Against Intellectual Monopoly

easy
to implement, but they are ineffective if not mandated by law, because there
is no reason to buy software or hardware that respects the advice.
    The second type of scheme encrypts content, and only software that
knows the relevant algorithms and keys can unlock the encryption. An example of such a scheme is DVD encryption. Until the scheme was cracked,
it was impossible to play a DVD without an authorized player. Encryption
schemes do not require legal enforcement to be effective: media companies
simply need to provide material in a format that cannot be played without
a player that they authorize. Encrypted material can also be linked to a
particular computer or device. Computer operating systems are sometimes
linked in this way, as is the case with Windows XP. So, even trading encrypted material can be foiled by a carefully designed scheme. Notice also
that under the DMCA it is already illegal to crack these schemes.

    Encryption schemes are widely used for video-game players. They require
special software that resides only on consoles (produced and commercialized
by the same company that manufactures the games) to be played. When
you buy one such game, you are aware that, without access to the specific
additional tool, you will not be able to play it. The market for video games
works well without any mandatory legislation. Those consumers who like
video games enough to pay also for the console buy the latter; those who do
not, do not. Some people buy a video game without owning a console or
planning to buy one. Evidently, they rely on the kindness of acquaintances
and friends to play the games on their borrowed machines. Should the
federal government step into this market and mandate that anyone who
buys a video game should also purchase the player to play it? This sounds
insane, as we are all used to the current arrangement and understand that
it works quite well. Obviously, there is no end to such insane possibilities
for government regulation. For example - digital audiotapes are not selling
very well, so why doesn't the federal government pass a law specifying that
everyone who buys a CD player must also buy a digital audiotape recorder?
    A key fact about legally mandating a content protection scheme is that it
requires everyone to bear the cost, regardless of whether they would choose
to do so. For example, businesses use a substantial fraction of all generalpurpose computers, including all mainframes and supercomputers. It is
hard to imagine that many businesses would voluntarily purchase expensive
and unreliable devices for their computers so that employees could spend
their time at work watching copyrighted movies. Clearly, it is economic
nonsense to require them to do so.
    Encryption schemes are pervasive and extremely common, despite that
they are not mandated by law. In fact, some of them are so familiar to us that
we do not even realize we are using them. So, for example, most rock bands
sing in English and people in countries in which English is not the mother
tongue have to learn English, at some cost, if they want to appreciate the
lyrics. Nevertheless, the French government, for example, does not legislate that French consumers purchasing music with English lyrics should also
pass a mandatory TOEFL test. They are intelligent enough to understand
that, if their citizens are happy just listening to the music and mumbling
some distorted English words, then they should be permitted to do so.

    Academic economists, such as the authors of this book, are also producers
of copyrighted materials and have, in fact, adopted an encryption scheme.
We write our research articles in jargon, using a large amount of mathematical symbols and formulas. This encryption is very effective: the content of
our research is accessible only to people who are willing to invest enough
resources to acquire the skills needed to break the mathematical code. As a
matter of fact, those skills can be acquired (in general) only by purchasing
the services of academic economists, that is, by enrolling in and successfully
completing a Ph.D. program in economics. Certainly, we would be most
happy if the federal government decided to make a Ph.D. in economics
mandatory for anybody who purchases an economic book or journal or
downloads a paper from an academic site (why not?). Nevertheless, we very
much doubt this would be in the national interest. Unfortunately, the American Economic