Society’s Pliers





What’s Napster
and Freenet?

 Why care and what to do?

By Michael Albert

The New York Times business pages have lately featured reports of a music industry crisis. Many leftists don’t read these pages, but this is big news for everyone, perhaps especially for the left.


Napster

Napster is a computer program plus a massive web site/server and information center. Sitting at your desk at home you type in a request for some music—perhaps anything by Springsteen, or perhaps a specific title by someone less known. The request goes to the web server that houses a catalog of other Napster users, including their computer addresses and a list of the music files they have on their machines. In this collection, the server finds what you want, perhaps many times on various people’s machines. You reply to news of this—that yes, I want that instance of it—and the system plucks a copy from the other Napster user’s machine and deposits it on yours. There are no fees. No cash changes hands.

You can see why this horrifies some folks. Unlike tape recorders and other copying machines where a person can duplicate an existing instance of music that they have immediately on hand, with Napster one can get copies very easily and eventually for a universal store of options. Not only has the abstract sanctity of the “mode of production” been challenged, as with taping equipment, but now the practical sanctity of the product’s promotion and dispersal is challenged as well.

Why should anyone care? Well, suppose you are the CEO of a music company. You operate your business by contracting musicians to give you control over selling their recorded songs. You sell the recordings as CDs or you license them in other venues, thereby accruing huge revenues. You use the revenues to pay for production facilities, for expenses in promoting/hyping and distributing the materials, for royalties to contracted writers and performers, and of course—and this is your guiding purpose throughout—to pocket a huge profit.

Now along comes Napster and the whole money-making edifice is suddenly in danger. People can potentially get free what you provided for a fee, and they can do this more easily than going to the store for your packaged version. They can inter-communicate as well, getting more honest descriptions of content and assessments of song quality from fellow listeners than your promotion provides.

In short, everything that gave you the bargaining power to oversee music transactions and accrue vast profits from them is now under siege. To you, Napster is horrible.

Now suppose you are Metallica or Bruce Springsteen or some unknown musician hoping to make a life for yourself doing art. If Napsterism spreads widely enough, you will have no place (other than direct appearances) to go to get an income from selling your music. Napster will make getting your art out to the public without compromise easier than ever before, and far less alienating.

But, assuming the massive expanded use of Napster and no associated new social mechanisms for generating revenues from it, you won’t earn millions, or even thousands through the sale of your recorded art, because no one will be paying anything for your music or for anyone else’s. There may also be no one to pay for recording studios and the like, up front, or to advance fees for touring, for that matter. Even if you like the spirit of Napster, there’s reason for you to be concerned.

Okay, yes, as some defenders of Napster argue, if Napster were to be at most used by only some folks to get only some of their music, it could wind up a boon to both music industry capitalists and performing artists by increasing audience size and interest, much as tape recorders did in the past. But this is disingenuous. If Napster works as intended, then the problems noted above are real. With Napsterism truly flourishing, there would be no basis for capitalists to profit off selling music or to have revenues to pay for recording studios, engineers, and diverse other components of the music production process in the first place, and likewise no basis for performers to earn income from music sales to eat, whether their meal would have been caviar or canned tuna fish. Yes, performers could still do direct performances, if they could find someone to front the costs of travel, set-up, promotion, etc., but that would still leave writers, composers, and recording engineers and editors, among others, with few if any options.

Solution: The recording studios and star performers go on the attack. They sue Napster to shut it down for violating copyright law. Once they get restraining orders and penalties imposed, Napster dies and the problem is gone. The corporations go back to profiteering as usual, the big stars go back to their fancy lifestyles and large incomes. The great mass of music industry workers go back to being exploited and powerless over their music regardless of how hard they work. But wait—business as usual may get a new shock.


Enter Freenet

Freenet, just now entering the public scene, does what Napster does, but it does it quite differently. Again you have a computer program into which you type your request for the new Patti Smith album or perhaps for the Australian Philharmonic performing Beethoven’s Third Symphony. This time your request goes out to other Freenet users and either finds what you seek or goes on to more. There is a subtle and complicated methodology, which, however, explores possible source points for what you want without limit. When your request succeeds, you pluck the item to your machine. So what’s the big difference between Freenet and Napster?

First, (if it lives up to self-description) Freenet is anonymous, untraceable, and uninterruptible. No one can know that you are in this community or that anyone else is. There is no record of your name, address, or what you choose to order. No request is traceable. More, there is no center though which all communication flows. There is no hub server or other repository of collected information. There is no collected information. There is no one to sick lawyers on. There is no way to shut Freenet down.

