So the copyright model had some viability because a song needed a disk or a cassette and it was not easy back then to copy records without severely distorting the quality and you could certainly not spread it across millions of people like you can today.

Ideas always required a high cost to spread, move about and to communicate and this situation supported the copyright and intellectual property model.

Now that ideas cost nothing to replicate, to spread, to move about and to reach people, the copyright model is completely destroyed and will fall into obsolescence. Any attempt to crack down on this free circulation of ideas will create enormous problems and could even lead to wars. At some point, the government’s desperate attempt to control the circulation of ideas and information will lead to their demise. Dinosaurs disappeared simply because they could not adapt to the fast paced changing environment despite their physical and bulk superiority and the fact that they ruled the world for a hundred million years.

Same thing will happen to governments, their war against freedom of speech, freedom of communication and freedom of ideas will cause their demise. There is too much at stake and the livelihood of too many people and organizations depends on it. If the government can’t win the war in Afghanistan, if it can’t win the war on drugs, it will certainly lose the war on ideas.

It would be hard to think of a more nonsensical statement than this. You anti-copyright harpies are really going over the edge! I expect to see drooling, screaming people on the street next, who claim that copyright drove them insane.

What’s the difference ?

I do that with music all the time. I have memorized several hundread songs I play in my head over and over again for free, plus I don’t need a portable MP3 player, I don’t need batteries and I don’t need headphones.

What are you going to do RIAA and MPAA ? Huh ?

That is why they do what they do. That is their goal, their livelihoods. The better they are at getting you to watch their stuff and the better the commercials do to get to you buy stuff the more money they make.

I don’t really see anything wrong with any of it.

Well, it does not bother me in the least that the government’s potential use of force is the ultimate source of confidence that pre-existing limited liability laws will protect my expectations regarding the extent of the risk I’m exposing myself to when I invest. In a more extreme but certainly relevant to your question example, it does not bother me in the least that my ultimate confidence in the safety of a factory, for instance, built near a border, depends at least in part on the government’s willingness to use force to protect me from uses of force originating across the border. (Think of the burning of Columbus, NM, in 1916).

So I have to say that whether the government ever should use force to make a particular business model viable, it certainly does use force (or potentially use force) to give me confidence that pre-existing laws will produce expected results. So can’t we say that any model depending on the corporate form to protect investors is supported at least in some way by the government’s potential use of force. So it can’t be simply a question of whether government force is involved somewhere in the mix to make a business model viable.

Certainly I can’t imagine someone arguing that vigorous protection of property rights other than IP rights is an illegitimate feature of a business model’s viable.

My adoration of the Framers of the US Constitution certainly causes me some level of bias in favor of finding the protection of IP rights to be legitimate. Since they thought it important enough to delegate to congress, my default would be to assume it is reasonable to protect this type of property. I don’t see the new technology as altering the basic issue: copies of IP will always be much cheaper to make than the original work was to produce. That was true in 1787 and is still true today. That copies are much much cheaper to make today doesn’t seem to me to alter this basic model. So were the Framers just out of lunch on this issue, or is there something meaningfully different in 2010 than there was in 1787?

That’s a faulty version of the slippery slope argument: We must not do A because if A then necessarily B, and B is certainly bad. But you’ve not even made the A-necessarily-B step. You just say if A “then it would not be a huge jump” to B. But your A and B are not very close at all: The situation I addressed (the A) is a decision to base one’s economic activity on a pre-existing law that permits one to have a certain expectation. (Like the pre-existing law creating limited liability corporations that permits me to invest with some level of confidence about what resources I’m putting at stake.) Your B (the horrible) is either (1) a post-hoc request for protection (I invested, now I want protection) or (2) a request for a new law (asking for some future protection before I agree to invest). I just don’t see the work that the horrible does for you.

