Against Monopoly

defending the right to innovate

Was Napster Right?

Monopoly corrupts. Absolute monopoly corrupts absolutely.

Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.

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Half Empty or Half Full?

I heard about this first from Richard Corsale who directs us to this article about the ACTA. The highlights? Three strikes and you are out...the music companies would get to shut down anybody for any reason...The entire "negotiation" - read big media wish list - taking place under the guise of "secrecy for national security."

Yet in Europe we have this - an internet users rights bill that explicitly rejects three strikes and you are out. I'll take this as a reliable summary of the situation

Christian Engstrom, a lawmaker from Sweden's Pirate Party, said the revised bill was somewhat of a victory for file-sharers, but warned that the EU assembly would have to keep a close eye on member states that want to cut off Internet users for online pirating.

The bottom line: the weasels continue to weasel and every time they come into the light we have to whack them again.

Ban the Phonograph!!

(via Robert Levine) The invention of the phonograph was going to discourage people from going out to see live music. The introduction of music radio was a surefire way of killing record sales. "Home taping is killing music" screamed the magazine ads when the cassette tape was introduced to the marketplace.

From "Technology has the labels singing the blues, but artists are plugging into a new relationship with audiences," by Greg Kot in the LA Times.

The Good, The Bad, and the purely delusional

(via Andrew Sullivan)

NPR chief executive Vivian Schiller

It's almost like there's mass delusion going on in the industry They're saying we really really need it, that we didn't put up a pay wall 15 years ago, so let's do it now. In other words, they think that wanting it so badly will automatically actually change the behavior of the audience. The world doesn't work that way. Frankly, if all the news organizations locked pinkies, and said we're all going to put up a big fat pay wall, you know what, more traffic for us. News is a commodity; I'm sorry to say.

Chris Ahearn, President, Media at Thomson Reuters

Blaming the new leaders or aggregators for disrupting the business of the old leaders, or saber-rattling and threatening to sue are not business strategies - they are personal therapy sessions. Go ask a music executive how well it works.

Blame Canada

It's all those Northern pirates

A Letter From Sweden

You may have heard that a judge in Sweden found against the Pirate Bay for copyright violation. He concluded that linking to material that might be under copyright is a violation of copyright. Here is a letter summarizing what is going on now:

Dear David:

I just had to write and tell you what has happened the last few days.

In about five days that has gone since The Pirate Bay verdict, the Pirateparty has now become 38.000 members strong. Still increasing fast. Six days ago we were only 14.000 - now we are Swedens fourth largest party - counting members. A couple of days later we will be no:3 if things keep going like they do.

To get in to the European parliament we need about 100.000 votes.

That goal actually seems quite reachable right now. Last election we had about 6000 members and we got 37.000 votes. And things are hot like never before right now for our questions - and nothing else seems really to be a hot topic. And, it´s less than 30 days left to the election.

Hope to keep you updated - this is going to be really exiting!

Today the newspapers blew up a scandal that the judge for The Pirate Bay trial actually also was a member of a couple copyright organisations. He had also worked with some of the lawyers that represented the copyright industry in the trial.

If you are interested read more about the incredible story you can read it in english at:

link here

I am currently writing a book called "The Pirate Manual - How to speak with voters" in swedish. I hope you don´t mind I mention your books.

Sincerely yours

Mika Sjöman The Swedish Pirate Party

Innovation and Copyright

The fools are at it again. Despite the wide availability of tools for copying DVDs to hard drives, the MPAA is suing RealNetworks for selling a copying tool that will only make one copy and doesn't undo the encryption. Details here and a quote:

In October, U.S. District Judge Marilyn Hall Patel temporarily barred sales of RealDVD after the product was on the market for a few days. At the time, the judge said it appeared the software did violate federal law against digital piracy, but ordered detailed court filings and the trial to better understand how RealDVD works.

Notice what is happening: the DMCA allows a single judge to take a product preemptively off the market based on an "appearance" of guilt.

Much of the harm in IP law would no doubt be alleviated if we just got rid of the use of injunctions.

Masnick versus Griffin Smackdown

Jim Griffin who has tried for many years to migrate the music industry to a mandatory licensing scheme has received backing from Warner for a plan called Choruss. Mike Masnick is skeptical of the details; Griffin for some reason has responded on private forums rather than public. The "interchange" the two is interesting - you can read about it on Mike Masnick's blog.

Sue the investors!!

No I'm not talking about Bernie Madoff suing the people who invested with him...I'm talking about the RIAA. The story is here. I've warned repeatedly that the "media" industry - a pipsqueak little industry not even the size of the IBM Corporation, and controlling a grand 10% of the entertainment market - is the tail wagging the dog. Why? Because they threaten innovation in all industries. Their theory basically is: we want money, someone should give it to us. Unfortunately they have enough money to purchase Congress and the Supreme Court.

The Music industry should drastically reduce prices

The Swiss newspaper TagesAnzeiger has an interview of Eric Garland on the digital music market (in German and broken Babelfish English). Essentially, he says that a whole generation of customers has been lost for the music industry through "piracy" and that the music industry should accept this instead of fighting it. One way to do so is to massively lower the price of music. At $1 a song, people hesitate to buy and look for alternatives. At $0.10, they would buy without hesitation and much more frequently. Piracy is then not worth it anymore.

