Don Marti

Thu 23 Jun 2011 05:59:40 AM PDT

Dean Baker on free markets

Just got done reading Taking Economics Seriously by Dean Baker. To quote from near the beginning of chapter 1:

"In general, political debates over regulation have been wrongly cast as disputes over the extent of regulation, with conservatives assumed to prefer less regulation, while liberals prefer more....Conservatives support regulatory structures that cause income to flow upward, while liberals support regulatory structures that promote equality."

A little general, but good point. It's refreshing to see a book that points out some of the creeping corporate welfare disguised as free market policy. And the book is worth reading just for the part about medical tourism.

The first example is the copyright system, though, and Baker unfortunately skims over a key difference between actual copyright law and anticircumvention law, or what you might call "protrust" law. (We have antitrust, and anticircumvention does the opposite, so might as well call it protrust.) He mentions the Dmitry Sklyarov case, in which a Russian programmer was arrested for writing software to "get around a form of copyright protection."

But "copyright protection" doesn't really describe technological systems very well, because there's no DRM system whose restrictions actually map to the same boundaries as real copyright law. DRM systems always go further. The reason why the CEO of Dmitry's employer got an "Honorary Deputy Sheriff" award was that the software was sold to made copies that the Fort Bend County Sheriff's Department was permitted to make under copyright law.

From a free market point of view, the problematic part about the kind of "anticircumvention" laws that Dmitry was accused of violating is this: they effectively turn private feature decisions from technology vendors into laws enforced at taxpayer expense. Copyright law has principles such as fair use and first sale, which no automatic system can handle.

A free market view might be something like this: the government won't regulate anti-copying and other restriction features of media systems, but it won't offer an enforcement subsidy either. Tim Lee wrote, in Circumventing Competition: The Perverse Consequences of the Digital Millennium Copyright Act,

"Congress ought not to enact specially crafted copyright legislation to assist particular industries in enforcing the terms of their contracts. If a contract’s terms are arbitrary, unreasonable, and impossible to enforce....then the company ought to bear the legal and public relations costs that come with monitoring and suing its own customers."

And the result of the Dmitry Sklyarov case? The US government dropped the case against Dmitry himself, continued with the case against his employer, and it ended in a jury nullification of the DMCA. Has there been a standalone anticircumvention criminal case (not just anticircumvention charges added to an infringement case) since then?