Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Lessig: Congress is broken and Obama has failed

Lawrence Lessig's name appears on our blogrole which, however, has been hibernated since August 20 last year. I can't tell whether our readers or my colleagues are aware of what he is up to. Today I came across this article in The Nation link here and this video on the internet link here and then he appeared on Bill Moyer's Journal last night (the transcript is up, but the video will appear next week) link here.

The easiest way to parse Lessig's current thinking is the four-minute video. He picks up on his disappointment with Obama who vowed to change the way business is done in Washington--and then seemed to forget his promise. Larry thinks along with many of us that Congress is broken and that the only way to change that is to limit campaign contributions. He proposes that they be funded by individuals and that they be limited to less than $100.

The most complete and eloquent account of Lessig's views is The Nation piece. Here he picks up on the recent Supreme Court decision in Citizens United v. FEC, which would make any limit on campaign contributions unconstitutional. "... the clear signal of the Roberts Court is that any reform designed to muck about with whatever wealth wants is constitutionally suspect." He despairs of getting the Congress, (that he calls the Fundraising Congress) to do anything. He proposes instead a Convention to amend the Constitution as the only possible avenue.

Here are two paragraphs from The Nation piece:

"Here a second and completely damning response walks onto the field: if money really doesn't affect results in Washington, then what could possibly explain the fundamental policy failures--relative to every comparable democracy across the world, whether liberal or conservative--of our government over the past decades? The choice (made by Democrats and Republicans alike) to leave unchecked a huge and crucially vulnerable segment of our economy, which threw the economy over a cliff when it tanked (as independent analysts again and again predicted it would). Or the choice to leave unchecked the spread of greenhouse gases. Or to leave unregulated the exploding use of antibiotics in our food supply--producing deadly strains of E. coli. Or the inability of the twenty years of "small government" Republican presidents in the past twenty-nine to reduce the size of government at all. Or... you fill in the blank. From the perspective of what the People want, or even the perspective of what the political parties say they want, the Fundraising Congress is misfiring in every dimension. That is either because Congress is filled with idiots or because Congress has a dependency on something other than principle or public policy sense. In my view, Congress is not filled with idiots."


"But it is this part of the current crisis that the dark soul in me admires most. There is a brilliance to how the current fraud is sustained. Everyone inside this game recognizes that if the public saw too clearly that the driving force in Washington is campaign cash, the public might actually do something to change that. So every issue gets reframed as if it were really a question touching some deep (or not so deep) ideological question. Drug companies fund members, for example, to stop reforms that might actually test whether "me too" drugs are worth the money they cost. But the reforms get stopped by being framed as debates about "death panels" or "denying doctor choice" rather than the simple argument of cost-effectiveness that motivates the original reform. A very effective campaign succeeds in obscuring the source of conflict over major issues of reform with the pretense that it is ideology rather than campaign cash that divides us."

For those of us who want to see intellectual property law changed or eliminated, here is the reality we face: nothing will change until something sharply limits campaign contributions.


I thank John Bennett for this post, and for the quality of his posts here in general. I've been following Lessig via change-congress.org more closely and frequently than I have been watching the Against Monopoly feed lately. A lot of the posts here just seem to be preaching to the choir, limited to debunking obvious libertarian myths, or discounting the economic non-experts merely for not previously reading the same literature. What we really need is people more like Lawrence Lessig, pushing the wider public for substantive changes in the way government makes these decisions, about IP and everything else. Anyone who really wants to get anything done in America needs to start by joining change-congress.org, especially after the horrible Citizens United vs. FEC decision in the Supreme Court. If we don't do something about America's pay-for-play political structure immediately, we will never see any real IP reform in our lifetimes.
Fred, I'm doing something immediately. I'm working on the Contingency Market. this is something that can level up the lobbying playing field wrt citizen vs corporation, just as it provides a non-copyright based revenue mechanism for the commissioning of published works.

'Doing something' is hard work that there but for the grace of god most people will go. Unfortunately, corporations (including those in their pay) have little incentive to help citizens out-lobby them or render their monopolies redundant.

Discussing what should be done, or what will happen if no-one does anything, are easy enough to be done in one's spare time. Still very helpful of course - I enjoy such discussion too.

It does seem strange to me that when we are faced with the possibility of a 23 trillion dollar national debt and more government influence in our lives than ever that anyone could be too concerned with intellectual property, which would appear to rank as a relatively low priority in the face of the government's apparent wish to take over our entire society along with their "take from the rich (and semi-rich) to give to everyone else" philosophy. If we fail to fix the government and reign government in, all else becomes meaningless.

I am sometimes disturbed by "government is evil" comments, but our politicians do seem to be trying hard to prove that the comments have merit.

Anon, state granted monopolies are effectively licenses for corporations to collect taxes on mankind's art and knowledge (that naturally belongs to mankind not monopoly holders) - given that 99% of the price of a monopoly protected work ends up as pure profit.

