Post Economics

Exit tweet loyalty

Friday, September 21st, 2012

Someday I will read Exit, Voice, and Loyalty (1970) and comment on pertinence to things I write about here (cf my almost due for 8 year refutation notes on The Logic of Collective Action (1965)), but I have long found the concept intuitive.

The Declaration of Twitter Independence has been quickly ridiculed. In addition to its over the top language, one way to think about why is that it seems an almost certainly futile and maybe inappropriate (Twitter won’t listen, and perhaps shouldn’t; Twitter can do whatever they want with their services) attempt at voice, accompanied with a halfhearted at best exit plan (“explore alternate platforms, giving precedence to those who do support such [muddled] principles [until Twitter adopts a more developer friendly policy]”).

“Doing it right” per the crowd I’m most familiar with (including me) is almost all exit: start developing your apps for StatusNet/OStatus and other federated and open source social web software/protocols; any voice should demand support for federation, ie facilitate exit. Twitter apologists would say Twitter is doing the right thing for the Twitter ecosystem, the complainers should deal. Twitter loyal oppositionists would say Twitter is doing its greatness a disservice with its policies and should change. I’m not sure what people who care but are in neither the federated nor Twitter apologist/loyalist camps might think, but I’d like to know.

The Declaration doesn’t lend itself to a charitable reading, I think it is worth giving it one. Regarding its futile and perhaps inappropriate attempt at voice: it is OK for customers to complain; smart companies often even listen and adjust; Twitter is now a large organization, parts of it very smart; worth a try. Regarding exit, they don’t want to, and there isn’t anyplace completely obvious for them to go, much as I’d like that to be StatusNet/OStatus; “explore alternate platforms” and wanting no limits on how data can be used and shared, and data available in standard formats all support exit, with the right amount of tentativeness. Although that charitable reading is possible, the Declaration could’ve been written much more strongly regarding all of the points discussed above. Low probability that I’ll fork it to do so.

Collaborative Futures mentions exit, voice, and loyalty in the context of free collaboration projects. It appears from the history that I didn’t write that bit, though it covers a pet concept and uses a pet phrase (configurations). That chapter is way too short, but I’m pleased in retrospect with its nuance, or rather, with the charitable readings I’m able to give it.

When I eventually return to this topic, I will probably complain that software freedom and nearby advocates are overly focused on exit, with lots of untapped potential for the movements in voice and loyalty, possibly the same for political libertarians, and that it difficult to keep in mind more than two of exit, voice, and loyalty, and the frequency of their pairings.

In the meantime a post last year by Xavier Marquez on Exit, Voice, and Legitimacy: Responses to Domination in Political Thought seems pretty reasonable to me.

Falsifiable PR, science courts, legal prediction markets, web truth

Saturday, September 15th, 2012

Point of Inquiry podcast host Chris Mooney recently interviewed Rick Hayes-Roth of TruthMarket.com.

The site allows one to crowdfund a bounty for proving or disproving a claim that the sponsors believe to be a bogus or true statement respectively. If the sponsors’ claim is falsified, the falsifying party (challenger) gets the bounty, otherwise the initiating sponsor (campaign creator) gets 20% of the bounty, and other sponsors get about 80% of their contributions back. TruthMarket runs the site, adjudicates claims, and collects fees. See their FAQ and quickstart guide.

It seems fairly clear from the podcast that TruthMarket is largely a publicity mechanism. A big bounty for a controversial (as played out in the media anyway) claim could be newsworthy, and the spin would favor the side of truth. The claims currently on the site seem to be in this vein, e.g., Obama’s birth certificate and climate change. As far as I can tell there’s almost no activity on the site, the birth certificate claim, started by Hayes-Roth, being the only one funded.

The concept is fairly interesting though, reminding me of three things:

Many interesting combinations of these ideas are yet to be tried. Additionally, TruthMarket apparently started as TruthSeal, an effort to get web publishers to vouch monetarily for claims they make.

