What?
Only if the lack of ability to recover development costs is a surprise. If a company knows they cannot cover development costs, like in a non-copyright situation, then they do affect the future.
I’m not disputing that the price is set by the market. In a non-copyright situation the price would soon go to the cost of marginal production. That price is certainly not enough to encourage development, so copyright forces the price to the level that does. This clearly disturbs you. In a non-copyright model all things would be cheap, but there would be little worth buying. The next Hollywood blockbuster would be two hours of cats playing piano.
You’ve clearly never done this. For something like a movie each new movie is evaluated independently. It might get funded out of the profits of the last one, but it will not get made if it cannot be justified as making a profit.
Things like software will include maintenance and small upgrade costs. These are more or less marginal continuing costs. That is not the same as the next version. For things with significant continuing costs companies sell licenses, like anti-virus software or EDA tools. Those are priced well above the production cost, and can be priced to encourage people to move to the next version - which also costs money. I can go into excruciating detail about how the EDA business does this but bottom line - development costs for new products are not continuing, unless you define all products as one product.
How would you go about financing the next game from your profits when the price is set in competition with those who do not need to collect profits to finance new development? And the problem is not less of something being made - the problem is whether it is made at all.
The Wiki introduction:
[QUOTE=wiki]
A monopoly (from Greek monos μόνος (alone or single) + polein πωλεῖν (to sell)) exists when a specific person or enterprise is the only supplier of a particular commodity. (This contrasts with a monopsony which relates to a single entity’s control of a market to purchase a good or service, and with oligopoly which consists of a few entities dominating an industry)[1][clarification needed] Monopolies are thus characterized by a lack of economic competition to produce the good or service and a lack of viable substitute goods.[2] The verb “monopolize” refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is business entity that has significant market power, that is, the power, to charge high prices.[3] Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market).[4]
[/QUOTE]
Notice this:
Monopolies are thus characterized by a lack of economic competition to produce the good or service and a lack of viable substitute goods.
If you copyright a game, you do not prevent others from making substitute goods, that is other games. If you copyright music you do not prevent others from making music. Hell, if you copyright a performance of Beethoven’s Fifth you do not even prevent someone else from performing and selling a copy of the performance of Beethoven’s Fifth - just not yours.
Here is a challenge: sketch a business plan which allows you to do any sort of development of a game or a movie in a world of no copyright. Patronage and slavery are not allowed, and your movie or game is complex enough that it cannot be done by hobbyists at night and on weekends.
How do they offer the services for less if they have to buy the machine also? Maybe if they steal it?
And yes, after you depreciate the machine and recover your costs you can charge less. The way the supplier of your machine deals with this (since he is screwed if everyone can use the machine for 30 years) is to innovate. If he can prove to you that you can serve your customers better with a new machine - enough better to justify the higher price you have to charge - he can sell you it. If the only difference between the new version and the old is a paint job, you hang on to the old one.
The point is that it should be a level playing field. If you are competing against someone who can get his machine for free via theft, you are going to lose.
Excellent. Then please, let us continue.
“This” is a complex set of ideas. What is disturbing me right now is all the assumptions built into those two sentences brushed away blithely with “this.”
Then it is a good thing I have not said, “We should eliminate copyright and ensure there are no other incentives to create original content,” don’t you think? I mean, that’d clearly be a really fucking stupid position.
So why do I keep getting it ascribed to me? I never said it. I’ve explicitly disavowed it. And yet…
My fucking god, dude, really? This was the original point of saying that marginal cost does not include sunk costs and price is not a function of sunk costs. I offer the idea that in the long run, development is sustained, so sunk costs can be seen as marginal costs, but said under normal conditions we don’t consider it so. Now you’re going to repeat my own position “at” me as if it were evidence that I don’t know what I’m talking about?
What the fuck?
I wouldn’t. Good thing I’ve not ever suggested we do this and good thing I’ve explicitly denied this position represents my opinions in any way, shape, or form, eh?
Notice this: “A government-granted monopoly or legal monopoly, by contrast, is sanctioned by the state, often to provide an incentive to invest in a risky venture or enrich a domestic interest group. Patents, copyright, and trademarks are sometimes used as examples of government granted monopolies…” Under “sources of monopoly powers” you see “Legal Barriers: Legal rights can provide opportunity to monopolise the market of a good. Intellectual property rights, including patents and copyrights, give a monopolist exclusive control of the production and selling of certain goods.”
