Wednesday, 21 April 2010


I've been arguing a bit with Peter Cresswell about copyright. Farrar has found it interesting enough to hoist some of my comments up onto Kiwiblog, so I might as well flesh things out here.

Peter takes a strict property approach: Copying is theft just as much as stealing a car is theft. It robs innovators of the fruits of their innovation, thereby reducing the incentive ever to create new works.
My ideas are my property. Steal the form in which my ideas are expressed or made con­crete, and you’re a thief.
You say-or, at least, your saccharine ditty says, that no-one is worse off if copying is allowed?
Well yes, we all are. We are worse off by the lack of new ideas produced and made concrete in the form of a book, or a CD, or a patentable invention.
Without copy right protection, you load the cost of production onto musicians, writers, artists and inventors, while all the benefits that would have and should have accrued to these producers go to instead to the thieves.
Copy my new kind of bicycle with out my permission, for example, and you take away from me all the benefits I’d hoped to derive from the invention of my new bicycle. Take away all the benefits that all the inventors of new bicycles hoped to derive from their invention, and pretty soon you have no new types of bicycle at all–-and, if the process continues across all fields of endeavour, eventually no new inventions at all, and no more technological progress.
Why would any one continue to produce new music, write new books or invent new things under such a set-up? Why would any one support such a set-up–unless they wished them­selves to steal?
There are two arguments here. First, there's a moral case that copying something is theft. Second, that copyright is necessary for innovation.

Let's take the second claim first. The economic literature on copyright largely follows seminal work by Landes and Posner. We first note that copyright has never been an absolute: the duration and scope of protection is not infinite. We're always trying to pick the scope and duration of protection that best balances the interests of creators of new content and social welfare. The level of copyright protection that maximizes social welfare, even in the long term, will always be lower than the level of protection that best protects new producers' interests because we can always view royalties for existing products as rents and consumers enjoy a bundle of existing and new works. Optimal protection won't be zero, as then future production is attenuated too strongly.

Surprisingly, though, the level of protection that best protects the interests of those creating new intellectual property also isn't infinite. If copyright protection were infinite in scope and duration, it would be impossible to produce new works as new works always draw on some prior art.

Finally, whenever we're trying to decide whether we ought to expand the protection given to newly created works, we ought never extend that extension to already created works as doing so has only second order effects on new creation (by increasing the expectation that, at some point, the protection given to newly created works might also be extended) but first order negative effects on consumer welfare and on the costs of new production.

If copyright isn't an absolute, then we're left choosing some best point. There are a couple of obvious points to look to, as noted earlier: the level of protection that maximizes welfare and the level of protection that would be chosen by a new creator who is balancing the costs of new creation against the returns he can draw from his creation.

Both of these points, I would argue, involve less protection than the level of copyright that we currently enjoy. A lot of new innovation is being hampered by the scope of current copyright protection: the Grey Album as case in point. Current levels of copyright protection instead seem chosen to best advance the interests of firms with very large back catalogues of characters and content. Whenever the duration of copyright seems likely to have Steamboat Willie fall into the public domain, the duration of copyright is extended, even though conferring protection to already existing works only confers rents.

If I had to pick, I'd aim at a point somewhere between the point maximizing social welfare and the point maximizing new producers' interests, but I'd never go to the right of the latter point.

Because copyright protection has never been absolute, the moral arguments just aren't clear-cut to me. Stealing somebody's car: that's obviously theft. It's obvious that copying a CD instead of buying it, conditional on that you would otherwise have bought it, is some form of theft. But what about an artist copying another artist's riff? What makes the song the perfect moral unit deserving of protection, but the riff or hook unworthy? If the riff or hook is morally worthy of protection, how much of the canon of pop music would disappear in a whiff of threatened litigation? Should Pachelbel's heirs be collecting royalties from everyone who's used that chord sequence? Wouldn't we then well imagine that every single artist would prefer, from the original position where they don't yet know whether they'll come up with really cool new riffs or great songs that build on existing riffs, to be in a world of less protection?

Peter argues reducing the scope or duration of copyright is morally and economically wrong. It then certainly seems odd that both Mises and Rand were able to publish their works under the morally abhorrent and economically ridiculous term of twenty-eight years protection with possibility of further twenty-eight years extension, rather than the current morally pure and economically sound life of the author plus fifty years (for literary works). I have a hard time seeing why reducing protection to that which once was in place is morally illegitimate.

Peter sensibly argues that the creative innovator deserves to enjoy the fruits of his creation - and I'd agree - but some portion of those returns come from the artist having free access to the existing body of common culture. Again, on moral grounds rather than economic, how can it be right that Walt Disney Productions and Tim Burton get to take the Alice story from what's now the commons and enjoy greater protection applied to their movie than Charles Dodgson ever enjoyed from his original book? I rather liked Tim Burton's remixing of the Alice story into something wonderful and new, and that remix wouldn't exist if Burton and Disney couldn't earn a return from it. But Walt Disney will lobby for the rest of its corporate life for the extension of the term and scope of copyright such that some other re-mix artist a hundred years from now won't be able to mash up scenes from this version of Alice with something currently unimaginable to make a new work every bit as creative as what Tim Burton achieved. That future work will fail to be created, and unnecessarily so.

If I were to make a moral case rather than an economic one, I'd ask what level of copyright protection musical and other artists would prefer, behind the Veil, knowing that they will draw on others' work while creating new works. There will be some level of protection we could reasonably imagine as having drawn consent behind the Veil. I think that also coincides with the "no further than" position I'd listed above, and I'm reasonably convinced that such a position also involves less protection than we currently have.

The Veil level of protection would be the default around which others could contract under Creative Commons for stronger or weaker protection, recalling one of the important features of Creative Commons: I can restrict the future use of my works to works placing no stricter restrictions on its use that I've placed on mine. So if I want stronger than the default protection, I'd better not be drawing from any works that have a lower level of protection and that restrict against such use. We'd then treat works in the commons as having the default level of protection with proviso that no more than the default is permissible in derivative works. If I were building a case based mostly on moral rather than economic arguments and that didn't worry overmuch about implementability, it would be the above. I'd think that Peter might agree with most of my Veil case, barring the proviso on works in the commons.

If I were to make an economic case that worried about implementability, I'd drop the proviso as largely unworkable, target a default point slightly less than the Veil level, and restrict the upper bound of the range of Creative Commons licences to some maximum strictness not far to the right of the Veil level to balance welfare considerations against creator interests. I'm not set on this particular formulation, but it seems roughly right.


  1. on a similar note, do you think software patents stifle competition in the software industry.

  2. @Moatz: I really don't know enough about software patents to comment. I've read a few things about the patent armories some of the big companies have been amassing, mostly defensively, so that they can countersue against another big company pulling a patent case against it. But I've not seen anything particularly comprehensive on it so I don't know how big a problem it is.