I’m pleased to be introduced by Jon Newton of P2PNet to Jeff Tucker’s incisive article observing the prohibition era of the 21^st century – illicit distribution of pop the culture rather than of pop the beverage.

So let’s infringe LewRockwell.com’s copyright and thumb our noses at the prohibition of copying another’s published work without their permission:

The Mercantilism of Our Time

by Jeffrey A. Tucker

Someone handed me a book the other day – a cult classic among music geeks – and urged me to read it, and, when I had finished, sign my name in the front cover. That way I could be added to the already long list of readers in the front cover, each of whom add added his or her scrawl to the book after having read it.

How charming!

Except for one thing: this is complete violation of the spirit of intellectual property law. All these readers were sharing the same book instead of buying a new copy. Think of the revenue lost to the publisher and the royalties lost to the author! Why, if this gets out of hand, no one will ever write or publish again! These readers are all pirates and thieves, and they should probably be subject to prosecution.

So goes the rationale behind intellectual property law. It’s what economists call a “producers’ policy,” design to create maximum revenue for one side of the economic exchange, consumers be damned. In that sense, it is exactly like trade protection, a shortsighted policy that stymies growth, robs consumers, and subsidizes inefficiency. It’s Bastiat’s “petition of the candlemakers against the sun” all over again.

Apply the IP principle consistently and it’s a wonder we tolerate public libraries, where people are encouraged to share the same copy of a book rather than buy a new copy. Isn’t this also an institutionalized form of piracy?

The defenders of IP would have to admit that it is. They are often driven to crazy extremes in sticking the claim that copying is a form of theft.

I asked one emphatic correspondent about the ethics of the following case. I see a guy in a blue shirt and like it, so I respond by wearing one too. Is this immoral?

No, he said, because the color blue occurs in nature.

What if a person draws a yellow happy face on the blue shirt? Can I copy that? No, he said, this would be immoral. I must ask his permission and gain his consent. Actually, it’s even worse than this case suggests. If even one person had previously worn a blue shirt with a happy face, no one else on the planet would be able to do that without seeking consent.

It should be obvious that if everyone were required to seek the permission for the use of every infinitely reproducible thing that “belongs” to someone else – every word, phrase, look, vocal inflection, chord progression, arrangement of letters, hair style, technique, or whatever – or if we were really to suppose that only person may possess the unique instant of any of these things, civilization would come to a grinding halt.

Sadly, this is where our laws are tending. Right now, there are laws being considered that would step up IP enforcement to the point of clear absurdity. Just last week, YouTube removed the background music of countless videos for copyright reasons, even though such videos help popularize the music. Even home performances of songs written in the 1930s – young kids playing piano and singing – were taken down at the behest of producers.

People are talking about extending patents to sports moves, extending copyright to story lines, imposing a central plan on computer design to comply with patents, forcing everyone on the planet to obey U.S.-style IP laws by means of military force. Kids are going to jail, institutions are hiring internal police forces to watch for IP violations, and an entire generation is growing up with a deeply cynical attitude toward the entire business of law.

We are at a prohibition-style moment with regard to IP, just as with liquor in the 1920s. The war on the banned thing isn’t working. Those in power face the choice of stepping it up even further and thereby imposing a militarized state in place of anything resembling freedom, or they can admit that the current configuration of law has no future and bring some rationality to the question. Other societies have indeed crushed innovation with this very impulse.

Do you know why we celebrate Columbus Day instead of Cheng Ho Day? Cheng Ho was a great Chinese explorer who, in the early 15th century, took his fleets to Africa and the Middle East, but he was forced to stop when the elites in the home country began to feel threatened by his discoveries. The Chinese government won the war on exploration, and became static and inward. You can win a war on progress but the gains over the long term are few.

In addition to relaying the above story, the authors of Against Intellectual Monopoly, in the last chapter of their fantastic book, make a case for the complete dismantling of the law. “Intellectual property is a cancer,” they write. “The goal must be not merely to make the cancer more benign but ultimately to get rid of it entirely.”

The authors do not leave at that. They are intellectuals of the real world. They first make a case against any more expansions of bad laws, and lay out some reform proposals: shortening patent and copyright terms, changing burden of proof for originality, eliminate ridiculous redundancy trials for drugs, and the like. The authors even volunteer their time to help craft legislation. But the really hard work here is intellectual, since the pro-IP bias is so entrenched. The authors take the pure abolitionist position as a way of shocking us out of our stupor.

Is change possible? Of course. It was thought in the middle ages that most all products required monopoly production. The salt producer would enter into an agreement with the ruler. The ruler would promise a monopoly in exchange for a share of the revenue. It was thought that this would guarantee access to a valuable commodity. How can anyone make a buck without a guarantee that his hard work would be compensated?

Well, it took time but eventually people realized that competition and markets actually do provide, as implausible as it may seem. As the centuries moved on, markets became ever freer, and we no longer believe that the king must confer a special status on any producer. They still do it, of course, but mostly for open reasons of political patronage.

And yet in this one area of “intellectual property,” all the old mercantilist myths survive. People still believe that a state grant of monopoly privilege is necessary for the market to work. The myth has now been crushed with this book. So now the laws can be beaten back and they are being beaten back in the age of digital media.

Realize that for young people today, the initials RIAA and MPAA are the most hated on the planet – the equivalent of the IRS of a past generation. The heck of it is that these are private entities. Think what this means.

Capitalists of the world, please pay attention: you have a serious problem when an entire generation is being raised to HATE private, capitalistic institutions. Now, you and I know that these institutions are doing something illegitimate, namely enforcing “intellectual property,” which is really nothing but state coercion. Still, this besmirches the reputation of free markets. So too is a generation of socialists being raised to hate U.S. foreign policy on the belief that its export of IP is a form of capitalist imperialism.

For these reasons, no one has a stronger interest in abolishing intellectual property than supporters of capitalism.

I said at the beginning of this series that it has taken me fully six years to think through these issues. The book by Boldrine and Levine broke through the reservations I had that remained. In the meantime, I’ve received hundreds of messages to the effect that other readers have made the jump too. Whatever is holding you back, I beg to you read this account. I personally consider it to be one of the most mind-blowing books I’ve ever encountered, and so now I join the armies of people who are demanding an end to a system that threatens our way of life in the most fundamental way.

For this reason, this book is seminal, not only for our times, but for the entire history of liberty. It has clarified a point that has been a source of confusion for many years, and put it front and center in the current debate.

It might need correcting in places and I have my own knits to pick over their neoclassical framework and talk of social costs and the like, but these are petty concerns as compared with the overall framework. What they have done is marvelous and extremely important.

February 9, 2009

Jeffrey Tucker [send him mail] is editorial vice president of www.Mises.org .

I am reminded by Improbulus (via ORG) that David Lammy, Minister for Higher Education and Intellectual Property (UK), has launched an Intellectual Property Office initiative on the future direction of copyright:
© the future – Developing a copyright agenda for the 21^st century

It begins “The copyright system is of fundamental importance to the future health and prosperity of our creative industries and our economy”, but a century or two ago a similar initiative might just as well have begun “The trade in slaves and their exploitation is of fundamental importance to the future health and prosperity of our manufacturing industries and our economy”.

Both of these statements demonstrate a lack of imagination, bordering upon a self-interested refusal, to envision a future in which a healthy and prosperous industry can be achieved without suspending individual liberty.

Of course, it is not in dispute that the suspension of individual liberty can be lucrative to those privileged with its suspension, nor that such beneficiaries will be keen to retain it. However, this unethical exploitation is not something to look forward to in the future, but an embarrassment to consign to the history books.

As for the IPO’s request for comments on the future direction of copyright I’d suggest that it can be compared to that of Robert Mugabe’s direction of Zimbabwe. Presumably well intentioned, but all his directions lead Zimbabwe to its doom. Despite everyone else’s attempts to stop the runaway train of his ‘government’, it continues on, inexorably as if in a slow motion crash.

