Fanboy Politics and Information as Rhetoric

News has to be subsidized because society’s truth-tellers can’t be supported by what their work would fetch on the open market. However much the Journalism as Philanthropy crowd gives off that ‘Eat your peas’ vibe, one thing they have exactly right is that markets supply less reporting than democracies demand. Most people don’t care about the news, and most of the people who do don’t care enough to pay for it, but we need the ones who care to have it, even if they care only a little bit, only some of the time. To create more of something than people will pay for requires subsidy.

-Clay Shirky, Why We Need the New News Environment to be Chaotic

There are few contemporary thinkers that I respect more on matters of media and the Internet than Clay Shirky, but his comment about how much reporting “democracies demand” has bothered me since he wrote it nearly a year ago now. I think the point of view implied in the quoted section above misunderstands what reporting really is, as well as how democracies actually work.

To understand the former, it helps to step away from the hallowed ground of politics and policy and focus instead on reporting in those areas considered more déclassé. The more vulgar subjects of sports, technology, and video games should suffice.

Fanboy Tribalism

One of the most entertaining things about The Verge’s review of the Lumia 900 was not anything editor-in-chief Joshua Topolsky said in the review itself. No, what I enjoyed most was the tidal wave of wrath that descended upon him from the Windows Phone fanboys, who it seemed could not be satisfied by anything less than a proclamation that the phone had a dispensation from God himself to become the greatest device of our time. The post itself has over 2,400 comments at the moment I’m writing this, and for weeks after it went up any small update about Windows Phone on The Verge drew the ire of this contingent.

The fanboy phenomenon is well known among tech journalists, many of whom have been accused of fanboyism themselves. It’s a frequent complain among the Vergecast’s crew that when they give a negative review to an Android phone, they are called Apple fanboys, when they give a negative review to an Windows Phone device, they are called Android fanboys, and so on.

To the diehard brand loyalist, the only way that other people could fail to see their preferred brand exactly the same way that they see it is if those other people have had their judgment compromised by their loyalty to some other brand. So Joshua Topolsky’s failure to understand the glory that is the Lumia 900 stems from the fact that he uses a Galaxy Nexus, an Android device, and his Android fanboyism makes it impossible for him to accurately judge non-Android things.

There came a certain moment when I realized that fanboy tribalism was a symptom of something innate in human nature, and that you saw it in every subject that had news and reporting of some sort. It may have become cliché to compare partisan loyalty with loyalty to a sports team, but the analogy is a valid one. Just as there are brand fanboys, there are sports team fanboys and political party fanboys.

Back in Middle School, I got really wrapped up in this–as a Nintendo fanboy. I had a friend that was a really big Playstation fanboy, and we had the most intense arguments over it. I don’t think I’ve ever had arguments that got as ferocious as those since–not about politics, not about morality, not about anything. We would each bring up the facts we knew that each of us thought should have made it obvious which console was superior and then get infuriated that the other side didn’t immediately concede defeat. I personally always came prepared with the latest talking points from Nintendo’s very own Pravda, Nintendo Power Magazine.

Cognitive Biases and Group Dynamics

Cognitive science has a lot to say about why people act this way. A lot of progress has been made in cataloging the various biases that skew how human beings see the world. Acknowledging that people have a confirmation bias has become quite trendy in certain circles, though it hasn’t really improved the level of discourse. My favorite trope in punditry these days is when one writer talks about how a different writer, or a politician they disagree with, can’t see the obvious truth because of their confirmation biases. Ignoring the fact that the writer himself has the very same bias, as all humans do!

Most of the discussion around cognitive biases centers on how they lead us astray from a more accurate understanding of the world. The more interesting conversation focuses on what these biases emerged to accomplish in the first place, in the evolutionary history of man. The advantages to cementing group formation in hunter gatherer societies is something that has been explored by moral psychologist Jonathan Haidt in his recent book The Righteous Mind. Arnold Kling has an excellent essay where he applies Haidt’s insights to political discourse.

