Freaking filesharing

During the flight back from Canada I read Freakonomics. Nothing freaky to literates. Anyhow, the book’s simple approach to deterrence somehow struck me. Accordingly, deterrence is a trade-off between three incentives: economic, moral and social. Start giving penalties (economic incentive) and people might think it is no longer unethical to commit unwanted behavior (moral incentive). The example in the book was the introduction of a $3 penalty for parents who picked up their child late from the kinderkarten. The result was more late pickings as the parents didn’t feel guilty anymore and the price of late picking was neglible.

Apply this to file sharing on the Internet. Statistics show that file sharing has been increasing the last five years save for the first half of 2004. In late 2003, the recording industry started to push through penalties to individuals and managed to get one of the most popular network at the time (FastTrack) practically down.

But that victory was short-lived. Users switched to more robust and secure networks. By attacking technically weak networks, the recording industry makes sure the sharing technology keeps on advancing and new technology gets adopted quickly. File-sharers unite!

The fact that there are now penalties hasn’t helped. The risk of getting penalized is next to nothing. Moreover, with an arrogant policy the recording industry has arguably lost moral ground. Why should I deter from sharing some widely-available Madonna or Rolling Stones hit with other users? I don’t think those artist will lose anything from sharing and besides, they seem to be both arrogant and too-rich. Sharing brings friends!

Thus, I’d argue that the social incentives encouraging sharing outweigh the moral and economic incentives to deter from sharing. The penalty-policy has perhaps added a marginal economic deterrent but, at the same time, it has weakened the moral deterrent and strengthened the social incentives. The outcome of this equation can be read from the statistics.