Would the Absence of Copyright Laws Significantly Affect the Quality and Quantity of Literary Output?
"The greatest constraint on your future liberties may
come not from government but from corporate legal departments
laboring to protect by force what can no longer be protected by
practical efficiency or general social
consent."1
John Perry Barlow
- Introduction
- Patents and Copyrights As Property
Rights - The Case of
Copyrights - Concluding
Remarks - Notes
Patents and copyrights are special forms of immaterial
property that grant to their owners the exclusive right to
control the
production and sale of a specified product–a literary or
artistic work in the case of copyrights, an invention or
productive process in the case of patents. Often these concepts
are subsumed under a broader concept of intellectual property,
but they are not completely analogous and cannot always be
justified with the same arguments. The term intellectual
property also covers some other very different concepts, such
as trademarks. Unfortunately, in recent discussions of these
topics the concept of intellectual property is often used
generically, blurring some important practical
distinctions.
Patents and Copyrights As Property Rights
Although the term intellectual property is
commonly used in the legal field, in economics it is rather
problematic, since it is difficult to justify this type of
property right with the same arguments used to justify property
in tangible goods. According to the economic theory of property
(following David Hume), society benefits from the delimitation
and protection of property rights because goods are scarce. There
is no point in defining property rights over goods when these
exist in abundance. On the other hand, when goods are scarce and
property is communal, they are not used efficiently. Private
property guarantees that scarce goods will be put to their most
efficient and productive uses.
From this point of view, however, it is difficult to
justify intellectual property rights, since these rights do not
arise from the scarcity of the appropriated objects. Rather, the
purpose of an intellectual property right is to create a
scarcity, thereby generating a monopoly rent for the holder of
the right. In this case, the law does not protect property over a
scarce good, since the scarcity is created by the law itself. In
fact, such artificial scarcity is the source of the monopoly
rents that confer value upon those rights. The big difference
between intellectual property rights and titles of property over
tangible goods is that the latter will be scarce even if there
are no well-defined property rights, whereas in the case of
patents and copyrights the scarcity only arises after the
property right is defined.2
Defenders of patents and copyrights often deny that
these property rights constitute monopoly privileges. They argue
instead that the term monopoly is inapplicable in the case
of patents and copyrights.3 While this may be a matter
of semantics to some degree, in any event there is no theoretical
incompatibility between the property and monopoly aspects of
intellectual property rights.
However, in practice, these aspects are closely related,
since the monopolistic nature of patents and copyrights is
precisely what confers economic value upon them. Obviously, like
any other monopoly privilege, patents and copyrights can be
valuable for their owners, though this does not in itself justify
their existence. Clearly, the owners benefit from patent and
copyright protection, but the really interesting question is
whether society at large benefits as well. One important aspect
of this broader issue can be dealt with in reply to the question
posed for this controversy.4
It should be noted from the outset that the term
copyright, as currently used, actually comprises a bundle
of several different rights that have become conflated because of
the use of a single concept to cover the entire
bundle.
The expression used to denote copyright in
Spanish, French, Italian, and Portuguese (derecho de autor,
droit d'auter, diritto d'autore, direito do autor) literally
translates as "author's rights." The concept of author's rights
encompasses a broader range of rights in addition to the notion
of copyright in the narrower sense (i.e., the right to control
reproduction of the work). Such broader rights include the
so-called moral rights
of the author, which view literary and artistic works as
extensions of the author's personality. The moral rights of the
author encompass the following protections: (1) the right to be
identified as the creator of the work (so-called paternity rights
of authorship and protections against plagiarism), and (2)
protections against unauthorized alterations or mutilations of
the work (so-called integrity rights of authorship).
As opposed to mere copyright, these two moral rights of
authorship have always been regarded as inalienable and
perpetual. (A third moral right is also recognized, namely, the
right to withhold publication, which is an aspect of a broader
right to privacy, although it is not always clear whether it
should be regarded as perpetual or whether it applies only to
living authors. Should society be bound by an author's wishes
after his death?)
Opposition to copyright in the narrower sense does not
imply opposition to the moral right of authorship, which is a
long-standing legal concept. Copyright, on the other hand, is a
fairly recent notion that dates from, roughly, the invention of
the printing press. Whether or not the right to control the
reproduction of creative works is viewed as a natural right of
authors, the fact is that prior to the invention of printing this
right was not regarded as implicit in the concept of
authorship.
