[Upd-discuss] Paper:"Digital property" By Sabine Nuss, NY, NY, April 12-14, 2002

[Zapopan Martin Muela-Meza]

“Digital Property”
by Sabine Nuss


paper presented at the
Socialist Scholar Conference, New York
After 9/11 - New Politics for Social Movement and the Left
April 12th - 14th 2002
http://www.volkskunstschaffen.de/sabine_nuss/digitalproperty.rtf

Digital Goods: What’s it all about?

My topic was announced as ”Digital Property” and you will already know
that it deals with the issue of property since the rise of the Internet.

At first sight the Internet seems to question the existence of private
property. This causes different reactions: improving copyright (the not
very surprising ”bourgois” reaction) versus the promotion of ”copyleft”
and ”free software” (seemingly an ”anti-bourgeois” reaction)

In the following I will sketch these positions and then I will criticize
the common presuppositions of both positions. At the end, I will give an
outlook on new trends of capitalist modes of production and the usage
including the mode in which free software is produced. 

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The Internet is a medium, and as such it is also a huge copy and
distribution machine. That doesn’t sound quite as thrilling as
”information superhighway” or ”Cyberspace” or ”virtual world” but well –
it’s a functional definition. 

What can be copied and distributed? As the German newspaper ”Frankfurter
Allgemeine Zeitung” put it briefly and precisely, ”products made up of
matter cannot be sent as data”. But everything else can: Sound, text,
picture and algorithms (software) can be expressed as digital data.

It is characteristic of these digital goods that they increase and don’t
decrease when they are passed on – they double when reproduced, and they
do that without a loss in quality.

The best-known phenomenon of digital distribution is the music exchange
system Napster. It wasn’t until the headlines produced by the Napster case
that the problems posed by digital property have gained wider public
attention.

So, what is the problem? To put it briefly: On the one hand, people see
the ability to commercially exploit digital goods called into question and
propose a stronger copyrights regime. They fear the end of private
property and the downfall of Western civilization in general.

On the other side is the ”Copyleft-movement” that rejects a restrictive
property regime on the net. ”Information wants to be free” is their
slogan.

Before I examine these positions in detail I want to draw a distinction
between two kinds of goods: on the one side there are those that only
appear as part of a whole product and don’t have to be exchanged directly
for money, that are (or can be) free; on the other side there are those
that are meant to be traded for money and thus have to (or should) be
charged for. Also to be taken into account is the vast amount of digital
goods that are produced on the basis of ”voluntary work” or with public
money at universities and in the context of research and development in
general.

An example:
1) The online-edition of a newspaper can be seen as part of a bigger
product, namely of a ”modern” newspaper.

Or take the free distribution of Adobe’s Acrobat Reader – the firm creates
a network and sets a standard that allows it to sell more Acrobat Writers.
Here, the free distribution of a digital good creates opportunities for
the realization of a profit that are part of a whole product that is being
produced according to standard capitalist principles – even if a part of
it is being given away.

In this case, digitalization doesn’t pose a property problem for
capitalism at all, only problems that also exist in the analog world.
Advertising and marketing strategies are always investments that pay off
or fail. That a host of online-newspapers had to shut down or cut down on
their workforce is not due to their material - as opposed to digital -
constitution but to their lack of profitability.

2) The second case is more interesting: A song by - let’s say – Madonna is
produced exclusively for the commercial market. It’s meant to be sold and
this is probably more difficult when you can download your free copy from
Napster or one of its successors.

The production of goods in capitalism – if we disregard hobby and
voluntary modes of production – always serves two purposes:

 production for the market, for the realization of a profit
 production for use (in order to be exchanged, a product needs a
use)

A good has thus a double character – and this also applies for digital
goods:

Considering that the Madonna song is now available free and everywhere on
the net, that it is thus not subject to the owner’s discretionary and
exclusive power of disposition, its value cannot (or only with
considerable effort) be realized.

