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2.26.2004
The Wealth of (Creative) Nations
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A new and interesting-looking book is described on the AEI website -- Poor People's Knowledge: Promoting Intellectual Property in Developing Countries.
According to the blurb: "This book is about increasing the earnings of poor people in poor countries from their innovation, knowledge, and creative skills. . . . The contributors' motivation is sometimes to maintain the art and culture of poor people, but they recognize that except in a museum setting, no traditional skill can live on unless it has a viable market. Culture and commerce more often complement than conflict . . . . "
It sounds like more support for the view that property rights and markets are important instruments for the promotion of culture as well as wealth.
posted by James DeLong : 2/26/2004 04:49:54 PM
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2.24.2004
2.19.2004
Et tu, Glenn?
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Glenn Reynolds, the 800-pound gorilla of conservative bloggers, sympathizes with a New Jersey woman who is suing the RIAA for enforcing its copyrights against unauthorized downloaders.
He does not address the pragmatic question: what is the alternative? If music is not protected so it can be sold in a marketplace, then how will a continuing flow of professional-quality product be provided? The "let them sell T-shirts" approach is risible; the numbers for the "give concerts" approach do not add up; and the compulsory licenses idea dissolves under scrutiny, as discussed in a nice recent paper by Professor Robert Merges.
The RIAA execs hate suing people. Nor do they enjoy getting pummeled from both left and right. If anyone gives them a viable option, they will seize it. But no one has. So their strategy has to be to maximize availability of legitimate downloading services and at the same time raise the costs of illegal downloads.
And, really, what is the objection to this? The alternative is to destroy the music-production system, and it is unlikely that fans would find that to their liking.
posted by James DeLong : 2/19/2004 02:28:16 PM
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Eldred and Economics
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Professors Stan Liebowitz and Steven Margolis, who have done fine work on the intricacies of network issues and the Microsoft case, have published an analysis of the amicus brief filed by a pack of economists in Eldred v. Ashcroft (last year's Supreme Court decision on the extension of copyright terms).
Their conclusion: "There are important aspects of the economics of copyright that were ignored or not fully considered by the Eldred economists. They overlook factors, such as the elasticity of supply of creative works, which might reverse their conclusion about the impact of copyright extension on the creation of new works. They neglect the possibility of network effects in the market for derivative works that might make a copyright commons uneconomic, independent of any impact on supply. Finally, they avoid the difficult empirical work that would be needed to provide an answer to the question they entertain."
Read it: Seventeen Famous Economists Weigh in on Copyright: The Role of Theory, Empirics and Network Effects (AEI-Brookings Joint Center for Regulatory Studies, January 2004).
It is a nervy piece, considering that the brief was signed by some of the true big-foots of the profession, but it is also an important one. I admit to an interest here; I was feeling lonely because of my criticism of the economists' brief in a PFF paper last year, Intellectual Property in the Internet Age: The Meaning of Eldred (see pages 13-15), and I am happy to have company, especially because my lawyer-based treatment lacks the elegance of Liebowitz and Margolis.
posted by James DeLong : 2/19/2004 09:44:36 AM
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2.18.2004
Civility, in an IP debate? Hah!
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I spoke too soon when I said, last week, that civility has broken out in blog exchanges about the Free Culture Movement. Larry Lessig is seriously irritated with my comments. He says:
"But here's the real question. Do these DC types (a bit of bit-head thinking, I agree, but sometimes it is necessary) really just not read? Or is this willfulness inspired by the belief that their funders don't read?
"And Mr. DeLong: If you'd like to debate this in a context where misstatements can be corrected directly, I'd be honored to debate you. Obviously, that would have to be an 'open' context, where people were "free" to disagree with you and quote you without your permission. I hope that isn't too communistic for your taste."
I feel similarly aggrieved - "How can he say that? Clearly, he fails to appreciate the true subtlety and nuance of my thought!" And I have accused the FCM folk of themselves being bit-headed. (The familiar logical argument, "You're another!") So I think a debate would be a fine idea.
PFF has its annual Aspen Summit coming up from August 22-24, and we will certainly invite Professor Lessig to come and discuss these matters. But that may be too long to wait, so we will also see if we can set something up on one coast or the other before then.
