The Mugwumpery

Another letter to the Economist:

Date: Thu, 24 Feb 2011 09:06:36 -0600
To: letters [at] economist.com
From: Dave <dave [at] mugwumpery.com>

Subject: Re “Ending the open season on artists”, 19 February

Dear Sir,

As a an “aghast” digital libertarian, I object to your presumption that stronger copyright enforcement is good or necessary for artists.

No one disputes that  artists must be rewarded for successful creation.  (Middlemen are another story.)  Copyright was a reasonably effective system when copying was expensive anyway and the means of reproduction were relatively centralized publishers and distributors, easily policed.  Now that works can be copied costlessly by any individual, the principle of limiting copying is both unworkable and inappropriate, as copying (although illegal) is not theft – because copying does not deprive the original owner of anything.

Certainly, artists must eat.  The challenge is to find new business and legal models to accomplish that without needlessly depriving the public of the full enjoyment of the fruits of creation.

Attempts to perpetuate obsolete business models by law are not the solution.

It is hard to make a strong argument in a letter short enough to get published.

My larger point is that there is what economists call a “deadweight loss” when someone who would have enjoyed a creative work doesn’t because of costs imposed by copyright.

Say we’re talking about a copy of The Beatles “A Hard Day’s Night” (which, completely off-topic, has some of the lamest lyrics imaginable – “…to get you money to buy you things“??).

Some consumers are willing to pay the asking price for the song under the copyright system.  In that case the artists get 10 or 20%, and the middlemen get the rest.  (And yes, the studio technicians, etc. need to get paid too, but not necessarily by a record company – painters seem quite able to buy blank canvas without middlemen to help.)

But more consumers (usually far more) are not willing to pay that much.  They’d enjoy having a copy of the song, but not enough to justify the price.  These people are going to be in the majority almost regardless of the price asked.  This is the deadweight loss; value that could have been realized without cost to anyone, but wasn’t.

To make it clearer – imagine we’re talking about a $1000 copy of Adobe Photoshop instead.  How many of the people who would benefit from using it are willing to pay that much?  Very few.  Yet it would cost Adobe nothing at all to let them use it for free – if that didn’t discourage those few who would pay from doing so.

Of course, under the copyright system this loss is necessary to make the system work – otherwise no one at all would pay.   And this is precicely the problem with the copyright system – it necessitates the deadweight loss to work.

As I implied in the letter, this wasn’t such a terrible flaw when copying was expensive anyway.  Records couldn’t be produced for free; paying the artist  a royalty only increased the price a little bit, so not much harm was done.   But that’s not true in a world where copying is free.

So we need a new system to reward creators for successful creation that other people value.  I can imagine a half-dozen ways to do it; so can you.  It will take some experimentation and evolution to get there, but propping up the obsolete copyright system is not going make it come sooner.