The technically feasible distribution of digital goods constitutes thus at
the time being a dysfunctionality for capitalist exchange. The problem can
obviously or apparently (this is the contested point) only be solved by
restoring the exclusive power of disposition over digital goods, i.e. by
securing property rights over digital goods.


Enclosures in Cyberspace

Actors

With digital goods circulating freely on the internet, the actors that
have an interest in the exploitation of these goods are fighting over the
exclusive power of disposition over them. Among them are:

 the content industry: publishers, record labels, the film
industry
 lobby groups, collecting societies
 artists (e.g. Metallica, Die fantastischen Vier)
 the state.

Apart from those with a practical interest in the matter, there are other
actors arguing in favor of copyright protection on a theoretical level,
among them economists, jurists (law scientists) and journalists. 

The Argument

What is their argument? In a nutshell, the proponents of copyright
protection regard private property protection as the basis for innovation
(this also signifies, of course, that without copyright protection there
wouldn’t be content on the net), i.e.:

intellectual property rights lead to efficient economic activity, and this
serves the common good. It’s the classic argument: An efficient economy is
somehow equated with economic growth which is supposed to lead to more
employment and to a better supply of goods and this in turn is equated
with the common good.

[this is typical of bourgeois discourse: individual interests are
presented as being in the interest of the common good.] 

Measures to enforce property rights

The above mentioned actors try to safeguard intellectual property rights
on different levels:

 Create awareness

Campaigns are being organized that aim at creating and increasing
awareness among the simple-minded consumers that with every download of a
copyrighted piece of music they contribute to the end of civilization as
we know it. Michael Lehmann, a german professor working on copyright
issues, maintains that: 

”indeed a specific awareness of doing something unlawful needs to be
culturally developed in the sense of ‘Those who reproduce content
illegally, steal, and those who distribute content unlawfully, are
thieves.’” 

 Technology

On the technological level, the number one strategy is to develop
copyright protection technologies like the so-called Digital Rights
Management (DRM) systems. These are software implementations that can
control the distribution chain of digital goods from the producer to the
user according to the specific needs of a particular business practice.

[But also copy protection techniques like adding useless bits of
information to music CDs in order to make it more difficult to read them
into a computer, are among the highly controversial technical measures
(controversial because older CD players can also have a problem with these
CDs).]

 Legislation 

These technical and ideological measures are supported by state
legislation. Examples are the DMCA Digital Millennium Copyright Act (US)
and the European Directive on Copyright that has yet to be put into
national law. Central to both is that circumvention of copy protection
techniques is made punishable. More precisely, the creation and
distribution of software that can avoid and undermine legal copyright
claims, is made illegal. 

[Obstacles 

It would be a topic in its own right to discuss whether copy protection
technology can be effective in the first place. Some people say that copy
protection basically isn’t possible because the data has to be available
unencrypted at some point in order to be consumed. And this in their view
makes it possible to reproduce and upload them on the net. Other
difficulties arise in the context of legal enforcement and user control.

At present, everybody who wants to, can – with a little know-how – get
pirated software on the net or from friends etc., or you download a key
that cracks shareware-products and extends their life-span beyond the
trial period.

To sum up, it is difficult to secure property rights effectively on the
net against uncontrolled distribution and use. Until now. Lawrence Lessig
shows convincingly that this can change. ]

The proponents of Copyleft

On the other side of the spectrum, the ‘freedom fighters’ of cyberspace
proclaim that ”information wants to be free.” The slogan originates in the
hacker movement and is older than the public debate on digital property. 

Programmers were the first to realize what it means when electronic data
is subsumed under the exclusion principle as a means of the realization of
a profit.

In the beginnings of the computer industry business was restricted to the
sale of hardware and technical support. Software was a by-product, then it
was no problem to exchange software to jointly work on it. This got more
difficult following the introduction of restrictive licenses on software.
Proprietary software emerged where the source code – a program’s
man-readable language – was held back, in a way like a company secret. 

The consequence was that programmers couldn’t improve on and develop
proprietary software.

