Milton Mueller replies to economists on extending copyrights [ip]

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Mon, 23 Feb 2004 00:17:41 -0500
From: Declan McCullagh <declan () well com>
---

Date: Sat, 21 Feb 2004 22:19:51 -0500
From: "Milton Mueller" <mueller () syr edu>
To: <politech () politechbot com>, <declan () well com>
Cc: <SSingleton () cei org>, <gbsohn () publicknowledge org>
Subject: Re: [Politech] What's so bad about extending copyrights? 
Economistsweigh in [ip]
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It's sad to see Liebowitz and Margolis reduced to rationalizing
blatant rent-seeking. Let me just deal with the most egregious
logical fallacy in their argument.

>Finally, we present data that counters a
>common claim that copyright extension so far out in the future can have
>little effect on creativity. The small fraction of books that have the
>majority of commercial value when they are new appear to remain valuable
>for periods of time that are consistent with the expanded term of copyright
>under CTEA.

A non sequitur.

Shakespeare's works are valuable centuries after they were written.
Does that mean that without a 500-year monopoly, they would
never have been written? Was an extended copyright term
necessary to induce him to write them? Obviously not, because there
was no copyright at the time.

With this rhetorical question in mind, one can see that
Liebowitz and Margolis have confused two very distinct issues:
1) what economic incentives are required to _motivate_ and/or
_reward_ creators of IP;
2) How long is a given copyrighted work economically valuable?

The fact that a copyrighted work is valuable in perpetuity does
not mean that one has a right to a perpetual government-enforced
monopoly over copying it. The governmental legal protection
comes with a (fair) price: the protection expires after a reasonable
term.

By confusing these two things, L&M are rationalizing rent-seeking
by publishers. Longer terms do nothing to reward creators or stimulate
more or better IP creation. This is proven by their own argument. Yes, in
fact a very small amount of the IP products (say, 2%) account for (say,
90%) of the economic value. What they forgot is that no one knows which
2% of the works is going to be so valuable! Which means *all* of the IP
that we have would be created regardless of whether the protection term
was extended or not. One simply does not know which products have the
long-lived value ex ante, only ex post. So it is only publishers seeking 
rents on
existing valuable products, not creators seeking rewards or stimulants
for creativity, who are interested in term extensions.

Put more simply, longer copyright protection does not increase the chances
that one will produce valuable work, nor does it increase the amount of
work that will prove to be valuable for a long time. It only increases the
rents received by those who happen to own products that the marketplace
deems valuable on a ex post basis.

A doctoral student of mine has just completed some empirical research
that shows that longer copyright protection terms have zero relationship
to the incentive to create. The only statistically significant relationship
one can find is between how much money a person has received from
royalties and how long they want the protection term to be. This
reinforces the argument above.

I can't wait for their next paper: L&M arguing that patent protection
should be extended for 100 years. After all, that Edison patent on
electricity generation is still pretty darn valuable.

--MM
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