Looking at the litigious tactics of the RIAA and MPAA, it’s becoming more and more apparent that this isn’t how a legitimate business model works. Scaring your consumers into buying your goods reeks of pre-Capitalist Monarchical tactics used to enrich themselves at the expense of their constituents, which is exactly what we see in these cases as well.

Economic theory states that the price of a good goes down in proportion to its availability: oil prices are rising as OPEC members restrict production, and the iPhone’s price dropped drastically as manufacturing capacity jumped soon after its introduction, for example. But what of information? By its nature intangible, its availability is limited only by the medium on which it is recorded. In the past, this allowed cartels such as the RIAA and MPAA to tie information to its medium, and inflate its value. But now that digital content and the internet have gone mainstream, the medium has been completely abstracted. Production costs only as much as bandwidth if you choose online distribution, and if you go the way of many Linux distros, peer-to-peer distribution costs you nothing at all. Looking at the supply and demand curves to the right should make it evident why this is: the demand curve looks relatively normal, but the supply curve is a horizontal line at p=0. The equilibrium point is then infinite production, with a price of zero (not shown, because infinity is pretty hard to graph).

Since the information itself is worth nothing from a purely economic standpoint, voluntarily paying for usage rights amounts to pure producer surplus, and mandating payment for it is simply price control and artificial scarcity. But, as copyright advocates are quick to point out, copyright acts as an incentive to create. After all, who would make a career out of musicianship if it weren’t profitable?

The advocates make a very good point here, but their prescription is misplaced. Problems of actual value cannot be solved by price controls, because in an era of mainstream digital technology and the internet, artificial scarcity cannot be maintained. People will be their own producers of the information, duplicating and distributing it on underground networks if they are pushed off the Web. The solution then is to place value not on the information itself, but the act of creating it: transferring incentive from the good to the service. In this way, people in information markets who could have previously have produced one popular item and then rested on their laurels, so to speak, continue to produce. They are commissioned and paid based on the work that they do rather than the people that use it.

As foreign as this concept may sound to ears trained to embrace intellectual property, it’s already in the embryonic stages in the Western world. In the software industry, IBM pours billions of dollars into Linux, an open source operating system: these Linux developers are being paid not on the number of licenses they sell, but solely for the work they do to bring forth a useful complement to IBM’s servers. Similarly, though Apple still charges for OS X, it is in a very good position to fund OS X development entirely by hardware sales, using OS X as another perk of the hardware. Google contributes large sums of money to the Mozilla foundation and many other open source projects, again not for direct return on investment from sales and royalties, but because it furthers their interests in non-monetary ways. In the music industry, we see that for all but the best-selling of artists, concerts and merchandise have long eclipsed recordings as the main moneymaker. The work of continually putting on concerts is the service for which they make money, rather than from selling rights to listen to their recordings, and people still go to theaters for the experience of the classic greasy popcorn bag, thunderous high-quality surround-sound, and a giant screen, things that aren’t feasible for mass consumer adoption (at least the giant screens and high-quality surround-sound).

Because this model adheres more closely to a market ideal by eschewing artificial scarcity and price controls, it eliminates the giant bubble that has formed around information industries - a still-growing bubble that will eventually burst when piracy reaches critical adoption mass. In addition, because the emphasis is on continued production rather than hitting it big and kicking back, we get a more productive economy, and a much higher sustainable GDP as information production continues to expand into the dominant economic sector.

The Declaration of independence makes no argument for the legitimacy of its claim that the rights of Life, Liberty, and the Pursuit of Happiness, that governments are instituted from the consent of the governed, or that the people have the right to overthrow oppressive governments. These are held to be self-evident - conclusions that anyone could arrive at without much thought. But are these truths actually self-evident anymore in the context of modern thought?

The American Revolution was the direct spawn of Enlightenment political thought. John Locke, in his Two Treatises on Government, was perhaps the most influential, having stated that each individual has the right to life, liberty, and property, a phrase that was copied with little modification straight into the American Declaration of Independence. Locke believed that the first right was unalienable due to its bestowment by the Creator, and the latter two derive from one’s capacity for rational thought - i.e., children have not yet developed and criminals have demonstrated their lack of rational thought, and so are not entitled to these rights.

So what of the deterministic shift in recent thought? Criminals are becoming less responsible for their actions, and more extreme determinists would say that no one at all is capable of truly rational thought except what is incidental. This therefore precludes the self-evidence of the latter two rights, and since naturalistic determinism itself precludes the existence (or at least involvement) of a Creator, the first right as well loses its self-evidence. Even without naturalistic determinism, simply secularity of state makes these rights much less clear, for without a Creator, nothing can be self-evident. One can certainly make the argument that it is advantageous to allow one’s citizens freedom of life, choice, and property, but any argument for the superiority of such a system can only evaluate it based on its results rather than any intrinsic value.

