You Can’t Have A Healthy Market Economy Without Property Rights. Why Do So Many In Tech Blogosphere Want To Abolish Cyber Property Rights And Cripple The Cyber-Economy?- Part 1 of 2

You Can’t Have A Have A Healthy Market Economy Without Property Rights. Why Do So Many In Tech Blogosphere Want To Abolish Cyber Property Rights And Cripple The Cyber-Economy?- Part 1 of 2

By David Lowery

Can you imagine the outrage if leading voices in Corporate America started advocating that we abolish all individual private property rights? Citizens could no longer own any property. All property would be collectivized. Citizens could no longer profit by creating and owning things. Further what if these same corporate voices used the justification that private property rights were hindering their ability to innovate?

We’d all laugh. Or man the barricades. This would never happen, right?

Well it is happening. This is exactly what many in the tech blogosphere are arguing we should do in the cyber-economy. These faux revolutionaries are arguing that Intellectual Property and the Internet are incompatible so in the name of “freedom” Intellectual Property must go. In the cyber economy ALL property is intellectual property. This means these folks are advocating for no private property in cyberspace. What does that sound like? Depending on your political leanings this is either some sort of corporate feudalism or a radical form of socialism.

Humans have had a lot of experience with both systems. Feudalism and radical forms of socialism have been practiced in many countries all over the world. Neither of these systems fostered democracy, free speech or anything anyone would regard as freedom. But more importantly these two systems stifled innovation and crippled the economies of the countries that were subjected to these political systems. Generally in order to encourage innovation and wealth creation an economic system must reward and incentivize everyone involved in the process. For example you can’t just reward the distributors of a product and neglect to reward the manufacturer of the product. You would not build a system that incentivized and rewarded innovation in the distribution and servicing of cars but refused to allocate any revenue to the manufacturer of cars.* There would be nothing for the distributors to sell. The only way the system might work is if the distributors managed to steal cars from the innovative neighboring economy that incentivizes and rewards the car creators. BTW this is exactly how YouTube and File-sharing sites manage to survive.

Now I’ve read enough mystical pseudo revolutionary garbage about the web to know what the responses will be to what i’ve just said. They generally fall into three categories:

“The Internet is different”

“Old Economic laws do not apply to the cyber-economy”

“A magic beaver lives in a spaceship under the Googleplex”

The Internet is different than what? This is never satisfactorily explained. Seems like a funny point but no one has ever been able to convince me (or themselves ) once I press this point.

Old economic laws do not apply to the cyber-economy? Yes they do. There is nothing different or new about the cyber-economy. Goods with near zero marginal costs? We have those in regular-space. We’ve had them for hundreds of years. The list goes on and on. If it makes any difference Google’s Chief economist Hal Varian also thinks the old economic laws apply.

While it’s entirely possible that a magic beaver lives in a spaceship under the Googleplex other pseudo religious and mystical properties assigned to the technology industry and in particular the web are just not true. I will bet anyone $1,000 dollars that 5 years from today The Technological Singularity has not occurred.  The Technological Singularity is a Nerd reverse creation myth. Abolishing intellectual property is not gonna turn the web into a super intelligent being and usher in a new age of peace, prosperity and enlightenment.

There are many more quasi religious narratives about the web. Some milder and some stranger. I don’t mean to single out this one. They all need to be debunked and challenged. For all they do is empower demagogues and commence hunts for Apostates.

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I realize that what I am saying about robust property rights and healthy economies is nothing new. It’s a rather elementary and banal critique of the Copyleft’s proposed cyber-economy. What is more interesting is why there are so few other voices out there challenging these wackjobs? Why is it left to the singer of a moderately successful cult rock band to challenge this nonsense? That’s the real story here. Where are the grown-ups?

It think it has something to do with those quasi religious narratives about the web. It encourages fanatics, nut jobs and unreasoned discussion. I mentioned last week that there is a mathematical argument to be made that the internet is making us stupider. Well there is also a very good argument to be made that the web is actually stifling free speech. It is certainly not always the place for reasoned discussion. It’s a land balkanized by ossified opinions and guarded by trolls.

The web is a place where people go to hear their own deeply held opinions parroted by others. There are few places that you may have a fair and balanced discussion. And If you say the wrong thing in the wrong neighborhood you find yourself in trouble. That’s why their are few “grown-ups” on the web. Most are not willing to endure the stream of hate mail, nasty Facebook comments, angry tweets and out-and-out threats that the tech blogosphere DELIGHTS in unleashing on anyone with which they disagree. That is why this rather radical idea of abolishing all intellectual property has taken hold. The grown-ups don’t wanna be called names by generation gimme.

