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Adobe Photoshop Family

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Thu, Jun 4, 2020 2:24 AM

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Fair Adobe Prices, and the Morality of Piracy

This was originally a response to a post on reducing piracy, but it got a bit long and digressed; so here we are. Some background on me: I'm 17, so I don't have any sort of disposable income, but I need various Adobe products for the creative fields I'm interested in.


Adobe deserves far less than it is asking, and its methods of distribution itself are deeply flawed. Let us examine the moral and economic mechanisms at play:

Adobe wishes for compensation for a product. 
  • Why do they deserve compensation?: They have put time, effort, and capital into the production of a product. Because labor was expended on the product, the market would dictate that the creators receive compensation in direct relation to the labor time put into the product's creation. Because this exchange is the method by which most if not all modern economies function, it is generally "moral" to compensate.
  • What should they be compensated for?: Products produced by Adobe are not standard goods. They are infinitely reproducible. The IP of the product took time and effort, yes; however, the actual product that a costumer purchases is not the result of labor, it is a copy of a single original product. Because the product can be reproduced after production with no more than marketing and server costs, the product has a finite amount of production labor, but a hypothetically infinite potential earnings because of its pricing structure. As mentioned earlier, products have value because of the labor that goes into them, not because of how useful they are (this is why air is free). Because the potential earnings of Adobe is infinite, while labor time is finite, the method of sale of Adobe products is amoral within the modern economy. Adobe's income should be directly related to the effort involved in the production of their product, which it is not.
  • What about supply and demand?: Adobe *can* charge what they charge. This leads many to believe that the product is worth what is being sold at, because that is how the market works. However, the supply of Adobe products is infinite, there is literally no scarcity, and that is not even including the myriad competitors to Adobe. The supply demand relationship would actually dictate that Adobe products, and any other infinitely reproducible products are worth nothing. That is problematic, so instead we must look at the IP, not the product itself. The IP was and is in demand, and because there are a finite number of products that fulfill the need, there is value associated with the underlying IP. Thus the supply-demand price would be proportional to demand for the specific Adobe product IP. Since other products fulfill this demand from other companies, the demand is split, and this should be reflected in the price (this is an automatic process in markets), which should result in competitive pricing. Normally, a price of a single unit of product is the labor value multiplied by the total number of customers divided by the number of units of the product (this is just the supply demand slope multiplied by the initial cost of production). However, reproducible products, as discussed, don't follow this relation. Instead, the *correct* price is be the initial cost of creating the IP (which includes the worth of the time invested), divided by the number of customers. This is the necessary relation, because this formula exactly compensates the creators for the time and effort that went into it, without the calculation relying on a finite supply. This is the only possible equation for the cost per unit that results in the creators receiving what the product is actually worth (for those who understand labor theory of value, this is the exchange value of the IP, instead of the product). 
  • So, what is the product worth?: The product is worth, in the end: (value of time used to create the IP + the cost of servers + the cost of marketing + the value of time expended on customer support + any other recurring or initial costs not mentioned) / (the amount of customers). Basically, it's just costs divided by demand.
           
This number is complicated more because of things like discounts, group purchases, etc. However, this addresses the general pricing mechanism correctly. Now that that is clear, we must address the moral issue of paying for current Adobe products.

  • Are the current Adobe products priced fairly?: Lets look at some numbers. According to this business tracking site Adobe had a *net* profit of 3.232 billion dollars for the 2019 fiscal year. That's pure profit. That means that of the gross 11.150 billion revenue reported by Adobe that year, significantly more than 25% was pure profit, even after paying the costs of production of all service IP they made, and all other costs *including salaries*. They are quite simply charging more than the value of any of their products. This figure even accounts for multi-hundred-million dollar acquisitions. They are charging more than their IP is worth, and they are getting away with it.
  • Why are they able to charge so much more?: The market is meant to regulate, and constrain producers to the actual value of products, and for the most part it does. However, the free market as conceptualized by Adam Smith was an atomized collection of competitors. When large corporations join the rat race, they don't need to listen to the market, they can go against it; this is a form of market warping. Adobe can warp the market in various ways, specifically, they can manufacture artificial scarcity of what is in reality an infinitely reproducible product. They do this by, for instance, large scale marketing campaigns that limit visibility of competing software, thus creating a virtual monopoly. Further, Adobe has made itself into a "name brand" meaning that the service they provide has changed slightly, now they offer the original service, in addition to selling ownership of their brand. Because this form of market warping makes the brand itself a product, this means that Adobe has a natural monopoly of that service and can charge whatever they wish. Of course, this monopoly doesn't exist for the actual functions o the software, only for the brand. However,  one often doesn't have the option to simply choose a competing software, because the market uses Adobe software as a standard. Many businesses essentially have to use this software either to be taken seriously as a business, or have a product that is considered credible. For instance my mother is an architect, and she does not believe that she could be taken seriously or succeed in her profession without using Auto cad. Yes, these things aren't necessarily Adobe's fault, and they are clearly not inhumane or even uncommon actions. However, these practices are abusive of the creative markets that Adobe sells to, not through any true fault of its own, but rather because that is how the market works.
             So is it amoral to pirate Adobe software?: No. Adobe is an abusive company. It warps the market, and charges far more than its services are worth. The individual customer doesn't owe anything to Adobe, its a company, its feelings can't be hurt. The things that we as consumers are responsible for protecting are those that work for Adobe, and the economy on the whole. It is economically justified not to support an abusive company, at least until prices for products return to a reasonable level. However, we must be careful not to harm Adobe employees. They rely on the company for their income, and it is important that they are able to maintain that security. Of course, many people will continue to pay instead of pirating, and that can support the company. Additionally, the market is less likely to encourage pirating once the price of the product is equal to its actual value. And finally, Adobe could easily earn far far less money and still employ all those who currently work there. In conclusion, Adobe is more or less essential for many creative professions. If you don't have the financial security to pay, then don't; they are an abusive quasi-monopoly, you are actually fighting that abuse by pirating. If you have the money, I would encourage you to think about the morality of the act of pirating. Yes, it is a crime; it is theft. However, you may feel the moral compulsion not to support such a company. The choice is yours.

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