Michael O’Hare in the San Francisco Chronicle’s Open Forum strikes a tone that sounds very middle-roadish to me. But in the end he advocates a compulsory license system to compensate artists, which I view as way off on the road’s left shoulder. At the end of the day no such system can replicate the fairness and precision of the free market.

O’Hare compares a digital song to a park, stating that all should be able to enjoy the park via taxpayer funding. But the park designer presumably was hired by the city, and never viewed the park as her own property. Thanks to copyright law, though, any song I write is my property, and I should have a say in whether it’s placed in a commons as public property.

What if you don’t download music? Well, you pay for that park even if you never set foot in it, right? These proposals generally involve applying taxes to one’s high-speed Internet connection. It’s safe to assume that some broadband subscribers will download so much they’ll only pay pennies a song. Other users who don’t download music will pay their tax and not get anything in return. The heaviest music downloaders are college students, who use their free university Internet connections and likely would dodge the tax entirely.

So people aren’t paying proportionate to their use, and we’re relying on the government to figure out how much each artist should get paid. O’Hare calls that part "tricky," which is like saying that hitting a hole-in-one on a Par 5 is "challenging." Tracking usage on numerous P2P networks globally -- and taking into account the fact that downloaders are global while the tax base funding downloading is only U.S.-based -- would involve gross estimations not worth the effort.

O’Hare is thin on the details of exactly how this compulsory licensing system would work. That’s understandable. Even if the public accepted uneven distribution of tax burdens, it would be a failure because artists wouldn’t get the compensation they can get in a free market. The way to ensure they can continue to get fair-market price for their work is to ensure the market is fair. That means enforcing intellectual property laws so that pirated goods have less impact on the market, while embracing the tremendous distribution power the Internet brings. The music industry is already moving in that direction, but unauthorized downloading continues to be rationalized and defended. It doesn’t help when people who enjoy downloading unauthorized works but don’t want to feel guilty about it are told, misleadingly, that there’s a government solution that would make their activity both legal and moral.

Some downloaders watch MTV, see the cribs of these modern music stars, and say, "That guy’s got enough money already." I’m envious of those multimillionaires but I’m not yet ready to embrace this post-capitalist notion of "too much." I think every artist longs to reach that level of success and that drives their creativity. Let me emphasize again: I somehow doubt that, somewhere in America, a teenager is playing a used electric guitar in his parents’ garage, dreaming of a day when he’ll make a modest yet uninspiring living off of government subsidies.

posted by Patrick Ross @ 3:51 PM | Markets: Business, Investment & Innovation

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