Man Without Qualities

Tuesday, December 03, 2002

Who Is Sonny Galt?

Jane Galt is certainly correct when she writes, elegantly, as is her custom:

The fact that widespread file-sharing would destroy the source of the files that are shared does not mean that the file-sharers won't go right ahead and destroy it. What's stopping them right now isn't goodwill, but insufficient broadband, and the absence of relatively simple equipment for playing the files on television. There's an economic term for this: The Tragedy of the Commons. Initially it referred to the overgrazing of common land by villagers; since no one had any rights to graze, it behooved everyone to graze their sheep as much as possible, to get the grass before their neighbor did. The result was that overgrazing destroyed the common for everyone.

The Tragedy of the Commons is seen where property rights are eroded or non-existant. No one has an incentive to preserve the public good, so everyone takes as much as possible while the getting is good.

In the case of intellectual property, widespread copying essentially destroys the property right. There is no incentive for any one person to preserve the revenue stream that makes the IP good possible, because their selfish neighbors will destroy it anyway. Everyone copies instead of paying $10 to see the movie, or $18 to buy the CD. Even if they know that they are ensuring that there will be no more feature films, or money to develop new recording technology or promote bands, everyone will still copy except for oddballs with strict ideas about respecting ownership.

The Tragedy of the Commons (also known as the "Overexploitation of the Common Pool") has broad relevance in the field of copyright law. For example, this Tragedy relates in several ways to the widespread hostility to the Sonny Bono Copyright Term Extension Act.

Ms. Galt considers the effects of the Tragedy on the source production of new materials. Another consequence of the Tragedy is degradation through overexploitation of existing materials. For example, the estate of Cole Porter once licensed the wonderful song "I've Got You Under My Skin" to a third party without sufficient license terms limiting the expolitation of the song. The result was a toilet bowl cleaner commercial with the jingle "I've Got You Under My Rim." That was a disaster for the Porter estate, which received the seriously damaged song back from the licensee. With the toilet association established, the use of the song, say, at wedding receptions, in movies and in other classy Cole-Porteresque environments was obviously impaired, but the licensee didn't care that the damage done exceeded the value obtained by the licensee from the commercial. Media companies stuggle mightily to ensure that their works acquire only "desirable" (that is, profitable) associations in the public mind. Free copying makes that control impossible - and would lead to lots of uses like toilet bowl commericals for, say, Mickey Mouse.

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