I have, curiously enough, been thinking about IP for quite a long time. It all started when I had my 8-bit Commodore 64 running at 1 MHz (that’s right 1 megahertz. More than 1,000 times slower than the slowest computer you can buy new today.)

This was still back in the day when people actually typed-in program listings from magazines. Compute!’s Gazette and later RUN were the major sources, Commodore Power/Play, becoming less so as time went on. (They did have a lot good stuff available directly on floppy, through their monthly Loadstar releases.) I actually don’t remember who owned the copyright on all that stuff—the original author, or the magazine.

But what I remember are those public service ads in the back of the magazine, warning people about “software piracy.” It is only much later that I discovered that there was an enormous struggle between people like Bill Gates, who believed that code belong to the original copyright holder forever (or at least as long as the copyright laws allowed), and people like Richard Stallman, who believed that code was like any other object that could be bought and sold. Once someone throws down $50 for a floppy disk, that code should be free for them to play with however he/she wanted to.

Obviously, Bill G won big-time, and Stallman ended up forming GNU and the FSF, and we’re still in the middle of this battle, and Bill G still has the upper-hand for now.

But Stallman’s position outlines the whole problem with IP in the first place.

Market capitalism, as expounded by Adam Smith and his Invisible Hand, has relied on the notion of property for centuries. Before the advent of intellectual property, all property was something tangible. Material goods, resources, commodities. The central transaction was the exchange of said material product for currency, which as has been pointed out, is a convenient fiction we have all decided to believe in , in order to simplify our ability to buy and sell. But in those days, currency was actually pegged to something of worth, usually some rare mineral like gold or silver. But we’ll get to that.

The key thing about real property—as opposed to intellectual property—is that if I give you 5 gold coins, you will give me the cow. Once you give me the cow, you no longer have any rights to the cow. The cow no longer belongs to you. It is no longer in your possession.

This is where IP varies wildly from classical property: it turns out that if you sell me an idea, I now possess the idea. But I have not deprived you of the idea. We now both own a copy, so to speak.

If IP were like any other kind of property, I would be free to do what I wished with the idea. I could sell it to another person. I could modify it and put it into action. Produce something of worth with it. I would actually own the idea.

What ended up happening instead is that the original stakeholder (often not the actual creator of the idea) insisted that the idea, no matter how often they divulged it to other parties for x amount of currency, would be theirs. Originally it was for a set number of years, but in time, the idea would be released to the public domain. Obviously, the stakeholder would still be able to make money off of the idea, they just no longer had exclusive rights to it.

In original practice, this was a great idea. Ideas are hard to come by, and if some other guy just copies the idea and sells my idea for cheap, I’m screwed.

But where it started getting jacked up was the fact that the stakeholder was granted rights to extended their copyright, or patent, over and over again, ad infinitum. There is now the stark possibility that things under patent and under copyright will never go into the public domain.

This is where we start running into problems of generativity (to use the word Jonathan Zittrain is fond of.)

Human nature being what it is, this is not surprising. We have survived an entire decade where the mantra was “greed is good.” Maybe for the greedy person, not so much for everyone else. A lot of lives were ruined by Reaganomics, labeled by his own vice-president as “voodoo economics”, and we’re still paying the price today. What we found out the hard way is that greed is not good, certainly not in the extreme form that was touted as a religion in that decade, and probably not in the moderate-to-severe form that we continue to operate under today. It is a well known fact that greed stifles both innovation and destroys trust, two of the key principles that a well-oiled capitalistic machine requires to keep on chugging.

But, lest you get the wrong idea, I’m not against intellectual property per se. I’m certainly against the notion that once you have your Big Idea, you should be able to make obscene profits off of it for the rest of your life. If you want to be considered a productive member of society, you ought to remain productive. If we’re going to be espousing a philosophy of TANSTAFL (there ain’t no such thing as a free lunch), then we should really espouse it. Life is a struggle, right? You’re supposed to just suck it up, right? So once your copyright runs out, too bad. Hope you have a new Big Idea up and running.

I am also against the notion that you forever have rights to the idea that you sold me. I mean, yes, I agree with copyright law. If you sold me an idea, I have no right to cross your name out and pretend that it was my idea. Credit is given where credit is due.

I would like to have the right to modify the idea, once it is sold to me, as I see fit. Add a little here, trim a little there, fit it into my own usage patterns. Once it’s modified, you shouldn’t be able to own the modifications. I should still be required to give you credit for the original idea, and maybe I shouldn’t be able to put you out of business with my modified idea. But if I’m not making any money off of it, I should be able to give copies of the idea to whomever I want as I see fit, as long as I continue to give credit where credit is due.

Here, the current copyright and patent system disagrees vehemently. This is where Stallman comes to the rescue.