Though Ecclesiastical states have their share of problems with corruption among other things, instability is not one of their weak points. Democracy and liberal freedom in general have proven over the past centuries to be remarkably stable compared to other secular forms of government, but how much longer can it exist before a more convincing system exploits the popular unrest inevitable in a state old enough to be removed from its prior government with another set of “self-evident” truths so called only because they exemplify the mindset of the time?

Never before in history has global communication in so many media been so accessible. Cultural elements now spread across the world, taking us ever closer to what increasingly appears to be a homogenous global base culture marked by subcultures rather than regional variation. In looking at this trend, one must ask, will this resulting culture become a conglomerate synthesis of the cultures of the world, or will one in particular come out on top?

Looking around the world, one can undeniably see the pervasive influence of American consumer culture, and by all accounts this is the culture coming out on top. Consumer culture appeals to the innate desire of the individual to pursue his own interests at the expense of a greater good, whatever that may be, like cocaine appeals to the innate personal desire for raw pleasure. And in the long run for a society it is no less addictive or destructive. The appeal of Western luxury to the developing world in Asia and Africa is almost irresistible despite the outspoken antipathy of many of their governments to the West.

Or does the antipathy to the West regard its policies rather than its culture? Why is it that Middle-Easterners can cry “Death to America” while drinking a Pepsi?

During the Cold War, the United States used culture very deliberately as a form of soft power. Listening to the Beatles broadcasting through the Iron Curtain sowed seeds of discontent among Soviet youth with the Union’s isolationism, and was eventually an important factor in bringing about the downfall of Marxism in the Soviet bloc. In recent years however, without a Soviet union to keep us on our toes, our deliberate use of soft power in this fashion has dropped off to near nonexistence. This does not mean that our culture is not spreading - on the contrary, it is spreading faster and more pervasively than ever - but now it is like the spreading of a virus rather than the injection of a serum: passive rather than active. Donald Rumsfeld even stated at one point that he did not even understand the concept of soft power.

The problem is that modern third-worlders in anti-American governments, rather than adopt pro-American sentiments as they adopt American consumer culture, dissociate the culture from the nation and shamelessly take on the most shameful of American ideals while positioning themselves ideologically opposite from, for example, the US’s favor towards Israel and Democracy in general. I do not of course refer to the higher anti-American ideologues - many of whom renounce consumerism just as strongly as American policy - but rather the lower classes in their sphere of influence, who see dissociation as a way to align themselves with their own ideologues without giving up the goods they have become accustomed to, however meager they may be (especially compared to the goods we receive in America).

We are then in the precarious position of having self-preservation from inner corruption at odds against self-preservation from outside forces. The most obvious way to protect ourselves from continuing terrorist threats is to dull their ideology with deliberate injections of consumer culture. As their youth grow into complacency as ours have, then the threat of attack diminishes. But with this diminished threat of attack comes an increased threat of collapse under the unsustainable load of deficit spending and indebtedness, both on the personal and federal level, and not just in the West, but worldwide should we consumerize the third world.

The answer we find on this the sixth anniversary of the most vivid demonstration of Western antipathy in American history, lies in the tedium of a continued war on terror coupled with a concerted internal propaganda effort aimed at breaking consumer culture. It is as Machiavelli says unfathomably difficult to reform a deeply corrupted nation, but what choice do we have? Perhaps it’s wishful thinking, but one could imagine the number of anti-American ideologues greatly diminishing if we do break through consumer culture.

Economic policy hinges on stimulating growth. Prior to the 1930s, the United States took a very conservative Laizzes-Faire stance on the economy, and by any standard of measure through the 1920s it seemed to be working well enough - even spectacularly as the decade progressed. But then the Great Depression hit, something that many saw as the quintessential failure of conservative economic policy. It was only with Roosevelt’s unprecedentedly liberal New Deal program coupled with the spending World War II entailed that the economy could get back on its feet again. What then went wrong? What changed in society that rendered an economic policy that had served us well for so long so suddenly obsolete?

Americans in the early 20th century, after enough money for basic needs and a few luxuries, for the most part would opt for more leisure time than more pay. But the early 1920s saw the rise of incredible new technologies to increase productivity per worker hour such as the assembly line. Productivity skyrocketed, leading to a massive glut of overproduction in a number of important fields like automobiles and consumer electronics. Faced with a population for the most part content with their current lot, these overproducing companies faced a dilemma: How do we sell all this excess?

