Business model for creative writing in a world without IP

Economics Political Theory
1

I have two questions about IP.

First question:

My wife just told me that during a conversation with her family over a dinner she mentioned my anti-IP views, and “it did not go over well”. My father-in-law gave a very original argument: “In a world without copyright, there would be no writers.”

Historic counter-arguments aside, this made me wonder: what would be the business model for writing and publishing business in a world without IP? How would full-time writers make money? Obviously, anyone is free to write for fun, as a hobby, but we are talking about those for whom writing is a main way to earn money. For instance, Tolkien, who has been mentioned a few times vis-a-vis IP, had to feed a large family, and writing for him was a real and important supplement to his income, despite his professor’s salary. (Plus, the government took away something like 50% of his money in taxes, which may partially explain his libertarian views :), but that’s another point.)

There are three potential ways that I thought of:

  1. Similar to the way scientists today publish their data, which is not copyrighted (although the specific articles may be). No sane scientist will object to another scientist doing a follow-up study as a “sequal” to his work. Nor do the scientists get paid by the journals that publish their data. Where do the scientists get their salaries? From grants. Nowadays, it’s mainly from the government, but obviously that doesn’t have to be the case.

In case of the writers, it could be private charities/funds that would pay the writers to write. Those charities/funds could be sponsored by publishing companies that might be interested in publishing the writers’ works.

  1. Even though a publishing company may lose business if other publishing companies get to copy its books and republish them, it still makes money from publishing first. So, there is an incentive for it to make a contract with a writer. Perhaps, knowing that other companies will publish (after copying), the amount for which it will make the contract will not be as large, but also possibly it will not object the writer making simultaneous contracts with other companies.

  2. Many people write in their blogs “for fun” today, but some blogs are also being monetized.

Are there other possible business models of how the writers could make money in a world without IP?

My second question:

I have read somewhere that when Tolkien’s books were re-published in the US without paying him anything, he wrote to his American fans and urged them to boycott these publishers. This was suggested, by the libertarian article that I was reading, as one of the non-coercive ways to make sure that the writers get paid for their efforts. (And if a publishing agency get a reputation for “pirating” other publishing agencies’ works, its reputation, and therefore its sales, will go down.)

My question is: do people around here agree with this approach (and with what Tolkien was doing)? Doesn’t it suggest that what the American publishers were doing was somehow immoral and unfair? But if Tolkien did not own The Hobbit and The Lord of the Rings then why was it “unfair” not to pay him?

Intellectual Property (IP) and innovation resources
2

I’m not sure how much you’ve looked into this, so I can’t be sure how much of this would be repeat for you. I’m actually kind of at a loss for how you can come to anti-IP views without being versed in the responses to these common questions. But try these on for size:

Against Intellectual Monopoly

Intellectual Property at Mises.org

Obviously Kinsella is the foremost authority on this, and his blog archives as Mises.org as well as C4SIF.org almost entirely focus on the subject of IP. You can find them in the links section at his Mises Wiki page, but here are a few highlights:

There are No Good Arguments for Intellectual Property

The Worst Argument for IP Ever?

Writers Can Prosper Without Intellectual Property (by Gennady Stolyarov II, actually)

Examples of Ways Content Creators Can Profit Without Intellectual Property

Funding for Creation and Innovation in an IP-Free World

Innovations that Thrive without IP

And of course there’s the other side of the argument as well…illustrated in pieces like these:

Yet Another Study Finds Patents Do Not Encourage Innovation

Germany and Its Industrial Rise: Due to No Copyright

Does Monopoly Create Wealth?

How Intellectual Property Hampers the Free Market

How to Slow Economic Progress

If you can’t get someone to read a full book (like the first link in this post), perhaps give this a try:

The Case Against IP: A Concise Guide

Intellectual Property (IP) and innovation resources
3

There was a point in time when this forum was more popular. Here is one IP thread from 2010 in addition to that reading list. There are others too…

4

There’s a reason why the staunch anti-IP position of the Mises Institute is so rare; for some industries, writing being one of them, IP abolitionists simply can’t offer alternative business models that would guarantee remuneration for the production of successful content.

