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***James Boyle on property cognitive bias

by Laurent GUERBY Mon Aug 21st, 2006 at 05:16:37 AM EST

In his latest article on the FT A closed mind about an open world, James Boyle offer some interesting thoughts about intellectual property:

Over the past 15 years, a group of scholars has finally persuaded economists to believe something non-economists find obvious: "behavioural economics" shows that people do not act as economic theory predicts.[...]

Studying intellectual property and the internet has convinced me that we have another cognitive bias. Call it the openness aversion. We are likely to undervalue the importance, viability and productive power of open systems, open networks and non-proprietary production. Test yourself on the following questions. In each case, it is 1991 and I have removed from you all knowledge of the past 15 years.

(More below)

***Back from front page

You have to design a global computer network. One group of scientists describes a system that is fundamentally open - open protocols and systems so anyone could connect to it and offer information or products to the world. Another group - scholars, businessmen, bureaucrats - points out the problems. Anyone could connect to it. They could do anything. There would be porn, piracy, viruses and spam. Terrorists could put up videos glorifying themselves. Your activist neighbour could compete with The New York Times in documenting the Iraq war. Better to have a well-managed system, in which official approval is required to put up a site; where only a few actions are permitted; where most of us are merely recipients of information; where spam, viruses, piracy (and innovation and anonymous speech) are impossible. Which would you have picked?
The questions I asked are related to the world wide web - which celebrated its 15th birthday last year. Would we create it today? In 1991, you would have scoffed at the web, at open-source software and at getting your information from Google. Control and ownership seem intuitively the right way to go. How do you feel about today's debates? Should we preserve "net neutrality" and openness or give network owners greater control? Should we create new rights for broadcasters and database owners? The next project of the behavioural economists should be to study our cognitive frameworks about property, control and networks. Like the pilot in the cloud looking at his instruments, we might learn that we are upside down.

Together with lawyers bias for money, it explains a lot, don't you think? :)

Better to have a well-managed system, in which official approval is required to put up a site; where only a few actions are permitted; where most of us are merely recipients of information; where spam, viruses, piracy (and innovation and anonymous speech) are impossible. Which would you have picked?

Who the hell "votes" for bureaucracy other than the bureaucracy? The various snarky statements about the author I would list next can be derived easily by the reader.

you are the media you consume.

by MillMan (millguy at gmail) on Thu Aug 17th, 2006 at 07:53:49 PM EST
The crowd exploiting copyrights and patents is relatively small or insulated (health drugs), so it's easy for them to keep their rent (much like agricultural subsidies).

The more the common crowd gets digitial and bitten by IP the more it will be harder for them to hide the hideous nature of this subsidy.

Here is an informative little piece from Linux Weekly News:

A couple of lessons on the hazards of proprietary software

The advantages of free software are not always immediately apparent to all computer users. Many people think that, since they have no interest in or ability for working with the source, its free availability is of no benefit to them. LWN readers, instead, tend to understand this issue well, so we try to resist harping on the point too much. Every now and then, however, the problems associated with non-free software hit such a level that one can only sit back and laugh - before writing a snide article on the subject.

Wired News has been carrying the story of a robotic parking garage in Hoboken, New Jersey. This garage is apparently an impressive gadget, for those who enjoy this sort of mechanical technology. It also depends heavily on its operating software; without that software, the system cannot operate, and any cars which happen to be inside remain there.

And that is exactly what happened. Robotic Parking Systems, the company which owns said software, decided that the time had come to raise its rates. The city disagreed, and talks between the two came to an ugly point. Once the old contract ran out and Robotic's staff were escorted from the scene, the garage was no longer operable and hundreds of cars were left imprisoned inside. Robotic claimed that any attempt to operate the garage constituted copyright infringement, since the city no longer had a license to run the required software.

As is described in a local newspaper article, the situation was eventually resolved, with the city licensing the software for $5500 per month. There have been mumblings about how the city would have been better off running open source software. A quick check shows a relative paucity of viable free robotic garage projects at the moment, however.

A slightly older story can be found in this South Florida Business Journal article. It describes the experience of a Georgia medical practice, which used the "Dr. Notes" package for its patient records. The friendly Dr. Notes people decided to raise their support fees by a factor of four, and, when the practice declined to pay, stopped providing the monthly password required to make the system work. At that point, all of the clinic's medical records became inaccessible.

