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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.


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Maybe the King Family Never Heard of Fair Use

The King family wants to sue people who are using Dr. King's image in conjunction with the recent election. Here's the story.

The fact that a lot of money is possibly at stake is irrelevant. If J.K. Rowling wrote a best seller that had a quote from an obscure author, would he have a right to sue for a piece of Ms. Rowling's royalty action just because she cleaned up financially, thanks only in part to her copyright monopoly? The monopoly formerly known as intellectual property is all about getting a piece of someone else's action by using the State, an institution rightly termed by Mr. Libertarian, Murray N. Rothbard, as "the biggest mass murderer, armed robber, enslaver, and parasite in all of human history." He couldn't have called it the biggest monopolist in history, because it's the only monopolist in history.

Promoting the Arts, or the Lawyers?

Here's the disturbing story.

Why the Movie Glut?

Today's Wall Street Journal has a front page article, "Glut of Flilms Hits Hollywood", about why so many money losing movies have been made lately. Donald Starr, chairman of Grosvenor Park, a film financing company, says: "The amount of sales that these films generate is just too small to be worth it. In any other business, if something doesn't make back its price, you stop making it. But for some reason in the film industry we keep making more of these movies."

The reason Mr. Starr is searching for was identified by the economist Arnold Plant in a classic 1934 article on "The Economic Aspects of Copyright in Books." He pointed out that the copyright regime has the perverse consequence of over stimulating the production of books people don't want to read. Publishers use the monopoly profits earned from successful books to fund the production of their duds. The same thing is true for any other part of the copyright industry, including films. An excess of small indie films get made, which don't earn their opportunity cost of capital. The other side of the ledger is that a small number of films (e.g., Titanic) and film stars (hello Leonardo Di Caprio), and books (e.g., the Harry Potter series) and authors (hello J.K. Rowling) earn far more than they would in a free market.

Julio Cole wrote an article on copyright discussing Plant's work "Controversy: Would the Absence of Copyright Laws Significantly Affect the Quality and Quantity of Literary Output?"

The solution is to abolish the copyright raj. Hey, maybe that would play in Bollywood.

The Rise in American Agricultural Productivity

In Against Intellectual Monopoly, Michele Boldrin and David K. Levine point out that the great rise in American agricultural productivity after 1930 took place when patents were not granted on plant life, especially in the case of corn. Corn varieties were patented only starting in 1974, almost half a century after the great ag productivity boom began (pp. 55-56). They state that better hybrid strains were the primary driver in the farm belt's boom.

The economic historian John Gordon Steele points to another factor in what he calls "The High Price of Farm Productivity" (scroll down a bit): Henry Ford's introduction of the Fordson tractor, which by 1922 cost less then a team of good horses. By 1930 the only farmers using horses were the Amish.

In 1900, a third of U.S. cropland was used for fodder crops; by 1930 it was used mainly for making human food. I don't know which affect was more important, but surely they both were influential.

Here is John Gordon Steele's economic history of America, An Empire of Wealth.

The Growth of Fan Fiction

Stephanie Meyer's best selling Twilight Series has become "the first social networking best seller."

Her readers have created a new Twilight world on the web, which has served as an alternative marketing tool for her books. Sales of other books such as Freakonomics and The Last Lecture have benefitted the same way.

Unlike the billionaire fiction writer J.K. Rowling, who sued a young French writer of a Harry Potter Lexicon for copyright "infringement," Stephanie Meyer has basked in the glow of the Twilight Lexicon, created by her fan Lori Joffs. Ms. Meyer's main problem now is that she's too busy to keep up with all the Twilight-related stuff, and too busy (and grateful) to sue anyone.

Fan fiction continues to spawn new genres. So it's not surprising that the copyright lawyer Rebecca Tushnet wants to bring it out of the shadows and make it part of "fair use." Ms. Tushnet, although I'm sure you're well intentioned, please don't do it. If you want to do something useful, join the abolitionists and argue against copyright.

And note that Star Trek creator Gene Roddenberry ignored fan fiction, and the Star Trek fan base (and his income) grew by leaps and bounds.

William Patry Bags His Blog

William Patry has ended The Patry Copyright Blog, and detailed his reasons for doing so.

His blog will be missed by all his readers, both copyright professionals and us amateurs. His copyright legal acumen, learning, and scholarship were second to none, and on full display in his seven-volume treatise Patry on Copyright, as well as in his blog.

In the last statement at his blog, he notes the depressing nature of the current state of copyright law. Of course it is depressing, but not just because of the reasons he sets forth.

