The Pirate Organization: Lessons From the Fringes of Capitalism (10 page)

Analog Revolution, Pirate Radio Stations, and the Monopoly of the BBC

Between the early 1920s and the late 1960s, the BBC defended its monopoly, claiming that other stations created interference on BBC airwaves. By claiming interference, the BBC also rationalized prohibiting foreign stations from broadcasting into British territory. AT&T made similar arguments in the United States when it claimed a commercial monopoly over transmissions received using AT&T-built equipment. In 1924, AT&T sued the New York–based pirate station WHN. AT&T won the case, but in the eyes of many the decision was not completely legitimate, so the court ruling was only partially applied. As many technical studies done at the time showed (in particular those of Ronald Coase), the interference argument proved to be completely false and was used only to protect monopolies that were increasingly difficult to defend. In the case of the BBC, this monopoly was upheld for another ten years via a royal charter granted in 1927, much like the one used three centuries earlier that upheld the East India Company’s monopoly. The BBC charter expired in 1967.

The British government created the BBC monopoly as a way to shape the emerging industries that would soon rely on the airwaves as a communication channel, which the authorities likened to “ether.” The BBC served as a vehicle to diffuse norms and standards that would shape the political, sociological, economic, and cultural dimensions of radio broadcasting for the decades to come. The first standard: the BBC is the central authority that broadcasts sovereign-endorsed programs throughout the British Commonwealth. Second standard: the objective is to educate the public. Third standard: only receivers certified by the postal service can receive BBC programs, and listeners must pay an annual fee to renew the license, which authorizes them to listen to the programs. The money collected was used to fund the programs, which, at the time, were free of advertising. If necessary, postal inspectors had the right to enter households, without warning, to check that listeners were following the rules. Fourth standard: the programs must inform people about a certain “noble” culture, especially through religious and classical music programming. The BBC recommended listening to entire programs in silence and in a seated position, with the main focus on the radio—in no way should household chores interfere with your listening while the BBC was teaching you. On Sundays, the BBC would cease broadcasting most of the day to encourage listeners to go to church.

After forty years of fierce fighting against pirate radio, the BBC’s monopoly finally came to an end in 1967. As a result, the BBC adopted some of the norms proposed by the pirates. After pirate radio stations poached most of its radio hosts, the BBC created Radio One, a station that offered a wider variety of programming, more current music, and a more liberal tone. As Adrian Johns explained, “as of 1967, the BBC became one among many … The irony is that it then found the critical and skeptical voice it had been missing … the virtues of the BBC only came to light at the end of its monopoly.”
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Surprisingly, the renewed radio broadcasting industry, as it has existed since 1967 and as most of us know, falls within the model proposed by the pirates in the first half of the twentieth century—a model against which major monopolies fought aggressively at the time.

Digital Economy, Cyberhackers, and Capitalism in the Third Millennium

Today, cyberpirates are opposing the normalization of data sharing and the monopolistic control of digital space. Many companies, especially from the music or film industries, defend their territory and therefore the exploitation of their property rights. In mid-January 2012, two important events marked the opposition between the two conceptions of information exchange on markets. The US Congress postponed the vote on the Stop Online Piracy Act (SOPA), promoted by many firms, whereas other organizations were demonstrating against this act. As the bill proposed to shut down sites within and outside US territory that contain any content protected by American intellectual property rights, opponents saw it as a prohibition to exchange cultural content freely on domains that belong to mankind in general and not to any particular territorial state. Wikipedia, which embodies this idea of digital common good, displayed a black home page and blocked access to its content for twenty-four hours in a move to protest against the act. About 160 million people worldwide saw the site’s banner that day. Google reported to have received 7 million signatures for a petition opposing the law.

The second event is the spectacular arrest of Kim Dotcom and the turning off of his company Megaupload. After Napster made peer-to-peer exchanges possible for music, Megaupload stirred things up with the diffusion of TV programs and films, centralizing content with and without legal protections and enabling streaming, questioning laws regarding intellectual property and the exchange of cultural content. Just as in the regular TV crime shows Megaupload stored in its servers, in the end the FBI stepped in to forcibly catch Kim Dotcom on the New Zealand island where he had found refuge. The FBI also seized the vessels of his computer-geek fleet. The Megaupload affair was seen by many as an act of compensation from the state toward the unsatisfied proponents of the SOPA, an indication that the sovereign state is firmly resolute in its intention to crack down on the organizations that unduly benefit from rights they do not own. Both events highlight the importance of continuously recoding the laws that govern intellectual property and the creation and distribution of cultural goods.

The actions of the pirate organization on the net take many forms. Pirates both create and distribute free software and content. They change the net in general. For example, a hacker was behind the invention of e-mail as a means to connect users of terminals in various locations. A researcher working on the Arpanet military communications project—the predecessor of the Internet—once discretely modified the source code of several software applications developed by the military research agency in 1971 in order to send the first e-mail remotely using the @ symbol “mainly because it seemed like an elegant idea.”
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The dream of an open digital world almost became a reality in the 1970s after a court ruled that AT&T (again!) was in violation of antitrust laws, which prohibited the company from selling UNIX software (the company agreed to terms but eventually started selling it again in 1982). UNIX is an operating system that enables software and hardware to run together on a computer. The free distribution of UNIX in the 1970s enabled users to easily modify the source code to meet their needs. These changes significantly improved upon the original version produced by AT&T, which nevertheless attempted to enforce its patent for UNIX starting in 1982 in order to collect royalties and prevent future modifications without compensating the thousands of developers who voluntarily developed the program. In response to AT&T’s uncompromising attitude, the hacker movement organized itself and took on quite a different dimension. Nothing has really changed. Pirates are still fighting to revive the slightly “crazy” idea of an open and free digital territory that would not fall under the complete control of governments and monopolies.

