In early 2006 a new political party had formed in Sweden: the Pirate Party. Not aligned along the traditional left–right axis, its platform called for a rollback of copyright laws and total amnesty for Internet file-sharers. The Pirates had seen how, when it came to the Internet, the concept of scarcity didn’t exist, and a university student like Ellis could create the world’s greatest music archive from his bedroom. The only recourse for copyright holders, therefore, was to re-create those conditions of scarcity by artificially limiting the supply. And, as Alan Greenspan had observed so many years earlier, such conditions could be secured only by pressure from the state.

This troubled the Pirates, who could see the lengths that governments and corporations would go, in concert, to survive in the digital world. The Pirates pointed to the judgments against Jammie Thomas and the raids on the Pirate Bay. They pointed to the RIAA lawsuits, and how for a time the music industry had been granted de facto subpoena power by the courts. They pointed to invasive corporate tracking software, to clandestine government mass-surveillance programs, to growing restrictions from data providers over the kind of traffic permitted over their pipes. They pointed to how the rights-holders wanted—actually needed—to turn the Internet into a police state.

In campaign literature, the Pirates made their point in stark terms: “It is impossible to enforce the ban against non-commercial file sharing without infringing on fundamental human rights.” People—especially younger people—listened. In early 2009, Sweden held its elections for the European Parliament, and the Swedish Pirate Party garnered over 200,000 votes, enough for a 7 percent share. For the next five years, two Pirates would take seats at the table of the European Union.

Of course, the EU parliament had 751 seats, so the amount of power they actually held was microscopic. Nevertheless, it represented the first serious challenge to the theoretical and moral bases of intellectual property law in centuries. Lobbying from media industries had pushed commercial copyright statutes from their original 14-year terms to protections that could last for hundreds of years. This had diminished the public domain and left the majority of cultural products in the hands of just a few multinational corporations. The two Pirate parliamentarians, lonely though they were, sought to reverse this, pushing to reduce the length of copyright to just five years and to eliminate all patents on software and biotechnology. The idea was that these changes would lead to a thriving public domain, universally accessible in the Internet era.

It wasn’t as crazy as it sounded. The trade in pirated mp3s had undeniably spurred innovation in the mobile device market, and the development of the smartphone could be traced directly back to Napster. The Pirates believed this episode was broadly applicable, and that the artificial conditions of scarcity imposed by the state were hampering innovation across a number of fields. They had noticed something else too, something even more radical: that the difficulties music executives like Doug Morris had experienced deploying capital over the past decade were shared in an increasing number of industries. In a world of digital abundance, it was getting harder to earn a profit.

This point was later made succinctly by Izabella Kaminska, a blogger for the Financial Times, who translated the Pirates’ arguments into macroeconomic terms. Discussing the inability of the world’s central bankers to engineer growth, Kaminska outlined the precise factors that had led Morris to slash his own operating budgets by more than 50 percent:

Negative rates are a function of global abundance (brought on by technological advances), and a trend that cannot be stopped even by the strongest central bank . . . For rates to stay positive we have to hoard almost everything in the world from the people that need it, if it is to have value. The artificial scarcity tactics that have been used through the ages to achieve this are getting harder to execute because of technological liberation—which is enabling the emergence of collaborative economy which bypasses rates of return.

Perhaps another world was possible. But organizing it proved difficult, and only in one other country besides Sweden did the Pirate Party gain a foothold: Germany. There, it registered 30,000 members in the course of a couple of years, polling in the high single digits, winning representation in several state-level elections in 2011, and threatening to put members in the Bundestag.

From his landed peerage at Fraunhofer, Karlheinz Brandenburg watched the rise of the German Pirate Party with disapproval. So, too, did Bernhard Grill. Though separated, the two engineers still thought along similar lines, and they both believed that the Pirate Party’s platform was economic cyanide. The Pirates’ ideas, if adopted, would radically reconfigure existing relationships of investment and profit. In this hypothetical world, companies like Microsoft and Adobe would see their revenues cut in half. Companies like Universal and Warner Music Group would go bankrupt almost immediately. Musicians, writers, and creative professionals of all kinds would be forced out of the marketplace and into relationships of patronage. And the next generation of inventors would probably become consultants.

Brandenburg and Grill were in some ways the fathers of the Pirate Party. Their decision to release the mp3 encoder for free on the Web had catalyzed a golden age of copyright infringement that had decimated the music industry even as it made them wealthy. But that decision had also catalyzed a political movement that now threatened their own livelihoods. No software revenues meant no mp3 licensing income. No mp3 licensing income meant the German state would be out hundreds of millions, and Brandenburg’s white-on-white Ilmenau campus would still be a cow pasture.

Both Brandenburg and Grill knew that, without the incentives of software patent revenue on the horizon, they never would have spent the better part of a decade conducting those listening tests. Brandenburg would likely have stayed in academia and sought a professorship. Grill might still be playing the trumpet. Listening to “Tom’s Diner” 2,000 times in a row was work, and the mp3 team would not have done that work without the incentive of future payoff. And that was their ultimate rebuke to the Pirates: without patent protection on software, the mp3 would never have existed.

CHAPTER 20

The day after his house was raided, Glover returned to work. What else was he supposed to do? He had a shift scheduled, and he hadn’t been formally charged with a crime. Pulling up to the guardhouse in his Ford, he cleared the vehicle whitelist and found a parking spot. As he emerged from the car, he was met outside the factory by Robert Buchanan, his boss.

Buchanan had worked as a supervisor at the plant for years. He had always liked Glover, whom he found to be a capable and diligent employee. He had promoted him off the packaging line, and they had played paintball together. Now, though, it was clear that something was wrong. The FBI hadn’t contacted Buchanan, but the incident with the sheriffs had happened during a shift change, with hundreds of employees watching.

Dell, said Buchanan, don’t come in here. You and me are friends, but you’re under investigation. I think you better go home.

It was the last time Glover would ever set foot on the plant’s grounds. He was fired within a week. Dockery would also be fired, and within a few weeks Karen Barrett was let go. Glover’s DVD business was shut down. The FBI confiscated his computers, his duplicating towers, his hard drives, and his PlayStation. They left him the duffel bag full of compact discs—those were worthless, even as evidence.