Tomorrow Part 2. I examine specific individuals advocating for the abolition of private property in Cyberspace.

The Trichordist Random Reader News & Links Sun Apr 29

Grab the coffee!

Google stops charging for advertising, moves to t-shirts and merchandise model instead (just like bands should)…
http://themusicaldisconnect.blogspot.com/2012/01/google-announces-ads-free-just-buy-tee.html

Class war on creatives; Salon reports astounding labor stats of 45.3% drop in “Musical groups and artists” from Aug 2002 – Aug 2011…
http://www.salon.com/2012/04/22/no_sympathy_for_the_creative_class/singleton/

Spotify to introduce “Pandora” like internet radio. This allows Spotify access to all music, as no artists or labels can opt out and royalties are set as stat rate. Will be interesting to see if the Major Labels have direct licenses that redirect the artist share to the labels.
http://www.hypebot.com/hypebot/2012/04/spotify-readies-pandora-like-radio-service.html

This week was Grammy’s On The Hill, support artists rights, call your representative…
http://capwiz.com/grammy/callalert/index.tt?alertid=61243176

In case you were wondering, traditional terrestrial radio airplay is still the number one influence in music purchasing “60 percent of musically active consumers citing it as a top influence.” We love social media but don’t believe the hype…
http://www.hypebot.com/hypebot/2011/12/active-vs-passive-fans-why-radio-tv-still-rank-tops-for-music-discovery-best-of-hypebot.html
https://www.npd.com/wps/portal/npd/us/news/pressreleases/pr_111110

If you disagree with Sergey Brin it’s only because you aren’t smart enough to understand that he doesn’t want to ask your permission to exploit you or your work so that Google can make more money…
http://copyrightblog.co.uk/2012/04/20/a-sergey-update-we-misunderstood-him/

Can’t make this up, Pirate Politician Says Party ‘Rising as Fast as Nazis’…
http://www.spiegel.de/international/germany/0,1518,829166,00.html

Hacker collective Anonymous to create pirate streaming music search engine so that music “can be free.”
http://www.slashgear.com/anonymous-targets-music-industry-with-anontune-20223840/
However, there is some interesting skepticism online.
http://www.geek.com/articles/news/anonymous-launches-anontune-streaming-music-service-20120419/

Larry Lessig explains why Hollywood (ie, “the copyright industry”) needs to accept that there’s no point in protecting copyright. This is the origins of the “break the internet” rhetoric. Uploaded by the Pirate Party to YouTube on Aug 27, 2009…

The Trichordist Random Reader News and Links Sun Apr 22

Grab the Coffee!

Here’s some interesting stories and links we discovered or were sent during the week. These may not be stories OF the week, as we share them as we find them.

German Court Rules Against YouTube in Copyright Case:
http://news.yahoo.com/german-court-rules-against-youtube-copyright-suit-115708414–sector.html

Supporting Copyright Is Not The Same as Opposing Free Speech:
http://www.guardian.co.uk/music/musicblog/2012/apr/19/copyright-freedom-speech

Rapidshare Writes Four Page Anti-Piracy Manifesto:
http://www.theregister.co.uk/2012/04/20/rapidshare_stop_piracy/

Interesting interview Between Ben Watt of Everything But The Girl and Journalist/Author Robert Levine:
http://www.buzzinfly.com/index-robert-levine-interviewed-by-ben-watt.html

Musician / Composer Mark Isham Launches ibuymymusic.org
http://ibuymymusic.org/I_Buy_My_Music_Dot_Org/Home.html

TechDirt Goes on the Defensive after Gearslutz thread asks, “Why does TechDirt hate musicians”:
http://www.techdirt.com/articles/20120415/02354118491/difference-between-nuanced-discussion-evil-underbelly-internet-is-apparently-fine-line-indeed.shtml
http://www.gearslutz.com/board/music-business/719114-why-does-techdirt-hate-musicians.html

The Chicago Reader Picked up On David Lowery’s “New Boss, Worse Than Old Boss” as posted at TheTrichordist.
http://www.chicagoreader.com/Bleader/archives/2012/04/17/the-good-old-bad-old-days

Another shout out to TheTrichordist, this time from The Cynical Musician:
http://thecynicalmusician.com/2012/04/recommended-reading-the-trichordist/

Grooveshark On The Hook : Notice and Shakedown

We salute Tunecore CEO Jeff Price who recently called for a boycott of Grooveshark on his company Blog. This after a series of articles from varied and respected media outlets such as Digital Music News, Hypebot, Billboard, and others who have been reporting on Grooveshark’s unethical practices against artists and the resulting lawsuit by the major labels.