The fact is that even in our modern, cosmopolitan world, we human beings remain a tribal species. Only instead of our tribes being the groups we were born among and cooperate with in order to survive, we have the tribe of Nintendo, the tribe of Apple, and the tribe of Republicans.

When the Apple faithful read technology news, they aren’t looking for information, not really. They’re getting a kind of entertainment, similar to the kind that a Yankee fan gets when reading baseball news. Neither have any decision that they are trying to inform.

Political news is exactly the same. When a registered Democrat reads The Nation, we like to think that there is something more sophisticated going on than our Apple or Yankee fan. But there is not. All of them might as well be my 13-year-old self, reading the latest copy of Nintendo Power. The Democrat was already going to vote for the Democratic candidate; it doesn’t matter what outrageous thing The Nation article claimed that Republicans were doing lately.

Information as Rhetoric

I think that the fear that there might not be enough truth-seekers out there fighting to get voters the salient facts about the rich and power is misplaced for a few reasons. For one thing, in this day and age, it is much easier to make information public than it is to keep it secret. For another, it is rarely truth-seekers that leak such information–it is people who have an ax to grind.

The person that leaked the emails from the Climate Research Unit at the University of East Anglia wasn’t some sort of heroic investigative journalist type with an idealistic notion of transparency. They were undoubtedly someone who didn’t believe in anthropogenic global warming, and wanted to dig up something to discredit those who did. He was a skeptic fanboy, if you like, and he wanted to discredit the climate fanboys.

The people that get information of this sort out to the public are almost always pursuing their own agendas, and attempting to block someone else’s. It’s never about truth-seeking. That doesn’t invalidate what they do, but it does shed a rather different light on getting as much information as “democracies demand”. Democracies don’t demand anything–people have demands, and their demands are often to make the people they disagree with look like idiots and keep them from having any power to act on their beliefs.

To satisfy either their own demands or that of an audience, some people will pursue information to use as a tool of rhetoric.

How Democracies Behave

Let us think of this mathematically for a moment. If information is the input, and democracy is the function, then what is the output?

I’m not going to pretend to have a real answer to that. There’s an entire field, public choice, with scholars dedicating a lot of research and thought to understanding how democracies and public institutions in general behave and why. My father has spent a lot of time thinking about what impact information in particular has on political and social outcomes. I am no expert on any of these subjects, and will not pretend to be.

I will tentatively suggest, however, that people do not vote based on some objective truth about what benefits and harms us as a society. I think people vote based on their interests. That is, narrow material interest–such as whether a particular law is likely to put you out of work of funnel more money your way. But also their ideological or tribal interest–whether it advances a cause you believe in, or a group you consider yourself a part of.

So I don’t really see a reason to insist on subsidizing journalism. All that will accomplish is bending those outlets towards the interests of the ones doing the subsidizing.

From Politics to Porcelain

I must study Politicks and War that my sons may have liberty to study Mathematicks and Philosophy. My sons ought to study Mathematicks and Philosophy, Geography, natural History, Naval Architecture, navigation, Commerce and Agriculture, in order to give their Children a right to study Painting, Poetry, Musick, Architecture, Statuary, Tapestry and Porcelaine.

John Adams

Think of the market as a set of magnets, pulling people into dense clusters. 80 percent of the population of the US lives in a large city’s metropolitan area, and the top 10 metropolitan areas alone account for a quarter of the population. Cities like Chicago and New York pull people not only from all over the country, but from all over the world. As new people are born and raised in each metropolitan area, the market sorts out where their skills would best be put to use. If it’s somewhere other than where they are, the magnet is engaged to pull them to the new destination.

People are not only pulled towards locations, but towards careers and towards investing in particular skillsets.

The actual mechanism in the place of the figurative magnets is not always as straightforward as offering more money to live in one place than another, or to take one career track over another, but it often is. There are other things, too, such as what professional development courses and training your current employer is willing to pay for you to take.

