Posted: October 6th, 2022

Econ111 Assignment

Econ111 Assignment

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Introduction
Musicians and music promoters primarily depend on music for a living. Music remains an intellectual property for the composer. Individuals receive payments after issuing the license to third parties who listen to the music. However, a musical composition is not subject to protection from infringement, if not registered with copyright authority. Copyright agencies provide the composer an exclusive right to make copies, distribute them, the right to perform publicly, to create extensions to the original composition and its display. Nevertheless, the whole composer’s right to their intellectual property faces the problem of piracy because of the existence of peer-to-peer (P2P) file-sharing technologies like Limewire and Kazaa. This sharing brings about ethical issues to parties sharing the music.
This paper will discuss the economic and ethical issues surrounding (illegal) P2P file-sharing technologies on the recorded music industry. The paper will talk about the above issues by using relevant economic and ethical theories. Moreover, the paper will provide its stand on the issue.
The Economic and Ethical issue surrounding (illegal) P2P file-sharing technologies on the recorded music industry.
Typically, most of the illegal music downloaded by users on the internet is under the copyright. Consequently, illegal sharing of musical files result in plummeting of record sales. The economy loses income in form of revenues, which could have been generated from the selling of CDs. Illegal downloading of music and albums denies composers the right to receive royalties, in addition to the government losing taxes. Additionally, entertainers and producers will lose money, since people do not attend a concert as they have the music at disposal. Furthermore, record stores have gone under because individuals do not visit them to buy music. The economy loses in terms of business permits and payroll tax.
Besides, illegal music downloading facilitated by P2P file-sharing technologies is an unethical practice. This tag is because individuals benefit from what technically belong to music composers. Illegal downloading amounts to cheating and it aim at making others suffer for the benefit of music recipients and the downloading firms.
Ethical Theories on P2P file-sharing technologies
Sharing of musical files without the authorization of the composer is unethical. The P2P file-sharing technologies promote unethical practices. As per Aristotelian ethics, individuals must practice things that are right and avoid the wrong thing (Heinaman, 2018). However, Aristotelian ethics does not come naturally; instead, it comes out of practice. P2P file-sharing technologies go against Aristotelian ethics since it does not practice the right thing, as it allows the sharing of illegal musical files.
Additionally, P2P file-sharing technologies go against Kantian ethics (Meissner, 2011 pp.195-205). According to Kant, it is unethical to consider the outcome of an action before evaluating whether the action was right or wrong. P2P file-sharing technologies provide a platform where individuals can download music files at lower cost, then later, the same people realize that sharing this musical files deprived the composer their rightful royalties.
Moreover, P2P file-sharing technologies go against Deontological ethics. According to deontological ethics, a person might do the right thing because it is right and avoid doing the wrong thing because it is wrong (Casali, 2011 pp.485-497). P2P file-sharing technologies do the wrong thing believing that it is right. As per programmers of P2P file-sharing technologies, they believe that they are spreading the music of composers in the process making them famous. However, even without the presence of P2P file-sharing technologies, musicians can be famous because of music stores.

The Economic theories on P2P file-sharing technologies
The concept of consumer and producer surplus is evident on the issue of illegal downloading of music using P2P file-sharing technologies (Goel, 2010 pp.6-33). Consumer surplus is the difference between the amount paid for a commodity, and the fair value consumers place for the product. In continuation, consumer supply refers to the money consumers are willing to pay for the product, and the figure actually paid. In a situation where consumers are willing and able to pay the higher price than the initial asking price, then they derive a huge benefit from the commodity. In the case of music, P2P file-sharing technologies make consumers pay low than the initial asking price.

Diagram 1: “Consumer and Producer Surplus”
Producer surplus indicates the difference between the price producers are willing to get after supplying commodities and the amount they actually get. The amount producers are willing and able to get after supplying their products is inclusive of profits. The amount they actually get is a loss since it is usually below the cost price.
In the case of music, the demand is perfectly inelastic, meaning the quantity demanded do not change with the quantity supplied. The demand for music will not change regardless of the price. However, individuals are willing and able to pay lower prices because they do not equate the benefit of missing music. There is a high consumer surplus in this case since consumers’ assumed price is high than what they actually pay. In retaliation, producers of music raise their price so that they will turn a consumer surplus into producer surplus.
Opinion on the Economic and Ethical issue surrounding (illegal) P2P file-sharing technologies
In my opinion, illegal file-sharing technology starves music composers of their hard-earned money. Nevertheless, the problem of piracy cannot end in the near years. The steps taken by the streaming companies are not the solution to the deep-rooted problem. For instance, crooks are now practicing “stream ripping,” this process still ensures that individuals download the music files. The case of consumer surplus indicates that even though consumers feel that the amount they are supposed to pay for the music is justified, they still pay low prices. It is uncommon to hear of poor musicians after many years of singing. Composers estimate profits so that they will benefit from their talents. In this case, it is not only the composers who lose but also the government. Tax cannot be paid on the net loss, which is usually the case with musical composers.
Additionally, it is unethical for individuals to enjoy the lower prices of music without factoring in the costs incurred to compose the music. Kant is right that it does not make sense to share the music and see if it will have consequence. The bottom line is that the sharing musical files will bring negative effects on composers, and the illegal file technologies know this upfront.
However, according to critics, P2P file-sharing technologies are beneficial to the music industry. In one example, critics observe that revenues are not affected by the sharing of a file, is what boosts record concert attendance. The critics argue that without the efforts of P2P file-sharing technologies then a musician will remain unknown. Moreover, critics use the example of X-Men Origins: Wolverine movie. The circulation of this movie before its release was because of P2P file-sharing technologies. Critics argue that the file circulation is what boosted its popularity before its imminent release.
Nevertheless, P2P file-sharing technologies create more problems to musical composers than the little benefits it brings. In fact, the music itself without the help of P2P file-sharing technologies can thrive under the existing condition.

References
Heinaman, R.A., 2018. Aristotle and moral realism. Routledge.
Meissner, N., 2011. Forced pirates and the ethics of digital film. Journal of Information, Communication and Ethics in Society, 9(3), pp.195-205.
Casali, G.L., 2011. Developing a multidimensional scale for ethical decision making. Journal of business ethics, 104(4), pp.485-497.
Goel, S., Miesing, P. and Chandra, U., 2010. The impact of illegal peer-to-peer file sharing on the media industry. California Management Review, 52(3), pp.6-33.
Economics online (n.d). “Consumer and Producer Surplus.” Accessed 1 May 2018, http://www.economicsonline.co.uk/Competitive_markets/Consumer_and_producer_surplus.html

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