Entertainment Protectionism Doesn't Create Jobs, It Destroys Them

from the welcome-to-econ-101 dept

Tue, Jan 6th 2009 1:21pm — Mike Masnick

Reader Darren sent in a link to an "opinion" piece in the UK's Independent by Stephen Garrett, a managing director of a TV production house that apparently makes some popular UK TV shows (he names Spooks, with which I am personally unfamiliar). The article is basically no different than any of the thousands of poorly thought out and badly argued demands from entertainment industry execs for government protectionism in the face of the giant "internet threat." Garrett goes through all of these mistakes pretty early on: comparing file sharing to the theft of physical property, twisting basic logic around to suggest that ISPs bear the responsibility of stopping file sharing (rather than, say, the entertainment companies learning to adjust their business model in the face of a changing marketplace), and playing the old and easily debunked ripple effects card in discussing the "damages" done.

But rather than going through those same old tired arguments again, this seemed like a good opportunity to take on a later argument he makes, which I've heard from others as well:

At a time of economic downturn, saving jobs and securing economic activity is more important than ever. Investment in new forms of bringing entertainment to the public depends on legitimate sales of material, whilst lost opportunities of innovation is the tab picked up by those who do pay for content for those who refuse to do so.

This, like Garrett's earlier points, shows a fundamental misunderstanding of economics. Saving jobs and securing activity is not more important than ever if those jobs and that economic activity are inefficient, unnecessary or hinder other important economic activity from taking place. Historically, almost every example of government protectionism has been to protect exactly those types of jobs and economic activity, and the end result is disastrous. Rather than adapting to changes in the market, the protected industry holds onto the past, while those industries in other countries adapt, evolve and improve. In the end, the "protected" industry simply can't compete, the jobs are lost anyway, and it's much more difficult for the new industry in those countries to grow and catch up to foreign competitors.

Garrett's suggestion of special protectionism in the entertainment industry in the UK is exactly the wrong solution for the industry and would lead to many more problems down the road. I would hope that people in the government in charge of deciding this stuff would understand this -- but so far, the UK's Culture Secretary has shown himself to have difficulty grasping some basic economic realities, so don't be surprised to see him buy into this sort of argument.

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Filed Under: entertainment industry, protectionism, stephen garrett

17 Comments

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Anonymous Coward, 6 Jan 2009 @ 1:53pm

Spooks
The show is called MI-5 on BBC America.
Apparently the brits don't think we know what a spook is.
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m3mnoch, 6 Jan 2009 @ 2:13pm

case in point
see also: american automotive industry.

rational people: dear car makers. you need to raise your mpg, lower your emissions and start looking to alternative fuels in order to compete.

govt: nuh-uh! their lobbyists pay us well!

*fast forward five years*

govt: um. excuse us, rational folks? will you please pay to bail out the american automotive industry? we could really use your help because we were stupidly protecting them. kthxbye!

m3mnoch.
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Mike B, 6 Jan 2009 @ 2:26pm

Re: Spooks
It's also on netflix streaming, and is a pretty good show.
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scott b, 6 Jan 2009 @ 2:58pm

Saving jobs and securing activity is not more important than ever...
I suppose what your saying is that the auto industry and the many of the financial instituations that have received funds directly from the government should have been allowed to crumble? I suppose that you may be right...but do you wanna tell the millions of people around the world that they are out of work and don't have jobs because of economic principle.
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m3mnoch, 6 Jan 2009 @ 3:04pm

Re: Saving jobs and securing activity is not more important than ever...
i'm fairly certain we just established that ... wait. lemme just copy/paste it from the title:

...Protectionism Doesn't Create Jobs, It Destroys Them

m3mnoch.
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Mike (profile), 6 Jan 2009 @ 3:09pm

Re: Saving jobs and securing activity is not more important than ever...
I suppose that you may be right...but do you wanna tell the millions of people around the world that they are out of work and don't have jobs because of economic principle.

