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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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John Updike

Tim Sullivan brings to my attention an an article in the NY Times on digital publishing. I was particularly struck by "the novelist John Updike [who] forcefully decried a digital future composed of free downloads of books and the mixing and matching of 'snippets' of text, calling it a 'grisly scenario.'" Taking this at face value (a bad idea - see below) one might wonder what John Updike was thinking: of course every book is made up of snippets. John Updike, after all, simply rearranges the words in the English language to form his books, and I would be surprised if he does not use entire phrases "stolen" from others. For example, a Google Book search for the exact phrase "he turned and ran" turns up 3150 hits - plagiarism, I suppose, and we can only be thankful that such a short phrase cannot be copyrighted.

At this point a disclaimer: the entire Updike talk is available as a (free) podcast, and the NY Times quotation above has little to do with John Updike's actual comments. About half of his talk is a paean to bookstores. He evidentally led a more privileged youth than I, because while I can recall little time spent in bookstores, I recall thousands of happy hours spent in libraries. The last half of his talk is a commentary on a Wired article on the digital revolution in books. His comments read less like a the forceful decrying of a grisly scenario than the sad reflection of a buggy whip manufacturer on the death of his industry. If you want to know what this brave new world is likely to be like, instead of John Updike's poorly informed speculation, you might want to read David Friedman's thoughtful analysis.

To be clear - I am doubtful that the "digital revolution" will lead to the end of the sharp "edges" of books as independent entities that we enjoy today. No doubt words, phrases, or even entire paragraphs, will be combined in new ways as new books that have edges of their own. And that is no different than it is today - each book is independent, yet no book is an island independent of the world and literature surrounding it. Indeed, it is the erudition of a man such as Updike that is a great part of his appeal.

The NY Times article (although not the actual Updike talk) brought to my mind the issue of the "moral rights" of authors. To what extent is a creator morally entitled to the value created by his creation? There seem to be two camps of "moral rights" those who worship as heroes the great creators (sometimes this is self-worship) and those who worship the free market. As to why great creators of books should be more entitled to fast cars and the other things that money can buy than great cabinet makers I will leave for others to figure out. I simply want to point out that economists celebrate the market because it works and not because it leads to outcomes that are just.

I can illustrate this through a simple example having nothing to do with intellectual "property." Let's focus on cabinets. We may imagine that there are six cabinet makers each of whom can produce only one cabinet. The first two can produce a cabinet in an hour, the second two each take two hours, and the other two each take three hours. Each cabinet maker can also spend his hours selling books at the bookstore for $10 per hour. There are six people who want to buy cabinets, one would pay $50 for a cabinet and two would pay $40 and three would pay $10. It is easy enough to see that the actual price of cabinets will be $20 as the two "marginal two-hour" cabinet makers compete with each other to produce the third cabinet. This produces a benefit of $10 to the first two cabinet makers, $30 to the first consumer and $20 to the next two consumers. As it happens the total benefit of $90 is the greatest possible - which is what economists refer to as the "efficiency" of the free market. But is this outcome "just"? Certainly each cabinet maker is recompensed for their time - otherwise they wouldn't produce cabinets. But is the first cabinet maker morally entitled to the extra $10 he gets for his efforts? If the $10 consumers were willing to pay $30, price would rise to $30, and even if the first cabinet maker was selling to the original $50 consumer, he would now net $20 instead of $10. If the "two-hour" cabinet makers could produce cabinets in one hour instead, price would fall to $10 and the first cabinet maker wouldn't get the extra $10 at all.

In other words, in the competitive market, the amount you get isn't some measure of your effort or intrinsic worth, but depends on all sorts of idiosyncratic conditions of demand and supply. Economists favor free markets not because they are "fair" or "just" nor are we against them because they are "idiosyncratic and random" but we favor them because they work to produce the greatest good for the greatest many.


Comments

Hi! This looks like a great site. One of my favorite topics. I found you through a link from Marginal Revolution. A couple of comments: One, the formatting isn't quite right in Firefox (for me, anyway). I get a horizontal scrollbar and stuff flows off the screen. It looks fine in Internet Explorer, but come on, let's make it work in the free browser! Two, your feeds don't seem to be working at the moment. I tried both the XML and the Atom feed. Other than that, great job, and thanks for doing and sharing this. I look forward to contributing my usual lightweight thoughts to the discussion.
Since Jim Bim didn't leave a real email address, I'm posting here in hopes he'll email me privately or comment further. I use Firefox, so I'm surprised about the formatting issue. It seems to be the case only with the page on which comments are posted - and is because of the fixed width of the box you enter your comment into. I'm surprised the box resizes itself in IE, it isn't supposed to. So the question for Jim or anyone else: would you prefer to enter your comment in a narrower box so that the text can format better, do you prefer the wider box at the expense of the formatting, or do you know the html for a resizable text entry box?

