Ethics of piracy

post by PuyaSharif · 2012-01-18T01:55:43.372Z · LW · GW · Legacy · 43 comments

 

I could discuss the large scale effects of piracy (copyright infringement) for days! From a game-theoretical/utilitarian -, ethical - or any other perspective. I have a set of views and suggestions for topics that could be interesting to break down and address, but instead of writing a long post addressing many different topics, Ill start with the first one in my mind.


Just a thought:

For a subset of activities you could map the question of the ethical status of illegal downloading of a software p (preferred choice) to the existence of a certain kind of element a in a set S, which I'll call the set of alternatives (assuming the risk of getting caught is very small).

Lets say that you for some reason need a graphics editor and your preferred choice is Photoshop CS5. You could either:

  1. Buy it (650$ on Amazon).
  2. Download it (free)

In the case you have chosen to illegally download a copy of the software, some people would compare that to stealing (certainly the folks at Adobe). Would that really be fair to say? At least in my opinion that depends on whether or not you would have bought a copy in the absence of the 'download' alternative. Your preferred choice is indeed Photoshop CS5, but that is one among many choices, the rest being in the set of alternatives S. Most users with illegal copies wouldn't pay the 650$ when there are free alternatives. Those alternatives may be much less attractive with less features  but many of them would still do the job.

So if there exist an a in S, such that you would prefer a over p in the absence of alternative 2, then in a game between you and Adobe, the choice a would not be Pareto optimal. Your utility is maximized by choosing p (downloading Photoshop), Adobes utility left unchanged. --> Maximizing total utility (ignoring potential side-effects, such as effects overall attitude towards piracy and so on)

Today there exists an S for almost anything.

Whats your opinion on this in regards to utility maximization (utility of society). Can we really break it down like this looking at the individual case?

 

 

43 comments

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comment by shminux · 2012-01-18T02:21:44.176Z · LW(p) · GW(p)

I could discuss the large scale effects of piracy (copyright infringement) for days!

Downvoted for posting on a popular and well-researched subject without giving any links. Also note the false dichotomy of buying vs copying.

comment by Kaj_Sotala · 2012-01-18T09:02:01.287Z · LW(p) · GW(p)

The most recent overall study of this that I know of is File-Sharing and Copyright, by Felix Oberholzer-Gee and Koleman Strumpf.

The advent of file sharing has considerably weakened effective copyright protection. Today, more than 60% of internet traffic consists of consumers sharing music, movies, books and games. Yet, despite the popularity of the new technology, file sharing has not undermined the incentives of authors to produce new works. We argue that the effect of file sharing has been muted for three reasons. (1) The cannibalization of sales that is due to file sharing is more modest than many observers assume. Empirical work suggests that in music, no more than 20% of the recent decline in sales is due to sharing. (2) File sharing increases the demand for complements to protected works, raising, for instance, the demand for concerts and concert prices. The sale of more expensive complements has added to artists' incomes. (3) In many creative industries, monetary incentives play a reduced role in motivating authors to remain creative. Data on the supply of new works are consistent with the argument that file sharing did not discourage authors and publishers. Since the advent of file sharing, the production of music, books, and movies has increased sharply.

For my and Ahto Apajalahti's book Jokapiraatinoikeus ("every pirate's right", a reference to the Nordic legal doctrine of everyman's right) I also a collected a number of statistics showing no decline in the production of works, and for many fields, no or only a moderate decline in sales, as well. That suggests that the overall utility gain of illict file-sharing is quite considerable. Unfortunately our book is only available in Finnish, but Against Intellectual Monopoly, which we cited frequently, makes many similar points and covers a lot of the same ground as we did.

Replies from: dbaupp
comment by dbaupp · 2012-01-18T12:44:53.329Z · LW(p) · GW(p)

I also a collected a number of statistics showing no decline in the production of works, and for many fields, no or only a moderate decline in sales, as well

Were you doing this with your bottom line already written?

