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Dot-Commies By: Lowell Ponte
FrontPageMagazine.com | Wednesday, June 14, 2000

IS THE INTERNET KILLING private property and capitalism? Is the Marxism that failed in the material world returning in triumph to rule the worldwide web?

The web will be Red, the always-stimulating Andrew Sullivan argues in the June 11 New York Times Magazine, because in a digital world where information and code sequences are the property, communal ownership is virtually inevitable.

On the web, he writes, "property isn't even 'shared.' It's possessed simultaneously by everyone. By turning physical property into endlessly duplicable e-property, the ancient human problem of 'mine-thine' has been essentially solved. There was once the parable of the loaves and the fishes; there is now the parable of copy and paste."

Property, as past centuries defined it, involves ownership and the ability to restrict who may possess it at what price. Even intellectual property in its physical manifestation was secured by trademark, patent, and copyright laws.

But such notions of property disintegrate, writes Sullivan, when a newly-released album by Metallica can be digitally copied in seconds and then given away instantly to anybody on the planet with a computer. Finding others with any recording you desire to copy for free from their hard drive can now be done via Napster, "a musical commune dreamed up by a college-freshman geek."

And the same kind of piracy can seize a writer's latest novel, easily digitized by scanning it into some computer-server in Timbuktu and made available to readers worldwide at no cost. And the same is true for magazines and newspapers. I read Sullivan's article for free at nytimes.com. And you paid nothing to be reading this column right now.

All of this fulfills Karl Marx's utopian vision, writes Sullivan. It erases class distinctions. The poorest person can travel the virtual world as easily as the richest, enjoy the same sites, feast on the same infinite library of music, pictures, and ideas. And it liberates us to relate to one another not through money, or as cogs in an industrial machine, but as fully realized creative human beings whose lives are no longer controlled by the dehumanizing calculus of profit and loss. In this new internet utopia we are all infinitely wealthy, all egalitarian digital billionaires.

"The only drawback," writes Sullivan, "is that many of us quite like our bourgeois individualism. I am somewhat fond of the fact that I will actually get paid for writing this column, rather than sharing it free."

What Andrew knows, but left unsaid, is that capitalism has confronted the challenge of how to profit from what is given away free before - and capitalism has triumphed. It will again.

I, for example, host a national radio talk show. Every Saturday night you could tune in to any of about 100 radio stations across America, or to worldwide web audio at many sites, and hear my show without paying a penny.

The same is true for television shows broadcast in your community. Get a TV. Affix rabbit ear antenna. Turn it on. And there, out of the air, you have your choice of beautifully produced and written television shows for free.

These are what economists call a "free good," so how can the marketplace avoid what is called the "free rider" problem - people who pay nothing to use your product?

The Noble Laureate economist Milton Friedman was once asked if he could summarize the essence of economics in one sentence. "There is no such thing as a free lunch," was his reply. The saint of science fiction writers, Robert Heinlein, put the same wisdom into an acronym, TANSTAAFL, "there ain't no such thing as a free lunch." It may cost you nothing to eat that sandwich at the welfare center, but a farmer had to grow the wheat, a miller grind it to flour, a baker sweat it into bread, a butcher manufacture the hot dog inside it, and so forth.

Somebody paid a price in their effort, risk, and time to create everything you have. And when you take what they have produced, even by digital copying, you are denying them a return on their investment. You are, in effect, turning somebody down that line of investment into your slave.

For those who toil in the fields of intellectual property, Sullivan worries, the growing mentality of collective entitlement combines with digital technology to make expropriation of their work impossible to prevent.

Radio and television solved this problem in various ways. Great Britain, and to a lesser degree the United States, used the 18th-Century model of public and private property. England imposed an annual tax on every television set to pay for BBC costs making and broadcasting programs. British authorities cruise neighborhoods today with receivers able to detect the faint radio oscillations given off by TV sets, and will fine and arrest those caught with untaxed television sets. Americans are taxed to subsidize public television, PBS, and National Public Radio in their daily broadcasts of socialist and Marxist propaganda.

But the larger path for broadcasters in America was commercial radio and TV. My radio show pauses every few minutes for advertisements, some from my network and some from each local station airing it. Listeners in theory could turn down these ads, but few do. The ads are brief, so the average listener is unsure exactly when the show will resume with some tidbit of great interest. And the ads are often designed to be entertaining, with higher "production value" than the show itself.

On television the ads are usually more lively and entertaining than the shows they sponsor. And no wonder. Second for second, frame for frame, TV commercials are vastly more expensive and more carefully crafted than TV shows. Centuries from now these commercials will be recognized as the highest art form of our time - much as renaissance religious paintings, funded as propaganda by the richest sponsor of their time, the Church, were the highest as well as highest-paid art of their day.

Motion pictures often contain hidden advertising in the form of "product placement." When Tom Cruise in a lunch scene picks up a Coke instead of a Pepsi, or when the latest James Bond drives a particular BMW or Mercedes, this is no accident. Money was paid to insert specific products into that movie, and in front of your eyes. (Third World socialist dictatorships were happy to show American movies that contained overt anti-American rhetoric - discovering only later that the real message viewers received was that Americans were wealthy, had beautiful cars and abundant food, and lived with little fear of their government. The movie sub-text was more powerful than the Leftist text.)

