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05.30.2007 (previous | next)
Site Tracks Black Markets

This site tracks the value of some "black market" goods from pirated movies to body parts and human trafficking. Missing: Murder for Hire, though Kidnapping is represented.

One ought to distinguish at least two types of markets represented here; a) those in which the goods being sold do indeed "belong" to the seller who wishes them to "belong" to the buyer. Markets for illegal drugs for example. "Belong" is in quotes because from a legal standpoint there are no "property rights," rather, the rights are those that would exist at law just as with any other planted produce or chemical stew if it were not for regulatory bans. Then there is b) the rights in question have been wrested away unlawfully from a third person and appropriated by the seller, who then transfers them to the buyer. Human trafficking, for example, and piracy.

This distinction is important because it is tempting from a libertarian standpoint to immediately think about the ruinous War on Drugs when one sees any commentary on the value of pirated products. It is sometimes assumed that anywhere one sees an expensive enforcement regime that does not produce the desired results, that the underlying substantive law cannot be justified. But here details matter.

If the laws against murder and assault were enforced by, say, two-year-olds armed with gold-plated toothbrushes, enforcement would be expensive and ineffectual. Likewise, if we had the current enforcement regime, but people suddenly developed the ability to teleport. But this is not an argument against the laws against murder and assault. It is an argument for revisiting the enforcement regime. Arguably, the current situation with copyright is partly analogous; either there is no enforcement, or, the enforcement is unsuited to the Internet environment.

Note that I said "partly" analogous. Copyright law also entails commitments to enforce rules about what people may do with their own equipment--computers, for example. Are we then back to an analogy to the War on Drugs? Once, I found that convincing. Now I think given all the other ways in which many other rights (property, contract, tort) restrict what we may do with our equipment, on the principle that my rights stop where others begin, that it is too unsophisticated an account of what property rights will be in an advanced networked economy.

There's another too-simple argument lurking here. Suppose we were to argue that the law of copyright is like the War on Drugs, because full enforcement of both would be intolerable. Full enforcement of the laws against murder would clearly be tolerable, even desireable. Full enforcement of the War on Drugs would put maybe 70 percent plus of the population in prison. What about the law on copyright? Analogous? Again, yes and no. But surely the argument is not done. First, the consequences of drug use fall substantially on the buyer or those near and dear to him and only indirectly on third parties, whereas the harm of piracy falls mainly on blameless third parties, the creators of the pirated product; the latter is much less a "victimless" crime. Second, the argument that full enforcement of copyright law would be intolerable seems to lose its moral force if the penalties were scaled back to civil damages. This is not clear in the case of the War on Drugs. For one thing, because there is no "injured" third party except arguably in the case of neglected children, there are no analogous civil damages to scale back too. If the penalties for drug use were simply small fines payable to the state? A sort of tax on drug use? Maybe.

My larger point: early on in my career, it appealed to my libertarian instincts to assume that there was trouble with a substantive legal regime any time I spotted it creating a black market. I now see that it is not so simple. Once one abandons the assumption that enforcement regimes are fixed, further discussion must follow at length, especially when the substantive rules support a market, as they do with copyright.

posted by Solveig Singleton @ 7:44 AM | Accounting, Counterfeit, Economics, Game Theory & Public Choice, International, Liberty and IP, Markets: Business, Investment & Innovation

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Comments

In the case of piracy-as-in-copyright-infringement, the copyright holder still has the legal "right" (privilege) to restrict copies being made. That right may have been violated by the seller - but the right has not been "wrested away" from the copyright holder by the "pirate" copier-seller - if it had been, then the copier-seller would now be the holder of the right to restrict copies being made. Obvious nonsense, and not the position under the law. It CAN happen that someone is wrongfully holds the copyright to someone else's work, but it is relatively rare.

The "full enforcement" of copyright law is not intolerable because of penalties affecting too many people, but because it would *require* the surveillance of all interpersonal communications.

Thus, we see "copyright" joining "terrorism" and "child porn" as an EXCUSE for the construction of a police state. Now, you guys might yet get away with that in America or China, but the memory of WWII, Nazism and the USSR is still too strong in Europe for it to be tolerated.

This is why Ian Clarke wrote, in the Freenet project FAQ:
http://freenetproject.org/philosophy.html

"Of course much of Freenet's publicity has centered around the issue of copyright, and thus I will speak to it briefly. The core problem with copyright is that enforcement of it requires monitoring of communications, and you cannot be guaranteed free speech if someone is monitoring everything you say. This is important, most people fail to see or address this point when debating the issue of copyright, so let me make it clear:

You cannot guarantee freedom of speech and enforce copyright law

It is for this reason that Freenet, a system designed to protect Freedom of Speech, must prevent enforcement of copyright. "

Posted by: Larko at May 30, 2007 8:03 PM

I don't usually comment on comments, but I will chime in here.

My intent was to discuss what one could infer about copyright--or not--from the bare fact that a black market in copyrighted goods exists. To make that clearer, I might have written that piracy and suchlike "purport" to transfer the rights to the buyer or made some other slight fiddle to the language. The discussion isn't intended to deal with *every* possible distinction between physical and intellectual goods, which we've discussed at length elsewhere; it was rather to deal the characteristics of black markets and to distinguish a) from b) type markets. Further distinctions are of course possible but not necessarily interesting.

To clarify further, the hypotheticals about total enforcement are helpful in clarifying our sense of how the underlying rights mesh with our sense of fairness, under any logically possible system of enforcement. Tying the hypothetical to what you think one system of enforcement would look like is going to cause one to miss the point of the thought experiment. Pretty much completely. A law professor's nightmare.

(As an aside, the assumption that total enforcement of copyright would entail a police state seems to be a jumping the gun a bit. I don't see that this follows at all. It's one possible scenario, but as most enforcement of copyright seems to belong the civil as opposed to the criminal realm, it doesn't seem particularly likely. Second, we'd better hope that the link between a police state and sharing information online is a tenuous one, as whenever one ventures online, one is little more than a data point to others regardless of what is being enforced or not enforced).

(Finally, the peculiar assurance of some Europeans that their assorted regulatory regimes insulate them from becoming a police state is worth noting. It is unclear to me how states that control labor markets, education, health care, and that for the most part, project enormous unfunded liabilities going forward due to social security and other projects are in any way insulating themselves from devolving into tyranny. Have you had your laptop inspected to make sure you aren't taking work home from the office lately? Tried to ask if there are alternative treatments for your dying child's cancer treatment in Germany?).

Posted by: Solveig at May 31, 2007 9:31 AM








 
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