WEBVTT - Do You Really Own that Digital Music or eBook?

0:00:03.200 --> 0:00:07.960
<v Speaker 1>This is Bloomberg Law with June Brussel from Bloomberg Radio.

0:00:15.240 --> 0:00:18.920
<v Speaker 1>I know this is hard for you, but Windsor is coming.

0:00:20.400 --> 0:00:24.200
<v Speaker 1>We know what's coming with it. We can't face it alone.

0:00:25.760 --> 0:00:30.000
<v Speaker 1>Despite John Snow's warning, did you watch Game of Thrones alone?

0:00:30.520 --> 0:00:34.239
<v Speaker 1>The record viewership for the HBO drama indicates maybe not.

0:00:34.560 --> 0:00:37.600
<v Speaker 1>But did you use someone else's log in and password

0:00:37.680 --> 0:00:40.680
<v Speaker 1>to watch the show? You might be surprised to learn

0:00:40.760 --> 0:00:45.800
<v Speaker 1>that HBO doesn't care. In fact, HBO encourages it. That's

0:00:45.840 --> 0:00:48.120
<v Speaker 1>just one of the lessons in the book Mine, How

0:00:48.159 --> 0:00:51.600
<v Speaker 1>the Hidden Rules of Ownership Control Our Lives by Michael

0:00:51.640 --> 0:00:55.160
<v Speaker 1>Heller and James Saltzman, and Professor Heller of Columbia Law

0:00:55.200 --> 0:00:58.480
<v Speaker 1>School joins me, Now, why the title mind One of

0:00:58.520 --> 0:01:02.400
<v Speaker 1>the first words babies. How does that relate to adults? Well,

0:01:02.480 --> 0:01:04.280
<v Speaker 1>let me give you an example. Actually was with my

0:01:04.400 --> 0:01:06.560
<v Speaker 1>kids in the park and they were fighting over a

0:01:06.560 --> 0:01:09.319
<v Speaker 1>little toy shovel and one of them said mine, I

0:01:09.360 --> 0:01:11.720
<v Speaker 1>had it first, and the other said no, I'm holding

0:01:11.800 --> 0:01:14.040
<v Speaker 1>onto it. And I realized that that little fight that

0:01:14.120 --> 0:01:17.440
<v Speaker 1>they had is actually very revealing about ownership works, not

0:01:17.520 --> 0:01:19.320
<v Speaker 1>just for kids, but for us grown ups as well.

0:01:19.520 --> 0:01:21.839
<v Speaker 1>So when my daughter was saying I had it first,

0:01:21.920 --> 0:01:24.640
<v Speaker 1>first in time, my son was saying, I'm holding onto it.

0:01:24.760 --> 0:01:27.559
<v Speaker 1>Possession is nine tenths of the law. They were using

0:01:27.680 --> 0:01:31.160
<v Speaker 1>two of just six simple stories that everyone uses to

0:01:31.200 --> 0:01:34.920
<v Speaker 1>claim everything in the world. Much remarkable is that businesses

0:01:34.959 --> 0:01:38.759
<v Speaker 1>and governments use those exact same stories, the exact same

0:01:38.840 --> 0:01:43.360
<v Speaker 1>mind and first to basically allocate all the resources that

0:01:43.400 --> 0:01:45.840
<v Speaker 1>we all fight about. This is how we decide climate change,

0:01:45.959 --> 0:01:48.240
<v Speaker 1>this is how we decide wealth inequality, and it's also

0:01:48.400 --> 0:01:50.480
<v Speaker 1>how we get in line as adults for everything that

0:01:50.480 --> 0:01:54.560
<v Speaker 1>we all want. Let's start with the axiom possession is

0:01:54.680 --> 0:01:57.840
<v Speaker 1>nine tenths of the law, and you say not really.

0:01:58.720 --> 0:02:01.240
<v Speaker 1>There are hundreds of ownership disputes that we're involved in

0:02:01.320 --> 0:02:04.720
<v Speaker 1>every day without realizing it. Part of why a maxim

0:02:04.760 --> 0:02:06.880
<v Speaker 1>like possession is nine tenths of the law is so

0:02:06.920 --> 0:02:11.280
<v Speaker 1>powerful that it feels natural and just and right. But

0:02:11.360 --> 0:02:14.000
<v Speaker 1>once you understand it, it's just a maxim. What savvy

0:02:14.040 --> 0:02:16.520
<v Speaker 1>businesses can do is turn those upside down. So let

0:02:16.560 --> 0:02:19.120
<v Speaker 1>me give you an example. Say you click by now

0:02:19.240 --> 0:02:22.079
<v Speaker 1>on Amazon to download a book or a movie. When

0:02:22.080 --> 0:02:24.280
<v Speaker 1>you click buy now, you have a little shopping cart

0:02:24.520 --> 0:02:27.040
<v Speaker 1>you have a buy now button, it feels like you

0:02:27.160 --> 0:02:30.239
<v Speaker 1>own that, And actually, studies are shown the pent of

