Against Intellectual Monopoly

Internet at all, solely for the use of secure government transactions.

    So, if hardware and software, together with the eager cooperation of the
computer user, have proved inadequate to protect content that the owner
wants protected, what chance has a media company of protecting content
on someone else's computer that the computer owner does not want protected? Indeed, this goes to the technical weakness of all content-protection
schemes - at some point, the purchaser will want to see the music or watch
the video. What human beings can hear or see, technology can record. So
what is next? Mandatory content protection for microphones? If a microphone detects a special copyright watermark, will it refuse to record the
offending material? So, then we can't make home movies if our neighbor is
playing loud copyrighted music next door?
    There are other problems worth noting. For example, government agencies ranging from intelligence agencies to the police will need to have the
ability to crack codes. It is foolish to think that these agencies are immune to
corruption. More generally, security must protect against the weakest link.
The weakest link in many content-protection schemes is the human one:
it is all too easy to bribe someone to bypass the protection; this has been
the major source of newly released (or unreleased) movies leaking onto the
Internet. Human error is a problem more broadly. Software can fail in its
intended purpose. The DVD encryption scheme was cracked because of
human error in the writing of software. The Xbox was cracked because of a
bug in a game authorized and certified by Microsoft.
    Finally, it is extremely likely that a legally mandated system would be
abused. So far, large corporations have exhibited little regard for such concerns as consumer privacy and have accidentally given up such minor bits of
information as people's credit-card numbers and Social Security numbers.
Rent Seeking and Taxes
    Intellectual monopolists have many tricks to get the government and the
public to pay their bills. In case you are still capable of being astounded
by the greed and chutzpah of the media industry, we submit the following.
Canada levies a tax on blank media such as CD-Rs and CD-RWs, using the
proceeds of the tax to pay copyright holders for the presumed copying of
their material on to these media. Toward the end of 2006, similar legislation
had been approved in Spain and approval was pending in a number of
European countries.
    On January 1, 2001, the Canadian Copyright Board increased the tax from
5.2 cents to 21 cents per disc. Brian Cheter, a spokesperson for the board in
Toronto, described the new tariff as a valuable measure that protects artists. He described it as a preemptive measure to recoup losses from "piracy"
and the peer-to-peer exchange of music. Notice the perversity: you tax
a general-purpose item such as CDs, which have many functions beside
storing copied music, to "enforce" some monopoly rents. Because the discs
purchased in bulk cost only about 60 cents each (without the tax), the tax
is pretty hefty. And now the chutzpah: the music producers are trying to
prevent downloading of music in Canada, even as they collect the revenue
from the tax designed to compensate them for this "piracy."23

Notes
    1. According to the 1997 Economic Census (available online at http://www.census.gov/
epcd/www/econ97.html accessed, February 24, 2008), the motion picture and soundrecording industries - which include not only motion picture and television production but also music and sound recording - employ 275,981 paid employees. In
contrast, IBM alone employs more than 300,000 people. The publishing industry is
quite a bit larger, with 1,006,214 paid employees, but many of these (403,355) are
in newspaper publishing, which receives practically no protection from copyright.
If we use the Motion Picture Association of America's exaggerated estimate that the
motion picture industry employs 580,000 people and add in the entire publishing
industry, we get 1,586,214 employees. Looking at manufacturing, we notice that the
fabricated metal product manufacturing, computer and electronic product manufacturing, and transportation equipment manufacturing industries all employ more
workers. Looking more realistically at the industries that benefit from copyright,
we add the 275,981 workers in motion picture and sound recording to the 336,479
publishing workers who do