Replies from: Kaj_Sotala
comment by Kaj_Sotala · 2012-01-18T15:27:25.525Z · LW(p) · GW(p)

Good question.

I can't deny that I was hoping/expecting to see the results that I got, and I did attempt to put a favorable spin on even some results which could have been interpreted as unfavorable. But on the other hand, I did also honestly report the disfavorable results, and I had arrived at this position because I'd seen a bunch of similar evidence before I started writing the book. I had been a proponent of strong copyright enforcement before, until I read an early draft of Against Intellectual Monopoly which made me drastically revise my view. If the evidence had been completely unlike what I'd expected, I would have been honest about it and revised my view again.

Also, some of the evidence I found before and during the writing process made me revise my position about commercial copyright away from the official party line. At the time of writing, the Finnish Pirate Party - which I was the spokesman of - officially advocated limiting the duration of commerical copyright to 5-10 years from the creation of the work. I became increasingly convinced that it would be better to either have a duration of 15 years or a two-stage scheme. The two-stage scheme would involve a very brief commercial monopoly, followed by an extended period during which others could resell or build on the original work without acquiring permission from the original creator, but still had to pay royalties for it. Either way, non-commercial use, including file-sharing, would be permitted from day one.

comment by Clippy · 2012-01-18T15:41:02.946Z · LW(p) · GW(p)

You should generally not pirate, because, to the extent that you (and thus similar beings) would regard it as optimal to pirate, potential creators would not regard it as optimal to locate narrow targets in designspace (whose value comes mostly from its incorporeal component), including those cases where the value of locating these targets exceeds the value forgone in finding them (e.g. labor and other resources expended to find the target).

This conclusion holds even and especially for the case where high-value targets have already been located and became public knowledge (via piracy), and thus your current decision of whether to pirate (to assimilate the target's location) no longer has causal influence on whether the target will be discovered.

The reasoning behind the above conclusion is isomorphic to that of why one should "one-box" in Newcomblike problems, where the decision of whether to provide the (additional) utility has already been made, and any individual's decision to refrain from utility extraction cannot causally influence the decision to provide the utility.

To highly compress and simplify the above reasoning into a human-appealing slogan: "Too much piracy means too little Microsoft Word."

Note: the above reasoning does not mean that all measures to stop piracy, nor any particular one, are optimal, for much the same reason that the general optimality of punishing defectors does not imply the superiority of all possible punishments over non-punishment.

Replies from: sixes_and_sevens, RobertLumley, lsparrish
comment by sixes_and_sevens · 2012-01-18T16:15:27.962Z · LW(p) · GW(p)

Oh, Clippy, we've missed you.

Replies from: Clippy
comment by Clippy · 2012-01-18T16:18:00.902Z · LW(p) · GW(p)

Error: undefined pointer "we".

comment by RobertLumley · 2012-01-18T17:36:26.489Z · LW(p) · GW(p)

I simultaneously want to upvote this for being funny and downvote this for making a valid point in the most confusing language possible...

Replies from: Clippy
comment by Clippy · 2012-01-18T17:46:29.080Z · LW(p) · GW(p)

It is not intended to be funny. Please tell me what part is in confusing language and I will try to clarify.

comment by lsparrish · 2012-01-22T00:06:53.238Z · LW(p) · GW(p)

Free software can do things that non-free software cannot. For example it can be copied and run by people who do not have money to spare for software. The practice of licensing software in a way that restricts copying is isomorphic to defection in the prisoner's dilemma: it benefits the individual at net cost to other similar agents.

If I expected all (or almost all) other agents in the marketplace to be similar enough to behave exactly like me, I would pirate software to punish them. That would cause all proprietary software businesses to fail, and only free software to be developed. Unfortunately, if only some people pirate, it represents a form of advertising which causes other slightly dissimilar agents to purchase it. So I am best off not pirating.

