Tuesday, September 21, 2004

Property vs. Privacy

It is easy to think that you can own property anonymously. The presumption that “possession is nine tenths of the law” means that anything in your possession is presumed your property unless somebody can present positive evidence it is not. Most of us cannot easily prove we legally own most our possessions and the law in general does not require us to. As long as an item is on our person or within publicly recognized property like our homes or cars, the law presumes that we own it.

This system works well for physical items because ownership of physical items is zero-sum. If one person is using the item then others cannot use it at the same time. A hundred people cannot read the same copy of a book at the same time. More importantly for presumptive property rights, if person A takes person B’s item then person B will notice and complain because they lost the use of that item. If nobody complains, the presumption is that all the property is where it is supposed to be.

The presumption system fails utterly when applied to non-zero sum property. If person A and person B can use the same item without obstructing one another, indeed without each person even being aware of the other, then nobody can assume that anyone will complain if an item is not under the control of the legal owner. The legal owner may not even be aware that someone else is making use of their property without their permission.

All digital media is non-zero sum property. Copying bits is the most fundamental computer operation. Before a digital computer can make any use of any data it must first copy it into memory. Right now, you are not reading this website, you are reading a copy of this website recreated on your local computer. With the right software, you could save that copy forever. Doing so would not interfere with the ability of others to read the website nor would I even know you had done so.

The only way to establish that an individual legally owns an instance of digital media is to permanently maintain a data trail connecting the creator of the digital media to the individual. To enforce their rights, the creators will need the ability to inspect any data trail at anytime. Practically, this means using an automated system. All current and proposed Digital Rights Management (DRM) systems use this basic concept.

The political problem is that people think of media as small physical items that they can purchase and own in near total anonymity. Until the Internet age, buying information meant buying the physical media it was embedded inside of. People think that when they buy a book they are buying the information in the book but what they really legally own only the physical paper of the book, not the unique pattern of information printed on the paper. The legal presumption of ownership is based on the physical possession of the paper, not the information on it. The physical paper is zero sum property. The information is non-zero sum.

Increasingly, more and more information is created, distributed and consumed purely in digital form. It never, at any time, exists in a non-volatile physical medium. The consumer never has in hand any kind of physical, zero-sum property that the presumption of ownership can be based on. People want the law to treat an MP3 file on their hard drive the same way it treats a CD on their rack but the two are in no way functionally comparable. They strongly resist all attempts to treat digital media differently from physical media but realities of the two media so diverge that applying the physical rules to the digital causes a complete breakdown of property rights. The only way to preserve property rights in digital media is to destroy anonymity in the purchasing and holding of digital media.

There are many valid concerns with the loss of anonymity in the consumption of information but without property rights the free-market will cease to operate in the creation and distribution of information.

The economic, social and political implications of the extinction of free-market information are staggering.

I will cover these implications in future postings.

(cross posted at Chicago Boyz)