealing 

      http://mimiandeunice.com/

     
  • R 8:17 am on September 6, 2012 Permalink | Reply
    Tags: Economics, ,   

    The Legacy Entertainment Industry’s Business Model: Charge A Ridiculous Markup On The ‘Copy File’ Command 

    Rick Falkvinge: “Increasingly, the copyright industry has tried to assert that “the free market will sort it out” in the field of culture sharing. The problem is that the copyright industry’s monopolized view is anything but a fair and free market.

    The copyright industry likes to pretend that making copies is somehow “stealing” and that on a fair and free market, everybody would be forced to buy from them. As is obvious to everybody else, this is the complete opposite of a fair and free market.

    When somebody buys something, no matter what, they own it. They have the right to do pretty much anything with it, they have the right to perform work on the object they have bought. Such work includes duplicating the object that you own; on a fair and free market, such duplication work is an offering like any other that competes with other people performing a duplication of the object in question.

    In culture sharing, people perform this work for free for one another – duplicate files for one another – as a good social deed, just like helping anybody else out with your own time is a good deed. (The copyright industry tries to vilify this activity as somehow being immoral and unfair, which completely misses the positive social mechanisms of good people helping friends and strangers alike, and only makes the copyright industry appear absurd, anachronistic, and downright evil.)

    Thus, the copyright industry deliberately confuses the goods that they offer for sale with the service of duplication, which is a completely different kind of offering. The service of duplication is what’s on an immoral, anachronistic monopoly, not the goods themselves.

    On a fair, free market, anybody is able to perform this work, as well as offer it for sale if they think their particular duplicative work is cost-effective.

    However, the copyright industry has the audacity and the entitlement to call out people who compete with them for this service as “thieves”, “immoral”, and “unjust”. That can only come from living in a complete world of denial and entitlement.

    In a fair and free market, competitiveness rules, and nobody has a monopoly – such as the copyright monopoly – on doing a particular kind of work, like duplication of a specific object. If somebody else can duplicate your original at a lower cost than yourself, then you weren’t able to compete and you’ll find yourself out of business. That’s called marginal cost – that competition takes place on the additional cost of every product once the investments are made, on the cost of duplicating an original – and that’s how the market works for all products in fair and free markets. It’s actually Economics 101.

    In my world, and in a fair and free market, any entrepreneur or executive that claims a moral right to prohibit others by law from competing with them can fuck off and die.

    Further, our economy works by people specializing, and paying each other for work that somebody else does more efficiently. If an electrician is better at wiring my home than I am, then I have the option of paying such a craftsman for his/her time, rather than spending my own time. That’s why we evolve as an economy and a civilization.

    The competition in the copyright monopoly and culture-sharing field is about who executes the “copy file” command the most cost-efficiently. That is largely a pointless debate, as the cost of executing a “copy file” command is trillionths of a cent – nobody would buy it from anybody, as everybody can do it themselves. Claiming a legal right to charge a premium of a gazillion percent over and above the real cost of this service is absurd and macroeconomically counterproductive.

    The copyright monopoly only serves to protect the past from the future, and it is the antithesis of a fair and free market, as are all monopolies.

    Original: http://falkvinge.net/2012/09/03/a-fair-free-market-or-the-copyright-monopoly/
    Techdirt: http://www.techdirt.com/articles/20120904/01443220262/legacy-entertainment-industrys-business-model-charge-ridiculous-markup-copy-file-command.shtml

     
  • R 5:33 am on September 4, 2012 Permalink | Reply
    Tags: Economics, ,   

    I want to explain what Piracy has done for the world and why you should not be ashamed of it. 

    http://www.fuwanovel.org

    Everyone can enjoy visual novels in the West.
    I want to explain what Piracy has done for the world and why you should not be ashamed of it. The youtube clip that was included with this pdf featuring John Perry Barlow (Co-founder of Electronic Frontier Foundation) comes from here.

     

     

    We live in this unfortunate world of scarcity, where there isn’t enough to satisfy everybody’s wants and needs.

