Getting paid to hack

Many of the products we buy today are no more than large collections of zeroes and ones. High-priced software, high-quality music, and valuable reference material such as computerized databases or CD-Rom encyclopedias are commercial products like any other, but the media of their transmission makes them different in at least one aspect: it is possible to copy them freely, or at least extremely cheaply. A compact disc of Elvis Costello and the Attractions is different from, say, a ham and swiss sandwich in many ways, but beyond the obvious is one reason that makes the nature of the two items and their production and purchase very different indeed: I can only eat the ham and swiss sandwich once, while I can listen to the Attractions CD repeatedly. This is a result of the fact that the CD contains information, rather than an actual substance such as the sandwich has. The consumable material in the sandwich is actual food and is gone after its consumption, while the consumable material in the compact disc is encoded binary data that will be around for the life of the physical disc. Since the sandwich can only be consumed once, we pay out an amount of money that signifies what one sandwich is worth to us. If I want another sandwich, I pay another $4.95. If someone were to invent a ham and swiss sandwich that could be eaten thousands of times (let\'s not go into the mechanics of how this would work) then the producer might be justified in charging many times the cost of an ordinary ham and swiss, on the grounds that I\'m getting more than just one sandwich. "Buy our sandwich once, and you\'ll never go hungry again!"

However, one might protest this idea if we know that it still costs the usual amount to make the sandwich. If a producer can make a repeatedly-edible sandwich for a couple dollars, and sell it for $4,000, he stands to profit hugely. The reason we might be able to justify charging four grand for a ham sandwich is that in our usual structure of sales and ownership, we agree with the vendor to pay a price reflective of what the product is worth to us, the consumer. In this light, it\'s irrelevant that the producer only spent $2.50 to make that repeatedly-edible sandwich, because to me as a consumer such a sandwich is worth thousands. Or to return to the example of the compact disc; it\'s irrelevant that the producer only paid a nickel to produce each disc, because to me it\'s worth fifteen dollars to be able to listen to "Punch the Clock" at my leisure.

The problem with this scenario is that it allows the producer to profit extremely at the expense of the consumer. I don\'t think I\'d too willingly pay more than fifteen dollars for a CD, and the record companies know this. Five million CDs sold at whatever wholesale price gets them to be $15 retail is a lot more profit than five million CDs sold at some lower price. Labels could charge less, in the hopes that people would buy more CDs (and this is the guiding principle behind distribution houses like BMG and Columbia House), but in general the cost is going towards promotion and marketing, rather than towards the minimal expense of getting the discs made and into stores.

In a capitalist organization, one concept inextricably linked to marketing and sales is that of ownership, or of intellectual property. A car company might have patent rights to manufacture and sell a particular model of car, or a record label might have the rights to make and sell a particular recording. A ham sandwich is a less specific item; anyone can make a sandwich and sell it, but only McDonald\'s has the legal right to call it an Arch Deluxe. This structure works well for assigning rights to the inventor or patent holder of a product - if someone designs a new kind of carburetor, they should have the right to exclusive manufacturing and marketing, without worrying about someone else capitalizing on that invention. This structure has been extended to cover the more abstract notion of intellectual property, thus giving an individual or