Second, Freenet isn’t only about music. The Freenet community, once it becomes operational, can exchange any digital material at all—music, video, books, and data of all kinds, including research. So if Napster felt like a bad dream to corporate accountants, Freenet is a nightmare. All information-related copyrights and revenues are challenged by this innovation, and, if reports are to be believed, there is no way to cut off the antagonist’s head because there is no head to cut off. Freenet, once going, purportedly lives forever.


The Conundrum

So we are back to the same “problems” that Napster raised by undercutting (a) corporate profiteers, and (b) however inadvertently, folks creating information except now we are talking not only about music, as before, but also about film, books, articles, and research or data of any kind.

Suppose this technology becomes widespread. A movie opens, in hours it is available for viewing on anyone’s monitor who wishes to see it, no muss, no bother, no tracing, no interrupting—and no litigation. So how does the movie theater charge for the film and pay the movie company to pay the writer and actors, and for all the other costs, and to profit as well? And why would anyone endure TV ads or pay for TV movies when everything available with ads or for a fee on TV is available any time at all, free and unencumbered, on the same monitor via Freenet distribution?

Goodbye Hollywood and Hollywood performers as we know them. The same goes for books, and for privately held research too. A book comes out. Hours later it is in the system, available free, almost instantly transferred to anyone, for display on your hand-held book monitor, or, if you are “old-fashioned,” for printing. Or imagine, data or code accumulated trying to invent a new drug or software program. What happens to the pharmaceutical or software industry when you can’t keep that kind of information under wraps either, and when, once available, it flows without borders or fees, with no way to know who is taking what, where, or when, and with no way to stop the transfers?

So what’s the conundrum for a well-motivated and rebellious leftist? It all sounds great, doesn’t it? Free stuff and, as a big bonus, information corporations crumbling. Well, not so fast. There is a moral and also an economic problem to consider.

Morally, in this scenario aren’t our future Freeneters ripping off the musicians, composers, recording engineers, actors, photographers, directors, writers, editors, programmers, researchers, or whatever? Aren’t we taking the fruits of their information-related labor, let’s say a book someone works ten years to write, and leaving them with diminished ways to get paid, if at all? How is that a good thing? Surely we ought to respect the right of folks to earn a living for their information-related labors?

Beyond the moral issue of the livelihood of information creators, however, there is also an economic Catch 22. If Freenet distribution works and spreads sufficiently to undercut the sale of information, essentially shutting down CD production, book publishing, etc., the upside is people will be able to get everything that is digital easily and for free. However, just what will be available for them to choose from? Where will people who wish to be in the information business—musician, recording engineer, editor, novelist, programmer, researcher, and whoever else is needed in the process of information creating—get the time, focus, and needed equipment to produce their print, audio, visual art, or insights? We will freely access everything that they make available, but the only thing they can make available will be what these folks can create in their off-hours, with few if any resources to bring to the task.


Solutions

Of course big information corporations are going to seek ways to continue to profit by production and distribution of audio, video, text, data, and code. Of course artists and information creators are going to try to keep getting an income for their work. There are lots of options folks might pursue. Outcomes are not pre-scripted. For example, corporations can forego direct sale of information and create free sites for dispersal that are funded by advertising, thereby mimicking TV and radio business plans and trying to undercut other free distribution methods. Stephen King can release a chapter of a book online, electronically, direct to his audience, and tell them he won’t release any more of it unless some large number of his readers kick in a dollar each to motivate him, thus turning himself into a replacement for corporate owners getting remuneration for output directly, even before the fact. But these options aren’t what I want to explore (nor are they likely to work, in my opinion). Rather, I’d like to consider what folks wanting the most economically and morally sound outcomes ought to advocate as a positive model for information economics.

We should, of course, celebrate the growing threat to undo corporate subordination of information workers. That is positive. We should equally celebrate the growing threat to copyright law and the private ownership and control of information in all forms. Corporate hierarchies are tyrannical and legal copyrights are morally and economically counterproductive, as is private ownership of the tools of production and dissemination. Each leads to immense lucre for a few, which has horrible distributional effects from top to bottom. And each impedes the universal and open use of the best available means for getting things done, inefficiently monopolizing techniques in the hands of a few.

