Internet Piracy: A Sure Bet

I just read a fascinating article at the New York Times on the inevitability of internet piracy by Nick Bilton.  Granted, it’s a few months old, but I couldn’t help but be amazed by the candidness of Bilton in reporting the simple fact that internet piracy is absolutely here to stay.

I couldn’t help but be encouraged.

On the issue of intellectual property in the domain of the Internet, the free market is winning against crony capitalism and government authoritarianism.  Individuals everywhere are receiving the benefit.  The losers are, of course, the production companies and the MPAA, who would love to remain forever rich based on the monopolistic privileges granted to them under copyright law.

Quite frankly, defenders of intellectual property have absolutely no response to this alleged “crisis” of the lack of intellectual property enforcement.  It is not going anywhere.   If you want to stop it at this point, you would probably have to ban the Internet.  Instead of continuing to come up with failed enforcement mechanisms, it will be exciting to see a day when the state finally retreats from its defense of special interests and recognizes that the pirates have won a complete and total victory.

Furthermore, as Bilton points out, this piracy will very soon be carried over into the 3D printing world when 3D printers will become as much a part of every home as laptop computers, televisions, and iPads.  Millions of individuals will have the ability to simply download a file for a design they want to create, probably through some sort of bitTorrent program, and then print out whatever the heck they want within the comfort of their own home.

Statists and sophists will decry such “piracy” as an evil and a scourge upon society.

Those of us who understand how free markets actually work will know better.  It doesn’t take a rocket scientist to realize that 3D-printing used in this fashion will make millions of people better off.  Simply put, through the power of piracy and the ability to copy designs, individuals will be able to provide things for themselves in their own homes that today we must go to a store to buy.   Think of all the business potential!  The innovation!  The spontaneous order!

The market is beautiful because it is peaceful, dynamic, competitive, and orderly all in one.  Copyright turns actors in the free market into mortal enemies, constantly looking out for those who would seek to steal their super special idea that they presume no one has heard of before.  As Isaac Moorehouse put it, it’s one of the most childish things I’ve ever heard of.

Sorry, this link is broken!  But PSY still made lots of money by ignoring copyright violations!  :)

PSY made millions on “Gangnam Style” by ignoring copyright violations.

The great thing is that the market is already realizing that this is the wave of the future…and adjusting to it.  For example, PSY literally ignored violations of the copyright on his song, “Gangnam Style.”  As a result, he made $8.1 million dollars and his video is now the most viewed video on YouTube with over 1 billion views.  Jeffrey Tucker details this fascinating reality in his article, “How the State Will Die.”

Meanwhile, Robert Neuwirth details the significance of the informal economy (known as System D)–which mainly consists of street vendors, small shops, and actors who are not subject to formal state regulation.  This is probably the closest thing to free market capitalism that we have in the world today…and it is rampant with this concept of “piracy.”   But this System D informal market works and it’s humming along beautifully.  It’s a blossoming flower of spontaneous order.  Even more than that, Neuwirth reveals that American businesses actually want to see their products pirated in System D so that they know they’re doing something right.

Everywhere, the market is already winning due to piracy.  Government regulation would try to stifle and prevent this, and in some cases it has, but the long run looks good for piracy, and consequently, for the free market.

This is what detractors of intellectual property have been saying for a long time.  Intellectual property law is a stale artifact of government intervention.  It stifles innovation and serves the special interests of crony capitalism.  But, by it’s very nature, it is incapable of keeping up with the forces of the free market.

The good news is that, unless you want to ban the Internet and 3-D printing…

…the pirates will always win.

Your move, IP advocates.

Let’s reflect on the lessons here. In our time, the state’s regulatory apparatus, not just in intellectual property, but in every area of life, has set up an untenable situation for nearly everyone. Even those who imagined that they would benefit from it are not doing so to the extent they believed. That is because the march of history does not stop in the face of even the largest attempts at enforcement. The market will prevail — which is just another way of saying that human action will prevail over the coercive machinery of the government — in the long run. – Jeffrey Tucker, “How the State Will Die”

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About Jason Hughey

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26 responses to “Internet Piracy: A Sure Bet

  • ipaq3115

    Can you explain how people being able to pirate files to print any product they want from their 3d printer (assuming we fast forward about 100 years in technology) promotes business opportunity?How does it promote the free market? I don’t understand how that works. Seems to me that the logical outcome of this free reign of “piracy” that you talk about would crush creativity and destroy just about every incentive to create something useful… unless I’m missing something in what you said.

