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Thread: File-sharing: The Paradigm Shift

  1. #1
    SonsOfLiberty's Avatar The Lonely Wanderer
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    Dec 2008
    Capital Wasteland

    Great article I picked up and figured I would share

    People are realizing on a scale that is large and growing that the criminalizing file-sharing is ridiculous. Although many people have a gut feeling about why this is wrong, it is important, imo, for the pro file-sharing movement to be able to explain clearly why it is wrong if we expect to reach critical mass. This must go beyond flimsy moral arguments which mean little to those who do not already share your morals. Here, I share with you some objective information that will, I hope, lead you to agree that file-sharing of all content, copyright or otherwise, should remain legal.

    Although many arguments for or against file-sharing are littered across the internet and news media, it is rare to find arguments on either side of the fence which do not rely solely on one’s personal morals. Instead of parroting such arguments, I would instead like to fine tune your concept of file-sharing to what I hope can be agreed by all to be the irrefutable reality of it’s implications as it relates to the consumer market. After all, it’s all about the money and it is my hope that based on this bit of information the average person will be able to make an informed decision about whether or not they support keeping file-sharing legal.

    The paradigm in question here is how we perceive digital files vs. how we perceive physical property. For the sake of this blog, I implore you to chuck the concept of copyright as we will pick it up again later. For now, just pretend it doesn’t exist.

    Let’s begin by examining something just slightly more tangible, but very similar to digital files in the way it is currently treated; currency. More specifically, FIAT currency. FIAT currency does not derive it’s value from tangible commodities (ie; gold). Instead, the value of comes from a government’s will to accept it as payment for taxes and allow it to be used as legal tender for the payment of debts. Bear with me, as I will be relating this to file-sharing.

    The most famous example of FIAT currency is USD. Because the original value of US paper currency was set based on the value of gold, USD was originally agreed to be as valuable as gold. One dollar was agreed to be equal to one ounce of gold. However, because it is not bound to gold (a limited commodity), banks were eventually allowed to loan out USD at an infinite ratio to the amount they actually had in reserve.

    To put this into perspective, a bank with 100 ounces of gold could lend up to, but no more than, 100 ounces of gold. Once they ran out, they would have to wait for repayment before they could lend it again. Skipping ahead, FIAT currency allows banks to lend more money than they have in reserve, based on the assumption that this will be paid back, plus interest. However, in order for the bank to fill the demand for loans, the bank must have more money to lend once the cash reserve runs out. Because it is assumed that the money originally lent out will be repaid, this debt can now be viewed as an asset. The bank can show the government that the money is expected to return to them, plus interest, and the government prints more currency for the bank to lend out while waiting for that repayment. This is an oversimplified explanation based on my simple understanding of how currency works, but it will do well to help you understand the concept of file-sharing as a commodity.

    An important thing to note is that as more money is created, inflation occurs. Essentially, if the dollar was once at a 1:1 value with the gold ounce and the amount of printed dollars doubles while the amount of gold in reserve remains unchanged, there is now twice as many dollars as there are gold ounces, making the new value of the dollar .5:1 (2 dollars to 1 ounce of gold). In this example, the value of the dollar was cut in half. Each time more money is printed, it’s value per dollar goes down. When the amount of currency created goes too far beyond the rate of commodities available for purchase, the currency goes into what is called hyperinflation and has virtually no value whatsoever. Going back to the simple gold example, when the ratio becomes trillions of dollars (for example) to that one gold ounce, it can be seen clearly that the amount of gold will not increase as quickly as the amount of dollars. The gap between the commodity’s value and the purchasing power of the dollar becomes infinite, rendering the currency useless. No amount of dollars will ever be equal to one ounce of gold. This is why everything used to cost a nickle. ;-)

    Now let us look at another type of commodity. We’ll use music for this example. At one time, music was sold on some form of physical vessel (CDs, tapes, vinyl, wax cylinders, etc.). If one wanted to listen to music, one had to purchase such a physical medium. Because these physical items are a limited commodity, it makes sense that one would need to pay a retailer in order to own this physical property (remember, we are discarding the concept of copyright for the moment). It is clear to see that with physical property, there is a limited supply. Because supply is limited, the value for this product remains, so long as the demand for this product is equal to or greater than the supply.

    Enter the digital age. The .mp3 is to music what hyperinflated FIAT currency is to gold. Most of you will already see where I am going with this. While at one time the supply of music was limited to it’s physical distribution, digital media has made music an unlimited commodity. What does this mean in relation to how it is valued? It is simple, if the the supply is infinite and the demand is finite (limited to the number of humans who desire it), then the value for the commodity is zero.

    There you have it. The market value for digital music is zero.

    Now, let’s welcome copyright into the discussion. Because music is now an unlimited commodity, proposed copyright laws seek to impose false limits on this commodity via force of law. Although the law can criminalize the distribution of copyrighted music, it can not and will not ever, ever, make it any less than an infinite supply. It can not give real value to music based on supply and demand. It can only give perceived value to music based on law. It depends on people’s belief in that value and their willingness to pay that value.

    Therein lies the problem. A growing number of people around the world no longer agree that a particular arrangement of ones and zeroes that can be written to any digital storage device (ie; iPod), by any person, for free, maintains the same value as a physical commodity which can only be gained by purchasing it from one of a few suppliers.

    There is no law in capitalism stating that artists must be able to sell their music. Although this is something we have taken for granted, it was only ever possible for a fairly short period of human existence. Having been born and raised in a so-called capitalistic society, let me assure you that it is the responsibility of artists to ensure their survival by adapting to the market. Especially in this case, where the market absolutely will not, through any amount of force, adapt to the artist. Otherwise, they must work forty hours a week like most people. As a capitalist, artists will not gain my sympathy in their failure, because what they call failure, the rest of us call life. It’s a bitch. Get used to it. You are welcome to disagree with the capitalist philosophy, but that is how it works you commie.

    HIS conclusion:

    While licensing and patents are beyond the scope of this blog, the individual sell of all digital media is no longer viable. It is obsolete. That ship has sailed and the new ship has arrived, proudly displaying a skull and crossbones flag. Although it will be difficult for some to accept, particularly those who profit off such sales (a minority group, mind you), it is time to pull the plug and begin mourning (or celebrating) the death of this industry.

    Until then, it is up to you to decide whether hundreds of millions of people around the world should be criminalized for the sake of very few people continuing to profit. It is also up to you to share this information with others. I firmly believe that each person deserves the right to make a decision based on a genuine understanding of a situation. It is my hope that this will give you an opportunity to do make such a decision. Your comments are welcome.

    Source: Pirates Blog
    Last edited by SonsOfLiberty; 05-08-2009 at 02:20 AM.

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    megabyteme's Avatar PROF MALINGERER BT Rep: +18BT Rep +18BT Rep +18BT Rep +18
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    Apr 2009
    Using Mrs. Nussbaum's CC#
    I certainly agree that digital files have changed the law of supply and demand. Distribution costs have all but been eliminated. I recognize the author's goal and see his argument. It is a good one.

    I do have slight disagreement with the value of these digital files being zero. It is a fact that these files are available for that amount. I do not believe the value should be reduced to that point, however. In light of the diminishing production costs, as well as distribution -the value is marginal. We should be paying what the market will bear. People have stopped buying music, because we recognize that we are paying more than it should be. Songs should be portable (without restrictions) and be valued in the pennies. Producers, record companies, and retail stores are no longer necessary- their value has been reduced to zero. They need to dry up and go away.

    Very interesting article. I hope we start to see more perspectives such as this one in the near future. We have a battle to fight and we will only win it through the communication of ideas.

    Thanks, SoL!


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