Friday, August 30, 2013

Copyright, Fandom, and Economics

I just finished watching Firefly (finally) which took all of about three days to see all the episodes. I wish that Joss Whedon had continued Firefly, and I hate FOX more than I can bear for cancelling the best American TV show in history. It makes me think of Copyright (one of my favorite subjects) because of how making new episodes of Firefly will be impeded by copyright for people writing and publishing derivatives on it. This has given me some ideas.

Copyright is not just a plain document of "you own this" but includes several facets, taken from Wikipedia:

The owner of the copyright has the following 6 rights for a period of between 95 and 120 years (it's complicated):
  • To reproduce the work in copies or phonorecords;
  • To prepare derivative works based upon the work;
  • To distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
  • To publicly perform the work, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works;
  • To publicly display the work, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work.
  • To digitally transmit sound recordings by means of digital audio transmission;

The way Copyright law is currently written, the owner of the copyright has exclusive rights to these even if he/she never ever uses them. I personally think these rights makes sense when they are being used, but what will often happen is finding old pieces of music from the early 20th century can be made very difficult and sometimes are out of print because the copyright owner won't publish them. The way copyright law is written, this means nobody can get legal access to them digitally or through their original means without going to a thrift shop and get lucky. If the demand outstrips the supply and the work has been out of print for 90 years, the publisher can refuse to distribute the work which hurts culture and the economy. I think copyright should be changed, some are based off previous posts, but to keep it simple I will put everything here:
For purposes of this proposal, art is a broad term encompassing all performed arts, written arts, visual arts, auditory arts, or any other form.
Creator means the artist, writer, composer, and can be represented in an official manner for legal purposes by an attorney or anyone the creator appoints.
Medium means the format the artwork is used in, whether it is online or offline. (Media plural)
  1. The owner of copyright has the duration for the life of the writers in the forms of music, fine arts, plays, or literature.
  2. Television shows and movies will be under copyright for a period of 50 years.
  3. The owner of copyright has the exclusive right to license publication, allow derivatives, allow public performances, or publicly display the artwork, in any medium, with the following exceptions in section 5:
  4. The following actions will void any copyright:
    1. If a copyright owner breaks one part of their agreement the copyright owner forfeits the entire copyright and the copyright goes to the creator(s) of the work who may reassign the copyright if they so choose. The copyright will go to the writer(s) of a TV Show or movie in this case.
    2. Any changes in the copyright agreement must be agreed upon by the copyright owner and the creator. The copyright owner will retain the copyright until the agreement is breached, the time limit is reached, or some other agreement is made transferring copyright or voiding the copyright if they have permission of the creator.
    3. If a copyright holder is deceased or fails as a business and the creator is still living the creator assumes copyright.
    4. The creator must approve of all changes with the copyright holder, but once the copyright has been signed neither party may violate the terms. The writer will have ultimate authority in this manner, or may appoint someone in his/her stead. The terms may be anything the parties agree to and are legally binding.
    5. In the case of visual arts involving multiple people, if the writer breaks the agreement with someone involved in writing the play the writer will have to make his agreement within 3 months or the work goes to the public domain.
    6. When a piece of art changes hands all people who worked on the artwork will retain their stake for payment in the proceeds of the art as agreed in the original copyright. (This is important for TV shows and movies because it means that they will get paid for their work even if the studio breaks their agreement, and won't be left hanging.)
    7. Upon the passing of an owner of copyright if their are other owners that person's share will be equally divided among the other owners. (I think this would be the most fair)
    8. If the creator of a piece of art breaks their part of the bargain without written agreement, the copyright owner will get full control over the artwork until the copyright expires.
  5. The following are the terms for which copyright is voided.
    1. If the work has not been published for 15 years the rights for reproduction and distribution are forfeited.
    2. If the work has had no sequels or arrangements (in the case of music) copyrighted for 15 years the right for derivatives is forfeited.
    3. If the piece of art has not been publicly performed for 10 years the right for performance is forfeited. For a movie or TV show this would be in the form of broadcasting.
    4. If the work has been undisplayed for 15 years the right for public display has been forfeited.
    5. All of the rights in section 5 are media neutral.
  6. Once the copyright of the work has been forfeited, it will be in the public domain forever. (Overturning Golan v. Holder)
Here are the reasons why this will be better for musicians and the economy:
First of all, this will encourage copyright holders to exercise their copyright and make works available to all, otherwise they will lose their copyright.

This will encourage pieces of lesser known art that are not well known to be able to be heard. If a piece is not being heard much by the general population, than releasing this copyright requirement will not harm the company that owns it since they would not have been making revenue from it anyways.