    The history of human civilization is man’s constant struggle against nature and scarcity. People in the past, all they ever did was look for food all the time just to get enough to eat! Most human beings that have ever walked this earth lived their entire existence in what today we would call ‘Absolute Poverty’. Before the 18th century, the average person was extremely poor. It was only VERY VERY recently the specialization of roles and the division of labor and trade post-industrial revolution that gave us the relative abundance that we enjoy today. Just in the last 50 years, average income of every person on the planet (adjusted for inflation) Tripled and lifespan is up by 30%, food production per capita is UP by a third yet world population DOUBLED! We are vanquishing scarcity! We are building heaven on earth! But…. but even in the 21st century we still have scarcity. We don’t have total abundance yet (we don’t have the replicator from Star Trek but we’re getting close!). My point is, burying scarcity IS human progress.

    Enter Internet.

     

    What happened when Internet…
    happened?

     

    For the first time in the history of the world, human beings somehow managed to create a gigantic copying machine that was capable of reproducing human knowledge unto infinity at almost no costs.

     

    This is nuts. because information had always been scarce. But with the internet there is now almost no scarcity.

    We’ve reached a point in history where information has become non-scarce. There is no shortage of information because there is no costs in reproduction. Everyone can have as much knowledge as they want and that it is good that everyone can have their curiosity be satisfied to its fullest extent without needing to trade-off. General purpose peer-networked computers make information scarcities approach zero. Therefore we should let people use it as much as possible so that everyone can benefit from this technology. With the internet, we are one step closer to overcoming this world of scarcity!

    Copying is producing something out of nothing.

    When you create a digital copy, you produce one more for the world, which means one less deprived mind. This is an INSANE Concept! because it is literally something-out-of-nothing (since cost of reproduction is zero). Everytime we copy, that is ONE less unit of scarcity left for the world to face (as opposed to stealing, which subtracts one from another’s). Therefore we should arrange society to make use of this Gigantic Copying Machine as much as possible because it is Damn Awesome.

    But what is the State trying to do? It’s trying to stop it. It’s fighting it tooth and nail. It’s trying to turn the digital age back into the analog age. They are overturning human progress. [youtube] The FREE spread of information is integral to human progress.

     

    “If you could reproduce hot lunches at will with no incremental cost, no one would characterize that as a disaster, except perhaps the delicatessen industry. But today, where human knowledge can be reproduced at no incremental cost, our first response is to see to it how we can make that stop?? Human knowledge has through history been the prime factor that drives the human condition, our ability to enjoy our lives. The unfettered access to human knowledge improves us and makes us better.”

    – Cory Doctorow, Author and Digital Activist

     

    ________________________________________________________________________________________

    >.<

    So can we please think of a way to incentivize creation that is not economically insane?

    See the cost of copyright

    See what we lose when we support copyright.

    There are better ways to arrange society that can have both artists getting paid AND free-use of the giant copying machine.

    _________________________________________________________________________________________

    Please visit forums.fuwanovel.org if you have further questions.

    IRC Channel: #Fuwanovel on Rizon. Click here to connect.

    Or you can email me:  aaeru@fastmail.fm

    Aaeru (fuwanovel.org)

    My blogs: Sharing is Liberty & Visual Novel Aer


    "What is wrong is that we have invented the technology to eliminate scarcity, but we are deliberately throwing it away to benefit those who profit from scarcity. We now have the means to duplicate any kind of information that can be compactly represented in digital media. We can replicate it worldwide, to billions of people, for very low costs, affordable by individuals. We are working hard on technologies that will permit other sorts of resources to be duplicated this easily, including arbitrary physical objects ("nanotechnology"; see http://www.foresight.org). The progress of science, technology, and free markets have produced an end to many kinds of scarcity. A hundred years ago, more than 99% of Americans were still using outhouses, and one out of every ten children died in infancy. Now even the poorest Americans have cars, television, telephones, heat, clean water, sanitary sewers things that the richest millionaires of 1900 could not buy. These technologies promise an end to physical want in the near future. "We should be rejoicing for mutually creating a heaven on earth!" Instead, those crabbed souls who make their living from perpetuating scarcity are sneaking around, convincing co-conspirators to chain our cheap duplication technology so that it won’t make copies at least not of the kind of goods they want to sell us. This is the worst sort of economic protectionism, beggaring (i.e. impoverishing) your own society for the benefit of an inefficient local industry. The record and movie distribution companies are careful not to point this out to us, but that is what is happening."

