----- Original Message -----
From: "Doug Henwood" <dhenwood@panix.com>

-I'm
-constantly getting emails from people complaining that LBO is too
-expensive, that I should give it away on the web, that I should put
-up Acrobat versions of Wall Street and A New Economy? (when it's
-done, which won't be long, I swear!), etc. Like I'm not trying to pay
-the rent by writing, like it costs nothing for Internet access,
-subscriptions, phone calls, travel, and like it takes no time to
-maintain a website. The net has bred a righteous sense of entitlement
-among users, because it seems to be costless - there's no commodity
-you can drop on your foot, so it must be free, right?

Yet it should be free.  It is horribly inefficient to have a useful item
that is costless to reproduce more widely be restricted through an
artificial narrow commodity sales scarcity.  There is an argument that
market transactions make sure that scarce tangible goods go to their most
efficient use (however much modern economic power may distort what
"effiiciency" means in particular contexts) but there is no efficiency gain
IN DISTRIBUTION from commodity exchange in information goods.

The problem is that there needs to be incentives and support for production
of such goods, but the market is an inherently inefficient mechanism for
that goal.

What would make more sense is for all the money currently paid for the whole
variety of information goods to be pooled and paid to the creators of the
goods on the condition that they be published widely in the most efficient
manner.  The problem with that now is you have free rider problems where
once goods were produced, those currently paying would refuse to pay
anything.

Which seems to call for mandatory fee collections - ie. taxes.   Information
goods are frankly natural utilities for much the same reason traditional
utilities once were-- there are high upfront costs for production and great
inefficiency in allowing marginal users to opt out of payment.

One simple way to achieve this would be to collect taxes, then pay authors
or musicians on a "per download" basis, thereby maintaining an incentive for
full appeal to the public.  This could be supplemented by NEA and NEH-style
grants for "worthy" information goods that, while less popular, are seen as
contributing more indirectly to the vital wellsprings of the culture.

-- Nathan Newman