  • Jason Hughey

    1) Easy. Any number of home businesses can be started by anyone who owns a 3D-printer, just like home businesses are started all the time by people with a laptop and an internet connection. Except now, a 3D-printer would enable someone to build up their own inventory of physical goods based on digital files of designs for those goods.

    And to say that is 100 years down the road is pretty inconcievable in my mind. Look at technology 10-20 years ago and look at it now. 3D-printing has the potential to arrive very quickly and bring with it all of the “piracy” concerns that defenders of IP are so worried about.

    2) I did show it, if you read my post. PSY and System D are already proving that intellectual property piracy is a positive market force that naturally emerges within a spontaneous order…with much better results than expensive IP litigation and very arbitrary enforcement. When all you have to do is buy a privilege from the government that grants you the authority to decide how an idea can be expressed, then that’s a government intervention that distorts the free market.

    Like I said, if you want to protect a notion of IP in our modern world, you literally have to ban the Internet. There can be no idea more totalitarian or authoritarian than that. Most conservatives would react in horror to any Internet regulation, but they’re willing to swing the door wide open for the sake of some non-existent and false notion of intellectual property. It’s inconsistent and immoral.

    Thankfully, there’s no way around this problem for IP advocates unless they want to be self-admitted totalitarians. Selective enforcement is inherently arbitrary enforcement and will produce unintended consequences. To all of this, the pirates will always have the upper hand because the technology is on their side. That’s because IP law is an unnatural abrogation of natural law and the spontaneous order that emerges when humans interact freely with each other absent government intervention.

  • Tim

    I understand the advantages of 3D printers and all the great things we might be able to do with them in the future. What I don’t understand is how allowing piracy of those designs benefits the economy. You are talking about taking away the right of the owners to their designs. Who is going to design anything if they can’t be assured justice against those who steal their designs?

    Sidenote: I know technology advances quickly and I’ll grant that 3D printers are useful for some things, but I’ve seen 3D printers and know how they work. There’s nothing particularly revolutionary about them and we are a very very long way from being able to extrude a cpu or lcd screen. The technology is not here yet and it’s not going to be for a while.

    I really don’t think PSY proves your point, first off it wasn’t piracy if he allowed his content to be spread. I would equate what PSY did to giving out free candy canes, the candy shop gives them out because they ultimately want you to come into your store and buy candy. Second, it was not a spontaneous rise to fame for PSY. Have you watched the video?? It’s terrible. I’m sure that’s just my opinion but really, how do you become such an icon overnight after being a failure for ten years? It’s all in advertising. If you don’t believe me you should try to start an internet based business. My dad and I tried with a really simple idea and we found that unless you have the money to advertise you have almost no way of getting your name out there. I’d be interested to know of those people who started a business with a laptop and an internet connection. Of course even if PSY didn’t have the money to advertise I bet Google saw the benefit in making him popular and I’ll bet they made a ton of money off of the advertising revenue PSY generated.

    The protection of intellectual property is not something that has to be stopped by the government. However, it is the government’s responsibility to punish the violation of intellectual property. Hopefully I can make what I mean clear. To compare it to the candy shop, the government’s responsibility in not to post an armed guard at every box of candy in the store.I’m not saying that at all, as it would be extremely unrealistic. Like you said, probably the equivolent of banning the internet. But the government can and should punish those who steal from the owner of the candy store. Just like the government can and should punish those who ‘pirate’ or steal designs/music/programs or whatever it happens to be. It’s not arbitrary enforcement unless the candy canes that were stolen and never recovered make the enforcement of physical private property arbitrary and useless.

  • Jason Hughey

    “Like you said, probably the equivolent of banning the internet. But the government can and should punish those who steal from the owner of the candy store. Just like the government can and should punish those who ‘pirate’ or steal designs/music/programs or whatever it happens to be. It’s not arbitrary enforcement unless the candy canes that were stolen and never recovered make the enforcement of physical private property arbitrary and useless.”

