We now return from that detour to our regularly scheduled blogging.
From the trenches of the intellectual property debate, Peter planted a flag: over expansive intellectual property regime has gone from glorious property as usual to inglorious taxation by regulation as usual.
The terms of this debate are set in an economic-theoretical frame. This frame attempts to create a commensurable value scale where there isn’t one, but provides something useful in the meantime.
I’d like to suggest that copyright in particular is where the problems with this point of view become more acute.
What do we gain by allowing filmmakers to have the legal right to restrict the copying of their creation?
If enforced perfectly, it would mean that no one would view the film at all unless the filmmaker allowed it; in a market setting this would generally mean unless the filmmaker was paid. So the filmmaker can ex ante expect that if a lot of people want to see the film, he will make a lot of money. This encourages him (or more likely, a studio which is able to pool the risk across many films) to invest more in the film; hiring better known actors, creating more detailed sets, and so on.
What is the value of this extra investment? The logic of econ says that the value is equal to the extra amount that people are willing to pay. But this is the problem with forcing commensurability where there isn’t any. Say that in the absence of a mechanism for forcing people to pay if they want to access copies of a film, people would spend more time outdoors with their families (a common accusation made about the effect of TV in particular). Surely time spent with our loved ones is more valuable than time spent watching movies or TV?
The example is tongue in cheek but meant to provoke some thought about what, exactly, it is that we are seeking to protect, when we seek to protect copyright with criminal prosecution and extreme measures like civil asset forfeiture.
Now, I like Eli’s pragmatic approach taken up here—it makes use of the valuable concepts from economics, but its assumptions about value are very minimal. On the latter score, it is mostly just respectful—Eli acknowledges (implicitly) that there are people in the film industry, as well as economists and intellectuals, who value the products being created under the current copyright regime and fear that reform would threaten those products. Using some very minimal assumptions from economics, he shows that we could radically reduce copyright terms and expect only very small changes in the income of rightsholders.
What I like about this argument is that it doesn’t appeal to the authority of Economics or Truth but instead respects the values of the other side and uses the tools of economics to attempt to persuade them. Tools are meant to be used—they are not meant to be all encompassing theories of everything.