Re: copyright expiration as a spur to creativity

On 11 Aug 1998, Dan L. Burk <burkdanl[_at_]shu.edu> wrote:
>
> On 8/10/98, Albert Henderson <noblestation[_at_]compuserve.com> wrote:
> >
> > Dan L. Burk <burkdanl[_at_]shu.edu> wrote:
> > >
> > > Albert Henderson <NobleStation[_at_]compuserve.com> wrote:
> > > >
> > > > Since when is "breaking even" an incentive to invest?
> > >
> > > First, plese note that the language of "breaking even" is yours,
> > > not mine, and you appear to be using it in a colloquial sense that
> > > inaccurate for this discussion. But, to the extent that you may be
> > > referring to the concept of pricing at marginal cost, it has been
> > > an incentive since the concept of "investment" was developed --
> > > probably c. 4000 BCE, or even before.
> >
> > The plain English "breaking even" to describe "beyond recouping
> > their investment" or "pricing at marginal cost" is not inaccurate.
>
> It is if you are using the term "breaking even" to exclude the cost
> of using money, which you apparently are.

Not at all. The cost of using money is better represented by the prime rate than by growth and earnings of investments. Interest on loans is tax-deductible. Are earnings?

Any businessman faces choices of investing in X, Y, Z, or leaving his resources in the safety of government bonds. A chance at maximizing profit -- with pricing well above marginal cost -- should be more compelling than other opportunities. Patents, copyrights, and other protections of property support such investments.

> > The opportunity to reap minimal profits or major losses is no
> > invitation to invest. Investors risk losses only for the chance at
> > major profits. Why should I kid around with esoterica when I want
> > to communicate?
>
> I don't know. Why should you?
>
> With regard to the question of profits, the source of your
> confusion once again appears to be failure to distinguish accounting
> profits from economic profits. "Profits" in the sense that you appear
> to use the term are simply the cost of using capital (or sometimes
> labor). When the investors are paid off, the business in fact should
> in fact do no more than "break even."

You should say "if and when investors are paid off." The reality is that many publishing companies run in the red and authors' contributions to their copyrighted work far exceeds the income derived. Many properties end up as remainders or shredded paper.

Given the importance of the copyright industries to education, science, social, and cultural interests, I believe investors should have every encouragement possible under protection of law.

> > > > What is it that singles out "content-oriented" publishers for
> > > > criticism while "conduit-oriented" information technology firms
> > > > are encouraged to make all the profits they can?
> > >
> > > I'm afraid that I don't follow this question at all, particularly
> > > the loaded language in the last line. Can you explain yourself
> > > further?

Think.  

> > Xerox Corporation and others that enable unauthorized, illegal
> > copying boast _profits_ far beyond the _gross_sales_ of any
> > publisher.
>
> In the first instance, I fail to see what your loaded language about
> "unauthorized, illegal copying" has to do with the comparison you are
> attempting to make. Xerox enables authorized and legal copying as
> well as unauthorized and illegal copying. I suppose that next you
> will want to compare publishers profits with those of General Motors,
> because some criminals drive their vehicles.

Only if you will defend the criminals.

> In the second instance, even assuming that your representation
> concerning revenue is accurate, it makes no sense to compare the
> profits of Xerox, or any other firm, with the "gross sales of any
> publishers," for reasons that you yourself pointed out above.

Which reasons were those?

> > David Packard (of Hewlett-Packard) even sits as co-chair of the
> > President's Committee of Advisors on Science and Technology and
> > enjoys a general waiver of normal conflict-of-interest restrictions.
> > No publisher sits in such a powerful insider position as far as I
> > know.
>
> Why is this in any way relevant to the discussion?

What is it that singles out "content-oriented" publishers for criticism while "conduit-oriented" information technology firms are encouraged to make all the profits they can?

NB Packard joined PCAST in 1990 and I believe continued to serve until his death.

> > > > Their profits are larger than any publishing company by several
> > > > orders of magnitude -- far beyond "recoupting their investment."
> > >
> > > First, as I noted to a previous post in this thread, assuming
> > > that your representation is accurate, you are probably confusing
> > > accounting profits with economic profits. Second, if the firms in
> > > question are doing more than "recouping their investment" then
> > > they will either 1) shortly be undercut by a competitor, until
> > > either they lower thier price to the marginal cost of production or
> > > they go out of business, or 2) they have an unwarranted degree of
> > > market power due to some competitive failure, in which case they
> > > are subject to regulation under antitrust law to correct the
> > > problem.
> >
> > You call patent rights an "unwarrented degree of market power
> > due to some competitive failure?"
>
> I suggest that you carefully re-read the paragraph above, or, if
> necessary, have someone assist you in carefully re-reading it. You
> will find that I do not call patent rights an unwarranted degree of
> market power due to some competitive failure, nor in fact do I
> mention patent rights at all.

The IT companies I mentioned depend on patent rights to sustain high prices and enormous profits. You re-read.

> > If you are against copyrights, I guess you might as well be against
> > patents for the same reasons.
>
> You are once again indulging in inferences that are unsupported by
> anything except your own biases. At no time have I stated that I am
> "against copyrights." Hence, it cannot follow that I am "against
> patents for the same reasons," since no such reasons exist.

On Wed, 29 Jul 1998, Dan L. Burk <burkdanl[_at_]shu.edu> wrote:
>
> They will, but why should they have to? The point is that the
> consumer is better off if the good can be made available for
> free, or nearly free -- and it can be, once it is created.
> Consequently, consumers of the good should only have to pay for
> it to the extent necessary to induce the creator to create it
> in the first place. 100 or more years of monopoly rents are
> probably not necessary to induce creation -- something less than
> that will probably suffice.

'Nuff said.

Albert Henderson, Editor, PUBLISHING RESEARCH QUARTERLY 70244.1532[_at_]compuserve.com Received on Thu Aug 13 1998 - 19:18:23 GMT