On the feeds - my browser seems to find them. Is there a problem with a particular reader or particular formatting?

Hi, David. Thanks for your reply. I'd be happy with a small box. If it ever became an issue for composing a comment I could write it in a bigger editor window and cut and paste to the comment box. (And FYI I looked again and it didn't resize in IE. I just opened up the front page and carelessly assumed it was working right, without realizing it was only the comment page that had the problem.)

I'm using Feedreader (feedreader.com) for my feed, and while I wouldn't rule out a problem with it or how I have it configured, it works reliably for all my other feeds (both XML and RSS). I'll try experimenting and see if I can figure something out.

I get an horizontal scrollbar too, and I use Firefox with the stock font configuration.

Regarding the box width, I agree with many people that prefer something close to 65-character-wide lines. They are long enough to allow comfortable writing and reading and short enough to avoid skipping lines. That's my standard for any plain text that I write.

As for the news feeds, I tried both the atom and the xml, and it did not work under Blam!. However, both feeds worked under Liferea. Blam! and Liferea are both Linux feed readers.

Something important: I don't think that requiring people to learn even the most basic HTML in order to post comments is a good incentive for reader's participation. I don't know which software do you use to run this blog, but I would suggest Wordpress [1]. I use it at my web pages and it works very well. It doesn't require people to write HTML code in order to post comments. Also, Wordpress is a very active project that is constantly improved and has good community support.

[1] http://www.wordpress.org

I discovered this blog yesterday, and it is already one of my favorite readings. Probably, because I am very interested in the subject of IP protection. I don't know who should I contact, but I would be very glad to help this blog with its technical problems. I am in no way a web developer, but I think I can help.

OK - I've cut the width of the box for entering the comments. We'll see if there are any complaints.

The problem with the feeds is probably caused by high byte characters that get pasted in from elsewhere. I've fixed the program to rewrite most of these to something sensible and validated the XML feed. Hopefully the feeds will work correctly and continue to do so; let me know if there are further problems.

Thanks, David. Much better! The feed is also working in Feedreader now.

As for including html tags, I don't mind it as it is such a basic thing, but I can see Guilherme's point. In my first post I neglected to add tags, not realizing they were necessary. No big deal.

Anyway, looking forward to following the blog and keeping my ire up about the dismal state of IP affairs.

It does "feel" much better now! Thanks! And the feeds are now working under the Blam! feed reader.
Perhaps I should move the offputting stuff about html below the text entry box to make it clear that tags are optional, and have the software convert blank lines to

tags so that you don't have to worry about entering them by hand to get the spacing right?

I think you're missing something important. You notion of fairness or justice seems to be unbalanced. Just because a person asks for a certian amount of compensation for their products does not me they deserve that amount. With regard to fairness, the buyer must also be taken into consideration. Using phrases like "morally entitled" muddy the issue. No one is morally entitled to be compensated for their labor. They are morally entitled to not be prevented from asking whatever compensation they choose. Morally entitled implys moral obligation. No one is obligated to buy anyones product.

Since no one is morally obligated to buy things no one is morally entitled be compensated for those things, be it more or less than their competition. The markets are fair and just not because people get what they want, but becasue people voluntarily cooperate in them. That's what 'works' means, when economists celebrate the market. None of your cabinet makers 'deserrve' or are 'entitled' to be paid anything. They are lucky that some one wants to buy their cabinets, just as the people who want to buy cabinets are lucky to find some one selling them for what they are able/willing to pay.

I'm not sure why this comment is posed as disagreement - since I agree with it. The issue over copyright isn't whether authors should be morally entitled to ask whatever compensation they prefer. It is whether they are morally entitled to have the government enforce their wishes on people who have paid for their products. No one (as far as I know) disputes the right of music producers to hobble their music with DRM and charge a high price for it. But are they entitled to get the government to force people to put DRM hardware on their computer? No one disputes the right of music producers to charge me a high or low price for their music. But are they entitled to tell me what I can do with the music after I've bought it?

The point I was making was that some producers of intellectual products feel that they are entitled to more than the right to ask for whatever compensation they want. They feel they have the moral right to every bit of social value generated by their "creation." There is (an admittedly confused) point of view is that this is what happens in the "free market capitalist system" with other "non-intellectual goods." If you don't believe this go read something like Novak's The Fire of Invention, the Fuel of Interest [AEI Press]. The example was to demonstrate that this isn't what free markets do at all; everyone gets to cover their costs, and the amount that they get above and beyond that is fairly arbitrary and has no particular moral force.


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