Taking as my inspiration the John Adams quote at the top of this post, I’m going to argue that the mechanisms the market uses to pull people into particular locations and career paths grow weaker as a population grows wealthier.

Where Have All the STEM Majors Gone?

It’s a disconcerting question for many an analyst of education in the US–why are we graduating so few majors in science, technology, engineering, and math? Alex Tabarrok has the numbers:

Consider computer technology. In 2009 the U.S. graduated 37,994 students with bachelor’s degrees in computer and information science. This is not bad, but we graduated more students with computer science degrees 25 years ago! The story is the same in other technology fields such as chemical engineering, math and statistics. Few fields have changed as much in recent years as microbiology, but in 2009 we graduated just 2,480 students with bachelor’s degrees in microbiology — about the same number as 25 years ago. Who will solve the problem of antibiotic resistance?

If students aren’t studying science, technology, engineering and math, what are they studying?

In 2009 the U.S. graduated 89,140 students in the visual and performing arts, more than in computer science, math and chemical engineering combined and more than double the number of visual and performing arts graduates in 1985.

Anyone can see that the average computer science major is going to make more money than the average visual arts major. The market has engaged the magnets and students aren’t budging.

Education isn’t the only area where the magnets’ strength are waning. According to the New York Times:

The likelihood of 20-somethings moving to another state has dropped well over 40 percent since the 1980s, according to calculations based on Census Bureau data. The stuck-at-home mentality hits college-educated Americans as well as those without high school degrees. According to the Pew Research Center, the proportion of young adults living at home nearly doubled between 1980 and 2008, before the Great Recession hit.

What is going on?

Lower Stakes, Greater Sacrifice

Let’s compare two hypothetical individuals, Tom and Harry. Tom is a 20 year old living 50 years ago, and Harry is a 20 year old today. My general hypothesis is that there are lower stakes for Harry’s decisions than for Tom’s, and that anything which requires a great deal of time and effort requires Harry to give up more than Tom had to.

Let’s consider Harry first. In the immediate term, he has an enormous amount of options for how to spend his time. There’s cable TV, the internet, video games; a whole myriad of stuff. Any field of study that takes up a lot of his time means giving up time doing any of that. As Tabarrok described, the average individual like Harry today chooses majors that not only demand less of his time–thus giving him more time to play video games–but are also enjoyable in themselves, such as the visual arts. After college, if he can’t get a job in anything resembling what he majored in, he can probably live with his parents, where he’ll still be able to enjoy many of the things he was already doing with his free time.

Now consider Tom. Sure, he probably had access to TV, but it wasn’t as pervasive as it is today, and it had like three channels. There were no video games, there was no internet or web; there weren’t even personal computers. If he picked a major that was a dud in the marketplace, maybe he could live with his parents–though he was less likely on average than Harry to be able to, as parents today are much wealthier than parents were fifty years ago–but what would he do there? Fifty years ago you needed more money to be able to get anything approaching the level of options that Harry has available almost by default.

Consider the different stakes: if Tom doesn’t get his career going, he becomes a burden on a family that might not be able to afford it, and he is also probably bored out of his mind and increasingly isolated. Harry, on the other hand, is much more likely to have parents who can afford that burden, and he has much more to do while he lives with them. He can entertain himself, and he can talk to people online; you may argue that the latter isn’t as fulfilling as in-person socializing, but it’s far less lonely than having no one to talk to.

Now consider what each has to give up by pursuing a STEM career: Harry loses out on hours of gaming, movies, TV, browsing the web, talking to people on Twitter, and so on. Tom doesn’t have any of that to lose.

The decline in the portion of men who are employed has been a secular trend for decades.

It has been hidden in the general population employment ratio because of the entering of women into the workforce. Note, however, that though the portion of women who are employed has grown, it still has never reached the level that men have fallen to now, during a soft labor market.