But this isn’t just about major labels, it’s also about indie artists and labels who have been victim to Grooveshark’s practices for years. Just one example is from Helienne Lindvall who detailed her attempts to have her music removed from the site in painstaking detail, to no avail. Later we’ll show how other artists and labels experience is exactly the same as hers.

Grooveshark illustrates the failing of the DMCA by creating an incentive to build a business on infringement. Previously YouTube did it and that practice is now at the center of the recently appealed, billion dollar lawsuit with Viacom. At the heart of the matter is ethics.

The DMCA was designed to protect Internet Service Providers (ISPs) from liability if they had no knowledge of infringing material. The DMCA was also designed to provide protection for artists to have their work removed from an ISP (website, etc) if it was discovered to be there. In other words, the DMCA was drafted to give a little latitude to reasonable people acting reasonably and to empower artists to protect their rights without having to file a federal copyright lawsuit.

Grooveshark, like YouTube before it, has exploited this loophole in an attempt to build a business on infringement. The attraction of this business model is substantial as there are no licenses, fees or negotiations and no artist royalty payments, ever. All they have to do is plead ignorance, and wait for the DMCA notices to come in. And, once the notices come in, just wait for another user to upload the same material again. And so it goes on and on; the DMCA dance of death until artists are too exhausted or broke to continue.

The really insidious part of the Grooveshark model is representative of the old saying, “It’s better to ask for forgiveness later, than to ask for permission.” This is also known as “negotiation via lawsuit.” Grooveshark’s strategy appears to be: lure in artists as they seek to have their illegally exploited work removed, and then try to get the artist to sign a license agreement. This heavy handed approach has been aptly titled, “Notice and Shakedown.” Thankfully, a lot of artists are smart enough to question such shady practices.

We know of at least one indie label who when they contacted Grooveshark to take down offending material were met with the smarmy onslaught and the hard sell.  You can see the pitch here in the first sentence of a DMCA query on the site.

http://help.grooveshark.com/customer/portal/articles/302472-your-music-on-grooveshark

“If your music was posted up without your permission and you’d like to have it removed, please click here to access our DMCA takedown form — we highly recommend, however, that you contact us first to talk about ways that Grooveshark can fairly compensate you for your music!”

Ah, yeah right. Exploit my work, then try to negotiate with me (using fuzzy math based on Spotify model) about how much you are not going to pay! At least Spotify is legal, and I can actually remove my titles. But it doesn’t end there.

“You have full control over all songs in music catalogue. This includes the option of removing them all together. It only takes a minute just follow these steps:”

Uh, yeah, ok, but keep in mind at this point, Grooveshark is only helping me to “manage my catalog” which just happens to be on the site illegally. Also removing the songs via their “rights management” system avoids a DMCA takedown. The entire set up of Grooveshark is to engage artists and content owners in a conversation to negotiate with Grooveshark, on Grooveshark’s terms because guess what, they already have your music illegally, and they’re not paying you. But wait there’s more…

“Currently, songs can only be removed one at a time – we’re sorry if this is an inconvenience. Please let us know if you need any help along the way”

Yes, you can help me. You can remove my catalog from your site that I didn’t give you permission to profit from by monetizing it against advertising. And the way to do that is to click on the DMCA form for a proper take down. Of course, you’d hope this would be the case, but unfortunately not so as witnessed by this report on Digital Music News from famed guitar legend Robert Fripp which is nearly identical to that of Helienne Lindvall. Even classical indie artist Zoe Keating could not get her music removed from the site after issuing at least six DMCA notices to Grooveshark.

As if all this we’re not bad enough CNET reported on internal emails that show how Grooveshark was intentionally using the illegal exploitation of artists work as the basis for it’s business model. Unfortunately, not everyone sees this practice as deceitful and unethical; TechDirt has rallied to support Grooveshark despite serious complaints dating back to 2009 by indie label DashGo.

Ultimately we’re encouraged that one of the things the internet is really good at is sharing information. As more artists become educated about their rights, and how they are being exploited, we can see that they are speaking out against these unethical attacks to their livelihood.

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]

None Dare Call it Theft

Is copyright infringement theft?

It’s a good question to ask on the internet if you want to spark another round of an endless discussion.

Opponents of the “infringement = theft” argument will marshal an impressive array of arguments.

There are the semantic arguments: theft has a settled meaning that doesn’t apply to infringement (ignoring centuries of usage to the contrary).

