hans@web8e.berkeley.edu (Hans Reiser </>) (06/11/88)
How can we reward researchers without the massive waste of restricting
copying with copyright laws?
How many times have you stolen pricey software? Or walked away from it
because there was no way to know if it was worth $300 without trying it for a
month? Or run away from it because what was on the $1 floppy was worth $50 to
you, but not that $300 pricetag. Being a producer is as much a problem as being
a customer. When you publish information others copy and spread across the
planet, you may receive only a small fraction of the benefit you provided.
Small enough that you may be better off not telling anyone outside your company,
or not researching certain subjects just because you can't find a way to receive
a substantial fraction of society's gain. Our society tries to provide you with
an incentive to research: a clumsy one in the form of copyright and patent laws.
Using these laws you set a fixed price: those who guess that they would receive
less utility from your program than the price don't buy it, and unnecessarily
miss out on using it. Is there a way to reward you in proportion to the value
of what you produce, without restricting its use to a fraction of what it could
be if it was free?
Consider requiring all information users to donate a percentage of their
computer hardware expenditures to subsidize information producers. ``Ugh!'' is
your first thought, ``What a horrible bureaucracy!'' Not necessarily. Let me
describe a structure for such a bureaucracy that might give us something more
efficient than restricting information flow through copyright.
Let's call it ISA, the Information Subsidizers Association. It must slay
two dragons: freeloading, and bureaucratic inefficiency. Four groups will have
a role in ISA: consumer members, hardware manufacturer members, government
members, and information supplier members. Information supplier members will
license information to ISA in return for reward. ISA will grant manufacturer
membership to manufacturers who add to their prices a percentage for forwarding
to ISA, and notify ISA which consumer members were thus forced to contribute how
much. ISA will grant government membership to governments who agree to assume
the responsibility of collecting dues from their residents, and to pay on behalf
of those not collected from. ISA will grant the right to freely use all the
information it owns to consumer members-while they are using hardware sold by
manufacturer members or inside nation members. It will use the international
patent and copyright treaties to prohibit all other use. Each consumer member
will send ISA a description of how he wants his dues distributed to producers of
information he has enjoyed. ISA will check to see if there is a conflict of
interest, and each time money is received from that member it will distribute
according to the last instructions that member sent.
Can we make it in the interests of each membership group to participate in
ISA, and then make it more hassle than it's worth to freeload? ISA will pit
each membership group against freeloaders in all groups.
It will expell consumers who use ISA information on hardware that is nei-
ther sold by manufacturer members nor inside nation members, and its manufactur-
ers will not sell to those who have been expelled. ISA will offer rewards for
information concerning such freeloaders. This will be effective with large cor-
porations and institutions, honest members, and members who find freeloading not
worth the effort.
To encourage manufacturer membership ISA will: 1) Not subsidize information
for hardware by sellers who are not members. 2) Point out that ISA increases
the relative value of a member's systems. 3) Work to get the sellers of
hardware compatible with a given hardware standard to decide as a group whether
to support ISA. (Small groups can often effectively cooperate.)
In making it in the interests of governments to be supporters we are helped
by the fact that the U.S. is half of the world computer market. Membership by
the U.S. Government would in and of itself guarantee ISA's viability. There is
a great variety of forms of pressure that could be brought to bear against non-
member nations by ISA's member nations and manufacturers, and the existence of
the international copyright and patent treaties suggests success is possible.
Hardware expenditures are the best simple measure of the importance of
information to a consumer weighted by ability to pay. Using this measure has
definite flaws, notably the economic inefficiency of discouraging barely
worthwhile hardware purchases by increasing the effective price of hardware, but
I see no better answer. Note that government members with inclinations toward
income redistribution schemes can choose to distort the flatness of the tax by
not collecting from some and overcollecting from others. This will be fine with
ISA. So long as the nation as a whole pays its full share ISA will fully respect
the sovereignty of the government member in dues collection. ISA itself is not
designed as a medium for income redistribution: if it was it would be unable to
acquire the membership of whichever nations felt they were the losers in the
redistribution.
The president of ISA will be elected by the members, with votes weighted by
the dues they pay. (You should have control over spending in proportion to the
amount of it that is your money, and the economic importance of seeing to a
company's information needs is reasonably guessed at by the money it spends on
hardware.) Members will also vote once a year to determine the percentage used
to calculate all dues: each vote will be weighted by dues paid last time, and
the median value will be the one chosen. Members will specify the percentage of
their dues that are to be paid to the president of ISA as his reward, and an
additional percentage he can spend to pay his staff and expenses.