The good news is that we are so wealthy as a society that fewer men need to work than they used to. The bad news is that our wealth is making it harder to convince people to do the difficult work required to make the kinds of material breakthroughs that people in the STEM fields are able to make. It has likewise grown harder to convince them to move away from their friends and family in order to go to the city where their particular skillset might have the greatest impact.

Studying Porcelain

John Adams was right–the mathematical, architectural, and commercial know-how of our ancestors has made it possible for more of us to study poetry and comparative literature. When people are bemoaning the lack of STEM majors and labor mobility, they should remember that the whole point of wealth is to provide us with more options. If someone is more satisfied spending their time reading and writing fiction rather than learning statistics or trigonometry, there is nothing wrong with that. They can increase our overall wealth just as much as a scientist can, if they produce things that are valued by a lot of other people.

On the other hand, it takes STEM skillsets to cure cancer or build self-driving cars, and the per-capita amount of people with those skillsets continues to fall in this country.

Still, I’m not too concerned. The vast majority of the world is nowhere near as wealthy as we are. Engineers, programmers, and chemists are being trained in unprecedented numbers in countries like China and India, and for the most part the whole world will benefit from their advances. As those countries grow wealthier, they’ll experience the same phenomena, but we’ll still be talking about enormous numbers of people with STEM skillsets. And we’re a long ways off from the developing world reaching a level of wealth comparable to the US or Western Europe.

 

Semi-Related Reading:

Publicness and the Modern Career

This week, I accepted a new job. It will be a big change for me–among other things, I will be leaving the DC area and moving to New York. I may talk about that in more detail some other time. For now, I’d like to focus on how a blog post I wrote three years ago and a recent connection on LinkedIn made it possible for me to get this job in the first place.

Writing

I love to write, and I always have. It is one of the few true constants across my entire life. These days, anyone with a love for writing should be putting their work online. If you are already going to be investing the time and energy to write something, you might as well put it where people might conceivably find it. At minimum, it makes it easier to share with friends and family who are geographically scattered. At best, you open yourself up for a lucky break.

I have been blogging since November of 2004, when I was 19 and my interests were primarily politics and philosophy. I had been writing online in one form or another for years before that, but it mostly involved arguing about religion or video games or whatever I happened to feel strongly about at the time in various forums. Blogging was different; it became my method of choice for thinking out ideas through writing.

The early stuff I wrote was variably juvenile or pretentious, or both, but the mere act of doing it helped me to get better over time. The more I did it, the more I found I enjoyed it, and the easier it came to me.

In late 2008 I started a new blog specifically for longer analytical pieces on technology and new media. I wanted a blog that I could point potential employers to without the risk that while they were there they might stumble into some dumbass thing I had written when I was 19. They would have to go to the extra effort of googling me to do that!

Medialets

Back in 2009, an app analytics company called Pinch Media released a slideshare presentation based on data they had on iPhone app usage. It went viral, briefly becoming the talk of the tech blogosphere, and even getting a nod from the Onion. I took issue with the way the angle tech blogosphere coverage was approaching it from, and also with how some of the data was presented in the slideshare itself.

So I wrote a critique on my blog, fully expecting that it would only be seen by the handful of friends and family who usually read my posts. Shortly after posting it, the analyst for Pinch Media jumped in with some salient remarks in the comments section, which was a fun surprise.

Then I was contacted by someone from a company called Medialets, which at the time was one of Pinch Media’s competitors in the mobile analytics space. Rana, one of their cofounders, asked if I would be open to talking on the phone.

We talked, and she floated the idea of maybe having me work with them on a project by project basis. It was definitely more interesting than the job I had at the time. But I did have a job, and grad school, and a girlfriend in DC, and family and friends in northern Virginia. I spent a lot of hours driving between all of them, with very little free time left afterwards. So I was interested, but I didn’t follow up, and they didn’t either. I followed Rana and Eric Litman, Medialets’ CEO, on Twitter. After a while, I noticed that Rana had left the company for other ventures, so I assumed I was unlikely to have any dealings with them in the future.