First a little back-history. For those not familiar with the original hacker ethos, before the rise of Microsoft’s empire, computer programmers routinely traded pieces of code here and there. You can tell this just by looking at the source code of any modern UNIX. There are all sorts of bits and pieces that have been swapped here and there, like pieces of DNA being spliced and reintegrated among various lineages. This was not a big deal, because in those days, machines were very limited, and each one generally ran something highly specialized. Software was not yet a commodity that could be shrink-wrapped and easily transferred from one machine to another. A software developer would grow the code on a particular machine that performed a particular function, and generally, that function en bloc was of very little use to others. Sure, you could dissect the application for useful bits and pieces, and that’s what the early hackers did. Whatever could be generalizable was generalized, and the application specific bits remained on that single machine.

Once shrink-wrapped software came into play, Microsoft wanted to make sure that they would get paid in perpetuity. So draconian software piracy laws were put into place. None of this promiscuous code sharing is allowed. Hell, it’s illegal to try to reverse engineer the byte code. Microsoft even went after guys who were trying to do the whole “clean room” thing.

This, as Jonathan Zittrain could tell us, was very stifling for innovation.

But the hacker ethos never really died. After all, computer science was born of the ivory towers of academia, where the notion of profit was a thought of whimsy. Contrary to what the average businessperson thinks, academia is not all peace and love and drug parties. The difference between business and academia is the currency which defines success. In business, it’s obviously how much money you make. In academia, it’s how many ideas you come up with and implement. And as far as I can tell, it’s harder to come up and implement ideas than it is to make money. Consequently, academia is probably a more cut-throat place than the average business person would think. You’ve got smarter people vying for a smaller pie (it’s not like the grants the NIH or DOE give allow you to live lives of luxury), with do-or-die consequences. Publish-or-perish. If you think making it in a corporation is tough, you should try getting tenure some day.

So innovation at least continued there. The hot-bed, as anyone alive in the two decades could tell you, was the San Francisco Bay Area. Berkeley. Stanford. Those were the places to be. Without them, there would be no BSD UNIX, no Sun Microsystems, no Sendmail, no BIND, no mice, no Apple, no Yahoo, no Google. We would still probably be dinking away at non-networked 80x24 line terminals, if we even owned them at all. The guy who said that there was a world-wide market for maybe five computers would’ve been right.

The rest is history. In 1994, Linux went 1.0, and so did 386BSD. The importance of the GPL and BSD licenses would not yet be appreciated for several years, but this is when it became viable not to run Windows. (I actually did run Linux for a short while on an already antiquated 80486/50 Mhz, at the suggestion of my roommate who was at least a hacker demi-god, if not a full fledged deity.) But the thing that set everything off was the release of the first graphical WWW browser—Mosaic. (Naturally, one of the first uses that one of the guys on my floor put it to was to find porn.)

Before anyone had coined the word “monetize,” before big business and traditional media even realized that they were about to be overwhelmed by a tsunami of epic proportions, what the graphical WWW did was make navigation idiot-proof. The net was no longer the privileged demesne of hackers. Social science and humanities majors roamed the net in search of articles, software, and porn.

And so we come to the software. This is probably about the time that floppy disks started becoming less useful. Zip drives had just come out. Consumer-grade CD-Rs were on the horizon.

The first thing that Eternal September did was completely break open software distribution. Even at 14.4 kbps, people were downloading software like it was crack. Some of this was completely legal. Some of it was totally not. Bill Gates’ nightmare scenario had happened. It was extraordinarily easy to get a piece of software you needed, given patience and time, something that the average student had plenty of.

Around 1997, more and more people started finding CD-grade audio tracks encoded in mp3. This is also when the peer-to-peer filesharing era began, pre-Napster.

A word about the music industry at the time. The price of CDs were still ridiculously high in the late ’90s. If anything, they were getting more expensive. Which, if you listened to a lot of the music at the time, didn’t make much sense, market-wise. How could the industry push a higher price when more and more of the music they were selling was such utter crap? I remember good CDs would have maybe three or four good tracks. The rest was bilge. Filler. Bullshit. You could only get singles in cassette form, too.

This would’ve probably been a stable situation if the RIAA were content with gouging consumers with crap CDs. But the fuckers got greedy. They started attacking used-CD stores. Making mix tapes was demonized. Even dubbing a new release from the radio was vilified. All the while, music continued to get crappier and crappier. Clear Channel started its consolidation movement, ensuring that one place where you stood a chance of finding something decent for free, would also get crappier and crappier.

You start treating your customers like criminals, and there’s a percentage increase in the likelihood that they would start behaving like criminals.

A word, again, about IP, and theft. See, theft is pretty straight-forward when it comes to real property. If I steal your car, you don’t have the car anymore. Same thing with your CD player, your computer.

