Over at the America’s Future Foundation website, Sonny Bunch responds with indignation to Matt Yglesias’s argument about the inevitability of free music. He starts by quoting the following excerpt from Matt’s post:
It is, of course, possible that at some point the digital music situation will start imperiling the ability of consumers to enjoy music. The purpose of intellectual property law is to prevent that from happening, and if it does come to pass we’ll need to think seriously about rejiggering things.
Bunch responds:
No! False! The purpose of intellectual property law has very little to do with Matt Yglesias being able to enjoy a wide variety of new music. The purpose of intellectual property law is to protect the intellectual property created by artists so they are rewarded for their efforts. The purpose of intellectual property law is to punish people who steal that which isn’t theirs.
I have trouble getting too worked up about the semantic question of whether copyright infringement is “really” theft or not. I don’t engage in illegal file sharing and I don’t condone the practice. But at the same time, there are important differences between literal theft and copyright infringement, and I don’t think it’s particularly illuminating to equate the two.
But I do think Bunch is on shaky theoretical ground. America’s Founders had a pretty clear view of this subject, which they enshrined in our Constitution, and it’s at odds with the story Bunch is trying to tell. The Founders placed property rights protection in the Fifth Amendment, reflecting its status as a fundamental right. In contrast, the copyright clause appears in Article I, Section 8. That’s a section that enumerates the powers of Congress, not the rights of citizens. Indeed, the Constitution does not require Congress to grant copyrights at all, and contains no specific protections for copyright holders. To the contrary, the only specific requirement is a limitation on copyright protection; it requires that copyrights—unlike traditional property rights—be “for limited times.” Finally, the Constitution contains an explicit statement that the purpose of copyright is a utilitarian one: to “promote the progress of science and the useful arts.”
Indeed, if Bunch seriously believes that the function of copyright law is to “punish people who steal that which isn’t theirs,” I would be curious to know whether he obtained Matt’s permission before quoting his blog post. This, of course, is permitted under copyright’s fair use doctrine. But if copyright is just another form of property rights, then theft is theft. I don’t think there’s a section in Locke’s Second Treatise that says stealing is OK if it’s done in small increments.
I was also puzzled by Bunch’s argument that copyright law is justified by artists’ “right to profit from their labors.” This is a peculiar argument to see on a blog of a free-market organization. In a free market, people do not have a right to profit from their labors. To the contrary, the genius of capitalism is precisely that profits are determined by consumers through the market process. Sometimes people make poor business choices and lose money. Sometimes increased competition pushes down prices and drives the least-efficient producers out of business. This is, in fact, exactly what’s happening to incumbent recording labels. That’s unfortunate for shareholders of those companies, but for the rest of us it’s simply part of the market process that has made us such a wealthy nation.
Similarly with authors, artists, and other creative people. Their compensation should be set by market forces. As I’ll be explaining in a future post, I don’t think zero-priced content means that musicians or authors won’t be able to make a living. But that’s neither here nor there as a policy matter. The fundamental point is that copyright is not a welfare program for musicians or authors. The function of the copyright system is not to ensure artists can “profit from their labors,” it’s to benefit the general public by “promoting the progress of science and the useful arts.”
Thanks for the thoughtful response. Just to make a quick point or two:
I was writing about how copyright law is understood now, especially within the context of the arts (a field I know far better than the sciences). The evolution of copyright has inexorably led to more and more protections for the producer of the content. I happen to agree with Mark Helprin insofar as I think this is a good thing. I don’t disagree that the framers of the Constitution had a different conception about what, exactly, copyright meant. It’s just not what I was talking about in that post.
I happen to agree with Matt that having generic versions of basic drugs is probably a good thing. I simply fail to see the connection between producing generic ibuprofen for the good of society and uploading 808 and Heartbreaks onto a BitTorrent so people can download it for free.
And I appreciate not wanting to get into a food fight over whether or not downloading new music for free is “theft,” but it’s more than an issue of semantics. Leaving aside the theory and the founders’ intent and the problems associated with copyright-in-perpetuity, in practice illegal downloads have decimated an entire, once-thriving industry. Anyway you slice it, this is problematic.
Sonny, the newspaper industry is also being decimated. Is this also a result of “illegal downloads?” If not, how do we know that the recording industry is being killed by “illegal downloads” rather than the same market forces that are killing newspapers?
