The theory behind copyright, of course, is that such government-granted monopolies are necessary to encourage innovation in a market. The idea is that, without such protectionism, no one would bother innovating, because they'd know that others would immediately copy them. This was based on theory, however, and tragically, many people have continued to assume this theory must absolutely be true. As we've noted in the past, it's this odd "faith-based" approach to copyright law. That's a problem, because every bit of evidence suggests this theory is simply not true
. Every time we look at creative industries where there is no or little copyright protection, we seem to find an awful lot of innovation and creativity, where the theory would suggest it doesn't make sense for that to happen. In fact, when we've compared industries across countries where one country has copyright protection and the other does not, those without copyright tend to be bigger
, more innovative and more creative.
In the past, we've looked at how the fashion industry
, the restaurant industry
, the stand-up comedy industry
, and even the magician industry
all seem to be incredibly creative and thrive without copyright protection. Now, Kal Raustiala and Chris Sprigman, who have been studying this same topic for a long, long time, are highlighting the same thing in an area you might not have considered: football plays
. Yes, football plays -- which are not copyrightable. As they note, American football has been filled with creative innovation when it comes to new plays. And, while the faith-based "theory" of copyright suggests that no team would innovate because others would just copy them, reality has shown quite the opposite. Raustiala and Sprigman go through a series of innovations, from the forward pass, to the "west coast offense" to the "zone blitz" to the "no huddle offense" to the "spread offense." Each were massive innovations that effectively changed the game.
As they note, each time there was a new innovation, it was met with "contempt," as others accused teams of "cheating." And, yet, over time, each of these innovations spread across the league, as teams copied them and continue to innovate as well. They point out that someone even did try to copyright a football formation once (comparing it to dance choreography -- which is copyrightable). Raustiala and Sprigman point out that, despite the fact that such plays aren't copyrightable, there's still so much innovation. One key point they make, is that this is an area where a first mover advantage is quite important. Of course, that applies in many other industries today as well.
Towards the end, they make a key point about economic theory, that's absolutely worth sharing:
Finally, the story of innovation in football is tied to a much deeper debate in the economics of innovation. Economists today disagree about the conditions most conducive to innovation. Some, following the ideas of Joseph Schumpeter, maintain that innovation requires shelter from competition -- the firm in a competitive market is hard-pressed to focus on anything but the short-term, and because profits are limited by competition, may lack the resources to innovate. Other scholars, following the lead of Nobel laureate Kenneth Arrow, argue that innovation is best fostered by sharp competition -- firms struggling for any advantage over their rivals are forced to innovate or die. This divergence in views has hardened into a Schumpeterian vs. Arrovian standoff -- and the state of the evidence does not allow us to fully understand yet which view is right.
Intellectual property law, however, is essentially Schumpeterian. The theory of patent and copyright is that by sheltering innovators from competition -- that is, by prohibiting copying of the innovation -- we encourage innovation. But perhaps the Arrovians are right. Football, for example, illustrates innovation occurring in the midst of cut-throat competition. And football doesn't stand alone. Some of the other creative industries we've described, such as fashion and food, look like Arrovian innovators as well.
This is a perfect summary of many of the debates around here (and reminds me why I've never been a fan of Schumpeter and keep one of Arrow's texts on the economics of information on my desk at all times). It also explains why I have so much trouble with today's intellectual property law. It completely assumes a Schumpeterian view on the world, when a significant amount of evidence suggests Arrow's view is the correct one. The one point where I disagree with the statement is the idea that the evidence is not compelling enough in one direction. The more you look, the more it seems to suggest that Arrow is absolutely right on this one, and Schumpeter is -- as with many of his insights -- compelling and thought-provoking, but slightly off in the all important details.