Then, a little over a month ago, Google’s Bradley Horowitz connected to me on LinkedIn for reasons that remain a mystery to me. But I figured he was probably connected to some interesting people, so I looked. I saw Eric, and remembered him from my previous encounter with his company, and thought–why not? So I connected with him.

In the time since my last interaction with Medialets, I had added an MA in economics and a job in online ad operations to my resume. It just so happened that they were looking for someone to work in ad operations, so Eric reached out to me about a job.

Living in Public

New media is not a panacea; it still takes experience and education to qualify for a job, and that isn’t going to change. But your ability to do a job is far from the only thing that determines whether or not you get it. To start with, your potential employer has to know you exist.

Jeff Jarvis has recently championed the benefits of living in public, and one of those benefits is definitely that it creates the opportunity to be discovered. If the kind of work you want to do involves skills that can be demonstrated online, you should be demonstrating them.

But there is more to what a person would be like as an employee than what skills they have. One of the benefits of the various social networks we’re on is that people can get a feel for our personalities over time. While this may not be a perfect indication of what we would be like to work with, I think it’s fair to assume that everyone prefers to work with people they like rather than people they don’t. If you have a blog that puts your skills and personality on display then you are creating the possibility that someone will grow to like you, someone who either has a job you are qualified for or knows someone that does.

Take Eli for example. His blog just oozes social science smarts. If you are looking for a young, brilliant economist, reading his blog should be enough to convince you that he’s your guy. Moreover, you really get a sense of what his interests are, as well as of his sense of humor. I had a class with him years ago, but I really came to know his personality afterwards, by talking to him on Twitter and reading his posts.

Jeff Jarvis thinks that we are in the midst of a moral panic about privacy concerns, and I tend to agree. The privacy conversation is an important one, and we need to have it, but we should be very careful not to undervalue what each of us can get from moving more of ourselves into the public.

My First Year With the Kindle

I am not a music person. Don’t get me wrong, I enjoy listening to music. But my taste in music has never been an important part of my identity, and listening to music has never really been something I devoted a whole lot of time to. For that reason, the iTunes revolution didn’t impact my life quite as dramatically as it did for some people I know, for whom music is a very crucial part of their lives.

What do matter to me are books. I read a lot of books, and always have. However, the digital revolution in books lagged way behind the one in music. We can’t know the reason for this, but there’s one story that intuitively makes sense to me. By the time the web was born, CDs were already the primary way we were getting our music, and CDs were a digital format. It was trivially easy to rip songs from those CDs to our computers, which made piracy just as trivially easy once people started going online in large numbers. This created pressure to create legitimate, low-cost alternatives to Napster. In the publishing industry, however, we were still working with essentially the same “analog” product that humanity has known since Gutenberg; a physical, printed book. It takes a big time commitment to scan books page by page to turn them into something digital.

Amazon had built its empire on book sales, and despite the fact that they had started selling just about everything else under the sun, they weren’t about the rest on their laurels. Jeff Bezos knew the digital disruption would be coming to books eventually, and he wanted to own it rather than have Apple or someone else come in and dominate the future of a category that had been Amazon’s bread and butter. Learning the lesson of the iPod, he would offer a device with a tightly integrated content ecosystem. In 2007 he announced the Kindle, which was just such a device.

The Kindle basically created the market for ebooks, and has dominated that market as a result. Barnes and Noble’s Nook is in a distant second, and Apple’s iBook store has less than half of Barnes and Noble’s market share (source).

The Kindle and Me

Despite my love of reading, I waited for years before I took the plunge. In 2009, after Amazon deleted people’s copies of Orwell’s 1984, I thought I might never trust them enough to buy into their ecosystem. However, after the PR firestorm that rained down on them after that, I’m confident they wouldn’t pull it again–as the big fish in the ebook pond they are being scrutinized very closely, so they’re unlikely to be able to accomplish it by stealth, either.

