Posted 11:08 AM by Robert

Why Is Mozart Like a Buffalo?

"It is hard to understand how, if the overall purpose of the Copyright Clause is to encourage creative work, how some retroactive extension could possibly do that," said Justice Sandra Day O'Connor. "One wonders what was in the minds of the Congress."

This is surely a curious statement from Justice O'Connor, for the main current attack on the copyright extension act - the so-called Bono Act - is predicated on the actual text of the Copyright Clause, which does not say a word about "encouraging creative work". The Copyright Clause instead says that Congress has the power to pass laws:

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.

The first copyright act created a term of 14 years, with the right to renew for another 14. In 1998 the term of the copyright monopoly was extended to the life of an author plus 70 years for individuals, or 95 years for corporate copyright holders. The government says that Congress has the power to impose any term - other than an unlimited one.

The economic argument (as opposed to the textual argument) being made in this case - and to which Justice O'Connor in part refers - by the opponents of the Bono Act is more than passing strange. One does not hear economists arguing that the economic effects of allowing long-term private property rights of other forms (say, corporate stock, real estate or animals) somehow suppresses the economic usefulness of those other forms of property. Generally, it is the absence of property rights that causes sub-efficient economic behavior. For example, when nobody owned the buffalo on the American plains, and therefore anyone could shoot them in any number, a lot of people did shoot them in preposterous numbers. THAT IS THE WELL-UNDERSTOOD REASON THE BUFFALO ALMOST BECAME EXTINCT. Today, the American landlord is similarly endangered by the common-pool effects of rent control laws, which essentially gut the exclusionary privilege of real property ownership including, quite literally, the right to charge efficient rents. This "overexploitation of the common pool" is one form of inefficiency created by the lack of sufficiently extensive property rights. One might keep in mind the interaction of limited copyrights and the "overexploitation of the common pool" effect the next time one sees a reproduction of an impressionist painting or a figure on the Sistine Chapel ceiling imprinted on, say a placemat or a shopping bag - or the next time one hears Mozart on the elevator (or hears "The Rite of Spring" in Disney's Fantasia, for which Stravinsky - then living just a few miles from Walt Disney - received essentially nothing because Stravinsky held no valid copyright).

But "overexploitation of the common pool" is not the only way efficiency is lost through failure of property rights. There is also the "capture" problem: if one doesn't own an artistic work, one can't capture all the value of promoting it. Put another way: one can make money a lot more easily promoting Rolling Stone songs than promoting Mozart operas. That's because if one promoted a Mozart opera, anyone else who wants to can just publish the exact same opera. Although one can retain rights in one's particular performance - the fact is that Mozart's genius is just a lot more important than the genius of any know performance or set of performers. So a lot of the wealth just escapes.

The perverse results of all this seems to include that one hears both too much Mozart (in the wrong places and at the wrong times and with the wrong associations) as a result of the "common pool" inefficiency and too little Mozart (in the right places and at the right times and with the right associations) as a result of the "failure to capture" inefficiency.

Both the "common pool" inefficiency and the "failure to capture" inefficiency are normally discussed in terms of the free (or "perfect") market alternative. But as pointed out in the prior post, where the copyright monopoly confers substantial value, that value is conferred by the creation of an imperfect market. This is a fact although there is an apparently unlimited number of silly copyright lawyers prepared to deny it. [Ordinary "copyrighted" materials are "substantially similiar" to other uncopyrighted works competing in the market. Copyright only protects works up to "substantial similarity." To the extent a copyrighted work is not "substantially similar" to any other, it faces only imperfect competition. This is why Harry Potter has market power but most screenwriters in Los Angeles are well advised not to quit their day jobs, although many do anyway.] How imperfect market interacts with the "common pool" and "failure to capture" inefficiencies at this point in the development of economics requires hugely complex and controversial game theoretic mathematics.

And notice that this economic analysis affects both the Copyright Clause attack and the First Amendment attack on the Bono Act. If failure to have sufficiently strong copyrights causes underdissemination of affected information (by the "failure to exploit" inefficiency), then having any finite copyright period at all might suppress First Amendment policy.

This is not to deny that there are people who would make good use of a Rolling Stones song if only they could get it away from the Mick Jagger. But there are people who would make good use of any backyard in America if they could just get it away from the owner.

One of the many peculiar aspects of the current challenge to the Bono Act is that the Copyright Clause requirement that the copyright monopoly be for "limited periods" may simply be bad economics. That doesn't mean that the limitations of the Copyright Clause should not be enforced, but it might be a good reason to construe the limitation, not the limited power, narrowly.

As an aside, it is indeed difficult to understand why the Supreme Court would want to undertake the heroic intellectual, economic and legal efforts necessary to gut the Bono Act - at least under the Copyright Clause argument, since Congress could achieve almost the entire effect by passing the Bono Act under its Commerce Clause power, which has no time limitation.

In fact, federal trademark rights are created under the Commerce Clause, and have no specified lifetime. Is there something wrong with that?

The Court has more of a mandate to perform experimental heroics to protect First Amendment rights. But until the mathematics and economics of copyright are better understood, they will probably keep far away from this generalized "cost benefit" approach.

The Man Without Qualities plans to return to Bono Act considerations to apply some of them to the prosaic chore of counting Supreme Court Justices noses, to show that those noses point in a direction distinctly Pro Bono.