Intellectual Property and The Original Scam

It’s been a while.  I’m busy.  And more importantly, I only post when I feel I have something significant to bring to the table.  It may not be fully formed- it usually isn’t- but it is a thought of consequence.  And now I have one.

The idea of intellectual property is fairly fundamental; if you have an idea, then it’s yours and nobody else is entitled to the use of it for their direct monetary gain. If you invent a machine that will juice lemons then you are able to make and sell lemon juicers. If you write a book, nobody else can claim that they wrote it and start selling copies under their name.

Here’s the problem, and the reason why all intellectual property policies and DRM schemes are simply an attempt to rip you off. By creating exclusivity, you instantaneously create an intellectual monopoly. And for some reason this is considered the natural state of affairs. I know I’m going to receive emails claiming that obviously you’ll see monopolies since nobody else can write exactly the same thing and sell it. But that’s not the point. Consider the fundamental difference between selling an invention and selling the contents of a book or movie. In the former, you are using your knowledge to produce something which has value, and in the latter it is supposedly the information itself that has value. Its value is derived from improbability- it is exceedingly improbable that a random generation of ones and zeros will produce the contents of a book, much less a movie. This is why a book has more value than, say, the number 7. However, the criteria of judging the value of a book is purely mental- the way it’s written, the subject it is written about, etc. etc. There is an arbitrary preference process similar to the selection of apples vs oranges in a free market situation where supply and demand take the wheel from the basic price of production. Now, here’s the difficulty. Information costs absolutely nothing to reproduce. Nothing. Once the movie has been filmed it can be duplicated de nada. If you want it on disc, you have to pay for the disc and the laser writer’s time, but that’s it. For books, the actual text costs nothing to distribute. The physical book needs paper and printers to create, and as such has some cost associated with it. So why is it possible to make billions of dollars selling rights to play a movie to a movie theater?

To answer that, we must go back to prehistoric times. Yes, before they had movies. Back when humans were still trying to eke out a living in various tribes. Here we have the invention of The Original Scam. How do you get something for nothing? Simple, you convince your victim that it is in their interest to give you something for free. A tribal elder decrying that the rest of the tribe must bring him food because he is busy obtaining the favor of the gods to bring them good fortune is a good example. Power is an indirect and abstracted manifestation of this situation, where people will give you utility in exchange for “favor” which is an attempt to get you to use your power to collect utility from others in the donator’s favor. From time to time the ones in power do dish out “free” utility, but only because it allows the stream to keep on coming. Imagine the X-Prize. The prize might be $100 million, but the competition might cost $70 million to compete effectively, and maybe $90 million to ensure victory. There can be only one winner, but as long as more than one team plays then the people hosting the competition get free money. This is a brilliant tactic that should be employed by NASA or other agencies more often because everyone “wins” in a sense since it is a direct capital venture and the losers knew they were taking that risk when they entered. However, it is used negatively with the application of power because the nature of power itself compels those under its influence to participate. What do I mean by this? Consider the government. The power of the government lies in the widely-held belief that its edicts hold power. It’s exactly like the belief in money, and exactly like a belief in any other form of utility. Now, due to the nature of power, you cannot simply choose not to believe in money because then you wouldn’t have any power and you would be utterly screwed. If you were to arbitrarily stop believing in power, you would do something illegal and everyone else’s belief in the power would see you screwed. It’s the application of the Prisoner’s Dilemma to power. If you haven’t read about the Prisoner’s Dilemma, I suggest you check it out here under “You Are Not Alone” (May 21, 2007).

Now regarding intellectual property. Once we have reached the stage where utility is as countable as cash, we are presented with the difficulty of counting that which cannot be counted. For example, books. How do you calculate the value of a book? The answer is simple: how much does it cost to print it? The information inside cannot be considered to have value since it can be freely duplicated, and no money was required to create it in the first place. The book itself, on the other hand, requires publishing apparatus, etc. So when you buy the book, the person selling it to you has you completely convinced that you are buying something beyond what you are actually paying for, and therefore you are prepared to spend much more than you would normally. But here’s the issue; do ideas have a value in and of themselves, or is the value of the idea only relative to the effect the idea can produce through its application, requiring a brain? So, does the idea of how to create a battery have intrinsic and real value, or is it the fact that the idea can be used by a person possessing a brain to produce a battery result in the value? The person trying to sell you the knowledge of how to produce a battery obviously wants you to believe the idea has intrinsic value, but it really doesn’t. If the idea turned out to be wrong, its value is quickly nullified because in reality it cannot be used to produce a battery, whereas if the idea had intrinsic value it would still be possible to sell it for value, despite being wrong. If this is true for technical knowledge, why is the rule different for cultural knowledge? The string of characters we commonly regard as a book has no value in and of itself, despite the publisher’s desire to turn a profit. It is the fact that you can read it that produces the value. Though this seems like a pointless distinction, it means that what the industry castigates as “piracy” is actually ethical. The reason being that the owners of the idea have purchased it and are entitled to sell it at whatever price they wish with the book itself logically carries over with the information the book contains. The issue is that such a system kills the demand for purchasing books from the publisher. For example, according to stringent anti-piracy laws, reading books aloud would be illegal because it is the spontaneous creation, by duplication, of information they wish to sell to each of the children. What they want is to limit the impact of each book they sell so that others are required to purchase more of them.