Question Software Freedom Day‽

Saturday, September 15th, 2012

If software freedom is important, it must be attacked, lest it die from the unremitting bludgeoning of obscurity and triviality. While necessary, I don’t particularly mean trivial attacks on overblown cleverness, offensive advocates, terminological nitpicking, obscurantism, fragmentation, poor marketing, lack of success, lack of diversity, and more. Those are all welcome, but mostly (excepting the first, my own gratuitously obscure, nitpicking and probably offensive partial rant against subversive heroic one-wayism) need corrective action such as Software Freedom Day and particularly regarding the last, OpenHatch.

I mostly mean attacking the broad ethical, moral, political, and utilitarian assumptions, claims, and predictions of software freedom. This may mean starting with delineating such claims, which are very closely coupled, righteous expressions notwithstanding. So far, software freedom has been wholly ignored by ethicists, moral philosophers, political theorists and activists, economists and other social scientists. Software freedom people who happen to also be one of the aforementioned constitute a rounding error.

But you don’t have to be an academic, activist, software developer, or even a computer user to have some understanding of and begin to critique software freedom, any more than one needs to be an academic, activist, businessperson, or voter to have some understanding of and begin to critique the theory and practice of business, democracy, and other such institutional and other social arrangements.

Computation does and will ever moreso underlay and sometimes dominate our arrangements. Should freedom be a part of such arrangements? Does “software freedom” as roughly promoted by the rounding error above bear any relation to the freedom (and other desirables; perhaps start with equality and security) you want, or wish to express alignment with?

If you want to read, a place to start are the seminal Philosophy of the GNU Project essays, many ripe for beginning criticism (as are many classic texts; consider the handful of well known works of the handful of philosophers of popular repute; the failure of humanity to move on is deeply troubling).

If you want to listen and maybe watch, presentations this year from Cory Doctorow (about, mp3) and Karen Sandler (short, long).

Law of headlines ending in a question mark is self-refuting in multiple ways. The interrobang ending signifies an excited fallibility, if the headline can possibly be interpreted charitably given the insufferable preaching that follows, this sentence included.

Try some free software that is new to you today. You ought to have LibreOffice installed even if you rarely use it in order to import and export formats whatever else you may be using probably can’t. I finally got around to starting a MediaGoblin instance (not much to see yet).

If you’re into software freedom insiderism, listen to MediaGoblin lead developer Chris Webber on the most recent Free as in Freedom podcast. I did not roll my eyes, except at the tangential mention of my ranting on topics like the above in a previous episode.

Opus!

Tuesday, September 11th, 2012

Opus is now an open source, royalty-free IETF standard. See Mozilla and Xiph announcements and congratulations to all involved.

This is a pretty big deal. It seems that Opus is superior to all existing audio codecs in quality and latency for any given bitrate. I will guess that for some large number of years it will be the no-brainer audio codec to use in any embedded application.

Will it replace the ancient (almost ancient enough for relevant patents to expire) but ubiquitous MP3 for non-embedded uses (i.e., where users can interact with files via multiple applications, such as on-disk music libraries)? If I were betting I’d have to bet no, but surely long-term it has a better chance than any free audio codec since Vorbis in the late 1990s. Vorbis never gained wide use outside some classes of embedded applications and free software advocates, but it surely played a big role in suppressing licensing demands from MP3 patent holders. Opus puts a stake through the heart of future audio codec licensing demands, unless some other monopoly can be leveraged (by Apple) to make another codec competitive.

Also, Opus is a great brand. Which doesn’t include an exclamation point. The title of this post merely expresses excitement.

I published an Opus-encoded file July 30. Firefox ≥15 supports Opus, which meant beta at the time, and now means general release.

To publish your own Opus encoded audio files, use opus-tools for encoding, and add a line like the below to your web server’s .htaccess file (or equivalent configuration):

AddType audio/ogg .opus

Hopefully the obvious large community sites (Wikimedia Commons and Internet Archive) will accept and support Opus uploads as soon as possible. Unlike their slow action on WebM. Speaking of which the Mozilla announcement mentions “working on the same thing for video”. I can’t tell whether this means submitting WebM (probably more specifically the VP8 codec) to the IETF or something else, but good luck and thank you in all cases. [Update: The proposed video codec charter starts from some requirements not mentioning any particular code; my wholly uniformed wild guess is that it will be another venue for VP8 and H.264 camps to argue.] [Update 20120913: Or maybe “same thing for video” means Daala.] [Update 20120914: Greg Maxwell comments with a precise answer below.]

