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How I answered a question concerning economics and internet freedom.

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?

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Nice post!

For whatever reason, it seems that a lot of people for totally free markets support theft when it comes to intangible creations. This pisses me off, and it's a significant part of the reason why I cannot in good conscience consider myself a Libertarian with a capital 'L'.

I agree with your perspective, and I dig the last paragraph, as I also do not want this issue to be warped into yet another opportunity for more policing... online or anywhere.

As both a visual artist and, more importantly and passionately, a musician (I do ALL original material; I don't bite others' work / ideas.), I abhor how people apparently have no appreciation for the skill and hard work that go into such endeavors. At the same time, I have most definitely lifted the odd image / sound file (NOT to include in my own work product in any way, mind you) from the "internets". So I am a gross hypocrite. BUT, I don't try to call it anything other than what it is.... theft. And I self-flagellate in guilt (OK, not quite!).

Theft = theft = theft = theft. If it walks like theft and quacks like theft, it's theft. (Let's at least not try to BS each other on that issue, folks.)

And this whole bullshit about how ideas / songs / pieces of music should not be owned is utter SHITE. When people are so lame as to insist that there must be a physical product / object in order for something to exist in reality... well, I cannot finish the sentence! But it is demeaning. Literally, what that says to me is that a piece of gum, which can be physically stolen from a store, is worth more and is more *valuable* as an end product than any of the great pieces of music ever created by anyone, ever!

And worse yet is the notion that by extension the toil of the musician / whomever is likewise of no worth. Seems hardly like anything free market to me!

Thanks for the post.

What would the Founders do?

I also agree with your

I also agree with your friend, and here is why:

Quick note; These ideas are not my own, I read them in an article somewhere, though I couldn't source where... I spend a lot of time on Von Mises and reading economics.

A song is not private property, even if you wrote it. You cannot own an idea or a song. Infact you never "own" anything save for raw materials and land. For example, you don't own a treehouse. You own the wood its built out of. The easiest way to proove this is to ask yourself if you own a treehouse which is built from lumber you've stolen from your neighbor.

Here are the criteria which an object must fullfill in order to be considered private property:

1) A finite product. Something with limits.
2) An item which cannot be used in the same way, by 2 or more people, at the same time.

The only way private property can be aquired is through original claim, or through purchase from its former owner.

So ask yourself, can two people use a song at the same time and in the same way without depriving the other of its enjoyment?

Yes. Therefore, a song is not something which can be defined as private property. A song is infinatly reproduceable, and making copies of it deprives no one of the ability to enjoy that song, even the original artist.

What the artist "does" loose, is an economic advantage to be the sole owner of it and profit from it. However thats only applicable when you have a market place built around government intrusion. In a truly free market where patents were never introduced by governments, this would be a non-issue because artists and the market would have developed other profitable means by which an originator of an idea can profit from their ideas and intellectual products. In other words, this is a problem caused by government, so the solution isn't more government. Its to remove the original problem.

A patent, such as Intellectual Property Rights is a government granted monopoly on the freedom to produce a certain product. Its you paying the government in order to be granted sole rights to market something.

This concept is antethetical to a free market, and is perhaps one of the single most limiting factors to human progress in our entire history (unless you count collectivist thought in all of its forms). Patent law is the 2nd of two grave mistakes written into our constitution (#1 being slavery).

Here is why:

First, the dark side of patents. Imagine if in your home laboratory, you solve cold fusion, and create a safe, limitless energy source that can free the entire world from dependance on fossil(*smirk*)fuels, providing cheap and abundant power to everyone. The moment you begin the patent process, the legal team of big oil whose entire job is to watch the patent markets for competition will swoop in, buy your patent out from under you with their endless resources and lawyers, and tuck your technology into a dark corner, never to see the light of day again.

Patent law is a product of crony capitalism (fascism for the politically incorrect person) and is used to destroy competition and protect the monopolistic stranglehold which "connected" companies have on the market. If you even try to build or market your own cold fusion reactor, they will sue you into destitution. Consider how much this holds back human technological progress?

Now the advantages to a free market without patent law: Imagine if there was no such thing as patents or "Intellectual property." Imagine Apple came out with the I-phone. Immediatly, their competition would reverse engineer it, learn how to replicate it, improve upon it, build it for cheaper etc. Apple would therefore need to constantly be improving its technology and lower its prices in order to stay on the cutting edge of the market.

A company's need to retain their skilled employees (and thus trade secrets) would be greater than ever, maximising market incentives to provide great working conditions and competitive pay.

