Tuesday, January 24, 2012

Failed Information Economy

I read an interesting article that was included in one of the books I'm reading (Content, by Cory Doctorow) that talked about how the information age has affected the policies of congress with regards to the economy. It was titled "How Hollywood, Congress, and DRM Are Beating Up the American Economy", and here's the link to it:  http://www.informationweek.com/news/199903173  It talked about how since the economists predicted that we would be moving into the "information age", America tried to shift the focus of the economy to the buying and selling of information online, rather than manufacturing, and this resulted in dropping the tariffs and whatnot towards imported foreign goods, making it far cheaper to buy raw materials from overseas, to have all your products manufactured overseas, or even to buy finished products from overseas, than to buy them from US companies. Thus, our economy's hopes and dreams were more or less pinned on the idea of being able to buy and sell information on the web. Unfortunately, there was one big problem with this idea, according to the author of the article, because they failed to take into account how fantastically easy it is to copy and spread information on the internet, and how ridiculously difficult it is to control any kind of information on the web. The key to being able to effectively sell and make a profit of a good is being able to control that good, making sure that no one else can take it, replicate it a bunch of times, and turn around and sell it(or just give it away) as their own (this is especially true of the entertainment industry: music, movies, games, etc.). Unfortunately, this is just about impossible to do on the internet. No matter how good the anti-hacking or anti-copying measures are on a certain product, all it takes is for one skilled computer guy to break that protection, copy the product(music, for example), and place that product up on the internet for free, and boom, control over that product is lost. Presented with the choice between paying for a product on the official website, and getting that same product for free on another website, lots of people will opt for the free choice. So, hoping for a successful economy based on buying and selling stuff that can be copied and given away for free so easily is a bad idea.
  I guess I should insert a disclaimer here, as there are obviously a ton of things I don't know about this topic, so if any of the stuff I put on here is incorrect, please feel free to correct me. Anyways, let's continue.
  I agree with this article because I think that the information age has incredible potential to improve the economy, as it's so much easier to access information than before, but the emphasis of the economy should still be on physical goods, because it's so difficult to enforce control over the digital ones. Digital stuff is so fluid and transient, for lack of a better way to say it. It's so easy for someone else to get their hands on, and so easy to copy, that depending on it seems unwise. It's a shaky foundation for an economy. It's kindof like trying to build your house upon the sand instead of upon the rock. Now, if we were to try and build our economy's foundation   on physical goods,  by trying to put the focus on promoting things like US manufacturing, that would be a much stabler foundation. "Copy and Paste" doesn't work on factories and manufactured products.
  I'm not trying to say that we shouldn't try to incorporate the internet into our economy. There are undeniably many economic opportunities presented by the web. However, I don't think that our economy's entire focus should be on the web. We don't want to throw all of our valuable eggs into one virtual basket that can be copied and pasted by anyone anywhere on the planet with a few computer skills, or access to someone who does. We can definitely develop both our country's manufacturing abilities and online endeavors at the same time. Just look at China. Their manufacturing is still immense, and yet they are rapidly expanding their presence on the world wide web.
  I guess I just don't like the idea of our economy depending so heavily on stuff done on the internet, which somebody else someplace else can easily copy, and maybe even do better. It makes it so that everything we can do, they can do too, with little effort. Not a good business plan.

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