Home > Facts and Figures, History Repeating Itself, Legal Issues > Against Copyright – Part 1, the “Benefit” Side of Cost-Benefit Analysis

Against Copyright – Part 1, the “Benefit” Side of Cost-Benefit Analysis

My recent post on copyright trolls has been rebutted by Jeff Cobia, writing at his blog here.  I suppose I should have expected it, since I kept the post short and fairly conclusory, as I realize I have a tendency to run on quite a bit.  My own lack of cited support seems to have been an invitation to trouble.

Nevertheless, I disagree with Jeff’s assertion that my post was “rubbish,” and I will accept his invitation to war.  However, since I respect his intellect, I imagine that this will be an exceedingly polite one.  That said, I shall now cry havoc, and let slip the blogs of war.

The Benefit Side of Cost-Benefit Analysis

Jeff immediately goes after my parenthetical – “Even if you were to concede that economic benefits flow from IP protections (and I would argue that, empirically, they do not)” – and I am not terribly surprised that he has.  My use of the term “empirically” was, I concede, a mistake, and that is precisely because the question of economic benefit to authors under copyright is an empirical one.  Ironic, no?

Of course, one cannot prove that the author will benefit, in the strictly pecuniary sense, more under a system without copyright, and this is so for exactly the reason that Jeff has pointed out.  If one assumes that the work is unique, one cannot compare its protected sale with its unprotected sale unless one has access to parallel universes.

However, I believe that authors would absolutely not be cast into penury with the removal of copyright.  Casual observers note the attachment of copyright and the flow of economic benefit and assume a cause-effect correlation.  I propose that this may very well be far weaker than commonly assumed.

I do have some empirical backing, of course.  This will obviously not be an exhaustive list, but I will point out a few highlights.

Germany and England

First, there is the case of Germany and England before the rise of copyright.  Copyright is a relatively new invention, with England adopting it in 1710.  Germany, by contrast, had no central government and no copyright by default until 1871.  This century and a half provides a very useful empirical resource for assessing authors’ relative ability to prosper with and without copyright.

Historian Eckhard Hoffner has compared the data between the countries.  In England, authors were paid for sale of rights to their work, as has continued in the modern age.  In Germany, where pirate publishing was “virtually allowed,” authors tended to be paid by sheet and edition, and by self-publication through subscription.  Even best-sellers were reprinted quickly by “pirate” publishers.  In both countries, however, book authors tended to earn a comparable average, and in both countries, writing was a viable career.

The biggest difference was at the poles.  In England, the >1% who were wildly successful (think of the J.K. Rowlings, the Stephanie Meyers, the Stephen Kings of our current age) could make a fortune.  The “fat middle” of the bell curve, however, was very comparable to Germany.

In Germany, however, the skew was more toward the other end – because writing was viable and the publishing industry was made far more efficient through the lack of copyright, there were many more books published, by a factor of 10 at the height (n.b. Germany had twice the population, but fewer urban citizens).

While the top >1% in Germany never attained the dazzling fortunes of their English counterparts, far more Germans were writing, making a living writing, and more importantly writing more.

The Lengthy History of Publishing

The common viewpoint of publishing is a static one (this is not limited to publishing, of course).  Publishing is what it is, and its implications are derived only from the present state of affairs.  However, the internet has come along, and the game is changing.  In a historical blink of an eye, the rules will be completely rewritten.

Funny that we find this so amazing.  Although the internet is a complete and total revolution in the publishing world, it is not the first, and it will not be the last.  Consider the long history, and the question “how will authors be paid without copyright?” becomes less relevant, because it soon becomes clear that the question itself is saddled with assumptions from the present day.  As it happens, authors have always been paid, and the assumptions from the present day are quite limited in their usefulness in explaining history beyond their short timeframe.

Scribes’ work had been largely unchanged for centuries until the advent of moveable type in the mid-1400s.  Serious consternation within the monastic class followed, but within decades, monasteries had set up their own printing houses and contracted out scribes’ work to established private printing houses.

The quantity of published books skyrocketed.  According to historian Michael Clapham, within the 50 years following the invention of moveable type, there were more books published than had been published since “Constantine founded his city in A.D. 336.” The number of editions since the 15th century must number in the billions.  (Michael Clapham, “Printing,” in Charles Singer et al., eds., A History of Technology, vol. 3, From the Renaissance to the Industrial Revolution, Oxford University Press, 1957. p. 37)

Perhaps more importantly, works beyond the Bible, Augustine, and Etymologiae were being published.  Despite having no copyright protections, the author was born.

