The Spectre of Math

February 28, 2010

More on the UK law

Filed under: Politics — jlebl @ 5:51 pm

A few more comments on the UK nonsense about the new UK law.

Ignoring any moral arguments against these laws, did anyone actually do the analysis of the cost vs. benefits? I mean these laws have direct costs for 1) ISPs 2) small businesses/libraries/etc…3) the increased costs to the state for enforcing such laws. There will be indirect costs for 4) all internet users as the cost of connection is raised. Finally, this will mean loss of connectivity, either in certain contexts or simply due to rising costs hence there will be a cost 5) the economy as a whole.

Alright, what about benefits. Did someone do actual accounting how much the entertainment industry will gain from these rules (I am assuming they are the biggest beneficiary). Not how much they are saying they are losing. That’s a made up number. But in reality, did anyone analyze how higher the profits will be with these rules in place? What needs to be taken into account is that some people who download illegal content would not buy it legally, and further what needs to be taken into account is that such rules will only reduce the rate of piracy (presumably) and will definitely not eliminate it. People copied content before the internet and they will continue to do so. Perhaps less so, but it will continue to occur.

Finally, did anyone independent really analyze the benefit to society and economy from the increased profit of the entertainment industry? Is there a pressing need? Are there fewer artists that create content? Are movie studios not making new movies? Would really more content be generated with these rules in place? Do make sure to figure into any analysis that decreased connectivity will to some degree stifle content creation, and besides the negative effect on society that this may have, this will also have a negative effect on the very industry which they are trying to “protect.”

Another perhaps strange effect is that people ARE willing to pay for things even when it is possible to get them for free. Economists often forget to figure in this effect. If you look at statistics of album sales during the napster days, you will notice that sales were up when napster was around and there was plenty of illegal music sharing, and sales went down around the same time that napster got shut down. Without drawing a conclusion of causality, such correlations should be on better scientific footing that simply the “obvious” conclusion that the music industry could have made even more money if napster wasn’t around.

I have not seen any such analysis done anywhere. The only arguments for are the faux-common-sense arguments that espouse the obviousness of the benefits of such rules and therefore there is no need to actually figure out what the benefits are.

Of course I am assuming that internet access does contribute to value creation in an economy and it is not true that internet is used solely for viewing porn and downloading illegal music. If I am wrong in this assumption then of course these rules are a boon to the economy. It will be a double whammy, less illegal downloads AND people will probably do actual work out of boredom from not being able to access porn.

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