Google and Copyright

by F.

In today’s FT, Microsoft fires a shot across Google’s bow. In an editorial, Microsoft says that:

Google, for example, says its book search technology will one day make available a copy of every book ever published in a vast online database of indexed content. A worthy goal, to be sure. But in pursuit of that goal, Google has taken a unilateralist approach by contending that it is entitled to grab books off library shelves and copy them wholesale without obtaining the permission of the publishers and authors who own the copyrights in those works.

I’m not sure who is right about this, but I think I know the question: what amount of legal protection will provide a sufficient incentive for people to create copyrightable works?

My gut? Very, very little. Human beings are creativity machines. We just churn out innovation after innovation. It’s amazing. I haven’t seen any evidence that IP laws spur innovation, which means that the cost of IP laws is a deadweight loss—paying someone for what they would do anyway.

There is a fact of the matter here, but mostly the discussion is just rhetoric, which is what you would expect. These quasi-moral arguments about what the “right” amount of protection is, in my view, are as empty as morality generally. (My current view is that morality is a cognitive bias.) Morality means wrapping up what you want in moral rhetoric: “I want X” turns into “It’s right that I get X.”

Where are the facts? Hard to say. Here’s what a recent study published in the Journal of Political Economy concluded.

For industries ranging from software to pharmaceuticals and entertainment, there is an intense debate about the appropriate level of protection for intellectual property. The Internet provides a natural crucible to assess the implications of reduced protection because it drastically lowers the cost of copying information. In this paper, we analyze whether file sharing has reduced the legal sales of music. While this question is receiving considerable attention in academia, industry, and Congress, we are the first to study the phenomenon employing data on actual downloads of music files. We match an extensive sample of downloads to U.S. sales data for a large number of albums. To establish causality, we instrument for downloads using data on international school holidays. Downloads have an effect on sales that is statistically indistinguishable from zero. Our estimates are inconsistent with claims that file sharing is the primary reason for the decline in music sales during our study period.