Ok, I confess!

I may have claimed I was moving 4000 miles for my research, but really, it was just to see these sweet Piraatenparty election posters in person. (Also: gosh, Heidelberg is pretty!)

In a dark room we can do just as we like

Earlier I expressed some pessimism about the future of copyright law, finishing with an extended quote from Bill Patry's own gloomy diagnosis. Now Charles Johnson has written a sharp response to Patry, insisting that the proper evaluand is not law but life, where copyright-as-lived is nearly irrelevant. I think Johnson is right in some ways but wrong in others, and my reasons for thinking his optimism misplaced have implications that go far beyond questions of copyright.

To clarify: I agree with the two claims that seem at the heart of Johnson's post: that as a practical matter, copyright law has proven ineffective at barring access to creative works; and that voluntary initiative (think DeCSS, Napster, Bittorrent, The Pirate Bay, IRC channels, etc.) is typically a better use of activists' energy and resources than governmental politics as far as actually enhancing freedom-as-lived. So what's the problem? In a nutshell, I think Johnson is too quick to downplay, 1, the damage that even "unenforceable" policies can do, and 2, the long-term social and political costs of states criminalizing, rather than merely ignoring, the "counter-economy" or radical sector more generally.

There's some truth to Johnson's claim that "a law that cannot be enforced is as good as a law that has been repealed." While jurisprudes might quibble about how precisely to characterise the situation, a norm whose existence is universally ignored by the legal system's officials is of questionable validity at best. The problem is when we turn to norms that cannot be generally or impartially enforced, but are enforced nonetheless, the penalties meted out in conformity to the whims ("priorities") of particular officials. The best examples of this, of course, remains what Lawyers, Guns, and Money call "The War on [Some Classes of People Who Use Some Sorts of] Drugs." As with copyright, vast segments of the population regularly break the relevant laws; doing so is neither practically difficult nor unusually risky; for a certain sort of person, even explicit admissions of criminality have essentially no consequences at all. And yet none of this stops officials from locking millions of their fellow human beings in cages for doing the wrong drug as the wrong sort of person at the wrong time--or voters from eagerly rewarding those officials with higher offices and greater powers.

This so widely acknowledged as to be almost banal, especially in Law & Society work, but it bears repeating: laws whose enforcement is possible only when selective are not uncommon, because officials--and not only officials--value the discretion such laws inevitably require. If everyone is guilty of something, officials can effectively target people and not merely behavior. There's a big difference between random enforcement and discretionary enforcement, even when structural factors constrain both to the same aggregate arrest totals, and I worry that copyright law will follow narcotics and "vice" policing into the ugly realm where all is permitted, so long as you don't annoy the wrong people.

Johnson has written some good critiques of the fetishization of our flawed constitution and against law-worship more generally, but I worry that he's too dismissive of the conceptual link between liberty and the rule of law. I don't pretend to have this stuff fully worked out, but I think the republican focus on protected status, a security against the arbitrary will of another, reflects an important dimension of any liberty worth defending. None of which implies that modern nation-states are either necessary to or particularly good at safeguarding this liberty; I merely want to insist that what matters is not aggregate enforcement but individual vulnerability, even if this vulnerability is largely insufficient to deter the proscribed behavior.

My second concern is more speculative, and (blush) rather Foucaultian. What leads to vulnerability is the gap between cultural and legal norms, a gap prompted both by the low (unconditional) probability of punishment and the marginal benefits of rule-breaking. Napster was revolutionary because it provided a service that hadn't before been available at any price--the possibility of getting nearly any song on demand. It's taken the music industry a decade to replicate this feat, but they've basically done it; for a lot of stuff, it's just easier to pay. The cost/benefit calculus has shifted.