And now we arrive at the crux of the issue; the value of intellectual property. Protection of information inflates its value by instituting scarcity by the same method as a government setting prices. But since the information has no value, a price cannot be set upon it directly. So, instead of setting the price, they set the quantity. So when you purchase a book they say that instead of buying the information inside, you are buying a license for one set of that information. You are prohibited from giving it away unless by doing so you lose yours. This means that you and your neighbor must buy two copies instead of sharing one, doubling sales from the two of you. But the effect is far greater, because there are millions of people who are required to buy their books individually, turning the sale of books into a massive superindustry. Changing the laws so you are allowed to sell the physical book, but the information within is free, would destroy the industry because you couldn’t charge $20 for 250 sheets of paper. Instead, you are returned to the natural free market setting where you are allowed to charge whatever you can for the product, unprotected and therefore uninflated by regulation. Selling books would still be profitable, but not nearly to the insane extent that it is now. Movies would be the same way; spending billions to produce a movie would be completely insane. Many will say, “but wait, if they don’t spend as much then the product won’t be as good!” You couldn’t be more wrong. The reason why modern movie producers are so risk-averse is because they stand to lose so much if the movie bombs. New movie ideas are few and far between in an industry where sequels, remakes and conversions (usually from popular novels) is the norm, and new ideas are economically punished overall, with repetition. This same “crap factor” applies to book writers, and even more so to publishers. The sheer volume of crap that gets written by those hoping to make a buck for free is astonishing. And the amount of money the publishers make compared to the pittance the authors are tossed is disgusting.

To take a slightly different tack- let’s use the perspective of information and memory.  Preserving copyrighted information in your memory is obviously legal.  If you watch a movie, you have the right to remember what’s in it. Similar to the rights of property deriving from the right to consume resource- i.e. eat, you have the right to control information you have experienced. Now let’s imagine that someone is gifted with a perfect memory. They remember everything they see or hear with perfect accuracy, and can even choose to replay it to themselves at will. Is this a violation of copyright? To broaden this idea a little bit, the contents of your head and the contents of your desktop computer are not really that fundamentally different- they’re both information. Pretty soon, we’ll probably understand the significance of neural networks enough to even interface the two. What happens then? When you watch a movie and then record your memories of it in the computer, how is that different from downloading the movie illegally and then watching it? There is a fundamental contradiction here- that you have the right to some information, but not to other information because some of it is accessible and some of it is not. Currently, we can’t access or share the contents of our brains directly, and therefore no sane copyright lawyer would argue you don’t have the rights to it. But when you buy a movie online you don’t have the rights to share it because you actually could share it if you wanted to. So the commonly held stance is that you are prohibited from sharing anything that you can share, but that you are allowed to share anything that you are unable to share. Ridiculous.

Here’s the superior model. Open source everything. Producers and publishers and video game manufacturers and who knows who else will yell and scream and kick in frustration as their little economic inflatable arm-floaties are ripped from them. But do you imagine that car manufacturers get the same level of preferential treatment? Sure they have their car designs, but what good are those to the owner of the physical car? They can’t summon another from just the plans. Competing companies might be interested, and they should be able to see them. That doesn’t mean they can just steal, wholesale, everything in them, because such things are protected by patents, not intellectual property. Patents are the superior system. Recently they have been corrupted, especially so in software, but the idea holds. Trade secrets are the mortal enemy of progress, so let everything into the open but prohibit free use. Transferring these ideas back to the book and movie industry. Just because you have the right to read the book and view the movie does NOT mean you have the right to put it on a DVD and then sell it. That right is reserved for the author of the book, and those rights she may sell to a publisher.

To resolve the contradiction from earlier, let’s say that I write a book, and then want to make some money for my efforts. I have a choice, I can keep it private or I can share it. I can send the book to a publisher, which will print copies of the book and then sell them for whatever it cost to print, plus some quantity to get them a profit.  They can’t make money from the content of the book- they’re only selling the physical printing of it. There is simply not as much money in publishing books as so many people would like you to believe. Not naturally, anyway.

Second issue- the author’s profit, and how it conflicts with mass distribution. Under the current model, the author makes a small royalty with each book sold. This is a very publisher-friendly strategy. I would propose a fundamental shift. When a book is made public, it is available to everyone for free. But there is no reason why the author should be pressed to automatically publicize everything. Circles of fans might link up and fundraise in order to pay for the release of an author’s next book. They will pay the author, in one shot, to open-source their work. They might also support the author after the fact by donations. As an interesting possibility, these rings may eventually become large networked companies which act like mutual funds for open-source material. They might collect donations from a wide base and then use their funds to open-source as much material as possible, taking credit for their hits. The ones that open-source the highest volume or the highest quality will attract more donators. The authors get pretty much all the money, and the will of the powerful is to open-source as much as possible, as quickly as possible.  It works.


2 Responses to “Intellectual Property and The Original Scam”

  1. colombianart Says:

    An interesting chain of thoughts – however almost within the first paragraph you present an error which undermines part of your argument: an idea can NOT be patented . . . so your lemon juicer as an idea is available to anyone. The way the lemon is juiced CAN be patented and this allows for many ways for this to be done.

  2. Evan Jensen Says:

    True, but they can’t make that particular lemon juicer, which is a physical commodity that has some cost associated with its production- a copyright. The patent covers the principle behind its operation.

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