While many people believe that downloading music is “stealing,” a broad swath of America clearly disagrees. The question is why? The answer is deflation.
While most of us believe inflation is a permanent and natural trend, in the absence of government controlled money supplies, there is actually a natural deflation. In fact, despite the fact the US government has vastly increased the money supply (causing inflation) over the last fifty years, we consistently get more for less with just about every manufactured product.
The effect is most obvious in technological realms, where today $100 gets you a billion times more computing power than thirty years ago, or a two hundred times faster internet connections then a decade ago. This exponential depreciation of processing power, storage, and bandwidth is commonly referred to as Moore’s law.
What’s really interesting, though, is that technology has similar deflationary effects on everything else as well. Ray Kurzweil has written about this frequently, but it’s visible in everything from food (we get more and more food for every one acre of planted land because of technologies like genetic engineering and modern agriculture equipment) and clothing (it’s exponentially cheaper to design, manufacture, and sell clothing than it has even been) to music (compare the cost of manufacturing, shipping and selling a CD vs. a downloadable album).
With the exception of land and human time, in all areas of society we have been conditioned to expect more for less over time. Yet until just a few years ago, the music industry was increasingly charging more, for the same product. And they were able to do this because copyright law gives them the ability to set prices like a legal monopoly.
While one can argue about the merits of copyright law, the reality is that people as a whole have a very reasonable sense of what things should cost. When people in aggregate are asked to pay far more than what they think something should cost, they start looking for alternatives. In this case, the alternative comes in the form of P2P technology.
A while back I wrote that the music industry will ultimately thrive and prosper because of all of this change. At the end of the day, that change comes because of our aggregate abilities to judge fairness. It’s no surprise, then, that for many people, finding ways around unfair pricing, is in itself, quite fair.
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