So long as you've got the money, that is. I suspect the optimal pricing structure will lead to something of a separating equilibrium; middle class kids pay (and share libraries via sneakernet), poor kids infringe online. Among the privileged, unlicensed downloading becomes much worse than illegal--it becomes tacky and pathetic, like crack (but not powder) cocaine. Or perhaps the parallel is to payroll taxes--convenient because automatic, at least for Dilberts living and working within institutions large and ordinary enough to become bureaucratized; annoying and painful, tempting evasion, for those who walk different paths. (And of course, that dynamic itself disincentivizes deviance.) Even now, a distressing number of people seem to think "he knew the risks" sufficient reason to temper the sympathy one might ordinarily feel for a person facing a 6-digit lawsuit over harmless acts; what happens when today's Organization Kids become tomorrow's prosecutors, governors, judges? (Ian MacDonald's novels Brasyl and especially River of Gods both portray futures with this interesting cultural-juristic twist on "the digital divide.")

One response might be to question my armchair sociology; far from being Foucaultian self-disciplinarians living in a digital Panopticon of Google-powered data mining, aren't Kids These Days selling their virginities on eBay and posting the videos to MySpace (before penning angsty regrets on Livejournal), consequences be damned? Perhaps. But I'm dubious that youthful oversharing in the name of authenticity is in any fundamental tension with copyright, once content owners and manufacturers realize that user experience is everything (think of the cellphone ringtone business).

Ultimately, it's precisely because I agree with Johnson about the importance of social, technological, and cultural change that I question his optimistic conclusions. It may be easier than ever to evade copyright controls, but even aside from the issue of discretionary enforcement, we need to look at the other side of the ledger: the increasing invisibility of those very controls. The defining feature of the Napster era was not simply the yawning gulf between copyright and copynorm but the indispensibility of copyright infringement to participation in youth culture, even for the privileged. This indispensibility is disappearing, and the gulf may go with it; the Google Books settlement promises to skip the Napster stage entirely--heading right to the locked-down iTunes paradigm--as the books of the world join its music in the digital ether. And that would be deeply unfortunate, less for econ 101 deadweight-loss reasons than for the impact on tomorrow's taken-for-granteds concerning freedom, ownership, and authority.

Response to von Lohmann

Fred von Lohmann of EFF stopped by and left a comment that's worth addressing directly:

"... I'm not quite that pessimistic. I think the general approach of the settlement -- a collecting society to solve the problem of getting permission for all the orphan works, along with an opt out right -- is the right one. At the same time, I agree that we need to take steps to reduce the "Google monopoly over books" risk.

I think legislation to supplement (not replace) the settlement might be the answer. This would not be legislation over the objections of copyright industries (which I agree is hard to push through a Congress compromised by years of disinformation and campaign contributions), but rather with support from copyright industries against Google. In fact, I think Google might not object, either, since I don't think monopoly is really their goal here. I suspect Google would be happy to rely on its engineering skill and head start to fend off most rivals.

We should all be thinking about how legislation might work as an adjunct to the settlement agreement. I know I am."

I confess that I simply haven't thought very deeply about Where We Go From Here; it's good to know that EFF is concerned about the settlement's effects, and I encourage everyone to support them in their efforts: donate here! Von Lohmann and EFF have done more for the fight to restrain the digital enclosure movement than I could in dozens of lifetimes, and I'm a bit ashamed that my post could be read as implying that efforts at reform, whether legislative or judicial, are hopeless. I don't believe that at all: if nothing else, EFF and others help make things less bad than they otherwise would be, and that's nothing to sneeze at.

That said, I don't think "a collecting society to solve the problem of getting permission for all the orphan works, along with an opt-out right" is the right approach; I think abolishing copyright is the right approach. So there's some disagreement right there. Of course, even if von Lohmann agreed with me about what would be optimal, it would be irresponsible for him to say so: EFF, like Creative Commons, gains credibility in part because of the moderation of its claims. A movement needs to have radicals, but its litigation arm needs to win cases and persuade elites. Even when the goals are shared by all, radicals and reformers will still (reasonably) disagree about What Is To Be Done.

