Why economists like copyright; but shouldn't so much now


Harrison Ainsworth

A perspective on the basic connections of copyright, industry, and internet

Part 1

Copyright doesn't exist for the usual reasons or justifications given. Those are really after the fact – they are at least partly coincident with truth, but not the real underlying motive.

Copyright exists because it fits the dominant industrial structure of the last 200 years: factory-mass-production. Without copyright, abstract items are more naturally produced as one-offs, more like a building. But with copyright, abstracts are turned into normal ‘consumer goods’ – a single factory stamping out many copies for sale. It fits the whole chain of commerce. And it adds another class of products to fuel the system.

This is the unconscious cause of all copyright defenses. Business can make money from it. And that is the clear tone of all orthodox views.

But quite suddenly, the internet has seriously disrupted this structure. ‘Industry’ has now lost control, not only of the means of production, but of its distribution too. That is why business is suing the public. Capitalist alarm bells are ringing.

Part 2

The reason for copyright being thought of as the only/best way is contingent and now gone. Because the particular practicalities of how buyer and seller can transact must fundamentally constrain the limits and ease of all economics.

Before, the easiest way a seller could transact with buyers was through a ‘broadcast’-structure physical sales channel. This is really what made copyright work and made it seem most efficient. Putting a ‘surcharge’ on copies – as copyright effectively does – was a very practical arrangement.

That seemed so universally necessary . . .

But now, with the internet, the circumstance is very different. On one hand, the copy ‘surcharge’ cannot work anymore – there are no stable solid containers, and the real cost is near zero. Copyright is broken. On the other hand, sellers can transact with buyers in a much less constrained way – and this is the way ahead.

The ideal general economics for ‘intellectual product’ is to sell the creation, not the copies. The buyer exchanges with the seller for the actual thing produced: effort and resources are compensated, and then the free gain of subsequent copies can be fully realised. The internet creates new possibilities for this, which must be an advance. Organisational forms – including economic – just need to catch-up.