The University of Chicago Law School Faculty Blog

Is Fashion a Bad?

I'll start by making a partly-facetious, partly-serious point about this very interesting paper. The authors pitch it primarily as an analysis of why fashion has a low-IP regime, rather than whether that regime is optimal. Many of their arguments do in fact amount to a claim that many players in the industry (if not necessarily the industry as a whole) benefits from a regime in which imitation is largely unconstrained by IP law. But they avoid--almost deliberately, it seems--any discussion of whether society in general is better or worse off because copyright doesn't seriously protect fashion designs.

That strikes me as a bit of a shame, because their analysis of induced obsolecense seems to fit nicely into another classic theme in political economy: how an industry can sometimes arrange its market to its own benefit but to the detriment of society. The fashion cycle is perhaps the classic example of wasteful social behavior. We spend enormous amounts of money, time, and grief on things we'll throw away the instant they start to go out of fashion a few months (or even days) from now. Raustiala and Sprigman are hip to this set of arguments; they have the cites to Thorstein Veblen and his "norm of conspicuous waste" to prove it.

Barriers to Entry and Status Marks

"The Piracy Paradox" disclaims any attempt to be normative. But of course it's the normative implications that are most intriguing. Let me apply the paper's insights to an issue I've been contemplating, namely, status trademarks.

I'm referring to the marks themselves, not to design elements in a blouse or coat that may achieve distinctiveness as trade dress. As the authors note, rapid turnover in fashion design is probably good for the fashion industry, and like the authors I'm agnostic about whether rapid turnover in fashion design is bad for the populace. (See note 89 of "The Piracy Paradox.") Fashion has an aesthetic element that makes investment in its renewal potentially valuable for society as a whole. What I'm less agnostic about is the lack of societal value in status marks themselves.

Fashion's Piracy Paradox

Hello, readers of the Chicago Faculty Blog.  It's a great honor to have our paper, The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, which will appear in the December Virginia Law Review, serve as the topic of discussion on the mobblog and we thank Randy Picker for suggesting the idea. We also want to thank the commentators he has rounded up; it’s always great to get feedback from colleagues whose work we admire.

The Piracy Paradox is about the challenge that the fashion industry presents to the orthodox theories of IP. Advocates for strong IP rights argue that absent such rights copyists will free-ride on the efforts of creators and stifle innovation. Yet fashion presents a significant empirical anomaly: the industry produces a huge variety of creative goods without strong IP protection in one of its biggest markets (the United States), and without apparent utilization of nominally strong IP rights in another large market (the countries of the European Union). Copying and derivative re-working are rampant in both the U.S. and E.U., as the orthodox account would predict. Yet innovation and investment remain vibrant.

Why, when other major content industries have obtained increasingly powerful IP protections for their products, does fashion design remain mostly unprotected --and economically successful? The fashion industry is a puzzle for orthodox IP theory.

Our paper explores this puzzle.

China and Climate Change

With all the attention devoted to the elections, a remarkable story has been neglected: By 2009, China is now expected to be the world's leading emitter of greenhouse gases, surpassing the United States. This is a stunning finding, because even recent estimates had seen the United States as no. 1, and China as no. 2, as late as 2020 or 2025.

In terms of international controls on greenhouse gases, the explosive emissions growth in China raises enormous challenges. Both the United States and China have resisted such controls -- and apparently China's resistance has been even firmer than that of the U.S. It is certainly imaginable that the U.S. will accept an international accord of some kind within the next five years -- at least if China and other developing countries can be persuaded to participate. But will China participate? Its economic interest suggests otherwise. As China's economic growth becomes increasingly dependent on fossil fuels, the costs of stabilizing its emissions will remain very high, at least in the absence of some kind of technological breakthrough.

Mobblog on The Piracy Paradox

This upcoming Tuesday—November 14—we are going to try a new format on the blog: an online workshop, or, as I have called it before, a mobblog. The idea is to pick a topic and have a group descend on the blog to discuss it for a few days. We will be discussing The Piracy Paradox: Innovation and Intellectual Property in Fashion Design by Kal Raustiala of UCLA Law School and Chris Sprigman of the University of Virginia School of Law. Chris is a former Chicago Law student, so we are particularly eager to have him back to spend time in our virtual halls.

 

Kal and Chris will start the discussion on Tuesday with a post that will summarize their paper (though, like any other workshop, there is no substitute for reading the paper itself). In addition to our usual Chicago bloggers, we have lined up a group of virtual participants, including Shyam Balganesh, Wendy Gordon, Amy Kapczynski, Michael Madison, Bill Patry and Tim Wu.

 

Arizona's (Defeated) Voter Reward Act

And so Arizona's Initiative, Proposition 200, to enter primary and election day voters in a lottery for a $1 million prize, funded by two years' of unclaimed lottery prizes, was defeated. It is politically correct to wish for higher voter turnout, but then incorrect to contemplate mandatory voting , as is found in some other democracies. But it turns out that while we do not like sticks, which is to say penalties for not voting (Australia has a $20 fine, sufficiently enforced that it was paid by some 50,000 persons in the last election there), we do not like carrots either. Arizona's plan would have offered voters the equivalent of a lottery ticket each time they voted in a general or primary election. Of course the expected value of this lottery ticket would have been fairly low, and had Arizona simply paid 50 cents or a dollar to each voter, who could then have turned around and purchased a lottery ticket with the money if a shot at a million prize was preferred, we do not imagine voter turnout skyrocketing. Instead, the mainstream preference, at least for mainstream politicans and academics, is for somewhat easier voter registration rules and procedures. Even if these are more expensive, they are politically more correct or acceptable.