(Disagreement isn't rationally required, of course; each could see the other's role as complementary. But I suspect that this is psychologically unlikely; radicals tend to feel that anything short of radicalism risks complicity, and I imagine few would be pleased by certain knowledge that their goals would only be achieved in centuries, and by the hands of that time's gradualists. Nor is it easy on the psyche to be an extremist committed to moderate reforms; see this nice article by Sheri Berman on the splits in the early 20th century Left.)

But I digress. My worry, as a copyright abolitionist, is not so much that von Lohmann is wrong as that he is right: the new institutions for license collection and copyright registration will embed copyright within the foundations of the 21st century's knowledge ecology, just as the content industries are attempting to do for consumer electronics. This is what depresses me: restrictions becoming increasingly invisible, with that very invisibility making it harder to imagine anything different. I worry about barriers to entry that are small enough to avoid political backlash, but large enough to deter hard-to-monetize innovation. I worry about the world's books reserved for those lucky enough to have already fallen in love with text, those willing to jump through some hoops to get at it (say, by waiting for their library's single free Google Book Terminal). I worry that finding a "reasonable" solution will inevitably lead to the triumph of administrative and managerial imperatives, with the public represented, if at all, as simply a mass of consumers. And I worry that this representation will increasingly become reality.

[/melodrama]

Publishing, Copyright, Google

I'll start with a confession: I was wrong about the Google Books Project. And my wrongness is underscored by just how right Siva Vaidhyanathan--whose worries I dismissed at the time as contrarian library-fetishization--was. It's true that a happy ending could still emerge, but if it does, it's likely to be in spite of Google, and in the teeth of its opposition. My mistake is perhaps instructive, because it exemplifies some cognitive biases that bedevil all of us: wishful thinking, overvaluing the causal impact of character traits (and individual agency, generally) relative to structural tendencies, and an unfortunate tendency to take sides--if only affectively, subconsciously identifying one's own interests with those of one party or another--when powerful entities clash.

A quick summary for those who aren't obsessed with this stuff: Google partnered with some libraries to scan a zillion books, some public domain but most out-of-print but still in copyright (generally, stuff published after 1922), insisting that this was fair use (and thus legal) because copyright holders could opt-out, and only snippets would be shown of in-print books. Unsurprisingly, various authors' and publishers' rights organizations sued. I was hoping for a big, triumphant showdown: I thought that Google (and perhaps only Google), with its ridiculously deep pockets, its "Don't Be Evil" motto, and its justly-renowned lead copyright counsel William Patry, possessed the means, motive, and expertise to bring forth the 21st century's Betamax Case. A big win for Google would safeguard the Book Project, and that alone would be great, but I cared mainly about doctrine: a high profile victory for fair use (and the doctrinal emphasis on use rather than copying this would entail) would give legal protection to innovators everywhere.

Well, not so much. Google settled, and why wouldn't they? Google's mission is to make cool software and money, not to fix copyright law. The settlement places some minor constraints on the Book Project, true; I'm sure some engineers are annoyed. But that's a small price to pay for an effective legal monopoly over the world's digital library. Even if Google weren't one of the only companies with the cash to take a lawsuit like this to the Supreme Court, it's no longer possible for any of the others to win. Why? Because any potential competitor would find themselves caught by the circular reasoning of the Coursepack cases: if someone else (Google) is paying a license fee, it means there's a market for license fees, which means your use is a commercial one, which means your case for fair use is much weaker.

So, what now? I wish I knew. Some libraries seem to be fighting against this; we'll see if that comes to anything. I suspect we're at the point where only a statute will do; but Congress' record on copyright is terrible, and terribly predictable. Change, here, is just not something I can believe in: the inherent diffuse-benefits, concentrated-costs collective action logic will only be exacerbated by the inevitable cries of "Look out, socialism!" and "Respect international law!" that any attempt to scale back copyright is sure to provoke. I suppose that if Google gets a little too greedy in its pricing and access policies, the resulting backlash might scour away some bad law. But let's be honest: regulation as a quasi-public entity is at least twice as likely. Even the best (realistic) case, a statutory fee schedule, represents a massive and needless giveaway, and has insidious consolidation effects besides.