If we examine John James’ list of article suggestions, most don’t even address the issue from a writer’s perspective. Reading them will inculcate you with lots of ethical propositions that won’t get you anywhere in a debate with non-Rothbardians, but hardly any solid points in favor of IP abolition in the literature market.

Writers Can Prosper Without Intellectual Property is pretty much the only article that tries to tackle the actual problem. And the arguments are pitiful:

  1. posits says that authors should just write more, which doesn’t solve anything. 2) doesn’t say why anyone would pay authors more in advance when published books could be multiplied billion-fold after just one example was sold. 3) and 4) argue that authors should either “get a real job” or find a rich guy who likes the cut of their jib. 5) only really works in an IP environment. Really, if you don’t approach this article with the hope of finding ammunition for a debate, you’d have to ask yourself how anyone could take such a position.

Kinsella’s blog article is even more hilarious. It’s a reading list as well, and most of it has no relevance for writers. The ones that do, like the article about Murakami self-publishing, aren’t even advocating IP abolition, they’re just presenting new publishing models in a digitalized IP world. You can’t make this stuff up.

In future debates about IP, just take a more nuanced approach and argue against those policies whose harm you can actually prove (industry patents come to mind). But taking the only source of exchange income a writer can expect to get for his work? Not a good call.

5

I love labels…

When do IP Freeloaders intend on dropping the hypocrisy and start paying for the IP of others, such as symbols contained in language, thoughts, or experiences of others?

IP Freeloaders enter the world from the womb and all i ever hear is how they want to take, pirate, copy, and transform the ideas or expeeriences of others acquired from their environment into their own alleged “original” work and then they want to use force paid for with other people’s money to protect these alleged “original” works.

You show me an inventor or author of an “original” work and I will point out sources for their ideas. Not even the great Rothbard or Mises went from womb to alleged “original” idea without taking, pirating, copying, or transforming a few ideas of others they absorbed from their environments.

Please provide an example of an “original” idea or work that is not derived from any other preceding human action or thought.

Or, provide an example of human beings creating matter and not just transforming it.

IP Freeloaders, despite their piracy, seem to operate on the assumption author reputation has no value in a free market and only pirated strings of symbols have value.

How about IP Freeloaders do civilization a favor and self persecute for the IP thefts or piracies they have committed to resolve their own hypocrisy.

6

If you can’t find a peaceful non-ceorcive way of profiting from your passion maybe you should just stop doing it? During 6 months I earned about 300 dollars on my music, and that’s almost without any advertizing. And I am amature, I am basically unknown. I don’t even know how to play a midi keyboard. I create stuff on my home PC with cheap headphones. And even I am not the best example. I just mention this to anyone, saying that without IP there won’t be art. Those people are FULL OF SHIT. If I used “agressive advertizing” I would most likely earn much more. If I had more business skills too, would help.

And start reading Kinsella. Sphairon is just cherrypicking and he doesn’t feel the satisfaction of the fact that without illegitimate IP laws many artists (in mainstream) would probably wouldn’t be millionaires.

Furthemore, it is the arguments of pro-IP monopolists that are pitiful and actually, immoral and insane. They just keep perpetuating statist dogma.

7

I love labels…

“Abolitionist” has the positive connotation of the anti-slavery movement, it’s a pretty generous label. How else would you characterize your stance?

Please provide an example of an “original” idea or work that is not derived from any other preceding human action or thought.

Just like you don’t have to combine your labor with every single particle of a plot of land to make it yours according to Lockean property theory, you don’t have to invent your own concepts and symbols to create unique intellectual property.

If you can’t find a peaceful non-ceorcive way of profiting from your passion maybe you should just stop doing it?

Property is coercive - you’re forcibly excluding others from its use. Must we also abolish property, then?

And start reading Kinsella.

I’m not disregarding Kinsella entirely, but neither he nor others have so far presented a credible case for why the production of new, original literature would increase in either quality or quantity after the abolition of IP.

