The Bad Science And Greed Behind The “Intellectual Property Stifles Innovation” Argument. Part 1.

For some time now the web/technology lobby has been arguing that copyright and other forms of intellectual property rights are stifling innovation.  And if you don’t actually  think about it you might agree.  I mean it sound sort of like the argument against government over regulation. Having to get permission from all those IP owners.  And then having to pay them?  Bad for innovation!

But is this really true?

No. And  the evidence is right in front of us.  Sites that exploit artists by ignoring copyright obligations are not any more innovative or “better” than sites that honor copyright and don’t exploit artists.  You can easily measure this. I’ll show you  how in part two. .  The only reason consumers prefer these sites is because they get the stuff they want without paying for it. And the only way they can do that is by ripping off the artists.  This is not innovation.

Second the Apple App store provides a stunning example of the innovation that occurs when you protect intellectual property.  When you allow content creators to be rewarded for their efforts innovation blooms.  And  remember it’s not just those that create the content that profit from their works. Consumers are richly rewarded with very useful and stable products.    Everyone wins. It’s a net plus for the economy.

With a little more work you can compare the levels of innovation in countries with weak intellectual property protection and copyright protection with countries with robust IP protection.  There’s a reason China did not invent the iPhone, the web browser or search engine.

In fact you could argue that  the very triumph is of western capitalism is due to our decision to reward innovators by protecting IP.  The collectivist soviet union was brought down not so much by our missiles and aircraft  but by our robust economy and snowballing innovation.  They couldn’t compete.

That’s why I find it curious that there are a number of strange academic and “scientific” studies on the horizon attempting to show the opposite.  Call me jaded but I’m pretty sure  the next few months the digital maoists will be up on capitol hill waving their little red “internet freedom” books citing these studies.

http://www8.nationalacademies.org/cp/projectview.aspx?key=49249

This  is one from the National Academy of Sciences that is studying whether copyright inhibits innovation.  Much like Tony Blair telling his ministers “the fix is in” on the Bush administration’s Iraq pre-war intelligence,  I was told by several people  that this study has been “hijacked”  those that want to set us back 400 years by collectivizing intellectual property.  These studies often use private money to help fund and determine who’s on  these “ad hoc” committees,  hence they can be hijacked by commercial interests. And looking at the list of contributors to the study? I’d say the fix is in.*

http://www.tc.umn.edu/~jwaldfog/pdfs/w17503.pdf

Here is a study from the amusing  Pop Economist  Joel Waldfogel. Normally I like this guy.  He is arguing the same point but in reverse.   This is a little harder to explain. But basically he is arguing that he can measure the “quality” of music. And since advent of  file-sharing the “quality” has not decreased therefore file-sharing has no effect on musical “innovation”.  Which also implies that copyright does not encourage innovation.

Don’t worry about it if you didn’t follow all that.  Just remember you laughed or scoffed when you read “he can measure the quality of music”.   And you should.   No one can measure the quality of music.

To Prof Waldfogel’s credit he has devised an ingenious and very complex way of  seemingly measuring current  music “quality” and comparing it to past music.  The only problem is it does no such thing.  Frankly it doesn’t measure anything.  Further I’m reminded of a phrase normally applied in the financial industry:  Complexity is Fraud.  In this case a needlessly complex formulation leads to false conclusions.

I say needlessly complex, because there are much simpler and concrete ways to measure whether file-sharing is harming musical innovation:  sales,  length of albums,  time between albums,  number of “hits” on each album, ratio of old to new music in films and TV, etc etc.

But regardless even if you could measure “quality” and hence make an argument that not enforcing copyright isn’t harming music “quality”.  This study is totally useless to the broader argument about IP in general. Musicians can (unfortunately) sometimes subsidize production of recorded music with live revenues. Movies studios, actors, directors,  authors, comic book illustrators can not do anything like that.  Beyond the entertainment business what would Apple do  if Foxcon could just make it’s own version iPhone?  Sell t-shirts to recoup their R&D costs?  I believe the copyleft knows that because musicians will make  at least some music regardless of whether they are paid,  that some musicians can fall back on live revenues, they have a golden opportunity to argue copyright stifles innovation.  If this sounds totally cynical it because it is totally cynical.  How many digeridiots are out there arguing authors and film directors need to sell t-shirts? well actually there are a few,  but not many.  Everyone knows that won’t work.   The entire copyleft is focused on musicians cause this is the only place they can sort-of-just -barely make the half assed argument.