0:02:30.320 --> 0:02:34.160
<v Speaker 1>people believe that buying something online is the same as

0:02:34.200 --> 0:02:37.320
<v Speaker 1>buying a physical copy of the book or the DVD,

0:02:37.720 --> 0:02:40.880
<v Speaker 1>and that's just not true. So what Amazon, Apple and

0:02:40.960 --> 0:02:44.360
<v Speaker 1>other online retailers realize that they can mobilize our deep,

0:02:44.480 --> 0:02:48.600
<v Speaker 1>our childhood instincts about possession, but actually sell us something

0:02:48.880 --> 0:02:51.920
<v Speaker 1>quite different and much less. So it's the case today

0:02:52.280 --> 0:02:55.720
<v Speaker 1>that Apple or Amazon can, and actually they have deleted

0:02:55.800 --> 0:02:58.200
<v Speaker 1>content right off of people's devices, and they have the

0:02:58.320 --> 0:03:00.320
<v Speaker 1>right to do so. But there's a big and growing

0:03:00.440 --> 0:03:03.000
<v Speaker 1>gap between what you feel like you are and what

0:03:03.120 --> 0:03:06.839
<v Speaker 1>you actually own online and the online retailers they get

0:03:06.880 --> 0:03:10.120
<v Speaker 1>an extra unearned premium on every single one of our

0:03:10.160 --> 0:03:14.560
<v Speaker 1>downloads we leave. The customers are not always right. So

0:03:14.600 --> 0:03:18.240
<v Speaker 1>in other words, you might buy a book for your

0:03:18.320 --> 0:03:21.840
<v Speaker 1>iPad or your Kindle and later find out that the

0:03:21.880 --> 0:03:25.720
<v Speaker 1>book has disappeared from your online library the book you

0:03:25.800 --> 0:03:29.680
<v Speaker 1>thought you had purchased. Isn't that crazy? Doesn't happen very often,

0:03:29.919 --> 0:03:34.120
<v Speaker 1>But actually some years ago Amazon deleted by George Orwell

0:03:34.280 --> 0:03:37.119
<v Speaker 1>right off people's devices, which is actually kind of amazing.

0:03:37.120 --> 0:03:39.360
<v Speaker 1>If that was exactly what Big Brother would do. There

0:03:39.400 --> 0:03:41.440
<v Speaker 1>was a licensing dispute, and don't turn up, they couldn't

0:03:41.480 --> 0:03:43.480
<v Speaker 1>sell that version of the book. But there have been

0:03:43.480 --> 0:03:46.160
<v Speaker 1>a number of cases where Apple and Amazon and the

0:03:46.160 --> 0:03:49.440
<v Speaker 1>other retailers have essentially bricked your device. You still have

0:03:49.520 --> 0:03:51.640
<v Speaker 1>the hardware, you still have the shell of your cell phone,

0:03:51.800 --> 0:03:54.360
<v Speaker 1>but they can basically lock you out of your contact

0:03:54.600 --> 0:03:56.520
<v Speaker 1>in ways that people will be surprised. You feel like

0:03:56.560 --> 0:03:59.600
<v Speaker 1>you own it, But the reality today is that possession

0:03:59.680 --> 0:04:01.960
<v Speaker 1>is much more like one sense of the law when

0:04:02.000 --> 0:04:07.600
<v Speaker 1>you're online. Amazon and Apple do they have provisions in

0:04:07.640 --> 0:04:10.280
<v Speaker 1>their terms of agreement that allow them to do that.

0:04:10.320 --> 0:04:13.440
<v Speaker 1>Those terms of agreement that no one ever reads. I

0:04:13.440 --> 0:04:15.840
<v Speaker 1>imagine they do. I'm saying I imagine they did, because

0:04:16.040 --> 0:04:19.320
<v Speaker 1>literally no one ever. I teach this stuff and I've

0:04:19.360 --> 0:04:21.560
<v Speaker 1>never read them. And what's amazing is in those terms

0:04:21.560 --> 0:04:23.280
<v Speaker 1>of service that they call them, they can put a

0:04:23.320 --> 0:04:25.120
<v Speaker 1>lot of stuff in there that you would just never

0:04:25.600 --> 0:04:27.840
<v Speaker 1>No one ever knows, no one ever. They're designed to

0:04:27.880 --> 0:04:30.880
<v Speaker 1>be unintelligible, and all everyone does is just click the

0:04:30.920 --> 0:04:33.000
<v Speaker 1>little I agree button a quick the buy now button,

0:04:33.240 --> 0:04:35.680
<v Speaker 1>and by doing so, the version of ownership that you

0:04:35.720 --> 0:04:39.600
<v Speaker 1>get online is a very highly limited, non transferable license

0:04:39.760 --> 0:04:42.200
<v Speaker 1>that gives them a lot of control over what you

0:04:42.240 --> 0:04:46.040
<v Speaker 1>can do with what you buy. What about subscription services

0:04:46.200 --> 0:04:51.280
<v Speaker 1>like HBO and Netflix. It's become acceptable to borrow someone's

0:04:51.360 --> 0:04:54.640
<v Speaker 1>log in and password and watch shows when you're not

0:04:54.680 --> 0:04:57.440
<v Speaker 1>paying for them. So what are the ownership rules there?