Then there are the legal arguments: you can’t sue someone for copyright infringement under theft laws. Leaving aside the fact that there is no single “theft” law — statutes different from state to state and country to country — this distinction only matters if you’re a prosecutor; doesn’t dictate how words can be used in common parlance. And I don’t believe anyone is seriously making the argument that the goal of calling infringement theft is to eventually bring infringement actions under theft laws.

In a recent New York Times article, author Stuart P. Green adds his own arguments to the debate. While generally more eloquent than what you normally find online, they are still not so convincing.

Green begins with his explanation of how we got here:

From its earliest days, the crime of theft has been understood to involve the misappropriation of things real and tangible. For Caveman Bob to “steal” from Caveman Joe meant that Bob had taken something of value from Joe — say, his favorite club — and that Joe, crucially, no longer had it. Everyone recognized, at least intuitively, that theft constituted what can loosely be defined as a zero-sum game: what Bob gained, Joe lost.

When Industrial Age Bob and Joe started inventing less tangible things, like electricity, stocks, bonds and licenses, however, things got more complicated. What Bob took, Joe, in some sense, still had. So the law adjusted in ad hoc and at times inconsistent ways. Specialized doctrines were developed to cover the misappropriation of services (like a ride on a train), semi-tangibles (like the gas for streetlights) and true intangibles (like business goodwill).

Green goes on to lay the blame on the current debate on, of all things, the 1962 Model Penal Code (?!?).

While superficially appealing, this story is an over-simplification (as any two paragraph summary of thousands of years of history can be). One could just as easily fashion a Green-esque history of property law to make the claim that taking someone’s pet is not theft.

After all, for thousands of years pets weren’t treated as property — it wasn’t until the early 20th century (much later than the appearance of copyright law) that the common law recognized taking cats and dogs as larceny. And today, you can find those who will argue that pets should not be considered property. It shouldn’t be hard to find scholars who will claim that pets should be “free as the air to common use” — and it’s not hard to imagine a site like “PetDirt.com” pointing to stories about Michael Vick to prove that it’s harmful to allow people to claim ownership over animals.

But it’s not as simple as that. You can easily find exceptions to this narrative throughout history, and property law is always evolving.

Next, Green makes it sound like the description of copyright infringement as theft is a recent phenomenon:

With intangible assets like information, patents and copyrighted material playing an increasingly important role in the economy, lawyers and lobbyists for the movie and music industries, and their allies in Congress and at the Justice Department, sought to push the concept of theft beyond the basic principle of zero sum-ness.

This claim has a certain appeal to the conspiratorially-minded. But it’s simply wrong.

People have used theft language to describe copyright infringement long before now. In fact, referring to unauthorized copying as theft has occurred before the term “copyright” appeared in the English language. Centuries before, even.

For example, Martin Luther placed a “Warning to Printers” on the inside of his 1541 German translation of the Bible. The warning read:

SO feret der Geitz zu / vnd thut vnsern Buchdrückern diese schalckheit vnd büberey / Das andere flugs balde hernach drücken / Vnd also der unsern Erbeit vnd Vnkost berauben zu jrem Gewin / Welchs eine rechte grosse öffentliche Reuberey ist / die Gott auch wol straffen wird

Avarice now strikes / and plays this knavish trick on our printers whereby others are instantly reprinting [our translation] / and are thus depriving us of our work and expenses to their profit, / which is a downright public robbery / and will surely be punished by God

Later writers would use the term “piracy” to describe unauthorized reprinting and plagiarism, such as Elizabethan pamphleteer Thomas Dekker, who encouraged his readers in 1603 to “Banish these Word-pirates, (you sacred mistresses of learning) into the gulfe of Barbarisme.”

It would not be until 1710 that the first copyright law would be passed — England’s Statute of Anne (though interestingly, the term “copyright” does not appear in the law and would not enter the language until the 1730s.) Since then, it’s not hard to find a wide variety of sources describing infringement as theft.

Some examples: An 1858 article in the Journal of the Society of Arts says, “All the legislation which has taken place upon the subject of Copyright in England has proceeded upon the just theory that an author or artist has a property in his work. Where, therefore, a Copyright work is literally copied, or copied with merely colourable alterations, it seems difficult to distinguish the moral guilt of such a theft from that of picking a pocket, and consequently that such an act of piracy ought to be punishable as a criminal offence.”

This dictionary from 1861 defines “piracy” as “infringement of the law of copyright; literary theft.”

The editors of the Round Table, a weekly U.S. journal, petitioned Congress in 1866 for an international copyright law, saying “this license for literary theft (for it is nothing less than theft) is beginning to affect our own writers and publishers. American works are daily reprinted in England, and at a less cost than the original publications.”

