1) Marginal Costs dictate price. This means, pirated goods are always cheaper than the official price, even if the pirated goods contain the exact same material and the same quality. This is due to the costs involved in R&D. In the short run, firms will sell at Marginal Costs, but in the long run, firms will want to make up for the fixed costs. Meaning, pirated goods put firms out of business - intellectual property/patents are necessary simply only to make up for the fixed costs.
When costs are fixed, it makes sense for you to recover them. It also makes sense for you to recover an additional percentage of the investment in order to motivate the production. But as soon as you recover them, it makes no sense to sell at any higher than marginal costs (i.e. zero). Basically, Windows XP sure as fuck should be free by now.
Your concern about fixed costs certainly is reasonable, but
at best it only justifies very, very limited copyright. If copyright is deemed necessary, in any case, it should not extend past the recovery of the fixed costs plus a fixed percentage (for motivation's sake). To grant any more protection is lunacy and allows disproportionate returns on investment. Also notice that under such a law, copyright infringement would never make anyone liable for more than the fixed costs (which are
actual costs that could be verified, so they are much easier to justify) and that once the payment is made works would enter the public domain. People at large would also gain an incentive to pay for works: so that they would enter public domain and thus be more accessible.
This means that I think that copyright/patent laws should expire sooner, or the way we think about copyright should change. I agree with Brain's idea that artists should be smart about it such as "if people donate X amount of money, this album will be released for free for everyone, donaters will get a CD mailed to them when it is also released". This doesn't mean, however, IP isn't necessary. IP is still necessary to protect these artists from lets say, people who "somehow" obtain their material and release it before the artist does.
Obviously, these artists do not have to produce anything before they are paid or before there is a guarantee of payment.
Goods being nonscarce/infinitely reproduceable means jack shit in the long run. Sadly [AR is] probably only capable of thinking in the short run considering that's the only argument [AR has] ever brought up seeing how [he is] constantly mentioning marginal costs.
The major issue here is that a surcharge on null marginal costs doesn't pass nearly as well as a surcharge on non-zero marginal costs. Not
nearly as well. There are advantages to free digital distribution that go well beyond price: the freedom to send a file to your friends, the freedom to get a file instantly at any place that makes it available. Any pay model requires non-trivial infrastructure and a lock-in on distribution which is unacceptable by today's standards. There is a
world of difference for distribution when you go from a few cents to zero and most of the advantages can hardly be monetized.
I'll put it bluntly: when the distribution cost is zero for everyone, to put a surcharge on distribution is lunacy. You just don't do it because you
can't do it. Don't try to justify failing business models. For as long as marginal costs were not zero, a surcharge was easy to justify and easy to enforce. Now it isn't, so screw it and let's find something else.
2) Pirating, however, is an incentive for the firm to change their business model. The current RIAA is pretty much like GM. They are doing badly not because "those damn japanese cars" or "those damn pirates", they are doing badly because their business model/quality of their offerings are terrible. Pirating should be an incentive for RIAA to rethink their business, not "we must protect ourselves from it". The same for most other services.
Honestly, as far as I know, they are doing fine. They are just being greedy. If they rethought their business models they might reduce piracy but they might not actually earn more as a result. Or I figure that they would do it.
3) Data is tangible. IP doesn't care how many times your "human mind" can reproduce shit. The point is that the physical manifestation of a concept is tangible. I don't see why just because it's in data form it shouldn't be protected by law.
Considering that zip files can have a certain amount of garbage at the end of them, it would be possible for someone to take a song protected by copyright, zip it and pad it in such a way that it becomes the binary representation of a prime number. Pad it enough and it would gain significance as one of the longest known prime numbers. Unzip it and you get a song. This has been done before for an "illegal" program, DeCSS, in order to ridicule the concept that one could ban or control the distribution of particular pieces of data. It also stands to reason that some random number generator could eventually generate a sequence of bits corresponding to a song. Should that be the case, you could produce a seed and a number n such that the nth bit of the sequence of bits produced by a RNG initialized with that seed marks the beginning of the song. Would there be laws prohibiting the distribution of that number? If I had a non-trivial algorithm that mapped an otherwise meaningful sequence of bits (e.g. 10101010101010) to a song, would that algorithm be illegal? To say that data is property is inane. Any sequence of bits can have several meanings, any sequence of bits can be produced in a wide variety of ways. Hence, any form of protection on "data" ought to be approximate and ambiguous, unlike protection on physical objects.
Of course, the point of law is to be enforceable - and the current way people think of enforcing copyright is not enforceable. This means the ideas behind copyright should be changed, doesn't make IP any less necessary.
Why is IP "necessary"? Ideas and works of art can be made profitable by holding either production or distribution until an up front payment is made. They can be made profitable with donations. They can be made profitable with subsidies. They can be made profitable by merchandizing physical representations. Why is IP "the answer"? I have not seen any reasonable argument that could not be resolved otherwise or does not involve disproportionate returns on investment.
When IP was originally conceived, the Internet did not exist and thus many of the ways in which ideas can now be monetized did not exist. Back in the 30s, if you made music and wanted to tell the world about it, your options were very limited. If you wanted to make money from it, you certainly could not do it on your own - you had to go through many hoops and at each step people would have ripped you off if they could. IP back then was easy to justify. But now? An artist can record a song, publish it on the Internet and get thousands of listens within days and an unerasable recognition of his or her work in the community. Setting up an infrastructure for people to pay him or her to produce more songs is trivial and immune to piracy. A donations model can also be made extremely easy by the Internet - easier than it could ever have been before, and instantaneous too. If you want to make a t-shirt of your band, you can do it within a couple minutes and reap benefits in an extremely short time. That, also, never was possible to that extent before.
I would say that IP didn't make sense for a long time, times changed, it made sense, times are changing, now it doesn't anymore. It's easy to think that IP is justified since we've never known any alternative and that there are some obvious arguments for it. However, I don't think these arguments are nearly as strong as you think they are and many of them are effectively outdated.