2009 was the first year where I was really tempted, too, as I moved out of my parents’ place and into an apartment, which meant moving my books. I left behind the majority of my books, but the ones I took still amounted to a ton of boxes. Knowing that this was not going to be my last move, I started wondering whether physical books were worth the hassle.

I wasn’t really pushed over the edge until last year. I can pinpoint a single event that did it–the publication of Tyler Cowen’s The Great Stagnation. It wasn’t just that a brilliant economist at the school I got my MA from was publishing a purely digital book. It was also that just about everyone in the economics blogosphere was talking about it. It was a $4 digital book that kicked off a fascinating debate and, really, set many of the parameters of the discussion around our current economic predicament. After watching this unfold, I couldn’t help myself–I really, really wanted a Kindle.

I asked for it for my birthday, which was three months later. Now, almost a year later, I currently have 62 items on my Kindle. I have read a ton, to put it mildly.

To put it plainly, I love my Kindle, and I love the Amazon ecosystem. The device itself is much lighter to hold than a book is. You don’t have to worry about holding it open or turning pages, so you can hold it with one hand. The fact that it isn’t a fully-featured computing device is definitely a plus in terms of avoiding distractions. I can also read my books on just about any computer–from my iPhone to my laptop. If I forget my Kindle at home, I can still continue whatever book I was reading by logging into my Amazon account and reading it in the browser.

2011 turned out to be a year where a lot of Great Stagnation-style, straight to digital short, cheap books came out. The other one that drew a similar amount of attention was Erik Brynjolfsson and Andrew McAfee’s Race Against the Machine, but there were also Ryan Avent’s The Gated City and Alex Tabarrok’s Launching The Innovation Renaissance. I read blogs by all of these people, and when they announced their books, it was just too easy to follow the Amazon link and click “Buy now with 1-Click”. As my friend James Long eloquently put it, “any interesting Kindle book which costs less than $5 feels free to me because of a floating point error in my internal processor.”

Similarly, when bloggers or people on Facebook or Twitter that I trust recommend a book that is less than $2, it is hard to resist snapping it up. Authors and publishers are clearly learning to take advantage of this–I recently read Child of Fire, a fantasy novel that goes for $0.99. The price of the next book in the series jumps up to $5.99, and the third one goes up to $7.99.

To legacy publishers, ebooks may seem like a mixed bag as they threaten their margins. To authors who haven’t been able to make it big in the old system, however, there are new opportunities. Take Tim Pratt, whose Marla Mason series was cancelled before it was finished due to lack of sales. So he serialized the book on the open web and sold the complete version directly through the Kindle store. He was among the first to call my attention to the growth that indie authors with a strong fan following were seeing for the Kindle titles when he tweeted the following:

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I’ve talked about how Scott Sigler has taken advantage of the ebook scene–I actually just finished reading Nocturnal on my Kindle before I started writing this post (though that one came out through his publisher). And Amanda Hocking captured everyone’s imaginations last year when it became clear that she was making some serious money off of her Kindle sales.

One thing I don’t like about Kindle books, compared to print books or just open, non-proprietary digital standards, is that my friends can’t borrow my books. With a print book, if I love it and have a friend I think would too, I can just hand it to them. While a subset of Kindle books have “lending” enabled, where you can let one other Kindle user read it through their account, most Kindle books do not.

However, Kindles keep getting cheaper and cheaper. The cheapest one right now is $79, and I will bet good money that we’ll eventually see a $20 one. In a world with $20 Kindles, having a secondary one that you lend to your friends seems a lot more plausible.

And one thing I love about Amazon as a company is how relentlessly they push down prices. One of the books on my Kindle right now is an item from their Lending Library. If you have Prime membership and a Kindle device, you can get one book a month for free from a subset of their catalog that are part of the program. I just read the entire Hunger Games series this way, without paying a penny.