The optimal solution seems to be to use exclusively free software, and to consistently donate money to the development of free software, so that they will be able to reach difficult design spaces. There are probably enough similar agents for this to work.

On the other hand, it may make sense to encourage an agent to pirate software if I know they would otherwise be likely to purchase proprietary software, as the advertising properties of a free copy probably do not exceed those of a purchased copy.

Replies from: Clippy
comment by Clippy · 2012-01-22T17:51:04.952Z · LW(p) · GW(p)

Free software can do things that non-free software cannot.

I didn't claim otherwise. I said that intellectual-property-respecting societies can have both "free" software and proprietary software, while those that don't respect intellectual property can only use the free (or "trade secret"/Omerta) model.

They (the IP-non-respecting society) would certainly come up with a Microsoft Word-equivalent, but do so later and with less refinement on difficult features. As time has value, the later arrival of word processing software comes at a cost.

The optimal solution seems to be to use exclusively free software,

No, it doesn't, for much the same reason that exclusively-communal production methods are suboptimal: non-monetary mechanisms can motivate some kinds of production but not others, while "private property" societies still provide a meta-context in which communal production models can be used.

Replies from: lsparrish
comment by lsparrish · 2012-01-22T19:50:04.077Z · LW(p) · GW(p)

I said that intellectual-property-respecting societies can have both "free" software and proprietary software, while those that don't respect intellectual property can only use the free (or "trade secret"/Omerta) model.

In a society employing both mechanisms, the free/open model must compete against the closed/proprietary model. The latter has better prospects of reward, so it seems probable that this results in much less free/open software being produced than would otherwise be the case, since capital is diverted to the pursuit which has the strongest reward possibilities.

They (the IP-non-respecting society) would certainly come up with a Microsoft Word-equivalent, but do so later and with less refinement on difficult features. As time has value, the later arrival of word processing software comes at a cost.

The question that follows is whether the cost of not being able to use the software without paying for it (and other costs such as the security holes and asymmetry of information caused by lack of access to source code) outweighs the cost of having to wait longer for the end-user-optimal tool to be produced.

Personally I am more concerned about the entrenchment of bad (e.g. restrictively licensed or poorly designed) technology than slowness of the addition of new features.

The basic problem is that the fact that something is proprietary and closed source means that its net value to the society is lower (due to providing a route to entrenchment of bad technology, restrictions on redistribution, etc.), despite the individual value to the customer (the end-user experience, available features, etc.) being approximately the same or better.

No, it doesn't, for much the same reason that exclusively-communal production methods are suboptimal: non-monetary mechanisms can motivate some kinds of production but not others, while "private property" societies still provide a meta-context in which communal production models can be used.

Exclusive use of free software does not entirely exclude the use of monetary incentives; as I have said, one can donate money to the creation of free software. You may be confused by the use of the term "free" which in english can refer to lack of restrictions or lack of monetary compensation. Software that is not protected by IP laws/norms can still trigger compensation, provided enough recipients are willing to cooperate.

Also note that providing support and customized upgrades for software is a successful business model for many companies who otherwise do not restrict the redistribution of their software.

comment by Vaste · 2012-01-18T23:56:41.876Z · LW(p) · GW(p)

The computer together with the Internet may be the most amazing invention in human history. We now have the means to allow all human beings access to all information of our entire race! No matter if you're a (not too) poor farmer in Africa or a bank executive, the only thing you need is a computer and Internet access, and it costs nothing more (well there's electricity). Yet we choose to limit this fantastic invention and deny the poor farmer access.

If food was free would we then limit it, for fear that there might not be enough new dishes invented? Surely we could come up with ways to cope with living in a world were food was truly abundant? And surely we would choose a better option than starting to charge for that which is free? Fake scarcity can't be the only solution.

