Information Landmine

"The Americans keep telling us how successful their system is. Then they remind us not to stray too far from our hotel at night." - An un-named EU trade representative quoted during international trade talks in Denver, Colorado, 1997.

Friday, November 17, 2006

So why have we got to sign the petition?

It's a well-known fact around Wetherspoon's in Newcastle that, as soon as I've had a few drinks, there's a more than fair chance that I'll start whining on to whoever will listen abou the evils of the current intellectual property regime. This is a fairly odd habit, although people seem to be remarkably tolerant. I occasionally try to imagine what I'd do if I had a friend who, at the slightest alcoholic inducement, continually tried to explain why the evils of the world could be most clearly understood through the prism of, say, tax law: the results are not pretty. In an effort to curb my IP habit (or at least minimise the coincidence of my alcohol habit with my IP habit), I'm going to try and confine myself to these expalantions on the blog, so that family and friends can just take them or leave them, and when we're down the pub we can all just get back to talking about how much we hate R Kelly. This first installment's going to be specifically about term extension for music performance, but then I'm going to have a go at some more general themes.

Before I start, I'd just like to say that, whatever may follow, I'm a real fan of intellectual property in its place. In the same way that you can be in favour of national defense, but against the military industrial complex, I'm for IP. The problem, as with national defense, is that IP tends to beget concentrations of power that try to influence the state (and usually succeed) in ways that seem obviously socially harmful - what economists call regulatory capture. The massive extension of IP rights in every country for the last century or so (example) is less a deliberately thought-through policy on behalf of governments and much more an instance of a few special interest groups pushing really hard for legislation that benefits them. Certainly it's got nothing to do with democracy in the sense of being a policy that the majority favours.

Sound recording extension is a great example of this. Mainly, it's just bad economics. People on the right hear the "property" bit in intellectual property and immediately assume it's a good capitalist institution and that we probably need more of it. There's an argument to be had over some aspects of IP in these terms (although it's probably fewer than you'd think), but in the case of copyright extension that's just plain wrong. Milton Friedman and friends provided a brief explaining just how ludicrous an economic proposition copyright term extension was in Eldred vs. Ashcroft (the trial where the Supreme Court considered the question of whether term extension was unconsitutional in the USA). As with a lot of IP questions, the nice thing about this issue is that both statist pinkos and rabid free marketeers should be able to hold hands and agree about something.

The economic idea behind copyright is that certain sorts of information are socially valuable, but there isn't enough incentive to create them in the market. So we create a monoploy right on those goods in order to encourage their creation. Like all monopolies, this makes things more costly to society at large; 50 Cent cds would cost slightly less than that if any record company could burn his music to disk free of charge, because there'd be genuine price competition to see who could supply it cheaper. The point is that if 'Fiddy' and those good people who help him in the studio weren't getting their cut, they might feel less inclined to foist their musical creations upon us, and that, apparently, would be a social loss (I find this line of reasoning works better if you think of Kanye West, but his name doesn't lend itself so nicely to the price war pun). The monopoly price from copyright that allows the record company to charge so much more than the price of production is essentially meant to be the incentive that makes people write music in the first place.

The idea is that longer copyright increases incentives to create. That's true in theory, but, if you stop to think about it, almost wholly insignificant past a certain point. Imagine you're a talented young musician, deciding whether you should commit that tune you've got in your head to immortality in the studio, or just go and get a job at Kwik Save. It's at least plausible to assume that you might factor the amount of money you could make into this, but it seems unlikely that you'd make that decision based on whether you thought you'd still be getting royalties fifty years into the future: "Hey, if this is still a hit fifty years from now, I won't be getting paid. Sod it, guess I'd better go with Kwik Save." The proposal is to extend the term from fifty years to life plus seventy. I fail to believe that there is a song in history that wasn't recorded because someone honestly thought: "Well, in the event that this thing is a monster success over the course of the next century, it's very possible that my as-yet-unborn grand-kids won't get any royalties." So the social gain in terms of added incentive to create music is tiny, particularly when you consider the shelf-life of the vast majority of recorded music: very few artists could honestly expect their songs to be making money two years down the line, so the issue of three-quarters of a century is going to be almost completely irrelevant to them. Whereas the social loss in terms of music that remains over-priced is huge. What's particularly ludicrous is they want to extend the term retrospectively: to do it for songs that have already been written - if we've already got the stuff, it seems a little silly to try and provide incentives to create it.

The other economic half of this question is the amount of new creativity that public domain music might generate. As stuff starts to slip into the public domain, you can imagine a lot of internet-based business models that could make money off providing interesting ways to access public domain material - think Napster but legal. There's also the issue of new music and sampling. Having to clear rights on samples means that only those with record company backing can legitimately participate in the sampling game - that's a whole load of music that isn't being made because we've decided that we need to keep up incentives for the stuff we've already got. Again, poor economics.

There are also some free speech issues I'd like to attack, which sort of bleed into the idea that a recording is its creator's baby and should be his to do whatever he likes with for all eternity. This thing seems quite long enough already though, so I might leave that for another time.


Blogger Steve said...

The first Two Laws of Wetherspoons are that (1) after a few drinks you'll start up on Intellectual Property and that (2) even before any drinks at all I'll start up on cycling!

The latter of the two supersedes the old law that used to state that after one or two drinks I'd start up on my doomed love affair with Rikke Barnholdt Hansen. That's progress!

19 November, 2006 13:42  
Blogger Uncle Petie said...

Perhaps one day I'll get over the way the intellectual property system's let me down and then we'll both be cured.

20 November, 2006 02:45  
Anonymous Jex said...

Whilst I suspect you have too much time on your hands, I am liking the blog alternative, not being the most frequent attendee of Newcastles's weatherspoon. Also find your written word a lot easier to follow than your spoken. And that's when you're sober. I signed your petition.

22 November, 2006 13:13  

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