Copyright is Not About Defending Old Models

Photo by DelmasLehman

Pretty much since Napster (1999), tech pundits have been presumptuously lecturing pro-copyright creators about economist Joseph Schumpeter’s principle of “creative destruction.”  This is the observation that the market will naturally produce innovations which will displace existing products or services, often rendering the older models obsolete.  Take Schumpeter, add hubris and piles of money, and you get the “disrupt everything” culture of Silicon Valley—one that is so arrogant that it treats anyone who won’t join the disrupt rodeo as a Luddite and a fool.

Typically, anti-copyright pundits like to repeat the buggy whip cliché, claiming that the individuals and institutions who defend copyright are “clinging to the buggy whip industry while automobiles wiz by them on the highway.”  It’s an effective talking point if nobody’s paying much attention.  And since the internet itself hasn’t exactly helped in the paying attention department, the buggy whip analogy became an even easier pitch with the arrival of social media and the 140-character debate.

It’s a message that even many creators and artists bought up to a point; but the misdirection in the analogy distracts many observers from noticing the false comparison being made.  Because if we stick with the metaphor, then it is accurate to say that copyright advocates do not argue the cause of buggy whips in a world of automobiles; they merely assert that transportation is still in demand, regardless of how people and goods are to be conveyed.

The hidden truth in this faux-Schumpeter exercise is the fact that nothing has actually displaced consumer desire for creative works. We still want movies, books, TV shows, music, etc.  What has changed—and only for a segment of the market—is the means of conveyance for these products. The copyright proponent doesn’t really care whether the CD or vinyl album remains relevant—only that music itself is still in demand.  The principle of creative destruction doesn’t even belong in this conversation (though one could argue that a destructive form of creative thinking is at play.)

Apropos of my recent post When Copyright Criticism is Something Else, it is easy to confuse the subject of intellectual property rights with the efforts of an industry or business to “cling” to market share tied to a fading product. That some record labels sought to squeeze every dollar out of CD sales before their obsolescence is to be expected, but this has little to do with the principle that copyright should continue to protect the makers of music—and should be revised wherever it is failing to do so.  Even the mistakes made by the recording industry, through its stumbling adaptation to the internet, should be viewed as separate from a broad defense of copyright’s purpose.

The buggy whip analogy, in this context, is a lie.  And what’s most galling about this particular lie is that it is still aggressively evangelized by the one industry best suited to exacerbate the non-competitive trends that have shaped (or mutated) the American economy since at least the 1980s. The internet industry promises Schumpeter-like results—a vow to repeal and replace, if you will—for authors of creative works, if they are willing to abandon traditional notions of a property interest in their work. Not only has this proven to be a con in the world of creative arts, but the industry’s influence, even among tech entrepreneurs, hardly makes a compelling case for fostering competition and innovation.

A recent article in The Economist reports on a summit held at the University of Chicago, where academics have begun to rethink the state of competition in the American market resulting from the trend away from regulatory influence that began nearly 50 years ago. “Those that make a high return on capital can sustain their returns for longer, suggesting that less creative destruction is taking place. The number of new, tiny firms being born is at its lowest level since the 1970s,” the article states.  A little later, the article says the following about Big Tech:

“An analysis by The Economist in 2016 suggested that about half the pool of abnormally high profits is being earned by tech firms. The big five platform companies—Alphabet, Amazon, Apple, Facebook and Microsoft—earned $93bn last year and have high market shares, for instance in search and advertising. They are innovative but sometimes behave badly. They have bought 519 firms, often embryonic rivals, in the past decade, and may stifle them. The data they gather can lock customers into their products. They may also allow firms to exert their market power “vertically” up and down the supply chain—think of Amazon using information on what consumers buy to dominate the logistics business. Investors’ sky-high valuations for the platform firms suggest they will, in aggregate, roughly triple in size.” [Emphasis added]

The internet industry presents its products and services—and frankly its ideology—as the antidote to decades of competition-killing in the market; and a big bullet point in this message is that a legal framework like copyright is an obsolete barrier stifling your potential. It’s an economic fairy tale meant to imply that if it weren’t for copyright being wielded by big corporations, you would have an easier time becoming the next YouTube star or killer-app developer. If that sounds like an exaggeration, I’ll remind readers of the time Julie Samuels of the EFF said in context to the “future of copyright” (2013) that “We want a thousand more YouTubes.”  I’m not repeating this silly declaration to pick on Samuels per se, but to highlight the fact that copyright advocates are frequently accused of standing in the way of absurd projections dressed up as legitimate market potential.