What happened to "No taxation without representation!" eh?

The world's greatest bank robbery has just occurred and no-one's noticed - that's as in 'robbery by a bank'. Indeed, more money has just been stolen by the banks from the people than has been stolen in all the bank heists put together since banks were invented.

Highlight of this comment: -- A solution to government will likely neither work nor be supported widely if it does not focus on a few key bottom-line issues: -- One of these is that concentration of wealth results in the opposite of competition. The billed "solution" would want to support competition and not concentration of wealth, even if we have to set rules to enforce this. -- Another point is that "all" people be given a fair chance to compete even if they start off weakly or did badly "last year". A system that allows accumulated effects to keep growing year after year will naturally lead to an upper class of some sort with the majority paying the price for the biased playing field from that point forward. How wide is the gap between these two major classes will largely depend on how much competition we required existed (as per above point). The US anti-trust laws today are not nearly enough (and enable a very wide gap). We need IMO wide and significant competition guarantees where no independent player or colluding players are allowed to get too large of a market. This requirement (which hopefully will be flexible) will introduce inefficiencies but prevent more harmful effects down the line. For example, rather than have a software company spread their proprietary wares widely to lock in a market, they would be forced into creating standards and rules that would enable competition. Their failure to support good standards that others do build upon will likely simply lead to "referee" action within a few years.

***** Now, the blah blah blah

I think any alternative to the current system needs to support a government that makes it a very high priority to support wide-scale independent competition where, almost by definition, no player owns too much of a market or related markets (going beyond the US antitrust laws, that focus on preventing exploitation of only the most extreme of cases).

The idea, but perhaps even encoded into "last-resort" rules, that should support this approach is that concentration of wealth in few hands is against free markets. Concentration means competition has been and will be disrupted without some sort of correcting action outside of this market failure.

Rules would recognize (assuming we believe this) that wealth concentration is against most individuals in that they can end up with small levers that would preclude reasonable efforts on their part, generally, to gain leverage tomorrow on those with the larger levers today. Anyone played Monopoly? Anyone consider how boring it would be to start each new game of Monopoly just as it was left off the last round (with losing players simply going further and further into debt of some sort)? Would those playing from the weak hand consider the "new" game to be fair?

The wealthiest, collectively, have an incentive to compete very little amongst themselves if they could legally collaborate and instead work largely to keep others out. They have a much farther way to fall than to rise, especially in the general case for a given quantity of effort and resources spent. There will be internal strife, but it will generally be accepted that outsiders should have a difficult time getting in. Just look at mob action. It's tough to get in, at least in a position to advance. In other words, most do not partake in the easy money. Markets are partitioned by the major players, yet there is still room for factions to overthrow past leaders. Needless to say, this system does not help the general welfare.

To consider a libertarian approach of no government or government that sets very few rules will not solve the problems stated above. We need teeth to enforce rules to require competition, and a natural consequence of this if we have good rules is that wealth is largely distributed rather than highly concentrated.

But let's go a little further. Can we have fair competition that is long-lasting and mindful of a democratic process if many people are being short-changed? I don't think so. If nothing else, people will not be able to strongly support the contradictions, and the masses will always be accessible to the next revolutionary with violent ideas. In fact, many will be skeptical of any "solution" that they think will enable Big Business to stomp on them and their rights. A "solution" without a strong-enough referee or social structure will be rejected by the masses (in my opinion, and rightfully so).

So if we support everyone, this implies we need rules that provide a degree of insurance (call it socialism) for everyone. Something that would allow anyone to have a chance to negotiate without being pressed between a bad option from those with large levers or otherwise potential death, illness, extreme poverty, ostracization, etc. Market participants need to be healthy (have a realistic chance to vote without duress and have access to information to make choices they believe will benefit them) to help a market be healthy.

Also, remember that it is much much easier to compete when you already have money even if you are foolish in your decisions. [A simple test: invest $100 vs $100 million in the stock market in the same industry and see in which scenario do you profit more and thus gain more future leverage.] So any rule or taxing regime will always have to recognize this, existence of growing amounts of easy money begot by earlier money, in addition to helping support this safety net system (whether directly or otherwise as a consequence of good rules that lead to this result in practice).

As a suggestion for a safety net system: require the first part of everyone's work to be paid/earned in such a way that basics of life are afforded. Then leave enough time in the week for people to compete for the "extras" in life. This system can be achieved probably in many ways, but it cannot be afforded if we don't have restraints on what some can earn at least with this first part of the work week, and relative to the cost of basic goods. Price controls would likely be essential (and doable perhaps if we use a "dollar" that is different from the ordinary dollar). We owe society a debt no matter how wealthy we are. We pay it off with the first 5-20 hours of the week (depending on your job and level), and then have the rest of the week to compete for the extras (or be an entrepreneur if you can't find such an "extras" job you like).

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