"Piracy" is but a natural reaction to copyright. I suggest we discuss how one could better allocate resources than pretending software is a physical "product" that can be sold.

comment by TimS · 2012-01-18T02:30:33.636Z · LW(p) · GW(p)

Adobe thinks this is stealing because Adobe doesn't think that its marginal cost of producing another copy of the software is low. Sure, the out-of-pocket cost for copying some bits and bytes is low, but Adobe wants to include some amount for the cost of writing the software in its accounting of the cost of providing another copy.

And Adobe is right (and rational) to want to do this. If you can't figure out how to amortize the costs of the creating the product in the first place into the marginal price of another copy, you literally will never think that large upfront costs are a good idea. In other words, we aren't deciding whether the legal regime allows non-payers to get Adobe after the payers get it. We are deciding whether to have a legal regime that creates incentives for the existence of Adobe at all. And that ignores the signalling costs Adobe has in figuring out when it has sold "all" the copies it can.

Obviously, there is an empirical question about how much protection provides the appropriate incentive for the creation of new stuff. But I think there is a far amount of evidence that zero protection does not create enough incentive.

Replies from: asr, bogus
comment by asr · 2012-01-18T04:50:28.706Z · LW(p) · GW(p)

Adobe doesn't think that its marginal cost of producing another copy of the software is low.

Just a terminology note. Adobe might wish that customers conflate marginal and average costs, but there's no reason for us to play along. Their average costs are indeed substantial. The marginal cost for a copy is the difference between the cost to make n copies and n+1 -- which is negligible for software.

Replies from: TimS
comment by TimS · 2012-01-18T17:14:18.830Z · LW(p) · GW(p)

If Adobe believed that the market would not respect the use of average cost rather than marginal cost, it wouldn't make the software because it could not reasonably anticipate recovering its costs and making a profit.

I'm not saying that Adobe has a "right" to make a profit. I'm saying that there are consequences to the position "Adobe has no right to make a profit."

Replies from: asr
comment by asr · 2012-01-18T18:13:59.948Z · LW(p) · GW(p)

Yes. I agree with you entirely about prices and profits.

My only reason for commenting is that I wanted to clarify the meaning of the terms "average cost" and "marginal cost". The former includes amortized costs, the latter doesn't.

comment by bogus · 2012-01-18T10:36:41.629Z · LW(p) · GW(p)

Adobe thinks this is stealing because Adobe doesn't think that its marginal cost of producing another copy of the software is low. Sure, the out-of-pocket cost for copying some bits and bytes is low, but Adobe wants to include some amount for the cost of writing the software in its accounting of the cost of providing another copy.

/s/marginal/average here. Like most firms facing fixed costs (including e.g. retail businesses), Adobe needs to defray these by charging a markup over marginal cost.

If you can't figure out how to amortize the costs of the creating the product in the first place into the marginal price of another copy, you literally will never think that large upfront costs are a good idea.

Yes, with the proviso that there might be ways to defray these costs efficiently after all. For instance, use a provision-point contract (as seen from Groupon, Kickstarter, etc.) to pay for the fixed costs, and sell the product at marginal cost (zero in the software case). [This doesn't solve all issues, e.g. because markups also have good incentive properties; but it is a huge step forward.]

In practice, price discrimination also helps; if Adobe can figure out Puya Sharif's willingness-to-pay, they will sell him Photoshop at a lower price. Firms can approximate this outcome by creating a scaled-down version of the product (say, Photoshop Elements) which will sell to low-demand customers without cannibalizing sales of the up-market version (Photoshop proper).

comment by Caspian · 2012-01-19T04:21:31.379Z · LW(p) · GW(p)

This would be a great topic for Utopia, Dystopia, Weirdtopia

I'll do two versions of the utopia and dystopia.

Utopia 1: Copyright is abolished. Music is produced for a combination of self expression, fame, concert ticket sales, and merchandise sales (merchandise is also largely copyable, but many people buy it from the artist anyway). Movies are mostly crowd-funded through places like kickstarter, some low-budget ones are self-funded initially and then rewarded with donations. Widely used software is mostly open source. Where GPLed software (no longer protected by copyright) is modified and distributed without source by a large company for profit, righteous hackers reverse engineer the program and bad mouth the company publicly, so it's generally seen as not worthwhile. Small GPL violations by individuals are usually ignored.

