Re: Fear of Life (was Microsoft, Automation)

Dan Fabulich (
Sat, 02 May 1998 02:56:12 -0400


Warrl kyree Tale'sedrin wrote:
>These industries are not "kept in place" by government coercion,
>except in the sense that any business is protected by keeping looters

No, there is a distinct difference. Consider it in terms of economic
supply and demand curves. The very first copy of a book is quite expensive
to produce, but subsequent copies are quite cheap. The first copy of a
book requires time, creative energy and artistic skill, whereas subsequent
copies can be produced in bulk and require considerably less innovation.
And perhaps most important of all, the artist very rarely actually DOES any
of the work involved in making copies of the book; this is a job best left
to printers.

We should expect, then, that the artist should be paid for the services
rendered, for creating the very first copy of the book, because THAT copy
actually required the artist's services. Art by commission is one such
example of an artist being paid for creating art, rather than for producing
copies of art. Auctioning the first copy to the highest bidder would be
another strategy.

However, once multiple people have a copy, the artist and anyone else who
has a copy of the book fall into nearly perfect competition. If the artist
offers a higher price for a copy of the book than anyone else, there is no
reason to buy from the artist; other copies are perfect substitutes. Since
we're in nearly perfect competition, the market price for the book should
be no greater than the marginal cost, the cost to make one more book. This
cost, of course, is no greater than the cost of printing.

Since an individual copy of a book costs almost nothing when it is in the
hands of many, but costs much more when it is only in the hands of the
artist, then it seems reasonable that the artist should make a profit
EARLY, when the book is being created, rather than later, when the book is
being printed.

>> as the human spirit of creativity
>> is released from the bonds of labor, free to create and influence
>> all other industries toward an even higher standard of living,
>> more art, more writing, and more software.
>A thousand years ago, every artist was directly rewarded by the
>people whom he directly delivered his art to, but could do nothing
>about copying and could not do any form of indirect delivery.
>Today, some artists sell their art to people who choose to make it
>freely available, while others receive indirect payment from each
>individual consumer -- who also receives the art indirectly. Only a
>tiny fraction of art revenues are related to art delivered directly
>from artist to consumer.
>A thousand years ago, only a tiny fraction of households contained
>any art whatsoever that wasn't made by its residents. Today, nearly
>every home does.

A thousand years ago, people were much much poorer than they are today. So
the fact that there was very little art around, which has always been
classified as a luxury, surprises me not a bit.

Also, it's important that we separate the supply of NEW art and the supply
of COPIES of art. While we might conceivably see a contraction in the
supply of new art as a result of the elimination of intellectual copyright,
the supply of copies of art would expand dramatically, as they would only
cost as much as it costs to reproduce the art. We should expect to see
LESS art in people's homes under copyright, not more.

With intellectual copyright, we get more new art, at a lower price than it
is worth, and fewer copies, at a higher price than they are worth. Without
intellectual copyright, we get less new art, at the high price it deserves,
and more copies, at the low price they are worth.

>Eliminate copyrights and patents, and indirect payment ceases to
>exist; so the artists who live off that indirect payment -- the large
>majority of those who can live off their art at all -- must turn to
>other fields. They will produce less art, or no art at all.

Less art, but at a higher price, thanks to auctioning/commision. It is not
clear, then, that the artists' revenues will contract.

>How does driving artists away from art and into other fields, produce
>more art?

See above.

>There is a substantial difference between being protected from
>looters who want to receive the benefit of your work without paying
>you (the writer as described), and being protected *by* looters who
>compel others to pay you without receiving the benefit of your work
>(the farmer as described).

Poor example. How about this one: The aviation industry, having a hard
time cartelizing, convinced the government to do it for them, setting up
the Civil Aeronautics Administration in 1938. (Later to become the Civil
Aeronautics Board, CAB.) Until deregulation in the 70s, it was allowed to
set interstate airline rates and prevent new interstate airlines from
forming. By setting a minimum price which no member of the cartel could
legally break and by preventing new airlines from forming, the cartel had a
coerced monopoly over interstate aviation.

Were passengers receiving the benefit of interstate transportation?
Obviously. Were they paying a fair rate for this benefit? No, absolutely

In this case, by not allowing new companies to make copies, the artist
gains a coerced monopoly over book copies; as a result, the artist can set
a much higher price than the copies are actually worth.

>The novel-writer simply wants to be paid by the novel-reader.

The novel-reader is not buying the work of the novel-writer. The
novel-reader is receiving the work of the novel-printer.

Think of it this way: the novel writer is making the mold from which
millions of cheap statues can be formed. Since this is true, the writer
should be paid for the mold, not for the statues.

>If the
>reader chooses to not read that novel, its author expects no payment.
> But novel-writers who receive no payment and have no reason to
>expect any payment in the future, tend to stop writing novels.
>Without copyrights, there would be no expectation of payment.

Again, the writer CAN expect payment. The author can write by commission,
or auction the work to the highest bidder.

>And while I am sure we all agree that 90% of all art produced today
>is crap, we don't necessarily agree on *which* 90%.

That's why we let the market decide.

Actually, this is the best reason of all to abandon intellectual property.
90% of what's written today is crap because authors don't bear the full
cost of a failed writing enterprise. If authors DID bear this cost, we
might see the supply of new novels contract while the quality increases,
just as we see in investment when we pull out the safety nets. Meanwhile,
more copies of those novels which have been produced can be sold cheaply
and to a wider audience.

So in conclusion, we get more copies of fewer but better novels without
copyright, and fewer copies of more but worse novels with copyright.

Care to try this again?

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