Reffering somewhat to the previous post on the Carte Blanche story, but I will be looking at a possible solution rather than the question itself (which I should say was briliantly stated).

In the ages before copyright, artists did not starve or fail to create, this alone is proof that copyright is not the sole means of supporting artists, in fact in the ancient world – artists were on average a slightly bit less likely to starve (under certain provisions which I will get to just now). The system in place then was something called patronage. Patronage was perhaps the one positive side effect of the class system, ¨nobles¨ were expected to sponsor artists, paying them a living wage to allow them the freedom to create art.
This was a great system except for one small catch – since an artist needed a patron to survive, patrons chose artists based on the willingness of those artists to create art that suited the patron.

This resulted in a kind of economic censorship which meant that only such art as failed to critisize the current powers-that-be could be funded, we see this clearly in Shakespeare´s work for example. Even in MacBeth – a story about a power hungry royal-wannabe who contrives his own doom through his ambitions, there is an entire paragraph dedicated to a character telling us just what a cool guy the king of England is. How he heals dandruff with his touch !

Of course artists were smart enough to get around this in some ways, Shakespear used the old ¨praise-poetry¨ technique – critisizing through praise, very effectively while Da Vinci simply made his living from science and engineering so he could practise his real art mostly undisturbed (of course he also took on commisioned works like the last supper but this made up a very small part of his art).

Copyright came into the picture when the printing press made copying a reality, in a world where an artwork was no longer an once-off thing but could be copied, it was designed to give artists some sort of recompence for those copies – but more importantly to censor just what was copied in the first place.
The censorship motivation mostly dissapeared over time (though it was still alive in the USSR right up the fall of the Berlin Wall) but copyright persisted, replacing patronage as the system for artistic recompense as the class system began to come appart.
For a while, everything was dandy, artists created, copyright got them paid and since there was no patronage – there was no economic censorship (other varieties of course abounded). Since copying was essentially and industrial activity, this made copyright essentially and industrial regulation so it didn´t bother us normal folk much.
We had neither the means nor the need to make copies anyway.

But behind the scenes, something happened over the course of the twentieth century. See the problem with copyright for artists is what you might call ¨seed money¨ – somehow they have to live while creating, and then they have to hope like hell they can sell the results for enough to live on until the next one is done. Enter ¨publishers¨, publishers became the middleman, by having large capital basis they could offer artists sums of money in advance to cover the risk of creation – it was never very much – in exchange for taking the copyrights from them. Of course the most successfull artists also get a royalty cut – but don´t imagine it´s typical. According to Courteney Love´s mathematics, the average non-superstart musician can expect a negative return on every single album they ever produce. The real money goes to the publishers, every time.

This was tolerated because publishers brought one more thing to the table -distribution, publishers had the means to actually get the art to the public. So the artists who generally aren´t interested in getting rich if they can just survive to create went along with it -because getting their message out was worth the poverty and the publishers could do that for them.

The advent of the digital economy and the network changed this, copying became ridiculously easy. Distribution became practically free of charge – the publishers were charging money for a service nobody really needed anymore.
Thanks to the internet, artists can now sell directly to a bilion users – even if only 1% buys, that´s more than the publishers would ever have given them.
So publishers freaked out, their house of cards was missing several decks on the bottom floor and it was about to fall down – their answer was to start abusing copyright to try and illegalize the tools that made this direct and peer-to-peer distribution mechanism possible in the first place.
Thus far, no amount of effort has worked but they persist and they would love nothing more than to destroy the network. It´s almost as if a horse dealer tried to blow up the Ford factory back in 1932.
The weapon they use to hide their nefarious scheme is to talk about the ¨artists rights¨ and how these artists starve because of copying by the public. The truth is the artists were starving long before the network because the publishers did a lot less to take care of them than the patrons used to – and most artists could never get published, without publication, there was no money to be made.

Copying has not robbed the artists of their livelihood, the publishers did that a long time ago – copying is robbing the fat cats of their cream, and that is why they are up in arms, and sadly have managed to get the very artists they exploit to speak up for them – because those artists are bound to their slavemasters as securely as their ancestors were to the wishes of their patrons.

So then, what can we do about this ? Well I have long been playing with the idea of a new form of patronage. A patronage system for the digital world. Here is how it may work:
Many countries currently tax the sales of certain electronics like CD media and pay this to recording companies since these media ¨may be used for illegal copying” – of course 99% of all CD-R´s bought are used to back up data on, not write music cd´s but oh well.
But even after paying a tax for being able to copy – you are still not allowed too…

Hold on though… maybe there is an opportunity here.
Imagine the government sets up a web site where anybody can register any artwork capable of digital distribution, the price of registration is to implicitely allow copying and derivation. But this site is linked to a fund. The fund gets it´s income from a sales tax on devices and media that can be used for digital copying, a small tax would more than suffice.
Then for every time an artist´s work is downloaded from the main site, he gets a cut of the fund, the maths is simple 80% of the fund gets distributed for direct downloads (say once a year or so) if your work was 2% of the total downloads, you get 2% of the 80% that is thus distributed – it´s a small piece of the pie, but the pie is so big that it is much more than they are making now. Since there is no limit on what you can post – the only limit to your income is your ability to please your customers – and there is no economic censorship, if people like your art, you get paid – and nothing stops them from personally paying you a little extra on the side if they really like it.
Now 20% of the fund is left, of this say 5% should be used for the cost of running all this, keeping the site up with plenty of bandwith, paying programmers salaries and the like.
That leaves 15% – this 15% is for secondary distribution. Some technology should be available from the site, a multiplatform program with source code. Nothing forces you to run it, but if you do – you are rewarded with an additional right – redistribution of copies.
The program never bothers you, it merely tracks when a copy of a piece of art downloaded from that sight leaves your computer. And reports back the names and numbers on this, without identifying you.
The 15% gets divided among artists based on how often their work is shared by previous downloaders. After the third tier, I believe there is no longer any justification for payment to creators (the third tier: if Jack downloads from the site, and gives to Sally, and Sally then gives to Peter, the author gets a big fee for Jack´s download, a smaller one for Sally´s copy, and nothing for Peter – the third tier).
This means artists are free to create anything and they are rewarded for digital art by allowing the users to make full use of the power that digital arts offer them. The users are happy because they are never asked for their credit cards, they are not ¨paying for the song¨ – when they bought their CD player or their computer a small amount of the price paid to allow them to do this !

The reason I say a government should do this, as little as I normally trust governments is that there is on major thing they have that corporations don´t – access to charge taxes. Magnatune will never make authors money from real listeners and no matter how much I like their ethical approach, the truth is that it is not enough.
Private enterprises will always have to charge for downloads, or a flat rate subscription or something, users will rather copy than pay – it´s that simple. But a government can get use a tax fund to pay the artists, a government never needs to ¨visibly¨ charge – users will see a world where for a small increase in the price of digital consumer devices, they get art they can copy, mix and share as much as they like – and then they can register their remixes on the site and get a cut of the action as well.

Sounds great eh ? Now all we need is a government not in the pocket of the fat cats so we can convince them to do what is best for art, that is the government you can sell this idea to.

PS. As a programmer and an artist, both fields which traditionally have relied on copyright to make money, I believe I am as adequately qualied as anybody to state that I believe if such a system was properly managed, without corruption and sufficiently well designed (in terms of technology) that it worked for the consumers rather than against them – that artists, programmers and other creators would go for it.