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More Double Talk From The MPAA On Upcoming Grokster Decision
from the economics-101 dept
It seems that every time Dan Glickman, the head of the MPAA speaks, he says something else questionable. From saying the movie industry should be more like the IRS to saying that BitTorrent technology is to blame for movie sharing online he never seems to understand the real issues his industry is facing. The latest, is that in a talk to the Progress and Freedom Foundation, a group that claims it's supportive of free markets -- but also wants strong government regulation on anything intellectual property related -- Glickman seems to embrace the contradiction this group supports. He says: "shall we keep in place legal protections that promote the free market or shall we tear down those protections in such a way to allow the black market to prosper and dominate?" Well, that's quite a spin, considering that it's the lack of government regulations that makes the market free. Black markets only exist when a market is overly regulated. In fact, that's the whole point of the black market -- to get around government regulations. If he really supported free markets, he'd let the market develop and see what happens, rather than begging the government to prop up his industry. If the MPAA wins Grokster, all it will actually do is create a larger black market, by outlawing plenty of useful technologies, forcing them all to go underground to that black market. Update: Wow. I missed the second part of that quote as found by Constitutional Code: "If we have learned anything over the past 50 years with the collapse of communism and the triumph of free-market capitalism, we have learned that abusing private property rights actually leads to less creativity, less technological development and less freedom." This is the old nugget that people use in favor of intellectual property: that "free" goods somehow equates to communism. This is a bizarre argument, because, once again, it's the free market (not the government) that's making these items free.
Reader Comments
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mpaa, free markets, black markets
In the mpaa double speak column, you state that black markets are a result of government over regulation. I think you're wrong about this and only need to look at the black market in DVDs and Microsoft Software to see it. Black markets thrive when prices are very high compared to material costs. For software, the cost of the software is so high that the cost of pirating it is more than acceptable.
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Re: mpaa, free markets, black markets
Various black market definitions, all seem to indicate the main factor is getting around a regulated price, usually from the government. However, you're right -- sometimes that regulated price is by a company. However, it's still a regulated price, rather than a free market.
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No Subject Given
Without the government intervention into the market (patent and copyright laws),
the corporations would have a difficult time keeping the prices much in excess of the reproduction costs.
Remember that monopolies need the threat of force to keep competition out.
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free markets
"it's the lack of government regulations that makes the market free."
That's a bit of an oversimplification. Even Adam Smith recognized that a truly free market depended on some regulation, to keep the businesses themselves from distorting the market. That's why we've got anti-trust legislation and the like, not to regulate the freedom out of the market, but to keep it sufficiently free that competition can take place.
There are economists who argue for no market regulation at all, but they're pretty far on the fringe. Most are realistic enough to recognize the need for balance.
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role of regulation
Mike, your statement
is over the top. After all, the existence of banking regulations, or police to stop bank robbers for that matter, help everyone. Likewise property title rules make free trade work better. Food safety laws.Things can get out of whack in either direction, of course, but in general a certain level of regulation is beneficial, and a certain, negative level is also accepted. But over-the-top systems such as corporatist facism, socialism, rampant devaluation, or France's fabulous-in-the-short-term-system all eventually come a cropper.
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Re: role of regulation
Indeed. I have nothing against the use of gov't regulation in cases of market failure. But that's not what Glickman is saying here at all...
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