Why So Much Anti-Copyright Rhetoric??

No, I meant “illegal” - the point that Sam Armstrong was making is that he can sell me a book under contract not to use it to make a copy. We are well and good so far. Then, he sells you a book under contract not to make a copy. Still well and good. Then, he sells it to 10 million other people, all under contract not to make a copy. SA’s idea is that none of us should make an illegal copy because we each agreed (contractually) not to. Ethically speaking, I think Sam Armstrong is technically right but the problem is that people often behave unethically and any one of us just might make an illegal copy - it’s cheap and easy to do so without detection. And once that copy has been made, Sam Armstrong’s conception of IP as “reserved rights” over physical media breaks down since he has no reserved rights in that illegally produced copy. That copy may be reproduced indefinitely without violating any of the author’s rights, in SA’s version of IP rights.

Kinsella has also pointed out that a contractual agreement between me (the buyer) and the author does not include third parties. While I may have agreed not to use the book to copy, no one else has so agreed and they may copy freely. So, if I loan a book to my friend, in copying the book, my friend has violated no contractual agreements or “reserved rights.” The problems with meaningfully defining property rights in this way should be obvious.

Clayton -

To say that is to revolt against markets in all other parts of it, too. Markets tend to eradicate profits; yet people, for a reason, tend to still seek those profits. When you take your argument to its logical conclusion, the question is this, why do people ever try to seek profits; for they will just tend to get eradicated. For example, if I notice a gap between the supply and demand of oil in a region, as an oil producer, seller, or whatever, I will try to sell in that region to make huge profits. But, if I do that, other people will ‘steal’ my idea and start selling in that area and get rid of my profits. So why should I even bother? Why do people ever seek to improve their efficiency, considering the other manufacturers will just ‘steal’ their ideas and increase their own efficiency, too? The argument that you are using applies to every situation in which people are seeking profit; yet you, and other people, use it only with what copyrights, patents, and whatever already protect simply because those are the things that are possible to do that with. How would people enforce such things in situations in which people, as entrepreneurs, are seeing gaps in demand and trying to fill them just by shipping things to different locations or something?

My knowledge of economics is pretty weak; so try to bear with me and fill in what I am missing. But I think that this is a pretty important argument. I see no reason why your argument does not apply to any seeking of profit whatever; for markets always tend to try to remove profits. Again, why should any person employ their ideas to find opportunities to make profits if it is inevitable that other people will just follow along, ‘steal’ their ideas, and eradicate their huge profits without trying as hard? Why should any one want to be the first person to improve their efficiency if they can just wait for an other person to do that and then follow suit, without wasting all of their time and money doing research?

That’s sort of an apples to oranges comparison. In one case, you are selling oil. In the other, you are selling your ideas. Your competitor can’t just come in and magically reproduce large quantities of oil from thin air as they can with your ideas.

Further, a person who decides to write a book does not profit from his decision to write the book. The profits come from the ideas contained within the book. Likewise, oil producers don’t earn money from their idea unless they act on it.

It is not even possible to sell ideas.

My idea was to sell in a certain region, not to conjour up a batch of oil.

I am not sure what your point is there.

It is not even possible to sell ideas.

Are you serious? If I create a new invention, but I don’t want to make the investments necessary to produce that invention, I couldn’t sell the idea to a manufacturing company?

My idea was to sell in a certain region, not to conjour up a batch of oil.

I know what your idea was. You want to sell oil in a certain region. An author wants to write a book about a particular topic. Neither party makes money by simply having an idea to do something, they need to actually act on their idea. It would be absurd if I could declare that I wanted to write a book about economics, and all people were outlawed from writing a book on that topic because I thought of it first.

I am not sure what your point is there.

My point is that having a whim to do something doesn’t deserve copy protection. I explained that above.

What copyright law is focused on is the final product. In case one, you are selling oil. You don’t need any special protection because oil can’t be reproduced from thin air. In case two, you are selling your ideas that are contained within your book. While others can have similar ideas, you are protected from someone copying your work verbatim and profiting from it.

Did you discover telepathy and not tell me about it? (I am not trying to be disrespectful; sarcasm is just the easiest way to make that point.)

