The libertarians on IP series continues. This week, it's my review of "public choice" arguments against IP. Brace yourselves, this is going to be long.

Public choice is an insightful if not always cheerful area of economics. Essentially, it analyzes the relationships between private interest groups (often business) and government. Surprise, these relationships can be problematic! Particularly the behavior known as "rent-seeking" which has nothing to do with landlord and tenant law. Essentially

the term "rent-seeking" means looking to government for sources of profit above and beyond what one would get in a free market. More formally, "rent-seeking" is defined as "the behavior associated with the use of scarce resources in the pursuit of monopoly profits created by government action." (That's from Economics, 3rd Edition, by Robert B. Ekelund, Jr. and Robert D. Tollison). Instead of creating new wealth through trade, a rent-seeker gets wealth by getting the government to take it away from someone else. A technical term for special-interest lobbying, if you will.

Rent-seeking is an actual or potential problem with pretty much everything the government does. And it is a very serious problem; if you don't believe me, read Jonathan Rauch. The question for today is, how does it work as an argument against intellectual property law?

Someone making this argument (such as, for example, me, some years ago) might open by noting the gradual expansion in the length of the term of years of copyright protection. Gradually, we are moving further away from the "life of the author" standard. And so, the argument continues, there should be no need to extend copyright beyond the life of the author; it cannot possibly serve as an incentive to create after he is dead, particularly for retroactive extensions.

And, so, the argument goes, intellectual property law is broader than it should be, not a good mechanism for preserving incentives to create, and so on. Coming from those who otherwise support expansive government, it is a bit inconsistent. But libertarians aren't in that camp; many of them are perfectly happy to see a lesser role for statute and a broader role for common law.

A few of my own observations about this argument:

The example that is typically chosen, the extension of copyright terms, is not as clearcut or horrifying a "red flag" that there is a serious rent-seeking issue with copyright law as its exponents might hope. It's a far cry from a direct subsidy. And furthermore the departure from the life of the author is arguably appropriate for corporate creations where there is no individual human author to die off. Finally, it's a pretty marginal change.

More generally, the public choice argument again shows that we need to be careful with intellectual property law, as with any statutory regime. Retroactive expansions of rights, as with any retroactive law, are especially tricky. But all this, like concerns about enforcement costs, once again doesn't show that the overall scheme of IP is not worth the gains (another day I'll tackle the question of where the burden of proof should lie). Public choice arguments are much more weighty when brought to bear against outright wealth transfers funded by taxes, or against monopolies like that of the Post Office, or ongoing schemes of regulation that create artificial obstacles to entry. (Don't worry, I'll devote another post to exploring the "IP is a monopoly" argument).

posted by Solveig Singleton @ 3:44 PM | Liberty and IP

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