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Economic Gridlock – the Invisible Cost of IP Law
smellsofbikes writes "This week's New Yorker magazine has a financial article, 'The Permission Problem,' discussing the hidden cost of patent, trademark and copyright laws. It's a subject anyone here already knows well, but he brings up two interesting points: 1) He uses the term 'tragedy of the anticommons.' Instead of depletion of a shared resource, this describes under-use of hoarded resources: areas that can't be explored because they're encumbered by patent/copyright issues. As he points out, the result of this is an invisible loss: drugs not made, software not written. The loss is impossible to quantify and difficult to see. I like the term 'tragedy of the anticommons' because it encapsulates a long-winded explanation into a pithy, memorable phrase that will stick with people unfamiliar with the topic. 2) He also cites a study by Ben Depoorter and Sven Vanneste that discusses why anticommons effects are seen, beyond mere competition. Individual right holders value their contribution to the overall project as a significant fraction of the project value, so if there are more than three or four right holders, their perceived value can far exceed the total value of the project, making it uneconomical."
Let me translate.
People are greedy.
Making a profit is good. Making a fair profit is better.
Of course, this article points out what the problem is without tendering a solution. No, I don't have a solution, either. Is this just human nature?
I recall reading in "A Brief History of Nearly Everything" how an anthropologist was paying a local tribe a bounty for every bone or fragment recovered from a fossil field. He soon discovered that the bounty hunters were smashing the large bones into tiny fragments in order to maximize their profit.
In this case, of course, it's an ill-thought-out bounty - whereas I don't know the answer for the IP question from the article. However, it points out the same conclusion: People will tend to maximize their profit whenever they see a way to do it that doesn't involve extra work on their part.
Mit der Dummheit kämpfen Götter selbst vergebens.
Actually, the person you are replying to is 100% correct.
The only time the service doesn't work is in an unestablished industry with 0 competitors. In every other industry if you look long term giving things out for free makes exponentially more.
You are absolutely incorrect about medical patents. If it weren't for medical patents, my cousin would have been able to release a cure for a form of HIV she discovered about 5 years back. 5 years! But what happened? A similar modification by a big company has been patented, and they did it merely by patenting every possible variant of the string she used.
Patents are allowing the medical R&D companies to over-recoup the costs of research by a factor of 50+, easily, considering government sponsored research as well.
Lets look at other industries. If cars were given away through promotions (which happens all the time), do you think it might draw up more buzz for the companies?
Lets look at other industries. Take any product, and the more you sell it for, the less people come back for more business. The less you sell it for, the more competitive and more people come back for more business. All products break, or wear down, or need some sort of service. Not all products are worth buying twice in anyone's eyes.
This is also why well trained and good customer service policies make or break a company. Think of Dell's customer service and how people hates them for that.
Why would someone hire you to ghost write a book if they can't get any profit from the actual sale of that book?
Just because there's no copyright on a work doesn't mean that there can be no profit on selling copies of it. Every bookstore I've ever been in stocks copies of public domain works, e.g. Shakespeare plays, Sherlock Holmes stories, which suggests that they and the publishers of those works must make enough to justify doing it. Apparently some people are willing to pay for the tangible copy even if they could get the work fixed within for free elsewhere. Of course, competition between publishers will tend to drive the price down to just above marginal cost, but that's fine as far as the customers are concerned.
Additionally, there are some other advantages a publisher can get in the marketplace which are unrelated to copyright. For example, there is a first mover advantage, where the first publisher to market can capture more business than he otherwise would until his competitors catch up. Shakespeare more or less did this, as his company would perform his plays first, but couldn't really stop other people from copying them (sometimes by means of audience members committing the lines to memory and dictating them later). Authors can take commissions, as well. There tends to be an inverse relation between price and the size of the audience. E.g. a wedding photographer can charge a lot because really no one cares about the photos he takes other than the families involved. But if ten thousand fans of a particular author each pledge a few dollars to get that author to write a book (there are some escrow schemes to make sure of the deliverables on both sides, roughly mirroring the means that authors and publishers already use to avoid either side being cheated) then that may be enough to get him to do it. Some people might not care about the copyright status of their work, because that's not how they plan to make their money (e.g. the work is just a draw for some other thing), or they're not interested in making money at all (much of YouTube).
And of course, the entire system always runs on authors and investors who are unduly optimistic. Remember, most authors are not stars, or even successful, and most works are of no or very little economic value. Copyright can't make works valuable, it just lets the copyright holder monopolize whatever value there is to be had anyway. Thus, a copyright on Gigli or Ishtar, or Heaven's Gate just isn't worth much.
Without copyright, established and popular authors tend to be better off than unknowns, but that's really how it is with copyright as well. And copyright isn't a magic method of getting popular. No one's figured out a perfect method for always making hits that will draw in a huge audience over the short and long term.
There is a likelihood that without the artificial incentive of copyright (or with less of an artificial incentive from reduced copyright) that fewer works will be created and published. That is a loss to the public. But the public gains from being less restricted as to those works. The important thing is to maximize the net public benefit, whether that requires more copyright or less. The effect upon authors and publishers, save for how that interacts with the public benefit, is of no consequence.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
If he wants to give it away, fine. If he wants to restrict it a million different ways, fine. It's his work, so it's his choice. [...] Without a strong IP system, that choice will be taken away.
My answer to this is quite simple: So? So what if the author doesn't have that choice?
The purpose of copyright law is to benefit the public, by increasing the level of quality in writing, music, software and other items covered by it. The mechanism used is letting the authors apply restrictions to their customers, which will (according to the implicit assumption) make more people pay the authors, which will make being an writer (musician, coder, etc.) be a good enough way of making a living that enough people will do so; spending eight hours per day on your craft will make you better than one who spends only their spare time (assuming there's less of that). That's how copyright is thought to fulfill its purpose.
If we let the authors grant fewer restriction, it might mean that some fraction of them will choose to enter a different business, and the public loses some of their products (they may still perform music or write code in their spare time). In return, since the public is less restricted, it will be able to use all authors' works to a larger extent.
Whether the trade-off is beneficial to the public depends on the specifics; but what is certain is that as long as copyright has its stated purpose, one should choose the option that benefits the public the most. Whether the authors lose options they have previously had should not, per se, influence the decision; it could, however, influence which option is best for the public, but you haven't argued that it does (or will).
The restrictions and the choice of whether and how to employ them are a means, not an end. You can't defend any means other than by showing how well they serve the end.
(sorry for the missing car analogy)
(insert a similarly styled rant on patents, and a similarly styled rant on trademarks, here)
...I can't get seasons 1 and 2 of Reboot because the current copyright owners (Universal) are just sitting on it.