Hollywood wants protection from pirates. It turns out that regulation is something that businesses usually demand, especially after a group of individuals or corporations establish a dominant position in the market.
Debora Spar asks of her Harvard Business School students: if your strike it rich on your gold mine, is it efficient to build fences and stand guard around your strike?
Of course not. You want a sheriff - hopefully paid for by your unlucky competitors tax dollars-to protect your property rights.
The Conquistadores came to the New World and looted the locals. They sent to booty back to the home country, only to be beset by nefarious pirates who robbed the treasure laden galleons.
According to Spar, Great Britain was the most notorious of the pirating nation. The British Crowned issued Letters of Marquis, legalized pirates, who shared the loot with the Crown in exchange for safe haven. Spar rhetorically asks, who are the pirates and who are the victims - The British who looted the Spanish galleons, or the Spanish who looted treasure from the American natives?
But the British also were beset by pirates in the Indian Ocean. The losses to British merchants was significant and they asked for the Royal Navy for protection. The response was that the merchants should mount cannon, but cannon weighed a lot and reduced cargo capacity. Finally, under pressure, the British drove the pirates from the sea in the space of ten years.
Spar's book, Ruling the Waves: Cycles of Discovery, Chaos, and Wealth from the Compass to the Internet, is worth reading and she is an excellent and engaging speaker.
I will leave the discussion of her ideas for further blogs.
However, I leave with a rhetorical question of my own:
If someone buys a commercially issued DVD or CD in a store and makes a copy, is that really piracy?
I will address that in a subsequent blog post, "Pirates, Bootleggers and Counterfeiters," but I think the answer is "no."
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