ILAW: Lessig on Markets and Culture

Jul 9, 2003

Professor Larry Lessig is up next here at ILAW, exploring markets and culture, followed by Professor Fisher with possible solutions to the present problem with regard to digital distribution and fairly compensating producers and artists.

Larry steps to the front:

Larry: What I want to do today is draw together the story about the law and the story about the market. The picture of change difficult to see without seeing it in terms of law, markets and culture.
Organizing idea: free culture. Think about free markets, free enterprise, free software, free speech...all images of free things.
An alternative conception: free lunch or free beer. Free meaning no cost. This is NOT what I mean. I bow to Richard Stallman, here; I am talking about a different kind of free.
I will not and I do not ever endorse that artists don't get paid.
The activity I want to focus on is building a culture. Building culture in a particular way. It's a free speech society; this doesn't give me a right to control the NYT. This is not anarchy. This is about freedom.
Stories: In 1928 Walt Disney created this work, "Steamboat Willy." This gave birth to Mickey Mouse. This segment is about the transformation of culture. This idea--a cartoon with music--had been borrowed from another film. In 1928 there was also this creator: Buster Keaton. Buster Keaton created "Steamboat Bill." Steamboat Bill is the source of "Steamboat Willy." This is a kind of creativity. We could call it Disney creativity.
"Treasure Planet" is a modern example. This continues to be the way Disney creates. The Brothers Grimm transformed by Disney: it made it nicer for children. This isn't just limited to Disney.
Japanese create "manga." They have copy cat comics. They build on the work. They do no not xerox it. They use it as an inspiration. This type of creativity is huge in that culture. This produces an activity twice a year where people trade these works.
This extraordinary creativity feeds the "manga"; it spurs it on to greater creativity.
Why was this type of creativity that made this possible in the US. The law reason: 1/ copyright duration. When Disney created, he built from works in the public domain. The important thing to focus on is that the public domain is a lawyer-free zone. This is a hugely important feature of a free culture. No permission required.
Copyrights expire because they are supposed to be "limited." Before 1774, copyrights were perpetual. The United States, appropriately enough, copied English law. Originally, the vast majority of creative work was in the lawyer-free zone.
Beginning in 1962, Congress began to extend the term of copyrights. In just thirty years, copyright was tripled. In 1973, copyright term was two part, and had to be renewed once. Average term was 32 years.
Today the average is the maxiumum; no renewal required. Only two percent of works have commercial value--the rest is in a regulatory black hole.
This is the first change. Second change: anything in a tangible form is protected and whether it is not registered or deposited or whatever--for the full term of copyright.
Change in the reach of copyright: technology change makes it so that "copies" are regulated.
What's unregulated? You can read a book, you can sell a book, you can give a book away. Because you are not producing a copy.
Under copyright, publishing is regulated. Fair use is an exemption.
On the Internet, everything involves making a copy. It's shifted from a field of presumptive freedom to a field of presumptive control.
Copyright Office FAQ: "If you use this, action may be brought." This signals a huge shift.
Before the Internet it is law that is controlling. Courts and judges have to enforce the law. There's a human in the chain. The Warner Bros. sent the Marx Bros. a C&D. The Marx Bros. says we pre-date you in the use of the word, "bros." The court would laugh at this claim. They interpret and apply the law.
But increasingly it is a machine--a computer that interprets and applies the law.
Adobe eBook Reader. Middlemarch--a work in the public domain. Permission to print--only ten times every ten days. Metered use of this public domain book.
Where does the control come from? Its source is not so much the law; it's the technology. That source of control is different. And we have multiplied that.
There is supposed to be a balance--copyright and its traditional limitations.
Aibo dog example; teaching people to hack their dog. Not with a machete, with a computer. Teach your dog to dance.
This was stopped via the DMCA. Law protecting code protecting law. Not allowed to tinker with the code. These are the technical changes.
Third layer of changes, adding to law and tech: markets.
Copyright is a monopoly. Framers limited the monopoly. Market shifts transform these monopolies since the '70s. Concentration. Tranformation in the scope of the effective control that these media companies can exercise.
Norman Lear creates Archie Bunker, "All in the Family." Contribute to discussion of racism, sexism, etc. Pilot was too racy. They said, "tone it down." He did another pilot, "still more racy."