I blamed my optimism on human nature, but really, it's not like I wasn't warned. Here's what Bill Patry himself--the heroic knight in my imagined good-vs.-evil showdown--said in his farewell to the blogosphere:

Much like the U.S. economy, things are getting worse, not better. 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.

Free culture vs. big-budget productions

Tim Lee has some fair-minded musings here and here on the dangers copyright infringement poses to large-budget video game development, prompted by the (apparently infringement-related) news that a well-reviewed hockey game franchise will not be continued. He wants to discuss what he calls "the policy question": whether it's bad if infringement puts increasing pressure on the big-budget video game business model. The comments are a mix, as usual, with Tom Lee thinking it might not be so bad to have smaller but cheaper games and Adam Thierer giving an emphatic "screw that!" to a future without production values fit for his HDTV 7.1 setup.

I think what's fascinating about this debate is how its very terms conceal what are arguably quite illiberal assumptions. We're used to thinking, perhaps wrongly, that it's right to evaluate economic policy through its effects on measurable outputs, etc., but it's important to realize that we're talking about cultural policy here, where such conclusions requires even stronger confidence in the propriety of imposing the planner's values on society. To be blunt: of course, ceteris paribus, it's a shame if a desired product is no longer available on the marketplace; every Madden is sacred and all that. But we can't say anything useful without knowing what else will happen, and once we do, we have to confront the fact that we're talking about whose liberty shall be sacrificed for whose LAN parties.

So let me propose an alternate, intentionally provocative reframing of the real question: the question is whether we should restrict, through civil and criminal penalties, the liberty of everyone to create, alter, exchange, and enjoy cultural materials to the best of his or her abilities and opportunities. And the reasons we are offered for the proposed restriction is that it will enable us as a society to finance the lavish, big-budget spectacles--whose budget is, of course, partially a result of such restrictive policies--that a certain segment of the population enjoys.

For myself, I have no idea what our cultural landscape would look like in a copyright-and-patent-free world. I suspect there would be large shifts--smaller budgets, more outsourcing, increased ties of cultural materials to continuous revenue streams (like MMOGs)--but, really, who can say? My point is that, absent, say, an Atlas Shrugged-like general cultural strike, this is the wrong question to ask. Obviously, some will want More and Bigger and Prettier games, especially if that's what the nation's game industry, itself shaped by prior mistakes in allocating rights, has encouraged consumers to want--but to take this as a social imperative is to mistake special interest pleading for the demands of justice. I want more and better erotic vampire fiction, but I don't think this warrants limits on human liberty. Should the videogame featureset treadmill slow down, will Thierer's complaints be more legitimate than mine, or than those of the old-time rock'n'roll aficionado who grumps that nobody makes 'em like they used to?

I think Will Kymlicka and others are right to think that human flourishing depends crucially upon one's ability to make sense of oneself through cultural artifacts, but it is a mistake to think this pushes towards any particular allocation of cultural resources. Are we really to say that the ideal society has so much poetry, so much literary fiction, so many sports video game franchises, and the like? The right response, here as elsewhere, is to preserve each person's liberty to weave the cultural strands around them into a tapestry that provides meaning, and for each of us to do what we can to enrich that cultural patrimony.

My correct views on everything

Just kidding. For the sake of brevity, this post will be limited to my correct views on intellectual property rights.

A vigorous discussion is going on here at the Tech Liberation Front, with Tim Lee being attacked for "playing favorites" by his pointing out that Novell's deal with Microsoft is bad for open-source development, but that insofar as Novell relies on the goodwill and effort of open-source developers, it may be forced back to the path of righteousness should said developers ostracize the company. Apparently suing competitors into the ground using morally illegitimate and often legally invalid government monopolies is the free market at work, but encouraging volunteers to withhold their, you know, voluntary contributions is Just Not Okay. Fireworks ensue; check it out. The fun continues in this thread, where Noel Le defends neo-Schumpeterianism ("only the promise of temporary monopoly induces competition and innovation") to its reductio ad absurdum conclusion: without DRM, no one would have invented the iPod. He actually believes this, folks.

