In the previous post, I argued that there's not much point in selling information, the same way you sell books, essentially because you can replicate information ad nauseaum. In this post I wish to make the point that, while it is indefensible to argue that exchange of information between private parties without commercial interest should be regulated, there is a case to made regarding regulations of exchanged information in the context of business.
Before delving deeper into this, I'll just give two examples: I can buy a book, and digitize its information and give to someone else. No law should stop this behaviour. But I should not be allowed to sell that information, for the right to commercialize it should (during some time) be an exclusive of the book's writer. The same could be said about software. While it is unjustifiable to have the legal system meddle in a private individual's communications just to protect economic interests, it is justifiable to do so in order to regulate commercial activity. This was the original scope of copyright law. Of course, back then, there was no easy way to exchange huge amounts of information (whether for commercial purposes or not). But nowadays there is, and so the only way to enforce a monopoly on information trade (which is what copyright essentially is) is to regulate the communication between the parties that are trading it. Which is, like I said above, acceptable for business, but unacceptable for the private communications of the citizenry.
What this means is that you can establish a functioning marketplace, without trumping basic privacy rights. But wait, does that mean that someone might try to corrupt the idea outlined above, and declare that to buy a book, you must first sign a form declaring that you will not share with anyone? After all, buying a book is a commercial transaction, right? Well yes, but unless you're buying it to be used in a (for-profit) enterprise, then the transaction should fall outside the scope of copyright. To put this another way, if you are using someone else's work (or more accurately, the information produced from it) to make a profit, then it is acceptable to have the law regulate that process, and guarantee a fair retribution to that someone else (as long as the copyright has not expired). This incentives innovation, and the creation of new works---exactly the result one expects from copyright.
Remember that we are talking about information that was published (i.e. made available for sale) voluntarily: at no point was there anything resembling information theft. What I propose is that information made available in such a fashion can be used and distributed by private parties with no commercial intent, and no interference from the law. It is only when using such information in profit-seeking enterprises that it becomes justifiable to regulate the process through legislation.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Sunday, 30 October 2011
Saturday, 22 October 2011
On selling
Selling is exchanging something---anything---for money. Now, there's not much point in selling something that nobody cares to buy. And, from the consumer's ("buyer")
point of view, there's absolutely no point in buying something that you
either don't want, or if you do want it, that you can make it yourself.
In other words, for that exchange to take place, there must be "something in it" for the seller, as well as for the buyer.
This model has stood the test of time: it is as old as business itself. Underlying it, is a fundamental assumption: that after some good has been exchanged for some amount of money, just as the buyer is no longer in possession of that amount of money, the seller is no longer in possession of the good that has been sold. This works well specially when what's being sold either can't be copied, or when doing so would have a higher cost to the buyer than the seller's price. But what happens when what's being sold is something as ethereal as, say, information?
Information might be ethereal, but we, humans, are not. Therefore, with the possible exception of when we're thinking about it, we have to bind information to some material support. Before digital technology, that binding use to be definitive: once you've printed a book, you cannot use the same ink and paper to print a different book. But when someone sells a book, he's not selling just the material support, or just the information on it---he's selling the whole bundle. And while it's true that to the buyer of a book, the information is more valuable than the support it exists on, it is not less true that information without some kind of support is largely useless. Except for the lottery numbers, or the code to arm a nuclear warhead, nobody buys information without some physical support (just imagine what it would be like to sell the contents of The Da Vinci Code, in its platonic ethereal form---a true Mission Impossible). And for this reason, there is not much point in selling information, per se. Or is there?
Enter digital technology, and some years later, the internet. Of the many changes, good and bad, that these two advances in technology brought to society, the one that is clear beyond the shadow of a doubt, is that information is no longer bound to some material support, and irreversibly so. We still need some form of support to interact with information, viz. screens and keyboards, etc. but we no longer have to transmit the support in order to transmit the information. Furthermore, when we say transmit, we actually mean copy: after I send something to you, we both have it. Now it is paramount to understand the magnitude and the implications of such a change. If before the internet age selling a book (or a newspaper) could be considered a way to transmit information (and to fund the work needed to compile and organize that information), afterwords, selling information is, at best, a one time deal. Because that first buyer can then spread that information world wide, with essentially no effort or additional cost. Obviously, that would have been impossible before the internet age. This poses an enormous challenge to the enterprises that base their business models on distributing information when it was permanently bound to some material medium---paper, plastic slabs, magnetic tape, or whatever else. But it does not change the fact it makes no sense to sell information in and on itself. Also note that after that first sale, both the seller and the buyer are now in possession of the information that was sold.