Demand quality before quantity (re Oakland police)

Sunday, August 12th, 2012

Another SF Chronicle article about crime and police staffing in Oakland includes but does not discuss a chart of violent crimes/population and violent crimes/officer for 10 California cities.

Crimes/officer screams out to me as the statistic for which Oakland is most anomalous. This could support the assertion that I incessantly hear and read from neighbors and commenters that Oakland needs more police — each officer has a large number of crimes to deal with — often in the form of “Oakland has half the police, in ratio to population, that most major cities have.” (This seems to be true relative to some U.S. cities, but is an exaggeration relative to other California cities; I have no idea why California cities seem to all have lower police/population levels than elsewhere in the U.S.) But it could also support an assertion that Oakland’s police department is spectacularly inefficient.

Crimes/officer is a facile measure of police department efficiency in the sense that it could be improved by hiring more officers and having them do nothing. Much better would be a measure of crime reduction per officer, a much more difficult and speculative number. But given the large range of crime rate outcomes given a relatively narrow range of staffing/population among California cities, I suggest policing efficiency must be a major determinant of those outcomes.

I calculated the number of officers per 1000 population for the cities included in the Chronicle chart, and included per capita income to throw out another frequent assertion, that Oakland has lots of crime because it is poor. Below is a screen capture from my spreadsheet.

A part of me is deeply annoyed each time I hear someone complaining about lack of police staffing or supporting for-appearances measures (gang injunctions probably an example of such) or claiming that such must be expressed because something must be done because there’s a crisis. Crime has been at a high level in Oakland relative to other U.S. cities for a long time. Furthermore, many Oakland residents see the police as the enemy, and not without reason.

It seems to me that even if one has a singular goal of increasing staffing levels, it makes sense to first demand and scrutinize department effectiveness. Adding officers to an ineffective department seems like a for-appearances measure, and not a good strategy for building long-term support for increased staffing and increased resident cooperation with police (and vice versa). Admittedly this kind of fix-what-you-advocate-to-increase-its-long-term-success is a satisfying position for me, but perhaps not for many others.

Happily, it seems there is at least one organization, Make Oakland Better Now that is advocating for both more and more effective police (I’d only reverse the order). MOBN’s reporting on the OPD’s nearly decade-long non-compliance with a police misconduct settlement and how the LAPD improved drastically under a similar settlement seems like required reading for anyone who wants better policing in Oakland. This includes those expressing a desire for increased public safety, and those who hate the police — I’m extremely dubious that goading constitutes either side’s best strategy.

Ride- and car-sharing and computers

Thursday, August 9th, 2012


Underemployed vehicles and land at Fruitvale BART parking lot, the 5th of 11 stations between me and Fremont.

Tuesday I attended Silicon Valley Automotive Open Source presentations on Car- and Ride-sharing. I heard of the group via its organizer, Alison Chaiken, who I noted in February gave the most important talk at LibrePlanet: Why Cars need Free Software.

The talks were non-technical, unlike I gather most previous SVAOS talks (this was the first event in Fremont, which is much more convenient for me than Santa Clara, where most previous talks have been held), but very interesting.

I did not realize how many car- and ride-sharing startups and other initiatives exist. Dozens (in Germany alone?) or hundreds of startups, and all manufacturers, rental companies, and other entities with fleets are at least thinking about planning something. That seems good on its own, and will provide good experience to take advantage of further more intensive/efficient use of vehicles to be enabled by robocars.

Carpooling and other forms of ride-sharing has gone up and down with fuel rationing and prices. Carsharing seems to go back to 1948 at least, but with slow growth, only recently becoming a somewhat mainstream product and practice. Ride- and car-sharing ought be complements. Sharing a taxi, shared vans, and even mass transit, could in some ways been seen as primitive examples of this complementarity.

