The purpose of copyright is to compensate the creator of the content: It's a common misperception that the Constitution enables our current legal regime of copyright protection -- in fact, it does not. The Constitution's clause on Copyright and patents states:

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries" (Article I, Section 8, Clause 8)

Thus, according to the Constitution, the overriding purpose of the copyright system is to "promote the progress of science and useful arts." In today's terminology we may say that the purpose is to lead to maximum productivity and innovation.

Scenario A
Artist's works are locked up under copyright, but he sells them for $1 per song downloaded.
Fans pay for and download 100 songs.

Scenario B
Artist frees up his work to the public domain, and encourages them to be spread freely. Thousands of copies of the song are downloaded. Artist sets up a Kickstarter to fund next batch of songs, and quickly raises $10,000

That's what Chris Taggart, co-founder of OpenCorporates and founder of the UK local government site OpenlyLocal, wondered recently when he was preparing to participate in a UK government workshop about open data:

Yesterday I received an email from a Cabinet Office civil servant in preparation for a workshop tomorrow about the Open Data in Growth Review, and in it I was asked to provide:

"an estimation of the impact of Open Data generally, or a specific data set, on UK economic growth… an estimation of the economic impact of open data on your business (perhaps in terms of increase in turnover or number of new jobs created) of Open Data or a specific data set, and where possible the UK economy as a whole"

My response:

"How many Treasury economists can I borrow to help me answer these questions? Seriously."

Because that’s the point. Like the faux Public Data Corporation consultation that refuses to allow the issue of governance to be addressed, this feels very much like a stitch-up. Who, apart from economists, or those large companies and organisations who employ economists, has the skill, tools, or ability to answer questions like that.

In fact, it's worse than that, since the actual figures produced by big companies – particularly those with a vested interest in preserving outdated copyright laws, say – often turn out to have no real basis in fact, as numerous previous Techdirt stories have shown. Large organizations can just use their size to lend an air of credibility to estimates that may be little better than some back of the envelope calculation.

Recognising this fact, Taggart decided to fight fire with fire by producing his own estimates that were pretty much jotted down on the back of an envelope. He also cleverly turned the question around, calculating not the positive impact of open data – something hypothetical and hence very hard to estimate – but the observed negative impact of closed data.

His calculations are surprisingly detailed (it must have been a big envelope), and are well-worth reading. His final figure? A loss of £17,850 million – around $28 billion – a year to the UK economy:

That, back of the envelope-wise, is what closed data is costing us, the loss through creating artificial scarcity by restricting public sector data to only those pay. Like narrowing an infinitely wide crossing to a small gate just so you can charge – hey, that’s an idea, why not put a toll booth on every bridge in London, that would raise some money – you can do it, but would that really be a good idea?

And for those who say the figures are bunk, that I’ve picked them out of the air, not understood the economics, or simply made mistakes in the maths – well, you’re probably right. If you want me to do better give me those Treasury economists, and the resources to use them, or accept that you’re only getting the voice of those that do, and not innovative SMEs [small and medium enterprises], still less the Big Society [ordinary people].

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The cumulative increase in expenditures on US domestic homeland security over the decade since 9/11 exceeds one trillion dollars. It is clearly time to examine these massive expenditures applying risk assessment and cost-benefit approaches that have been standard for decades. Thus far, officials do not seem to have done so and have engaged in various forms of probability neglect by focusing on worst case scenarios; adding, rather than multiplying, the probabilities; assessing relative, rather than absolute, risk; and inflating terrorist capacities and the importance of potential terrorist targets. We find that enhanced expenditures have been excessive: to be deemed cost-effective in analyses that substantially bias the consideration toward the opposite conclusion, they would have to deter, prevent, foil, or protect against 1,667 otherwise successful Times-Square type attacks per year, or more than four per day. Although there are emotional and political pressures on the terrorism issue, this does not relieve politicians and bureaucrats of the fundamental responsibility of informing the public of the limited risk that terrorism presents and of seeking to expend funds wisely. Moreover, political concerns may be over-wrought: restrained reaction has often proved to be entirely acceptable politically.

In seeking to evaluate the effectiveness of the massive increases in homeland security expenditures since the terrorist attacks on the United States of September 11, 2001, the common and urgent query has been "are we safer?" This, however, is the wrong question. Of course we are "safer"--the posting of a single security guard at one building's entrance enhances safety, however microscopically. The correct question is "are the gains in security worth the funds expended?" Or as this absolutely central question was posed shortly after 9/11 by risk analyst Howard Kunreuther, "How much should we be willing to pay for a small reduction in probabilities that are already extremely low?"

Indeed, at times DHS has ignored specific calls by other government agencies to conduct risk assessments. In 2010, the Department began deploying full-body scanners at airports, a technology that will cost $1.2 billion per year. The Government Accountability Office specifically declared that conducting a cost-benefit analysis of this new technology to be “important.”12 As far as we can see, no such study was conducted. Or there was GAO’s request that DHS conduct a full cost/benefit analysis of the extremely costly process of scanning 100 percent of U.S.-bound containers. To do so would require the dedicated work of a few skilled analysts for a few months or possibly a year. Yet, DHS replied that, although it agreed that such a study would help to “frame the discussion and better inform Congress,” to actually carry it out “would place significant burdens on agency resources.”