But we also have to take seriously the incentive side of the equation and the just desires of information workers to earn a living. Not only does Freenet threaten a sector of capital, causing owners to scurry about trying to find ways to defend their dominance and profit or alter their pursuitsi, it also calls into question the norms and mechanisms of remuneration for labor. For if we are to take seriously the claim of knowledge and art and information workers that they deserve a fair income, as we certainly ought to, then we have to ask, okay, how much income is fair? But as soon as we ask this question, it is obvious that Bruce Springsteen, Frank Sinatra’s heirs, Metallica, et. al. do not deserve as much income each year as a dozen, a hundred, or a thousand steel workers. They ought to earn a decent income for their labors, sure, but not in accord with what they can extort, nor in accord with what their product is worth to admirers. People should earn for their labors, but only for the useful effort and sacrifice they expend. This is what people can themselves adjust in response to the incentive of payment. We pay people to put up with the sacrifices involved in doing labor. This is also what is meritorious and deserves pay. They shouldn’t get more, for example, if they have better or worse equipment, if they happen to be in a highly valued or less highly valued pursuit, if they happen to be born larger or smaller or with a quicker or less quick sense of melody or programming talent. It is only for useful effort and sacrifice that people should be paid, either morally or as an economic incentive, but the amount paid should reflect the outlay of effort, not the value of the product.

So what happens to the artist, writer, researcher, recording engineer, or editor? If they do socially valuable labor in their field, they ought to be remunerated for their effort and sacrifice. If they don’t, then they shouldn’t. Who decides? How about their fellow information producers?

To continue with the music example, suppose we see a democratically organized community of music creators and performers (but not the owners)—as the music industry. Suppose that aspiring performers apply to the industry’s members to join it, and old performers appeal to their co-workers to stay in, and likewise for all its other workers. Suppose that the Freenet community of music listeners supports this industry by collectively transferring a massive revenue payment to it, and that, in turn, the music industry of music workers, organized democratically, pays each of its members in accord with their outlay of effort and sacrifice in their work, where a full-time worker in the field, at an average level of exertion, gets some agreed full-time salary, say $50,000 a year, and where one can earn somewhat more or somewhat less due to exerting more or less than average. Now, (a) Would this be moral? (b) Would this provide incentives sufficient for the creation and performance of music to thrive? And (c), could the funds necessary for all costs and payments come forth, somehow, from Freenet? (d) Is this replicable for other information industries?

These are the questions to ask, it seems to me, if we are serious about how to use a tool like Freenet for music or for any other information industry.  How about the specific Freenet proposal? Well, I think it is morally sound that a performer or writers or actor or director or researcher or recording engineer or editor or other intellectual/artistic/information worker recognized as doing worthy work and deserving employment in his or her field by his or her democratically organized peers should earn a sensible income pegged to the effort and sacrifice expended in his or her labors. I think it would also be morally sound that those in the field do the hiring and firing of their fellow employees, determine the purchase and apportionment of equipment, of studio time, of promotion efforts, etc. Democratic control over the industry by its participants. I also think this provides the right incentives all around.

Consider the aspiring writer, actor, singer, etc. She wants to ply her craft. She loves it. She can pursue it and if she is good enough and serious enough, she can get a job in her industry and earn a  comfortable income. Is such an income enough to elicit effort from her? Will the fact that she can’t even hope for riches cause her to forego making music? Well, to gauge incentives you have to consider alternatives. The issue isn’t whether this approach offers less of an optimum material carrot—of course it does, that’s the point. The issue is whether there is enough carrot. Well, the would-be writer, actor, singer, etc. could choose to become instead a school teacher, a custodian, a short-order cook, a waiter, and so on. Seeing things this way, it becomes obvious that $50,000 a year, or some similar sensible income, is indeed enough incentive to motivate aspiring music workers, or other information workers, to develop and exercise the talents they were desperate to utilize anyhow, rather than to deep-six them and take some other kind of job.

Now let’s consider some group like Metallica super-star rock band actively opposing Napster. They would be pissed, in most cases, at our Freenet scenario, because via this approach they would earn millions less than via the more traditional corporate model. But now let’s ask, after their pissing runs its course, what their options are. In the Freenet scenario, in the short-run these stars can continue with their recording or other parent contracted companies, presumably getting revenues from them, having them pay for promotion and recording time, etc. This is no problem for Freenet, because Freenet gets and distributes their music no matter what. As time passes and more and more consumers of their information relate to Freenet, the stars can either remain performers in their industry signing up with Freenet and earning a nice but not exorbitant income, as well as having associated production and touring costs handled, or they can say goodbye to their craft and take up some other pursuit.

Assuming Freenet grows steadily, ultimately there is no other way to get income for their efforts than through this community of listeners and music industry workers. Their old recording company is no longer in the music recording business. Yes, stars like these can perform live, in some instances, but who will advance the fees associated with such appearances and who will do the promotion, etc.? And assuming this scenario unfolds, which audience would pay to attend these scabs on Freenet and on its just remuneration norms, fair fees, and democratic practices? My bet is that even for highly jaded millionaires—assuming they are given a little help to understand what it means to be a normal working person—the Freenet incentives will work fine. They perform now, when you think about it, despite that they are so rich they can easily forego all further income. In the new model, they always have a big material incentive to perform at a full pace and with their full talent—to earn a continuing living income.

