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  • Digital Barbed Wire

    Posted by Shannon Love on September 14th, 2004 (All posts by )

    This post over at Slashdot highlights the problems that small software publishers have with the piracy of their products. One publisher was so frustrated he programmed his product to delete the home directory of the user if the product was activated with an illegitimate serial number but even this “nuclear” option did not work. The small publishers lament that only a big publisher like Microsoft can reliably get paid for its software.

    This is a critical issue of intellectual property rights and like all intellectual property rights issues it has a lot to do with cows.

    Many people image that the era of the Open Range in the American West was the era of the small rancher. After all, nobody could stop anybody from running cattle anywhere. The technology to create a system of fences to demarcate property lines and to contain livestock did not exist. Nobody could build a system of wooden fences across the open prairies of Texas or Montana. It seems obvious to many modern thinkers that this must have been an anarchist paradise. Any wanna-be rancher could take a few head of cattle out on the Open Range and let them fatten on free grass before driving them waddling back to a railhead for a fat profit. The little guy could finally make a buck off the free and open grass lands.

    It didn’t work that way.

    In reality the era of the Open Range was the era of the cattle barons, massive outfits with tens of thousands of heads of cattle and hundreds of employees backed by the capital of big investors back east. They ran roughshod over the small ranchers. The cattle barons dominated because without property rights the biggest operations gained all the competitive advantage. Without fences managing and protecting a free ranging herd took a lot of manpower and hiring that manpower up front took a lot of capital.

    With no means of physically separating herds, small herds had to get out of the way of large herds or risk being permanently commingled. No malicious intent was required. It happened often by accident. Since nobody had any particular right to any particular grazing land or water source, the big herds went where they wanted to and the little herds got out of the way or disappeared. If a small herd did get commingled the small rancher had almost no hope of recovering his losses. Without property rights it was very hard to prove exactly who owned which animals and the barons could afford to fight legal cases or real fire fights must easier than the small rancher.

    Small ranchers never stood a chance until the development of barbed wire. Barbed wire made it practical to demarcate property lines on the prairie, it let small operations manage more cattle with fewer hands and it let farmers protect crops from ranging herds. It made practical the implementation of strong property rights on grazing lands.

    Barbed wire ended the era of the Open Range and with it the era of the cattle barons but they didn’t go down without a fight. This was the era of the range wars. Despite the romantic stories, those cutting wire and knocking down fences were far more likely to be employees of cattle barons trying to run over the property of a yeoman farmer or rancher than the opposite. Barbed wire brought the family farm to the Great Plains and the cattle barons and their mega-corporations faded from the economic landscape.

    In the end, the little guys won thanks to a new technology that enabled strong property rights and brought the era of the Open Range to an end.

    In regards to Digital Rights Management (DMR) we are currently in the Open Range era. Anybody can publish software out on the Open Range but only the big publishers have the independent means to compel payment for that software. Neither cultural norms nor the power of the state will assist the small publisher in getting paid.

    As the cattle barons hired small armies of cowboys, cyber-barons like Microsoft can hire legions of lawyers and auditors to insure that at least the institutional users of their products pay for them. Microsoft gets a far higher rate of return for each dollar it spends producing software than smaller publishers can even dream about.

    One of the most destructive concepts that grew out of various strains of socialism is the idea that strong property rights benefit the rich and powerful at the expense of the poor and weak. In fact, the exact opposite is true. Large and powerful interest can find other means of protecting their economic interest other than relying on the cultural or state enforcement of property rights.

    What the software industry lacks is digital barbed wire, a technological means of reliably enforcing property rights in cyberspace. Until we have it, we shall live in the era of the cyber barons.

    (cross posted at Shannon Love’s Blog)

     

    4 Responses to “Digital Barbed Wire”

    1. incognito Says:

      Good post Shannon.

    2. Shannon Love Says:

      Thanks

    3. Anonymous Says:

      It’s weird too, because a lot of these small software developers are asking very little for their programs. I’ve purchased many 5, 10, or 15$ programs. My favorite that I’ve purchased is Snood, a highly addictive, but retarded game. I encourage everyone to purchase a copy. ;)

    4. Shannon Love Says:

      Snood is a strangely compelling game. Very simple yet interesting. Its a lot like Tetris in that regard.

      I can personally attest that Snood’s release very nearly brought Apple Computer’s operations to standstill when it was first released.