Arrangements of music in particular will be a boost to the economy, because pieces of lesser known music that aren't selling (which don't produce a lot of income for their owners) will be able to be released to all for arranging new forms of the piece of music. This will help composers create new works based on older pieces like countless early 20th century pieces and get paid for their work.

This will encourage copyright holders to have people create derivatives and then the copyright holder will receive a new copyrighted work and be encouraged to publish it, because if they always forbid the derivatives they will lose that right.

A system that allows copyright holders to restrict derivatives, performances and reproductions of their property that they are not even sharing does not benefit the company and does not benefit the economy. Releasing such lesser-known and not well advertised pieces of art to the general population when the publisher or movie studio won't license performances or derivatives will allow artists to go ahead and be creative, which is the opposite of what our current copyright system does which hurts the economy by decreasing the potential for artwork.

Section 3 here would have made it so that when FOX decided to cancel Firefly Joss Whedon et al could have searched for a different studio to make Season 2 assuming that Joss Whedon et al agreed that the sale of Firefly included making more than one season. This would have made it so that movie studios have to work with their clients. When studios can deny an artist from making or distributing his/her/their work the economy and culture is hurt. There needs to be a way out of this for people like Joss Whedon who have their works denied. I would feel awful if I worked extremely hard to get a piece of art done writing plots and then be denied to perform my work, not to mention it would hurt me financially. It is also very mean spirited to the fans. This shouldn't be possible and hurts the economy because all of the sales and advertising from season 2 was lost. That is deadweight from copyright.

I have the rights go to the writer automatically (unless if he/she defers the rights to someone else) because it is easier than giving the right to all of the people who act in the play and it means that decisions can be made faster. The writer will have a vested interest in the production and distribution of the artwork and were the ones to create it originally. The other artists (actors etc.) who created the artwork can have shares of the art as they determine when they work and the copyright is attained, and this is designed so that if copyright transfers they keep their interests intact. Their stake in the artwork is permanent and may not be traded or sold. I envision this as a way that actors and the tech crew of movies and TV shows can have stakes in the art they make after it is published so they can get paid for their work as determined by their original agreement however they choose. I'm trying to be as flexible for them as possible while still making certain copyright holders need to be accountable to their agreement and people like Joss Whedon cannot be jerked around. I'm also shortening the length of copyright because if you can't make a profit in something over 50 years than it's not very popular, and such a long copyright term prevents derivatives from being made which is damaging to the economy and our culture because we are losing productivity and creativity.

Long live Serenity!

Tuesday, August 27, 2013

Deadweight loss is real, but depends on the situation

One frequent complaint you will hear about taxes (predominately from conservatives/laissez-faire/austerians/Austrian School/whatever-they-call-it-now) is that taxes are bad because they create deadweight loss. They view taxes as if that money is just leaving the economy, so taxes are evil but they stop arguing this when they start talking about the military-industrial complex and bank bailouts.

I would argue it depends on what the money is being used for and how that benefits or harms the economy in whether it is predominately deadweight.

If you are taking $18 billion and spending that on weapons to send to Egypt and Israel (we arm both sides) to the point where they don't need more weapons, it creates some manufacturing jobs here in the United States, but many of these weapons aren't used. It also means factories here at home are getting government grants to produce weapons. Planet Money Why couldn't we repurpose our military industrial production facilities to produce solar panels, the parts to Geothermal plants to tap into the North American-Pacific plate boundary in the vicinity of the towns of San Francisco, Los Angeles, and San Diego, California which will help move us towards a sustainable energy future (which is also about the same cost as conventional coal and less expensive than the coal plants that are currently being built.) which will ensure that our economy is stronger. This does create some jobs, but all of the money that goes to the materials that produce the unneeded weapons is deadweight loss because that doesn't support jobs or anything beneficial for Americans, and the benefits are probably small compared to the cost. The difference is by definition undeniably deadweight loss.

