Monday, March 29, 2010 - The Progress & Freedom Foundation Blog

Business Insider Attacks James Cameron for "Whining" That Piracy Undermines the Risky Studio Investments That Enabled Cameron's Films To Enrich Millions of Lives

When you read a "business magazine" edited by persons with at least a GRE-level grasp of modern economics, you will not encounter headlines like "Walmart Whines That It Would Be Richer If Poor People Didn't Shoplift," or "DirectTV Whines That Signal Theft Keeps 'The NFL Sunday Ticket' from Raking In More Cash," or even "Capitalist Stooge Steve Jobs Whines That iPod Counterfeiting Keeps Him from Becoming Even Richer."

Predictably, real business magazines and journalists don't publish such quasi-Marxist drool because it is so vacuous. As economist Joseph Schumpeter famously argued, profits enrich particularly thoughtful, creative capitalists because market economies drive producers to innovate. Instead of engaging in a Punch-and-Judy battle to "perfect" competition against non-innovative producers of fungible goods, smart producers can make risky investments in order to innovate and differentiate their products so they can--if consumers really love their work--earn significant profits, (some of which must be re-invested in the next round of risky innovation).

Consequently, real business journalists know that stealing from today's "rich" innovators merely punishes and deters the risky, costly innovation that drives the American economy and creates American jobs. Competent "business magazines" thus reject the economics of dictator Robert Mugabe: they do not smirk and sneer that whenever capitalists innovate successfully and get "rich," then they should not "whine" if others steal from the investors who made the risky investments that let them get rich by innovating.

But Business Insider is not a real business magazine. It has seemingly embraced "Mugabenomics." It appears that Business Insider would thus condemn Steve Jobs if he "whines" about the counterfeiting or shoplifting of iPods. Surely Jobs is now rich enough that stealing from Apple is OK with Business Insider--even though, from the perspective of Apple's investors, the vast sums paid to Jobs are a cost of doing business that reduces their potential profits and their ability to re-invest in more new innovations.

At least, those are the conclusions that I draw from the Business Insider article entitled "James Cameron Whines He'd Be Richer if Avatar Weren't the Most Pirated Movie Ever." Business Insider seems to be suggesting that successful capitalist innovators should not "whine" about piracy, counterfeiting, or shoplifting.

I would expect this sort of stealing-is-cool idiocy from deranged leftist academics, Marxist Free-Press founder Robert McChesney, or selfishly indignant teenagers. I thus sincerely hope that American adults now engaged in job-creating, risk-taking businesses will stop doing business with Business Insider--and any other "business magazine" that tries to prop up its own wobbling "business model" by indulging in similar make-those-capitalist-piggy-innovators-squeal rhetoric.

Indeed, if the populist team at Business Insider insists upon donning their green tights and celebrating looting, perhaps they should take a hint from its most admired practitioner, the quasi-mythical Robin Hood. As portrayed in movies, Robin did practice theft, but he and his Merry Men--unlike the crack "team" at Business Insider--usually minimized the economic harm thus caused by advocating stealing from corrupt and rapacious tax collectors--not by advocating stealing, again, from the same productive businesses from whom the corrupt and rapacious tax collectors were already stealing.

I thus look forward to seeing whether Business Insider, runs, on April 16th, an article entitled "IRS Whines that the Federal Deficit Would Be Lower If People Didn't Commit Tax Fraud." That would still be pretty stupid. But it would be marginally less stupid than the spectacle of a "business magazine" condemning tax-paying American innovators and investors who dare to "whine" about piracy, counterfeiting, shoplifting, or other forms of "Mugabenomics."

PS: As for why consumers like me, rather than artists and investors, might join Cameron in "whining" about the piracy of films like Avatar, perhaps Business Insider failed to note that one sentence from this article explains our thinking: "Cameron says he is working on getting 3-D content on smart phones--no 3-D glasses needed." That is precisely the sort of consumer-empowering innovation that film piracy undermines.

And thanks, as always, to the invaluable Dean's List for calling this article to my attention.

posted by Thomas Sydnor @ 12:19 PM | Capitalism , Copyright , E-commerce , Economics , Generic Rant , IP , Innovation , Internet , Mass Media