All of which is merely a lead-in to the point of this post, which is about the Broken Window Fallacy of intellectual property. The parable of the Broken Window, you may recall, is about refuting the claim of the onlooker who, upon seeing a window broken, asserts that just this sort of window-breaking is necessary for the economy. After all, "Everybody must live, and what would become of the glaziers if panes of glass were never broken?" What this misses, of course, is "what is not seen", what would have happened if the glass hadn't been broken: the money spent on replacing it would have been directed towards some other, productive, pursuit; perhaps a pair of shoes. As Bastiat pithily notes, "destruction is not profit." The implications for intellectual property should be transparent, but don't seem to be (though Tim Lee, unsurprisingly, gets it). So let me break it down for everyone else.

One interesting effect of US copyright law is that, as Judge Kozinski puts it, "Congress has given courts the power to order books burned." Infringing copies may be impounded and destroyed. Instead of innocent children breaking the window, we now have the agents of the state. More typically, by giving monopoly privileges of greater or lesser scope, patents and copyright (especially the derivative works right in copyright, which prevents me from, e.g., competing with Laurell K. Hamilton in offering vampire-porn featuring Anita Blake and Jean-Claude), write into law the principle that one may only buy windows from particular glaziers and their licensees.

Just as in the Bastiat story, you have the helpful onlooker who says "But everyone must live, and what would become of innovation if every innovator could have his insight copied by the first free-rider who came along?" Just as in the Bastiat story, this is wrong. What is seen is the way in which the protected firm uses his IPR to generate monopoly profits, some of which are then plowed back into R&D, generating a pleasant stream of innovation. What is not seen is what would happen in the absence of this protection: the innovator would have to keep innovating in order to maintain his market, leveraging his expertise into further productive developments, while newcomers would be able to experiment on their own with the knowledge produced by the first. Money that once went to monopoly rents would go instead to other, more productive things--including further innovation.

The neo-Schumpeterian retort is that this is hopelessly naive: innovation requires large capital investment and the reasonable hope of monopoly rents to recoup it. But this is mere question-begging, and its plausibility lies, again, with the distinction between What Is Seen and What Is Not Seen: when we give innovators monopoly privileges of this sort, we thereby tilt the playing field dramatically towards heavily capitalized firms by jacking up the costs of the inputs (eg., prior innovations, a skilled legal team, insurance against lawsuits) to production. As a result, What Is Seen is capital-intensive innovation; What Is Not Seen is the less capital-intensive innovation that the legal regime has stamped out.

And so:

• When a surgeon insists that only he should be allowed to perform a certain operation, because only then will surgeons come up with new procedures, we say (rightly): "I don't believe you."
• When the domestic auto industry says that it must be protected from foreign competition, because only then will it have the profits to innovate, we say (rightly): "I don't believe you."
• When a chef says that only she should be allowed to sell a certain recipe, because only then will the restaurant business innovate, we say (rightly): "I don't believe you."
• When a fashion designer says that only he should be allowed to sell fashions of type X, because only then will fashions innovate, we say (rightly): "I don't believe you."
• When the pizza-delivery guy says that only he should be allowed to sell pizzas, because only then will pizza-delivery innovation happen, we say (rightly): "I don't believe you."
• When a singer says that only she should have the right to sell recordings of her songs, because only then will she bother to sing at all, we should say: "I don't believe you."
• When an author says that only he should have the right to sell books he has written, because only then will he write anything, we should say: "I don't believe you."
• When a company says that only they should be allowed to let customers buy things with a single-click, because only then will anyone come up with such out-of-the-box thinking, we should say: "I don't believe you."
• When authors and investors more generally say that they should be granted the exclusive rights to their respective writings and discoveries, because only then will we have progress in the sciences and useful arts, we should say: "I don't believe you."

