I also fail to see why creating a bigger value pie is not creating a bigger economic pie. What matters is the value, not the price. The price dropping is only bad if it affects the supply, but if I can copy it at will, there is already an infinite supply. And most people already value pencils only as a transient "I need a pencil right now". For most people, the value of a pencil comes from its utility as a writing implement.
Having a pencil with you has the extra value of you having guaranteed access to a pencil when you need it, but "if pencils can be replicated without thought and without concern", you already have this extra value.
What you actually did was shrink the economy in pencils. Rather than your friend buying a pencil, he now has one he got for free. If you can reproduce them for nothing and give them to all your friends, the price is zero. Value is more tricky, but as is taught in school, to some extent value is elastic to price.
While there is no mathematical direct connection, an object with no price given away tends to have a lower value in people's eyes, unless the object is particularly special regardless of price.
If someone can get another one instantly and without effort, they are unlikely to value what they have except in the transient moment of using it. The rest of the time, it's just taking up space. Filling the world full of extra free pencils doesn't increase either the economy in pencils it floods the market and kills the price , and widespread availability for free makes them less valuable to own, less likely to be something you would care for, because you can just get another one anywhere.
Mass free reproduction removes most of the value in the end. And they then used that pencil to make some art. Horrible, I know. I think I am beginning to understand your point. But it seems to be missing something. It might have "shrunk the economy in pencils", but pencils are not the whole of the economy. My friend now has both the pencil and the money he would have had to spent to buy the pencil, instead of just the pencil.
This extra money he can use to buy other things, while still writing with the pencil. So, unless the value of the extra pencil is negative, the total value of the things my friend has is now increased by the value of a pencil. No matter how small it is, it is still an increase. I agree that the value for the pencil does get smaller for several reasons the fact that if the market is flooded with pencils their selling price goes to zero, so they do not have value as something to be sold; the fact that if I have over pencils the value for me of each one is around a thousandth of what if I had only one pencil; and so on.
But I do not think it would go below the intrinsic value it has both as a writing implement and as raw material if it is made of wood, I can burn it for heat, for instance. And you are assuming a perfect replicator which can instantly create a new pencil out of thin air and which is available everywhere. A more realistic replicator would have some cost in raw materials for each new pencil, and would be something which is either at a fixed location your home, for instance or which you have to carry with you everywhere having some weight and volume, not to mention the weight and volume of the raw materials.
So there is a cost to me every time I replicate a pencil the cost of the raw materials plus the cost of either having to be at home or having to carry the replicator and raw materials with me. One of the things that makes the economy really go is cycles. Your friend buys a pencil, that moves money through the pencil economy, paying the pencil makers, who in turn buy products perhaps that your friend sells. The real key with money is the number of times it goes through the economy.
It's in part why the trade imbalance is so stressful, as it removes money from the US economy, where it cannot cycle. When you shortcut the economy by giving away a pay product for free , you are right that the money might go elsewhere. But it also removes a certain number of people from the economy. The pencil maker no longer has a job because nobody pays for pencils. He no longer buys wood from the mill, who no longer buys it from the loggers, who no longer drink lots of Dunkin Donuts coffee, and so on.
Every non-sale or sale has a ripple effect. The typical answer is "he didn't buy a pencil, but instead he used that money to X". That is fine, there is still economic activity. The more people you get involved in the economic activity, the better. You want to create more cycles. If the pencil guy was going to buy the same thing your friend bought instead, one cycle of the economy was removed. Think of the one industry boom towns. There isn't just a factory, there are other things.
Stores, gas stations, restaurants, and all sorts of other businesses that exist because of the cycle. The factory closes and all the other jobs go away as well, because there is nothing priming the pump. As for your pencil example, if it is costing you money to make a pencil, then you have sort of killed you own example. You would still be buying the raw materials, and there would still be economic activity as a result of pencils.
It would be lower than retail pencil sales, and some people are still cut out of the economy. It is also unlikely that you would give away too many pencils, if each one is costing you money. Your argument sounds a lot like the broken window fallacy. And as for my example: I will not twist an example just to make my own argument stronger.
