Copyright Is About Incentives, Not Protection

from the net-benefits dept

Whenever we discuss the issue of copyrights and bring up the fact that copyright is not a welfare system to protect creators, people get upset with us. There seems to be this false assumption that copyrights (and patents) are designed for the sake of protecting the creator of content. That's not true and it's never been true. From the very earliest debates about the concept of intellectual property in the US, it has always been about creating incentives for innovation -- or, as the Constitution so eloquently puts it: "to promote the progress of science and useful arts." In thinking over the various debates over copyright, it seems to come down to this particular issue over and over again. Those who are focused on the original purpose of copyrights recognize the problems with the copyright system and are interested in fixing them. Those who believe that the purpose of copyrights is to "protect" don't have a problem with the way things are, or with the idea of strengthening copyrights, even if they weaken the actual market and are a net negative on society.

This is quite clearly indicated in a great article by Julian Sanchez arguing against extending copyright protections to the fashion industry (found via Tim Lee). The question of extending copyrights to the fashion industry has been discussed at length before, but a few key points in Sanchez's piece highlight this split in thinking about the issue. He notes, as many others have, that the industry is constantly innovating and is quite healthy -- which is why the idea that new "incentives" are needed seems laughable. However, if you view things from the position that copyright is about protecting, then it's a different story. Sanchez notes that while individual designers may be harmed, it's only helped the overall industry. From that standpoint, if you believe in protectionism, then you say these new laws are needed to "protect" those who are harmed -- ignoring the greater harm caused to the rest of the industry.

The history of economics is littered with examples of why protectionism is rarely, if ever, a reasonable policy. It tends to backfire badly, in part because it takes away many of the incentives for competition and innovation. In protecting one area, you are inevitably harming another. Indeed, studies have shown that innovation in the fashion industry is often because of the rampant copying, rather than in spite of it. That's the way you want markets to work -- where competition drives innovation by forcing companies to keep innovating to leapfrog each other. Sanchez quotes legal scholar Kal Raustiala to make the point: "When a successful restaurant opens up on a street that's never had a restaurant before, there's a way in which the second business is parasitic on the first. But in the United States, we call that capitalism and competition."

Filed Under: copyright, fashion industry, incentives, protections

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  1. identicon
    Travis, 25 Sep 2007 @ 12:05am

    Re: This may not be so bad...

    So run with this idea. We extend the protections, and fashion suffers. But who's going to be left to repeal it? The people with power or money(inevitably made rich by the protection) are the main people who could do something about it--and exactly the people that would do anything to keep it from going back to the way it is now.

    Sure, it might make a great sidenote in the econ textbooks, and as far as I'm concerned it might as well be the fashion industry that suffers this fate, but I don't think that the situation would play out quite as ideally as you imagine. It's far more likely that it'd set a precedent toward more unneeded protections than it would make the world realize that we should have a huge shift in our thinking about copyrights. But perhaps I'm just a cynic and a closet fashion zealot :-)

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