Another Look At The 'Does File Sharing Equal Stealing?' Question

Jon Healy, whose writing for the LA Times I admire quite a bit, has written up a very balanced discussion concerning whether or not file sharing equals theft. He links to some of my writings on the subject, as well as pointing to the views of two Nobel Prize winning economists, F.A. Hayek and Milton Friedman, who both point out that copyright is not property, and treating it as such causes problems. He then presents the entertainment industry's view, which (of course) is that copyright is no different than traditional property. Then he brings in legal scholar Mark Lemley (of whose work I'm also a fan) who tries to bridge the gap by noting that copyright isn't property, but that infringing it "is wrong, and should be punished." However, Lemley also points out that most people recognize copyright isn't traditional property, and the entertainment industry's insistence that they're the same works against the industry, as most people recognize immediately that this argument is false, taking away credibility.

Healy comes out on the balanced side himself, suggesting that infringement is close enough to theft. He does so by comparing it to "theft of service" for cable companies, and noting that "you're still acquiring something of value without paying for it, and you're doing it without the seller's permission." This is a commonly used argument, and seems reasonable at a first pass, but I'd like to address why it's incorrect. Just because you acquire something of value for free (and without the original seller's permission) it doesn't automatically make it "theft." Let's run through some examples:

• I go to the pizza shop and they offer me a free soda with two slices. The soda has value, but I just got it for free, and did so without Coca-Cola granting permission. I don't think anyone would claim this is stealing or even wrong or immoral.
• My friend lets me borrow a book, which I read. The book has value. I got it for free, without the permission of the book author or publisher.
• I get on a train and pick up the newspaper that a passenger left behind. The newspaper has value. I got it for free, without the newspaper company granting permission. I don't think anyone would claim that's stealing.
• I go to the beach. The people sitting next to me are playing music on their stereo, that I can hear. The music has value, but I just got it for free, without the permission of the record label.
• I go see "Shakespeare in the Park." I get to see something of great value for free, without permission of William Shakespeare.
• Verizon sees that Sprint is going to announce an "all you can eat plan" and decides to introduce its own similar plan. Verizon got that idea for a bundle from Sprint for "free" and certainly without Sprint's permission. Yet, we call that competition, not stealing.

You can come up with your own examples. Now I'm sure people will start picking apart each of these examples. They'll say things like in the pizza/soda example, the pizza shop has implicit permission to resell the soda at any price they deem reasonable, since they paid for it in the first place. But, if that's the case, then we have another problem for those who claim that copyright is real property -- because the same thing isn't true with copyrighted material. Those who insist that copyright is the same as real property break their own rule by also insisting that they retain perpetual rights to the good, even after it's been sold. If copyright were like real property, after the creator sold it, the buyer could do whatever they want with it, including giving it out for free. Yet, it clearly is not like that. Coca-Cola sold soda to the pizza shop and the pizza shop can do whatever they want with it, including giving it out for free. So, if the entertainment industry wants to keep insisting that copyright is just like real property, and therefore infringement is theft, then they should also agree to let anyone who has bought their works do whatever they want with them, including give them away for free.

In fact, each "but, this is different because" explanation for the examples above can easily be turned around to prove the point that copyright is different than real property -- because it applies the same rules differently and deals with fundamentally different types of goods or services. What it really comes down to, yet again, is that this is a business model problem. For years, an industry that relied on artificial scarcity is discovering that it's hard to keep that artificial barrier in place. It can't pretend something is scarce when it's really infinite -- and trying to limit it will only backfire in the long run. What you need to do, instead, is figure out new business models that embrace the infinite nature of the goods, and focus on selling additional scarce goods, preferably additional scarce goods that are made even more valuable by freeing up the infinite good.