How The RIAA & MPAA Are Like The Anti-Innovation German Weavers' Guild Of The 16th Century

from the protectionism,-not-innovation dept

Five years ago, we wrote a post comparing the RIAA (and the MPAA) to 17th century French buttonmakers, who used their guild to go absolutely crazy in blocking a horrifying new innovation: cloth buttons, which could be made by weavers, without making use of the members of the buttonmakers guilt. The story came from Robert L. Heilbroner's book The Worldly Philosophers (an all around excellent book if you want to learn some of the basics of the history of economics).
"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."
I think the parallels to the RIAA and the MPAA are pretty self-evident. Freaking out about others entering the market? Check. Running to the government and demanding protections? Check. Expecting others to get permission to innovate? Check. Able to get government-sanctioned fines levied on those new players? Check. Feeling totally entitled to violate the property rights of others to "find" evidence of "subversive goods"? Check.

It seems this comparison between the RIAA/MPAA and protectionist, anti-innovation guilds of that era has occurred to others as well. In a recent episode of the Planet Money podcast, host Adam Davidson does a "deep dive" into the economics of a 16th century German weavers' guild and discovers the same patterns. Collusion in the guild to keep out innovation, to artificially limit the market, to keep wages of employees down and, most importantly, the first response to any competitive threat is to run to the government and lobby for greater protections.

The comparison to the RIAA and MPAA is so obvious that Adam Davidson calls it out pretty early on in the discussion, noting that these "guilds" don't seem all that different from those two groups today. Of course, given that they're both built on copyright law, which originally was designed as a protectionist tool for a similar publishers guild, perhaps the similarities aren't too surprising.

Filed Under: guilds, history, lobbying, protectionism
Companies: mpaa, riaa

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  1. identicon
    Ed C., 2 Apr 2012 @ 4:43pm

    Re: Re: Re: Re:

    Nice how you said nothing that actually rebutted what I said, choosing instead to attack what you think I said. Furthermore, I find it rather ironic that you believe "all theorized systems...will always eventually fall for the same reasons," yet you assert that capitalism is better without any justification whatsoever.

    First, note that I said nothing of "economics". Just because I mentioned "capitalism" you assumed that's what I meant. But no, I said "philosophy". I do agree with your assessment that any "economic" system that that fails to take serious issues such as greed into consideration is ultimately doomed. The centralized systems such as the old USSR failed in part because they failed to take greed into consideration. Modern capitalism, however, doesn't treat greed as an issue at all--it upholds greed as such a central tenet that it becomes intertwined with all facets of life and thought. As I said, "philosophy". It's more than mere economics, it's how people live their lives and think about the world.

    Another fallacy of the common systems is they assume people, either as individuals or as a collective society, will always protect their own interest as a matter of self-preservation. However, self-interest can be subverted to serve the interest of a leader or authority instead, often to the detriment of the people. For instance, speculation in the housing market made a few people a lot of money, while the many they conned lost a great deal more.

    To answer your question though, if I had to choose between capitalism, communism or socialism, I would say "D: none of the above". I don't know all of the theorized systems of economics, and I'd contend that you don't either. Just because of all of the current ones in use have failed doesn't mean all options have been tried and that no better system exist. It just means we have to learn from our mistakes and actually do something to address them, rather than assume nothing can be done and doom ourselves to repeating the same mistakes that we already know don't work.

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