Immigration Law Reform

A lively and interesting debate on immigration law reform has dispiritingly concluded with a new law that provides for, but does not fund, the construction of a wall along a portion of the border with Mexico.  Left unenacted were proposals to establish a guest worker program, to extend criminal penalties for unlawful presence on U.S. territory, to strengthen sanctions for employers who hire undocumented workers, and to amnesty noncitizens who have illegally lived and worked in the U.S. for many years.  Much of the debate has proceeded as though the answers to these questions depended on first principles.  We should either welcome immigrants or close our borders.  If we want to welcome them, then we should (for example) not create criminal penalties for unlawful presence.  If we want to close our borders, then we should not issue amnesties.  But this is all mistaken.  Whatever the right first principles, they do not cut between such low level policy alternatives.  A liberal immigration policy could welcome many people by raising quotas or reducing admission criteria while still criminalizing those who enter unlawfully; a strict immigration policy could simply reduce the quotas while offering an amnesty to those who are already here and cannot realistically be expelled.

Good immigration law and policy at the level being debated today depends much more on second-order issues of institutional design than first-order principles.  Good law depends on such empirical and institutional issues as whether it is cheaper to stop people at the border or pick them up in the interior; whether the type of immigrant we want to admit can be readily determined at the border (for example, academic credentials and work experience) or is better determined after a few years living in this country (for example, degree of assimilability); how important it is for immigrants to learn English and become assimilated; whether the government needs flexibility to remove people in light of changed economic and security circumstances; and so forth.

For a paper that provides a theoretical framework for addressing these issues, drawing on the economic literature on job market signaling, and the law and economics literature on ex ante versus ex post adjudication, go here.  The abstract is below.

E-Readers and the Future

I had occasion, finally, to get my hands on one of the new Sony E-Readers, and it set me thinking about the path dependency of innovation in the face of legal obstacles. If you have not seen one of these electronic-pocket-book-platform things, you will have trouble imagining how such a small change could convince many users that the world of reading is about to change. The Sony device sells for about $400 and holds up to 80 books. The one I tested had Freakonomics loaded on it, and so I read and marveled. Only the charts in Freakonomics looked a tad worse than they do on familiar pages. But one look at this device sets the mind and heart to work on the possibilities.

A Review of John's Yoo's WAR BY OTHER MEANS: AN INSIDER'S ACCOUNT OF THE WAR ON TERROR

You should read this book, though not for the reasons the author intends. John Yoo is a law professor who served in the Office of Legal Counsel of the Department of Justice from 2001 to 2003. In that capacity, he participated -- often quite centrally -- in the key post-9/11 legal decisions that framed the Bush administration's war on terror, including the Patriot Act, the National Security Agency surveillance program and administration positions on torture, military tribunals and the treatment of alleged terrorist detainees at Guantanamo Bay.

In War by Other Means , Yoo delivers on his subtitle. This is indeed "an insider's account of the war on terror." He sets an ambitious goal for himself: "to explain the choices that the Bush administration made after 9/11," choices made "under one of the most dire challenges our nation has ever faced." Yoo is mild-mannered, but he is angry, and his anger pervades this work. He attacks the media, human rights advocates, legal academics, civil libertarians, former attorney general John Ashcroft, the Supreme Court, conservative pundit George F. Will, librarians and even the Bush administration (among others) for cowardice, self-aggrandizement, overreaching, ignorance, dishonesty and cupidity.

Pricing the Elections

F.A. Hayek, for a long period at the University of Chicago, emphasized the ability of markets to aggregate dispersed knowledge, ensuring that prices incorporate new information. Prediction markets, aggregating dispersed knowledge, have been flourishing on the Internet, and many of us have been impressed by their accuracy. For example, the Hollywood Stock Exchange has done well in forecasting Oscar winners and box office receipts. But many people are skeptical; they believe that as these markets become better known and more manipulable, they will often be proved wrong.

We are about to have a new test of prediction markets in the political domain. As of this writing, the markets say that the Senate will stay in Republican hands and that Democrats will capture the House. Some markets offer more specific forecasts. For example, the Washington Stock Exchange now predicts that Jim Talent will defeat Claire McCaskill in Missouri; that Bob Casey will defeat Rick Santorum in Pennsylvania; that Robert Menendez will beat Tom Kean in New Jersey; that Jim Webb will beat George Allen in Virginia (a surprising prediction, at least to me); that Joe Lieberman will defeat Ned Lamont in Connecticut; and that Bob Corker will defeat Harold Ford in Tennessee. It will be interesting to see if there is significant movement, in any of these predictions, over the next days.

It should be possible to learn a great deal once we know about the accuracy of such predictions. The Washington Stock Exchange does not involve real money; overseas markets, some of which allow a number of relevant bets, do. Will real money be shown to matter? Will the markets do well in predicting not only who wins the Senate and the House, but also who wins particular races? Might there be some major surprises? We'll have the answers soon.