Subject: Re: crux of the essence
From: "tony stanco" <>
Date: Tue, 16 Oct 2001 23:05:14 -0400

>I do not necessarily disagree or agree.  I don't understand the

My posting had more to do with the postings of others that tried to fit
intellectual activities into the pigeon holes that were built for a
different time. Modern day economics was invented to explain phenomena that
was occurring independently of the explanations in the first place. So, if
our time is not explainable by traditional concepts, it is the concepts that
need to change, not the activities that obviously are working (e.g., Free
Software development).

>I intended to argue that we could return to copyright
>-- including the requirement that material to be protected be
>identified rather than the idea that everything is 'born owned'
>(Berne owned?); that copies be made available for educational
>purposes; that protection be  quite limited (ransom?); and that
>equipment owners not necessarily own all material created by the
>Do you intend your implication to be that we could simply afford more
>error in the creation of information markets when physical goods were
>critical and thus that copyright was fundamentally flawed from the
>beginning? And now we need a less flawed mechanism for assigning
>rights? And what would that be?

I am not sure what you mean. What I meant is that property rights in
physical things were invented, because the scarcity and exclusionary
characteristics of physical things implied that to make the best use of
those things meant that people had to compete to show their best use was
better than another's. How this was done was that price was used as a proxy
for the best use under the assumption (right or wrong) that the person who
would pay the most had the best use. [And if he didn't, the system was
sufficiently self-correcting that that person would lose money and couldn't
continue suboptimally for very long]. This whole system was built upon the
characteristics of physical things.

Since you wanted to get things to the highest and best use, the system had
to give property rights in things, so that people could own them and trade
them, since to get things to their best and highest use meant that trades
had to occur to get them there.

What is ultimately important here is to realize that what is paramount is to
maximize societal benefit. In other words, society allows people to act in
personal self-interest if and when it works to increase societal wealth at
the same time. Society therefore created a system of private property
rights, contract rights, etc.. because that system worked for physical

That system worked great for 300 years. Now we get to a time where the
important things are no longer physical but intellectual -- software being a
great example. Since few people work from first principles, but rather work
from analogy, they can't see that intellectual things are different. So they
say it is property, intellectual property in fact (even if it doesn't have
the characteristics of property). And they want to apply the same legal
rules and principles of economics that were applied to physical things. But
it doesn't work as anticipated. It doesn't create the greatest societal
benefits. It creates inefficiency. It creates monopolies. It creates very
powerful people-- too powerful for a democracy. Therefore, society looks for
new answers.

The answer will be what system maximizes societal benefits.  Once we see
what that is (say it is Free Software Development in software), society
creates the rules, laws, myths, structures and explanations to support and
justify it.

Since the current ones rely on the foundations of physical things, there is
no reason for them to be the same for intellectual things, when the
essential characteristics of physical and intellectual things are so
different. One is defined by exclusion and scarcity (i.e., increasing
marginal costs). The other by inclusion (or by creating communities) and
decreasing marginal costs.

Going to first principles with intellectual things you see that people are
important, not physical things. So the new time is going to be about
people's rights, not property rights. The system will have to find a new
balance between private and public, so that societal benefit is maximized
while at the same time giving the producers (the people) some incentive to
act in societal interest. But it is unlikely to be anything like what we
have now.

Society is unlikely to let Disney or Microsoft have what they want. Why?
because society no longer needs the corporate organizational form to create
the greatest good. It did for physical things. But it doesn't need it for
intellectual things. The corporate form was created to finance the huge
capital projects of the Industrial Age. In the Intellectual Age, you only
need people to act together and they can organize themselves without
corporate organzation as GNU/Linux has definitively proved.

We are only in a transitional period as society tries to rearrange. If we
really want to try to figure out conceptually the end state, instead of
letting trial and error work for a decade or two, then we need to go to
first principles and realize the world is completely different. Don't look
at property rights. Don't look at the current corporate organization of
production worldwide. Look at the people. Unlike the production of the last
300 years, people is all that is required to produce in the new Intellectual

To try to explain the new world in the terms of the old is as likely to work
as trying to explain the Industrial Age in the theory, laws and myths of the
Feudal Age while you still lived in the Feudal Age and didn't know what was

On the other hand, this could be completely wrong :)

>I would like to learn more about information ownership in non-Western
>culture. Does anyone have a scholarly reference for that? I have a
>world copyright book but it really just traces compliance with
>Western concepts of copyright after the end of Colonialism. Clearly
>those concepts of ownership as embedded in non-western cultures
>failed in comparison with the information ownership of the West with
>respect to harnessing the power of printed information for innovation
>but this does not mean that the other models will fare worse for
>harnessing digital information.
>At 20:15 -0400 10/16/01, tony stanco wrote:
>>  >>At 3:35 -0700 10/16/01, Tom Lord wrote:
>>>>Seriously though -- if you can cite a particularly relevant piece of
>>>>economic theory worth reading to get good ideas about the business of
>>>>software -- especially free software -- and give convincing reasons
>>>>for that cite, I'd like to read it.  Personally, I'm skeptical:
>>>>software has all sorts of structural properties for which there is no
>>>>good precedent in the history of human economic activity, as near as I
>>>>can tell.  Surely you disagree...
>>>Jean Camp wrote
>>>I think perhaps the creation of copyright is the analogy. Copyright
>>>is taken as a given now but it was quite radical when created. As the
>>>press matured the regulation of information based on the scribal
>>>model was found intolerable. Of course in any nation the regulation
>>>of the press was tired to the revolutionary  age of the seventeenth
>>>and eighteenth centuries. Yet in all nations copyright was found to
>>>be the only reasonable way to control information.
>>It is at least arguable that all economic theory of the last 300 years was
>>premised on the concept of property, because it was trying to explain the
>>Industrial Revolution and is therefore .....
>>The new world of intellectual things are essentially different. They are
>>most efficiently produced by inclusion, not exclusion or competition to
>>same degree. It is arguable that traditional economics, therefore,
>>nothing in the new age and sends us in the wrong direction.  Of course,
>>can disagree and probably do...