Once again, the alliance between a sovereign state and monopolistic organizations nurtures a milieu that delineates the norms applicable to a partially uncharted territory. And once again, this situation gives rise to organized piracy by excluding groups of people and pushing them to the fringes. These pirate organizations stand up against the state and its accompanying legitimate corporations. We may even wonder whether AT&T, Microsoft, and Google are to American sovereignty what the VOC was to the sovereignty of the United Provinces—that is, instruments of normalized capitalist deterritorialization disguised as corporations. In early 2010, a member of Hillary Clinton’s staff, following an attack by Chinese cybercorsairs against Google, told the press that the American Department of State “is not the armed hand of Google for foreign policy.” The simple fact that it appeared necessary to release this statement speaks volumes about the internal dynamics of capitalist expansion, as it is perceived by the upper echelons of the state. Months later, it would be revealed that Google had been working hand in hand with the highly secretive National Security Agency (NSA) to investigate the origins of this attack, which had but minor consequences. And in 2012, a court ruled that Google did not have to disclose the exact nature of its relationship with the NSA.
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Any resemblance with the VOC’s state-supported conquest of the high seas in the seventeenth century would be, of course, purely coincidental.

The Inner Tension Between Capitalism and Liberalism

Sea pirates fighting for the end of the East India Company’s monopoly? Pirate radio struggling against the BBC’s monopoly? Early cyberpirate communities targeting the monopolies of AT&T and Microsoft? For those who think that capitalism and liberalism go hand in hand, this must come as a shock: capitalism does not exactly expand into new territories using the invisible hand of free market economics, but rather the very visible hand of state monopolies.

In this respect, the list of corporations recently targeted by Anonymous, the pirate organization supportive of Julian Assange’s WikiLeaks, is puzzling. Visa and MasterCard? A combined 95 percent market share worldwide. Monsanto? A 95 percent market share of genetically modified soybeans in the United States. In a 2010 interview in
Forbes
, a journalist asked Assange whether he would call himself a free market proponent. Assange’s answer was crystal clear: “Absolutely. I have mixed attitudes towards capitalism, but I love markets. Having lived and worked in many countries, I can see the tremendous vibrancy in, say, the Malaysian telecom sector compared to the U.S. sector … In Malaysia, you have a broad spectrum of players, and you can see the benefits for all as a result.”
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Do capitalism and monopolies work badly together? Well, that depends. What is competitive today may become monopolistic tomorrow, and vice versa. One of the essential reasons capitalism spread in the modern era using monopolies is because they represented the best organizational arrangement to accelerate the circulation of flows through the action of a sovereign state. The apparently ironclad relationship that currently exists between capitalism and free trade is in reality an unsound opinion that is based on historical shortsightedness. Free trade is not a necessary cog in the capitalist machine. During the first two centuries of capitalism, monopolistic trade organized under the aegis of the sovereign state is what enabled deterritorialization of flows to increase and intensify. Interestingly, many industries that are core to our society grew out of monopolistic regimes.

Another prominent monopoly in the seventeenth century was the one granted to the Stationers’ Company through the 1662 Licensing Act, which is the ancestor of the 1709 Statute of Anne, also known as the first copyright act in history designed by a monopolistic coalition of publishers. The Licensing Act was a law passed by the British sovereign in order to control book circulation and contain harmful pamphleteering. Copyright law then emerged out of a monopolistic framework that was aimed at nothing more than censorship, as envisioned by Queen Mary I in 1557, when she first devised an arrangement “where the London guild would get a complete monopoly on all printing in England, in exchange for her censors determining what was fit to print beforehand.”
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Fortunately, the subsequent Statute of Anne reversed some of the most antisocial provisions of the Stationers’ Company charter by putting an end to the perpetual character of copyright protection, thereby curbing the privileges of the monopoly. By specifying an expiration date for intellectual property protection, the 1709 charter partly displaced the problem and postponed the conflict between the sovereign and the pirates. Now that innovation circulates so much more rapidly, many think the state should reconsider—that is, shorten—the duration of intellectual property protection.
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Capitalism and free trade are not intrinsically linked. In fact, free trade represents only one method of capitalism. Clearly, this conclusion has tremendous implications for current political discussions about the future of capitalism—but also about the future of anticapitalism as debated heatedly among antiglobalization movements.

Chapter Ten

THE PIRATE ORGANIZATION IN CYBERSPACE

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather
.

—John Perry Barlow, “A Declaration of the Independence of Cyberspace,” 1996

Our age is the age of cyberspace. It, too, has a regulator. This regulator, too, threatens liberty. But so obsessed are we with the idea that liberty means “freedom from government” that we don’t even see the regulation in this new space. We therefore don’t see the threat to liberty that this regulation presents
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—Lawrence Lessig, “Code Is Law,” 2000

The struggles between states and pirate organizations in the digital territory are complex, but the questions that arise from this new struggle are reminiscent of the Golden Ages of sea piracy and pirate radio: if the net is a territory, what should its boundaries be? How should they be defined and by whom? Who should control cyberspace and the information circulating therein? How should we share the legitimate profits derived from deterritorialized capital, which accumulates on the net mainly in the form of software, information databases, and viral celebrity? For software companies, the exploitation of their property rights under the form of licenses to users fuels their continuous investments into upgraded versions of their products. Pirate organizations contest the public benefit of such proprietary systems; for them software should be free to use, as it is akin to a language that belongs to humanity.