This reminds me of the comparison between the early US and British book industries in Michele and David's book. Flood the market with cheap goods, then no one can offer a lower price and you still make more profit than by enforcing copyright. And you improve public welfare, too.


You know you are making progress when you are attacked by lobbyists. Michele's presentation yesterday at Cato was attacked by the Copyright Alliance. Apparently there was a discussant named Robert Atkinson, who, unfortunately, appears not to have read the book carefully. Well here are some of the claims along with my responses

1) While the book contained some proposals for reform, it was explicitly calling for elimination of intellectual property, and in fact the book repeatedly claimed that studies suggested all parties would benefit from its removal, although Atkinson found no study that truly documented that claim. Boldrin replied that he is politically realistic and knows you must start with reform before you can get to full elimination.

*Apparently Atkinson missed Chapter 8 of the book which that the best available data shows that intellectual property has little or no effect on innovation. As there are many harms, also well documented throughout the book, a policy with no social benefits and many harms would seem ripe for elimination. I don't know, by the way, of any study or assertion that elimination of intellectual property would benefit everybody - I'm pretty sure, for example, that some authors, movies stars, and others, would make less money without IP than they do with it. The stated goal of IP however, is to promote innovation and progress, not to enrich specific individuals.

2) There is no focus on incentives for innovation in the book, essential if you are to discuss IP. Boldrin replied that innovation occurs often without incentives, a position Atkinson strongly disputed.

*The central theme of the book is that innovation requires incentives. We spend chapter after chapter documenting what the incentives are when there is no intellectual property, so this increases our doubt that Atkinson read the book carefully.

3) It was backwards to claim the Internet means creators should have to extract rents more quickly now after release, as the digital age shows it's even harder to do so as pirated works produce that much more quickly.

*I can't even parse what is being claimed here, but we've devoted a lot of time to the issue of how rents are extracted in the presence of cheap internet copying. While it is certainly possible to charge and profit with rapid copying and no intellectual property, the evidence suggests that the best business model in many cases is that of giving the recorded/copiable product away for free over the internet and selling complimentary products, for example, in the case of musicians, live performances.

4) The book sees price falling to zero but ignores the fact that in that scenario, revenues fall to zero.

*This statement is mathematically incorrect. As a practical matter, as price falls revenue can go up or down, depending on how much sales increase.

5) The book has an unfortunate tendency toward diatribe, such as calling IP evil, referring to US Supreme Court justices as having double-digit IQs and suggesting that those who support copyright don't appreciate facts.

*I admit the book has an aggressive tone, although I'm not sure all these assertions about what we say are correct. But speaking of diatribe, we are not the ones who refer to our opponents as thieves and pirates.

As a Schumpeterian myself...I think Atkinson is right on the money. Copyright, and IP in general, is all about incentives. Rights are given, a limited monopoly is created, to encourage authors and inventors to produce writings and discoveries. This comes from the Progress Clause of the US Constitution, aptly named, as a focus only on use of end-products will soon leave you with fewer end-products.

*We are not Schumpeterian because Schumpeter created a theory for which there is no evidence. Notice how it is simply asserted that IP incentives achieve the desired effect. It is funny how those people who decry theory (we are theorists) assert their own theories as if they were evidence. We are extremely concerned with innovation as the engine of modern economies; we started as did most economists thinking that limited monopoly was a necessary incentive for innovation. Based on evidence we no longer believe that. The evidence can be found in our book. On the face of it the proposition that monopoly (even limited monopoly) is somehow the friend of innovation is not terribly plausible.

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Most Recent Comments

The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace

The right to rub smooth using a hardened steel tool with ridges I'm a bit confused by this--even if "hired to invent" went away, that would just change the default

Do we need a law? @ Alexander Baker: So basically, if I copy parts of 'Titus Andronicus' to a webpage without

Do we need a law? The issue is whether the crime is punished not who punishes it. If somebody robs our house we do

Do we need a law? 1. Plagiarism most certainly is illegal, it is called "copyright infringement". One very famous

Yet another proof of the inutility of copyright. The 9/11 Commission report cost $15,000,000 to produce, not counting the salaries of the authors.

WKRP In Cincinnati - Requiem For A Masterpiece P.S. The link to Amazon's WKRP product page:

WKRP In Cincinnati - Requiem For A Masterpiece Hopefully some very good news. Shout! Factory is releasing the entire series of WKRP in Cincinnati,

What's copywritable? Go fish in court. @ Anonymous: You misunderstood my intent. I was actually trying to point out a huge but basic

Rights Violations Aren't the Only Bads I hear that nonsense from pro-IP people all the

Intellectual Property Fosters Corporate Concentration Yeah, I see the discouragement of working on a patented device all the time. Great examples

Music without copyright Hundreds of businessmen are looking for premium quality article distribution services that can be

Les patent trolls ne sont pas toujours des officines

Les patent trolls ne sont pas toujours des officines

Patent Lawyers Who Don't Toe the Line Should Be Punished! Moreover "the single most destructive force to innovation is patents". We'd like to unite with you

Bonfire of the Missalettes!

Does the decline in total factor productivity explain the drop in innovation? So, if our patent system was "broken," TFP of durable goods should have dropped. Conversely, since

Does the decline in total factor productivity explain the drop in innovation? I wondered about TFP, because I had heard that TFP was increasing. Apparently, it depends on who

Music without copyright I do agree with all the ideas you have presented in your post. They are very convincing and will