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Re: Microsoft and Novell - Exacerbating an Ideological Divide?

X. Trapnel — Tue, 14 Nov 2006 21:33:08 -0000

Noel, either you've taken that Lemley quote out of context, or Lemley is insane. Patents quite obviously prevent competing products just to the extent that they're broad enough to cover them; Tim and many others have demonstrated over and over and over again that this is almost always the case with software patents. Moreover, insofar as copyright includes a derivative works right, it, too, prevents competitors. Finally, the DMCA and similar forms of metastasized quasi-IPRs prevent competition through their effects on interoperability, as Tim in particular has shown.

Regarding transactions costs, sure, having a few huge incumbent firms makes such negotiation much easier--but that's absolutely the wrong benchmark. The right benchmark is one in which there are *no* patent-related transactions costs, because we don't have software patents.

Finally, the idea that Tim's views are somehow infected by value judgments while those of IP-maximalists are not is just hilarious. Any discussion of how rights and liberties ought to be defined and enforced necessarily implicates value judgments. The use of wealth-maximization criteria of efficiency, to cite an obvious metric, has rather clear value judgments built-in, as does a focus on compensation and purchase rather than production and consumption.

Re: Microsoft and Novell - Exacerbating an Ideological Divide?

X. Trapnel — Tue, 14 Nov 2006 22:26:40 -0000

None of the studies of patents that I have seen have convinced me of their worth, no. But let's put that aside for the moment.

Cox's comments strike me as wrongheaded in two ways: First, his conclusion that "good programmers write good code, regardless of ideology," is true but trivial--the point is not indoctrinating programmers but working to free them from patent thickets and the threat of legal sanctions that currently threaten them. It's institutions that are primarily the concern; norms and informal sanctions ("ideology"?) entered the discussion insofar as they can serve to blunt the destructive impact of the current, deeply misguided, rules in place.

Second, "the enemy of my enemy is my friend" is simply not a sound rule of institutional design or political philosophy. Yes, some communitarian hippies like Open Source. Some of them are vegetarians, too, but that doesn't mean we should all commit to meat-only diets for fear of allowing them undue leverage. The only way I can make sense of this argument is as follows: 1, reasonable disagreement is acceptable among libertarians about IP; but, 2, any deep divide among *influential* libertarian groups on this issue means giving legitimacy to the anti-IP side, which has a lot of anti-capitalist communitarians backing it; which then, 3, will help communitarian statists put into place anti-free-market policies more generally, to the detriment of our principles and the world.

But there's some massive question-begging going on here. From the libertarian anti-IP side, IP is unjust and socially wasteful, at best a nuisance and at worst catastrophic--we're supposed to roll over on the issue because, what, property itself will be repealed if we ever concede that anti-capitalists managed to get something right? The advice only makes sense if we're wrong to begin with.

It also seems that there's some weird goalpost-shifting going on with respect to the 'taking sides' issue. From the point of view of libertarian anti-IP folk, companies that are willing to use their IPRs to threaten competitors are using weapons they ought not to have, weapons that threaten the viability of peer-production as a model. To point this out, and to encourage those who care about peer production to use what informal sanctioning mechanisms they can to induce better behavior, is hardly 'taking sides' on the issue of selling software versus giving it away, or opening up the source versus keeping it secret (even hardcore anti-IPR folks like me have no problem with keeping secrets!).

Finally, libertarians of *all* stripes, educated as they are in public-choice principles, should see IP policy as precisely the sort of arena where we should be *most* skeptical that the particular bargains which have been struck represent just or efficient outcomes as opposed to those most preferred by concentrated and organized interests--including, yes, corporations, which are not all sweetness and light.

Re: My DRM Agnosticism & Indifference toward Media Format Compatibility

X. Trapnel — Thu, 16 Nov 2006 18:46:29 -0000

Adam: Regarding your comment that "I still have not heard anyone here explain to me how we'd actually have more video game console competition if you could play all your games on just one console." ... Let me try.

Like Tim, I'm not always certain that the resources needed to create interoperability are always, at the margin, worth investing it in rather than other things. Let's take the MP3 player example rather than the video game one, because here we don't have any costs of providing interoperability. The argument is as follows: right now, so long as people can rip CDs to MP3s or pirate them in MP3 format, any player can play any song. This means that hardware manufacturers know that ALL they have to do is compete on features and price. Hence lower barriers to entry and more competition. This is one of the reasons that MP3 players have progressed so well.