    – Electronic Frontier Foundation co-founder John Gilmore
    http://www.eff.org

     

     

     
  • R 8:05 am on August 24, 2012 Permalink | Reply
    Tags: , Economics   

    You can have Internet and free sharing of information, or you can have Working Copyright. You CANNOT have both. 

    Free internet is completely incompatible with working copyright. It is impossible to have both at the same time. I first read about this concept via Stephan Kinsella a while back but it took me a long time before I understood what he meant. I understand it now so I will explain.

    Copyright can only be justified if it is effective.
    In other words you need to be able to enforce it. Copyright works only if it is able to prevent your customers from redistributing their purchases (in order to achieve monopoly). Once the monopoly is attained, the copyright holder becomes the SOLE distributor which means, Every copy equals a sale. This is the defining characteristic of copyright. If it can’t do this then it isn’t even copyright anymore.

    Some legal principles will have to go.
    As of December of 2011, an estimated 2.26 billion people are now on the net (and growing exponentially). That’s 33% of the world’s population (note: 1 billion comes from Asia). So obviously ‘Due Process’ in the US must be repealed. Same with Innocent until proven Guilty (4th, 5th & 6th amendment in the US Constitution), because in order to respect these legal principles, you would need like a tenth of the world’s population to be juries or copyright lawyers just to settle all the copyright cases generated… which would be a practical impossibility. That is why those will have to go. No court hearings. No trial. Websites get automatically taken down.
    “Yes it is very important that our artists get paid. It is more important than ‘Innocent until proven guilty’.

    Abolishment of the Postal Secret.
    Enforcement of copyright REQUIRES the abolishment of the postal secret: you can’t sort legal from illegal without looking at it first, hence we will need to give up our privacy, which is a fundamental human right.
    “Yes it is very important that our artists get paid. It is more important than our human rights.

    Destruction of Free Internet
    The problem with the internet is that every computer can directly communicate with every other computer. It is arranged as a peer-to-peer network.

    In order to enforce copyright, you will need to conduct deep packet inspection. All of the transmitted data NEEDS to go through a central point, thus drastically altering the structure of the internet as to essentially ‘break’ it. In other words, it becomes like this:

    The other way is to offload the inspection work to our ISPs so as to become so prohibitively expensive to run their business that they will have to close shop. This is the only way to attain total monopoly for copyright holders (yes they’ve tried the other methods, none of them will work).

    You can have Free Internet or you can have Working Copyright. You CANNOT have both.
    Because law is not God. It is not all-powerful. You cannot make piracy disappear and then have free internet too.
    A commercial law like copyright HAS to be enforced in order to work and it has to be effective.
    If you support copyright, you support the State’s continued enforcement of copyright (until it’s not a joke) which means free internet and free sharing of information will have to go.

    Yes it’s two-step logic but not rocket science.

    Why does copyright HAVE to be enforced?
    What is the point of a copyright that isn’t enforced? What use is copyright if people I have sold to can just share their purchases with each other? The copyright holder HAS to have true monopoly in order to attain the effect of copyright.

    You must understand that when copyright was invented, they weren’t thinking about the internet, they were thinking the Printing Press. Back in the 18th century, it was possible to employ the State’s power to shut other printers down because THERE WERE SO FEW OF THEM.
    Back then, you could sue all of your competitors and have them cease operation. In 2012, you would have to sue your country’s entire population.

    In an age where desktops, laptops, phones, tablets et al have all become virtual copying machines and they’re all directly connected to each other, Copyright begins to look hilariously outdated.