The techonlogical explosion, and the economicly competitive advances (cheaper prices, better quality) would be staggering and utterly advantageous to the consumer.

Throughout history, mankind has stood upon the shoulders of our predecessors to advance technology. The introduction of modern patent laws removes our ability to do this. Every inventor must start several rungs down the ladder of progress, and must completely avoid methodologies and technologies which are patented or risk being financially ruined. This is an absolute depresent to the advance of mankind. As usual, the product of government intrusion into the market.

Patent law is the reason that we are not colonizing the stars, driving flying cars, living for 200 years and enjoying a golden age of liberty, free from government tyranny.

Don't believe me? Then consider that "patent" law is exactly what the government is using to go after and destroy internet freedom. The internet, arguably the greatest advance of man kind, which connects the entire world and allows the free, unfiltered sharing of ideas, techonology and philosophy, uniting us together in a way that has never happened in all the ages of the world is, unsuprisingly, a threat to governments. The internet is waking humanity up to the nature of governments.

Its the height of irony that IP law is being used to go after "Internet pirates," when the first patents were used by the collectivist tyrannys of Europe to grant captains the "right" to become priviteers in order to attack their competitors. Patents created piracy, and now they want to use it to stop online piracy. What a joke.

Anyway, hope that gives you a good perspective.

I totally agree with you, but

I totally agree with you, but I disagree at the same time. While you own the wood the tree-house is made out of but not the concept of a tree-house. I was talking about software. And in software, you do not own the language the program is made out of, you own the software. Also a software is technically a physical object even though it is so small (measure in bites) remember according to Vsauce on YouTube the entire internet weighs a gram. :-). But none the less software is not an idea it is the result of an idea. And in this instance the software is not created by you it is created by them.

You simply duplicate it without building it yourself and sell it to others for cheaper or just steal it or distribute it for free. All of which in my opinion is theft. Some programs involve innccreeedddible brain power and man hours to create beyond anything you could imagine. at the end of the day they own that final product. They do not own the idea of the final product. If you want to sell a media playing program you have to make your own, you can't pirate the software and sell it for yourself. But you have every right to make your own media player.

So I totally agree with you about the abuses of government on intellectual property but it goes far beyond what I am saying. What I am saying is everyone has the right to make something and distribute it who cares if it is the same as someone else's. You MADE it. But you don't have a right to steal what someone else made. I think it is morally true in the software and hardware. You own it when you make it yourself and can sell it under that condition.

The problem in this area is that its just too easy to duplicate. Which makes me wonder if we should really even bother trying to protect the software legally, and leave it up to the people that manufacture it to keep it safe. It seriously is a controversial area.

In short...

...I agree with your friend.

NOTE: I am not advocating violence in any way. The content of the post is for intellectual, theoretical, and philosophical discussion. FEDS, please don't come to my house.

How is the fact that people

How is the fact that people are stealing a signal to the markets? It might be a signal that there are people who want to product who can't afford it. But its not a legitimate signal if the company is able to survive the competing companies who could lower prices if it were profitable to do so.

What's funny...

is that back in the 80's and 90's the companies who rolled out the most effective copy protection tended to be the companies that went out of business.

If people couldn't make copies then fewer people got a chance to try out the software -- and become dependent on it. Dependency on the software means many people will pay for the next version and will be more likely to purchase support contracts. Also, without being able to copy less people even hear about the product through sharing. Allowing copying is like drug dealers giving free samples to create addiction AND advertising all rolled into one.

~wobbles but doesn't fall down~

Right but in this case I would argue,

that isn't the same thing as pirating a software which is stealing. Most of these companies allow people to trial their software for 15-30 days which is plenty of time to make a decision.

I'm talking about...

pirating the most expensive business and technical software and using if illegally for two years and then when the company releases a new version the pirater ends up buying the software they wouldn't have purchased (or even known about) if they hadn't pirated it. In this case the company loses money if not for their software being pirated.

Pirating allows dependency (and appreciation and maybe even guilty feelings) to form where otherwise it might not...

~wobbles but doesn't fall down~

Well you mean like Auto Cad

Well you mean like Auto Cad and ERP software. I understand what you are saying, and i don't know the history of those in pirating. I still think that theft is theft and is not a reliable signal for overpriced goods.

Joη's picture

"Vague title, content must be too uninteresting for me to care"

↑ that's what people will think.

It's not like people won't care about internet freedom, even.

"You underestimate the character of man." | "So be off now, and set about it." | Up for a game?

The title could be better,

The title could be better, sure.