Okay, in this hypothetical scenario would the money exist to make these sensible payments to so many people, and not just to the artists or writers, but to everyone needed to create these information products and to pay for the recording studios, research tools, etc.? Remember, though Metallica gets way less than before, there are many performers, artists, writers, etc. who would earn more under the Freenet procedures than they do now under corporate norms. So, yes, this is the hard part, to promote not only desirable values but workable practical methodology as well.

But imagine Freenet involves a yearly fee. You pay this fee each year and for that payment you get access to the technology to get as much music, books, and all kinds of information and digital data as you want, all at no extra cost, no adds, no commercialism. The fee that you pay finances the subsequent payments to the producers and performers and other involved workers who sign up to be part of the community, ensuring that the flow of quality product keeps on coming. The fee goes to the music industry of all involved workers, and similarly for the book industry of writers, editors, etc., the film industry of cinematographers, designers, actors, and so on.

Because of the structure of this setup, consumers accesing and enjoying the music, books, films, and research, know that no owner is profiting from the fees, and that no performer is getting rich from it. All the payments are appropriate for people to earn sensible incomes and to pay associated production costs. So would you pay the fee to these industries? I certainly would.

Can Freenet grow as a community, incorporate ever greater numbers of workers and consumers, dominate the distribution of digital information, and simultaneously construct mechanisms to collect fees going to appropriate industries of information workers? Can it accomplish this without having a central server that can be sued and penalized? Should leftists take an interest in the effort and push desirable proposals of this sort, so that the Freenet phenomenon challenges both capital and also wrong-headed extravagant remuneration for work? Yes, I think we ought to. There is a lot of consciousness raising, at the very least, that can happen in this context. At most, perhaps a significant aspect of capitalist economy can be progressively revamped.


A Related Case Study

One last related matter. Consider a university, let’s say Columbia in New York City. It provides its faculty with a huge store of research facilities, time, and income to do their thing, including coming up with new information and theories, new drugs, new engineering tools, etc. Columbia needs income to finance this research activity so it institutes a commercial scheme. All its researchers sign a contract that a large fraction of any profits or revenues accruing from their labors will go to Columbia to in turn finance the whole operation.

There is, however, a side implication. Columbia imposes a gag rule on its staff and students for fear of losing the inside track to needed revenues. Thus, no one can talk about any ideas or data that might somehow contribute to future patentable product or other money-making schemes.

The personality and behavioral problems are evident, so a researcher or perhaps a leftist critic of the commercialization of education challenges Columbia to change these norms. Columbia responds that yes, we agree that it would be nice to forego the gag rule, but then we lose the profits and how can we finance the environment and pay for the tools and create the context conducive to innovation and insight in the first place? The fact is, Columbia has a good point, in the current context.

But there is, again, a solution. Suppose that instead of Columbia functioning independently and in competition with Harvard and Princeton and every other research center—they are all entwined in a grand research industry via the Freenet relations described earlier. Now the information can flow without barriers (as science is supposed to). The revenues can come from all of society since we are all the beneficiaries of innovation, and can go to the whole research industry, and after supporting the costs of tools and whatnot, each researcher and worker in the area gets a fair income as determined by their peers in accord with the effort and sacrifice they expend.

In one sweep the inefficiencies of secrecy, insulated competitiveness, and gross disparities of reward are eliminated. The security of the whole enterprise is ensured. Because researchers don’t need the promise of massive riches as motivation any more than artists or writers do—a nice living income will do fine—the incentives are in order, indeed, they are far more rational than those now in place.


Conclusion

The discussion of Napster and Freenet in coming months, like everything else that our current media addresses, will be dumbed-down to serve the interests of elites. But we can do better. We can realize that there are real issues at stake in this information battle, real possibilities of challenging old social relations with wonderful new values and options, and we can fight for these possibilities,

To top it off, the creator of Freenet, Ian Clarke, created this tool very self-consciously, desiring to eliminate competition, privacy, private property, and all forms of censorship. This is not exactly the mindset of Sony or Microsoft. Will Clarke, Springsteen, and others support cleaning up the industry by making it equitable and democratic, even at the expense of the super incomes of the super stars? Should activists work to make it happen?     Z

Michael Albert is an author and staff member of Z Magazine and ZNet.