They hate us for our freedoms 3

So, who are these ‘they’ who hate us, and how are they attacking our freedoms? Where to start? Governments? Politicians? Businesses? Let’s start with businesses. Let’s start with music and motion pictures and other elements of the entertainment business.

The problem that our society has with business is that most of the business models and most of the laws that support them originated in 18th and 19th, and early 20th-century realities. Realities like, everything being made of molecules – heavy, expensive, hard-to-shape. In modern times, let’s date that from August 12, 1981, value started to reside in electrons instead. Cheap (effectively free), easy to transport, easy to flip into new shapes. The idea isn’t mine. Nick Negroponte articulated it first. He talked about the value of his laptop. Physically, it cost less than $5K, as I recall. From an information content standpoint, to him it was worth closer to $500K. As soon as this concept took hold, it started to wreck the old economy, or at least, certain aspects of the old economy.

At first, it started out as theft. Once technology got into the hands of HS and college students, they started doing what students have done since time immemorial, they stole things that their otherwise poverty-stricken lifestyle wouldn’t allow them to have. Over the last almost-thousand years, how many starving students in garrets in Paris have stolen a jug of wine and a loaf of bread for their friends, and ended up singing themselves to death in the last act? The difference between then and now is that then, they were stealing things of actual intrinsic value. The marginal costs of producing that jug and that wine, the marginal cost of grinding the flour and baking that loaf of bread might be low, but they were not trivial. In addition, there was a likelihood that the vintner and baker would actually have sold out of wine or bread, if they timed their production properly. In other words, not only did the theft of the bread deprive the baker of his work, it prevented a sale.

Today, the marginal cost of producing the next copy of a video game or a piece of music is essentially zero, and the HS kid in his mom’s basement would likely not buy the game or the music if the price is higher than, say, $1 per song. So theft is still theft, but the meaning, the implications, of that theft has changed. To make an over-the-top analogy, suppose we had the ability restore someone to life, to the instant before they died, memories and physical condition intact. What would that do to the crime of murder? It’s still murder, but is it the moral outrage that it was back in the day, when dead was dead? So the advent of the electron age changed the implications of production and theft, and in those changed implications lies a new business model.

It was, I think, Corey Doctorow who first championed the idea of giving away things with a marginal cost of zero, and making your money on truly scarce items. This works. This is working in the music business so well that there are more people making their livings making more music than ever before. The only part of the music business that has fallen on hard times is the part that prints plastic disks and ties artists up in restrictive ripoff contracts. The big business side of the business. They are hurting, not because of theft (many studies have shown that sales of pirated songs go up), but because they are being disintermediated out of business. There is no way the old music giants can survive in their current form if the new business models take over. They might survive if they change and adapt and shed three quarters of their workforce and nine-tenths of their managers, but 90% of their management would vote against such a decision (and probably all of their stockholders, or at least those of them who only look to the next quarterly dividend, so, nearly all).

What to do? Well, the tradition in American business is that if you can’t beat them on price, quality or service, you can always beat them down with lawsuits. You change the laws. You attack the very concept at its roots, defining copyright as eternal, and violation of copyright as the moral equivalent of drug dealing. Of course, the music business is not the only one to take this approach and to benefit from reduction in freedoms. Disney is notorious for enticing lawmakers to extend copyright, every time Mickey Mouse comes up against existing limits. This drags along millions of works that would otherwise have become available. In another example, once the Digital Millennium Copyright Act was in place (another last ditch defense effort by the music and movie industries), other businesses started exploiting its weaknesses. Printer companies began putting encrypted codes into their machines so that only their gold-flake-expensive inks and toners could be used. DMCA makes breaking that encryption a violation of law. Garage door manufacturers tried the same thing, to lock out secondary manufacturers of openers.

You are not against freedom — as such — but against those freedoms that limit your ability to live the kind of life you feel you are entitled to. After all, it’s been that way forever; well, for for all of living memory; OK, so for the last fifty years. So what if you destroy the concept of “fair use”, and make it impossible for the owner of a DVD to play it on any machine other than the ones you approve of. So what if, in the process of preserving your way of wealth you destroy a whole ecosystem that has nothing to do with you, if you kill innovation and creativity and wealth creation for others, well, that’s too bad. Those others should have found a different way to increase the size of the pie. You have made sure that your slice of the smaller pie is still the same size.

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