Economist's Defense Of Perpetual Copyright: It's Best To Just Ignore The Economics

from the wait,-really? dept

We're rapidly approaching the time in which perpetual copyright hits its existing statutory limits -- so I've fully been expecting an increase in arguments for why copyright needs to be extended again. Of course, the actual economic evidence doesn't support this at all. Instead, the evidence suggests there's tremendous value in a broader public domain. So how will maximalists argue for copyright extension? If a recent paper from economist Stan Liebowitz is any indication, it will be through strawmen and the argument that we should ignore the economics. Seriously.

Jerry Brito recently had Liebowitz join him on the Surprisingly Free podcast to discuss a paper Liebowitz wrote entitled Is Efficient Copyright a Reasonable Goal? Liebowitz, if you're unfamiliar with him, has become the MPAA/RIAA's favorite economist over the last few years, and they tend to trot him out in various debates over file sharing. He also seems to have what feels like a personal vendetta against economists Felix Oberholzer-Gee & Koleman Strumpf, who have repeatedly shown how weaker copyrights have benefited society. This particular paper appears to mostly consist of Liebowitz taking some of Oberholzer-Gee and Strumpf's arguments out of context, building a strawman around them... and then arguing that we should ignore economics.

First up, he argues that there are legitimate theorists out there who believe that we shouldn't let artists get too rich -- and that those same people don't seem to mind anyone else getting rich. In the podcast, he focuses on how basketball players get super rich, and we would all think it's crazy to tax most of their income, even if it were shown that they'd continue to play basketball at a lower salary. He notes, correctly, that incomes above the point at which they'd still be playing basketball are a form of economic rents, and the theory is that you can tax such economic rents without doing much harm elsewhere -- and that's a "more efficient" solution. So, strawman number one is this idea that there are people who think that it's okay to stop musicians from getting super wealthy, but who feel otherwise about, say, pro-basketball players.

He argues that there's no way in policy to "tax" basketball players, but because we can control the length of copyright, we can (and do) levy exactly that kind of "tax" on content creators like musicians by taking away their copyright.
We don't actually go after rents in the tax system. No one tries to remove the 90% of rents that people get if they're top basketball players. No one says 'well, gee, Charles Barkley, back in the day, when he was doing it, or Michael Jordan, or anybody now, we should have taken 90% of their income away, because it was all rent.' So the textbook says we should and it would be efficient if we could, if we're just looking to generate revenues for the government. But there's no practical application of actually trying to do any of that.

The one place in policy where we can do something like that, is something like copyright. Because in copyright we can control the length or duration of the copyright, which largely controls the amount of rents that the creative individuals get. Now, it's an average, but that's something that we can do for them, that we can't do for almost any other occupation. And that's sort of the difference here. So we're talking about efficiency in terms of copyright. And what's different here is that the ownership rights that the copyright holder is given is not permanent, it's temporary. And we control how long it lasts by the law. Every other type of ownership, to a large extent, is not considered temporary, and you get to keep ownership as long as it stays in your property or your heirs' property.
Of course, there are all sorts of fallacies in those two simple paragraphs. First, the idea that taking away someone's copyright 70 years after they've died is a form of "taxing their rents" is ludicrous. Nearly every work covered by copyright has exactly zero economic value by that point. The vast, vast, vast majority of such works are not being exploited economically at all. Furthermore, I'm having trouble thinking of economically inclined people who argue that it's reasonable to tax 90% of anyone's income, whether they be basketball players or musicians. While I'm sure there are some people out there who think that megamillionaire musicians earn too much, as far as I can tell, those people feel almost exactly the same about megamillionaire athletes as well. But I haven't seen any serious arguments that we should take away 90% of the revenue those folks make. In part, it's because of the bizarre assumption that Liebowitz slips into his explanation above: that the sole goal is maximizing government revenue. But that's not what anyone is generally trying to do from a policy perspective. If anything, it's quite different. They tend to look at maximizing public benefit.

So, already, we're down a bizarre rabbit hole. How did we get here? Well, not surprisingly, if we look at the actual paper, it seems to come from Liebowitz's obsession with Oberholzer-Gee and Strumpf. He regularly cites that paper as supporting this strawman. Yet if you read their actual paper, it does not (as Liebowitz claims) "imply" that it's socially beneficial to pay creators less. Instead, all that Oberholzer-Gee and Strumpf point out is that there are many reasons why people create outside of copyright, and that a weakening of copyright does not, necessarily, harm the incentives to create, but might provide significant additional benefits to the public.

In the podcast, Jerry Brito valiantly pushes back on some of the more extreme arguments that Liebowitz makes, pointing out that claiming that putting works into the public domain is the equivalent of taking away someone's high salary is making the classic mistake of arguing that copyright is no different than scarce property. It descends into the same old argument, where Liebowitz claims that Brito is arguing in favor of "stealing" and pulls out the silly argument that his position would apply equally to "stealing" a car. Brito points out that this is untrue, and his concern is that copyright, unlike traditional property rights, is actually a restriction on what others can do with their own private property (i.e., you can't make a copy of a work whose copy you already hold). Liebowitz refuses to concede the point, other than the minor concession that non-rivalrous goods are somewhat different than rivalrous ones. But, of course, that difference is everything... and Liebowitz pretends it's insignificant.
Jerry Brito (JB): Let's say you wrote a book, and I want to use my printing press to make a copy of it. I can't do that.