On the other hand, other types of government spending can be beneficial. If we make it so that tourists can see more parts of America it could boost the economies of currently unserved inner cities like Nashville, Las Vegas, and Columbus. Expanding AMTRAK is the way to do this, because there is consistent proof that for every dollar spent on AMTRAK we get more than a dollar in economic benefits for the economy. AMTRAK is not an expenditure, it is an investment. We have the railroads and the money to do amazing things, we just don't have the will. Expect more articles on this here on my blog, it is one of the best ways to grow the economy. Well Researched Source 1 and 2

One other type of expenditure these deadweight people love to target is education. We spend a lot on education through the economy, and it drives conservatives crazy. With every expenditure it is critical to see the opportunity cost of not doing something. If we teach a child how to do math, write, read, speak a foreign language, do science, understand the world around them and why it got that way (history) it is very expensive, but it is more expensive if we don't do it. There is very consistent research that people with more education make more money over their lives meaning they are more valuable to the economy and more likely to make world-changing inventions. Some people love to talk about how college-dropout billionaires didn't need that college, but they all had some education, and usually dropped out to form the companies that made them rich. Out of 400 billionaires, 34 of them dropped out from college, or 0.85%. Bill Gates is an anecdote. Most of them are like Warren Buffett and have advanced degrees. Wikipedia When it comes to the economy as a whole, people who graduate from college are less likely to be unemployed and are more likely to make an upper-middle income (with a few exceptions, like teachers). BLS If we didn't have the types of programs that allowed these people become great businessmen we would all be the worse for it.

So, the next time someone complains about taxes and claims with their Bachelors that there is deadweight, ask yourself about the opportunity cost of doing it and you will have a better picture. Perhaps the $6.4 trillion dollars spent on education is actually worth every single penny.

Monday, August 26, 2013

A poorly written document on copyright law

I was seeing that the European Union is proposing to extend copyright law to 95 years (which will come closer, but still be shorter than the length of American copyright law) and found this document written by the British Phonographic Industry Ltd. (which I am certain has absolutely no interest in extending copyright *sarcasm*) which had several major problems.

  1. They claim that they will lose revenue from recordings from the 1950s and 1960s, which will be a significant blow to their revenues. (page 3)  If they can't find new musicians regularly than they need to work harder to get people to come to their corporation. If this logic had been going on, for lets say, 200 years, one could imagine a record label saying in 1865 (or so) "We will soon lose a lot of revenue from the works of Ludwig van Beethoven which will be a significant blow to our shareholders" which continuing this logic would mean there is some fat cat in the City of London or Frankfurt who would now own all of Beethoven's last works, no work needed besides lobbying the government. I am a musician and I was going to play Peter and the Wolf for my last concert in high school (Prokofiev died 60 years ago) but the publisher wouldn't allow my orchestra to play it, which is harmful to the economy because it decreases the number of performances of popular pieces.
  2. Extending copyright for works of which the composers are already dead means that people who want to create new versions of those pieces cannot without permission of the publisher, which given my past experience with these fat cats makes it so I highly doubt that it will be better for the economy as a whole.
  3. The companies might get 3 billion pounds of revenue from keeping old works copyrighted (imagine if one company still owned all of Beethoven's works from the last 15-20 years of his life) but I would bet the reduction of performances and variations on old pieces being written will reduce British GDP by more than 3 billion pounds. (Imagine if the 500 best known pieces from the 1950s and 1960s get a lot more variations written by musicians over the next 15-20 years if this is not extended and each piece will cost roughly 7 pounds. If each of these sells 1 million copies, that is equal to 3.5 billion pounds, which means by extending copyright if these figures are correct will reduce overall British GDP by 500 million pounds. It requires the big picture of the economy beyond these companies bottom line.)
  4. If these companies can only conceive of increasing their profits by protecting their music from (mostly) long-dead composers instead of finding new musicians to publish, than they don't deserve to be in business.
  5. The 3 billion pounds figure is over the next 50 years which means the total impact to these companies' profits will be on average 50 million pounds annually across the entire recording economy. Getting one new album to sell 10 million copies globally (or a global market penetration of about 0.1%) for 5 pounds each year will make up this difference.
  6. The most ludicrous of all their claims is that extending copyright makes pieces more available. There are a few channels on Youtube I really enjoy listening to, (predominately GoldieG91) that have music written by early 20th century composers who are not well-known. When I try to find the music to these pieces in stores, and sites like musicnotes online where I want to purchase the pieces to make variations of them, I can't find them because the companies that own the pieces don't publish them a lot. With lesser known pieces I think the probably see no profit in marketing these beautiful pieces they own. If the pieces were out of copyright someone would find the piece and put it on where everyone can find it. As a musician, I have observed that copyright actually decreases the availability of lesser known old pieces, and has absolutely no impact on the availbility of cultural standards like most of George Gershwin's works.
I am in favor of limited copyright, but the current attitude of the recording industry is that they need to keep all of their older pieces which means they have little to no incentive to find new works. Keeping copyright on old works forever hurts musicians, composers, and everyone but the shareholders of the companies, and the shareholders might actually be losing out because the companies have absolutely no incentive to find new pieces which will boost their revenues beyond what extending copyright will provide because most people who want these older pieces already have them. All in all, this is a really absurd article.