This is the topic of the OP. Has anyone stepped up on the matter of copyright, besides the strawman version of me?
I’m still waiting to hear some. I’m clearly not saying that creative content will never be developed - kittens on pianos is creative content. I’m saying that complex content won’t be except perhaps under a patronage model. Will elves do it?
Sunk costs are only sunk costs at the time development is over. If the situation changes, development stops - trust me, I’ve seen it. But development cost not affecting things happens once. The next development budget is not a sunk cost yet. I laid this out fairly clearly, but you just repeat yourself.
Great. Then how do new things get developed?
I know all about government sanctioned monopolies - I used to work for Bell Labs. Patents, which I have not mentioned, are a much better example for you. A significant patent can prevent work in an area and give an effective monopoly. But even if your area is Disney characters, or Star Trek, copyright cannot create a monopoly. Trademarks can do that. You can’t prevent someone from making a new Mickey Mouse cartoon through copyright, but you can through trademark law. Do you object to that also?
And please give an example of copyright granting a monopoly, except in the most narrow of senses.
Well, it looks like it is impossible. Since you appear unable or unwilling to explain how high end product will get created without copyright protection, I can only conclude that you are willing for it to not happen in order to prevent what you call monopolies.
I’ve already given an answer - get rich people or the government to fund development of art or games or whatever for the common good or to gain prestige. Besides that, I have no idea.
This was never in dispute. I don’t know the point of bringing it up.
Sure, it’s possible.
Right. Which may be why I said “If this was going to be a good investment, you needed to question that before you dumped 20 million into the project because now, today, that money is gone and all you have in hand is your game…” in the post which started this particular bit of “debate.”
You just never read a thing I said, which is surprising because we normally seem to never disagree on anything.
You mean, right now? In what scenario would you like me to comment on?
So you mean, except for the part where they are a monopoly, prove they’re a monopoly? Cute.
How about you avoid jumping to conclusions about my position? Does that seem like a possible course of action? If it isn’t, please let me know, so I can give up this thread entirely.
And I said, and gave reasons for, the answer under a no-copyright scenario will pretty much always be no. If you can see a way it will be yes, please share. If not, then, as I said, you are willing to toss out the new product baby with the copyright bathwater.
I have no idea what you think you are saying, but I’ve been trying to go over it point by point, and not delete pretty much everything without comment.
No, in an environment where prices get driven to basically incremental production costs, which seems to be what you favor.
I noted that patents can grant true monopoly power in certain circumstances. I noted that trademarks can give a sort of monopoly on works involving a certain character or world. But how does my copyright on my “Thighs of Thunder” game give me any monopoly power besides preventing people from copying Thighs of Thunder. If I didn’t trademark anything, and you came up with an independently created “Abs of Thunder” game appealing to the same market, I have no power to stop you. That ain’t much of a monopoly.
I’ve been sitting here for a while eagerly awaiting your solution to this dilemma. I can’t think of one, but that does not mean one doesn’t exist. Do you have one?
A game which you can sell for $50 each. So it was good to invest all of that money producing the game.
If pirates can produce it for free, the game in your hand is worth zero. No more R&D. No more new games.
Am I missing something?
The part where I proposed we eliminate copyright and just sit back. Don’t worry, I missed that part, too.
I didn’t propose we throw out anything. All I said was that subsidizing industries with monopolies is unsound. Since you don’t even think copyright counts as monopolies, I guess you have absolutely no leg to stand on whatsoever that I would throw out anything. 
It’s clear you’re going point by point, but you seem to have lost the context of my comments entirely, like, why I made them in the first place. All I can say is we have not disagreed on anything whatsoever even though your comments have taken a form of correcting me.
I favor that environment. Unquestionably, I favor that environment. I just never said we could get there.
It doesn’t.
Almost no monopoly is perfect. If you are only willing to consider nearly-perfect monopolies then you are of course correct that copyrights aren’t monopolies. This seems like a really silly position but I will agree that under such an interpretation you are correct.