Stan Liebowitz (SL): Right. Not without getting permission.

JB: Precisely.

SL: Absolutely. That's what copyright does. But that's essentially a property right. You can't come and use my car without my permission. That's what property rights do.

JB: Sure, but the reason we might want to cut off the rent in the copyright space, where we just want to cut it off where they've earned enough to induce them, whereas we wouldn't want to do that for basketball players, is simply that, in the copyright space, you're limiting what I can do with my property. My physical property. My printing press. I can't use my printing press to make a copy of your book. It's affecting me. Whereas Michael Jordan performing well, doesn't really affect me one way or the other.

SL: Well, you can print anything you get the rights to print. I don't think it affects your freedom any more than it restricts your freedom to drive my car whenever you want to.

JB: No, but when I drive your car, then you can't drive it. But if I use my printing press to make copies of your book, you still have your book.

SL: I no longer have the earning capacity that I have from writing the story.

JB: Which is why we have copyright. And the question is at what point should it end?

SL: That's right. And you're talking about the non-rivalrous consumption aspect of intellectual property.

JB: Exactly. At what point should the limit on my freedom be lifted?

SL: Because it's an issue where you want to have the freedom to generate revenues from an item that I created. That's one aspect of it. I'm not sure we should give you that freedom, just as we shouldn't give you the freedom to sell my car. I mean yes it's true that one's rivalrous and one's not rivalrous. But I create the story. Why should you be allowed to generate revenues on a story that I created?

JB: I guess I'm...

SL: What does that have to do with your freedom? We do view the property right differently on copyright than we do on other items, but I'm not sure we should. You claim there's a difference in freedom and I'm saying, 'no, just as you can't take my car without my permission, I don't see why you should be able to take my story without my permission.'

JB: Let's not get too deep into this, but I'd simply say...

SL: I mean you want the freedom to steal, is what you're saying.

JB: Well, no...

SL: It infringes on your freedom.

JB: No, no, no...

SL: If you consider an item, and we'll say let's treat it like other property, then yes, my story is my story. And you want to steal it.
It continues in that vein. Perhaps for way way too long. It's not hard to pick out the series of logical fallacies that Liebowitz relies on there. He doesn't differentiate between actually taking something (such that the original person no longer has it) and making a copy of the work, such that there are now more copies in the world. Those two situations are extraordinarily different both conceptually and economically. He refuses to recognize the simple fact that the very basis of copyright is restricting the freedom of others (perhaps for legitimate reasons -- but restricting them nonetheless). He doesn't seem to recognize that the ability to benefit (profitably or not) off the works of others is not a horrible thing -- and, in fact, it's a key piece of how economic growth works. That is, Liebowitz appears to be arguing against economic growth, by suggesting that all externalities are inherently "bad," contrary to nearly all economic literature on the subject.

He also tosses out the ridiculous paired fallacies that (1) ignoring the copyright takes away all "earning capacity" from a work and (2) taking away earning capacity represents a real harm or loss. Neither is true. There are still plenty of ways to benefit without copyright, and uncaptured earning capacity is a marketing problem. It means you failed to convince someone to pay. That's it. If Liebowitz's argument that harming someone's "earning capacity" is somehow an unfair removal of their property rights -- which is exactly what he claims above -- is accurate, then he would appear to be against all competition. That is the very nature of competition, of course: to try to take away a competitor's earning capacity, such that the revenue that might have gone to a competitor goes to you instead.

In the paper itself, thankfully, Liebowitz's argument is somewhat more thought out and nuanced, though still not at all convincing. He shows the traditional curves of demand vs. marginal cost and marginal revenue -- and the price and quantity produced under the different circumstances, arguing that:
Under a regime of competitive production of reproductions (no copyright), the equilibrium price of a reproduction is Pc (equal to marginal cost, MC) and the quantity of reproductions purchased is Qc. There is no profit earned in the market for reproductions since the market is assumed to be competitive.
However, as we've discussed for years, this simplistic analysis assumes a static market, and one where the producer does not innovate or provide differentiated, scarce value above the product itself. That is, musicians can (and do!) create additional value that they get people to pay for that can't be copied, such as the personal connection between the artist and the fan, a live show, physical merchandise, the beneficial feeling of supporting an artist, etc. In other words, the classical analysis is way too simplistic, and ignores how everyone, whether dealing with rivalrous goods or non-rivalrous goods, prevents price from being pushed to marginal cost: by adding additional scarce value. The problem is when you focus solely on the non-rivalrous good, and assume that there are no additional scarcities (tangible or intangible) that can be created around it. While Liebowitz does make a nod to this fact later in his paper, he doesn't spend much time on it.

The end result of all of this? Liebowitz more or less admits that his argument does not make economic sense, and then still seeks to justify perpetual copyrights.
Let's remember that the key point I'm trying to make is one that is not particularly amenable to economic analysis. I don't deny that it's efficient to sort of weaken copyright to a certain balancing point. What I'm saying is that we can do that, we have the tools to do that, and no one finds it particularly morally objectionable to weaken copyright to get to what is the proper balance. The point of my paper is that if we were doing it the way we're saying we would like to, we would be removing rents from the creators of copyrighted works, because that's how you get the balance that's most efficient. But we don't go reducing rents elsewhere in the economy, say from basketball players.
In other words, the argument here is: because basketball players are rich, we shouldn't reduce copyrights, because then musicians might not become quite as rich.