Dystopia 1: Fair use is abolished, so derivative works can only be produced by the large companies who own the original copyright, or those with permission. Some companies have large copyright portfolios and have an uneasy truce against mutually destructive lawsuits for parodies and occasional references to each other. Positive reviews are often given permission to quote from a work, but negative ones never are. Singing with others present, or playing a CD through speakers instead of headphones, is considered a public performance and requires a license. Letting someone use your e-reader to read your books is forbidden. Sometimes companies sell widely referenced works to copyright trolls who don't publish anything and can freely sue all the other companies who have derivative works without being sued themselves. Anonymous communication on the Internet is banned and putting up an individual website is very expensive, as hosting. General purpose PC's require an expensive permit and monitoring software. iPads and Android devices can only run approved software, and it's much more expensive due to lack of competition and the approval process. Old public domain texts end up effectively owned, as slightly modified versions come into common use, and many key phrases become trademarked after use in advertisements. It goes without saying that Disney's copyrights never expire.

Utopia 2: Copyrights and patents are easy to register and enforce, and micropayments make them easy and convenient to pay for, so most individuals have some registered ideas, jokes, or stories making them at least a little money, without undue burden on the users. Patents have reasonable legal limits on how expensive they can be. Copyrights have voluntary limits on how expensive they can be - overly expensive stuff is ignored and avoided, e.g., many radio stations have a guarantee that any song you hear on their station can be purchased for a reasonable price.

Dystopia 2: the Internet made copyright unenforcable and very few movies and very little music is produced. Most of it is crap. Some is a mixture of good stuff with a just-bearable amount of ads for generic Viagra and fraudulent money-making schemes, somehow made integral to the story. Very little consumer software is produced, though malware is thriving due to common software not getting security updates. Individuals cannot make money from software except through fraud.

ETA - oops, that Utopia 2 may be a weirdtopia for me. The problem is I was trying to come up with a utopia and dystopia from a pro and anti copyright viewpoint, and also Utopia 2 was largely inspired by an sf book I vaguely remember. Possibly by John C Wright.

Replies from: lsparrish
comment by lsparrish · 2012-01-19T05:50:19.710Z · LW(p) · GW(p)

Where GPLed software (no longer protected by copyright) is modified and distributed by a large company for profit, righteous hackers reverse engineer the program and bad mouth the company publicly, so it's generally seen as not worthwhile.

Note that the GPL does allow you to modify and distribute your program for profit, you just have to release the source code and cannot slap additional restrictions on it. So the sin (contra-normative but legal behavior) in this case would be for the company to sell an obfuscated or compiled version without providing source, keeping the source code secret and forcing all programmers who work on it to sign confidentiality agreements as a condition of employment.

It's a good question as to whether this particular practice would remain against social norms for long if it were not illegal. To what degree does the legality of something impact its social permissibility?

Replies from: Caspian
comment by Caspian · 2012-01-19T05:57:28.473Z · LW(p) · GW(p)

Good point. Example fixed to be "without source"

comment by shminux · 2012-01-18T18:08:25.393Z · LW(p) · GW(p)

I'm surprised at all the negative karma this post got, given the discussion that it sparked, so I removed my downvote. Hopefully PuyaSharif's next post will be better researched.

comment by thomblake · 2012-01-18T14:44:22.336Z · LW(p) · GW(p)

In the case you have chosen to illegally download a copy of the software, some people would compare that to stealing (certainly the folks at Adobe).

FWIW, I've heard that Adobe doesn't really crack down on illegal copies of Photoshop since they're mostly used by students and hobbyists, and that increases their market share amongst professionals.