Saturday, August 24, 2013

Opponents of IRV

Over the past few months I've seen a number of people who oppose instant runoff voting and they usually claim it is "too complicated".

The question I have for them is if they can answer this question:

I potentially have 5 flavors of ice cream in my freezer, chocolate, vanilla, neapolitan, strawberry, and caramel. Which is your favorite, and if that isn't there, which one is your second favorite? People do this automatically, we are natural rankers.

Just replace those five flavors of ice cream with five parties running for an office, Democrat, Republican, Green, Constitution, Libertarian, which one is your favorite and which is your second favourite, etc.? You then have a real election in the United States.

If someone over age 3 can't do this, than that person makes me sad, because this process is not complicated and is easy for people to do. It requires a little more time on election day, but freedom isn't free. Freedom takes the time and compassion of average Americans to defend against politicians that will sacrifice our constitution in acts like the PATRIOT ACT. In the cases where people have voted against IRV, maybe the ballots aren't written well, but that's not the fault of instant runoff voting, that's the fault of local government not hiring good advisers to select good election equipment, and easily fixed. Australians and Irishmen use this symptom and they have had no problems and they don't find it confusing (given how there are not massive campaigns to move to our system, which gave Canada Stephen Harper for a second term with 40% of the vote). Given the terrible situation of the last Canadian and British elections where the minority won a majority of seats, it is clearly better than first past the post.

I would even argue IRV is an easier system to use because when I vote in the primary elections in my state I have only one vote to give to only one candidate, and I find we frequently get some third party candidates who I really like but because I don't want to split the vote I have to pick between two or three completely qualified candidates, which is difficult. It would be easier for voters to have only one election and rank the candidates. It would also cost less because the government would only need one election which would save money on ballots, machines, and be better for our government's funds, assuming they have good equipment and use well-written ballots.

I also wish we could have a third party to challenge the Democrats, given that the Democrats routinely compromise the most important parts of their platform. They removed the most important parts of Obamacare and no Republicans voted for it, the majority voted for the PATRIOT ACT in 2001 and there was no massive movement to replace them. This is intolerable and they can't get away with abandoning their base like this with no punishment.

Just felt like I had to put this rebuttal on here after seeing so many poorly argued articles on the internet about IRV. It is not confusing, it is not complicated, and it gives more accurate results.

Monday, August 19, 2013

Gas prices are strange things

A summary of findings on a quick search for the features of the gasoline industry.

Gas taxes is a very strange economic animal. Gasoline is necessary for people to get around, and taxing it provides revenue for the government. This makes it an incredibly unusual sector in the economy given how no other item fuels transportation to the same level. I first thought that the association between gas taxes and the price of gas was misleading between countries (because I found little correlation between gas prices and gas taxes different states in the USA) and given the economic integration between European nations and that they will get their oil from similar sources (Russia, Norway, Middle East, and North Sea) I expected them to be similar, but in fact that is not the case as the gas prices range from $1.68 per liter in tax-free Samaun, Switzerland to $2.56 per liter in oil rich Norway. The US pays about $1.00 per liter currently tax included. Gasoline is a very complicated economic issue.

I was looking at gas prices per country and when you take in the cost of taxes and how much goes to the oil company I think of a potential reason why gas prices change by country. One statistic I found is the average price before taxes is actually lower than in Germany. This is interesting given the incredible amount of oil they receive from Russia. But when you take the ordinary view to taxes, you find that the high tax burden reduces the amount of money going to the gas company, meaning more of it goes towards the government. Without taxes, the price of gas in Samaun, Switzerland is still $1.68 per liter, none of which goes to the Big Bad Government. It means the profit goes to the owner of the store, not to public works. Reducing the gas tax doesn't necessarily mean that the cost of gas will decrease!

I suspect given the differences between countries and total amount spent on gasoline changes the elasticity of gas prices between countries, because in a country with mass transit options there will be less traffic (due to fewer cars) and less time needed to get to work or home, which decreases stress and increases work energy, which could be a factor to why Europeans make more than Americans in general (measured by Median Income).

