[ EEPI-Discuss ] Re: back to property rights etc

[Dan Krimm <djkrimbo@earthlink.net>]

At 2:20 PM +0100 5/26/05, David Tomlinson wrote:

...

>I will be quoting extensively from this paper
>http://ssrn.com/abstract_id=719777
>Copyright Class War and suggest that like
>http://ssrn.com/abstract_id=582602
>Property, Intellectual Property, and Free Riding it is worth reading in
>full as background.

Don't currently have time to read these in full, but I've read the
abstracts.  I tend to agree with them, but not necessarily with your
interpretation of them.



>In my view you are missapplying Coase and Property Rights are in
>conflict with your Social Contract (utilitarian view).
>
>http://ssrn.com/abstract_id=719777 Copyright Class War p282
>"Natural law suggests that doubts should be resolved in favor of the
>owner; the law of property, based on the concept of rivalrous land or
>chattels that can be possessed by just one person at a time, tends to
>skew the outcomes of cases toward the copyright owner. Copyright in this
>view is a sort of Lockean justice, whereby something becomes the
>property of its creator and the law merely confirms what the owner is
>already entitled to and specifies remedies for infringement. A statutory
>basis for copyright, on the other hand, implies a utilitarian approach
>that grants just enough to the author to stimulate the production of
>creative works, for the ultimate benefit of the public."

Sorry, Coase espouses a utilitarian strategy as I have learned it (in an
economics class) -- the idea is to create a market expression for social
value that otherwise does not enter into market dynamics.  I learned Coase
specifically in the context of allowing public/common goods and/or
externalities to be given market expression in the sense of "Pareto
efficiency" which is what economists talk about when they use the word
"efficiency" -- i.e., negotiations for outcomes where there is a net gain
or at least no net loss in value for all negotiators.  As I was taught,
Coase argued specifically that assigning property rights could allow
efficient outcomes under fair negotiations in cases where otherwise those
goods were not expressed in market incentives.

Copyright in the US is not about moral rights ("natural law"), it's purely
about economic issues.  US pushed hard to keep moral rights out of WIPO and
TRIPS.  It's only about incentives and compensation, here.



>> I'm very impatient with the suggestion that, just because artists create
>> art because they *want* to (they certainly do, I can attest to that
>> firsthand since I am a musician -- exclusively avocational these days),
>> they shouldn't get compensated for the societal value of that work.  It's
>> not ultimately about the selfish interests of artists, though I do have
>> those in mind as well.  It's about the value to society.
>>
>Coase or the Utilitarian view you can't have both.

Yes I can!  :-)  One author does not win an argument by fiat simply because
he is published somewhere.  I am allowed to disagree with Schaumann.  He is
not God, or even Pope Benedict.



>> Works left uncreated by one artist or group will never be created by
>> another artist/group to substitute.  In fact, as an artist ages, the older
>> artist will not create the works that would have been created by the
>> younger artist.  When artists fail to make works that they might have made
>> if they had enough resources, those works are forever lost to society, and
>> whatever value they may have provided is lost.
>>
>
>There is no limit to the art that should be produced or consumed, or any
>contraint on the resources to be expended. Yes that sounds like
>collective licencing to me.

Sure there are limits:  the market decides what it will use or not, and
that determines the remuneration to the creator (or assigned rightsholder).
If the market doesn't use (and remunerate) much, then the artist has less
resources to create more, and even a filthy rich artist can only create a
finite amount of works per unit time.

But yes, it is all about collective licensing.  I stand by that as a viable
option.



>http://ssrn.com/abstract_id=719777 Copyright Class War p281
>
>"Like its predecessors, the Statute of Anne principally benefitted
>publishers, granting them statutory monopolies for limited times.
>Authors were merely straw men, expected to assign their rights to
>publishers, who were enlisted by the publishers to enhance their case
>before Parliament.146 Nevertheless, for the publishers, asserting the
>rights of authors was a brilliant tactic. It was so good, in fact, that
>it is still employed today.147"

Yeah, but now, if we design the system the way it is newly technologically
possible to do so, we can bypass the need for a centralized publisher, and
the author can retain the rights directly.

The *whole reason* we are in an IP crisis today is because the power to
publish has been massively decentralized by new technology.  One cannot
ignore this fact in one's analysis.  This is exactly why I say we should
hold the content oligopoly to its rhetoric -- because the rhetoric now
supports the little guy in the distributed-platform era.



