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March 09, 2009

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Tim Cullen

Professor Sunder:

While I agree with your proscriptions for intellectual property, I actually think it's possible for an economic view of IP to produce a justification for your reforms: I think cultural theory and economic theory (when wielded correctly) produce congruent viewpoints.

Participating creatively in a culture generates social welfare and social capital even when no money changes hands. As you note, the digital revolution has enabled this kind of participation on a scale and variety never seen before. This creates a problem for economists as they are generally unable to measure this new social welfare. The scale of this new participation has distorted traditional economic models which might have been appropriate in years past.

If this social welfare could be accurately measured, then an economic analysis could produce the justifications for the reforms you've identified, like broadening the availability of fair use.

The problem is that modern economics' empirical toolkit isn't up to the task: it can measure money, but not pure utiles (for lack of a better word). Money was a good proxy for utility, but less so in the age of the internet.

Until economists figure out ways to measure the hidden social utility of cultural participation (the behavioral economists are making inroads here; see also the work or Robert Putnam), and until that welfare informs the economic analysis of intellectual property structures, economists' proscriptions will be significantly flawed, perhaps fatally so.

Bottom line: they'll get there eventually, and when they do, economists will agree with you.

Bruce Boyden

If we move away from a utilitarian explanation of copyright as incentive to create, toward a recognition of the importance of copyrighted works in our culture, which way does that cut? One answer, suggested above, is that copyright law should be less restrictive in order to allow broader redistribution of that material in the culture. But isn't another answer that copyright law serves an important signifying function by recognizing the importance of the creators of such cultural artifacts? Copyright might therefore be seen as a reward for particularly popular contributions. That would counsel *against* any significant relaxation in copyright's restrictions, since the less protective it is, the less special it is.

Uzair Kayani

This is a good topic. I do think there are some blind spots in IP law, but not as many as we think. The following points were interesting:

(1) "the narrow economic account, focused on the production of more goods, does not ask who makes the goods, and whether there is equal capacity to participate in making our culture."

This seems like a point about barriers to entry: some people are able to enter the market for cultural production and others are not. I think economics would explain this by noting that IP law often grants temporary monopolies to producers, and the legally enforced monopoly is, of course, a barrier to entry. This barrier is often overcome either because black markets emerge, or because culture is a durable good and the monopolist cannot control the secondary market in culture. I might have to pay to buy a book but then I can sell it for a dollar to Green Books. Or I might pay to perform a derivative song but that song might lead to other songs that no longer require licenses. This second case suggests that even if the protected work doesn't contribute enough to culture, its positive externalities do.

(2) "Culture plays a critical role in development, and in meeting the U.N. Millennium Development Goals, which include the eradication of extreme poverty, universal education, gender equality, child and maternal health, combating HIV/AIDS, and achieving environmental sustainability."

This suggests that culture is a public good, and so we face collective action problems or hold ups in producing it. The producer of culture does not fully internalize its benefits and the beneficiary does not internalize the costs. We could overcome this by using eminent domain in intellectual property, or by taxing the public and then subsidizing cultural production, for example, through the national endowment for the arts.

(3) "Increasingly, we now understand that we develop our autonomous selves by inhabiting tradition, not just resisting it."

I understand this to mean that we should have complete freedom in choosing which tradition to inhabit. For example, I might decide to inhabit Japanese or Russian culture; I would like the freedom to do so but I might make different choices. Here the problem is larger than IP, because cultures (and identities) are inherently divisive. I cannot inhabit a culture insofar as (1) culture is a social phenomenon and (2) the society whose culture I decide to inhabit rejects me. This has to do with time-honored practices like identity politics, tribalism, excommunication, and shunning rather than IP, I think.

(4) "in seeking to move intellectual property beyond its narrow economic approach, I do not mean to say that getting the economics of innovation right is not important. But it is not all that is important in setting the metes and bounds of intellectual property. The fundamental failure in the economic story of intellectual property has to do with information’s role in cultural life and human flourishing."

I think this is right insofar as economics is concerned with scarce resources and it is unclear whether culture is scarce. If it is not, then there is no point economizing or paying people to produce it. Cultural change, as opposed to pre-existing cultures, has an opportunity cost, though. If we are fine with culture the way it is, we don’t need incentives for cultural production, but if we want it to morph, we will need to pay cultural producers to offset their opportunity cost.

Michael F. Martin

This sounds interesting. The challenge will be to come up with quantitative answers with reliability to match the ones provided by the modified neoclassical paradigm now in place.

I like some of the ideas flowing out of positive psychology:

http://brokensymmetry.typepad.com/broken_symmetry/2009/03/rebuilding-a-culture-of-innovation-in-the-united-states.html

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