I am not sure why that is relevant to my argument; I understand that.

I was presupposing that the oil already exists. If two companies each have 100 units of oil, that is not the only variable; they, as entrepreneurs, have to decide where to sell the oil. If the first company finds a gap in demand, they will sell in that area; but then, when the second company sees the huge profits that the first is making, they will, of course, ‘steal’ the idea, move in, and destroy the huge profits. So, what incentive does the first company have to do that? Because of the lack of laws giving them a monopoly, once they move in, other companies will just follow them. Why should they spend time researching where to sell things when they could just wait for the other companies to figure it out first? Finding things out like that costs money.

Did you discover telepathy or not tell me about it? (I am not trying to be disrespectful; sarcasm is just the easiest way to make that point.

No, I did not discover telepathy, nor do I see what that has to do with having an idea for a reasonable product. Someone I know invented something, and is working on selling their idea to a manufacturing company because they don’t want to be involved with producing it themselves. I guess my relative is an outlier.

I am not sure why that is relevant to my argument. I understand that.

I thought it was relevant. You were comparing (1)someone having an idea about selling finished goods to (2) someone selling a finished good that is essentially their ideas. If I write the book I mentioned, and profits are high, other people can write books on the same topic. With copyright law, they just can’t copy my work verbatim for profit.

As for the oil producer, if profits are high, competitors can enter into that market to try and sell oil. They can’t buy one unit of the original producer’s finished good and make milions of copies of it without absorbing the costs to create each unit of that finished good. When people copy a book to sell it, they avoid the full costs of creating that book; all of the creation costs are the creator’s burden.

So in one situation, the competitor pays only a fraction of the cost to produce each unit of a good for profit, while in the oil example, the producer must pay the full cost of producing each good. Copyright law levels the playing field, and protects the creator.

I was presupposing that the oil already exists. If two companies each have 100 units of oil, that is not the only variable; they, as entrepreneurs, have to decide where to sell the oil. If the first company finds a gap in demand, they will sell in that area; but then, when the second company sees the huge profits that the first is making, they will, of course, ‘steal’ the idea, move in, and destroy the huge profits. So, what incentive does the first company have to do that? Because of the lack of laws giving them a monopoly, once they move in, other companies will just follow them. Why should they spend time researching where to sell things when they could just wait for the other companies to figure it out first? Finding things out like that costs money.

If two authors each have the time to write a book, that is not the only variable; they, as authors, have to decide what to write about. If the first author finds a gap in demand, they will write a book about that topic; but then, when the second author sees the huge profits that the first is making, they will, of course, ‘steal’ the idea to write about that topic, move in, and destroy the huge profits. Thanks to copyright law, the second author can’t just buy one of the first author’s books and make millions of copies of it, he must also invest his time to bear the costs of creating his own unique work, leveling the playing field.

As for why the first person should enter a market, the incentive is that they reap the huge upfront profits that you keep talking about. That’s the reward. Even if someone comes in to try and imitate the oil producer, imitation will take longer than the couple of minutes required to copy a book. Also, the new competitor isn’t coming in claiming to be the old competitor; they must generate their own brand power, as any new author would have to do.

If you don’t mind, I’d like to take this opportunity to ask a question. Let’s imagine that an author writes a book in a country without copyright laws, and he and the publishing company of his choice are able to sell enough copies of his first book to turn a profit. Now, other publishers are aware of this author’s money-making potential, and they are prepared to make copies of any future books that this author writes in order to profit off of his popularity. How could the author make any reasonable money if his publishing company knew that any money paid to the author is a cost that their competitors would not have to match? Additionally, in the internet age, how could the publishing company compete if a website copied the book and posted it for all to see in order to generate advertising revenues? Given this threat, can they really afford to pay the author anything?

My point is that it is only possible to sell the medium, not the idea. It is important to understand that.

No, I was comparing (a) “someone selling a finished good”, which is oil, to (b) “someone selling a finished good”, which are books.

Sure.

Again, I was presupposing that both companies already had the oil that they wanted to sell.

No, they do not. Whether I have a copyright or not, the paper and other materials that I use to produce the books cost the same thing.

I am not sure what you are trying to explain there, sorry.

