Friday, April 19, 2013

Avast, Ye Scurvy Dogs!

American Teeth has a great piece on [IP] piracy that would fit right in here at EE. The crux of the argument:
If euvoluntary exchange is always just, then for piracy to be wrong it has to break one of the rules above. However, for piracy to be stealing, it has to break the same rule that stealing breaks, in the same way. This is where the argument that piracy is stealing breaks down, because, as I will show, stealing is a coerced transaction and piracy is a transaction with an uncompensated externality. It's a rule five [coercion by human agency] violation versus a rule four [uncompensated externality] violation. [emphasis in original]
To me, there are two parts to discussions of IP. There's the practical, consequential bit, summarized nicely in the Tabarrok Curve, and  there's the deontological, perhaps metaphysical question of ownership. When I buy a recording, am I buying the excludable media on which the non-excludable composition is imprinted? Am I buying an aetheric arrangement of airborne distortions? Am I buying the pleasure the music brings?

The consequential arguments are easy to address. It's an empirical claim whether or not online piracy impinges on the Income Statements of record labels. I'm not so sure the other questions can be answered quite so simply. The discipline of economics has a lot to say about the nature of ownership. Here's what probably the greatest microeconomist of the 20th c. wrote about property rights:
A property right is the exclusive authority to determine how a resource is used, whether that resource is owned by government or by individuals. Society approves the uses selected by the holder of the property right with governmental administered force and with social ostracism. If the resource is owned by the government, the agent who determines its use has to operate under a set of rules determined, in the United States, by Congress or by executive agencies it has charged with that role.
Private property rights have two other attributes in addition to determining the use of a resource. One is the exclusive right to the services of the resource. Thus, for example, the owner of an apartment with complete property rights to the apartment has the right to determine whether to rent it out and, if so, which tenant to rent to; to live in it himself; or to use it in any other peaceful way. That is the right to determine the use. If the owner rents out the apartment, he also has the right to all the rental income from the property. That is the right to the services of the resources (the rent).
Finally, a private property right includes the right to delegate, rent, or sell any portion of the rights by exchange or gift at whatever price the owner determines (provided someone is willing to pay that price). If I am not allowed to buy some rights from you and you therefore are not allowed to sell rights to me, private property rights are reduced. Thus, the three basic elements of private property are (1) exclusivity of rights to choose the use of a resource, (2) exclusivity of rights to the services of a resource, and (3) rights to exchange the resource at mutually agreeable terms.
-Armen Alchian in The Concise Encyclopedia of Economics

This idea of alienability, that one of the most important, perhaps the most important stick in the bundle of rights, is absent (or at least muted) whenever whizzing electrons are involved is an interesting puzzle for folks like me who are interested in the intersection between philosophy, economics, and policy. The very notion of what conventional ownership is is at stake in this debate. It's tough to claim euvoluntarity when one of the core assumptions is at the crux of the squabble.

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Do you have suggestions on where we could find more examples of this phenomenon?