Until people start recognising that copyright is an unethical anachronism, a vestige of a bygone era in which individual liberty was considered secondary to industrial prosperity, then any direction will be the wrong direction.

Copyright has to be abolished. Asking for comments on the future direction of copyright is like asking the same for slavery (with any unenthusiastic comments to be ignored).

Just as with Zimbabwe, the sooner copyright runs out of steam and its crash is complete the better for everyone, when people can rediscover their culture free of its totalitarian yoke and resume the enjoyment of their freedom to share and build upon it.

Attempting to adjust the direction of copyright onto an apparently less damaging course, at best simply postpones its inevitable crash (abolition) and thus extends the duration of its current damage.

The plutocratic publishers (à la Mugabe) do not need my assistance in their lobbied direction of copyright toward abolition – and they are doing an excellent job of making it sooner rather than later.

Unfortunately, until people see the damage that copyright does they will be unable to recognise that it should be abolished. Therefore, Cassandras such as I eventually realise, despite trying, that there’s nothing we can do or say to avert the disaster.

The train wreck that is copyright’s future has to happen.

There is considerable propaganda attempting to mislead the public into believing that downloading is a criminal act on the part of the downloader, e.g. “Illegal downloads caused considerable losses to the music industry last year” or “If you download copyrighted music you are committing a serious crime”.

So, let’s get the legality of downloading established once and for all:

1. Downloading is the act of communicating a file from a supplier’s server computer to a recipient’s client computer, at the latter’s request, and at the former’s consent.
2. Downloading a file (containing or representing an intellectual work) involves the manufacture of a copy.
3. The copy is manufactured by the supplier (by their server) because they (unlike the downloader) are in receipt or possession of the source work, or have access to it.
4. The manufactured copy is communicated by the supplier to the downloader (the recipient) via a computer network (whether electronically, optically, or by radio transmission, etc.).
5. The downloader receives the manufactured copy, but does not participate in its manufacture (impossible without the source) in the download process.
6. It is possible that ephemeral, intermediate copies were produced by the network and other devices during the transmission of the copy and its storage by the recipient.
7. The recipient (their client computer) may have had to assemble the final file if the copy was transmitted in small fragments rather than in one piece, however, the act of such assembly does not constitute copying.

If the intellectual work is not protected by copyright no infringement can occur.

If the intellectual work is protected by copyright, and the supplier is not licensed by all copyright holders to the work to manufacture and distribute copies, then the supplier may infringe copyright in the process of manufacturing and supplying copies to downloaders.

In no case does the downloader, the recipient of a downloaded file, commit copyright infringement.

Having downloaded, the downloader may then commence the manufacture and supply of further copies to others, which is of course a potential infringement.

Culpability for copyright infringement lies not with who requests an act of copying, nor with who receives a copy, but with who performs the critical act of manufacturing a copy (and who distributes/transmits it).

In conclusion:

• Downloading may involve copyright infringement, but this is not an act committed by the downloader.

If two joggers wearing portable CD players meet, and one gives the other their CD of Barry Manilow’s Greatest Hits, and the other reciprocates with their CD of Cher’s Greatest Hits, then each jogger still has just one CD each.

However, if two basket weavers meet at a market, and each, in admiring the craftsmanship of the others’ work, agrees to weave the other a replica of the one basket they each have left, then they both end up with two baskets each.

So, clearly, with material handicrafts, exchanges are more productive, whereas with intellectual works and digital technologies they are not.

Well, this is the counter-conclusion to the frequently quoted George Bernard Shaw aphorism: “If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”

The point about sharing or communicating ideas is that it involves copying. We do not yet have the technology to manufacture copies of apples as easily as we may manufacture copies of baskets.

• Exchanging intellectual works, or ‘communication’, is typically accomplished by copying rather than movement – because copying is usually cheap.

• Exchanging material works, or ‘barter’, is typically accomplished by movement rather than copying – because copying is usually expensive.

An exchange simply means that two parties each perform an action as part of what is usually agreed to be an equitable transaction, where each party receives something from the other. Whether copies are produced in the exchange is coincidental, and simply indicates that productive labour took place rather than only transfer of property.

