For free-market idealists who should take economy courses
>Competition is a good thing - and yes, there need to be more models which make music accessible to everyone - and these systems are being explored already in subscription forms and more, but this isn't a post about the music industry or Alltunes.com - it's about the f*cking greed of a big bunch of lazy fat ass sloths who think everything should have a penguin motif on it, and be labelled 'free'. (i have nothing against linux, just the hive mind)
What is funny with people blinded by the market ideology is that they're generally the ones who have the least knowledge and competence in ecnomics.
Let's walk you through a little explanation of the origin of the market economy and its justification by economists.
The general aim is to achieve social good. Meaning the best overall satisfaction of the population. It is NOT and has never been to give an edge to clever people, or to allow a few winners to make lots of money because "they deserve it" or whatever. No, the aim is simply to make the most for the overall population. It seems quite logical, as if that were not the final aim, it would not go together very well with democracy (if the aim is to make the cleverest the richest, then we should favor coups so that clever people end up absolute dictators because "they deserve it").
Starting from there, economists, for a good number of centuries (4 now) have been thinking about how to achieve this. Knowing that man is selfish, achieving overall good is difficult. Fortunately, it was discovered that UNDER A NUMBER OF (quasi mathematical) CONDITIONS, pursuit of slefish profit by everyone may actually be a good way towards the greater good.
This has led to the success of the market economy, where people are free to compete to get the most of whatever they want, and that way achieve the greater good.
But how is that done? It's based on a number of assumptions.
To achieve the social good by selfishness, there must be competition, that is, individuals vying for market share by competing on costs and quality.
But why would that lead to social good? You seem not to know and to stop at "if it's free market, then it's good. People who think further are morons". You're wrong. There is a reason why it leads to social good, and it's not just magic.
It is because competition drives down costs, theoretically and in a perfect world, down to marginal cost of production. And that marginal cost tarification is the price where the most people benefit the most from the products.
And in turn, why should competition drive prices down to marginal cost? It's because of the assumption that all industries face decreasing returns, that is, each new unit costs a bit more than the previous one to make.
That is 17th century economics, based on the main production of the time, that is food (once you've used all good soil, you have to use lower yields soils and thus you get decreasing returns: the additional production requires more efforts than the previous ton) and raw materials (it is quite obvious that petrol is more costly to extract once you've finished readily accessible onshore fields).
Since economists, as opposed to people who know nothing but are just regurgitating general conclusions applied to wrong contexts, are not that dumb, they also have investigated, one century or so later, with the raise of indutrialisation, how to reach social optimum in case of INCREASING returns, that is when the next unit costs less to produce than the previous one. This includes fixed-costs industries, such as... the music industry. Getting ONE Madonna new series of 15 songs takes a lot of money. Making 1.000.000 duplications of these songs can esaily cost around 0 cent (you can just put the first series on a p2p network and here you go, you've got yourself 1.000.000 versinos for free).
The conclusion of modelization, thinking (yes, actually THEY do think) and experience has proved that the optimal way of managing this is through tarification at marginal cost (here, 0 cent), which is the single most important thing that is underlying the efficiency of the free-market economy. Then of course, the producer loses money, because he never gets the initial investment back. Which is why the marginal-cost tarification is not all. There is also the investment subsidy, which can take many form but must be decorrelated from the act of getting access to the product (or it's just a cost which invalidates the possibility of optimal behaviour of agents leading to efficiency). It could be government funded, it could rely on a special tax, it could be based on an all-you-can-eat pricing (priced to cover investment and benefits and followed by a 'free' price), or whatever other schemes.
But it is what economics prove.
Then there come ignorant people who just take the general conclusion (free-market economy is good) and completely ignore the restrictions that apply to this, probably because it's easier for them to think the world is simple. Unfortunately, it doesn't work this way.
As a consequence, there is no justification to the music industry clinging to a model of tarification that is bad for society as a whole, as proven by centuries of economics which you probably know nothing about.
The correct tarification that REAL free-market lovers push for is the one that does make music free, because that is what its marginal cost is. And it's not just by chance if radio is free, if TV in general is either free or based on all-you-can-eat tarification.
Music HAS to go that way if free-market's justifications are to be upheld, and in the same way as a monopoly can rightly be punished for abusing its position (because it runs against competition which is the usual way toward marginal-cost pricing), an oligopoly that prevents marginal-cost tarification should not go unhindered.
Biting the hand that feeds IT