Copyright law was created by specific acts of
legislation. In fact, every extension of the scope of copyright
law to cover new productions resulting from technological
innovations (such as photography, phonographic recordings of
musical creations, film productions, computer software, and so forth) has
required special legislation to that effect, since these
extensions did not arise naturally from judicial decisions. As
the following extensive quotation illustrates, courts have simply
been unwilling to apply a concept created specifically for the
case of printed books to these new situations:
The concept of copyright is rooted in the technology of
print. The recognition of a copyright and the practice of paying
royalties emerged with the printing press…. Copyright was
a specific adaptation to a specific technology, and to the
problems and opportunities it created. The law recognized that.
The landmark case in the United States was White Smith v. Apollo
(1908). It denied protection to piano rolls or sound recordings
because they were not "writings" in tangible form readable by a
human being. That common law concept of copyright excluded from
protection many new technologies of communication since 1908. But
the motion picture industry, the recording industry, and more
recently the broadcasting industry have persuaded Congress to
extend various protections to them, since courts were not willing
to do so…. However, with the arrival of radio and
electronic reproduction, and now photocopy reproduction, the
concept becomes inappropriate.
There is no easy way to keep tabs on the numerous
reproductions in somewhat variable form that can take place in
innumerable locations with these new technologies. The analogy is
to word-of-mouth
communications in the 18th century, not to the print shop of that
period. Nonetheless, information and publishing industries whose
welfare and survival depends on finding some way to charge for
their information processing services have latched on to
copyright protection under statute law and are trying to get the
courts or the Congress to extend copyright protection to
computerized data, photocopies, and telereproduction.
Though recognizing that in those technologies the
existent copyright law is basically unenforceable, they
nonetheless grab on to whatever frail reed it may provide rather
than turn to the even frailer reed of trying to invent, and to
get into legislation, some entirely new as-yet undevised system
for rewarding the creators of information…. the U. S.
Congress passed a new copyright law in 1976, which was designed
to solve all the new problems of copyright for cable television,
photocopying, and computers. It has solved few if any of
them….
How inappropriate the concept of copyright is to
computer communications becomes evident as we examine how the law
has to squirm to deal with the simplest problems…. the process
of computer communication entails processing of texts that are
partly controlled by people and partly automatic. They are
happening all over the system. Some of the text is never visible
but is only stored electronically: Some is flashed briefly on a
terminal display; some is printed out in hard
copy….
The receivers may be individuals and clearly identified,
or they may be passers-by with access but
whose access is never
recorded; the passer-by may only look, as a reader browsing
through a book, or he may make an automatic copy; sometimes the
program will record that, sometimes it will not. To try to apply
the concept of copyright to all these stages and actors would
require a most elaborate set of regulations. It has none of the
simplicity of checking what copies rolled off a printing
press….
One would like to compensate an author if a computer
terminal is used as a printing press to run off numerous copies
of a valuable text. One would not like to impose any control as
someone works at a terminal in the role of a reader and checks
back and forth through various files. The boundary, however, is
impossible to draw. In the new technology of interactive
computing, the reader, the writer, the bookseller, and the
printer have become one. In the old technology of printing, one
could have a right to free press for the reader and the writer
but try to enforce copyright on the printer and the bookseller.
That distinction will no longer work, anymore than it would ever
have worked in the past on conversation. Those whose livelihood
is at stake in copyright do not like that kind of
comment.
They contend that creative work must be compensated.
Indeed it must…. But the system must be practical to
work.… in an era of infinitely varied, automated text
manipulation there is no reasonable way to count copies and
charge royalties on them…. It may be very unfair to
authors. It may have a profoundly negative effect on some aspects
of culture, and in any case, whether positive or negative, it may
change things considerably.
If it becomes more difficult for authors and artists to
be paid by a royalty scheme, more of them will seek salaried
bases from which to work. Some may try to get paid by personal
appearances or other auxiliaries to fame. Or the highly
illustrated, well-bound book may acquire a special significance
if the mere words of the text are hard to protect. Or one may try
to sell subscriptions to a continuing service….
These are the kinds of considerations one must think
about in speculating about the consequences for culture of a
world where the royalty-carrying unit copy is no longer easy to
protect in many of the domains where it has been
dominant…. it is clear that with photocopiers and
computers, copyright is an anachronism. Like many other
unenforceable laws that we keep on the statute books from the
past, this one may be with us for some time to come, but with
less and less effect.5
The final passages from this long quotation suggest the
intriguing possibility that, in arguing whether authors
should have a copyright over their creations, we may be
posing what will increasingly become a moot question.