Richard Stallman, programmer at MIT and today’s guru of the free software
movement, was understandably annoyed and lamented the end of the glorious
days of freedom  and open cooperation in software development. He founded
the Free Software Foundation,  launched the General Public License (GPL)
and coined the term ”copyleft” as opposed to ”copyright”.

But the rejection of private property over source code is for Stallman not
only a more efficient mode of production but also a step towards a freer
society. 

Software under GPL has to be ”free”, although free in this context doesn’t
necessarily mean ”free of charge” but that the source code remains openly
visible and accessible to all – collaborative development and improvement
is thus possible. A great amount of software was developed in this spirit,
and one of the best-known products is the operating system Linux.

In the late nineties, a sort of countermovement was formed, the Open
Source Movement, that also advocated open source codes but rejected
Stallman’s political ideological attitude. Open Source’s motivation lies
rather in the greater efficiency of open, compared to proprietary source
code. Commercialization is explicitly welcomed.

In the meantime, a couple of organizations have emerged that use the label
”free” to shield the internet from private commercial interests, but also
from governmental regulation.

The term ”free” is now not only applied to software but also to text,
music and pictures. These digital goods are declared ”free” and can be
copied, modified and distributed, a quality they keep after being
distributed. 

The Argument

The copyleft-people also put forward the common good-argument. The
preamble of the Free Software Foundation’s charter states that ”digital
space (‘Cyberspace’), with software as its medium and its language has an
enormous potential for the promotion of all mental and cultural aspects of
mankind.”  A central task of the Free Software Foundation is therefore the
promotion of democracy. 

In almost any debate on Copyleft, ”promoting democracy” is mentioned, and
this always in the sense that access to knowledge and information has to
be guaranteed.

A widespread fear is also that the commercialization of the net could lead
to and strengthen the surveillance state, a fear that I find quite
reasonable – but that is a different story.

DRMS would restrict the possible uses of digital goods enormously,
compared to the analog world. The fair-use principle for example, that
gives the buyer of a music CD the right to make private copies and pass
them on to friends, would be impaired when a track could only be copied
three times or if the use of an e-book was restricted to the buyer. In the
latter case, the accustomed practice of lending books to friends would
come to an end. But all this is being argued about fiercely at the moment.

Regarding the content industry’s arguments, the Copyleft-people dismiss
the point that without property rights there would be no creativity. They
point to the example of musicians who in their majority don’t actually
earn a living with the music they make.

They also point out the fact that digital goods aren’t scarce but
duplicate when passed on. Consequently, they see private property
protection as theft – and what is being stolen is public space (Maguhn,
German Member of ICANN). Rather, in their opinion it is plain to see that
the rules and laws that govern cyberspace are different from those that
apply in the analog world, and therefore they regard the traditional
property rights system as unfit and outdated for the digital age.




Alternatives to Copyright

Content on the net is thus to remain free. Contrary to the copyright
principle, other strategies are put forward that are seen to be more
adequate for the digital age, e.g.:

Donation models, that allow voluntary payments to artists at a mouse click
(a portal like this already exists under www.fairtune.com);

Redistribution- or fund models: It is being considered to set up a fund
paid for by a fee levied on video, audio and PC-equipment. The payouts
would be allocated according to the artists’ popularity, that could be
determined using a special software (number of downloads per song etc. see
Ku 2001 ) 

Furthermore, offering services is presented as a possible way out of the
dilemma: the product itself can remain free of charge and the services
offered around it can generate revenue (concerts instead of music goods,
suggestion of Barlow, Grateful Dead songwriter, and others, …a kind of
merchandising model).

Critique of Both Positions

Copyright: only private property can generate efficiency?

The copyright-position rests upon the Property Rights Theory (which is
based upon John Locke, and at a later date upon Douglass North, among
others), which to explain and challenge I have not enough time here.
Therefore only two central points of critic:

 To claim that only private property can generate efficiency is
inherently correct in the context of capitalism, when efficiency is seen
in terms of producing surplus value and not in terms of increased
production of goods. But even then, secure property rights are only a
necessary, not a sufficient condition, because for an increase in
producing surplus value other aspects play a role (like e.g. competition,
demand, etc.).

