Sunday, May 6, 2012

Copyright is a subsidy

The Congress shall have Power... 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. -- Copyright Clause, United States Constitution
As you can see, the rationale for copyright, in the US at least, is about promoting progress. It has nothing to do with notional "rights" of authors, and is explicitly not a property right. But the Constitution was a long time ago; maybe laws have changed focus since then. Well, no. The Copyright Act of 1790 bills itself as "An Act for the encouragement of learning." It was amended in 1831, primarily to extend it, with very little discussion of its purpose. A major revamping was undertaken in 1909, again with very little discussion of purpose. Finally, more changes were made in 1976, which is still good law, and once more, it failed to specify a purpose for copyright. The only purpose of copyright is its original purpose; no new purpose has been specified, so we must conclude that Congress was satisfied with the Constitution and the original act.

Now, of course, everything the government does is supposed to be for our benefit, in theory, though perhaps not in practice. So naturally the question arises as to whether copyright, in the above context, really qualifies as a "subsidy" per se. I think it does. A subsidy, in traditional terms, is money paid (usually by the government) to a business or industry to encourage that business model, theoretically due to positive externalities. However, in practice, the term may also be used to describe the government consistently favoring one company or industry over another in e.g. government contracts. From this, we see a broader principle: a subsidy is an action, typically by the government, which encourages a particular behavior via an economic incentive, at the cost of a reduction in competition, for the benefit of the public at large. Well, let's look at copyright through that lens. Copyright is defined as a limited monopoly granted by the government, so it's clearly an economic incentive which reduces competition. Theoretically, it's supposed to encourage the authorship and publication of creative works. This is supposed to benefit the public because of the mere existence of those works, and because, theoretically, they'll eventually enter the public domain for all to enjoy; this is a positive externality. That certainly seems to meet the criteria I specified above. Perhaps this definition is too liberal, but the principle is still there: copyright exists to benefit the public, not the author.

Now, I'm not saying that all copyright is inherently evil; I've never said that subsidies are necessarily bad. Indeed, it's thanks to copyright that we have many high-quality works. But I do feel that the reduction in competition means that there is a balance: there must be some point above which a particular subsidy does more harm than good, as the loss in competition eventually outweighs any public benefit. Of course, someone espousing a command economy would probably disagree with me on this point, but I feel the difference in opinion there is rather beyond the scope of this post. This principle applies quite nicely to copyright. Currently, copyright lasts for 70 years after the death of the author; essentially two and a half generations. It is not clear to me that this effectively "promote[s] the Progress" of anything. If it confers no benefit to the public as a whole, why are we doing it?