When I was a teenager my family moved to Whittier California. It was about 1947. Whittier had parking meters. I was offended—even outraged. Parking should be free. A few years later I had changed my opinion for reasons I don’t recall. I was then just a bit embarrassed at my previous outrage. Charging for something scarce seems now to me to be the smoothest mechanism for alloting a scarce resource, if the transaction cost is small. Even then parking meters worked pretty well.

Just now (2005) after hurricane Katrina gasoline prices have risen very quickly in light of the lost capacity to refine oil, but more on that later and elsewhere.

There is something approaching the outrage that I recall on the subject of DRM (Digital Rights Management). The rhetoric is that DRM is evil. Here are some points that are frequently made:

  1. When you buy music you should continue to own it as when you buy a record or CD.
  2. Copyright law has a ‘fair use’ provision allowing for limited copying of copyrighted works. DRM makes this inconvenient (some say impossible).
  3. DRM keeps you from doing with your computer all that the basic hardware allows. The assumption here is that DRM hardware will be mandated either by law or the choice of those who build commodity hardware.
  4. DRM perpetuates a business model that would not otherwise be viable in light of the new technologies. That model is of the music industry and also book publishing where a closed community of large businesses decided who to promote. This is presumed, often silently, to be bad. Some argue that most income from music consumers goes not to the artists but to the executives who make these decisions and their advertising budgets.
  5. DRM will interfere with my own creative efforts. This is a complex argument. The simple form is wrong for the DRM that I have seen described only protects such material that the originator has taken extra steps to protect. It might lead to a situation, however, where commodity hardware is unable to perform my work that I produce thru commonly available means. This scenario is plausible if the amateur artist is too rare to warrant features in commodity hardware. This scenario does not seem imminent. DAT (Digital Audio Tap) is said to have died thru fear of illegal copying.
First I respond personally to these points:
  1. I am happy that I have a collection of a few hundred CDs of the music I like. Ditto books. It was an agreement between me and the publishers that I would continue owning the copies. That’s mostly why I agreed to pay them. Copyright law gives them some assurance that I won’t impact their sales by making copies for their friends. I wouldn’t pay nearly as much for a CD whose content was ephemeral. When you pay to see a play or movie you don’t come away with something to keep except your memories. I go to few plays. I pay much less to see a movie in a theatre than I would pay for a copy that I could replay later. This seems like a market issue.
  2. I will quibble here. My understanding of the TPM hardware puts me, the owner of the hardware, on the same footing as anyone in Hollywood, except that Hollywood has access to a private key whose public counterpart is ensconced in the TPM chip in my computer. I don’t know whether it is a secret but it needn’t be to protect Hollywoods’s interests.
  3. This is a complex question. I think that the amateur has a better chance to displace the professional in music and literature and some movies. I mean by professional here one who works thru a publishing company. Music has never paid performers or composers well, except for a tiny few. It never has.