Rationing is not in effect now, and real prices aren’t that high, so I imagine current activity must be mostly be a result of computers and communications making coordination more efficient. This is highlighted by the reliance and hope of startups and other initiatives on the web and mobile applications and in-car computers and communications for access, control, coordination, reputation, and tracking.

But none of this seems to be open source at the end-user service/product level. Certainly much or even most of it is built on open source components (web as usual, auto internals moving that way). These seem like important arenas to argue against security-through-obscurity in vehicles and their communications systems, and to demand auditability and public benefit for public systems in various senses (one of the startups suggested marketing their platform to municipal governments; if reputation systems are to eventually mediate day-to-day activities, they need scrutiny).

Future of Intellectual Protectionism and not much Innovation Policy

Wednesday, May 23rd, 2012

I read all of the pieces selected for a „Future of copyright” anthology resulting from a contest run by the Modern Poland Foundation (apparently the winner of a small cash prize will be announced tomorrow; I highly recommend all of the pieces below and commend the judges for their selections):

7 are fiction (the 3 exceptions are me, Spitzlinger, and Togi). 5 of these are dystopian (exceptions: Binns, Mansoux), 4 of which (exception: Å»yÅ‚a) involve some kind of fundamental loss of personal control as a result of intellectual protectionism (even more fundamental than drug war style enforcement involves, which Å»yÅ‚a’s does concern). 3 of these (exception: Eddie) involve extrapolations of DRM, 2 of which (exception: Melin) involve DRM implants.

I’d like to see versions of the dystopian stories written as IP propaganda, e.g., recast as RIAA/MPAA pieces from the future (several of the stories have funnily named future enforcement organizations in that vein). Such could be written as satire, apology, or even IP totalist advocacy (utopian rather than dystopian).

Of the dystopian stories, Solís is probably most dystopian, Eddie most humorous, and Betteridge overall best executed. Å»yÅ‚a needs a bit of development — the trend posited is incongruous and unexplained — but maybe due to an unknown factor to be suggested by fictional future freakonomics, or perhaps I just missed it. Melin ends with some hope, but annoys me for contemporary reasons — why would the recipient of a body part artificially grown with “open” methods be constrained in the disposition of that part by a “Creative Commons license” on those methods? Another reason to discourage use of CC licenses for hardware design.

The two non-dystopian stories take the form of a “letter from the future” in which various “open” movements and “models” win (Binns; if I had to bet on a winner of the contest, I’d put my money on this one) and an allegory for the history and projected future of copyright (Mansoux; probably the piece I enjoyed reading most).

Of the 3 non-fiction pieces, Togi is most non-standard — a rant in the form of lemmas — and fun, though briefly goes off the rails in asserting that “those entities which represent the greatest tax gain will be preferred by government.” If that were the case, all that is prohibited would instead be taxed. Statements about “revenue” leave little wiggle room, but I suppose a charitable interpretation would include in “tax gain” all rents to those influencing power, be they bootleggers, baptists, or those directly obtaining tax revenue. Spitzlinger accepts the stories my piece rejects and suggests something like the Creative Commons Attribution-NonCommercial-ShareAlike license be the default for new works, with the possibility of additional temporary restriction (a one-year usufruct, perhaps?).

All of the pieces evince unhappiness with the current direction of information governance. Of those that reveal anything about where they stand on the reform spectrum (admitting that one dimension makes for an impoverished description of reform possibilities; that’s one of the points I hoped to communicate in my piece) I’d place Binns, Melin, and Spitzlinger away from abolition, and me, Mansoux, and Togi toward abolition.

I expect the contest and anthology to be criticized for only representing reform viewpoints. Sadly, no maximalist pieces were submitted. The most moderate reform submission didn’t follow contest rules (not a new piece, no license offered). More than alternate perspective versions of IP dystopias, I’d like to see attempts to imagine future systems which increase private returns to innovation, perhaps looking nothing like today’s copyright, patent, etc., and increase overall social welfare — I’m dubious, but please try.

Update 20120524: The two most fun and non-standard entries wonMansoux, with an honorable mention to Togi. I now must also congratulate the judges on their good taste. Read those two, or the whole anthology (pdf).

