I think that what it comes down to is, free market capitalism does not work when applied to Intellectual Property.
The key issue with any transaction is setting a price that is fair to both buyer and seller. The free market is supposed to find the 'best' price for any given item, by ensuring that the buyer has the freedom to seek out the best price, on the condition that sellers are not allowed to sell below the cost of production.
The few laws that are applied in lassez-faire capitalism are those to ensure that the market works efficiently, eg antitrust, anti-dumping, and so on. This free market is the key to enabling Adam Smith's 'Invisible Hand' to ensure that the economy is organised as effieciently as possible, in general.
BUT the problem is, this system only works for commodities, ie items where the seller has a choice of who they want to buy from. If the price is too high, they can buy somewhere else, and if there are no alternative suppliers, the increased prices will induce some to start up.
The very idea of intellectual property invalidates this, because there is no alternative way to buy a particular album that you want (the price is determined centrally, whichever shop you go to). This means there is little way for the market to set a 'fair' price for music, videos, software and the like. Ultimately, if you want that particular album, you have no choice (legally) but to pay whatever the asking price is.
Another feature of IP is that the incremental cost of each item is small, with respect to the original cost of creating the content in the first place. There is no concept of 'cost + margin' to fall back on to determine what something should be sold for.
A couple of instances that show this up:
Should new patent AIDS drugs be sold cheaper in Africa than Europe / America? Should CDs? How would you enforce anti-dumping laws for videogames, given that prices tend to reduce exponentially over time anyway? (£40, £20, £10, £5). Did games mags giving away year-old Amiga games kill that market?
And of course, there's the whole piracy thing - can you steal, without directly depriving anyone of anything?
One idea I had, thinking along these lines, was this:
All software should be free All computer hardware should have a 5% tax (maybe 2.5% off govt. sales tax, 2.5% increased price) All computer software should log usage and report to a central trusted location (anonymously) The usage statistics should be used to allocate the hardware tax amongst software manufacturers.
Result:
Computer users pay no more than before, but have unfettered access to any software they desire.
Computer manufacturers see a slightly increased tax, but their products are more valuable because they are more useful.
Software development companies make as much money as before, but don't have to worry about piracy. The new system rewards truly good software, and punishes makers who use good marketing to get punters to buy products that won't actually be useful.
Goverment gets slightly less sales tax, but a happier, more educated and more productive populace.
Ok, I don't know what the % would need to be, and I know it's a flawed idea, but hey, it's better than the current attempt to stretch old-style, commodity capitalism to cover ideas as well.
Whatever, I really think we need a new way of thinking about this.
Yes - if they can ensure that all portable players require 'authorised' music to play, then they have a strong position, because you need to pay for music to take it on the road (train, jogging, whatever).
On the other hand, as long as there are recordable MiniDiscs around, you're sorted - any music you have, in any form, can be recorded onto a blank MD.
MDs restrict you from taking further digital copies (SCMS), but as long as you keep master digital copies of all your audio (on CD or on your PC), that's irrelevant.
On the other hand, if you really need something smaller than an MD portable, best get a non-SDMI MP3 machine quick!
I agree, this seems to be a crucial point that the music industry has overlooked. They are very concerned about preventing original digital instances of their work being directly copyable, however,
The only problem with analog is when you have a copy of a copy, ie 2nd, 3rd and onwards generations. A first generation analog copy on good quality equipment should be fine.
If digial music can be played, then it can be recorded as analog. The crucial thing is, it can then be returned to digital format (wav or mp3), and all subsequent onward distribution can be done digitally, with no further quality loss.
So I think the whole protected digital music thing is a bit silly really.
Slashdot Mirror
I think that what it comes down to is, free market capitalism does not work when applied to Intellectual Property.
The key issue with any transaction is setting a price that is fair to both buyer and seller. The free market is supposed to find the 'best' price for any given item, by ensuring that the buyer has the freedom to seek out the best price, on the condition that sellers are not allowed to sell below the cost of production.
The few laws that are applied in lassez-faire capitalism are those to ensure that the market works efficiently, eg antitrust, anti-dumping, and so on. This free market is the key to enabling Adam Smith's 'Invisible Hand' to ensure that the economy is organised as effieciently as possible, in general.
BUT the problem is, this system only works for commodities, ie items where the seller has a choice of who they want to buy from. If the price is too high, they can buy somewhere else, and if there are no alternative suppliers, the increased prices will induce some to start up.
The very idea of intellectual property invalidates this, because there is no alternative way to buy a particular album that you want (the price is determined centrally, whichever shop you go to). This means there is little way for the market to set a 'fair' price for music, videos, software and the like.
Ultimately, if you want that particular album, you have no choice (legally) but to pay whatever the asking price is.
Another feature of IP is that the incremental cost of each item is small, with respect to the original cost of creating the content in the first place. There is no concept of 'cost + margin' to fall back on to determine what something should be sold for.
A couple of instances that show this up:
Should new patent AIDS drugs be sold cheaper in Africa than Europe / America?
Should CDs?
How would you enforce anti-dumping laws for videogames, given that prices tend to reduce exponentially over time anyway? (£40, £20, £10, £5). Did games mags giving away year-old Amiga games kill that market?
And of course, there's the whole piracy thing - can you steal, without directly depriving anyone of anything?
One idea I had, thinking along these lines, was this:
All software should be free
All computer hardware should have a 5% tax (maybe 2.5% off govt. sales tax, 2.5% increased price)
All computer software should log usage and report to a central trusted location (anonymously)
The usage statistics should be used to allocate the hardware tax amongst software manufacturers.
Result:
Computer users pay no more than before, but have unfettered access to any software they desire.
Computer manufacturers see a slightly increased tax, but their products are more valuable because they are more useful.
Software development companies make as much money as before, but don't have to worry about piracy. The new system rewards truly good software, and punishes makers who use good marketing to get punters to buy products that won't actually be useful.
Goverment gets slightly less sales tax, but a happier, more educated and more productive populace.
Ok, I don't know what the % would need to be, and I know it's a flawed idea, but hey, it's better than the current attempt to stretch old-style, commodity capitalism to cover ideas as well.
Whatever, I really think we need a new way of thinking about this.
Yes - if they can ensure that all portable players require 'authorised' music to play, then they have a strong position, because you need to pay for music to take it on the road (train, jogging, whatever).
On the other hand, as long as there are recordable MiniDiscs around, you're sorted - any music you have, in any form, can be recorded onto a blank MD.
MDs restrict you from taking further digital copies (SCMS), but as long as you keep master digital copies of all your audio (on CD or on your PC), that's irrelevant.
On the other hand, if you really need something smaller than an MD portable, best get a non-SDMI MP3 machine quick!
I agree, this seems to be a crucial point that the music industry has overlooked. They are very concerned about preventing original digital instances of their work being directly copyable, however,
The only problem with analog is when you have a copy of a copy, ie 2nd, 3rd and onwards generations. A first generation analog copy on good quality equipment should be fine.
If digial music can be played, then it can be recorded as analog. The crucial thing is, it can then be returned to digital format (wav or mp3), and all subsequent onward distribution can be done digitally, with no further quality loss.
So I think the whole protected digital music thing is a bit silly really.