It’s only a dilemma if you think I suggested we eliminate copyright and then sit back and do nothing. Since I’ve never said that, the dilemma is entirely in your head.
Here are the problems as I see them:
- Copyright rents are insufficient incentive because they have no relationship to consumer surplus, which means that people will under-create
- In absence of copyrights we have no way to determine how we would reward holders sufficiently to get them to give up their copyright (or if we should)
- Copyright rents raise prices and fail to come close to maximizing social welfare
Do you agree that these are three problems we face? (Maybe we face others, but, do you agree these are problems?)
It’s a neat trick when market prices in one of the world’s most competitive industries are summarily delegitimized simply by using the word “rent.”
Who played that trick? We should compensate creators of content for their effort. We should compensate people who copy DVDs for their effort. The union of those two propositions is not sufficient to justify copyright.
Since my arguments so far have indicated that we do not sufficiently compensate the people in question by giving them monopoly rents, do you suppose I have actually dismissed anything?
Or do you just not care to actually discuss the issue with me?
That’s really just intentionally misleading. It also ignores the history of compensation of creators and mass entertainment. Compensating creators on a per-copy basis is what makes high quality mass entertainment possible. That by itself is entirely sufficient to justify the copyright system.
Since I reject the use of the term “monopoly rent” as conclusory and propagandistic, you’re going to have to come up with a different baseline if you want any reasonable discussion.
Please elaborate.
I disagree. I think we don’t have enough creative materials and those that we do don’t see enough distribution. I think both of these are related directly to copyright. I don’t believe, contrary to everyone’s wild assumptions, that “no system at all” is better than copyright.
It’s just a description. Copyright is a monopoly on copying a work. No one has disputed that without copyright, prices would fall fast on a lot of works (games and movies in particular, though probably not books so much). Then the difference between the normal profits and the current profits based on the copyright monopoly just is called rent. Here’s wikipedia on economic rent: “Some returns are associated with legally enforced monopolies like patents or copyrights.” You want me to call it “pure profit” instead? Fine. Pure profit. Economic profit? Fine. Economic profit.
Parties interested in the OP but not the series of arguments with me might be interested in the book Against Intellectual Monopoly by economists Michele Boldrin and David K. Levine. I haven’t read it, just found it. From the reviews (here’s a recent one—embedded pdf) it seems the authors do in fact argue for abolishing intellectual property laws without replacing them with anything at all.
Except you. You have more property than you did, but you didn’t exchange anything for it. Since the other party didn’t even know about your taking their property, that’s theft.
I agree with Oakminster: you are (poorly) rationalizing theft.
Except that this information exists somewhere other than in just your brain. Again, you are trying to rationalize theft. Code is real. It exists as electrical impulses or a recording of those impulses.
More rationalization. And very poor rationalization.
An image of your house, as seen in public, you mean?
You are taking code. Your subsequent analogy fails, and I’ll show you why:
No, there is a difference. Copying a DVD cannot be done without actually accessing the code on the DVD. Making a copy of the Kitty Hawk would require the acquisition of raw materials that were not originally part of the Kitty Hawk. Were you to dismantle the Kitty Hawk, piece by piece, and put it back together again, you would have stolen the Kitty Hawk. Now, if you can convince me that you can make a DVD of a film without ever once accessing the actual film’s DVD, you might have a better rationalization. But that isn’t what you do, or what you claim to be doing.
Basically, you’re ignoring copyright law altogether, and claiming that people do not have a right to their own creations. You might think that’s moral, but the vast majority of the rest of civilization disagrees with you.
The Founders didn’t think so. The governments of the world don’t think so. And I think I can prove they are sound - under certain circumstances - as a reward for risk. If we assume we wish to encourage innovation and invention, and if we grant that innovating involves risk that the cost of innovation does not match the benefit, then a system that increases the reward for innovation that is successful will tend to encourage innovation, which is sound. A system that equalizes returns for those who innovate and those who do not innovate is clearly going to destroy innovation.
I agree that no monopoly is perfect. But there is a big difference between a monopoly where others compete at the margins and one, like my example, where others compete on a nearly equal footing. So this isn’t much of an answer.
The following is very helpful.
I’m not sure what you mean by consumer surplus. I’m also not sure if what you are saying is that increased “rents” will increase creation or decrease it.