Lear took it to CBS. CBS loved it. They ran it. The rule at that time required separation between content and conduit. This guaranteed a certain kind of check. Rules were changed.
Another hero of mine, Jack Valenti, lobbied AGAINST this change. He fought media concentration and lost.
On June 2, Michael Powell's FCC made an extraordinary change.
Think about these all together: the punchline. Never before have fewer people been in charge of more of our culture. The technology, the law and the market sets up a fundamentally different society. It's an owned culture. It's a permission society.
No one can do to the Disney Corp. what Walt did to the Brothers Grimm.
This culture war--this copyright law--is an unintended consequence of a law that has been bloated by 200 years of lobbyists pushing from one direction.
Binary thinking. Property v. piracy conception. This is wrong. False.
We need ways to respond to this. We used the law, lost. Eric Eldred created a free library on the Internet. In 1998 he vowed civil disobedience. This gave birth to Eldred v. Ashcroft. This began at the Berkman Center and reached, to my surprise, the Supreme Court.
Hal Roach owns Laurel and Hardy; they said in Eldred, American culture will literally disappear. They will not be restored and distributed until they are gone.
Supreme Court sent us back to Congress. They are now considering the Public Domain Enhancement Act. 50 years, $1, free culture.
Lobbyists are saying, "No." Copyright holder would be burdened and all we would get is the public domain.
Two ideas: Creative Commons. Two kinds of extremes. Copyright holders have complete control. Other extreme, no copyright.
Third group: SOME rights reserved.
1995: panic over the Internet and copyright. Now we're moving to extreme: total control.
We're ignoring the place in the middle. Do not build the world according to the idea that this middle doesn't exist.
CC is building an environmentalism for culture. Projects, all designed to build a public domain. This is to build a layer of reasonable copyright into the equation.
Licenses: attribution, etc. These are expressed in different languages: human readable, lawyer readable, machine readable.
Cory Doctorow, a hero of mine--Down and Out in the Magic Kingdom. The book sold out months in advance. More than 70,000 people downloaded it online, and bought the book. The freedom was a way for him to spread his work, increase sales. Peter Wayner did a study: tracked the sales of his used books. More people bought it when they could get it for free on the Internet.
We're building something called iCommons. Porting the licenses to different legal regimes. So far we have close to a million people adopting. But what we want is ten million. This would say to Capitol Hill, "We believe in something different than the extreme."
Some say, "We must defend fair use!" This is not what we should be arguing about. We need to defend the FREE use. Argue for free use.
The point about this--recognize law and technology and market effect. We must recognize that each good idea can be carried to an extreme.
Terry: So, Larry's ceded me a bit of time to finish my presentation. Another proposal, in the same spirit as Larry's. Moderation. An aspiration to create a system that respects creators and consumers, and re-creators.
The specific target of this proposal is the music and film industries. We're in a bad spot. We have not liberated the promise of the new technologies. What about an alternative compensation system?
Possibilities: 1/you could ENHANCE property rights, 2/think of the entertainment industry as a public utility, and 3/create an alternative compensation system.
The basic idea: intellectual products are public goods. Non-rivalrous. Unless there is some intervention--public goods will be under-produced. In what ways can government act? Five techniques for providing the goods: 1/provide it themselves, 2/subsidizes the production, 3/government gives rewards--prizes after the fact, 4/ government confers monopoly powers on producers (toll roads, intellectual property rights) and 5/government assists parties in increasing excludability (trade secrets law, anticircumvention laws).
Increasingly, government turns to 4 and 5. My recommendation/proposal: reconsider strategy 3.
Alernative Compensation System: 1/register, 2/tax, 3/count and 4/pay.
Register, unique ID, designate in your application the other works you may have incorporated. Then, taxation. The government would impose it. What's the criteria?
I recommend: measure the "damages" sustained by the music and film industries. We'd need $ 2.5 billion. Concentrating on the domestic market: you could tax CD burners, DVRs, blank CDs, MP3 players, broadband subscribers.
Then, you'd need to count consumption. Use sampling and surveys.
Once this is in place: lift copyright law and the DMCA from the digital realm.
$ 42 a year for UNLIMITED access to music and film. No price discrimination. Extraordinary explosion of culture. Artists would compensated. The tech manufacturers would have their products taxed; but the demand would be stronger.
Demerits of this proposal. Who would be hurt?: 1/manufacturers, 2/distributors, 3/marketers, etc. Other hazards: risks of rent-seeking, distoritions and cross-subsidies.