Of course, those arguing for increasing taxes on the rich might disagree about the claim that no one wants to "tax" the super rich in other fields. But the larger point here remains... well... confounding. Liebowitz makes a number of assumptions that simply don't make economic sense -- and even then admits that his conclusion doesn't make economic sense -- but still suggests that perhaps copyright should be perpetual... because, in his view, we don't tax other professions.

There are still a few more years before the real battle over copyright extension heats up, and I fully expect that we'll be seeing some crazy arguments between now and then for why copyright should be extended, but if this is the best that the MPAA and RIAA have got right now, they may want to seek some additional help.


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    PaulT (profile), Oct 24th, 2012 @ 8:24am

    You could just boil all that down to one single point - if somebody thinks that putting something in the public domain removes its author's personal ability to monetise it, they don't know what they're talking about.

    "SL: I mean you want the freedom to steal, is what you're saying."

    I wonder if he's one of the regular trolls. Sure sounds like one.

     

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      Anonymous Coward, Oct 24th, 2012 @ 5:05pm

      Re:

      I had the same thought as I read it. When it enters public domain it isn't that it must be free, it's that it opens up competition with the author. Similar to the way patents work now.

       

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    Eric Wisti (profile), Oct 24th, 2012 @ 8:32am

    What?

    So, in arguing about an economic right (copyright), we should ignore economics? "Since we're ignoring economics, I'm going to copy your stuff for free, ignoring economics." Nice argument.

     

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      Jesse (profile), Oct 24th, 2012 @ 9:18am

      Re: What?

      The two points I would say to this guy:

      a) If someone uses his printing press to make a copy of your work, that doesn't prevent you from still selling your work. If it did, then bottled water could not exist (as there are viable free alternatives to bottled water everywhere).

      b) The big difference between the basketball player and the artist you are describing is that the artist is earning their money from work they did in the past and the basketball player has to continually work to earn more money (rather than resting on laurels). Yes, we are limiting the artist from maintaining a monopoly on old work, but not limiting them from creating new work. Your comparison is deeply flawed because it ignores this rather important distinction.

      QED, bitches

       

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        Anonymous Coward, Oct 24th, 2012 @ 10:43am

        Re: Re: What?

        The big difference between the basketball player and the artist you are describing is that the artist is earning their money from work they did in the past and the basketball player has to continually work to earn more money (rather than resting on laurels).


        This is nonsense. Recordings of music, whether albums or singles, do not sell themselves. You're looking at the songwriting and recording as the only labor that goes into releasing music. Marketing, promotion, distribution, etc. are also a form of labor. Outside of the classic mega-stars, music that isn't being fiercely marketed and promoted does not continue to sell. Even then, I don't know that it's fair to say those classic albums sell themselves; someone has to pay for the digitization, remixing, remastering, new promotion, etc.

        Of my own releases, bumps in sales occur in older recordings only when I find some way to get people to re-visit them (read: I work to market them), or when new releases spark interest in the back catalog. At no point are recordings selling while I sit around doing nothing. Sales generally only occur concurrently with marketing pushes. I suspect this is true for most recording artists.

        It's true that superstars might be able to relax, but in those cases they're employing a team to do the outside work. If they can afford that, then they've earned it. Still, it's not the case that "no work" is going into the sales push.

        If someone uses his printing press to make a copy of your work, that doesn't prevent you from still selling your work.


        It would prevent me from selling my work to the people he's selling my work to. Whether everyone who bought from him would have bought from me is up for debate; it would depend on how the works are priced, I presume, among other nuanced factors.

        If it did, then bottled water could not exist (as there are viable free alternatives to bottled water everywhere).


        That depends on where you're typing from. I'm in NYC, and here one can easily find themselves without access to clean drinking water somewhere in the city. Some office buildings don't even have potable water. I'm sure people from other countries might take issue with your statement as well.

         

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          hxa7241, Oct 24th, 2012 @ 11:05am

          Re: Re: Re: What?

          > It would prevent me from selling my work . . .

          Not having a special monopoly privilege is not prevention -- it is just not having that special privilege. You only expect to have it because such laws already exist; if they did not there would be no reason to.

          And if simply wanting something was a justification, you could demand you want the right to be principal cellist for the Finnish national orchestra or something: because otherwise a witholding of that right would be 'preventing' you from doing it. That is just circular.

           

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          Josh in CharlotteNC (profile), Oct 24th, 2012 @ 11:44am

          Re: Re: Re: What?

          Recordings of music, whether albums or singles, do not sell themselves.

          Are you trying to set up a strawman, or are you making the point for us?

          Of course they don't sell themselves. That is the basis behind CwF - connect with fans. If the artist that created the recordings has a harder time doing that than someone who just copies, then the artist has already lost.

          It would prevent me from selling my work to the people he's selling my work to.

          Nonsense. It may make it marginally harder if there is no effort to CwF, but the artist has a tremendous advantage - people want the real thing and they want to support the artists.

           

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          James Burkhardt (profile), Oct 24th, 2012 @ 12:33pm

          Re: Re: Re: What?

          Marketing, promotion, distribution, etc. are also a form of labor.

          A) Which in older years was a massive undertaking. Lock-outs prevented independents from getting into existing marketing/promotion streams. Distribution (creation of tapes/discs and getting them into stores) was limited by existing capital. Now, marketing can be done via youtube. Distribution via iTunes. No longer do you need the initial capital. Labor needs have shrunk in this regard.