The world has summarily discarded vast systems of restrictions on the labor mobility of medieval serfs, slaves, women, South African blacks, indigenous Australians, and a long list of others.

Wednesday, May 2nd, 2012

I highly recommend the paper Economics and Emigration: Trillion-Dollar Bills on the Sidewalk? (pdf, summary) by Michael Clemens as well as a companion materials (mp3 interview).

Clemens surveys the small (four studies; I think I’d only heard of one of them) literature that has estimated the gains from removing all barriers to international migration. The estimates range from 67% to 147% of global product! Compare with summing high and low estimates for removing all barriers to international trade and investment: between 0.4% and 5.8% of global product. Yet the amount of attention given to these topics by economists is the inverse, and mostly from the immigration, rather than emigration side of the coin. At best a case of chasing easy precision over oomph (Clemens speculates lack of study could be due to obviousness, mercantilist/nationalist tradition, and lack of data).

I was happy to see mention of historical examples:

Of course, these elasticities could be different at much higher levels of emigration. The literature gives no clear support for such a pattern, however, even under greatly increased migration. In historical cases of large reductions in barriers to labor mobility between high-income and low-income populations or regions, those with high wages have not experienced a large decline. For example, wages of whites in South Africa have not shown important declines since the end of the apartheid regime (Leibbrandt and Levinsohn, 2011), despite the total removal of very large barriers to the physical movement and occupational choice of a poor population that outnumbered the rich population six to one. The recent advent of unlimited labor mobility between some Eastern European countries and Great Britain, though accompanied by large and sudden migration flows, has not caused important declines in British wages (Blanchflower and Shadforth, 2009).

“Brain drain” used an excuse for apartheid (it’s good for them!) makes me sad, but gladly the literature does not offer support for the effect, as I suspected. There’s a passing mention in the paper, and a bit more in the interview, concerning emigration from Sweden — Clemens says 1/3rd of the population left. The two citations in the linked Wikipedia article claim 20% and 33%, but probably cover different time periods. I’d like to see a comparison of annual emigration rates for various geographies at various times. Clemens also says that one can read anti-immigrant statements in U.S. newspapers a 100+ years ago that mirror those of today.

A couple other quotes from the paper:

economists should be open to the possibility that dramatic changes in what is practical can happen over several decades. After all, changes in geographic labor mobility that were unthinkable only a few decades ago have come to pass. Through the 1980s, a Polish national attempting to emigrate to West Germany could be shot by soldiers sealing the Inner German border from the east. Today, Polish jobseekers may move freely throughout Germany. The world has summarily discarded vast systems of restrictions on the labor mobility of medieval serfs, slaves, women, South African blacks, indigenous Australians, and a long list of others.

[…]

These initial results accord well with an entirely separate macroeconomic literature (for example, Hall and Jones 1999) which finds that most of the productivity gap between rich and poor countries is accounted for by place-specific total factor productivity, not by productivity differences inherent to workers. Large differences in location-specific total factor productivity mean that free movement of goods and capital cannot by themselves achieve the global equalization of wages, as they can in the most abstract trade models (O’Rourke and Sinott, 2004; Freeman, 2006, Kremer, 2006).

Place-specific total factor productivity can increase, and people in all places should strive to do so (best autonomously) — that’s approximately what “development” is about — results are very, very mixed. I wonder if various “open” things can’t help more than they do now, and will write about such eventually, but it’d be on the margin. And international apartheid is an abomination that should be eliminated immediately regardless of the long-term substitutability of development and migration.

The economics profession of the 20th century has taken a pass on migration, as they have on IP, with even more tragic results. Please change that! As his interviewer says, Clemens’ paper sketches a research program good for many Ph.D. theses.

