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
    Dan, 18 Jan 2007 @ 9:43am

    My two bits

    Hello everyone. I've really enjoyed reading both sides of this argument.

    David, I think you've represented your points quite well, considering the generally hostile atmosphere. While I don't agree with some of your arguments I think you make a good case, and many of the responses to what you've said have been less than convicing.

    I believe that for the movie industry the solution can be found in a scenario outlined in a previous post. #63 made the case of a baseball game, which is an entertainment experience availble for consumption on two levels. You can either pay $50 (or whatever) per ticket, plus $6 per beer, plus $4 per hot dog, etc. for the "experience" of being entertained, or you can watch the game at home on TV for "free" (plus ads, or maybe a couple of bucks for pay-per-view), and bring your own beer and hotdogs. Even with the option of accepting a potentially lower standard of entertainment for substantially lower cost people (in huge numbers) still open their wallets to go to the game. That tells me that even if people can download your movie for "free" (or an inexpensive digital-rental arrangement) they'll still pay to go to the theater, provided you can make the entertainment experience worth the expense.
    All of this places a good deal of responsibility on the theater venue itself (For me that means no advertising in the theater, or "piracy is wrong" messages, there's just no excuse for that kind of consumer abuse), but also on the industry to control costs and deliver "entertainment" rather than just a "film" (It's been covered, but the production process is grossly inefficient, actors/producers/directors are incredibly overpaid, and creativity is at an all-time low). The point is, people will always be willing to pay for good entertainment, but the internet is not going away. Downloading movies is not going away, it's going to keep getting easier.

    None of this applies to music. If a musician/group can't make enough money touring or playing local venues to survive then they're not doing a good job.

    That's my two bits. Thanks everyone.

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