Piracy is a Social Threat

21Jan12

In an election year that is likely to be decided by which candidate has the best plan to solve the US debt crisis, it does seem somewhat ironic that a measure that will, as a side effect, make that task somewhat easier and less painful for the average voter has become the focus of such vitriolic protest. The US in particular, but the Western World in general, is moving away from the manufacturing base that led their pre-eminence in the world- the new economy, we are told, will be a knowledge economy- an ideas economy. An important aspect of this future economy will be the artistic output of videogame designers, musicians, movie makers, etc. Without protection of their revenue through copyright protection, then the simple fact is that it will become increasingly economically unviable to produce this content. Given the standards of some of this content, we might be moved to say that this is not necessarily a bad thing, however the success of much of this content would suggest otherwise for more than a few.
Although academics and economists like to paint a picture of a future world where economic activity exists without the stimulus provided by money, there are some deep holes in their prognostications- namely if we do not need money to buy products and services that satisfy our needs and wants, where is the motivation to go out and earn money by producing said goods and services? Leaving aside the debate about what ultimately drives economic activity, it is still a fairly obvious fact that money is a prime motivator and enabler of our daily activities. While it is true that money cannot buy happiness, it makes the search for happiness a little easier. But as the European debt crisis reminds us, we can live beyond our means for a while- perhaps a long while- but sooner or later we have to pay.
There is no doubt that the SOPA legislation before Congress is a ham-fisted attempt to resolve the problems of copyright infringement. There seem to be few, if any, safeguards for those caught in the middle, the ISPs and site hosts, from being maliciously targeted by competitors or even just the garden variety of ratbag. But to suggest that the underlying principle is a threat to freedom of speech is a big stretch. At its heart, SOPA is meant to ensure that the efforts of corporations and individuals are protected through a more stringent interpretation of the requirements of copyright law. This is not a situation where content is being banned from the internet in toto- it is a situation where pirated content is being targeted.
If, as its supporters maintain, the internet is a modern miracle enabling the production and dissemination of new sources of content, then such targeting should not be seen as a threat. While we might grumble over the details of the legislation and the protections contained within it for innocent third party hosts, there is nothing in the legislation that specifically targets other than pirated content. So to claim that such efforts are likely to change the internet for the worse, then we must treat the prognostications of the true believers with a bit more scepticism. To claim that the SOPA legislation is inherently flawed brings into question the prognostications of the true believers; if the internet relies on pirated content for its survival, then it is an ultimately doomed vehicle. The threat is in not protecting copyright, business is likely to pursue ever more extreme protections- perhaps even abandoning the internet as we know it for some alternative that allows them to earn money.
One of the more interesting facets of the book-reader revolution that has been overlooked is the ability of publishers and retailers to access your content and delete it. It is true that, for now, this threat has been largely undone by public outcry at the few instances when it was tried. Or, rather, the threat of public outcry. But if the alternative is bankruptcy, it will not take too much for this reticence to be cast aside. Indeed, there is something of a legal principle that you can take back or destroy property that is rightfully yours. While this might not sit well with the average person, a corporation that sets out to target illegally obtained content, as opposed to the device on which it is stored, is not likely to face too many problems in the courts. There could be an argument for trespass, but a corporation should be able to get around that by simply not trespassing- simply releasing the requisite virus into general circulation should take care of that.
At $58billion dollars, the loss of revenue from pirated content is something that should concern us all. The tax revenue on the profits alone is hardly likely to be small change, no matter how many tax loopholes corporate accountants are likely to find. Moreover, the multiplier effect from this amount of money circulating in the world economy, much less the US economy, would go some way to improving the outlook for the future. And it is the future that should concern us.
Economic growth and prosperity in the future is going to increasingly rely on the generation of knowledge and ideas. We are currently facing a situation in which the nations producing that knowledge and ideas are unable to find a way to make them pay. Yet the infrastructure that supports the generation of knowledge and ideation costs money- bucket loads of money. The education system, universities and so on are all reliant on the fact that government is able to pay for them. But if the government finds itself in a situation where it cannot generate revenue through taxes because individuals and corporations are unable to raise revenue because their content is being pirated, then the support mechanism for those ideas will dry up- and then those ideas will dry up. It can be a virtuous circle; right now it is a vicious circle.
We are all reliant on the generation of revenue. Individuals need the revenue provided by capital returns, salaries, wages, etc. Businesses need revenue provided by sales. Governments need revenue provided by the taxes on businesses and individuals. In order to generate this revenue, we need a healthy economy. If the future healthy economy is one reliant on ideation and knowledge, then it is going to be vital to protect them. It is not a threat to freedom of speech; it is not an invasion of privacy. Ultimately, just as defeating the pirates on the high seas ultimately allowed 18th century trade to flourish, defeating the pirates on broadband will ultimately allow 21st century trade to flourish.
As an aside-
The decision by the government to again subsidise the auto industry is a matter of deepest shame. No matter the excuses trotted out by the relevant ministers and spokespeople, it was clear from the outset that this decision was meant to save a few parliamentary seats at the next election- or rather not lose them two years out. And despite the protestations of the Liberal Party to the contrary, there is no doubt that they would have made the exact same decision had they been in power for much the same reasons- the slim hope of gaining or retaining seats at the next election. How much is this latest effort likely to cost- although initial estimates are $1billion the broader question is how much is it going to cost in missed opportunities? What would $1 billion in subsidies mean for the tech sector or medical research or any one of a dozen more worthy industries?
We are forever being told that Australia’s future economic prosperity is going to rely on the establishment and support we provide future industries. Yet this decision is a lifeline to an industry that surely must be well past the used by date in this country. If it was an industry sector producing for export it might be a different matter- but it is increasingly an industry that is producing vehicles that Australians do not even want. Of course the real irony is that a modicum of intelligence and a bit of inspiration would suggest that a truly Australian motor vehicle, a vehicle designed to meet the challenges offered by this continent, would surely be an export winner. But these are qualities lacking in the motor industry more generally- international motor companies are now masters of preserving themselves by suckling at the teat of government largesse instead of through innovation and development.

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Tags: economics, piracy, SOPA, tax