0:04:58.000 --> 0:05:00.200
<v Speaker 1>Isn't that crazy? Like when I ask people, like you know,

0:05:00.279 --> 0:05:02.760
<v Speaker 1>people who share passwords with friends for Hbo, where I

0:05:02.800 --> 0:05:05.279
<v Speaker 1>spend this throup for Netflix? All of my students, all

0:05:05.279 --> 0:05:07.160
<v Speaker 1>of my friends say, sure, of course we do. That's

0:05:07.160 --> 0:05:10.479
<v Speaker 1>just standard practice. And you said, it's borrowing. It's not borrowing.

0:05:10.480 --> 0:05:12.839
<v Speaker 1>It's actually illegal. It's actually a federal crime. It's not

0:05:12.880 --> 0:05:17.120
<v Speaker 1>even close to legal. But here's the thing. HBO knows

0:05:17.120 --> 0:05:20.320
<v Speaker 1>that you're borrowing these passwords. They can track you down,

0:05:20.640 --> 0:05:24.080
<v Speaker 1>and they choose not to. They don't just tolerate, they

0:05:24.080 --> 0:05:27.479
<v Speaker 1>actually encourage best of their core content. How is that

0:05:27.520 --> 0:05:31.440
<v Speaker 1>even possibly the case? Possible? Because HBO and Netflix are

0:05:31.480 --> 0:05:35.080
<v Speaker 1>some of the most stephisticated and savvy businesses about ownership design.

0:05:35.440 --> 0:05:38.039
<v Speaker 1>We all know that rocket engineering puts people on the moon,

0:05:38.480 --> 0:05:41.400
<v Speaker 1>but a few people realize how ownership engineering is us

0:05:41.440 --> 0:05:44.719
<v Speaker 1>all day long every day. So what HBO is using

0:05:44.880 --> 0:05:47.560
<v Speaker 1>in this contact the reason that they're actually encouraging people

0:05:47.600 --> 0:05:50.600
<v Speaker 1>to share passwords, they're using an ownership strategy we call

0:05:51.080 --> 0:05:54.960
<v Speaker 1>tolerated staffs. Tolerated staffs work for them because what they

0:05:54.960 --> 0:05:57.400
<v Speaker 1>are trying to do actually, in the words of HBOS

0:05:57.440 --> 0:05:59.960
<v Speaker 1>president Richard Leppler, he said, what we're trying to do

0:06:00.000 --> 0:06:02.880
<v Speaker 1>it was build video added so they could come after you,

0:06:03.320 --> 0:06:05.799
<v Speaker 1>but instead they want you to think that you're stealing

0:06:05.880 --> 0:06:08.839
<v Speaker 1>just a little. It actually profits them as part of

0:06:08.880 --> 0:06:12.599
<v Speaker 1>a long term customer acquisition strategy. They actually write about

0:06:12.600 --> 0:06:15.520
<v Speaker 1>this in some detail strategy that savvy businesses are using

0:06:15.680 --> 0:06:19.120
<v Speaker 1>in a Harvard Business Review article that's titled even Elon

0:06:19.200 --> 0:06:22.120
<v Speaker 1>must doesn't care about patent should view. And the point

0:06:22.200 --> 0:06:25.719
<v Speaker 1>there is that savvy businesses have strategies life tolerated stuff

0:06:25.920 --> 0:06:29.520
<v Speaker 1>where they're re engineering your experience of ownership for their profits.

0:06:30.080 --> 0:06:33.080
<v Speaker 1>You right that the meek shall inherit very little, and

0:06:33.160 --> 0:06:37.400
<v Speaker 1>you point to South Dakota as the new Switzerland. Howls

0:06:37.480 --> 0:06:40.479
<v Speaker 1>South Dakota become the go to money haven for the

0:06:40.560 --> 0:06:44.440
<v Speaker 1>super rich. What a wild place. I mean when I

0:06:44.480 --> 0:06:46.480
<v Speaker 1>think of South Dakota, I think of like the sturgist

0:06:46.520 --> 0:06:49.720
<v Speaker 1>motorcycle raality, or maybe like Mount Rushmore. But if you're

0:06:49.760 --> 0:06:53.400
<v Speaker 1>super rich, South Dakota is a very special place. It's

0:06:53.440 --> 0:06:55.720
<v Speaker 1>where the wealthiest people, not the one per centers, but

0:06:55.839 --> 0:06:58.240
<v Speaker 1>the one percent of the one percenters go to hide

0:06:58.240 --> 0:07:00.839
<v Speaker 1>their money. It's a place that has cre aided essentially

0:07:00.960 --> 0:07:04.320
<v Speaker 1>legal system that makes payment of taxation essentially optional for

0:07:04.400 --> 0:07:07.920
<v Speaker 1>many kinds of taxes. It also makes facility or responsibilities,