          B)Copyright does not drive the sales, if you need marketing and promotion. Marketing and Promotion do. If you are only marketing the one album, sales will dry up eventually. You need to keep producing music to continue a high volume of sales. Luckily, thanks to the internet, you can do both at the same time. Only the top artists (normally the top producing artists) can ever have sales volume high enough to live off residuals, just like only the most popular athletes will make enough in promo deals to keep an income after retirement from competition.

          Someone has to pay for the digitization, remixing, remastering, new promotion
          Which you don't need copyright to protect. I still buy Beethoven despite public domain recordings existing. Economics suggest that if your business model requires you to have a monopoly to sell a popular 100 year old song at a profit, perhaps that 100 year old song does not much economic value.

          Of my own releases, bumps in sales occur in older recordings only when I find some way to get people to re-visit them (read: I work to market them), or when new releases spark interest in the back catalog.
          Argument made. You don't need extended copyright terms because your music has little economic value beyond what you can produce through marketing. So after say 40 years, others should have a go at marketing your 40 year old music, as you have either A) exhausted your marketing efforts after 40 years promoting one album, or B) continued to produce marketable music, and therefore have further catalog to make money from. Extended copyright terms do not change the fact that you need to KEEP WORKING to make more money. It is the marketing that is providing economic value, not the music. If i bought your album, and went "Hey I like this guy!" and found you on iTunes thorough your still copyrighted album, Id quickly find your back catalog in your name, and you would still make money, even without copyright protecting you. Because iTunes would still be easier then finding the free download.

           

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    Anonymous Coward, Oct 24th, 2012 @ 8:38am

    Economist, pointing at nuclear blast:

    Look at the pretty mushroom cloud (ignore the devastation).

     

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    The other AC, Oct 24th, 2012 @ 8:40am

    It doesn't make sense

    I don't see how reducing copyrights really harms a creators ability to get rich. Most of the duration of the copyright occurs after they're worm food.

    We have a life+70 duration. Few people make a piece of art then live for another 70 years (you'd have at least live into your 80s or 90s), so the artist is rarely the person who benefits from extra long copyrights. They're dead for most of the duration.

    And besides, for the majority of works any revenue derived from them tends to come within a short period of time after they're created. Books tend to sell well with the initial publicity then fade into obscurity in the bargain bin.

    Music typically has a couple year lifetime, maybe 20 for decent stuff. After that, it's pretty much just the top 40+/- songs from the decade that are relevant.

    Movies after 10 years are generally forgotten other than the few Oscar winners and big name titles.

    Then even the ones that are still relevant commercially are still well past their prime. They still rarely sell/make anything close to their initial revenue right after release.

     

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      Anonymous Coward, Oct 24th, 2012 @ 9:08am

      Re: It doesn't make sense

      The only ones who benefit from extended copyright are corporations, who own the vast majority of them.
      Over 90% of all copyrights are held by tv/movie/music studios and book/magazine publishers (or mega-corporations like Time-Warner, Viacom, or Disney that control both).

       

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        LrdVapid (profile), Oct 24th, 2012 @ 10:40am

        Re: Re: It doesn't make sense

        Disney is a wonderful example of how to use a perpetual copyright system to make money: only bring stuff out for a limited time every 20 years or so.

        It also allows them to cut down on competitive products by allowing them to sequester items no longer considered viable to sell.

        The only loser is the culture. We didn't need that anyway, did we?

         

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      Forest_GS (profile), Oct 24th, 2012 @ 9:18am

      Re: It doesn't make sense

      All you have to do for an example of a no-copyright environment is look at the current designer clothes market. So many dresses that are copied, and the originals still sell well. The cheap knock-offs are bought by people what don't want to spend $1000 for one dress. Everyone is happy.

      Sadly, I saw something about talks to bring copyright into the designer clothes market recently.

       

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      Anonymous Coward, Oct 24th, 2012 @ 9:31am

      Re: It doesn't make sense

      The creator is dead by time works go into the public domain. There is no harm to the creator. At this point, I'd dare say the creator doesn't care.

      As for the basketball analogy, it fails to consider one key thing: Charles Barkley is getting paid to continue to play basketball, not because of a game he already played in the past. Content creators are getting paid for work they've already been paid for multiple times. I wish I could collect some more money for the work I did 20 years ago. That would be nice. Maybe the guy who put the roof on the movie directors house should be paid every time it rains.

       

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      MrWilson, Oct 24th, 2012 @ 10:04am

      Re: It doesn't make sense

      "so the artist is rarely the person who benefits from extra long copyrights"

      This is the significant point about the people making the argument for perpetual copyright.

      Cui bono? To whose benefit is the argument?

      And of course it's the corporations. Corporations don't naturally die. As long as they're making money and don't get killed off by tragic circumstances, they can survive perpetually (like the "immortal" but still killable elves from the Lord of the Rigns).

      I don't see artists arguing for perpetual copyright. It's always shills for corporations. It's also corporations that argue and lobby against copyrights reverting to the original artist, their heirs, or estates.

      If you want to talk about people "stealing" copyrights, it's the corporations that are trying to assert perpetual ownership over the works of others.

       

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    Anonymous Coward, Oct 24th, 2012 @ 8:44am

    I would love to make art but copyright doesn't last long enough for me to even bother. Think about it, sure, my great-great grandchildren will benefit but what about my great-great-great grandchildren, huh? Ever think about them? How are they going to live without my protected artistic works in 2126? Without that guarantee I'm afraid there will be no art from me.

