Eternal Copyright

In an op-ed entitled “A Great Idea Lives Forever. Shouldn’t Its Copyright?” in last Sunday’s New York Times author Mark Helprin tries to make the case for eternal copyright.

Once the state has dipped its enormous beak into the stream of your wealth and possessions they are allowed to flow from one generation to the next. Though they may be divided and diminished by inflation, imperfect investment, a proliferation of descendants and the government taking its share, they are not simply expropriated.

That is, unless you own a copyright. Were I tomorrow to write the great American novel (again?), 70 years after my death the rights to it, though taxed at inheritance, would be stripped from my children and grandchildren.

Before we go any further, let me point out that the government of Cook County takes a little bit of my home every year. Rather than actually assigning a percentage of my home to the County, I just send them a check for the cash value of what they’re taking. They may not be taking all of it at once, but they’re taking it nonetheless. (And if I fall behind on payments, they certainly will take it all at once.)

Keep in mind, this is not a sales tax or an income tax. It’s not based on any kind of activity involving the property. They just take a piece of it every year simply because it exists. Nobody is charging authors money every year just for having a copyright.

…why, when such a stiff penalty is not applied to the owners of Rockefeller Center or Wal-Mart, it is brought to bear against legions of harmless drudges…

…the Constitution states unambiguously that Congress shall have the 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.” …

It is, then, for the public good. But it might also be for the public good were Congress to allow the enslavement of foreign captives and their descendants (this was tried); the seizure of Bill Gates’s bankbook; or the ruthless suppression of Alec Baldwin. You can always make a case for the public interest if you are willing to exclude from common equity those whose rights you seek to abridge. But we don’t operate that way, mostly.

Helprin is badly confused. You can’t enslave people without taking away their freedom, and you can’t seize Bill Gates’s money without taking money away from him. Likewise, taking Rockefeller Center or Wal-Mart stores deprives their owners of the use of them.

Making a copy of one of Helprin’s novels, however, doesn’t take anything away from Helprin. It doesn’t take anything away from his publisher, either. That probably sounds wrong to people like Helprin for whom copyright is a part of everyday life, but it’s not, as a simple example should demonstrate.

Let’s say Helprin writes a novel, and his publisher prints an initial production run of 20,000 copies. The publisher then sells 10,000 copies for $10 each, and pays Helprin a 10% royalty. At this point, Helprin has his original manuscript and $1000 cash, his publisher has 10,000 leftover books and $9000 cash, and his fans have 10,000 books.

If I received one of those books, I could spend a week typing it into my computer and then use an online printing service to run off another 10,000 copies which I could sell to the public. After the sale, Helprin would still have his original manuscript and $1000 cash, his publisher would still have 10,000 leftover books and $9000 cash, and his fans would still have the 10,000 books they bought. In other words, they’d have exactly what they had before I copied his book. They lost nothing.

Helprin would no doubt object that he is owed royalties on the copies I sold, but the reason for that is not as obvious as he thinks it is. I paid for the book, I purchased a computer, I bought an internet connection. Then I did all the work of typing in the manuscript, just like he did, and I paid to have it printed and sold, just like his publisher did. Neither he nor his publisher spent any time or money getting my 10,000 books printed, so why would either of them deserve to get any money?

Here’s another way to look at it: If I bought Rockefeller Center or a Wal-Mart store, I could do whatever I want with it. But if I buy a copy of his book, he wants the right to prevent me from making copies of it. He wants to control what I do with it after he’s sold it to me. And he’s implying other people of being greedy?

Nevertheless, copyright law says he should get money. Why is that? It turns out there are a couple different types of property.

My wife and I own our home, two cars, several computers, and a bunch of other stuff. Legally speaking, ownership of any property consists of a collection of rights to that property, two of which are important in this context. The first right my wife and I have is the right to use our property. We can occupy our homes, drive our cars, and surf the web on our computers.

The second right we have in our property is the right to exclude others from using it. We can keep other people from entering our home, driving our cars, and using our computers. This right follows naturally from the first, because the right to use our property is harmed if other people are also allowed to use it. What would be the point of owning a home if anyone else could enter it to prepare a meal in our kitchen or take a shower in our bathroom? We might as well live in the park.

Economists say that these types of property are rivalrous goods. The users of these goods are rivals: One user’s enjoyment of the the property comes at the expense of all other potential users. Most of the goods you buy in stores are rivalrous. The can of Diet Coke I’m drinking as I write this is a rivalrous good: Every sip I take is a sip that no one else will ever enjoy. I have depleted the world of a can of Diet Coke, and someone else will suffer by being unable to drink it.

(There are probably 100 million cans of Diet Coke in the world right now, and several billion cans of close substitutes, so my consumption of this can imposes very little hardship on the rest of the world, which is why the market cost of a can of Diet Coke is only 25 cents.)

I’m also eating a piece of steak, and that too is a rivalrous good (albeit a more expensive one). That raises the question: What kinds of goods are non-rivalrous?

You’re reading it. The contents of this blog are a non-rivalrous good.

I don’t know why you’re reading my blog. Perhaps you find it informative, perhaps you find it entertaining. Perhaps it reinforces your own values, or perhaps you are reading it to plan your rebuttal. Whatever the reason, whatever you’re getting out of it, its utility for you is not diminished if someone else in the world is also reading it.