>> Artists (including me and all the musical artists I've ever known and
>> worked with) do want to get fairly compensated for the value they create,
>> because if it's good enough taken as a full collection of works there is an
>> expectation that they could collect a full-time living from the use of that
>> content and thus concentrate all their creative energies on the art instead
>> of having to cannibalize that energy to pay the rent with other means.
>> That is, it is to society's benefit that talented artists be enabled to
>> make art full time (not necessarily to become famous or filthy rich), and
>> that a market exist to express the value of their work for that purpose.
>> If they do it well, then they should be rewarded.  If they suck, then the
>> market should fail to compensate them.
>>
>There is no market, only an open ended tax.

There *is* a market:  rightsholders get remunerated according to popularity
of the use of the work.  It's proportional in the same way that aggregation
of individual transactions adds up to total social/market value.  (And the
overall rates are collectively negotiated -- collective negotiations still
constitute a market.)

Remember, I described a service model that does not entail a universal tax,
merely a surcharge on a dedicated music service which customers may
subscribe to or not as they wish, voluntarily.  Not all collective
licensing is compulsory and not all of it entails taxation.



>> In short, just because big record labels have abused the copyright paradigm
>> doesn't mean that some sort of property rights shouldn't apply to creative
>> works.
>>
>Yes it does, abuse often results in the forfit of rights (which was the
>wrong model in the first place).
>
>Copyright has been rendered obsolete by the internet where the consumer
>pays for distribution and storage, and the barriers to entry are about
>the same as producing a demo track for the music industry. (You can
>still have the music industry as a publicist, if you wish to use the
>venture capital model).
>
>Recorded music distributed on P2P is marketing not a product.

Geez, the whole distinction between promotion and distribution is being
eroded online.  The attempt to maintain this artificial split between
exposure and payment is becoming increasingly unsupportable, because there
is shrinking differentiation between "transmission for stream" and
"transmission for copy" online -- there is only "transmission".

Promotion *is* distribution, online, at the end of the road (we're still in
transition, but we need to prepare for the endgame).  The only way to deal
with it is to merge the two characteristics in a single integrated system.
It can be on a per-service basis or it could be on a per-Internet basis.
One way it becomes simply a license fee incurred by the music service, the
other way it looks like a sort of universal tax.  Personally I prefer the
dedicated service model, but if we can't get there I'd accept the
full-Internet model (as long as the auto-recommendation engines work well
on a distributed basis).



>> There is nothing to apologize for in suggesting taxation as a method of
>> governance.  Taxation is one valid response to the structural impossibility
>> of markets to address the production of public goods (and avoid negative
>> externalities) of value to society in general.  Even hard-line libertarians
>> tend to agree that things like military justify government and taxation.
>> It's not a matter of *if* taxation is justified *at all*, but *what*
>> qualifies as justified for taxation.
>
>I agree, popular music should not fall within the domain of government
>and therefore tax. There is a free market in Live Music constrained by
>physical property. That market would still exist and support artists and
>works of art.

Only big stars can make living off of live performing.  I know, I've done
the dance myself and danced with others as a sideman.  Here are some
structural problems with it (ignored by John Perry Barlow, of course -- the
Grateful Dead were a star act in the live performance world, massive
celebrities):

 - Small venues can only hold a moderate number of audience members, thus
limiting the productivity (dollars per performance) of live performing.

 - Getting into large venues requires also being able to guarantee large
audiences, and only stars can do that without significant risk.  (Venues
tend not to bring their own regular audiences.)

 - If your audience is geographically spread out, then it may be impossible
to get them together in one place at one time (everyone has different
schedules) in order to make a profit from live performing for them.

 - Depending on the scheduling of gigs, travel and accommodations on the
road can more than eat up performance fees.  The grass-roots live
performance market is highly unpredictable, spotty, and inefficient, with
tons of friction in the market.

Perhaps you'd like to see all non-star musicians get into the T-shirt
business.  But then they are in the T-shirt business and not the music
business.  That's the celebrity model right there: tangential value, not
direct value.  It skews the market incentives very badly.  A artist with a
great T-shirt and lousy music will sell more T-shirts than an artist with
great music and a lousy T-shirt.

