The Legacy Entertainment Industry's Business Model: Charge A Ridiculous Markup On The 'Copy File' Command
from the pointing-out-the-obvious dept
Rick Falkvinge has a post up on his website highlighting how copyright is antithetical to the free market. We’ve pointed this out many times in the past, though for reasons I don’t fully understand, some people still don’t quite get it. Copyright is a government-granted monopoly privilege. In a true free market, you don’t have monopolies (and you certainly don’t have government’s granting them). This doesn’t necessarily mean that copyright is bad. It’s just that it’s clearly not a free market concept. It is, at best, a mercantilist concept of protectionism for the holder. Falkvinge digs in on this idea further, noting that copyright is, in many ways, also antithetical to the concept of personal property in that it seeks to limit what people can do with things they own:
When somebody buys something, no matter what, they own it. They have the right to do pretty much anything with it, they have the right to perform work on the object they have bought. Such work includes duplicating the object that you own; on a fair and free market, such duplication work is an offering like any other that competes with other people performing a duplication of the object in question.
In culture sharing, people perform this work for free for one another – duplicate files for one another – as a good social deed, just like helping anybody else out with your own time is a good deed. (The copyright industry tries to vilify this activity as somehow being immoral and unfair, which completely misses the positive social mechanisms of good people helping friends and strangers alike, and only makes the copyright industry appear absurd, anachronistic, and downright evil.)
He also notes where much of the confusion comes in — which is that the legacy players “deliberately” confuse “the goods that they offer for sale with the service of duplication, which is a completely different kind of offering.” And that leads to problems — because the “markup” that the legacy players are trying to charge on the services of distribution are astronomical:
The competition in the copyright monopoly and culture-sharing field is about who executes the “copy file” command the most cost-efficiently. That is largely a pointless debate, as the cost of executing a “copy file” command is trillionths of a cent – nobody would buy it from anybody, as everybody can do it themselves. Claiming a legal right to charge a premium of a gazillion percent over and above the real cost of this service is absurd and macroeconomically counterproductive.
And what we’re left with is a world that is not, in any way, a free or fair market, but one where there are inefficiencies due to government-granted monopolies.
In a fair and free market, competitiveness rules, and nobody has a monopoly – such as the copyright monopoly – on doing a particular kind of work, like duplication of a specific object. If somebody else can duplicate your original at a lower cost than yourself, then you weren’t able to compete and you’ll find yourself out of business. That’s called marginal cost – that competition takes place on the additional cost of every product once the investments are made, on the cost of duplicating an original – and that’s how the market works for all products in fair and free markets. It’s actually Economics 101.
So if we’re going to argue over whether or not today’s copyright system (or any copyright system) makes sense, it’s important to recognize these basic facts. You can argue that copyright is good and necessary, but you can’t argue that it fits into a free market system, because it doesn’t.