File Sharing and Private Property

A common view in the file-sharing debate is that we have two free-market values standing against each other. On the one hand we have free speech and the freedom of information. On the other hand we have property rights, some claim.

It’s not that simple, however. Those of us who really defend property rights must show that we understand what property rights are, why they exist, how they work, what they encompass and what role they play in the the discussion about file sharing.

Property is not a simple concept that we define the same way regardless of the circumstances, but rather an umbrella under which many different legal rights are crowded. Each type of ownership consists of its own set of rights and is associated with certain limitations.

Whether copyright should be considered a part of the property-right family is widely discussed. We will never get a clear answer. Since the question is a semantic one, it is to some degree an arbitrary choice to categorize or not categorize copyright as a type of property right. For the sake of this discussion it doesn’t matter what labels we use.

There are more differences than similarities between conventional property rights and copyright. Property is a convention that has existed so far back in history that we cannot determine it’s origin. Property rights have been adopted out of necessity. We need rules determining who should control a resource that is scarce. Ownership is also a necessary condition for freedom and entrepreneurship since almost all human activity requires the property rights to tools of various sorts.

The basic argument for property rights – the need to divide scarce resources between us – doesn’t apply to copyright and other immaterial rights. The access to an immaterial good is unlimited, as long as politicians don’t limit it with copyright laws. Therefore, economists normally describe copyright as a legislated monopoly. The monopoly, which is limited in time, includes among other things the right to spread and produce copies of an immaterial product. This causes the file-sharing conflict that we need to deal with.

The purpose of creating a monopoly for copyright holders was to increase the incentives for innovation. Whether the monopoly is effective has been questioned by FA Hayek among others. Recent Nobel-Prize recipient Eric Maskin has studied the software-patent legislation introduced in the 1980s and concluded that these laws have not led to an increase in the software industry’s R&D investments. I don’t suggest that immaterial rights such as copyright should be abolished, but we can never take for granted that laws actually work as intended.

Parts of the copyright laws appear to work well and can be enforced with reasonable means, for instance the exclusive rights to commercial use of an immaterial good. Commercial activities are generally carried out in large scale by few agents, and therefore it’s doable to go after those selling copies of a movie without the right holder’s permission. At least within the borders of one’s own country.

On the other hand, copyright laws that ban non-commercial copying and distribution don’t function at all. Unlike property rights, that have arisen through spontaneous order and fit naturally into our belief systems, the copy ban is the result of government planning. Planned economies seldom work well, and the copy ban is no exception. Citizens have always copied information to the extent that they have been able to.

Even if most of us agree that copyright laws should be enforced with reasonable means – as should other laws – that leaves us with the question about what copyright laws should encompass. The boundaries of copyright have been moved many times and it’s far from evident that today’s version is optimal. It would indeed be strange if a copyright regime from the 1960s was functional in our current information society.

At times of technology shifts, conflicts can arise between copyright and the property rights of the physical world. This happened when the video recorder came 30 years ago. Up till then no one questioned the fact that tv broadcasters decided what programs could be seen at what times. With the VCR, viewers could suddenly copy tv shows, taking away the networks’ exclusive right to schedule tv viewing.

Had politicians decided to outlaw the copying of tv shows the networks could have retained their exclusive rights – at least in theory. A VCR ban would however greatly interfere with the citizens’ right to dispose of their own technical equipment. Copyright stood against conventional property rights, resulting in a limitation of the scope of copyright.

We now face a similar choice, but with greater implications. At stake we obviously have parts of the copyright laws. But also at stake we have not only the freedom of information but also significant physical property rights.

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Horace Engdahl pushes for Internet Control

This is our second article in Expressen. It’s a response to the Swedish Academy’s secretary Horace Engdahl, who strongly opposes decriminalizing file sharing. 13 Moderate-Party parliamentarians signed the article.

Led by Swedish-Academy secretary Horace Engdahl, a coalition of special interests is attacking our proposal to reform the laws that currently criminalize millions of Swedes. They argue that allowing file sharing would be a hard blow to tens of thousands of creative artists. However, those that signed the article are not creative artist themselves. Instead it is a group of lobbyists who join Engdahl in claiming that they represent the interests of artists.

The article writers’ clients are not artists but distributors. It is fully logical that the Publisher’s Association is skeptical to a technical development that enables writers to distribute their work without the help of publishers. The Recording Industry’s interest organization IFPI is in the same boat. Recording studios are obviously not interested in a market where they themselves are not needed.

There will always be some people whose goal is to preserve the current order. When the market changes, they get frightened and call for harsher legislation. Their interest in stopping progress must be weighed against the public’s interest in taking advantage of the opportunities that technology gives them. If politicians had met the demands from the copyright industry throughout history we would have had a considerably poorer media landscape; without VCR:s, mp3 players and online tv.

Of course the media industry needs reasonable rules to play by, but the public’s view of what is reasonable differs from the one that the Swedish Academy’s secretary expresses. Therefore the ban on file sharing has lost its legitimacy, and the law’s prospects of being successful are nonexistent.

The right to reasonable rules should apply also to Internet Service Providers, who don’t want to be an online police force. Making broadband suppliers watch what their customers download on the Internet would be like making postal services open every package. Those who defend creators’ rights should also defend everyone’s right to communicate without surveillance.