Now let's take a world in which, magically, there's no more internet piracy, all CDs are magically DRM'd, and iTunes has retained its dominance online. Now hardware manufacturers can only compete if their product is SO MUCH BETTER than an ipod that it justifies consumers rebuying their entire library all over again.

The same logic applies more or less directly to consoles: if there were no legal or artificially technical barriers in place to interoperability, hardware companies could compete purely on hardware features rather than historical lock-in. Hence, lower barriers to entry and more competition.

The counterargument is Noel Le's hyper-Schumpeterianism. Noel Le's theory--shared by a depressing number of people--is that market power and lock-in isn't just an unfortunate consequence of market processes, but is in fact desirable and necessary for all competition, and in fact, the higher the barriers to entry, the more competition we'll get because of how valuable getting that monopoly will be. This is the view that Levine and Boldrin rail against in their book, and rightly so, because it's insane: it comes down to "nobody will compete unless they believe they can get a temporary monopoly." This is exactly the argument that free-marketers have critiqued so strongly back when it was used to defend feudal guild privileges, when it was used to defend tariffs and subsidies, when it was used by Galbraithians to defend favoring industry concentration, etc. etc. throughout history. IT WAS AND REMAINS A LIE.

As Boldrin and Levine show so well, monopoly doesn't breed competition (and innovation), COMPETITION breeds competition (and innovation). It is a complete inversion of free market principles to claim that we ought to enhance legal barriers to entry IN ORDER to get competition. The wonderful thing about people is that they innovate precisely IN ORDER to successfully compete, and the more cutthroat the marketplace, the more innovation we see.

The absurdity of Noel's position can best be seen in his claim that absent DRM, "who would bother making the ipod?" Well, gosh, Apple would and did, for one. The iPod was introduced (and I bought one!) 1.5 years before the iTunes store; if you think most iPod users fill them up with iTunes DRM'd tracks, you are insane. Apparently 1.5 billion tracks have been sold; 67 million iPods have been. That translates to, oh, about 23 tracks per iPod. How many people do you know that have 23 tracks in their iPods, Noel? I have a few thousand, and none of them are DRMd.

Schumpeterianism was wrong when Schumpeter expounded it and it's even more wrong now. Apologies for the passionate tone, but this is important.

Re: My DRM Agnosticism & Indifference toward Media Format Compatibility

X. Trapnel — Thu, 16 Nov 2006 18:57:26 -0000

Also: because this keeps coming up, I'd like to point out that arguments for the social importance of DRM or IP based on how much current businesses rely on them are simply non-sequiturs. Of course if we give people extra legal rights, they will use them, and structure their businesses around them, and quite possibly come to rely upon them. That says absolutely nothing about what would happen in their absence. ADM relies on our artificially jacked-up sugar prices to sell their corn syrup; that doesn't mean agricultural protectionism is a good thing.

I can't decide whether to laugh or cry when I see people like Noel Le passionately defending legal restrictions on commerce by saying we're criticizing the decisions "the market" has made. No, we're criticizing the way these LEGAL RULES have DISTORTED the free market.

Re: My DRM Agnosticism & Indifference toward Media Format Compatibility

X. Trapnel — Thu, 16 Nov 2006 20:47:53 -0000

Noel, you do realize that every successful player has been "DRM-free" in the sense that they all play unprotected MP3s, right?

And you also realize that eMusic, which sells DRM-free tracks, is now the 2nd-most successful online store, right?

And you ALSO realize that the most popular form of music, the plain ol' CD, which sells something like 400-500 million units per year in the US--which translates to around 4-5 billion tracks--is ALSO DRM-free, right?

Because gosh, it seems like if you did recognize these simple facts, you'd also realize the absurdity of your own question. Consumers don't like DRM. They put up with it when they have to--when the songs they want are available no other way, or when other conveniences (online procurement) outweigh the bothers. Record labels are obsessed with DRM because DRM gives them the illusion of control, and because arguments in favor of giving up control are very counter-intuitive and go against the industry's corporate culture and individual incentives.

Re: My DRM Agnosticism & Indifference toward Media Format Compatibility

X. Trapnel — Thu, 16 Nov 2006 20:58:19 -0000

In case my previous comment was too subtle, let me restate: every premise in your argument, Noel, is false. Consumers overwhelmingly choose, whether through CDs or through internet piracy (~1 billion tracks -per month-), DRM-free music.