    Won't somebody think of the great-great-great grandchildren?

     

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      Anonymous Coward, Oct 24th, 2012 @ 9:12am

      Re:

      Your children will only benefit in the event that the work has been a massive success, and is worth republishing for the copyright holder. The main advantage of long copyrights to the copyright holders is that they can keep works of the market so that they do not compete with new works. In this case none of your descendants benefit as there are no royalties.

       

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        Not an Electronic Rodent (profile), Oct 25th, 2012 @ 1:35am

        Re: Re:

        Your children will only benefit in the event that the work has been a massive success, and is worth republishing for the copyright holder.
        But that's just disgusting! It's taking away the RIGHT of great grandchildren everywhere not to have to work a day in their lives or do anything uyseful ever. We cannot stand for that, it must be rectified. We must enact a copyright extension that dictates mandatory tithing to any artist that publishes a work!

         

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    DH's Love Child (profile), Oct 24th, 2012 @ 8:59am

    Good God

    " they may want to seek some additional help."

    Please don't offer suggestions.. I'd rather see them shoot themselves in the head.

     

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    out_of_the_blue, Oct 24th, 2012 @ 9:02am

    Is Liebowitz an "econmist"? If so, then like all, he's crazy.

    As I've said, "economics" is just opinions about who should live in idle unearned luxury and who should be forced to labor and give their products to others. Basis of civilization is fairness.

    But to cut through your DULL prolixity, here's a simple fact: in the prosperous 50's and 60's, income tax rates did indeed go to 90%, such that, for people with high incomes, working another hour was almost counter-productive. Yet those are the decades that produced the basics for nearly all modern technology, went to the moon, and so on.

    The only connection between low tax rates and economic prosperity is that with low tax rates, especially on unearned income ("capital gains"), then The Rich prosper but everyone else suffers. Income disparity in the US is back to 1920's levels, and The Rich now explicitly own the gov't, have it start wars to steal resources around the world, and steal domestic liberty to install an unprecedented surveillance system.

     

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      James Burkhardt (profile), Oct 24th, 2012 @ 9:19am

      Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

      You happen to have a strange debate process. A) agree with the Basic point of the article. B)Argue that everyone is an idiot because they haven't decided to topple society in one sweeping move without an example of anything that works better. C)??? D)Profit.

      What?

       

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      Dark Helmet (profile), Oct 24th, 2012 @ 9:21am

      Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

      "in the prosperous 50's and 60's, income tax rates did indeed go to 90%, such that, for people with high incomes, working another hour was almost counter-productive. "

      Wait...WHAT?!? How does working another hour, still earning 10% in takehome pay (assuming you've already crossed into the 90% bracket), equate to being counter-productive? And you are aware that tax exemptions did exist in the 50's as well, right?

       

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      Robert (profile), Oct 24th, 2012 @ 9:23am

      Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

      Wow, coming from you OOTB, I am really impressed!

      Damn.

      Wait, are you sure this is really you and not an imposter?

       

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        Atkray (profile), Oct 24th, 2012 @ 10:56am

        Re: Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

        I think that is the real original OOTB who does have some coherent posts. Sadly it seems that recently he is spending more time as TAM or bob or AJ.

         

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        Anonymous Coward, Oct 24th, 2012 @ 11:50am

        Re: Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

        I thought the same thing.

         

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      DCX2, Oct 24th, 2012 @ 9:55am

      Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

      income tax rates did indeed go to 90%

      I actually came here to blast Mike about the strawman of 90% income tax rates, but I suppose this will do.

      Note that those were MARGINAL tax rates. The EFFECTIVE tax rate is much lower than that.

      See this nice wiki graph that shows how a marginal rate of 35% at 370k actually results in an effective tax rate of about 28% - before any deductions and such.

      http://upload.wikimedia.org/wikipedia/commons/8/85/Federal_Income_Tax_Rates_in_the_US%2C_20 09.jpg

       

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        PT (profile), Oct 24th, 2012 @ 5:17pm

        Re: Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

        Yes, but the effective tax rate is asymptotic to the marginal rate - the more you make, the closer it gets. When The Beatles released "Taxman", they really were paying a marginal rate of 95%, and an effective rate probably well over 80%.

        Didn't seem to stop them creating music, though.

         

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      Milton Freewater, Oct 24th, 2012 @ 3:15pm

      Re: Is Liebowitz an "econmist"? If so, then like all, he's crazy.

      "As I've said, "economics" is just opinions about who should live in idle unearned luxury and who should be forced to labor and give their products to others. "

      I don't really agree with your reductive attitude toward economics in general, which is a whole field of study. There are a few facts involved.

      More to the point - if you believe copyright is a moral issue, as you just claimed on another post, why are you not claiming this whole post is irrelevant? Moral rights don't sunset. If copyright infringement is morally wrong, it's morally wrong regardless of what the law says.

       

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    Anonymous Coward, Oct 24th, 2012 @ 9:03am

    I don't deny that it's efficient to sort of weaken copyright to a certain balancing point. What I'm saying is that we can do that, we have the tools to do that, and no one finds it particularly morally objectionable to weaken copyright to get to what is the proper balance. The point of my paper is that if we were doing it the way we're saying we would like to, we would be removing rents from the creators of copyrighted works, because that's how you get the balance that's most efficient. But we don't go reducing rents elsewhere in the economy, say from basketball players.