In short, I have really enjoyed my first year in the Kindle ecosystem. It’s really a very exciting time for anyone who loves to read.

The Value of Intellectual Products

Ultimately it comes down to common sense. When you’re abusing the legal system by trying to use mass lawsuits against randomly chosen people as a form of exemplary punishment, or lobbying for laws that would break the Internet if they passed, that’s ipso facto evidence you’re using a definition of property that doesn’t work.

-Paul Graham, Defining Property

According to the RIAA, our current failure to enforce copyright has cost us $12.5 billion per year in economic losses, and over 70,000 jobs a year. The message: piracy makes us poorer and leaves tens of thousands of people per year unemployed.

I don’t think I can do a better job of responding to that sort of estimate than Rob Reid did recently with his short Ted Talk.

Putting aside the methodologically questionable cost calculations, some have argued that unless a mechanism exists for rewarding creators whose creations we value, we won’t get those creations at all–or at least, not very many of them.

I believe that this is the only question that matters.

Priorities

I don’t care how many jobs are created or how much revenue the IP rights-holders make in a given year, or even if they make any revenue at all. All that matters is how much value ends up being created for consumers.

When I put out this idea on Twitter, Eli disagreed.

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A discussion ensued.

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And the answer, in my opinion, is that we want them to do that in a way that maximizes the value to consumers in the long run. Along the way, this will inevitably provide value to producers, but that value will be fleeting, as we find increasingly efficient ways to do what they do. The important thing is to consider the value provided to consumers, for as Bastiat said, “the interests of the consumer are the interests of the human race.”

In our role as consumers, it is in our interest for everything to be plentiful. In our role as producers, it is in our interest for whatever we produce to be scarce. Scarcity is poverty, abundance is wealth.

In short, our priority should be to arrive at the arrangement that provides consumers with the maximum amount of value from intellectual products. If we could provide exponentially more value to consumers from intellectual products but their producers were unable to make a dime, that would be a net improvement. That’s not the situation, but I think it’s clarifying to keep that extreme scenario in mind.

Trade-Offs

To us it seems pretty obvious that people always want to treat it as a pricing issue, that people are doing this because they can get it for free and so we just need to create these draconian DRM systems or ani-piracy systems, and that just really doesn’t match up with the data. If you do a good job of providing a great service giving people… as a customer I want to be able to access my stuff wherever I am, and if you put in place a system that makes me wonder if I’ll be able to get it then you’ve significantly decreased the value of it.

Gabe Newell, co-founder of Valve

What does not help is when consumers are pushed into something by reducing their options elsewhere. When Americans pay a premium above the global price for steel or sugar, it isn’t because they value those commodities that much more than their international counterparts; it is because policy has restricted the number of alternatives available to them. This approach destroys wealth rather than creates it, leaving only a handful of producers better off at our expense.

Every policy that the big content lobbies have pursued have been of this nature. From the copyright extensions to bills like SOPA; they have sought to extract more value for themselves individually by shrinking the pie for the rest of us. All while telling us that it’s for our own good.

Their efforts always come at the expense of the honest customer who isn’t trying to game the system. Meanwhile, they have done nothing to curb piracy, which remains trivially easy.

Eli recently wrote out a thought experiment where we were in a world in which enforcing laws against murder became as hard as it currently is to enforce intellectual property laws. His argument:

Suppose a new technology were introduced that made it easy to get away with murder (e.g., David Friedman’s plan for Murder Incorporated). This technology makes it extremely costly, though, say, not impossible, to stop murders from occurring. What happens to the optimal amount of murder enforcement? The amount that must be spent to deter each murder has gone up, so the price of deterrence has gone up. Consequently, society should aim to deter fewer murders.

I was a little skeptical of where he was coming from…

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But he elaborated that what he was trying to say was that “if even laws against murder should be sensitive to enforcement costs, then it makes sense to also make copyright law sensitive to enforcement costs.”