In the absence of copyright what does it mean for someone to give up their copyright?
In any case, we do have lots of examples of this. If you work for the government, you basically give up your copyright because government publications are open source. In fact if you work for hire you give up your copyright, and are working in a patronage model. Professional journals typically require you - or your company - to sign over copyright to them, since your reward is professional advancement and not sales. They can republish your work without your consent or even knowledge. So copyright does not even require rents, but it does force ownership to be clear.
Raise prices, true. I don’t know if it maximizes social welfare - at least not the current system which is biased towards corporations more than individual creators - but it is more conducive to social welfare than the no copyright alternative because of the innovation it supports.
Not really. The problems I see are more that we’ve lost sight of the benefit of letting others make use of the material after the costs of the creator are recovered and the creator is rewarded.
What a bizarre thing to say. No person could ever hope to keep up with the creative content out there. Distribution channels are more wide open than ever - anyone can publish anything at any time. Copyright is not a requirement - you are free to publish without copyright if you wish to. You just can’t take. I can see where a person is unhappy with the amount of creative content of what he particularly wants, but that is different. That is like someone saying their isn’t enough porn on the Internet because his favorite brand of sheep is not represented.
Since no one is prevented from publishing their work without copyright, anyone who desires this approach would be unaffected. The only people affected are creators who wish to be paid. Since they are not going to increase their output working for peanuts, we can conclude that removing copyright will reduce the amount of creative content out there.
Reasons why the whole “property” and “theft” arguments are irrelevant and weak:
- “Theft” is whatever we decide it is
- Taking physical property is only wrong because we decided it is, there is nothing inherently more “thefty” about it than anything else we call “theft”
- We also decided taking intellectual property is wrong and that we would call it theft - therefore it is theft
It just doesn’t matter if the creator still has a copy - the issue is how do we ensure people can make a living creating this stuff given that it is pretty much impossible to prevent copying.
We should encourage innovation. Who are you arguing with on that point? We should also let the market set the costs of production, not monopolies. Governments, the Founders, you and yours in this thread have conflated the two. Well, I think we should try to find a way to break them up. If Disney is satisfied with pulling in a billion dollars for Alice in Wonderland DVDs at $22 a pop, then let’s just pay Disney a billion dollars and eliminate the copyright. Disney has the exact same incentive you offered, which you think is sufficient, and more people get to buy the DVD and those that would have bought it anyway see a tremendous consumer surplus.
Is that a serious proposal in itself? No. (For one thing, how would we know whether the copyright to the Alice in Wonderland DVD was worthwhile prior to its popularity?) But it shows that copyright is not the awesome solution you propose because we can make everyone better off without making anyone worse off.
Well, I’ve cited your own wikipedia and economists. I can pull out judges and lawyers too, but at this point I think you’re being stubborn for its own sake. I’ve shown it. Your own cite showed it. They’re monopolies. Like all monopolies, they’re not perfect, and they don’t grant perfect market power. But no one has ever suggested that the only monopolies which exist must have complete market power or otherwise be perfect, so why continue to quibble on this point?
Consumer surplus is what you get when you pay $2 for an Alice in Wonderland DVD that you would have paid $22 for.
Sloppy phrasing. We’d like to pay people the money they’d take in under a copyright scheme so that we could just eliminate the copyright, but without copyrights in the first place we can’t figure out what it would be. This is the function of the patent auction I mentioned early in the thread, to create a way for markets to judge the value of a patent so we could get rid of the patent.
I know it fails to maximize social welfare because of the Alice in Wonderland example. If we make an economically neutral one-time transfer to a copyright holder the exact amount they’d get from copyright, then banish the copyright the hell it belongs, they get just as much incentive as with copyright but the rest of the economy would get a more fairly priced good (the copies). Again, this is not a proposal, it is an illustration that we’re a long way from maximizing social welfare, even if we assume that the money the copyright holder gets is the proper amount for encouraging creation, a proposition for which no one has offered any support.
But that also fails the social welfare test because some people are worse off in that situation, those that would not spend a single penny on Alice in Wonderland but are now part of the compensation process to Disney. Unless you meant that only the people that would spend money do spend money, and for them it’s neutral because they just spent the exact same amount they they did under the copyright system.