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Distinguishing consumer protection from rent-seeking


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Distinguishing consumer protection from rent-seeking

  1. 1. Distinguishing consumer protection from rent-seeking Dr Ian Brown Oxford Internet Institute
  2. 2. Other voices in the © debate <ul><li>Economists </li></ul><ul><li>Innovators & artists </li></ul><ul><li>Citizens </li></ul>
  3. 3. The Welfare Costs of Tariffs, Monopolies and Theft <ul><li>“ If the profit rectangle is the income transfer that a successful monopolist can extort from his customers, surely we should expect potential monopolists, with so large a prize dangling before them, to invest large resources in the activity of monopolizing.” -Prof. Gordon Tullock (1967) </li></ul>
  4. 4. Human Action <ul><li>“ Those fighting for free enterprise and free competition do not defend the interests of those rich today. They want a free hand left to unknown men who will be the entrepreneurs of tomorrow and whose ingenuity will make the life of coming generations more agreeable.” -Prof. Ludwig von Mises (1949) </li></ul>
  5. 5. The Wealth of Nations <ul><li>“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” -Adam Smith (1776) </li></ul>
  6. 6. CTEA 1998: An Economic Analysis <ul><li>“ If the producer has resources remaining, after funding all the projects whose expected returns are higher than the cost of capital, this remainder should be invested elsewhere, not in sub-par projects that happen to be available to the firm. If a producer pursues the same set of projects in any event, then its incentives will not be improved from the mere fact of a windfall from consumers.” -Friedman, Coase & 15 others (2002) </li></ul>
  7. 7. Intellectual privilege <ul><li>“ Hence my complaint against copyright: it violates the rights we would otherwise enjoy at common law to peaceably enjoy the free use our throats, pens, and presses. That is not to say that copyright is per se unjustified. We can excuse facial violations of our common law rights, such as the takings effectuated by taxation or the restraints imposed by antitrust law, as the costs of obtaining a greater good. But it does mean that copyright qualifies, at best, as a necessary evil.” -Prof. Tom Bell (2007) </li></ul>
  8. 8. New business models <ul><li>&quot;It's a great time for music. But the record companies have finally worked out they're on the losing team. Whether you do it yourself through MySpace, or on a label, the record is just the smallest part. It's all based on a model born of the 1970s and 1980s. It doesn't apply to 2007.” -Alan McGee (2007) </li></ul>Credit: Peter Mallett
  9. 9. New business models <ul><li>“ We believe that suing our fans is destructive and hypocritical. We do not want to sue music fans, and we do not want to distort the law to coerce fans into conforming to a rigid digital market artificially constructed by the major labels.” -Steve Page (2006) </li></ul>Credit: Barenaked Ladies
  10. 10. New business models <ul><li>&quot;I like the people at our record company, but the time is at hand when you have to ask why anyone needs one. And, yes, it probably would give us some perverse pleasure to say 'F___ you' to this decaying business model.” -Thom Yorke (2006) </li></ul>Credit: Matthew Hickey
  11. 11. Conclusions <ul><li>Can we please focus on consumers, artists and innovation rather than large right holders? </li></ul><ul><li>Gowers and Hugenholtz reports a good start </li></ul><ul><li>French plans to cut off citizens from the Information Society an appalling idea </li></ul>