In honor of the SOPA blackout, here are some thoughts on copyright law. But first, a brief detour into murder law.
There are a positive number of murders each year. If we put more resources into investigating and prosecuting murders, there would be fewer murders. Nevertheless, it is not at all clear that we are spending too little on murder. The optimal number of murders is positive, not zero. The best policy with respect to murder is to try to maximize the net benefits of the policy, not to minimize murders.
Suppose a new technology were introduced that made it easy to get away with murder (e.g., David Friedman’s plan for Murder Incorporated). This technology makes it extremely costly, though, say, not impossible, to stop murders from occurring. What happens to the optimal amount of murder enforcement? The amount that must be spent to deter each murder has gone up, so the price of deterrence has gone up. Consequently, society should aim to deter fewer murders. Under some extreme circumstances, we might even be better off if murder were legalized (and if people were advised to just be more polite to each other).
Similarly, whatever your prior belief about copyright enforcement, the Internet has made it easier to get away with copyright infringement. The amount that must be spent to deter each instance of copyright infringement has increased. Consequently, society should aim to deter fewer instances of copyright infringement, not more instances as SOPA supporters advocate.
In fact, the cost of deterrence has increased so much that we should begin to rethink copyright law. We could increase the benefits of deterrence if we targeted only high-value infringements. This means that we should shorten the term of copyright, since high-value IP tends to be newer IP (in fact, copyright terms have increased in recent decades, a move in the wrong direction). We might consider expanding “fair use” copyright exemptions to include more non-commercial uses, since commercial infringements are more likely to diminish the value of a copyright. Most importantly, we should withdraw public resources from the enforcement of IP violations. Private enforcement through the tort system has a built-in safety valve: when the cost of enforcement rises, people will do less of it. But the criminal system is essentially a public subsidy for enforcement; no wonder that pro-copyright factions are attempting to criminalize copyright infringement through SOPA and other legislation.
The bottom line is that recent expansions of copyright terms and enforcement powers get the comparative statics exactly backwards. In an age of costly enforcement, it’s time to give up, at least at the margin, on copyright. And at the margin, content creators should just be more polite to content consumers.
So I have been thinking about this today. I would expect a critical response to your post along these lines: IP law creates a quasi-rent, which incentivizes R&D. When it is cheaper to violate copyright, the quasi-rent shrinks (possibly to zero). The quasi-rent’s net social benefit declines in size: this is an argument for limiting the length of IP protection. So, when piracy is low, it is eating at the fringes of the quasi-rent but the incentives remain; when piracy becomes cheap and rampant, it starts eating at the very heart of how we incentivize certain types of production that are key to our information-based economy.
Put another way, to use your murder example, the cost of a small amount of murders is relatively low as long as people can more or less go about their lives normally without living in constant fear of murder. In the extreme, if murder became cheap and rampant, the survival of the species might literally depend on ending murder, in which case we might dedicate a lot of resources to stop it. Just think of the “DC Sniper” from a few years back: people were afraid to even leave the house, so the social cost of murder had risen drastically (so it made more sense to stop it). So while your murder example does help, I don’t think it’s exactly the right analogy we want to use.
Enough devil’s advocacy. I would respond thusly: copyright infringement is getting cheaper (information wants to be free) at the same time that the benefits of a larger public domain are getting greater (see Benkler’s “The Wealth of Networks”) and it seems clear that if not now, then soon, the net benefit of even a token amount of copyright protection will be negative. So not only has the cost of enforcement gone up (meaning we should invest less in enforcement as you describe) but the benefit of enforcement has actually declined sharply as well.
We are just not reliant on these quasi-rents for production of intellectual products, and we are becoming more reliant on peer-produced products that require a large public domain. This is in part because the cost of peer-production has declined, and also a response to the declining quasi-rents from proprietary production.
It is possible to name some products which are not likely to benefit from the large public domain, things with a small user base and expert developers (certain types of software, for instance, or certain drugs) but it seems that in these cases we’d be much better off incentivizing in a different way: commissioned work, prizes, etc.
I haven’t read “The Wealth of Networks,” but what you say seems reasonable. My main point with the murder example is that if even laws against murder should be sensitive to enforcement costs, then it makes sense to also make copyright law sensitive to enforcement costs.
First, I think it is important to explain with the opportunity cost of enforcement of the marginal infraction is. This is the great “unseen” in most of these discussions. Since most of your audience already understands that, I can see how it got left out, but for the average reader to get past “The optimal number of murders is positive, not zero.” since most of them have not sat through a semester of Williams’ examples…
Second, the example is a good one, if not a bit in the extreme. And it should be clear that as enforcement costs go up, quantity of enforcement should go down.
Of course, freezers are a good substitute for gasoline, and instead of seeking out enforcement, we should see artists seeking out alternative ways of getting paid. Which they are. See: Kickstarter. One of my favorite bands, Five Iron Frenzy, recently set a new record for funds raised prior to production of their new album. I anticipate more and more of this sort of thing.
Patronage of the arts is the way of the future.
Oh, and I think Zac is right.
His basic argument is that the internet has drastically lowered the cost of peer production methods by reducing transactions/information sharing costs, but information has to be free (libre not gratis) in order to take advantage of this benefit. The book is great, and all online, http://cyber.law.harvard.edu/wealth_of_networks/Table_of_Contents
But SOPA advocates aren’t aiming to deter more instances copyright infringement than the pre-Internet situation. Rather, they are aiming for more copyright enforcement than the pre-Internet situation. These are not the same thing.
If copyright enforcement becomes much more expensive, it does not follow that “we” should spend less on copyright enforcement. It is going to depend on whether, at the new margin, the marginal cost of greater enforcement exceeds the marginal damage from infringement. Perhaps “we” should spend more on copyright enforcement, because although the cost of enforcement has risen, the marginal damage from infringement has risen even more. The result is theoretically ambiguous and can’t be solved in the way you suggest.
I share your worry about private parties offloading enforcement costs onto the public purse. If we could leave it up to tort law then a cost-sensitive pseudo-market solution would be much more likely to result.
The easiest way to understand and explain the issues of enforcement and opportunity costs is to remember that you can reduce automobile fatalities to zero by banning the use of all automobiles. Fixating upon a single metric to the exclusion of all others is a recipe for poverty and totalitarianism.
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