Technological developments in certain areas–photocopiers,
video and
sound recording, computer scanning, and so forth–are making
it harder to enforce claims to intellectual property. At some
point, we might just have to give up trying to enforce such
claims.6
But what would happen if copyrights were suddenly
relaxed? Since the main utilitarian argument for
maintaining copyright protection is that it stimulates literary
and artistic creation, it is fair to inquire whether the absence
of legally protected copyrights would significantly affect the
quality and quantity of literary output.
To answer this question, we should note first that most
authors never make much money writing books, and some actually
underwrite the printing costs of their own works. Other authors
are willing to accept payment for their intellectual property in
terms of copies of their work (often in the form of off-prints of
journal articles). A great deal of scientific and academic
writing is of this kind. For many of these authors, writing for
publication is a way to increase their brand-name capital in
order to obtain higher incomes from other activities.
Still other authors are interested primarily in
spreading their views, so they would presumably have no interest
in discouraging the reproduction of their writings, provided, of
course, that their authorship is acknowledged. These authors
would be quite happy if others were willing to reprint their work
at no cost to themselves. The output of this type of writing
evidently would not be affected much by the absence of copyright
protection.
A second type of author writes for a living. If there is
no other appropriate way to reward this person, then the absence
of copyright protection would most likely reduce his or her total
literary output. The real question is whether maintaining
copyright protection is the only way to guarantee an income for
this type of author. Sir Arnold Plant, an early twentieth-century
English economist, believed that authors would find a way to sell
their product if a demand truly exists for it.7
Notice, however, that the mere existence of copyright protection
does not create this demand, it only provides a means to
monopolize a demand once it has been found to
exist.
It is impossible to know a priori what kind of
market structure would dominate in a different legal climate,
though possibly there would be greater reliance on salaried
writers for subscription-type publications with content being
"given away" as loss-leaders to stimulate sales of other
products.8 Moreover, as Pool suggested, there might be
greater reliance on collateral sources of income, such as
personal appearances, lectures, consulting, live
performances,9 and so on. Whether alternative market
arrangements would fully compensate the loss of income currently
derived from copyright is an open question. Best-selling writers
and composers might very well earn less money in a world without
copyright protection. If so, then the quantity of literary
and artistic output would most likely be lower. But precisely how
much lower would be impossible to predict.
Plant argued that the absence of copyright protection
would likely result in a smaller number of titles
published.10 If true, this would not necessarily be
bad, since most people seem to want more good books at lower
prices and not necessarily more titles. Plant held that the
copyright system has a somewhat perverse consequence because it
encourages the publication of a broader range of titles, but not
enough copies of the books people really want to read. Due to the
nature of the industry, a publisher
cannot be sure of the success of a new title, and, in fact, most
titles do not even cover the printing costs. Nevertheless, when a
title is successful it can be quite profitable, and these profits
subsidize the losses from unsuccessful titles.
Since a publisher cannot know beforehand which new
titles will be successful, publishing can be compared to a
lottery. To make money on successful titles, a publisher has to
take a chance on many different titles, most of which will likely
be unsuccessful. Copyright affects this situation by increasing
the profitability of successful titles. In terms of the lottery,
copyright protection increases the prize without affecting, on
the other hand, the risks involved. Ceteris paribus, we
expect that with equal risks, a larger prize will induce a player
to buy more tickets. Therefore, more titles will be published
under a copyright system, but the resulting monopoly position
guarantees that the books people really want (the successful
titles) will be published in smaller quantities and at higher
prices.
Issues related to intellectual property are becoming
increasingly important in policy discussions. Recent
technological developments–such as computer software
(particularly the question of so-called Internet patents) and
biotechnologies (in terms of the "patenting of
life-forms")–have created whole new classes of products
that pose significant problems for the definition and
delimitation of property rights.11 On the other hand,
some of these technological innovations, such as downloadable
MP3 computer
files, are making it harder to enforce even conventional forms of
intellectual property seen, for example, in musical recordings.
The strains and stresses that these newer technologies impose on
current intellectual property law are resulting in calls for
tougher enforcement of existing legal mechanisms.
The United States government has for several years taken
the lead internationally in pressuring other countries to
strengthen their intellectual property laws and make them conform
more closely to current United States standards. In light of such
developments, now is as good a time as any to rethink the concept
of intellectual property rights. Perhaps, instead of proposing
reforms to strengthen patents and copyrights, we should be
moving in the opposite direction?