As a musician, I want to get value because of the great music I make, and
not have to depend on getting into a completely different business selling
T-shirts (or whatever other tangential value you propose).

Without some sort of direct compensation for the *recorded* music, I'm
screwed, plain and simple.  Getting a fair return for recorded music is my
only hope for self-sufficiency as an independent musical artist making
high-quality music that appeals to a moderately sized audience.



>> To create a market, one must first create property rights.  I have to say I
>> don't take seriously the suggestion that we obliterate all property rights
>> to music compositions and/or recordings.  It just doesn't seem at all
>> politically feasible.
>>
>I thought it was a social contract (utilitarian), the BBC is supported
>by a hypothicated tax on households (the BBC prefers Licence Fee) and
>provides a Public Service. I don't think this is necessary for popular
>music, which can be supported by live performance. Although currently
>some BBC taxation goes to popular music and artists.

Who said we were talking only about *popular* music?????  Geezes pieces.

I don't give a sh** about popular music.  I'm talking about enabling *art*
music.  I'm not talking about the top of the popularity curve, but rather
the middle curve.  The stuff that does not kowtow to
least-common-denominator fads but rather appeals to enduring meaning on its
own terms.  It tends to have smaller audiences, but it means more to those
audiences than Britney means to the teenies.  It endures over a longer
term, and is much less fad-driven.  And there is a large untapped audience
out there that is not served by Britney but still has a hard time finding
the quality it wants that exists in the grass-roots.

I make progressive jazz and free improv.  I've worked with talented
singer-songwriters who make music that is not designed to get airplay on
ClearChannel radio.  There is an opportunity here in the new-technology
platform, but only if recorded music retains remuneration rights.



>> But in a digital-computing/network context the enforcement of
>> content-control rights is systematically problematic (hackers, the analog
>> hole, etc.).  Nevertheless, if as a society we deem it is of value to
>> create a market incentive to create creative works, then we have to assign
>> some sort of rights and ensure they can somehow lead to payment in
>> proportion to the aggregate social value of the works.  So instead of
>> control rights we fall back to remuneration rights, enforced at point of
>> access rather than enforced via a per-unit market transaction.
>>
>Good we have ditched control, but you still have a consumption based
>model for a non-rivalrious good. (A consumption based model is
>inappropriate, even a percentage of the fund, still creates pressure for
>the expantion of the fund (tax). And it is a unnecessary and unjustified
>tax.

Non-rival goods, yes.  Also non-excludable goods.  Add the two together and
you get public goods:

i.e., No Market

In order to create a market, you have to assign some rights.  Control
rights don't work (that's been part of my point from the beginning), so
fall back to remuneration rights.



>> But, taxing the distributed Internet is not the only way a viable service
>> model could be designed to replace content-control-based markets.
>>
>> We could enable bulk licensing for bulk catalogs, for example.  It could be
>> in the form of a voluntary collective license applied to dedicated music
>> services like Yahoo/LAUNCHcast, where you make your decision as a customer
>> on an all-or-nothing basis.  However, I wouldn't mind seeing law that
>> forces music services to allow any artist into their catalog on equitable
>> terms with any other artist (in return for the service being able to
>> include any work in its catalog at its own discretion).  In this model the
>> "compulsion" would not be on the user but rather on the service and the
>> artist in complementary ways.
>>
>Join the club or be excluded from recorded popular music ? It lacks
>control, but still creates scarcity of non-rival goods.

Not necessarily.  Some of these works will still be "ripped" from the
system and used outside the system (because strong DRM is assumed to be
absent, because that would be more dangerous to society than obliterating
all content rights).

You have, say, free P2P systems.  However, those who can pay for the extra
added value of an integrated service will still be attracted to the paid
service and generate royalties to the artists or assigned rightsholders.
(I'm assuming here that only the few acts that still crave fame and
celebrity will assign their rights, other DIYers will retain them.)

I'm sensitive to the difference between an elite market and the mass of
people in developing nations that cannot afford elite market prices.  So
let them have it for free legally.  But charge the premium service.  Or,
create taxation in the developing countries that is appropriate to their
income levels, but still allocate from collective pools according to use.

There are solutions to the inequities of IP that can be found without
destroying IP outright.  They are no more impractical than obliterating IP,
both would be difficult to push, given the strength of the IP industry
lobbies.  I don't see that your model is any more inevitable than mine --
in fact, both are tough hills to climb.