    Why can’t we have Not-Working-Copyright?
    Because the pretext behind copyright says that its purpose is to create an economic incentive to creators so as to promote the progress of learning (by granting a monopoly privilege). Not only is it not achieving this economic incentive, it is in fact regressing progress because the copyright system does not exist for free. Someone has to pay for it. These expenses are shouldered by the people. They come from YOUR wallets (via taxes). See We Must Acknowledge The Costs Of Copyright. We only have a limited amount of resource to make the best of it… why can’t we send this money to public hospitals instead? (which are now severely underfunded)

    See Is There ANY Part Of The Copyright Monopoly That Meets Legislative Quality Bars? http://torrentfreak.com/is-there-any-part-of-the-copyright-monopoly-that-meets-legislative-quality-bars-120812/

     
    • Aaeru 3:35 pm on September 5, 2012 Permalink | Reply

      “… If you want, in real effects, copyright to last for even one year in the non-commercial sense, then the minimum requirement is for you to start by abolishing the internet and any other form of mass communications medium. Any restrictions you’d require to enforce non-commercial copying will have to be strict enough the communications medium simply won’t work anymore. That’s how the real world works.” – Lawrence Lessig (Founder of Creative Commons)


      “…The thing is you cannot enforce the copyright monopolies and other forms of intellectual property without looking at what people send online to each other. That is after all where these files are being shared. And if you are looking at what people are sending to each other, you are also by definition starting to limit freedom of speech. That is why you see hundreds of thousands of Europeans on the streets, rallying against what politicians thought was a done-deal. So they were taken completely by surprise, as were the American politicians with SOPA. You cannot enforce these old monopolies laws without cracking down on Fundamental Civil Rights. Which is why you are seeing entire generation rising up against these monopolies.” –
      Rick Falkvinge (Founder of the first Pirate Party)

  • R 8:03 pm on July 30, 2012 Permalink | Reply
    Tags: Economics,   

    Attention Economy 

    In theories of the attention economy, attention is first of all a scarce resource, which is what allows the Internet to become an economic medium again, that is, a medium to which all the axioms of market economics can once again be applied. Scarcity is the condition that can give rise to a proper economy, the ‘attention economy’. Attention is a scarce resource because ‘the sum total of human attention is necessarily limited and therefore scarce’ (Goldhaber, 2006). As Michael Goldhaber explains,

    “By the Attention Economy, then, I mean a system that revolves primarily around paying, receiving, and seeking what is most intrinsically limited and not replaceable by anything else, namely the attention of other human beings.” (2006)

    • Tiziana Terranova, Attention, Economy and the Brain
     
  • R 7:56 am on July 14, 2012 Permalink | Reply
    Tags: Economics   

    Dean Baker: Copyright protection is an antiquated relic of the late Middle Ages that has no place in the digital era. 

    “Near the top of the list of the Pirate Party’s demons is copyright protection, and rightly so. Copyright protection is an antiquated relic of the late Middle Ages that has no place in the digital era. It is debatable whether such government-granted monopolies were ever the best way to finance the production of creative and artistic work, but now that the internet will allow this material to be instantly transferred at zero cost anywhere in the world, copyrights are clearly a counter-productive restraint on technology.

    As every graduate of an introductory economics class knows, the market works best when items sell at their marginal cost. That means we maximize efficiency when recorded music, movies, video games and software are available to users at zero cost. The fees that the government allows copyright holders to impose create economic distortions in the same way that tariffs on imported cars or clothes lead to economic distortions.

    The major difference is that the distortions from copyright protection are much larger. While tariffs on cars or clothes would rarely exceed 20-30 per cent, the additional cost imposed by copyright protection is the price of the product. Movies that would be free in a world without copyright protection can cost $20-$30. The same is true of video games, and the price of copyrighted software can run into the thousands of dollars.”