Re: My DRM Agnosticism & Indifference toward Media Format Compatibility

X. Trapnel — Thu, 16 Nov 2006 21:31:04 -0000

Chris: it's not the incompatibilities *per se* that make them attractive; it's the features of each--and writing software that takes advantage of all the featuresets takes time, effort, and money. If a PS3 could play all the games of every MS and Nintendo console, it would suddenly become much more attractive. Unfortunately, this is a hard technical problem. Still more unfortunately, IPRs and exclusivity agreements get in the way of even trying. But it is very important to separate conceptually the FEATURES, which are good, and the barriers that these place in the way of interoperability, which are bad but somewhat inevitable.

Re: My DRM Agnosticism & Indifference toward Media Format Compatibility

X. Trapnel — Fri, 17 Nov 2006 11:42:07 -0000

Very quick response:

1. It's impossible to do an exact apples-to-apples comparison, because the labels are refusing to release DRM-free music, generally. So we don't have the chance to compare 50 Cent's track on iTunes with Fairplay vs. 50 Cent's track on eMusic with no DRM. It's hard to compete with free, but it's ALSO hard to compete with big-name labels backed with massive advertising and exposure; it's rather astounding the eMusic is doing as well as it is. So I agree that my piracy comparison is *slightly* unfair, because of the 'free', but people compete with free all the time (private schools, bottled water, cable television, etc., etc.). The point about music CDs does hold, and is even stronger because here the comparison is unfair the other way--most people don't WANT whole albums.

Just be serious: are you really claiming that people LIKE DRM? At the moment, most aren't bothered *much* by it, because it doesn't interfere with their iPod use, and the iPod is still, by far, the best music player out there. But suppose in 5 years someone finally, definitively, kicks the iPod's butt and creates a player far superior on every dimension. All of a sudden there are going to be some very, very unhappy customers who realize that All Their Songs Are Belong To Apple.

2. This is pure question-begging, except perhaps for the caveat about 'obvious'. IPRs aren't LIKE other property rights; you already HAVE a property right in the object that instantiates the idea/creative expression/whatever. IPRs are PRECISELY prohibitive arrangements that grant market power--if they weren't, nobody would WANT one. Just like tariffs, their effect is limited just to the extent that people can substitute around them--Kim Harrison instead of Laurel Hamilton for vampire-romance, 50 Cent instead of Eminem, one patented process (or OSS) versus another. My claim was: IPRs, and the DMCA through DRM, restrict competition. It's not a refutation of my claim to say that market processes will mitigate these effects; that's like saying tariffs on sugar aren't bad because we get corn syrup to compete. What markets are doing is trying to route around the damage; that doesn't mean the damage isn't there.

Re: Nice Operating System You’ve Got There, It Would Be a Shame if Anything Happened to It

X. Trapnel — Sat, 18 Nov 2006 15:50:05 -0000

It's funny how this is the logical comment thread for a lot of what was discussed earlier, but it seems that everyone's already vented their spleens.

Still: boo Microsoft! Boo!

Re: Broken Windows and Copyrights

X. Trapnel — Mon, 20 Nov 2006 09:16:10 -0000

Thanks for the generous response and critique. I'll say more later, but I'll just admit right now that my main problem with copyright, by far, is the derivative works right. Take that one away, and I'll be happy to be an ignored extremist grumbling in the corner. =)

Re: Broken Windows and Copyrights

X. Trapnel — Mon, 20 Nov 2006 14:38:27 -0000

Noel, please stop talking nonsense about the iPod's success. You have yet to address what seems the single most important stylized fact for this discussion about the iTunes Music Store: they have only sold enough songs to account for Almost no-one is buying an iPod with the intent to fill it with iTunes' DRM music.

Perhaps you are getting confused by the very real fact that iTunes integration is a big selling point for the iPod. But this has nothing to do with DRM, and everything to do with the fact that iTunes is a very well-designed MP3 playing music program. People like iPods because they are gorgeous, hip, and user-friendly; people like iTunes because it is a great piece of software; people like them both even more because they are designed to work well together. I repeat: none of this has anything to do with DRM. I use both an iPod and iTunes all the time, and my position on DRM is pretty obvious by now. I use both iTunes and my iPod to play DRM-free MP3s. Which is why your comment about "iPod vs MP3 players"--as if the iPod weren't an MP3 player itself!--is so bizarre.