Members may place as much of their dues as they wish at the discretion of
the President's staff. The staff of ISA will research ``who has provided what
with how much utility to others'' to an extent that would not be practical for
individual members. For instance, the staff will randomly sample members to see
what software they are using at a given instant and ask how much utility it
provides-evaluating with statistical sampling programs trivial to an individual
member, but not trivial when summed over the set of all members. The natural
tendency will be for large corporations to provide allocation instructions with
more detail and fewer dollars at the President's discretion compared to instruc-
tions from individuals.
Openness of records possessed by ISA is a difficult question. On the one
hand it should be open to all so that there can be no doubt as to the integrity
of the President. On the other hand it should be completely secret so that the
complete privacy of all members will be respected. The compromise we will use
will be to allow each member a complete accounting of their own contributions,
and elect an independent auditor who has the authority to look at all the
records and institute a recall election on grounds of corruption. The auditor
will be elected using the same algorithm as the President.
The ISA constitution may be changed by any petition from a dues weighted
majority of the members. The President may propose changes, which must then be
ratified by a dues weighted majority of those who vote. Reasonable notification
and opportunity to vote must be provided.
It will probably be necessary for ISA to approach the government for exemp-
tion from anti-trust laws.
How can ISA be structured to reduce fears of having yet another bubble gum
bureaucracy project stuck to the bottom of our feet? First, by structuring ISA
to funnel money rather than spend it directly. Second, by placing the money it
spends on its staff at the discretion of the dues payers. Third, by having it
only control the funneling to the extent that dues payers let it. Fourth, dues
payers control ISA in proportion to how much of the money he spends is theirs,
which reduces the ability of special interests to control more than they pay
for. ( Historically, whenever special interests could control more than they
paid for they have tended to use the bureaucracy to dip into other people's
pockets. )
In order for ISA to succeed in attracting a variety of nations, some of
which may hate each other, it's important that ISA be structured as completely
independent of any particular national government.
ISA will maintain an online library of all subsidized information, and make
it accessible from the major computer networks.
The Information Subsidizers Association will eliminate choosing to not use
software because the price is too high. It will also improve the correlation
between the benefit provided to the consumer and the reward received by the pro-
ducer by effectively placing determination of the price in the hands of the con-
sumer, who is the one best informed as to the utility he has received, and by
not forcing the consumer to evaluate before using.
Starting software entrepreneurs will enter the market with increased ease.
It's a lot easier to give a good program away than it is to sell it. When
friends can casually swap programs they like, word of mouth will multiply usage
of good programs more rapidly. Also, no consumer will be stuck with having
bought a fancy packaged program that turned out to be useless.
To help make ISA valuable for non-members to join consumer members will be
asked to reward information supplier members in proportion to the maximum of:
the utility of their product, or the cost of obtaining it other than through
ISA.
ISA membership rights will travel with the hardware the dues are paid for;
a change of ownership will not require additional dues, and old hardware cannot
have its dues transferred to new hardware. What about depreciation of obsoles-
cent machines? ISA taxes are aimed at hardware consumption, and owning hardware
and being the one to use it during the ``prime of its life'' should be viewed as
a form of consumption.
ISA won't reward the services of printing diskettes and documentation, and
holding user hands. Since both writing software and holding user hands are forms
of providing information, you might ask, what's the difference? Let me take some
time to draw the theoretical line.
The Spread Cost of a product is the additional cost of affecting the last
member of a group with that product, given that you have already affected all
the other members of the group with it. The Averaged Cost is the cost of
affecting a group divided by the number of people in the group.
Yes, I know, that took a moment to digest. But here's where we get to why
those concepts are introduced: We can usefully categorize products by the
difference between their averaged cost and spread cost. Let's do it: Point Pro-
ducts have a spread cost close to their averaged cost at their societally
optimal production and distribution levels; Area Products have a spread cost
substantially less than their averaged cost. The spread cost of giving software
to all the users of a given type of computer is much less than the averaged
cost, which makes it an area product. Once you've designed a program and given
it to your mother, it doesn't cost much more to post it on the computer nets and
let everyone have it. The spread cost of holding user hands, printing documen-
tation, or distributing diskettes is close to the averaged cost, making them
point products. The exhaust from your car is an area product-you can't easily
pollute one person's air without polluting another's. Your car itself is a
point product-producing more cars costs GM money.