Impounded cars may be a major annoyance, but locking doctors out of their medical records can lead to life-threatening situations. Holding the keys to those records can give an unethical company a powerful weapon, useful for extorting price increases from its customers. It is not the sort of situation any business would want to get into, much less one which is concerned with health care. Access to a company's critical data should not depend on another company's continued good will.

Proprietary software will always carry this kind of risk. It is subject to the whims of the company behind the license agreement - and corporate whims can be subject to sudden and catastrophic change. One still hears stories of business leaders worrying about whether they can handle the risks of moving over to free software. They would be well advised to consider thoroughly the risks of not moving as well.

by Laurent GUERBY on Fri Aug 18th, 2006 at 09:02:08 AM EST
[ Parent ]
Who the hell "votes" for bureaucracy other than the bureaucracy?

Anyone who doesn't want to live as a hunter-gatherer.

The question is rarely "bureaucracy or no bureaucracy?", it's "what type of oversight is appropriate in this situation?".

Now, in the case of managing the internets, I'll note that it's been in the news lately. First sentence:

The US government has awarded net overseeing organisation ICANN the contract to administer changes at the top of the internet until 2011.

by Omada on Fri Aug 18th, 2006 at 09:46:08 AM EST
[ Parent ]
Give the public some credit on discerning what bureaucracy they need and which they don't. The author does not, which is why I am dismissing him.

you are the media you consume.

by MillMan (millguy at gmail) on Fri Aug 18th, 2006 at 01:02:30 PM EST
[ Parent ]
Well, isn't democracy supposedly all about the public deciding what bureaucracy they need?

I have no previous knowledge of James Boyle, but the blurb at the bottom of the article says:

The writer is professor of law at Duke Law School, a co-founder of the Center for the Study of the Public Domain and a board member of Creative Commons

I get the impression that the author is trying to sow little seeds of thinking differently about intellectual property among readers of Financial Times, without having them dismiss him as a raving commie lunatic.

(Personally I think the GNU General Public License is even better than sliced bread.)

by Omada on Fri Aug 18th, 2006 at 05:22:07 PM EST
[ Parent ]
We are accustomed to think of "Property" as an "Object".  But as Jeremy Bentham pointed out, this is not in fact the case:

"It is to be observed, that in common speech, in the phrase 'the object of a man's property', the words 'the object of' are commonly left out; and by an ellipsis, which, violent as it is, is now become more familiar than the phrase at length, they have made that part of it which consists of the words 'a man's property' perform the office of the whole."

In other words, "Property" is not an "Object" as we are accustomed to understand it, but in fact a Relationship consisting of the bundle of rights of "ownership" and "use" of productive assets.

I am pointing out that a new legal "wrapper" now exists for this bundle of property rights. I call it the "Open" Corporate - of which the new UK Limited Liability Partnership ("LLP") is the first example (with an extremely misleading name, since it is not legally a Partnership at all and bearing no resemblance to the US LLP) and the US LLC a close cousin (although not technically a "Corporate" body).

What I am getting to is that a new "middle ground" now exists between "Closed" (eg "Copyright") and "Open" (eg GNU licence/ "Copyleft").

ie a vehicle for Intellectual Property (and any other kind of Property, come to that) which is BOTH "Closed" in that only Members of the entity may use it, AND "Open" in that anyone who consents to the IP vehicle's governing agreement may use it.

Revenue sharing may be part of the agreement of course: if there is no charge, then the revenue shared is zero.

It's not Rocket Science, but the "Common Source" unintended consequence of a new, and probably optimal corporate form created six years ago for the wrong reasons by the UK government, in a distinctly dubious way.

Best Regards

Chris Cook


"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Aug 18th, 2006 at 07:19:03 AM EST
Since you're talking about corporate, IP royalties are one of the main tax evasion scheme used by corporations (eg: for how much you lease your trademarks to your subsidiaries). See Ireland so-called "boom".
by Laurent GUERBY on Fri Aug 18th, 2006 at 09:03:28 AM EST
[ Parent ]
Could you tell me a bit more and point me to a discussion?

Words and ideas I offer here may be used freely and without attribution.
by technopolitical on Sat Aug 19th, 2006 at 01:27:50 AM EST
[ Parent ]
From The Economist, a taxing battle:

[...] Navigating this mishmash of regulations is no easy task. Transfer prices are very tricky. Most countries set them at "arm's length"--ie, the price an independent party would pay for a given service or product. Though the principle is a nice one, the practice is complicated, particularly because companies are increasingly service-oriented and rely more on brands, intellectual property and other hard-to-price intangibles. The issues raised by transfer pricing can thus be dauntingly philosophical. "You are dealing with fundamental questions, such as what creates value," says KPMG's Ted Keen. "And the answer is different every time."