 That man or woman can only be innovative or creative when his or
her property rights are secure, is an untenable premise that infers
anthropological causes from social relations existing in capitalist
societies. Capitalist forms of human relations are supposed to express
anthropological features

Copyleft: Cyberspace – really a completely different world?

The internet freedom fighters explicitly separate cyberspace from the real
world (other rules etc.). This is false, both analytically and in reality.
The internet doesn’t hover above or outside the capitalist world. The
capitalist dysfunctionalities of the internet that can still be observed
are leftovers from the early days of the net when it wasn’t geared towards
private exploitation but obeyed power political imperatives and was in
this sense a state project.

The critics of private property relations on the net refer only to the
level of commodity circulation. They don’t take into account the sphere of
capitalist production. Only by the sphere of production property relations
affect the circulation sphere. I will explain briefly what this means.

In bourgeois perception, exclusive control over the goods originates in
one’s own labor, i.e. he who plucks the apple shall keep it (John Locke).

According to Marx, this is not the case. For Marx, the power of
disposition derives from the social relations of production.

For this, the existence of the double free worker is central, who has to
be

 without property (free of means of production)

 formally free in order to be able to sell his or her labor  

As we know, the consequence is what Marx labels the transition of the laws
of appropriation. Capitalist property is not based on the appropriation of
one’s own work but rather on the appropriation of other people’s work.

The rest is a familiar story:

The worker is forced to sell his labor in order to survive,

the capitalist buys the labor and lets it work longer than what would be
necessary for its reproduction,

and this extra work goes as surplus value into the products that are meant
to realize their value in exchange for money.

These are the exchange relations that determine the workings of the
production sphere and from them the capitalist draws the disposition power
over ”his” product (which is legally established in civil law and in
property rights jurisprudence),

The capitalist then tries to exchange this product for money in the sphere
of commodity circulation. It is only there where the problems arise. So
you can see: The ownership problem posed by digital goods only concerns
the circulation sphere, this is where the exchange of goods is disrupted.
If you take this perspective, naturally the question does not arise why a
principle like the exclusive power of disposition exists in the first
place and where it comes from. Rather, the only question that comes up is
how to change and adapt this principle considering the special quality of
digital goods. 

This is especially apparent in the terminology of the ”free” (free
software, free music etc.). ”Free” in this context doesn’t have to do
anything with ”free of charge” but rather denotes the openness of the
knowledge embodied in the digital good. But how can a digital good be
controlled, priced and accounted for, i.e. be fit for exchange, when it
can be ”freely” copied (as often as I want to) and distributed (to
whomever I want)?
The Internet-freedom movement has to resolve the contradiction between the
pressure to realize profits and the free availability of digital goods by
devising alternative models – and this is what they do, as I have said
before.

In this, they resonate with the promoters of modern management models for
the internet economy, where similar models are discussed but in a
different terminology and with the aim of avoiding the difficulties for
establishing restrictive property rights on the net, and not in order to
keep information ”free”. Ultimately, these models result in digital goods
being part of a whole product, as described earlier. These digital goods
appear to be ”free”, but that is an illusion, because as part of a whole
product they would still be subordinated to commercial pressures and only
stay accessible as long as they were profitable as part of this product.

Conclusion

The whole debate is indicative of the fact that capitalism is in the
process of coming to terms with the new technologies. 

Pessimistically speaking, there will be a transition period that will
functionalize goods exchange on the net - by trial and error.

What will happen exactly, whether the copyright lobby prevails or whether
the copyleft-movement will succeed in promoting their alternative models
in an uneasy alliance with managerial economists, remains still to be seen
- the emergence of mixed forms is not unlikely.

But the alternative models point in a different direction that goes, to
put it briefly, ”from product to process”. Not the copyrighted products
are to be sold but the services ”around them”. In this context I want to
mention Jeremy Rifkin who argues that the increasing immateriality of
products is an integral part of a development in society as a whole that
leads to the disappearance of property. Following technological
innovation, the service sector expanded because ”more and more goods –
then bulwark of the private property system – are transformed into pure
services” (Rifkin 2000: 115). What used to be sold was now more and more
”accessible”.  The trend towards more ”access” doesn’t, however, threaten
private property, it is rather a revenue and pricing model more
appropriate for the internet. 

