Thursday, May 08, 2008

levy in the land of gadgets

Reports today suggest Japan is considering applying a levy to iPods and other content recording and storage devices "to compensate musicians and other copyright owners."

The levy being discussed sounds relatively small -- several dollars on top of the price of the gadget in question. Somewhat predictably, gadget makers are resisting this scheme.

When I bought my iPod, I'm not sure I would have even noticed a few extra dollars on the bill. I'd be interested to know if anyone can reasonably predict fewer Japanese consumers would buy digital media devices as a result of such a levy. If the market can bear the cost, and creators are fairly compensated for their excellent work, then pretty much all that's left are the objections of the manufacturers, whose profits would be unaffected.

Thanks to Kristian over at Carfac Ontario for the heads up on this.

(cross-posted to


Infringer said...

Russell McOrmond makes an interesting comment on this issue, pointing out how content providers want levies on the Internet because of the "free ride" the ISPs are getting, while at the same time the ISPs what to charge the content providers for a tiered internet because of the "free ride" the content providers are getting on the backs of the ISPs.

What both groups fail to do, and John makes the same mistake in this post, is to justify why any group is entitled to demand payment from the other in the first place.

It has nothing to do with whether anyone would "notice a few extra dollars". It has everything to do with whether the group receiving this funds (to which we have no choice but to pay) is actually entitled to it.

Anonymous said...

Delightfully, John Degen has argued that we can put a $1000 tax on iPods, and cure many of the ills of our society.

He may not quite realize he argued it, but he argued that the Japanese levy can be justified on the following two points:
A. An increase of a few dollars to the price of an iPod won't affect sales.
B. The levy is justified on the basis of fairness.

So from there, how do we get to a $1000 tax?

Observe that after the original levy (let's say it's $5) is applied, we can apply a second levy of the same amount without any fear of affecting sales (see point A). In fact the second levy would cause a relative price increase even smaller than the first. The benefit of this second levy would go to low-income earners, thus making for a more fair and just society, satisfying point B. So Degen's logic successfully defends it.

Now for the third levy. I've noticed it's unfair that high gas prices disproportionately affect rural dwellers, who also tend to own fewer iPods. So we can make things more fair (point B) by again increasing the price by a few dollars, and not affecting iPod sales (point A).

So now all you have to do is find 197 other such causes, and there's your $1000 levy. Degen has yet to hear an argument that iPod sales would be negatively affected by it, so this would therefore be windfall to help correct all the inequities of the modern world.