It is quite enlightening to read comments from pure ideologues unfamiliar with what it takes to organize, operate and fund a business.

What you all do not understand about business, law, economics, and finance could fill much more than the national archives.

If you had any practical sense of what economic assets were, and about the different types of property identified both in law, and in equity, you might begin to understand the significance of intellectual property.

However, since you all cannot see beyond your myopic anarchic ideology of pure laissez faire capitalism which exists only in treatises, I do not hold out such hope.

I had the unrewarding experience of meeting and speaking with Mr. Harper at a recent function in Washington these past few weeks. I found him less than engaging from an intellectual perspective.

Sincerely,

Lawrence A. Kogan, Esq. CEO Institute for Trade, Standards and Sustainable Development, Inc.

Waterworld is a good example of a failure in the market.

I am not opposed to “reasonable” IP protection. However the area has the usual problem of those with large interests in the issue pushing for overextending IP protection and those with diffuse interests not paying attention.

My point is this: the free market should be in charge of determining value, not monopoly powers handed out by the government.

Now, we can all stand a little arbitrary monopoly, but when it extends in time to terms as long as a century, and when it unjustly prevents competition, and when it hampers consumers ability to enjoy products that they pay for, and when it discourages new players from trying to make competing products, it becomes much more than a little arbitrary monopoly — it becomes fascism.

And if King Kong only ends up making $150 million, does that mean that we don’t have enough IP protectionism? That we need to extend patent rights to the film industry, so that any future giant-monkey films/stories/books/cartoons have to pay licensing back to the studio?

Or could it just be that the market doesn’t value King Kong at $200 million?

DeLong’s position seems to be that the government should step in and ensure that the movie studio can recoup its cost, no matter how silly the storyline or characters, no matter how ridiculous the chase scenes, no matter how many dinosaurs and giant bugs per minute, no matter how astronomical the budget.

That’s a silly position, and DeLong should be ashamed for trying to foist it on us.

What’s the King Kong example about?

Replace ‘incentives for the production of creative works’ with ‘utility’ or similar and I might agree, for the former ignores production costs and enforcement costs (apart from those that directly impact more production).

I like Jim Harper’s phrasing:

The relevant market is for entertainment and leisure, not for big-budget movies. Policy should only care whether people are entertained, not whether they are entertained a certain way or by a certain industry.

If non-commercial, decentralized production methods really are superior, they should be able to prove their worth without changes to the copyright system. So I’m perfectly willing to take a wait-and-see attitude.

There’s another misconception in the quote above — production that doesn’t rely on state enforcement isn’t necessarily non-commercial.

As Mike notes, the “what happens to big-budget movies” question is the wrong question. It uses the wrong definition of the market. The relevant market is for entertainment and leisure, not for big-budget movies. Policy should only care whether people are entertained, not whether they are entertained a certain way or by a certain industry.

Replace ‘incentives for the production of creative works’ with ‘utility’ or similar and I might agree, for the former ignores production costs and enforcement costs (apart from those that directly impact more production).

I like Jim Harper’s phrasing:

The relevant market is for entertainment and leisure, not for big-budget movies. Policy should only care whether people are entertained, not whether they are entertained a certain way or by a certain industry.

If non-commercial, decentralized production methods really are superior, they should be able to prove their worth without changes to the copyright system. So I’m perfectly willing to take a wait-and-see attitude.

There’s another misconception in the quote above — production that doesn’t rely on state enforcement isn’t necessarily non-commercial.

As Mike notes, the “what happens to big-budget movies” question is the wrong question. It uses the wrong definition of the market. The relevant market is for entertainment and leisure, not for big-budget movies. Policy should only care whether people are entertained, not whether they are entertained a certain way or by a certain industry.

On the question of big budget items, you should look at some more of Levine’s work. He has an entire chapter in his book focusing on the pharmaceutical industry, comparing differences across nations, and finding that patent protection for pharma is not indicative of a stronger or better pharma industry.

Also, as for Jim DeLong’s question… I still think most of the answers that he claims aren’t answers actually were decent answers (though, admittedly, some of them were from me, even if he misquoted me).

However, the real issue was the problem of the question: “How do we keep producing $200 million movies?” has an assumption that that’s the way things need to be. Once again, it’s about protecting one particular industry (the blockbuster movie business) rather than focusing on the real question of “Can we still create entertainment vehicles people want?” Why focus only on the $200 million blockbuster?

Hell, I’m sure the buggy whip makers a century ago were asking “with the automobile market coming along, won’t someone tell us how to keep creating buggy whips?”

The problem with the point that DeLong and others from PFF were taking was they seemed to take absolute points: there is no business model without stronger protection. Then, when any of us pointed out that there were business models, completely disproving their absolute position, they would say that it doesn’t count because on its own, it doesn’t match up with the size of the old business model. But they’re looking at it very narrowly. How can NBC Universal get $200 million back to pay off the $200 million blockbuster? Perhaps they should be focusing on making more smaller cost films that can recoup that lower amount instead… Sure, maybe it’s more difficult to recoup the full $200 million, but that doesn’t mean the entertainment industry dies, it just means it changes.

Market economics at work… If people get upset that there aren’t $200 million blockbusters any more, I’d bet that someone more creative will come along and figure out the business models to make it work.

The difference between DeLong and myself is that, despite him suggesting I have some sort of “copyleft” viewpoints, I actually seem to trust the free market to come up with the business models, and he assumes the gov’t needs to come in and enforce the only business model he can see. I’m not quite sure how that makes me a “leftist.”

I don’t think these questions are easily answered. But if you’re having a debate about whether IP is, on balance, a good thing or notm they afre the kind of questions that have to be asked.