I suspect that we will find that we have some common ground, and some areas of sharp disagreement, and bringing these and the reasons behind them into focus would be useful.
posted by James DeLong : 2/18/2004 04:47:47 PM
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2.11.2004
More FCM
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Kevin Werblach's blog this morning has some interesting additions to the dialogue over the Free Culture Movement. Something unusual seems to be going on here -- a serious outbreak of civility in an Internet discussion.
posted by James DeLong : 2/11/2004 11:52:36 AM
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2.10.2004
More on the Free Culture Movement
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Kevin Werbach takes issue with my post yesterday on the Free Culture Movement, arguing that successful open source projects are indeed based on property rights because they depend on well-defined software licenses.
His point has some merit. The open source movement has several branches. Some of these are hospitable to a regime that is partly private and partly public, a rough analogy to the physical world, in which we depend on a mixture of private lands and a commons infrastructure of roads, communication rights-of-way, and other public facilities. In the software area, the Berkeley Software Development license would fall into this camp.
Other parts of the movement are not hospitable to property rights. The Free Software Foundation is dedicated to the idea of using property rights in the form of the "copyleft" General Public License to undermine copyrights in proprietary software -- a sort of ju-jitsu trick.
Lessig's Creative Commons is a neat attempt to bridge these gaps, providing licenses for every ideological taste. It is a very useful enterprise.
In my view, the Free Culture Movement in general tends to be overwhelmingly tilted toward the FSF view and much too little inclined toward the BSD. Nor does it recognize the importance of property rights in spreading ideas and culture, a point made in a recent article by R. Polk Wagner. However, I would be delighted to be proven wrong in this judgment of the FCM.
I take umbrage at Werbach"s characterization of me and my ilk as "copyright maximalists." It is clear as a matter of historical experience and common sense that property rights get cut and trimmed to fit the technological and transaction-cost realities of the age. This is inevitable and proper -- my book Property Matters: How Property Rights Are Under Assault and Why You Should Care (1997) devoted several chapters to this theme. (You can buy it for a buck and a half on Amazon.) Harold Demsetz looked at this issue in his classic 1967 article, Toward a Theory of Property Rights.
The Internet is creating new technological and transaction-cost realities, and property rights are getting cut to fit, sometimes with a razor and sometimes with a meat-ax. This is both good and bad, and I have been on both sides of the issue. For example, I have defended both the music industry and the music downloaders within the space of 1,000 words, which is a pretty good trick.
Take another example: Should I have linked to the Demsetz article in the above paragraph? It is a link to the American Economic Review, which is a copyrighted publication. My view is that if Google finds it, I can link to it. If the linkee does not want this, it has the responsibility of protecting itself. The transaction costs of any other property regime are too high. In the Montana of the 19th century, the farmers had the responsibility of fencing their fields to keep the cattle out; it was not the ranchers' duty to fence in the range. I am also influenced by fair use considerations in the context of a political discussion, and by the impossibility of accessing the article even for payment. But the AER might take a different view of finding my cattle in its field.
Finally, contrary to the claims of the FCM, the trend in copyright has not been a one-way road to expansion. As a former Register of Copyrights pointed out:
"During the past 90 years, to solve political controversies and to hand out economic freebies to sympathetic supplicants, Congress has sweet-talked authors into giving up their right to say yes or no to a use of their works -- the essence of a property right -- in exchange for a longer term. A long list of special pleaders now gets free use of copyrighted works, including small businesses, veterans' groups, bars, scholars, restaurants, fraternal groups, marching bands, Boy Scout troops, nursing homes, libraries, radio broadcasters and home tapers. Another long list of powerful industries gets to use copyrighted works in exchange for a small government-set fee, whether the author likes it or not: cable and satellite companies, record companies, juke-box operators, public broadcasters and, most recently, Internet companies."
(Ralph Oman, Letter to Editor, Washington Post, March 11, 2002, p. A20.)
The FCM should be making important contributions to the process of redefinition, but so far what we hear from it is why property rights are bad, in whatever context happens to be under discussion at the moment, except, perhaps, for the spectrum problem mentioned by Werbach. The FCM should be on both sides of the issue - "here is where rights should be trimmed, and here is where they should be expanded."
posted by James DeLong : 2/10/2004 10:42:14 AM
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2.9.2004
Copy Left (continued) OR The Free Culture Movement
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The story so far: On January 25, the NYT Magazine ran an article by Robert Boynton called the "Tyranny of Copyright?" which lauded Professor Lawrence Lessig of Stanford and various other members of the "free culture movement," aka "the Copy Left."
