While the whole world has been protesting against the SOPA act and the ACTA agreement, lamenting the end of freedom within the Internet or even all over, I have been siding with people who understood the situation differently; who thought that the vast percentage of the protesting masses could not utter a coherent slogan about freedom, and were instead merely trying to protect their own entitlement to steal. So why is it that I’m calling Salman Rushdie wrong when he’s seemingly trying to protect the publishing industry?

Mr. Rushdie said that the attempt of US Justice Dept to pursuit legal action against Apple and publishers such as Penguin, Simon & Schuster, Hachette Book Group, Macmillan and HarperCollins alleged collaborating to keep the prices of ebooks high means that the Dept “wants to destroy the world of books,” as “anyone who thinks that fair pricing that allows authors to make a living is a cabal or cartel system is deep in the grip of Napsterism – the belief (fostered by Napster in the music world) that it’s OK to acquire people’s work for almost nothing.” But it simply cannot be argued that the attempt to unhorse price fixing is equivalent to stealing.

To fully appreciate the situation we have to agree on the scope of our analysis. I’d like to look at both problems trying to find out which solution is going to benefit society as a whole to a greater extent. It appears to me that the only objective way to appreciate these problems is to find an approach that is best for the whole of humanity, or at least the parts of it concerned with the issues. With that in mind I have to point out to a few differences between what the business lobbying groups are trying to achieve with SOPA and similar acts, and what US Justice Dept is trying to do with their price fixing accusation. While it is clear that the character of information makes it hard for people to grasp the immorality of stealing it (it’s easy to confuse human sense of morality, just consider the difference in the approach of most humans to morally equivalent situations of having to slaughter an animal and having it slaughtered by another person), it is surprising that the difference between breaking the right to own and acquiring the right to unobstructed enterprise isn’t clear to many.

The main reason why I am against legalising stealing information, or insisting on sharing all information freely, is that it may hinder the creation of new, innovative products and ideas. People who would be willing to work on these may not bother if they will not be able to earn money as a result of their time and effort spent. Therefore by making this a practice society may very well be gaining freedom to access all information, but it may also be rendering the available information useless. This seems to me not to be the case with writers. Plenty of good writers choose their profession because they either have to write or can’t not write. Many examples of great writers living in poverty seem to confirm my proposition. Therefore regardless of whether a book would cost $25 or $5 there would still be many good writers, hence society isn’t going to suffer from letting the prices free.

The more important point has to do with the heart of the issue at hand, that is economics of the publishing industry. Whether there are legal grounds to conclude that the prices are fixed or not is irrelevant to my argument, what is important is the question whether preventing such inquiry by the authorities is healthy for the market as a whole. A cursory glance at any textbook in economics would reveal that it isn’t so. In general any deviation from the free market framework, such as fixing prices by a group of publishers, is creating net social loss by preventing trades that are mutually beneficial. There are cases where this can be untrue, in situations where monopolists give more to society than they take from it. This happens when the negative consequences of monopoly as stated above are outweighed by the innovations that the accumulation of capital allows. This is not the case in the publishing industry. All their innovations can be reasonably produced without great conglomerates, and apart from ebook readers their only innovations take the form of new ebook formats with ever more digital rights protection schemes.

So there is no good reason for protecting publishers’ plot to keep prices fixed at artificially set levels. It is going to hurt the whole of society, including the writers and publishers themselves. While DRM systems they construct are more and more ingenious, they are not matching the pace of people who break them. Free markets may mean lower prices, but setting prices higher than they would be in free market only makes people want to sign up for Napsterism more. So you have it all backward, Mr. Rushdie. It’s strange that the person who is the icon of defending free speech would have a problem grasping the idea of free markets. Stealing is bad but fixing prices, or reducing market freedom, is bad also. As Mr. Rushdie illustrated, confusing the two is not better.

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