Thus embedded with advertising, a future movie made at low cost with modern digital technology (and this is the real nightmare of Hollywood, that today you could make a Big Screen projectable movie with a digital video camera and computer editing equipment that cost only $5,000) might be given away to everybody on the internet.

Why not give it away, like a free supermarket newspaper, if the movie is merely a loss leader to attract you to subtle propaganda that is really concealed advertising? The movie can be paid for by those whose products are integrated into it. As this becomes the norm, the only purpose for copyright will be to prevent digital substitution of other brands for those showcased in the original.

These potential paths to profit from what is "free" have already taken on more and more subtle and amazing dimensions. As a consultant and developer in this field, I wish I were at liberty to tell you more. But some things cannot be given away free.

Economist David Friedman, son of Milton, was prophetic more than a decade ago in his book The Machinery of Freedom. A day may come, he suggests, when your stay in the hospital will be paid for by the advertisers eager to expose you to their ads during your visit. Schools can now be partly funded with advertising and corporate sponsorship, as increasingly is PBS.

We have scarcely scratched the surface of what advanced capitalism can do "for free." I have touched here before on integrating advertising with enterprise and politics. New York Times best-selling author Peter McWilliams makes all his books available for free at his website McWilliams.com. They continue to sell because readers recognize that buying a book from him is cheaper than paying several cents per page to copy it "for free" on their inkjet printer. (This may change when e-books allow for digital downloading of 20 or more books into one easily-carried book-sized reader, but today his books could presumably be downloaded to disc as easily as to a printer.)

But the fallacy in talking about "free" use of such products is that they are not "free." Most involve an exchange acceptable to both parties. I can read Sullivan for free at nytimes.com, but to do so I must expose my mind to the messages advertisers paid the New York Times to put there. Sullivan's article, like my radio show is the bait that lures an audience into being exposed to those ads.

Advertisers pay handsomely for access to your mind. And you, in exchange for an entertainment or article you want without paying for it, are willing to open your conscious and unconscious mind to their messages.

One study estimated that the average American sees the words and logo of Coca-Cola 140 times per day. I never recognized the intensity of such commercial propaganda until, to do a Los Angeles Times story, I spent a week in communist Cuba where capitalist messages were prohibited. Mercifully, I was not required to stay for a lifetime of compulsory communist propaganda. The reason capitalists require advertising, of course, is that we are free to buy or reject their product and must be persuaded to buy voluntarily.

You could create your own website today, and if it began to attract 25,000 "distinct hits" per month advertisers would pay YOU to post their ads. (You might need far fewer hits if you attracted precisely the audience a particular advertiser wanted to reach.)

What, however, could Metallica do about its music being distributed around the world free through the "commune" of Napster? It is not easy, as Financial Post writer Diane Francis observed, to use slow courts and 18th-Century property law to prevent 21st-Century e-pirates who can steal intellectual property and digitally spread it throughout the world in seconds. It is even harder when these pirates are 14-year-old geeks who make no profit for themselves, who are not in it for the money. Francis suggests that musicians "may have to put up with poor CD sales, but will make money through live appearances, endorsements or merchandising." The old formula, whereby bands perform on tour mostly to get (free) air play on major market radio and to sell more CDs, will need to be transformed. And if heavy metal bands could program subliminal "backward masked" satanic messages into their songs, why not sell subliminal commercial messages like "Drink Budweiser?" Go back and study both cover and music of that brilliant album of yore "The Who Sell Out," and be wise.

While amateur capitalists fret along with Sullivan, the wacky gadfly Jeremy Rifkin is out with his latest book of horrors entitled The Age of Access: The New Culture of Hypercapitalism, Where All of Life is a Paid-for Experience. Like Sullivan, he sees that the internet will delete old-style capitalism. But unlike Sullivan, Rifkin sees that what will replace it is not dot-communism but new-style capitalism. In this Hypercapitalism, old notions of property and ownership will be replaced by Access, individualism will be replaced by "Thespian persona," and the world people "live" in will be like a non-stop virtual Las Vegas where everything you want will be available - for a price.

It will be a David Brooks Bobos in Paradise fulfillment, Rifkin fears - a virtual reality superficially far hipper, more various, and in Aldous Huxley's Brave New World term more "pneumatic," than the capitalism of the 1950s gray flannel suit, but in the end no less sterile or vacuous.

So will crossing the digital divide turn us Red, or instead turn us into readers of tech-oriented business magazines like Red Herring? You've just read this article on the internet, for free, and now feel a bit more capitalistic. Don't you?

Mr. Ponte co-hosts a national radio talk show Monday through Friday 6-8 PM Eastern Time (3-5 PM Pacific Time) on the Genesis Communications Network. Internet Audio worldwide is at GCNlive .com. The show's live call-in number is 1-800-259-9231. A professional speaker, he is a former Roving Editor for Reader's Digest.

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