Future of Copyright

Monday, April 30th, 2012

“Copyright” (henceforth, copyrestriction) is merely a current manifestation of humanity’s malgovernance of information, of commons, of information commons (the combination being the most pertinent here). Copyrestriction was born of royal censorship and monopoly grants. It has acquired an immense retinue of administrators, advocates, bureaucrats, goons, publicists, scholars, and more. Its details have changed and especially proliferated. But its concept and impact are intact: grab whatever revenue and control you can, given your power, and call your grabbing a “right” and necessary for progress. As a policy, copyrestriction is far from unique in exhibiting these qualities. It is only particularly interesting because it, or more broadly, information governance, is getting more important as everything becomes information intensive, increasingly via computation suffusing everything. Before returning to the present and future, note that copyrestriction is also not temporally unique among information policies. Restriction of information for the purposes of control and revenue has probably existed since the dawn of agriculture, if not longer, e.g., cults and guilds.

Copyrestriciton is not at all a right to copy a work, but a right to persecute others who distribute, perform, etc, a work. Although it is often said that a work is protected by copyrestriction, this is strictly not true. A work is protected through the existence of lots of copies and lots of curators. The same is true for information about a work, i.e., metadata, e.g., provenance. Copyrestriction is an attack on the safety of a work. Instead, copyrestriction protects the revenue and control of whoever holds copyrestriction on a work. In some cases, some elements of control remain with a work’s immediate author, even if they no longer hold copyrestriction: so-called moral rights.

Copyrestriction has become inexorably more restrictive. Technology has made it increasingly difficult for copyrestriction holders and their agents to actually restrict others’ copying and related activity. Neither trend has to give. Neither abolition nor police state in service of copyrestriction scenarios are likely in the near future. Nor is the strength of copyrestricition the only dimension to consider.

Free and open source software has demonstrated the ethical and practical value of the opposite of copyrestriction, which is not its absence, but regulation mandating the sharing of copies, specifically in forms suitable for inspection and improvement. This regulation most famously occurs in the form of source-requiring copyleft, e.g., the GNU General Public License (GPL), which allows copyrestriction holders to use copyrestriction to force others to share works based on GPL’d works in their preferred form for modification, e.g., source code for software. However, this regulation occurs through other means as well, e.g., communities and projects refusing to curate and distribute works not available in source form, funders mandating source release, and consumers refusing to buy works not available in source form. Pro-sharing regulation (using the term “regulation” maximally broadly to include government, market, and others; some will disbelieve in the efficacy or ethics of one or more, but realistically a mix will occur) could become part of many policies. If it does not, society will be put at great risk by relying in security through obscurity, and lose many opportunities to scrutinize, learn about, and improve society’s digital infrastructure and the computing devices individuals rely on to live their lives, and to live, period.

Information sharing, and regulation promoting and protecting the same, also ought play a large role in the future of science. Science, as well as required information disclosure in many contexts, long precedes free and open source software. The last has only put a finer point on pro-sharing regulation in relation to copyrestriction, since the most relevant works (mainly software) are directly subject to both. But the extent to which pro-sharing regulation becomes a prominent feature of information governance, and more narrowly, the extent to which people have software freedom, will depend mostly on the competitive success of projects that reveal or mandate revelation of source, the success of pro-sharing advocates in making the case that pro-sharing regulation is socially desirable, and their success in getting pro-sharing regulation enacted and enforced (again, whether in customer and funding agreements, government regulation, community constitutions, or other) much more so than copyrestriction-based enforcement of the GPL and similar. But it is possible that the GPL is setting an important precedent for pro-sharing regulation, even though the pro-sharing outcome is conceptually orthogonal to copyrestriction.

Returning to copyrestriction itself, if neither abolition nor totalism are imminent, will humanity muddle through? How? What might be done to reduce the harm of copyrestriction? This requires a brief review of the forces that have resulted in the current muddle, and whether we should expect any to change significantly, or foresee any new forces that will significantly impact copyrestriction.

Technology (itself, not the industry as an interest group) is often assumed to be making copyrestriction enforcement harder and driving demands for for harsher restrictions. In detail, that’s certainly true, but for centuries copyrestriciton has been resilient to technical changes that make copying ever easier. Copying will continue to get easier. In particular the “all culture on a thumb drive” (for some very limited definition of “all”) approaches, or is here if you only care about a few hundred feature length films, or are willing to use portable hard drive and only care about a few thousand films (or much larger numbers of books and songs). But steadily more efficient copying isn’t going to destroy copyrestriction sector revenue. More efficient copying may be necessary to maintain current levels of unauthorized sharing, given steady improvement in authorized availability of content industry controlled works, and little effort to make unauthorized sharing easy and worthwhile for most people (thanks largely to suppression of anyone who tries, and media management not being an easy problem). Also, most collection from businesses and other organizations has not and will probably not become much more difficult due to easier copying.