It appears to be news to Horace Engdahl and his allied file-sharing opponents that the Moderate Party values freedom of speech and freedom of information. Had they done their homework they would be aware that decriminalizing file sharing was part of our election platform. The following could be read on the Moderate-Party web site: ”Today’s harsh laws have suddenly criminalized millions of Swedes. Such laws are of course not acceptable. If the Parliament has passed a law that doesn’t work in the real world, one should not be afraid of changing the law.”

Horace Engdalh claims that some of us who want to decriminalize file sharing are only seeking attention, and that we don’t understand what we say. This is incorrect. We have researched the file-sharing issue well and take it seriously. The issue is exceptionally complicated and therefore we have opted for the only alternative that is possible if we want to avoid a society where individuals are subjected to unreasonable surveillance.

The Moderate Party is an open organization valuing free discussion as a tool for shaping better policies. Therefore we have full respect for those of our party colleagues who believe in tougher anti-piracy laws, even though we are convinced that our party must come to a more pragmatic position.

Stopping file sharing is not as simple as passing a law. For every file-sharing channel that is closed, new ones will quickly open, and soon file sharing will be anonymous. Besides, a large portion of all copying takes place outside of the file-sharing networks on the Internet. Everything from email to chat software and cell phones can be used send movies and music. How does the Swedish-Academy secretary plan to prevent this? By searching citizens on the street and making razzias in every private home?

What do writers living in control states around the world think of the Swedish-Academy secretary joining the special interests’ fight again free information flows? It’s easy to demand harsher laws, but more difficult to stand for the consequences. Is Horace Engdahl prepared to defend the control society that he has now become a proponent of?

Decriminalize File Sharing

This is an English translation of an article that I, and six other Members of the Swedish Parliament representing the Moderate Party, had published in Expressen on January 3, 2008. The article, calling for decriminalization of all file sharing, has started a loud debate in Swedish media.

Last fall, Sweden’s government-appointed copyright analyst Cecilia Renfors released a report proposing to close down file sharers’ Internet connections, banning them from the online world. The responsibility to execute the ban is put on the Internet Service Providers. Internet Service Provides who refuse to cut their subscribers’ connections would be fined.

When the Swedish government sent the Renfors proposal out to agencies and organizations for consideration the criticism was harsh. The Swedish Courts of Appeal questions whether banning citizens from the Internet would indeed reduce online file sharing. Despite several other countries having already taken similar action, none have had good results to show for it.

The Data Inspection Board, responsible for safeguarding the individual’s integrity, asks whether the Renfors proposal is consistent with the protection of private correspondence that is granted by the European Convention on Human Rights. EU directives as well as national legislation say that the responsibility of the Internet Service Providers is to offer a tool for communication – not to keep track of what individuals discuss or what information they exchange. The Competition Authority adds that it’s unreasonable to give private businesses responsibilities that should belong to a government agency. The decisions to ban subscribers from the Internet would be arbitrary without a proper legal process. And so it continues when you read the comments from the major agencies. Agency after agency slams the Internet-ban proposal.

Representatives of the copyright industry are more enthusiastic to closing down citizens’ Internet connections, and they hold up France as a positive example. In France, government agencies, copyright holders and Internet Service Providers have been forced into an alliance. General Electric describes how it works: “In reality it means that the Internet Service Providers must watch what their customers do on the Internet and report it.”

The Antipiracy Bureau describes Sweden as a free zone for file sharers, and defends compromising the individual’s legal rights with the argument that other countries have done this already. Yet why should Sweden adapt to positions of countries like France? Sweden is one of the world’s most prominent technology nations, and our technology friendliness must be reflected in our policies. As part of a global network, we can offer Internet users all over the world the freedom of information that they are denied in their home countries.

Decriminalizing all non-commercial file sharing and forcing the market to adapt is not just the best solution. It’s the only solution, unless we want an ever more extensive control of what citizens do on the Internet. Politicians who play for the antipiracy team should be aware that they have allied themselves with a special interest that is never satisfied and that will always demand that we take additional steps toward the ultimate control state. Today they want to transform the Internet Service Providers into an online police force, and the Antipiracy Bureau wants the authority for themselves to extract the identities of file sharers. Then they can drag the 15-year-old girl who downloaded a Britney Spears song to civil court and sue her.

Will the Antipiracy Bureau be satisfied with this? Probably not, because even the harsher laws now proposed will not stop the file sharing. Already there are anonymization services on the market that make the new laws ineffective. For this reason, the Antipiracy Bureau will demand new tools that further intensifies the surveillance of the Internet. The simple truth is that almost all communication channels on the Internet can be used to distribute copyrighted information. If you can use a service to send a message you can most likely use the same service to send an mp3-song. Those who want to prevent people from exchanging of copyrighted material must control all electronic communication between citizens.

In the late 1970s, the copyright industry wanted to prevent people from recording TV-shows with then-new Video Cassette Recorders. In 1998 the recording industry tried to get mp3 players banned. We politicians have to make clear that we are not prepared to build the technology-hostile control state that would be necessary to satisfy the Antipiracy Bureau and their likes.