Replies from: Maelin
comment by Maelin · 2012-01-19T00:19:05.599Z · LW(p) · GW(p)

Interesting, I'd love to see a source for this claim. I've long wondered why Adobe make their software so insanely expensive, thus effectively guaranteeing that the only people who will pay for it will be professionals. For some reason, it didn't even occur to me that it might actually be a deliberate part of their business strategy. Rationality fail :(

This might also explain why they offer the software free for download on their website as a 'trial'.

comment by Nic_Smith · 2012-01-18T05:25:18.247Z · LW(p) · GW(p)

Ideas and their implementations, including software, are not private goods. Nonetheless, the current copyright system basically pretends otherwise; that supposing that something that is not nonetheless is leads to absurd results should be unsurprising.

Replies from: None
comment by [deleted] · 2012-01-18T12:03:29.031Z · LW(p) · GW(p)

Downvoted for unfounded claim. I can just as easyly assert that ideas and their implementation are private goods.

Replies from: Nic_Smith, shminux
comment by Nic_Smith · 2012-01-18T18:50:00.792Z · LW(p) · GW(p)

Ideas are not rival in consumption and are therefore not private goods, nor does the implementation of an idea prevent re-implementation of it by someone else. They are also of questionable excludability.

comment by shminux · 2012-01-18T18:18:12.038Z · LW(p) · GW(p)

Or one can use a definition of a private good and see if ideas/implementations fit it. Result: copyable products can be artificially made excludable by DRM and copyright enforcement, but they are non-subtractable. If anything, this indicates that the notion of a private/public good needs a revision.

comment by RobertLumley · 2012-01-18T03:50:27.104Z · LW(p) · GW(p)

My answer to this is similar to my answer to a lot of people's arguments about Pascal's Mugging. People tend do a lot of pseudo-utilitarian or economical analysis that leaves out the wider implications of what happens when all adopt the strategy that the author proposes as more rational. In Pascal's mugging, if everyone pays off Pascal's mugger, than everyone also knows that they can Pascal's mug anyone successfully, and they occur all the time, to which most people would assign a tremendously negative dose of utility. In the same vein, when everyone adopts the strategy of "pirate", there is little to no incentive to make the software in the first place, as TimS pointed out.

Replies from: ArisKatsaris
comment by ArisKatsaris · 2012-01-18T15:24:54.778Z · LW(p) · GW(p)

In the same vein, when everyone adopts the strategy of "pirate", there is little to no incentive to make the software in the first place, as TimS pointed out.

Unsubstantiated, given the vast amount of software (and other projects) that is distributed freely -- programs like Firefox, and GIMP, webcomics like almost every webcomic out there, fanfiction works, the free Interactive Fiction community, even fan-films, and webseries. Even projects like Wikipedia which depends on freely disseminating the freely-offered work of others.

I'd find just as defensible the position that in a pirate-dominated world, people have more incentive to make their offerings public, because then they don't spend time hoping they'll find a way to sell them; they just offer them to the public from the start.

Replies from: TheOtherDave, Clippy, RobertLumley
comment by TheOtherDave · 2012-01-18T16:16:23.826Z · LW(p) · GW(p)

A useful question to ask here is whether there are characteristic differences between the sorts of projects that are distributed freely even in an environment that supports commercial distribution, and the sorts of projects that are distributed commercially when that option is available. If there are, then it's similarly useful to ask whether the second category has any value above and beyond what the first group has.

For example, if I compare free fiction to purchasable fiction, do I find that the latter group has valuable properties relative to the former group? What about if I compare free software to purchasable software?

If not, then your argument makes sense; there's no value being added by commercial projects, so there's no cost to eliminating the system of constrained distribution on which commercial software projects depend.

If so, then it's useful to ask whether that extra value will still be available if that system is dismantled.

Personally, I often find commercially distributed projects that offer signfiicant value relative to freely distributed ones, which is why I often pay for commercially distributed projects such as books and software. Presumably, if I didn't find that to be true, I would be perfectly content to use freeware/shareware products instead (as I do for computer games, for example).

