Member Rara Avis
This is going to be a little strange, but I'm going to post the same answer to two entirely different threads. One thread is about California and the fairly serious energy shortage there, while the other thread is about Napster and whether music should be free to all. These may seem unrelated, but I think both threads are actually talking about the same thing.
There's a lot of talk in the California thread (and in California) about conservation, and even suggestions that lack of conservation is the real problem. It's not. There's no shortage of electricity in this here Universe, only a shortage of facilities to generate and control it. There are a LOT of reasons behind California's current problems, most seemingly tied to a deregulation that did nothing to encourage conservation or ensure construction of power plants. But, in truth, it goes back many years prior to deregulation.
Here's the deal. If you invest $100 in plan X, there's a chance you'll lose all or some of it. But there's also the possibility you can turn your $100 into $200. You can lose all your money or you can double your money? What do you do? Well, of course it depends on the odds in either direction, but as long as the chance for success is above fifty percent, it's not a bad deal. Now suppose, the government steps in and says, well, you can still lose your $100, but the most we will let you make on the deal is $120. Now, you can lose all of your money or you can make twenty bucks. The risk has suddenly grown much larger than the potential gain, and most investors will probably find better places to put their money.
Before there was deregulation in California, there was (duh) regulation. Which is just a fancy name for price-fixing. The effects may be recent, but the cause goes back many years - because that's how long it takes to build energy producing plants. And that is what is lacking in California. Why? Because for many years the government made if difficult to justify investing the billions (yea, that's a "b") of dollars necessary to upgrade the system. Businessmen will not invest their money when the risk isn't offset by suitable gain. And you really can't blame them.
Deregulation was an attempt to fix this historical oversight, but it was poorly implemented and came a little too late. California needed a longer transition period, I think, where investors were encouraged to build new plants while still protecting current supplies of energy. But even if implementation had been perfect, there would still in all likelihood be an energy crisis in California today. Because, without incentives, people don't risk their money.
What does this have to do with Napster?
From a personal perspective, I strongly dislike copyright infringements. I suspect everyone already knew that. But from an economics standpoint, the issues go much deeper and relate directly to the problems in California.
Music companies invest millions of dollars in building popular stars. They will lose money on twenty unknown artists in the hopes of recouping those losses on that one big-name personality. The result is good music for us and profits for them. And that system has worked pretty well for quite a few years. Then along comes something like Napster, making it very easy for hundreds of thousands of people to download free music and avoid paying for those CD's. You can argue all day long that free downloads will lead to increased sales, but that's obviously not the way the recording companies see it. And it's up to them to decide how best to market their product. Take away that freedom to run their own business, and few of them will continue to try.
You may want music to be free, but that's not the reality of life. Someone, at some point, has to pay for nurturing the artists, building those sophisticated recording studios, launching those impressive branding campaigns, and distributing those millions of plastic discs. Companies have been willing to make those investments (in a very risky business model) because they believed they could make a profit. Remove that incentive - or even the perception of that incentive - and they're not going to risk their money.
People simply do not invest in the future without suitable incentives. The state of California (and many other states, even now) believed that energy should be cheap. The result is today's energy shortage. If too many people insist that music (and other intellectual efforts) should be free, the result will eventually be a shortage of good music.
You get what you pay for, if not now, then certainly eventually.