0:07:07.960 --> 0:07:10.960
<v Speaker 1>for examples, to pay former spouses or provide child support,

0:07:11.360 --> 0:07:14.280
<v Speaker 1>or payoff people use injured in all practice cases, or

0:07:14.360 --> 0:07:17.200
<v Speaker 1>business partners use defrauded. It makes all that payments and

0:07:17.240 --> 0:07:21.040
<v Speaker 1>all that responsibility largely optional. And because it's so attractive

0:07:21.080 --> 0:07:25.120
<v Speaker 1>for avoiding responsibility and taxes, it's become in recent years

0:07:25.160 --> 0:07:29.000
<v Speaker 1>the world leading money caymer. It actually crushes Switzerland and

0:07:29.080 --> 0:07:31.560
<v Speaker 1>the payments. This is where the world super wealthy go

0:07:31.640 --> 0:07:34.520
<v Speaker 1>to hide their money. And most Americans don't realize that

0:07:34.560 --> 0:07:37.800
<v Speaker 1>we now have in this country is too actually separate

0:07:37.840 --> 0:07:41.440
<v Speaker 1>systems for wealth transmission, the super concentration of wealth in

0:07:41.440 --> 0:07:44.080
<v Speaker 1>the very small handful of families, the fact that today

0:07:44.200 --> 0:07:48.960
<v Speaker 1>sixty of wealth in America has inherited. It's inherited not earned,

0:07:49.200 --> 0:07:52.480
<v Speaker 1>and only one percent of families have fort of total

0:07:52.520 --> 0:07:55.640
<v Speaker 1>wealth that doesn't happen through market cources. It isn't a

0:07:55.760 --> 0:07:58.760
<v Speaker 1>factive nature. It is results from a deliberate set of

0:07:58.840 --> 0:08:03.240
<v Speaker 1>choices by fas like South Dakota to create this basically

0:08:03.280 --> 0:08:06.960
<v Speaker 1>optional taxation and responsibility system. They've created a way to

0:08:07.080 --> 0:08:10.400
<v Speaker 1>create actually a new aristocracy in America. And I don't

0:08:10.400 --> 0:08:13.200
<v Speaker 1>even mean that metaphorically. The name of the trust that

0:08:13.280 --> 0:08:17.240
<v Speaker 1>avoid stay taxes in particular are called dynasty trusts. They're

0:08:17.240 --> 0:08:20.120
<v Speaker 1>meant to create modern dynasties. For most of us, we

0:08:20.360 --> 0:08:22.880
<v Speaker 1>actually have to pay our taxes and fulfill our responsibilities.

0:08:22.880 --> 0:08:25.080
<v Speaker 1>And if you drive a Honda and hit somebody, they

0:08:25.080 --> 0:08:27.400
<v Speaker 1>can garnish your wages to pay off the claim. But

0:08:27.440 --> 0:08:29.360
<v Speaker 1>if you have a trust set up in South Dakota

0:08:29.480 --> 0:08:31.720
<v Speaker 1>and you're wealthy enough to hystem with your Lamborghini, you

0:08:31.800 --> 0:08:34.240
<v Speaker 1>never have to pay. It's really something that the founders

0:08:34.280 --> 0:08:37.800
<v Speaker 1>would have been appalled by. It's not something that's consistent

0:08:37.840 --> 0:08:40.800
<v Speaker 1>with either a progressive vision of America, and it isn't

0:08:40.800 --> 0:08:44.600
<v Speaker 1>consistent with a conservative vision of America equal either. It's

0:08:44.600 --> 0:08:48.240
<v Speaker 1>been consistent with a vision based on responsibility and uh

0:08:48.320 --> 0:08:51.480
<v Speaker 1>you know, opportunity and working hard. But we've done and

0:08:51.520 --> 0:08:53.440
<v Speaker 1>what we've done in this country is to create an

0:08:53.520 --> 0:08:57.240
<v Speaker 1>alternate legal system UH through which people can basically create

0:08:57.640 --> 0:09:01.280
<v Speaker 1>aristocratic dynasties. Actually very much in mentioned with the founding

0:09:01.320 --> 0:09:04.160
<v Speaker 1>principles of this country and the ownership. Reason for this

0:09:04.760 --> 0:09:08.720
<v Speaker 1>is that property in America is not defined by federal law.

0:09:09.600 --> 0:09:13.760
<v Speaker 1>It's not defined by the Constitution. It's defined by individual states.

0:09:13.880 --> 0:09:18.720
<v Speaker 1>So states like South Dakota can basically impoverish um states

0:09:18.760 --> 0:09:21.839
<v Speaker 1>where people actually want to live, States like California and

0:09:21.880 --> 0:09:25.920
<v Speaker 1>New York EXAs of Florida, where wealthy people live. The

0:09:26.000 --> 0:09:29.680
<v Speaker 1>chief Justice of that state Supreme Court said, well, many

0:09:29.720 --> 0:09:32.480
<v Speaker 1>people may find a way to fly over South Dakota.