>> I actually feel that if such services were truly open to a full catalog (as
>> far as that is practical -- let's call it "open access, discretionary use"
>> in the form described above), such a service could feasibly "compete with
>> free" and we could reasonably allow free file sharing outside of such
>> systems into the domain of fair use, because it would not significantly
>> undermine the market.
>>
>If unrestricted filesharing would not preclude premium services, for
>people who valued the service (Exclusive or Collective Rights attempt to
>exclude unrestricted filesharing).
>
>> Not all "compulsory licensing" looks the same, and it shouldn't be painted
>> with the same brush.  Not all forms of blanket licensing involve "taxing
>> the Internet".
>>
>You don't understand my position.
>
>Currently the live music market supports artists (with a few rich and
>famous exceptions) and the recorded music market supports publishers. It
>is only the recorded music market that is under threat by the removal of
>copyright.
>
>Musicians would be required to perform for their income, as they do now.

You don't understand the reality of live performing as I've noted above.
This is not a viable market for anyone but the big stars, anyway.  Barlow
is an elite and I view his ideas as dangerous for artists taken as a whole.
In fact, Barlow makes his music money from publishing royalties (he is a
co-author of several Dead songs, and he gets mechanical and performance
royalties from sale and license of Dead recordings).

Your whole premise seems to be based on a fallacy.  If we rely on live
performance only, then we have absolutely given the market away to the
stars and celebrities only.  The grass-roots will *never* climb up into the
game without revenue from recordings according to actual merit.



>"Don't sell music -- sell musicians. Record companies are in a
>paradoxical bind. Sales of recorded music have been falling for five
>years running. But musicians are more in demand than ever among a host
>of media and advertising outlets, from film studios to fashion labels to
>liquor companies. So Jimmy Iovine, chairman of Vivendi Universal SA's
>Interscope Geffen A&M Records, reasons it's high time people like him
>look for more outside deals to take advantage of their artists' visibility."

"Sell celebrity" is what you're saying here.  That's not good enough for
me.  I want to sell the art, not the artist.  The artist is not what is of
value to society, only the art is what is of value to society.  The artist
is of value only as long as the artist continues to make valuable art.



>I would suggest the economic reality (rather than political will), is on
>my side. The social contract is a myth, that would continue to be used
>to tax the public on consumption on non-rival goods, and it is not even
>artists who are under threat.

I think you are at the very least premature in calling the game at this time.

The social contract may be a myth, but it could actually become reality.
Especially because the rhetoric of the social contract has been so deeply
embedded in the conceptuality of the present day.  If the social contract
became a reality, it would be good for society, because the star system
distorts culture in negative ways.

The problem with new tech is that content is now non-excludable (and making
it excludable would be too Draconian to contemplate).  Content does have
social value, and without a market expression for content in and of itself
society will have less of it and less quality of what it does have.
Culture will suffer (it has already suffered because the market has been
hijacked by non-content-based incentives).

I'm not suggesting my view is the low-hanging fruit by any means, but it is
the *right* thing to do for society, for artists, and for the balance of
culture.



>The model for a Public Good, is Taxation, not Property Rights (even
>under Coase). Property Rights are open ended and can imply control and
>the right of veto. Collective Rights are just a co-op, and exist to
>increase the effectiveness of the rights.

My understanding of Coase is that assigning property rights is specifically
an option with public goods and externalities in order to give them market
expression.  If you want to argue with my professor and the authors of my
textbook, I'll put you in touch...  ;-)

Property rights are not "open ended" -- they can be defined however is
appropriate to the specific context.  They can imply control/veto, but need
not mandate that control.  They can also be set up in a way that implies no
such thing.  You seem to have a very narrow view of the range of potential
for property rights.  Lessig's whole point was that these are not "typical"
physical property and thus should be treated differently.

I do think that "copy-rights" are no longer the issue in an online context,
because that implies control.  I do think that "usage rights" or
"performance rights" continue to make more sense.

Collective bargaining will then be necessary to maintain the balance of the
market at a collective level.

Dan

PS --

>I agree with David Wade about post, but for now the main issue.

To criticize one action of a current administration is not to be partisan.
It doesn't matter who the administration is, the comment was aimed at
structural/process characteristics of the US political system.  To call
that partisan is itself far more partisan than my comment on its own terms.
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