The only peculiarity of ideas (as opposed to any externally fixed intellectual work) is that while they may be copied (given comprehendable explanations), they are almost impossible to remove from the possession of their owners, except perhaps by induced amnesia or hypnosis.

So, apart from the inaccessibility of human minds, there’s no magic in communication (copying) vs barter (moving).

Given the absence of magic in copying, we can instead wonder at the motivation for quoting Bernard Shaw’s aphorism.

The quote is typically used to suggest that intellectual property is an oxymoron or that (given copying is facially productive) there can be no such thing as theft of intellectual property. For example, if you steal my one basket, I have no baskets, whereas if you steal a copy of my CD, I still have it. This is to misunderstand the wrong in stealing. The rights violation is not simply to diminish someone’s property, but to violate their privacy (property derives from the right to privacy). The logical remedy is to undo the violation, i.e. to return the material or intellectual work removed (including any copies manufactured).

Thus if you had instead burgled my private workshop to make a basket with your own materials that copied my new, secret basket design, despite no material theft this would still be stealing, i.e. theft of my intellectual work in my private possession, theft of my intellectual property, violation of an inventor’s exclusive rights to their designs. It doesn’t matter that you are productive in your act of stealing a copy you’ve made.

Just as it is invalid to say that productive theft cannot be stealing, so it is also invalid to say that infringements of privileges are stealing. If you buy a CD recording of a concert you attended and make a copy of what is your own property, you have violated no-one’s privacy. There can be no theft – whether of material or intellectual property. You may be infringing someone’s privilege (of copyright), but that is not theft.

As for the violation of exclusive rights (as recognised of authors and inventors by the US Constitution), this requires removal, communication or copying to occur across the boundary of a private domain (without the owner’s permission), although this can be abetted by further distribution of the intellectual property so stolen.

We should conclude that communication can violate rights in only the following ways:

1. It constrains another’s liberty (drowns out another’s speech)
2. It impairs the truth (deceives or misrepresents)
3. It commits or abets a privacy violation (distributes stolen IP)
4. It jeopardises life (incites violence)

Communication is the copying of information. Human communication is speech, and moreover the liberty to communicate is a fundamental right not only necessary for the individual, but also for cultural exchange. It cannot be abrogated to create a transferable privilege for the commercial benefit of printers. That said, immortal coporations having no rights may be regulated and subject to such monopolies if a government can demonstrate this as being beneficial to its mortal citizens.

Therefore, as long as no rights are violated, any copyright infringement that occurs in an individual’s communication cannot render their act unethical. Moreover one could say that such copyright infringement is ethical.

I read on TechDirt that Paul Mulshine recently wondered in the online Wall Street Journal what the new revenue model would be for newspapers, or rather, what the new model for ‘compensating journalists’ would be, and if anyone could tell him.

Well, it does seem that to tell him takes an inordinate amount of arcane technical knowledge, even if it doesn’t quite take a genius.

Attempting to reply by following “Please add your comments to the Opinion Journal forum.” simply wastes your time by informing you after you attempt to submit your reply that the topic is closed.

And then, when attempting to contact the journalist directly you find that such a privilege is only available to WSJ subcribers.

This is not the right way for a newspaper to go about either obtaining an answer from its readers, or forming a constructive relationship with them. Furthermore, I doubt such hurdles will endear the most avid potential customers to the journalist, nor persuade them to realise their potential by getting out their wallets and encouraging the journalist to continue writing.

I have therefore decided to resort to the message-in-a-bottle equivalent of blogging about this in the expectation that Paul Mulshine will eventually find the answer to his question washed up on his shore (if he can find it amongst the sodden newspaper jetsam).

Online newspapers would do well to at least make a meagre attempt to test their readers’ experience of using their sites. The last century may have brainwashed them into thinking that feedback can only occur via ‘Letters to the Editor’, but they should have the intelligence to check that their online equivalent actually works – rather than cast aspersions against the ability of their readers to ever exhibit any intelligence.