0:09:32.920 --> 0:09:35.680
<v Speaker 1>Somehow their dollars find a way to land. Here is

0:09:35.720 --> 0:09:38.560
<v Speaker 1>the money helping the people of the state. What's so

0:09:38.960 --> 0:09:42.160
<v Speaker 1>galling about what South Dakota has done is that no

0:09:42.200 --> 0:09:44.559
<v Speaker 1>one in South Dakota benefits. There isn't one road in

0:09:44.600 --> 0:09:47.679
<v Speaker 1>Sathakota that gets paid by their ability to decrease the

0:09:47.840 --> 0:09:50.559
<v Speaker 1>taxation pays to the states where people actually live. That

0:09:50.720 --> 0:09:54.040
<v Speaker 1>one road get pays now, one school book gets brought.

0:09:54.360 --> 0:09:57.120
<v Speaker 1>The only people in South Dakota. Who benefits are the

0:09:57.280 --> 0:10:01.200
<v Speaker 1>tiny handful of trust administration lawyers and bankers who wrote

0:10:01.200 --> 0:10:03.959
<v Speaker 1>these laws, who updates them every year, and who get

0:10:03.960 --> 0:10:07.640
<v Speaker 1>fees for administering them. One legislature says, there probably aren't

0:10:07.679 --> 0:10:09.920
<v Speaker 1>a hundred people in the states who realize that they're

0:10:09.960 --> 0:10:13.600
<v Speaker 1>creating a studel aristocracy in America. But because of South

0:10:13.679 --> 0:10:17.520
<v Speaker 1>Dakota is taking the lead. Other states, Nevada in particular, Alaska,

0:10:17.679 --> 0:10:20.560
<v Speaker 1>a handful of others are racing to catch up with

0:10:20.720 --> 0:10:23.240
<v Speaker 1>giveaways to the super wealthy. So we now have what's

0:10:23.280 --> 0:10:26.120
<v Speaker 1>called a race to the bottom. It's actually competing with

0:10:26.160 --> 0:10:29.240
<v Speaker 1>each other forever more elaborate giveaways that are sort of

0:10:29.320 --> 0:10:32.720
<v Speaker 1>under the table, hidden in this parallel legal system for

0:10:32.800 --> 0:10:38.360
<v Speaker 1>the super rich. That's fascinating. Let's go on to another rule,

0:10:39.080 --> 0:10:42.320
<v Speaker 1>which is your home is your castle. You say your

0:10:42.320 --> 0:10:44.960
<v Speaker 1>home is really not your castle, right, So what we're

0:10:44.960 --> 0:10:47.760
<v Speaker 1>what we're going through here is um uh. Some of

0:10:47.760 --> 0:10:49.920
<v Speaker 1>the ownership stories has said at the beginning there are

0:10:49.920 --> 0:10:52.880
<v Speaker 1>only six of them, and we turns out that possession

0:10:52.920 --> 0:10:55.400
<v Speaker 1>is one tense of the law. You're a savvy business owner,

0:10:55.840 --> 0:10:58.480
<v Speaker 1>and it turns out that the meekshell not inherit very much.

0:10:58.960 --> 0:11:01.360
<v Speaker 1>If you're in the world of stu upakotas Um dynasty

0:11:01.400 --> 0:11:04.640
<v Speaker 1>truck and now we're going to uh, your home is

0:11:04.640 --> 0:11:06.480
<v Speaker 1>your cassitle. It turns out that your home, that's a

0:11:06.559 --> 0:11:10.080
<v Speaker 1>very powerful feeling we have, that's my space peep out.

0:11:10.920 --> 0:11:14.240
<v Speaker 1>But that notion of ownership is so powerful that it

0:11:14.320 --> 0:11:18.000
<v Speaker 1>becomes a tool that's available for all sorts of governments

0:11:18.000 --> 0:11:21.160
<v Speaker 1>and business businesses to sort of redefine what it means

0:11:21.200 --> 0:11:23.720
<v Speaker 1>to have home in ways that may surprise some of

0:11:23.760 --> 0:11:26.320
<v Speaker 1>your listeners. UM. So one of the so when you

0:11:26.360 --> 0:11:28.960
<v Speaker 1>stay my home ismand castle. If you own a home

0:11:29.240 --> 0:11:30.760
<v Speaker 1>but you have as a sheet of paper, it's a

0:11:30.800 --> 0:11:35.240
<v Speaker 1>two dimensional deeds um, which doesn't necessarily mean anything that

0:11:35.320 --> 0:11:38.360
<v Speaker 1>is attached to your home, like how much airspace above

0:11:38.440 --> 0:11:42.000
<v Speaker 1>is attached, what resources below are attached, how much out

0:11:42.040 --> 0:11:44.880
<v Speaker 1>from the side do you have? All of those questions

0:11:44.920 --> 0:11:47.439
<v Speaker 1>are very much up for grasped. A hundred years ago,

0:11:47.480 --> 0:11:50.880
<v Speaker 1>when we first had air flights, UM, landowners would send

0:11:50.880 --> 0:11:53.120
<v Speaker 1>bills to the plane companies and say, hey, you're your