Digital distribution has the potential to do for books what the moveable type did, but on a much larger scale, and like the monks of the 1400s, copyright hawks are similarly concerned.  But remember that copyright law is a relatively recent invention.  Even in England, the earliest adopter, copyright was not established until the 18th century.  In the meantime, we certainly did not find that authors were discouraged from their pursuits.

Although there could never be an empirical study of the future of publishing (a history of the future?), one can reasonably expect that, if allowed to do so, history will tend to follow similar courses, albeit through different channels.  The internet is no less a revolution than the printing press, but in both cases, I think the evidence has – and will – accrue to side of non-restrictionists.

Far from discouraging publishing, I think the internet has so far fostered an explosion in publishing of all types, and for the most part, copyright has never been vigorously enforced in digital media.  I expect that authors will find ways to monetize their own publications outside of the restrictive licensing system of traditional, fixed-media copyright.  Jeff has already mentioned one who does – Cory Doctorow – but that is merely one avenue (and one that is probably more common than it seems).  Perhaps the most profitable has not been conceived of yet.

Monetization in a Pirate’s World

This leads into the discussion of monetization, and I am sure that I will be accused of unwarranted assumptions if I did not elaborate on the above.  I do not think that monetization of authorship outside of the copyright context is at all a pie-in-the-sky concept.  In fact, it has been done before, and to great effect.

Consider the music industry.  Despite the fact that the RIAA and [some of] its members have somehow managed to survive, it seems as though it is mainly a vehicle for lawsuits.  People simply do not buy CDs anymore.  What is left of the physical CD industry will soon be dead.  Even iTunes, the great creative destroyer, may not survive long on its first-mover advantage unless it can continue to give the people what they want.  Overwhelmingly, what the people want is “free” music.

So how would artists be paid?  Well, it did not take the internet to come up with an answer for this.  Bands like the Grateful Dead have been doing it since the age of vinyl.  Their entire business model was at one point based on the bootleg; they actively encouraged their fans to record, swap, and distribute their concerts.  They found, unsurprisingly, that this had the effect of driving customers to their concerts.  In fact, by encouraging people to act outside the scope of copyright, they have likely driven more fans to pay for more-lucrative concert tickets that would otherwise have been possible.

Before this is dismissed as a case isolated to music, or even to jam bands whose music is only “good” while one is still under the influence, consider what the Mises Institute found when it put the Ludwig von Mises book Omnipotent Government online for free download, as related by Jeffrey Tucker.

The Institute set about freeing the book from its copyright shackles by contacting its original publisher.  Although the book was never a strong seller, the Yale Press still insisted that the Institute pay it in advance for what they assumed would be lost sales.  The Institute did so, and put the book online.

By opening up the text for reading, discussion, linking, printing, etc., the Mises Institute sold more copies of Ominpotent Government  in the month after its free release than it had in the 10 years prior.  Yale Press ended up with both a payment for lost sales and a plethora of extra sales.  It turns out you do not even need a ticketed performance to monetize freely-released copyrightable works.

Non-Pecuniary Benefits

Of course, all of the above has assumed that pecuniary gain has driven authorship, when in many instances throughout history it clearly has not.  For example, although academia has never been one to take copyright lightly (with the notable exception of MIT, which leads the world in Open Courseware), many academics have found that non-remunerative publication, even self-publication, has led to consequences beyond a lack of royalty checks.

In the world of “publish or perish,” many academics have found that being noticed is far more useful than getting a small check for publication in a low-circulation scholarly journal.  Of course, this can be monetized as well, with prestigious professors being offered positions at prestigious universities, and professors of more practical fields being paid for consultations or a selective group of clients.  But prestige can be satisfying in its own right.

The fame and esteem derived from wide adoption of an eponymous theory or process can be overwhelmingly positive.  Imagine how many cocktail party invitations Jeff would get as the progenitor of the lifesaving “Cobia Technique.”  But I digress.


In the end, the situation comes down to cost-benefit analysis, and I do concede that not enough data are available or even possible to determine the exact amount of benefit.  However, on the strength of the above, and other similar scenarios, I would argue that the benefits of copyright are far overstated by copyright trolls similar to the Las Vegas outfit referenced in my original post.  I would also argue that they are likely to be overstated even by those with their feet more solidly on the ground, like Jeff.

There is no way to prove it, to be sure.  But there is no way to disprove it either.

So perhaps it is more useful to look at the cost side of the cost-benefit analysis.  That, naturally, is what I will take up next.  Stay tuned.

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