    So let me get this straight:
    - It is economically efficient to weaken copyright.
    - No one finds it morally objectionable to weaken copyright.
    - It is desirable to weaken copyright.

    Therefore:
    - We should not weaken copyright.

    What.

     

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      Anonymous Coward, Oct 24th, 2012 @ 11:26am

      Re:

      His arguments are so weak that he talks black fluently.

      But he is right: If you speak and do not recieve you concieve exponentially less money from South Africa.

       

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    jupiterkansas (profile), Oct 24th, 2012 @ 9:05am

    When the basketball player stops playing basketball, he stops making money. Using that example as a counter to copyright is simply ridiculous.

     

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    Lord Binky, Oct 24th, 2012 @ 9:07am

    "But I create the story. Why should you be allowed to generate revenues on a story that I created? "

    If no revenues are generated from the story, then it's ok? I guess he just admitted that pirating is ok everyone!

    If it's not ok to use a story even when no revenues are generated, then every parent should be thrown in jail for reading a book to their child, that child didn't have to buy their own copy of the book.

    Hell, reading a book more than once should be illegal since you are making use of someone's story without paying them again, which is preventing them from generating revenue.

     

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      Chosen Reject (profile), Oct 24th, 2012 @ 10:32am

      Re:

      I always wonder, if it's not OK to use a story that someone else created, and this guy is wanting copyrights to be extended, then why is it OK to use old stories? Where do these people draw their line? Why is it not OK for me to use Steamboat Willie(published 1928), but it is OK for me to use Peter and Wendy(published 1911)? You can say because one is older, but in the context of wanting to extend copyrights, that doesn't make any sense. There was 17 years between the publishing of those two works. The Copyright Term Extension Act in 1998 extended copyrights by 20 years, which by my math, is more than 17.

      Disney will tell you it is immoral to use Steamboat Willie until it is 120 years old, but they published Peter and the Starcatchers in 2004 when Peter and Wendy was only 93 years old. They'll tell you that you are killing artists if you use their works before 120 years is up, but they produced their Jungle Book movie only 73 years after Rudyard Kipling's work's copyright expired. Which is it? Is it immoral to use someone else's creation at all or only if it's before a certain time? If it's only before a certain time lapses, what is that time? The maximalists are very inconsistent here.

      And I'd love for someone to say, "but they are following the letter of the law". Correct, so is Aereo. So was Megaupload. Yet in those cases, following the letter of the law is considered bad because they don't follow some mystical-open-to-interpretation-only-by-copyright-holders spirit of the law.

       

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        Chosen Reject (profile), Oct 25th, 2012 @ 9:36am

        Re: Re:

        Edit for posterity:
        produced their Jungle Book movie only 73 years after Rudyard Kipling's work's copyright expired
        Should read:
        produced their Jungle Book movie only 73 years after Rudyard Kipling wrote his book (the same year the copyright expired)

         

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      Pirate Captain Jim, Oct 25th, 2012 @ 11:26am

      Re: Rereading

      That's why ebooks are in turmoil right now. Authors and publishers have an unprecedented opportunity to stifle the future of the royalty-free used book market by making sure it doesn't get to exist in the electronic space.

       

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    Anonymous Coward, Oct 24th, 2012 @ 9:07am

    I would love to see copyright end latest when the creator dies. No more immoral (blargha) profiting by records companies on the creator's death with re-issues, compilations, lives, and other posthumous studio track, duets, hologrames and whatever else their fertile imagination can come up with. :D

     

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      Anonymous Coward, Oct 24th, 2012 @ 9:14am

      Re:

      Establish a fixed length instead. Tying it to lifespan, while better than having the additional seven decades, is unfair to those who die unfortunate deaths, and will likely make targets out of the creators of exceptionally popular things.

      As for the length to use, I recommend zero years.

       

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        Lord Binky, Oct 24th, 2012 @ 9:25am

        Re: Re:

        I don't think we have to worry about incentivizing the deceased to create more. I have yet to hear any complain about being paid fairly either.

        Although I guess it could be seen as heroic to start assassinating the greatest writers so their work can be used 'For the grandchildren'.

         

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          Anonymous Coward, Oct 24th, 2012 @ 9:58am

          Re: Re: Re:

          Perhaps I should be a little clearer.

          As I mentioned, I think the length of copyright should be a constant number of years. I would like that number to be zero, but that is rather unrealistic, at least for now.

          What I think won't work is adding an "or until creator's death" clause. That adds an economic incentive to have people die, and no matter how reprehensible we find a murderer who offs an artist to free up his works, those works are freed as a result; unless and until someone steps in and makes an exception for murders, and then for accidental deaths, and suicides, and all the other things that people die of besides old age. And eventually someone proposes that we can solve all of those problems and loopholes by just bolting more years onto the monopoly after the author's death, and you end up with the nonsense we've got now.

           

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            Lord Binky, Oct 25th, 2012 @ 8:24am

            Re: Re: Re: Re:

            Copyright overall is just BAD.

            It should be obvious from as much struggle & shoehorning that goes into making it exist and usefull while minimizing it's negative effects. Even then we still have to ignore the harms it causes to slightly justify it's existence.

            It slows down so many things, for no other reason than profit and pretend control. That same profit can be made from smart business elsewhere, and the control over things copyrighted is make-believe and why we have to try to create a permission culture with absurd penalties. All the while it wastes people's time, and slows down many other things.