0:11:53.120 --> 0:11:56.400
<v Speaker 1>trust passing over my land by flying up over overhead,

0:11:56.960 --> 0:11:59.040
<v Speaker 1>and early on in America, we desired that at the

0:11:59.200 --> 0:12:03.080
<v Speaker 1>flight of that's the level of airplanes that wasn't part

0:12:03.080 --> 0:12:07.040
<v Speaker 1>of it was attached to your land. That attachment only

0:12:07.080 --> 0:12:10.599
<v Speaker 1>worked a certain ways up. But today we have the

0:12:10.679 --> 0:12:13.559
<v Speaker 1>question about drone. So, for example, can symbody fly a

0:12:13.640 --> 0:12:16.240
<v Speaker 1>drone above your land? And that's very much a line

0:12:16.320 --> 0:12:18.680
<v Speaker 1>question because potentially they have cameras a book down on you,

0:12:19.640 --> 0:12:22.240
<v Speaker 1>and potentially they also serve, you know, to deliver pizza

0:12:22.400 --> 0:12:25.400
<v Speaker 1>or Amazon boxes. So we're at a moment where, like

0:12:25.520 --> 0:12:29.079
<v Speaker 1>any new resource, ownership of it is up for wraps.

0:12:29.120 --> 0:12:31.360
<v Speaker 1>The ownership of the airspace above your house at the

0:12:31.440 --> 0:12:34.760
<v Speaker 1>drone level, the so called drone away is very much

0:12:34.800 --> 0:12:38.840
<v Speaker 1>contected today and there's no natural or correct or right answer.

0:12:39.160 --> 0:12:41.880
<v Speaker 1>All that you have is the six simple stories of

0:12:41.920 --> 0:12:45.640
<v Speaker 1>ownerships that everyone uses to fight about everything. And it's

0:12:45.679 --> 0:12:48.599
<v Speaker 1>not just the airspace above, it's also all the resources

0:12:48.600 --> 0:12:51.600
<v Speaker 1>below your lands of water, the oil, the gap, um

0:12:51.640 --> 0:12:54.480
<v Speaker 1>do those belong to you? What if your neighbor puts

0:12:54.480 --> 0:12:56.560
<v Speaker 1>a drools a zeper well, it's puts in a more

0:12:56.600 --> 0:12:59.320
<v Speaker 1>powerful pump and sucks the water away from your well?

0:12:59.640 --> 0:13:03.560
<v Speaker 1>Can do that? And the answer is again up prograbed. Uh.

0:13:03.760 --> 0:13:05.840
<v Speaker 1>The specific answer for the well is much in much

0:13:05.880 --> 0:13:09.800
<v Speaker 1>of America, absolutely they can do You have all these

0:13:10.080 --> 0:13:14.240
<v Speaker 1>wild examples in the book what's your favorite? But my

0:13:14.360 --> 0:13:17.439
<v Speaker 1>favorite example actually is I motivated us to write the books.

0:13:17.720 --> 0:13:20.480
<v Speaker 1>Was flying on an airplane working in my laptop and

0:13:20.600 --> 0:13:22.640
<v Speaker 1>the person in front of me leaned back and squished

0:13:22.679 --> 0:13:25.640
<v Speaker 1>my laptop, and I realized that that wedge of space

0:13:25.800 --> 0:13:29.280
<v Speaker 1>behind the seat was an ownership story isn't governed by law,

0:13:29.440 --> 0:13:33.000
<v Speaker 1>but it's very much up programs. Does that space belong

0:13:33.080 --> 0:13:35.080
<v Speaker 1>to the person in front? Do you have a right

0:13:35.120 --> 0:13:38.000
<v Speaker 1>to recline? Is a space attached to the seat because

0:13:38.040 --> 0:13:41.040
<v Speaker 1>the button controls the space? Or does the space belong

0:13:41.080 --> 0:13:43.400
<v Speaker 1>to the person and back for their needs? And from

0:13:43.440 --> 0:13:46.360
<v Speaker 1>my laptop? So my story is possession. I possessed the

0:13:46.400 --> 0:13:49.840
<v Speaker 1>space or first. I was there first, And what I

0:13:49.920 --> 0:13:53.400
<v Speaker 1>realized was that that wedge of space was outside the law,

0:13:53.679 --> 0:13:55.880
<v Speaker 1>but it was a compliment each of us go through

0:13:55.920 --> 0:13:58.680
<v Speaker 1>all the time whenever we fly. If we and what

0:13:58.800 --> 0:14:01.040
<v Speaker 1>happens is we all try to work it out. We

0:14:01.160 --> 0:14:03.880
<v Speaker 1>try to be politely, try to use good manners, and

0:14:04.120 --> 0:14:08.199
<v Speaker 1>the hidden ownership story there is that what we're experiencing

0:14:08.200 --> 0:14:11.120
<v Speaker 1>a personal conflict. But I was experiencing to someone leaning

0:14:11.120 --> 0:14:14.319
<v Speaker 1>into my lap. Turns out to be a highly engineered

0:14:14.360 --> 0:14:18.240
<v Speaker 1>form of ownership that the airlines are using for their profits.