ISA won't reward point product type information; it will reward area pro-
duct type information. Point products can be effectively responded to (with a
reward or demand for compensation) by those they affect on the individual level;
area products should receive a response by those they affect acting as a
coherent group. ISA will require that dues be paid on all point products
designed to aid the use of information area products. It does this in order to
better encourage the production of those information area products. The use of
those point products is the best available measure of the importance of those
information area products to the user.
Our society tends to respond to the production of point products fairly
adeptly; it tends to stumble in rewarding area products. Often the group an area
product affects can't organize to effectively respond to the product as a group,
and societal inefficiency results. One area product is particularly important to
our civilization over the long run-information. Copyright and patent laws are an
attempt to make information area products behave like the point products they
aren't. More effectively rewarding information area products is the aim of the
Information Subsidizers Association.
We are accustomed to the idiocies of copyright, and so they seem less
extreme to us than the dangers of yet another Bureaucrat Employment Opportunity.
But think for a moment of how most copyrighted software reaches only a small
fraction of those it would reach if copying were free. It's difficult to esti-
mate what the total increase in the utility of a given piece of copyrighted
software would be if anyone could copy it freely, but estimating a factor of 2
to 3 might well be conservative for some products.
What's going to happen when music, books, and films become commonly avail-
able across computer nets? Or, perhaps more near term, when Tandy comes out
with its promised read-write CDs? Without ISA, pirating will cause music, book,
and film industry's revenues to plummet, and we'll all suffer from the attendant
reduction in quality.
ISA will not eliminate the freeloader problem from software production, but
I think it will move our industry a step closer to an efficient information dis-
tribution system. Even as a commercial association without government support
its problems with freeloaders will be no worse than those of the copyright
mechanism. In that they will tend to focus on a finite list of freeloading
manufacturers rather than millions of individual software pirates its problems
will be fewer.
Do you think ISA meets the test of being better than copyright laws? To
make ISA happen will require a long effort on the part of many. If you think
that effort might be worth it, please let me know. You can help by simply send-
ing me email expressing your support, so that I can have a stack of letters to
show my congressman. I'd appreciate that.
Hans Reiser
email: hans@zen.berkeley.edu
ph: (415) 482-2483
postal:
6979 Exeter Dr.
Oakland, CA 94611andy@carcoar.Stanford.EDU (Andy Freeman) (06/15/88)
In article <10777@agate.BERKELEY.EDU> hans@web8e.berkeley.edu (Hans Reiser </>) writes: Reiser's scheme doesn't work for a large fraction of the software market, and distorts the hardware market. There are lots of programs that only have a few users each. They don't have lots of users because they're fairly specialized. Producers of such software won't be paid by Reiser's ISA because it doesn't (and can't) survey every user; it merely survey's a statistically significant portion. This is fine for operating systems, editors, compilers, spreadsheets, some databases but not much else. (For example, there are very few airline databases and their software is specialized, so airline database programmers won't get squat from ISA.) In addition, the software cost to the hardware cost is basically wrong. Look at the PC/clone market. Extremely reliable machines tend to cost more, as do portables, but why should the ISA tax on these machines be higher than that on the cheaper desk-top models? At best, the ISA serves a portion of the hardware and software market. Since those groups can already form such an organization yet they haven't, it seems that the people who would actually benefit from an ISA don't want it. The ISA that Reiser is really promoting requires more coercion than he's admitting to because he's lobbying congressmen. (If it didn't, he could set it up himself and sign up any hardware and software types who were interested.) I suspect he's a stooge for a large software house (or he's a wannabe). They'll naturally benefit from a process that can be influenced by politics like "we deserve a bigger portion because we're constantly releasing new versions while that guy hasn't updated his program in years" or even "we have 100 programmers, we should get more money than some guy working in a garage even though the same number of people use our programs." -andy ps - Anyone who thinks that the ISA won't get into software development is smoking better stuff than I can afford. Of course, ISA-developed software will be benefit from the politics mentioned above. UUCP: {arpa gateways, decwrl, uunet, rutgers}!polya.stanford.edu!andy ARPA: andy@polya.stanford.edu (415) 329-1718/723-3088 home/cubicle