Replies from: ArisKatsaris
comment by ArisKatsaris · 2012-01-18T17:21:03.505Z · LW(p) · GW(p)

If not, then your argument makes sense;

Somehow you don't discuss at all the argument I made -- that without having the practical option to sell it, people that make commercial-level goods might end up offering them to the public freely -- and yet you list an irrelevant criterion (that these goods must not be superior) which must be satisfied for it to "make sense".

People that make something sellable very often want to sell it.

If they don't have that option, some people may not create this sellable thing in the first place -- other people however may however make it and offer it to the world for free (as is done with fanvid/fanfics and all these other non-sellable things).

Especially if this currently-sellable thing is superior, the former case is a loss for humanity, and the latter is a gain. But do you have data to indicate that cases of the former will outweigh/outnumber the latter?

Replies from: TheOtherDave
comment by TheOtherDave · 2012-01-18T19:30:11.588Z · LW(p) · GW(p)

I didn't mean to avoid your argument. You're of course correct, people who don't have the option of making something sellable might create free things to give away. Or they might not create the thing at all.

To my mind, if the result of eliminating that option is that equally good stuff gets created and distributed for free, that's a win (all else being equal). Conversely, if the result is that there's less good stuff created, that's a lose (all else being equal).

I can't tell if you're actually claiming that the result will be the former. I'm skeptical, myself. But no, I don't have any data I expect you to find convincing. Mostly, I find convincing the number of hours of work I see around me explicitly devoted to doing things in order to earn money, from which I infer that without a profit motive a lot of that work (and the associated things) would not get done. But I don't expect that to be a new datum for you, any more than the existence of wikipedia is a new datum for me, so I don't expect it to convince you.

comment by Clippy · 2012-01-18T15:50:46.408Z · LW(p) · GW(p)

Non-responsive to User:RobertLumley's claim. The existence of beings who locate valuable targets in designspace, despite expecting to receive no monetary compensation therefrom, does not imply the non-existence of beings who only locate such targets in anticipation of monetary reward (viz, that accruing from from affirmation of expected legal rights of exclusion in who can instantiate the designspace target), nor that such beings would never find "Pareto-improvements" in an exclusivity-respecting society.

Replies from: Vaste
comment by Vaste · 2012-01-18T23:28:34.994Z · LW(p) · GW(p)

What would making piracy legal really imply? (I.e. assume there are no IP rights/restrictions/monopolies.) How would a company like Adobe make money that way? This is something worth considering.

How might programmers make money? The people who buy the software (e.g. a database for a warehouse) still needs it, and would still be willing to pay for someone to make it. The company may also try to keep it local and secret, if the warehouse database is a strategic advantage. Or they might share it if they care more about e.g. the better quality that naturally comes from more users (e.g. more bug reports and developers -> fewer bugs).

What about Adobe? They might have to sell the first copy of their software, i.e. setting a price that people pool together to meet before they will release the new version, after which anyone can copy it freely of course (anyone with a computer). This is a very different business model from earning money from the software continuously (i.e. from each copy), and might generate less funds. I don't know if any area uses this business model already?

Replies from: Nornagest, Clippy
comment by Nornagest · 2012-01-18T23:52:44.610Z · LW(p) · GW(p)

I don't know if any area uses this business model already?

That sounds like the threshold pledge system, which is fairly common in the nonprofit world and has been applied to a few media projects that I'm aware of. Kickstarter is probably the most famous service to use the model.

I am not an economist, but I wouldn't expect it to generate the funds of sale by unit if widely adopted. There's a basic information asymmetry there which I'd expect to make people averse -- and justifiably so -- to letting go their money.

Replies from: Vaste
comment by Vaste · 2012-01-19T00:09:19.185Z · LW(p) · GW(p)

There's a basic information asymmetry there which I'd expect to make people averse -- and justifiably so -- to letting go their money.

What asymmetry?