0:14:18.679 --> 0:14:21.760
<v Speaker 1>In the same way that HBO was using tolerated sets

0:14:22.600 --> 0:14:27.760
<v Speaker 1>to build customers, airlines use a different, very advanced tools

0:14:27.840 --> 0:14:32.040
<v Speaker 1>of ownership design, which we call strategic ambiguity str Teachic

0:14:32.080 --> 0:14:36.280
<v Speaker 1>ambiguity is present much more often in your life than

0:14:36.320 --> 0:14:39.040
<v Speaker 1>you realize. And the way the airlines use ambiguity in

0:14:39.080 --> 0:14:42.960
<v Speaker 1>that context is they deliberately keep it unclear who owns

0:14:43.000 --> 0:14:46.560
<v Speaker 1>who controls that wedge of space. They know that we're

0:14:46.600 --> 0:14:49.680
<v Speaker 1>going to all fall back on politeness and good manners

0:14:49.680 --> 0:14:52.400
<v Speaker 1>to story it out and one when that happens. But

0:14:52.520 --> 0:14:55.280
<v Speaker 1>it does is it left them sell that relegis space

0:14:55.440 --> 0:14:59.360
<v Speaker 1>twice on every seat on every flight for you to

0:14:59.440 --> 0:15:03.480
<v Speaker 1>recline and for my needs. So it's extremely profitable for

0:15:03.520 --> 0:15:06.520
<v Speaker 1>the airline. And the reason that these the complicts are

0:15:06.560 --> 0:15:09.240
<v Speaker 1>breaking out today over that wedge of space, the stories

0:15:09.280 --> 0:15:12.880
<v Speaker 1>of planes getting grounded, the viral video, some of your

0:15:12.880 --> 0:15:15.920
<v Speaker 1>listeners may have seen a fight on up in the air.

0:15:16.360 --> 0:15:18.680
<v Speaker 1>So what the airlines are done is they squeeze the pitch,

0:15:18.960 --> 0:15:22.400
<v Speaker 1>the distance between seats down from thirty five inches down

0:15:22.440 --> 0:15:26.080
<v Speaker 1>to just on some planes today, they've made that wedge

0:15:26.080 --> 0:15:29.600
<v Speaker 1>of space a more valuable resource. And whenever any resource

0:15:29.680 --> 0:15:33.280
<v Speaker 1>becomes more valuable, ownership is up for wrapped and they

0:15:33.320 --> 0:15:36.120
<v Speaker 1>realize that you by using ambiguity, they could sell that

0:15:36.160 --> 0:15:40.120
<v Speaker 1>space twice and they can make the business class these

0:15:40.240 --> 0:15:42.960
<v Speaker 1>up front more valuable. They create a market for business

0:15:42.960 --> 0:15:50.520
<v Speaker 1>class by making economy economy of space officially unpleasant. So

0:15:50.600 --> 0:15:53.360
<v Speaker 1>for me, it was that experience of flying that made

0:15:53.360 --> 0:15:57.040
<v Speaker 1>me realize how powerful these ownership stories are in shaping

0:15:57.840 --> 0:16:01.080
<v Speaker 1>every minute of our lives. Every day, all day long,

0:16:01.400 --> 0:16:03.920
<v Speaker 1>we're engaging in these ownership battles and we just don't

0:16:03.920 --> 0:16:07.040
<v Speaker 1>see it. So for me, the AHA moment was seeing

0:16:07.400 --> 0:16:10.360
<v Speaker 1>that that process I was having on the airplane was

0:16:10.440 --> 0:16:13.320
<v Speaker 1>actually an ownership battle. And it turns out of actually

0:16:13.400 --> 0:16:15.800
<v Speaker 1>the simple solution actually news you can use for your listeners,

0:16:16.080 --> 0:16:17.600
<v Speaker 1>which is if you try to pay the person in

0:16:17.680 --> 0:16:20.440
<v Speaker 1>front of you twenty bucks that usually not to recline.

0:16:20.840 --> 0:16:23.920
<v Speaker 1>That often won't work, And if you say just please

0:16:23.960 --> 0:16:26.880
<v Speaker 1>don't recline, that won't work either. But what works three

0:16:26.960 --> 0:16:29.320
<v Speaker 1>quarters of the time, according to one study, is if

0:16:29.320 --> 0:16:31.840
<v Speaker 1>you offer to buy them a snack or a drink,

0:16:32.280 --> 0:16:34.520
<v Speaker 1>they won't recline because then you guys are in it together.

0:16:34.920 --> 0:16:37.520
<v Speaker 1>You're part of a community, and neither of you are

0:16:37.520 --> 0:16:41.440
<v Speaker 1>realizing if the airlines are basically property from that deal.

0:16:42.320 --> 0:16:45.520
<v Speaker 1>But that is actually a practical way to solve the problem.