With IP, however, if I download a copy of your song, well, you still have your song. You are not deprived of your song. You may be aggrieved because I now have a copy of your song without paying for it, but even this is not theft, at least not in the real property sense. You can’t count opportunity cost as theft. It would be outrageous to ask for compensation for things that are contingent. That way leads to insanity. In all likelihood, I wouldn’t have paid for it anyway, so it’s not like you lost a sale.

On the other hand, yes, this is copyright infringement, which, until recently, would not be prosecuted under criminal law. One can argue about exactly how much harm someone is sustaining from distribution of material that the receiver would probably never have paid for anyway, but this debate is a particularly well-worn track that I have no desire to trod upon right now. It would certainly be problematic if I began turning a profit from said distribution, but barring that, I think it’s still pretty damn equivocal.

But, you know what, once the RIAA started getting kicked where it hurts (in the pocketbook), miraculously, good music started coming out once again. You could buy a CD (still at obscenely inflated prices) and it might actually have five or six good tracks on it. The industry actually got better. Who knew what a little actual competition would do to the free market!

Oh, sure, as the pipes got fatter, and the content came down faster, filesharing grew to epic proportions. Napster came, revolutionized, then went. Kazaa came afterward, then eMule, and on-and-on, and now there’s Bittorrent.

But you know, what? Real fans still want the CDs. Hell, we want the vinyl. We want our favorite artists to get paid commensurately to the work they produce.

Unfortunately, this is not how it actually works. The RIAA is kind of like a protection racket. They take upwards of 80% of what you make as an artist. Oh, you’re still making a ton of money if you’re a quadruple platinum-selling artist or band. But there’s a conceptual disconnect between the producer of the IP, and the people who make the most profit from the IP.

The other thing is that the RIAA continues to make absurd claims about what is and what is not under copyright law. Under the original laws, it is perfectly legal for me to rip the CDs that I have actually purchased and turn the tracks into MP3s or AACs, so long as I don’t distribute them. What does the RIAA call me? A thief. What they demand is that I not only buy the CD, but if I want to play tracks on my iPod, I have to buy the mp3s separately. And if the iTMS authentication system ever went into the crapper (like how Microsoft’s Play-for-Sure is swirling down), I would have to re-purchase them again. This is utter crap and infringes on my rights.

Again, the rest is history. Things came to a head when Steve Jobs wrestled for control of who gets to distribute what. It didn’t change the fact that the artists are still getting shafted, but at least the consumer (for the most part) only has to pay for the tracks they actually want, and not the crap filler tracks that the RIAA is so fond of. The turning point of all this is the fact that the Steve understands that DRM fucks things up. To appease the RIAA, he locked iTMS up with a pretty rudimentary form of protection that us trivially circumvented. (Although, truth be told, all DRM will be circumvented in time. As Bruce Schneier—cryptographer extraordinaire—points out, trying to make bits uncopyable is like “trying to make water not wet.”) But now that he had them by the balls, he decided that it was time to stop screwing around and actually give people what they want: un-crippled digital versions of their tracks.

Radiohead and then Trent Reznor went even further an decided that they didn’t need anyone’s help with distributing their music.

We are entering uncharted territory.

So none of this would probably even matter if America actually made things any more. If that were the case, IP would be a negligible part of our economy, and we could go on with our non-sustainable consumerist ways. Unfortunately, what we apparently still make are crappy cars no one else wants, and Apple, Inc. products (even though most of the parts come from Korea and Southeast Asia.) Oh, and weapons of mass destruction. How could I forget about those? The only other thing that we churn out, quite successfully, I must say, is the ever-vaunted IP. Movies, video games, music, etc., etc.

Now let’s say that the RIAA and the MPAA managed to retain a lockdown on their sundry wares. It just wouldn’t matter. Certainly the Chinese don’t give a flying fuck about our copyright law, and you can also find the newest releases on DVD, CD, and MP3/AAC in Russia.

IP just doesn’t have the robustness that traditional property has. In this digital world, there’s absolutely no way to stop people from making knock-off copies. Oh, you can try and strangle the pipes, but that’s only going to work in the developed world, which unfortunately, has only a small fraction of the world’s population. It’s not going to stop the actual, real pirates. It’s not even going to slow them down. All you’re doing is pissing off your paying customers, making it even more likely that someone in the developed world is gonna go to them for their product instead of to you.

The only other thing we really got going for us is the service industry, I suppose. It’ll be a long while before AI and robotics can actually replace some of these specialties, but the imperial decay is coming. You can smell it the way I can smell Pseudomonas and C. difficile. Oh, it’s not going to happen all of the sudden. We’ve already had our Vandals-at-the-gates moment with the WTC attacks. It may even take several decades before we come to the realization that the emperor has no clothes. But it’s coming. It’s no joke. Get ready.