Tomorrow I’ll start debunking a bunch of the specific  “copyright is inhibiting innovation”  arguments. This should be fun.

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17 thoughts on “The Bad Science And Greed Behind The “Intellectual Property Stifles Innovation” Argument. Part 1.

  1. So basically people are measuring innovation by the amount of quick profit it makes.

    If Technology companies innovate and ignore copyright of music/film/content then they can see big financial returns pretty quickly.

    If they tried to adhere to copyright law and do everything “above board” it would take them a lot longer and they’d risk never making it because there would be a competitor ahead of them only to happy to take the shortcut and ignore IP rights. I don’t understand why they can’t just be honest about that instead of continuing with the bogus argument that IP rights stifle their innovation when it actually stifles their ability to make huge profits.

    Interesting though that the software industry these days is dogged by IP/patent issues (illustrated by your buddies at the EFF https://www.eff.org/issues/how-patents-hinder-innovation) where the tech companies are only to eager to file lawsuits against infringers (where quite often it’s entirely accidental).

    By the way – one thing I’ve not seen mentioned on Trichordist is the porn industry. A good article on the BBC website by Louis Theroux about the decline of the industry due to unlicensed tube sites http://www.bbc.co.uk/news/magazine-18352421
    I guess you might not want to lower the tone, but the surge in private webcam sites is interesting – do you know of any well-known artists who do private paid webcam gigs? I mean initimate, solo affairs from their home/studio where people can request songs/interact rather than streaming full gigs from venues. I’m pretty sure there’d be a decent market for that sort of thing. You wouldn’t necessarily have to take your clothes off (unless you really wanted to)

  2. You haven’t distinguish between protecting and idea and protecting revenue!

    Protecting an idea, can stall the corruption of an idea.

    Protecting an idea can impede progress. Cancer researchers copyright every step of research and innovation, so if a cure was found the trail of pharma-companies able to claim a share of the money, would mean a decade long legal battle – the only way it’d be resolved is if one of the larger companies bought all the rest.

    Protecting revenue of a infinitely reproduceable artefact, who’s reproduction has no cost is NOT a human right. Artists deserve to recover production costs and be rewarded for their time and creativity, but copyright doesn’t defend that, it keeps Brangelina in adopted kids, or means Sonny can buy a bigger yacht: not my idea of a fair system, is it yours?

    What about artists constricted by their record companies, supposedly defending their intellectual property? Frank Zappa, Prince, George Harrison, Eric Clapton unable to publicly thank the artists who played on their albums – unable to pay them directly?

  3. Well done, David. And congratulations on yesterday’s volume of sharing of your letter to Emily White. We in the filmed entertainment industry rely on people like you to share the analysis you do about the music industry. It’s clear that the Internet and these attitudes toward piracy have hurt music, and you have 15 years worth of evidence to support this assertion. Now that quality streaming video is available, filmed entertainment is the next victim; and you’re absolutely right that there is nothing the filmmakers will be able to do except to stop making great films. The up-front investment is just too significant; and Kickstarter is not the answer.

    I share your fundamental belief that America has led in innovation, especially in the arts, because we are unique in supporting a mechanism that promotes profitable enterprise based on that innovation. Remove the mechanism and we, too, will produce shoddy work or no work at all.

    Keep writing! Thank you!

    DN

  4. yes, that should be fun. afaik, the “quality” of music has gone down immensly the past years, what with all the mainstream shit and the loudness wars. are you saying this is because of filesharing? if so, i’ll stop using the internet right this very moment.

    when you are done seeing the world in black and white, you should take a look at the whole idea of what art is. take andy warhol for example. basically founded an entire artform, based on what? other peoples stuff. fancy that.

    or the drum and base/jungle scene, based their entire genre on the amen break, and both of these two genres are huge. fancy that. or hip hop and the advent of sampling which pretty much defined the entire freaking music industry we have today. fancy that.

  5. Uh, noone argues that copyright stiles innovation but infinite copyright does. That is, perpetually extended copyrights that never expire, well after the death of the artists, their children, and grandchrildren, for the benefit of corporations.

  6. Strong IP rights regimes are not universally good. In some ways they help the cause of innovation, in some ways they hurt.

    Patents do actually stifle innovation in certain domains. Google just spent $13 billion for Motorola’s patent library, for defensive purposes. Some of those are innovative patents, some are garbage with a stamp from the Patent Office. Not many are going to make it into inventions from Google. That’s $13 billion not spent innovating.

