How I answered a question concerning economics and internet freedom.Submitted by LunaTech on Fri, 01/18/2013 - 18:57
Here is what he asked me:
I think the internet should be as free as we could make it. Not just in the United States, but everywhere. Music and movie pirating is a huge topic at the moment. In my opinion the government should not take sides with these people. The market has spoken and the prices are too high. People will find other ways to watch. Instead of lowering prices, or finding new ways to make their money they use their lobbies to pressure our government and others to help fight their problem.
What are your thoughts on Internet Freedom?
And here Is what I said...
When talking about internet freedom it can become very complex and emotional. Internet pirating is definitely a huge issue. But it isn't a signal that the software is overpriced. Competitors don't even have a chance to offer a lower priced version! How are prices going to come down if the business doesn't have revenue to support changes that would increase efficiency? The only real signal that something is over priced is when it is no longer profitable for the business and they aren't able to sustain normal operations. It hurts the software companies just as it may hurt apple to steal ipods (is that a signal to apple that ipods are over priced?). Cars are expensive but if everyone found out they could steal cars without getting caught is that an HONEST signal? In an ideal world, everything is free! But the way I understand economics it is the laws of supply and demand that in a free market setting things are allocated as efficiently as they can be. A lot of labor goes into the making of good software and the price of that labor is not free. Businesses would price it lower by finding ways to produce it cheaper if they were struggling because of not enough people buying the software. So, you would naturally see those prices come down after changes in the way business is done in order to make it profitable. And of course competitors who seek to also revolutionize whatever industry they compete in. This would give them an incentive to lower their price. But what happens when people steal the software is they are bypassing the supply and demand laws of money economics. So even if the company lowers their price, people who now may be able to afford the software might already have it anyway (from a pirate site) why will they buy something that they have for free?
And if people know it can be gotten for free why pay anyway even if the price is lower? I think software companies should develop more ways to protect their software, before we let regulators create an internet police and try to assume authority over ISP's and domain providers services. That's just my take I don't know enough about it to have a definitive answer. Its a tough issue!
Any comments or criticisms?