So I finally got my application in for the NSF postdoc and got some needed sleep. So instead of working on my math like I should be now I went and downloaded the new Radiohead CD, “Rainbows.” Now I don’t actually like Radiohead that much so I didn’t pay anything at all¹ and that’s a perfect example of the inefficiency of the current copyright system. I’m likely to get some positive utility out of this (satisfying a hoarding instinct if nothing else) and this utility is a pure loss on a normal copyright system. However, it’s pretty annoying to hear all the people on the media and in forums act as if the fact that people are paying Radiohead for their CD shows that this is a plausible alternative model.

Even paying $0 for real honest reasons (worth less to me than transaction cost of using a credit card) even I was inclined to feel a little bit guilty and no doubt this is what causes people who actually like Radiohead to chip in a reasonable amount. But one feels guilt primarily because you feel that Radiohead is somehow stepping out on a limb by trusting users to set their own price. If this was ever to become a common practice that pressure would disappear. More critically is that the very people like me this system benefits will cause it to break.

People have strong intuitions of fairness and if you ever tried to distribute music more generally with this sort of system people would start feeling like suckers when they pay twice what their friend did for the music. Ultimately there will be an inevitable slow creep to the bottom as people check with their friends and see that their only paying $6 so that’s not cheating if I do that or come up with other reasons why it’s okay not to pay a bit less. I mean hasn’t everyone someone justifying their use of P2P by saying they would buy music if only the studies didn’t produce such crap? The same process of self-justification would start to happen with self-priced products as well. Besides, who is going to decide to buy 5 CDs worth of music they only sorta like for their car trip because they only have $15 to spend and they value the CDs they really like more than that?

No, I’m afraid solving the inefficiencies of the copyright system will require a fundamental change to the system of IP for creative content. Some means of truly collective purchase is required and the best system that I can think of at this point is to put works in the public domain after 3 years or so with a taxpayer funded system that compensates content producers based on numbers of tracked downloads from some central online repository. Maybe some clever person can figure out something better but as IP fills a bigger and bigger role in our lives the unacceptable inefficiencies of the current market become less and less bearable so sooner or latter something will change.