Copyright Maximalists Attempt To Downplay Significance Of RSC Report By Chanting Their Mantra: Copyright Is Property

from the you-can-say-it-as-many-times-as-you-want-and-it's-still-not-true dept

As promised, we're going to continue working on our series of posts analyzing the Republican Study Committee's (RSC) report on copyright myths and how to fix the broken system. We already explored the first myth the paper discusses, that the purpose of copyright is to compensate the creator. That has simply never been true. The purpose is laid out plainly: "to promote the progress of science and the useful arts." And if you really want to go back to the original meanings of all of this, the "science" part is what copyright was talking about, and they really meant for it to cover learning. It was not originally intended for all creative content at all. That's a later bastardization. Even so, it's pretty clear that the purpose of copyright was to "promote the progress." The mechanism was to create an artificial scarcity, via exclusion, that helped support one possible business model for content creators: selling copies of their works for a limited time. That's it. The purpose: promote the progress. The mechanism: artificial scarcity. The problem is when people confuse those two and assume the "mechanism" is the purpose. Tragically, that's what happens all too often.

After we published the initial post on this, some complained that we weren't giving "the other side" fair hearing. So with this post, I wanted to highlight three responses from copyright maximalists, who claim that the arguments made in the RSC paper are faulty. It's important to understand what is being said and where these arguments come from. Let's start with Tom Giovanetti, the man who once called me a "bolshevik" for suggesting that copyright reform was necessary. Amusingly, Giovanetti appears to take credit for getting the RSC to pull the document, though we know that those with much more significance made the calls that actually had an impact. However, Giovanetti's dismissal of the RSC paper is based on one adamant statement: that copyright is property. Period. End stop. No questions.

Rather, it's because, as a property right, copyright is a critical element within the GOP's market-orientation. Markets simply don't work without property rights. You can't have contracts, or licensing, if you don't have clear and enforceable property rights. ALL business models, not just "new" business models, rest on property rights.

This is one of those "nice in theory, totally not true in practice" claims. Here's the thing: copyright has some elements that are "property-like." It allows legal exclusion, like property. It can be sold and transferred, like property. But it has many facets that are not at all like property. The content in question is non-rivalrous and non-excludable for the most part. That's not at all like property. Anyone who defines it as property, without acknowledging the "non-property-like" attributes, is either ill-informed or being purposely misleading. I'll leave it to the reader to determine which is the case here.

As for the idea that all business models "rest on property rights," that's an interesting argument, but again one not supported by reality. Many business models are built on real property rights -- that is, property rights around scarce goods, which are excludable and rivalrous -- but when it comes to non-scarce or infinite goods, there are lots of new business models generated, often by increasing the value of different scarcities. To prove Giovanetti wrong is easy. You just point to any one of the the many content creators who give away their works for free, and profit elsewhere. Hell, point to us. You're reading this for free, and we're making money -- without relying on the "property right" of copyright. Are we relying on some other property rights? Sure. Property rights for real, scarce, property.

And that's the real problem with those who just default to the "copyright = property" argument. It's silly and it's meaningless, because the fact that you can't necessarily rely on copyright for all your profits does not mean there aren't other property rights by which you can make money. In fact, history has shown time and time again that when something is subject to unfettered copying, new business models appear elsewhere.

Further, because the GOP believes in innovation, copyright is a natural fit, because copyright incentivizes and encourages the creation, distribution and promotion of new information. The alternative to copyright isn't free information, but less creation, less widely distributed and marketed.

This is also empirically untrue. Giovanetti seems to want to tell fairy tales by ignoring the actual evidence. Over the last decade, at a time when copyright infringement has been widespread, the amount of content created has skyrocketed at unprecedented rates, and that content has been much more widely distributed and marketed, thanks in part to new technologies.

Furthermore, if we're going to go hardcore "property rights," then it would seem that Giovanetti should really be supporting the copyright reformers, since current copyright reform tramples on property rights all the time. My DVR can't automatically skip commercials. But I paid for it. Why can't I have it do what I want it to do? I bought this DVD, why can't I legally move the content to my computer to watch it? I bought this book in Thailand, why can't I now sell it in the US? These are all issues where copyright is currently invading my property rights. Now, you can make an argument that these are reasonable restrictions on my rights, but if you're going to just scream "property rights" like Giovanetti does, you would think that it's only fair to highlight the ways copyright intrudes on property rights as well. But he doesn't. So, it's difficult to take Giovanetti seriously on this point at all. And since his entire argument is based on this fallacy, let's just move on.