No, it’s a result of newspapers essentially embracing the Napster model as the industry standard. By saying that their content is literally so worthless that it can be given away for free to attract eyeballs, they shot themselves in the foot. I appreciate the fact that newspapers have always been little more than a delivery device for advertisements, but consumers still had to pay for the news…once someone becomes accustomed to getting something for free, it’s pretty difficult to get them to start coughing up cash again. This then leads to a downward spiral: If I can get the news for free on the Internet, why should I subscribe. Without subscribers, print revenues (both from subscriptions and advertising) plummet. Which leads to more investment on the web instead of in papers. Which leads to more people dropping their subscriptions and reading on the web. Etc.
In short, the newspaper industry’s wounds are almost entirely self-inflicted.
(There are other, related problems — the difference between revenue generated from print advertisements and online advertisements; increased competition; losing the monopoly on local ad sales, etc. I’d also argue that newspapers are fundamentally different from CDs, insofar as newspapers are selling you a product to get advertisements in front of you, whereas record labels are selling you CDs to get the music on the CD in front of you. Big difference there.)
No, it’s a result of newspapers essentially embracing the Napster model as the industry standard. By saying that their content is literally so worthless that it can be given away for free to attract eyeballs, they shot themselves in the foot… once someone becomes accustomed to getting something for free, it’s pretty difficult to get them to start coughing up cash again.
With all due respect, I don’t think this is consistent with basic economics. In a competitive market, which the market for news surely is, prices are set by supply and demand, not by the what customers are “accustomed to.” No one is preventing any given newspaper from putting up a paywall. The reason most don’t is that competition prevents them from doing so. This is not the fault of newspapers any more than it’s the fault of farmers when a good harvest pushes down the price of wheat.
Obviously, file-sharing is one factor in the decline of the recording industry. But it’s just accelerating a trend that would happen anyway. The fundamental issue is just basic supply and demand. When the cost of producing a product falls, the price of that product falls with it. When the marginal cost of a song or a news story falls to zero (or very close to it), the price goes to zero as well.
“When the cost of producing a product falls, the price of that product falls with it.”
But the cost of producing news *hasn’t* really fallen: You still have to pay people to collect the news, people to edit it, people to publish it, travel costs, etc. It’s actually *very* expensive to produce news. What has fallen is the cost of producing the product that transmits the news. That’s the problem with the newspaper industry: It costs a ton of money to put out a decent product, but they’re giving away that product for free. The reason for doing this goes way back to when the Internet was first getting going and newspapers received advertising rates on the web that were close enough to print rates that it made sense to give away the product for free: Grab enough eyeballs and you more than make up for the lost 25 cents a hard copy cost. When advertising revenue cratered there was no way to make up that lost revenue source because, as I said, people were accustomed to getting their news for free.
It’s (sometimes) expensive to produce the first copy of the news. But subsequent copies are extremely cheap. This is what economists call marginal costs, and they’re what drive equilibrium prices. Check out my latest post in which Virginia Postrel explains the point better than I could.
Postrel’s post is about maximizing profit; to that end, “cheap” isn’t the same as thing as “free.” I imagine that if the publishing houses decided to adopt the model that the newspaper industry did, they’d be out of business within the year.
The idea that it is illegal file sharing that decimated the industry is still unsupported by any major study. How much did I-tunes kill the album as an art form. There are now no distribution costs for music. All of these things cut into how much somebody can charge for a work of art.I believe it may have accelerated the process but as long as the marginal cost of every copy of anything is zero, then the price will approach zero.
The problem with music, television, and newspapers is their inherent belief that they should continue to make as much money as they have in the past. Next up is E-books. When digital copies of books become ubiquitous we will see the same destruction of the industry as we know it. Authors and publishers will be unable to accumulate the wealth they have in the past, and they will assume that the money they didn’t make was stolen from them by a generally small group of tech savvy people who illegally trade copies of a persons work.
“in practice illegal downloads have decimated an entire, once-thriving industry.”
But Sonny, they haven’t been decimated at all!
“Data on the supply of new works are consistent with our argument that file sharing did not discourage authors and publishers.2 The publication of new books rose by 66% over the 2002-2007 period. Since 2000, the annual release of new music albums has more than doubled, and worldwide feature film production is up by more than 30% since 2003. At the same time, empirical research in file sharing documents that consumer welfare increased substantially due to the new technology.”
http://www.hbs.edu/research/pdf/09-132.pdf
Hi, Tim, it’s Tom.
Here is a link to my reply to the inane babble of Matthew Yglesias:
http://blog.pff.org/archives/2010/02/copyrights_in_music_do_not_exist_only_to_benefit_m.html#more
I expect nothing from the likes of Yglesias, but I am disappointed by your post on this matter. I would have hoped that the depressing experience of watching Lawrence Lessig abandon the absurd position that you and your buddies chose to relentlessly defend might have suggested your critical weakness as a thinker: you tend to deny obvious realities even when doing so makes you look ridiculous.
