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Wednesday, October 12, 2011

Piracy of intellectual property will stop as soon as poverty is wiped out

“We pretend to work and you pretend to pay us”, described the arrangement between proletariat and State in the old Soviet Union.
Today in developing countries, the relationship between intellectual-property pirates and copyright owners is similar: “We pretend to respect your copyright, while you pretend to sue us”.
The lack of law enforcement that often exists in the developing world combined with limitations in the pricing policies of copyright owners means that IP producers will continue to bluster about their rights, without doing much to enforce them.
As in all types of crimes against property, the relationship between owners and pirates is based on an equation that balances greed and fear.
Since the cost of making an illegal copy of a movie, song or software is far lower than the price of the legitimate product, and since in most developing countries it is hard to be punished for making or selling a pirated version, the equation in this case yields a simple conclusion: crime pays.
The pirates can even pretend that their actions have a moral justification. In this case it’s a variation on the doctrine – another tip of the hat to Karl Marx - that property is theft. Being nothing if not robust capitalists themselves, however, the IP pirates limit themselves to the principle that says, “overpriced property is theft”.
The argument seems credible, in a world in which copyright owners for the most part sell their stuff for a single, universal price.
A license to use the latest version of Microsoft Office Professional, for example, sells for around $500, whether the buyer lives in Norway or Nicaragua.
But while many Norwegians can afford to spend $500 for basic software, few people in Nicaragua or a hundred other countries are in the same position.
In this case, people who sell knock-offs of the same software for $50 can think of themselves as modern Robin Hoods, helping to even up one of life’s great injustices.
For their part, copyright owners have little choice except to have a single-price policy.
If they tried to charge different amounts, depending on how rich a country is, they would have to hire armies of economists to figure out which countries are upper-class, which ones are upper-middle and so on – and, as usual, no two economists would agree.
In any case, when it comes to consumption there is no such thing as a rich country or a poor one, just rich people and poor people.
If an American producer sold a software package for $500 in the United States and $100 in Uzbekistan, critics would justifiably complain that rich Uzbekis were being treated better than poor Americans.
In any case, the biggest markets by far for patent and copyright owners are in developed countries, where rules tend to be enforced.
This leaves intellectual property owners in poor countries with only one remedy – pretend for the sake of appearances to lean on local governments to crack down on IP piracy, knowing that many lack the resources necessary to provide basic security for their people, let alone enforce copyright rules, while in others the police and judges themselves are happy to provide cover for a lucrative racket.
For their part, the governments of poor countries are happy to look decisive, by pretending to get tough with pirates.
Psst! Comrade! Want to buy a DVD?

Fred Blaser
República Media Group