So, here’s my answer to Paul Mulshine:

Good news will always be valued.

Unfortunately, copies are extremely cheap to make, and ever greater numbers of people are paying a black market price for them rather than the monopoly price, i.e. paying nothing instead of something.

Instead of a revenue model that depends on monopoly protected sale of copies of news, you’ll have to move to sale of news. Sell what people want (news), not that which they can make themselves for nothing (copies).

Fortunately, the very device that makes copying so cheap is the same device that makes communicating with one’s customers so cheap, i.e. The Internet.

So, form a bi-directional relationship with your online customers (see VRM) and sell the news to them, and moreover, encourage a free market in copies (rather than the black one that exists anyway).

That’s what the new revenue model is.

Too many people remain mystified that an MP3 that is free to copy or download can still become the best selling album, i.e. Ghosts I-IV by Nine Inch Nails.

That is a quandary that results from the copyright inculcated tradition of conflating the copy with the art. This is why people have so much difficulty figuring out why people pay for that which they can get for nothing.

So, let’s separate the copy from the art:

• Those who value the art should pay the artist.
• Those who value the copy should pay the printer.

There will thus remain a residual market for valued souvenir/collectible copies, e.g. vinyl.

However, in the digital domain the Internet is dissolving the idea that the art (and the commission to the artist) is bound with the copy.

We should then recognise that art should be released from the impotent shackles of copyright, changing from black to white a free market in the production and distribution of copies – distinct from the production and publication of the art.

Why should the artist receive a royalty from someone else’s hard labour in producing a copy?

Let the artist be paid for their art, not the production of copies.

The difficulty facing audiences today is figuring out how they can pay the artist for their art, given they don’t need to pay them (or anyone else) for copies.

For example, if you’ve already downloaded the MP3 copy for free, but want to pay the artist for their art, why also pay Amazon for a copy you don’t need? Why should Amazon get a cut of the money the audience wants to pay solely to the artist?

There was a very good article on the Million Music blog yesterday:
http://millionmedia.wordpress.com/2008/11/20/bloggers-vs-majors

This asked why music bloggers had changed from sympathy and tolerance toward major record labels to outright condemnation, and wondered if this had been due to the labels’ recent ‘assertion of their rights’ by exercising their powers under the DMCA that had resulted in people’s entire blogs being taken down rather than just an offending post.

So I commented thus:

Individuals (human beings) have natural rights. Corporations don’t, they have privileges.

Copyright is a privilege that suspends the natural right to cultural liberty (specifically the right to share and build upon published works) in order to grant a lucrative monopoly to publishing corporations.

The DMCA is simply an enhancement of powers granted to copyright holders.

So, the majors are not asserting their rights, but exploiting their privileges.

If anyone was going to assert their rights it would be individuals asserting their right to share copies of published music recordings.

Unfortunately, most file-sharers and people who publish blogs containing mp3 files don’t realise they have a right to do what they’re doing.

Users of Google’s ‘Blogger’ service are reliant upon Google, so really they should host their blogs themselves on their own PCs if they don’t want them taken down by those privileged by the DMCA.

The blogger agreed in a subsequent comment with my moral viewpoint, but invited my further explanation.

So I then suggested in a second comment that if the labels kept on using the DMCA (or EUCD) as if it were a cultural sniper rifle, that eventually they’d have so many victims that they’d prompt a rebellion, that the worms would turn – if they haven’t started already. Cultural participants will either develop bullet proof vests (defenses against the DMCA) or will shoot back (use the DMCA against the labels).

Shortly afterwards it seems (from my referral logs) that someone from Universal Music found the post and its comments so disagreeable that they’ve ‘persuaded’ the blogger to discontinue publication.

Time: 21 Nov 2008 11:06am
IP: 167.167.136.2
Host: ip-167-167-136-2.ukrom.umusic.com
Page: index.php
Referrer: http://millionmedia.wordpress.com/2008/11/20/bloggers-vs-majors/
Method: GET
Status: 200

Interesting times…