    And this is my point. Millions of people are pirates. Odds are, if someone has music on their iTunes, at least a few tracks are pirated. There’s no way to punish all of them…none.

    • Tim

      I understand that, but we shouldn’t completely abandon the idea of justice simply because we can’t catch every single violator should we?

      That article you linked to, “How the state will die” I think it was, had the great example of youtube. They were going to get hit with tons of content infringement if they didn’t do something about the videos. Instead of trying to crawl their site and ban every illegal video they gave users the option of legally and easily licensing the content and paying for it with ads. That’s what I see as a great free market solution to that kind of problem.

      • Jason Hughey

        Exactly! YouTube decided to harness the forces that would have been previously been fined and sued under federal law and turn “piracy” into a positive force…which leads in to my point in this post that the market is already accepting the benefits of piracy and seeking to resolve it peacefully rather than hounding down infringers.

      • Tim

        But isn’t federal law the reason for that all to happen in the first place? The piracy in and of itself would have never caused anything positive. It was the fact that there were consequences for piracy that caused Google to do what they did with Youtube. I don’t understand how piracy alone is a positive market force.

  • Jason Hughey

    No, federal law is never the reason for a positive and peaceful free market solution to piracy. Law dictates that pirates be punished. Google didn’t punish them. At first they tried, but it was a miserable failure because you simply can’t punish one pirate without 100 pirates popping up in his place. So, they let the pirates get away with their pirating.

    Federal law did not tell Google to do this. Federal law, in fact, encouraged Google to pursue the “crack down” approach. It failed, so Google decided to harness the power of piracy.

  • Tim

    Okay, if the law protects an individual’s right to copyright and allows for people to be prosecuted for violating that copyright does that not encourage people to not pirate content and find ways to keep content from being pirated on their site?

  • Jason Hughey

    No. That’s why copyright violations occur thousands of times every day.

  • Jason Hughey

    Regardless, that’s not a legal consideration, but a profit consideration, demonstrating that your assertion that the law was the cause of Google’s policy change is probably not true.

    • ipaq3115

      I thought that was your whole point. To do away with any sort of ip law. Remove the legal considerations and leave only the profit motivations. My question was, how does paying content creators fit into your scenario of unrestricted piracy?

    • ipaq3115

      This backs up my assertion that the whole reason google did anything was because of the law. What other motivation did they have? How would they make money from paying the content creators?

      • Jason Hughey

        I feel that you’re talking in circles now. And also, it’s completely false to say that Google doesn’t make money off of this deal. They make money from advertisements as well on YouTube.

  • Jason Hughey

    Haha! Yes, that is my point. 🙂

    It would work like it does in the rest of the free market. Content producers will compete to produce their ideas, allowing them to gain a temporary advantage of their competitors when they come up with new ideas that aren’t prevalent in the market. To remain viable, they will have to continue innovating and producing new content/ideas that attracts consumers. If they don’t do so, they’ll fall prey to what all businesses should fall prey to when they fail to satisfy consumer demand: bankruptcy. Even if someone copies your idea, you still have the control to rebrand/reprice/update or otherwise make your idea more attractive than the copies that circulate of the initial idea.

    This already happens in fashion all the time. No company has a copyright/patent on blue jeans, button down shirts, pencil skirts, silk scarves, three piece suits, or any other fashion “design” for clothing you can think of. Consequently, to stay in business in fashion, you only make what’s in style–what’s trending. If you make the mistake of trying to bring back the 70s when everyone is trying to bring back the 50s, then you’ll go out of business fast. The key point here is that fashion is purely an idea, yet no one is allowed to copyright or patent designs…and yet, we don’t see idea producers having a problem making money. Heck, fashion designers can be extremely rich.

    • jk2001

      Fashion design isn’t copyrighted because there aren’t laws to protect them. The point is that property is created by law. Perhaps, given the centrality of designs, they should be copyrightable.

      Maybe it’s hard to get the law passed because the people doing the work tend to be women, and they are only one part of a larger manufacturing business. The designers don’t do the branding or marketing. A manufacturer might gain something from copyright protection, against other manufacturers… but would lose leverage against the designers, who have ideas the manufacturers want to steal.

