SOPA and PIPA

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Today the English language Wikipedia will be blocked out for twenty four hours to protest against the SOPA and PIPA acts that are currently going through the US congress. The background to the blackout, and some information on the acts themselves can be read on the anti-SOPA blackout page.

I must admit that I haven't read the details of these acts. Probably 99% of congressmen haven't either. But we all know that they will read as though they were dictated to Congress by the US media industry, particularly the Hollywood studios, and as a kind of last stand defence, the recorded music business which stands as an ever-present reminder to Hollywood of what might happen to them if these bills are not passed.

What will be conspicuous by its absence is the case that this IP will actually deliver economic rents to the studios resulting from their control of an artificially scare resource: the distribution network that they control, that is now being challenged by alternative channels available through fast internet connections.

The economic and political case is not entirely one-sided. People like to watch Hollywood films, because they have high production values which are partly the consequence of the high profits the studios can gain from their control of content and its distribution.  In eff
Jack Sparrow (Johnny Depp) - not really him, o...

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ect they can obtain monopoly profits, because if you want to see Pirates of the Carribean 5 the only place you can get it from is Walt Disney Pictures. Of course a large part of these monopoly profits is diverted into the pocket of Johnny Depp, because he controls the supply of that essential ingredient of the franchise, namely Jack Sparrow.

Anyway, these acts will create new offences and give additional powers to the holders of this IP to support their position relative to what it would be without them. This takes power away from consumers and gives it to producers. In a democracy it seems odd that the democratic will of the consumers who would presumably overwhelmingly prefer these measures not to go ahead, is overriden. The resolution to this paradox was given by Mancur Olson in his book The Logic of Collective Action (the link is to Wikipedia which, of course, will be unavailable if you are reading this on the 18th, ironically).

Olson realised that because the return per capita on lobbying by small groups of vested interest was so great, and that organising large groups was so difficult, the small groups would progressively hijack the democratic process. Basically in large groups everyone assumes that someone else will make the effort - the famous 'free rider problem'.

Since I came across Olson's ideas I have realised that they have terrific explanatory power. When I see any proposal for a new piece of legislation I now ask myself: 'which industry/professional body will benefit from this?'. Invariably  the industry/profession will be heavily represented in the body of experts called upon to draft the legislation. Of course one group benefits from almost all new legislation: they lawyers themselves. Is it surprising that so many politicians are lawyers?

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