Even in the (to my knowledge) only comprehensive empirical review of the topic, Against Intellectual Monopoly, the authors had to concede that their arguments for an abolition of IP in industry and science do not necessarily apply to literature:

In contrast to shoe factories, even with minimal installed capacity, the copies of a book that can be made over an extremely short period of time may be so many as to essentially flood the market, dropping the price to near marginal cost almost immediately… The resultant difference between price and marginal cost may be so small that, when multiplied by the number of copies, it yields an insufficient rent. The rent is insufficient because, say, the book is very complicated, and it took a long time to complete … Most ideas are not divisible, and there are cases in which the cost required to come up with the first prototype of an idea is quite large compared to the size of the market for copies of the idea. (p. 135)

8

Far be it from me to encourage you to further contradict your father-in-law, but…

The right to claim legitimate authorship attribution - that is, to dispute plagiarism - is unrelated to IP and would still be retained in its absence. IP is about subsidizing a business’ exclusive privileges to engage in trade with products derived from the “intellectual property” (story, concept, software subroutine, logic, musical pattern, etc. ad infinitum). The absurdity of IP is it ultimately treats “ideas” as “things” that remain the property of the originator long after he has dispersed the idea to others.

Whether it’s entrenched companies buying up patents on competitive technologies or Disney’s “Song of the South” rotting away in some vault for the last 20 years, IP screws the workhorse of the economy - the consumers.

9

Today, there’s an awful lot of “literature,” but a dire shortage of literature, if you catch my meaning.

I expect that without IP we would have less “literature,” but about the same quantity of literature.

Is that better or worse for society? Well, in the long-run, it’s probably better. However, in the meantime, a lot of low-end demand might not be met and this will displease many consumers.

10

Perhaps you could illustrate a fence authors have built?

11

False. Writing more solves the problem of not generating enough income with one’s current output. It’s just like anything else…greater profit is usually generated with greater productivity.

(Not to mention this means greater output overall…thus having a positive effect for the society besides.)

If that’s your view, why would anyone pay anyone for writing anything?

I would also be interested to hear how you explain all the real world examples like this.

You mean “people who can’t survive without having a state-granted monopoly should either find another line of work that is legitimately profitable for them or find someone who will pay them for their service directly.”

Because it’s been so throughly tested in a non-IP envrionment.

Oh brother. This crap again?

Aren’t you the one who just summarized “writers should write more”? Are you seriously suggesting when monopoly privilege is removed there wouldn’t be an increase in innovation and output?

Then, again, I would love to hear how you explain the increase in sales on books that are released in digital form for free (as also seen in virtually dead titles that see a resurgence in popularity right after the LvMI obtains copyright and releases them)…as well as the “phenomenon” of digital copies (whose marginal cost is quite literally zero) not only maintaining a profitable price, but in many cases a price above that of a physical copy.

12

False. Writing more solves the problem of not generating enough income with one’s current output.

I guess we don’t need to worry about the cost of taxation either as producers can simply up their output and make just as much money as before!

If that’s your view, why would anyone pay anyone for writing anything?

I would also be interested to hear how you explain all the real world examples like this.

Writers get paid by publishers because publishers receive exclusive control over the distribution of their works and are entitled to damages by third parties infringing upon that control.

Your video is by no means an endorsement of IP abolition. What the author says is that he found selective waiving of his copyright claims on the web to increase sales of his hardcopy editions. That’s a basic principle of marketing: give something for free, attract more customers. If you specifically asked him if he’d be fine with people selling hardcopy editions of his works for a fraction of the price without paying him a share, you’d probably elicit quite a different reaction.

“people who can’t survive without having a state-granted monopoly should either find another line of work that is legitimately profitable for them or find someone who will pay them for their service directly.”

So Auntie Olivia should give up her farm to the marauders because she lacks the means to protect her property and doesn’t know anyone who will help her? Is that the new libertarian justice?

Because it’s been so throughly tested in a non-IP envrionment.

If I can freely copy everything I like for any and all purposes, the author’s importance in online advertising diminishes and the SEO engineer’s role becomes proportionally more important.

Oh brother. This crap again?

Property rights are not voluntary, they are imposed. They may be justly imposed, depending on your ethical inclinations, but they are imposed nonetheless.

Are you seriously suggesting when monopoly privilege is removed there wouldn’t be an increase in innovation and output?

