{"id":2367,"date":"2009-04-17T17:15:00","date_gmt":"2009-04-17T22:15:00","guid":{"rendered":""},"modified":"2020-03-27T21:23:18","modified_gmt":"2020-03-28T02:23:18","slug":"its-economy","status":"publish","type":"post","link":"https:\/\/henrymelton.net\/2\/2009\/04\/17\/its-economy\/","title":{"rendered":"It’s an Economy"},"content":{"rendered":"

With the announcement today of the conviction of the Pirate Bay crew, various news blogs carried the news, and as usual, the angry chorus of righteous indignation by the file-sharing fans in the comments below each news article. I declined to participate, because there’s not much chance my words would be heard. <\/p>\n

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However, there were some memorable comments that I can only chuckle about, sadly.<\/div>\n
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“I support creative commons but I’m against IP.” I’ve seen this one time and again. It’s a sad result that an agreement built on top of copyright is seen as a counter to copyright. It’s the same way with the GPL, the GNU General Public License<\/i> that is the basis of much of open source software. CCC and GPL are copyright<\/b> licenses. They are successful because they have leveraged the strong (and getting stronger) protections for Intellectual Property, to the ends their supporters want. <\/div>\n
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The howls of the angry mobs that can be seen in today’s comment sections of the Pirate Bay news are the 21st century version of the 19th century Luddites (wiki link)<\/a><\/span><\/i>. The economy has shifted and the people who don’t understand it want to break the textile machines (or DRM) and insist that manufacturers do it their way. <\/div>\n
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We are shifting from an economy that makes physical objects to one that buys and sells IP. The rules about theft that applied for apples and bolts of cloth have had to change rapidly to allow for nano-cost duplication of digital objects of value; songs, movies, ebooks, etc. It’s not strange that many people don’t realize that yet. It’s sad that the Pirate Bay people, and a lot more like them, will go to jail because they don’t get it.<\/div>\n
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This shifted 21st century economy, what is it? Pretty simple. The Basics:<\/div>\n
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Pattern Cost<\/b> + ( Unit Volume <\/b>x Unit Production Cost<\/b>)<\/div>\n
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must be equal to or less than <\/div>\n
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Other Income<\/b> + (Unit Volume<\/b> x Unit Consumer Price<\/b>)<\/div>\n
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or else the creator of the product will go out of business.<\/div>\n
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Other Income<\/b> is startup funding or a Patron of the Arts gift or the artist’s dwindling bank account. Where the product is free to the consumer, this has to come from somewhere. Sometimes advertising can make up it up, sometimes people burn up their life savings.<\/div>\n
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In traditional manufacturing, the Pattern Cost<\/b> is divided up among all the sold units and becomes part of the difference between Unit Production Cost<\/b> and Unit Consumer Price<\/b>. The link between UPCost<\/b> and UCPrice<\/b> is obvious to everybody, and the popular myth is that, because digital duplication costs are miniscule, the price should go to zero. The reality is, that pesky Pattern Cost<\/b> won’t go away, and because of the history of old-style manufacturing, most consumers have no idea how big it actually is. It was always hidden before.<\/div>\n
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An ethical marketplace can exist with digital distribution. The various music stores are proof that it can be done. Now it’s just a matter of trial and error finding the correct mix of prices that can sustain the artists and the merchants without souring the customers.<\/div>\n
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What’s really not ethical are the downstream duplicators, leeching off the ethical markets. Whether CD bootleggers lining their own pockets or the thriving torrent websites, whether done free by gift culture people gaining their own cred or the commercial sites selling advertising\u2013none of them feeding anything back up to cover that Pattern Cost<\/b> problem.<\/div>\n
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To misquote a politician, “It’s an economy, stupid!” The people who don’t understand that are likely to get a few bruises before it’s all done.<\/div>\n
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With the announcement today of the conviction of the Pirate Bay crew, various news blogs carried the news, and as usual, the angry chorus of righteous indignation by the file-sharing fans in the comments below each news article. I declined to participate, because there’s not much chance my words would be heard. However, there were… Continue reading It’s an Economy<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[112,287,288,289],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p4t90x-Cb","_links":{"self":[{"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/posts\/2367"}],"collection":[{"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/comments?post=2367"}],"version-history":[{"count":1,"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/posts\/2367\/revisions"}],"predecessor-version":[{"id":2368,"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/posts\/2367\/revisions\/2368"}],"wp:attachment":[{"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/media?parent=2367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/categories?post=2367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrymelton.net\/2\/wp-json\/wp\/v2\/tags?post=2367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}