Intellectual Property laws

I am not a huge fan of Intellectual Property (IP) laws.  I do think that people should be paid for the work that they do, but as the Writer’s Guild Association strike has shown, much of that money goes to big corporations, not the creators.

I do buy CDs, which I rip to iTunes or MP3s without the Digital Rights Management (DRMs) issues.  I own DVDs of many TV shows.  So I am not some peer to peer downloading fanatic.  But I really feel that the entertainment industry has gone too far.

Dean Baker who has the blog Beat the Press has a nice blog comparing counterfeits to unauthorized copying.


A true counterfeit good is intended to deceive the consumer. This would be an article of clothing supposedly by a famous designer, an original painting by a famous artist, or fake currency, all of which are intended to capture a far higher price in the market because the consumer is misled about their identity.

Unauthorized copy,

On the other hand, there are unauthorized copies which sell for prices that are far below the price for which the “real thing” would sell. This includes handbags and articles of clothing that may carry a designer label, but often sell for a small fraction of the designer label price. It is almost inconceivable that consumers don’t know that they are not getting the designer product.

What it all means for consumers and owners of IP

 This distinction is essential because with true counterfeits, the consumer is the victim. In the case of unauthorized copies, the victim is the company to whom the government has granted a monopoly over the sale of the item in question. The consumer is a beneficiary when they purchase an unauthorized copy at a price that is far lower than the price of the authorized version. For this reason, consumers are not likely to cooperate in efforts to stamp out the trade in [un]authorized copies. The government’s efforts to crack down on this trade is likely to meet the same fate as the Soviet Union’s effort to stamp out the black market trade in blue jeans, it didn’t work.

Dean Baker has written a couple of other reports regarding IP.  One is a new model of software development, another looks at the cost of text books, and the third focuses on the whole issue of IP including drug patents and copywright laws, it is a great overview.

Future posts on this topic will include how we force IP protections into trade agreements, how it is large source of revenue to offset our negative trade balance with other countries, and other fun stuff.



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