The quarrel between GlaxoSmithKline and the IRS, for instance, revolves around what made Zantac--its hugely profitable ulcer drug--so valuable. Was it the money poured into research and development in Britain, or the advertising and marketing in America? Clearly, both were factors, but deciding how much was contributed by whom, and thus how to divvy up costs, profits and taxes is hard.

Of course, transfer pricing is open to manipulation. A report by America's Senate in 2001 claimed that multinationals evaded up to $45 billion in American taxes in 2000. Whatever the truth of this claim, some of the report's details were eye-catching: one firm sold toothbrushes between subsidiaries for $5,655 each. [...]

I don't have handy revenue and profit for some companies over Europe countries, if I find the time to redo the search I'll do a diary on it.

For artists and Ireland, see wikipedia Tax Haven, the Ireland line.

Hope this helps.

by Laurent GUERBY on Sat Aug 19th, 2006 at 07:42:37 AM EST
[ Parent ]
Thank you!

Words and ideas I offer here may be used freely and without attribution.
by technopolitical on Tue Aug 22nd, 2006 at 02:18:47 AM EST
[ Parent ]
A clear example of this is the difference between the Internet and cellular telephone systems. The Internet is largely "open," and has all the advantages and disadvantages you list. Cell phone systems are closed, and the result is that you can't do a whole bunch of things that are technically possible--simply because the cell phone companies don't let you.

At least in the traditional regulated utilities there has been discussion of how to move them towards openness. Land line phone systems allow you to connect your privately-purchased telephone, for example. Electric power companies allow you to feed power back into the network.

I hear NO voices suggesting open cell phone systems.

by asdf on Fri Aug 18th, 2006 at 09:08:22 AM EST
Just wait for WiMax.

Nothing is 'mere'. — Richard P. Feynman
by Migeru (migeru at eurotrib dot com) on Fri Aug 18th, 2006 at 09:10:09 AM EST
[ Parent ]
Open-source ( WiMax + Voice-over-IP ) = open cell phones

Nothing is 'mere'. — Richard P. Feynman
by Migeru (migeru at eurotrib dot com) on Fri Aug 18th, 2006 at 09:11:19 AM EST
[ Parent ]
I love my Nokia 770, near totally opened up by Nokia (this is a debian system :).
by Laurent GUERBY on Fri Aug 18th, 2006 at 09:13:07 AM EST
[ Parent ]
Can it send streaming video to your friends?
by asdf on Fri Aug 18th, 2006 at 09:32:41 AM EST
[ Parent ]
The Nokia 770 is a wifi "laptop" that fits in your pocket with a 800x480 touch screen and a MMC card slot (1GB disk max).

So technically yes you could do it.

Wikipedia on the Nokia 770.

by Laurent GUERBY on Fri Aug 18th, 2006 at 09:54:14 AM EST
[ Parent ]
With DRM and telcos it remains to be seen wether the Internet will remain that open in the coming years (I'm optimistic since now it's everyone problem so politicians cannot get away with screwing it too much).
by Laurent GUERBY on Fri Aug 18th, 2006 at 09:12:12 AM EST
[ Parent ]
Looking at nature I discover and IP protect the letter 'e.'

Thn you com and, looking at my rsarch, discovr and protct th lttr 'a.'

nothr prson gins intllcutl protction for th lttrs 'c' and 'o.'

sn w'v gt hug prblm mmuniting.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Aug 18th, 2006 at 09:44:31 PM EST
It often seems to me that people equate the value of knowledge with its value as a corporate property. This creates a huge cognitive bias. Most knowledge is of greater overall value if disseminated freely -- but it then has no value as an asset in anyone's accounts.

Words and ideas I offer here may be used freely and without attribution.
by technopolitical on Sat Aug 19th, 2006 at 01:26:15 AM EST
The question is - value to whom?

The open/closed issue is a mishmash of conflicting and competing positions, with a lot of simple-minded ra-ra ideology on both sides.

It's impossible to take the problem seriously until both sides make some serious effort to untangle the subtleties, and stop trying to present the problem as something that's only available in black and white.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Aug 21st, 2006 at 05:28:14 PM EST
[ Parent ]

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