Next up, we've got the Copyright Alliance, a lobbying organization that was set up to protect large studios and record labels' interests while pretending to support creators' interests. They brought along a law professor named Mark Schultz, who you would hope would understand the law, but in fact has a rather simplistic argument that not only falls into the same Giovanetti trap of "but, but, but copyright is property," but goes further in arguing that copyright reformers are really just a bunch of evil "collectivists" seeking to redistribute property from those who rightfully own it to anyone else.

The people who create expressive works deserve to own them and benefit from them. So do the companies that finance and purchase these works for commercial exploitation.

Note that we're already starting off on a bad foot, where the entire basis of the argument is a purely moral one -- that people "deserve" to "own" expressive works. But this statement, beyond pulling at the moral question rather than anything factual, suffers from significant problems. First, what is the "them" that people "deserve" to own? The original work? Sure. But, just as a candlemaker owns that candle, once he sells it to someone else, he no longer "owns" that candle. So, this is a pretty weak starting point. All copies of the work down the line? Well, that's a problem too. Because if I buy that candle, I can make a copy, and I'm not violating anyone's rights in the tangible world. So, already we seem to be stepping beyond the normal bounds of how these things work. But we're just beginning down a weird rabbit hole stuffed to the brim with strawmen that Schultz wants so badly to knock down:

Many modern copyright scholars and commentators have embraced a severe utilitarian view of copyright. In this view, the sole justification for copyright is the benefit that creators provide to society. Society would benefit most if creators worked for free, but, alas, we cannot always convince them to do so. Copyright is thus an unfortunate necessity, given to creators to induce them to provide society what it needs. The labor or welfare of creators has no importance under this view—they and their works exist to serve the good of the greatest number.

I know of no person, on any side of this debate, who has argued that "society would benefit most if creators worked for free." What many of us have argued is that there are more compelling and useful business models from which they can benefit, while also providing greater societal benefit. In economics, it's called increasing the pie. But people like Schultz, who perhaps have little background in economics, seem to think that this is a zero sum game -- and if anyone else benefits, it means the content creator must be losing. Reality says something quite different. You can expand the pie such that the creator can benefit, and profit, and so can society. That's what many of us are aiming towards.

Furthermore, the claim that "copyright is a necessity" to incentivize creation once again ignores the fact that there are other, significant business models that don't rely on copyright at all. It's difficult to take someone seriously when they set up a strawman that reflects an argument no one is actually making... and then knock it over with an even sillier argument that ignores the reality of the market.

As between creators (along with those who finance and/or purchase the rights to their work) and others, who has a better claim to control and exploit a work of authorship? Of course, to a dedicated IP utilitarian, this question is irrelevant. Nobody deserves anything; society takes what it needs, subject to the need to persuade the producer to keep producing what the takers want. While such a churlish and ungenerous view of creators is apparently acceptable to some, many would find the implications chilling.

Again, this is a pure strawman, made up in the fantasy world that lives in Schultz's mind. I've never seen anyone argue that "society takes what it needs." But he's right that the question he's asking is irrelevant. He's asking who is best to "control and exploit" something that does not need to be controlled or exploited in the manner he suggests. As an analogy, it is like he is saying "who better to control and exploit the road in front of your house, than the house owner?" You could legitimately make that argument. But, of course, we don't think of the road in front of your house as being something that someone needs to "exploit." Why? Because it is a piece of infrastructure that creates much greater benefit for everyone, such that they can profit. This is not a case of taking away rights from someone to make them worse off. It is about using core infrastructure to increase the pie and make greater opportunities for everyone. When viewed that way, you can see where focusing on the direct exploitation of each work is pretty silly. What if, instead, the system that works is one in which the music enables many other business models that allow for greater profits?

So, Schultz's argument is based on the same basic fallacy as Giovanetti's, just at a slightly higher intellectual level. Rather than just focusing on "copyright is property," Schultz is arguing both that copyright is property, and that we live in a zero sum world. Since neither point is true, his argument falls apart entirely. Moving on.