Here’s what makes sense to an economist but sounds horrifying to most non-economists:

If we are looking at Eli’s scenario from the point of view of the objective goal of maximizing the number of lives we save, then logically, we must accept his conclusion.

Say his murder technology made it so that it would take $80 billion in order to save a single person from being murdered. Say, in theory, that we could have spent that $80 billion on buying enough penicillin to save 8,000 people’s lives. Clearly, it makes more sense to spend it on those vaccines–if saving lives is really your goal.

All of this is to say that there are always trade-offs, and while the goal you have in mind may itself be subjectively chosen, the trade-offs themselves are absolutely objective. We can’t always know what they are, but they’re not something you can just wish away.

And really, that’s what the IP lobby’s strategy so far has come down to–trying to wish digital technology and the Internet away. But they are not going anywhere.

The New Balance

There is going to be more piracy than there used to be. That is the new reality that we are all going to have to live with.

Fortunately for us, we’re not living in Eli’s nightmare murder scenario–this technological shift brings with it benefits as well as challenges. In fact, I would argue that the benefits dramatically exceed the downside, from the perspective of value being made available. For example, you get a kind of “production as consumption” that occurs–people who like to write or illustrate or take pictures and share them online with an audience of uncertain but probably limited size. This very post is an example of that. I value the ability to share my writing with others, however few they may be in number.

More to the point, you get near costless replication of digital content, and near costless distribution around the world. Has the rhetoric around IP protection reached a point where I really need to actively argue that those are very good things?

Alarmism aside, the big IP rights-holders are not exactly hurting for money. Services like iTunes, Cable TV, and Netflix are making money hand over fist for them. Apple has paid billions to developers of apps alone–who are also producers of intellectual products. Then there are services like Kickstarter which allow consumers to pitch in for the up-front costs of creating intellectual products, and services like Paypal which make it easy to donate.

So the mechanisms to reward creators in the new digital landscape already exist, and new ones are being built all the time. Consumers have demonstrated that they are willing to open up their pocketbooks and use those mechanisms when it’s for something that they genuinely value.

So how should we be rethinking intellectual property enforcement, and intellectual property law itself, moving forward? I turn again to Eli:

In fact, the cost of deterrence has increased so much that we should begin to rethink copyright law. We could increase the benefits of deterrence if we targeted only high-value infringements. This means that we should shorten the term of copyright, since high-value IP tends to be newer IP (in fact, copyright terms have increased in recent decades, a move in the wrong direction). We might consider expanding “fair use” copyright exemptions to include more non-commercial uses, since commercial infringements are more likely to diminish the value of a copyright. Most importantly, we should withdraw public resources from the enforcement of IP violations. Private enforcement through the tort system has a built-in safety valve: when the cost of enforcement rises, people will do less of it. But the criminal system is essentially a public subsidy for enforcement; no wonder that pro-copyright factions are attempting to criminalize copyright infringement through SOPA and other legislation.

The bottom line is that recent expansions of copyright terms and enforcement powers get the comparative statics exactly backwards. In an age of costly enforcement, it’s time to give up, at least at the margin, on copyright. And at the margin, content creators should just be more polite to content consumers.

We need to loosen, but not eliminate, IP law and IP enforcement.

In the long tail, creators are already doing what needs to be done–focusing on creating value rather than on fighting against technological destiny. Witness Scott Sigler, who has built up enough of a fan base to make a living doing what he loves. Or the numerous webcomic artists who have managed to support themselves while still giving away their primary product for free.

I think that eventually, the big IP rights-holders will adapt to the latest technological shift just as they adapted to VHS, cassettes, and vinyl records in the past. For instance, big publishers are starting to reduce the uncertainty of their investments by waiting for people to make it big online before drafting them to the major leagues, so to speak.

We are simply in a transitional moment. Eventually our institutional arrangements will make full use of the advantages that digital technology and the Internet provide for creating value.