Now: if the time comes when many consumers will have built up a significant library of DRM'd iTunes tracked, then this will, in fact, result in a lock-in effect that will help the iPod withstand rivals. But we're not there yet, not at all.

Re: Broken Windows and Copyrights

X. Trapnel — Mon, 20 Nov 2006 14:41:26 -0000

Whoa, weird HTML mess-up there. My first paragraph should have read: "they have only sold enough songs to account for less than 25 songs per iPod. Almost no-one is buying an iPod ... "

Re: The Community Shrugged

X. Trapnel — Mon, 20 Nov 2006 15:46:21 -0000

I have to say, that was probably the best use of Atlas Shrugged in punditry I've ever seen. In the actual book, the 'strike' never seemed particularly credible to me, for various reasons--but precisely because of the normative structure that forms the heart of the F/OSS community, the threat is quite potent in this case. Great post.

Re: A Practical Argument against Copyright Protection

X. Trapnel — Wed, 22 Nov 2006 10:57:06 -0000

... of course, the broken-windows argument applies straightforwardly to patents and some of the rights attached to copyright (esp. deriv. works and public performance). So combine mine argument with his and ta-da, we're done, only trademarks left! =P

Re: A Practical Argument against Copyright Protection

X. Trapnel — Wed, 22 Nov 2006 10:58:03 -0000

Ack, 'mine argument' = 'my argument.' It's noon, I should be awake by now.

Re: A Practical Argument against Copyright Protection

X. Trapnel — Wed, 22 Nov 2006 13:36:33 -0000

Erm, before Noel gets in on this, let me just clarify: I think trademarks are okay!

Re: Square Wheel

X. Trapnel — Mon, 27 Nov 2006 12:58:09 -0000

What's particularly sad is that, because of the iTunes DRM and conservative featureset, there really is plenty of room available for a bold company to give customers things they want but can't have, even without much genuine innovation. And it's not like MS doesn't have cash to fight lawsuits if need be. Ah, well.

Re: The Journal Fails to Do Its Homework

X. Trapnel — Fri, 01 Dec 2006 15:17:03 -0000

Oooh, snap.

Seriously, nice that you got cited; unfortunate that it was done in such a sloppy way.

Re: Carr on the Failure of DRM

X. Trapnel — Thu, 07 Dec 2006 21:22:43 -0000

I have to say, it would be so very awesome if the labels' fear of iTunes continued dominance, and the bargaining leverage that would represent, led them to sell unprotected MP3s as the only available tactic to sell directly to iPod owners. How delicious.

Re: Moglen on the Moral Significance of Free Software

X. Trapnel — Mon, 11 Dec 2006 19:26:19 -0000

While Moglen's speech is nice and warm and fuzzy, it's important to remember that he was able to *get* compliance at least partly because he *could* have demanded money (coercively). When you bargain in the shadow of the law, the law helps determine bargaining power, even if neither person wants exactly what the law guarantees him as a matter of right.

The GPL is a clever way to use the tools of copyright to subvert certain aspects of it, and I admire it in many ways, but its use is a distant 2nd best to a world without copyrights/patents.

--

And Noel, obviously copyright is a more decentralized system than getting permission to write a song from the Creativity Clearing Council or something. It's a LESS decentralized system than a world without copyright, though. This isn't that hard.

Re: Dairy Competition from the Post

X. Trapnel — Mon, 11 Dec 2006 20:34:42 -0000

That is so incredibly depressing.

Re: Teleflex Article

X. Trapnel — Tue, 12 Dec 2006 00:00:21 -0000

Nice work!

Re: Rip, Mix, Sell?

X. Trapnel — Wed, 13 Dec 2006 19:14:01 -0000

I thought we were assessing what is or isn't appropriate, and what rules ought to be in place, not what is or isn't currently legal. Steve R. has it exactly right. Why should the law be structured around prosecuting the simultaneous eating and having of cake in order to lock in business models? First off, the sky isn't falling: Dominey *doesn't* quite still have his cake; he now has MP3 files of everything, but no longer has hard-copy backups. He could burn some, obviously, but they won't be genuine original CDs; and if you think that's a trivial distinction then much of the art and culture market, where authenticity is highly prized, will be thoroughly baffling to you.

Re: Rip, Mix, Sell?