Read carefully! I was wondering about new, original literature. I have no doubt that already existing works would be churned out a minimal prices.

as also seen in virtually dead titles that see a resurgence in popularity right after the LvMI obtains copyright and releases them

Popularity does not equal remuneration, but authors need to live off something other than admiration, too. Of course, the LvMI can publish the works of dead authors for killer prices (or for free) with no regard for such considerations.

as well as the “phenomenon” of digital copies (whose marginal cost is quite literally zero) not only maintaining a profitable price, but in many cases a price above that of a physical copy.

The consumption infrastructure does, of course, favor high-priced digital publications. Products like the Kindle are pre-configured to lead customers to the expensive offers of its mother company, not to the book section of the ThePirateBay. Same story with iTunes.

What do you think would happen if somebody built an e-reader or a digital listening device that actively encouraged pirating? It doesn’t happen because a producer can just smell the avalanche of lawsuits coming his way. If people could get new, original literature for free just as easily as they could buy it in an expensive store, what, ceteris paribus, would they prefer?

13

a) You literally said “writing more doesn’t solve anything.” I merely pointed out that was a false conjecture

b) There is a difference between simply earning a true market rate for one’s work (i.e. not having a state-granted monopoly) and having income one earns stolen from him.

That doesn’t explain why they would get paid “in advance”…when there is no guarantee any sales will be made.

a) It’s not my video. But thanks anyway

b) Strawman. Never said or even implied it was an “endorsement” of anything.

The video was anecdotal proof that distributing a book in digital format for free not only does not destroy physical sales, but in fact can increase them. (In this case, at least 300%). This directly contradicts your assessment.

Most would say the “something” you give away would be like a plastic squirt gun or a raffle for a car wash to bring customers to a super market…not the actual work you’re trying to sell.

Again this directly contradicts your conjecture that when a book is distributed freely, it would drive sales down.

Perhaps you should ask him.

Not that I see any parallel here, but just for fun I’ll follow along with your hypothetical. A woman has a farm that marauders are moving in to take over, and she cannot protect the property herself, and doesn’t know anyone who will help her. I’m confused. Are you suggesting that no one would help her?

If yes, then my question becomes, what exactly is your suggestion? People be forced to help her against their will? Is that the same old socialist “benevolence”?

This in no way proves anything you said or refutes what I said.

Have fun with this discussion in that other thread.

I did read that. I was talking about new stuff. Perhaps you should take your own advice…I find it interesting how you would choose to ignore the other sentence in my response: “Aren’t you the one who just summarized ‘writers should write more’?” You’d have to work quite hard to convince me that by “writers should write more” you were simply saying they would have to physically type out (or handwrite) existing works at a higher rate, so that more copies might be sold…let alone that you were under the impression that the article itself was suggesting such a thing. Especially when it made a point to give multiple examples of extremely prolific composers whose productivity would dwarf that of most of those who lived under a copyright regime.

…Because people buying zero copies of works you wrote and having never heard of you is just as good as people buying thousands of copies and being interested in anything else you put out.

Of course they publish the works of plenty of living authors under a CC-BY-3.0 license as well.

Have you taken lessons from Krugman? You quote a claim that “copies of a book that can be made over an extremely short period of time may be so many as to essentially flood the market” would end up “dropping the price to near marginal cost almost immediately… The resultant difference between price and marginal cost may be so small that, when multiplied by the number of copies, it yields an insufficient rent.”

And then I show you real world proof of that being completely false, and your response is “Exactly. Just as one would expect.”

I’m starting to get bored.

14

I get bored too, when I hear same old canards and no real arguments. They just ignore what you say (I mean here, they ignore FACTS, real world examples. One after another) and keep spounting assertion after assertion and making ridiculous analogies.

My two main obeservations:

  1. IP is a monopoly

  2. if you can’t make profit peacefully, maybe you should just stop doing it.

15

I like the bit about Auntie Olivia.

Consider the song “Happy Birthday to You.” The simple tune is based on some kindergarten teachers’ song from 1893 (before most folks’ grandparents were even born) called “Good Morning to You” and Warner Bros. claims to “own” the copyright extending into 2050 - hear “happy birthday to you” in a movie and this listing will be in the music credits. Or look at the “Estate” of Martin Luther King Jr. claiming copyright ownership of his speeches - and even his IMAGE!

