April 15, 2010 at 21:19Information is not a commodity
The problem of the spread of intellectual property in digital form, better known as the "copyright problem," has been haunting the minds of the Internet community for years. And not only the Internet - the big minds of this world also puzzle over how to make a triple out of a two, that is, how to give the non-economic entity the taste and smell of an economic product.
Why "non-economic"? About it further.
The problem of the distribution of digital content in a nutshell in a primitive language is expressed by the phrase "can be copied." In scientific language, this is called “zero replication cost.” It is this very zero cost of replication that causes problems.
I think that everyone will agree with me that if a sausage loaf could be copied like a file, then its value would be zero. Shops and stalls selling sausages would be meaningless, since only copies made for money would have value, thanks to certain legislative restrictions. It would be possible to infinitely introduce laws that would prohibit copying sausages, collect punitive detachments that monitor compliance with the laws, create special protection for sausages, however, all these cordons are unreliable and collapse with the advent of the first free copy.
It is the first free copy that is the barrier that translates information from the goods into the essence. To understand this process, we turn to the definition of the concept of “economic theory”.
Economic theory is the science of how people and society choose how to use scarce resources that are multi-purpose.
I specifically highlighted the keywords. Scarce resources. This is the very stumbling block that displays information from the field of science called "economics".
Information ceases to be a commodity at the very moment when it ceases to be a scarce resource. This happens when the first free copy appears. And the first free copy appears at the moment when it can be made.
Exactly. The appearance of the first free copy is due solely to the ability to make it, and not at all to the quality of the information.
It should be understood that as soon as information ceases to be a commodity (not abstract "information in general", but concrete) - it leaves the economic sphere and its regulation becomes impossible by economic methods.
This provision automatically rejects the ideas that are so popular on the Internet for eliminating the problems of digital distribution of content, which, if exaggerated, sound something like this:
1. Information should be free. Free information is information with an initial zero cost of a copy. In the market model of the economy, the creation of such information is possible solely from a sense of personal altruism of community members. Relying on personal altruism in some areas is simply not possible, since altruism is not possible to issue any guarantees. That is, the quality of the information produced in this way is extremely unstable (although, potentially, it can be very high).
2. Another economic model will surely appear, which will replace the outdated one. It will not appear, and if you carefully read the previous paragraphs - you already know why. The appearance of the first free copy removes information from the scope of the economy, and economic models for its distribution become inapplicable.
3. You should look for alternative ways to earn money if the main one ceases to generate income. Naturally follows. The writer should stop writing if all of his books are downloaded for free. Or, writing exclusively by order is not important, it will be one philanthropist or a group of interested people who are capable of paying a price to the cost of the work received. The main thing is that the transaction should be carried out before the first free copy appears - then it will be regulated by economic methods. In any case, with this approach, the mass market will go away - a necessary condition for the possibility of reducing the price of a copy, which means that the final product with the same quality will increase significantly in price. Or, its quality will endlessly decline.
4. It is necessary to move from compulsory payment to voluntary, that is, to donations. Again, in the real world, where there are ninety egoists per altruist, the possibility of normal earnings in this model is extremely doubtful. The Radiohead’s inspirational example was, unfortunately, a flash in the night, and it didn’t disperse the darkness of the surrounding area at all - the authors and musicians who followed in their footsteps bitterly noted the meagerness of the income thus obtained. Amounts at best reached hundreds of dollars. And, of course, the income received in this way is extremely unstable. I'm not even talking about how humiliating for the author such a model of receiving money.
Since the solution to the problem of digital distribution after receiving the first free copy by economic methods (encouraging good authors with money for the purpose of natural selection is what copyright haters dream of) is impossible, and the time to receive one for a mass product tends to the time of release of the product, you should look for other methods solutions to the problem. You will be surprised, but they are. There are two
ways in this case: 1. Eliminating the possibility of obtaining a free copy, or maximizing the period of time from the release of the goods to its receipt. This is what most do. DRM, HASP, StarForce - all these non-economic methods follow this provision. Corporations do this.
2. Assignment of responsibility for obtaining a free copy. Legislative regulation. What governments do.
What can be achieved by destroying these mechanisms? For this, it should be understood that these mechanisms, limiting the possibility of obtaining free copies, transfer information back to the sphere of regulation of a market economy and allow impact on its production by market methods, that is, it is possible to "vote in rubles." The removal of barriers will lead to the destruction of market mechanisms, and everyone will suffer from it - consumers who will have to either receive inferior information or get information at a higher cost - and producers who lose markets to generate income.
I will repeat the main idea in a more understandable form. If a product can be copied for free, then it ceases to be a product, which means that market regulation mechanisms are not applicable to it. That is, the fact that you buy books and music in the online store and you (and your friends) really like them will not lead to the fact that your favorite writers and musicians will write more. Moreover, consumer sympathies in this case do not play any role whatsoever, since the authors will in fact rely solely on the solvent altruistic stratum of society, which is extremely few and unstable, which means that their situation will be very unreliable. Imagine that you will be paid a salary on the basis of a die roll - today 5 thousand, a month later 90 thousand, and then six months a thousand a month. And you have a wife, a child and a loan for a car ...
What conclusions can be drawn from this? In order for market regulation of information to be possible, information should not be free and it should have a non-zero cost of a copy. This is something that has not been solved at present, and it is very doubtful whether it will succeed - the objective laws of our world come into effect. For the same reason, it is impossible to sell air other than by violent means - it is not a commodity and is not subject to economic regulation. So, we should look for economic models that will not concern the distribution of information in digital form in general. However, how to do this for companies whose business is entirely based on digital distribution is an open question.
