mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Monday, August 29, 2005

Finally, an honest music exec...

Via The Agitator comes this cnet article about a Warner Music exec in France who is honest about his rent-seeking.

We like government levies when they benefit us," Bronfman said. "I would like none of the legislators in France, for instance, to say they should no longer pay us a levy for all the blank CDs that are being sold, (though) it doesn't make up for the revenue that we're losing...If the government mandated filtering technologies, we'd be delighted."

And if the government mandated a law that everyone in the US had to PayPal MadAnthony $1, he'd be very happy, as well as somewhat wealthy. But that doesn't mean that it's a good law. In fact, that would be a bad law (well, except for me).

Economists have a term for laws like this - rent-seeking. Rent seeking is basically any transfer of wealth from one group to another via government - usually when businesses uses political clout to get a law passed that results in a transfer of wealth from consumers to the business. Usually these laws are subtle - licensing requirments for a given profession, laws that prohibit advertising of a product or profession, or a price floor that an item cannot be sold lower than. All of these are laws enforced by the government, supposedly for noble purposes, but which exist primarily to reduce competition and make more profit for the business.

But these are subtle. What the Warner Bros exec was advocating was the direct transfer of money from consumers to the government, which would then give it to the record companies.

At least they are honest about it, unlike most rent-seekers.

BTW, the law they talk about - and which France shot down (yea France!) was a tax on blank media and on digital audio devices like the iPod. The idea is that music pirates use blank media to pirate songs, so a portion of that money should go to the record companies. The problem, of course, is that not everyone who buys an iPod puts pirated music on it - some people use it for legal free music, or music that they bought electronically from iTunes or other electronic music stores, or for songs they ripped from CD's they owned. Blank media like CD-R's are even worse, since they are frequently used to store data, make mixes of music that people own, or make backups of software.


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