Which part of the fact that the jobs will get destroyed either way did you miss? And, the fact that by going with protectionism, you make it almost guaranteed that the eventual shakeout is worse than if you just let the industry evolve?
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Anonymous Coward, 6 Jan 2009 @ 5:09pm

protected industry

It is not at all clear why the above term was used in connection with the views expressed by a content creator/provider.
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Mike (profile), 6 Jan 2009 @ 5:53pm

Re:
It is not at all clear why the above term was used in connection with the views expressed by a content creator/provider.

Because he was asking for protectionist policies to protect that industry.
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Anonymous Coward, 6 Jan 2009 @ 5:56pm

Tell me - why are we not supporting the buggy whip industry with taxation on the automobile ? Certainly this would save those precious jobs and provide really good buggy whips.
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cram, 6 Jan 2009 @ 7:03pm

"Historically, almost every example of government protectionism has been to protect exactly those types of jobs and economic activity, and the end result is disastrous."

Hasn't the US been successful in protecting its agricultural sector through outrageous protectionist policies? The end result has been disastrous only for other countries, not the US.
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Mike (profile), 6 Jan 2009 @ 7:12pm

Re:

Hasn't the US been successful in protecting its agricultural sector through outrageous protectionist policies? The end result has been disastrous only for other countries, not the US.

Actually, I'd argue that the end result has been pretty damn disastrous for the US as well, though not all of the impact is evident just yet.
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cram, 6 Jan 2009 @ 7:16pm

Instead of trying to prevent "illegal" file sharing and whining about "lost" DVD sales, perhaps the industry could seek more state funding for production of films and TV programs (since they are so expensive, as Garret says) - on the condition all content thus produced is made available to the public at nominal rates and released into the public domain soon.
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Anonymous Coward, 6 Jan 2009 @ 7:58pm

Societies evolve. Technology evolves. Business either learns to evolve with it, or it eventually ceases to exist. To put a spin on an example used around these parts: unless you're Amish you probably use a car to get around in the US instead of a horse drawn buggy. If you really want a perfect example of the escalating results of protectionist policies (even if they were done for "religious" and not "economic" reasons) go look at an Amish village compared to most American cities (not that there isn't something to be said for the "simple" way the Amish live, but let's face it, largely they are the butt of jokes for the larger community).
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Lawrence D'Oliveiro, 6 Jan 2009 @ 10:52pm

Re: Farm Protectionism
Mike wrote:

Hasn't the US been successful in protecting its agricultural sector through outrageous protectionist policies? The end result has been disastrous only for other countries, not the US.

Actually, I'd argue that the end result has been pretty damn disastrous for the US as well, though not all of the impact is evident just yet.

Considering those farm policies have been in place for much of the last century, when do you think the impact is going to hit?
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bikey (profile), 7 Jan 2009 @ 12:22am

Ironically, IP has become about clinging to the past and avoiding innovation. This is true across the IP board, but particularly in entertainment. Look at Broadway - nothing but revivals. Look at Hollywood - nothing but sequels and well worn stars playing themselves (there are obvious exceptions but I think this hold true in terms of numbers). Look at mainstream popular music - very little aside from what crusty rich old record execs thinks 'will sell' to the lowest comdenom. The originality (and the reasonable admission price) was paramount in making American entertainment its ambassador to the world. No wonder we have to rely on militarism to make our influence felt. It's all that's left.
As for saving jobs through the protectionism particular to the IP sector, it has never held up against even the most basic research. Jobs go where cheap labor lives. IP concentrates money in old ideas far beyond their use and prohibits young ideas from growing up out of the topsoil.
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Tony, 7 Jan 2009 @ 9:14am

Re: Re: Saving jobs and securing activity is not more important than ever...
All this propping up of businesses that are "too big to fail" makes me think of trying to hold back a landslide with sticks.

We put more and more sticks underneath to hold it up, while the weight keeps piling up on top. Eventually, we can't keep up, and the whole thing comes crashing down, even worse than it would have been in the first place.

The same shortsightedness that got us here is what's going to make the crash even worse.
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chris (profile), 8 Jan 2009 @ 12:45pm

Re: Re: Re: Saving jobs and securing activity is not more important than ever...
All this propping up of businesses that are "too big to fail" makes me think of trying to hold back a landslide with sticks.

in the case of the entertainment industry fighting file sharing, it's more like playing chicken with a train.
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