Friday, 11 June 2010

Copyright, free riders and the New England turnpikes


The problem really isn’t that copyright is a bad thing. As a right it’s not really much different from assorted easements, permissions and other non-physical property rights (I don’t own the drive to my house but I own a right to use it to access my house). So I defend it and the associated right for those who own the copyright to expect the law to be on their side.

The problem is the free rider. Or more importantly the inevitable avoidance of payment (and remember this isn’t a moral argument). As such the challenge for owners of digitised information is how to protect the value of their asset. At present the approach is to seek (or rather to persuade those who administer laws) to seek more and greater powers to identify and control those who are taking a free ride.

This is a short-sighted approach that is ultimately doomed to failure. I’m by no means an expert on the working of the Internet but it seems to me that those who wish to take a free ride are going to carry on doing so. Each endeavour to close the loop – to check the metaphorical ticket – will be defeated by technological creativity. And the ever more draconian measures demanded by the owners will be resisted because of the collateral impact on legitimate activity (or the legal manifestation of Marshall McLuhan’s dictum).

However, we should not dismiss a model simply because of free rider problems – there’s a strong argument for allowing the present system to continue and for alternative models of production, protection and payment to evolve. To understand this I recommend reading this piece by Daniel Klein on the New England turnpike companies where the author describes how – despite a huge double problem of free riding – investors still stumped up to buy stock in these companies. Although these investors became stockholders in a business it was a business that they knew would lose money. In effect their purchase of stock was a private payment to secure the supply of a public good.

It strikes me that ‘investors’ in music, film and software are aware of the free rider problem but recognise that without some willingness to purchase something that free rider problem will mean no music, film or software. Thus we accept the need to purchase. Those businesses that provide simple, easy access to the product in response to these payments are like the turnpike companies in that the purchasers of this access enjoy a smoother journey avoiding the need to travel round the tollgate on a rough, dangerous track.


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