What about contracts? They could use contracts to make sure people do not copy them for a while. Or what about “theatre” type showings? They could release the book in libraries which do not allow you to take the books with you before they release it to the public. That is how Princeton is allowing people to read one of the unpublished works of Salinger without letting any one get a hold of it to copy and distribute.

When did condone pretending to be the auther?

My point is that it is only possible to sell the medium, not the idea. It is important to understand that.

If you say so.

No, I was comparing (a) “someone selling a finished good”, which is oil, to (b) “someone selling a finished good”, which are books.

Then why are you so concerned about someone imitating the oil producer’s decision to enter a market, if the sale of the good is the only thing in question? Authors also have to worry about others writing about their topic of choice, but this really has nothing to do with copyright law.

Again, I was presupposing that both companies already had the oil that they wanted to sell.

Either way, they had to bear the costs of obtaining/refining that oil. The cost doesn’t go away whether it happened before or after the companies decided to enter the market. I presupposed that two authors both had time they wanted to use to write a book. That time has costs, just as the oil does.

No, they do not. Whether I have a copyright or not, the paper and other materials that I use to produce the books cost the same thing.

It’s basic math. I’ll use books again. Let X be equal to the cost of writing and editing a book, including the costs of desiging cover art and other related costs. Let Y be the costs that you are talking about, the paper and materials used.

Cost for the first publisher = X + Y

Cost for the second publisher = Y

It’s really hard to miss the obvious advantage that the second publisher has over the first publisher. Using your oil example, let F equal the fixed costs associated with obtaining and refining oil, and V equal the variable costs associated with the same.

Cost for the first oil company = F + V

Cost for the second company = F + V

As you can see, new competitors in your oil example don’t have a cost advantage as they do in the case of the books. I don’t see how that can be debated.

I am not sure what you are trying to explain there, sorry.

The two authors are in the same boat as the oil companies with regards to stealing an idea to enter a certain market. However, authors are at risk because, sans copyright laws, their work can be copied without the imitator paying cost X described above.

What about contracts? They could use contracts to make sure people do not copy them for a while. Or what about “theatre” type showings? They could release the book in libraries which do not allow you to take the books with you before they release it to the public. That is how Princeton is allowing people to read one of the unpublished works of Salinger without letting any one get a hold of it to copy and distribute.

How are you going to enter into a contract with every potential copier? What would a potential copier have to gain by signing such a contract? Even if you made each purchaser sign an agreement that they would not copy the book, they could always hand the book to a friend for copying purposes because you can’t contractually bind third parties without their consent.

All of these problems are simplified by copyright law. I’m not upset that I can’t copy another author’s work for my own gain, because I benefit if I can enjoy the same copy protections as he does.

I am not concerned.

It will be convenient to use your example to show you what I am talking about.

Let X be the cost of deciding what to print, including the author deciding what marks to put on the page and the publisher deciding which author to publish. Let Y be the cost of printing it, including the paper and all of the other materials.

  1. Cost to the first publisher = X + Y

  2. Cost to the second publisher = (less than X) + Y

Let F be the cost of deciding where to sell, including trying to find gaps in demand and other things. Let V be the cost of selling it, including getting the oil, transporting it, and the other things.

  1. Cost for the first oil company = F + V

  2. Cost for the second company = (less than F) + V

Where did the “fixed” and “variable” thing come from? From the beginning, I was talking about how it costs money to research where to sell, where gaps in demand are:

Yet you neglected to even mention that in your example. Why?

I am not contesting that. I am just saying that such “risk[s]” exist in all parts of the market to the extent that, if you support ‘IP’ laws, you should also support a myriad of other monopolies.

When did I contest any of that? Also, you ignored my other example, the one about the “theater”.

I am not concerned.

If you say so.

It will be convenient to use your example to show you what I am talking about.

Let X be the cost of deciding what to print, including the author deciding what marks to put on the page and the publisher deciding which author to publish. Let Y be the cost of printing it, including the paper and all of the other materials.

1. Cost to the first publisher = X + Y

2. Cost to the second publisher = (less than X) + Y

Let F be the cost of deciding where to sell, including trying to find gaps in demand and other things. Let V be the cost of selling it, including getting the oil, transporting it, and the other things.