National governments are the most powerful entities in this list, and the biggest wildcards. Although most of the time they act roughly as administrators or follow the cue of more powerful national governments, copyrestriction laws and enforcement are ultimately in their courts. As industries that could gain from copyrestriction grow in developing nations, those national governments could take on leadership of increasing restriction and enforcement, and with less concern for civil liberties, could have few barriers. At the same time, some developing nations could decide they’ve had enough of copyrestriction’s inequality promotion. Wealthy national governments could react to these developments in any number of ways. Trade wars seem very plausible, actual war prompted by a copyrestriction or related dispute not unimaginable. Nations have fought stupid wars over many perceived economic threats.

The traditional copyrestriction industry is tiny relative to the global economy, and even the U.S. economy, but its concentration and cachet make it a very powerful lobbyist. It will grab all of the revenue and control it possibly can, and it isn’t fading away. As alluded to above, it could become much more powerful in currently developing nations. Generational change within the content industry should lead to companies in that industry better serving customers in a digital environment, including conceivably attenuating persecution of fans. But it is hard to see any internal change resulting in support for positive legal changes.

Artists have always served as exhibit one for the content industry, and have mostly served as willing exhibitions. This has been highly effective, and every category genuflects to the need for artists to be paid, and generally assumes that copyrestriction is mandatory to achieve this. Artists could cause problems for copyrestriction-based businesses and other organizations by demanding better treatment under the current system, but that would only effect the details of copyrestriction. Artists could significantly help reform if more were convinced of the goodness of reform and usefulness of speaking up. Neither seems very likely.

Other businesses, web companies most recently, oppose copyrestriction directions that would negatively impact their businesses in the short term. Their goal is not fundamental reform, but continuing whatever their current business is, preferably with increasing profits. Just the same as content industries. A fundamental feature of muddling through will be tests of various industries and companies to carve out and protect exceptions. And exploit copyrestriction whenever it suits them.

Administrators, ranging from lawyers to WIPO, though they work constantly to improve or exploit copyrestriciton, will not be the source of significant change.

Free and open source software and other constructed commons have already disrupted a number of categories, including server software and encyclopedias. This is highly significant for the future of copyrestriction, and more broadly, information governance, and a wildcard. Successful commons demonstrate feasibility and desirability of policy other than copyrestriction, help create a constituency for reducing copyrestriction and increasing pro-sharing policies, and diminish the constituency for copyrestriction by reducing the revenues and cultural centrality of restricted works and their controlling entities. How many additional sectors will opt-in freedom disrupt? How much and for how long will the cultural centrality of existing restricted works retard policy changes flowing from such disruptions?

Cultural change will affect the future of copyrestriction, but probably in detail only. As with technology change, copyrestriction has been incredibly resilient to tremendous cultural change over the last centuries.

Copyrestriction reformers (which includes people who would merely prevent additional restrictions, abolitionists, and those between and beyond, with a huge range of motivations and strategies among them) will certainly affect the future of copyrestriction. Will they only mitigate dystopian scenarios, or cause positive change? So far they have mostly failed, as the political economy of diffuse versus concentrated interests would predict. Whether reformers succeed going forward will depend on how central and compelling they can make their socio-political cause, and thus swell their numbers and change society’s narrative around information governance — a wildcard.

Scholars contribute powerfully to society’s narrative over the long term, and constitute a separate wildcard. Much scholarship has moved from a property- and rights-based frame to a public policy frame, but this shift as yet is very shallow, and will remain so until a property- and rights-basis assumption is cut out from under today’s public policy veneer, and social scientists rather than lawyers dominate the conversation. This has occurred before. Over a century ago economists were deeply engaged in similar policy debates (mostly regarding patents, mostly contra). Battles were lost, and tragically economists lost interest, leaving the last century’s policy to be dominated by grabbers exploiting a narrative of rights, property, and intuitive theory about incentives as cover, with little exploration and explanation of public welfare to pierce that cover.

