Copyright and Public Goods

Copyright and Public Goods
by Elliot Temple
Originally posted to the Beginning of Infinity List, August 18, 2011


Some copyright holders get offended when people get stuff for free. They want to be paid. They don't want to provide a public good.

They uncritically assume that every time someone uses their stuff they deserve to get paid.

Actually, all goods anyone ever sells to the mass market public are *mixed bundles* in the following sense: they consist of multiple parts, some of which are given away for free and some of which are charged for.

All goods are partially "public goods" and partially not.

It's not possible (or desirable) to avoid giving away anything for free. It's actually a good thing that there is always free benefit being provided to people because it helps people.

To make money, what you have to do is find some limited number of things to charge for. You do not need to, and cannot, charge for everything. Why should you be able to sell at a high price what is so cheap to create?

You should focus on making money with the things you do charge for, and not worry about the free benefit that non-customers get. It's good that they get it, it's not hurting anyone, and you may gain good will and future customers.


What sorts of things are routinely given away for free?

Consider for example a person who might need a particular type of computer cable on short notice in the future. You might think he'd therefore have to buy and store one, just in case. However if there is a nearby store which sells them then he doesn't have to buy one now. He can, for example, put that money in a bank instead and receive interest payments. The store has, for free, solved his problem of wanting to have one available on short notice. He also makes use of their shelf space rather than his own, for free.


Consider a restaurant. It gives away for free the option to get certain foods. This has concrete monetary value. When a good restaurant opens it raises the value of nearby housing. The owners of those houses just got free benefit even if they never visit the restaurant.


Consider Apple. At their Apple stores they give away free wifi and free use of demo devices. Getting to try using a Mac or iPad is a valuable and fun experience which Apple provides for free. Apple also provides various documentation for free, some software for free, various video presentations for free, various software updates for free, and many other things.

All these free things are "public goods": free benefits given to the public at large with no way to be selective about who gets it and no way to prevent free riders: people who gain the benefit and do not pay for it.

What do companies do about this? They pick some things to charge for, and make money. The rest is not a problem for them. If people are getting free benefits that doesn't mean they are making less money from what they do sell.

Giving away public goods does not harm you and does help people. It's not a bad thing and it does not mean you are owed anything. If you want money then what you have to do is figure out how to sell something, and focus on doing that without getting upset about the *positive* side effects.


For more information about public goods, see:

http://fallibleideas.com/public-goods