At the present it seems that the way in which the immaterial world adjusts
to and fits into the given capitalist property structures gives rise to a
new, postindustrial production paradigm. Here, this can only be touched
upon briefly. 

Free software can be called the archetype of this trend: Its mode of
production is based on open knowledge, cooperation, flat hierarchies,
flexibility, worldwide networking, and in most cases on unpaid labor
without a binding contract. The open source and free software model has
for a long time assumed the role of a leading example for industry and
managers. Norbert Bensel, head of human resources at DaimlerChrysler
Services corp., presented at a conference new work models that come close
to aspects of the free software model not only in terms of language. He
described the new work model with the following catchwords: ”have fun” (as
a motivating force instead of earning money), ”motivate volunteers”,
”reputation for cool code”, ”turn customers into colleagues”, ”employee’s
need for self-fulfillment” etc.

New work forms with flexible contract and time arrangements like
part-time-, borrowed, fee-based and other temporary work contracts are
increasingly taking the place of the traditional full-time work
relationship, that already today make up only a mere two-thirds of all
work relationships.  According to estimates, these work arrangements will
make up at least half of all work relationships within the next couple of
years.  The teams and employees in the so-called network co-operations are
coordinated with the means of ”indirect steering”, i.e. unlike in company
hierarchies there are no concrete work assignments for whose achievement
every superior employee is responsible to his superior. Only the goals
that have to be met are specified to the competing project teams, and they
have to struggle to meet them. These goals include profit margins or
productivity values and they are oriented to the shareholder value
principle, i.e. the aim to increase the company’s value in the interest of
the main shareholders. From this perspective, for the employees in the new
work organizations labor signifies ”to be the manager of the resource
‘I’”. Thus, they are directly exposed to the unbounded exploitation
context and they engage in the ”constant and endless self-economization of
this relationship” (see Glißmann 2001: 129 ).
 
It fits into the picture that musicians increasingly reject contracts with
record companies. They prefer direct contacts to their customers and
market themselves on the net. The proposed criteria how money can be
raised for text or music without copyrights also point to tougher
competition and to precarious non-binding work relationships.

”Even in a world without copyrights, the journalist who is the only one to
possess a relevant information will still be well-paid. This is because he
doesn’t mind that the report loses its copyright protection after being
passed on, when he has already earned his money. (…) So the future belongs
rather to the agile ‘information brokers’, who could be self-employed free
lancers or small, highly specialized teams, than to the traditional big
publishing houses…” (Geser 2001 ).

Whatever the future holds, the dissolution of traditional production
relations is nothing new in the history of capitalism:

“Modern industry never views or treats the existing form of a production
process as the definitive one. Its technical basis is therefore
revolutionary, whereas all earlier modes of production were essentially
conservative. By means of machinery, chemical processes and other methods,
it is continually transforming not only the technical basis of production
but also the functions of the worker and the social combinations of the
labor process.” (Marx Capital, Volume 1867, 1976: 617).


Zapopan Muela
----------------------------- v -------------------------------
"Tiranos y autócratas han entendido siempre que el alfabetismo, 
el conocimiento, los libros y los periódicos son un peligro 
en potencia. Pueden inculcar ideas independientes e incluso
de rebeldía en las cabezas de sus súbditos.
----------------------------- v -------------------------------
"Tyrants and autocrats have always understood that literacy, 
learning, books and newspapers are potentially dangerous. 
They can put independent and even rebelious ideas to the heads 
of their subjects."
----------------------------- v -------------------------------
-- Sagan, Carl (1997). The Demon-Haunted World: Science as a Candle
in the Dark : El mundo y sus demonios: La ciencia como una luz en la 
oscuridad. México: Planeta, p. 390; New York: Ballantine Books, p. 362.


		
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