Why "non-economic"? About it further.
The problem of the distribution of digital content in a nutshell in a primitive language is expressed by the phrase "can be copied." In scientific language, this is called “zero replication cost.” It is this very zero cost of replication that causes problems.
I think that everyone will agree with me that if a sausage loaf could be copied like a file, then its value would be zero. Shops and stalls selling sausages would be meaningless, since only copies made for money would have value, thanks to certain legislative restrictions. It would be possible to infinitely introduce laws that would prohibit copying sausages, collect punitive detachments that monitor compliance with the laws, create special protection for sausages, however, all these cordons are unreliable and collapse with the advent of the first free copy.
It is the first free copy that is the barrier that translates information from the goods into the essence. To understand this process, we turn to the definition of the concept of “economic theory”.
Economic theory is the science of how people and society choose how to use scarce resources that are multi-purpose.
I specifically highlighted the keywords. Scarce resources. This is the very stumbling block that displays information from the field of science called "economics".
Information ceases to be a commodity at the very moment when it ceases to be a scarce resource. This happens when the first free copy appears. And the first free copy appears at the moment when it can be made.
Exactly. The appearance of the first free copy is due solely to the ability to make it, and not at all to the quality of the information.
It should be understood that as soon as information ceases to be a commodity (not abstract "information in general", but concrete) - it leaves the economic sphere and its regulation becomes impossible by economic methods.
This provision automatically rejects the ideas that are so popular on the Internet for eliminating the problems of digital distribution of content, which, if exaggerated, sound something like this:
1. Information should be free. Free information is information with an initial zero cost of a copy. In the market model of the economy, the creation of such information is possible solely from a sense of personal altruism of community members. Relying on personal altruism in some areas is simply not possible, since altruism is not possible to issue any guarantees. That is, the quality of the information produced in this way is extremely unstable (although, potentially, it can be very high).
2. Another economic model will surely appear, which will replace the outdated one. It will not appear, and if you carefully read the previous paragraphs - you already know why. The appearance of the first free copy removes information from the scope of the economy, and economic models for its distribution become inapplicable.
3. You should look for alternative ways to earn money if the main one ceases to generate income. Naturally follows. The writer should stop writing if all of his books are downloaded for free. Or, writing exclusively by order is not important, it will be one philanthropist or a group of interested people who are capable of paying a price to the cost of the work received. The main thing is that the transaction should be carried out before the first free copy appears - then it will be regulated by economic methods. In any case, with this approach, the mass market will go away - a necessary condition for the possibility of reducing the price of a copy, which means that the final product with the same quality will increase significantly in price. Or, its quality will endlessly decline.
4. It is necessary to move from compulsory payment to voluntary, that is, to donations. Again, in the real world, where there are ninety egoists per altruist, the possibility of normal earnings in this model is extremely doubtful. The Radiohead’s inspirational example was, unfortunately, a flash in the night, and it didn’t disperse the darkness of the surrounding area at all - the authors and musicians who followed in their footsteps bitterly noted the meagerness of the income thus obtained. Amounts at best reached hundreds of dollars. And, of course, the income received in this way is extremely unstable. I'm not even talking about how humiliating for the author such a model of receiving money.
Since the solution to the problem of digital distribution after receiving the first free copy by economic methods (encouraging good authors with money for the purpose of natural selection is what copyright haters dream of) is impossible, and the time to receive one for a mass product tends to the time of release of the product, you should look for other methods solutions to the problem. You will be surprised, but they are. There are two
ways in this case: 1. Eliminating the possibility of obtaining a free copy, or maximizing the period of time from the release of the goods to its receipt. This is what most do. DRM, HASP, StarForce - all these non-economic methods follow this provision. Corporations do this.
2. Assignment of responsibility for obtaining a free copy. Legislative regulation. What governments do.
What can be achieved by destroying these mechanisms? For this, it should be understood that these mechanisms, limiting the possibility of obtaining free copies, transfer information back to the sphere of regulation of a market economy and allow impact on its production by market methods, that is, it is possible to "vote in rubles." The removal of barriers will lead to the destruction of market mechanisms, and everyone will suffer from it - consumers who will have to either receive inferior information or get information at a higher cost - and producers who lose markets to generate income.
I will repeat the main idea in a more understandable form. If a product can be copied for free, then it ceases to be a product, which means that market regulation mechanisms are not applicable to it. That is, the fact that you buy books and music in the online store and you (and your friends) really like them will not lead to the fact that your favorite writers and musicians will write more. Moreover, consumer sympathies in this case do not play any role whatsoever, since the authors will in fact rely solely on the solvent altruistic stratum of society, which is extremely few and unstable, which means that their situation will be very unreliable. Imagine that you will be paid a salary on the basis of a die roll - today 5 thousand, a month later 90 thousand, and then six months a thousand a month. And you have a wife, a child and a loan for a car ...
What conclusions can be drawn from this? In order for market regulation of information to be possible, information should not be free and it should have a non-zero cost of a copy. This is something that has not been solved at present, and it is very doubtful whether it will succeed - the objective laws of our world come into effect. For the same reason, it is impossible to sell air other than by violent means - it is not a commodity and is not subject to economic regulation. So, we should look for economic models that will not concern the distribution of information in digital form in general. However, how to do this for companies whose business is entirely based on digital distribution is an open question.