Legal treatises routinely made use of theft language, such as this 1886 treatise from R.R. Bowker: “After the invention of printing, it became evident that new methods of procedure must be devised to enforce common law rights. Copyright became therefore the subject of statute law, by the passage of laws imposing penalties for a theft which, without such laws, could not be punished.”

A letter printed in an issue of the Literary World from 1899 made the case that “An author’s brain work is as exclusively his own stock in trade as is any other work of any other artisan of any kind. Stealing brain work is as much a theft as stealing handiwork. Any person of ordinary intelligence can understand this fact. The copyright of all such work is the author’s own. If he chooses to delegate rights to reporters, well and good. He may do this as he does to his publishers, by royalty or by sale, according to mutually approved terms. But any right assumed otherwise than by permission of the author is downright robbery, according to all high standards of morality.”

These are only a few examples. Since the early days of copyright, infringement was, “frequently equated with theft.”

Indeed, not only has infringement routinely been described as theft, some have argued that it is worse than stealing tangible property.

German philosopher Johann Gottlieb Fichte wrote in 1793:

[I]n consideration of the fact that anyone is a thief who usurps the use of others’ property for his own profit, then the reprinter is without doubt a thief. If, furthermore, a theft is the more heinous when it involves things which by their very nature cannot be kept under lock and key, then the reprinter’s theft is one of the most heinous, since it involves something which necessarily lies open to the public, like air and ether. And if, finally, a theft is all the more heinous the nobler the objects it is perpetrated on, then it is the most heinous of all when it involves things that are creations of the mind.

And an 1840 book, An Historical Sketch of the Law of Copyright, noted:

For the printing a work, the sole right to which belonged to another, was looked on as little better than theft, and punished accordingly. Indeed, it was said, that such conduct was worse than to enter a neighbour’s house and steal his goods: for negligence might be imputed to him for permitting the thief to enter: but in the case of piracy of Copyright, it was stealing a thing confided to the public honour.

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The ancient Romans defined larceny as “Contrectatio rei alienae, invito domino cujus illa fuit” — “a diversion of the thing of another, contrary to the will of him, to whom it belongs.” Copyright gives creators an exclusive right to copy, perform or display, and make derivative works of their works, and copyright infringement is an appropriation of these things against the will of the copyright holder. For as long as copyright has been recognized by law, authors, philosophers, legal theorists and judges, and the general public have described infringement using theft language. The arguments that it is wrong to do so ignore logic and history.

What’s more, these arguments ignore the harm copyright theft causes the general public. Just last month, a Phoenix Center for Advanced Legal and Economic Public Policy Studies report demonstrated how “The existence of IP theft—even when assuming theft is costless to affect, produces consumption goods of quality fully equal to those consumers pay for, and does not suppress labor supplied—results in a reduction in social welfare” and “reduction in the rates of theft of intellectual property would benefit society (producers and consumers).”

So why do these arguments continue? At a basic level, they generally stem from this idea: it is wrong to call infringement theft because the word “theft” has moral overtones. But this begs the question that infringement is never an immoral act. Clearly that’s not the case.

Of course, saying that it’s sometimes appropriate to call copyright infringement theft does not mean we’re required to describe every act of infringement as theft. Someone who writes a fan-fic of a popular book, posted online for free, may end up with a work that a jury might find infringes the original, but I doubt few people would consider this theft — some authors even encourage such acts. There are plenty of other examples of online behavior involving non-commercial copying or transformative uses that, if put in front of a court, would be considered infringement but nevertheless would find few willing to describe as theft. So it’s worth being careful when using theft language.

However, that doesn’t mean it’s never correct to call infringement theft. When a service like Grooveshark, for example, doesn’t “pay the artists, the labels and/or the songwriters for the use of the music that’s making them tons of money”, it’s fitting to say they “knowingly and willingly use a legal loophole to steal from artists and songwriters.” For services like these, which seek to profit off creators’ labor without permission, it is very helpful to create clever semantic arguments that make their behavior seem not as bad as it is.

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[ THE 101 ] [NEW BOSS / OLD BOSS ] [ SPOTIFY ] [GROOVESHARK ] [ LARRY LESSIG ]
[ JOHN PERRY BARLOW ] [ HUMAN RIGHTS OF ARTISTS ] [ INFRINGEMENT IS THEFT ]
[ THE SKY IS RISING : MAGIC BEAVER EDITION ] [SF GATE BLUNDERS PIRACY FACTS ]
[ WHY ARENT MORE MUSICIANS WORKING ] [ ARTISTS FOR AN ETHICAL INTERNET ]