A practical argument against IP protection

I personally feel that it is not immoral to copy intellectual property, but the empirical case for when IP protection is economically efficient is less clear. When IP is protected, more gets produced (since producers are compensated), but less gets used (because people who value it at more than copying cost but less than price don't use it). Whether the result is a win depends on messy empirical facts about the supply and demand for each good.

For example, I suspect that music would thrive under a no-IP regime, while feature films would languish. After all, songs are fairly cheap and easy to make, there is no shortage of musical talent in the world, and people get enough pleasure from the act itself that the lure of huge profits is unnecessary. Movies, however, take a big team of people, a lot of equipment, and a lot of money to produce. Sure, digital video is reducing that cost, but you aren't going to see a few people whip together Lord Of The Rings for fun anytime this century.

As a result, I am left uncertain what IP laws I'd consider ideal. An argument by Milton Friedman about "consensual crimes", however, pushes me more in the anti-IP camp. Libertarians, of course, decry such "crimes" for moral reasons, but his argument manages to be both consequentalist and general. He points out that consensual crimes have a naturally higher enforcement cost and worse effect on civil liberties.

The reason is that for a normal crime, such as theft, there is someone actively trying to stop the crime, and with the interest to report it and help solve it. For a crime such as prostitution, neither the buyer nor the seller are being harmed. Hence neither will report it, and neither will help solve it. On the contrary, both have an interest in hiding it. So to catch someone at such a crime, you need to spy, to mole, to entrap - because the participants aren't going to help.

Regardless of your moral beliefs, anyone with a practical bent understands that enforcing laws has costs, and those costs must be measured against the benefits of stopping the bad activity. This argument adds some consequentalist punch to libertarian morality by suggesting that the class of activities we think should be legal (consensual ones) will naturally be more expensive to ban than the class we think should be illegal (nonconsensual ones). In the specific case of IP, the copier/user and the copied are engaging in consensual activities - as with prostitution, it is only some distant authority who wishes this activity to stop. Hence as Paul Phillips says:

...technology has progressed to the point where an average user with an average computer can share information with others on a scale formerly restricted to the most dedicated commercial pirates. Peer-to-peer file sharing networks enable the exchange of millions of copyrighted songs every day. Soon we'll see the same with video, and software, and everything else that can be fixed in a digital medium.

The only ways to stop this trend are either: monitoring and jailing people on an unprecedented scale, or attempting to completely control the means of information exchange. This is exactly analogous to the war on drugs, and it will have exactly analogous results. Either we will start filling our prisons with nonviolent information sharers as we do with nonviolent drug users, or the government will have to have its fingers VERY deeply into ALL computer equipment manufactured and sold so as to enforce digital rights. In either case they will form an instant and gigantic black market for computer equipment, with all the concomitant evils.

Either of these outcomes should sound grossly unappealing. Enforcing IP law in the 21st century will require government intrusion on a level we can barely imagine, that will only get worse over time as technology enables increasingly difficult to detect methods for circumventing copy controls. Encryption would have to be outlawed. Only government approved, heavily restricted computer equipment (so-called "trusted computing") would be obtainable via legitimate channels. Private networks would be illegal or have to submit to intensive monitoring. Even if this were the only argument against IP (which is far from the case) I believe it would be more than enough to require us to seek alternatives.

The bottom line should be clear. The argument which says that IP protection may or may not be efficient, depending on the supply and demand curves for an industry, depends on zero enforcement costs. As Milton & Paul point out, enforcement costs for a consensual crime are far, far from zero. Thus the efficient level of protection seems quite likely to be zero.

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