Hollywood lawsuits to strike Net pirates

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Not necessarily in a capitalistic society...

In a capitalistic society, suppliers do not get to arbitrarily set the price of goods sold. They can TRY to do that, but the final price of the good is determined by whatever the market decides. So no, I do not believe that a supplier (even as the "owner") has any moral right to completely set the terms of the sale (which includes the price).

Some might argue that copyright is not supposed to be monopolistic, not capitalistic. Unfortunately, this argument falls flat because everyone (the market) recognizes that the scarcity created by Copyright Law is artificial. While basic economics is too simplistic to model what happens in real life, it is basically true that when a substitute is available for a good, then the price of the good goes down.

In this case, a perfect substitute is available-- a pirated movie for a lesser price in place of an original movie for a higher price. In fact, the pirated movie may be far more attractive than the legitimate good because a pirated movie may not have DRM or other onerous restrictive technology. The potential customer has the choice to purchase the real thing or download an illegal copy.

While "morality" and "legality" might affect the cost of goods and elasticity, I do not believe that they play much of a role in economic behavior. Legal or not, moral or not, if a cheap and convenient substitute is available then people WILL take it. Those riding white horses can yell "thief" and "no fair" until they're blue in the face, but it won't make a difference. True capitalism doesn't exist in this world (because powers that be always try to manipulate the market itself and there is no perfect market). But capitalistic behavior has been a darn good model thus far.

A "take it or leave it" model basically assumes that (1) the seller can dictate whatever terms, and (2) the buyer only has two options-- accept all the terms and take it, or reject the terms and leave it. Unfortunately for content owners, I believe this model is unsustainable and cannot exist for intellectual property.

Why? Because the marginal cost of creating a copy (a perfect substitute) is almost zero. There is never any reason for a buyer to accept terms from a seller (especially onerous terms) when he or she can make or obtain a near perfect copy for free. Sellers are competing with free. This doesn't mean that they can't make money (for example, look at bottled water), but it does mean that sellers cannot arbitrarily set any terms of sale, even if they are legally entitled to do so.

Others may not have the right to demand that you sell them your home for $5, but if they want your home, and can find a convenient way of duplicating your home for $5 without taking away any part of your home in the process, then some (most) of those guys will do it whether you like it or not, or whether the law says they are entitled or not.

Cheers!

Posted by: Root User   Posted on: 11/05/04 You are currently: a Guest | Members login | Terms of Use

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