We should refuse to believe such claims not because they are never true. On the contrary, the individuals and firms making the claims often will be unable to compete, if they are forced to do so on a level playing field. But it is precisely those who need such monopoly privileges to compete who we least want in the marketplace to begin with. Competition, not monopoly, is the mother of invention.

Of course I am not denying the presence of positive externalities, nor am I denying that music, books, and technical progress exhibit them to an enormous degree. My point is rather twofold: first, to use the coercive force of state authority as a tool to internalize all positive externalities is precisely to take on the hubris of the central planner. Second, even if you are asking the planner's question, to believe that IPRs are necessary is to display a laughably narrow view of human motivation, one that entirely ignores the complexity of the choices and preferences facing real people.

This is worth elaborating on, so let's take books as an example. It's true that if it were simply impossible to make a living writing books, fewer people would write them. But even here, the number would not be zero: think of all the fanfiction writers who not only will not be remunerated but face possible legal action for their efforts. Think of the gentleman-scholars and -writers of ages past. Think of the simple fact that some people enjoy writing. Think of weblogs, for goodness' sake!

But current-profits vs. no-money is, of course, a false dichotomy--absent all copyright, authors would still get paid, though probably not as much. People are willing to pay significant premiums for brand-label prescriptions over generics, brand-label cereal over store-brand made in the same factory with the same process, etc.; do we really think that no one would buy the Authorized Edition, even if it cost a shade more? Indeed, buying books is generally an expressive rather than merely an instrumental act--if it weren't, the new-book market would have a much harder time than it currently does competing with public libraries and used books.

The planner's question, then, is whether we need copyright to properly incentivize. And when we think carefully, it becomes immediately apparent how absurd it is to think the author needs to be guaranteed the entire social surplus for this to happen, or even any significant part of it. At the technical level, we only have an inefficient allocation if, for any author whose writing is more socially beneficial than any other use of her time, there exists some activity she could pursue instead that she would find more privately rewarding. The question is whether we should expect this to be the normal state of things, without copyright, and I think the answer is clearly no. Reasons why include:

1. Comparative advantage. Authors are often not very good at other things! Just think about the day jobs that various famous authors had before they 'made it big.'
2. Non-monetary values. Being an author has rewards beyond the monetary, just as being an actor or an academic or a judge does. Those who are able to be good authors typically have preferences structures that place a high weight on the rewards that come with being one.
3. Backward-bending labor supply. When effort is rewarded more heavily, there's both a substitution and an income effect: working is now more valuable, but you're also more rich, and hence might want more leisure. Often authors work hardest and are most productive, not when they are widely acclaimed and wealthy, but when getting that chapter in on deadline is all that will keep them from being evicted.
4. Endogeneity of potential author supply. Books are not just what authors produce, they are also an input into producing future authors. Have you ever heard of an author who doesn't like reading, who didn't practically live at their local library as a youngster? Drive down prices and increase availability of current works, and you shape the preferences and abilities of the next generation, resulting in more authors later.
   

When all these factors are considered, exclusive rights start looking penny-wise and pound-foolish. Which should lead us, in this as in pizza-delivery, to give up on the planner's hopeless task, and let a genuinely free market sort it all out. The lesson is the general libertarian one: yes, perhaps government intervention could fix this particular market imperfection or that one. But by granting the state this power, you throw open the door to the most pernicious and thorough rent-seeking, and guarantee that the good you've accomplished will be far outweighed by the resulting evil.

Well, all done. To anyone who made it this far, I congratulate you, and I leave you with this lovely quote from Joseph Schumpeter, who may have been wrong but was undeniably clever: "Early in life I had three ambitions. I wanted to be the greatest economist in the world, the greatest horseman in Austria, and the best lover in Vienna. Well, I never became the greatest horseman in Austria." Even he, I think, would have denied that patents should be awarded in economic theory, horsemanship, or lovemaking.