Friday, October 07, 2005

Digital rights, social wrongs, economic corrections

I’ll splurge this down, rather than worry about actually having a coherent and fluid argument.

  1. DRM makes devices less flexible, and less able to adapt to future uses.

  2. This shortens the lifespan of consumer electronics goods.
  3. Consumer electronics poses significant environmental externalities in its production and disposal not borne by the producer or consumer.
    (Although there are efforts to remedy this.)

  4. DRM is environmentally unfriendly.

  5. DRM prevents the use of material in ways tha has wider social benefits (e.g. remixing by school children as part of a project).

  6. Devices containing DRM should be taxed to reflect their social and environmental externalities.

Note the twist at the end. We don’t outlaw DRM, or repeal laws that make its use enforceable.

If you wanted to get the political establishment on your side, just find some vocal interest group to hypothecate your iPod tax towards (e.g. starving millionaire rock stars), et voila the lawmaking machinery jumps into action. Don’t campaign against DRM. Use the price mechanism, Luke - it pervades all things and binds all things together. Find your own body of vested interest, and harness it.

Perhaps we should simply generalise this? Laws like DMCA and EUCD are little more than state-sponsored protection rackets for established business models, so why not claw back some of the benefit? Sure, you can have DMCA protection! Just as long as you register your product with the Bit Reproducion and Transmission Device Commission and pay the usual 5% of sales to the government :)

Quite how the anti-tax free-marketer inside me manages to struggle out of this intellectual straight-jacket, I’m not so sure…

I’ve been slowly making my way into Oz Shy’s Economics of Network Industries (about 18 months after Bruce Williamson first recommended it to me at WTF, so it’s taking a while). I’ll comment about the book in more detail another day, but if there’s one take-away it is this: there are many different kinds of network industry resulting from different forms of “interface” between the network components. It is by no means obvious which (if any) flavours of network industry a DMCA-like law is economically efficient for, or whether indeed any such in-depth analysis was ever done prior to copyright maximalism taking hold. It might behoove some of the campaigners for DRM reform to look beyond their own intellectual circle and engage the economists who have already trodden this turf. Make the lawmakers see you’ve done your homework.

Hmm, how about this for a really wild thought, well outside telecom. Capitalism is the economic technology that replaced feudalism. It found a superior way of harnessing self-interest to promote the wider good. This was achieved through increased decentralisation of economic power — you didn’t need to ask permission to start a business. We’re still hunting for the social technology to replace v1.0 mass democracy, whatever it may be. Once we crack the problem issues like DMCA will probably go away, since capture of the lawmaking process will become too expensive. To subvert Hayek’s economic message, the pricing information of new laws will more readily become apparent to those affected. This undermines the “information advantage” that the lobbyists have: a few people know they stand to gain much, whilst the masses don’t realise they’ve each lost a little bit of their cultural and economic opportunity.
(Then again, if Americans haven’t yet discovered the superiority of Bramley apples for making apple pie, I don’t hold out too much hope for a world without distance eliminating all social and economic barriers to opportunity…)

Until you either reach your techno-regulated anarchist nirvana (or opt out of trying), there’s only way of dealing with polluting digital technologies: old-fashioned political slog.


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