User talk:Mercury merlin
a thought experiment about the broken window fallacy and free culture
Imagine I am in possession of some digital content, which could be anything, a software program, a piece of music, a book or a film, a recipe, an expression of a mathematical formula, anything at all.
Imagine I have a friend, who requests a copy of that content. I could always deny him, and keep the content secret, or I can choose to make it available to him. Today's technology means that copy can be made and delivered to him at effectively zero cost to either of us. If there is any cost at all it is negligible, and can be wholly assumed by my friend, so all I need do is make the content available and he can do the rest.
If the content was created by me, or if I received it under a Creative Commons license, then the transaction would be legitimate under present law in most jurisdictions. Put that to one side for a moment, and add up the overall utilitarian effect of the transaction. Since my friend asked for a copy, presumably the digital content presumably had some utility, in an economic sense, whether artistic, functional, or in some other way.
Before the transaction, I had the utility of a copy, and after the transaction my friend had the utility of a copy, and I still also have the utility of a copy. No physical resources were consumed by the transaction, though it's possible some money might have changed hands.
Either way, after the transaction, the total wealth of society has increased by the utility of one copy of the content, as the economy still contains the same amount of money, the same resources, and two usable copies of the content where there was only one before.
My friend can now also make a further copy available to another friend, if he wishes, and ultimately I cannot prevent that, though unless I provided it under a free license, further redistribution would likely be copyright infringement. Even so, every copy has some utility, the cost of redistribution is zero, and the supply is infinite. Thus, each copy made increases the total wealth of society, irrespective of whether money changes hands or not.
When copying and redistribution are restricted, with an artificial scarcity imposed by licensing fees per copy or per use, monetary activity and industry surrounding licensing fees may be considerable. However, society as a whole is left poorer by the utility value of every copy not made. Not only that, every dollar, pound, or euro spent may contribute to the circulation of money, and apparently added value, but since distribution of a copy had no actual costs, this money changed hands for no actual gain overall. It could have been spent otherwise, for genuine added value, and this is not seen or apparent because it was potential that was not realised in practice.
This is the same waste as replacing broken windows in the fallacy of that name; while it is good for glaziers, the total wealth of the society is reduced. In this example, licensing fees and End-User agreements may be good for the content industry, but the total wealth of our society is reduced compared to what it might have been if content was redistributable, as is possible under a Creative Commons license such as Attribution-ShareAlike, to take one example.
For material which is intangible, infinitely reproducible, and in infinite supply, everyone benefits if we find fresh models, such as Creative Commons, which still permit direct rewards for the creation of new and original work, without attaching an artificial cost to copying and distribution which in truth and as a matter of practical reality cost nothing.