7 ms·

Software has large development costs that must be recouped, so marginal cost doesn't really play into what's going on here. Just because something cost a lot o

by kiba 16y ago

Software has large development costs that must be recouped, so marginal cost doesn't really play into what's going on here. Just because something cost a lot of money to produce doesn't mean you get to price it "cost + profit margin". Reality doesn't work that way. And things does get driven down to zero. Look at pirates who offer download of vista for free on bittorrent. Webcomics are free. Most Asian comics that are available in English are in actual, pirated and scanlated, but are often available in way more convenient format than the legitimate things(which are often not translated and probably never will make it to the shore of foreign countries). Most stuff on the internet are free anyway, which should be ample evidence for my argument.

siglesias 16y ago
Most stuff on the internet are free anyway, which should be ample evidence for my argument. What stuff? Stuff that's paid for with advertisement dollars? Do you think this stuff would still be free or marginal cost without those advertisement dollars? I think the fact that so much software and media (probably well over 90%) is paid for in some fashion by consumers (either through advertisers or directly) is evidence to the contrary of what you are saying. There's no such thing as a free lunch. Econ 101.
- kiba 16y ago
  Things would still be driven down to marginal cost. It would instead be pirated, rather than be supported by advertising dollars. It would mean that people would have to find alternative business models. So, it does not void my arguments at all.
  - deleted 16y ago
    [deleted]
- siglesias 16y ago
  The risk of being fined makes the cost of piracy non zero.
  - kiba 16y ago
    Manga site operators borne the risks, not the users. Also, private channels effectively reduce risks effectively to zero. There are also non-monetary costs to pirating, which are mostly viruses and time. However, they don't generally count toward monetary price, but they are cost nonetheless. That being said, most people don't get caught anyway. So the risk is effectively zero.
  - siglesias 16y ago
    I'm not sure that these back channels affect market prices significantly. Technically they aren't even part of the free market, legally speaking.
    - eru 16y ago
      I guess the economist's definition of a market is more useful for this analysis than the legal one.
rick888 16y ago
"Look at pirates who offer download of vista for free on bittorrent." Microsoft is one of the largest software companies in the world. They can afford to take the hit with piracy. The thousands of other smaller companies that sell software don't have this ability. "Webcomics are free. Most Asian comics that are available in English are in actual, pirated and scanlated, but are often available in way more convenient format than the legitimate things(which are often not translated and probably never will make it to the shore of foreign countries)." This is a bad example. Software and Music are exact duplicates.
- kiba 16y ago
  I don't see how killing small software firm versus inability to kill big software firm is particularly relevant to my argument.
  - rick888 16y ago
    so what is your argument? I don't really see one in your post, so I was adding to the discussion.
    - kiba 16y ago
      Merely that marginal cost does absolutely play a role and that people are really driving it down.
      - rick888 16y ago
        "Merely that marginal cost does absolutely play a role and that people are really driving it down" Which isn't true. The marginal cost of copying random bits is the same as the marginal cost of copying Microsoft windows. The piracy culture that has become rampant in the last 10 years is driving the cost down.
- Super_Jambo 16y ago
  Software and Music are not exact duplicates, musicians can and do get paid to perform live.
loewenskind 16y ago
>Look at pirates who offer download of vista for free on bittorrent. You take an example of people stealing a product and giving it away as evidence of the free market at work? wtf? Most of the "free" stuff on the internet is paid for by advertising (which you pay for when you buy products) or serves as a loss leader.
- kiba 16y ago
  You take an example of people stealing a product and giving it away as evidence of the free market at work? wtf? Copyright is a monopoly right, not property right. People don't steal, they crack and make copies. This is somewhat analogous to me making a bunch of Honda cloning after reverse engineering one. I am not depriving of the car dealership their cars, only made cars exactly like honda more abundant. Maybe you think people stealing away your profit is unethical, but it doesn't matter to economic forces. You will lose trying to defend yourself from massive piracy. Most of the "free" stuff on the internet is paid for by advertising (which you pay for when you buy products) or serves as a loss leader. You don't pay for it. You are the product.
robryan 16y ago
What happens though when it becomes uneconomical to produce much of the software we take for granted? Sure to an extent the race to the bottom can be sustained due to a large ecosystem of developers but eventually something has to give, developers have to put food on the table.
- kiba 16y ago
  What happens though when it becomes uneconomical to produce much of the software we take for granted? Sure to an extent the race to the bottom can be sustained due to a large ecosystem of developers but eventually something has to give, developers have to put food on the table. Sure, if you're trying to alway sell digital goods at a price. However, you could try to sell things that are actually scarce and less likely to be driven down to marginal cost such as your programming services. There are bunch of business that require custom made software and they're not going to get it by pirating software.
- kragen 16y ago
  The software we take for granted has already been written. There is no danger that it will become uneconomical to make more copies of it. It may be uneconomical to write certain new pieces of software, but that's not software we're currently taking for granted. The majority of software development, something like 90%, is already bespoke project work, which doesn't depend on copyright to fund it. In fact, the more freely we can copy software, the more value we can produce in bespoke project work. Django, Linux, Firefox, and SQLite make it possible for me to toss together a simple CRUD web site in 45 minutes.