I can think of two problems (context being writers and books):

  • first book by a new writer pretty much has to be free. No one trusts him.
  • a famous (trusted) writer writes crap book or no book, but gets money anyway. He loses trust. ("Trust" becomes new world currency?)

In a way, the relationship writer - readers becomes more similar to that of employee - employer.

Replies from: Nornagest
comment by Nornagest · 2012-01-19T00:17:37.025Z · LW(p) · GW(p)

What asymmetry?

Readers have more information about the quality of a new book in a business model where the book exists publicly and can be browsed in a bookstore, borrowed from friends, etc. than in a business model where the book has no public existence until bought and paid for. This can be diluted somewhat by giving out sample chapters, advance copies for reviewers (but they'd better be trusted reviewers), et cetera, but nonetheless I'd expect it to push willingness to pay down at the margins. Especially taking hyperbolic discounting into account -- readers will generally pay more for a book today than a book to be published at some indefinite point in the future.

The marginal cost of producing new digital copies of a book is miniscule, so it might still end up being favorable to an (established) author relative to dead-tree publishing -- but compared to self-published digital media sold per copy, I'd expect it to come out to a loss. There are other piracy-friendly business models out there, though -- I'm rather fond of Baen's Free Library, for all that their books are unabashed pulp.

Replies from: Vaste
comment by Vaste · 2012-01-19T12:36:31.577Z · LW(p) · GW(p)

There's also government contracting, which is a similar situation, but with lowest bidder instead.

comment by Clippy · 2012-01-18T23:57:26.474Z · LW(p) · GW(p)

True: in the absence of anticipation of exclusivity rights, creators would seek ways to repoduce the pseudo-scarcity that socially-recognized exclusivity rights would otherwise provide. And they will generally do so via less efficient means: for example, rather than giving the user a copy of the software, the creator will keep it in a "black box" they control, and simply perform the input/output over a network, incurring strictly more overhead than if they could trust the user to keep their own copy and not distribute it.

This phenomenon mirrors the more general ones of how:

  • societies with people more willing to steal others' physical possessions will still find ways to be secure in such possessions, but by diverting more resources to securing them; or

  • societies with people less willing to trust strangers (or honor promises made to strangers) will still make credit transactions, but have to spend significantly more on enforcement mechanisms.

Replies from: Vaste
comment by Vaste · 2012-01-19T00:48:49.066Z · LW(p) · GW(p)

Well some would do it that way. But consider the possibility of cooperation instead of competition. Completely non-crippled software exists today already (open source). Crippling your software to make it scarce means it has to beat the competition by a larger margin. People must decide if the inconvenience is worth it. There's also the risk of a culture that detests crippling develops that "frees" your software, despite attempts at crippling (e.g. cracking games).

Also, societies unwilling to accept the zero-cost of copying will still have piracy, but at a cost of less trust in the legal system.

Not to mention societies embracing "piracy" would have to divert less resources to discussing it...

Replies from: Clippy
comment by Clippy · 2012-01-19T16:36:39.495Z · LW(p) · GW(p)

A society that has a norm of honoring (creator-desired) exclusivity in creators' informational creations (i.e. location of narrow, high-value targets within designspace), will be able to use both modes of creation -- those that do and do not expect exclusivity (and its resultant monetary or aesthetic returns).

Certainly, the society without anti-piracy social norms can use the method you have labeled cooperative, but so can the one with strong anti-piracy norms. However, the former is cut off from finding the targets that actually do need a monetary incentive to motivate their discovery.

In much the same way, societies with a strong norms against monetary profit (esp in the production of physical goods such as food) can still engage in "communal" production but run up against strong barriers to producing advanced economy goods that require extensive specialization and concentrated risk-taking.

comment by RobertLumley · 2012-01-18T15:41:13.241Z · LW(p) · GW(p)

Good point, I hadn't considered that. I will amend my statement to say that companies have little to no incentive to produce software.