Intellectual property is dead.
Oh, sure, it's still kicking. There are lots of people out there making a living by treating the products of their intellect as property. But looking over the Internet landscape, and noting Napster, DeCSS, widespread piracy of printed works, and so on, I think it's safe to say that the laws protecting "intellectual property" are as obsolete as Prohibition, and as impossible to enforce.
Take a book, for example. The cost of production of a book -- the content, not the physical instantiation -- is, I believe, essentially unchanged since ancient times. I doubt that Homer worked any harder creating the Odyssey than Stephen King did on his latest potboiler. Writing implements and word processors have made it easier for authors to save a copy of the book, but the creative spark remains unchanged.
What has changed is the cost of producing physical copies of a book. When books had to be made one-at-a-time, whether with cuneiform or quill, they were limited to a select few readers. The printing press made books available to the many, but the cost of production was still measurable; with a few exceptions (for example, religious books, where missionary groups foot the bill) people pay for printed copies. This in turn allowed, through the standard capitalist system, the collection of a markup to keep the entire system running.
Now, with the Internet, the cost of producing a copy of a book has dropped to essentially zero. Anyone can put a web site up and copy a book. With a scanner and OCR, you can get any work on to the Internet for a few hundred bucks. And you don't have to be the copyright holder to do it, either.
The only reason you can't find every book in the known universe on the Internet for free is that no one has gotten around to scanning it yet. But that will change. The genie is out of the bottle. And all the lawyers in the world can't put it back in.
Those of us in the intellectual product creation business need a new paradigm. Oh, maybe not this year or next year, but soon. I foresee a time where, if I publish a book through Sybex, it becomes available on the web within days in copies that pay me no royalty. At that point, the economic incentive to publish vanishes. So, probably, does my publisher.
Some attempts have been made to come up with ways to stave off this fate. I can think of a few that I find doomed to failure:
1. Legal action. Sure, we can sue a few people out of existence. But with the various FreeNet projects underway, it will soon be entirely possible to publish a pirated edition in a distributed fashion with the location of the actual work impossible to determine. When there's no one to sue, the lawyers can just give up and go home.
2. Micropayments. I have no doubt that you could set up a voluntary micropayment system that would allow people to pay for reading online works. I have grave doubts that most of them would do so. Remember the attempt of the first legitimate edition of Lord of the Rings in the US to convince people by moral suasion not to buy the unauthorized edition? Didn't work. And any system that demands non-voluntary payments gets circumvented by others without scruples who republish.
3. Value-added editions. The notion here is that you find something that can't be pirated and make it a part of the printed edition. Problem: what would that be, precisely? CD-ROMs are none too big to download now. Perhaps we can package a 30-minute chat with the author with legitimate copies?
4. The "gift economy". You hear this in open source circles sometimes. If you give people things, they will give you things. Yeah, well, maybe. I'll believe it when I see it.
So, what's the answer? Well, what makes you presume there is an answer? There's not much call for mounted knights any longer; the rise of artillery saw to that. It's possible that there will be no call for authors, either, with the rise of the Internet.
As for me, though, I can put forth a few tentative statements, perhaps the first moves towards a resolution:
1. It's time to stop depending on books for income. Writing software pays more, and being a one-to-one activity, rather than one-to-many, it is not subject to the same piracy problem -- a solution I develop for one client does the next client no good at all. (Shrink-wrapped mass-market software, on the other hand, does suffer from the same problem as books).
2. I won't stop writing because I can't stop writing. Writing-for-publication is a side effect. I can no more stop writing than I can stop reading. Possibly more of my writing will go to non-economic fora, however.
3. I hope I'm not too set in my ways to recognize the new paradigm when it shows up at the door.