Government-enforced IP is bad even for the short term, since it seeks to impose property-ownership dynamics on intangible things. In other words, it’s reification of the highest order.

IP = Imaginary Property.

As far as an author’s ability to profit (in the monetary sense) from his work, he can sell his manuscript(s) however he wishes. And of course he can sell it to a publisher in the hopes of getting a lot of copies out and sold while it’s fresh and new.

Once he’s maximized profit by dispersing the new books into the world of “existing works” he could have a tidy sum of money. Not to mention autographed copies always will always fetch a higher price - and only the real author could non-fraudulently produce that. If he wants to put it up as a digital copy up on the Internet, he is free to come up with either a pay-per-view scheme or a “Donate” button. Many bloggers do this already and receive the benefit of immediate attribution as well as quick profit.

16

Ok. So, JJ, I’ve agreed with everything you’ve said in this thread so far. Saphrian (or w/e) is in complete contradiction here and is completely wrong on his example as well. But, JJ because of that I feel like you are wrong on this point. I may be unclear on interpretations as well.

This is wrong. iTunes has a weak business model. They rely on IP; contracts with the producing music companies (and some artists that are involved in their contractual arrangments). VaLVE makes computer games and sells games through their cloud service Steam and when they do Christmas sales they knock prices down 75% and see a 1500% increase in real dollars, not units shipped. “At 75% off, they are making 15% more money than they were at full price.” ((Forbes Magazine said that VaLVE is worth more than Apple. ; per person working against revenue. “100% Year-over-year growth since 2004”))

*The lower the price, the larger the market, the more the revenue… Scarcity doesn’t exist on the internet. All of it is a function of abundance…*I though I was on the Mises forums…

This is right. I am not sure why Saph. would quote it then continue to make the point that

It obviously does not. And further, an example of this, could be the Kindle. I bought a Kindle with the sole intention of using it as a pirated media device. It is the best research aid there is, next to the internet itself. The same argument could apply to other mediums as well. I have external hard drives that are media players for any TV I want as well; only pirated movies, music, TV, games and every benefit offered by the cloud. No ads, watch when you want, but no money. I’m not gonna buy stuff from Amazon when I can get it free from Diod. Purchases are based soley on quality and integrity/moral imperative (haha I meant respect for creator). It is gonna be hard to top that kind of convenience and at the same time be asking for large amounts of money.

Have you seen the idiocy in “renting” a digtial copy of a textbook at a college? $85 is what they want at my school to rent an ebook for a semster…WHAT IS THE SENSE OF THAT? Then they feel like devriving me of future use of the material which would not harm their financial position AT ALL?? It can be replicated permenantly for virtually no cost and transmitted only at the cost of the copper or fiberoptic wiring or antenna necessary to transmit the information. Which is itself irrespective of the actual information!!

EDIT: Further speculation informs me that, as far as I can tell, high prices for digital copies are so far meant to subsidize the cost of the more expensive to produce, and possibly not even selling, physical copies. This would be why a $95 Harcover textbooks ends up with an $85 eBook rental copy. The same can be said for all of the movies, music and games that go unpurchased at full retail price, but purchased online for only a slight price decline. Games/DVDs/CDs at the store cost 60/20/15 bucks because of the amount of effort required to produce and ship them added to the retail sector costs. (Most AAA movies make their production costs back before the movie leaves the initial theater run and those copies of film, or discs w/e, cost hundreds of thousands of dollars a piece. Meaning that if a movie theater is showing the same movie on three screens, they bought 3 copies for a million dollars or so. Idem per console games and development, accessory, and sales contracts) Once the major retailers (Best Buy comes to mind) have gone into bankruptcy and production of physical copies has declined, the prices of digital copies may decrease.

17

I’m still waiting for an example of that fence…

Should SP (spiritual property) be protected as a right?

Or BP (body property)?

After all, my pee is recycled into water without compensation… do I not own my own pee?

18

Gee, Live_Free_Or_Die, you spent more than 3 hours producing that pee! I think you are ENTITLED to some of the reward, you know!

19

Not only did it take my time to produce this quality piss that is recycled into water for profit. It costs money to produce it.

20

Exactly!