    • Dean Baker

    http://www.aljazeera.com/indepth/opinion/2012/05/2012514204029381972.html

     
    • Stephan Kinsella 2:51 am on July 15, 2012 Permalink | Reply

      And yet, “Dean Baker” does not oppose copyright or patent on principle, and indeed,

      “Baker “goes on to suggest some alternative means to fund such creative works in a world without copyright, including ideas like ‘artistic freedom vouchers’ that would give people a refundable tax credit on supporting creativity, on the condition that any of the creativity funded by such money would not be able to protect it with copyright for a period of time.” So despite Baker’s pose that he is some radical supporter of pirate party ideas or an opponent of statist copyright grants—he is not. He supports these statist, ridiculous “artistic freedom vouchers.” This is pure theft: from taxpayer to state-favored “artist”. And he is not even against copyright. In my post Economist: Copyright Is An Antiquated Relic That Has No Place In The Digital Age, I noted that Baker, like Alex Tabarrok in the field of inventions, recommends taxpayer funded multibillion-dollar “artistic freedom vouchers” to promote artistic creation. See also William Patry on How to Fix Copyright and The “Artistic Freedom Voucher” [sic], where I note that Roderick Long here quotes Timothy Lee: “I can’t agree with Baker that all copyright and patent monopolies are illegitimate.” Baker poses as some maverick radical IP reformer, even though he does not oppose getting rid of these monopolies, and indeed favors adding to this abominable program tens or hundreds of billions of dollars of taxpayer funded state-directed subsidies to the arts and innovation. With radical reformers like these, who needs socialists?

      http://c4sif.org/2012/05/the-economist-copyright-is-an-antiquated-relic-that-has-no-place-in-the-digital-ages/
      http://c4sif.org/?s=%22dean+baker%22

  • R 7:22 am on July 14, 2012 Permalink | Reply
    Tags: , Economics,   

    John Gilmore: This is the worst sort of economic protectionism — beggaring your own society for the benefit of an inefficient local industry 

    “What is wrong is that we have invented the technology to eliminate scarcity, but we are deliberately throwing it away to benefit those who profit from scarcity. We now have the means to duplicate any kind of information that can be compactly represented in digital media. We can replicate it worldwide, to billions of people, for very low costs, affordable by individuals. We are working hard on technologies that will permit other sorts of resources to be duplicated this easily, including arbitrary physical objects (“nanotechnology”; see http://www.foresight.org). The progress of science, technology, and free markets have produced an end to many kinds of scarcity. A hundred years ago, more than 99% of Americans were still using outhouses, and one out of every ten children died in infancy. Now even the poorest Americans have cars, television, telephones, heat, clean water, sanitary sewers — things that the richest millionaires of 1900 could not buy. These technologies promise an end to physical want in the near future. “We should be rejoicing in mutually creating a heaven on earth!” Instead, those crabbed souls who make their living from perpetuating scarcity are sneaking around, convincing co-conspirators to chain our cheap duplication technology so that it won’t make copies — at least not of the kind of goods they want to sell us. This is the worst sort of economic protectionism — beggaring your own society for the benefit of an inefficient local industry. The record and movie distribution companies are careful not to point this out to us, but that is what is happening.”

    • Electronic Frontier Foundation co-founder John Gilmore
     
  • R 9:46 pm on July 9, 2012 Permalink | Reply
    Tags: Economics   

    Mike Masnick: The Grand Unified Theory On The Economics Of Free 

    Once you’ve broken out the components, however, recognizing that the infinite components are what make the scarce components more valuable at no extra cost, you set those free. Not only do you set those free, you have every incentive to create more of them, and encourage more people to get them. You break them into easily accessible bites. You syndicate them. You hand them out. You make them easy to share and embed and distribute and promote. And, yet, all the while, you know exactly what scarce resources those non-scarce goods are tied to, and you’re ready to sell those scarce resources, recognizing that the more people who are consuming the infinite goods, the more valuable your scarce resource is.

