The De Facto Rules

by Krishna on March 4, 2012

Bryan Caplan writes:

If I’d failed Spanish, I couldn’t have gone to a good college, wouldn’t have gotten into Princeton’s Ph.D. program, and probably wouldn’t be a professor. But since I’ve merely forgotten my Spanish, I’m sitting in my professorial office, loving life.

Most people can relate to this. During school and college, we have to study and pass several subjects. Nearly all of the knowledge imparted will never be used by the students in their professional or personal lives and most will be forgotten, though the specific pieces of knowledge forgotten or unused will vary from one person to another. Yet not learning the subjects at the time will ensure that the student does not graduate and ends up in a much worse place in life. Failing is far worse than forgetting, even though both indicate the same state (lack of knowledge or skills) albeit at a different point in time.

This reminds me of a recent successful Indian movie, “3 Idiots”. The protagonist (played by Aamir Khan) is a student at an engineering college who finds the teaching by the professors suffocating. He publicly criticizes teaching to the test instead of imparting education that can be used in practical ways. The exam results come out and we, the audience, expect him to fail. But it turns out that he has earned his way to become the top student in the class. What the student understood is that, you can criticize the rules, but while they are in effect, you have to play by them.

In many scenarios, people forget this. They don’t like the rules and invent an imaginary set of rules that suits them. Just as the student who unilaterally decides which subjects to study or which not, based on his assessment of what is appropriate, this generally ends in sadness when reality strikes. And there is also the case where people imagine that a written set of rules are in effect, where as the opposite is true in reality.

Take the copyright and piracy debate. De jure, we have laws that afford copyright protection and enforcement to creators. De facto, the enforcement is not total and the advancement of technology continually pokes new holes in that enforcement. On one side, we have copyright violators who don’t seem to understand (and are shocked to learn first-hand) that there are laws governing copyright and there are departments of the government that are in charge of enforcing those laws.

And on the other side, we have Andy Ihnatko:

The world does not OWE you Season 1 of “Game Of Thrones” in the form you want it at the moment you want it at the price you want to pay for it. If it’s not available under 100% your terms, you have the free-and-clear option of not having it.

Any business which has the same attitude is living in a dream world while more agile startups steal their customers. This is equivalent to saying, “If you want to hear this song, you can buy it along with ten other songs you have no interest in hearing on this CD. You do have the option of not buying it.”  Or to take the television series example from a few years back, “If you want to watch this episode, you can see it on Thursday at 11 pm. Or five months later as a re-run on this obscure channel which may or may not be available on your channel line-up. Or just before the next season on DVD along with the other episodes. You do have the free-and-clear option of not seeing it.

Ihnatko scored some points capitalizing on the inter-generational divide by calling those who would object to the current status quo as people with a “smug sense of entitlement”. He misses that rampant piracy is indicative of a supply problem that producers should fix. Most people do exercise their option of not watching the series, with only so many hours in the day and with so many other entertainment choices. Piracy is a sign that there is a market to be tapped with better pricing and availability.

The point I want to make is that Ihnatko and others like him seem to think, “These are the rules. This is how you should think. This is how you should act.” And somehow the act of their believing it would make it true for the behavior of others. It doesn’t work that way, just like posting a speed limit of 55 mph does not mean that everyone is traveling under it. You have to look at actual behavior. Sometimes, you have to adjust your incentives. Sometimes you have to make new rules.

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