Reportedly, Judge Patel of Napster fame has drunk the Free-Culture-Movement Kool-Aid and concluded that we need to replace exclusive private rights in expressive works with a comprehensive system of compulsory licensing that would, inevitably, put the federal government in control of the production of expression. After all, this plan worked so well in the Soviet Union....

It also seems absurd to give up so easily on a system of exclusive private rights that has been stunningly successful at encouraging the production of a vast array of expressive works. Indeed, I have always suspected that the most important--yet underanalyzed--question in copyright law is this: Why, in the latter two-thirds of the 20th Century, did the U.S. transform itself from a net importer of expressive works into the world's leading creator and exporter of expressive works?

This really was a remarkable change. In 1840, one of our first and best friends in Europe, Alexis de Tocqueville, titled an entire chapter of Democracy in America as follows: The Example of the Americas does not Prove that a Democratic People can have no Aptitude and no Taste for Science, Literature or Art. A century later, in 1940, the U.S. situation had begun to become radically different.

When you start trying to figure out why, it becomes obvious that untangling the potential influences will be no small task. Certainly, industrialization and increased rule of law play a huge role, and it certainly could not have hurt that the U.S. did not play host to two World Wars. Nevertheless, it remains difficult to believe that these factors alone explain the shift. Moreover, if you look at what the U.S. was doing differently from most other nations, two potential factors of interest emerge.

First,U.S. copyright law provided both criminal penalties and deterrent civil remedies, (i.e., statutory damages) throughout the period of interest. These were potentially significant differences. Most countries derive their legal systems from the Continental, (or civil-law) tradition, which, by default, tend to award contract-like damages for most civil wrongs. If you look at the copyright laws of many civil-law countries, it soon becomes obvious that absent criminal prosecution or an unusual patent-like situation in which an injunction could have highly punitive effects, infringement might often be an economically rational choice. In short, U.S. law may have been uniquely well suited to create a functional private market for expressive works based upon exclusive rights that were, as a practical matter, relatively enforceable.

Second, the U.S. differs from most other countries by relying heavily on indirect, rather than direct, government subsidies to encourage the growth of both market and non-market mechanisms for the production of expressive works.

In other words, the U.S. has no Ministry of Culture and tends to support expression not through direct government funding of the creation of particular works, but through indirect incentives to create--like tax-exemptions for universities, charitable organizations that support the arts, private foundations, and tax-incentives for creative activities like film production. Economist Tyler Cowen discusses these mechanisms in his books Good and Plenty and In Praise of Commercial Culture.

In short, the critical difference for the U.S. may be that we have tended to encourage the production of expression through mechanisms that more strongly tend to encourage creators to please private, rather than governmental, tastes--be they those of wealthy private patrons or private markets.

I have no doubt that we will need to continue to think carefully and critically about how to structure copyrights and infringement remedies in order to find some way to reconcile the proven creative potential of private rights in expressive works with the generative potential of the Internet and other interactive, digital communications networks. But I also have no doubt that skipping the hard part about critical thought and defaulting to the easy solution--more use of the inflexible, technology-specific compulsory licenses that made it needlessly difficult to get legal music onto the internet--is a bad idea.

posted by Thomas Sydnor @ 10:14 AM |

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