            The aren't any problems we try to solve with copyright that would not be better addressed with specific solutions.

            And thinking you deserve control of something after giving it away doesn't occur anywhere else, why do we think that with information?

             

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    Anonymous Coward, Oct 24th, 2012 @ 9:09am

    I knew it was coming

    this is the wookie defense for copyrights..

     

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    artp (profile), Oct 24th, 2012 @ 9:12am

    You wouldn't want to tax a basketball player who is making a lot of money

    And yet, when I was laid off and given a separation payment at the rate of one month's pay per year of service, the government taxed it as a windfall.

    The law does not make sense when it is made one little tiny piece at a time and stitched together with never-never thread by billionaire tailors.

    But I'm not bitter... much.

     

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    Beech, Oct 24th, 2012 @ 9:13am

    Car analogy

    I believe the proper car analogy is "if I own a used Taurus, and Ford produces more Tauruses, they are affecting the 'earning capacity' of my Taurus! (due to supply and demand)"

    Clearly car manufacturers should stop making cars so mine retains its value.

     

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    crade (profile), Oct 24th, 2012 @ 9:14am

    Every time you cook a carot you're stealing money from the descendents of first person you thought of cooking a carot, who were stealing from those of the first person who thought to plant one who were stealing from those of the first person who thought to eat one who were stealing from those of the first person who thought to pull one out of the ground.

     

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    Anonymous Coward, Oct 24th, 2012 @ 9:18am

    1/ Outsource actual production while maintaining artficial high prices and pumping up profit
    2/ Protect positions through IP-langrab and export of perpetual IP-rights, taxing everyone else's activity
    3/ IP-Bubble implodes
    4/ Worst recession ever

     

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    Wes, Oct 24th, 2012 @ 9:27am

    This is why we should not allow information to be owned in any way. The benefits people trot out about prescription drugs research and a few other unique cases don't outweigh the knowledge and cultural costs associated with intellectual property.

     

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    Tor (profile), Oct 24th, 2012 @ 9:41am

    Transaction costs

    If you look at copyright as a way of reducing the transaction costs involved in the creator striking a deal with those who benefit from his/her work, then it seems very strange to come from an economical perspective and claim that "hey, we should for all practical purposes make copyright perpetual".

    Yeah right - that would really reduce the transaction costs...

     

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    Bengie, Oct 24th, 2012 @ 10:09am

    hmmm..

    Ignoring ethics, morality, and economics, longer copyrights are a Good Thing(tm)

     

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    hxa7241, Oct 24th, 2012 @ 10:12am

    There is a complete rebuttal to Liebowitz's article here: http://www.hxa.name/articles/content/reply-to-efficient-copyright_hxa7241_2012.html

    Liebowitz is sort-of trying to make a moral argument, since he well knows the economic argument does not support his maximalist intent. But the problem is he really does not seem to know anything about how to.

     

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    The Infamous Joe (profile), Oct 24th, 2012 @ 10:16am

    Uh.

    SL: Because it's an issue where you want to have the freedom to generate revenues from an item that I created.

    What if I want the freedom to just give away, without generating revenues?

     

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    Atkray (profile), Oct 24th, 2012 @ 11:18am

    The real issue

    "Why should you be allowed to generate revenues on a story that I created?"

    This is the whole problem, the selfish greed that insists that no one else should be able to benefit from the work of someone else. It doesn't matter if you aren't doing anything with it and someone decides to build on your dormant work and it brings you some new-found recognition, the fact that someone else is benefiting just galls them.

    Copyright maximalists don't want reasonable copyright they want complete control in perpetuity.

     

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    ECA (profile), Oct 24th, 2012 @ 12:03pm

    So..

    IF' I can write a wonderful song that many people love.
    I copyright the music, song and all of it..
    I can get paid every time someone PLAYS IT??
    THEn my family can also????

    So,
    I can clean a floor.. Stip it, sand it, wax and seal it, Buff it SHINY.. And get paid HOW MUCH?? for the rest of my life??

    Pay the artist LESS?? Charge the customer MORE??
    They dont get much from the recordings ANY WAY?? that has been shown many times.

    Are we STILL paying for that 1920's CHEST??

    A Cellphone has around 200 patents that have to be PAID, and you wonder WHY IT COSTS SO MUCH..

     

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    Simple Mind (profile), Oct 24th, 2012 @ 1:13pm

    let's play b-ball

    If we agree to tax Coby Bryant more then will this guy agree to reducing copyright? Because I am all for both of those things.

     

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    Trevor (profile), Oct 24th, 2012 @ 2:06pm

    A better comparison is:

    Creator A creates a book, and sells it to person B. Person B uses the book, but because of copyright, B cannot sell it, unless A gets a cut.

    Automaker A creates a car and sells it to person B. Person B uses the car, but every time thecar is sold, the automaker would need to get a cut, or be able to block future sales...

     

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    Zem, Oct 24th, 2012 @ 4:04pm

    An alternate analysis of this debate

    To get the full gist of my analysis it would help to read the wiki article on the names of colours.

    http://en.wikipedia.org/wiki/Green#Languages_where_green_and_blue_are_one_color

    I would put forward that this debate isn't about ecenomics at all but the conflict that arises when a society and it's language are in a transitory phase. Here we have a person who only knows the one word, that covers both the colours blue and green, debating someone who has made the shift to blue and green being separate words.