To explain this from another angle: what justifies that first sale is that the information has value to the buyer, and that's why he pays for it to the seller. I.e. he pays for the work needed to produce that information. But nobody will pay the seller for the distribution of copies the information he produced, because the internet has removed all economic value from the process of distribution (because now anyone can do it, hence nobody is going to pay for it). This has always been the case with mathematics and physics: as any book written about those subjects (no matter how valuable to science) is unlikely to become a best seller, funding could not come from distribution. Given that now distribution brings ever more dwindling revenues, such a scenario will become more widespread.
But we're going astray. My contention here is that you cannot sell information in and on itself. And that is not because information is somehow special: you cannot sell anything that the buyer can easily do or copy himself, because, well, he's going to do or copy it himself. There's no added value. In the case of information, there is (a lot) of added value in producing it, and so people will pay for it (yours truly here included), but there is absolutely no value in retail selling it, for the reasons set forth above.
This model has stood the test of time: it is as old as business itself. Underlying it, is a fundamental assumption: that after some good has been exchanged for some amount of money, just as the buyer is no longer in possession of that amount of money, the seller is no longer in possession of the good that has been sold. This works well specially when what's being sold either can't be copied, or when doing so would have a higher cost to the buyer than the seller's price. But what happens when what's being sold is something as ethereal as, say, information?
Information might be ethereal, but we, humans, are not. Therefore, with the possible exception of when we're thinking about it, we have to bind information to some material support. Before digital technology, that binding use to be definitive: once you've printed a book, you cannot use the same ink and paper to print a different book. But when someone sells a book, he's not selling just the material support, or just the information on it---he's selling the whole bundle. And while it's true that to the buyer of a book, the information is more valuable than the support it exists on, it is not less true that information without some kind of support is largely useless. Except for the lottery numbers, or the code to arm a nuclear warhead, nobody buys information without some physical support (just imagine what it would be like to sell the contents of The Da Vinci Code, in its platonic ethereal form---a true Mission Impossible). And for this reason, there is not much point in selling information, per se. Or is there?
Enter digital technology, and some years later, the internet. Of the many changes, good and bad, that these two advances in technology brought to society, the one that is clear beyond the shadow of a doubt, is that information is no longer bound to some material support, and irreversibly so. We still need some form of support to interact with information, viz. screens and keyboards, etc. but we no longer have to transmit the support in order to transmit the information. Furthermore, when we say transmit, we actually mean copy: after I send something to you, we both have it. Now it is paramount to understand the magnitude and the implications of such a change. If before the internet age selling a book (or a newspaper) could be considered a way to transmit information (and to fund the work needed to compile and organize that information), afterwords, selling information is, at best, a one time deal. Because that first buyer can then spread that information world wide, with essentially no effort or additional cost. Obviously, that would have been impossible before the internet age. This poses an enormous challenge to the enterprises that base their business models on distributing information when it was permanently bound to some material medium---paper, plastic slabs, magnetic tape, or whatever else. But it does not change the fact it makes no sense to sell information in and on itself. Also note that after that first sale, both the seller and the buyer are now in possession of the information that was sold.
To explain this from another angle: what justifies that first sale is that the information has value to the buyer, and that's why he pays for it to the seller. I.e. he pays for the work needed to produce that information. But nobody will pay the seller for the distribution of copies the information he produced, because the internet has removed all economic value from the process of distribution (because now anyone can do it, hence nobody is going to pay for it). This has always been the case with mathematics and physics: as any book written about those subjects (no matter how valuable to science) is unlikely to become a best seller, funding could not come from distribution. Given that now distribution brings ever more dwindling revenues, such a scenario will become more widespread.
But we're going astray. My contention here is that you cannot sell information in and on itself. And that is not because information is somehow special: you cannot sell anything that the buyer can easily do or copy himself, because, well, he's going to do or copy it himself. There's no added value. In the case of information, there is (a lot) of added value in producing it, and so people will pay for it (yours truly here included), but there is absolutely no value in retail selling it, for the reasons set forth above.
Saturday, 10 September 2011
Emprego, inovação & a "big picture"
Um colunista da CNN diz que os empregos estão obsoletos, o que levou a uma longa discussão no HN. Aqui pelo burgo, onde obsoletos ou não, os empregos são cada vez mais uma raridade, o senhor do vídeo em baixo embebido diz que o que é preciso é que a malta que sai das universidades, em vez de mandar CV's para as empresas, e depois dizer: "pronto está aqui o meu CV, agora arranje-me um emprego" é preciso que o pessoal aprenda a vender o seu trabalho. Toda a gente que eu conheço teve uma reacção unânime ao ver este vídeo: elogios de louvor. Bem, toda a gente menos eu.
