The story SOPA

The big story in recent days has been the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA), and how various important sites on the Internet have shut down to protest these bills. I'm strongly opposed to these bills, but I've not been following the story very closely because I find it implausible that such radical legislation will pass, when so many powerful corporations are arrayed against it.

Of the little I've read, three pieces have made an impression. None of these are particularly original, but two of them are well expressed, and thought provoking. The third is not.

Over at The Leisure of the Theory Class, Eran Shmaya writes

But what about protection of “intellectual property” ? Clearly this is not a necessary condition for a civil society. It’s also not a necessary condition for production of knowledge and culture. We had Plato and Archimedes and Cicero and Shakespeare and Newton before it occurred to anybody that Bob has to get Alice’s permission to reproduce a code that Alice wrote.

This seems correct to me. As the Economists would say, knowledge is non-rivalous, even if it is (with the help of the law!) excludable. Jefferson put it much more elegantly when he wrote to McPherson.

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

We want to reward people who create new knowledge and art, and to encourage them in their work. We create this artificial form of property so that those who use their work repay them some part of the value they receive.

And Eran is right when he writes that

I realize some people lose their job because of online piracy. Also, Some people lost their jobs following the introduction of ATMs. But we view ATMs as positive development since it made a certain service way cheaper. My guess is that the same is true about intellectual piracy — it makes distribution of culture and knowledge cheaper and therefore makes also the production of culture and knowledge cheaper. True, some companies, particularly the established ones, are damaged by intellectual theft. Other companies, particularly startups, benefit.

Intellectual property, like other forms of property, is a form of protection offered by society because its benefits outweigh the costs. All forms of property are artifical, of course. If the same piece of land could be used by any number of people, each in their own way without any causing any inconvenience to others who wish to use the same piece of land, we wouldn't allow anyone to own land either.

Eli Dourado blogs

There are a positive number of murders each year. If we put more resources into investigating and prosecuting murders, there would be fewer murders. Nevertheless, it is not at all clear that we are spending too little on murder. The optimal number of murders is positive, not zero. The best policy with respect to murder is to try to maximize the net benefits of the policy, not to minimize murders.

OK, with you so far.

Suppose a new technology were introduced that made it easy to get away with murder (e.g., David Friedman’s plan for Murder Incorporated). This technology makes it extremely costly, though, say, not impossible, to stop murders from occurring. What happens to the optimal amount of murder enforcement? The amount that must be spent to deter each murder has gone up, so the price of deterrence has gone up. Consequently, society should aim to deter fewer murders. Under some extreme circumstances, we might even be better off if murder were legalized (and if people were advised to just be more polite to each other).

Similarly, whatever your prior belief about copyright enforcement, the Internet has made it easier to get away with copyright infringement. The amount that must be spent to deter each instance of copyright infringement has increased. Consequently, society should aim to deter fewer instances of copyright infringement, not more instances as SOPA supporters advocate.

This seems logical to me, and the extension to copyright law follows immediately. It is much more costly to enforce copyright law in the age of the Internet, which means that we should try less, not more.

However, the commentators on his blog had a good point to make: this is true only if the benefits of deterring murder (or copyright violation) are constant. If the costs go up, and the benefits go up too, it is no longer clear what we should do.

As Zac Gochenour wrote in the comments

Put another way, to use your murder example, the cost of a small amount of murders is relatively low as long as people can more or less go about their lives normally without living in constant fear of murder. In the extreme, if murder became cheap and rampant, the survival of the species might literally depend on ending murder, in which case we might dedicate a lot of resources to stop it. Just think of the “DC Sniper” from a few years back: people were afraid to even leave the house, so the social cost of murder had risen drastically (so it made more sense to stop it).

But then

Enough devil’s advocacy. I would respond thusly: copyright infringement is getting cheaper (information wants to be free) at the same time that the benefits of a larger public domain are getting greater (see Benkler’s “The Wealth of Networks”) and it seems clear that if not now, then soon, the net benefit of even a token amount of copyright protection will be negative. So not only has the cost of enforcement gone up (meaning we should invest less in enforcement as you describe) but the benefit of enforcement has actually declined sharply as well.

Greg Mankiw's blog post struck me for different reasons. He is the most distinguished (or at least the most famous) of these three writers. His post is also the most badly thought out, and poorly argued.

The anti-SOPA crowd argues that this is a matter of basic liberty. But it's not. In a free society, you don't have the freedom to steal your neighbor's property. And that should include intellectual property. Moreover, it is the function of the state to enforce those rights. We don't leave it up to civil litigation to protect property rights (although that is part of the solution). We give the state substantial powers to stop theft. Just as owners of tangible personal property have good cause to call for a police force and a system of criminal courts, owners of intellectual property have good cause to ask the state to stop those who would infringe on their rights.

For this level of analysis, you don't need a Harvard Economics professor who used to chair the Council of Economic Advisors. Your garden variety drunken uncle can do as well.

I wonder if the next paragraph from his post explains why he holds this view better than any Economic theory of public goods could

This is an important economic issue for the United States. We are large producers of intellectual property: movies, novels, software, video games, TV shows, and even economics textbooks.

Emphasis added. He ends his piece by firing a salvo of platitides at the reader

Believers in free enterprise, property rights, and economic liberty should be among the most vocal advocates of laws to stop intellectual piracy.

I have no reason to quote him here, except that I found his piece startling crude and pointless, and it seems I am not the only one to feel this way. Over on Twitter, it seems both Matt Yglesias and Modelled Behavior agree.