In a post below, Jim writes: "The blunt fact is that EFF and its cohorts are in favor of socialized intellectual property -- distribute it for free and have the government subsidize the creators." I recently engaged in an e-mail debate with someone affiliated with EFF and have to agree. The debate centered around a paper by Mark Lemley of Stanford Law School, in which he argued that creators have "no right" to capture value for the popularity of their works, that "economic theory offers no justification for awarding creators anything beyond what is necessary to recover their average fixed costs," that property law is only "justified" to ensure they gain enough to recoup fixed expenses, and that "excess profit" is "socially wasteful." The alternative, of course, is a government-sponsored licensing system that eliminates that socially wasteful excess profit. My response? "In a subsidy model, I wonder how many teens would buy their first guitar, plug it into an amp, stumble their way through a painful version of Stairway to Heaven, and say to themselves, 'Someday I'll grow up to be a big star and enjoy a modest living covering costs through government subsidies.'"

posted by Patrick Ross @ 10:04 AM | Markets: Business, Investment & Innovation

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