Consider this example from your post: “The Founders placed property rights protection in the Fifth Amendment, reflecting its status as a fundamental right. In contrast, the copyright clause appears in Article I, Section 8.”
I hate to bear the bad news, Tim, but the Fifth Amendment was not part of the original Constitution—so the Framers could not have put the Copyright Clause there even if they had wanted to put all property-rights related provisions of the Constitution in one place, which they did not.
In short, Tim, your argument is just ridiculous. Similar “logic” could suggest that copyrights and patents must be more important than other property rights because the capacity to protect them was provided in the original Constitution—not in some “add-on” amendment. But I would not make that argument because it is daft—the Framers’ debates about whether a Bill of Rights was or was not a good idea are too well known to permit any serious thinker to make such an argument. Your argument suffers from precisely the same fatal flaw, in reverse.
Next, you say, “Indeed, if Bunch seriously believes that the function of copyright law is to ‘punish people who steal that which isn’t theirs,’ I would be curious to know whether he obtained Matt’s permission before quoting his blog post. This, of course, is permitted under copyright’s fair use doctrine. But if copyright is just another form of property rights, then theft is theft.”
Grow up, Tim: that is ridiculous. The scope and incidents of the vast array of rights that qualify as “property rights” differ in almost every conceivable respect, and copyrights are no exception. But the fact that not all property rights are (or should be) subject to “fair-use-like” limitations does not mean that one commits “theft” by using a short quotation without authorization.
Indeed, I take copyrights quite seriously, yet I just I appropriated quotations from your post without your permission. And with good reason: I cannot take your “argument” seriously. Nor can you. Because if you did, then you would have to concede that a mortgage cannot be an intangible property right because the rights of Wachovia, (which owns the mortgage on my house) are not infringed if my neighbor’s dog enters my lawn without permission and poops. Care to concede that, Tim?
And by the way, Tim, doesn’t that pooping dog refute your silly claim that “theft is theft”? It isn’t. For example “trespass is not trespass.” In other words, not all technical trespasses need be or should be treated as the sorts of trespasses that should prompt lawsuits or 911 calls. A masked burglar using a crowbar to force open a window to my house and a neighbor who enters my lawn to collect dog poop are both, technically, “trespassers.” But if you insist on pretending that “theft is theft” and “trespass is trespass,” and that you can thus perceive no difference between the dangerous burglar and the thoughtful neighbor, forgive me if I extend to you the courtesy of assuming that you are lying.
I do not understand why you bother to make arguments like this one, Tim. They harm no one but you.
Finally, you say, “I was also puzzled by Bunch’s argument that copyright law is justified by artists’ ‘right to profit from their labors.’ This is a peculiar argument to see on a blog of a free-market organization. In a free market, people do not have a right to profit from their labors. To the contrary, the genius of capitalism is precisely that profits are determined by consumers through the market process. Sometimes people make poor business choices and lose money. Sometimes increased competition pushes down prices and drives the least-efficient producers out of business. This is, in fact, exactly what’s happening to incumbent recording labels.”
Don’t play word games, Tim—public-policy analysis is not “Junior Jumble.” Someone who says that an artist should have a right “to profit from their labors” has neither stated nor implied that an artist should have right to profit just because they have labored. No one thinks that, and you insult only yourself when you pretend to be so dense as to think that someone else said something so absurd.
Nor are you even arguably correct when you claim that “incumbent recording labels” are suffering because “competition [has] pushe[d] down prices and [is driving] the least-efficient producers out of business.” That’s nonsense, and you know it, Tim. Their problem is piracy/infringement/theft/[insert your favorite synonym here]—not market “competition.” I have explained why this is so in detail when responding to the inanities of Mr. Yglesias, and what I said there applies here.
For example, in Grokster, StreamCast Networks, the distributor of the Morpheus file-sharing program, stated in its own business-development materials that the advantages of its “business model” were that it had “no product costs to acquire music” and the “ability to get all the music.” This is what you, Tim, would call “competition.” To paraphrase your own words, “This is a peculiar argument to see on a blog of a free-market [‘thinker’].”
Sorry to resume our disputes, but your arguments have, again, become too deeply flawed to ignore. Otherwise, I hope that your doctoral program is going well, and that Princeton is handling the winter with more grace than we are down here. (Though, actually, for D.C./N.Va., the local response has not been all that bad.) –Tom
4 months later…
Are you kidding me? The Fifth amendment, part of the Bill of Rights, aka amendments 1 through 10, was not written by the Framers?