A perfectly costless replicator is as unreal as a perfectly frictionless surface. Even for one of the most "costless" real-life examples we have replication of data via a network there are still several costs network access costs, maintenance costs, equipment costs, the electricity to make all that work, etc , only that they are small enough and often enough already "sunk", since most of these people already have a computer with Internet connection that most people think of them as free.
Even then, they are there and can be visible; compulsive data collectors, for instance, might have to buy several terabytes of external storage. Richard profile , 30 Dec am. WRONG It removes certain activities from the economy but the people are free to deploy themselves usefully elsewhere. As technology progresses things generally become cheaper, that leaves more resources for other things.
That is how economic growth has happened ever since the industrial revolution. History has a name for people who oppose this process - they are called Luddites. You mislead yourself by concentrating on the money aspect. Money is simply a token of exchange - it has no deeper meaning.
Real wealth consists of real goods, money is just a number. Comparing values at different times and levels of technology is notoriously difficult. If Mike has a pencil replicator which creates pencils at zero cost then the price of our pencils will drop to zero - but we can still write with them. Anonymous Coward , 31 Dec am. If we can magically produce goods and services at will ie: pencils then the purpose of having an economy has already been served and there is no need to have businesses and an economy to serve an already served purpose.
Without the traditional perspective of scarcity, valuation can no longer be accurately modeled by traditional supply and demand pricing.
When the true value lies outside the limits of your model you must change your model. So, the zero or near zero price of copies of internet content is NOT an economic problem in and of itself. The real economic problem associated with this situation is how to manage the interaction of a singular hyperefficient market with the overall aggregate market, that is: how best to determine how much storage, bandwith and content to produce vs guns and butter.
Forget the overproduction of storage, bandwith, and content. Those, over time, will level out as the need for more will conceivably continue to grow perpetually. The huge economic problem is the immeasurable impact of assigning prices to nonscarce goods in such a way that the absurdity of doing so is masked from the market at large.
The potential for overinflation in this situation vastly exceeds the normal bounds of an overinflated market, such as the housing bubble. In the housing bubble, massive mis-valuation took place due to way overvalued mortgages that were not likely to be paid on. As a result a huge chunk of production resources were misallocated, but the impact was to some extent limited by the scarcity of all the inputs.
That is, the number of overvalued mortages which was not properly limited by the ability of buyers to pa was still limited on all other sides by scarcity in all other inputs. Not only does RapidShare have a well-staffed anti-abuse department, that aims to process DMCA and other takedown notices in an efficient manner, Raimer also revealed that RapidShare has its own crawler that actively seeks out links to pirated content hosted on their website, and after verifying it is indeed infringing content, removes them without the content holders even getting involved.
The information collected by our software is then being evaluated, verified and processed by our anti-abuse department," added Raimer.
While copyrighted content still exists on RapidShare's servers, Raimer believes that content holders are "realistic" about the unreasonable tasks of ensuring the service isn't being abused at all. Duplication of links or content is strictly prohibited. Mastered B. Select TWO A. Storage access B.
Limited network access C. Incorrect credentials E. Network access controls Answer: A. Kernel vulnerabilities B. Sticky bits C. Unquoted service path D. Misconfigured sudo Answer: D. Unsecure service and protocol configuration B. Weak password complexity and user account D. Misconfiguration Answer: A. Use path modification to escape the application's framework. Create a frame that overlays the application. Inject a malicious iframe containing JavaScript.
Pass an iframe attribute that is maliciou Answer: B. Letter of engagement and attestation of findings B. SOW and final report D. Risk summary and executive summary Answer: D. SNMP brute forcing B. ARP spoofing C. Skip to main content Guess who is mad as hell and isn't going to take it anymore?
Far from common knowledge An expert in Internet law, the 36 year old Raimer has defended RapidShare in several key court cases. Email matthew. Channel Ars Technica.
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