Esoteric Dissertations from a One-Track Mind

June 27, 2007

The Broken Window Fallacy as Employed by NBC-Universal

Filed under: capitalism, politics — codesmithy @ 7:31 am

NBC Universal used a variant of the broken window fallacy in congressional testimony about the economic impacts of P2P movie sharing. People are playing up the fact that they mentioned corn farmers, which is a bit absurd and demonstrates extraordinary naivety on the issues of industrial corn production in the United States. What they were trying to argue is that movie-going supports many other industries. However, if they really want to make that case, they can’t just look at how money was spent in one particular case, and totally dismiss the fact that the money would have been put to other uses in alternative scenarios. This would have to be based on genuine progress indicators to the society as a whole.

It is possible that P2P is a boon to genuine progress indicators since more people have access to the movies at a lower price. Millions of people receive a benefit versus the content provider which takes a loss. But the net benefit to society, as a whole, is greater. Now, obviously, this is not an ideal situation because content providers would quickly go out of business, the very reasons copyright laws are a good idea in the first place. However, that is a trade-off, the benefit to society on one hand versus incentives to create on the other.

It is obvious that the legislative system has swung too far in favor of the copyright holders. The most blatant recent example is the Copyright Term Extension Act which retroactively extended copyright for works already published. If copyright is justified in terms of an incentive, retroactively applying is absurd by the laws of causality. Extending the term definitely sweetens the deal for people planning on writing works in the future, but it has no bearing on what was done in the past, since no incentive of further copyright were required in order for the work to be created, ipso facto. The Supreme Court upheld this corruption saying that it was Congress’ right to set whatever terms it wished with copyright terms and limits.

This is one of many examples of businesses, this time in the entertainment industry, using our government to guarantee their continued profits at the net detriment of the general welfare of all the citizens. That said, I don’t necessarily endorse the use of P2P technology to share current movie releases, since under reasonable copyright protections movies such as “Pirates of the Caribbean” would be protected. However, movies such as “Dr. Strangelove” or “Casablanca” would be in doubt. I could see civil disobedience for old movies, but not current ones. Claims of righteousness by P2P movie down-loaders to stick it corrupt copyright laws strike me just as disingenuous and self-serving as entertainment industry’s arguments to extend copyright retroactively.

However, the arguments about copyright don’t have the same emotive quality. In fact, a careful examination of the pros and cons of current copyright law is the last thing the entertainment industry wants. Instead, they stick with straw-men, ignorance, or just plain lies. I am just struck in awe that they use such blatantly transparent arguments. What did we do to make them hold our collective intelligence in such contempt? By wanting to see their creations in the first place?

1 Comment »

  1. […] long ago. If we don’t impeach now, then that part of constitution is effectively dead, just like our copyright laws. There will always be some reason, not to impeach the president, at least not over something as […]

    Pingback by James Madison on Impeachment « Esoteric Dissertations from a One-Track Mind — July 18, 2007 @ 10:25 am

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