- John Perry Barlow, "The Economy of Ideas: A Framework
for Patents and Copyrights in the Digital Age (Everything You
Know About Intellectual Property Is Wrong)," Wired 2.03
(March 1994). This document can be accessed at: . - Perhaps the clearest statement of this argument can
be attributed to the English economist, Sir Arnold Plant, from
a 1934 paper titled, "The Economic Theory Concerning Patents
for Inventions," in Selected Economic Essays and
Addresses (London: Routledge & Kegan Paul, Ltd., 1974),
35—36. For more on Plant's economic thought, see R. H.
Coase, "Professor Sir Arnold Plant: His Ideas and Influence,"
in The Unfinished Agenda: Essays on the Political Economy of
Government Policy in Honour of Arthur Seldon, ed. M. J.
Anderson (London: Institute of Economic Affairs, 1986),
81—90. - For instance, Michael Novak, The Fire of
Invention: Civil Society and the Future of the Corporation
(New York: Free Press, 1997), 69, 144. - Though they share many common features, patents and
copyrights provide different types of protection, and they have
quite separate legislative histories. My discussion in the
following section will focus on copyrights and is largely based
on Sir Arnold Plant, "The Economic Aspects of Copyright in
Books," in Selected Economic Essays and Addresses
(London: Routledge & Kegan Paul, Ltd., 1974), 57—86,
and Robert M. Hurt, "The Economic Rationale of Copyright,"
American Economic Review 56 (May 1966): 421—32. A
classic paper by Fritz Machlup and Edith T. Penrose, "The
Patent Controversy in the Nineteenth Century," Journal of
Economic History 10 (May 1950): 1—29, provides a good
introduction to the historical literature on patents. For a
more recent critique of the patent concept, see Pierre
Desrochers, "On the Abuse of Patents as Economic Indicators,"
Quarterly Journal of Austrian Economics 1 (Winter 1998):
51—74. On the general issue of intellectual property, see
the excellent articles by Tom G. Palmer, "Are Patents and
Copyrights Morally Justified?," Harvard Journal of Law and
Public Policy 13 (Summer 1990): 817—65; "Intellectual
Property: A Non-Posnerian Law and Economics Approach,"
Hamline Law Review 12 (Spring 1989): 261—304; and
N. Stephan Kinsella, "Against Intellectual Property,"
Journal of Libertarian Studies 15 (Spring 2001):
1—54. - Ithiel de Sola Pool, Technologies Without
Boundaries: On Telecommunications in a Global Age
(Cambridge, Mass.: Harvard University Press, 1990),
254—59. - We may have already reached this point in the case of
musical recordings. - Plant, "The Economic Aspects of Copyright in Books,"
61. - This is the business model underlying contemporary
journalism, which essentially hires staff writers to help sell
the main product: advertising. There are many other examples of
this type of arrangement. For instance, early radio
broadcasters were subsidized by radio manufacturers, who were
willing to lose money on broadcasting to stimulate demand for
radio sets. Incidentally, it seems to me that this example
describes well how the market would solve the problem of
computer software in the absence of copyright. It is often
claimed that if software could be copied freely, then software
developers would have no incentive to create it. Note, however,
that hardware manufact-urers would have an incentive to
support software development (and, perhaps, even give it away
for free), since the availability of more and better software
increases the demand for hardware. - In the case of music it is interesting to note that,
prior to the development of the phonograph, copyright over
music applied only to sheet music; i.e., it did not extend to
the musical performance. It is an open question whether the
gradual extension of copyright to cover not only musical
recordings but any kind of public performance, has
resulted in increased quantity and quality of musical
composition. In any case, if musical recordings could be freely
copied (which, in practice, increasingly happens to be the case
now due to the development of MP3 computer files), musicians
would still have an incentive to compose and record music to
stimulate the demand for live performances. - Plant, "The Economic Aspects of Copyright in Books,"
72, 80. - On patenting life, see John H. Barton, "Patenting
Life," Scientific American 264 (March 1991):
18—24. As for Internet patents, recall that in October
1999 Priceline.com sued Microsoft's
Expedia group for infringement of its patented "name your own
price" auction system, while Amazon.com, the leading Internet
book retailer, sued its main rival, Barnes&Nobel.com, for
infringement of its patented "one-click" ordering system. See
Kevin G. Rivette and David Kline, "Discovering New Value in
Intellectual Property," Harvard Business Review 78
(January-February 2000): 54—66.
Julio H. Cole
Professor of Economics Universidad
Francisco Marroquín. Guatemala