    The result is the "signle word colour" person is never going to understand the arguments made by the second. With the additional tragedy of the second person fully understanding the firsts argument, but rejecting them.

     

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    That Anonymous Coward (profile), Oct 24th, 2012 @ 5:48pm

    Economist's Defense Of Perpetual Copyright: It's Best To Just Ignore The **AA paid Economist.

    FTFY

     

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    Lord Binky, Oct 25th, 2012 @ 8:10am

    I was going to post this as a reply, but it got too long >_

    I REALLY don't see how we went backwards in thinking, besides the fact someone said, 'BUT ELECTRONICS'.

    When I bought a paper book, the paper in the book is mine. The ink on the pages are mine. But I didn't buy the book to own dried ink and biodegradable plant matter.

    I bought it for the information held within the patterns of the ink that sits on the paper bound within the covers of the book.

    It is acceptable to replicate the information in the book by hand, then give that to a friend, even sell it or keep the replicated information and sell the paper book. When I sell the book, the value of the item is still NOT in the physical item, it's in the information stored in the patterns on the physical item (ie. the printed letters). The physical mass has little value itself, and ALWAYS has.

    Nothing has changed about the value of information in the transition from electronic storage vs dye(Ink) storage.

    Except somehow humans are expected to give up their rights to information now, because it is worthwhile (Worth the time and effort) for individuals to replicate information.
    =-=-= How it's ALWAYS been...for business =-=-=
    If you wanted to sell dried Ink on paper(publisher) to a store that wants to sell dried Ink on paper again(book store) for more than the costs of manufacturing and shipping the item, you had to increase it's value somehow.

    If you wanted to sell a blank book, people might buy that, so the book store might buy it. To increase the value of a blank book, you might change the shape, size, color of various parts of the book and hope that it increases the value of the blank book to the bookstore's customer, and therefore the value of the blank book to the bookstore.

    To further increase the value of dried ink and bound paper, the publisher would arrange the dried ink into patterns called letters, and put the letters in a pattern that would contain information.

    To maximize the value of the dried ink on paper, the publisher wants to maximize the value of the information in the ink patterns to the customer's of the book store, and therefore the bookstore's value of the book. So the publisher would pay a person to create/use information (An
    Artist/Author) to put in their book.

    Nothing prevented the author from giving the same information to another publisher. One of the ways increase the value of the information in the book over information in another publisher's book is for that to be different/unique information. There are MANY other ways to continue to increase value, such as adding more information like pictures.

    A common way to increase value of the information in the publisher's books, the publisher and author would make a formal agreement (contract) for the author to not give the information they created to another publisher. This is not required, or necessary at all.

    As soon as the information in the book is spread to other people, it can be copied and changed by those people. Regardless of copyright it's possible, and part of the value of the information.

    This could be even another publisher. This second publisher wants to sell their ink and bound paper to the bookstore as well, so they put the same information (translate it and maybe more!) in their book as well. They could also sell to a different book store that does not receive the first publisher's book's, and therefore values the second publisher's book more than if they already had books with that information.
    **THESE ARE GOOD THINGS*** Without the second publisher, there is little pressure for the first publisher to quickly sell the information to as many stores as possible, or translate the book, or do as many other things to increase the value of their book as possible. They may do these things over a long span of time to keep increase the value of their book to the book store's customer's as the information become more widespread, and that **IS BAD**.

    Time is the one thing all humans have a limited amount of. Increasing the time improvements take on purpose is bad for people, it wastes their most precious resource.

    In spite of this, we created copyright. We try to limit the spread of information. Artificially increasing the time it takes that information to spread and be used, which only wastes our most precious resource.

    And why? For who? The publishers? Like I just said, that would be bad for everyone. The author's? The author's either would be creating art on their own for their love of it, or are the tools of publisher's to sell ink on paper. Copyright does not help them create, and only limits their creations. They may feel they own the information they created, but that is wrong, and folly. They are NOT the god of their information, controlling it however they see fit. If they do not like how another human may use their information, they should simply keep it to their self then. That is all the control they truly wield over their information in their mind, anything else is a silly notion and quite impossible much less even remotely practical.

     

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    Lord Binky, Oct 25th, 2012 @ 8:28am

    And this really pisses me off.

    "SL: If you consider an item, and we'll say let's treat it like other property, then yes, my story is my story. And you want to steal it. "

    If you gave your story away, ie you sold it, WHY do you still own it? A jeweler no more owns the ring he made after he sold it, than an author owns the story after he stold it.

     

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    Pirate Captain Jim (profile), Oct 25th, 2012 @ 1:39pm

    Corporations are people, too...

    It's not my unborn great, great (...) grandchildren who Liebowitz is trying to protect, it's the corporation -- the movie studio or record label or publishing house. Or maybe it's The Captain Jim Estate, Inc., established by my ex-wife's legal team.

    If somebody is going to profit from my work after I die, it had better be the people who outlawyered me while I was alive, not some random librarian or teenage mashup artist on YouTube. Let's sue those lawbreaking bastards for everything they're worth.

     

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    Anonymous Coward, Oct 26th, 2012 @ 11:05am

    I don't understand the comparison to a basketball player. Every year the basketball player has to put in significant work to be able to perform the task the get paid for where the artist only toils once and gets paid for life. For the comparison to be appropriate wouldn't the artist have to create constantly seeing only a few months period of reimbursement followed by more work for the next years possibility for reimbursement with the inevitable forced move to commenting on others work instead of being paid for there's?

     

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