Companies all over began at that point to launch huge advertising campaigns to try to engender in the American mindset the “Dissatisfied Consumer”, as GM vice president Charles Kettering put it. Kettering and GM were, in fact, instrumental in this mass-brainwashing, at one point stating that “the key to economic prosperity is the organized creation of dissatisfaction”. Of course by economic prosperity he meant producer prosperity. GM began to introduce yearly car models at this point to achieve this end, and it was at this point as well that advertising began to take off as a ubiquitous medium and shifted largely from logos appeal to pathos appeal. Economists like Hazel Kyrk heralded the new consumer culture as a new dawn of economic prosperity, and the new Consumption Economics school of economic thought was quick to emerge from it, and Americans conformed their buying habits from clothing to food to utilities to the whims of producers and advertisers.

But the huge productivity increases were not coupled with an increase in wages. In fact, as human capital became in large part unnecessary for much manual labor due to automation, layoffs and pay cuts were hardly uncommon. In order to absorb the overproduction, consumers had to purchase on installments and credit, a sector that mushroomed during the 1920s. The credited money flowing into the economy was in many cases not backed by actual capital, and grew to such a large portion that banks were caught by surprise when they could not produce enough capital to back the mass withdrawals that took place in 1929. The economy simply imploded from saturation with hollow credit money.

Mass-consumerism was essentially the killer of conservative economic policy. But from the comatose corpse of our laizzes-faire economy rose not a backlash against the consumerism that brought forth the situation, but instead a new form of economic policy designed to sustain and encourage the consumer mindset: Keynesian economics. The policy changes in the ensuing decade were in many ways retrospectively obvious safeguards to protect against another crash, such as requiring banks to hold a certain percentage of their recorded capital as actual capital, but in others such as social security, welfare, and unemployment benefits were designed to supplement or even replace wages in order to transform even the poorest rung of society into consumers. Even today arguments to raise the minimum wage are based on the assumption that anyone who works is entitled to consumership. In its battle with conservatism, consumerism emerged victorious with the world economy as the casualty, and survived even through the depression to become a stronger force today than ever before.

But mass consumerism, even with liberal economic policies, is not sustainable in the long run. The national debt has risen almost every year since Roosevelt’s administration and is exponentially increasing - from nearly $0 in 1932 to an astronomical $8,981,543,146,057.86 as of August 24, and will continue to rise for the foreseeable future. In the last election, dire projections were made that the government will be bankrupt by the 2030s if it continues to pay out wage supplements. Even with the debt centralized like that, the economy cannot handle an indefinite increase in national debt, yet a return to 1920 conservatism ceteris paribus would only crash the economy sooner rather than later.

The only long-term sustainable economic option without major economic restructuring is to reverse nearly a century of cultural brainwashing by producers. Severe limits and restrictions on advertising in any medium coupled with a massive propaganda campaign encouraging contentness and thrift would be the least we could do - intentional reshaping of an entire cultural mindset was done once before; it must then be done again to reverse the damage of the first.

Unfortunately, consumerism has magnified complacency to the detriment of alarm. It may just take another Great Depression to reawaken us to our own decadence.

The Capitalist economy is structured so that each person tries to exploit the system for his own gain. By allowing for and even encouraging this sort of individualistic behavior, Capitalism ensures its own survival: exploitive and selfish behavior are inevitable in society, and part of the reason Communism fell is because of behavior in the interests of the individual over the group.

Because Capitalism is built on this system of encouraging self-interested behavior to the detriment of the group, the participants work against each other, effectively balancing out the system in the long run - Adam Smith’s “Invisible Hand” that guides the market to long term equilibrium. This system of motivation is perhaps the strongest of any, because obligation or compulsion hardly ever compel everyone to work their hardest. But working for one’s self on the other hand, multiplied by the entire population of any particular Capitalist economy, produces a group product - GDP - far more consistently greater than any other economic system to date.

But a culture of adamant individualism has its downsides as well. Certainly this was the complaint of Marx and other anti-Capitalists: riches only bring more greed - by any account unhealthy for the psyche. Self interest at the expense of others creates a culture harmful to the individual psychologically, and if taken to its logical extreme, even physically as well (self-interest is, after all, what drives the vast majority of crime).

This then is the irony of Capitalism: by working in our own self-interests and against those of the whole on a massive scale, we actually harm ourselves psychologically and emotionally for the benefit of and in order to uphold that same whole.