Each of the above determinants of the future of copyrestriction largely hinge on changing (beginning with engaging, in many cases) people’s minds, with partial exceptions for disruptive constructed commons and largely exogenous technology and culture change (partial as how these develop will be affected by copyrestriction policy and debate to some extent). Even those who cannot be expected to effect more than details as a class are worth engaging — much social welfare will be determined by details, under the safe assumption that society will muddle through rather than make fundamental changes.

I don’t know how to change or engage anyone’s mind, but close with considerations for those who might want to try:

  • Make copyrestriction’s effect on wealth, income, and power inequality, across and within geographies, a central part of the debate.
  • Investigate assumptions of beneficent origins of copyrestriction.
  • Tolerate no infringement of intellectual freedom, nor that of any civil liberty, for the sake of copyrestriction.
  • Do not assume optimality means “balance” nor that copyrestriction maximalism and public domain maximalism are the poles.
  • Make pro-sharing, pro-transparency, pro-competition and anti-monopoly policies orthogonal to above dimension part of the debate.
  • Investigate and celebrate the long-term policy impact of constructed commons such as free and open source software.
  • Take into account market size, oversupply, network effects, non-pecuniary motivations, and the harmful effects of pecuniary motivations on creative work, when considering supply and quality of works.
  • Do not grant that copyrestriction-based revenues are or have ever been the primary means of supporting creative work.
  • Do not grant big budget movies as failsafe argument for copyrestriction; wonderful films will be produced without, and even if not, we will love whatever cultural forms exist and should be ashamed to accept any reduction of freedom for want of spectacle.
  • Words are interesting and important but trivial next to substance. Replace all occurrences of “copyrestriction” with “copyright” as you see fit. There is no illusion concerning our referent.

This work takes part in the and is published under the CC BY-SA 3.0 license.

dsc02482.jpg

Intellectual Protectionism’s regressive double taxation of the real economy

Sunday, April 29th, 2012

How Apple Sidesteps Billions in Taxes:

Almost every major corporation tries to minimize its taxes, of course. For Apple, the savings are especially alluring because the company’s profits are so high. Wall Street analysts predict Apple could earn up to $45.6 billion in its current fiscal year — which would be a record for any American business.

For anyone slightly concerned about inequality, this record ought to raise another red flag concerning the effect of copyright and patent monopolies. (Similarly, review a list of the wealthiest individuals.)

Apple serves as a window on how technology giants have taken advantage of tax codes written for an industrial age and ill suited to today’s digital economy. Some profits at companies like Apple, Google, Amazon, Hewlett-Packard and Microsoft derive not from physical goods but from royalties on intellectual property, like the patents on software that makes devices work. Other times, the products themselves are digital, like downloaded songs. It is much easier for businesses with royalties and digital products to move profits to low-tax countries than it is, say, for grocery stores or automakers. A downloaded application, unlike a car, can be sold from anywhere.

The growing digital economy presents a conundrum for lawmakers overseeing corporate taxation: although technology is now one of the nation’s largest and most valued industries, many tech companies are among the least taxed, according to government and corporate data. Over the last two years, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S.& P. companies’. (Cash taxes may include payments for multiple years.)

First tax: monopoly pricing. Second tax: burden shifted to entities less able to move profits. Remove monopolies for much good, then resume debate about all aspects of taxation per usual, as you wish.

Caveats:

  • Real economy usually refers to non-financial sector. Suggestions welcome for non-IP sector.
  • I may be double counting: without copyright and patent, “real” economy share of profits would increase, tax burden concomitantly.
  • Not all profits that are easy to move result from copyright and patent, e.g., I suspect a small proportion of Google’s profits are even indirectly resulting from such.
  • There are more non-IP than IP-related entities on record wealth and profit lists, in particular natural resource entities. I don’t claim IP is the dominant source of inequality — but surely an increasing one — and more easily mitigated than natural resource entities, or for that matter, dictators and other state entities, which I wish were included on rich lists.