      As for the wealth of designers, that’s overblown. The wealth goes to the brands and manufacturers, not the designers.

  • Tim

    I think you missed my point. I don’t really want to argue the economy of it all because I’m sure we could argue that point all day long and then some. My question has been, why shouldn’t content creators have the choice to prosecute people who steal their content? Sure you can make the point that there are benefits to allowing content to be freely distributed (ie not prosecuting) but shouldn’t the content provider have the freedom to bring charges against someone else who is benefiting from his hard work? I understand that it’s impossible to stop all piracy… just like it’s impossible to stop all conventional stealing, but that doesn’t warrant discarding the idea all together does it?

    I was not saying at all that google doesn’t make money off of advertising, but they don’t make money off of piracy because they effectively eliminate it on their site, it’s not piracy anymore when it has been paid for. I really don’t see how you can claim any market force that came from that.

    • Jason Hughey

      No group of people has the right to prevent another group of people from using their idea and making money off it. That’s not a “freedom,” that’s a monopoly privilege granted by the state. Don’t confuse the terms.

      • Tim

        I understand that’s your opinion. I’m trying to figure out how a country that was born on protecting private property could justify such a violation of an individual’s property, intellectual or not. Doesn’t directly benefiting from someone else’s property violate the principles our country was founded on?

  • Jason Hughey

    I’m as ardent a defender of property rights as anyone I know. That’s why I am so adamantly against intellectual property. It grants economic actors political power to control free people and their right to own property. Intellectual property says, no matter how hard you have worked or strived, if it can in some way be shown to be because you benefitted or otherwise relied upon someone else’s IP, they have the right to throw you in a cage. That’s as explicit an attack on property rights as any other government regulation.

    I used to think exactly like you, and I know many people who have followed a similar path. A truly free market perspective on IP law is counter-intuitive, and it’s something I wrestled with for about three years before becoming anti-IP in my beliefs.

  • Tim

    And innocent people can never be convicted of a crime?

    I’m not saying the way it’s done is perfect by any means, but you can’t expect that. All you are talking about are flaws in the system now. Don’t you think we could improve the way intellectual property is protected? I think a much more reasonable definition of intellectual property could be found than the wide one you just gave. However I can see how our crazy system of copyright protection and all that could fit under that wide umbrella.

    That said, in any system people can wildly accuse someone of stealing their property and demand compensation. Just like someone can make ridiculous claims about having invented a rectangular phone with rounded corners or something crazy like that.

    I can see a broken system, but I also see a fundamental right in intellectual property. It can be abused like anything else but to completely ignore it is an injustice I think.

    I also don’t think I could disagree more with your last statement. When I think free market, I think of a market that is also protected from theft and basic rights infringement. I think of the natural incentives that drive a free market. If I create something people want I can sell it and make a profit. If I write a song I can sell it without it being stolen and circulated on the internet, and if it is I can bring charges against those who did and recover my losses. Without intellectual property I see a market void of incentives to create new things, and innovate.

    Right now I create programs for work and I’ve spent countless hours constructing and debugging my programs. There is real value there and I wouldn’t want it taken from me any more than a carpenter would want their chairs stolen. I don’t see how that isn’t my property, but that’s just me and it sounds like I probably won’t convince you of that 😛

  • jk2001

    Piracy has nothing to do with markets, except in extracting from them. The current system of internet piracy still benefits some companies, like the companies that help you find free copies of content, the power companies, and the companies selling the hardware and infrastructure. When software is copied and the programmer is not paid, the computer hardware seller and ISP already got paid, and will get paid. That’s not fair, especially because, often, it’s the software or content that people want.

    The logical direction for the defense of piracy has to be to create open source hardware for building internet infrastructure, owned by the community: an internet commons. That hardware would run free software to manage the data.

    Of course, nothing is free – the engineers, programmers, sysops, and artists need to get paid, just like the factory workers who make the hardware, and miners who dig up the copper. The trick is that in a free system, without markets, that problem needs to be solved, and in solving it, you can create a new kind of society with not only less intellectual property, but less private property in general.

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