History Repeats Itself: How The RIAA Is Like 17th Century French Button-Makers

from the no,-seriously... dept

As regular readers know, I've been working through a series of posts on how economics works when scarcity is removed from some areas. I took a bit of a break over the holidays to catch up on some reading, and to do some further thinking on the subject (along with some interesting discussions with people about the topic). One of the books I picked up was one that I haven't read in well over a decade, but often recommend to others to read if they're interested in learning more about economics, but have no training at all in the subject. It's Robert L. Heilbroner's The Worldly Philosophers. Beyond giving readers a general overview of a variety of different economic theories, the book actually makes them all sound really interesting. It's a good book not necessarily because of the nitty gritty of economics (which it doesn't cover), but because it makes economics interesting, and gives people a good basis to then dig into actual economic theory and not find it boring and meaningless, but see it as a way to better understand what these "philosophers" were discussing.

Reading through an early chapter, though, it struck me how eerily a specific story Heilbroner told about France in 1666 matches up with what's happening today with the way the recording industry has reacted to innovations that have challenged their business models. Just two paragraphs highlight a couple of situations with striking similarities to the world today:
"The question has come up whether a guild master of the weaving industry should be allowed to try an innovation in his product. The verdict: 'If a cloth weaver intends to process a piece according to his own invention, he must not set it on the loom, but should obtain permission from the judges of the town to employ the number and length of threads that he desires, after the question has been considered by four of the oldest merchants and four of the oldest weavers of the guild.' One can imagine how many suggestions for change were tolerated.

Shortly after the matter of cloth weaving has been disposed of, the button makers guild raises a cry of outrage; the tailors are beginning to make buttons out of cloth, an unheard-of thing. The government, indignant that an innovation should threaten a settled industry, imposes a fine on the cloth-button makers. But the wardens of the button guild are not yet satisfied. They demand the right to search people's homes and wardrobes and fine and even arrest them on the streets if they are seen wearing these subversive goods."
Requiring permission to innovate? Feeling entitled to search others' property? Getting the power to act like law enforcement in order to fine or arrest those who are taking part in activities that challenge your business model? Don't these all sound quite familiar? Centuries from now (hopefully much, much sooner), the actions of the RIAA, MPAA and others that match those of the weavers and button-makers of 17th century France will seem just as ridiculous.

If you're looking to catch up on the posts in the series, I've listed them out below:

Economics Of Abundance Getting Some Well Deserved Attention
The Importance Of Zero In Destroying The Scarcity Myth Of Economics
The Economics Of Abundance Is Not A Moral Issue
A Lack Of Scarcity Has (Almost) Nothing To Do With Piracy
A Lack Of Scarcity Feeds The Long Tail By Increasing The Pie
Why The Lack Of Scarcity In Economics Is Getting More Important Now

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  1. identicon
    Homer, 15 Jan 2007 @ 11:55pm


    But the market requires honesty to work

    If you think I'm arguing otherwise, you are *so* missing the point.

    You can't say that you expect honesty to be a part of the process at the same time as you are saying (implicitly or explicitly) that the customer is, by default, dishonest.

    There is nothing in my argument that says (in any form) that I think that stealing is okay. I accept (however sadly) that some shrinkage of that type is inevitable. For me, the costs (in effort and trust) to try and prevent every last bit of it isn't worth it. I'm not going to treat my honest customers like criminals on the off chance that I might keep one or two other people from stealing.

    In the areas where I am a customer, I make every effort to do right, and be honest and forthright in my dealings with those I do business with. But for any person (or business) who treats me badly because they fear (without evidence) what I *may* do, I have no regard whatsoever. I will not steal (thereby confirming their misguided worldview), but I will also not do business with them, no matter what, nor will I advise others to do so.

    I would expect no different treatment from my customers if I were to treat them so shabbily.

    If the efforts of the RIAA, MPAA, etc. were specifically designed to actually address theft of service and copyright violation, I would have little problem with them. But the behaviour they engage in (that every customer is, by definition, a thief, out to defraud at any opportunity), the belief that their antagonistic practices do anything but alienate those customers; that is what I rail against.

    Their business methods *do* need to change, to adapt to the way information can be spread.

    While I would rather it be otherwise, there will always be those who take from others, and there is no reasonable scenario that will make that go away (at least not at any cost that can be borne).

    The right solution is not to hamper or alienate your honest customers, but to reward them. Offer extras that can't be downloaded, or that are tied to a particular account. There are a number of ways to handle the problem without telling your customers that you despise them.

    Treat them like you want them to be your customers, instead of your enemies. As strange as it may seem, all indications are that most people are actually willing to pay for what they get.

    You're not going to squelch every instance of theft, but if you treat your customers like dirt, they aren't going to have too many qualms about treating you like dirt in return.

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