That’s generally true of all intellectual property. Your enjoyment of a song on the radio is undiminished by the number of other people enjoying it, and it doesn’t matter how many other people see the same show on television. Intellectual property is a non-rivalrous good.

It gets a little complicated if we’re talking about intellectual property that’s more tangible than a web page. If you’re reading Helprin’s book, your enjoyment of it is undiminished if someone else is reading another copy. But your enjoyment would surely be diminished if someone else was reading your copy instead of you. That is, the books themselves are rivalrous goods, but the ideas within are not.

This is not an ideal situation, however, because of an asymmetry in the market for ideas. The problem arises because only Helprin does the work of creating the idea, but his fans are able to enjoy the idea once they read his books.

Helprin, like many writers, probably enjoys the feeling that comes from finishing a book. That is his reward for doing the hard work of creating the book. In the absense of copyright, that is his only reward, since his fans don’t have to buy their copies from him or from someone who pays him royalties.

Suppose instead of writing the book, Helprin does something he finds at least equally enjoyable. Perhaps he spends the same amount of time relaxing on the beach. More likely, he spends the time working at a paying job so he can earn the money he needs to bring himself enjoyment. Helprin doesn’t get the joy of having written a book, but only because he chose to do something else to bring enjoyment instead.

The same cannot be said of his fans. They no longer get to enjoy reading his book, but unlike Helprin, they cannot enjoy whatever it is he’s doing instead. They simply lose out.

What it all adds up to is that lots of people would benefit if Helprin wrote the book, but only Helprin benefits if he doesn’t write the book. Clearly the world as a whole would be better off if he wrote the book. However, the world doesn’t get to decide if the book gets written, only Helprin gets to do that. But because he only receives part of the benefits of writing the book, he may decide not to write it, and the world may not be as pleasant as it could be.

That sort of situation is called a market failure. The free market does not properly reward the creators of intellectual property, so in the absense of another reward mechanism, the creators tend to produce less intellectual property than would ideally be desired.

One good solution to this problem is to arrange a way for Helprin to share in the benefits that other people receive from his book. In a free market society, we do this by arranging a way for the people who benefit from the book to pay the author some money. Rather than specifying some sort of fixed fee—a buck a copy, say—we have created a legal mechanism by which Helprin is allowed to prevent other people from making copies of his book without his permission. This allows Helprin and any interested parties to negotiate a rate that they all agree on.

Of course, it costs Helprin nothing when someone else produces and sells a book, so his royalty income is pure profit. Even at a penny per book, he’d be making money. Of course, if he raises the price higher, he’d make even more money. At two pennies per book, he’d make twice as much per book, but the increase is price would reduce the number of books sold, so he wouldn’t quite make twice as much profit.

As he keeps raising the price of the book, he’d keep making more per book but selling fewer books. At some point, raising the price another penny wipes out enough sales to balance out the increase in income from a higher price. Beyond that point, raising the price reduces income. This is the point of maximum income, and it’s the price he’ll set for his books.

(Well, actually, he’ll just work out a deal with his publisher, and his publisher will guess at his price. The point is that his price will be significantly higher than zero, which is what it would be if he couldn’t enforce his copyright.)

At that price—whatever price he sets above zero—a significant number of people will not be able to afford his book and therefore will not be able to enjoy it. This is a problem. The content of his book is a non-rivalrous good, meaning it hurts no one if more people read it, so it costs nothing to re-use the content in another book, yet the copyright system still prevents some people from getting copies.

That is a market failure of a different sort: We have a good that is innately free to produce, yet some people still can’t get enough of it. The solution we have chosen was a compromise between these two types of market failure: We have copyrights to give people an incentive to create intellectual property, but those copyrights expire so that everyone can eventually benefit.

Helprin claims copyrights expire for the public good, and I suppose that’s true. But the public good—encouraging artists to create art—is also the reason that copyrights exist at all. Ideally, we’d like to give artists the right incentive to create valuable art while also seeing to it that everyone who could benefit from a piece of art does so. The structure of copyright law is a compromise intended to balance the tradeoff between rewarding the artist and inpoverishing his patrons.

…Barnes & Noble is able to publish price-reduced non-copyrighted works not so much because it saves the 10 percent to 15 percent of revenue that would go to the gruel-eating authors, but because it saves the 50 percent that would go to the publishers. Booksellers that publish their own titles benefit not from escaping the author’s copyright, but the previous publisher’s exercise of a grant of rights… “Freeing” a literary work into the public domain is less a public benefit than a transfer of wealth from the families of American writers to the executives and stockholders of various businesses who will continue to profit from, for example, “The Garden Party,” while the descendants of Katherine Mansfield will not.

Helprin’s claim is pure nonsense, bordering on outright lies. If you wan’t to read “The Garden Party” and you don’t want to spend money at a book store, you can go here. That’s Project Gutenberg, an online repository of public domain works. Along with its partners and affiliates you can find about 100,000 titles with just a few searches.

Barnes & Noble makes money selling copies of “The Garden Party” because Barnes & Noble went to the trouble to print copies of it and ship those copies to stores that are near to people who want to read it. If the descendants of Katherine Mansfield took the trouble to print and distribute their own copies of “The Garden Party,” they could make money too.

This last point sheds some important light on the whole situation. When the copyright on Helprin’s book expires, he and everyone else can make equal use of his story. He is in no sense a second class citizen here. All that has happened is that he has lost his special privileges that no one else had.