16 July 2003

Continuing the discussion with Professor Solum:

•  We have a fundamental disagreement on the nature of property. Professor Solum said (emphasis added) that

Intellectual property is different from tangible property in a crucially important respect (rivalrousness). And because of that difference, the economic case for perpetual property rights in tangible things does not extend to intellectual property. In that sense, intellectual property is "inferior," and, in that sense, this is a well-established and uncontroversial fact.

   No, it is not a "well-established and uncontroversial fact." It is not a fact of any kind. It is an a priori assumption, just like every other categorical or definitional distinction in economics. For many purposes, it is a valuable one; not, to my mind, for this purpose. Professor Solum's argument, at the extreme, essentially raises rivalrousness to the level of the single most critical aspect of property. I do not believe that he truly intends it to reach that far, but that is a valid conclusion. Perhaps as a theoretical matter there are some, or even many, circumstances under which this is a valid and sound conclusion. It is not, however a fact; and it is certainly not incontrovertible, as recent work from the "behavioral" school of economic thought demonstrates.
   My unprovable a priori position is that classical and neoclassical economics, because they are founded upon the assumption that all resources are economically scarce, often produce answers of limited value when the resources are nonscarce (either within a given market or in general). Whether intellectual property would qualify as a "scarce" resource is far from obvious; in the context that we are discussing it, I believe that it might. As the whole point of this discussion is to try to build communication as the first step in building a bridge, I also believe that concentrating excessively on "solving" this aspect of the problem will only prove a barrier to any other aspect. I suspect that we're going to have to agree to disagree, and see where we can go from there in recognition of the disagreement.
   It seems to me that part of the disjuncture between Professor Solum's approach and the approach I've tried to outline arises from incompatible definitions of "economics" and incompatible models within "economics." I cannot state any other solution than noting that, within those models, we both appear to be "right." Which model one accepts within the broad scope of "economics" is essentially an unstated assumption. Over the years, I have gotten into and/or observed so many arguments that eventually founder on this barrier to communication that I have given up trying to convince anyone else that the models I credit are better than the ones he or she does. It is just as valid to open one's soft-boiled egg at the big end as at the little end.
   I feel compelled to respond somewhat more strongly to two other points Professor Solum raised concerning the "rents" issue. First, I cannot find a principled distinction between "excludability" and "rivalrousness" that would apply to intellectual property, even should I accept that "rivalrousness" has a meaning independent of "excludability" (not all schools of economics do). If there is such a principled distinction, all it does is, as noted above, raise rivalrousness to the most significant aspect of property. In any event, there is an a market-based analog to "rivalrousness" in intellectual property exploitation that unfortunately comes from something usually labelled "exclusive": that an exclusive right is in many circumstances worth more in the market than is a nonexclusive right to the same intellectual property. This is most apparent in patents, but does occur in copyright. Consider, for example, the market difference between the fee offered for the "average" exclusive anthologization right to previously published short fiction and the fee offered for a nonexclusive anthologization right for that same work. Or, perhaps more directly, consider the difference between the fee offered for first publication rights to a work of short fiction and that offered for reprint rights.
   Second, and less cordially, I reject the application of the tragedy of the commons to our disagreement. I have not argued in favor of perpetual copyright, which could make analysis of the tragedy of the commons relevant. Should Congress continue to extend the terms every time "Steamboat Willie" gets close to entering the public domain, that argument may gain more validity. I advocated that the "right" copyright term is one that is both substantially longer than the "five to ten years" Professor Solum proposed and somewhat shorter than the 120 years accorded works for hire or life plus seventy years accorded natural persons under the current statute. This objection is thus inapplicable.

•  Professor Solum's response on the motivational biases in the academic's treatment of intellectual property is both well-taken in one sense and tends to demonstrate my point in another. Admittedly, I did not provide specific documentation on how much academics make from their intellectual property. It is incredibly difficult to do so, because much of the data is (rightfully) confidential. However, there are some general circumstances and statistics that one can use to demonstrate at least that Joe Academic does not make his or her living directly from the income he receives from intellectual property. First, keep in mind that 99% of the academic works published (and perhaps more) as articles in journals and periodicals do not result in direct income of any kind. A chemist's article in JACS garners no fee for the right to publish it. It may help obtain tenure, or promotion, or an endowed chair, or better research grants; but those are indirect effects that come from the use by others of the property itself, not from the chemist's initial placement of the property for availability to others.
   The situation is not all that much better for books. The median royalty advance for serious nonfiction among university presses appeared to be around $3,500 during calendar year 2001, the latest for which I have a broad enough base of figures from which a conclusion might be drawn. Approximately 20% of those works earn out the royalty advance within three years after publication. On that basis, I do not believe that Joe Academic can expect to earn his or her living solely and directly from his or her intellectual property, unless Joe Academic can churn out ten books a year for year after year—and promptly sell publication rights for all of them to willing publishers.
   Or can he/she? Isn't name recognition a form of intellectual property? Yes. It is. It is the designation of origin of certain expressions—which is more like a trademark than a copyright, and bears no apparent relationship to the copyright term. Instead, this is a matter of droit morale (moral rights). Consider, for example, the hypothetical instance in which the copyright term expires one day after publication. Since others can copy the material immediately, one can no longer exploit the material itself directly to make a living, except insofar as one can control the means of making those copies. However, the knock-on effects of properly attributed authorship—tenure, promotion, grants, endowed chairs—will continue to function for academic authors regardless of the copyright term.
   Professor Solum wonders:

Where, for example, did Lessig engage in "inordinate discount[ing]"? Who else has done this? My previous reply asked for the evidence for Petit's claim of bias, and such evidence has not yet been produced.

   It is not fair to Professor Lessig to try to dissect his books in such a manner. I can only point out a trend and negative inference in the examples cited in his books and the last four or five of his articles that I have read: that virtually every negative example (most of which were well-taken) concerning misuse of or harm arising from the copyright term related to a copyright that was neither owned by nor being abused by the actual creator. This misuse of/harm caused by the copyrights by a class of copyright holders was then used to justify restrictions upon all copyright holders. In some instances, I agree with Professor Lessig's particular suggestions; in most, however, those suggestions would harm a class of copyright holders for whom I have seen little evidence indicating habitual or widespread abuse of those copyrights, and who depend directly upon the income from those copyrights to allow them to further the progress in the sciences and useful arts.
   Professor Solum's objection that I have not dealt with my purported "reversal" of the bias effect does do one thing, I think. I infer that Professor Solum is conceding that the degree to which academics and nonacademics rely for their basic living upon income received directly from exploitation of intellectual property, and copyrights in particular, is different. I believe that this difference is, on average, significant enough that it introduces a bias into the system. I made an inferential argument concerning what that bias was based upon a relatively broad correlation between the class of origin of the most extreme anticopyright statements and the apparent (non)reliance of that class upon income received directly from copyrighted materials. That is all I was trying to imply. If Professor Solum concedes that there is a degree of difference but believes that the degree is not sufficiently distinct to create a distinction in kind, that is his right, as there is very little hard evidence.