Note: This post was cross-posted at the CATO Unbound on 1/14/2013. The January 2013 issue of CATO Unbound feature a debate on copyright reform, Opportunities for Copyright Reform This post responds to the discussion in that issue, but it also stands alone as a critique of copyright reform proposals that fail to understand how copyright’s nature as a property right allows for tremendous flexibility via private ordering
Derek Khanna’s lead essay, as well as his memo for the Republican Study Committee, urge libertarians and conservatives to rally around copyright reform as both good policy and good politics. While copyright law has its problems—like any statutory scheme, it is far from perfect—pursuing the “way forward” suggested by the lead essay is unlikely to yield policy or politics that are helpful or appealing to advocates of the free market.
If we embark on the path to copyright reform, where we end up very much depends on where we start. Given how the lead essay frames the discussion, it points us to a bad end. I addressed some of my general philosophical and policy disagreements with the RSC memo elsewhere. In this short response essay, I focus on the problems with the lead essay’s portrayal of copyright as “regulation.”
The lead essay describes copyright as a “government-imposed system of regulation.” I fear that this characterization confuses private ordering with government intervention. It proposes to put copyright on a path that likely would lead to more intervention.
In a superficial way, intellectual property rights may indeed seem to resemble the sort of economic regulations that provoke skepticism among free market advocates. For example, it appears that copyright prohibits the remix DJs discussed in the lead essay from freely employing their labor and selling the products of that labor.
The problem with the “regulation” label is that copyright law, in its broad strokes, does not tell anyone what he must and must not do.[1] Copyright only acts as a prohibition if a copyright owner chooses to use it that way. However, there is a vast diversity in how copyright owners actually choose to exercise their rights—they may sell copies at a fixed price, negotiate terms on a case-by-case basis, forgo payment entirely via a Creative Commons license, or simply choose to ignore or tolerate unlicensed uses. Or an owner may simply choose not to license at all. Fair use might override many of these choices, and, in any event, an unhappy potential buyer or user can always attempt to negotiate further.
Like other forms of property, copyright thus represents an invitation to a transaction and an opportunity to bargain. This opportunity for parties to transact and bargain is one of the key differences between property and regulation. A regulator has a duty to enforce the law—and if a regulator chooses not to enforce, then a court may order him to do so. Copyright owners need not enforce their rights, of course. Moreover, it is perfectly legitimate to offer a property owner money to forgo their right to enforce their copyrights; such commercial transactions are really the whole point of copyright. Make the same offer to a regulator, and you go to jail.
The distinction here between property and regulation ought to matter to conservatives and libertarians. We are rightly concerned that regulation impedes freedom. We typically embrace the exercise of property rights as furthering freedom. How we classify a copyright owner’s actions—regulation or property—makes a difference, particularly when they are stubbornly refusing to allow others to use their works in the way that others deem most prudent and efficient.
The rhetorical application of the “regulation” label tends to undermine support for the exercise of property rights. Advocates of free markets generally supported the rights of Susette Kelo and her neighbors when they resisted the city of New London taking of their property to give to another private party in the Kelo v. City of New London case. Nobody vilified Kelo and her neighbors as “regulators” for exercising their property rights, first by refusing to sell and then by fighting the city’s taking of their property. While Kelo’s opponents won anyway, their path certainly would have been even smoother if the city could have pulled the neat rhetorical trick of casting Kelo and her fellow plaintiffs as the bullying “regulators.”