Friday, August 27, 2010

Those wacky Germans

There is a short and very interesting story in Der Spiegel about an academic study regarding the effect of copyright differences on publishing volumes and industrial development in 19th century Germany and England.  

Indeed, only 1,000 new works appeared annually in England at that time -- 10 times fewer than in Germany -- and this was not without consequences. Höffner believes it was the chronically weak book market that caused England, the colonial power, to fritter away its head start within the span of a century, while the underdeveloped agrarian state of Germany caught up rapidly, becoming an equally developed industrial nation by 1900.
Even more startling is the factor Höffner believes caused this development -- in his view, it was none other than copyright law, which was established early in Great Britain, in 1710, that crippled the world of knowledge in the United Kingdom.
Germany, on the other hand, didn't bother with the concept of copyright for a long time. Prussia, then by far Germany's biggest state, introduced a copyright law in 1837, but Germany's continued division into small states meant that it was hardly possible to enforce the law throughout the empire.
The peanut gallery would like to shout something about anarchism and decentralization here, but are afraid certain (sorta) German blog readers would probably take issue.  Anyhow, back to our story ...

Höffner's diligent research is the first academic work to examine the effects of the copyright over a comparatively long period of time and based on a direct comparison between two countries, and his findings have caused a stir among academics. Until now, copyright was seen as a great achievement and a guarantee for a flourishing book market. Authors are only motivated to write, runs the conventional belief, if they know their rights will be protected.
Yet a historical comparison, at least, reaches a different conclusion. Publishers in England exploited their monopoly shamelessly. New discoveries were generally published in limited editions of at most 750 copies and sold at a price that often exceeded the weekly salary of an educated worker.
London's most prominent publishers made very good money with this system, some driving around the city in gilt carriages. Their customers were the wealthy and the nobility, and their books regarded as pure luxury goods. In the few libraries that did exist, the valuable volumes were chained to the shelves to protect them from potential thieves.
In Germany during the same period, publishers had plagiarizers -- who could reprint each new publication and sell it cheaply without fear of punishment -- breathing down their necks. Successful publishers were the ones who took a sophisticated approach in reaction to these copycats and devised a form of publication still common today, issuing fancy editions for their wealthy customers and low-priced paperbacks for the masses.

One of these days people are going to wake up and realize that vast chunks of intellectual property should be done away with because they represent a major intrusion by the state into the free market.  That's right, the true free market liberal should only grudgingly allow for the existence of copyright at all, and only in those cases where the market has demonstrably failed to produce stuff we all benefit from.  While you can make some legitimate argument that no one will spend billions getting a drug approved without some guaranteed property at the end, the same argument is much much weaker when it comes to the time invested in writing a book, coming up with a new programming idea, or recording your new hit single.  After all, we have an awful lot of the latter three, despite the fact that most of the creators don't make spit.  If the market ain't broke, don't let the government fix it; the whole idea is to design a system where, as Einstein put it, we have as simple a definition of property as necessary, but not simpler.  Potentially, this means a principled free market will involved dramatically less private property.

The whole thing reminds me of another juicy tidbit out of an entertaining interview with Robert Laughlin that JEA recently recommended (you can download the audio if you don;t want to read the transcript):

Q. So you are suggesting that the increased scope of patent laws is a response to the flow of jobs and knowledge overseas? 

A. Yes. 

Q. Why are you worried about that? 

A. That was my take on it. And also I read it. The same goes for the patent laws. Knowledge for the sake of itself is not very useful to us; we want things that are owned by us; that someone else learns them and takes them and we can prosecute them, it's against the law. Now what's the problem? What I figured out is that it's actually quite fundamental and obvious--it's elementary economics. If you live in the world where knowledge is the currency, there must be less of it. Why? Because no one will pay for something you get for free. So, in the Jeffersonian ideal world, everybody's a farmer and they write letters to each other--they exchange information but they charge you for corn. The world we have increasingly grown into, is where we have to have secrets. That's how you make your living. Making a living is not nice--I'm not going to give you the thing unless you pay for it. My measure of of success is whether I can shoehorn a very large amount of money out of you for this thing. The way economics works is that process isn't solid unless you really want to give me the money. The amount of pain you have to pay is a measure of how valuable the thing is that I'm giving you. So, in the information world where information is the economy, there has to always be paying in exchange of information; has to always be money exchanged. There has to be something scarce. That means that strewing the world with enlightenment can't be. So, knowledge can't be free any more. Not only that, but the sense of the law is it's not just acquiring knowledge--it's if you go and acquire it yourself, you are violating the law. In some cases that is a criminal act. Learning things of technical value is theft, and that means that the whole idea of just learning stuff and bettering yourself doesn't make any sense if the thing itself is valuable, owned by someone else.

Create artificial scarcity, aka control the supply, is the first rule of almost every business.  And it's the only rule the State Apparatus ever has.

No comments: