March 2001

What's all this fuss about Napster, anyway? Why does the government pay farmers to stop growing things when people are starving? Does Microsoft have a monopoly? How can I protect my privacy on the Web?

What in the world do all these things have in common? Let me connect the dots for you.

There is a strange sort of paranoia, it seems, among the people who really understand technology -- that is, the people who *create* technology. They think that Big Brother is closing in on them, shutting down Napster, mandating secure communications with government back-doors, and protecting the copyrights of the very companies they claim to be prosecuting (Microsoft). Is there a realistic reason to fear these seemingly oppressive legalistic regimes?

Fundamentally, the issue here is one of property rights. Who owns a piece of information? Some would say "whoever created it." That's funny; tell that to the family of Jimi Hendrix, who had to fight for years to gain the rights to distribute and profit from their dead son's recordings. Tell that to Petr Taborsky, a Czech immigrant who spent several months on a state prison chain-gang in Florida because he refused to renounce his three coal-processing patents and donate them to Florida Progress corporation. Tell that to the makers of artistic drawings that mimic child pornography, who risk confiscation of both images and physical computer equipment.

Why do we even argue the concept of property rights when it comes to information? The reason is simple: we have been indoctrinated into believing that information has the one quality in common with physical property that makes it economically viable, and that is SCARCITY. When a craftsman creates a piece of furniture, he creates one physical item that cannot be replicated at zero cost. Therefore, since it has a cost, it can become an economic commodity. To take this object away from this person without payment -- either by force, by threat, or by deception -- is to deny this person the benefits of this item.

But information is not like that. When I speak aloud, my words are available to all who hear them, and their information content can be repeated without cost. (That's called gossip.) If I tried to ask the government or a government-backed commercial corporation to regulate and limit and charge for these words, I would probably be laughed at (and possibly be considered a loony). Nobody regulates gossip, nor can anyone reasonably prevent it without denying people significant personal freedom. Even great ideas like freedom, integrity, and justice are spoken of through both formal and informal means, and the words spoken about these non-gossipy topics supersede any ruling elite's attempts to control or profit from them.

The problem with information issues today is that no ruling culture today, even in any "modern" country, recognizes that the issue of scarcity is both *unnatural* and *obsolete*. It is unnatural because, for example, agricultural products are inherently super-abundant. Weeds grow when we wish they wouldn't. Farmers produce "too many" crops and must actually be paid to destroy them, or at least to stop planting. We know that even energy is not a scarce commodity, because the electric-generating windmills in California were not even being used during the recent power crisis. And of course gossip is available in unlimited quantity at essentially zero cost. (It is quite possible to gossip and work at the same time!)

Scarcity only arises out of man-made restrictions -- namely, man-made distribution limitations. Let me repeat that: scarcity is obsolete. We have an economy that assumes that all commodities are scarce, but almost nothing is scarce any more. Instead of a problem of limited production, we have scarcity solely due to limited *distribution*. Instead of the craftsman with his single piece of furniture, we have huge factories churning out millions of identical (though mediocre) pieces of furniture. In order to keep the price high, distribution networks place artificial barriers between potential buyers and sellers. The unsold product is liquidated or destroyed. The same thing occurs in almost every field of production -- agriculture, physical goods, information. We have an economy whose foundation is the assumption of scarcity, and whose framework is the promotion and the preservation of artificial scarcity for the purpose of maintaining an obsolete system of lazy elites, petty corporate dictators, and power-hungry government officials.

The world economic system is therefore not equipped to deal with any technology that exposes the lie.

Governments are not equipped either legalistically or psychologically with the idea that every person on Earth could simultaneously access the same piece of information at essentially zero cost. The corporate music distribution network that takes a low-cost event (a band playing a song) and rations it -- yes, RATIONS IT -- must be preserved at all costs, the government believes, because the entire foundation of the capitalist system is the assumption that a price system and thousands of government regulations are needed to maintain the illusion of scarcity.

The only way a Napster-style program can be accepted by the powers-that-be is if it incorporates a rationing mechanism to add artificial costs to the distribution of music. But the Internet is like a genie already out of the bottle; it may be too late to re-introduce scarcity now that people have gotten used to the reality of near-zero-cost communication. It's hard to ration infrastructure without erecting obvious tollbooths.

Therefore, there is a close connection between crop subsidies, the Microsoft case, Napster, and privacy. Yes, privacy is also becoming obsolete, because information exchange is becoming a zero-cost activity. Before the Internet, information exchange was expensive. Now, *preventing information exchange* is expensive. Before mass-production, food and material products were expensive. Now, *preventing excess production* is expensive. ("Excess" being defined not as "enough for everybody" but rather "enough to make a profit.") Microsoft is essentially a distribution monopoly, since anybody has the freedom to engage in unlimited *production* of software. But money is only made by rationing its distribution -- through PC preloads, control of the retail stores, and government-backed crackdowns on alternative channels (such as "piracy"). Piracy and privacy issues are both examples of attempts to artificially restrict the distribution of information; one for commercial gain, the other for personal gain.

Thus it should be obvious that, in the present economic order, the owner of information is whoever controls the media upon which it exists, and the channels through which it is distributed. Microsoft's copyrights deal not with software creation, but rather software distribution. Microsoft's monopoly is therefore a distribution monopoly, and any government attempts to punish Microsoft for its crimes must deal with the issue of software distribution, preloads, and artificial barriers to simultaneous competing distribution (through proprietary interfaces). Similarly, issues such as Napster, privacy, and education are all matters of who controls the dissemination of information. None of these issues can be resolved satisfactorily to all parties without deciding first just what restrictions, if any, should be placed on information distribution -- and who should decide those restrictions.

Most recent revision: February 28, 2001
Copyright © 2001, Tom Nadeau
All Rights Reserved.