As we rang in the new year, a variety of creative works entered the public domain, where they will be free to copy, share, or build upon. Books like A.A. Milne’s Winnie the Pooh, recordings like John Philip Sousa’s arrangement of The Star-Spangled Banner, and compositions like George and Ira Gershwin’s Someone to Watch Over Me are among the many works that unlocked over the weekend, according to Duke University’s Center for the Study of the Public Domain.
New public domain works are a welcome development at the beginning of each year, but always long overdue. Generally, works like these should be unlocked faster.
Copyright policy is more about incentives than principles
There is no obvious “default” or “free market” or “morally right” policy for copyright. Reasoning out whether it should exist based on philosophical first principles is largely a dead end. Some people have a strong moral inclination that information should be free. Others have an equally strong moral inclination that creators should own their ideas. Most people feel sympathetic to both viewpoints.
In practice, we do an arbitrary compromise between these ideas. This is quite apparent each new year; some works remain under copyright, and others don’t. For example, Ernest Hemingway’s In Our Time was already in public domain last year, while The Sun Also Rises just became public domain this weekend, and Hemingway’s later works remain under copyright.
But an arbitrary compromise is actually the right call. There are strong economic reasons to grant exclusive rights for a time, but also, strong reasons to eventually let that exclusivity lapse. Copyright is ultimately a reasonable system with unreasonable parameters.
To think about why, we first should consider what copyright does well. The purpose of copyright is to bring about an incentive structure that brings works like Someone to Watch Over Me or Winnie the Pooh into production, nothing more. And for popular works like the Gershwins’ songs or Milne’s books, this system works extremely well, because it can make use of decentralized information about people’s preferences.
It would not be obvious to a policymaker, ex ante, that one particular story about a honey-guzzling bear is destined to be loved. The only way to find this out is ex post, by observing that people are willing to pay for them. Intellectual property rights accomplish this goal.
There are substantial downsides to copyrights
But this system has its limitations. I’ll highlight three that are particularly important: Intellectual property rights can result in fewer people enjoying the product than would be efficient. They can be expensive to determine and enforce. And they can ultimately create a kind of drag on the whole economy if too many of the economy’s rewards are for work that was done in the distant past.
First, paying creators makes a monopoly of sorts, and monopolies often result in less enjoyment of the product than is optimal. For example, imagine if you didn’t have to pay full price for works, but instead, just for the cost of printing or downloading. You’d get to enjoy more of them than you would otherwise. This of course exists, and is often known as online “piracy.” The first-order consequences of online piracy are that you are better off, and nobody is worse off.
We can ultimately reject an online piracy model, at least for some works, because we worry about the second-order incentive effects of creators not getting paid. But then we miss out on the good first-order consequences of distributing the work to anyone who wants it.
As works enter the public domain, the piracy model effectively becomes legalized. Some extraordinarily popular books are now available on websites like Project Gutenberg for free. At this point, The Great Gatsby is available to people who are curious to read it, but not willing to pay full price, and that is a real gain in welfare.
A second cost of the copyright system is the costs of the legal system itself. For example, Winnie the Pooh has spawned many different products, and the rights are relatively complex, resulting in legal battles between the rightsholders that lasted long after A.A. Milne’s death (and in fact, even after Christopher Robin Milne’s death.)
The courts system is not free. The people who worked on these cases were probably extraordinarily sharp and diligent, and if they were employed in some other field their work would be extremely valuable in expanding the economy as a whole. Instead, though, they worked on fighting over a pre-existing source of wealth.
As my colleague Tim wrote previously, the costs of determining or apportioning intellectual property rights can also work poorly for less-heralded works, too. They can be technically under copyright somewhere, but so obscure or unlucrative that the rightsholder is hard to get in touch with. The legal cost of dealing with copyright is prohibitive, and the work essentially vanishes from distribution because nobody thinks it is worth the trouble to figure it out.
A final cost of copyrights—or in fact, many kinds of properties—is a bit more subtle. But they function a bit like a tax on the rest of the economy, somewhat reducing the incentive for new productive activity.
There is only so much real income or real purchasing power to go around, especially if the economy is already operating at full employment. If too much purchasing power goes to rewarding work done in the past (economists often call these “rents” or “quasi-rents”), there is less of it to reward or incentivize current production.
On balance, copyrights last too long
You may have noticed that most of the works discussed here are almost a century old. That is because 95 years is the length of copyright for many works; it is far too long. The most compelling arguments for copyright are about marshaling sufficient compensation to incentivize creators to work. And any work that still earns attention 95 years after publication has surely been lucrative enough that the author is compensated sufficiently. Or put another way, I doubt there were many artists or writers from 1926 who chose not to produce their best work because it might not receive royalties in 2022.
Extremely long-dated copyrights only matter to the wildly successful—and if you are expecting to be wildly successful, you are likely to produce your work anyway. The additional years of copyright are what economists would call “inframarginal;” they don’t affect your decision because they don’t bring you close to the tipping point where you’d change your mind.
Given the costs of copyright—that fewer people enjoy the work, that legal wrangling eats up resources, and that we’d often prefer to allocate rewards in society towards more current innovations—it makes little sense to jealously guard intellectual property for as long as we do.