    In the pharmaceutical industry patents protect the outsize investments those companies make, but they also partition the genome in ways that don’t match how the genes interact in our bodies, which limits the problem solving ability of an entire industry.

    An inflexible copyright regime certainly does stifle innovation. Witness the follow-ons to Paul’s Boutique and 3 Feet High and Rising… oh, wait, there aren’t any.

    Does all IP need to be ‘collectivized?’ Not necessarily. Do we benefit when some is? It’s hard to deny that on a blog served using GPLed software:

    http://codex.wordpress.org/License

    plus BSD licensed software (it’s even Russian):

    http://nginx.org/

    Is a strong IP regime important? Maybe, but a smart one is better.

    I think there are hard problems here, and we don’t know all the answers yet. We do need to compensate artists. But there are also opportunities emerging in the new economic regime, and we need to grasp them too.

    • nice comment john. I wrote this series a while back. I think I touch on the fact that many people voluntarily collectivize their IP in small communities like amateur radio where making commercial software isn’t always profitable. I’m all for voluntarily collectivizing IP. I just don’t want it to mandatory.

      • Open source web servers dominate all webservers. At the last Netcraft survey in February, it was just shy of 80% of all websites worldwide, between Apache, nginx, and a few odds and ends. That’s not a ‘small community.’

        The economic difference is that the developers are highly skilled, and can profit from their work on freely-available webservers. Working on popular open source software makes a market for your skills. I’m sure Igor Sysoev does very well for himself. They are also people who could be wringing microseconds out of trades on Wall Street, so that affects the market for their skills.

        Also, there is a commoditization dynamic. A new webserver might be worth investing in for a business, but not for competitive reasons, so there’s no reason not to share.

        At this level, technology uncouples money from power to some extent. It’s possible to add some capability to internet software that sees wide uptake just by investing time and skill, without millions of dollars in capital outlay. So the people engaged in that don’t look at it in as much of a capitalistic way. Changing the world is a lot more accessible.

        Artists don’t have those dynamics working for them. It’s a lot more labor intensive for Jonathan Coulton to develop the career he has, based on a community he has a real relationship with. He’s managed to develop a range of other profitable avenues, like the song at the end of Portal. I think it’s a lot more interesting than industrially produced arena rock, but that’s a matter of taste, I suppose.

        I think what we’re seeing is the contraction of music as an industry, and the development of it as a community. That’s a painful transition for a lot of folks, but some people do seem to be finding ways to succeed. I don’t know if it will produce a bigger pie at the end, but it does seem smaller for the moment.

        And if you think this is just about music and movies and books, you haven’t been watching the price of 3D printers drop through the floor in the last couple years.

        http://reprap.org/

        http://www.thingiverse.com/

        http://opensourceecology.org/

        Closed IP will have to compete with open IP in a lot more domains in the 21st century. The two have their own models of innovation. It’ll be interesting to see who wins.

      • Good points but I should clarify.

        A great misunderstanding between software developers and musicians occurs because, most software development has shifted to a service model. So open sourcing/ demonetizing the product makes sense. cause the service stream can be so lucrative.

        On first blush I can see why software developers then try to push their business model onto musicians. If you only looked at the biggest most famous acts you would think that our “service” revenue, the live show is highly profitable.

        Further our product is not moving towards one “uniform” standard the way a lot of software does. one product that works for most people. Artists also have a competing imperative to make highly unique “products”. This is why ultimately copyright is really important for artists.

  7. America get a big boost in the Industrial Revolution when Samuel Slater broke British IP laws and stole plans for factories from Britain to use in Rhode Island? Developing countries have historically stolen IP from industrialized countries. Please don’t pretend that America pulled itself up by its mythical bootstraps.

  8. Most of the “IP stifles innovation” arguments that I have heard, and agree with, deal more with software patents, rather than works of creative art. The issue is that many patents issued for software technologies today are so stunningly broad that they leave no room for new innovators to come in and build on those ideas without risk of a crushing lawsuit by a big tech company with very deep pockets.There are also many patents issued for very fundamental software design principles and ideas, often without any specific implementation attached to them. It’s like if someone came along in the 19th century and patented the use of a hammer and anvil. It’s like patenting the idea of an automobile. This leads to big tech companies hoarding enormous portfolios of patents, which they never intend to use, just to defend against any possible future litigation, or to sue the hell out of anyone else who later comes up with the same idea.