Copyright law, in common with all "intellectual property[,] is a cancer," as Michele Boldrin and David K. Levine put it in Against Intellectual Monopoly, p. 264. Like all cancers, it has a tendency to metastasize and grow. It ultimately threatens the life of its host. Even short of killing, it can make life unpleasant, as it did for a young Chinese computer scientist, who was jailed for "infringing" a copyright last year. I don't recall William Patry speaking out against the violation of his liberty, but this blog did. Boldrin and Levine also discuss this issue at length. I can't recall one defender of the monopoly formerly known as intellectual property (or copyright) ever even taking note of the contradiction between liberty and "IP."

He notes that:

Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately.

Although his point about copyright's preservation of failed business models and technologies is correct, I must respectfully dissent from his view that its reason for being is "to encourage learning and the creation of new works." Copyright, like its older sibling patent, was born in an unholy alliance of kings and rent seekers, and is all about statism and rent-seeking, not creation and innovation. (N.B. William Patry disagrees with this and wrote about it at his blog.) Unfortunately, he has removed his archives, so it's impossible to read his blog on this subject.

Finally, his statement that

In order to encourage open discussion I permitted not only comments but anonymous and pseudonymous comments. I did that because I wanted to encourage the largest number of people to participate, and after four years I believe that was the right decision

is a bit disingenuous, as Crosbie Fitch and I would both attest to, having both had (non-crazy) comments he disagreed with removed.

The legal arcana was a bit heavy going, and of more interest to copyright lawyers. I will miss his blog more for its historical scholarship and erudition, as well as its occasional bursts of humor. I might not have discovered authors such as Ronan Deazley otherwise, to name one.

Olympic Trade Mark Grab

The August 1 edition of the Wall Street Journal reports that organizers of competitions involving animals, robots, and even body parts have been changing their names to avoid "infringing" the trademarked name "Olympics."

The Ferret Olympics is now the Ferret Agility Trials; the Raw Olympics and Rawlympics are now the Raw Games.

America's only native criminal class (i.e., Congress) passed a statute in 1978 giving the U.S. Olympic Committee a monopoly on the word "Olympic" and a few other words. This was buttressed by a 1987 SCOTUS ruling.

The USOC is trying to prevent "ambush marketing." Its lawyers think that people organizing races by ferrets and such will undermine its profitability. If ever there were an example of what Ludwig von Mises called the Montaigne fallacy (seeing the market as a zero-sum game with someone's profits causing someone else's losses), this is it.

"Piracy" as a Source of Innovation

The Economist (July 19) has two articles on "piracy" and innovation, "Look for the Silver Lining", p. 23, and "Thanks, Me Hearties", p. 74.

Both articles note that record companies are using stats about file-sharing network traffic to learn where new singers are most popular, so they can target their marketing and advertising more effectively. TV programmers can do the same thing.

"Silver Lining" cites Bill Gates' point that "piracy" enables Microsoft to compete more effectively against open source software such as Linux.

It also mentions Matt Mason's book The Pirate's Dilemma, where he mentions a Japanese designer who removed the "whoosh" mark from Nike's Air Force trainers, slapped on his own design, and sold them for a premium price under his own brand. Instead of suing him, Nike saw an opportunity and invested in his firm, then started its own premium remix brand.

Matt Mason says the copied should innovate anew by copying the "pirates" path. Imitation can indeed be a form of innovation, as Michele Boldrin and David K. Levine show in Against Intellectual Monopoly.

Here is Matt Mason speaking about the pirate's dilemma; here is a blog related to his book: "The Pirate's Dilemma".

Apple versus the Mac Clones

Apple filed a suit against Psystar Corp., a Mac clone provider, to prevent it from selling its $399 Open Computer with copies of Apple's software. Psystar produces its own computers, which are packaged with copies of software it owns that happened to be produced by Apple.

Read it and resolve not to buy an Apple product:

"Apple Files Suit Over Mac Clones".

Musical Creativity Through Borrowing

The musician Gregg Gillis A K A Girl Talk is making a creative career by borrowing music from established artists. His latest album is a creative compilation of 300 songs. So far he hasn't been sued for copyright "infringement," but that might be due to the fact that his best selling work has sold only 20,000 copies, not enough to rile up the copyright capos. (The usually voluble RIAA didn't comment for the story.)

Fair use is the name of his game. He defends his modus operandi by saying that he what he does is "to take something so familiar and twist it into a new entity." He slices and dices old music so that it becomes his new creation. Game over for copyright.

Here is the article from the Wall Street Journal, June 27, p. B7.

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