Now, Professor Lessig has blogged two "important quibbles" about what he regards as "an otherwise great article":
- The division of credit; Lessig thinks the article makes too much of his former home, Harvard, and not enough of contributors from other places.
- Lessig characterizes as "silly" the article's use of the term "Copy Left" because "the movement" is not of "the [political] Left." Nor does this capture the meaning of "copyleft," the term coined by the Free Software Foundation.
Lessig also notes that PFF "launched an attack on 'the movement.'" Bill Adkinson of PFF did make what we would prefer to call a comment, but let that bide, since Lessig does not address its substance.
Today's Episode: Those on the other side of the Free Culture Movement care little who gets the credit or blame for it, but the question of its political orientation is a fascinating one.
The FCM does not think that production and consumption of intellectual creations should be organized by property rights and markets. Instead, it favors a mechanism of production based on the open source software movement, in which software is made available at no charge, and is also freely modifiable by the world at large. When asked how the producers of intellectual products would be funded, the FCM talks of patronage, government subsidy, taxes on hardware with subsequent distribution to creators, provision of services related to the creations, and advertising.
Realistically, since so much of the FCM is academically-based, a further answer is redistribution from tuition-paying parents and university endowment funds. (I can't resist noting that one of the most valuable pieces of property one can have in the contemporary U.S. is a tenured chair at a major university. It is worth a couple of hundred grand per year, most of the teaching is off-loaded onto untenured peons, you can work on what you want, and you won't be fired, except, perhaps, for supporting a political conservative.)
In the end, because the other methods are insufficient, under an FCM regime most funding would have to come from government support, either through subsidy or through taxes or fees that are then redistributed according to government-mandated formula.
In my view, this combination of hostility to property rights and markets plus faith in government management is the defining characteristic of the political left. But I do not really care about the label. Whatever you call it, it is a bad idea.
Nor was the NYT article "great." It was a piece of vapid incoherence. It threw into one big stew issues of economic support for creativity, freedom of political debate, the interactive nature of artistic endeavor, and issues of "fair use." It accepted the exaggerations and obfuscations of the FCM as gospel. It cited Linux as a general model, despite the reality that Linux is the product of its own specific context, and is not a model for much of anything, including software. It failed to distinguish, except in one throw-away phrase, between the many different types of creative products - music, movies, software, games, books, magazines, newspapers, and academic journals - all of which present distinct issues.
There is no doubt that the FCM is raising some real issues, and pointing to some real problems. But, IMHO, the fact that it is in fact politically motivated detracts from its ability to develop solutions to those problems. And yes, I think it is indeed of "the Left," in the sense that it is opposed to property rights and markets, and would ultimately, in effect if not by intent, undermine the human freedom and economic progress that depends on these institutions.
posted by James DeLong : 2/9/2004 12:25:54 PM
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2.4.2004
Copy Left: The opposite of copyright
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On January 25, the New York Times Magazine published a piece by Robert Boynton on "The Tyranny of Copyright" (available for a fee). It is an admiring report on the academic "Copy Left" - especially its principal spokesman, Stanford Professor Larry Lessig - and describes their "fear that the United States is becoming less free and less creative" due to the expansion of copyright.
As I argued in an earlier piece, this depiction is utterly at odds with reality. In recent years, creativity, personal expression, and communication have all expanded beyond what we ever could have imagined, largely as a result of the digital revolution - especially the Internet. The ease of obtaining and disseminating information is nothing short of amazing.
In order to make their case, Lessig et. al. basically argue that things are going to reverse quickly and radically. For example, Boynton recites a list of the "copyright horror stories" designating the legal actions brought by the record industry against those illegally distributing files as "the most publicized." Even efforts to sell music online are viewed with dread. Boynton reports that:
"The Copy Left sees innovations like iTunes, Apple's popular online music store, as the first step toward a society in which much of the cultural activity that we currently take for granted - reading an encyclopedia in the public library, selling a geometry textbook to a friend, copying a song for a sibling - will be rerouted through a system of micropayments in return for which the rights to ever smaller pieces of our culture are doled out."