by kiba 16y ago

siglesias 16y ago

Most stuff on the internet are free anyway, which should be ample evidence for my argument. What stuff? Stuff that's paid for with advertisement dollars? Do you think this stuff would still be free or marginal cost without those advertisement dollars? I think the fact that so much software and media (probably well over 90%) is paid for in some fashion by consumers (either through advertisers or directly) is evidence to the contrary of what you are saying. There's no such thing as a free lunch. Econ 101.

kiba 16y ago
Things would still be driven down to marginal cost. It would instead be pirated, rather than be supported by advertising dollars. It would mean that people would have to find alternative business models. So, it does not void my arguments at all.
- deleted 16y ago
  [deleted]
siglesias 16y ago
The risk of being fined makes the cost of piracy non zero.
- kiba 16y ago
  Manga site operators borne the risks, not the users. Also, private channels effectively reduce risks effectively to zero. There are also non-monetary costs to pirating, which are mostly viruses and time. However, they don't generally count toward monetary price, but they are cost nonetheless. That being said, most people don't get caught anyway. So the risk is effectively zero.
- siglesias 16y ago
  I'm not sure that these back channels affect market prices significantly. Technically they aren't even part of the free market, legally speaking.
  - eru 16y ago
    I guess the economist's definition of a market is more useful for this analysis than the legal one.

rick888 16y ago

"Look at pirates who offer download of vista for free on bittorrent." Microsoft is one of the largest software companies in the world. They can afford to take the hit with piracy. The thousands of other smaller companies that sell software don't have this ability. "Webcomics are free. Most Asian comics that are available in English are in actual, pirated and scanlated, but are often available in way more convenient format than the legitimate things(which are often not translated and probably never will make it to the shore of foreign countries)." This is a bad example. Software and Music are exact duplicates.

kiba 16y ago
I don't see how killing small software firm versus inability to kill big software firm is particularly relevant to my argument.
- rick888 16y ago
  so what is your argument? I don't really see one in your post, so I was adding to the discussion.
  - kiba 16y ago
    Merely that marginal cost does absolutely play a role and that people are really driving it down.
    - rick888 16y ago
      "Merely that marginal cost does absolutely play a role and that people are really driving it down" Which isn't true. The marginal cost of copying random bits is the same as the marginal cost of copying Microsoft windows. The piracy culture that has become rampant in the last 10 years is driving the cost down.
Super_Jambo 16y ago
Software and Music are not exact duplicates, musicians can and do get paid to perform live.

loewenskind 16y ago

>Look at pirates who offer download of vista for free on bittorrent. You take an example of people stealing a product and giving it away as evidence of the free market at work? wtf? Most of the "free" stuff on the internet is paid for by advertising (which you pay for when you buy products) or serves as a loss leader.

kiba 16y ago
You take an example of people stealing a product and giving it away as evidence of the free market at work? wtf? Copyright is a monopoly right, not property right. People don't steal, they crack and make copies. This is somewhat analogous to me making a bunch of Honda cloning after reverse engineering one. I am not depriving of the car dealership their cars, only made cars exactly like honda more abundant. Maybe you think people stealing away your profit is unethical, but it doesn't matter to economic forces. You will lose trying to defend yourself from massive piracy. Most of the "free" stuff on the internet is paid for by advertising (which you pay for when you buy products) or serves as a loss leader. You don't pay for it. You are the product.

robryan 16y ago

What happens though when it becomes uneconomical to produce much of the software we take for granted? Sure to an extent the race to the bottom can be sustained due to a large ecosystem of developers but eventually something has to give, developers have to put food on the table.

kiba 16y ago
What happens though when it becomes uneconomical to produce much of the software we take for granted? Sure to an extent the race to the bottom can be sustained due to a large ecosystem of developers but eventually something has to give, developers have to put food on the table. Sure, if you're trying to alway sell digital goods at a price. However, you could try to sell things that are actually scarce and less likely to be driven down to marginal cost such as your programming services. There are bunch of business that require custom made software and they're not going to get it by pirating software.
kragen 16y ago
The software we take for granted has already been written. There is no danger that it will become uneconomical to make more copies of it. It may be uneconomical to write certain new pieces of software, but that's not software we're currently taking for granted. The majority of software development, something like 90%, is already bespoke project work, which doesn't depend on copyright to fund it. In fact, the more freely we can copy software, the more value we can produce in bespoke project work. Django, Linux, Firefox, and SQLite make it possible for me to toss together a simple CRUD web site in 45 minutes.