1. Cost for the first oil company = F + V

2. Cost for the second company = (less than F) + V

Where did the “fixed” and “variable” thing come from? From the beginning, I was talking about how it costs money to research where to sell, where gaps in demand are:

Let me simplify my argument for clarity. Authors and oil companies both have costs associated with deciding which market to enter. Both could wait for competitors to choose markets first and then try to imitate those competitors. If they do so, they forgo the profits associated with being a first mover into a market. That is the reward for the risk of investing in research.

However, things change after a decision to enter a market has been made. In the author’s case, a good is produced that can be easily reproduced at a fraction of the cost, not including any research costs. In the oil company’s case, a good is produced that cannot be reproduced at any cost. Any company choosing to produce the good must bear the full cost of producing that good, regardless of when the good was produced in relation to when the company entered the market.

All those assumptions being true, the equations I presented earlier are correct. If we must include research, let R be research. Let all other variables be as I described my prior post in this thread:

First publisher’s cost = R + X + Y

Second publisher’s cost = Y (they do not pay any portion of X since all of X has already been done by another company)

First oil producer’s cost = R + F + V

Second oil producer’s cost = F + V

So the first publisher/producer both pay R, but they are rewarded with first mover profits if their research was correct. Once research is complete, the good must be produced/supplied. In the case of the publisher, only one has to pay the writing, editing, and design costs. If this is not true, please address it, since I’ve had to state it several times. In the case of the oil companies, they both must account for the full cost of each unit produced, including all fixed and variable costs. It doesn’t matter when they acquire the oil, the cost is accounted for when it is sold (Accounting 101).

Yet you neglected to even mention that in your example. Why?

I’ve answered this, but I’ll repeat it. The reward is first mover profits.

Unfortunately for authors, without copyright protections their good can easily be reproduced without the copier bearing any of the writing, editing, or design costs. All of these costs take place after research is done, yet the second publisher gets to avoid those costs along with the research costs.

Fortunately for oil companies, competitors that enter the market still have to bear the full costs of the goods they sell. After research costs are taken out, new competitors do not gain any other cost advantages. This is different from people copying books. Again, please refute this if it isn’t true.

I am not contesting that. I am just saying that such “risk[s]” exist in all parts of the market to the extent that, if you support ‘IP’ laws, you should also support a myriad of other monopolies.

Please list these monopolies that I should also support according to your logic. Also, a copyright isn’t much of a monopoly since substitute goods can be created. You might think author A’s economics book is too expensive, but other authors can produce cheaper economics books. One of the main defining points of a monopoly is that no reasonable substitutes are available; otherwise, how could they become a monopoly?

When did I contest any of that? Also, you ignored my other example.

What? I stated that copyright law was needed. You asked why people couldn’t use contracts instead. I explained how I thought it would be nearly impossible. Now you state that you never thought it was possible.

If that’s the case, what was the point of your question? Also, what other example?

On a separate note, I’d like to address your idea of research. You say that the first firm is the only one that pays research costs. How does the second firm ever discover the first firm’s profits if they don’t invest in research?

“My handling of the book does not differ between the two cases.”

I give you the right to handle the book during the day, but not at night. I have transfered a property right over to you. Do you have the right to handle it during the night?

How would you even do something like that?

I say “I hereby transfer the right to handle this book during the day to I. Ryan”. That’s it.

You also have to make him agree to spend resources to make sure that nobody gets a hold of the book and scans it ever, then be responsible if anyone does. Oh, and you, the IP king, has to provide sufficient proof of who breached this contract unless you are planning to sell the book to only one person. I think I will buy my books from reasonable people, and I do for the most part only buy books from mises.org. I’ve gotten pretty much everything else I want from a free book store or I can find it online.

Did you not notice that I put “(less than X)” and “(less than F)” instead of nothing?

It just might slow it down; that was my point.

This one:

I am in the process of doing that.

We do not define monopoly like that in Austrian economics.

Yeah, exactly.

What? Are you telling me that it always costs the second publisher less money to print books than the first?