But there is no mention of how this parade of horribles might happen in reality. One might think a serious, skeptical journalist might ask, but Boynton does not enlighten us.
Boynton makes much of Lessig's concern that copyright terms are too long. But Internet piracy has shrunk the effective copyright period to zero for the large and growing number of people using P2P systems. Copy Leftists don't want to discuss the narrow issue of stealing music; such copying cannot be seriously defended in the name of creativity. But at bottom, they seem to believe that people are entitled to obtain works for free, immediately.
Or more precisely, they are unwilling to accept any limitations on how content may be obtained or used, even limitations that are necessary to preserve the right of creators to have a meaningful opportunity to market their work. Rather, they seek to protect the free and illegal distribution of movie and music files on the Internet, unfettered by iTunes minimal constraints or even a price tag. They often invoke comparisons with an analog world in which technological limitations largely restrained infringement. Limited restraints to reign in piracy will leave consumers with a wealth of new opportunities.
And such limited restraints are essential. Copyright is designed to be the "engine of free expression," it promotes creativity by giving authors incentives to invest time and effort and money in creating new works. To fulfill this vital role, copyright laws must give creators effective means to protect these rights. (Indeed, the New York Times clearly recognizes this, copyrighting its works and demanding payment for use.) Most important, consumers as a group benefit from a system that eliminates free-riding, enabling the cost of a work to be spread over as many users as possible. (For more on this, see Jim DeLong's testimony last year.) And even a system of micropayments, enabling market transactions, can benefit consumers, vastly increasing both availability and convenience of works they want. (Randal Picker's article discusses these possibilities.)
Copy Leftists suggest, contrary to this tradition, that copyright is being used to inhibit creativity, for example by delaying the ability of authors to benefit from ideas. But this is nonsense - ideas are not protected by copyright at all and may be used immediately. More generally, Copy Leftists seem unwilling to recognize the enormous public value from works available for a price under copyright, including consumer surplus.
But apparently the Copy Left does not care much for mass markets in content anyway. Yale Professor Yochai Benkler says that TV has "narcotized us," and emphasize that people are "interactors" who don't just buy goods and consume. Efforts to make content markets more efficient at serving consumers are unlikely to satisfy Professor Benkler.
Benkler's vision may be seen as elitist, utopian, or prophetic. But the fact remains the vast majority of us (well, me anyway) are overwhelmingly consumers of culture, enjoying the works created by those willing to invest their talents and money in creating music, movies, games, and other forms of digital entertainment products. The Copy Leftists are entitled to their vision. But they should not be permitted to undermine the copyright system that enables the rest of us to enjoy a cornucopia of entertainment and cultural works.
posted by Bill Adkinson : 2/4/2004 11:26:03 AM
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2.2.2004
Super Bowl (c)
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When I could last until the end of a Monday Night Football game, I remember being treated to dramatic readings of the NFL's restrictions on the use of the broadcast. Apparently they meant it. The NFL is reportedly sending cease and desist letters to organizers of large Super Bowl parties taking place in Las Vegas hotels and elsewhere. The NFL says these "pay-per-view" events violate the copyright laws.
Why is the NFL being a party-pooper? Well, some believe this is an effort to disassociate itself from the gambling at the Vegas locations. But the NFL says the chief concern is that the Super Bowl not become a pay-per-view event - and that the people drawn from their homes to these events are not counted in the Nielsen ratings that determine the advertising fees the NFL receives. Oh, of course. Show me the money.
The NFL's hard line may seem a bit extreme. But is a useful reminder of a basic economic principle: You get what you pay for. The NFL is paid to bring (Nielsen-counted) eyeballs to ads, and its incentive is to maximize that count. This is an inherent limitation on the business model for this broadcast (and others) - free content financed by paid advertising. It illustrates why simply "finding a new business model" to compete with free content on the Internet is a poor answer to today's piracy problem. The best way to get content providers to provide opportunities to enjoy excellent content in convenient formats is to promote effective markets for such rights. Consumers will get what they pay for.
posted by Bill Adkinson : 2/2/2004 08:14:50 AM
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