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Tom Sydnor’s Comment on “GAO Still Stonewalling” post

May 14, 2011

Tom Sydnor posted a thoughtful comment on my “GAO Still Stonewalling” post.  That post included two FOIA requests we made of GAO requesting that they disclose a list of the undisclosed “experts” from “organizations” that they interviewed for the report.  That is, experts in addition to Felix Oberhozer-Gee, whose findings are that we need not worry about declines in revenue in the music industry because musicians will work for “free beer” and–if you know what I mean–“admiration”.

Tom is formerly a Senior Fellow and Director of the Center for the Study of Digital Property at The Progress & Freedom Foundation. Before his work at PFF, he was a copyright advisor in the Office of International Relations at the U.S. Patent and Trademark Office, and was Counsel for Intellectual Property and Technology for the U.S. Senate Committee on the Judiciary which is where I first met him.  Before working at the Judiciary Committee, Tom worked in private practice on IP law matters.

Tom was a leading voice questioning the validity and bias of the GAO “report” including an extensive critique.  I referenced that excellent critique in our FOIA request, in fact.  No response on that from the GAO, either.

Tom’s comment follows:

“Chris, I find the GAO response incredibly disappointing. As you may know, I did a paper about the GAO Observations Report soon after it was released. Here is a link:

http://www.pff.org/issues-pubs/pops/2010/pop17.10-Punk%27d_GAO.pdf

I am also pleased to note that the GAO reply, when examined, shows that GAO was unable to find any domestic source that actually does support its daft approach.

Fundamentally, the real problem is that GAO just seems to lack the basic competence required to understand that the term “consumer surplus” derives—as OMB notes—from market economics, (specifically, from Alfred Marshall), and thus presumes that exchanges occur only as a result of voluntary, mutually beneficial exchanges between consenting producers and consumers of some socially valuable resource. Consequently, if I mug someone, loot my local Best Buy or download music illegally, I may grab some cash or valuable products for free, but I do not acquire “consumer surplus,” as economists use that term.

To forget this is to imagine that market economics, like Emile Proudon, equates property with theft. And that is just plain stupid.  But perhaps Nobel Laureate Douglass North put it best: “[I]f the institutional framework rewards piracy, then piratical organizations will come into existence; and if the institutional framework rewards productive activities then organizations… will come into existence to engage in productive activities.” Douglass C. North, Economic Performance through Time, (1993),
http://nobelprize.org/nobel_prizes/economics/laureates/1993/north-lecture.html.

Perhaps one day, GAO will again display some remedial grasp of economics. –Tom”

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