The final stop on our tour of rationalization comes from Terry Hart's Copyhype blog, where he kicks it off with a bizarre, and entirely false statement about me, claiming that I stated I will "no longer be able to enjoy future papers, for they will only pale in comparison." I said no such thing, nor do I believe any such thing. Hart is usually quite careful in his statements, and the fact that he needs to resort to an outright lie to kick off his post should give you a sense of where he's going to come from with his attack on Derek Khanna's paper.

Most of Hart's arguments are based on taking snippets of quotes from people in the past to argue "nuh-uh" to things in Khanna's paper. That is, rather than argue reality, let's focus on what someone said years ago if it disagrees with the paper. That's not particularly convincing. It is not difficult to come up with just as many quotes from people arguing the opposite viewpoint at the same time. So, for example, he quotes some people arguing that copyright is property -- both among the Founders and more recently at the Supreme Court. But, it is equally true that there were Founders who believed copyrights to be evil monopolies, and there are Supreme Court rulings that state that copyright is not like property. So, I'm not sure what good random quotes (sometimes out of context) do for this argument.

But then we get to the crux of Hart's argument, which presents a rather troubling and misguided understanding of innovation in capitalist societies:

One of the favorite claims of copyright skeptics is that creators routinely oppose new technology because it “disrupts their business model.” On the contrary, it is often the case that the businesses utilizing the new technology are the ones who feel entitled — entitled to profit off the exploitation of established rights without compensating creators merely because they are using new technology. In this case, creators do “deserve” compensation. This isn’t a prize at the bottom of the box, it’s one of the foundations of a just capitalist society.

Note that we're taking a step up the intelligence scale here from Schultz, but basically making a more advanced version of the same argument: that someone "deserves" something. Again, this is a moral argument that distracts from the point and is hard to support in reality. Second, there is a major assumption in that paragraph that is simply untrue: the idea that companies "feel entitled to profit... merely because they are using new technology." Nothing could be further from the truth, especially in a "just capitalist society." In such worlds, there is no "entitlement" to profit. There is merely what you can get in the market. What many new companies are doing is not feeling entitled to profits because of new technologies, but using new technologies to create economic growth and then using that economic growth to put in place a business model in which people or companies transact with them willingly, such that they can profit.

That is how capitalism works.

What many maximalists seem to fail to understand is that these new technology providers increase the pie. They create economic growth through new technologies and services, and they profit from some of that, but also leave open much of that expanded market for others to profit. This is true throughout history. I know that Hart, in particular, tends to break out in hives (a joke) whenever anyone brings up the "VCR," but it's an instructive example. The movie industry insisted that it was allowing consumer electronics companies to "profit off the exploitation of established rights without compensating creators merely because they are using new technology." And, yes, while Hart would like to scrub this point from history, Jack Valenti did say that the VCR was to the American filmmaker what the Boston Strangler was to the woman at home. It was, as Valenti was making clear, supposedly going to kill the industry.

But it didn't. It was merely five years after Valenti said those words during a Congressional hearing that revenue to the Hollywood studios from home movies surpassed the box office. Five years. And it didn't require a new law. Or forcing these "tech companies" to pay the rights holders what they "deserved." No, instead all it took was the entertainment industry adapting to the new technology and realizing that the pie grew. Massively.

Amusingly, in his let's forget Jack Valenti post from last year, Hart had the following to say about the "myth" that copyright reformers build around Valenti's testimony:

the myth that “content industries hate technology” fails for several reasons. It requires fabricating a group (“the content industry”), ascribing a broad characteristic to it (“hates technology”), and then pulling together disparate quotes from anyone who has stated a concern over some new technology as proof of the theory.

Yet, of course, that's the exact same thing that Hart does in his post trying to debunk Khanna's paper. He fabricates a group ("the tech industry") ascribes a broad characteristic to it ("feels entitled to profits that others deserve because of new technology") and then pulls together disparate quotes as proof of that theory.

So, while I find Hart's critique of Khanna's work informative in surfacing a few interesting historical quotes, it too fails for the same basic reasons as the other two responses cited above.

That said, I appreciate that they are willing to jump in to the debate, and find it sad that members of Congress, whether Republican, Democrat or anything else, have decided that it's not even worth having this debate at all.

Filed Under: copyright, derek khanna, economics, mark schultz, property, rsc, terry hart, tom giovanetti