    • agreed on patents. patent trollin is a big issue. But don’t fool yourself I see plenty of this pushed to copyright. The entire lessig hybrid economy is specifically about this.

      • On the one hand, the software industry is presuming to apply its practices to other industries (music, film, etc.), but also the consumer isn’t making the distinction. To David’s point about Lessig, the PR coming out of the tech industry pushes slogans borne of certain IP practices that might be great for innovation in those areas, and the language filters into the consciousness of kids downloading free media. We’re constantly assailed with similes involving the printing press, etc., but these examples have nothing to do with the right of copy by the maker of creative works. The argument that “theft is innovation” can easily result in the end of historically vital industries.

  9. http://spectrum.ieee.org/nanoclast/semiconductors/nanotechnology/china-surges-ahead-of-india-does-it-matter

    Came here because of your letter to Emily White. Putting aside your references to suicidal artist, I’m totally in favor of your position and have share it on FB.

    Now, the term ‘IP’ is heavily overloaded and covers some very diverse subjects: trademarks, patents, copyright etc. etc. The fact that certain privileges granted by current law has been capitalized must not disturb sound reasoning; a privilege is just that, it is not a ‘natural law’ property. Studies of innovation tend to show that ‘independent innovations’ are very rare; usually innovations are ‘in the air’ and occur simultaneously in a number of places. The wealth of our nations depend on free (i.e. open) exchange of ideas.

    Fashion is an example of a thriving industry that mostly works on the premises of a rather open exchange of ideas. Please go see http://www.ted.com/talks/johanna_blakley_lessons_from_fashion_s_free_culture.html

    I’m totally in favor of copyright, which BTW is also the legal foundation for GPL and Creative Commons (while I’m flabbergasted by the recurring copyright extension acts).

    Please do separate copyright from other intellectual privileges issues.

  10. Man is not a rational animal, but a rationalizing animal. Would the issue of copyright be such a heated topic if people couldn’t steal music? Would we be talking about copyrights if the only way to get music was to buy a CD? Before MP3 and computers ripping CDs, no one talked about whether they should pay for music or not. They just bought it. Few people today would actually steal CDs, other than people who’ll shoplift anything. Now that music can be easily copied and distributed, people are finding ways to rationalize their actions.

    Evidently, copyright only works if you have a physical product to sell that can’t be easily copied. Long before computers and the 20th century, people did make illegal copies of books to sell. That’s how copyright emerged, to stop illegally printing. It’s only when enforcement of copyrights are enforced is when people respect copyrights.

    What would happen to the music industry if the only way to hear a song was to buy a physical object that couldn’t be copied by the consumer? People would just accept it and buy the new music.

    In other words, the respect of copyrights is directly related to how easy the copyrighted material can be copied. Few people steal Mercedes, but if they could be copied as easy as music most people would be stealing them.

  11. As A result of globalization we see and learn more about what is happening around the globe. Social media programs show us targets and ways of living that we have never seen before and due to on how to be social, not on how to do social. For some people this has created the need to keep in touch with people all over the world we encounter in our travels. As I’m writing this article, I am a Dutch woman, lives in Switzerland, working on an international project. The technique is only satisfy the need to stay in touch with people, cultures and societies around the world.

  12. Found this post late:

    It’s also worth noting that this has been tried in the past, and failed. One doesn’t even have to take the argument apart logically — just say, “That coin’s been tossed already, and here’s what happened.” Post-revolutionary France tried the same thing: removing what was at the time copyright protection from creators and innovators. They had the same hippy-trippy attitude toward it.

    It failed. Innovators and creators do what they do out of a sense of inner thirst, true. But once that inner thirst has been slaked by the act of creating, they sure do want to be rewarded for it. And if the culture in question won’t reward them, they simply go elsewhere — which is precisely what happened in France. The brain drain that struck that country was scientifically and artistically crippling.

    In the end, the issue is that the only people who ever argue against copyright are people who consume and who do not create. And they are the WRONG PEOPLE to determine why someone creates. It’s like listening to a roomful of armchair quarterbacks going over why their favorite team won or lost the game, and what the coach should have done. They haven’t the slightest idea of what it takes to win a game, or else they’d be playing instead of spectating.

    Similarly, if the anti-copyright types actually knew what creative innovators did and what they wanted, they’d be creating and innovating instead of passively consuming.

    Seriously — check out the history of post-revolutionary France. Lots to learn there about copyright and what happens when you don’t allow bright people to benefit from their own work.

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