Efficient Markets Aren't About Small Business Or Big Business

from the hippies-shilling-for-big-business dept

It never fails that when we discuss intellectual property issues like patents, someone accuses us of being in the pocket of “big business” that is apparently trying to screw over the small independent inventors. Yet, just as amusingly, when we discuss all of the bad things that big businesses do to consumers, we’re accused of being anti-capitalists or socialists. Neither is true. We support efficient markets, because we believe that they tend to open up more opportunities for everyone — and we believe that treating customers right is actually a better way to build a long term business. Pissing off customers is simply a bad business strategy, and relying solely on intellectual property is a way to get lazy and stop innovating. Unfortunately, though, we’re seeing a bunch of people these days try to turn these discussions into “big business” vs. “small business” fights, rather than actually looking at what’s best overall.

First, there was Nick Carr and his assertion last week that users of sites like MySpace, Digg and YouTube were being exploited like “sharecroppers” by these “big” internet businesses. Now, a photojournalist has written up a similar piece at The Register whining that all of these people who support copyright reform and things like citizen journalism are actually creating a new sharecropping system, and that we’ve all become “unwitting allies, or shills, for big business.” He says this, again, as if it’s some sort of battle between big business and small business — but that’s not true at all.

What he really means is that we’re siding with the folks who have figured out how to make his existing business model less relevant. It’s not up to us to protect his business model. He makes two big claims here. First, that the flood of either free or cheap photographs has wiped out the demand for his work, and, second, that it’s effectively ruining the business since the quality of these other photographs isn’t very good. If that’s true, then that’s a conflicting statement. If the quality is no good, he should be able to convince others of that, and show them how his photographs are worth paying more for. It’s up to him to show that, though, not everyone else not to take or use other photographs. The fact that he’s unable to convince anyone that his photographs are worth a huge premium is an issue he needs to deal with. It should be an opportunity to show how much more valuable his photos are — and if the market doesn’t buy it, then perhaps they’re not really as valuable as he thought. To pitch it as a “small business” vs. “big business” debate is wrong and misleading. It’s really about his own inability to compete in the marketplace today. That’s not big business vs. small business. It’s just business.

Update: Apparently this disease is catchy. Tim Lee points us to an MSNBC opinion piece by Siva Vaidhyanathan (who I often agree with), where he seems to be complaining about how big businesses are making money off the aggregation of all this user generated content, and that this “labor of the crowds” should go towards more socially useful things. Again, it seems to be blaming big businesses for being able to make money off of providing people services they want to use. It’s hard to see why that’s a problem.

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Comments on “Efficient Markets Aren't About Small Business Or Big Business”

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SFGary (user link) says:

I get impatient with the crowd that thinks that the WWW is some sort of socialist enterprise and that everything on it should be shared either for free or a nominal payment. They also forget that all the sites you mention and more are businesses and there are shareholders looking to make $$. To their credit these sites also have huge legalese click throughs that let people know that what ever is posted by user is freely licensed to them.

I mean if you don’t like the terms don’t use the product. In my case I use WP over Blogger or any Sixapart product because I prefer WP’s terms. Its just that simple.

The more insidious problems arise when Google and other large Internet enterprises could possibly manipulate their algorithms to give preference to their own products or downgrade the competition. I can only hope that hungry competitors are waiting to take advantage of those lapses.

misanthropic humanist says:


This is a very relevant article Mike posted, but sadly few comments.

To answer SFGary; I am rather disappointed by those whos narrow political understanding equates sharing with “socialism”.

Socialism is a state level enterprise in which high taxation is used
to support a welfare system and key commodities are nationalised
for the common good.

Whether you subscribe to that politic or not, it has nothing to do with sharing.

There is an insidious meme in circulation which builds on the false assumption that when ordinary people choose to conduct their lives with openness and sharing they are anti-business.
This is so wrong I don’t know where to begin.

You are entitled to your choices and your right to try and make a business so long as it does not impinge on my right to share my resources, either by way of barter or as an altrusitic endeavour.
Fine… buy your premium content from a corporation if you sincerely believe you are getting value for money. Don’t try to inhibit my right and the rights of others to freely share if your “business” cannot compete in that climate.

Siva Vaidhyanathan (user link) says:


Thanks for linking to my article from MSNBC. Just to clarify, I was not complaining about big businesses aggregating information. I have problems with such processes. But they are not simple. I am not merely “against” such things.

No, Tim deliberately misread my article. I was complaining about Time’s simplistic hyperbole about the “you” revolution. My problems were with Time, not Google.

But to your point, aggregation is a problem if it is done 1) without disclosure to the subjects of aggregation and 2) without oversight limiting abuse.

I think this is a fascinating subject and worthy of much more discussion. I would value your reactions when I actually write about it.

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