August 03, 2004 10:06 PM

Is Piracy a Major National Security Threat?

Businessweek has an interview with David Israelite of the DoJ about piracy and its effects.

In it, he makes a rather remarkable claim:

Q: You've said that the theft of intellectual property is a national security problem. Why?

A: First of all, we talk about it being an issue of economic national security. Our economy is so based on intellectual property ideas that, unless we can protect them, we're really looking at a situation where it's going to hurt our ability to survive as a country.

Secondly, so much of what we do now involves computers, whether it be with software or other types of communication lines. Often, intellectual property is a key component to the things we do to protect ourselves as a country.

Lets have a look at these two claims.

First, there is the question of economic losses from piracy. The entire US movie industry's revenue stream is somewhere like $40B. The US recording industry's revenue is something like $15B. (These numbers might be off a bit but they're the right ballpark, which is enough for this calculation.) That's $55B total. The U.S. economy as a whole is somewhere in the vicinity of $12,000B. That means if the entire music and movie industries vanished without a trace, the economy would (worst case) shrink by something like 0.4%. Note that this does not take in to account new economic activity that might be engendered by piracy, which might be substantial.

Even assuming that we had much more than 0.4% drop in economic activity with the demise of the movie and record industries — which I seriously doubt — it would still hardly count as something that could, and I quote David Israelite, "hurt our ability to survive as a country". I suspect that, given the figures from recent recessions, we could manage far worse without our "survival" being at stake.

Second, Mr. Israelite notes that people use computers and communications lines, and then somehow implies that computers or communications systems would be threatened were intellectual property threatened. I will note that I am writing this blog on a computer using no proprietary software whatsoever, and my server has no proprietary software on it either. Obviously our use of computers and the internet could continue unabated were proprietary software to vanish. If Mr. Israelite has a specific point on this, he has made it rather poorly.

Overall, I judge the claims he makes to be poorly founded. However, the promulgation of such claims is rather predictable in the light of Public Choice theory.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Intellectual Property, Politics

July 28, 2004 2:27 PM


I've been citing Wikipedia articles a lot in my recent postings.

I'd like to give the Wikipedia people a bit of a plug. They've instigated a free encyclopedia, written by... well, anyone who cares to help write it. ("Free" in this case means both the free software and free beer senses of the word.) The web site that hosts the encyclopedia is a "Wiki", a system that allows anyone who sees a problem with a page or wants to contribute to do so, immediately. There's literally a button on every part of every page named "edit".

Wikis, like all "open source" style projects, work on the stone soup model. You start with a small implementation of an idea and convince lots of people that they should help you improve it. What starts as a kettle and a rock turns into something far, far better. The public good "problem" is stood on its head. The non-rivalrous, non-excludable nature of pure information doesn't bring the "market failure" traditional economic analysis would predict, but instead becomes an advantage begging to be harnessed.

If any project shows the power of an open source community, it is Wikipedia. In a few short years, they've produced, for free, one of the best information resources I'm familiar with, and they've barely even started. If you haven't looked at Wikipedia, you should.

By coincidence Slashdot is running an interview today with Wikipedia's founder Jimmy Wales.

There's a great quote in the interview that I'd like to share:

I frequently counsel people who are getting frustrated [...] to think about someone who lives without clean drinking water, without any proper means of education, and how our work might someday help that person. It puts flamewars into some perspective, I think.

Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That's what we're doing.

I think he's on to something. Couple

  • An internet filled with the complete sum of human knowledge
  • $10 laptop computers with cheap satelite internet access
and I think that it will no longer be possible to keep people poor and ignorant except if they want to be, no matter what their neighbors, religious leaders and governments might want.

For a fictional vision of what such technologies could bring, see The Diamond Age by Neal Stephenson.

July 26, 2004 10:06 PM

Run a fan site, go to jail.

I've always thought that running a fan site for a television program is a strange pass-time. You spend lots of energy promoting and advertising someone else's product for free, and no one from the company is ever likely to even thank you for for it.

However, there is a difference between ingratitude and filing charges for criminal copyright violation, which is what the MPAA has done to a guy running a Stargate SG1 fan site.

I wonder if anyone told the folks at the MPAA that trying to jail your customers is bad for business?

Of course, the MPAA has a history of taking stupid positions.

[Originally seen on bOINGbOING and via Adam Fields]

ADDENDUM: It appears that the story is in fact months old. You can find a government press release on it here. I have no information on what may have transpired since then.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Intellectual Property

July 26, 2004 9:45 AM

Are AK-47s Pirated Goods?

The New York Times has a front page story (sorry, registration required to read it, and it probably won't be accessible in a few days anyway) about how the Russians are upset about the "pirating" of the AK-47 worldwide. They assert that the numerous clones of the famous rifle made in factories around the world are illegal because Russian intellectual property is being used without any licenses.

On the face of it, this claim is completely ridiculous. The rifle was designed over 50 years ago, so any patents that might be claimed have long since expired. There might be a claim on the name "AK-47" itself, as a trademark, but the usual rules on trademark say "police it or lose it", and the mark has been in use as a generic term for the design of this particular rifle for so long without anyone being sued that I doubt any court would now enforce a claim for such a mark.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Intellectual Property