Why are you making the distinction between “fixed” and “variable” costs? And why did you add “R” but keep “X”?

Heh, good luck enforcing that.

“You also have to make him agree to spend resources to make sure that nobody gets a hold of the book and scans it ever, then be responsible if anyone does. Oh, and you, the IP king, has to provide sufficient proof of who breached this contract unless you are planning to sell the book to only one person. I think I will buy my books from reasonable people, and I do for the most part only buy books from mises.org. I’ve gotten pretty much everything else I want from a free book store or I can find it online.”

Nope, I don’t. I haven’t transfered him the right or anybody else the right to scan it, so, if anybody does, they’ve violated my right in the book. They are responsible for it, they have committed a violation of my rights.

Contracts MEAN NOTHING. I can create a contract saying “I will give you a dollar in two days” and then not give you the dollar. It was only a promise, not a transfer of property. Here is how I will actually owe you a dollar. “I hereby transfer to you the right to a dollar on condition that two days pass”. There, now if two days pass, you have a claim to the dollar, and if I don’t let you take it, I have violated your right to the dollar.

Well, let’s look at this from a few different angles.

Let’s say you post a flyer on a public bulletin board. At the bottom is the notice “Copyright Sam Armstrong 2010 - ALL RIGHTS RESERVED.” By broadcasting the contents of your flyer, I think you have automatically relinquished any rights you may have had to prevent or prohibit copying of that flyer. Your notice at the bottom of the page carries no more weight than if you had written, “I hereby own the firstborn child of all who read this piece of paper.”

If, on the other hand, you had laid the flyer on your kitchen table and I sneaked into your house with a hidden camera and snapped a picture of it, I think you have a reasonable basis from which to say I have violated your property rights. A piece of paper in your house is presumably private and I have no business sneaking around photographing things of yours without your permission.

So, we have to distinguish right from the outset between broadcasting something versus keeping something on your own property or person or in your private effects. The latter comes with a presumption of privacy, the former does not.

Most claimants of copyright want to have their cake and eat it, too. They want to broadcast content, while still claiming that it remains effectively private.

Yeah I have no problem with saying I can copy something which is being broadcast to me, assuming it’s not through cable tv or something which has rules against that. But certainly through an antenna.

But it’s not just that, it’s more than that. Once a single illegal copy is made, then all other copiers of that illegal copy would no longer be violating your rights because you would have no rights in that illegal copy. I hardly think this is the position you are advocating, is it?

Clayton

But what I’m saying to this is that the illegal copy IS owned by the original copyrighter. And it happens as soon as they used the book to create the copy as part of the payment of breaking the original property rights in that book. When someone violates your rights, they owe you something, and it doesn’t happen that they owe you something once a judge says they do, they owe it to you immediately. Part of what is owed is that copy. Now that copy’s property rights are solely owned by the original creator, and the neither the copier nor anybody else have any rights to it. So if they use that copy to create another copy, they have still violated the original owner’s rights, and would thus owe that copy of a copy too the original owner, and it would again, happen immediately.

“Heh, good luck enforcing that.”

Agreed, but that doesn’t mean I don’t have the right to. I don’t think my position is practical, just that I have the right to enforce.

I tend to think that, once we get out of the realm of practicality, all of these things break down.

An example is our faculty of taste. Its ‘purpose’ is to advise us as to what to eat; but it evolved under definite conditions in which only a certain set of objects were given to it as input to appraise. So, if you give it an object going beyond that set of objects, it is entirely unpredictable what it will do; it will no longer give you worthwhile advice; it will just give you a bunch of meaninglessness.

Analogously, property rights originated to solve certain problems. So, if you start to talk of things that it never took as input when it evolved, it is entirely unpredictable what will happen.

That was not very good of an explanation; but, if you want more information, I discussed things like that in one of my recent posts.

Agreed, but that doesn’t mean I don’t have the right to. I don’t think my position is practical, just that I have the right to enforce.

You’d have to make a contract similar to what I wrote above. Almost nobody would agree to hiring a full time security guard to watch the newest copy of Harry Potter, so it is basically irrelevant. As soon as someone gets a hold of information who hasn’t explicitly agreed not to disseminate it, you have no right of enforcement.