“The fact that they are producing things and not making money (more accurately not making as much as they CLAIM THEY SHOULD BE) is a business model problem.” Well, most viable business models include at least some feature of the person who invests resources and creates a valuable property (a car, for example) is unquestionably entitled to the benefit of this conversion of resources into some product that can be sold. If he knew up front that he would not get the benefit, he would do something else, wouldn’t he? So the question I raised is whether IP, which is fundamentally different from products like a car, precisely because the exhibiting or making and selling copies is the way you recoup your investment rather than a simple sale of the unique item, suggests a different sort of willingness to make investments and create products. I don’t think you addressed that question.

Since Hasbro’s focus is making money on toys, and they do make more money from toys, they don’t really care about their show being online for free.

I propose the title “Ponies for Freedom”

Books pose the same issue: writing, editing, designing and preparing the book are all allocations of resources (whether time or otherwise). Who should get the return on that investment, the people who made the investment, or someone else?

The question is whether the government should use force to make a particular business model viable. There are plenty of business models that wouldn’t work (would give “someone else” a return on an investment) unless the government propped them up too; thankfully these business models haven’t been similarly propped up. Almost immediately New Orleans comes to mind as a similar situation, where something wouldn’t be viable without government intervention, and people who depend on it consider it unreasonable to suggest that it’s an artificially-supported situation.

Except that the “invisible hand” WAS the actual motive force for the creation of hollywood in the first place. One of the primary reasons that the Industry is now in California and not where it originally developed (which was the East Coast around New York and its neighboring states), was to escape copyright enforcement which was much more heavily prevalent there than on the West Coast. So the notion that genuine markets cannot get the money to write books/ make movies is a crock. In relation to books there are more and more authors releasing under creative commons or outright sharing their stuff and still deriving a profit from it.

As to the notion of allocation of resources itself, that is NOT sufficient justification to provide legal privileges to “recoup investment”. If it were, then it would not be a huge jump to say that merely investing IN ANYTHING is sufficient to demand some law to ensure they get their money back. It is fairly obvious at that point exactly what would happen to the competitive process if one were to argue on those lines: it would cease to exist because the notion of economic loss would cease to exist.

The fact that they are producing things and not making money (more accurately not making as much as they CLAIM THEY SHOULD BE) is a business model problem. There is no getting around the non-scarcity argument and what it implies to thing which are infinitely reproducible. None. There is no non-arbitrary legal remedy which can fix it; the only way it can be fixed is through business models which properly utilize both scarcity and non-scarcity of the good to ensure the developer/investor/whatever can make a living. This is totally possibly in these industries, but they do not want to change to do it. It is probably true that changing in this manner will also fundamentally change what kinds of movies are made (huge budget jobs like Avatar for example would likely not be made). But so what? Why is it a given that movies as they are made now SHOULD be made that way and should continue to be in perpetuity? There isn’t; it is taken as a given by the industry because they have no desire to change. I see little reason to artificially perpetuate their business model when technology is obviously screaming that it has to change.

Suppose the justification based on “innovation” is a canard. (Didn’t someone opine that there are only four basic plots?) Is there not an economic justification? It’s not called innovation, it’s called allocation of resources with an expectation of return. You may want to poo-poo Hangover II, but obviously lots of folks are enjoying it, otherwise it would not have sold so many tickets. Should those people have to pay for their enjoyment? And if someone is paying for the enjoyment, to whom should that payment go — the persons who initially invested the resources to create the movie or someone else?

Books pose the same issue: writing, editing, designing and preparing the book are all allocations of resources (whether time or otherwise). Who should get the return on that investment, the people who made the investment, or someone else?

If IP laws create a certain stability that permits potential investors of resources to calculate, with at least some certitude, the potential return on their investment of resources, does that not make it more likely that they would invest those resources to make books, movies, or what not? If you focus on what rights should exist in a movie that has already been released to the public, whatever that means, you are skipping over the point where the movie does not exist and someone has to decide whether to allocate resources to create it.

The invisible hand of the market is pretty amazing, but it doesn’t write books or make movies.