Não quero com isto dizer que o senhor esteja errado naquilo que diz: muito pelo contrário, acho que está absolutamente certo. No fundo o que ele diz é que cada trabalhador deve saber ser um "micro-empresário": deve saber "vender" o seu "produto" (neste caso, o seu trabalho). O conselho não é novo: já em 2005, Joel Spolsky dizia essencialmente o mesmo:
Então, qual é a minha objecção a isto?
Simples: isto empurra-nos para uma sociedade que tem uma dependência crítica da inovação. Esta última, que tanto nos deu de bom, quando forçada deste modo, faz com que comece a haver um incentivo para que se resolvam problemas que ninguém tem. Para usar uma expressão mais sucinta, cria-se um incentivo para começar a "manufacturar a procura" (manufacturing demand). Dito de outro modo, a necessidade de inovações que continuem a fazer com que o dinheiro circule é tanta, que começa a fazer sentido que para além de criar um produto, se crie também o mercado para esse produto. O marketing e a publicidade passam a ser tão (ou mais!) importantes do que o produto sobre o qual incidem.
E qual é o problema que isto tem?
Só incentiva as "inovações" que dão lucro, e incentiva muito mais as que o fazem a curto prazo, do que as que dão lucro a longo prazo (as empresas só começam a pensar no longo prazo depois de o curto prazo estar assegurado). E isto é mau por várias razões. Primeiro, porque torna quase impossível que alguém que não seja rico dê algum contributo à sociedade que não seja gerador de lucro---e há muitas formas de riqueza que vão para lá do dinheiro. Segundo, isto leva-nos a um ciclo vicioso em que a dependência da inovação é cada vez maior. Se por alguma razão, houver algum período em que o ritmo a que surgem empresas novas e ramos de negócio novos diminui---e assumindo que os padrões demográficos se mantêm---isso significará mais desemprego, com todas as consequências que daí advêm. E depois lá virão os political pundits do costume, dizer como é necessário investir na inovação, na criação de emprego, no aumento da produtividade, etc. Em suma, continuar a tratar os sintomas, enquanto se faz de conta que a doença não existe.
Miguel - Prós e Contras (20-06-2011) from José Carlos Oliveira on Vimeo.
Não quero com isto dizer que o senhor esteja errado naquilo que diz: muito pelo contrário, acho que está absolutamente certo. No fundo o que ele diz é que cada trabalhador deve saber ser um "micro-empresário": deve saber "vender" o seu "produto" (neste caso, o seu trabalho). O conselho não é novo: já em 2005, Joel Spolsky dizia essencialmente o mesmo:
Why should CS majors learn econ? Because a programmer who understands the fundamentals of business is going to be a more valuable programmer, to a business, than a programmer who doesn't. That's all there is to it.É claro que isto coloca todos os que escolheram outro ramo de estudos que não gestão, marketing ou economia, numa posição um pouco inglória, pois vão acabar por ter que estudar essas matérias na mesma. Mas esse parece ser o caminho a percorrer para criar mais emprego: criar mais empreendedores.
Então, qual é a minha objecção a isto?
Simples: isto empurra-nos para uma sociedade que tem uma dependência crítica da inovação. Esta última, que tanto nos deu de bom, quando forçada deste modo, faz com que comece a haver um incentivo para que se resolvam problemas que ninguém tem. Para usar uma expressão mais sucinta, cria-se um incentivo para começar a "manufacturar a procura" (manufacturing demand). Dito de outro modo, a necessidade de inovações que continuem a fazer com que o dinheiro circule é tanta, que começa a fazer sentido que para além de criar um produto, se crie também o mercado para esse produto. O marketing e a publicidade passam a ser tão (ou mais!) importantes do que o produto sobre o qual incidem.
E qual é o problema que isto tem?
Só incentiva as "inovações" que dão lucro, e incentiva muito mais as que o fazem a curto prazo, do que as que dão lucro a longo prazo (as empresas só começam a pensar no longo prazo depois de o curto prazo estar assegurado). E isto é mau por várias razões. Primeiro, porque torna quase impossível que alguém que não seja rico dê algum contributo à sociedade que não seja gerador de lucro---e há muitas formas de riqueza que vão para lá do dinheiro. Segundo, isto leva-nos a um ciclo vicioso em que a dependência da inovação é cada vez maior. Se por alguma razão, houver algum período em que o ritmo a que surgem empresas novas e ramos de negócio novos diminui---e assumindo que os padrões demográficos se mantêm---isso significará mais desemprego, com todas as consequências que daí advêm. E depois lá virão os political pundits do costume, dizer como é necessário investir na inovação, na criação de emprego, no aumento da produtividade, etc. Em suma, continuar a tratar os sintomas, enquanto se faz de conta que a doença não existe.
Miguel - Prós e Contras (20-06-2011) from José Carlos Oliveira on Vimeo.
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