·  by Zach Graves

Imbalanced ‘incentives’ hurt creativity more than they help

Originally Posted On: R Street

Are lawyers the driving force behind artistic freedom? Astonishingly, that’s the impression you get when you read the Copyright Alliance’s account of a recent panel on music copyright hosted at George Mason University. To be clear, they note the importance of creators, in the sense that:

Intellectual property drives economic and artistic freedom, thereby supporting a professional class of musicians and innovations that continue to fuel the creation of music.

But this emphasis aims to privilege the copyright lawyers, as if copyright enforcement were the primary source of artistic creativity. Certainly, copyright plays an important role in securing incentives for creators. But it’s absurd to suggest that regulatory monopolies are the only source of artistic creation and freedom or that stronger intellectual-property laws are always in the best interest of artists. Rather, the history of intellectual-property laws have often been a double-edged sword for creators.

There are numerous examples of overly broad intellectual-property laws being used to limit free expression. Just take a look at EFF’s Takedown Hall of Shame. Or, in the music industry, the recent judgment against Pharrell and Robin Thicke (presumably, to provide further incentive for the creativity of the late, lamented Marvin Gaye). Or the video game maker who was sued for using the likeness of Gen. George S. Patton. The absurdities go on and on.

While intellectual property is an important legal protection that helps encourage creation, it has its limits. Where intellectual-property laws are too weak, there may be insufficient incentive to create. But where they are too strong, they impose costly restrictions on other creative freedoms and distort the market to transfer unearned wealth from consumers to rights holders. The latter, it should be noted, aren’t always artists. This is especially true in the music industry, where entrenched middlemen armed with large legal teams extract most of the revenues.

Our nation’s founders took steps to achieve the proper balance. Indeed, we must not forget that the constitutional basis of our intellectual property system is a utilitarian one. The Progress Clause grants Congress 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.” The clause doesn’t create a “property right,” as such, any more than Article I’s grant of war-declaration powers to Congress creates a property right in declarations of war. The Progress Clause creates a legislative power, with instructions to use it as an incentive for creation. Where such exercises of power provide appropriate incentives – or, worse, undermine other incentives – they ought to be constrained.

Human nature being what it is, it’s not surprising that the copyright industries have succeeded, over the years, in ratcheting up copyright protections with less attention to the underlying theory of the Progress Clause. Thus, copyright terms today are nearly 580 percent longer than at the time of the founders, and extend to works far beyond the maps, charts and books that originally were covered.

But why should we think copyright that lasts decades after an author’s death serves to promote creation, particularly for all those retroactive term extensions?

mickeyChart lifted from Tom W. Bell’s blog. Check out his excellent book on copyright,  published by the Mercatus Center.

Even Ayn Rand (who otherwise strongly supported intellectual property) expressed great concern about excessively long terms:

If [intellectual property] were held in perpetuity, it would lead to the opposite of the very principle on which it is based: it would lead, not to the earned reward of achievement, but to the unearned support of parasitism. It would become a cumulative lien on the production of unborn generations, which would ultimately paralyze them.

That doesn’t stop advocates of “more is better” copyright maximalism from pushing the myth that stronger intellectual property promotes free markets. Remember, we are talking about regulatory monopolies. Just because something has property-like qualities doesn’t mean it’s equivalent to tangible property. As my former Cato colleague Brink Lindsey writes:

Many people might find it puzzling to see copyright and patent laws listed as examples of growth-inhibiting regulatory excess…[But] the case of taxi medallions should make clear that regulatory policies don’t necessarily support free markets simply because they feature tradable property rights.

Artists ought to be able to make a living where there’s a robust market for their work. But just because you produce something doesn’t guarantee people want to buy it. You don’t have a right to ask the government come guarantee you a living wage. Another fine excerpt from the Copyright Alliance blog:

Marc Beeson, staff songwriter at Downtown Music Publishing, gave the final presentation. For his presentation, Beeson gave a sobering look at the state of songwriting, both as an industry and an art, due to the loss in physical album sales. For instance, while physical sales used to account for 50 percent of his income as a songwriter, streaming, which has almost completely replaced physical sales, has failed to pay even a basic living wage.

It’s true: people don’t buy physical records anymore. The issue extends far beyond Downtown Music. The whole industry has seen sharp declines in mechanical royalties, as analog-era business models continue to decline. But the music industry as a whole has been adjusting and will continue to adjust its business model in response to those changes. According to a study by Midia Research, global music-publisher revenue has shown strong growth thanks to diversified revenue streams.

Even if the music industry were tanking because of falling record sales, or if people started listening to podcasts instead of music, or whatever other market shift you could imagine, it wouldn’t be a problem our legal system needs to fix. If millennials stop buying cars, the proper role of the government isn’t to come in and make Uber more expensive so General Motors can get a subsidy. We don’t need to protect buggy-whip manufacturers any more than we need to protect people selling physical records (despite protestations from Bushwick hipsters).

As I’ve discussed, there’s great merit to having a system that provides legal protection for their creative products. But this must be carefully balanced against the limitations that system inevitably imposes on other forms of creative expression, as well as other uses of tangible property.

The Copyright Alliance is a nonprofit organization which claims to represent “artists, creators and innovators” (despite being run by a mix of trade associations, mega-corporations and labor unions). Is that really what they’re doing by pushing copyright maximalism? Or, as with taxi medallion owners, are they protecting the rents they receive off the ones doing the real work, while doing their best to put up barriers to keep everyone else out of the market?