It is a political tactic—not a serious economic discussion—to predict an impossible outcome and then blame a group or a particular legal regime for preventing that outcome.  And I am intrigued by the extent to which so-called progressives fall for this narrative given how similar it is to the false argument that “all regulation is a barrier to jobs and prosperity.”  There seems to be a blind spot to the reality that the industry, which insists that copyrights are stifling opportunity in the digital age, comprises the companies with some of the worst track records for fostering any innovation they do not own.

It would be wrong not to include global media conglomerates (i.e. major copyright holders) in the universe of entrenched corporations that have benefitted from this trend of consolidation.  No question they have–even to the extent of self-parody as when Tina Fey’s series 30 Rock (2006-2012) consistently lampooned the relationship between product giant GE, its network NBC, and the late-night comedy show Fey’s character writes. But the deregulatory policies, dating back at least a half-century, which have resulted in some of the ill-effects of mega-mergers and massive consolidation, cannot be blamed on copyright law, even if copyright plays a small role in that larger narrative.

For individuals—especially artists and creators—to abdicate copyright in response to  corporate domination is as irrational as giving up the right of free speech because we don’t like the SCOTUS ruling in Citizens United.  Copyright is one of many policy areas in which we must decide either to continue tweaking the system or to abandon the underlying principles altogether.  By inappropriately invoking Schumpeter in this debate, the internet industry seeks to disguise the fact that it has roughly the same attitude toward copyright’s protection of creators as the extraction industries have to environmental law’s protection of the biosphere.  Perhaps it’s time for copyright skeptics to recognize that the most outdated aspect of this whole conversation is their stupid buggy whip analogy.

This entry was posted in Copyright, Economics and tagged , , , , . Bookmark the permalink.

3 Responses to Copyright is Not About Defending Old Models

  1. nikkokkola says:

    I would like to point out the hypocrisy here. The tech industry, led by Google, likes to promote the idea of “sharing is caring” and “information should free.” This is true, except when that information is produced by Google. Currently Google is suing Uber for alleged IP theft. What, they don’t want THAT information to be free? And by 2013 Google was in the top 10 companies as far as number of patents applied for annually. Does the mere fact that they apply for any patent show pretty clearly they do not want THEIR information to be free? And when are they going to release the code behind their search engine? Considering that they are at monopoly status of providing well over 50 % of search functions, they should be obligated to share their code to clear up anti trust allegations that they are favoring prioritization of results that they have financial ties to. The bottom line is they have no right to criticize copyright that protects the IP created by others when their are simultaneously taking aggressive actions to protect their own IP. So if protecting IP is a horse and buggy mentality they also share that.

    • David Newhoff says:

      Thanks for the comment. If you read the article in The Economist. You’ll note that it cites Richard Posner, now a judge who espouses a measure of IP skepticism, particularly in the realm of patent trolls. And while patent trolls are a problem, it is Google doing much of the lobbying for “patent reform” that would only entrench their dominant position. More specifically, the definition of “troll” that would be applied in their view of reform could include Stanford University, which is a beneficiary of…you guessed it — the patent for the Google search algorithm. Hypocrisy abounds.

  2. jameshogg says:

    “Perhaps it’s time for copyright skeptics to recognize that the most outdated aspect of this whole conversation is their stupid buggy whip analogy.”

    Quite right. It’s a metaphor that tries to change the subject.

    I prefer “failed fiat currency” myself. Like pretending we would be able to stop people counterfeiting money if money came in notes, coins, and MP3s.

    I would very much like to know if there is a gold-standard supporter reading this who also supports copyright, and what his reasoning is for both when both are put in comparison.

Join the discussion.