Historically, almost every significant economic crash has been due to one factor of the human psyche, the inability to conceive of change. Not adapt to change; we’re pretty damn good at figuring things out after the fact. Beforehand? Not so much. Entire industries collapse because of the assumption that the fourth quarter will be exactly like the first, only more so. This is true even when those assumptions are based on patent absurdities.One incredibly obvious absurdity that infects everyone from a two person tech startup to the federal government; prosperity requires indefinite growth. It’s ingrained in our psyche. But think about it. Economics is not divorced from the physical world, and in the end economics is still the organized distribution of resources. Things will always run out. Labor, energy, capital, customers, people’s attention spans, bandwidth, tax base— everything is finite. Therefore, at some point, growth must stop. The problem, of course, is because of the assumption prosperity requires growth, we’ve done everything to insure that when it does stop it becomes a massive disaster because all the systems we’ve constructed to assume growth don’t really work when growth stops. (Case in point, the design of the Social Security system, which requires a constant permanent growth in the working population in order to work.)Now, Microsoft’s existence is based on a similar absurdity, the permanent upgrade path. The idea that software is in a continual state of improvement, and that it is a valid assumption that the end user will continue to buy the new version of an application every few years or so. Both are at odds with reality. Every technology has an endpoint, there comes a time when a system is so mature that it does what it does well enough that any future meddling actually makes things worse. I write for a living, and deal with several flavors of MS Word every day. I can say that, for my purposes, there is absolutely no functional difference in any version of Word released since 2000. It’s a damn word processor. You’re not making it any better. The OS is facing the same problem. Intel has said there’s no compelling reason for them to upgrade their 80,000 PCs to Vista. The only reason the public’s buying the OS is because it comes on new machines— a substantial number of which are being downgraded to XP. The fact that XP is “good enough” is going to become a big problem for Microsoft. They’ll continue to push new OS’s onto new PCs, but fewer people are going to bother “upgrading,” meaning that developers are going to serve a Windows market that’s more and more fractured, and therefore they will not be as likely to utilize new “features” in the OS, (if half the computers there are running XP, you’re losing half the market when you develop something that only works for Vista or Windows 7). With less software requiring the new OS, it becomes even less attractive to upgrade. And as more and more of the stuff people do with computers moves to the internet, the OS on the machine becomes irrelevant. If your browser does all of what you need, why do you need Vista?In fact, Intel’s decision should give itself pause, because it’s based on a similar model. What happens to the tech industry when people don’t buy a new PC every three years? What happens when the five-year old PC works just fine?
I am a writer, that means I make money off of my intellectual property.This does not mean I like digital rights management in any way, shape, or form. Here is an object lesson why. I don’t even blame Microsoft for giving the finger to all their former MSN Music customers, because tying rights to a user’s hardware is an inherently untenable model. With any DRM scheme, you are telling the end user “buy content, buy content, buy content” at the same time saying, “but we’ll have to shitcan all the content when the hardware changes, we sell the company, or go bankrupt.” Do we want a world where a publisher can go under and people have legitimately owned content that just expires? Of course, the bean counters like the idea of the user buying it all over again, but how many users will tolerate that? Who's willing to gamble their entire library on the chance that Kindle 2.0 won’t be backward compatible?The economic goal here is not to squeeze the end user, it’s to make sure the content creator gets paid enough to continue creating the content. Metallica and Haraln Ellison may bitch and moan about their audience “stealing” their work, but unless they’re at the point they're selling stuff out of their trunk, the end user ain’t who’s signing their checks, and books and CDs ain’t what they’re selling. They (and I, and most creative types) are selling the right to publish our creation to some other entity. As long as that entity makes money on the transaction, they will continue to buy Metallica’s songs and Mr. Ellison’s books. Royalties are just a mechanism of profit-sharing that’s essentially arbitrary— most writers get an advance against those royalties that’s negotiated as high as possible to get as much money as possible up front. So, ideally, you get paid a lump that hits a sweet spot that exceeds all the future royalties by just enough not to eat into the publisher’s profits so much they don’t want to buy the next book. DRM exists as an attempt to preserve the current economic model, not to serve the ultimate goal of that model. The goal is to make money on content, not to force people to pay for content, a subtle, but profound difference.Frankly, if a publisher of mine can figure out how to turn a larger profit on my books by giving them away, assuming I share in that profit somehow, I’m ok with that.
You may have heard of the non-profit initiative called “One Laptop Per Child.” It is essentially an attempt to bridge the technology divide between the technological west and the developing world. OLPC was founded by Nicholas Negroponte with the goal of producing a laptop as cheaply as possible and provide it to schoolchildren all over the world. While development goal was a laptop under $100, they’ve managed a production model at under $200, which seems quite in line with the group’s mission. The XO is being produced and distributed as we speak.Now, of course, since the hardware takes up most of that $200 cost, the XO runs a Linux OS and associated open source software. And we all know that when someone actually distributes an inexpensive flash-based Linux laptop, God kills a Microsoft Marketing VP.Funny thing is, whenever someone opens a market, Microsoft wants to stick its 800 lb gorilla foot in it. Doesn’t matter how much sense it makes, they want some of that hot Third-World computing action and they’re asking OLPC to beef up the hardware so the XO has half a chance of running a suitably crippled version of Windows XP. Wow. They’re whining about being locked out of hardware when they’ve gone out of their way to dictate terms to hardware vendors that would make it impossible to run a non-proprietary (i.e. non-Windows) OS— and incidentally making sure the same hardware doesn’t even work with Vista a fair bit of the time.Apparently, SFWA doesn’t have a lock on irony.
Microsoft seems to be in the vanguard, defending a 19th Century economic model for IP law. Not only has it deformed the purpose of its operating system into one giant copy-protection scheme, but now it’s attacking open-source software vendors with vague threats of patent violations.Here’s the problem in a nutshell: copy protection is essentially impossible. The defenders of old-style IP law are throwing money, lawyers and technology at an insoluble problem. The fact is, if you allow a user to see content, that user can reproduce the content. Throw whatever technical hurdles you want at the issue, in the end, you have to give the user access to the content or there’s nothing to read, watch or listen to.Everyone seems to focus on the wrong end of the problem. The economic issue is not how we force all the consumers to pay for that Metallica song— tain’t going to happen, as everyone who owned a radio-cassette player in the 80s will attest to. The economic issue is how do we compensate content creators for the effort used to produce the content? Paying royalties on copies of the work is a model from the industrial revolution, back when books were just another widget coming off an assembly line. Not a good model in a digital world where one book/cd/movie/article can be replicated ad infinitum with little or no central control. (Ironic example: look here then here)The fact is that lack of control has already happened. And draconian measures by Microsoft, the RIAA and the motion picture industry actually worsens the problem by pissing off average end users and eroding the moral compunction against wholesale piracy— which is the only real clothing the emperor has at this point.The other fact is, I’m not one of those that believe you can legislate the economy. Sure, you can make things worse, or inconvenient, or dangerous— but eventually a new mode of operation will emerge. The corporations that adapt will survive, and those that don’t adapt will collapse, throwing their last few millions at lawyers and legislators trying to make it stop. As for individuals, I am not as pessimistic as the luddite Dr. Hendrix. If anything, the need for entertainment in this economy is increasing exponentially, and there will be no shortage of opportunities for writers, musicians and actors to make a living. Just don’t expect your work to stay in a nice little box after you cash the check.
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