0:16:45.720 --> 0:16:48.400
<v Speaker 1>From your book, we see that your ownership rules seem

0:16:48.480 --> 0:16:51.440
<v Speaker 1>to be changing at different times. Is there any advice

0:16:51.480 --> 0:16:53.720
<v Speaker 1>you can give to the average person about how to

0:16:53.800 --> 0:16:58.320
<v Speaker 1>make ownership rules work for them? Absolutely? So the key

0:16:58.320 --> 0:17:01.480
<v Speaker 1>first is to understand that it's that ownership is not

0:17:01.520 --> 0:17:04.879
<v Speaker 1>something distant and fancy and something to a lawyer. This

0:17:04.960 --> 0:17:07.680
<v Speaker 1>is such an important piece of what I actually try

0:17:07.680 --> 0:17:09.880
<v Speaker 1>to tell my law students as well. And I said

0:17:09.920 --> 0:17:13.280
<v Speaker 1>this earlier in our conversation. Law is overrated. Ownership is

0:17:13.359 --> 0:17:16.360
<v Speaker 1>up for grabs in your life all day long. It's

0:17:16.400 --> 0:17:18.959
<v Speaker 1>the stories that kids are telling on the playground when

0:17:19.000 --> 0:17:22.040
<v Speaker 1>they're playing over the swing. It's nothing fancier for you

0:17:22.119 --> 0:17:24.320
<v Speaker 1>as a grown up. And this is true not just

0:17:24.440 --> 0:17:27.000
<v Speaker 1>for really big issues like climate change, which we haven't

0:17:27.000 --> 0:17:30.080
<v Speaker 1>talked about, which is an ownership battle, or wealth inequality,

0:17:30.080 --> 0:17:33.960
<v Speaker 1>which more transparently is, but it's very true on sort

0:17:33.960 --> 0:17:37.679
<v Speaker 1>of the employment on what control you have over your jobs. So,

0:17:37.760 --> 0:17:40.359
<v Speaker 1>for example, a lot of people have nondisclosure and noncompete

0:17:40.359 --> 0:17:44.080
<v Speaker 1>agreements in their in their in their contracts people don't

0:17:44.119 --> 0:17:47.160
<v Speaker 1>realize are not enforceable. But once you start to examine,

0:17:47.160 --> 0:17:50.560
<v Speaker 1>like every piece of your life, like, how is it that, um,

0:17:50.720 --> 0:17:52.399
<v Speaker 1>you know people walk around you to the front of

0:17:52.440 --> 0:17:55.240
<v Speaker 1>the Starbucks line, uh to pick up their drinks? Well,

0:17:55.280 --> 0:17:59.080
<v Speaker 1>they have the app. So Starbucks is engineered line waiting

0:17:59.760 --> 0:18:02.240
<v Speaker 1>to basically two different visions of whose first in time

0:18:02.359 --> 0:18:05.520
<v Speaker 1>people simply line up and wait people who use the app,

0:18:06.119 --> 0:18:09.080
<v Speaker 1>and that engineering of lines was on all around you.

0:18:09.280 --> 0:18:12.440
<v Speaker 1>Next time you're standing in line, but it's a long line. Um,

0:18:12.440 --> 0:18:14.640
<v Speaker 1>this may well be an entrepreneur who is actually being

0:18:14.680 --> 0:18:18.840
<v Speaker 1>paid to wait in front of you. So free every day,

0:18:18.880 --> 0:18:20.720
<v Speaker 1>every minute as you go through your day. Once you

0:18:20.760 --> 0:18:24.880
<v Speaker 1>start to notice that, it's very hard, you'll see, um,

0:18:24.920 --> 0:18:26.800
<v Speaker 1>the world in a very different way. And once you

0:18:26.880 --> 0:18:29.879
<v Speaker 1>see it, it's hard to un see it. Once you

0:18:30.119 --> 0:18:33.880
<v Speaker 1>see how ownership really works. My hope is that your

0:18:33.880 --> 0:18:37.240
<v Speaker 1>listeners is that that's part of what empowers them to

0:18:37.280 --> 0:18:40.200
<v Speaker 1>have the tools to be more effective advocates, as as parents,

0:18:41.119 --> 0:18:44.080
<v Speaker 1>but as and as consumers, and also I think that

0:18:44.240 --> 0:18:47.440
<v Speaker 1>citizens Okay works at all those levels. Thanks Michael. That's

0:18:47.440 --> 0:18:51.399
<v Speaker 1>Professor Michael Heller of Columbia Law School. The book is Mine,

0:18:51.840 --> 0:18:55.400
<v Speaker 1>How the Hidden rules of Ownership control our lives. And

0:18:55.440 --> 0:18:57.639
<v Speaker 1>that's it for this edition of the Bloomberg Law Show.

0:18:57.920 --> 0:19:00.280
<v Speaker 1>I'm June Grosso. Thanks so much for listen and eight.

0:19:00.400 --> 0:19:02.919
<v Speaker 1>Please tune into The Bloomberg Long Show every week night

0:19:03.000 --> 0:19:05.760
<v Speaker 1>at ten pm Stern right here on Bloomberg Radio