    So, the simple bulletpoint version:

    • Redefine the market based on the benefits
    • Break the benefits down into scarce and infinite components.
    • Set the infinite components free, syndicate them, make them easy to get — all to increase the value of the scarce components
    • Charge for the scarce components that are tied to infinite components

    You can apply this to almost any market (though, in some it’s more complex than others). Since this post is already way too long, we’ll just take an easy example of the recording industry:

    • Redefine the market: The benefit is musical enjoyment
    • Break the benefits down (not a complete list…): Infinite components: the music itself. Scarce components: access to the musicians, concert tickets, merchandise, creation of new songs, CDs, private concerts, backstage passes, time, anyone’s attention, etc. etc. etc.
    • Set the infinite components free: Put them on websites, file sharing networks, BitTorrent, social network sites wherever you can, while promoting the free songs and getting more publicity for the band itself — all of which increases the value for the final step
    • Charge for the scarce components: Concert tickets are more valuable. Access to the band is more valuable. Getting the band to write a special song (sponsorship?) is more valuable. Merchandise is more valuable.

    What the band has done in this case is use the infinite good to increase the value of everything else they have to offer. They’ve increased their marketsize by recognizing how they can use the infinite goods as a free promotional resource and made the value of the overall ecosystem around them more valuable.

    • Mike Masnick

    http://www.techdirt.com/articles/20070503/012939.shtml

     
  • R 8:53 pm on July 9, 2012 Permalink | Reply
    Tags: Economics,   

    Taking, stealing, theft, piracy are dishonest and inaccurate words. 

    Stephan Kinsella
    “There really is not a stronger argument. There is simply nothing wrong with copying, emulating, learning, competing. It is not “taking” an idea–the originator still has it. “Taking” is the wrong verb. If I see you build a log cabin and learn from you, and build my own, I have learned from you but not taken from you. Taking, stealing, theft, piracy are dishonest and inaccurate words. If you sell a product and people compete with you and mimic you and make it harder for you to make profit–that’s the free market process. Nothing at all wrong with that.”
    http://www.mises.ca/posts/articles/how-intellectual-property-hampers-the-free-market/

     
  • R 8:13 pm on July 9, 2012 Permalink | Reply
    Tags: Economics   

    Instead of thinking of piracy forcing a “price” of zero, you think of it as being a “cost” of zero. 

    In economics, we’re often taught, is the “science of scarcity” or understanding resource allocation in the presence of scarcity. All too often, economics itself is defined by scarcity. The “zero” changes all of that. Plugging a zero into an equation that expects a non-zero sends it haywire (think of what happens when you divide by zero) — and that leads people to think that the equation must be broken. So, for example, basic economics tells you that a free market will push prices towards their marginal costs. If their marginal costs are zero (as is the case with digital goods and intellectual property), then it says that price will get pushed towards zero. However, this makes people upset, and makes them suggest the model is broken when a zero is applied. They see a result where there is no scarcity, and it doesn’t make sense to them since they’ve always understood economics in the context of scarcity.

    However, the point is that if you understand the zero, there’s nothing to worry about and the model works perfectly. It just requires a recognition that the scarcity doesn’t exist. Instead, you have abundance. You can have as much content as you need — and in that world, it makes perfect sense that there’s no costs, because without scarcity there need not be a cost. Supply is infinite, and price is zero. That does not mean, however, that there’s no business. Instead, it just means you need to flip the equation and use the zero to your advantage. Instead of thinking of it as forcing a “price” of zero, you think of it as being a “cost” of zero. Suddenly, you’ve lowered the cost of making something to nothing — and you should then try to use as much of it as you can. One simple example of this is to use that item that “costs” zero as a promotional good for something that does not have a zero marginal cost. When you realize how zero factors in, you realize that there’s nothing new or radical here at all. It’s just coming to terms with the idea that free market economics still works in the face of zero (in fact, it thrives) and there’s no reason to put in place government-sanctioned barriers to shape the market.

    • Mike Masnick

    http://www.techdirt.com/articles/20061025/014811.shtml

     
c
Compose new post
j
Next post/Next comment
k
Previous post/Previous comment
r
Reply
e
Edit
o
Show/Hide comments
t
Go to top
l
Go to login
h
Show/Hide help
shift + esc
Cancel