X. Trapnel — Wed, 13 Dec 2006 19:21:55 -0000

Finally, a technical point: those 3000 sales directly cut into *used CD sales*, from which the record companies and artists would have received nothing anyway. The only connection to new-CD sales is through a complicated general equilibrium model of expectations: on the one hand, a thriving used-CD market lowers new-CD demand by acting as a substitute good; on the other, it *raises* new-CD demand by providing the buyer with extra value (the potential resale value). It's not straightforward *at all* what the net effect is, especially once you throw in the endogenous nature of musical tastes.

Re: Rip, Mix, Sell?

X. Trapnel — Wed, 13 Dec 2006 19:24:58 -0000

Charles: should it be legal to buy seeds, grow corn, keep some for next year's crop but sell the rest to others? Obviously not. We must outlaw this disastrous cake-eating-and-having.

Re: Rip, Mix, Sell?

X. Trapnel — Wed, 13 Dec 2006 19:31:02 -0000

I'm not claiming that only the original pure form has any worth; that would be absurd. I merely state the obvious: the two things are not identical. If the industry can't leverage that into profit, that is there own problem.

As for where I draw the line: it's pretty simple, actually. None of the things you list are theft. Walking into the store and taking the CD without paying for it--now *that's* theft.

I refuse to accept that 'property' entails having all rights that may be necessary to extract *maximal profit* from a given thing. But then, I'm one of those abolish-copyright extremists.

Re: The Technology Liberation Front » Archive » Criticizing Wikipedia Only Makes It Stronger

X. Trapnel — Thu, 21 Dec 2006 17:29:05 -0000

Absolutely astonishing! A website created and maintained mostly by American nerds reflects the biases of American nerds with respect to contested policy issues? This calls for serious action!

What really makes me laugh about the example is that the very first things I see when I look up Net Neutrality are two huge warnings telling me that, 1st, the article is about a current event, and 2nd, the neutrality of the article is disputed. Before I've even started reading, I know to be on my guard.

Reliability is a probabilistic property. Wikipedia's reliability is high but quite variable across different domains. Moreover, it's pretty easy to predict which domains will be less reliable and to take account of this. The bottom line is that saying "Wikipedia gets wrong a controversial issue I care a lot about, therefore it must be a joke" is about as valid, epistemologically speaking, as "But nobody I know voted for Bush, so there must have been fraud!"

Re: Graham on the Gap Between Rich and Poor

X. Trapnel — Thu, 28 Dec 2006 18:29:53 -0000

A nicely written essay, but it seems question-begging at some of the most central points. Saying that compensation would track marginal product in a genuinely free and frictionless market is basically right; claiming that, therefore, current compensation structures track marginal product doesn't follow (insert generalized radical critique of state capitalism, insights of economic sociology, etc.). It's telling that some of his primary examples (actors, technologists) rely so heavily on what he elsewhere derides, monopoly rights--it doesn't make his argument wrong, necessarily, but it highlights what he does and doesn't think worthy of comment. And, of course, his argument about incentives for wealth creation is true only in its most abstract, fundamental formulation; it certainly won't get you, by itself, 'X tax structure generates more wealth than Y' for any but the most extreme values of X and Y.

Re: Graham on the Gap Between Rich and Poor

X. Trapnel — Thu, 28 Dec 2006 18:33:31 -0000

Oh, and: Graham's claim that 19th century industrialists were engaged in wealth-production *rather than* coercive extraction is rather strained--it seems pretty clear that they did both.

Re: Competition is a Feature, not a Bug

X. Trapnel — Thu, 11 Jan 2007 22:04:22 -0000

I'm puzzled by Mr. Bennett's tone here--I just don't see how MS and Apple ripping off Xerox (as opposed to MS ripping off Apple) proves much of anything. If anything, the lesson seems to be an anti-IP one--if *everyone* was ripping off Xerox (and each other) largely without legal consequences, but innovation was proceeding swiftly (and it certainly was), that's a nice example of why we don't need patents or strong copyright.

Now Bennett claims that the moral is Xerox got ripped off and made nothing from its innovation, but so what? Our copyright/patent/trademark policy should not be about Doing Justice To Innovators, it should be about allowing a free market to produce innovation and 'promote arts and useful sciences'. If some corporations fail to adequately monetize their inventions, letting nimbler startups eat their lunch, that's a crying shame but Not Our Problem.

We only have a problem if inadequate incentives lead to a suboptimal rate of innovation, but none of the arguments Bennett, Blafkin, or Le have adduced show this.