The costs of expensive vs. cheap gasoline aren't just limited to the price at the pump but also how expensive it is to park in different countries and cities. It also changes by the amount of time you spend in traffic. If you spend most of your time in traffic you have an economic opportunity cost to having low gas prices (as exists in the United States) which means your real savings are going to be lower than they already appear. German cities don't have traffic like in the United States since they have mass transit that is efficient. This saves a lot of time, and when you factor in the cost of parking in the United States the cost of driving here is closer to that of Europe. We also spend far more of our income on driving than most Europeans. (Bloomberg)

Also, if the United States paid $1.50 per liter most of us would have no alternative most of the time to driving which would be a much bigger blow to our economy than rising Europe's price per liter by 50 cents would be. This is probably part of why the percent of income spent on gasoline is higher in the United States than all of Western Europe. Given how local mass transit is really inexpensive in Europe it costs less to get around than in the United States. The effect of the change of price on gasoline on the economy is much more volatile in the United States than Europe due to existing lack of alternatives to driving for the majority of Americans.

As a sidenote, one finds that the cost per mile of flying in Europe is lower than that in the United States with a higher price of oil. This probably has to do with the competition between airlines and the competition between airlines and railways, both of which reduce the price as Adam Smith would predict.

In summary:
  1. Reducing the gas tax does not mean the price at the pump will remain lower in the long-run. Gasoline is not a perfectly competitive good, so it will not have a balanced reaction to price changes.
  2. Countries that have higher taxes gasoline pay less money to oil companies than countries with lower gas taxes and have more money for public works like mass transit that leads to savings in parking, pollution, and time in traffic. This further reduces the overall cost to society.
  3. Other costs to individuals and society come with with less expensive gasoline in traffic jams, parking costs, and environmental damage, which makes the savings less.
Interesting reading that led to my conclusion: which is very well sourced.

Now, what would I do differently?
First of all, gasoline is a naturally ologopolistic good. You will never have a perfectly competitive gasoline marketplace, and this means the price will always be higher than potentially competitive alternatives, such as hydrogen if we can import the technology to develop it on site as Scandinavia is working on and Iceland has done. ( This requires strong bold action to change the energy paradigm of an entire nation, so it will need to start soon as Governor Schwarzenneger (R, amazingly) did in California. By having hydrogen it will be more competitive and it will depress the price of hydrogen across the world. If we can develop fuel cells and/or solar panels for flying than flying will remain an option for the future. Some people then think of blimps, but there are modern ways of storing hydrogen under high pressure that is safe, and offers 500 to 600 km (310-375 miles) on a single tank with quick fueling, which is competitive with gasoline filled cars. This requires intelligent thinking on the part of governments and the development of companies to move our energy paradigm since the end of oil is inevitable.

Electric cars are talked about, but their lack of range and the unlikelihood of developing batteries that can both charge quickly and go for long enough distances, makes electric cars an uneconomical and impractical solution.


Thursday, August 8, 2013

Reform lobbying

Currently you need to disclose your pay if you are a lobbyist if you get paid above $3,000 in a one year period, if you lobby more than one client, and only if you spend 20% or more of your time lobbying for a single client.

The first two are easy to determine, but the second one is harder if a lobbyist works for 10 clients or so, and I don't think it is a fair requirement.

Instead of using these three ways, we should change lobbying like the following:

New rules for lobbying:
1. No Individual, corporation, or any organization may make donations to political campaigns. All campaigns for federal office will be publicly financed.
2. Access to senators and representatives will be on the basis of two measures. The first determinant will be whether they are your representative. Constituents will always have priority over non-constituents in selecting their appointment time. People who have seen the representative or senator less will be able to pick first in their registration time, and people who have seen the representative or senator the most will pick their appointment last. Appointment slots will be filled 7 days in advance so meetings will be relevant and people have time to make it to DC. This will be filled so that everyone will rank the time slots they want, and the time slot will be given to the person with the most precedence. If two people who have seen the representative/senator the same amount and are both constituents have the same slot the person who registered first will have priority.

This will encourage lobbyists to attend public committee hearings to present their cases. Hearings will have equal opportunity giving precedence to people who have spoke to the committee less so that occasional speakers have the ability to speak and professional lobbyists speak last as their is time. People with prepared posters have five minutes, and other people have two minutes. Hearings will be no less than three hours. Committees will have speaking order alternate between people who favour the proposition is on the table and those who oppose it to make sure both sides can be heard. All hearings on legislation must be publicly broadcast.

Any public official who is caught making back room deals or accepting money from someone while in office or officially running for office will be guilty of a first degree felony punishable by a fine worth ten times the bribe, five years prison with no parole, will lose suffrage for life, will be barred from government employment and running for public office for life, and will lose their access to meetings with government officials for life.

A bribe is defined as any amount of money given to a public official or candidate or campaign for public office by another person.

New Zealand has these types of rules for finance and they are the least corrupt country in the world.